Nova Scotia loans $75 to Northern Pulp to purchase land

Nova Scotia is loaning $75 million to help Northern Pulp purchase 475,000 acres of land.

The land will be purchased from Neenah Paper and will ensure a wood supply to the Abercrombie, Pictou Co., pulp mill and protect the land as a forestry asset.

Northern Pulp is a major player within the province's forestry and paper industry. The forest industry contributes $700 million to Nova Scotia's gross domestic product, employs about 11,000 people and has more than $1 billion in exports, or 17 per cent of Nova Scotia's export trade.

The province will also invest $16.5 million to purchase 55,000 acres of the land Northern Pulp is buying, most of which is slated for protection in Cumberland, Colchester, Pictou, Halifax, Hants and Guysborough counties.

"This purchase includes some exceptional natural land for protection at an excellent price and will help us move toward our goal of protecting 12 per cent of the province's land mass by 2015," said John MacDonell, Minister of Natural Resources.

The province purchased the land for $300 per acre, well below market value.

The provincial investment will also allow Northern Pulp to invest $5 million to reduce odour in the community surrounding the Abercrombie mill.

Funding for the Northern Pulp loan will come through the province's Industrial Expansion Fund. Funding for the land purchase comes from $75 million budgeted in September 2009.

These transactions are consistent with the 2006 Softwood Lumber Agreement. None of the parties involved, Northern Pulp, Northern Timber, nor Neenah Paper, own or operate sawmills, nor are they related to softwood lumber producers.

Northern Pulp Nova Scotia Corporation was created in 2008 after the sale of the former Neenah Paper pulp mill. The mill has operated in Pictou County since 1967.