Effective immediately, BC’s provincial government is stepping in to protect the pensions and jobs of Catalyst Paper Corporation retirees and employees at its Powell River mill. The move will assuage concerns of workers worried about their pensions if the future of the mill is in jeopardy.
In making the announcement on Friday, July 27, premier John Horgan said it was good news for former and current Catalyst employees whose pensions and jobs are threatened by US Department of Commerce tariffs.
“We are working hard to address the impacts of this threat and ensure the long-term viability of Catalyst’s BC operations, but should threatened tariffs force Catalyst Paper to take desperate actions to protect its own interests, our government’s action will protect retirees and workers,” said Horgan in a statement from the premier’s office.
City of Powell River mayor Dave Formosa said the announcement is great news.
“If Catalyst sells a mill in BC, specifically in my community, which is my biggest concern, they cannot sell the mill assets only without providing for the deficiency in the pension plan,” said Formosa. “Regardless of what type of sale it may be, if there is a sale, the pensioners would have to be topped up from the sale money.”
The province has accomplished this by amending the Pension Benefits Standards Regulation to modify relief granted in 2012, which gave Catalyst more time to pay off its 2012 pension funding shortfall.
In a statement also released on July 27, Catalyst president and chief executive officer Ned Dwyer said current strong pulp and paper prices have allowed the company to “withstand the onerous US duties we face, but the industry requires real solutions to address the ongoing challenges in BC with respect to fibre, electricity costs and other competitiveness issues.”
The government’s action and premier’s use of terms such as quick sale, mill closures and receivership is an ominous undertone to the future of Catalyst.
Formosa said there is a lot of speculation about the company.
“There's no doubt we've always been concerned about the longevity of the mill,” he said. “It’s just a precautionary move.”
Horgan said he has been in talks with Catalyst unrelated to the regulatory change announced, including competitiveness issues and the viability of the company’s three mills and Richmond headquarters, which employ 1,500 people.
According to the statement, pension entitlements for Catalyst salaried retirees and workers will be more secure should company owners, in the face of tariffs, be forced to sell or close one or more of its three pulp and paper mills in Port Alberni, Crofton and Powell River.
“We cannot stand by and allow almost 1,000 Catalyst retirees, with an average company pension already less than $20,000 per year, to be last in line should US tariffs push Catalyst into bankruptcy or dissolution,” stated Horgan.
Formosa said the city has expressed concerns and the province’s pension announcement is indicative that it has listened by enacting legislation to protect pensioners.
“Should something happen we would really like to see our pensioners protected and the money not just going back to the funds in New York,” added Formosa.
Catalyst is privately owned by three hedge funds holding the majority of shares.
Formosa said rumours about Catalyst’s future create apprehension.
“There are rumours of a possible sale of the Crofton mill,” he added. “That just has people feeling uneasy.”