Workers at B.C. paper mill take 10 per cent wage cut

Deal will save money-troubled Catalyst upwards of $18 million
||Last Updated: 03/20/2012

British Columbia’s biggest pulp and paper company has reached a deal with over 1,000 workers at three locations and two different unions.

The deal is being considered a second chance for Catalyst as the company has been experiencing financial difficulty for quite some time, culminating in December 2011 when it defaulted on a $21-million bond interest payment. The company’s total debt is estimated at more than $800 million.

The five-year agreement includes a 10 per cent wage reduction, along with adjustments to vacation and health benefits. Catalyst expects the deal will produce annual savings of between $18 million and $23 million dollars.

“Approval of the new labour agreements lets everyone know that the people who make up Catalyst are taking the actions necessary to save jobs and ensure we have a viable and competitive business for the future,” said Catalyst president and CEO Kevin Clarke. “We appreciate there is still an enormous amount of work to do to complete the restructuring plan that will enable the company to exit creditor protection on solid footing going forward.”

Approximately 700 members of the Communications, Energy and Paperworkers (CEP) Union work at the Port Alberni, Powell River and Crofton mills on Vancouver Island, B.C. About 400 members of the Pulp, Paper and Woodworkers Union of Canada (PPWC) who work at the mill in Crofton were the last group to vote on the offer, approving it by 55 per cent.

The agreements will run from May 1, 2012 to April 30, 2017.

The company announced at the end of January 2012 it would be seeking court-ordered creditor protection after the workers at the Crofton mill voted against a labour contract critical to the company's voluntary restructuring plan. The future of the plant was contingent on the union’s approval of the latest offer.

Catalyst Paper manufactures specialty mechanical printing papers, newsprint and pulp.

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