BURSTThe closure of a Williams Lake wood pellet plant “blindsided” the city, according to Mayor Surinderpal Rathor.
The shut down is being attributed to a combination of external market and supply chain pressures, making operations at the location “no longer commercially viable” according to comments from Caroline Bleay, communications manager for Drax in Canada.
The Drax-owned wood pellet plant, which produces wood pellets for heating from wood fibre, announced the planned closure of the Williams Lake facility to staff and the public on Nov. 26, impacting 30 direct employees and a number of contractors.
Rathor said the city had reached out to the company after hearing rumours of a potential closure, but hadn’t gotten a response.
The city worked for over a year to support Atlantic Power’s Williams Lake Biomass Plant to secure viable contracts in that company’s efforts after the company came to the city to announce a possible closure, citing rising fibre costs and what they saw as a nonviable agreement with BC Hydro. Rathor said the city would have worked to try and help Drax as well had they been in the know.
“We’re very disappointed that we didn’t have the opportunity to assist this business and hope that the business community knows that we are available to support businesses to navigate these challenging times that we find ourselves in,” said Beth Veenkamp, manager of economic development for the city.
The closure will result in a loss of nearly $400,000 in tax and utility revenues to the city, as the council begins 2026 capital budget discussions.
The spectre of the loss of revenue was raised at the Nov. 25 committee of the whole meeting at city hall as budget talks with staff got underway. Coun. Scott Nelson pushed council to aim for a zero per cent tax rate increase by cutting capital costs and deferring projects.
Nelson suggested council seek cuts to staff’s draft capital budget while also wanting the city to go ahead with promised projects like a new pickleball facility, which he championed at the most recent council meeting, aiming for breaking ground next year, despite not having a design plan, funding or knowing what the project might cost.
While some details were provided for Drax closing the Williams Lake plant, the provincial forest industry situation is at the heart of it all, according to Bleay.
The loss of a bid on a key local fibre supply was one of the factors which led to the decision to close, she said.
The fibre they lost in the bid process made up 50 per cent of the Williams Lake plant’s annual fibre supply.
Bleay said the curtailment at area sawmills, including the closure of a West Fraser sawmill in 100 Mile House, are impacting fibre supply as well.
Employees of the Williams Lake plant were sent home on Tuesday evening, with all employees then gathered at the plant for the announcement of the closure on Wednesday morning. Bleay said this was meant to ensure the safety of staff so everyone could be on site at once for the announcement.
Mayor Rathor said the city is reaching out to the province to see what they might be able to do.
He said having been a worker at a local mill during his career, he is thinking of the workers and concerned for how people are going to make ends meet.
Rathor said the loss of the business will also be a big hit to the city’s budget.
“I’m standing with the workers, with our local community, with local businesses,” he said.
Bleay said employees are being supported with severance, well-being resources including career counselling, and are being encouraged to apply for positions at other locations across the company.
“The team there is very close, very safety-oriented,” said Bleay, noting the employees will be looking out for one another.
She said the employees have done an excellent job producing top quality pellets at the site.
The Williams Lake pellet plant will close when the current contracts and fibre supply run out, which is expected to happen at the end of the year. The plant will then be put into care and maintenance mode and there is no decision yet on what the long term plans are for the site, noting it will remain in Drax ownership for “the foreseeable future.”
Bleay said the decision to close the plant is not a reflection of the community, which has been amazing.
“We’ve been a part of this community for a very long time,” she said.
Drax is an international company, with a parent company in the United Kingdom.
The Williams Lake Tribune has reached out to the Ministry of Forests for a response to the announcement.