Mill lays off workers as it holds one-week shutdown

‘Sales might be a little slow right now’

Most employees at Port Hawkesbury Paper have received one-week layoffs as the mill conducts a market-related shutdown.

The layoffs began Sunday, confirmed Archie MacLachlan, first vice-president of Unifor Local 972. He didn’t have a figure for the number of unionized employees affected by the shutdown but said only a skeleton crew remained to maintain the paper machine during the downtime.

“When you have a big paper machine like they have here that produces a lot of paper in a short period of time, and I believe that sales might be a little slow right now, this time of year,” MacLachlan said.

The mill directly employs almost 350 people. It makes supercalendered paper for the magazine, catalogue and flyer market.

MacLachlan said while the union would prefer there were no layoffs, it is not an exceptional circumstance to see market-related shutdowns in the paper industry. He said some employees took vacation time for the week.

“It’s really a situation of a whole bunch of small things added up to they decided to take a week of downtime,” MacLachlan said. “

A similar shutdown and layoffs also took place last summer. The steam plant at the mill, which is operated by Nova Scotia Power, is currently in the midst of a threeweek shutdown, MacLachlan said.

“They can’t provide us steam right now because they’re shut down and when they’re shut down if we’re running … (when) we debark the wood we would have to put it outside and with power rates in the summertime being high and their inventory is probably a little high, they decided to shut down for a week,” MacLachlan said.

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

While there is always a good deal of speculation in the community about the mill, which is the largest single employer in the Strait of Canso area, MacLachlan said he doesn’t believe there is any need to panic about the shutdown.

The supercalendered paper produced by the mill is a specialized product and if a customer is lost it’s not simply a matter of selling product to someone else, he said.

“Everybody’s flyer is different and everybody’s magazine is different so it’s harder to run and put product in a warehouse and then say, ‘OK, we’ve got 500 rolls of this paper, we’ll just send it to this customer,’” he said.

A decision by the U.S. government slapped large tariffs onto Port Hawkesbury Paper’s exports, after two American producers argued its products are unfairly subsidized because of assistance the province provided to restart the mill.

Port Hawkesbury Paper has said the interim duty of 20.33 per cent announced by the U.S. Department of Commerce is unfair and without merit.

In April, Port Hawkesbury Paper received some good news in its battle against the Americans. A NAFTA panel sided with Port Hawkesbury Paper in directing the U.S. Department of Commerce to reconsider issues on which the department based imposing border duties, including the electricity rate paid by the mill.

In an interview Monday, Minister of Business Geoff MacLellan said he wasn’t aware of the layoffs.

“We’ve had discussions with our legal team in Washington,” MacLellan said. “It really is in the legal realm back and forth on what would contribute to an unfair trade practice with respect to the operation there in Port Hawkesbury. We’re very much apprised of the situation.”

He added the mill and its workforce have been working to identify new product lines to diversify its operations and make better use of its facilities.

MacLachlan said he believes the duties are unrelated to the current shutdown.

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. In the case of Port Hawkesbury Paper, at issue was the aid package it received in 2012 valued at about $124.5 million from the province to reopen the mill after a yearlong sales process, as well as a special electricity rate that it receives.

Under an October 2015 Department of Commerce decision, Port Hawkesbury Paper is subject to a 20.18 per cent duty.

Since the tariff was applied it has been in held in trust pending the outcome of the dispute, which Dube said totalled about $50 million in duties by April.

Dube said at the time despite the duty, the mill is continuing to work to be a lowcost and high-quality producer of supercalendered paper and the order book was strong despite market trends in paper use.

Production at the mill resumed in October 2012, after the resumption of operations following a year-long sales process.

The mill is owned by Pacific West Commercial Corp. It also supports 400-500 jobs in trucking and harvesting of wood.