Dozens of workers laid off as Vancouver Island mill shutters paper operations

The Catalyst pulp and paper mill in Crofton, B.C. (CTV News)

A long-struggling pulp and paper mill on Vancouver Island is shuttering its paper operations indefinitely, laying off dozens of employees after years of production pauses and temporary restarts.

Paper Excellence Canada announced the closure of the paper production facility at its Catalyst mill in Crofton, B.C., on Thursday, saying operating costs were too high due to inflationary pressures on raw materials, energy costs and a lack of domestic fibre supply.

"These pressures have materially impacted the current and future financial viability of the paper operation," the mill owner said in a news release, adding that approximately 75 employees will be let go as a result of the move.

"We recognize the difficulty this decision has placed on both our employees and the Cowichan Valley community," Blair Dickerson, the company's vice-president of public affairs, said in the release. "We will work to minimize negative impacts wherever possible."

The mill's pulp operations will continue production, with the pulp arm's 400 employees unaffected by the paper curtailment. The company said the Crofton mill operators will now focus on making the remaining pulp facility "cost competitive" and aligned with the company's business strategy.

Mayor asked province for help

The closure of the paper production facility comes just two weeks after the mayor of North Cowichan asked B.C. Forests Minister Bruce Ralston for help supporting the mill as the ongoing production pauses at the municipality's largest employer and largest taxpayer left a significant hole in the local economy.

Paper Excellence says it will continue to supply its customers with paper products from its other mills, where possible.

"Paper Excellence Canada thanks both federal and provincial governments for their efforts to support Catalyst Crofton's paper operations," the Richmond, B.C.-based company said.

"The company will respect the terms and conditions of all contribution agreements affected by this indefinite curtailment and will work with the appropriate government agencies on the next steps."