St. Mary's Paper to re-open with $8.8 million from province

St. Mary's Paper to re-open with $8.8 million from province

Today's announcement by Sault MPP David Orazietti of $8.8 million in provincial cash to re-open St. Mary's Paper is all about hope.

Today's announcement by Sault MPP David Orazietti of $8.8 million in provincial cash to re-open St. Mary's Paper is all about hope.

It's hoped the Sault operation will start producing paper in time to take advantage of strengthening markets, says Orazietti.

That's why the Ontario government is lending the century-old paper mill another $8.8 million.

St. Mary's Paper, meanwhile, also hopes to capitalize on an opportunity to enter into a deal with a local First Nation to produce wood pellets which it will sell on the open market for home heating.

In addition, the Ontario government is hoping that St. Mary's Paper will benefit from its Northern Industrial Electricity Rate Program and reduce its production costs enough to have a viable business plan.

And St. Mary's Paper hopes to generate a portion of the electricity it needs for production from a co-generation project that would be partially fuelled from hog-fuel, or waste forest byproducts of its production process.

The paper company shut down in March because of unfavourable market conditions and now its expecting to resume production of paper from one machine initially by December.

A media release from David Orazietti's office follows.

***************************** Orazietti delivers $8.8 million to re-open St. Mary's Paper

Province continues to invest in Sault industry to protect jobs and strengthen community

SAULT STE. MARIE - The provincial government is providing an additional $8.8 million to St. Mary’s Paper Corporation in order for the super calendar printing mill to re-start its primary printing machine in time to take advantage of strengthening markets and secure orders for the busy holiday season, David Orazietti, MPP announced today.

"Our government is making an additional $8.8 million investment to re-open St. Mary's Paper, which will directly and indirectly benefit hundreds of workers and their families in the Sault and area," said Orazietti. "We are continuing to provide unprecedented levels of funding for health care, education, new infrastructure and economic initiatives that are improving public services and strengthening our community."

Through the Ministry of Northern Development, Mines and Forestry (MNDMF) the Ontario government is providing an $8.8 million loan to help St. Mary’s Paper reopen and take advantage of strengthening markets.

The provincial government has been actively engaged with officials at St. Mary’s Paper since March, 2010 when the mill curtailed operations as a result of unfavourable market conditions.

The province has also committed to ensuring the appropriate wood supply will meet the company’s needs.

"The government of Ontario has been exceptionally supportive of St. Mary's Paper," said Dennis Bunnell, CEO of St. Mary's Paper Corporation. "This provincial funding provides the cornerstone we need to build a sustainable bio-mass based enterprise that begins with resuming paper manufacturing and bringing back many direct and indirect jobs to the community and to Northern Ontario."

In 2006-2007 the Ontario government provided $17 million to facilitate the restructuring of St. Mary’s Paper.

The province was the only level of government to deliver support in 2007 and it is the only level of government contributing to today’s announcement.

In response to challenges in the forestry industry, such as escalating costs and a high Canadian dollar, the provincial government, beginning in 2005, made $1.08 billion available to the forestry sector in Ontario.

The province’s commitment to the forestry sector to update equipment and improve energy efficiencies is the largest-ever provincial investment in the forest sector in Canada.

Investments under the province’s $1.08 billion forest sector initiatives funding include:

- $350 million in loan guarantees

- $328 million for the construction and maintenance of forest access roads‬

- $150 million in conditional grants to support new capital investments‬

- $140 million in electricity rebates for Northern pulp and paper mills ‬

- $79 million in timber and stumpage price adjustments/ rebates

- $37 million to improve the Forest Resource Inventory‬

- $4 million in an Ontario Wood Promotion program to enhance value-added manufacturing‬

The re-opening of St. Mary’s Paper also means that the company will qualify for the provincial government’s northern industrial electricity rate program (NIERP), which was announced in Ontario’s 2010 Budget.

The NIERP program is worth $150 million annually and it allows large industrial facilities, such as St. Mary’s Paper and Essar Steel Algoma, to reduce their electricity costs by an average of 25 percent.

Today’s announcement is the latest example of how the provincial government is making Sault Ste. Marie stronger and more prosperous.

Other initiatives include:

- $408 million new Sault Area Hospital project

- $80 million for construction of 4 New School Projects

- $40 million for new Long-Term Care Home

- $30.4 million in Municipal Transfers including OMPF and uploading service costs (43 percent increase in 7 years)

- $25.8 million for St. Mary’s Paper Corporation ($17 million to re-open in 2007)

- $25 million for municipal road construction and improvements

- $16.5 million for Huron Central Rail line upgrades

- $15 million for construction of Invasive Species Research Centre

- $8 million for construction of new Academic Building at Sault College

- $8 million for construction of new Biosciences Centre at Algoma University