Northern Pulp to sell off assets five years after N.S. mill closed

Northern Pulp is selling off its assets five years after its Nova Scotia mill closed.

More than five years after it closed its Nova Scotia mill, Northern Pulp is starting the process of selling off its company assets, putting an end to discussions of it potentially opening a new kraft pulp mill in the province.

Northern Pulp, which fell under creditor protection following the closure of its Pictou County mill in June 2020, said it will start a court-supervised sales process under the Companies’ Creditors Arrangement Act (CCAA). The sale was outlined in the company’s settlement agreement with Nova Scotia in May 2024.

“This decision follows the completion of a comprehensive feasibility study, which concluded that the company could not achieve the 14% Internal Rate of Return (IRR) required in the settlement agreement to develop a modern bioproducts hub in Liverpool, Nova Scotia,” a news release from the company says.

Northern Pulp launched the feasibility study into a new mill as part of the settlement agreement. The company previously said designing and building the bioproducts hub could cost more than $2.5 billion.

“Northern Pulp is thankful for the support and collaboration of the Province of Nova Scotia and local stakeholders throughout the feasibility study,” the release reads. “The company also extends its gratitude to Nova Scotia’s forestry sector for its support during its ownership of the Pictou mill and the feasibility study. The forestry sector’s contributions are vital to the province’s rural economy, providing jobs, sustaining communities, and fostering sustainable practices.”

In a separate news release, Tory Rushton, minister of Natural Resources, said the provincial government will continue to pursue a new sustainable pulp mill in the province.

“From the outset, our government was at the table, working closely with the company to explore every viable option,” Rushton said. “We provided meaningful support and discussed programs like our Capital Investment Tax Credit that could have offered significant financial assistance.“We did everything we could to help make it a reality. And while this is not the outcome we had hoped for, our government remains a steadfast partner with the industry in exploring how we might work together – and with the federal government – in attracting a new partner that sees the potential in doing business here.”

Northern Pulp says proceeds from the asset sale will repay debt incurred through the CCAA process, fund pension plans and help with site maintenance and closure costs. Any remaining money will go to the province.

Northern Pulp said the court-appointed monitor is seeking a stay period until Aug. 29 to “establish a baseline offer.” The British Columbia Supreme Court will hear the request on Thursday.

The provincial government ordered the shutdown of Northern Pulp’s mill in 2020 when the company failed to meet the environmental requirements for a new effluent treatment plant.

-With files from The Canadian Press

For more Nova Scotia news, visit our dedicated provincial page