06/18/2012 03:29 EDT | Updated 08/18/2012 05:12 EDT

Corner Brook mill faces tough future even with government help, says premier

ST. JOHN'S, N.L. - Newfoundland and Labrador Premier Kathy Dunderdale says she's willing to discuss government help for the province's last paper mill but is ruling out direct operating subsidies.

Dunderdale said Monday the province has supported Corner Brook Pulp and Paper through various programs, but the mill's potential shutdown is a very real threat as global demand for newsprint declines.

"I can tell you that this is not a game of bluff," she told reporters.

"And anybody's who's suffering under that illusion ought to really get it right."

The government won't prop up the mill through direct operating subsidies, she confirmed.

"We're not going there, and we've been quite clear on that from the beginning."

More than 300 unionized workers have until Friday to vote on a final contract offer — a deadline imposed by the mill's Montreal-based owners Kruger Inc.

The national president of the union that represents workers at the struggling mill has publicly urged members to accept the company's proposed collective agreement.

Dave Coles of the Communications, Energy and Paperworkers union is warning that the mill on Newfoundland's west coast could close otherwise.

Dunderdale stopped short Monday of offering an opinion either way.

"I'm not going to tell the people under what conditions they have to provide their labour to Corner Brook Pulp and Paper," she said.

"They're going to make that decision."

Kruger says the mill is on the verge of bankruptcy and it needs 10 years instead of five to pay back a pension deficit.

Dunderdale said workers at the mill and hundreds more in the forestry sector would suffer if it closes.

She did not disclose what measures the government is considering, but said the mill faces a tough future even with a new contract and provincial support.

Global demand for newsprint has steadily fallen in recent years, shutting down two other mills in the province in Grand Falls-Windsor and Stephenville.

"I've seen the business plan on a go-forward basis and it's going to be a long time before Mr. Kruger sees any money coming out of Corner Brook," Dunderdale said of mill owner Joseph Kruger.

Natural Resources Minister Jerome Kennedy told reporters earlier this year that the province has invested about $50 million in recent years for training, worker support programs and other efforts to assist the mill.