HALIFAX - Nova Scotia's government is going to add about $118 million in debt to acquire a large tract of private forest land that belonged to Resolute Forest Products Ltd.
The deal announced Monday night will give the province control of 220,000 hectares of woodlands in the province's southwestern region, along with a power generation plant, the factory site and the wood fibre inventory of the defunct paper mill.
Resolute Forest Products Ltd. closed the former Bowater-Mersey paper mill near Liverpool, N.S., in June, throwing about 320 people out of work.
Under the terms of the arrangement to take over the assets, the province is acquiring the shares of Bowater Mersey for $1 from Resolute and the Washington Post Co. Ltd.
However, with those shares come worker pension and severance liabilities that the province says are estimated to be $118.4 million, which will be added to the government's debt of $13.3 billion.
Premier Darrell Dexter says acquiring the assets is necessary in order to revive the forestry industry and "generate jobs and wealth in the province."