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| Softwood deal holding up aid for mills: Minister |
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2006/6/15
The province is holding back $50 million earmarked to help New Brunswick pulp and paper mills modernize because the money might violate the new Canada-U.S. softwood agreement, says a cabinet minister.
Business New Brunswick Minister Kirk MacDonald said none of the cash promised last December will be handed out until the province knows it won't be considered a subsidy under the softwood deal negotiated in April by the federal government.
That agreement would end a long-standing trade dispute between Canada and the U.S., but it may not allow the province to spend $50 million to help mills buy new equipment.
"We also have to look very closely at the softwood lumber agreement," MacDonald said.
The cash is part of a $250 million aid package Premier Bernard Lord announced last December to help bail out the province's forestry industry, which has been plagued by the high Canadian dollar and intense global competition.
Mill owners all over the province say they can't compete against more modern pulp and paper mills overseas, and can't afford to upgrade their mills. Some have closed permanently, others have announced temporary layoffs to cut costs.
Seven months after the package was announced, several mills in the province are still in financial trouble, and none of that money has been handed out.
Liberal leader Shawn Graham, who has been lobbying the province to help mills modernize, said the program shouldn't be a problem under the deal. "I strongly feel that an investment tax credit is re-investing profits back into our mill infrastructure. It's not a subsidy," he said.
Graham is calling on the province to clarify how the modernization program will work, before more mills close permanently. |
| Source:http://www.cbc.ca |
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