PORTLAND (AP) — A government financial package aimed at reopening a failed paper mill in Nova Scotia could threaten production and jobs in Maine, officials with the state’s paper industry said.

The Nova Scotia premier last week unveiled a plan to provide $125 million to help restart the former NewPage Corp. mill on Cape Breton, which closed nearly a year ago, putting 600 employees and 400 loggers out of work. British Columbiabased Pacific West Commercial Corp. has since bought the mill with plans to restart a streamlined operation. The premier’s proposal for loans and discount electric rates still needs approval from the Canada Revenue Agency.

Lower prices

Maine paper mills are concerned that provincial subsidies would allow the Canadian mill to sell its products at lower prices, thereby putting Maine mills at a competitive disadvantage, said Maine Pulp and Paper Association President John Williams.

The Canadian mill makes magazine and catalog paper similar to that manufactured at some of Maine’s largest mills, including ones in Bucksport, Jay, Skowhegan, Madison and Rumford. Williams said he doubts the Canadian production would force any of those mills to close, but it could spur them to idle individual paper-making machines to trim production.

“Anytime you put more paper into a market that’s oversupplied, it’s a threat,” Williams told the Portland Press Herald.

Pulp and paper manufacturing has been a longtime mainstay of the Maine economy, currently employing roughly 7,400 people who have an average salary of $63,000.

There’s already an oversupply of coated, high-gloss paper on the market with advertising shifting from print media to the Internet. Industry figures show consumption of the socalled supercalendered paper in North America has fallen from more than 2.1 million tons in 2007 to a projected 1.2 million tons this year.

If the Nova Scotia mill puts more product on the market, it could force papermakers elsewhere to cut production, said Bill Cohen, a spokesman for Verso Paper Corp., which owns mills in Bucksport and Jay.

“In a market where we’re already over capacity, it puts more pressure on prices,” he said.