Orazietti addresses St. Marys Paper situation

NEWS RELEASE

DAVID ORAZIETTI, MPP

************************* Province continues to work with St. Marys Paper

McGuinty government awaiting final information for proposed co-generation project

QUEEN'S PARK - Yesterday St. Mary’s Paper announced that they plan to curtail operations until such time as market and business conditions warrant reopening.

The company’s official press release stated, " . . . difficult business conditions over the last several years including historically low product prices, a high Canadian dollar vs. US currency, recent increases in the mill’s key input costs, and the indirect subsidy of U.S. competitors as a result of the Alternative Fuel Tax Credit Program which was in place through calendar year 2009 in the U.S.” were the key reasons for the current shutdown.

The Ontario government is actively engaged with officials at St. Marys Paper and on Monday, March 8 company officials met in Toronto with the Minister of Northern Development, Mines and Forestry (MNDMF) [and] Sault MPP David Orazietti, as well as ministry staff from MNDMF, and the Ministry of Finance.

The company is currently working to complete a market and sales analysis that will provide necessary information, guide recommendations and help determine the best course of action.

The McGuinty government is the first government in Ontario to introduce power purchase agreements for biomass through an independent process delivered in partnership with the Ministry of Energy and Infrastructure and the Ontario Power Authority (OPA).

In 2009, St. Marys Paper was one of three companies to submit a proposal for co-generation in Ontario through an independent RFP process, however, it was not approved by the OPA due to pricing and engineering considerations.

Despite the earlier unsuccessful application, the OPA agreed to assist St. Marys Paper to determine if it was possible to modify the project to enable it to move forward.

Presently, St Marys Paper is planning on submitting final information within the next several weeks which will allow the OPA to complete its evaluation.

It is recognized that St. Marys Paper needs to achieve a viable business model separate from the possible introduction of co-generation in order to move forward.

“Our government is committed to working with St. Mary’s Paper to help find solutions to the challenges the company is presently facing,” said Orazietti.

In 2006 and 2007 the McGuinty government provided over $17 million and worked with St. Marys Paper to successfully re-open the mill without the assistance of any other level of government.

Since 2003 the McGuinty government has committed to the largest-ever provincial investment in the forest industry in Canada by making a $1.1 billion investment through various programs to assist the forest sector.

These programs stimulate new forest sector investments in value-added manufacturing and co-generation as the industry becomes more competitive and transitions into the future.

************************* Earlier SooToday.com coverage of this story

St. Marys Paper lays off 300.