About a week ago Premier Darrell Dexter announced he had a deal to keep the Bowater mill in Liverpool open. After weeks of agreeing with both opposition parties to take politics out of looking for a solution to the imminent closure of the Bowater Mill, the premier decided to put the agreement into legislation and ask the legislature to vote on it. A move that is nothing but political, and as it happens, a move which only delays the implementation of the deal and furthers the uncertainty for workers and residents in Queens.
Going to the legislature on this deal might sound on the surface to be a good idea. Yet, the truth is the premier refuses to release information to the opposition parties to make an informed decision on the deal, and just asks Nova Scotians to trust him that the deal is good. As well, there is no indication the premier plans to take future Industrial Expansion Fund expenditures to the legislature, so this is clearly nothing but a politically motivated move that is unfair to people in Queens.
There are many unanswered questions about the deal. Many of the questions being asked by the opposition are coming from people living in Queens County itself. Yet the NDP refuses to acknowledge that. The NDP refuses to provide answers to those questions. In fact, Vicki Conrad, the NDP MLA for Queens, put out an inflammatory press release suggesting that by asking questions about the deal it means both opposition parties are opposed to helping solve the problem of the possible closure of the Bowater mill.
Let’s not forget, the federal NDP’s former International Trade Critic, Peter Julian, has called Bowater a corporate opportunist. (For the record Premier Dexter dismissed this saying the company is now Resolute, except that this was simply a name change in November of this year, and a name change does not change corporate history)
Let's also not forget that this bailout of Bowater may in fact cause more risk and uncertainty for workers at the mill, not less. So here are just a few of the issues that Nova Scotians, and opposition parties, deserve answers to on this deal before it is voted on.
No Workforce Protection?
The premier, and indeed the entire NDP caucus, claim the deal protects the mill for five years. But in fact it does nothing of the sort.
There appears to be no requirement for Bowater to avoid future layoffs. As well, Bowater can write off certain expenditures against the government loan. It appears that by doing so Bowater could shorten the length of the agreement and if the market isn’t going well, still close the mill before five years.
That means every worker at the Bowater mill, and every business owner or employee who relies on the mill, will remain on a razor’s edge wondering if the mill will close. How does that provide any security?
Worker Pensions At Risk?
The deal signed by the province requires the province to purchase land from Bowater (Resolute) for almost $25 million. This is land is one of a group of assets which currently could be used as security for pension liabilities with the company should operations wind up.
The sale of this land to the province reduces the asset base backing the pensions of current and past workers at the mill. Moreover, there is a provision for the province to buy further land up to around $40 million. If exercised, this option would further reduce the assets backing pensions at the mill.
Given that the market is at best uncertain for the newsprint produced at the mill, and even the premier admits there is no guarantee at all beyond five years, this should be a significant concern as now is the opportunity to protect the pensions of workers at the Bowater mill. One needs only to look at the pension concerns in Port Hawkesbury over the closure of the NewPage mill to see this risk is real.
Shutting Out Renewable Energy Suppliers?
Part of the deal includes giving Bowater access to the province’s COMFIT program. According to Nova Scotia Power there is only 3.3 MW of COMFIT access available in the entire Liverpool, Brooklyn, Milton area. It’s very likely the increase of production by Bowater’s Brooklyn Energy will wipe out a significant portion of the capacity available to other COMFIT participants.
Why does this matter? The COMFIT was designed to allow renewable energy producers to access the grid. It was designed to allow communities, businesses, and others to be able to be part of the job creation, economic generation, and other opportunities that could come with that access. It was also seen as a way for municipalities to generate electricity and have an alternate revenue stream to help mitigate property taxes. The NDP has not told Nova Scotians how many jobs, how much production, an how much economic generation will be foregone by signing off this generation to Brooklyn Energy.
This is a loss of planned economic activity in the region and should be subtracted from any economic benefits suggested by the deal.
What Land Is Being Purchased?
The province had already committed to protecting 12% of the province’s land for conservation. The NDP have suggested the land purchase in this deal mentioned above will help address that. However the truth is less clear than that.
The money for the purchase will be given to Bowater by January, but the land to be acquired will not be finalized until the end of March 2012. Furthermore, the premier’s own staff have not disputed comments that some of the purchased land may be logging roads and clear cuts which come with their own liabilities and are hardly conservation quality lands.
Moreover the Minister of Natural Resources has been reported as saying the money for this purchase may come from the province’s debt. While I have no doubt there will be a shell game to show a surplus in the annual provincial budget, the fact is this is a direct charge increasing the debt of the province, and Nova Scotians have no guarantees in the deal on exactly what land they will get from it. By putting it on the debt, you have to add the cost of interest, so the true cost will be more than the roughly $25 million in the agreement.
Oh, and a side note, the option in the agreement is priced at $800 a hectare. A number of private woodlot owners have suggested that this may depress the price of their own land for the next five years (the life of the agreement) at a time that such land in 2011 dollars is sometimes going for over $1000 a hectare.
How Many Jobs Really?
The premier has claimed repeatedly that 2,000 jobs are impacted by this deal. This is an odd claim and isn't supported by the data. Statistics Canada says just over 2,200 people are employed in all of Queens County. As well, a study by the Atlantic Provinces' Economic Council says only 35 indirect jobs exist for only 100 in any industry. Thus for the 220 jobs at the mill, there are only about 77 indirect jobs related directly to the mill.
While it is reasonable to allow that some jobs outside of Queens may be impacted, and there may be jobs 100% associated with the operation of the mill not counted in the 220 at the mill itself, it is also safe to assume that some jobs will disappear just by virtue of the agreed reduction of the workforce at the mill.
It is also absolutely wrong to say that every single job impacted by the mill will suddenly disappear if the mill closed. In fact some woodlot owners have said that while they supply Bowater, whether the mill is there or not would largely be a wash for them. Some hardwood producers in particular have noted that they could see increased economic output by focussing on hardwood production.
This is not to say a mill closure would not impact jobs. Of course it would. But it is absolutely wrong to say all 2,000 jobs that might have some connection to the mill would be gone. Does every gas station which sees workers from the mill close if the mill closes? Does the municipality lay off every staff member if the mill closes? Probably not. But many of those staff from businesses and government agencies that would remain are counted into that 2,000 number the premier keeps using.
Why Is No One Planning For The Future?
Perhaps worst of all, this deal does nothing to address the future. As you begin looking at retraining, even those who are laid off as a result of this deal, you have to retrain for some job that actually exists. The workforce in rural Nova Scotia has been decimated. Jobs have been lost and people have left the workforce out of desperation. There is no plan in this deal to diversify the Queens COunty economy.
The deal presented may be the only option given the short deadline of January 3, 2012 which appears to be the drop dead date for Bowater's board. But the NDP now admits they knew about the planned closure of the mill in August so they had plenty of time to start looking beyond five years. They had plenty of time to present to Nova Scotians a strategy for the future of the South Shore. A deal like this as part of a longer term strategy may have been far more palatable to Nova Scotians, because the structural issues would start to be addressed
Instead, the opposition is left to vote on a deal on which government will not answer questions. Questions that many Nova Scotians are asking - including Nova Scotians in Queen's County. The government will not provide access to the research it has commissioned on the future of the industry, yet wants the opposition to vote on a deal purportedly based in part on that research.
The premier isn’t looking for real answers and responses to the deal, he’s only trying to use the Bowater deal as a way to make a political statement in advance of what may very well be an election next year. The premier is using it to say that somehow asking questions and seeking answers on a government deal is wrong, when in fact the role of the opposition in a democracy is exactly to ask questions on behalf of citizens.
