Pulp and paper has been an essential part of Nova Scotia’s economy for a long time. Three huge mills have supplied a lot of jobs in the poorest parts of this have-not province. In Port Hawkesbury in Cape Breton, the NewPage mill has provided work for more than 1,000 people since 1962. In Queens County, the Bowater Mersey mill is the biggest employer by far. In Pictou, Northern Pulp has dominated the local economy since 1967. Struggling towns also have relied on their mills for the lion’s share of tax revenue.

But now the digital age (with help from the depressed world economy and the high Canadian dollar) is destroying the pulp and paper business. In September, the NewPage mill, which had produced newsprint and glossy paper for magazines, closed down. Last year, the mill lost $50 million. It has filed for court protection from its creditors while a buyer is sought, but who wants this white elephant? NewPage owes unsecured creditors $156 million (including $64 to Dave’s Taxi). Worst of all, NewPage retirees are staring into the abyss of a severely underfunded pension plan.

The Bowater Mersey mill principally supplies newsprint to The Washington Post (a minority owner of the mill), although it has sought other customers and has made efforts to diversify into book-grade paper. Along with most newspapers, the Post has suffered a steep decline in its print circulation and is switching to the web. Bowater Mersey now often shuts down for weeks at a time. There is a lot of apprehension that this mill will go the way of NewPage, with incalculable effects on the Queens County economy.

The Northern Pulp mill supplies pulp to makers of household goods such as tissue. These are more resilient products than newsprint. But ownership of the mill has changed twice in the past four years and the facility has an uncertain future.

The ripple effects of all this distress are substantial. NewPage was Nova Scotia Power’s largest customer, using about 13% of the electricity generated by NSP, with an annual power bill of about $100 million. As these mills get into difficulty, they demand cuts in power rates. But cuts in power rates for the mills would almost certainly mean an increase in rates for households.

In the midst of this crisis, Nova Scotia’s government has shown itself to be timorous and unimaginative. Its response to the NewPage closure, for example, is to facilitate the sale of a business that no one wants to buy. Meanwhile, the province’s economy, the worst in Canada, continues to deteriorate, with private-sector job creation falling by 3.5% in the past 12 months.

And while the recent announcement that $25 billion to build ships for the military will go to Irving-owned, Halifax Yard is cause for optimism, the massive contract still comes down to a huge federal subsidy. That’s a far cry from what’s needed most in the long term — the evolution of a vibrant, self-sustaining private sector economy.

Economies struggling with these kinds of challenges aren’t easy to fix. But it’s time for the province to face the reality that Nova Scotia’s economic mainstays are collapsing -— and to come up with a viable plan to guide the province into the future.  IE