Tag Archives: Port Hawkesbury

CBC‘s Land and Sea television program aired an episode today titled “Maritime Forestry“.

The episode shows how many rural maritime communities with deep roots in the forest are struggling to survive.

The show highlights:

• Dalhousie, New Brunswick
• Port Hawkesbury, Nova Scotia
• St. Quentin, New Brunswick
• Nackawic, New Brunswick

You can watch the episode online here:

http://www.cbc.ca/landandsea/2013/03/maritime-forestry.html

Updates from Nova Scotia today concerning the purchase of the former NewPage Port Hawkesbury mill:

Creditor Protection Period Extension

Creditor protection period has been extended for another month – until September 28, 2012.

Request for $2 million in spending to restart mill

Nova Scotia Supreme Court justice John Murphy refused to approve $2 million in spending requested to restart the idle mill.  The request was filed yesterday after business hours, which did not give time for other stakeholders to respond.  Pacific West Commerical Corp. was willing to put up $500,000 and was requesting $1.5 million from the provincial funds used to keep the mill operating.  Justice Murphy said, ”I’m not satisfied the circumstances justify the extent of the exemption (of required notice).”

Restructuring agent Peter Wedlake told CBC, “What we’re trying to do is get the mill ready to start producing paper as soon as the deal is closed and to that end there needs to be maintenance done on machinery, there needs to be inspections done because the mill has been closed for a year… some limited supplies just so the mill is in perfect shape, so the mill is ready to roll the day the deal can close and they can start rolling and making paper.  The issue is the fall season. They want to be able to take those orders and to confirm with their customers they will be up and operating, so they need to get started in September so they get the fall season for customer orders,” Wedlake said.

The hearing to spend $2 million from the restructuring money will be heard on Thursday of this week.

Municipal Tax Agreement

Later today the court is expected to rule on the 10 year municipal tax agreement the mill has with the Municipality of Richmond County.  Pacific West Commercial Corp. wishes to break that deal when it restarts the mill as Port Hawkesbury Paper, reducing its tax bill to one-sixth of its current level at $2.5 million.  This story will be updated when the ruling has been made.

Update: Richmond County has lost its bid to stop Pacific West Commercial Corp. from changing its tax arrangement with the County. Justice John Murphy ruled that the mill’s prospective buyer, Pacific West Commercial Corp., can argue its case before the Nova Scotia Supreme Court in a hearing scheduled for Sept. 13.

Read more:
Judge to hear $2M spending NewPage application (CBC)
Judge extends creditor protection for idle NewPage mill (Chronicle Herald)
Pacific West’s bid to nix mill tax deal can proceed, judge rules (Chronicle Herald)

The Chronicle Herald has done a good job summarizing the hurdles that still have to be cleared before the sale of NewPage Port Hawkesbury will be finalized allowing the mill to reopen.

Advanced Tax Ruling

The Canadian Revenue Agency has indicated that they may not grant an advanced approval of the complicated tax arrangement between Pacific West Commercial Corp. and Nova Scotia Power before September.

Pacific West Commercial Corp. is insistent that the sale deal be complete by the end of August to allow the company to restart one of the paper machines in September.  The company feels this is crucial to their plan to secure customers.

Discounted Power Rate

Pacific West Commercial Corp. is awaiting the decision of the Nova Scotia Utility and Review Board that is expected later this month.  The company said they are unwilling to complete their purchase of the mill without a secured, 7 year, discounted power rate.

Meeting of the Creditors

The creditors are meeting on August 15 and will vote on the sale of the mill for $33 million to Pacific West Commercial Corp. (a Stern Partners business).

Secured Claims

Yesterday a judge approved two orders that place a priority on specific claims and vacated any remaining liens on the mill property.

The following are now determined to be secure claims and will be eligible to receive 100 cents on the dollar:

• certain pension claims
• municipal property tax claims
• certain trust claims asserted under the Builds’ Lien Act.

The current stay of proceedings expires on August 31. There are already been 6 extensions to NewPage Port Hawkesbury’s original period of creditor protection.

Read NewPage facing further tax hurdles (The Chronicle Herald)

Yesterday, May 9th, the Government of Nova Scotia introduced legislation that could result in better pension benefits for the workers and pensioners of the NewPage mill in Port Hawkesbury.

“Government recognizes that buying annuities in today’s market could mean a significant loss of benefits for NewPage employees and pensioners,” said Minister of Labour and Advanced Education Marilyn More. “We are taking steps today to give these women and men an option that could result in some market recovery and some restoration of lost value.”

Within six months of a pension plan closing, its administrator prepares a financial report that compares the value of the plan’s assets with its obligations. After that report is approved by the province’s superintendent of pensions, annuities are purchased to provide plan members future pension benefits.

NewPage’s four pension plans are underfunded. If annuities were purchased now, pension benefits would be reduced by up to 40 per cent.

The bill introduced this week would give the NewPage pension plans up to 11 years to recover from low investment returns and interest rates. While there are no guarantees about future market performance or interest rates, long-term performance has been positive.

It would also give members information to help them make their choice, the right to opt in or opt out of the extended wind-up, and an annual update of how the plan is doing each year of the extended wind-up.

“This bill will give our pensions a chance to grow and to take advantage of higher interest rates in the future,” said Archie MacLachlan, vice-president of Local 972 of the Communications, Energy, and Paperworkers Union, which represents NewPage’s unionized workers. “Our members understand that there are risks involved in the stock market and that interest rates may remain low for many years.”

Three of the NewPage pension plans are for unionized workers in the mill, office and clerical positions and woodland operations and the other is for salaried, non-unionized workers. As of Sept. 30, 2011, the four plans included 646 active employees, 763 retired members, 46 inactive members and 53 deferred members.

Source: Government of Nova Scotia

Nova Scotia is repealing its Stora Forest Industries Limited Agreement Act and amending the Crown Lands Act.

The province feels the changes will provide economic, environmental and social benefits to Nova Scotians by revising the way forests on Crown land can be managed.

“Nova Scotians want government to change the way their natural resources are managed to ensure that they are used sustainably and these legislative changes will bring the long-term stability needed in good forestry management,” said Charlie Parker, Minister of Natural Resources. “We are helping to protect forestry jobs while managing our forests in a sustainable way.”

The Stora Forest Industries Limited Agreement Act was implemented in 1959 to provide a licensing agreement for accessing timber on Crown lands to a specific company at the mill at Port Hawkesbury. Subsequent owners of the mill also operated under the act. The mill is now for sale.

“The Stora act is old and outdated. It may have met the needs of a previous era, but today government is seizing this opportunity to modernize forest legislation to be more sustainable,” said Parker.

“These changes should give forest industry companies and investors increased confidence that our provincial government backs an active industry,” said Steve Talbot, executive director of Forest Products Association of Nova Scotia. “With longer licensing agreements, companies will be able to plan for the longer term, continue providing secure jobs and a sustainable industry across the province.”

Proposed amendments to the Crown Lands Act would allow the province to enter into long-term licensing agreements with forestry operators across the province. Licensing agreements allow companies access to timber on Crown lands and state terms and conditions companies must meet to have access.

Currently, the province can only enter into short-term agreements. The proposed amendments would extend agreements up to 20 years, and allow for renewals. Renewals would be granted if forestry operators met the province’s standards and regulations.

Source: Government of Nova Scotia – Department of Natural Resources

Robin McAdam, Executive Vice President, Strategic Business & Customer Services for Nova Scotia Power, has released more details of the tentative power agreement between Pacific West Commercial Corporation (PWCC) and Nova Scotia Power regarding the Port Hawkesbury mill on his blog.

McAdam wrote that the power supply arrangement will help make the mill competitive while ensuring the rest of Nova Scotia Power’s ratepayers are not only protected from additional costs, but they also get a benefit from the proposed agreement.

Here are the basics of the deal as outlined by McAdam:

• Nova Scotia Power will “assign” the energy from certain renewable energy assets – the Nuttby and Digby Neck wind farms and most of NS Power’s hydro assets (except the Mersey System) – to the mill. This does not entail a transfer of ownership; rather, it means that those generation facilities will be deemed to be producing the energy the mill needs, so the mill will essentially be self-generating electricity. This does not mean that the power from these facilities goes directly to the mill. These facilities will continue to operate so as to most efficiently service all Nova Scotia customer.
• Rather than being billed for electricity, the mill will provide NS Power with dividends on preferred shares assigned to NSPI in exchange for dedicating the use of the specified generating assets. The dollar value of the dividends won’t be tied to the specific generation costs of the “assigned” facilities, but, rather, the “incremental cost” of the electricity it uses. That means the dividends will be calculated as the additional cost of generating electricity for the mill, after NS Power has served all other customer demand with the lowest cost generation available. A complex system of forecasting will provide the mill with hour-by-hour costing a day in advance, so mill managers can determine when it will be most cost-effective to operate.
• For each megawatt-hour of electricity it uses, the mill will contribute $2 towards the fixed costs of the electricity system. Fixed costs are costs that don’t reduce with lower customer demand on the system, such as the cost of generation facilities and transmission towers and wires.
• As well, there is a second avenue by which the mill, if it becomes profitable, could contribute to fixed costs. Under the agreement, NS Power will hold 30% of the mill’s common shares. McAdam stressed that this does not mean NS Power will be taking an equity position in the mill. What it does mean, however, is that if the mill is profitable and PWCC declares common dividends, those dividends will flow directly to system fixed costs, benefitting all NS Power customers. These dividends would be in addition to those provided in compensation for the incremental cost of providing the mill with electricity.
• To make this all happen, NS Power will become a limited partner and part shareholder with Pacific West, so that NS Power customers can receive dividend payments. These arrangements together will enable tax savings that will help make the mill profitable. The tax structure of this arrangement has been submitted to the Canada Revenue Agency for approval, in parallel with the Pacific West’s application to the Nova Scotia Utility and Review Board.

McAdam further clarifies that common share dividends won’t go to NS Power or its shareholders, and further emphasizes that this deal is specifically structured in a way that provides no profit or loss to NS Power or its shareholders.

Read more: Pacific West (Nova Scotia Power’s ‘A Cleaner Megawatt’)

The workers and pensioners of NewPage Port Hawkesbury are asking the Nova Scotia Government to consider making some legislative changes that would allow them to recoup some of their pension losses.

As it stands now, the pension plan for these workers is drastically underfunded by approximately $130 million, meaning each worker and retiree will be set to lose 35% of their pension value when the plan is wrapped up.

Instead, the workers are asking that the pension plan isn’t wrapped up when the mill is sold to Pacific West Commercial Corp., but instead, delayed for several years, maybe as many as 10 or 11, to allow the pension to regain some of its value.

For this to happen, Nova Scotia would have to amend the Pension Benefits Act or introduce new legislation that will allow the pension plan to live on beyond the life of the mill.

Although, even in the best case scenario, it is estimated that this may allow only 5% of the loss to be recouped.

Read more:
NewPage workers ask for legislative pension changes (CBC)

The Port Hawkesbury paper mill is one step closer to reopening now that its new owner, Pacific West Commercial Corp., has reached a seven-year tentative energy agreement with Nova Scotia Power.

The tentative agreement will be submitted to the Nova Scotia Utilities and Review Board for approval.

The agreement will see Nova Scotia Power provide the mill with hourly power rate projections a week in advance so the plant can decide how much of its facility to operate.

The tentative agreement creates a partnership between the mill and Nova Scotia Power. If approved, Nova Scotia Power will hold both preferred and common shares in the mill.

Nova Scotia Power will receive dividends reflecting the value of the energy used by the mill. Those payments will also include a $2 per megawatt hour contribution to the utility’s fixed costs.

Robin McAdam, Nova Scotia Power’s executive vice-president of customer services, said the utility would have a 30% profit participation rate in the mill.

Nova Scotia Power is confident that this agreement will prevent their other customers (including households) in the province from having to subsidize the the mill.

The approval will take approximately 3-4 months. Some aspects of the agreement will require approval from the Canada Revenue Agency.

Sources:
Tentative energy deal reached for idled paper mill in Cape Breton (The Canadian Press)
Stern Partners, NSP officials reach agreement on power for mill (101.5 The Hawk)
NewPage buyer reaches N.S. Power deal (CBC)

The unionized workers of the idled Port Hawkesbury paper mill in Nova Scotia have voted 85% in favour of their contract offer from Pacific West Commercial Corp.

This ‘yes’ vote brings the mill one step closer to reopening under its new owner.

Marc Dube, spokesman for Pacific West Commercial Corp. said he would now turn his attention to working with Nova Scotia Power regarding energy supply and costs and with government regarding fibre supply and a forest management plan.

Dube said they are facing a Nova Scotia Utilities and Review Board hearing in late June or early July, with the possibility that the mill could reopen in August if all outstanding matters are settled.

About 400 people were eligible to vote on the contract offer. 300 placed a vote, with 85.6% of voters in favour of the new 10-year contract.

“Our members did a lot of soul searching over the past couple of weeks,” said union spokesman Steve MacDougall. “Now that this is passed I hope people realize that the mill workers are not a greedy bunch and that we have taken this responsibility seriously.”

Read more:
NewPage workers vote to accept Stern offer (CBC)
Mill workers vote to accept contract ultimatum (Chronicle Herald)
Majority of workers vote to accept contract deal with pulp and paper company (Canadian Press)

The workers of the former NewPage Port Hawkesbury mill in Nova Scotia have decided to vote on their offer from Pacific West Commercial Corp.

Some improvements have been made to the offer, including sections that cover seniority rights and vacation pay.

The Communications, Energy and Paperworkers Union is recommending that the workers accept the offer that will see just 229 unionized employees return to work with the new owner.

Voting will be held Monday and Tuesday. Pacific West Commercial Corp. has asked that they have a final answer by Thursday.

Archie MacLachlan, who sits on the union’s executive, compared the vote to having a gun to their heads. He said if they don’t accept, he’s convinced the mill will close for good.

Source:
Union recommends NewPage mill workers accept offer (CBC)