Tolko sells mill in The Pas, 300-plus employees keep jobs

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This article was published 10/11/2016 (3601 days ago), so information in it may no longer be current.

The paper mill in The Pas has a new owner and a new lease on life.

Late Thursday afternoon, Tolko announced the sale of the mill to Canadian Kraft Paper Industries Ltd., a company affiliated with American Industrial Acquisition Corp.

The sale comes 2 1/2 months after Tolko dropped a bombshell on the northern community of about 5,500, announcing it would shut down the mill in December.

As part of the agreement, the more than 300 current employees at the mill will keep their jobs.

Tolko officials said they will work with Canadian Kraft Paper Industries Limited to support a successful transition.

“This is great news. It is fantastic news,” said Jim Scott, The Pas’ ecstatic mayor.

Facing the closure of the town’s largest employer, it was all hands on deck to try to find a buyer and save the plant.

Over the past few weeks concessions have been negotiated, allowing the sale to AIAC to be completed. They include unionized workers agreeing to a 10 per cent pay cut for five years, a three-year moratorium on pension solvency payments and an annual $450,000 municipal tax holiday for the next three years.

“There has been a great group of local guys who really worked hard on this. I couldn’t be happier for all of them,” Scott said. “The residents coughing up taxes for three years… that is a huge sacrifice. Workers taking a 10 per cent pay cut…. It was a huge effort on behalf of everyone in the region.”

Premier Brian Pallister called the deal “great news for the community” and “a testament to teamwork.”

“The people of the community, the workers in the plant, the leadership in the town itself – and of course our staff here worked very, very hard, as did others,” he said.

The province didn’t offer subsidies to make the deal happen, although the Pallister cabinet passed an order granting the purchaser a pension payment holiday if the unions agreed to it.

“This sends a powerful message that there’s opportunity in the North, and it doesn’t depend on handouts from the government. It depends on the capabilities that we have with our people. It depends on the assets that we have in this province,” the premier said.

Vernon, B.C.,-based Tolko planned to close the kraft paper mill Dec. 2, claiming after years of efforts the company was unable to improve the operation’s competitive position.

News of the mill’s closure came on the heels of Omnitrax Canada announcing it was cutting rail freight service from The Pas to Churchill to one train per week from two.

Also in late August, Aseneskak Casino in nearby Opaskwayak Cree Nation (OCN) announced its intention to move within the next two years, putting 147 local jobs at risk. In late October, the IGA grocery store in OCN announced it was shutting down, throwing 47 people out of work.

There is not much known about AIAC other than it has been part of many similar deals such as this across North America.

Brad Thorlakson, president and CEO of Tolko Industries Ltd., thanked employees and retirees at the Manitoba operation for their dedication and patience and support of the sale.

“We also want to acknowledge the critical role that the Swampy Cree Tribal Council played in enabling this sale; and recognize the Manitoba government, the Town of The Pas and local unions for their co-operation and work towards making this sale happen,” he said in a prepared statement.

martin.cash@freepress.mb.ca

— with files from Larry Kusch