By Daniel Mc Hardie
As appeared on page A1
Business New Brunswick is stitching together another multi-million loan package for a northern textile mill as it waits for potentially lucrative bilateral trade agreements with a series of South American countries.
Atholville’s Atlantic Yarns mill is collecting a $2.4-million loan as a show of “good faith” and another $1-million loan for a waste recovery system from the Liberal government. Business New Brunswick Minister Greg Byrne said the Canadian textile industry is being hurt by the lack of bilateral trade agreements similar to ones signed by the United States and these funds are meant to help Atlantic Yarns stay competitive until those pacts are finalized.
“It is to improve efficiencies generally and improve stability in the industry. It is also a measure of good faith, I would say,” Byrne said.
Byrne said he and Premier Shawn Graham have expressed how important these trade deals are with International Trade Minister David Emerson, who has assured they are a top priority for the federal government.
“We are hoping during the near future that Canada will be successful in negotiating those agreements and that will make this plant very competitive,” he said.
Among the countries that Canada is hoping to sign trade agreements with are: Peru, Ecuador, Bolivia, the Dominican Republic, El Salvador, Nicaragua, Columbia and Honduras.
This isn’t the first time the provincial government has opened its wallet to help Atlantic Yarns or Atlantic Fine Yarns, which is owned by the same company and operated in Pokemouche.
Atlantic Fine Yarns has received approximately $41 million in different loans and loan guarantees since 2000. And on April 10, the Liberal cabinet waved the interest on its loans for another year, a similar stance taken by the former Conservative government. And on April 5, the cabinet approved a $2.4-million loan not to exceed four years and another $1-million loan for a term not to exceed 10 years. To date, taxpayers have fronted Atlantic Yarns $37.7 million bringing the total public investment in the two mills to $78.7 million.
As the commitment from the public purse continues to escalate, taxpayers need to ask when is enough, according to Charles Cirtwill, acting president of the Atlantic Institute for Market Studies.
Cirtwill said he wonders how much more money will be pumped into the mills if the trade agreements aren’t signed for another five years.
“It doesn’t sound like it makes a lot of sense to me,” he said. “That is the problem you get into when you start subsidizing businesses that are struggling you get in a situation where not to lose the money you have invested you spend more money and taxpayers remain on the hook.”
The cash infusion isn’t being met with any opposition by the Conservatives, however. Tory MLA Kirk MacDonald, the Opposition’s business New Brunswick critic, said the company has very strong management capabilities and a tremendous product, so it’s important to provide support.
MacDonald, a former business minister, also said those future trade agreements are integral to helping this company survive.
“The funding support that has been announced by the minister of Business New Brunswick will help create efficiencies in the plant to help make it competitive and get it to the point where it can actually benefit from these trade agreements,” he said.
The Atholville mill’s relationship with taxpayer funds dates back to its first $24-million loan guarantee, it has also received a $800,000 package, a $5-million loan, a $3.7-million direct loan, a $4.3-million forgivable loan package of which only $1 million has been used and the recent $3.4-million investment.
The Pokemouche mill was given a $29-million loan in 2000, it has $9.9 million in interest owing, it has received a $3.3-million loan guarantee and the interest owned on its loan is reviewed yearly and it can be forgiven.