by Reid Southwick
SAINT JOHN – For the second time in three months, the provincial government is rolling out multi-million-dollar assistance packages for two struggling textile mills in northern New Brunswick.
Cabinet documents released this week reveal the province has sunk an additional $1.050 million into Atholville’s Atlantic Yarns mill and $700,000 into the Atlantic Fine Yarns mill in Pokemouche.
The latest loans, which come after the province doled out a $3.4-million loan to the Altholville mill in April, bring the total public investment in the two mills to nearly $80.5 million.
The bailouts are designed to keep the mills afloat while they wait for Ottawa to open new markets through bilateral trade deals with Latin American countries. Washington, meanwhile, has already signed agreements with these countries, leaving Canadian firms at a competitive disadvantage.
“(Ottawa) knows that this is a priority for New Brunswick. It’s on their radar screen and they’re actively pursuing those bilaterals,” Business New Brunswick spokesman Ryan Donaghy said Friday. “(The mills) are two operations that employ a lot of people in the northeastern part of the province and we are working to see them be competitive and viable.”
The mills employ a total of 360 workers who earn from $10 to $12.50 per hour.
The province’s campaign for a better deal for its textile mills received some momentum last week when Prime Minister Stephen Harper travelled through Central and South America in pursuit of trade liberalization.
Canada has been looking to sign trade agreements with Peru, Ecuador, Bolivia, the Dominican Republic, El Salvador, Nicaragua, Colombia and Honduras.
The United States, which is Canada’s largest foreign textiles market, is rapidly signing exclusive bilateral trade deals with other countries, leaving its North American Free Trade Agreement partner in the lurch. Canadian firms are left to pay the 15-per-cent tariff waived to U.S. companies.
But an economic development analyst said Friday the second round of government assistance in just three months is a signal it’s time to either close the public purse or identify how it will actively help the mills access foreign markets.
“It’s time to bite the bullet,” said Charles Cirtwill. “What we’re seeing now is the worst possible scenario of government support for individual businesses.”
Cirtwill said if the province were to cut the flow of funds now, it would not only have to justify the job losses, but also the more than $80 million that would “go down the pipe with them.
“This is exactly why they shouldn’t have cut the first cheque to begin with,” he said. “The question now is how long will taxpayers be left on the hook while the government bides these companies over?”
The Opposition Conservatives, however, applaud the province for supporting the mills with another multi-million-dollar assistance package.
“We’re taking the initiative to ensure the company can continue to provide employment at their current level in the area of the province where major employers such as this are few and far between,” said Kirk MacDonald, critic for Business New Brunswick. “I would have concern if this pattern continues over an extended period of time.
“But at the present time, I can understand why the government has taken the steps that it has.”