N.S. government slammed over new paper mill agreement

Nova Scotia Premier Darrell Dexter speaks in Cape Breton, in Halifax on Saturday, Sept. 22, 2012. (Andrew Vaughan / THE CANADIAN PRESS)

HALIFAX - The Nova Scotia government is under fire after inking a new agreement it hopes will lead to the reopening of the shuttered NewPage Port Hawkesbury paper mill.

Some critics say taxpayers are shouldering all the risk.

Premier Darrell Dexter announced the revised deal late Saturday with Pacific West Commercial Corp., which has offered $33 million for the 50-year-old facility, less than 24 hours after the bid collapsed.

The deal includes revisions to a $124.5 million provincial funding package announced in August.

Nova Scotia's profit-sharing cap of $9 million will also be increased to $24 million under the new agreement.

Kevin Lacey of the Canadian Taxpayers Federation says profit-sharing assumes that the mill will make money.

He says that likely will not happen in the short-term given the mill's and the paper industry's track record in the province.

The agreement still depends the Nova Scotia Utility and Review Board approving a new power rate.