Aid will help Harmac pay for new projects

Robert Barron, Daily News
Published: June 26, 2009

Officials at Nanaimo's Harmac pulp mill say they may not get the maximum amount they qualify for in federal funding from Ottawa's $1- billion aid package for the nation's struggling pulp and paper industry, announced last week, but they expect it will be enough to allow the mill to move forward with long-delayed projects.

Harmac, just one of 27 pulp mills from across Canada that fits the criteria for funding from the Green Transformation Program, is eligible to receive more than $70 million.

The program is designed to help offset approximately $7 billion in subsidies that American pulp mills receive, but only Canadian mills that use black liquor in their operations can qualify for the funding, which leaves out other struggling pulp mills on Vancouver Island.

As well, eligible mills must use the money for either improvements to their energy efficiency or their environmental performance and Harmac has longstanding plans for both, but has had problems accessing credit during the ongoing global recession that's needed to fund new projects at the mill site.

Harmac president Levi Sampson said the mill has been "assured" in a teleconference call with federal officials it will receive a significant portion of the funding, but it will likely be the fall before it's known how much.

In the meantime, Sampson said the mill can finally move forward with plans to build an electrical generation plant that will produce power from wood waste which will be added to the province's power grid, as well as upgrades to the mill's boilers to operate more efficiently with less effluents.

"We'll do the work and pay for it up front and receive the federal for funding for it afterwards," he said. "I think the major lenders will come on board to lend us some money for these projects now that we have the Canadian government to back us up financially."