Deciding Northern Pulp’s future

Nova Scotia’s business minister Geoff MacLellan says it’s not the time to talk about all the money that Northern Pulp owes the province, and it won’t be until after environment minister Gordon Wilson makes his decision on the mill’s new effluent treatment facility on or before December 17.

CBC reporter Michael Gorman notes that MacLellan wants to “avoid creating more anxiety than already exists around the issue.”

“So to add any noise — any sort of side conversation about loans and values and when they’re going to be called and those things — I think is very unhelpful,” said MacLellan.

The minister may well feel it is “unhelpful” for the government to speak openly about the awkward predicament it finds itself in as it prepares to make a decision on whether or not to approve Northern Pulp’s new treatment facility. But the province’s outstanding loans and potentially costly obligations to Northern Pulp, which the government has to consider when making decisions affecting the mill, are exactly the things the people of Nova Scotia have every right to know about.

Fifty-three years of opaque, dubious, and even dirty dealings involving provincial governments kowtowing to foreign corporations that have owned the bleached Kraft pulp mill in Pictou County have hardly engendered public trust. Without more clarity from the government, the public has no reason to believe that this time, and after so many decades, the government will finally come clean about its decision-making. And act more like the regulator it is supposed to be, rather than a backroom enabler, financier and sometimes, virtually a hostage of the mill.

In September 2019, Premier Stephen McNeil penned an op-ed published in the Chronicle Herald, entitled “Setting the record straight on Northern Pulp.” McNeil praised the company for the efforts it was making “to complete a science-based focus report,” adding that, “the final decision on whether the new effluent treatment facility gets the go-ahead must be based on science and reason.”

But will it?

There are certainly grounds for doubt.

Let’s start with a look at the science in Northern Pulp’s proposal for treating and dispersing its effluent without the use of Boat Harbour, which the Boat Harbour Act stipulates has to be closed on January 31, 2020.

Poor grades for Northern Pulp’s focus report

In late November, some media outlets obtained comments that five federal departments submitted to Nova Scotia Environment about the Northern Pulp focus report for its proposed effluent treatment facility.

Some of the comments are damning, and remind me of the kinds of things teachers used to scribble in red ink all over a particularly poorly done school assignment, right underneath the big red F.

And yet, despite hard-hitting articles featuring the federal agencies’ comments by Michael Gorman for CBC and Keith Doucette for Canadian Press, and a defensive press release from Northern Pulp, there has been remarkably little additional coverage or public discussion of what they say about the quality of the science in —and the validity of — Northern Pulp’s focus report.

The Canadian Press story got only limited traction. I’ve seen no national coverage of the comments. Nor have I found any reference to the comments in the Chronicle Herald or any SaltWire papers. SaltWire columnist Jim Vibert did comment wryly that despite the government’s claims that it would base its decision on science:

… unless the science is alchemy, astrology or perhaps political, the Pictou County pulp mill’s plan won’t pass muster.

Northern Pulp’s plan

Northern Pulp’s plan is to construct an activated sludge treatment facility beside the pulp mill on Abercrombie Point (and adjacent to the Canso Chemicals site that is heavily contaminated with mercury). From there it would pump the treated effluent — up to 85 million litres a day — through a pipe nearly a metre in diameter and 15 kilometres long. It would cross Pictou Harbour, run overland alongside Highway 106 to the PEI ferry terminal at Caribou Harbour, and then four kilometres out into the rich fishing grounds of the Northumberland Strait.

On November 19, groups opposed to the plan held a press conference in Pictou to detail their concerns about the quality of the science, inaccuracies and missing information in the focus report (which the Halifax Examiner reported on here).

It seems scientists in five federal government departments were equally unimpressed by the focus report. Many of their criticisms are the same as the ones made by those independent experts working on behalf of 3,000 fishermen, Pictou Landing First Nation, and Friends of the Northumberland Strait.

Given the thousands of pages that Northern Pulp has submitted to the province for the environmental assessment of its effluent treatment facility, for which the province has already paid $6 million under a secret agreement with Northern Pulp, it is astounding how many information gaps and deficiencies the federal government scientists found.

Here are some of the criticisms that the Department of Fisheries and Oceans (DFO) made in its four pages of comments (I’ve put a few of the more critical phrases and words in bold):

• The description of the Project and technical details and mitigations presented in the focus report are not sufficient in completely characterizing the project effects related to DFO’s mandate.
• There are information gaps related to the disposal at sea location (which may result in impacts to fish and fish habitat), final pipeline construction methodology and mitigation to avoid or minimize potential HADD [harmful alteration, disruption or destruction of fish habitat], Death of Fish, including marine mammals and sea turtles.
• The preliminary review identified a number of gaps in the information presented. For example, information on marine species in particular is lacking and, at times, factually inaccurate. Moreover, the oceanographic modelling was considered inadequate.
• The review of literature describing the aquatic community in the area is deficient: a substantial number of reports and publications are available that provide more contemporary information on aquatic communities. The report largely relies on a desktop review of sparsely published and in some cased [sic] outdated materials or incorrectly uses fisheries as a proxy for species distribution.
• The limited spatial and temporal marine habitat assessment and baseline distribution of many of the marine fish species presented are inaccurate … The report also incorrectly indicates that some species utilize the area for only migration (e.g. Atlantic herring, American eel, striped bass).
• There is an absence of information on marine mammals, leatherback sea turtles and sharks.
• Herring harvest areas directly overlap the pipeline in outer Caribou Harbour and Northumberland Strait as stated but more importantly the project area includes herring spawning and larval distribution.
• The project is within the marine refuge (Scallop Buffer Zone 24) … This important area is closed to scallop dragging to protect juvenile lobster, scallop, flounder and their habitat. It is not clear that the Scallop Buffer Area-Marine Refuge has been adequately considered in the environmental management and planning sections of the document.
• Some common species names are incorrect (American plaice and not Atlantic plaice.)

Environment and Climate Change Canada (ECCC) made eight extensive and detailed critiques of the focus report, most too technical to quote here. But here are a couple of things it had to say (again the emphasis is mine):

• Intensity factors for the calculation of allowable daily discharges for BOD [biochemical oxygen demand] and TSS [total suspended solids] are rounded up from what is identified in ECCC’s May 2019 Detailed Proposal for the Modernization of the Pulp and Paper Effluent Regulations … Rounding-up the intensity factors represents an increase in allowable discharges.
• It is unclear how many marine water quality samples were in fact collected or how the laboratory results were used to calculate the Background Water Quality … In addition, no justification for the number of samples or sampling locations was provided.

Health Canada sent 14 pages of comments. Here are a few:

• Health Canada is unable to assess whether the project as outlined in the Registration Submission and Focus Report may pose unacceptable or un-mitigable risks / adverse effects to human health as adequate information … has not been provided at this time.
• After consultation with the Department of Fisheries and Oceans (DFO) it was determined that the choice of a 2D oceanographic model is not appropriate for far-field modelling in Northumberland Strait … therefore errors in modelling may impact that potential risk / adverse effect of the project to human health …
• Air dispersion modelling was completed at the facility’s average production output of 280,000 to 300,000 air dried metric tonnes (ADMT), however the facility has an industrial approval to operate to 330,000 ADMT … The air dispersion modelling should be completed at maximum operational output to provide worst case scenario for the project …
• Further … the increased output would increase the quantity of biosludge used in the boiler, which could also contribute to higher concentrations of COPCs [Contaminants of Potential Concern].
• Due to the screening methodology used by the consultant, COPCs in effluent may have been inappropriately screened out … and may underestimate the risk associated with the project.
• The report did not address the risk associated with exposure to chemical mixtures which could underestimate the risk to human health associated with the project.

Public Services and Procurement Canada submitted four pages of comments. It called for an analysis of the bedrock where the marine portion of the pipe was to be buried, and raised concerns about ice scouring. In addition, it noted that:

• The report was, overall, found to be cumbersome to navigate and incomplete in certain areas.
• No mention is made of leak detection for the underwater buried portions of the pipe. Independent of effluent impacts associated with effluent discharged from the end of pipe in deeper waters, what would the potential impacts of water quality and biota be resulting from undetected leaks, particularly in shallower near shore areas? There appears to be an underlying assumption that leaks in the buried marine portions of the pipeline are not an issue.
• Section 10.1: Marine Archaeological Resource Impact Assessment (AIRA). This section indicates the complete ARIA is provided in Appendix 10.1. Appendix 10.1 includes a 1-page letter report, this is not an acceptable ARIA.
• Appendix 7.4 – Environmental Effects Monitoring Program (EEM): This Appendix consists of an excerpt from the Pulp and Paper Effluent Regulations and does not provide project specific details.

Transport Canada sent Nova Scotia Environment an email, in which it noted:

• While there are some further details included in the Focus Report regarding the location of the pipeline, Transport Canada has yet to receive more specific details that are required in the form of an application for approval under the CNWA [Canadian Navigable Waters Act] and for a Lease or License to access Transport Canada lands at the Caribou Ferry Terminal.
• It is important to note that there is potential for direct impacts to navigation …

Mountains of material for the minister

Four of the five departments said that the review period (36 days) was too short, given the huge volume of material.

The focus report, which was required by then-environment minister Margaret Miller in March when she found 19 key deficiencies in Northern Pulp’s original registration documents, amounts to more than 2,600 pages.

The original registration documents that Northern Pulp submitted on January 31, 2019 to Nova Scotia Environment comprise 1,734 pages.

Comments on the registration documents from the public, groups, governments, municipalities, and PLFN make for another 4,423 pages of reading.

Nova Scotia Environment has to wade through all of that — plus many more pages of comments submitted during the public review period for the focus report — before the decision is made on the new effluent treatment facility.

But Nova Scotia Environment spokesperson Rachel Boomer told me that as daunting — and implausible — as it may seem, Minister Gordon Wilson:

… will read and consider all of the submissions, including those from expert reviewers and from the public, before making his decision. The deadline for him to make his decision is Dec. 17.

On decision day, the minister has three options. He can approve the project. He can reject it. Or he can demand an Environmental Assessment Report.

If the minister were to demand a full environmental assessment report, it could take well over two years, involve public hearings, and an “Environmental Assessment Panel.”

Northern Pulp spokesperson Kathy Cloutier already said in January this year that without any delays in the approval process, Northern Pulp would need more time to get the facility up and running, and so would need an extension on its use of Boat Harbour “in the proximity of a year” past the legislated closure date of January 31, 2020.

An environmental assessment report could add years to that.

Responsibilities, obligations, and liabilities

On January 30, 2020, Northern Pulp’s industrial approval from Nova Scotia Environment will run out. That permit, issued in March 2015, gives Northern Pulp permission to operate the pulp mill and also:

…the facility also known as Boat Harbour Effluent Treatment Facility … containing two (2) settling basins, an aerated stabilization basin, the former stabilization lagoon (known as Boat Harbour) as well as dams and related appurtenances.

It requires Northern Pulp to submit a “detailed closure plan” to the province for any and all parts of the facility one year “prior to decommissioning/closure of the Facility, or any part thereof.”

The closure plan “shall include the method and practices for the handling and disposal of all products and waste materials on Site.”

Of course, Northern Pulp is not responsible for the clean-up of Boat Harbour, thanks to a series of agreements provincial governments have signed with the mill owners over the decades.

In 1970, the Progressive Conservative government of Premier G.I. Smith agreed that the province would own and be responsible for treating the mill effluent in the Boat Harbour facility for 25 years.

In 1995, the Liberal government of Premier John Savage signed a Memorandum of Understanding extending that agreement, and an indemnity agreement that “saved harmless” just about anyone who had ever had any official link to the mill from any liabilities relating to the mill’s effluent and treatment.

In 2008, the Progressive Conservative government of Premier Rodney MacDonald signed an Acknowledgement Agreement that extended the mill benefits in the 1995 MOU.

Still, the industrial approval requires the mill to submit a closure plan for Boat Harbour, and it is the mill’s permit to operate, so I wondered if it has respected its legal obligation.

I emailed Northern Pulp, Nova Scotia Lands (which is responsible for the Boat Harbour remediation project), and Nova Scotia Environment and asked if any closure plan had been submitted.

As of this writing, no one has answered that question. Both Ken Swain of NS Lands and NSE spokesperson Rachel Boomer replied that they wouldn’t be commenting until Minister Wilson had made his decision. I’ve not heard from Northern Pulp.

So for now, we don’t know whether Northern Pulp has submitted a closure plan for Boat Harbour, which it should have done on January 31 this year, a year in advance of the closure date legislated by the Boat Harbour Act.

In August 2019, in its decision that Pictou Landing First Nation has a right to be consulted about provincial funding for the mill’s new effluent treatment facility, the NS Court of Appeal noted that:

Without an effluent treatment facility, there will be no new Industrial Approval. Then the Mill’s operation would end, as would the effluent and emissions.

As the Current Industrial Approval will expire on January 30, 2020, the Mill may not operate after that date without a renewed Industrial Approval … That renewal will require satisfactory treatment of effluent …

The Court also revealed that the government had been making secret agreements with Northern Pulp to fund the design and engineering of the new facility:

Northern Pulp and the Province have signed an Agreement dated December 28, 2016, and an Amendment dated September 27, 2017, that provide reimbursement by the Province to Northern Pulp for engineering, design and environmental assessment expenses for the New ETF [effluent treatment facility].

On December 13, 2017, the Province, by the Minister of Transport and Infrastructure Renewal, and Northern Pulp signed an Agreement providing the Province would reimburse Northern Pulp’s detailed design and engineering costs, up to $8 million, for the new ETF.

According to the Court of Appeal, those 2016 and 2017 funding agreements between the government and Northern Pulp:

1. reduce the likelihood that Northern Pulp would allow the Mill to close after January 30, 2020, to avoid paying the full cost of the a New ETF; and
2. heighten the likelihood of ministerial approvals that are necessary for the Mill to operate after January 30, 2020.

In other words, because it is a funder of Northern Pulp’s new treatment facility and beholden by previous legal agreements to ensure the mill gets permits it needs, the province is in a conflict of interest and not in a position to make an unbiased decision on the proposed effluent treatment facility.

This casts doubt on claims that the decision will be based on “science.”

But the story is even more convoluted than that. There are also legal angles and possible lawsuits to be considered.

A high-stakes legal game

The Court of Appeal determined that without the province’s contribution to the cost of a new ETF, there is a “distinct potential” that Northern Pulp would “decline to pay the full amount for the new ETF and would be content to sue the Province for the alleged breach of the Lease [for the use of Boat Harbour].”

Currently, Northern Pulp has a lease allowing it to use Boat Harbour for its effluent until 2030 because of an extension that was signed in 2002, three years before the lease signed in 1995 would have expired.

The 2002 lease extension was signed by the Progressive Conservative government of Premier John Hamm.

Today, former Premier Hamm is chair of Northern Resources Nova Scotia Corporation, part of the Paper Excellence Group, which in turn is connected through its owner, Jackson Widjaja, to the massive corporate empire of the billionaire Widjaja family of Indonesia. Northern Resources Nova Scotia is the umbrella for a family of companies linked to the mill, including Northern Pulp Nova Scotia, Northern Pulp, Northern Pulp Nova Scotia Corporation, Northern Pulp NS GP ULC, Northern Timber Nova Scotia LP, and Northern Timber Nova Scotia.

The 2002 decision of John Hamm’s government to allow the mill to use Boat Harbour until 2030 could cost the province dearly. According to the Court of Appeal decision:

Northern Pulp has notified the Province that Northern Pulp claims compensation for the early termination of the Lease (January 30, 2020 instead of December 31, 2030) as a result of the Boat Harbour Act.

But there are other complications and bills to settle.

Northern Pulp affiliates still owe the government of Nova Scotia nearly $85.5 million.

Between 2009 and 2013, the NDP government of Darrell Dexter provided Northern Pulp companies with $111.7 million in grants and loans.

In February 2017, I submitted a Freedom of Information request for details on all the provincial grants and loans, including interest rates, terms, and repayment status. In June 2017, I received a record with those details redacted.

I appealed the redactions, but more than two years later, have still not received a reply.

In August 2019, the Chronicle Herald submitted a similar FOIPOP, and in November received full disclosure of the details that had been redacted in my “information package.”

As a result, we now know that $65 million is still owing on a $75 million loan. The NDP government made that 30-year loan to Northern Timber Nova Scotia in 2010 to finance the purchase of 475,000 acres of land in the province. The loan also included a hidden gift of $7 million. As part of the same deal, the province bought back 55,000 acres of the land at 1.7 times the price Northern Timber — then owned by New York-based private investment firms Blue Wolf and Atlas Capital — had paid for it.

So Northern Pulp owes the people of Nova Scotia a lot of money, owns a lot of land that it purchased with a loan from the government that it has until 2040 to repay, but is intent on getting still more money out of the province in compensation for the loss of Boat Harbour.

And of course, because of agreements made by previous governments, citizens and not Northern Pulp will be paying for the remediation of Boat Harbour. Speaking to the Halifax Examiner in November 2018, Ken Swain of NS Lands said the clean-up could cost up to $315 million.

The federal government has pledged $100 million towards the remediation of Boat Harbour, for which it has also required a federal environmental impact assessment.

So far, it has not done the same for the new effluent treatment facility.

Where is the federal government?

The comments from the five federal agencies were obtained by the media on November 25, the day before Jonathan Wilkinson, the new minister of Environment and Climate Change Canada, was slated to make a decision on whether the Northern Pulp project would have to undergo a federal impact assessment.

But on November 26, saying he had just become minister the previous week, Wilkinson told the Toronto Star that he needed more time because he had just “assumed the responsibility” the previous week. He would be making his decision on December 20, three days after the provincial decision is due.

I sent a list of detailed questions to Environment and Climate Change Canada to find out more. Specifically, I wanted to know whether ECCC could subject the effluent treatment facility project to a federal impact assessment if the province had already approved the project, what criteria would be used to decide whether a federal assessment would be required, and what role the federal agency submissions, so critical of the focus report, would play in that decision.

The first response I received was a generic statement attributed to Minister Wilkinson, which replied to none of my questions. It doesn’t deserve to be reproduced here, except as a footnote to illustrate what sometimes passes for federal government media relations responses these days.

I re-sent the questions to ECCC, asking they be answered individually, and received this reply:

The provincial and federal processes are independent of each other. The federal Minister may designate a physical activity not identified in the Physical Activities Regulations as per section 9 of the Impact Assessment Act if he is of the opinion that the activity may cause adverse effects within federal jurisdiction or adverse direct or incidental effects, or there are public concerns related to those effects. The Minister may also consider adverse impacts on the rights of Indigenous peoples.

The Agency sought and received its own advice from expert federal departments in conducting its analysis of the designation request and to inform its recommendation to the Minister.

What happens next?

I asked PLFN legal counsel, Brian Hebert, if he thought there was any chance that environment minister Wilson could possibly approve Northern Pulp’s proposal, based on the science in the focus report, which was so broadly criticized by five federal agencies. He replied:

One of the weaknesses in the environmental assessment process is that at the end of the day whether to approve a project is a political decision. The final decision is left to the minister. The minister can take into account a variety of factors including economic impacts, environmental impacts and social impacts.

Theoretically, the minister could devise a number of conditions for an approval, but because of the sheer number of issues, it would almost make a mockery of the approval.

The whole purpose of the assessment in advance of approval is to identify the risks and make sure they are mitigated against. In the case the science and data is not there to even identify fully the risks or determine how best to mitigate them. So in short, the minister can approve the project subject to a laundry list of conditions, but this is very risky and of little comfort.

Hebert concludes:

Hopefully the government will base its decision on the science as it has maintained it would. The science is lacking and there is no choice but to reject the project or order a full environmental assessment report. Approval is not an option.

But of course, if the past is anything to go on, anything is possible when it comes to the very long and very complex saga of the pulp mill, and the role that governments have played in prolonging it.

Only one thing can be said for sure: decision day is nigh.

Cover photo: Northern Pulp Mill at night. Photo courtesy of Tony DeCoste Photo-Video

Joan Baxter is author of The Mill: Fifty Years of Pulp and Protest.