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Elk Falls closed by new CEO

Paper producer Catalyst closed its Elk Falls mill in Campbell River yesterday after more than a year of juggling back taxes and worker wage negotiations.

“The steep decline in commodity paper markets, coupled with uncompetitive labour and tax costs were contributing factors that could not be overcome,” Kevin J. Clarke, newly appointed president and CEO, was quoted in a Catalyst news release.

“The uncertainty regarding the future of this mill was detrimental to all our operations and had to come to an end,” said Clarke.

The closure comes over a week after Catalyst paid $4.8 million in taxes owed to Campbell River. The company initially refused to pay, citing Campbell River tax rates as too high.

The mill closed indefinitely in February 2009, laying off more than 200 workers. Since then, Catalyst and the Canadian Energy and Paperworkers Union Local 1123, which represents the mill workers, have been in tense negotiations over wages with remaining employees who hadn’t taken severance packages.

With bold wage proposals from both sides, negotiations became hostile and an agreement was not reached that would give Catalyst financial leverage to re-open.

The E.I. claims of some of the remaining 100 members have expired, while others who were laid off are pursuing re-training, said Dan Bergsma, vice president of CEP local 1123.

“This is a sad day for another small community,” said Bergsma.

“These are great, well-paying jobs. That’s the tragedy of this; that we weren’t able to get together and come up with something. This industry is a really valuable and viable part of B.C.”

CEP Local 1123 and 603 will continue to represent the workers throughout the shutdown of the plant and any eventual sale of the property, said CEP western region representative Karen Cooling.

The closure may still be fresh, but the possibility of finding a new owner interested in running the plant is pretty good, said Cooling.

“It’s a newer mill,” said Cooling.

“It’s in very good shape and it’s in a good location. It’s got newsprint and it’s got the Cogen [power plant] next door. It’s as good a mill to try and sell in Canada as any, definitely better than most. I would say that we would be cautiously optimistic.”

Catalyst spokesperson Lyn Brown wasn’t able to comment on a possible sale of the Elk Falls mill by deadline.

Justin Langille reports for The Tyee.

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