The Nova Scotia government is revising a funding package for the NewPage Port Hawkesbury paper mill after a tax agreement considered vital to restart the operation was rejected.
Energy Minister Charlie Parker said the government has changed a $124.5-million deal it announced last month after the Canada Revenue Agency dismissed a power rate arrangement for the shuttered Cape Breton mill.
Parker said the government crafted a Plan B in case the arrangement was rejected and talks began with the mill's prospective buyer, Pacific West Commercial Corp., soon after the Canada Revenue Agency made its decision Thursday.
"There was really no other option," Parker said in an interview on Friday. "It is just vitally important that mill be up and running to protect the workers and their families."
He said the agency's ruling allowed the province to grant Pacific West Commercial forgiveness on some of the loans the Vancouverbased company would receive under the funding.
Under funding announced in August, the government offered financial incentives to Pacific West Commercial, including $66.5 million in loans, $26.5 million of which could be forgiven if it meets certain criteria, including wage targets.
The government also agreed to buy about 20,840 hectares of land from NewPage Port Hawkesbury for $20 million. That money would go to the mill's creditors, who have agreed to accept less than what they're owed from the operation.
The mill in Point Tupper, N.S., shut down last September, laying off almost 600 employees and affecting another 400 forestry contractors. It opened in 1962.
