BRIGHTON: NewPage casualties piling up
Private contractors say a government aid package for the forestry sector in eastern Nova Scotia is pushing them out of the market and delivering cheap wood from Crown land to Northern Pulp Nova Scotia Corp. on the taxpayer’s dollar.
“The price has killed the private contractors,” says Russell Huntington, a spokesman for the recently formed Eastern Nova Scotia Private Wood Producers Association.
Huntington claims Northern Pulp is stocking up on subsidized pulpwood under a scheme meant to benefit contractors.
Almost a year ago, the government delivered a $14-million aid package to keep contractors busy cutting wood on Crown land. The plan was also geared toward keeping the idled NewPage Port Hawkesbury Corp. paper mill “resale ready” by securing an unbroken supply chain from the forest floor to the mill gate.
Now, with the closure of the former Bowater Mersey mill last month, Northern Pulp has become the only player in the province purchasing pulpwood.
In a buyer’s market, “they throw a price out there and you’re supposed to work for it,” said Huntington, who lives in Marion Bridge and operates a family business, MB Pulp Ltd.
But not him — when Northern Pulp mailed him a contract to sign, he “threw it in the garbage.” The $35-a-ton offer was not enough to cover the stumpage he pays to private landowners and the cost of maintaining his gear, plus a trucking surcharge on wood shipped more than 200 kilometres.
Huntington figures wood being cut on Crown land is being sold “at a loss to Northern, which doesn’t make sense.”
“Before the mill closed, we were getting $51 a ton roadside,” he said. He predicted the price would have to come back to at least $45 a ton to make it viable for private contractors to cut wood on private land.
Huntington says some private operators have idled their own machinery and gone west. He laid off workers in May and hasn’t cut a stick of pulpwood since the start of June.
A spokesman for Northern Pulp didn’t return a call in time for this column. A spokeswoman for the provincial Natural Resources Department, Jodi Sibley, stated in an email it was “inevitable” that the government’s plan to keep harvesting Crown land would have a “small impact on the market,” which she suggested would be “offset by the benefits” of a working mill.
As the sale of the mill drags on, the value of stockpiled pulpwood from Crown land is drying up, literally.
“The wood they’re cutting right now will be too dry by the time the mill opens in Port Hawkesbury,” Huntington said. “The wood’s got to be reasonably green to be processed.”
Yet Northern Pulp can buy up the devalued wood at a low price, he said, “because they’re making kraft paper and they can use drier wood than the mill at Port Hawkesbury.”
And that leaves private contractors lining up with unsecured creditors and pensioners as the latest casualties in the costly campaign to sell the Point Tupper paper mill.
Rachel Brighton is a freelance journalist and former magazine publisher. She writes on environmental technology for the new Herald Magazine and on small business for The Chronicle Herald.