POLITICS

Coastal B.C. mayors plead for premier's help to save pulp mill towns

05/29/2012 03:15 EDT | Updated 07/29/2012 05:12 EDT
VICTORIA - Premier Christy Clark is offering help to three coastal British Columbia 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 financial crisis they face 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 some form of support for the communities and the company.

"We find ourselves in a position where the situation is dire," he said. "The communities represented here, we are all mill towns. These are the No. 1 employers that we have. We're hoping the government gets it."

"We're hoping for some support," said Formosa. "We're not asking for anything for free."

Last week, Catalyst's creditors narrowly rejected a plan to restructure the company.

Catalyst, protected under the Companies' Creditors Arrangement Act, is up for sale, but the communities are desperate to ensure the mills keep operating.

"The chances of this iconic industry disappearing are real," said Formosa. "The help we are looking for may not even need to be required. We just need them to say, 'Hey, we're here and if we need you we'll be there."

He 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 a three-page letter to the premier.

Clarke's letter suggests the government did little to boost the confidence of Catalyst creditors prior to the restructuring vote.

"Despite many letters to you and meetings with your staff, Catalyst's requests that the B.C. government set right the fundamentals it controls and that were essential to the successful emergence for Catalyst from CCAA went unheeded," stated the letter, which was leaked to reporters.

"The lack of substantive and public action by the B.C. government on the items identified for its attention was disappointing."

The letter also suggested Pat Bell, the jobs, tourism and innovation minister, did not take seriously the company's concerns that creditors may reject the restructuring plan.

"The minister's assertions that he and the B.C. government were working with the company simply were not true," stated the letter. "His statement in the media that he felt the restructuring vote would succeed was certainly not based on the company's understanding or experience with the CCAA process."

Clark downplayed the contents of the letter, saying the sides all appear to be working together after Tuesday's meeting.

"We have to move forward and we have to sort of put that in the past," she said. "I want to make sure that the communities, the pensioners and the workers, that their interests are looked after if we can possibly find a way to do that."

Formosa said the communities have endured worker layoffs, mill shut downs and have slashed their tax bite on Catalyst, but the prospect of loosing 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."

Formosa said if Powell River loses Catalyst, the community will most likely lose many of its amenities, including health-care specialists.

"We don't want to see the mill go down," he said.

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 bail-out.

"It's up to the government to show its interest," he said. "Action is required."