forest products/pulp and paper

For almost seventy years, McMillan has represented a full range of forest industry clients, including integrated forest products companies, value-added secondary manufacturers, harvesting and silviculture contractors, timber land owners, investors and underwriters, and First Nations.  The work we undertake for our clients encompasses operational, transactional and regulatory matters that are vital to their competitive success. 

Our forest products team is supported by a professional forester and experts from other practice areas such as Employment & Labour Relations, Tax, Environment, Litigation, Climate Change and Emissions Trading, Competition and Trade, Real Estate and First Nations & Aboriginal Law groups.

We advise forestry and paper products companies on all aspects of their ongoing operations, from drafting contracts and day-to-day regulatory compliance issues to resolving trade disputes.  Among other representative assignments, our lawyers have:

• Acted on behalf of the proponents of a C$1 billion joint venture project for the construction of a new pulp mill
• Advised major forestry companies with respect to energy purchase and transmission agreements, the development of co-generation facilities and contracts for the sale of electricity and responding to calls for ‘green' energy from biomass fuel sources and advising regarding agreements for the supply of electricity to BC Hydro
• Drafted and negotiated fibre supply and timber purchase agreements
• Drafted sets of precedent agreements and other forestry-specific commercial contracts for normal course operations with logging contractors and other service providers 
• Handled a variety of controversies and litigation, including joint venture management disputes, contractor/lien disputes, contract negotiation, arbitration and mediation, forest tenure issues, forestry legislation issues, environmental compliance issues, transportation issues, insurance claims, product liability, and land claims and title disputes
• Advised a joint venture comprised of companies operating seven pulp and paper mills on Vancouver Island and the south coast of BC, formed to procure and transport natural gas through a new gas pipeline—a project that involved federal, provincial and private financing
• Advised a major forestry company on re-organizing the structure and operations of a joint venture operating certain value-added re-manufacturing plants and a veneer slicing facility, to more efficiently utilize the available wood supply
• Assisted a lumber wholesaler with outstanding export charges, interest and penalty imposed pursuant to the Softwood Lumber Products Export Charge Act and the Excise Tax Act
• Advised the forest industry in British Columbia in relation to the acquisition by Canadian National Railway of BC Rail
• Advised the Forest Products Association of Canada in connection with the establishment of forest management areas to address environmental and conservation issues in the supply of fibre to production facilities
• Advised major forest tenure holders in connection with competitive issues upon various acquisitions and divestitures
• Advised the forest industry in connection with proposed Canadian federal transportation and distribution

Our lawyers are actively involved in advising forest industry clients on natural resources, energy and environmental issues.  We regularly deal with almost all sectors of the natural resource arena and have an understanding of the interaction between the various sectors.  We participate in the development of forestry laws and policies through participation with various industry associations. We have extensive experience in the regulatory aspects of industry transactions, such as applications for and transfers of Crown timber tenures, aquatic licences, water licences, leases and permits.  Our firm also provides representation in environmental controversies involving regulators and the courts. 

Our offices throughout Canada are strategically positioned to serve the regulatory needs of forestry clients regardless of size, and our lawyers regularly deal with the ministries responsible for the administration of forestry-related issues in a number of Canadian provinces, including various ministries of forests and natural resources, environment, energy and mines.  Our involvement with federal regulatory agencies is extensive and encompasses Environment Canada, Canadian Environmental Assessment Agency, Indian and Northern Affairs Canada, Fisheries and Oceans Canada, Industry Canada and the NAFTA Secretariat.  We have similar depth of involvement at the various provincial levels.

Our lawyers have been engaged in a wide variety of forestry-related disputes, including litigation of regulatory issues before administrative tribunals, injunctions in land-use disputes, complex matters involving First Nations, and the analysis of risks associated with contract negotiations between forest licencees and forest service providers.  Our team has the skill and depth of experience to understand the on-the-ground issues and provide the necessary support.

We regularly assist forestry and paper companies in their acquisitions of and mergers with other companies in the industry, as well as purchase and sale transactions involving operations, facilities and timber resources.  Typical of the deals that we facilitate is our representation of West Fraser Timber Co. Ltd. ("West Fraser") in its acquisition of Weldwood of Canada Ltd. from International Paper Co. for C$1.23 billion in cash.  The transaction helped our client become North America's third largest lumber producer and Canada's largest plywood producer, and it required the negotiation and settlement of a consent agreement between West Fraser and Canada's Competition Commissioner.  We also assisted West Fraser with the complex financial structure for the deal, which combined cash with:

• The issuance of C$275 million+ in subscription receipts underwritten by a syndicate led by Scotia Capital Inc.
• C$150 million of 4.94% senior unsecured debentures underwritten by a syndicate led by TD Securities Inc.
• US$300 million of 5.2% senior notes offered through a syndicate led by Citigroup Global Markets Inc. and Goldman, Sachs & Co.
• A partial utilization of C$500 million in credit facilities provided by a banking syndicate led by TD Bank

Other major acquisition, merger, purchase and sale transactions in which we have acted for forest and paper industry clients include:

• Acted for Genuity Capital Markets G.P. and Canaccord Financial, underwriters, in a $145 million EACOM private placement
• Acted for Georgia-Pacific LLC in its 2010 purchase of Grant Forest Products Inc.'s oriented strand board (OSB) facilities at Englehart and Earlton, Ontario and Allendale and Clarendon, South Carolina for approximately US$400 million
• Acted for West Fraser in its acquisition of International Paper Company's US lumber business for US$325 million and related financings
• Acted for West Fraser in its sale of two BC sawmills to a US acquirer
• The purchase of forestry industry assets worth almost C$1 billion, one of the largest forestry-related party transactions ever in Canada
• An asset purchase transaction in which the client acquired a purchasing agency for European importers of wood products
• A "going private" transaction that resulted in the parent company acquiring over 6 million common shares in the client for over C$251 million
• An asset purchase transaction in which the client acquired a major wood-products operation of the seller for over C$167 million
• The purchase of a forest products business, including a sawmill, a medium density fibreboard plant and a bleached chem-thermomechanical pulp mill, for almost C$400 million

McMillan has mastered the complex mix of legal, financial and regulatory issues involved with the financing of forest products company operations, including the building of pulp mills and other capital-intensive facilities.  We offer project finance assistance to lenders and borrowers for these complex transactions.  Our financing counsel encompasses public debt and equity financing, private placements, project/construction financing, bank operating and term facilities, and sale/lease backs.