Mediation talks have broken off once again between the Tembec paper mill in Pine Falls, Man., and its workers.

About 250 workers were locked out by Tembec Inc. on Sept. 1.

Contract talks between the United Steelworkers union and the company began Aug. 13, but the two sides have been unable to reach a collective agreement.

Cam Sokoloski, president of the United Steelworkers local at the mill, said the union has made concessions but Tembec isn't budging.

Tembec is still asking for workers to take a 35 per cent cut in wages and benefits.

"We're getting just phenomenal support from the community, which has been great that way. But guys are getting a little discouraged," Sokoloski said.

A spokesperson for Montreal-based Tembec has said the company needs an "immediate and significant reduction" in labour costs at the paper mill to keep it competitive in a market where demand for newsprint is down.

Ted Pichor, mayor of Powerview-Pine Falls, said some workers have left town to find work elsewhere.

"There's been some frustration that's setting in. I think if it goes on any longer it's going to be quite devastating for a lot of families in the community," he said.

Pichor added that the situation has far-reaching consequences on the town as a whole. The mill is responsible for 50 per cent of the tax base, he said.

The mill is about 130 kilometres northeast of Winnipeg.