Canadian Forestry Industry: Closure Of Pulp Mill Spells Hard Times For Nova Scotia

The forestry industry of Nova Scotia in eastern Canada may face a bleak future following the recent closure of a mill operated by Northern Pulp Nova Scotia Corp. in Abercrombie near the town of Pictou. The shutdown of the mill on Jan. 31 led to the immediate loss of jobs for about 300 millworkers and uncertainty for thousands of others in Nova Scotia whose forestry-related jobs were intertwined with mill activities.

The closure was mandated by the local government because it had been pumping toxic wastewater for decades into Boat Harbour, a body of water located near an indigenous community.

The company had five years under 2015 legislation to find a way to stop pumping its waste into Boat Harbour. Northern Pulp was also unable to receive a state permit to construct a new effluent treatment facility.

In operation since 1967, the mill had long been criticized for polluting local lagoons with its treated effluent.

Nova Scotia Premier Stephen McNeil said his government “will help and support” mill workers in their transition to new careers.

McNeil has unveiled a $50-million forest industry fund that will be used to retrain, educate and provide emergency funding for mill workers who have been laid off.

“The impact of this situation reaches beyond those directly employed in the forestry sector and it’s vitally important that support is available to all those who need it,” McNeil said in a statement.

But Don MacKenzie, president of the Unifor local union that represents Northern Pulp workers, said the government’s efforts are not sufficient.

“I see a lot of devastation in their [workers’] faces, a lot of tears and a lot of apprehension as people don’t know what the future holds,” he said.

The Nova Scotia government blamed Northern Pulp for the mill’s closure.

“The company has had five years and any number of opportunities to get out of Boat Harbour, and at this point we’re nowhere close to that,” Nova Scotia Premier McNeil said. “That’s not on us. That’s the decision the company has made.”

But laid off workers blamed the government.

“It’s a profitable mill, there’s a market for everything it makes and it is meeting all the environmental regulations that are in place right now,” said Blaise O’Laney, a mill superintendent, just prior to the closure. “So basically we’ve been legislated out of a job.”

Pictou County warden Robert Parker said the economic fallout from the mill’s closure will be severe.

“Some people will say it [closure] won’t bother us, we always bounce back,” he said. “But a boxer can only take so many body blows and I think we’re getting near that limit where something has to give here soon.”

Pictou County also may lose $330,000 in annual tax revenues from the mill.

“It’s all based on revenue,” said Parker. “If you’re not making money, then you don’t pay the taxes. It’s not like a residential assessment.”

Beyond the laid off workers, loggers, truck drivers and others will also be hurt.

“There’s going to be a million dollars or more [not] spent in this county every week,” said Parker. “That has a huge impact, no matter whether you are selling groceries, or cars or new homes, whatever, a million dollars a week is a lot of lost revenue.”

Nancy Dicks, mayor of New Glasgow, said 77 mill workers live in her town.

“We’re playing a sort of waiting game right now to see what the employees of Northern Pulp are going to be doing and whether they’ve made the decision to move,” said Dicks. “How is this going to play out, when are we going to feel the ripple effects of this?”

Local sawmills will also feel the pain – the Northern Pulp mill used to buy about 700,000 tons of woodchips from local sawmills each year.

Robin Wilber, president of Elmsdale Lumber Co., warned: "This is a slow death, not something that's going to happen quickly. It took years, decades, to build markets for the value-added byproducts from sawmills at a reasonable price."

The Nova Scotia government does not even know how many people will be negatively impacted by the mill’s closure.

"We know how many workers there are at Northern Pulp, and how many workers have been displaced, have been laid off at Northern Pulp," said Kelliann Dean, chair of the government’s Forestry Transition Team. "We will only know who we're helping by who comes forward at the [government’s] Access Nova Scotia centers."

Tim Houston, leader of Nova Scotia's Official Opposition party, criticized the local government.

"Making sure we have a diversified economy that's functioning at the highest level is important," he said. "That starts with understanding how the economy works, and when the government says they don't really understand how many people are involved, they're saying they don't understand how the economy works. That's bad."

Paper Excellence Canada Holdings Corp., the parent company of Northern Pulp, said the closed mill employed 350 people and that more than 2,000 of the 11,000 forestry-sector jobs in Nova Scotia province were tied to the operation.

Julie Towers, deputy minister of lands and forestry, estimated that as many as 400 people have already lost their jobs since late December when the mill’s imminent shutdown was announced.

The operators of the Northern Pulp mill also owe millions of dollars in outstanding loans to the province.

McNeil said the provincial government has held talks with company representatives from Northern Pulp over loan repayments.

"Those loans are owed to the people of the province and we expect them to be repaid," McNeil said. "That's what the conversation has been about -- it's never been about not repaying them."

A spokesman from McNeil's office said the outstanding total is about 84.9 million Canadian dollars ($64 million).

However, there may be some hope.

Bruce Chapman, the general manager of the Northern Pulp mill, claimed the mill’s parent company, Paper Excellence, wants to reopen it in the future – following, among other things, an environmental assessment. But this process could take years.

“Our plan right now is to work through the environmental assessment … and reopen the mill in the future,” he said.

The forest industry is an important manufacturing sector in Canada, employing more than 200,000 people as of 2017 and accounting for about 7.2% of Canada’s total exports that year. The industry contributed some $24.6 billion to Canada’s economy in 2017

“The Canadian forest industry is a major employer nationwide, but its economic contributions are particularly important in many rural and Indigenous communities, where forest-related work is often the main source of income,” the Canadian government stated. “In these communities, forestry jobs are crucial to ensuring economic sustainability.”