The 20-year deal — which is renewable after a decade — also allows the Cape Breton mill to buy up to 400,000 cubic tonnes of pulpwood harvested from Crown lands.
Natural Resources Minister Charlie Parker said under prior agreements, there was no requirement that paper mills had to buy a set quota from private woodlot owners.
"It's a much better arrangement for Nova Scotians," Parker said.
"It allows for private woodlot owners to be able to access this market to sell directly to the mill."
Andrew Fedora, the executive director of the Federation of Nova Scotia Woodland Owners, said the deal is a step forward for thousands of rural Nova Scotians who rely on the mill as a wood purchaser.
But he said it doesn't guarantee that the mill will pay enough to make harvesting pulpwood worthwhile for woodlot owners.
"It does create a little bit of potential for contractors and landowners to bargain for a better price, but I'm somewhat skeptical they will receive a fair price for their wood," he said.
Private woodlot owners in Cape Breton have said the new owners of the mill, Vancouver-based Pacific West Commercial Corp., haven't been paying as much as the previous owners NewPage and StoraEnso.
Marc Dube, a spokesman for the mill, said he expects the company will be able to purchase the wood required at a fair price.
"We've set a price that's competitive," Dube said. "It's certainly competitive with other businesses that buy pulpwood in the province and we've been very successful in meeting our needs with the prices we've set."
He said the total amount of wood purchased may exceed 600,000 tonnes.
The plant resumed making paper last month after a yearlong shutdown.
Parker said the agreement with Port Hawkesbury Paper also provides for a benefits agreement with the Mi'kmaq and prevents the company from harvesting any land that may be protected for conservation purposes.
"We control the lands," he said. "Overall, it's better for businesses, better for woodlot owners and better for the environment."
But Matt Miller, a spokesman for the Ecology Action Centre, said the conservation group is concerned about a provision that allows the mill to give a biomass facility access to hardwood.
Miller said he would prefer the agreement ensure that Nova Scotia sawmills first had a chance to use the hardwood for higher value wood products.
"It would have been better to empower those mills with the ability to manage that resource for themselves and have the biomass facility take what's left over," he said.
However, he said the group considered the deal to be an improvement on previous licence agreements.Suggest a correction