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Northern Pulp signals legal action against N.S. government over mill closure

NOVA SCOTIA (From news reports) -- Northern Pulp is once again signalling legal action against the Nova Scotia government over what it says amounts to $450 million in losses it incurred by the closure of the Pictou County pulp mill.

In a news release Tuesday, Northern Pulp -- a Paper Excellence company that belongs ultimately to the billionaire corporate empire of the Widjaja family of Indonesia -- said it has taken "the necessary steps to preserve its legal rights" related to the closure of the mill 10 years prior to the end of the term of its effluent treatment facility lease.

The mill has been shut down since January 2020, when it failed to get approval for an effluent treatment facility to replace the use of Boat Harbour. The former tidal estuary was legislated to be closed to effluent by the Boat Harbour Act.

The Nova Scotia government signed an indemnity agreement with the mill's former owner, Scott Maritimes Ltd., back in 1995, outlining what could happen if the mill closes or plans for a new facility were rejected.

The agreement protects Northern Pulp against loss or damages, and suggests the province would be entirely on the hook for the cost of cleaning up Boat Harbour and building the new treatment facility.

Northern Pulp said it has tried unsuccessfully to engage the two previous provincial governments in settlement discussions.

Company would use funds to restart mill

It said the newly elected Progressive Conservative government recently requested that Northern Pulp file its legal claims related to the closure of the mill, and allow the province time to evaluate the claims before engaging in any settlement discussions.

The release said the company has started that process by making claims under the province's indemnity for $100 million in losses.

"This action confirms our desire to reach a mutually agreed-upon settlement that is fair to taxpayers and compensates us for the losses suffered," said Jean Francois Guillot, vice-president of operations for the east for Paper Excellence Canada.

"Our intention is to use these funds to transform and restart the mill once we receive environmental approvals."

The company said the total losses related to the closure of the mill exceed $450 million.

Company officials have said its plan to reopen its shuttered mill in Abercrombie Point, N.S., will cost an estimated $350 million.

Put the case down: premier

Premier Tim Houston said on Tuesday that if Northern Pulp has a legal case to make, they should make it.

"It's time for the company to put its case down," said Houston at the legislature.

"I think that's in the interest of Nova Scotians so that they can show their commitment to this province. I believe that should happen, and once they show their case, things can progress from there."

Under Northern Pulp's new plan, treated effluent from the mill would be released directly into Pictou harbour.

Northern Pulp also announced Tuesday that an environmental assessment registration document will be submitted to Nova Scotia's Environment Department by the end of November to start the Class 2 environmental assessment of its new plan.

The province's Class 2 assessment is more stringent and takes longer than a Class 1 assessment.

The company previously proposed an alternative system that would have piped treated effluent 14 kilometres from the mill to a discharge point in the Northumberland Strait. That plan, with a price tag of $120 million, did not pass environmental assessment.

The mill went into creditor protection several months after its closure last year. The news release said it will appear before the British Columbia Supreme Court on Oct. 29 to request an extension of their protection until April 30, 2022.

Previous governments also made loans to Northern Pulp in 2009 and 2013 and to Northern Timber Nova Scotia Corp., an affiliate company, in 2010. The outstanding balance on the three loans is about $85.5 million.

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