NS: Richmond holding steady despite uncertainty over paper mill

Chris Shannon
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The Cape Breton Post

The NewPage paper mill was Richmond County's single-largest taxpayer and employed about 200 of its residents.

A locked gate frames the scale house at the NewPage mill in Point Tupper in this file photo.

[ARICHAT, NS] — Richmond County managed to maintain its current tax rates and keep services and programs in place following budget deliberations last week.

The municipality has had to deal with uncertainty with the closure of the NewPage paper mill 10 months ago — Richmond’s single-largest taxpayer.

Deputy Warden Victor David said it’s been a period of uncertainty as potential buyer Pacific West Commercial Corp. continues its negotiations with various stakeholders in order to purchase the idled mill.

“We made adjustments for NewPage,” David said. “The directors kept their budgets in line ... and it worked out fantastic.”

The base residential tax rate stands at 75 cents per $100 of assessment, while the base commercial rate remains at $2.01 per $100 of assessment. It’s the third consecutive year there’s been no change in the tax rates.

The budget increased slightly by $600,000 to $13.8 million for fiscal 2012-13.

David said the municipality has always budgeted on the assumption one of its main industrial customers could falter, as was the case with NewPage.  

The Point Tupper mill shut down in September citing financial challenges that included an unfavourable exchange rate between American and Canadian currencies and high fuel and electricity costs. About 1,000 people were thrown out of work either at the mill or in forestry operations when the plant closed.

About 200 of the 600 direct employees who worked at the mill lived in Richmond County.

NewPage also represented more than 30 per cent of Richmond County’s annual tax base, making it an integral part of the municipality’s fiscal health.

“Right now they owe us approximately $2 million, so we’re just waiting for the transition to be finished. And that money should be paid once the sale is finished,” David said.

“We also had to make allocations for that money. We hope it’s like money in the bank.”

NewPage is currently in creditor protection.

If the proposed power rate structure is approved by the Utility and Review Board following a hearing later this month, including its proposal to operate only one paper machine, Pacific West could expect to save about $32 million on electricity in its first year in operation.

The municipality hasn’t felt the severe economic impact a year-long paper mill closure, and has the ability to create due mainly to its own efficiencies with municipal operations.

“Some of the directors were able to save money in their departments due to retirements, and bringing in a younger workforce,” he said. “We are now fully staffed in each department. Everything is going good. We’ve been able to maintain status quo.”

Organizations: Pacific West Commercial, Utility and Review Board

Geographic location: Richmond, Cape Breton, Point Tupper Richmond County.NewPage

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