As if the stinking pulp mill in Pictou County hadn’t done enough damage over the 53 years it was clearcutting and pulping Nova Scotia’s forests, pumping out noxious emissions that poisoned the air over large parts of this province and Prince Edward Island, dumping its stinking effluent (nearly a hundred million litres of the stuff every day) into Boat Harbour where it caused untold suffering for the people of Pictou Landing First Nation, all the while sucking up provincial and federal tax dollars and being gifted vast amounts of cheap wood on Crown land and cheap water. Now the mill owners are suing the province for “damages” of hundreds of millions of dollars.
So there it is.
Northern Pulp thinks it’s been victimized by Nova Scotians.
On December 15, Northern Pulp Nova Scotia Corporation, together with 10 other affiliates, including owners Paper Excellence and Hervey Investment B.V. (which appears to be little more than a street address in The Netherlands, ranked the world’s top 4th tax haven), filed a statement of claim in the Nova Scotia Supreme Court.
According to Statistics Canada’s Inter-corporate Ownership website, Paper Excellence and its Canadian holdings are part of the Indonesian-controlled Sinar Mas / Asia Pulp & Paper global corporate empire, which is owned by the multi-billionaire Widjaja family.
The court filing notifies the province that Northern Pulp Nova Scotia (NPNS) et al. are seeking damages “to compensate them for loss and damage suffered as a result of acts and omissions of officials and representatives of the Province which have forced the closure of the Boat Harbour effluent treatment facility (the “BH-ETF”) and the pulp mill (the “Mill”).”
The Northern Pulp mill has been closed since January 2020, when its proposal and focus report for a replacement effluent treatment facility for Boat Harbour failed to get provincial approval, and it found itself with no place to send its effluent.
The statement also claims that Paper Excellence sees the Nova Scotia mill as “a valuable long-term investment to supply customers in growing Asian and European economies.”
And it states that Northern Pulp and its affiliates have suffered “indemnified losses in excess of $100 million” between the mill’s closing in January 2020 and June 2021, and that “NPNS and affiliates will continue to suffer and incur very significant Indemnified Losses unless and until such indemnified losses are mitigated by a successful re-starting of the Mill,” and that such indemnified losses are expected “to exceed $450 million.”
None of the allegations have been tested in court, of course, and it remains to be seen whether the Nova Scotia government decides to confront them, or to try work out some kind of settlement with the Paper Excellence companies.
If the province does choose a settlement, or agree to bear the financial burden of re-opening the hibernating pulp mill, it certainly wouldn’t be the first time the pulp mill owners got what they wanted out of the province.
How a pulp mill captured a province
Provincial governments over the years have been more than generous to the moneyed mill owners — four American and now a global conglomerate controlled from Indonesia.
Since Paper Excellence has decided the time is right for it to make its case for why it believes itself a victim deserving still more public money, maybe it’s time Nova Scotians do the same, and take stock of the high costs they have paid to keep the mill running.
The following list of giveaways is just a start, and by no means exhaustive. Actual figures are probably much higher. But this list still suggests that the real victims are not and have never been those who own the mill, but the people of Nova Scotia whose governments have sold them down the river in their desperation to cater to the demands of the mill owners over five decades.
1960s: Cheap fibre and water, free infrastructure, tax breaks, and criminal behaviour
In 1965 the Progressive Conservative government of Premier Robert Stanfield passed the Scott Maritimes Limited Agreement Act that gave Scott, the Pennsylvania-based pulp and paper giant, a 50-year lease on 230,000 acres of Crown land with some of the finest standing timber left in the province. That was in addition to the million acres Scott already owned in Nova Scotia.
The lease was to be renewed after 40 years, so remains in place today, and has been complemented by Northern Pulp’s access to Crown forests in southwest Nova Scotia through the WestFor consortium.
Stanfield went against the advice of experienced forestry officials and set the stumpage rates at half of what they recommended.
The Stanfield government also gave Scott a five-year tax holiday, as well as a 20-year break on land taxes.
The Scott Maritimes Limited Agreement Act also gave the mill the right to use a minimum of 25 million Imperial gallons (114 million litres) of fresh water every day. In 1966, Stanfield authorized the government construction of a dam across the Middle River ($2 million) and a pumping station ($500,000) so that the province could fulfill its “obligation” to create a reservoir to provide the mill with fresh water.
The government also committed to building a causeway across Pictou Harbour that linked Pictou town with Abercrombie Point, where the mill was built. The cost of the causeway was many millions of dollars, shared by the provincial and federal governments.
In 1966, Stanfield authorized the Nova Scotia Water Authority to provide for the disposal of mill effluent into Boat Harbour and to acquire “all land required” for that purpose.
As Mi’kmaw Elder and scholar Daniel Paul put it in his book We Were Not the Savages, the way the province’s Water Authority officials ruthlessly deceived Pictou Landing First Nation to convince the Chief to sign over rights to the precious PLFN tidal estuary “A’se’k” for $60,000 for pulp effluent was “almost criminal.”
After that, the province paid $2.2 million for the effluent pipeline to Boat Harbour.
1970s – 1980s: Nova Scotia takes care of the pulp mill’s dirty business
In 1970, Progressive Conservative Premier GI Smith’s government signed an agreement with Scott that said the province would “own, operate and maintain” the pulp effluent treatment system, and Scott would pay just $12.03 per million Imperial gallons (4.5 million litres) and “indemnify and save harmless” the company from all claims relating to the effluent.
The province also paid $1.5 million towards a “pollution abatement plan” for the mill. (It’s possible there is another jurisdiction in the world where a government agreed to take responsibility for treating the toxic effluent from a pulp mill owned by a large multinational, but I haven’t been able to find another example of this extraordinary arrangement anywhere else on the planet.)
In 1983, the federal and provincial governments gave the mill $7 million under a Canada/Nova Scotia Pulp and Modernization Agreement.
1990s: More money and a series of incredible agreements
In late 1993, the Liberal government of Premier John Savage gave the mill $17 million to upgrade the Boat Harbour facility to meet new federal pollution guidelines.
But that was nothing compared with the gifts Savage’s government would make to the mill in 1995 in a series of agreements that still haunt Nova Scotians today, and feature large in Northern Pulp’s statement of claims to the Nova Scotia Supreme Court.
In 1995, another American pulp and paper giant, Kimberly-Clark, purchased Scott Paper, and became owners of the Scott mill and its land holdings in Nova Scotia.
The same year, with the 1970 agreement on effluent treatment expiring, responsibility for operating the Boat Harbour effluent treatment facility was transferred from the province to the new mill owners.
At that point, the mill’s lawyers, including Bernie Miller, then with McInnes Cooper & Robertson, worked on a series of four agreements signed by the mill owners and the province.
In 2009, Miller would become a registered lobbyist for Northern Pulp in Nova Scotia, and remain one until 2014, when he was appointed by Liberal Premier Stephen McNeil as Deputy Minister of Office of Priorities and Planning and later also Office of Strategy Management.
One of the agreements negotiated in 1995 with the province was a Memorandum of Understanding, under which the province agreed to restrict the operating standards it could impose on the mill.
An Acknowledgement Agreement signed New Year’s Eve 1995 obliged the provincial government — which in theory is the regulator meant to keep corporations in check — to “use its best efforts to assist Scott … to obtain all necessary permits, consents and approvals to permit the construction and operation of a replacement effluent treatment facility” for Boat Harbour when the lease for its use expired in 2005.
A new lease agreement was also signed by Savage’s government on New Year’s Eve in 1995 that extended the mill’s use of Boat Harbour 10 years until 2005.
But the most incredible giveaway of Nova Scotians’ rights and sovereignty came in the Indemnity Agreement witnessed by Bernie Miller, who was representing the mill, and signed by Liberal Minister of Supply and Services at the time, Gerald O’Malley.
That Agreement provided total indemnity to just about everyone who had ever worked for or had anything to do with Scott Maritimes against any claim arising from any new or reconfigured treatment facility, “without limitation.” [emphasis in the Agreement].
Further, the indemnification would “remain in full force and effective perpetually the transfer of responsibility for operation” of the treatment facility from Nova Scotia to Scott. And the indemnity was “intended to provide the broadest possible indemnity to the Indemnified Parties” and to be “given a broad and liberal interpretation in favour of the Indemnified Parties.”
These Agreements between the mill and Savage’s Liberal government were all secret, and the public only became aware of them years later.
2000s: A new lease for Boat Harbour, and lots more money
In 2001, Kimberly-Clark proposed to Pictou Landing First Nation that in exchange for the closing of the Boat Harbour part of the treatment facility and putting a new pipeline that would take the treated effluent directly to the Northumberland Strait, they agree to an extension of the lease for the use of the treatment facility until 2030.
PLFN agreed to the deal, providing the new pipeline went in and the stabilization basin in Boat Harbour were closed.
In 2002, the Progressive Conservative government of Premier John Hamm signed an executive order that gave the mill owners the use of the Boat Harbour treatment facility until 2030.
But then the new pipeline promise, which was the only basis for PLFN agreeing to the extended lease, fell through.
The extended lease for Boat Harbour that Hamm had enacted, however, remained in place.
Eight years later John Hamm would join the board of the US private equity firm, Blue Wolf Capital Management that, together with another US firm, Atlas Holdings, had acquired the mill in 2008, renaming it Northern Pulp.
Hamm had retired from politics in 2006, and in September 2010, he became chair of the board of Northern Resources Nova Scotia Corporation, which owned Northern Pulp.
Around this time, government money began flowing into the mill owners’ coffers.
In 2009, the Progressive Conservative government of Premier Rodney MacDonald loaned $15 million to Northern Pulp, owned by Blue Wolf and Atlas Holdings.
In March 2010, the NDP government of Premier Darrell Dexter gave Northern Pulp a 30-year loan of $75 million to purchase 475,000 acres of land that had originally been owned by Scott. There was a hidden gift of $7 million in the loan, as the province immediately bought 55,000 acres of the land from Northern Pulp at 1.7 time the price per acre that the mill owners had paid for it.
Atlas Holdings issued a press release thanking the Nova Scotia government, and “our partners in Northern Pulp, Dr. John Hamm and Blue Wolf Capital Management, who helped us conceptualize and negotiate this complex transaction.”
In January 2011, just before Paper Excellence acquired the mill, Peter MacKay, then Conservative MP for Central Nova, announced that the Conservative government of Prime Minister Stephen Harper was giving $28 million to Northern Pulp from its “green transformation program fund.”
In 2013, two years after Paper Excellence took over the mill, the provincial NDP government promised the company an additional 125,000 tonnes of green fibre per year from the promise, which would come from the newly acquired Bowater lands that Nova Scotians had spent $117.7 million to buy.
A 2008 study by the Ecology Action Centre had found that in the previous three decades, the governments of Canada and Nova Scotia had spent about $650 million subsidizing forest industries that favoured clearcutting in the province.
In 2013, the NDP government of Darrell Dexter announced it would refinance a 2009 loan to Northern Pulp for $5.4 million, and provide it with $20 million more in financing, of which $2.5 million would be forgivable if employment targets were met. The employment targets were not spelled out.
The province was chipping in $5.2 million towards a $10.2 million chipping mill for Northern Pulp, and $12 million for equipment that was supposed to reduce the emissions of particulate matter.
Meanwhile, the province didn’t impose any fines or directives when in 2014, Northern Pulp emitted nearly 11 times more particulate matter from its recovery boiler than was permitted for pulp mills in the United States.
Between 2009 and 2013, the province financed Northern Pulp to the tune of $111.7 million.
“An accident waiting to happen”
In its long history of polluting the air, water, and the politics of Nova Scotia, the mill has only been fined two times.
One was in May 2016, when Northern Pulp pleaded guilty to “depositing or permitting the deposit of a deleterious substance, namely pulp and paper effluent” in fish habitat, after its pipeline broke in 2014 and spewed 47 million litres of untreated effluent over sacred Mi’kmaq burial grounds on the Pictou Harbour shoreline.
That break led to the blockade by Pictou Landing First Nation, which would not be lifted until Premier Stephen McNeil agreed to bring in legislation to close Boat Harbour, which he did in the spring of 2015.
In delivering his decision on the case in May 2016, Judge Del W. Atwood said the pipeline rupture was “an accident waiting to happen” and Northern Pulp was “midway on the scale of culpability.” He fined the company $225,000.
In June 2016, the province initially fined the mill $697.50 (the same as a jaywalking fine in Nova Scotia) for exceeding permitted emissions of particulate matter, but then withdrew the summary ticket.
A year later it was fined again for the same offence, and this time forked over the few hundred dollars.
Add to all of this the fact that Northern Pulp will not be paying a single cent towards the remediation of Boat Harbour.
Injury upon injury
The federal government has pledged $100 million to the project. Nova Scotians will pay the rest of the costs. In November 2018, Ken Swain of Nova Scotia Lands, who is project leader for the Boat Harbour Remediation Project, told the Examiner the total cost could be up to $325 million, but of course that could be a serious underestimate for the project that is still undergoing a federal impact assessment.
And to add injury and insult to decades of injury and insult, there is also the fact that Northern Pulp et al. sought and received creditor protection in the BC Supreme Court, which means it has been failing to make contributions to the Special Pensions Payments and also been able to avoid repaying what it owes to Nova Scotia.
While the companies are in creditor protection, the province of Nova Scotia agreed to freeze the companies’ repayment of nearly $85 million of outstanding loans.
What makes the lawsuit even more galling is that while Northern Pulp pleads poor and fails to repay what it owes Nova Scotians, the BC Court has allowed Northern Pulp et al. to use $450,000 of the interim financing afforded to them by the creditor protection arrangement to sue the province.
Perhaps it’s time Nova Scotians had their day in court to document all the damages and costs they have incurred since the pulp mill first opened in 1967 — and will continue to incur for many years to come — because of its massive environmental and economic liabilities.
Many of the immense costs — to human health for example — have never been tallied.
The damage to the province’s Acadian forests will take centuries to repair, if indeed it can even be done.
When it comes time to decommission the mill itself and clean up the toxic mess of Abercrombie Point, including a plume of mercury in the bedrock underneath the former Canso Chemicals plant, it’s hard to imagine that a single one of the current or former corporate owners will step forward with the hundreds of millions of dollars (or more) that will be needed to undertake that massive task.
But Nova Scotians will be there to try to clean up the mess and shoulder the huge bills the corporate profiteers leave behind in Canada’s Ocean Playground.
They always are.
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Well, that was a sad, infuriating read. What a string of dumb decisions on the part of the NS government of each time. I hope there is some way to finally be rid of these corporate freeloaders.
Are the figures in current dollars?
No, they are taken from reports and media articles at the time the loans and grants were made. So they would be a good deal higher in today’s dollars…worth some calculating for sure.
High paying unionized jobs at Northern Pulp, with some workers making in excess of $100,000 a year plus benefits.
Paper Excellence should be counter sued by the Province with a demand that every penny granted or loaned to the mill in the last 20 years be immediately refunded.
wow it is almost unbelievable .. see how much we are suckers
“…Nova Scotians will be there to try to clean up the mess and shoulder the huge bills the corporate profiteers leave behind in Canada’s Ocean Playground.
They always are.”
That pretty much says it all.
Thank you Joan for continuing to follow this story when so many – particularly those in the corporate media – would rather look away.
– Berta Gaulke