N.S. government reaches settlement agreement with Northern Pulp

More than two years after British Columbia-based Paper Excellence, owners of Northern Pulp – the idled pulp mill in Pictou County – filed a lawsuit against the Nova Scotia government, the two parties have reportedly reached a settlement agreement.

According to a news release from the province, the agreement addresses issues including the $450 million lawsuit against the government regarding the mill’s closure in 2020, $99 million in loans the company owes to Nova Scotia, former mill workers’ pensions, and a potential investment in a new mill in Queens County.

Nova Scotia Premier Tim Houston makes an announcement in Halifax about Northern Pulp on May 23, 2024. (Jesse Thomas/CTV Atlantic)

“We’ve come a long way and have come to a resolution that is fair to all sides,” said Premier Tim Houston in the release. “The company believes there could be a future for them in Nova Scotia, working with the forestry sector in southwestern Nova Scotia, and we’re open to hearing them out.”

Paper Excellence launched the lawsuit in late 2021, claiming lost income after the province shut down the mill – which opened in the late 1960s – in January 2020 due to a failure to meet environmental standards in the Boat Harbour Act.

The release says the agreement – which is pending approval by the British Columbia Supreme Court – would see Paper Excellence conduct an independent feasibility study on a possible new kraft pulp mill in Queens County in the area of the former Bowater mill. The study could take six-to-10 months to complete.

If the study determines the new mill is viable, Paper Excellence would:

• pay roughly $50 million for court costs
• pay the province $15 million to settle its debts
• top up Northern Pulp pension plans by roughly $30 million
• seek financing and work with the province to establish a new mill

“The closure of the Pictou County mill in 2020 was a big blow to its employees and their families, as well as to the forestry families who have worked across the supply chain for generations, primarily in rural Nova Scotia,” said Tory Rushton, minister of natural resources and renewables, in the release. “A modern, efficient mill operating in the Liverpool area could create the pulp market this sector needs to rebuild, bringing with it good-paying, export-focused jobs.”

Stephen Moore, executive director with Forest Nova Scotia, said he's glad the province and Paper Excellence were able to strike a deal.

"We have an agreement that makes pensions whole and we have an agreement that could potentially bring hundreds of jobs to rural Nova Scotia and potentially over a billion dollars of investment in our provinces," he said. "This is a good day."

In a separate news release, Paper Excellence said if the new mill is deemed to not be feasible, the Northern Pulp group's assets in Nova Scotia will be sold and the proceeds will be used to repay debtor-in-possession financing, fund pension plans, and contribute to cleanup costs.

Paper Excellence also says the Pictou site will be maintained for potential future "woodland logistics operations."

A court hearing on the settlement agreement will be held on May 31.

- With files from CTV Atlantic's Jesse Thomas

For more Nova Scotia news visit our dedicated provincial page.