NLIS 7
March 16, 2005
(Natural Resources)
The following was issued today by Ed Byrne, Minister of Natural
Resources. It was also read in the House of Assembly:
I rise in this House today to provide an update to the people of
Newfoundland and Labrador on the status of discussions between this
government and Abitibi Consolidated Inc. on the future of its
operations in Stephenville and Grand Falls-Windsor.
Government is very concerned about the future of both of these paper
mills and the impact that any change in their operations would have
on its employees, the communities in which they live, and indeed,
the entire regions which view these mills as the drivers of their
regional economies. And generally, we are concerned about the future
of the pulp and paper industry in this province.
It was very early in our mandate that we understood very clearly
that we had to engage Abitibi to try to resolve some of the issues
facing the company. At that time, our understanding from the company
that their focus of concern was on the Stephenville mill due to its
high energy costs and its lack of a dedicated on-island wood supply.
Initially, this government established a ministerial working group
which included myself, as the Minister of Natural Resources, and the
Minister of Innovation, Trade and Rural Development. This working
group was supported by senior government officials including the
deputy minister of Natural Resources, the chief executive officer of
the Forestry Services Branch of my department, and the deputy
minister of Innovation, Trade and Rural Development.
Our task was to seek solutions to the issues facing Abitibi�s mill
in Stephenville.
While these discussions were ongoing - as a sign of good faith -
government directed Newfoundland and Labrador Hydro to renew its
contract - known as the Interruptible B contract - with Abitibi.
This contract paid $1.3 million to Abitibi in 2004 should Hydro
require Abitibi to slowdown its Stephenville operations to lessen
the demand on the provincial electricity grid during peak months
during winter. As it happened, Hydro did not have to interrupt the
power to Stephenville mill; yet, Abitibi retained the $1.3 million.
On December 15, 2004, Abitibi informed government that unless we
could provide some assistance with cost, immediately on the energy
side, and long-term on both the energy and wood supply, the company
would announce in January 2005 the permanent closure of its
Stephenville mill.
Based on that information, I arranged to meet with John Weaver,
chief executive officer of Abitibi, on December 21, 2004. During
that meeting, I clearly outlined for Mr. Weaver and his senior
vice-presidents that we want Abitibi to maintain all of its current
operations in this province.
I also made it clear to Mr. Weaver that priority or absolute access
for Abitibi to the wood supply in Labrador was not something this
government was prepared to consider. Should Abitibi want access to
this wood, then I informed the company they need to build
partnerships and relationships with the key stakeholders in Labrador
to achieve that objective.
However, I believed at that time, there remained an opportunity for
us to continue discussions with the company. Again, as a sign of
good faith, this government agreed to a request from the company to
provide a contribution of $1 million, which offset the power rate
increase for a period of 60 days, provided government with access to
the company�s data, designs, estimates and other information related
to potential hydro developments on the Exploits River, and allowed
time to explore all options.
Just over a month following that meeting, we were advised that
Abitibi was undertaking internal operational reviews of four of its
mills - including Stephenville and Grand Falls-Windsor.
That was the first indication this government had that Abitibi was
also putting its operations in Grand Falls-Windsor through a formal
review.
Since that announcement by Abitibi, there has been much speculation
about what this company plans for its Newfoundland and Labrador
operations - much of which has been provided by the company itself.
It is from the company that the employees of the Stephenville and
Grand Falls-Windsor mills and the people of this province have
learned of several options under consideration by the company.
According to the union these options include: 1) Continue to run the
mills in Stephenville and Grand Falls-Windsor but find ways to cut
costs; 2) Close the Stephenville mill; or 3) Close Number 7 machine
in Grand Falls-Windsor and maintain Number 3 machine.
Obviously, those options have caused much anxiety among the people
whose livelihood is dependent on Abitibi maintaining all of its
operations here - from the people working in the mill, to those
harvesting the wood, to the business that supplies goods and
services, to the corner stores, the restaurants, hotels - and the
list goes on.
Within the past week, I have had the opportunity to meet with the
unions which represent the mill workers and loggers for both the
Stephenville and Grand Falls-Windsor mills.
As well, in the coming days, I plan to meet with representatives of
the municipalities in these two regions of the province.
While there has been much speculation of what Abitibi intends to do,
I want to take this opportunity to quite clearly indicate to the
employees, their unions, and to the people of Grand Falls-Windsor
and Stephenville, this government�s position on a couple of key
issues.
This government does not have any intention of amending Bill 27
which is the piece of legislation that provides Abitibi with its
timber licences until 2010 with the condition that it retain the
operation of two papermaking machines in Grand Falls-Windsor and
maintain annual production levels at substantially the same levels
as those in the proceeding three years of the 2002 agreement.
Our discussions with Abitibi are ongoing with regard to addressing
the challenge of energy costs at the Stephenville mill. We will
continue to explore all possible solutions to these challenges. Our
objective is to reach an agreement that will assist Abitibi yet not
put any extra burden on all the ratepayers, including residential
and industrial customers.
As you can appreciate, this government does not want to see any
downgrading of the Abitibi operations in Newfoundland and Labrador.
I want to assure Abitibi�s employees in this province, the unions
that represent them, the people of Grand Falls-Windsor, the people
of Stephenville, the residents of the surrounding communities, and
all of Newfoundland and Labrador, that this government is committed
to looking at any and all options, and is prepared to do what is
reasonable to see these mills operate into the future.
2005 03 16 2:25 p.m. |