It’s a done deal: Tolko Industries has sold its paper mill in The Pas.
Completion of the sale was announced Nov. 10, with US-based American Industrial Acquisition Corp. (AIAC) purchasing what is the single largest employer in The Pas.
The deal is the result of a joint venture agreement between Canadian Kraft Paper Industries Ltd. (CKP) and Swampy Cree Holdings (SCH), along with concessions by unionized workers and a regulatory change by the provincial government.
CKP is an affiliate of AIAC, while SCH is an economic development corporation owned by eight First Nations.
SCH board member and Opaskwayak Cree Nation Chief Christian Sinclair said the joint venture brings Manitoba into the 21st-century reality of First Nations collaboration with industry.
To facilitate the sale, the Manitoba government passed a statutory regulation after AIAC announced its intention to buy the mill. It provides the company with a three-year exemption from making solvency payments that would otherwise have been required under law for Tolko pension plans.
“Our government is extremely pleased by the successful completion of an agreement between Tolko Industries Ltd. and Canadian Kraft Paper Industries Limited that will preserve existing jobs and secure long-term, sustainable development through one of the primary employers in northern Manitoba,” said Premier Brian Pallister.
The Town of The Pas also contributed to the deal, agreeing to provide a three-year property-tax hiatus for AIAC. Unionized Tolko employees agreed to a 10 per cent wage reduction.
Until a buyer was found, Tolko had planned to close the mill on Dec. 2, citing financial losses.