The province of Nova Scotia and Paper Excellence Canada have reached a settlement agreement that ends plans to reopen the controversial Northern Pulp mill in Pictou.
In return, a feasibility study will be carried out for the potential construction of a new modern kraft pulp mill in Liverpool.
After years of tension surrounding environmental concerns related to effluent from the Northern Pulp plant, the agreement puts a permanent end to plans to transform and reopen the aging plant. Paper Excellence is abandoning these plans and will instead focus on maintaining the site for possible forestry logistics operations, conditional on the establishment of a new factory elsewhere. The Pictou factory, which once employed 300 people, has remained idle since its closure in 2020 ordered by former Prime Minister Stephen McNeil due to effluent discharges near the Pictou Landing First Nation.
At the heart of the deal is the completion of a feasibility study, funded by Paper Excellence, to determine the viability of locating a state-of-the-art bleached kraft pulp mill in Liverpool, near the former Bowater mill. If this study concludes that such a project is viable, Paper Excellence will seek third-party financing to design, build and operate this new state-of-the-art plant. Otherwise, Northern Pulp’s assets in Nova Scotia will be sold to repay debts.
The agreement also provides for the settlement of all pending disputes. Paper Excellence will withdraw its $450 million lawsuit against the province, while Nova Scotia will settle the $99 million in loans owed by the company. Regardless of the outcome of the feasibility study, the agreement also guarantees fully funding the pensions of current and former Northern Pulp employees.
This agreement marks a turning point in relations between Paper Excellence and Nova Scotia. Although the Pictou case is closed, the company says it wants to build relationships of trust with communities and First Nations, and have a positive impact while supporting the provincial forestry sector. The settlement agreement must still be approved by the Supreme Court of British Columbia by May 31. If approved, the next few months will be crucial in determining the future of the pulp industry in Nova Scotia.
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