MIRAMICHI, N.B. - More than $17 million in public money will go towards reopening a mill in northern New Brunswick that was shut down five years ago, the provincial and federal governments announced Friday.

The funds will go to Arbec Forest Products, which purchased the former Weyerhaeuser mill in November. The plant made oriented strand board, a material used in home construction, before it closed in 2007 and laid off 140 people.

New Brunswick will provide a $15.3-million package that includes payroll rebates, a $5.6-million loan and a $7-million loan guarantee. The Atlantic Canada Opportunities Agency will give the Quebec-based company $2 million.

Premier David Alward said the two levels of government are making a strategic investment that will create more than 110 jobs at the mill and many others in the woods and supply chain.

"It's more people who will be able to work in the Miramichi instead of having to travel elsewhere for work," Alward said in an interview.

"It's getting people back into the woods and getting the other service companies back to work."

Arbec abandoned plans to take over the mill in 2009 after it couldn't get enough wood to operate the facility.

The mill is getting almost 278,000 cubic metres of Crown wood allocation. Natural Resources Minister Bruce Northrup said the company has committed to purchase a significant amount of wood from private woodlot owners in the area.

Alward said he's confident the work to get the mill reopened will pay off, adding that about $60 million will be injected into the Miramichi area annually as a result of the mill reopening.

Bill Fraser, the Liberal member for the riding of Miramichi-Bay du Vin, said he thinks the government funding for the mill is a good investment.

"We've been hit very hard by the recession in the last few years with the downturn in the forest industry," he said.

"I'm very pleased that Arbec has decided to invest in the Miramichi, and we want to welcome them to our community."

The mill is expected to reopen later this year and be at full production by early 2013.