Hold off on dam decision: mill unions

FORT FRANCES—Local union representatives told town council Monday night that they felt Abitibi-Consolidated having a hydro-generation company here could have dire consequences for the pulp and paper mill.
CEP 92 recording secretary Allan T. Bedard, who has filed an appeal of the decision made by the town’s committee of adjustment to sever dam property from the rest of the mill, said the local unions have many concerns regarding this development.
Bedard said one possibility is that a power trust company would not return any of its profits back into the paper mill for maintenance or new equipment.
“This becomes a scary event when we were told recently by management that they could bring in kraft pulp from Mexico at $25 a ton cheaper than [we] can make it in Fort Frances,” he remarked.
“And we’re told paper is barely holding its own. Scary, isn’t it?
“The potential of shutting down is magnified further when the dam is removed from the mill as a separate entity,” added Bedard.
If the mill is shut down, the town then would lose a significant portion of its tax base. It also would also mean local businesses shutting down, negative impact on secondary industries (like trucking), and youth migration only would increase further.
“The municipal infrastructure and way of life in Fort Frances would be in severe jeopardy if it shut down,” Bedard stressed.
He also felt the 1905 power agreement could be jeopardized if a separate power company was set up, noting the dam was built with the sustainability of the mill and the community in mind.
Losing this agreement would affect everyone in town.
Bedard also noted council has a commitment to the people of Fort Frances to act in their best interests.
Herman Pruys, IAM 771 president and mill council chair, echoed that sentiment, questioning whether the lower hydro rates the town enjoys would be endangered, especially if the new power company has new shareholders looking for dividends.
CEP 306 vice-president Kevin Watts said that if the paper mill has to start paying market prices for power, it would cost an estimated $45 more to produce each ton of paper.
This would add up to a $28 million annual loss.
“I can’t believe we could overcome that obstacle,” Watts remarked. “There’s no way we could recover from it.”
CEP 92 president Thorrot Cox said he has doubts as to whether Abitibi would keep the mill open after starting up the new power company, especially if that power company sells power to the mill at market prices—and consequently drives up the cost of making paper.
He noted Abitibi has closed down its unprofitable mills in the past, but shouldn’t give up the one here just yet.
Bedard noted the mill here actually made a profit of $1.57 million in July, and is projected to make an annual profit of $17 million this year.
That said, Cox noted the local unions have asked the company to put $300 million into the mill here for maintenance and modernization of equipment, but the company only will be spending $177 million to do so—not necessarily an auspicious sign.
CEP 92 vice-president Bruce Wreggitt said the future of the paper mill seems grim, given jobs cuts earlier this year and more recent talk of job realignments and more staff cuts.
“Are they already starting to streamline for the future?” he asked. “I’ve got over 20 years in the mill and I’m not safe.”
As reported in Tuesday’s Daily Bulletin, CEP’s appeal of Abitibi’s 11 applications approved by the committee of adjustment last month will be heard by the Ontario Municipal Board in a future hearing.
Mayor Dan Onichuk said it is crucial the town, Abitibi, and the unions have a meeting prior to this hearing, and discuss issues such as the land severance, the proposed power company, and, just as importantly, the “hog fuel” boiler—an idea to which Bedard ultimately agreed.
“We want this mill to be profitable. We want a bio-mass boiler. We want this mill and the jobs that flow with it to continue on for the next 100 years,” said Bedard.
“We want to work with council and Abitibi in a positive way.”
Bedard and the other local union leaders also were scheduled to have a meeting with Abitibi officials in Thunder Bay on Tuesday regarding the dam/power generation issue.
(Fort Frances Times)