Nova Scotia

Northern Pulp asks court to order settlement negotiations with N.S.

The owners of Northern Pulp are trying another approach to get Nova Scotia to pay for the closure of their Pictou County mill two years ago. As an alternative to the lawsuit it filed last year, the company has proposed a mandatory mediation process.

Company recently filed lawsuit against province for up to $450M in losses

The Northern Pulp mill in Abercrombie Point, N.S., has been mothballed for two years. (Robert Short/CBC)

The owner of Northern Pulp is trying another approach to get Nova Scotia to pay for the closure of its Pictou County mill two years ago.

Last week, the company made an application to the Supreme Court of British Columbia — where parent-company Paper Excellence is headquartered — for a court-appointed mediator to bring the parties together and negotiate a settlement.

In the application, Northern Pulp argues mediation would be more efficient than the court battle that could otherwise ensue. The company filed a lawsuit against the province in December for as much as $450 million in losses related to the early termination of its lease on Boat Harbour.

In spite of having filed the lawsuit, the company says a negotiated settlement is its preferred route.

"To that end," the company wrote in its application to the court, "and due to the lack of meaningful progress towards engaging in settlement discussions voluntarily, the Petitioners [Northern Pulp] are applying for the mediation order, approving the proposed mandatory mediation process."

'We won't be forced into anything'

Premier Tim Houston told reporters Thursday that his government is still reviewing its options on the matter.

"It's a significant case," he said at a media availability following a cabinet meeting. "We won't be forced into doing anything."

Houston said he's aware of the company's assessment that mediation would be quicker and therefore cheaper for all parties involved, but he's waiting for an assessment from the province's legal team.

"My only obligation and concern is to the taxpayers of Nova Scotia," he said. "We'll work with the lawyers internally to find out the best way to make sure this gets its appropriate review."

Northern Pulp proposed Thomas Cromwell, a retired justice with the Supreme Court of Canada, as mediator. 

The mediation process, as proposed, would be confidential and non-binding, but any settlement reached would be binding for all parties.

The question of liability

Houston wouldn't say whether he believes Nova Scotia is liable for losses, in any amount, associated with Northern Pulp's closure. 

The closure stemmed from a piece of legislation introduced in 2015 by the previous Liberal government that mandated the closure of the mill's effluent treatment facility at Boat Harbour by January 2020 — 10 years before the lease expired. 

Boat Harbour, shown here in 2019, was used to treat industrial waste for more than five decades. (Steve Lawrence/CBC)

On its side, Northern Pulp has an indemnity agreement, signed by the province and one of the mill's previous owners in 1995. Northern Pulp inherited that agreement when it took over in 2008.

Among other things, the agreement indemnifies the company against lost profits and consequential damages related to premature loss of use of Boat Harbour.

Reopening the mill

Meanwhile, Northern Pulp is also moving ahead with an application to Nova Scotia's Department of Environment for approval to overhaul the mill and build a new effluent treatment facility.

The environmental assessment process could last for about another two years before construction could begin. 

The company argues that resolving its "disputes" with the province is a necessary step in restarting the mill. 

'A very strange path'

NDP Leader Gary Burrill told reporters Thursday he looks at the proposal of a forced settlement negotiation as simply "another version" of a lawsuit.

The approach, he said, is odd and concerning, given that Northern Pulp's executives have been explicit about their desire to improve relationships with the community in which the mill operates.

"For a company that has identified as a primary challenge the re-establishing of some kind of social licence, it is a very strange path to be on to proceed by suing, for the mega millions, the people of Nova Scotia from whom you are hoping to get that support," said Burrill.

ABOUT THE AUTHOR

Taryn Grant

Reporter

Taryn Grant is a Halifax-based reporter and web writer for CBC Nova Scotia. You can email her with tips and feedback at taryn.grant@cbc.ca

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