AF&PA Protests Subsidies for Reopening Canadian Mill

On January 10, the American Forest & Paper Association wrote to the U.S. Trade Representative, Ron Kirk, protesting “the potential negative impact from the financial aid package provided by the Nova Scotia provincial government for the reopening of the Port Hawkesbury Paper Mill,” which former owner NewPage closed in September 2011, due to high energy, manufacturing, and logistical costs, as well as soft markets for printing and writing grades. Specifically, AF&PA points out that “breaks, grants [and] subsidies” the Province has provided, totaling $124.5 million, amount to market interference that is illegal under Canada’s World Trade Organization and North American Free Trade Agreement commitments.

The mill’s new owner, Pacific West Commercial Corporation, restarted the mill on October 1, 2012, under the influence of those subsidies. AF&PA states that the mill “has the capacity to produce 395,000 tons of supercalendered paper, representing about 20 percent of the North American market” for that product and that an addition to total capacity at that scale, with the price supports indicated, would “undermine the SC market and lead to the closure of U.S. capacity and the layoff of American workers.”

In addition to AF&PA, the Maine Pulp & Paper Association and Rep. Mike Michaud (D-Maine) have taken up the issue.

Submitted by the Forest Resources Association.