CBCNEWS — Nova Scotia regulators have rejected an attempt by Resolute Forest Products to obtain confidential business information from its paper-making rival, Port Hawkesbury Paper.

Last month, Montreal-based Resolute asked for evidence filed by Port Hawkesbury Paper to support the Nova Scotia mill’s application for discount power rates in that province.
The evidence included five years of financial projections, a mill profit comparison and a specially commissioned report by an investment research company.

Resolute wanted the information to bolster an arbitration claim for $100 million in damages against the Canadian government under the North American Free Trade Agreement.

The company filed a claim in 2015 that federal and provincial government subsidies to Port Hawkesbury Paper “discriminated in favour of Port Hawkesbury and resulted, among other damages, in the closing of Resolute’s Laurentide [Que.] mill in October 2014, depriving Resolute of its investment in that mill, and the value of other investments, in violation of the company’s rights under NAFTA as a U.S. investor in Canada.”
No right to see confidential info
In a decision released Wednesday, the Nova Scotia Utility and Review Board ruled Resolute had no right to see commercially sensitive information filed by Port Hawkesbury Paper for a discount electricity rate. The rate, known as the Extra Large Industrial Active Demand Control Tariff, was approved by the utility and review board in March 2020.

Port Hawkesbury Paper argued that since Resolute was not a party to the power rate application, it had no right to access commercially sensitive information filed and accepted in confidence by regulators.

Resolute argued there is a broader public interest in disclosure because it’s in the best interests of Nova Scotians to know whether measures adopted by the provincial government to financially support Port Hawkesbury Paper are consistent with the provisions of NAFTA.

“Resolute maintains its position that the confidential [Port Hawkesbury Paper] materials are highly relevant and material to the NAFTA arbitration…. It is a question of the fair administration of justice under international law,” Seth Kursman, a spokesperson for Resolute, said in an email response to CBC News.
Conflict of interest
Peter Gurnham, chair of the Nova Scotia Utility and Review Board, and members Roland Deveau and Roberta Clarke ruled Resolute was not entitled to the evidence.

The tribunal said Resolute had no intention of using the information in connection with power rates but for an arbitration “wholly unconnected to the matter before the board.”

“Finally, the board finds that Resolute has a conflict of interest in that it is a competitor of [Port Hawkesbury Paper]. Proof of that is its claim against the government of Canada for $100 million because of assistance it believes was unfairly provided to [Port Hawksbury Paper], Resolute’s competitor,” it said in its ruling.

Even though NAFTA was replaced by the new Canada-U.S.-Mexico Agreement on trade, which did away with investment arbitration between Canada and the U.S. for new investments, Resolute’s case is grandfathered.

Kursman said the company is considering its options to obtain the information before the arbitration hearing next month.

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