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UNITED STATESSECURITIES AND EXCHANGE COMMISSION Washington, D.C.
20549

FORM 40-F

(Check One)

 ̈ Registration statement
  pursuant to Section 12 of the Securities Exchange Act of 1934

or

x Annual report pursuant
  to Section 13(a) or 15(d) of the Securities Exchange Act of 1934

|For fiscal year ended: December 31,
      2005 | Commission File number:
  000-49751
|---------------------------------------------- | -----------------------------------

CATALYST PAPER
CORPORATION(Exact name of Registrant as specified in its
charter)

|Canada                             | 2621                                              | 98-0138030                     
|---------------------------------- | ------------------------------------------------- | -------------------------------
|(Province or other jurisdiction of | (Primary standard industrial
      classification | (I.R.S. employer identification
|incorporation or organization)     | code number, if applicable)                       | number, if
applicable)         

16th Floor, 250 Howe Street, Vancouver,
  British Columbia, Canada, V6C 3R8 (604) 654-4000(Address and telephone number of Registrant’s principal executive
  office)

CT Corporation, 111 Eighth Avenue, New York, New York
10011 (212) 894-8700(Name, address and telephone number of agent
for service in the United States)

Securities registered or to be registered pursuant to Section
12(b) of the Act: N/A

|Title of each class: **N/A** | Name of each exchange on which registered:
      **N/A**
|---------------------------- | --------------------------------------------------------

Securities registered or to be registered pursuant to Section
12(g) of the Act: Common Shares

Securities for which there is a reporting obligation pursuant
  to Section 15(d) of the Act: N/A

For annual reports, indicate by check mark the information filed
  with this form:

|x Annual Information
      Form | x
      Audited Annual Financial Statements
|------------------------------- | -------------------------------------------

Indicate the number of outstanding shares of each of the
issuer's classes of capital or common stock as of the close of the period
covered by the annual report: 214,604,120 Common Shares

Indicate by check mark whether the Registrant by filing the information
  contained in this Form is also thereby furnishing the information to the Commission
  pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934 (the Exchange
  Act). If Yes is marked, indicate the filing number assigned
  to the Registrant in connection with such Rule.

Yes  ̈ 82-__________
  No x

Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the proceeding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

Yes x No  ̈

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FORWARD-LOOKING INFORMATION

All statements, other than statements of historical facts,
included or incorporated by reference in this annual report on Form 40-F
constitute forward-looking statements within the meaning of section 21E of the
Exchange Act. Statements that address activities, events or developments that
Catalyst Paper Corporation (the Registrant) expects or anticipates will
or may occur in the future, including such things as future cost savings,
synergies or capital expenditures (including the amount and nature thereof),
product prices, business strategy and measures to implement strategy,
competitive strengths, goals, expansion and growth of the Registrants
businesses and operations, plans, references to future success and other such
matters constitute forward-looking statements. When used herein, the words
estimate, project, anticipate, expect, intend, believe and similar
expressions are intended to identify forward-looking statements. Whether actual
future results and developments will conform with expectations and predictions
is subject to a number of risks and uncertainties, including those
considerations discussed in the Managements Discussion and Analysis  Risks
and Uncertainties section of the Registrants annual report for the fiscal year
ended December 31, 2005. Important factors that could cause actual results to
differ materially from those implied by the forward-looking statements include,
but are not limited to, competition from other pulp and paper manufacturers,
cyclical pricing and demand in markets for the Registrants products,
requirements for additional capital expenditures, and availability of fibre
supply.

Consequently, all of the forward-looking statements made herein
are qualified by these cautionary statements and there can be no assurance that
the actual results or developments anticipated by the Registrant will be
realized. The Registrant undertakes no obligation to release publicly any
revisions to any forward-looking statements to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.

CONTROLS AND PROCEDURES

|A. | Evaluation of Disclosure Controls and
      Procedures
|-- | ------------------------------------------------------

The Registrant conducted an evaluation
  under the supervision and with the participation of the Registrants management,
  including the chief executive officer and chief financial officer, as of December
  31, 2005, pursuant to Rule 13a-15 promulgated under the Securities Exchange
  Act of 1934, as amended (the Exchange Act) of the effectiveness
  of the design and operation of the Registrants disclosure controls and
  procedures. Based on this evaluation, the Registrants chief executive
  officer and chief financial officer concluded that such disclosure controls
  and procedures are effective to ensure that information required to be disclosed
  by the Registrant in reports it files or submits under the Exchange Act is (a)
  recorded, processed, summarized and reported within the time periods specified
  in the rules and forms of the Securities and Exchange Commission (SEC)
  and (b) accumulated and communicated to the Registrants management including
  the Registrants chief executive officer and chief financial officer, or
  persons performing similar functions, as appropriate, to allow timely decisions
  regarding required disclosure. It should be noted that while the Registrants
  chief executive officer and chief financial officer believe that the Registrants
  disclosure controls and procedures provide a reasonable level of assurance that
  they are effective, they do not expect that the Registrants disclosure
  controls and procedures or internal control over financial reporting will prevent
  all errors and fraud. A control system, no matter how well conceived or operated,
  can provide only reasonable, not absolute, assurance that the objectives of
  the control system are met.

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|B. | Changes in Internal
Controls
|-- | ----------------------------

There was no change in the Registrants
internal control over financial reporting that occurred during the period
covered by this report that has materially affected, or is reasonably likely to
materially affect, its internal control over financial reporting.

AUDIT COMMITTEE FINANCIAL EXPERT

The Registrants board of directors has determined that it has
at least one audit committee financial expert serving on its audit committee.
Messrs. Chambers, Johnstone, Lerstad, Purchase, Dragvik and Collins and Ms.
Laberge have been determined to be audit committee financial experts for the
purposes of applicable legislation. Each of them is independent as that term is
defined for purposes of audit committee member independence under the corporate
governance standards of the New York Stock Exchange.

CODE OF ETHICS

The Registrant has adopted a Code of Corporate Ethics and
Behaviour that applies to all directors, officers and employees, including its
principal executive officer, principal financial officer and principal
accounting officer. The Code of Corporate Ethics and Behaviour sets out the
standards of conduct that apply to each persons performance of his or her
duties and is designed so that the Registrants affairs are conducted fairly,
honestly and in strict compliance with its legal obligations. The Code of
Corporate Ethics and Behaviour is available at the Registrants website at
www.catalystpaper.com.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

External Auditor Service Fees in Canadian
dollars(1):

|                   |  | Year Ended December 31, 2005 |  |  | Year Ended December 31, 2004 | 
|------------------ |  | ---------------------------- |  |  | ---------------------------- | 
|Audit Fees         |  | $594,200                     |  |  | $732,200                     | 
|Audit Related Fees |  | 188,600                      |  |  | 124,500                      | 
|Tax Fees           |  | 139,900                      |  |  | 90,900                       | 
|All Other Fees     |  | -                            |  |  | -                            | 
|                   |  | $922,700                     |  |  | $947,600                     | 

|(1) | The exchange rates at December 31, 2005 and 2004, based
      on the Bank of Canada noon spot rate were $1.166 and $1.204 (C$/US$),
      respectively.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------

The nature of each category of fee is described below:

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Audit Fees

Includes services that are provided by the independent auditor
in connection with statutory and regulatory filings, principally for the audit
of the annual financial statements contained in the Form 40-F, Annual
Information Form, Management Proxy Circular and offering memoranda.

Audit Related Fees

Includes assurance and related services provided by the
independent auditor that are related to the performance of the audit,
principally for general advice on accounting standards, the audit of the
Registrants pension plan and the audit of a wholly owned subsidiary.

Tax Fees

Relates to tax compliance services provided by the independent
auditor, including assistance with questions regarding tax audits.

The Audit Committee is responsible for pre-approving audit and
non-audit services provided by the independent auditor. The Audit Committee has
delegated to its Chairman the authority, to be exercised between regularly
scheduled meetings of the Audit Committee, to pre-approve non-audit services
provided by the independent auditor up to a maximum amount of CDN$100,000 in the
aggregate. All such pre-approvals shall be reported by the Chairman at the next
meeting of the Audit Committee following the pre-approval.

OFF BALANCE SHEET ARRANGEMENTS

The Registrant uses financial instruments to reduce its
exposure to foreign currency and price risks associated with its revenues, costs
and long-term debt. The Registrant considers these financial instruments
important in terms of cash flow for their ability to hedge against changes in
the U.S. dollar on which much of its revenues, the prices of its products and
energy inputs are based. The Registrant also uses interest swaps to reduce its
exposure to long-term interest rates associated with its senior notes.

At December 31, 2005, no commodity price hedging instruments
were outstanding in respect of products sold. The following table highlights the
Registrants foreign currency options and forward contracts outstanding to sell
U.S. dollars at December 31, 2005:

|                              |   | Options           |  |  |              |  |   |                   | 
|----------------------------- | - | ----------------- |  |  | ------------ |  | - | ----------------- | 
|                              |   | Purchased Options |  |  | Sold Options |  |   | Forward Contracts | 
|                              |   |                   |  |  | Average Rate |  |   |                   | 
|Term                          |   | US$Millions       |  |  | Cdn$ / US$   |  |   | US$Millions       | 
|                              |   |                   |  |  |              |  |   |                   | 
|As at
      December 31, 2005 |   |                   |  |  |              |  |   |                   | 
|0 to 12 months                | $ | 450               |  |  | 1.1930       |  | $ | 232               | 
|13 to 24 months               | $ | 50                |  |  | 1.1447       |  | $ |                  | 
|                              |   |                   |  |  |              |  |   |                   | 
|As at
      December 31, 2004 |   |                   |  |  |              |  |   |                   | 
|                              |   |                   |  |  |              |  |   |                   | 
|0 to 12 months                | $ | 422               |  |  | 1.2902       |  | $ | 362               | 
|13 to 24 months               | $ | 56                |  |  | 1.2882       |  | $ | 56                | 

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At period-end exchange rates, the net amount that the
Registrant would receive to settle the above contracts and options is $23.6
million, of which $13.1 million is included in prepaids and other, and $7.7
million has been recognized and included in sales.

At December 31, 2005, the Registrants long-term debt related
forward foreign exchange contracts to acquire U.S. dollars totalled US$59
million over a two-year period, at rates averaging CDN$1.5802/US$ . At period
end exchange rates, the net amount the Registrant would pay to settle these
contracts is $24.3 million.

The Registrant also uses financial instruments to reduce the
Registrants exposure to energy costs. At December 31, 2005, the Registrant had
oil swaps to purchase 50,000 barrels at an average contract rate of US$28.25 per
barrel, settling between January 1, 2006 and March 31, 2007, and natural gas
swaps to purchase 0.2 million MMBTUs at an average contract rate of US$6.67 per
MMBTU settling on March 31, 2006. At year-end rates, the net amount the
Registrant would receive to settle these contracts is $2.7 million.

From time to time, the Registrant enters into interest rate
swaps to manage the Registrants exposure to changes in long-term fixed interest
rates associated with its senior notes. The Registrant entered into
fixed-to-floating interest rate swaps on US$40 million, under which the
Registrant will receive a fixed rate receipt of 7.375%, and pay a floating rate
averaging U.S. six month LIBOR plus an average of 2.0% . The swaps mature March
1, 2014, although US$30 million are cancellable at the counterparties option
between March 1, 2009 and March 1, 2014, for premiums which mirror the call
premiums on the 7.375% senior notes. At period end rates, the net amount the
Registrant would receive to settle these contracts is $0.4 million.

CONTRACTUAL OBLIGATIONS

The following table presents the aggregate amount of future
cash outflows of the Registrants contractual obligations as of December 31,
2005, excluding amounts due for interest on outstanding indebtedness:

|                          |   | Payments due by period            | 
|------------------------- | - | --------------------------------- | 
|                          |   | (In millions of Canadian dollars) | 
|Contractual Obligations   |   |                                   | 
|                          |   |                                   | 
|                          |   | Total                             | 
|Long-term debt            | $ | 861.9                             | 
|Capital lease obligations |   | 7.1                               | 
|Operating leases          |   | 93.4                              | 
|Total                     | $ | 962.4                             | 

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UNDERTAKING AND CONSENT TO SERVICE OF PROCESS

|A. | Undertaking                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Registrant undertakes to make available, in person or
      by telephone, representatives to respond to inquiries made by the staff of
      the SEC, and to furnish promptly, when requested to do so by the SEC
      staff, information relating to: the securities registered pursuant to Form
      40-F; the securities in relation to which the obligation to file an annual
      report on Form 40-F arises; or transactions in said securities.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|B. | Consent to Service of Process                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Registrant has previously filed a Form F-X in
      connection with the class of securities in relation to which the
      obligation to file this report arises.                                                                                                                                                                                                                                                                                        

SIGNATURES

Pursuant to the requirements of the Exchange Act, the Registrant
  certifies that it meets all of the requirements for filing on Form 40-F and
  has duly caused this annual report to be signed on its behalf by the undersigned,
  thereto duly authorized.

| | CATALYST PAPER CORPORATION
| | --------------------------
| |                           
| | By:                       
| | Name:                     
| | Title:                    
| |                           

Date: February 3, 2006

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EXHIBIT INDEX

|Exhibit No. | Description                                                                                                                                                                                                                                          
|----------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|            |                                                                                                                                                                                                                                                      
|1           | Annual Information
      Form                                                                                                                                                                                                                        
|            |                                                                                                                                                                                                                                                      
|2           | Audited
        Consolidated Financial Statements of Catalyst Paper Corporation as at
        and for the year ended December 31, 2005                                                                                                               
|            |                                                                                                                                                                                                                                                      
|3           | Managements
      Discussion and Analysis                                                                                                                                                                                                           
|            |                                                                                                                                                                                                                                                      
|4           | Consent
      of KPMG LLP                                                                                                                                                                                                                            
|            |                                                                                                                                                                                                                                                      
|5           | Certification
        of Russell J. Horner, President and Chief Executive Officer, pursuant
        to Rule 13a14(a).                                                                                                                               
|            |                                                                                                                                                                                                                                                      
|6           | Certification
        of Ralph Leverton, Vice-President, Finance and Chief Financial Officer,
        pursuant to Rule 13a-14(a).                                                                                                                    
|            |                                                                                                                                                                                                                                                      
|7           | Certification
        of Russell J. Horner, President and Chief Executive Officer, pursuant
        to Rule 13a14(b).                                                                                                                               
|            |                                                                                                                                                                                                                                                      
|8           | Certification
        of Ralph Leverton, Vice-President, Finance and Chief Financial Officer,
        pursuant to Rule 13a-14(b).                                                                                                                    
|            |                                                                                                                                                                                                                                                      
|9           | Fourth
        Amending Agreement to Credit Agreement dated July 12, 2005 among the Corporation,
        its subsidiary restricted parties named therein, the Toronto Dominion
        Bank, as administrative agent, and the lender parties thereto.

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