It’s easy for commentators and so-called taxpayer advocates to sit back and wax philosophical about how the government has no place handing over taxpayer dollars to private corporations.
But when you’re in a community about to lose its primary employer – as our neighbours down Highway 10 in The Pas are – it’s difficult to stand firmly atop that ideological foundation.
Putting both politics and emotion aside, there is room for government subsidies in private business simply because there are times when taxpayers have more to gain by providing subsidies than by withholding them.
In other words, if the government can provide, say, $5 million in support to a business, but still generate $10 million back in revenue by saving jobs, preserving property tax revenue, keeping people in the province and so on, then such a move may make financial sense.
The problem in The Pas is that there has been no public indication that Tolko Industries is open to another bailout. In announcing the pending closure of its paper mill in that community, Tolko specifically said the decision had nothing to do with the province or other levels of government. The mill was just no longer feasible.
Accepting a bailout would likely commit Tolko to maintaining its mill in The Pas for some prescribed period of time. Based on the unpredictable economics of the forestry sector and the long-time struggles of its The Pas operations, it’s quite possible that Tolko is simply unwilling to make such a risky promise.
Reporters may well be missing the point when they demand to know whether the new PC government has offered Tolko some cash to stay open. It would be more appropriate to ask Tolko whether it is open to accepting taxpayer cash and its accompanying terms, rather than assuming so.
How steep are Tolko’s losses in The Pas? That figure has not been reported, but we do know that an offer from the Town of The Pas to forego over $840,000 in taxes in each of the next three years was not enough to sway the forestry giant.
Fortunately, there has been talk of other parties potentially purchasing the mill from Tolko. Reports Tuesday morning revealed one would-be buyer has put forth a letter of intent.
This potential buyer would have to find ways to turn a profit where Tolko could not. This could mean another workforce reduction at an operation that has already eliminated so many positions over the years, even after receiving bailout dollars from the previous NDP government.
Northerners are crossing their fingers that the mill will indeed continue operating beyond the planned closure date of Dec. 2, preserving all 332 direct jobs and another 250 or so contract-logging positions.
And if that’s not possible and there must be workforce cutbacks in order for a deal to fly? Well, in a resource-based town like
The Pas, some forestry jobs are a whole lot better than none. This would also give time for the market to strengthen, perhaps creating more jobs down the road.
May The Pas and the provincial government do all that is reasonably necessary to preserve a forestry industry in northern Manitoba. Given its importance to the province as a whole, our region deserves no less.