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Winnipeg Free Press - PRINT EDITION

Hope remains for idled mills

Tolko says sawmill at The Pas may reopen, but not this year

By: Larry Kusch

Posted: 01/23/2010 1:00 AM | Comments: 0 (including replies)

The company that owns the sawmill at The Pas says it is confident the operation will reopen one day, but it likely won't happen this year.British Columbia-based Tolko Industries Ltd. stopped producing lumber at the northern Manitoba town a year ago this month, laying off about 100 workers, as the recession virtually halted new-home construction in the United States.

The mill in The Pas, far from major domestic and offshore markets, depends on U.S. buyers for its existence. Most analysts say they believe 2010 is still going to be a quiet year for construction south of the border, and Tolko is waiting for a sustained turnaround before it recalls workers, many of whom have found other jobs.

"We've been quite clear that this is not a permanent closure, and we do intend to resume operations here when the markets dictate that it can be done profitably," plant manager Dave Neufeld said in an interview.

"From an optimistic perspective, we're hoping that we can restart the sawmill in the spring of 2011."

Tolko nearly permanently closed the sawmill and its adjacent paper mill four years ago until workers at both plants accepted pay cuts. At the time, taxes the company paid accounted for 17 per cent of the town's annual budget. The paper mill remains open, and its order book is full for 2010, Neufeld said.

The Pas Mayor Herb Jaques said the community is fortunate many of the laid-off workers seem to have found jobs close to home.

"I don't think there was an exodus," he said, noting the local economy has been fairly buoyant, despite the layoffs. Several mill workers found jobs at the local jail, while others were absorbed by regional mining companies as well as other industries and services.

Jaques said it might be difficult for the company to find qualified labour when it eventually does want to reopen the sawmill.

But Neufeld said he was confident many of the laid-off workers -- with years invested in pensions and vacation time -- would want to come back to one of the region's top-paying employers, allowing the company to restart the mill on a single-shift basis. That would require about 80 workers.

"Then we're going to have to recruit new employees to man up for a second shift, and that will be a bit of a challenge from the perspective of training the people," he said.

Of greater concern is many of the mill's tradespeople -- millwrights, electricians and mechanics -- are closing in on retirement. They've maintained their jobs at the plant because of their seniority, helping to produce wood chips for the paper mill.

Neufeld said the company will have to recruit apprentices and work with the province and the University College of the North on training programs to deal with the looming skilled-trades shortage.

Repeated requests for an interview with the union representing sawmill workers, United Steelworkers Local 1-324, were not answered. Last year, the Steelworkers agreed to a new three-year collective agreement, retroactive to last Feb. 1, that both sides said would help the mill reopen sooner. However, by the time the laid-off workers finally get their jobs back, there may be less than a year remaining in that contract.

Meanwhile, Neufeld said the sawmill faces one more hurdle as it waits for a return to profitability.

Last year, the United States slapped a 10 per cent duty on imports of softwood lumber from four Canadian provinces, including Manitoba, for failing to sufficiently lower exports as prices fell.

The duty came on top of an existing five per cent fee.

The latest surcharge won't come off until $68 million in penalties is collected. That could take a couple of years to pay off given the slow pace of lumber exports to the United States, Neufeld said.

larry.kusch@freepress.mb.ca

Republished from the Winnipeg Free Press print edition January 23, 2010 B4

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