Hundreds of workers in Miramichi are heading into the summer uncertain of what's happening with their jobs, but the potentially permanent closure of the UPM Kymmene mills in Miramichi could also cost New Brunswick taxpayers millions of dollars.

Paper giant UPM announced Tuesday it is closing its two Miramichi mills for up to a year starting in August, putting 600 people out of work. However, the company said there will have to be significant changes in the current business environment for the plant to reopen.

UPM is Miramichi's biggest employer, and news of the latest closure to hit the region quickly spread.

On city streets, residents including Leonard Connors said it could devastate the area. 

"It's going to do a lot, a lot of hurt, all along the whole Miramichi," Connors said.

But the impact could reach into wallets beyond Miramichi.

Last year, Bernard Lord's Conservative government gave the company a $1.5-million grant. It also gave UPM $3.5 million in other assistance, including training money.

The money was handed over without conditions, meaning the province can't recoup it now that the mill has closed.

Business Minister Greg Byrne says it's too early to assume the money is gone.

"We're looking at a temporary shutdown at this point, and certainly that's how we're treating this, and we're going to continue to work with the company on an ongoing basis to see if there are opportunities to improve productivity."

Government officials say UPM was offered even more provincial money in December if it modernized its facilities.

The company decided it couldn't afford to do that, so it didn't get the money.

Mayor, minister look at options

Miramichi Mayor John McKay and city council are holding an emergency meeting Wednesday evening to figure out how the city will deal with the shutdown.

McKay, who was out of town when the announcement came down, said he was blindsided by it. 

"We want to be in touch with the premier and the federal government to develop a strategy that's going to ensure that Miramichi gets through this and is stronger for it," he said.

Byrne said the province will be looking at ways to help UPM employees who'll be laid off when the company shuts down operations this summer. He said a committee will consider retraining programs for the 600 workers and other possible economic opportunities for the city. 

He also said there is hope, pointing to the community of Nackawic, where several years ago, the local pulp mill went into bankruptcy and hundreds of workers lost their jobs.

"Now it's a vibrant operation again. It's moved into a bit of a different product line, and it's a successful and viable business," Byrne said.

The Nackawic turnaround, however, came when a new company bought the mill.

UPM official Jyrki Ovaska said that while all options are being considered, putting company assets on the market is unlikely.

"It's not the UPM policy to sell the mill to competitors which would continue production in the same business area which is one of UPM's main areas. So the shutdown is not a signal that the mill is up for sale."

Both Ovaska and Byrne said the best hope for UPM and its workers is an improved business climate.

UPM said it's shutting down the Miramichi operation because there's too much magazine paper on the market right now and the strong Canadian dollar is hurting business.