Nova Scotians are getting sued for half a billion dollars.
That is, unless Northern Pulp is awarded damages on top of the $450 million in lost profits and costs it is seeking in a lawsuit filed Thursday with the Nova Scotia Supreme Court.
The statement of claim filed by Northern Pulp on Thursday in Nova Scotia Supreme Court alleges that provincial government bureaucrats conspired to force the company to voluntarily close the Abercrombie Point kraft pulp mill to get the taxpayer off its legal obligations to Northern Pulp and the Pictou Landing First Nation.
It alleges there was a choreographed approach between provincial government departments via a committee of deputy ministers reporting to the executive council to first misrepresent data to set unachievable targets (well beyond those set by national pulp and paper effluent standards) for the mill’s industrial approval to operate as far back as 2014, then set a timeline for completing a replacement effluent treatment facility their own consultant said was unachievable.
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When Northern Pulp continued work on seeking an environmental approval for the replacement to the Boat Harbour Effluent Treatment Facility, the statement of claim alleges government bureaucrats refused to provide effluent quality targets it would have to meet until after work on it would have already started.
It alleges that even as bureaucrats in various government departments conspired to delay the ability of Northern Pulp to meet the Jan. 30, 2020 deadline for a new effluent treatment plant, other senior government administrators advised them “it will work out” and not to prepare to layoff workers or curtail production because then premier Stephen McNeil would issue an extension to the deadline.
“The Province has chosen to take intentional and coordinated action to accomplish (the closure of Northern Pulp) in a manner that breached its contractual obligations to the Plaintiffs and disregarded other rights of the Plaintiffs,” reads the statement of claim.
“The Plaintiffs’ also assert claims in this Statement of Claim for misfeasance in this statement of claim inpublic office, the unlawful means tort, negligence, conspiracy and negligent misrepresentation arising from the acts and omissions of officials and representatives of the Province intended to force the closure of the (Boat Harbour Effluent Treatment Facility) and consequently the closure of the Mill and thereby allow the Province to avoid its obligations to the Plaintiffs or from negligent misrepresentations made to the Plaintiffs.”
The suit alleges that after Pictou Landing filed suit against the province in 2012 (amended in 2014 and then in 2019) for taking its lands to build the Boat Harbor Effluent Treatment Facility, along with damages caused by the provincial government-owned facility, committees were struck to figure out ways to use existing government regulatory levers to force the facility’s closure before Northern Pulp’s lease expired in 2030, force the pulp mill’s closure and thereby limit the taxpayer’s liability to both Pictou Landing and Northern Pulp.
One of those is referred to in the statement of claim as the Closure Committee, comprised of Pictou Landing First Nation Chief Andrea Paul, band council and Department of Aboriginal Affairs deputy minister Justin Huston.
“The Closure Committee discussed how to use Northern Pulp Nova Scotia’s need for a renewal of its industrial approval for the mill as a lever to achieve, among other things, the early closure of the Boat Harbour Effluent Treatment Facility,” reads the statement.
“(The Department of Environment) also consulted with the Closure Committee from time to time on industrial approval -related matters. The provincial representatives on the Closure Committee reported directly to David Darrow, deputy minister to the Premier and Clerk of the Executive Council.”
It alleges that to force Northern Pulp to shutdown, Boat Harbour Remediation Project executive director Ken Swain settled on demanding the mill meet unachievable conditions that, among other things, would actually put them in violation of federal pulp and paper effluent regulations, in a new industrial approval to operate.
“In order to do this Swain insinuated himself and his staff into the process that would lead to the development of a replacement industrial approval for the mill,” reads the statement of claim.
“He assumed authority he did not have to direct how the Province and, in particular, Nova Scotia Environment would develop the terms and conditions for a replacement industrial approval in a way that would bring about the closure of the Boat Harbour Effluent Treatment facility. Swain did this to limit the obligations of the Province to Pictou Landing First Nation with the knowledge that this would result in breach of the agreements and cause significant losses to be suffered by the Plaintiffs.”
Those "agreements" referenced by the company are an indemnity agreement against environmental liability for Boat Harbour or any losses suffered from its forced alteration or closure, a lease to Boat Harbour running until 2030 and a memorandum of understanding promising the province would do everything in its power to assist Northern Pulp with the necessary permits to operate.
Northern Pulp appealed the conditions of the industrial approval – a process that took until 2016 to result in conditions the company considered it could comply with.
By that point the province had passed the Boat Harbour Act, which legislated the closure of Boat Harbour by January 2020, despite its own consultant’s report that stated in a best case scenario, a facility couldn’t pass all regulatory hurdles, get built and become operational until 2021.
That best case scenario assumed Northern Pulp would begin planning right away instead of spending a year fighting the conditions of an industrial approval.
The statement of claim alleges that as Northern Pulp began work designing the replacement facility the Department of Environment refused to set effluent quality targets it would need to meet.
“In other words, Northern Pulp would have to design a replacement effulent treatment facility, purchase the major equipment and then substantially complete the modifications to the Mill in the hope that the effluent quality limits eventually set by Nova Scotia Environment would be capable of being achieved by the newly constructed facility,” reads the statement of claim.
“Nova Scotia Environment’s position that it would only establish effluent quality limits during the (later) industrial approval process for replacement effluent treatment facility was an intentional effort to harm Northern Pulp by reducing its ability to design an effluent treatment facility that would be reasonably capable of obtaining an environmental approval in a timely fashion or (and in the alternative) to force Northern Pulp to abandon its efforts to secure such approval. Moreover, by the time the industrial approval was finalized, construction of the replacement effluent treatment facility would have been well underway.”
Further delays, alleges the statement of claim, were caused by a fishermen-led blockade of a survey vessel contracted by the company for studies of the outfall location and by additional demands for studies made by the Department of Environment.
As early as 2018, Northern Pulp notified the provincial government it would not be able to meet the legislated January 2020 deadline for the existing Boat Harbour Effluent Treatment plant’s closure.
That same year Environment Minister Margaret Miller said there wasn’t enough information in Northern Pulp’s environmental assessment registration document and demanded a focus report with additional studies.
“In the course of that work Northern Pulp staff and their consultants met with representatives of Nova Scotia Environment to seek information on NSE’s expectations on the studies and clarification of what precisely should be studied,” reads the statement of claim.
“Nova Scotia Environment’s senior staff were unwilling to provide the clarity required suggesting it was up to Northern Pulp to ‘figure it out’ on its own. During the development of the Focus Report in the spring and summer of 2019, Nova Scotia Environment greatly increased the scope of the studies required.”
The statement said that as it warned the government it wouldn’t be able to meet the Jan. 30, 2020 deadline it was repeated reassured that they could expect an extention to the Boat Harbour Act to allow them time to design, get approval for and build a replacement effluent treatment facility.
“Northern Pulp was advised in or about the autumn of 2019, directly and indirectly by senior officials and representatives of the Province including Duff Montgomerie and Karen Casey that ‘things would work out’ and that Northern Pulp should not prepare to shut down the Mill or issue lay-off notices to its employees,” reads the statement of claim.
“Relying on those representations, Northern Pulp continued work on the detailed engineering for the replacement effluent treatment facility, kept the mill operating at full capacity and refrained from providing notices to the Province under the Industry Closing Act and from providing layoff notices to its employees.”
Then on Dec. 17, 2019 the environment minister declared there was not enough detail in Northern Pulp’s focus report to make a decision and three days later then premier Stephen McNeil announced the province would not extend the deadline to Boat Harbour Act.
The mill shut production in January 2020 and in the following months laid off 302 employees.
Northern Pulp is seeking lost profits and damages totalling $450 million.
None of the allegations have been proven in court.
