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Port Hawkesbury Paper celebrating five years of staying open

POINT TUPPER, Nova Scotia (From news reports) -- Five years ago this past week, many in the Strait of Canso area breathed a collective sigh of relief when its largest single employer restarted production after a yearlong shutdown.

The reopening of what is now Port Hawkesbury Paper came after a year of legal wrangling and negotiations with the various groups that have a stake in the future of the mill, formerly NewPage Port Hawkesbury, which had shut down when its parent company filed for bankruptcy protection in the United States.

It's a very different company than when it shut down in September 2011. Only one of the mill's two paper machines -- the newer supercalendered machine that produces paper for the magazine and catalogue market -- went back into production, cutting the number of employees by about half to around 300.

"It sneaks up on you," Archie MacLachlan, first vice-president of Unifor Local 972 which represents Port Hawkesbury Paper's unionized employees, said of the anniversary, noting many people probably don't realize the amount of time that has passed.

"We knew all along we had a pretty good operation here and were certainly thankful that somebody bought the operation and we've run the last five years basically very well."

New owner Pacific West Commercial Corp., headed by Ron Stern, won concessions from the union, a discounted power rate, a tax deal with Richmond County and approval of the $33-million purchase by creditors and the courts, as well as $124.5 million in aid from the province over 10 years.

There have been a few short market-related shutdowns in the past two years, but company officials have generally reported strong order books. MacLachlan said the relative strength of the Canadian dollar has also helped the mill, which exports most of its product to the United States.

He said there have been "a few bumps in the road."

"We're only half the size we used to be, so there's been a lot of people forced to move elsewhere and a lot of challenges for the retirees who took quite a cut in their pension," MacLachlan said. "I know the community as a whole is thankful that the mill started up. You really don't hear much about it, and that's probably a good thing."

The fifth anniversary also marks the halfway point for the 10-year contract that unionized employees ratified in order to get the mill reopened, which included no wage increases during that period.

"They weren't buying it unless they got a 10-year contract," MacLachlan said. "It's been a struggle, a lot of people are thankful to have the job, but 10 years is a long time to go without a wage increase or that kind of stuff. For the most part, everybody's glad to be back to work."

Amanda Mombourquette, executive director of the Strait Area Chamber of Commerce noted the shutdown came at the same time the region was losing other industrial jobs, including at the Georgia Pacific gypsum mine. She worked in economic development at the time, and noted they tallied about 500 total jobs lost in the area over about three years.

"That's something that's going to take more than five years to come back from," she said.

But chamber members generally now share the hopefulness for the area's economic future that the Strait region has traditionally shown, she said.

"There's generally an air of optimism in the region right now, which wouldn't have been the case five years ago before things had turned around," Mombourquette said.

Local businesses are reinvesting in the community, including a local car dealership building a new location, she noted.

"There's a much stronger dense of collaboration and sustainability when we speak to people in the industrial community in general, they're working together all the time and that bodes well for everyone," Mombourquette said.

Mayor Brenda Chisholm-Beaton said the perception is that Port Hawkesbury, a stone's throw away from Point Tupper, Richmond Co. where the mill is located, is a mill town, but she describes it as more of a service centre. Families, including her own -- her husband works at the mill -- certainly felt the pain during the shutdown, but Chisholm-Beaton believes it has recovered.

"There is certainly a reliance, not only Port Hawkesbury but also our surrounding communities, on Port Hawkesbury Paper, but I do feel that the community has rebounded in the past five years, gotten over some of the fall-back from the closure," she said.

Based on updates council has received from mill officials, Chisholm-Beaton said she believes it is in "a good place" now.

"They are always looking for ways they can diversify their paper industry into maybe some other opportunities and they're exploring different products and different partnerships that they can form to keep the company relevant," she said.

Mill development manager Marc Dube could not be reached for comment.

One challenge the mill has faced is a battle against costly duties levelled against it beginning in 2015 by the U.S. Department of Commerce. Earlier this year, it received some good news when a NAFTA panel sided with it in directing the department to reconsider issues on which the department based imposing border duties, including the electricity rate paid by the mill.

The trade action came as the result of a petition filed by two American producers of supercalendered paper that say the Canadian paper goods are unfairly subsidized.

Since the tariff was applied it has been in held in trust pending the outcome of the dispute. Dube said in April it had paid about $50 million in duties to that point.

MacLachlan said the tariff dispute hasn't really affected the workers, although how it will ultimately be resolved remains a concern.

****

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