Economic impact study shows PHP still strong despite tariffs

    PORT HAWKESBURY: Six years after its re-opening, Port Hawkesbury Paper LP (PHP) continues to significantly contribute to the economy of Nova Scotia with total expenditures exceeding $1 billion since the mill was re-opened in 2012.

    In the fall of 2018, PHP partnered with Gardner Pinfold to undertake an economic analysis and impact study. The results measured five indicators: the gross value of output, gross domestic product, employment, labour income, and taxes.

    The report confirms that in 2017, the mill’s operating expenditure in the province exceeded $170 million. The mill generates 325 direct full-time equivalent jobs and an estimated 700 indirect jobs in the region. The average income is $75,000, which is 44 per cent higher than the average industrial wage in Nova Scotia.

    “I think what it demonstrates is that the mill is a significant economic engine for eastern Nova Scotia that it continues to be well received in the market place, and that it’s very much an integral piece of the communities here,” Allan Eddy, director of business development said.

    Tax revenues of all types, from both direct and spin-off activities, amount to approximately $27 million annually. Tax revenues include personal income tax, taxes on products and production, and municipal taxes.

    The mill’s supply chain includes over 500 Nova Scotia companies with over $30 million spent on wood harvesting and operations alone.

    “Port Hawkesbury Paper’s spending reaches virtually every part of the province, and the mill’s financial impact is critical to Nova Scotia and provides economic cohesion that stabilizes the community.”

    Eddy acknowledged part of the intention behind the study was to address concerns people had about in the wake of the 20.18 per cent tariff and demonstrate the mill continues to be a very strong economic player in the province.

    “Those tariffs were a very significant challenge to the business,” he said. “One of the strong pieces of it is the company had to respond and find new efficiencies within the mill, which has made us stronger as we come out from under those tariffs.”

    Something not included in the economic impact study is that PHP has invested over $3.5 million this past year to increase the efficiency of the mill itself, which has the potential to increase the output capacity of the pulp side of the process by 15-20 per cent.

    This is the second economic impact study completed since the mill was purchased and reopened in October 2012.

    “The take home message from those if you look at them, they’re fundamentally the same,” Eddy highlighted. “Despite being in the position of a 20 per cent duty, the mill was able to bear down and get focused to work our way through that and maintain that same level of economic impact. That’s a pretty significant accomplishment.”

    PHP is the largest industrial employer in Cape Breton and is the leader in supercalendered paper manufacturing in North America.

    The PHP mill team continues to focus on using all available assets at the mill and investing in research and industry innovation on value-add projects. Most notably, PHP has made significant investments in the thermomechanical pulp (TMP) operations for improving paper production.

    Additionally, the Woodlands team is achieving the highest levels of international certification and management to ensure the long-term sustainability of the 523,000 hectares of mill managed Crown woodlands resources.

    “What the study shows us is we’re on the right path and it’s important we continue to stay focused and work with our customers and our suppliers to run and improve upon a world class business right here in Port Hawkesbury.”