Northern Pulp says it will sell its assets, after deciding a new mill in Liverpool doesn’t make business sense. (Harry Freeman and Son Limited via Facebook)

UPDATED Tues., July 15 at 5:40 p.m.

Northern Pulp will sell its assets, killing the idea of a new kraft pulp mill in Liverpool.

The company, owned by Domtar-controlled Paper Excellence, has been under creditor protection since June 2020 after it closed its pulp mill in Abercrombie Point, Pictou Co.

It announced in a news release Monday evening that it would begin the process to sell off its holdings.

Tory Rushton, Nova Scotia’s natural resources minister, told QCCR on Tuesday that the province did all it could to make the Liverpool mill a reality.

“Surprised, a little disappointed. This has been a waiting game for landowners and people that supply low-grade wood ffibe to the market.

“Quite frankly, the province and the government have been working very hard on this project and I think we laid our cards on the table.”

Northern Pulp announced in March that a nine-month feasibility study found that a new $2.5-billion mill in Liverpool didn’t make business sense. It required an annual rate of return of at least 14 per cent and it said that wouldn’t happen without a significant amount of government support.

The province granted the company’s request for more time to look for more funding for the project. Monday’s announcement made it clear they weren’t successful. 

Rushton said the new facility would have provided a much-needed industrial customer for the low-grade wood fibre produced by private woodlot owners and mills like Harry Freeman and Son Limited in Greenfield.

“For the whole area, the whole forestry sector in Nova Scotia, I’m certainly not taking my hands off the steering wheel here. We’re going to carry on, and the conversation about a mill, I’m sure it will pop up again and we’ll be at the table to have those conversations, but right now we’re still investigating and working with the sector to achieve a market for the fibre.”

Last May, the province announced a deal to settle the company’s $450-million lawsuit against the province after Northern Pulp was forced to close its mill because of environmental concerns.

Under that agreement, the company said it would look into opening a new bioproducts mill in Liverpool.

In its news release Monday evening, Northern Pulp said the court-appointed monitor Ernst & Young would begin the sale process.

Liverpool was a thriving mill town for more than 80 years. Bowater operated a pulp and paper mill in nearby Brooklyn from 1929 to 2012, which employed thousands of people in Queens County over its lifespan.

But reaction to a new mill was mixed, given Northern Pulp’s environmental record.

Ashley Christian, president of the South Queens Chamber of Commerce, said she believed a new mill in Queens County was a real possibility.

“While the idea of the mill of a modern bioproducts mill was exciting from an economic standpoint for Queens County, we did have some concerns and reservations about Northern Pulp’s past, their reputation, and environmental record,” she said Tuesday.

“I was expecting the mill to go through based on the conversations that I’ve had with individuals in the forestry sector, it felt like they were pretty confident as well. So I was a bit surprised. 
But again, I think it was probably the right decision.”

Email: rickconradqccr@gmail.com

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An undated aerial photo of the former Bowater Mersey plant in Brooklyn. (Queens County Historical Society Photo Collection, housed at the Queens County Museum)

UPDATED March 11, 6:30 p.m. 

Northern Pulp says it’s struggling to make a business case for a new mill in Liverpool.

As part of a settlement agreement reached with the Nova Scotia government in May 2024, Northern Pulp launched a nine-month feasibility study into a new bioproducts mill in Queens County.

The province has agreed to give the company a five-week extension as it tries to figure out whether a new kraft pulp mill is viable in the area.

In separate statements released Monday night, both the province and Northern Pulp parent company Paper Excellence said the company hasn’t yet been able to make a business case for a successful mill.

Nova Scotia’s Natural Resources Minister Tory Rushton told QCCR on Tuesday that the province has worked with Paper Excellence for the past nine months on the study.

He said the province needs a processor for the forestry sector’s pulp wood. 

“We know we need a home for the low-grade wood fibre but at the end of the day, this is going to be a business decision from their part,” Rushton said.

“We’re willing to work with them to meet the environmental standards of a new-era mill that would find a home for ecologically produced forest products. I don’t want to speculate what the next five weeks may bring, but we’re supportive of this extension.”

Paper Excellence, owned by forestry giant Domtar, estimates a new mill would cost $2.5 billion in government and private funding to design and build. And it would require a rate of return of 14 per cent, as outlined in the settlement agreement.

The company’s statement said that while the proposed new facility doesn’t meet that threshold, it plans to look for more financing in the next five weeks to get the project going.

“As of today, the proposed new facility’s (rate of return) does not meet the threshold (rate of return),” the company said in the statement.

“However, the company will use the extension period to continue working to identify and evaluate potential financing opportunities to benefit the project.”

Rushton said he’s hopeful the company can make it work.

“At the end of the day, we’ve taken all the measures we can to support their information and allow them to make an educated decision. So we’re certainly hopeful there could be a postiive outcome in this.

“There are different companies that are looking at using wood fibre for renewable biofuels, renewable aviation fuels, things that have to utilize bioproducts from ecological forestry practices. So we’re interested in having a conversation with anyone that wants to come and have a conversation about using our bioproducts from forestry activities.”

Ashley Christian, president of the South Queens Chamber of Commerce, said she wasn’t surprised by the delay.

“I think there’s so much uncertainty in the economy at the moment and certainly a bioproducts mill would be affected by any potential tariffs that could still exist by the time this mill would be operating,” she told QCCR on Tuesday. “I’m not surprised that Domtar wasn’t ready with a decision. And I anxiously await May and for them to publish that decision.”

Christian said local reaction to a new mill in Queens County remains mixed.

“I think that residents recognize the potential economic impact of a mill in our county, however on the flip side recognize the potential environmental and health concerns as well. So I echo the concerns of our residents and agree with them. … I think (the feasibility study is) just the first part of this. That’s when the real work begins as citizens and for the business community to advocate for Queens County and the health of our environment here.”

According to Northern Pulp, the feasibility study looked at a mill that would produce kraft pulp, as well as biogas and biochemicals used in food, pharmaceuticals, cosmetics and adhesives. The study also considered green energy projects, including a plan for carbon capture and storage.

Last May, Premier Tim Houston announced a deal with Paper Excellence. That was to settle the company’s $450-million lawsuit against the province after Northern Pulp was forced to close its mill in Pictou County in 2020 because of environmental concerns.

The company has been under creditor protection since the shutdown. 

A hearing is scheduled in British Columbia Supreme Court for Friday (March 14) under the Companies’ Creditors Arrangement Act so that the company can ask for the five-week extension to find more funding for the project.

Bowater operated a pulp and paper mill in Brooklyn from 1929 to 2012, over the years employing thousands of people in Queens County.

When it closed, it threw 320 people out of work.

Email: rickconradqccr@gmail.com

Listen to the audio version of this story below