HALIFAX -- A Nova Scotia Supreme Court judge has rejected a bid by the prospective owners of the idled NewPage Port Hawkesbury paper mill to cancel a municipal tax deal.
In his ruling Monday, Judge John Murphy said Richmond County was able to prove it would suffer real financial hardship if Pacific West Commercial Corp. was allowed to terminate the agreement the county made with the mill's former owner, Stora Enso, in 2006.
The deal would require Pacific West Commercial to pay Richmond County $2.5 million annually over 10 years, but the Vancouver-based company argued it should only have to pay about one-sixth of that.
Murphy said he didn't get enough information from Pacific West Commercial to prove its arguments.
"The mill has not given me a basis to assess the impact a $2 million reduction is likely to have," said Murphy.
Richmond County said if the agreement were nixed, it would have resulted in a possible 26.5 per cent residential tax hike and deferred maintenance of buildings and equipment.
Outside court, the county's deputy warden said he was satisfied with the court's decision.
"It's a judgment for fairness, not just for Richmond County, but for all municipalities throughout the province," said Victor David.
Lawyers for the company left court without commenting. But the chief restructuring officer for Ernst & Young, the court-appointed monitor overseeing the sale of the mill to Pacific West Commercial, said the court's decision shouldn't have an impact on whether the plant will reopen.
"We continue to expect that the mill will reopen, hopefully before the end of this month," Peter Wedlake said outside court.
