northern pulp scuttles plans for new pulp mill on nova scotia's south shore
4 minute read
the former northern pulp mill, seen from across pictou harbour.
file
a new pulp mill sought for nova scotia’s south shore will not be happening, at least not in the near future.
“northern pulp nova scotia has confirmed it was unable to secure the necessary funding for a new mill project,” natural resources minister tory rushton said in a statement released monday evening.
“from the outset, our government was at the table, working closely with the company to explore every viable option,” rushton said.
northern pulp, under creditor protection since the closure of its kraft pulp mill at abercrombie point in pictou county in june 2020, said in a news release that it is now starting the process of selling off its company assets.
the court-supervised sales process under the companies’ creditors arrangement act was outlined in the company’s settlement agreement with nova scotia in may 2024.
the company’s announcement follows the completion of a comprehensive feasibility study, which concluded that the company could not achieve the 14 per cent internal rate of return required in the settlement agreement to develop a modern bioproducts hub in liverpool.
northern pulp launched the feasibility study into a new mill as part of the settlement agreement.
advertisement
rushton said the province provided meaningful support and discussed programs like the capital investment tax credit that could have offered significant financial assistance.
the minister said the government did everything it could to help make the new mill a reality.
natural resources minister tory rushton says the provincial government did what it could to make a new northern pulp mill a reality on the south shore.
ryan taplin
/
the chronicle herald
“while this is not the outcome we had hoped for, our government remains a steadfast partner with the industry in exploring how we might work together – and with the federal government – in attracting a new partner that sees the potential in doing business here.
“our government has always and will continue to support forestry families and communities. we remain open to bold ideas and strong partnerships that put our natural resources to work in ways that benefit all nova scotians.”
on thursday, premier tim houston said he was hopeful that the mill would be a go.
“there are still discussions happening,” houston told reporters after a thursday cabinet meeting.
“i certainly hope there is a new mill. there is a need for it to support the forestry sector, certain segments of it, pulp market and others. there is a need for a mill for sure. the business case is being discussed. the court process is continuing on as well.”
the premier said he was not aware of an ask for government financial support.
advertisement
in a march 19 letter to prime minister mark carney, houston listed a new pulp mill as one of the province’s priorities.
“thousands of nova scotians were impacted by the 2020 closure of northern pulp’s nova scotia mill,” houston wrote in that letter.
“since then the province negotiated an agreement with the company whereby they would explore the financial viability of a new mill in nova scotia.
“nova scotia has made it clear that the company can use existing investment programs within nova scotia for this venture. one factor in determining their financial viability is securing financing from the canada infrastructure bank (cib). this loan would go towards financing a new, modern pulp mill.”
the premier asked for carney’s support for an application to the cib to “help build a modern, safe mill that will create more jobs and economic prosperity in one of our traditional industries.”
in march of this year, northern pulp said it would cost $2.5 billion to build a new, cutting-edge plant on the province’s southwest shore, near the site of the former bowater mersey paper company mill in brooklyn, on the shores of liverpool harbour.
the company said the proposed project, which would require private and public funding, did not meet its required rate of profitability and that it wanted more time to find financing.
advertisement
that financing has not been found.
on thursday, lawyers representing northern pulp and its associated companies will ask the british columbia supreme court to extend creditor protection until aug. 29 and an interim financing agreement until dec. 18.
according to an affidavit filed with the court by northern pulp parent paper excellence holdings corp., chief operating officer jean-francois guillot said the time will be used to pursue the “no new mill” scenario.
under that scenario, northern pulp’s vast tracks of woodlands will be sold, along with its idled kraft pulp mill at abercrombie point to pay its debtors.
the value of those woodlands, which includes 172,000 hectares bought in 2009 with a $75 million loan provided by the province, remains to be seen.
when northern pulp went into insolvency in 2020, the province was still owed nearly $63 million on that loan.
first in line to get paid will be companies that provided $65,387,000 in interim financing to keep northern pulp afloat since its 2020 creditor protection filing.
next in line, if there is any money left over, will be the pension plans of former mill workers.
then comes $15 million to maintain and clean up the mill site at abercrombie point and finally the outstanding provincial government loans.
share story
