Correspondence from Catalyst Paper Corporation

October 12, 2012

Mayor Graham Hill and Members of Council Town of View Royal 45 View Royal Avenue Victoria, BC V9B 1A6

Dear Mayor Hill and Members of Council:

Catalyst Paper successfully emerged from the Companies' Creditors Arrangement Act (CCAA) in September on firmer financial footing and better able to compete in the global marketplace.

While other Canadian pulp and paper companies have spent years in CCAA, Catalyst exited after only eight months. During that period, Catalyst did not lose a single customer. In fact, we added customers and products. As well, in spite of all that Catalyst faced this year, we remained on Corporate Knights' list of the Best 50 Corporate Citizens in Canada.

It has been a remarkable 2012 for Catalyst Paper. I think the attached Report on Business story from the October 9^th Globe and Mail delivers an accurate portrait of where we’ve been, and the potential ahead.

While the demand for newsprint and printing paper in general has declined, the demand for quality paper, produced in a sustainable manner with a low- or zero-carbon footprint, remains. Catalyst is a recognized global leader in carbon reduction, and our employees, our management, our communities, and our suppliers are committed to competing in global markets. Not just to survive, but to flourish and prosper.

We are fast to adapt and we are focused on the future. We'll speak up on fundamentals that rest with governments and that support BC or Canadian manufacturing jobs, or in Catalyst’s case, the 7,000 direct and indirect jobs and $2 billion in annual economic impact that our operations generate.

Accordingly, I have attached President and CEO Kevin J. Clarke’s opinion piece from the October 6^th edition of The Vancouver Sun. Sensible and competitive electrical rate purchase structures will ensure that BC manufacturing companies are not placed at risk or at a disadvantage when selling their BC products into the export market. Catalyst will encourage and help the BC and federal governments, in concert with all provinces, to link national and provincial energy development and hydro solutions.

Catalyst Paper will continue to do everything in its power to deliver good jobs in our remarkable communities in a province that derives enormous benefits from the company’s economic impact. If you have any questions, or would like more information on our company, please do not hesitate to contact me.

Sincerely,

Lyn Brown, Vice-President Marketing & Corporate Responsibility (604) 247-4713 Lyn.Brown@catalystpaper.com

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