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Kitimat Remains In a Whirl Over Pending Eurocan Closure

By 250 News

Tuesday, November 03, 2009 09:48 AM

Prince George, B.C.-  The number of people who will be left  out of work when the Eurocan mill in Kitimat closes at the end of January is growing.

Speaking on the Meisner program this  morning on CFISFM, CEP Union local reps for the mill, Mary Murphy and Adrian Welsh  say the latest number of direct jobs  to be lost will be 568, that’s up from the initial 535 announced by West Fraser when it lowered the boom on the  aging mill.

“We are already seeing the impact in Kitimat” says Mary Murphy “You can get a furnished apartment  at a very reasonable rent with a couple of months of electricity for free, we have lots of homes on the market.”   While there are plans for a Liquid Natural Gas line and export port for Kitimat, Murphy says that won’t solve the problems long term “We need a long term repair, not a quick fix,  we need  a commitment to forestry   to ensure it is a viable  industry.”

“We see truck after truck after truck dumping logs in the water, and none of them are being utilized by us, they are being shipped somewhere else” says Murphy, “We need  a commitment to  support industry in our  own country first.”

Murphy says everyone will share in the loss of the jobs in Kitimat “When you’re in Vancouver, you’re picking up the bill for 568 people being out of work, you’re picking that up.”

Because the mill is being shut down permanently,  West Fraser will be honouring the  contract provisions for severance pay.  The contract provides for 2 weeks severance  per year  for up to  20 years of service and one week per year for service beyond 20 years.

Kitimat Mayor Joanne Monaghan says the town is “in a whirl”.  She says people are still asking is this real, is this really happening?  The Eurocan mill paid between $3 and 4 million dollars in taxes to Kitimat, “That will continue next year, but when the mill is closed, the assessed value will reduce that considerably.”

Monaghan says the employment impact will spill out  to the support industries, and  the impact will be more like 2 to 3,000 jobs. “We had a meeting with West Fraser yesterday, we made several proposals but West Fraser kept saying  it’s not going to work, its not going to work.”  She says  the company doesn’t seem willing to  talk about options “It was a very discouraging meeting.”

Mayor Monaghan says there will be another meeting this weekend.  She says the pending LNG  project could  create up to 1700 jobs “I have spoken to the university and they are willing to  offer some programs to help workers  develop skills  they may need to  land those jobs.  That project will give us a window of a couple of years.” Another possibility is the construction of the  Highway 37 electrification  line, but  there needs to be  some sort of assistance until that construction starts.  “I am willing to work with  anyone to push  the buttons to help my community.”


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West Fraser is notorious for keeping mills going at a loss. If they are cutting this mill of then its really, really bad. Free labour prob wouldnt save this mill.
This is just great for longtime workers , you wont see a Penny from EI, you are getting screwed, you have to use up all your severance and by then you won't get EI and this is after you payed in for 20 Years plus and never collected , it is a great System we have ?
If your lucky they may change the Rules for you !

Can one roll the severance directly into an RRSP and collect EI?
Outwest. You are misinformed. When I lost my job at Abitibi I received a severance package. Once my severance money was gone I collected EI. It was quite simple. There was no reduction in benefits or length of time I was allowed to collect EI. At the time the max was 45 weeks which is what I was entitled to.

Govsux: Severance pay acts like regular pay in the eyes of the Employment Insurance program. Say you receive 10 grand in severance. That is equal to about 3 months pay for the average millworker. You would have to wait for 3 months before you could collect EI. If you immediately rolled your severance into an RRSP you would have no money for 3 months while you waited for EI if you catch my drift.
between 2001 and 2006 the population of Kitimat dropped by 12.6%, the largest percentage decline of any Canadian census division

2006 population 8,987, a little smaller than Chetwynd.

This is purely a business decision. The only reason that community exists is because of alcan and the mill was tertiary. Its not like there have been no signs or warning, look at the population drop over the last 5 to 10 years.

Where was the hue and cry for Tumbler Ridge? When the mines closed, people sold out and moved, or just moved. A few years later it is a thriving little community that capitalized on its available resources and now has the chance to be sustainable.

If the citizens of Kitimat want to stay, they better find their next revenue source on their own. That is a daunting thought for employees and especially for union members who counted on a big daddy to feed them forever. Now they must adopt an entrepreneurial attitude or move. It really is that simple.

If they wanted access to a deep channel port in kitimat instead of Rupert, they would have put in road and rail to accommodate it. They didn't, they put all their eggs in Rupert. Likely because the road and rail already existed. That to was a pure business decision.

Companies do not exist to support a community. They exist to be profitable. If it ain't profitable, it ain't business. Have any of you seen the West Fraser balance sheet?

My most sincere condolences to the citizens of kitmat. Sorry that you must endure this event and the other economic catastrophes in the recent past.

What ever does not kill you, makes you stronger.
I was talking of a much larger Payout, but then again Ruled may have changed for the better.
You have to wonder what kind of economic system we've developed in B.C. How can the first model of a beautiful instant town which was supposed to go on forever producing aluminum using the hydro-electric power from the lakes and rivers we gave them ... and paper products using our forests ... employing our citizens to make this happen ...

how can Kitimat be left like this ... abandoned, struck dumb with the horror of a world without income ... how would they cope?

After reading this article, and the comments, I thought I would Google around to see the state of affairs on the ground in Kitimat.

I googled "Kitimat + house + for sale" ...

and felt instantly sick when the coloured advertising popped up celebrating the wonderful opportunities which have become available due to the recession ...

and recessions, it says in coloured type, is "a normal part of the regular economic cycle".

So there's no social contract between the big mills who used our resources and our citizens to make their profits? Which means

... there's no crisis in Kitimat. No worried families. Nothing bad will happen if we just start buying and selling, selling and buying ... making profits ... except ... ? Except ... that just isn't true.

We know that's a flat-out lie. So isn't it time, I wonder, to begin testing to see if our whole economy based upon lies? Because we know for a fact, there's a bunch of people in Vancouver on a 101-day spending spree trotting around with an entourage and a torch ... using enough money to set Kitimat back on its feet again, if you ask me.

Something about British Columbia is starting to make me nervous lately.
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"If they wanted access to a deep channel port in kitimat instead of Rupert, they would have put in road and rail to accommodate it. They didn't, they put all their eggs in Rupert. Likely because the road and rail already existed."

Loki, you are uninformed. Kitimat has a deep channel port with great access. Not sure whom you are refering to when you say "they". Alcan, now Rio Tinto purchased the land back in the 1940s. Eurocan, now West Fraser, has their own dock on the Douglas Channel alongside Rio Tinto. Kitimat is a thriving community that has taken a hit with the downsizing of Rio Tinto, and has now been blindsided by West Fraser. Also, the Kemano Townsite was abandoned by Alcan for their business reasons. It is those factors alone that have impacted the community population. When you have 4 major industries downsizing simultaneously, it is difficult to counteract the effects. Especially when the global market plays such a MAJOR role in determining where a business should set up operations for the longterm. Your assertion that the District of Kitimat allowed the decline and sat idly by, is completely incorrect. The declines are a DIRECT reflection of industry downsizing. Kitimat's council and economic development have been working tirelessly over the years to secure, long term economic sustainability.
PORT STATUS:
Private Sector Port – Proponents welcome to Build, Own, Operate
Deep-sea marine terminals; Present port facilities include two
Break-bulk private terminals and a liquids handling marine terminal.
Transshipment opportunities exist for liquids and may exist with
current break-bulk facility owner.
"Additional Private Port facilities in development: LNG Import
Terminal, Regasification and Liquids Handling Facility; Aggregate
Break-Bulk Terminal.

Projects being assessed by Private interests: Petroleum product terminals,
Break-Bulk Terminal operations for import and export of others cargo.
Private, First Nations and Crown Lands available for development.
http://www.kitimat.ca/assets/Business/PDFs/private-international-port-of-kitimat.pdf

Taken from page 5.
I never said that there was not deep channel port in kitimat. What I said was they (the undefined entity such as shipping companies and any other user) chose not to use those facilities. Instead they chose another deep channel facility in a port that already had infrastructure.

The point being that kitimat is not in the running for any "new" industries because of it location which is more than 50 KM from a main road and I am not aware of any rail to kitimat.

Unless someone can suggest a viable enterprise for the valley, why would any investor commit to any development in Kitimat. It is a single industry Company town with that industry contracting.

It does not help that somebody is dumping raw whole logs to be exported, depriving any locals from manufacturing jobs.
Loki:" I am not aware of any rail to Kitimat."

The rail connection between Kitimat was constructed and in use before the highway between Kitimat and Terrace was completely finished.

Kitimat exists because of Kemano power and the smelter. Eurocan came later, as did Ozelot.

There are no compelling reasons why Kitimat could not accommodate additional industry.

Deep sea port, rail and road infrastructure, plenty of water, land and electricity.

I hope that it will weather the present storm and will emerge more prosperous than ever.



I figured there should be rail there. Thank you for the info.

"There are no compelling reasons why Kitimat could not accommodate additional industry."

Can anyone come up with a compelling reason any additional industry would want to start up there? The mill was a given when it was first built due to the forests and markets. Now, the forest industry is extremely competitive and in decline.

I think that is the real question. Huge power generation and ample fresh water are great resources to support an industry. The existing deep channel port would be great a benefit for anyone as well. If I were an investor, what would draw me to drop a few hundred million in that town? What would be the sell?
Agricultural fibrous hemp!

Provides renewable cellulose to feed the mill.
The mill has a unique product in a rising market.
The mill would have to be retooled. Possibility of various government incentives for renewable or unique resource industries for the retrofit. This leaves support industries in place for maintenance and expansions.
Could be primarily an export industry capitalizing on the deep channel. That would not exclude eastern trade on the rail or road.