Dexter defends Bowater purchase

Premier Darrell Dexter provided new details on Tuesdaydefending the province's decision to buy the shuttered Bowater-Mersey paper mill in Brooklyn.

"It is more than the land. It is about people. It is about Nova Scotia gaining control over its economic destiny and bringing new life to the forest industry," he said.

The province announced the purchase on Monday, about six months after Resolute Forest Products closed the former Bowater-Mersey mill, putting roughly 320 people out of work.

Theprice Nova Scotia paid for theplant and land was the lowest in recent years,anofficial with the Department of Natural Resourcessaid atthe "Forestry of the Future"conference.

Shesaid the government ended up getting the land for $524 per hectare, that's less than the $1,507 per acre the province paid for a 2010deal with J.D. Irvingto buy 10 parcels of land in southwest Nova Scotia.

The Bowater purchase includes 220,000 hectares of woodlands, Brooklyn Power Corporation, the mill site and fibre inventory. The province paid $1 for the assets but assumed a total of $136.4 million in liabilities.

According to the asset and liability numbers provided at the lumber conference Tuesday, the provinceexpects to make a profit of $14 million.

Nova Scotia Power's parent company, Emera, has agreed to buy the power plant for $25 million. That money will be used to cover the $18 million inotherliabilities and employee costsfor the mill's former workers.

Dextersaid the cost of servicing the pension debt will be paid byprivate wood harvestersusing some of the land, estimated to bring in about $4 million per year. Pensions for former mill employees will be 100 per cent covered.

The massive tract of land included in the deal covers a land area about the size of Yarmouth County. About 12,000 hectares of the land will be designated as "protected."

The deal did not include the purchase of the Oak Hill sawmill because of concerns that provincial involvement with that asset wouldcause conflict with the CanadaU.S. softwood lumber agreement.

"As disappointing as it is, I think the Nova Scotia government had no other optionbut to back away from the sawmill's sale and purchase," said Dave Coles, president of the Communications, Energy and Paperworkers Union.

Opposition questions

Both opposition parties welcomed the purchase of the land, though they criticized the details of the deal, particularly the cost and future liabilities.

Progressive Conservative Leader Jamie Baillie said assuming $130 million of debt is too much.

"Why haven't we bought some of the land to protect it and regulated the rest ofit to make sure it is available for use? It would've been a much cheaper way for taxpayers," he said.

Liberal Leader Stephen McNeil doesn't like the fact that the provincebought the Brooklyn power plantand flipped it to Emera.

"In 2001, it was valued at $77 million and today we sold it for $25 million," McNeil said. 'It was a wonderful opportunity, quite frankly, for the government to look for expressions of interest outside Nova Scotia Power."

Brooklyn Power is worth less today because it cannot get cheap steam from the pulp mill, which closed.It now runs entirely on biomass.

The governmentsaid the deal for the Brooklyn plant will protect ratepayers andjobs, as well as offer a clean energy source. The plant is expected to generate five per cent of the province's renewable energy for the next 13 years.

The former paper mill itself will be turned into a research centre for forest innovation. The goal is toproduce wood products other than newsprint.