Ottawa ready to divvy up billion dollar green energy fund among pulp mills

Gordon Hamilton, Vancouver Sun
October 8, 2009

Canadian pulp and paper mills are expected to find out today how big a piece they will get from Ottawa's $1-billion green energy fund, introduced last June to counter U.S. pulp mill subsidies.

The announcement is to be made at Nanaimo's employee-owned Harmac Pacific pulp mill. Harmac was written off when former owner Pope & Talbot became insolvent in 2007 but has not only survived but thrived under its new ownership structure.

"We're excited that the announcement is going to be made at Harmac," said Harmac Pacific president Levi Sampson. "It speaks volumes to what we have accomplished here."

The Harmac mill shut down in May 2008 and was restarted by the employee-led group one year ago. It now employs 275 people.

Sampson said Harmac has plans to use the funds to rebuild its boiler. Under the program, companies can apply for a credit of 16 cents per litre of a pulp byproduct called black liquor that they burn to create energy. The Canadian program has a billion-dollar cap. Companies likely produced enough black liquor to use up the entire fund within the first five months of the year.

The fund is intended to counter an equivalent U.S. subsidy introduced in September 2008 and expected to run until this December, a total of 15 months.

David Gandossi, chairman of the B.C. Pulp & Paper Task Force, said the Canadian program will aid the industry nation-wide but will not be enough to match the impact of the U.S. subsidy.

"The B.C. industry is very pleased with the program. We are very pleased with the speed and the professional approach of the government in implementing it. We just wish it was bigger."

He said the U.S. black liquor subsidy -- estimated at $8 billion -- is expected to end in December, but in the meantime new American subsidies are being introduced to aid the American forest industry.

"We need more to keep up with what is going on across the border."