Pulp and Paper Industries Eligible for Funds

Wednesday, June 17, 2009 09:50 AM

Canadian Pulp and Paper producers who invest in improved energy efficiency and environmental performance may qualify for funding from a new, $1-billion Pulp and Paper Green Transformation Program, Minister of Natural Resources Lisa Raitt announced today.

“This new funding will help ensure that Canada has a pulp and paper sector that is both commercially and environmentally sustainable for years to come,” said Minister Raitt. “By making a smart investment today, we are laying the ground work for a greener, more secure future for the pulp and paper sector and the people who work in it.”

The Green Transformation Program intends to provide funding of $0.16 per litre of black liquor, up to a maximum program total of $1 billion. Black liquor is a liquid by-product of the chemical pulping process used to generate renewable heat and power. Eligible companies participating in the Green Transformation Program will be required to invest these funds over the next three years in capital expenditures that make improvements to energy efficiency or environmental performance on any pulp and paper mill in Canada, including mechanical mills.

“Every dollar made available through this program will benefit forest-based communities across Canada and provide them with a brighter future,” said the Honourable Denis Lebel, Minister of State for the Economic Development Agency of Canada for the Regions of Quebec.

In addition to its ongoing support of Canada’s forest sector, the Government of Canada is providing $170 million over two years under Canada’s Economic Action Plan to help companies develop new products and processes and capitalize on new market opportunities internationally.

The $1-billion Community Adjustment Fund and $1-billion Community Development Trust are helping to mitigate the short-term impacts of economic restructuring in communities hard hit by the recession.

To minimize the financial impact of the downturn on workers and the communities they live in, the Government is providing $200 million to extend work-sharing agreements over the next two years to a maximum of 52 weeks. This funding will help employers and employees avoid temporary layoffs while their industry recovers.

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Posted on Wednesday, June 17, 2009 09:50 AM in News by 250 News

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Comments

Posted by: The Real Moses on June 17 2009 10:20 AM

If I read this right, there is government funding for Pulp Mills to clean up their emissions? Yay! Stimulus spending well spent. My children, future grandchildren and beyond thank you. Now how about the railroad and the oil refinery...

Posted by: The Real Moses on June 17 2009 10:24 AM

Maybe we should send some lobbyists to the States to convince Obama to give the American oil refineries and rail yards an unfair subsidy, and that will get Ottawa to move... like it did on the pulp mill black liquor deal :-)

Posted by: gus on June 17 2009 11:19 AM

Nope, not necessarily, as I read it.

Does not need to have anything to do with emissions. It has to do first with ensuring that byproducts of the industrial process which can be used to fuel the process are used for that purpose.

If it is used for that purpose, they will get funds per litre used that must be used to �invest these funds over the next three years in capital expenditures that make improvements to energy efficiency OR environmental performance.

"The Green Transformation Program intends to provide funding of $0.16 per litre of black liquor, up to a maximum program total of $1 billion"

If I am reading this correctly, the Canadian subsidy must be used to improve operational performance standards while it sound like in the USA it is an unconditional subsidy and can be used to lower prices and become more competitive in that fashion.

Posted by: The Real Moses on June 17 2009 11:56 AM

I don't think the US black liquor subsidy has a hope of surviving for long. It's expensive to the taxpayer, and does not produce a sustainable return. It's welfare for the wealthy, with no real economy fix. Sure, it temporarily give's their pulp mills a boost, but it doesn't make people buy more paper, or read newspapers...it just rewards the pulp mills for flooding the market with more product. If the Canadian plan works as described, the boost helps older mills update their technology to become more efficient. Hopefully the Americans will see the light, and change their subsidy loophole and do something that has long lasting value instead. The real solution with both the Canadian and American pulp/paper industries is getting more demand for pulp and paper, or learning to live with the decreased demand...or adapting to provide new products, for which their might be a demand. Maybe it's OP250's fault, too many people reading the news online, and not buying newspapers :-)

Posted by: Windigo on June 17 2009 12:09 PM

Where was the Minister Of Natural Resources Lisa Raitt with the $1-billion the Sawmill industry could have used to help them through the hard times almost two years ago.
This new focus of trying to make sure the Canadian pulp mills are going to remain competitive and viable for years to come just goes to show us all that the sawmills are going to be an extinct industry very soon.
The best way to keep your cost's down in the pulp industry is to eliminate the middle man (the sawmills) and log for chips. The operating cost's to fall a tree, chip it (saw logs inclusive) and then truck the chips to a pulp mill is a lot cheaper without the sawmills being a part of the process.
A very high portion of the logs in the area are pulp and this makes the chipping companies drool, knowing that a good portion of the fiber in B.C. is destined for chips for the pulp mills. In fact these chipping facilities can take a good portion of the responsibility for local mill closures. The Canfors, West Frasers, Iterfors and Tolkos of the world used to need the chips from the sawmills, but the above companies have all concluded that it is cheaper to pay a chipping contractor to chip all the logs harvested (including saw logs) rather than mill the logs into lumber and chips, creating jobs and keeping a viable industry alive.
I believe that it is time for all of us to realize that what the Canfors, West Frasers, Iterfors and tolkos of the world want they will get....after all they are the government, Gordo and all of our so called elected MPs are no more than over paid front men who will do as they are told regardless of impact.

Posted by: He spoke on June 17 2009 12:13 PM

Hmm, seems like we are missing out on the big picture. we have to burn diesel instead of natural gas to be more environmentally sound.

At least we are smarter than our ugly brother to the south. our funding is tied to improving the mills, theirs are still a straight hand out.

Posted by: diplomat on June 17 2009 12:45 PM

Before we do anything it would be better to wait for the predictable American backlash, punishing duties and lawsuits to see if we can get away with it.

They are bigger than us. And perhaps more desperate.

Posted by: swingline on June 17 2009 4:20 PM

Windigo, that doesn't make much sense, as you're still paying stumpage on sawlogs even though you'd be chipping them?

Posted by: NMG on June 17 2009 5:34 PM

Money well spent and a step in the right direction IMHO. I think anything that helps make the mills more efficient and also helps on the environmental front should be welcomed. It would appear that this money will help in the short term while also having longer term benefits.

Posted by: kitkat on June 17 2009 6:41 PM

Windigo is dead wrong. It is way more expensive for a pulpmill to chip whole logs and they only do it out because they have to in order to run. (Because of so many sawmill closures).
Sawmills absorb the costs associated with getting the logs out of the bush. Stumpage, contractors, delivery, road building, environmental compliance... Pulpmills only pay for chips, and if the sawmills are selling their product for a profit than the money they get for chips is a bonus.
Pulpmills do not want to absorb these costs.