Espanola, Ontario, Canada, 09 November 2010 -- (Marketwire) -- Today, the government of Canada is investing in Domtar Corporation to improve the company's environmental performance and help drive the evolution of Canada's forest sector.

Domtar will receive CAD 700,000 in funding under the Pulp and Paper Green Transformation Program (PPGTP) to replace the aerators at its mill in Espanola with more energy-efficient models.

"Investments in projects like this demonstrate our government's commitment to helping the forestry sector develop greener and more sustainable solutions," said Christian Paradis, Minister of Natural Resources. "This is a good example of how government investments in energy-efficient technologies are lowering the environmental impact of Canada's forest industry and establishing the groundwork for a renewed, more competitive sector."

The new equipment will improve air quality and will require less energy, reducing the mill's electrical power consumption by 3500 MWh/year.

Domtar is one of 24 pulp and paper companies across Canada that qualified for credits under the CAD 1 billion PPGTP program based on their 2009 production levels of black liquor, a liquid by-product of the pulping process used to generate heat and power. Today's funding announcement marks the second allotment of PPGTP credits to Domtar Espanola. In June, the mill received CAD 995,000 to install a refurbished wood waste grinder that will allow the mill to process bark more effectively for the production of renewable energy.

Today's announcement complements and builds upon the success of many initiatives in Canada's Economic Action Plan that are helping enhance Canada's forestry industry and sustain jobs in the communities that depend on it. Budget 2010: Leading the Way on Jobs and Growth established the CAD 100 million Investments in Forest Industry Transformation program to promote the development, commercialization and implementation of advanced technologies in the forest sector — helping create a world-class industry able to compete in the clean energy economy of tomorrow.

In addition, the government of Canada has committed CAD 170 million to assist the development of next-generation forest products and expand global markets for Canadian forest products. This funding includes CAD 40 million to develop pilot-scale demonstrations under the Transformative Technologies Program.