Terrace and Kitimat are working together to find a way to move forward after West Fraser’s announcement last Wednesday that it will permanently close the Eurocan paper mill in Kitimat.

“So far we’re all getting our minds around the situation and trying to figure out what the next steps are, what options are available, if any,” Terrace mayor Dave Pernarowski said.

After many years of trying to reduce operating costs and improve results at Eurocan, West Fraser said the company will permanently close the unprofitable operation.

The closure is expected to take place on January 31, 2010, putting 535 employees out of work; the company says 62 of its 535 employees come from Terrace.

“There’s been some discussion as to what types of things might be available in terms of assistance,” Pernarowski said of his conversations with Kitimat mayor Joanne Monaghan and forests minister Pat Bell.

Economic development officer Sam Harling of the Terrace Economic Development Authority said it was an extremely unfortunate occurrence to have this announcement at this time, but it’s not surprising given the market that they’re faced with and the economic conditions.

The mill is 40 years old and produces linerboard and kraft paper. It has historically struggled with high costs and negative returns.

Sawmill curtailments in the region have decreased the supply of lower-cost unused wood chips to Eurocan and increased the mill’s reliance on more expensive whole log chips, which West Fraser said is a contributing factor to the mill’s recent problems.

“I think we’re lucky to have Eurocan hang on as long as they have,” Harling said, but added that the region’s economy has started to diversify to a point where it may be able to manage this loss.

“TEDA is working hard to diversify the local economies so we’re not dependent on single entities like Eurocan,” he said. “They’ve helped significantly in building our region, but we can no longer depend on industry like that, we have to diversify.”

Harling said there are also opportunities in the region, citing development and other industry like the port in Prince Rupert, the Northwest Transmission line, and potential in the mining industry as some examples. Projects like this will bring about employment.

Harling also added that the region can capitalize on the opportunity surrounding the site.

“The land and infrastructure of Eurocan may present opportunities for future possibilities,” he said, pointing out that some industries like going into a freshly closed site. “The infrastructure that’s there is attractive infrastructure.”

Pernarowski said a little bit of time is needed to see what steps can be taken to mitigate the situation.

“There’s obviously a direct impact to our community as well,” he said, recognizing that there is going to be a lot of peripheral businesses in the area that will be affected by the closure.

“It’s terrible news....but we’ll work through it,” Pernarowski said, adding that the city is looking at options and looking into which businesses will be impacted.