Vancouver Island mill deal collapses

The businessman behind the proposal to re-open the Port Alice pulp mill, says he's walking away from the deal after the workers rejected a proposed contract that included concessions on pensions and seniority.

The mill was the main employer for the Island community until it closed and went into bankruptcy in 2004, throwing 300 people onto the unemployment lines.

• FROM APRIL 8, 2004: Island mill town losing mill

A group of U.S.-based investors had formed a company – Neucel Speciality Cellulose – and had been trying to buy the mill.

Last week, it convinced the provincial government to pay for cleaning up existing pollution at the site. But Neucel was unable to convince the millworkers to accept a new contract.

Courtesy: Village of Port Alice

• LINK: Neucel backgrounder on contract issues (.pdf)

CEP union officials say that's because it would have frozen their existing pension plan, eliminated seniority, and reduced company contributions to health and welfare benefits.

Spokesperson David Shaub admits the 57 per cent rejection vote has caused a rift among Port Alice residents.

"There is a definite split in the community, and feelings are going to run high, and it's going to run pretty hard for awhile."

• LINK: Village of Port Alice

At this point, here are no other buyers on the horizon. Economic Development Minister Colin Hansen says he hasn't given up hope for the mill. But he also doesn't know of any other companies in a position to buy it.

• INTERVIEW: On The Island's Paul Vasey speaks with businessman Richard Bassett and with Don Vye, the president of the Port Alice local of the CEP.