Cape Breton Post
Economic history repeats itself in Strait area
Now idle pulp mill was a response to job losses 50 years ago
The pulp and paper industry came to the Strait area in response to an economic crisis, and the current uncertain future of the Point Tupper paper mill could potentially result in similar significant change in the area’s economy.
The economies of all of the communities in the greater Strait of Canso area largely rely, directly or indirectly, on the mill, which has had operations of one form or another in Point Tupper since 1962.
While the construction of the Canso Causeway, completed in 1955, meant safe, reliable and easily accessible transportation between Cape Breton Island and mainland Nova Scotia, it also resulted in the loss of the ferry service that crossed the Strait of Canso and local Canadian National Railway operations, which devastated the area’s economy, throwing hundreds of people out of work.
In response, the Four Counties Development Association with representation from Inverness, Richmond, Antigonish and Guysborough counties was formed. They worked to attract industry to the area that could take advantage of the deep ice-free harbour that was formed by the construction of the causeway.
In 1956, the Swedish papermaker Stora Kopparberg was invited by the province to look at potentially setting up a pulp mill in eastern Nova Scotia. The Four Counties Development Association responded by providing the company information about the Strait area, including the availability of wood and large quantities of water.
Nova Scotia Pulp Ltd. was incorporated in 1957, and construction of the mill began in Point Tupper in November 1959. It was completed in December 1961, costing more than $40 million. Stora was also given leases to 520,000 hectares of Crown land for a period of 50 years. It was later given access to additional Crown land and currently holds leases for 600,000 hectares in the province’s seven eastern counties.
The mill’s official opening took place Jan. 2, 1962, and it began operating in February 1962 producing 100,000 tonnes a year of bleached sulphite market pulp. It employed 400 people directly and supported more than 800 wood trucking and harvesting jobs. It was the largest market pulp mill in North America.
In 1969 an expansion of the pulp mill was announced, along with construction of a new newsprint line.
In 1972, the company started up a 149,000 tonne per year newsprint line and the pulp mill began producing 161,000 tonnes a year. The developments brought 150 new mill jobs and 875 new positions in the harvesting and trucking of wood.
From 1975 to 1981, the spruce budworm devastated many of the softwood stands in the Cape Breton Highlands and there was widespread opposition to Stora’s attempts to spray against the pest.
In February 1982, an explosion at the mill’s steam plant killed five workers Hugh Arnold Campbell, 29, of Brook Village; James Charles Mason, 48, of Ashdale; Pat King, 37, of Evanston; Paul St. Pierre, 43, of Port Hawkesbury; and Glen Anthony Sampson, 20, of Louisdale, a vocational student who was taking work training at the mill that week.
The mill was modernized, with the newsprint machine upgraded in 1987, and three years later it developed the first entirely chlorine-free chemical pulp market in North America.
In 1993, officials with the mill’s parent company mused publicly about shutting it down, as the mill had to implement pricey environmental treatment policies. A local committee was formed to work with the company and the following year production at the newsprint mill actually increased. In 1995, the $70-million secondary treatment plant began operating. Also that year, Stora planted its 100 millionth seedling during a ceremony in Queensville, Inverness County.
On Dec. 11, 1995, company president Jack Hartery and woodlands vice-president Russ Waycott announced at press conferences in Halifax and Point Tupper that it would construct a $750-million supercalendered paper line at the mill, which would produce 350,000 tonnes of paper annually for use in the North American magazine, catalogue and flyer market. Ground was broken in May 1996, and the project employed up to 2,000 people during the construction period.
In October 1997, the commissioning of the new machine, PM2, began with production of thermomechanical pulp, to be used to produce the glossy paper, beginning the following February.
In 2002, Stora Enso announced it would close PM1, the newsprint machine, unless it could reduce costs, and asked members of the Communications, Energy and Paperworkers Local 972 to reopen their contract. The company shut down the machine as it conducted negotiations with the union. After members ratified a new contract, PM1 was restarted. The agreement included early retirement provisions, reduced opportunities for overtime, and introduced more flexible work practices with tradespeople multi-tasking where necessary and contracting out during four shutdowns per year.
In 2003, the company embarked on a $90-million expansion of the thermomechanical pulp line, which converts wood chips to paper pulp under high temperatures. It began operating the following year. The province agreed to provide $15 million to support training of employees and infrastructure.
Throughout 2005, the union and company participated in contract negotiations and were unable to come to an agreement, despite the help of a conciliator. In December, the union voted in favour of striking. The mill was shut down for Christmas and after employees rejected a final offer from the company in January 2006, they were locked out by the company.
While the mill was shut down, the province agreed to give Stora Enso $65 million over five years in exchange for relieving it of obligations to provide additional Crown land to the company.
The mill remained idle for most of 2006. On June 21, the union’s mill division voted 54.4 per cent in favour of a contract that included wage cuts and other concessions; the smaller clerical division voted 51.1 per cent in favour. The mill remained closed, however, as Stora Enso sought to reduce electricity costs. The mill restarted both of its paper machines in November.
In September 2007, Stora Enso announced it was selling all of its North American mills to NewPage Corp. for $2.52 billion.
“ That mill does have challenges, but it also is extremely well-invested,” then NewPage president Rick Willett said in a conference call, calling PM2 the best supercalendered machine, if not the best paper machine in North America.
On Aug. 22 of this year, NewPage Corp., which was burdened by heavy debt levels, announced the Point Tupper mill would shut down indefinitely. The announcement came as a surprise to many, as the mill had been operating at near full operating capacity for months, without maintenance shutdowns, and the mill had taken less down time than other NewPage mills during the recession. The move resulted in layoff notices going to 600 mill employees and also directly affected 400 people working in the woodlands. The company subsequently sought protection from its creditors and announced the mill was up for sale.
Documents filed by monitor Ernst & Young show that the mill owes $156 million to its unsecured creditors. The amount that it owes its 11 secured creditors was not disclosed. Its debts include $4-5 million owed to forestry contractors and trucking companies.
The province has announced a $15-million plan to assist contractors and conduct silviculture work while the mill is shut down. It has also said it will assist in the effort to sell the mill and will seek market analyses for its products.
Court approval of any potential sale will be sought by Nov. 22.
With an uncertain future facing the region’s major employer, the Strait area could find itself in a position similar to the one it was in when efforts were made to attract Stora Kopparberg to Point Tupper more than 50 years ago.