HALIFAX -- A decision by Nova Scotia's premier to keep a pledge he made to a First Nations community five years ago will result in the closure of an aging pulp mill and the loss of thousands of forestry jobs across the province.

Stephen McNeil on Friday rejected Northern Pulp's plea for a deadline extension that would have allowed it to continue dumping wastewater in Boat Harbour, near the Pictou Landing First Nation, after Jan. 31.

"The company has had five years and a number of opportunities to get out of Boat Harbour, and to this point we aren't even close to doing that," the premier told a news conference.

He said the deadline in legislation passed in 2015 would be enforced: "Northern Pulp will be ordered to stop pumping effluent in Boat Harbour, and let me be clear, there will be no extension."

The mill, in operation since 1967 under various owners, has faced consistent criticism for its poor environmental record. It has been dumping treated effluent into lagoons near Pictou Landing for decades, and successive provincial governments have reneged on promises to clean up the once-pristine estuary.

A former Nova Scotia environment minister once referred to toxic mess at Boat Harbour as one of the worst cases of environmental racism in Canada.

McNeil's high-profile announcement was welcomed by Pictou Landing Chief Andrea Paul, who acknowledged the premier had a tough decision to make with so many jobs on the line.

"I am grateful that he has decided to put an end to the pollution and (provided) an opportunity for us to heal," she said in a statement.

"Cleaning up Boat Harbour is all my people have ever wanted, and Premier Stephen McNeil kept his promise and -- on behalf of my community -- we are thankful."

McNeil announced a $50 million forest industry fund that will be used for retraining, education and emergency funding for workers in immediate need of help.

"I know this could not have come at a worse time for you, but the company has failed to respect the timelines given to them five years ago," the premier said. "To those workers and their families, please don't despair. Our government will help and support you in this transition."

The mill's parent company, Paper Excellence Canada, confirmed the 50-year-old operation will be closed, eliminating 300 jobs at the mill and an estimated 2,400 positions in the forestry sector.

At a news conference in Halifax shortly after the premier's announcement, CEO Brian Baarda said the company has already started shutting down the mill and issuing layoff notices and contract cancellations.

The shutdown will have a significant impact on another 8,300 positions across the province, he said.

"This decision ensures the closure of Northern Pulp and the devastation of Nova Scotia's forest industry," Baarda said.

"We're committed to doing the right thing by the environment, and we're committed to the closure of Boat Harbour. Unfortunately, this closure leads to the closure of everything."

Jim Ryan, the mayor of nearby Pictou, N.S., said the premier made the right decision.

"Honouring ... the promise that he made to the people of Pictou Landing First Nation was certainly the right thing to do," said Ryan.

"We are pleased the premier has announced the transition fund, but it's obviously never enough when this kind of industry closes. But hopefully it will be used to lead to a new sustainable forestry industry."

In a typical year, the mill generated over $200 million annually for the provincial economy by making 280,000 tonnes of kraft pulp, primarily to make tissues, paper towels, toilet paper and photocopy paper.

The company had submitted plans to build a pipeline to pump 85 million litres of treated effluent daily into the Northumberland Strait as part of its proposed effluent treatment system.

But the government twice told the company it had failed to provide enough information to allow for a proper assessment of the plan's impact on human health and the environment.

Fishermen in Nova Scotia, Prince Edward Island and New Brunswick said a pipeline would hurt the local lobster fishery, as well as other smaller fishing enterprises.

"Premier McNeil made a courageous decision," said James Gunvaldsen Klaassen of Ecojustice, an environmental law group. "He did the right thing for Pictou Landing First Nation, for the vulnerable environment of the Northumberland Strait and those who make their living from it."

Some Pictou residents, who have long complained about the mill's recurring stench, said a pipeline could hurt tourism along the picturesque strait between Nova Scotia and P.E.I.

By January 2019, Paper Excellence said it had run out of options, noting that 80 per cent of the kraft pulp mills in North American use a lagoon system similar to the one at Boat Harbour -- and the other 20 per cent use a facility like the one in the company's latest proposal.

Baarda said Friday Northern Pulp's efforts to secure environmental approval for its pipeline project included extensive consultations with experts and the production of 68 studies.

"It was based on sound science that showed no meaningful environmental impact," he said.

The main problem was that Nova Scotia's Environment Department failed to provide a clear path for the company to follow, he said.

Union spokeswoman Linda MacNeil said the $50 million in provincial transition funding won't go far, given that the mill spends $40 million annually on salaries for its 300 employees.

"That money will be used to buy a bus ticket for the employees at the mill to move to another province," said MacNeil, Atlantic regional director for Unifor, the union that represents most of the workers at the mill.

McNeil rejected the suggestion he is gutting the forestry industry, saying there is a need to diversify the sector. He pointed to the production of woodchips by sawmills, most of which are purchased by Northern Pulp.

"We now need to look for a diversified market for that product and other products that we have in this province," he said, pointing to Europe as one area of opportunity.

This report by The Canadian Press was first published Dec. 20, 2019.