Blaming "poor market conditions,'' U.S. forestry giant Weyerhaeuser Co. is closing a pulp and paper mill in Prince Albert, Sask., in a devastating blow to the provincial economy that will cost 690 jobs.
It's a major cut to resource-based economies of the city and the province in general, which billboards its good relationship with the U.S.-based forestry products firm as a symbol of the region's success in the industry.
Premier Lorne Calvert moved swiftly after the announcement to set up a task force that will examine issues surrounding the closure, while Prince Albert Mayor Jim Stiglitz was left to reassure his citizens that their community of 30,000 will endure.
"It was very much of a shock when I got the call first thing in the morning - just like a dream almost, you don't know it's real,'' Stiglitz said.
"But, you know, we are from Prince Albert, we are from Saskatchewan here, we've faced these kinds of things before ... we're still here.'' Calvert said the province will examine all the options it has at its disposal to keep the plant operating at some level and he didn't rule out investing taxpayers' dollars in the facility.
But he was careful not to raise expectations too high in the minds of workers who just lost their jobs.
"They and we are, I think, very realistic about the circumstances that face our families in Prince Albert,'' Calvert said.
"We want the workers and families to know that the provincial government and the people of Saskatchewan are standing with them and will work with them to find solutions.'' A phased shutdown of the mill will start Jan. 3, the company said in a release last week. Paper operations will cease production on or about Jan. 2. The pulp mill will continue operating until spring.
Weyerhaeuser said the uncoated free-sheet paper and pulp markets "face fundamental challenges.'' "There's more supply than there is demand, which means prices are weak and inventories are mounting,'' said company spokesman Wayne Roznowsky.
"General terms - there is less paper being used and this led to the strategic decision that Weyerhaeuser would be moving towards the indefinite closure of Prince Albert pulp and paper.'' Like most forestry companies, Weyerhaeuser has been hurt by higher raw materials and energy costs that have squeezed its finances. Other Canadian companies, from Domtar to Tembec and Abitibi-Consolidated, have also been cutting costs and streamlining operations to improve their finances in an increasingly difficult market.
At Weyerhaeuser, the company said it intends to explore all options with respect to the future of the Prince Albert mill, including identification of potential buyers.
The Prince Albert mill has an annual capacity of 280,000 tonnes of uncoated paper and 130,000 tonnes of market pulp.
The Communications, Energy and Paperworkers Union of Canada said the Weyerhaeuser operations in Prince Albert should be sold and kept running.
"We think both the paper and the pulp mills are viable,'' said Dave Coles, the western regional vice-president for the union.
"They may not fit in with the global synergies of Weyerhaeuser, but that is no reason to abandon this community, its workers and their families.'' Brian Payne, CEP's national president, called for "urgent action" on the part of the federal government to save the Prince Albert mill and dozens of other threatened forestry operations across the country.
Weyerhaeuser, based in Federal Way, Wash., is one of the world's largest integrated forest products companies. In 2004, sales were $22.7 billion US.
The company became a major player in the Canadian forestry market after the late 1990s purchase of the former MacMillan Bloedel Ltd. of Vancouver, which at the time was one of Canada's best-known lumber producers.
