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Province reaches settlement in Pictou County pulp mill lawsuit

By Jacob Moore May 23, 2024 | 11:11 AM

The Nova Scotia government has reached a settlement agreement with Paper Excellence Group that would shut the Northern Pulp mill in Pictou County and let the company explore building a new facility in Queens County.

The settlement, which still must be approved by court on May 31, will make the company pay for costs incurred through the court process, pension plans for former employees and more.

Premier Tim Houston says he knows the mill may have created well-paying jobs and created millions of dollars in forestry exports, but it’s environmental record can never be repeated.

“I know people are concerned about the reputation of the company in the province in the past,” Premier Tim Houston tells reporters Thursday. “Any project that comes forward will need to meet today’s standards and will undergo environmental assessments, significant public engagement and indigenous consultation.”

The Pictou County mill faced a lot of criticism from people in the community because its waste water facility in Boat Harbour was dumping into waters on nearby First Nation land.

Former Liberal Premier Stephen McNeil decided to shut down the mill after Paper Excellence couldn’t get approval for their new waster water treatment plan in 2020. This follows rules set out in the 2015 Boat Harbour Act, which says the area could no longer be used for wastewater treatment after Jan. 31, 2020.

Since June of 2020, the company was under creditor protection with the British Columbia Supreme Court. Its head office is located in that province.

Paper Excellence Group filed a lawsuit for $450 million against the province of Nova Scotia in December 2021.

The court ordered the province and the company to enter a mediated court process in April 2022.

Mill closure creates gap

A 2018 report on forestry by professor William Lahey suggests the demand for lower-grade forestry products and sawmill byproducts declined after the Bowater mill in Brooklyn, N.S., closed in 2012.

Paper excellence will conduct their own study to see if putting another mill in the same area is feasible. The government expects the company to begin the study immediately and take up to nine months. Building a new mill on that site would cost about $1.4 billion, the government says.

If the new site appears viable, the government says the company will:

  • pay about $50 million for costs incurred by the company through the court process
  • pay the province $15 million to settle its debts, and the province will release its security
  • top up Northern Pulp pension plans by about $30 million
  • seek financing and work with the province and other stakeholders to establish a new mill

If the company finds the Queen County site is not a viable place for a mill, they will decommission the Pictou County mill and also sell their timberlands, making payments with the proceeds in this order:

  • about $50 million for costs incurred by the company through the court process
  • $30 million to top up the pension plans
  • $30 million to the province to settle its debts; the province will release its security
  • $15 million toward the cleanup and maintenance of the Northern Pulp site and implement a site closure plan
  • any remaining funds to the province

Former employees to keep pensions

Maintaining pensions for former mill employees was a top priority for Premier Tim Houston, he told reporters Thursday.

“I can’t imagine what the last few years have been like for people worrying about their pensions and their future,” he says.

Unifor Local 440, the union representing the workers, announced their support for prioritizing pensions in a news release.

The union says the mill workers have been uncertain about their pensions for years.

“It’s imperative both parties to the agreement offer the basic respect to retirees and former employees by fully funding the pension plan,” writes Unifor Atlantic Regional Director Jennifer Murray in the release. “Hearing Premier Houston speak of the workers’ pension funding being personally important to him gives us confidence the pension will be a priority.”