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Ontario waived Resolute's repayment of $23 million for Fort Frances mill project

Province asked for repayment or 'an alternative remedy' acceptable to the MNRF.
Fort Frances mill 2
Resolute's Fort Frances mill was recently sold to Riversedge Developments, a redevelopment company (Tbnewswatch file)

FORT FRANCES, ON — A town councillor in Fort Frances wants the provincial government to reveal the details of an agreement the previous Liberal government struck with Resolute Forest Products.

Douglas Judson has written current Natural Resources Minister John Yakabuski requesting a copy of an agreement in June 2017 under which Resolute was no longer required to repay a $23 million grant.

The money was offered a decade earlier on a conditional basis to help fund the construction of an electricity-producing turbine at the Fort Frances pulp and paper mill. 

The $90 million, 54-megawatt facility was completed in 2009, but Resolute shut down the mill in 2014.

According to a company document filed with the U.S. Securities and Exchange Commission, in October of the same year the Ministry of Natural Resources and Forestry sent the company a notice requiring repayment of the grant in the event the mill remained closed.

The document, however, also states the ministry was prepared to consider "an alternative remedy acceptable to the MNRF."

While the mill remained closed, numerous extensions of the deadline for repayment were granted over the next three years, 

Finally, on June 29, 2017, Resolute's corporate filing states, an agreement was reached under which the company "will not be required to repay this amount."

Earlier this year, Tbnewswatch attempted to obtain details of the settlement.

Both the company and the ministry declined to release the information, with a ministry official saying "the disclosure of these records would reveal financial and commercial information which was supplied to the ministry in confidence...(and) the disclosure of the records may impact future negotiations carried on by the ministry."

A Resolute spokesperson said "it's important to point out that our upwards of $35 million invested to maintain the mill in a 'hot idle' state far exceeded grant funds received."

Judson is seeking full disclosure, however, telling Yakabuski it's important to understand "the full breadth of terms and conditions that the Government of Ontario has historically imposed on licensees with wood fibre rights in the Crossroute Forest and on the operations, management, and/or disposition of the Fort Frances mill."

The Crossroute Forest provided wood fibre for the mill, and currently feeds three other Resolute production facilities in northwestern Ontario.

Judson's request comes two weeks after Resolute completed the sale of the Fort Frances property to redevelopment firm Riversedge Developments, which many in the community fear intends to demolish the mill.

In his letter, Judson says the previous Liberal regime (under MNRF ministers Bill Mauro and Kathryn McGarry) "appears to have acquiesced" to Resolute in reaching a settlement over the grant.

"We would hope that in entering such an arrangement, the Liberals would have put any number of conditions in place to protect this significant public investment and Fort Frances. For example, conditions preventing Resolute from selling the mill to someone who would demolish it," the letter states.

"As we move forward in our discussions with Riversedge, the province, and other stakeholders, it is critical that we have a full understanding of any and all restrictions or requirements that have been placed on this facility and adjacent forest region by the province," Judson concludes.

Gary Rinne

About the Author: Gary Rinne

Born and raised in Thunder Bay, Gary started part-time at Tbnewswatch in 2016 after retiring from the CBC
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