Economy

The mill employs 230 individuals according to its website.  The majority of those jobs are unionized labourer positions and the remainder is comprised of administrative and managerial posts.  Using Statistics Canada’s 2010 average salary for NAICS 32211 (pulp and paper) of $74,834, the mill pays just over $17 million in wages annually.  Applying a social index factor of 2.3, Northern Pulp contributes slightly more than $39.5 million annually to the local economy through direct employment.

The mill has been a regular recipient of government funding.  Since 2009, Northern Pulp has received almost $130 million in grants and loans, or an average of approximately $32 million per year from 2009-2012.  Unconfirmed reports indicate the mill loses $2 million per month or $24 million per year.  These two figures suggest three important things about the economics of Northern Pulp:

1. The yearly average of $32 million received in government funding compensates for the mill’s losses, thereby functioning as a subsidy to keep the mill in business.

2. With a loss of $24 million/year, Northern Pulp is not contributing corporate tax dollars directly to the province.

3. Although the Nova Scotia taxpayer is not a direct shareholder of the mill, the subsidies provided by the province suggest that the Nova Scotia taxpayer has a vested interest in the operations and profitability of the facility over and above the health and environmental impact.

There has been no full cost accounting of the impact of the mill on the community.  In addition to the direct economic contribution of Northern Pulp and the direct government funds provided to the facility, there are other community costs that have not been quantified.  Pictou mayor, Joe Hawes, reportedly claimed “the pulp mill’s smell has a negative effect on property values and real estate sales as well as the tourist industry, and is probably not good for people’s health” (ForestTalk.com, 2010).

To truly appreciate the economic impact of this facility, it is important to understand these costs.

First, the higher incidence rate of health conditions in the area suggests that health care costs may be similarly elevated in Pictou County as well.

Anecdotally, we are hearing reports from local businesses about the negative impact of the mill on their business potential, guest reviews on TripAdvisor.ca suggest disgust with the mill negatively impacts tourist appeal and desire to return to the town, and the Lonely Planet travel guide likely dissuades potential visitors with this entry about Pictou: “Water St, the main street, is lined with interesting shops and beautiful old stone buildings but unfortunately the sea views are blighted by a giant smoking mill in the distance”. However, a valuation of lost opportunity costs from tourism and other entrepreneurial endeavors has not been undertaken.

Similarly, there is an expectation that the mill has depressed real estate values in the area.

There is also the potential cost to the fishery due to water emissions.  An Australian investigation of softwood pulp bleaching techniques conducted by Nelson et al (1995) concluded that treated ECF (elemental chlorine free) and TCF (totally chlorine free) effluent was still toxic to a range of aquatic test species.  And, Environment Canada reported that between 2007-2010 (Cycle 4 of Environmental Effects Monitoring), almost 70% of Canada’s pulp and paper mills’ effluent had confirmed biological effects on fish, fish habitat and some fisheries resources (Environment Canada, 2012).  As the Environment Canada report did not specify which facilities in Canada were at issue, there is currently no way to know whether Northern Pulp is among one of the 70% of mills creating harmful biological effects for the fishery.

Finally, to ascertain the full financial impact of the mill on the area, the 100 million liters of clean, fresh water consumed daily by the facility must also be ascribed a value.