Kruger Inc. said assistance worth $15.4 million from the N.L. government will help Corner Brook Pulp and Paper survive. (CBC)

A newsprint mill in western Newfoundland has been pulled back from the brink, thanks to a bailout in the provincial budget.

The Newfoundland and Labrador government revealed in Monday's budget it will cover $15.4 million of Corner Brook Pulp and Paper's costs, including its share of replanting and managing forests.

Jean Majeau, who speaks for Montreal-based parent company Kruger Inc., said the assistance will help the company weather the global economic crisis, which has been brutal on newspapers and on the companies that supply their newsprint.

"We're all in a survival mode right now. We want to go through this crisis," Majeau told CBC News.

"What I can say is that it makes the difference … and allows us to keep the mill running until market conditions improve and the mill returns to profitability."

Finance Minister Tom Marshall said the government is increasing its share of the annual silviculture program, which replants trees for future use. As well, the government is foregoing Kruger's annual costs for the forest inventory, insect control and managed land programs.

In exchange for the support, the government said it has reached a deal with Kruger to have some timber rights revert to the Crown.

Corner Brook Pulp and Paper is the only newsprint mill still operating in Newfoundland and Labrador.

AbitibiBowater shuttered a century-old mill last year in Grand Falls-Windsor, and closed a smaller mill in Stephenville in 2005.

The newsprint industry worldwide was in decline even before the recession started.

Majeau said Kruger is confident market conditions will eventually improve.