Potential buyers for mill, Tolko says

September 14, 2016

By: Winnipeg Free Press

THE PAS — Several potential buyers are scoping out Tolko Industries.

No one — from the company, the mayor of The Pas or Growth, Enterprise and Trade Minister Cliff Cullen — would identify those potential buyers Monday.

Tolko said it has received preliminary inquiries from several entities for its facility in The Pas.

Jim Baskerville, a vice-president for the Vernon, B.C.-based Tolko Industries, said in a statement the company is checking on the “viability of proposals” as they come forward, but cannot “provide any speculation regarding ownership scenarios at this time.”

He confirmed the company has rejected Mayor Jim Scott’s proposal for a three-year holiday from property taxes as an incentive to keep the paper mill open beyond Dec. 2.

“We acknowledge both the generous offer and genuine interest from Mayor Scott in attempting to keep the mill running.” Baskerville said. “As with our statement when we announced the closure, Tolko made the decision to close based on the considerable financial challenges that face the business, and as a result we will not continue to operate the business.”

The company announced Aug. 22 would close Dec. 2, putting more than 300 people out of work in the northern town of 5,500. The Pas is about 600 kilometres northwest of Winnipeg.

Government will ‘facilitate an ownership position’

Cullen was in The Pas Monday to meet with municipal and First Nations leaders, as well as union representatives. He confirmed there are several companies “kicking tires.”

“Obviously, there is people interested and having a look at the asset, and we certainly will be part of those discussions,” Cullen said after the meeting.

“There are some companies that are here kicking the tires. and we are optimistic that something will happen… I am sure those that are interested in purchasing the assets will be coming back to government to see what we can do to facilitate an ownership position.”

He refused to say whether that means a tax break or a grant for the potential buyer. He would only say the province would provide “some incentive for ownership.”

“As a new government, we are trying to be innovative in coming up with solutions. We are not interested in short-term solutions for short-term political gain,” Cullen said.

He said he hopes there the federal government could be involved in a potential deal.

Cullen said his government had put a “number of things on the table” in order to encourage Tolko to stay in town, but he refused to go into detail.

No to bailout

The PCs say a bailout to keep the company in The Pas is not an option. The Pallister government has taken a similar stance with Denver-based railroad company Omnitrax Inc, which announced in July it was closing the Port of Churchill and reducing freight service by half, to one train a week. Government officials and Omnitrax have been silent on what the future holds for Canada’s only Arctic deep water port.

“We are not interested in making… short term bailouts. Obviously, if there is a long-term business plan, we are interested in a business that wants to be here for the long term,” Cullen said.

Scott said he left the meeting optimistic after learning that “we are all on the same side,” in reference to the provincial government, municipal leaders and First Nations.

Scott said he received a letter from Tolko saying there is “potential interest.”

“If those tire-kickers go for a test drive, that is what is going to matter,” he said.

The NDP said Monday former premier Greg Selinger’s government had been involved in talks with Tolko, area municipalities and First Nations up until the April 19 election.

Nothing had been settled or agreed to, but Tolko was listening, and the company had not threatened to close The Pas facility, said NDP spokeswoman Rachel Morgan.

NDP offered help

Interim NDP Leader Flor Marcelino wrote to Premier Brian Pallister Aug. 30 to outline the NDP’s discussions with Tolko, and to implore the PC leader to offer Tolko some of the incentives the New Democrats say they had made.

Marcelino copied the letter to indigenous and municipal leaders in northern Manitoba, but had not made it public until this week.

“Your government has provided a large subsidy to Maple Leaf (Foods), and you have indicated you are prepared to do the same for Bell Canada,” Marcelino wrote.

Marcelino outlined a series of proposals the NDP had made to Tolko and to northern Manitobans, including upgrades to road infrastructure to and from the paper mill with support through the Manitoba Trucking Productivity Improvement Fund; to help gain access to timber closer to the mill that would reduce transportation costs; and help gain access to improved rail transportation.

Morgan said discussions were ongoing for several years and continued until the spring election.

“We were trying to keep the mill open,” she said. “We were aware Tolko was facing challenges. These were ongoing talks. These were issues we were discussing with them. The Selinger government was exploring all of these areas to find a way to keep the mill open.”

By: Winnipeg Free Press

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