Industry Committee on Sept. 10th, 2010

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

A point of order.

[The Chair, Conservative, Michael Chong]

Monsieur Proulx.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Mr. Paterson has been good enough to accept our invitation, and I think the minimum of respect we owe the gentleman is to name him by his real name, which is “Paterson”.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Proulx.

Please let's try to continue this without any further interruptions.

Mr. Blaney, you have the floor.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

I hope you did not count as part of my speaking time the ridiculous comments made by our friends opposite.

Mr. Paterson, can you assure the Committee that the wages and benefits of the workers, as well as what you owe to your pensioners, will be protected in future under an agreement with your creditors?

[David Paterson]

Well, the labour agreements we've negotiated will be part of the emergence plan and they will be court approved, as will the pension agreement. We hope to announce the settlement on that very soon. That becomes a legal requirement of the process, as approved by the courts both in the U.S. and Canada.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Very well; thank you.

Mr. Paterson, do you agree with me that any intervention by the Canadian government must be done in accordance with the Softwood Lumber Agreement?

[David Paterson]

Yes, the softwood lumber agreement needs to be complied with, and hopefully we are complying.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

As regards your agreement with creditors, do you have expectations of the government in terms of access to funding? And if so, what do you intend to do with the funds?

[David Paterson]

The funds that will be available to us will be the settlement of the NAFTA, and as I mentioned earlier that will be used to reduce the amount of debt we have to put on the company at emergence.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Any other program, any other funds?

[David Paterson]

We have the green energy fund, which was related to the black liquor credit--the famous black liquor issue with the U.S. Those funds need to be spent, I believe by 2013, and we have plans embedded to spend those moneys on Canadian assets.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

How much would that represent?

[David Paterson]

I think it's $33 million for us.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Thank you.

Finally, what would have been the cost of a carbon tax on your business and the burden for your operation?

[David Paterson]

I'm not an expert on the carbon tax issue, but it would be very problematic, in that we burn.... It depends how carbon tax is measured. If it's applied to biomass, it would be very harmful to the industry.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Hopefully we will prevent it from this drama. Thank you.

That's my last question. I think Mr. Wallace also has a question

[The Chair, Conservative, Michael Chong]

Go ahead, Mr. Wallace.

[Mike Wallace, Conservative, Burlington, ON]

Thank you.

I just have a general question. I'm also on the finance committee, so....

You talked about 2009 being a bad year.

[David Paterson]

Yes, it was.

[Mike Wallace, Conservative, Burlington, ON]

Would your industry be on the leading edge of the cycle? When would have been your indication that things were slowing down for the forestry industry or the paper manufacturing industry? Is it the middle, the end? When does the natural up and down of the economy affect your industry? Is it at the beginning, or where is it in the cycle?

[David Paterson]

In general we tend to be a leading indicator because paper consumption is an indication of future economic activity. When people get concerned about the economy, they stop buying and they destock.

The ultimate example is that October 2008, on a volume and price basis, was our best month in probably 10 years, and demand collapsed in November of 2009. We went straight down by 25%.

[Mike Wallace, Conservative, Burlington, ON]

That quickly.

Thank you, Mr. Chair.

[The Chair, Conservative, Michael Chong]

We have a very brief question from Monsieur Bouchard.

You have one minute.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Chairman.

Mr. Paterson, I referred to Boralex earlier. You said that there was no possible agreement, that the negotiations had been going on for a long time, but that if you were able to reach an agreement with Boralex, which provides steam, you would reopen the Dolbeau-Mistassini plant. I would like you to make a firm commitment in that regard. The mayor of Dolbeau-Mistassini is here, as well as the reeve for the Regional County Municipality of Maria-Chapdelaine, and Mr. Lamontagne, who represents the workers. I want a clear answer from you: will you commit today, in front of these representatives, if a firm agreement is reached between Boralex and AbitibiBowater, to reopen the Dolbeau-Mistassini plant?