Crofton, British Columbia, Canada, 02 December 2008 – The Pulp and Paper Workers of Canada (PPWC) Local No. 2 and Catalyst Paper announced today that a tentative agreement has been reached on the renewal of the collective agreement at the Crofton Division. The deal addresses the twin priorities of an CAD 80 per metric ton target in labor costs and the PPWC Industry Pattern Agreement.

The four-year agreement will enable the operation to achieve competitive labor costs through innovation in work practices and implementation of new ways to reduce manning levels without the need for traditional layoffs and severances. The age and service of employees allows for the workplace changes needed with a succession plan for senior employees who are leaving the division at a high rate every year.

“The union is to be commended on their solutions-focused approach to dealing with the significant issues that confront the industry and our cost structure. We achieved an agreement that balances the needs of their members while helping to establish a more cost-efficient operation that keeps workplace safety and production focus in everyone’s mind,” said Richard Garneau, Catalyst president and CEO.

“Commitment, effort and understanding by both the Catalyst and Local No. 2 negotiating teams made this deal possible. The untypical nature of these negotiations meant everyone had to take a holistic view to make the myriad of components fit in a plan suited to these turbulent economic times. Ratification of this agreement puts the Crofton pulp and paper mill in a better position to weather the challenges the industry is currently facing,” said Lloyd Kelly, president, PPWC Local No. 2

The union is recommending acceptance of the agreement to its members and results of the ratification vote are expected to be known on December 3, 2008. The PPWC represents approximately 560 employees at the Crofton mill.

Catalyst is the largest producer of specialty printing papers and newsprint in western North America. The company also produces market kraft pulp and owns western Canada’s largest paper recycling facility. The company’s six mills have a combined annual capacity of 2.8 million metric tons of production. Catalyst is headquartered in Richmond, British Columbia, Canada, and its common shares trade on the Toronto Stock Exchange under the symbol CTL.