Bowater cuts pulpwood pay by 10%
The Bowater Mersey paper mill has imposed a ten per cent cut in the price it pays for wood harvested from private lands.
Andrew Fedora, the executive director of the Federation of Nova Scotia Woodlot Owners, said the price cut was effective Monday — from $36 a tonne to $32.50 a tonne.
"We've seen a drop in pulpwood by roughly 10 per cent," Fedora told CBC News on Tuesday.
"If you're an average person that might not seem like a significant decrease but when you're talking production of wood, it has quite an impact on landowners."
Resolute Forest Products, the owner of the Liverpool mill, has made it clear it needs to save money in every aspect of the business if the paper mill is to survive.
Unionized workers at the mill have already agreed to concessions that will see 110 full- and part-time jobs cut and the local municipality approved a 15 per cent property tax reduction for the mill, worth $135,000.
The province has also thrown Bowater Mersey Paper Co. Ltd. a $50-million lifeline over the next five years to keep the paper mill afloat, which includes a grant of $25 million to help overhaul the newsprint-making process.
'Not a big surprise'
Fedora, who represents approximately 1,200 woodlot owners in Nova Scotia, said companies that harvest from private woodlots for Bowater Mersey are now feeling the pain.
"It's honestly not a big surprise. I mean, looking at it from a company perspective, they're trying to do everything they can to cut corners and cut costs," he said.
"It's much easier for a large company to deal with a select few large contractors as opposed to a scattering of smaller contractors. But that doesn't do anything to really help your rural, local communities."
Fedora said the pulpwood price cut will affect hundreds of woodlot owners and small contractors in western Nova Scotia, who have already been feeling pressure after the closure of the NewPage Port Hawkesbury mill in Cape Breton.
"If the price was to drop a couple of more dollars a tonne, you could see a lot of people go out of business," said Fedora.
"I think the mills do realize that there is a threshold and they've always looked at that — that if you cut it too low, you're going to completely lose your infrastructure."
Pierre Choquette, the director of Canadian Public Affairs for Resolute Forest Products, confirmed the price cut to CBC News but declined to go into further details.
"Pricing is a matter between the company and contractors," he said.
"This is a response to supply and demand. It is about market conditions."