A shuttered pulp mill leaves Terrace Bay, Ont., feeling anxious, stressed and uncertain
Michelle Allan | CBC News | Posted: January 12, 2024 9:00 AM | Last Updated: January 12
It's long been the community's main employer but residents now wonder what's next
The union hall in Terrace Bay, Ont., was packed wall to wood-panelled wall with restless millworkers, pink-cheeked from the January wind whipping off Lake Superior.
People checked out pamphlets about applying for unemployment insurance and looked through lists of job search websites piled on a table at the back of the room as they came to terms with the shutdown of the AV Terrace Bay pulp mill earlier this month.
Terrace Bay is the kind of northwestern Ontario town where everyone knows each other — and if you're not a union pulp mill worker, chances are you used to be or are at least related to a few. Experts say this is where the best pulp in the world is made.
Despite that, the mill owner, Aditya Birla Group, shut the mill down in early January and temporarily laid off 400 workers. It has been a crushing blow that's left people anxious about the future, reflecting scenes that have played out in mill towns across Canada in recent years, including in British Columbia, northern Ontario and Nova Scotia.
There's no word on when or if the Terrace Bay mill will reopen, if ever, or what the company plans to do — whether that means reopening it when market conditions improve or selling it to another company. In the meantime, it is keeping the pulp just warm enough to stay usable while workers wait to hear if they still have jobs.
"Why are we temporarily idling? What's gonna happen with us?" said Kathy Howe, a shipper in pulp storage.
Howe said workers were blindsided by the closure, and questioned why they weren't given more notice from owners and management.
"They're wrong and they're pretty shady for the way they went about this — just sprung it on everybody. Here's your layoff with no explanation. Everything was hidden."
It's a really bad feeling to know that your main industry has been up and down like a yoyo so much. So many people have based their lives around that mill. - Jesse Cruz, hardware store owner in Terrace Bay
Howe said she received a layoff notice on Jan. 3, but was called back to work the following day to manage trucks coming in. She has no idea how long she'll be able to count on getting paycheques from the mill and worries about the difficulty of finding a new job.
"I moved 18 hours to come up here and I don't want to have to relocate," said Howe. "I have an elderly father in Schreiber and I can't leave him, so I'm kind of in limbo."
Many in Terrace Bay have endured this situation before as the pulp mill has been through cycles of shutting down, changing ownership, then shutting down again.
Terrace Bay was once an economically thriving company town. The pulp mill, which was established in the 1940s, grew to employ thousands of people by the late 1970s. It fell on hard times in the early 2000s when the pulp and paper industry entered a period of uncertainty.
Aditya Birla stepped up to buy the idled pulp mill in 2012. The mill was fined $250,000 after pleading guilty in 2015 to seven offences under the Environmental Protection Act, and was temporarily shut down in the wake of an explosion that killed a worker in October 2011.
Mill closures have a domino effect — local businesses often suffer too. People out of work can't afford to spend much and many end up moving away in search of work elsewhere, said Jesse Cruz, who owns the Home Hardware in Terrace Bay
"It's a really bad feeling to know that your main industry has been up and down like a yoyo so much," said Cruz, "So many people have based their lives around that mill."
Cruz said his four generations of his wife's family were all employed at the mill. He was hoping his son would have the option of learning a trade and finding a well-paying job at the mill someday, but worries that's no longer a stable option.
Few options for skilled workers
The pulp mill is by far the biggest employer in Terrace Bay. If it's gone, local skilled trades workers looking to make a living may have to search farther afield.
"They'll definitely have to go to a camp job or drive maybe an hour, hour and a half each way every day to find the next closest major industry," said Cruz.
WATCH | Laying out the stakes for Terrace Bay amid the mill shutdown:
The pulp mill is the only large employer of tradespeople close to town. While other high-paying trades work is available in northwestern Ontario, much of it is at remote work sites, where employees often live on site in rotation, said Stephen Downing, president of United Steelworkers Local 665.
"The mining industry is picking up. So there's a lot of the week in, week out, two weeks in, two weeks out [jobs] that people are looking at," Downing said. "As far as in town, there's not very much."
When the mill is running, Downing said the work is good and they're proud of the product they produce.
The union secured wage increases of between 20 and 24 per cent at the end of 2022, as well as pension and benefit improvements. Now, they're trying to help many of those same workers find resources to apply for unemployment benefits and access programs for second-career training.
"I think most of us are optimistic that things will come together, but in the meanwhile, I think everybody is in shock," said Downing.
Economic ripple effect throughout the region
Like many of his constituents, Terrace Bay Mayor Paul Malashewski worked at the mill for decades. He has seen it close and reopen time after time, and knows just how deeply it's felt.
"It has a big effect on the north-shore communities," he said. "The last study they did when the mill went down in 2009, there's like 1,800 jobs affected by this mill being down. It's widespread from White River, Hornepayne, Hearst where we get our chips from, all the way to Thunder Bay."
Relying on the mill as the sole economic driver for the community is risky, but Malashewski said diversifying is difficult and expensive for towns like Terrace Bay.
"We spent around $3 million on waterfront development," he said. "We're always looking for investors to move into town and start another business or other industry."
Terrace Bay won't be able to afford to diversify without government money, Malashewski said, adding he is in talks with their local MP, MPP and Ontario's minister of natural resources to try to drum up support, said Malashewski.
The mayor said he's disappointed to see the mill's owner withdraw from Terrace Bay.
"When [Aditya Birla] came to Terrace Bay in 2012, as a Fortune 500 company… The hopes were high," he said. "They made a lot of promises."
Some in town feel betrayed by the company, said Gino Leblanc, a former mill worker who now manages the only grocery store in Terrace Bay.
"After 10 years of having the price of pulp through the roof, Aditya Birla should have made tons of money. And why is it that a month or two months after the price of pulp goes down that they're closing the doors?" said Leblanc.
Pulp mills are expensive to open, operate and maintain, according to pulp experts, and some mills have closed even when pulp prices are high due to the sheer capital investment required to operate them. These expenses have only ballooned as inflation and steel prices rise.
CBC News has reached out to the company multiple times since the closure was announced last week, but has not yet received a response.
Amid pulp mill shutdowns in other parts of Canada, the one in Terrace Bay is the second to close in the past month in northern Ontario, after the Domtar Plant in Espanola in late 2023.
"There used to be probably a dozen pulp mills in northwest Ontario. I believe we're down to four right now," said Malashewski.
But that difficulty means few have survived, and the ones that are still standing have a greater share of the market to show for it.
"This is a good business. There's a good young workforce here," said Malashewski.
As Terrace Bay tries to court new owners, locals hope they will puts down more permanent roots this time.
"Hopefully somebody out there sees the potential in the mill, and comes in and puts some life back into it — somebody who cares about small communities, somebody who's willing to see what needs to go into the mill to make it viable for a long time again," ," said Cruz, the Home Hardware owner.