The B.C. government’s move to restructure Catalyst Paper’s pension obligations is only the start of a long-term restructuring of the forest industry, Premier John Horgan says.
The immediate threat is the imposition of anti-dumping duties totalling 22 per cent that took effect in April, which Horgan called “an assault on our industries” and unfair trade practices by the U.S.
“We’ve been meeting with Catalyst and the communities they operate in, Powell River, Crofton, North Cowichan and Port Alberni, since April when we held a conference here with local MLAs,” Horgan told reporters at the B.C. legislature Monday.
“But there are also underlying issues when it comes to pulp production in British Columbia, and the primary issue is access to fibre. As we’ve seen an increase in the export of raw logs, as we’ve seen a decline in the number of sawmills, which means there are fewer chips, there’s less feedstock for the pulp sector. That’s one of the fundamental issues that existed prior to the tariff question coming forward.”
RELATED: Unions protest Trump’s paper duties
Horgan said the regulation change made Friday to extend Catalyst’s time to pay off a pension funding shortfall is designed to prevent a scenario faced by Sears employees in B.C. “who went to the bottom of the line when it came to addressing receivership.”
Keeping pulp and paper mills from meeting a similar fate, as they struggle with the latest round of anti-dumping duties that protect U.S. mills from Canadian competition, is the immediate task. The latest duties target uncoated paper such as newsprint, and has raised protests from U.S. newspaper companies that it is pushing their costs higher.
B.C. trade officials expect that with the deteriorating trade relationship with the U.S. in recent months, tariffs on paper products could go even higher, up to 28.5 per cent, as early as August.
Catalyst moved in June to sell its U.S. mills to Nine Dragons Paper Ltd., a Hong Kong company. Catalyst indicated the sale eases the company’s debt position and allows it to focus on its B.C. operations, which employ 1,500 people.