Powell River mayor leads group fighting for paper mill

VICTORIA — Premier Christy Clark is offering help to three coastal B.C. communities struggling to prevent the loss of their major employer, but it comes after a leaked company letter highly critical of the Liberal government’s approach to the file.

Clark said Tuesday she appointed former finance minister Colin Hansen to help workers, pensioners and the communities of Port Alberni, North Cowichan and Powell River work through the crisis as Catalyst Paper Corp., struggles to survive.

Clark said the finance ministry will work with Catalyst Paper to address its financing issues, but she made no promises.

Catalyst Paper’s pulp operations on the West Coast provide about 1,700 direct jobs and 7,000 indirect jobs and create about $2 billion annually in economic returns.

Powell river mayor david formosa, who led a delegation of community, union and business leaders into a meeting with Clark at the legislature, said the government needs to step up with support for the communities and the company.

“We’re not asking for anything for free,” said Formosa.

Last week, Catalyst’s creditors narrowly rejected a plan to restructure the company. Protected under the Companies’ Creditors Arrangement Act, it is up for sale, but the communities are desperate to ensure the mills keep operating.

Formosa said Catalyst will be asking the government to “back stop” a $50-million bridge loan to help it emerge from creditor protection.

Prior to the meeting with Clark, Catalyst president Kevin Clarke sent the premier a three-page letter suggesting Victoria did little to boost the confidence of creditors prior to the restructuring vote.

Formosa said the communities have endured worker layoffs, mill shutdowns and have slashed their tax bite on Catalyst, but the prospect of losing their major employer is frightening. “Our community has shifted about $17 million in taxes over to residential and commercial in the last seven years,” he said. “The mill is now taxed like a business on the [street] corner.”

Opposition New Democrat Leader Adrian Dix said the government must work out some form of survival package for the communities and the company, but he stopped short of calling for a financial bailout.