Buying power from Corner Brook paper mill isn't an N.L. Hydro handout, mayor says

Corner Brook Mayor Jim Parsons says Newfoundland and Labrador Hydro isn't providing a handout by buying Corner Brook Pulp and Paper's electricity from Deer Lake Power.

As reported by CBC News on Monday, N.L. Hydro is buying power from the mill's Deer Lake power station at 27.5 cents per kilowatt hour — nearly double the average domestic electricity rate when basic customer charges are included in Newfoundland — and it doesn't need it to supply customers.

Hydro paid Kruger, owners of the mill, $22 million for power between January and July 2024, as part of a six-month contract, which has since been extended and will expire at the end of March, as the mill struggles through a changing newsprint industry.

But Parsons said he doesn't consider the payments a handout and is confident the mill will stay on the west coast for generations to come.

"I think that's really unfair. The mill has provided power to N.L .Hydro many times. They're a very stable backup when they have problems elsewhere," Parsons told CBC on Tuesday.

"Yes the rate is high, but it's what you would pay for this kind of thing. So I think that yes, it is important that our government supports the mill in various ways, but I think it's a mischaracterization to say this is a handout."

Keith Goulding, treasurer and past president of the Greater Corner Brook Board of Trade, says he was encouraged by the agreement when the news broke. He sees it as an opportunity for the diversification the mill needs.

"The paper industry is changing, and the mill needs change to remain current. And this is one of the ways in which they can remain current," Goulding said.

That diversification is essential, he added, especially with how connected the mill is to the city's economy.

Kruger employs 425 people with a deep trickle-down effect.

"You have about a three to one multiplier for businesses that work and support the mill. If you have 400 employees, then you have about 1,200 in the community that work to support those 400 people," said Goulding.

"You have people that work in logging, forestry, trucking all around western Newfoundland and in through central Newfoundland that support the mill and the mill supports them. So it has a large impact here. You are talking thousands of jobs."

Despite hardships, Parsons says he's confident there will be operations and employment for years to come.

The first step is to see if the agreement between Kruger and N.L. Hydro is extended past March, he said, and encouraging the provincial government to keep chat lines open.

"This year is going to be a hundred years for the mill operating in our city. It's the reason for being, really, in Corner Brook," he said.

"[Kruger] have expressed to me that they have a long-term commitment to the city and to employment in the city. So I think that this will all work out."

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