Canada commits C$20 million to Mercer International's Peace River pulp mill
NEW YORK, Aug 26. The Government of Canada committed C$20 million, approximately US$14 million, to Mercer International Inc. (Nasdaq: MERC) for its Peace River pulp mill in northern Alberta, the company disclosed in an 8-K filed Tuesday. The funding flows through Prairies Economic Development Canada under the Regional Tariff Response Initiative.
Key takeaways
- The Government of Canada committed C$20 million (about US$14 million) to Mercer International's Peace River pulp mill in northern Alberta, disclosed in an 8-K filed Tuesday.
- The funding flows through Prairies Economic Development Canada under the Regional Tariff Response Initiative and splits into a C$1 million non-repayable contribution and a C$19 million repayable portion, with repayment beginning in 2031.
- The capital supports a transformation plan to improve productivity and modernize the mill, including upgrades for expanded bio-energy production and carbon capture and storage.
- The funds go directly to Mercer's subsidiary, Mercer Peace River Pulp Ltd. (MPR), which has operated in the region for more than 35 years.
- Minister Eleanor Olszewski announced the funding, framing it as support for workers and businesses amid Canada's trade conflict with the United States.
NEW YORK, Aug 26. The Government of Canada committed C$20 million, approximately US$14 million, to Mercer International Inc. (Nasdaq: MERC) for its Peace River pulp mill in northern Alberta, the company disclosed in an 8-K filed Tuesday. The funding flows through Prairies Economic Development Canada under the Regional Tariff Response Initiative.
The package splits into a C$1 million non-repayable contribution and a C$19 million repayable portion, with repayment scheduled to begin in 2031 subject to the terms of the contribution agreement. Mercer's subsidiary, Mercer Peace River Pulp Ltd., receives the capital directly.
Eleanor Olszewski, Minister of Emergency Management and Community Resilience and minister responsible for PrairiesCan, made the announcement during a visit to the northern Alberta facility. She said Canada did not choose its trade conflict with the United States but would stand up for workers and businesses under pressure, according to the release. The C$20 million, she said, would help the mill compete and protect jobs that northern Alberta families depend on. MPR has operated in the region for more than 35 years.
What the capital covers
Mercer said the funding supports a broader transformation plan at Peace River designed to improve productivity and modernize the mill. Planned work includes upgrades to prepare the facility for expanded bio-energy production and carbon capture and storage. A carbon dioxide capture demonstration unit is already running at the site, the release shows. The mechanism is cumulative: the repayable portion dwarfs the grant, so the government retains a financial claim on the mill's future output rather than writing off the full sum.
Juan Carlos Bueno, Mercer's president and chief executive officer, said the investment supports the mill's productivity and competitiveness and reflects the role MPR plays within northern Alberta's forest products economy, according to the filing.
MPR draws pulpwood and residual fiber from the region's mixed boreal forests to support pulp and energy production.
Mercer International operates in Germany, the United States, and Canada, with consolidated annual production capacity of 2.1 million tonnes of pulp, 1,023 million board feet of lumber, 210,000 cubic meters of cross-laminated timber, and 230,000 metric tonnes of biofuels, as of the release.