Corner Brook's mayor and the president of the board of trade say they're concerned about a new tariff on newsprint but are confident the local pulp mill will be able to handle it.
"It's never good news when you hear that your local industrial tenant's getting slapped with a tariff," Mayor Jim Parsons told CBC on Wednesday.
A ruling late Tuesday night by the U.S. Department of Commerce imposes a preliminary tariff of 9.93 per cent on all uncoated groundwood paper, such as newsprint, sold to the U.S. About half of Corner Brook Pulp and Paper's annual production — some 120,000 tonnes — is exported to the States.
Parsons says he doesn't think a new tariff will spell the end for the mill on Newfoundland's west coast.
"I know there's been rumours for years and years and years, but the mill has been very stable, so I don't want to start casting any negative energy on where the mill will go in the short term," he said.
"It just shows we're not out of the reach of the crazy politics that are going on in the States now, and the protectionism, and the Donald Trump factor," he said. "It's not pleasant, but I'm optimistic that we can find a way through it."
Globalization pros and cons
Keith Goulding, president of the Corner Brook Board of Trade, said Trump's protectionism is the downside to the globalization that has also benefited the mill.
"All roads seem to lead to Trump, don't they?" he said. "Globalization is impacting us in a number of positive ways. All this paper is produced and they export it all over the world, so we benefit from globalization, and now we see some of the negatives as well."
'There may be organizations that have more empl0yees, but the mill is the reason for being, for Corner Brook. It's the reason we're here in the first place.' - Jim Parsons
Corner Brook Pulp and Paper is still an important part of the town, said the mayor.
"There may be organizations that have more employees, but the mill is the reason for being, for Corner Brook. It's the reason we're here in the first place. It's still a very, very, very important part of our economy. It brings in new money to the region and to the province, so it is very important."
Concerns about sustainability
Goulding said he's concerned about the mill's profitability and sustainability with the new tariff, estimated to cost about $8 million at current market prices. But he said the mill is still the cornerstone of the local economy.
"It is still what founded Corner Brook. It is still the main part of what's driving the local area and local economy," he said.
"Eight million dollars is a lot of money. I think, I'm optimistic, that it's something that Corner Brook Pulp and Paper can absorb and can work with. I'm worried and concerned if you see more down the road. If you get up to $10, $20, $30 million, how can we sustain that at that point?"
It's a very competitive industry, he said.
"Kruger has done an excellent job of sustaining itself and positioning itself to weather a lot of the storms we've seen over the last decade," he said, pointing to AbitibiBowater closing mills in Newfoundland in 2005 and 2009 during downturns.
"Corner Brook Pulp and Paper was able to sustain that, partially because of the energy. They had to produce their own energy at Deer Lake Power, so that's an important asset for them, and that's what's been sustaining Corner Brook Pulp and Paper, and that's what I hope is going to help make this blow softer and something they can absorb."
The mill has the benefit of a stable power supply, local infrastructure and a relatively weak Canadian dollar, said Parsons.
"So there are a number of advantages, and I think there is an opportunity for the mill to work its way through these challenges, so I'm optimistic."