Nova Scotia government doles out $10 million more for Northern Pulp

The Nova Scotian government will be giving Paper Excellence, the parent company of Northern Pulp and a corporation linked to the multi-billionaire Widjaja family of Indonesia, still more millions.

This time, the amount is $10 million.

Northern Pulp still owes the province $85 million from previous loans. And the company still owes $65 million on a 30-year loan given by the NDP government in 2010 for the purchase of 475,000 acres of Nova Scotia timberland, with a hidden gift of $7 million. (A full list of government loans and grants to Northern Pulp can be found here.)

Two years ago, in a secret agreement, the provincial government also chipped in $6.1 million towards Northern Pulp’s studies for the environmental assessment of its new effluent treatment facility, which is reported here.

You won’t find any of this information in Tuesday’s press release from Premier Stephen McNeil’s office and the Department of Transportation and Infrastructure Renewal, which is remarkable not so much for what it does say, as what it neglects to say.

Here how it begins:

Now that the Northern Pulp mill has stopped discharging wastewater into Boat Harbour, Nova Scotians expect the remainder of the shutdown of the mill site to be completed in a way that is safe and protects the environment.

So far, so good.

It goes without saying that Nova Scotians do indeed expect Northern Pulp to clean up its mess, at least that part of it that is not Boat Harbour, which will be remediated by the province with $100 million in funding from the federal government.

The rest will come from the province, because of a series of agreements that past governments have signed with mill owners over the years.

Estimates for the cost of the Boat Harbour Remediation Project vary. In 2018, Ken Swain, who is executive director of the project for Nova Scotia Lands, told the Halifax Examiner that Boat Harbour remediation could cost anywhere from $152 to $325 million.

No one is quibbling about the province’s responsibility to clean up Boat Harbour itself. It was the dirty dealing and lies by provincial government officials back in the 1960s that led Pictou Landing First Nation to sign an agreement that allowed their precious tidal estuary, known as A’se’K – or “the other room” – to be fouled and destroyed by pulp effluent from the mill on Abercrombie Point.

Boat Harbour became one of the worst — if not the worst — example of environmental racism in Canada, and its clean-up is long, long overdue. Once the federal environmental assessment is completed, the remediation and the healing process of “A’se’K” and Pictou Landing First Nation can begin.

However, now the government is informing Nova Scotians that they are responsible for more than just the remediation of Boat Harbour. This is what the press release says:

Government owns the pipe that runs from the mill to Boat Harbour and is funding work to decommission the pipe along with other key elements of the environmental clean up.

Government is providing Paper Excellence, the mill’s parent company, a maximum of $10 million, or about half of the cost of shutting down the Boat Harbour effluent treatment facility, as part of the work to hibernate the mill. The funding will pay for the removal of the leachate, decommission the pipes, ditches, and settling and aeration basins on the site.

“We are committed to seeing the clean up is done right, and through the funding agreement, we will hold the company accountable to make sure it does,” said Premier Stephen McNeil. “Completing this work is an important part of the process to return Boat Harbour — A’se’k — to its original state for the people of Pictou Landing First Nation and surrounding communities.”

The company’s work plan is in line with orders from the Minister of Environment and needs to be complete before Nova Scotia Lands can remediate Boat Harbour in 2021.

The press release certainly glosses over why the government “owns the pipe that runs from the mill to Boat Harbour,” which is apparently the reason that the people of Nova Scotia are paying for its decommissioning and “other key elements of the environmental clean up,” which is “part of the work to hibernate the mill.”

So here’s a quick summary of what lies unwritten between those lines.

Nova Scotians are the involuntary owners of that effluent pipe because over the years, a series of governments have signed agreements that immensely benefit the mill owners.

The Halifax Examiner reported on these agreements several times, and again in this article on December 8, 2019, which summarized them this way:

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.

These agreements put the province in something of a legal bind – and potentially a very costly one.

As the Halifax Examiner reported here, when the Boat Harbour Act went to the Law Amendments Committee in April 2015, Northern Pulp’s submission pointedly reminded the province of the numerous agreements it had with the mill, including:

• Memorandum of Understanding dated December 1, 1995
• Lease dated December 31, 1995
• License Agreement dated December 31, 1995
• Indemnity Agreement dated December 31, 1995
• Water Supply Agreement dated June 30, 1995
• Lease Extension Agreement dated October 22, 2002
• Acknowledgement Agreement by the Province dated May 12, 2008

From this, the article concluded that:

In other words, Northern Pulp fully intends to hold the province to all of the legal agreements previous governments signed over the years, which could be very costly indeed.

Northern Pulp has already shown its litigious side. In 2015, when the province tried to impose some new pollution and water use limits in a new Industrial Approval (IA) for the mill, it filed documents in the Supreme Court of Nova Scotia to appeal the new IA. The province caved, gave Northern Pulp nearly everything it wanted in the new IA, and the case was withdrawn.

In January 2019, Northern Pulp and the province went to the Nova Scotia Court of Appeal to contest a 2018 Supreme Court decision that Pictou Landing First Nation had a right to be consulted about any provincial funding for a new effluent treatment facility.

Northern Pulp general manager Bruce Chapman has said the mill expects to be compensated for the loss of the use of Boat Harbour. In February 2019, Transport and Infrastructure Renewal spokesperson Marla MacInnis told the Examiner that the government had been:

…in discussion with the company about what would be fair compensation for the province’s decision to end the lease of Boat Harbour 10 years and 11 months early. These discussions have not yet concluded. When we reach a final agreement, we will share the details with Nova Scotians.

All of this suggests that Nova Scotians should probably not be surprised by the latest government largesse to Northern Pulp, and that they should also brace themselves for more to come.

However, this is not the message in Tuesday’s press release or the official government line.

In response to a series of questions about the provincial contribution of $10 million for the decommissioning of the effluent pipe, ditches, settling and aeration ponds, spokesperson for the Office of the Premier, Kristina Shannon, sent this statement:

The investment announced today is separate from the Boat Harbour Remediation project. The funding is not connected to any lease, indemnity agreement or outstanding loans. Government and all Nova Scotians want to see this work is done effectively and in a safe and timely manner, and through the funding agreement, we will hold the company accountable to make sure that happens. As the press release states, the funding agreement is up to a maximum of $10 million; Northern Pulp is responsible for the remaining costs.