Natural Resources Committee on May 30th, 2023

[Kody Blois, Liberal, Kings—Hants, NS]

Thank you very much.

Mr. Williams, obviously Mr. Angus and other members of the committee have raised some of the concerns around the perception of the structure. I can't sit here with certainty and know what is and what isn't true. I appreciate your being here.

Do you have any recommendations you can provide to this committee quickly about ways...? You can further disclose information that can help put to rest some of the concerns that are being raised.

[John Williams]

We can be as transparent as you need us to be. I'm happy to lodge things with the committee in terms of the ownership structure or whatever you need, quite frankly.

I would also say one thing. Obviously, we have a bunch of North American lenders who now lend to us, some of the very best names in investment banking in the U.S. All of them—

[Kody Blois, Liberal, Kings—Hants, NS]

I apologize. I have only a limited amount of time.

What I heard there is that you're willing to share further documents as necessary to help do this, so thank you.

I want to ask about creditor protection. On May 1, 2023, the company that owns Northern Pulp, which, of course, is Paper Excellence.... There's been an extension through the B.C. Supreme Court. What is the hope of the company in this four-month extension in terms of being able to resolve that issue in Nova Scotia?

[John Williams]

Obviously, we remain positive.

J.-F. is very close to it, so I'll let him answer.

[Jean-François Guillot]

We still have hope and are looking for solutions. The goal is to restart operations at the Northern Pulp mill. We will therefore continue our efforts over the next four months.

[Kody Blois, Liberal, Kings—Hants, NS]

How does the decision by the Nova Scotia government to not allow the water plant facility that is tied to Michelin...? My understanding is that the provincial government has not allowed that shared resource, which is extremely important. How does that play in, in terms of the decision-making movement for it? I have to assume it's consequential.

[Jean-François Guillot]

That does not preclude Northern Pulp from having water rights. It's just a question of coming to an agreement, since we share this natural resource with Michelin.

[Kody Blois, Liberal, Kings—Hants, NS]

Are you paying pensions of employees right now under the credit protection order? Are employees who work for Northern Pulp being paid their pensions? Give me a yes or no.

[Jean-François Guillot]

We are subject to the creditor protection rules of the Companies' Creditors Arrangement Act, the CCAA.

[Kody Blois, Liberal, Kings—Hants, NS]

I take that to be a no, because the rules don't call for it necessarily.

[Jean-François Guillot]

I would give the same answer.

[Kody Blois, Liberal, Kings—Hants, NS]

Fine.

How much money, approximately, is owed to creditors right now? Is that public information? Can you share with the committee how much the Northern Pulp operation owes creditors?

[Jean-François Guillot]

Since this falls under the CCAA, it's difficult for me to answer. What I can say is that the only major creditor is the province itself.

[Kody Blois, Liberal, Kings—Hants, NS]

I'm a Nova Scotia member of Parliament. I represent Kings—Hants. I have my colleague here from Sydney—Victoria. Ms. May obviously has connections to Nova Scotia as well.

I'll preface the conversation, because I can appreciate that the mill has been very important for the forestry sector. I know that Ms. May's conversation will be along the lines of Boat Harbour and some of the impact on the indigenous community in Pictou Landing.

I have certain sawmills that have certainly benefited from the presence of that mill, so I understand that. What would you say to the people of Nova Scotia about there being a current lawsuit for $450 million to the taxpayers? That's certainly me and my colleague. That's all the million Nova Scotians. Do you think that's fair and equitable?

I want to ask this question of Mr. Williams. You're the chair of the board. As the board helps govern the responsibility of Paper Excellence, where do you draw the line in terms of an equitable nature, notwithstanding that the contract that might have been divulged with the Province of Nova Scotia was demonstrably a bad one years ago?

[John Williams]

Mr. Chairman, thank you for the question.

I would say we feel that we need to protect our interests. At that moment in time, obviously, we had a profitable mill. That mill no longer operates. Therefore, we've had severe losses. Again, I'm not going to comment on the detail of legal activity.

[Kody Blois, Liberal, Kings—Hants, NS]

Mr. Williams, do you equate the fact that the mill doesn't operate to a decision by the Province of Nova Scotia or to the inadequacy of the work that was done to address the environmental challenges locally?

[John Williams]

That's a legal question that needs to be resolved—not here.

[Kody Blois, Liberal, Kings—Hants, NS]

I have about 30 seconds left as I understand, Mr. Chair.

Mr. Williams, are you worried about the perception that there's a loss of trust in the province of Nova Scotia, notwithstanding the benefit the plant has had to the community, and that this lawsuit is seen as punitive? How do you build up trust in communities that are seeing this lawsuit happen and also try to do business there in the future?

[John Williams]

I think that is the challenge. I think you've expressed it. It remains the challenge.

[Kody Blois, Liberal, Kings—Hants, NS]

Thank you, Mr. Chair.

[The Chair, Liberal, John Aldag]

Thank you.

We'll jump right now to Ms. May, who will have two and a half minutes.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Thank you very much to all members of the committee for allowing this. I do have questions.

Your company's choice to use the Companies' Creditors Arrangement Act to go to a judge at the Supreme Court of British Columbia and to seek binding arbitration deliberately excludes any role for Pictou Landing First Nation, who have been aggrieved through lies, abuse and environmental racism for years. Does it trouble you at all that your approach to getting your mill reopened is to exclude any indigenous involvement?

[Lana Wilhelm]

Mr. Chair, as I said in my opening remarks, we inherited, in some of our mill purchases in Canada, a legacy of broken trust and promises. In no place was that more apparent than in Boat Harbour and Northern Pulp. We have determined that we will close Boat Harbour. We're determined to rebuild that relationship with communities. We have what we believe is a plan to transform the mill to a place where we can rebuild that trust.

Of course, with reconciliation, there are no shortcuts here.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Excuse me, I have very limited time.

Excuse me, Ms. Wilhelm and Mr. Williams, you chose a legal route that went to the Supreme Court of British Columbia. That was excellent forum shopping in finding Judge Shelley Fitzpatrick, who did the same thing for Mountain Equipment Co-op. You chose a route that would exclude first nations from involvement when you went into binding arbitration with the Nova Scotia government, and, as my colleagues have pointed out, while suing Nova Scotia for $450 million.

I have time for one more quick question, so forgive me for being very abrupt.

Do you believe the connections between Paper Excellence and the People's Republic of China—such as co-locating in headquarters and having had loans from the People's Republic of China's development bank—are sufficient that your company or that the People's Republic of China could invoke the Canada-China Foreign Investment Promotion and Protection Agreement, the FIPA, in order to seek secret damages from Canada for regulating your business?

[An hon. member]

That's a reach.