N.S. government awaiting news on feasibility study for new pulp mill in Liverpool

Nine months after officials with Northern Pulp started examining the viability of a new mill in Queens County, Premier Tim Houston says it is his understanding the work continues.

Houston announced last May that his government and officials with Northern Pulp's parent company had reached a settlement agreement that ended years of legal wrangling, and would allow time to explore the viability of constructing a new mill at or around the site of the former Bowater mill near Liverpool.

That work was expected to take about nine months. One of the conditions the company has set for moving ahead with a new mill is that it would generate an internal rate of return greater than 14 per cent.

On Friday, the premier told reporters that he believes the company is still working to complete its feasibility study. It's fair to say that company officials want to move ahead and think there is a business case, said Houston, but he added that they're still crunching numbers.

"I think they're at the financing stage and seeing what financing is possible," he said.

Houston said he hasn't received a formal request for financial assistance from the company.

The Northern Pulp mill in Pictou County was forced to shut down in 2020 following the company's failure to obtain provincial approval for a new effluent treatment facility. A replacement was required after members of the legislature unanimously passed the Boat Harbour Act, a bill that ended early the lease Northern Pulp had to use the former tidal estuary to treat effluent from the mill.

Since then, the company filed for creditor protection. Ensuing lawsuits and legal threats between the two sides came to an end last May when the settlement agreement was announced.

Natural Resources Minister Tory Rushton told reporters on Friday that the latest update he has on the file is that company officials plan to file more paperwork next week as part of the creditor protection proceedings in British Columbia Supreme Court.

"What's in those papers, I don't know," he said.

"We've been very supportive of the process, trying to make a pathway forward for an environmentally-friendly mill — a new era mill to come to the area — but right now it's certainly with the company to make that decision and make that known to the public."

A company spokesperson confirmed to CBC earlier this week that officials are preparing to file their next affidavit for the court hearing.

Rushton said the forestry sector needs a market for pulpwood and low-grade wood products to take the place of what Northern Pulp used to consume. It's something that was outlined in the Lahey report on sustainable forestry, he said.

But whether that new market is a new pulp mill remains to be seen. Rushton noted that there could be other options, such as the creation of biofuels and aviation fuels using forestry byproducts. A recent study also made the case that the development of biomass combined heat and power plants, along with associated district heating networks, could create a market for low-grade wood and chips.