The Pas tries to save paper mill by offering Tolko a major tax break
Town offers $840,000 a year in tax reduction for three years to keep local paper mill open
The mayor of The Pas is offering a massive tax relief to the owners of a nearby paper mill in an effort to stave off a closure that could cripple the town's economy.
"We can't just sort of sit back and see how things fall out, so we are going to take the lead and we are literally going to attack," Mayor Jim Scott told CBC News.
The town of 5,500 suffered a huge blow in August when Tolko Industries announced they would close the mill on Dec. 2 and lay off more than 300 workers.
Mayor Jim Scott says the town offered $840,000 a year in tax reduction for three years, but there are still details to be worked out, including getting consent to use taxes from the area school division.
The Pas mayor says he hasn't received a response yet from Tolko executives. The company said it will provide CBC with a statement later today.
With a Dec. 2 deadline looming, Scott says the community had to find ways to delay the closure of the mill so that they could get a long-term plan in place.
The town has developed a response team and they've also begun working on a number of initiatives, including:
- Hiring an external consultant to work with stakeholders and provide constant presence on the issue.
- Reducing operational costs of running the town by identifying efficiencies and savings, though not laying off staff.
- Working with the provincial government and federal government's Western Economic Diversification department on future plans for the town.
Scott says the looming Dec. 2 closure meant they had to act fast.
"We are trying to find a way to continue to make paper. It's very difficult to get that done by [Tolko's] deadline of Dec. 2," said Scott. "So what we've suggested is we will put up some money that will help and you can continue operating the plant beyond Dec. 2."
Scott said community leaders believe it's better to give Tolko approximately $2.6 million in tax breaks over three years while keeping the annual payroll to local mill works, which Scott estimates at $37 million.
The tax breaks will involve some serious belt tightening on behalf of the community and Scott says the town has asked the province of Manitoba for help in developing an asset management plan.
The Pas and other northern communities have suffered multiple economic blows this summer. Denver-based OmniTrax Rail laid off port workers in Churchill and has cut rail shipments to the community. That move created job losses in The Pas at OmniTrax rail yard facilities.
Then in late-August the Aseneskak Casino announced it was looking to relocate to Winnipeg.
Manitoba Minister of Growth, Enterprise and Trade Cliff Cullen said he and other government officials will be in The Pas next week to meet with local politicians and business leaders about a northern economic development strategy.
"Our government is working with the town of The Pas to identify long-term, sustainable options for northern development," Cullen said in a written statement.