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2012-07-16 at 14:23

Ontario forgives $24M loan to encourage investment in Terrace Bay Mill

By Jamie Smith, tbnewswatch.com
CFNOWin great stuff Weekday mornings during the Al Cresswell Morning Show with Your Hometown Sound...CFNOClick Here

The province is forgiving more than $24 million in loans in an effort to get people in Terrace Bay back to work.

Ontario’s Superior Court will decide Monday whether the troubled Terrace Bay Pulp will be sold to India-based Aditya Birla Group. The move is recommended by Ernst & Young, the company’s court-appointed monitor.

The mill owes more than $42 million to creditors, the largest being the province of Ontario at $24.1 million.

“We wanted to leverage obviously interested investment in the mill so we elected to forgive that portion of provincial responsibilities,” said Natural Resources Minister Michael Gravelle.

“I believe that was the right decision.

“It was clear that we were not going to be getting the provincial loan back in terms of the offers that were going to be coming forward.”

Aditya Burla’s $250 million plan means 630 jobs between the mill and woodland operations as the company uses the mill to make dissolving pulp, used in textile production.

Gravelle said the province, which was played a key role in negotiations, will be making announcements once the deal is official.

“I will say here that indeed part of that will include job guarantees,” he said.

China-based Tangshan Sanyou Xinda Chemical Fibre Co. made a $220 million bid for the mill last week. Gravelle said that shows there is significant foreign interest in the region’s forestry industry.

“I think there are some significant opportunities in the region.”

 

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Comments

We've improved our comment system.
TWM says:
Taking the money straight out of our hands, lending it to someone and then say "don't worry about it" you might as well add "there's plenty more of where that came from"
7/16/2012 3:23:17 PM
hunterthedog says:
Hey Michael, if I can convince you that I will not pay my provincial taxes EVER AGAIN can I just stop paying them? Stupidest thing I have heard said in a long time.

And I love the wording "we elected to forgive". So very funny indeed, as we "elected" you to your current position not waste $24 million of OUR money in the first place.
7/16/2012 3:56:42 PM
RicknB says:
Hey Mikey

Can I have a loan?
7/16/2012 4:13:02 PM
tbaynorth says:
So am I missing something? Buchanan is set to get $110 million from Aditya for the purchase of the mill. He has $42 million owed to creditors so that means Buchanan is already taking a profit of $68 million. So doesn't forgiving this loan essentially put $24.1 million directly into Buchanan's pocket?
7/16/2012 4:17:44 PM
ring of fire dude says:
That's what happens when Buchanan is the biggest financial donor to the Provincial Liberal Party , not to mention his executive henchmen also sit on the Liberal Riding Association . Buchanan made more money off the Ontario Government (us) than he ever made selling lumber and pulp . What a bunch of SLIDERS !!
7/16/2012 6:52:26 PM
Delbert Grady says:
Take the money from the Liberal party coffers.

Maybe next time they'll think twice before just handing over our tax dollars?
7/16/2012 4:23:13 PM
drummerboy says:
lucky bucky walks away again scot free, while we, the taxpayers, get tagged AGAIN! this man must be stopped from ever owning a business, and ruining peoples lives again.
7/16/2012 4:43:26 PM
freddyc says:
Another instance of where KB and Co. "fleece" the taxpayers of the North with no repercussions....utterly sickening
7/16/2012 5:10:02 PM
DazeofThunder says:
Notwithstanding the people's salaries and boost to local economy, how much of this money earned will be leaving the country? It's almost at 24 million already...poof....gone
7/16/2012 5:13:01 PM
Buddy Garrity says:
Gravelle-nomics, take away 75 million dollars from the mnr, who protect/manage your wildlife/fisheries/parks plus cut 1000 employees plus 30 offices..but throw away 24 million for a company that can,t manage and left terrace bay high and dry - don,t trust him,
7/16/2012 5:41:33 PM
yoyoma says:
I'd love to know what kind of dirt bucky has on gravelle. forgiving such a large sum like it was nothing. Guy must have something good on him to be able to keep doing this
7/16/2012 5:45:12 PM
Drayton lad says:
The Mill sold for 2 million,of which all will go to the smaller creditors.The Gov. elected to drop their debt so the other creditors get payed!Go to ForestTalk.com,read whole deal for yourselves.Bucky gets nothing, ZERO, except the accident issues from 2010 and the death in 2011.He is finished in the forest industry along with his cronies :-)
7/16/2012 6:39:21 PM
wayne says:
If the $24 million forgiven loan is truly going to seal the deal for $250 million private sector investment, and create 630 direct jobs (high-paying jobs), and a large number of indirect jobs, then that's a good thing for Terrace Bay and Northwestern Ontario.
7/16/2012 7:09:08 PM
paddlenut says:
Wait a minute? Are these the same people who raised bloody murder that the province didn't do ENOUGH to keep Terrace Bay in business??
7/16/2012 7:30:17 PM
dozerman says:
WOW...I am speechless!
7/16/2012 8:59:01 PM
rallard says:
What was the logic involved in this decision?

The Chinese offer paid the Province back the Millions it was owed.

The Chinese deal included 100 more jobs.

The Chinese deal would have seen the mill back in operation by October, not three years from now.

The Chinese deal also included the reopening of the saw mills in Nakina and Longlac.

The Chinese deal needed no government money. Be assured the other deal will.

Tangshan Sanyou Xinda Chemical Fibre Co. is a subsidiary of China Hi-Teck Group with assets of over 6 Trillion dollars.

Why would the government of Ontario accept an offer that is so inferior to that of the Chinese? I think that this process needs to be looked into and the government officials involved need to account for their decision to take such an inferior offer and stick the taxpayers of Ontario with a 21 Million dollar bill. I thought Ontario needed tax dollars why would they throw them away?
7/16/2012 11:03:11 PM
tiredofit says:
to answer your question of "Why would the government of Ontario accept an offer that is so inferior to that of the Chinese?" is simple, its because they are the Liberal Party of Ontario (which is not your Father's Liberal Party" as they say). They look at the original deal as a win win for Terrace Bay and they want to look good for the new company... just wait until they get their first Hydro bill!!
7/17/2012 9:48:23 PM
CGA says:
YEAH! Good point! And, part of the terms would allow hundreds of Chinese expats to operate the mills and settle in NW Ont. I say again, go see what has happened with the steel mill in Sault Ste. Marie. Somewhere in the fine print Canadians were not included.
7/17/2012 11:56:29 PM
Wolfie says:
You guys are ridiculous. Buchanan isn't benefiting from this, AV Group is. They had agreed to buy the mill for $2 million plus assuming all debts. So with the government forgiving this money, that means it is $24 million less AV Group will have to pay for the mill, and presumably $24 million more that they can invest in the plant.

From ForestTalk.com

Purchase Price of the mill

AV Terrace Bay’s purchase price for the mill is $2 million plus the amount of the assumed liabilities.

The assumed liabilities includes the approximately $24.2 million (plus accrued interest and costs) the mill owes the province of Ontario from a loan granted in 2010 allowing the mill to emerge from its first period of creditor protection.

As a condition of the purchase agreement, the province of Ontario will forgive the provincial debt obligations of the mill.

I'm not saying this is a good deal for the province, but at least inform yourselves before you spout.
7/16/2012 11:05:35 PM
mapleleaf1970 says:
Unreal! Liberal government passes it's budget, planning to cut more jobs because Ontario is spending more than it's making. Wake up the only problem in this province is government waste and accountability! I will never vote Liberal Again!! Just a bunch of Conservatives in disguise.
7/16/2012 11:34:48 PM
Joey Joe Joe Jr. Shabadoo says:
lol, yet the flood victims are forced to get donations for any monies?

i guess because the government will be matching whats taken in & is good enough in thier minds?

if this flood happened in ottawa, they would have had all new houses built by now for them im sure

good ole thunder bay gets its royal treatment once again, royally!

its like were on our own in NWO & only just a hasstle to the rest of ontario, or so it seems?

cut this, cut that in NWO while T.O. & ottawa are spending a fortune every day of the year on EVERTHING they need w/o any hesitation from the government!

just because we lack population dosent mean we have to lack in progress

where are the GO TRAINS linking us to the rest of ontario atleast? this is something thats needed around here, not bubble art or talking poles!!
7/17/2012 4:10:27 AM
nvjgu says:
Well maybe they will forgive the income tax I owe.
7/17/2012 5:47:09 AM
Curious says:
GET RID OF THE LIBERALS! This just makes my stomach turn i want to vomit!
Buchanan royally shafted the employees and now is walking way with millions of our dollars - boy I wonder what kind of deal him and Michael have going? No money for doctors but lots for the Liberals and their donors!
7/17/2012 8:43:52 AM
QM says:
Not withstanding whatever has been said, its pretty likely that the machinery will be stripped and sent to India. Same as Red Rock. Within a year.
7/17/2012 8:52:21 AM
yqtyqt says:
$24.1 million you say. Well let's just tack in on to the accumulated debt of $275 billion that our grandchildren will have to repay. Plus interest.

The amount is overshadowed by the costs of the gas fired generating power plants in Mississauga and Oakville that the Fiberals cancelled just before the last provincial election. And just in time for Dalton to save several liberal seats pulled from the fire. This cost Ontarians hundreds of millions of dollars, if not billions. But it saved dalton from going into the voter toilet.

Let's face it folks. Fiscal responsiblity is not Mikie and Billies & daltons strong point. As a matter of fact, they have no clue about what they're doing to future generations. But then again, they won't be around when these debts have to repaid. The drummond report was highly critical of the out of control spending of the liberal government. The same report that dalton has flushed down the dumper.

Like Lori says, if it's gone then it's gone - no big deal
7/17/2012 8:56:00 AM
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