Richmond County council has ratified a $1.3 million property tax agreement with Pacific West on the Point Tupper paper mill.
The council said it would offer Pacific West a deal on local taxes if Nova Scotia's Utility and Review Board gives the company the green light to purchase the former Newpage mill.
Pacific West lost its Supreme Court challenge last week to reduce taxes from $2.2 million a year to slightly more than $400,000.
On Friday, the entire proposal to purchase the mill fell through. In a dramatic twist 24 hours later, Premier Darrell Dexter announced a new deal was struck. A part of that new deal is the concession from Richmond County, which was debated Monday night.
With the tax break approved, Deputy Warden Victor David said it will fall on the taxpayers to make up the gap. But he said they would try to keep a tax increase to a minimum.
"For the mill to operate and to produce income in the area is very important to the Strait area and to Richmond County," he said.
During the court process, Richmond County estimated the tax deal would result in a tax revenue decrease of 24 per cent, and a $1.8 million annual shortfall. The county also predicted a potential 26.5 per cent increase in residential taxes and 27.5 per cent increase in business taxes.
On Sept. 14 – before the Supreme Court ruling – Richmond County did offer a compromise to Pacific West for $1.3-million in taxes. But the company rejected the deal.
Politicians weigh in
Energy minister Charlie Parker is downplaying concerns there's no guarantee the mill will survive in the long term. He said the product is unique and that will add to the facility's ability to survive.
"There's real potential in supercalendered paper, it's not just regular pulp but a different product," he said.
If the deal is approved by the province's Utility and Review board, 300 people will be called back to work next week.
"The company is looking at other alternatives and other products that we can manufacture from this wood in our region," said Parker. "They're here for the long term and we're looking forward to working with them."
But opposition parties are not sold.
Liberal Leader Stephen McNeil is critical of the NDP for investing so much in one company.
"I can tell you one thing, if I was the premier there would have been a guarantee, there would have been job guarantees attached to any money that we would have put into a business, making sure that Nova Scotians would be employed," he said.
He said the government has signed too many agreements without guarantees.
"We know the workforce will be cut in half, and there is no guarantee or commitment by stern that they have to employ a certain number of Nova Scotians to benefit from our tax dollars."
Conservative leader Jamie Baillie says the province is simply spending too much.