Forestry giant Tolko’s decision to pull out of The Pas in a little over three months marks the latest blow to northern Manitoba’s resource-dependent economy.
For The Pas, the loss of Tolko Industries Ltd’s mill operations effective Dec. 2 means the loss of 332 direct jobs. According to the Winnipeg Free Press, there are about another 250 contract loggers from the area. Tolko is The Pas’s largest single employer.
Having struggled through shift cutbacks, wage reductions and a cyclical market, Tolko announced Monday that after 19 years in The Pas, it could no longer absorb financial losses.
“It’s an absolutely massive amount of bad news for the community,” The Pas mayor Jim Scott said Monday. “This is a major blow to our community. We really have to quickly, efficiently speak to as many people in government as we can to see what direction we can go and what help there might be. It’s just been a really bad day.”
Cliff Cullen, provincial minister of growth, enterprise and trade, assured that “necessary supports” will be available for affected workers and their families.
“While sustainable long-term capital investment by Tolko would have been encouraged and facilitated, it is apparent now that focus must shift to exploring more creative and innovative alternate models for this sector,” Cullen added in a statement. “This development also reinforces the need for further economic diversification and development in northern communities such as The Pas, a priority of our new government. We will be launching a targeted program in the months ahead, emphasizing the attraction of new companies, the development of entrepreneurial opportunities and the expansion of existing businesses.”
In a separate statement, Tolko president and CEO Brad Thorlakson said the company has valued its time in The Pas and respects its employees.
“We understand that this will be a very difficult time for them and the community, but we cannot continue to sustain the losses at the operation,” he said.
Employees were told of the closure early Monday, with many receiving layoff notices. Severance package terms are expected to be announced in early September.
“This is a very sad day for workers and the community that has invested so much into the mill over the years,” said Joie Warnock, western director for Unifor, the union that represents most employees at the Tolko mill.
According to Scott, The Pas’ remote location has been a challenge for Tolko.
“It’s a transportation issue. It’s not a matter of funds,” he said. “We know we produce the best paper in the world. The issue is getting the product to the marketplace.”
While Tolko said in a statement the closure “is in no way a reflection of the people, community or local and provincial governments” that have been part of the operation over the years, The Pas MLA Amanda Lathlin sought to link the decision to the PC government.
“The first thing I thought of was the employees, their families, our communities,” said the NDP representative, describing her reaction to the closure. “I feel there’s a trend in the Pallister government. It’s been a few times now where they have ignored the North.”
Churchill-Keewatinook Aski MP Niki Ashton was also hoping for a different reaction from government.
“It’s absolutely devastating,” said Ashton, whose riding includes The Pas. “The government is betraying the North. There is significant wealth in what we produce, and government should be part of the solution and there’s no sign of them.”
Tolko’s announcement was the latest in a series of troubling economic announcements in northern Manitoba over the past 10 months.
In November 2015, nickel giant Vale confirmed an earlier announcement that its smelter and refinery in Thompson will close in 2018. CBC has reported those facilities together employ more than 500 people.
In December 2015, Hudbay announced its 777 mine will close in about 2020 as projected, as hopes of extending the mine’s life had been dashed. About 265 people, or 20 per cent of Hudbay’s Flin Flon-Snow Lake workforce, were working at 777 mine as of May 2016.
In July 2016, OmniTrax announced the closure of the Port of Churchill in the community of the same name. This reportedly means the loss of 35 unionized jobs along with dozens of seasonal workers in the town of about 800 people.
The forestry mill in The Pas first opened in late 1960s. Formerly owned by Manitoba Kraft Paper and Sawmill Operations, it was purchased by Tolko in 1997.
Tolko, based in Vernon, BC, has temporarily closed The Pas mill in the past, including in 2014 when it was shut down due to transportation issues.
According to the Free Press, the mill produces heavy kraft paper, which is used in products such as cement bags. Tolko had previously discontinued lumber production in The Pas.
– with files from Jonathon Naylor
