A handful of companies who are jointly responsible for Northern Pulp and its timberlands were granted creditor protection on Friday by the British Columbia Supreme Court.
1057863 B.C. Ltd, Northern Pulp Nova Scotia, Northern Timber Nova Scotia and other related non-operating affiliates responsible for the Pictou County kraft pulp mill claimed that they would run out of money next month.
Without creditor protection they warned that they wouldn’t be able safely idle the kraft pulp mill and contribute to its portion of the responsibility for cleaning up the Boat Harbour Effluent Treatment Facility.
The mill stopped productions of kraft pulp, a long fibred strengthener used in products like toilet paper,in January after Premier Stephen McNeil refused to allow its continued use of the existing provincially owned effluent treatment plant at Boat Harbour while it seeks regulatory approval to build a replacement.
Northern Pulp’s plans to build a new treatment plant adjacent to its Abercrombie Point mill and pump its treated waste into the Northumberland Strait faced wide opposition from the Pictou Landing First Nation, fishermen from the three maritime provinces, environmentalists and concerned local citizens.
It was supported, meanwhile, by the province’s forestry industry which claim the mill is required as a destination for byproducts from sawmilling and harvesting operations.
The mill consumes just over a million tonnes of softwood annually.
According to the mill’s filings, its owners believe that the province violated a series of signed agreements when it forced the mill to stop using Boat Harbour to treat its effluent in January.
“The Petitioners believe they have various claims against the Province relating to the forced closure of the Mill and commence the within proceedings with the objective of resolving issues with the Province, restoring the Mill and relevant forestry assets to an operational state and re-engaging their workforces as soon as possible,” read court documents filed in British Columbia.
The documents allege the current terms of reference under which the mill is seeking an environmental approval don’t lay out clear targets it has to prove it can meet.
They state that protection from creditors for the mill, which has no revenue and liabilities that exceed its book value by $131 million, will allow it to negotiate with the province and the Pictou Landing First Nation a way that it can build a new effluent treatment plant and restart as a going concern.
Even if it got the support of the province and the first nation that has been forced to live beside the mill’s pollution since 1967, the mill anticipates that it would take two years to build and commission a new effluent treatment plant once regulatory approval is received.
The current environmental approval process that the mill recently stepped away from takes a minimum of a year.
The mill did not seek relief from debts under creditor protection and stated in a press release Friday that it will continue to meet all obligations to its employees, suppliers, contractors and retirees.
“The CCAA filing has become necessary in light of the decision of the Province in December and in order to preserve the value of assets, complete the hibernation of the Mill in a safe and environmentally responsible manner and provide needed time to engage with stakeholders and explore alternatives for restarting the mill,” said Graham Kissack, Vice President, Environment, Health, Safety and Communications for Paper Excellence Canada in the press release.
“We want to operate in Nova Scotia and believe that a modern mill and healthy environment can co-exist in Pictou County, just like it does in 89 other communities with pulp and paper mills across Canada.”
