A recent review of the largest industrial employer in Cape Breton and the leader in supercalendered paper manufacturing in North America confirms that it continues to drive the economy.
In the fall of 2018, Port Hawkesbury Paper LP (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 since the mill was re-opened in 2012 under new ownership, total expenditures exceed $1 billion.
In 2017 the mill’s operating expenditure in the province exceeded $170 million. According to the study, this spending triggers additional output in the rest of the Nova Scotia economy valued at an estimated $132 million, for a total of $302 million in expenditures. Tax revenues of all types – from both direct and spin-off activities – amount to approximately $27 million annually from PHP. This includes personal income tax, taxes on products and production, and municipal taxes.
The study also notes that PHP generates approximately $25 million in direct labour income. This equates to an average income of $75,000 per employee, 44 per cent higher than the average industrial wage in Nova Scotia.
The mill generates 325 direct full-time equivalent jobs and an estimated 700 indirect jobs in the region.
Allan Eddy, PHP’s director of business development, said the study demonstrates that the mill is a significant economic engine for eastern Nova Scotia, calling it “an integral piece of the communities here.”
Eddy pointed out that Port Hawkesbury Paper’s spending reaches virtually every part of the province, and the mill’s financial impact is critical to Nova Scotia.
While acknowledging that part of the intention behind the study was to address challenges presented by the 20.18 per cent tariff, Eddy pointed out that the company’s ability to respond to that obstacle by finding new efficiencies, made the Point Tupper operation stronger.
Something not included in the economic impact study is that PHP has invested over $3.5 million in the past year to increase the efficiency of the mill itself, which has the potential to increase the output capacity on the pulp side by 15-20 per cent. PHP has also made significant investments in the thermomechanical pulp 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.
This is a far cry from the dark times at the beginning of this decade when former owner NewPage Corporation was trying unsuccessfully to find a new owner, when the NDP government was accused by the current premier of giving away taxpayers’ money in a sweetheart deal, and when union members were heading west for greener pastures.
This was a trying time for everyone and there was no certainty the Strait area’s largest employer was going to keep operating, and even if a buyer was found, would they take it over just to gut it and sell it off for parts?
When the Stern Group appeared on the scene, they came with a sound pedigree. After they purchased the mill, there was belt-tightening and some forestry practices were reprimanded by the province, but overall, the company has proven they can make the local operation work again.
These numbers are proof Port Hawkesbury Paper is moving in the right direction.