Province likely not on hook for lost profits: lawyer
If Northern Pulp sues the province for forcing it to shut down, the government would have a solid defence, says the lawyer representing Pictou Landing First Nation. “Because of the amount of money involved Northern Pulp would be fairly motivated to take a run at the province, particularly if they decide that they’re really not going to move forward with the new treatment facility,” said Brian Hebert, who helped author the Boat Harbour Act that effectively shut down the mill by requiring it to stop pumping effluent in the community’s harbour on Jan 31. The company is moving forward with a new environmental assessment process for its proposed treatment facility but that means it will be out of commission for at least two years. But Northern Pulp has a Boat Harbour lease agreement with the province that runs until 2030. The company will likely be looking for compensation for the lost production time, said Hebert. But if it’s serious about following through with the regulatory process and building the treatment plant that would replace Boat Harbour, the company would be asking the province to subsidize it. In that case, Northern Pulp would likely take the less adversarial route and try to negotiate a deal. “If they’re going to move with the treatment facility and they’re still hoping the province would contribute to that then they’ll probably try the negotiation route.” Regardless, the province shouldn’t bite, said the lawyer. “I think that the province has a lot of defences for any claim and so I hope that they are fairly aggressively defending against claims and they just don’t say they’ll agree to a number." Meanwhile, Premier Stephen McNeil said last week that he didn’t foresee litigation. But he also said the province does have liability associated with the closure of Boat Harbour. He suggested that any potential compensation would be reduced because the company failed to submit an acceptable proposal for its treatment plant. “That liability is very different than what it would have been if they had continued to operate as a going concern,” said McNeil. Northern Pulp may seek a judicial review of the province’s decision to turn down its plan to stay open and continue to pump effluent into Boat Harbour. Hebert said the question remains whether the province broke the lease by bringing in the Boat Harbour Act. The lawyer said that isn’t the case because the act includes a provision that says it cannot be construed as breaking any private agreement. “It would be an uphill climb for them.“Besides, he said, the province should never have agreed to extend the lease. He said Pictou Landing First Nation has always been adamant that the lease extension should never have been granted beyond 2005. “They were promised a bypass pipeline into Northumberland Strait and that was never done.”