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N.S. reaches deal with owner of Northern Pulp; firm pursues new mill in Queens County

The Canadian Press

HALIFAX — A new agreement between Nova Scotia and the owner of Northern Pulp will see the company abandon plans to reopen its idled Pictou County mill and instead focus on building a new plant in southwestern Nova Scotia.

Progressive Conservative Premier Tim Houston said if the deal is approved, Paper Excellence will start a feasibility study for a potential new kraft pulp mill near the former Bowater mill in Brooklyn, N.S., near Liverpool.

"The Pictou mill is not reopening. But that doesn't have to mean an end to the hope for the kind of good-paying jobs and forestry work and exports that a pulp and paper mill brings with it," Houston told reporters Thursday in Halifax. "The company believes that Liverpool could again support a mill, and I agree."

The Pictou County plant once employed about 300 people but has been idle since 2020 after it failed to meet the province's environmental requirements. The Liberal government at the time said the mill could no longer be allowed to dump effluent into Boat Harbour near the Pictou Landing First Nation, after the company had done so for decades. Former Liberal premier Iain Rankin once called the situation one of the worst cases of environmental racism in Canada.

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"I know people are concerned about the reputation of this company in the province," Houston said. "Let me assure you that any project that goes forward will need to meet today's standards and undergo environmental assessment, significant public engagement and Indigenous consultation."

Provincial officials said the agreement with British Columbia-based Paper Excellence addresses the $450-million lawsuit the company launched against the province over the 2020 closure of Northern Pulp, as well as the $99 million in loans the firm owes the province. They also said the agreement will protect the pensions of Northern Pulp workers, with Paper Excellence saying in a statement Thursday the pensions of all current and former Northern Pulp employees will be fully funded.

The settlement must be approved by the British Columbia Supreme Court, which will hold a hearing on May 31. If approved, the company's lawsuit will be dismissed and all motions within the court process against the province will be withdrawn. Paper Excellence, which has been under creditor protection since June 2020, says it would then immediately begin an independent feasibility study on the potential for a new pulp mill in Queens County. That study is expected to take around nine months.

Jean-Francois Guillot, chief operating officer of Paper Excellence's fibre division, said the agreement reached with the province is a “win-win” for both sides that have spent years skirmishing.

"We spent too much time, too many years trying to fight each other and, in my books, we didn’t accomplish anything. So it was time to switch gears and do something more positive," Guillot said in an interview Thursday.

If a new mill is considered viable, Paper Excellence will pay about $50 million for costs related to the Companies' Creditors Arrangement Act and $15 million to the province to settle debts. The company will also put $30 million toward pension plans.

Provincial officials say it's too early to estimate how much work or money will be needed to decommission and clean up the Pictou site if the new mill is deemed viable. Guillot said the Pictou County site will be evaluated as part of the feasibility study to determine what should be done with it, and if there's potential for it to be used in some way for future pulp operations.

If the study finds that a Queens County pulp mill is not viable, the pension and creditor arrangement payments will remain the same, but the company will have to pay the province $30 million to settle debts and spend $15 million on the clean up and closure of the Pictou mill site.

This report by The Canadian Press was first published May 23, 2024.

Lyndsay Armstrong, The Canadian Press