Paper Excellence announced Thursday the permanent closure of the Mackenzie Pulp Mill.
Production at the mill was originally curtailed in June 2020 putting 253 employees out of work in the community of about 3,800 people 186 kilometres north of Prince George.
It said employees from the mill have been relocated to other Paper Excellence facilities where possible and the terms of the collective agreement with Unifor Local 1092 will be respected and severance payments made.
The company attributed the decision to market impacts caused by COVID-19 and lack of local economic fibre.
"Since acquiring the Mackenzie mill in 2010, Paper Excellence has invested more than $360 million in the facility," the company said in a statement. "However, despite these investments and the committed team of employees in Mackenzie, the facility’s small production capacity and the ongoing lack of local economic fibre meant the mill could not be globally competitive."
Conversely, Paper Excellence said it is restarting one of the paper machines in its Powell River mill in early May, investing with and establishing jointly beneficial partnerships with First Nations, and making a $13 million capital investment in its Port Alberni facility to "diversify into higher-value markets."
The company is working towards a "significant capital investment" in its Crofton facility on Vancouver Island and restarting its facility in Prince Albert, Saskatchewan.
Nechako Lakes MLA and BC Liberal forestry critic John Rustad called the development disappointing. He maintained the Mackenzie area is home to one of the "biggest fibre baskets we have" and speculated that uncertainty over what the governing NDP has in store for the industry played a role.
""The big shifts that the government is talking about in terms of forest management and allocation, I think, were too much of a headache for them," Rustad said.
He also predicted a further closure of a pulp mill and a sawmill north of the Pine Pass as the restrictions on access to fibre in the name of protecting Caribou take hold in the Chetwynd area.
Asked if pellet plants competing for fibre may be having an effect, Rustad suggested it's possible and noted that pulp mills on Vancouver Island can access "fibre recovery zones." He said pulp mills, with their significantly-larger capital outlays, have relied on inexpensive fibre to make ends meet.
In an emailed statement, forests, lands and natural resource operations minister Katrine Conroy said the news has left her saddened.
“My sympathies are with the impacted workers and their families. I spoke with Mayor Joan Atkinson this afternoon and assured her that our government will continue doing everything we can to support the workers, their families and the community," Conroy said.
Conroy also said that over the last two years, government has provided nearly $3 million in funding for job creation and support for employees hit by the closure.
"Through WorkBC and the Job Placement Co-ordination Office in Mackenzie we continue to help impacted workers access government programs, skills training referrals, job referrals and job placement," she said.
Paper Excellence, meanwhile said it "looks forward to the BC government’s continued focus on competitive mid-term timber supply and modernization of forest policy while ensuring an equitable distribution of access to forest tenures to support the diversity and competitiveness of the sector and the production of high value products."