HALIFAX - Nova Scotia's premier is calling on the province's private utility company to take in less profit after the NewPage paper mill in Port Hawkesbury announced it would shut down indefinitely next month.
Darrell Dexter said he wants Nova Scotia Power to drop its plans to look for an increase in its rate of return on investment at power rate hearings in September given the economic circumstances affecting the mill and the 1,000 workers it is poised to lay off.
"I think that's inappropriate given everything that we know," Dexter said Tuesday following a meeting with mill executives.
"My advice to them would be to withdraw it. I think we need to be realistic about the cost base for these industries but also for residential ratepayers."
Nova Scotia Power filed an application to increase the rate of its return on equity to 9.6 per cent from 9.35 per cent. It did not immediately return a request for comment Tuesday.
In June, NewPage and another Nova Scotia paper mill -- Bowater Mersey Paper Company Ltd. of Liverpool -- also filed an application for lower electricity rates with the province's Utilities and Review Board.
Dexter wouldn't say whether NewPage officials asked him to support its bid for a lower rate. He said the review board would have to strike a balance in its considerations.
"We want our industry to have competitive electricity rates and what we don't want is to drive up residential rates," said Dexter.
He said the government was willing in the meantime to help market the NewPage paper mill's products to emerging markets in Asia and South America.
"One of the questions is how do we go about marketing that mill more appropriately ... to ensure that they have good stable and profitable markets to sell into."
Dexter wouldn't say whether the company requested financial help. He said he has assigned the mill's file to a group of cabinet ministers that would look for possible solutions to the company's financial woes.
NewPage has said its Port Hawkesbury mill has been unprofitable for more than a year.
It acquired the Cape Breton plant in late 2007 when it bought Stora Enso's North American assets in a deal worth US$2.5 billion.
Earlier that year, the Nova Scotia government gave $10 million to Helsinki-based Stora as part of a seven-year, $65-million deal to help keep the plants operating until 2013-14.
Bill Stewart, director of woodlands for NewPage Port Hawkesbury, said he didn't know what it would take for the province to save the mill.
"It's a complex issue," said Stewart. "I don't know that there is a single issue, but we need to work hard to find those solutions."
Dexter said he was looking at all options to help the Cape Breton mill, which has struggled with a high Canadian dollar and rising shipping and electricity rates.
He will meet with union leaders, Mayor Billy Joe MacLean and Cape Breton-Canso Liberal MP Rodger Cuzner in Port Hawkesbury on Wednesday.
He said he was also prepared to travel to NewPage's Ohio headquarters to talk with the company's ownership group, but not until he has a plan in place.
