A British Columbia Supreme Court judge has approved a settlement agreement between the owners of the Northern Pulp mill and the Nova Scotia government. The Northern Pulp mill in Abercrombie Point, N.S., is viewed from Pictou, N.S., Dec. 13, 2019. THE CANADIAN PRESS/Andrew Vaughan
VANCOUVER - A British Columbia Supreme Court judge has approved a settlement between the Nova Scotia government and the owners of the Northern Pulp mill. The agreement, reached after court-ordered mediation starting in April 2022, addresses the company’s creditor protection proceedings.
Under the settlement, Paper Excellence, the owner of Northern Pulp, will drop its $450-million lawsuit against Nova Scotia and abandon plans to reopen its mill in Pictou County. Additionally, the company will conduct a feasibility study for a potential new kraft pulp mill near Liverpool, N.S.
Lance Williams, a lawyer for Northern Pulp, explained that the agreement helps avoid prolonged and costly litigation. Sean Foreman, representing Nova Scotia’s Justice Department, called the settlement a fair and comprehensive resolution, providing clarity on complex legal and financial issues and protections for pensioners. He also noted that it offers new prospects for the forestry sector.
Northern Pulp has been under creditor protection since June 2020, following the closure of its mill due to non-compliance with provincial environmental requirements for a new effluent treatment plant. The mill had been discharging waste into Boat Harbour near the Pictou Landing First Nation for decades, which was no longer permissible under provincial law.
The agreement also addresses the $99 million in loans owed by Northern Pulp to the province. Paper Excellence has committed to fully funding pensions for both current and former employees. If the feasibility study for the new mill deems it viable, Paper Excellence will pay $50 million to cover costs related to the Companies’ Creditors Arrangement Act and $15 million to the province to settle debts. Additionally, $30 million will be allocated to pension plans.
If the new mill is not viable, the company will pay $30 million to the province to settle debts and $15 million for the cleanup and closure of the Pictou County mill site. Premier Tim Houston mentioned that the full extent of contamination at the Northern Pulp site and the cleanup costs remain unknown until the future use of the site is determined. He assured that environmental standards and processes will be upheld in any future developments.
For now, the company is required to maintain the site under an existing ministerial order to ensure environmental protection.
