Scotia Investments Limited letter to employees

November 1, 2012

Memo to: All Employees, Scotia Investments Group of Companies

It is with deep regret that we announce that the board of Scotia Investments Limited has concluded that Minas Basin Pulp and Power’s

(MBPP) containerboard mill in Hantsport will be closing in December of this year. We are sharing this news today with all

employees and we are focused on helping them through the transition.

With last year’s restructuring of operations and adjusting of the workforce, many have remained hopeful that, together with some

recent improvement in pricing, the mill could be competitive. However, after several years of challenge, the board has concluded that

it is time to recognize that the mill is at the end of its cycle.

Long term sustainability cannot be achieved. Like most other mills in this

sector, we continue to experience marketplace challenges, increased competition (using newer, more efficient technology) and rising

costs of operation. In recent years, we have made many improvements to try and address these issues and have explored

numerous options in an attempt to make the mill competitive.

This impacts 135 employees, however upwards of 40 will be transitioned to sister company CKF Inc. or other companies within the

Scotia Investments Group of Companies. We will begin working immediately with the remaining employees to find alternative

options and support them through this transition and mill closure. We are supported by trained Human Resources counselors, who are

in place to provide various transition services. We are in touch with our own member companies and other employers throughout the

entire region, as many of our employees have qualifications that would be considered by others to be valuable assets. We will be

fulfilling all employment obligations, including the pension plan.

We are very grateful to the management team, led by Scott Travers, for their tireless efforts and dedication to the mill, its employees

and customers. Scott joined Minas Basin as an engineering student and has contributed passionately and steadfastly to the vision,

innovation and spirit of this entire organization. During his tenure, we’ve been recognized across this province and in the industry, for

many innovative energy and process solutions, making us one of the greenest mills in North America. We wish Scott the very best, as

he embarks on pursuing other opportunities. Our Vice President, Operations, Terry Gerhardt will be key in leading us through this

transition in the coming months.

Scotia Investments plans to continue to focus and invest in those growth opportunities that provide the greatest benefit to the

company, its employees and the province. While we have worked closely with governments over many years, we are not seeking

support for the mill.

It is important to note that we are not leaving the paper or packaging industry, we are re-focusing within the paper sector on those

areas in which we can confidently succeed. Our sister company CKF will continue to expand operations and increase production for

a growing customer base and new markets, which is why we are able to offer some positions to outgoing MBPP employees.

Furthermore, the energy division including the power dam operations of MBPP will continue as going concerns.

This mill has a proud and long life to celebrate. In an industry where mills typically last 50-75 years, we’ve outpaced and outlived

many, and our accomplishments are due in no small part to the excellence of the management and the commitment and hard work of

employees. All members of the Scotia Investments Group of Companies’ management team are available to support you through this

time of transition.

Yours sincerely,

Archie W. MacPherson

President & CEO