The B.C. government is moving to protect jobs and pension benefits for some 1,500 workers and 1,000 retirees at Catalyst Paper including at plants in Port Alberni and Crofton.
It comes in the face of more anti-dumping duties imposed by the U.S. on Canadian newsprint in March.
The Department of Commerce found in a preliminary investigation that Catalyst was selling newsprint south of the border by as much as 22.16 per cent less than fair market value.
U.S. Customs and Border Protection is instructed to collect cash from Canadian newsprint importers based on those rates.
“In the face of punitive U.S. trade action, our job is to make sure the interests of B.C. workers and retirees are protected,” said Premier John Horgan.
“We are working hard to address the impacts of this threat and ensure the long-term viability of Catalyst‘s B.C. 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.”
The province says that Friday’s action means pension entitlements for salaried retirees would be more secure should Catalyst be forced to sell or close one of its three pulp and paper mills. It insists that the company fund the remainder of outstanding pension obligations immediately.
Catalyst was granted relief under the Pension Benefits Standards Regulation by the previous B.C. Liberal government in 2012 to give it a longer period to pay off what the current government calls a significant pension funding shortfall.
A press release from the province of B.C. announcing the move says that U.S.-Canada trade relations have deteriorated in recent months, and B.C. trade officials now anticipate punitive U.S. tariffs, possibly as high as 28.5%, on Catalyst‘s paper products, as early as August 2018.
In a statement in April, Catalyst’s CEO said “Unfortunately, the duties come at a difficult time for our industry. Newsprint sales are declining while our operating costs continue to increase.”
Catalyst Paper’s combined operations in B.C. generate over $2 billion in annual economic activity and are key contributors to the local economies of Vancouver Island, Powell River and Metro Vancouver.