Nearly two-and-a-half years after it was put on temporary closure, Canfor Corp. said Monday it has decided to permanently close its Rustad sawmill and pay nearly 150 employees severance for their years of service.
The move comes just two days before employees had planned to hold a rally in front of Prince George-Mackenzie MLA Pat Bell's office and United Steelworkers Local 1-424 president Frank Everitt said a public campaign by employees had some bearing on Canfor's decision.
"I certainly think it helped motivate Canfor to a successful conclusion for the members," Everitt said.
Everitt also described the outcome as a "long-time coming."
Employees will receive 10 days pay for each year of service plus 12 weeks pay in lieu of notice.
Shonna O'Donnell, whose husband Gerald worked at the mill for 30 years, welcomed the news but said her husband's new job as a truck driver is not as good because he's away from home so much.
"It's taken him away from us," O'Donnell said.
Her husband stands to receive between $80,000 and $100,000 over two payments, one in January and one in December this coming year. Everitt said Canfor had asked to pay out the severance over four years but that proposal was rejected.
O'Donnell said they'll likely put their money into a registered savings plan but claimed many former Rustad employees will need the money for more immediate expenses because "they're just hanging on."
Everitt said there was some hope a year ago the mill would reopen to meet demand from China, "but the price of lumber didn't go up, so then we began to change the focus and bring finality [to the closure].
Canfor communications director Christine Kennedy said both sides were already working hard to reach terms for the permanent closure by the time the rally was announced.
The sawmill, which had operated for 62 years prior to the closure in July 2009, 10 of them under Canfor ownership, did not have much of a future in today's climate, Kennedy indicated.
"Rustad is an older and less efficient sawmill and it's got high operating costs and lumber demand and prices really need to be at a peak for that mill to be operated economically," Kennedy said.
"The capital investment that would have been needed to bring it up to a globally competitive standard was just more than was possible to invest in it."
The company is instead focused on a $300-million, three-year capital investment plan on other facilities. Kennedy said $13.6 million of that is going into optimizing the planer and control systems at the P.G. sawmill. Onsite work began in October and the major installation is scheduled for Dec. 16 to Jan. 2.
"So it's definitely reinvesting back into the Prince George area," Kennedy said.
Canfor also permanently closed its Tackama sawmill in Fort Nelson where 199 employees will receive severance.
