Nanaimo mill gets $27-million share of Ottawa's aid package

Canwest News Service
October 9, 2009

Nanaimo's Harmac mill will receive almost $27 million from the federal government's $1-billion aid package designed to prop up the nation's struggling pulp and paper industry.

Minister of International Trade Stockwell Day announced while touring Harmac on Friday that the Nanaimo facility is among 38 pulp and paper mills across the country to receive funding under the federal Pulp and Paper Green Transformation Program.

The federal funding is in response to an estimated $6 billion in subsidies and tax credits Americans are handing its pulp mills that use a pulp byproduct known as black liquor (traditionally used to fire boilers at the mills), which is considered an alternative fuel. Some American mills that were closed due to market difficulties have reopened thanks to the subsidies.

Canadian mills, which don't receive comparable subsidies, continue to deal with a struggling marketplace so the federal funding aims to level the playing field for mills that use black liquor. Only mills producing black liquor between Jan. 1 and Dec. 31, 2009, are eligible for funding from the program. The 38 mills selected will receive up to 16 cents in funding per litre of black liquor used and the money must be used during the next three years.

Harmac uses 458 million litres of black liquor per year with one pulp line in operation. That number is expected to increase by 50 per cent now that the mill has started a second line.

The funding couldn't come at a better time for Harmac, which has been having problems accessing credit needed to fund new projects at the 500-hectare mill site. The criteria for the funding stipulates that the mills must use the money for either improvements to their energy efficiency or their environmental performance.

Harmac has plans for upgrades to the mill's boilers to operate more efficiently with less effluents, as well as other efficiency upgrades.