Pension protection agreement for workers at Corner Brook Pulp and Paper
Deal will offer up Deer Lake and Watson's Brook power plants as collateral
Corner Brook Pulp and Paper and the Newfoundland and Labrador government have come to an agreement to protect pensions for the mill's employees in the event of bankruptcy.
In an interview with the Corner Brook Morning Show on Monday, Minister of Municipal Affairs Eddie Joyce said the deal will take care of the mill's unfunded pension liability by using the company's Deer Lake and Watson's Brook power plants as collateral.
"This is a win-win for the pensioners, for Corner Brook Pulp and Paper, and the current workers at the mill," he said, adding that the deal has the support of the mill's union and retirees.
With the agreement, Joyce said the company will be able to increase focus on maintaining daily operations at the mill and look towards the future.
Modifies 2014 loan
The deal is a modification of a prior agreement from 2014 that saw the province give the company a loan of $110 million dollars.
Joyce said that if the mill goes under, the province will receive the power plants at their current valuation, and any additional money over the $110 million already invested will go to fund pensions.
The plant is currently valued at $150 million, he said, and that will increase to $175 million in 2018 and $200 million by 2019.
"Once this is approved, if Corner Brook Pulp and Paper went bankrupt, this money from the power plant will go directly to the pension plan," Joyce said.
With files from the Corner Brook Morning Show