Catalyst Paper : Applauds Government’s Decision to Cut PST on Electricity

Richmond, BC - The elimination of the PST on electricity is a welcome and strong step forward to protect and support jobs in British Columbia's pulp and paper sector, says Len Posyniak, Senior Vice President, Human Resources & Corporate Services for Catalyst Paper Corp.

British Columbia's thermo-mechanical pulp and paper sector supports 5,600 direct and indirect jobs across the province, generating about $250 million in annual revenue for governments. In BC, Catalyst operates mills in Powell River, Port Alberni and Crofton, a distribution centre in Surrey, and is headquartered in Richmond.

The provincial government announced the change in its 2017 budget. Effective October 1, 2017, the PST on electricity will be reduced from 7% to 3.5%. On April 1, 2019, electricity will be fully exempt from the PST.

'This is good news at a critical time for our industry and for Catalyst and the workers and communities who depend on our operations,' said Posyniak. 'This tax change will help improve our global competitiveness and create better hosting conditions for re-investment in British Columbia.'

The tax policy change was recommended by the BC Commission on Tax Competitiveness. The Commission's November 2016 report stated: 'For certain industries the tax on specific inputs can have an even greater competitive impact. B.C. is the only jurisdiction that levies a sales tax on electricity and other sources of energy used by business, which puts B.C.'s energy intensive industries such as pulp and paper at a particular competitive disadvantage.'

Today's tax change is supported by the forest industry, forest workers, their unions and a broad number of communities that depend on forestry jobs. Electricity is a significant input cost for pulp and paper mills, accounting for more than 30 per cent of a mill's production costs. In 2015, Catalyst paid more than $138 million in electricity, plus an additional $9.6 million in PST, compounding the cost of electricity for mills.

'I want to thank government for recognizing the importance of the pulp and paper sector in BC's economy, and for taking action to protect the high paying jobs that the pulp and paper industry creates in every region of the province,' said Posyniak.

-30-

About Catalyst Paper:

Catalyst Paper manufactures diverse papers such as coated freesheet, coated one side (C1S), flexible and industrial packaging, coated and uncoated groundwood, newsprint, directory, as well as market pulp. Customers include retailers, publishers, commercial printers and converters of specialty applications in North America, Latin America, the Pacific Rim and Europe. With five mills across North America, Catalyst has annual production capacity of 2.3 million tonnes. Catalyst is headquartered in Richmond, British Columbia, Canada, and has been ranked by Corporate Knights magazine for 10 consecutive years as one of the 50 Best Corporate Citizens in Canada.

For more information:

Len Posyniak
Senior Vice President, Human Resources & Corporate Services
604-247-4013
Len.Posyniak@CatalystPaper.com