Logging, plant jobs saved as new owner acquires Tolko mill

The Tolko paper mill in The Pas will remain in operation, now that the company has sold the mill rather than shutting it down in December as planned.

The sale will come as a huge relief to the roughly 250 contract loggers who have been supplying about half the Tolko plant’s pulpwood, wood chips and hog fuel.

The sale, announced on in early November, will see Canadian Kraft Paper Industries Limited, a company affiliated with American Industrial Acquisition Corporation, take over the Kraft paper mill and the company’s sawmill.

“We are pleased negotiations with Canadian Kraft Paper Industries Limited have reached a successful conclusion,” said Brad Thorlakson, president and CEO of Tolko. “I want to thank the employees at the Manitoba operation for their dedication and patience throughout this process, and to the retirees for their support of the sale.”

Under the agreement, the current employees will transition to Canadian Kraft Paper Industries to keep operations going.

The sale of the mill saves more than 300 jobs but it came with costs. Unionized employees accepted a ten percent pay cut for five years, and agreed to a three-year exemption on making pension payments. The municipal government granted a $450,000 tax exemption to the new company for three years.

In a statement, Premier Brian Pallister said, “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.”

Thorlakson said Tolko, which is based in Vernon, BC, will work with the new owners to assist with the transition.

He added that the company wanted to acknowledge the critical role that the Swampy Cree Tribal Council played in enabling this sale, and recognized the Manitoba Government, the Town of The Pas and local unions for their cooperation and work towards making this sale happen.

The deal is the result of a joint venture agreement between Swampy Cree Holdings, an economic development corporation owned by eight First Nations, and Canadian Kraft Paper.