It's not a federal bailout for the embattled Canadian pulp and paper industry, but Ottawa is throwing the sector a lifeline with $1 billion to make mills 'greener.'
Federal Natural Resources Minister Lisa Raitt announced a new Pulp and Paper Transformation Program, June 17, designed to improve energy efficiency and environmental performance.
The move was made to head off a threatened Canadian trade action against the United States over a huge $6 billion black liquor subsidize that threatened to dump cheap pulp into international markets.
The program provides funding of $0.16 per litre of black liquor, up to a maximum program total of $1 billion. Black liquor is a liquid by-product of the chemical pulping process used to generate renewable heat and power. Raitt said the government is laying the foundation to make the sector more sustainable for the long haul.
Eligible companies will be required to invest this money over the next three years in capital expenditures on any pulp and paper mill in Canada, including mechanical mills.
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