The province has accused Northern Pulp of misappropriating taxpayer funds and misrepresenting its financial state to allow it to funnel more money back to its parent company. The accusations are found in affidavits filed by high-level Nova Scotia government officials in the British Columbia Supreme Court in which they argue Northern Pulp shouldn’t be allowed to accept a $50-million loan from Paper Excellence Canada and related company Pacific Harbour North American Resources.

The province is opposing a deal that Northern Pulp claims would allow it to continue paying severance to its laid off employees, its share of the cost of Boat Harbour’s shutdown and cleanup, safely idle its kraft pulp mill and work toward an environmental approval for a new effluent treatment plant. The deal is in the form of $50 million in interim financing being offered by Northern Pulp’s parent companies, Paper Excellence Canada and Pacific Harbor North American Resources