There was an almost audible sigh of relief heard in the community on Monday as the results of a crucial vote became known.
Catalyst Paper Corporation creditors voted overwhelmingly in favour of a financial restructuring plan, a decision that allows the company to keep operating. Jobs, both direct and indirect, have been saved, along with the estimated $2 billion a year in economic activity the company generates.
In 2011, Catalyst paid $50 million in wages and benefits for 410 employees in Powell River, generated 1,810 spinoff jobs, $360 million in spinoff economic activity, $7.4 million in spending with local businesses and paid $2.9 million in property taxes.
The community has been experiencing an economic chill since January 31, 2012 when Catalyst entered court-ordered creditor protection. Its future appeared uncertain in the subsequent months, especially toward the end of May when creditors voted down the initial plan to restructure the company’s debt, albeit by a narrow margin.
While Catalyst planned to, and did, enter a sales process when the vote failed, that was not the best outcome for the company, its workers and pensioners, nor the communities in which it operates.
While many people contributed to the successful second vote, City of Powell River Mayor Dave Formosa deserves credit for much of the behind-the-scenes heavy lifting. He has worked hard with pensioners, who stood to lose 30 to 35 per cent of their pensions if Catalyst was sold, to trigger the second vote. Pensioners agreed to give up their extended health benefits and allowed the company more time to restore a large deficiency in its pension fund.
Formosa was also instrumental in organizing a meeting with Catalyst executives and BC Premier Christy Clark. Up until he stepped in, pleas from the company for provincial government assistance had gone unheeded. The meeting signalled that the government was listening and Clark appointed key government representatives to work with the company.
Catalyst still faces numerous challenges, not the least of which is falling markets. The court must sanction the vote and the company isn’t expected to emerge from creditor protection until September.
During the past six months, much has changed. Catalyst has developed stronger ties with the communities where it operates and with the unions that represent its workers. Everyone has made concessions in the struggle to keep the company afloat. Those who have put their time, effort, ingenuity and skills to work know why they did it and why, in the end, it was all worth it.
