Dear Editor: We are asking for important information from our government about its past, present and future dealings with Kruger Inc. and Deer Lake Power.
We are concerned for our pensions and feel we deserve straight answers about what has been going on.
When Bowaters tried to close the mill in the early 1980s, they did so thinking that they could continue to own and operate the Deer Lake power plant and sell its power at a huge profit without ever making another roll of newsprint. It would have been Churchill Falls all over again.
Our premier at that time, Brian Peckford, stepped in and stepped up to foil that Bowater plan.
With the help of Clyde Wells as legal counsel, the government scuttled the plan by creating new regulations that tied Deer Lake power production directly to the operation of the mill in Corner Brook. In so doing, Bowaters was denied their last laugh and the operation successfully transitioned to Kruger.
Our first question for our government is: Has there been any material change to any of the laws or regulations that have long tied Deer Lake power production to the Corner Brook mill? Could Kruger (or Nalcor for that matter) ever assume the necessary water rights to generate power at Deer Lake Power without having to operate the Corner Brook paper mill?
If so, what was changed, when was such a backroom deal made and why wasn’t the public told about it?
And along those same lines, it is obvious to us that if the paper mill ever was to be put into bankruptcy, the provincial government would either purchase or expropriate Deer Lake Power from Kruger for its own benefit.
What happened at the AbitibiBowater mill in Grand Falls-Windsor gives cause for us to think that would happen and, if you think this scenario through, it could actually be considered a win for the government in their mind.
If the power plant was expropriated, Kruger would eventually get a $200 million-plus cheque to put in its back pocket from either the federal or provincial government as compensation for the expropriation.
They would get this money even though the power plant was bought and paid for back in 1925 and has paid for itself many times over since.
Just think that through — Kruger could, if it wanted, bankrupt the paper mill and walk away from all its liabilities, including the pension fund, while putting a $200 million or more cheque in its pocket from Deer Lake Power because Deer Lake Power’s is a separate legal entity from the mill and is also debt-free.
And that is where the pension issue comes in.
While Corner Brook Pulp and Paper and Deer Lake Power are two separate legal entities, both companies share responsibility for the same pension plan for all employees.
Question two: If the mill was declared bankrupt and the province (or any other operator) was to operate Deer Lake Power for itself, will the government ensure that the existing pension plan for all employees and retirees will remain financially connected to Deer Lake Power as an ongoing operation and will the full, unfunded liability left by Kruger be assumed by Deer Lake Power as an original and ongoing part of that same plan?
Yes or no? Fair is fair.
We are asking the provincial government to answer these two important questions and put their answers on the pages of this newspaper for all to see.
The answers provided could dissuade Kruger from thinking it can get out of the paper business and into the power business — if that is what they are considering.
The answers could help save our mill and they could also give hope that our hard-earned pensions will still be there in the future.
Ed Anstey and Jim Dover, former presidents of Local 64