A pulp mill in Thurso, Que., said it is temporarily laying off 200 employees for 10 weeks, citing a drop in production after China imposed duties on some outside mills.
Fortress Paper said Tuesday it was laying off two thirds of its workforce for the next 10 weeks, but vice president Marco Veilleux said the layoffs would not be permanent.
B.C.-based Fortress Paper moved into the mill three years ago and converted it from a traditional pulp and paper mill to one producing pulp that can be used in rayon, with the idea of selling its product to clothing manufacturers in China.
Veilleux said China imposed duties on mills in Brazil, the U.S. and Canada on Nov. 7, in what he called an effort to protect its own cotton industry, a competitor to Fortress's product.
With the Thurso mill's cost of production climbing by 13 per cent, selling to China is not economical, Veilleux added.
Layoffs will hit community hard, says mayor
The mill is a major employer east of Gatineau. Thurso Mayor Benoit Lauzon said even temporary layoffs will hit the community hard.
He estimates the mill supports a thousand spin-off jobs in the region.
Fortress has met with a Chinese delegation in hopes the 13 per cent duty will be lowered.
In the meantime about 100 employees will stay on at the mill during the shutdown and Veilleux said the mill would look at ways to lower production costs.
The mill might also consider producing more traditional pulp for paper again if it is economical to do so.