British Columbia

John Horgan pledges pension support for Catalyst Paper workers as U.S. tariffs loom

Looming forest industry tariff increases and deteriorating trade relations between Canada and United States has prompted British Columbia's government to protect the pensions of retirees and workers at three Catalyst Paper pulp mills.

Company required to cover pension shortfall should mills in Powell River, Port Alberni, Crofton close

Catalyst's operations in B.C. generate more than $2 billion in annual economic activity and are key contributors to the local economies of several coastal communities, including Powell River, the site of this mill. (Catalyst Paper)

Looming forest industry tariff increases and deteriorating trade relations between Canada and United States prompted British Columbia's government to protect the pensions of retirees and workers at three Catalyst Paper pulp mills, said Premier John Horgan.

The government made the move in response to the company's sale of its U.S.-based forest companies last month and the prospect of higher lumber tariffs later this summer.

"This was a pre-emptive step," Horgan said.

"It was a step to ensure that we didn't have a similar scenario that we had here with pensioners who worked for Sears, who went to the bottom of the line when it came to receivership."

Horgan said he is not aware of any impending closure or sale at Catalyst pulp operations in Powell River, Port Alberni or Crofton. But he is concerned about their long-term viability, and his government has been meeting with the company since April.

"Catalyst is certainly facing some significant challenges, I don't want to diminish those. But we're working as aggressively as we can to address the underlying problems that we can affect, and we're standing with Catalyst and others from the trade challenges from the United States," he said. 

"We want to make sure that those tariffs are removed, and Catalyst can get back into the issue of their long-term needs."  

Company to cover pension shortfall

The company completed the sale of its U.S. operations last month in a deal worth $175 million US.

Catalyst and the province's former B.C. Liberal government agreed in 2012 to give the company 16 years to pay off pension funding shortfalls.

Employee unions also agreed to wage concessions at the Port Alberni, Powell River and Crofton mills.

Horgan said the government has now changed the pension relief regulation so that Catalyst would be required to immediately cover the pension shortfall upon a sale or closure, protecting the pensions of 1,000 retired employees and 1,500 workers.

'Ongoing challenges'

In a statement issued Friday, Catalyst CEO Ned Dwyer said they understand the company's operations are critical to its employees, pensioners, suppliers and communities.

"With strong pulp and paper prices we have been able to withstand the onerous U.S. duties we face, but the industry requires real solutions to address the ongoing challenges in B.C. with respect to fibre, electricity costs and other competitiveness issues."

A B.C. government statement said U.S.-Canada trade relations have deteriorated and provincial officials now anticipate tariffs as high as 28 per cent on Catalyst's paper products by August.

Catalyst's combined operations in B.C. generate more than $2 billion in annual economic activity and are key contributors to the local economies of Vancouver Island, Powell River and Metro Vancouver.

With files from CBC News

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