Saturday, 13 April 2013 13:47

N.S. firms still steamed over Northern Pulp aid

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A Pictou County businessman is critical of the Dexter government for helping a much larger company expand at the expense of his operation.

Robert Langille, president of E&R Langille Contracting Ltd. of New Glasgow, says direct involvement by government in helping Northern Pulp finance a wood-chipping plant at its Abercrombie Point facility will force his small company to shutter its $5-million wood-chip investment on Mount William, putting about 18 employees out of work.

“Somebody made a bad decision there,” Langille told me Friday, adding that he will soon meet with Northern Pulp to discuss what the changes will mean.

An independent forestry contractor currently providing about 30 per cent of the wood chips used by Northern Pulp, Langille says the government’s decision to help the pulp mill build its own plant is doubly hurtful since his application for a business loan from government was rejected a few years ago.

Ironically, Langille says, his application was rejected on the grounds it would have created an unfair advantage over other suppliers.

When the Northern Pulp funding announcement was made last week, the NDP government boasted that Northern’s new chip plant would create 20 permanent full-time positions and save Northern about $8 million annually.

Langille says he and his father, Ed, started the forestry company a number of years ago, and today it employs about 90 workers, including his brothers, Darren and Craig.

In addition to the Mount William operation, it is involved in wood harvesting, trucking, road building and operating another wood chip operation in Aulds Cove, which Langille says will be dedicated to supplying fuel for the new biomass power plant at the Port Hawkesbury Paper mill in nearby Point Tupper.

There is no way of substituting chips from the Mount William operation for those slated for the biomass plant, he says. There is different equipment and a different process involved in making the biomass fuel.

On the other hand, the Northern Pulp operation is an important economic engine for northern Nova Scotia, employing about 250 people. The company has also benefited from plenty of taxpayer support.

In addition to providing loans for the wood chipper, which reportedly has been on site at Northern Pulp since last fall, the provincial government also provided a $3.6-million loan and a $900,000 grant to fund the conversion of Northern’s boilers and lime kiln to run on natural gas.

The conversion is expected to save the pulp plant about $8 million in annual energy costs. The province is also helping Heritage Gas extend its pipeline to reach the Northern Pulp plant.

At the same announcement last week, the government revealed that it is loaning Northern Pulp $12 million — $2.5 million in the form of a forgivable loan — for the installation of new pollution abatement equipment in the pulp company’s 40-year-old smokestacks.

In total, the province has reportedly loaned Northern Pulp $107 million since 2009. The federal government also provided $28.1 million in grants through the Green Transformation Fund in 2011-12 to assist the company in becoming more environmentally friendly.

Nevertheless, small Nova Scotia companies feel they are being hurt by the government’s direct financial involvement.

Just last month, another supplier to Northern, Hodgson’s Chipping Ltd., a family-run business based in Truro, shut down and put about 70 full-time employees out of work.

Hodgson’s blamed the shutdown on the NDP government’s decision to reduce clearcutting by 50 per cent over five years. Select cutting is more costly for the forestry contractor, but the price paid by Northern Pulp has stayed the same.

The loss of the Hodgson’s supply left Langille as the last Nova Scotia independent wood chip supplier to serve Northern Pulp.

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