New settlement agreement could see Paper Excellence open new kraft pulp mill in Nova Scotia, drop lawsuit

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A new settlement agreement subject to approval by the British Columbia Supreme Court would see the Paper Excellence Group, owner of the Northern Pulp mill in Pictou County, Nova Scotia, abandon a major lawsuit against the Nova Scotia government and withdraw its proposal to upgrade its mill. 

B.C.-based Paper Excellence filed the $450-million lawsuit in late 2021 to retrieve lost income after Nova Scotia 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 company had been working to create a new effluent treatment facility to handle wastewater from the mill, but was met with significant resistance from  environmentalists for its plan to have an open system for managing effluent from its bleached kraft pulp mill. 

Paper Excellence, however, is looking to move forward with an independent feasibility study of the potential for a new kraft pulp mill in Queens County, in the area of the former Bowater mill. The  feasibility study would begin immediately and could take up to nine months to complete. 

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If the study finds a new mill is viable, the company will pay about $50 million for costs incurred by the company through the court process; pay the Nova Scotia government $15 million to settle its debts; top up Northern Pulp’s pension plans by about $30 million; and seek financing and work with the province and other stakeholders to establish a new mill. 

If the study finds a new mill is not viable, the company will still follow through on the commitments above, but also decommission the current mill site in Pictou County and sell its timberlands. The company would also pay $15 million toward the cleanup and maintenance of the Northern Pulp site and implement a site closure plan. 

“Ensuring fair treatment for the company’s pensioners was a priority for us, as well as finding a pathway to a stronger economic outcome for Nova Scotians,” announced Premier Tim Houston in a statement. “The investment to build a new mill would be $1.4 billion, and Nova Scotians can be assured that any project that might come forward would need to be designed to today’s standards and undergo an environmental assessment and significant public consultation. The company has committed to meeting these expectations.” 

Paper Excellence announced in a statement that a mill returning to Queens County would provide a “new, reliable market for the region’s forestry sector and result in greater distance between two paper mills working in the province — the other being Port Hawkesbury Paper in Richmond County.” 

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