What are Paper Excellence’s real plans for Northern Pulp?

Paper Excellence is on a desperate charm offensive in Nova Scotia, trying to build “trust,” get support to refit and re-open its Pictou County Northern Pulp mill, make people believe that the company has somehow transformed itself overnight, and convince us all to forget its many egregious environmental, social, and political transgressions and bullying tactics.

Here’s Graham Kissack, vice president environment, health & safety and communications at the Paper Excellence Group, speaking at a virtual special meeting of Pictou Town Council earlier this week:

We need to be clear and say it again here; what happened in the past, is past. This is the start of the start, in terms of a new environmental assessment, and consultation on what we’re proposing. So what happened with the previous version of the project has nothing to do with what we’re planning today and what we’re going to do and how we’re going to move it forward. And we’ve heard from stakeholders and especially community and PLFN [Pictou Landing First Nation] that we need to do a better job in terms of communicating and sort of establishing the sincere and honest and collaborative working relationships.

In the past few days, Kissack has been busy presenting the Paper Excellence PowerPoint detailing the company’s plans for a “complete transformation” of the pulp mill to a variety of other audiences.

As the Halifax Examiner reported, the plans include a $350-million refit of the pulp mill, including a new effluent treatment plant adjacent to the mill that would then release the effluent into Pictou Harbour, although the exact location has not yet been determined.

Kissack’s partner in the presentations is Dale Paterson, whose LinkedIn page identifies him as someone with close ties not just to the pulp industry, but also to Paper Excellence. Originally from Meductic, New Brunswick, Paterson was vice-president of operations for Paper Excellence in British Columbia from 2012 to 2014.

Paterson is now head of the Environmental Liaison Committee that Northern Pulp put together last year, to “engage and solicit key stakeholder commentary” and to accomplish a long list of lofty goals, which are detailed in the October 2020 monitor report to the Supreme Court of British Columbia, where Northern Pulp and its affiliates sought creditor protection a year ago. (The Halifax Examiner reported on that case, Northern Pulp’s debts and main creditors, and on the opaque Paper Excellence corporate family here, here and here.)

At the Pictou Town Council meeting, Paterson said that since July 12, he and Kissack have met virtually with about 80 people from “forestry groups,” including the industry organization Forest Nova Scotia, the Cumberland Forestry Advisory Group,” as well as “major landowners.”[1] If the names of these forestry groups ring a bell, it could be because they were among the ringleaders in the recent forestry industry assault on and subsequent gutting of the Biodiversity Act before it had even made it to Law Amendments, as the Halifax Examiner reported here.

Paterson also told the Pictou Town Council they had met with “160 to 170” ex-employees and retirees from the pulp mill.

He admitted they had not met with Pictou Landing First Nation (PLFN), the community that suffered most directly and intensively because of the mill operations since the 1960s, which had turned the PLFN precious tidal estuary A’se’K (“the other room”) into a toxic lagoon filled with stinking pulp effluent.

Rather, Paterson said, they had met with an “off-Reserve Mi’kmaw group out of Truro, at their request through Environment Canada.”

In addition, Paterson told Council they had met with “two fishing groups.” But, he admitted, these were not fishing groups from the Northumberland Strait, who stridently opposed the mill’s earlier plans to pipe its treated effluent 14 kilometres overland and into the rich fishing grounds a few kilometres offshore from Caribou Harbour.

Paterson said the Northumberland fisherman “would not” meet with them, and that when they were asked to join the Environmental Liaison Committee eight or nine months ago, “they elected not to participate in it.”

“So we looked for other people from the fishing industry who would come to the group,” Paterson said.

Paterson said they had also met with a group of mayors, and that they had meetings scheduled with the Municipality of Pictou County Council, the Stellarton Town Council, and the Westville one after that.

Paterson didn’t mention it, but last week the two men also hosted a “technical briefing” for media, which ended abruptly and without warning after just over an hour, at the same moment that the Examiner was asking a question about how the company intended to build trust, as reported here.

“We’re not sort of a normal company”

At the Pictou Town Council meeting, Kissack and Paterson didn’t have the chance to dodge questions nearly so easily as they did when they hosted the media briefing.

Because of that, and because of the persistent and pointed questions of Pictou Mayor Jim Ryan, Deputy Mayor Nadine LeBlanc, and Councillor Melinda MacKenzie, Kissack and Paterson revealed — possibly inadvertently — some intriguing and also worrisome things about Paper Excellence and its plans for the mill, and the pensions of its employees and former employees.

Take, for example, this revealing exchange between Mayor Ryan and Dale Paterson:

Ryan: There is a significant amount of money being borrowed from Paper Excellence as part of the creditor protection. I guess my question is, will Northern Pulp make an effort through the creditor protection to fully funding the pension plan for its former employees?

Dale: That’s a fair question. We just finished topping up the remainder of 2020. 2021 is moving forward. We are having some discussions with the provincial government, probably now after the provincial election. So we’ll be able to answer that in the next couple of months. As you know the writ came through, so we’ll be waiting now.

Ryan: So is that the way that’s usually done, a year or two at a time? I guess my question is there are a limited number of employees right now who work for both you and your predecessors at the mill who are concerned about their pension? … As a company that is looking to gain trust within the community, is that something you have considered, a fully funded pension?

Dale: Yes, and one of the issues we have is we’re not sort of a normal company. We work through and have financial budgets approved on normally a four- to five-month window right now. This approval is six months. We’re going into another approval in October.

So Northern Pulp is “not sort of a normal company” and no, it won’t confirm that it will fully fund its former employee pension plans, even though it wants to gain trust, even though its parent company Paper Excellence recently announced it was purchasing the pulp and paper giant Domtar for $3 billion in an “all-cash transaction.”

Neither Kissack nor Paterson got around to mentioning this, or the outstanding loans worth nearly $85 million that Northern Pulp owes the province, or any of the other largesse it has received in recent years from the public.

Paterson told Council that the mill switched from bunker oil to natural gas seven years ago, so new pollution control could now be installed on the power boiler. Not surprisingly, he failed to mention that the installation of that gas pipeline was paid for by millions of public dollars provided to the company in 2013 by the NDP government of Darrell Dexter.

Who is paying for the refit, asks the mayor over and over again

But the Pictou mayor is very interested in who is paying for the expensive mill refit. He asked Kissack and Paterson if Paper Excellence is going to pay the full cost of the planned $350-million refit of the Pictou pulp mill.

Kissack’s baffling, waffling reply:

We have to order these things out. I mean in principle right now it’s there, but we still need to present the concept to the community. We have to get feedback. What we’re presenting today is what we might not end up with, right? We can’t presuppose the outcome here. So we’re going about this in a linear fashion. We need to understand what we’re working with before we can finalize all the details in terms of financing and everything else for the project. And that’s a discussion that rolls into 2022 for sure.

Ryan didn’t give up. “So you have no commitment from your parent company to cover the cost of any refit?” he persisted.

This time it was Paterson who answered — or rather, who failed to answer the question:

What we’ve done, Mayor Ryan, to answer your concerns, is we have looked at the next 25 to 30 years and the question was, “At $350 million is the mill viable?” And that came from the owner. And my comment back to him is yes, the wood is available sustainably over the next 25 years, and that the mill can survive as a business. That was his concerns [sic]. And from that, he gave the green light to keep moving forward. As we come and get input on this end, that cost may go to $375 [million]. But we know the mill can be a business moving forward. And that was the critical thing for him. The financing discussions will come, I would guess, once we finish the detailed engineering on the job, which would be in about a year, and year and a half, in terms of ultimately how it’s financed.

Ryan, the ever-patient mayor who doesn’t give up in the face of frustrating — if not infuriating — obfuscation, tried again, this time from a different angle. “Do you see an expectation where you would request funding or loans from the province of Nova Scotia?” he asked.

Paterson’s reply:

There will be, there is discussions [sic] that are ongoing with the province of Nova Scotia. My job here is to address the financial, whether the company can survive financially over the next 25 years. And I’m leaving that other stuff to the financial people.

So there it is, a pretty solid indication that Paper Excellence — a company ultimately owned by the multi-billionaire Widjaja family of Indonesia, with a corporate empire stretching around the globe — is in discussions with the province of Nova Scotia about possible funding for the refit of a 54-year-old pulp mill that has already benefited from at least a billion dollars of public largesse in the form of grants, loans, tax breaks, and a very long list of perquisites.

Among the many very big favours that Nova Scotians have generously — if unbeknownst to them — accorded the mill and its owners over the years are access to cheap and a great deal of water, and cheap wood on choice Crown woodland, something that Paterson said the mill will have access to for another 25 years.

Not only did Paper Excellence, through its Northern Pulp family of companies, come to own 425,000 acres of land in the province, an acquisition that Nova Scotians financed in 2010 with a $75-million 30-year loan, it also has large leases of public land it has been granted over the years.

The 1965 Scott Maritimes Limited Agreement Act gave the mill owners a lease on 230,000 acres of Crown land in Halifax County, on which grew some of the finest standing timber left in the province, a lease that was later increased to 250,000 acres. [2]

In January 2013, when the NDP were still in power, Deputy Minister of Natural Resources Duff Montgomerie wrote a letter to Pedro Chang, then-deputy CEO of Paper Excellence Canada. In it he let Chang know about the plan to purchase 550,000 acres of the former Resolute (Bowater) lands, pointing out that Northern Pulp could submit proposals under the planning process for the use of that land and previously owned Crown lands in western Nova Scotia. In the letter, Montgomerie made Northern Pulp a generous offer of an additional 125,000 tonnes of fibre from Crown land, bringing its total allocation to 225,000 tonnes per year. This was before the government had even begun the public consultations on the future use of Crown lands in southwest Nova Scotia, a good portion of which the provincial government later handed over to WestFor Management to manage … and clearcut. Northern Pulp is still one of the 11 members of the WestFor consortium.

And just for the record, back in the early 1960s, two forestry experts were tasked by the government of Premier Robert Stanfield to assess the remaining forest resources in Nova Scotia to determine whether there were enough wood reserves on mainland Nova Scotia for the new mill planned for Pictou County. They found that there weren’t, not even with Crown land included. They advised against the mill. Their findings were ignored and their recommendations overruled.[3] Then, as now, politics and corporate interests ruled the day.

Shirking its obligations in Boat Harbour

Then there is the travesty of Boat Harbour.

For more than half a century, in what is considered one of the worst examples of environmental racism in Canada, the pulp mill piped its effluent into Boat Harbour, causing immeasurable suffering for Pictou Landing First Nation. There were numerous pipeline breaks, including one in 2014 that spewed 47 million litres of untreated effluent onto sacred Mi’kmaq burial grounds and led to a fine of $225,000 for Northern Pulp, and to a PLFN blockade that was not lifted until the province pledged to close Boat Harbour.

As if that weren’t enough, because of a decision by the Progressive Conservative government of Premier GI Smith in 1970, the people of Nova Scotia were the owners of the mill’s treatment facility and thus its toxic effluent.

Then in 1995, under the Liberal government of Premier John Savage, the province signed an Indemnity Agreement with the owners of the mill that absolved them and anyone even remotely associated with the mill — ever — and everyone related to them of any responsibility for any of the harm caused by its pollution.

As a result, the province is responsible for the remediation of Boat Harbour. Ken Swain of the Crown corporation Nova Scotia Lands that is handling the project, told the Examiner in 2018 that the project could cost up to $325 million. The federal government is chipping in $100 million for the clean-up.

And yet, Northern Pulp, now claiming it wants to build trust in Nova Scotia, hasn’t even fulfilled its minimal obligations in the initial decommissioning of Boat Harbour.

In March this year, Nova Scotia Lands announced that Northern Pulp had failed to submit the decommissioning plan for Boat Harbour that was due on February 28, 2021. Northern Pulp is responsible for removing the top layer of sludge from Boat Harbour, but because it had failed to submit a plan for doing so, the province was taking on that project too, a project costing $19 million.

Is it really all about the fibre?

Towards the end of the Pictou Town Council meeting, Councillor Melinda MacKenzie asked why Paper Excellence wasn’t considering a new mill instead of refitting the old one.

Kissack replied that a new mill would cost more than a billion dollars, then let slip this admission:

If you were going to start from scratch, by the time you had it put together, we’d have run out of time, and the rest of the forestry products sector, the sawmillers and the harvesters would have long found other sources to buy their fibre.

It’s worth remembering here all the doomsday predictions from big forestry players and Unifor, the union that represents the pulp mill workers, that the proverbial sky would come tumbling down on Nova Scotia if the mill were to close.

Throughout 2019, while Northern Pulp’s proposal for a new effluent treatment facility was undergoing a provincial environmental assessment, forestry interests and Unifor constantly pressured then Premier Stephen McNeil’s government to amend the Boat Harbour Act and allow the mill to continue operating and using the lagoon for its effluent until it had a new treatment facility approved and built.

After McNeil refused to amend the Act, in January 2020 Unifor’s national president Jerry Dias issued a dire warning that the government was gutting the forestry industry, and claimed the mill’s closure would cast “tens of thousands into unemployment and financial uncertainty.” Dias called the mill closure a “horrible outcome” for “thousands of workers connected to the forestry sector.”

Since the mill went into hibernation, the big players in the forestry industry have complained bitterly about how its closure has harmed them, maintaining incessantly that they need the mill as a market for their wood chips and low-grade pulpwood.

And yet, Kissack admitted in front of Pictou Town Council that one of the reasons Paper Excellence is planning a refit of the mill, rather than building a new one, was because they didn’t want to give the forestry sector time to find other markets for their fibre.

Paterson went on to say they had done “financial reviews” and found that a new mill would cost about $1.2 billion, and it would take six or seven years to get it built. He then launched into a litany of reasons they wanted to refit the existing mill, which “had a couple of big benefits.”

The employee turnover was low, Paterson said, and the mill ran well. And then he too came back to the question of the wood supply for the mill, adding that the fibre in Nova Scotia “is a very significant strength, it gives people who buy this fibre a distinct advantage.”

In other words, Paper Excellence is after the fibre that the northern softwood plantations and much-altered and diminished Acadian forests provide. Fibre availability, especially northern softwood that produces strong pulp, is already an issue in parts of the country. Paper Excellence recently shuttered one of its pulp mills in British Columbia because of a shortage of “economic” fibre in the region.

Presumably, the “fibre” available in Nova Scotia’s beleaguered forests looks more economically viable to Paper Excellence, which claims the wood supply is available for at least another 25 years.

The price for northern bleached Kraft pulp, which is produced in the Pictou mill, has been rising dramatically in recent years, partly because many of the polluting mills that produce it have been closing.[4]

Will the charm offensive work?

Asked last week for her response to Paper Excellence’s stated desire for “reconciliation” with Pictou Landing First Nation, Chief Andrea Paul told the Examiner she would like “to know how they define reconciliation.”

Pictou Councillor Melinda MacKenzie asked Kissack and Paterson what kind of consultation they’ve had with Pictou Landing First Nation.

Kissack replied that the company has “relationships” with 25 Indigenous groups across Canada. He admitted that what happened with Boat Harbour, and the injustices over 54 years were “ugly” and that “there is a lot of harm and damage there.” He didn’t mention that in 2019, Paper Excellence pushed the provincial government to amend its own legislation so the mill could continue using Boat Harbour for years until it had a new effluent treatment facility, which would have indefinitely extended that harm and damage.

Instead, Kissack said Paper Excellence wanted to “build solutions” with Pictou Landing First Nation. “But in terms of actually building that trust and being sincere and creating a long-term relationship, that’s work that Dale is on,” he said.

But building “trust” is not going to be easy for Paper Excellence. Comments on the Council’s Facebook page numbered 625 as of July 21 and they are nearly all critical.

At the end of the special meeting, this is what Ryan had to say about Paper Excellence’s plans for the mill.

I have to give my own comments on this. Dale, you mentioned your blind spots in the past, and based on what I’m seeing. I’m seeing all kinds of big promises, but I’m finding it very, very difficult personally to find trust in this plan … my own personal view is that putting treated effluent directly into the harbour is not acceptable in my opinion.

A postscript

It may seem trivial, but there is something extremely basic that the two men could do to make themselves at least appear to know something about the local audience to whom they are directing their charm offensive.

If the two Paper Excellence spokesmen really want to be taken seriously and believed as they try to ingratiate themselves with Pictou Landing First Nation and the people of Pictou County who have had to live with a stinking pulp mill for more than half a century, the might want to start by learning how to correctly pronounce the words “Pictou” and “Mi’kmaq,” both of which they repeatedly mangled during the media briefing and the Town of Pictou Council meeting.

[1] The two largest — if not the largest — private landowners in Nova Scotia are the US-based investment firm, Wagner Forest Management, and a member of the Northern Pulp affiliates owned by Paper Excellence, Northern Timber Nova Scotia Corporation. Together, these two companies own close to a million acres of land that was originally owned by Scott Paper from Philadelphia, that had run a mechanical pulp mill in Sheet Harbour until it was closed after flood damage in 1971, had owned 20% of the Port Hawkesbury pulp mill, and also built the mill in Pictou County in the 1960s, which it sold in 1995 to Kimberley-Clark. In 2004 Kimberley-Clark spun off a company called Neenah Paper, and in 2006 Neenah sold about half of its million acres in Nova Scotia for $155 million to Wagner Forest Management, meaning about 3.7% of the province now belonged to an American investment firm. Wagner Forest Management then created two entities to manage its 500,000 acres land. One, Nova Star, held properties that could be sold off as cottage and development properties. The other, Atlantic Star, signed an agreement to provide Neenah with fibre for its pulp mill. As the Halifax Examiner reported here, Wagner Forest Management appears to have had a heavy hand in the campaign that led to the gutting of the Biodiversity Act in April 2020. A Paper Excellence spokesperson told the Examiner that while the company had concerns about the Biodiversity Act, it was not involved in the campaign to have it repealed. The Paper Excellence company, Northern Timber, owns 425,000 acres of Nova Scotia. In 2010, the NDP government of Darrell Dexter loaned Northern Pulp, which was then owned by two private equity firms in the United States, $75 million to buy the 475,000 acres or remaining Neenah lands in the province. As part of the deal, Nova Scotia immediately bought 55,000 acres of this land from Northern Pulp, at 1.7 times the price per acre that Northern Pulp had just paid for it. Thus, not only did Nova Scotians finance the land purchase for the US owners of Northern Pulp, they also offered them a hidden gift of $7 million. That loan is part of the nearly $85 million that Paper Excellence still owes the Nova Scotia government, which agreed to freeze payments while Northern Pulp and its affiliates are in creditor protection in the Supreme Court of British Columbia. More information on these land purchases and owners is available in my 2017 book, “The Mill: Fifty Years of Pulp and Protest.”

[2] More on the mill’s Crown land leases and access to public woodlands is also available in the 2017 book.

[3] L. Anders Sandberg and Peter Clancy. 2000. Against the Grain: Foresters and Politics in Nova Scotia. Vancouver, BC: UBC Press. pp 118-119.

[4] Palmer, David. “The tiger flicks its tail.” Atlantic Forestry Review. March 2018. Pp 14 -15.