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Northern Pulp receives initial order for voluntary credit protection

Northern Pulp has received an initial order for voluntary credit protection, which parent company Paper Excellence Canada says is a “necessary” step to keep its pulp mill in hibernation mode.

The companies 1057863 B.C. Ltd, Northern Pulp Nova Scotia, Northern Timber Nova Scotia – collectively called Northern Pulp – received the order under the Companies’ Creditors Arrangement Act (CCAA). Paper Excellence Canada itself has not sought creditor protection.

The initial order stays proceedings against Northern Pulp to provide the opportunity to restructure its business and financial affairs. Ernst & Young will monitor the CCAA proceedings.

“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,” says Graham Kissack, vice-president, environment, health, safety and communications for Paper Excellence Canada, in a statement.

“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.”

Northern Pulp, which had been operational since 1967, stopped production on Jan. 31, which was the province of Nova Scotia’s deadline for the pulp mill to cease using the Boat Harbour Effluent Treatment Facility, which deposited treated effluent into aerating lagoons adjacent to Pictou Landing First Nation.

Without an approved replacement facility, Northern Pulp put the mill into “hibernation,” and now maintains a small staff to oversee security and maintenance of equipment in the event the mill can reopen with a new effluent treatment facility.

Northern Pulp’s original proposed plan for a replacement facility was rejected by the province in December 2019.

On Apr. 29, the province gave the mill two years to provide a more detailed environmental assessment (EA) according to the government’s final terms of reference, and on May 14 issued a ministerial order governing the mill’s shutdown period.

The order instructs the mill how to conduct on-site activities including regular measurements of water and air quality.

Paper Excellence Canada has since appealed the shutdown order, and put its EA process on hold.