Richmond, British Columbia, Canada, 18 September 2009  – Catalyst Paper (TSX:CTL) today presented the two union locals representing workers at the Elk Falls paper mill with a plan that would result in the restart of production. The company’s plan provides for the start up of at least two of the mill’s paper machines and a profit-sharing system based on the company’s earnings, in return for changes to wages and benefits. Under the company’s plan, the average hourly wage rate would remain in excess of CAD 26.00.

“Our business is in the grip of a deep cyclical downturn, coupled with demand shifts and structural changes. We have to make adjustments to the cost structure of each of our mills to give them the greatest opportunity for a successful operation long-term,” said Richard Garneau, president and chief executive officer.

“We would rather work through the details of the issues facing the Elk Falls mill together with the union locals, but they declined that opportunity and asked the company for a plan,” he said. “We recognize our plan proposes changes to the status quo at the mill but believe it reflects the need to adapt to the lower-cost demands of our new, smaller, highly competitive market,” he added.

The Elk Falls mill was indefinitely idled in early February with resulting layoffs affecting approximately 400 hourly and staff employees. Elk Falls hourly employees are represented by Communications, Energy, and Paperworkers Union of Canada (CEP) locals 630 and 1123.

Catalyst Paper manufactures diverse specialty printing papers, newsprint and pulp. Its customers include retailers, publishers, and commercial printers in North America, Latin America, the Pacific Rim, and Europe. Catalyst has six mills, located in British Columbia, Canada, and Arizona, USA, and a combined annual production capacity of 2.5 million metric tons. The company is headquartered in Richmond, British Columbia, and its common shares trade on the Toronto Stock Exchange under the symbol CTL. Catalyst is listed on the Jantzi Social Index and is also ranked by Corporate Knights as one of the 50 best corporate citizens in Canada.