Region Archives: Canada East

SAGUENAY, QUE. — Wood, as well as aluminum, are economic drivers in Quebec’s Saguenay-Lac-St-Jean region north of Quebec City. The … looming 25 per cent tariffs are leaving businesses in Saguenay-Lac-St-Jean bracing for impact. Inotech, a company that specializes in manufacturing equipment for the wood industry, said the economic disruption started in early February, when Trump had initially promised to impose tariffs, before delaying them. “In Quebec, the entire wood market was paralyzed,” said Michel Marceau, the company’s CEO. “People are waiting to see what will happen and during this time, no one is investing,” added Michael Dufour, Inotech’s sales director. A recent study from the Canadian Chamber of Commerce identified Saguenay and Drummondville — a city northeast of Montreal — among the Canadian cities most vulnerable to U.S. tariffs.

The Domtar saw mill, formerly Resolute, in Thunder Bay exports almost 90 per cent of its produced softwood lumber to the U.S., and like the many other Northwestern Ontario mills in the forestry sector, will likely not feel serious impacts from the U.S. government’s imposed 25 per cent tariffs, a local union official says. The impact is expected to be felt by the Americans. Stephen Boon, the northern area director for the Unifor union, called the pending 25 per cent tariff on softwood lumber a “double whammy” as lumber producers deal with existing tariffs. …”Trump has said he doesn’t need (Canada’s) lumber while we still provide the U.S. with 25 per cent of it…,” Boon said, calling Trump’s claims a “bluster.” “It’s not a factual statement. They do need our lumber, and even if he tries to open up federal forests for logging, it’s not something that’s going to happen overnight.”

A new-era pulp mill in Nova Scotia would be a game-changer, creating long-term export-focused good-paying jobs in the forestry sector and throughout the economy. That’s why, over the past nine months, our team has worked with Northern Pulp as they assess the business case to build and operate a new mill in Liverpool. Today, the company announced that it has not reached the financial threshold to support a project, as defined by the settlement agreement, and is looking for a five-week extension to review the financial model. The Province agrees to this extension and would welcome news of a change in circumstances that would positively affect the outcome. …If not this project … our doors are always open for other interesting projects that put our natural resources to work. …And we would continue to work alongside the forestry sector to find new ones. This file is not closed – it’s very much open and active.

• Aaron Beswick in the Chronicle Herald: New Queens County pulp mill would need government support: Northern Pulp

Nine months after Northern Pulp started examining the viability of a new mill in Queens County, Premier Tim Houston says the work continues. Houston announced last May that his government and officials with Northern Pulp’s parent company had reached a settlement agreement that ended years of legal wrangling, and would allow time to explore the viability of constructing a new mill at or around the site of the former Bowater mill near Liverpool. That work was expected to take about nine months. On Friday, the premier told reporters that he believes the company is still working to complete its feasibility study. …Natural Resources Minister Tory Rushton said the forestry sector needs a market for pulpwood and low-grade wood products to take the place of what Northern Pulp used to consume.  …Rushton noted that there could be other options, such as the creation of biofuels and aviation fuels using forestry byproducts.

Vincent Miville

U.S. President Donald Trump has announced an exemption from tariffs on Canadian goods covered by CUSMA. At the height of the trade war between the United States and Canada, Ottawa responds to U.S. tariffs by imposing its own counter-tariffs on various products. However, this approach is not the one favoured by former Quebec Premier Philippe Couillard, who discusses it with our host, Catherine Lafrance. We examine the potential impact of tariffs on the Canadian forestry industry with Vincent Miville, Director of the Fédération des producteurs forestiers du Québec. According to Régis Genté, author and correspondent in the Caucasus and Central Asia for Le Figaro, RFI, and France 24, there is nothing surprising about Donald Trump’s conciliatory attitude towards Russia, as Putin’s nation has been “cultivating” him for decades—a topic he explores in his recent essay, Our Man in Washington.

TORONTO – Kruger Products announced a new creative campaign, ‘Made by Canadians for Canadians,’ to remind consumers, now more than ever, to embrace their uniqueness and buy made-in-Canada tissue products. With over 2300 Canadian employees and nine manufacturing facilities strategically located nationally, Kruger Products is making it easier for Canadians to choose everyday quality tissue products made by, and in, their communities. Double-double ply Canadiana for the win. The new campaign leans into the nuances of Canadiana with humour to ensure consumers everywhere tip their toques (not hats), direct guests to the washroom (not restroom), embrace the extra eh-bsorbent and go the extra kilometre (not mile) for the environment with well-known brands. Made by Canadians for Canadians. Like Canadians, the campaign is a perfect combination of practical, humourous and helpful for those looking to identify and buy goods manufactured in Canada.

Irving Paper says it doesn’t want a government subsidy to save jobs, but that the province does need to step in to find a solution to high electricity rates. That’s as the company is criticizing “management issues” at NB Power. The Saint John manufacturer announced that it is cutting 140 jobs at its Bayside Drive mill. ….But in a new letter, Irving Paper VP Mark Mosher said a subsidy won’t work as it’s a problem affecting all New Brunswick ratepayers. …“For all of New Brunswick’s energy intensive and trade exposed industries, the issues and repercussions of uncompetitive electricity rates are not new and continue to worsen.” …Natural Resources Minister John Herron recently said his department has been working with J.D. Irving to develop a “financially sustainable” solution that preserves jobs for New Brunswickers. [to access the full story a Telegraph-Journal subscription is required]

KP Tissue says it won’t provide guidance for its next quarter and has delayed a decision on a major capital investment because of US tariffs. The publicly traded Mississauga-based company, which owns 12.5% of Kruger Products and shares the same management team, typically provides earnings guidance when it reports earnings. But CFO Dino Bianco said that Kruger/KP would not provide profit guidance for Q1 “given the evolving news and volatility.” …Roughly one-third of Kruger’s revenues are exposed to tariffs, made at its nine Canadian plants and Canadian softwood pulp used by its one US facility, in Memphis. The company has also delayed a decision on where to locate a new US$600-million tissue manufacturing facility. Kruger has scouted locations in Canada and the US and had expected to make its pick in early 2025. …Further complicating the decision, he said, are the exchange rate, possible reciprocal tariffs, a potential recession and “collateral impacts around freight.” 

The CEO of the pulp and paper mill in Kapuskasing, Ontario, says he was not surprised, but is disappointed by US tariffs that are expected to have a big impact on Canada’s forestry sector. “The pulp and paper business is in a very difficult place in Ontario,” said Terry Skiffington, the CEO of Kap Paper. In January, the century-old mill, historically known as Spruce Falls, received a $10-million loan from the provincial government to help the business diversify… by building a biomass plant which would produce energy by burning wood that can’t be used for paper production. …”We can move products into Europe, into Asia and into India relatively competitively, which is odd intuitively when we’re sitting in the centre of Canada,” he said. …”I’m feeling like I’ve done a few rounds in the ring with Mike Tyson, but our intention is to remain on that course,” Skiffington said.

Like other New Brunswick forestry towns, the rural community of Kedgwick is on edge. The economy of the municipality relies on two major sawmills, J.D. Irving Ltd. and Groupe Savoie, and several smaller forest operations. …About 24,000 New Brunswickers work in the forestry sector, and 80 per cent of the industry’s output — softwood and hardwood lumber, pulp and paper, shingles, fibre and strand board — goes to the United States. …The market share for Canadian wood in the U.S. has dropped from 34 per cent in 2000 to 23 per cent last year because of multiple factors, including the duties, said Dustin Jalbert, a wood products economist with the U.S. price forecasting firm Fastmarkets. But there still isn’t enough American supply to completely replace Canadian wood, even at higher prices, and the U.S. industry couldn’t ramp up to meet that demand for three to five years, he added.

New Brunswick’s natural resources minister says he’s working closely with Irving Paper to ensure a durable solution is in place to save jobs at its Saint John mill. John Herron said the need to protect the plant on Bayside Drive on Saint John’s east side was urgent, given the number of high-paying jobs – 143 – and economic activity at stake. …“It’s certainly not lost on me that the plant is very important to the regional economy and the provincial economy. …J.D. Irving, Limited, the mill’s parent company, announced early last week that it would shut down one of its two machines at the old plant because it said NB Power’s high industrial rate for electricity was making it uncompetitive in the global paper industry. …The machine that’s being shut down is the most energy intensive of the two.

NEW BRUNSICK — J.D. Irving Ltd.’s claim that “uncompetitive” electricity prices charged by N.B. Power is exclusively responsible for forcing it to close a production line at its east side Saint John paper mill has pushed the provincial utility and its rates into the spotlight. And N.B. Power is not taking the criticism quietly. …Dominique Couture said, “N.B. Power large industrial rates are lower than Nova Scotia, P.E.I., HydroOne (in Ontario), Alberta and are on par with Saskatchewan.” N.B. Power did raise industrial and residential rates 13% in the past year and has plans to raise them more than 9% again this year, beginning on April 1. Still N.B. Power disputes that has made electricity pricing uncompetitive in New Brunswick. …Quebec and British Columbia have substantial hydroelectric production and offer industrial power rates to mills between 10 and 28 per cent below N.B. Power’s subsidized rate.

Related coverage by the Telegraph-Journal Editorial Board: Power rates are a real problem. An Irving subsidy isn’t the solution

ESPANOLA, Ontario — Resource towns dot the Canadian landscape; they blossomed during the boom times of the last century. Lumber mills, plywood factories, and plants producing rolls of newsprint – with their signature aromatic plumes of smoke – defined many places on the Highway 11 or 17 corridor. …In the 21st century, no municipality relying on one industry can think itself safe from global change or distant corporate headquarters driven by the bottom line. Espanola, located about 71 km west of Sudbury, is another northeastern Ontario community where a mill closing sent ripples through the local economy. On Sept. 6, 2023, Domtar announced it would “indefinitely idle” its pulp and paper operations. …In a town of 3,986 (as of 2021), about 450 workers were affected almost overnight.. …”We are launching a process to establish an economic diversification strategy for the region. …It is only a matter of time before something establishes itself there.”

Jennifer Murray

Unifor says it won’t stop fighting for unionized paper mill workers receiving layoff notices this week from J.D. Irving Ltd. Jennifer Murray, Atlantic regional director of Unifor, said 100 of the 140 people laid off from Irving’s Saint John paper mill workforce are Unifor members. …Workers of these specialized jobs were notified Monday they would be laid off officially within 45 days, said Murray. …Murray said JDI was in discussion with Unifor regarding rising energy costs. Unifor had several meetings with the provincial government to find strategies to protect these jobs. …So far, JDI has said there may be opportunities for some of these workers to be put in positions elsewhere within the company. …Unifor had a meeting with Natural Resources Minister John Herron Tuesday on strategies to bolster the forestry industry in the province.

It was only a matter of time before the folly of NB Power’s mismanagement would hit New Brunswickers where it hurts the most: their jobs. Irving Paper announced layoffs for about half its employees, 140 people, on Monday. The company was frank about the reason: uncompetitive power rates. There is no reason to think this is some kind of corporate bluster. New Brunswickers have seen for themselves what’s happened to their power bills. …Since the turn of the century, it has been clear NB Power was on a very bad financial path. That’s principally the fault of the utility executives and the board. …As NB Power tries to squeeze the lemon even tighter, it will drive more companies to either downsize, leave the province, or shut down altogether. J.D. Irving, Limited, the parent company of Irving Paper, understands this well.

J.D. Irving announced that it will permanently reduce operations at its Saint John paper plant, laying off 140 workers. Workers at Irving Paper were informed Monday morning that the layoffs will take effect immediately, according to a release from the company, which listed the plant’s total workforce at 310 employees. …”As New Brunswick manufacturers face more and more significant headwinds, it is becoming increasingly difficult to shoulder the impact of soaring electricity costs and remain competitive in an international market,” said Irving Pulp and Paper VP Mark Mosher in a statement. The move comes after J.D. Irving advocated last fall at the Electricity and Utilities Board hearing against changes to the way N.B. Power calculates charges. At the hearing, N.B. Power argued the move was a self-serving attempt by JDI to escape expenses the company wants others to pay for.

In related coverage:

• CBC News: Residents urged not to despair after Irving cuts Saint John workforce
• Telegraph-Journal: Irving mill lays off nearly half its workers, blames NB Power rates

Corner Brook Mayor Jim Parsons says Newfoundland and Labrador Hydro isn’t providing a handout by buying Corner Brook Pulp and Paper’s electricity from Deer Lake Power. Hydro is buying power at 27.5 cents per kilowatt hour — nearly double the average domestic electricity rate — and it doesn’t need it to supply customers. ..But Parsons said they’re a very stable backup when they have problems elsewhere,” Parsons said. “Yes the rate is high, but it’s what you would pay for this kind of thing. So I think that yes, it is important that our government supports the mill in various ways, but I think it’s a mischaracterization to say this is a handout.” …”The paper industry is changing, and the mill needs change to remain current. And this is one of the ways in which they can remain current,” Goulding said. …Kruger employs 425 people with a deep trickle-down effect.

CORNER BROOK — The provincial government, through its Crown-owned utility company, is helping prop up the struggling newsprint mill in Newfoundland and Labrador by buying unnecessary electricity from Corner Brook Pulp and Paper at an inflated rate. It’s power that Newfoundland and Labrador Hydro does not need to supply customers, according to the utility company. …N.L. Hydro has confirmed that it is buying electricity from Deer Lake Power, which energizes the paper-making machines at the Corner Brook mill, for 27.5 cents per kilowatt hour. That’s nearly twice the average domestic electricity rate — 15.3 cents, when the basic customer charge is included — on the island of Newfoundland. …The power purchase agreement is just the latest attempt to save the Corner Brook mill by both Liberal and Progressive Conservative governments. …Kruger has described Corner Brook Pulp and Paper as a “vital force” in western Newfoundland’s economy.