Tolko Industries' departure from The Pas 'almost like a death blow,' mayor says

The mayor of The Pas describes Tolko Industries' exit from the Manitoba town as "almost like a death blow," but he hopes the community's economic diversity will pull it through.

Tolko, the largest employer in the town of about 5,500, announced on Monday that operations will cease at the local forestry products mill Dec. 2 and all 332 employees will be laid off. The news comes shortly after Omnitrax announced it's cutting freight service in half on the Hudson Bay Railway and closing the Port of Churchill.

"It's a one-two punch and this second punch is almost like a death blow; it really does hurt," The Pas Mayor Jim Scott said Tuesday.

"What are we going to do? This is some pretty big stuff. This comes on the heels of OmniTrax saying that they're drastically reducing their freight line, eliminating the grain haul season."

Tolko, a Vernon, B.C.-based company, said on Monday that it has tried for 19 years to improve the cost structure of its Manitoba operations but in the end, the mill is "not financially sustainable."

Closure comes 'out of the blue'

Juha Rautavirta, a long-time Tolko employee, said short-term layoffs were expected but not an all-out closure.

"It came out of the blue," Rautavirta said.

There will be "lots of empty houses" in The Pas if no one takes over the mill, he said.

The mayor said there was always a possibility Tolko might pull out of the community, but news of the closure caught him off guard as well.

"The price of their product, getting it to market and finding the customers and making a profit out of it became more and more difficult, and I guess at some point it could happen. You just wish it wouldn't have happened," he said.

"But now that it has, we have to let that sink in and we have to try and figure a way to move forward."

Council met on Monday night and they're "100 per cent committed to working with Tolko towards finding some sort of solution to this," Scott said.

"If it means that they're moving, then that's what it means, but we're going to do everything we can to try to lessen the blow — eliminate it if possible, but certainly lessen the blow."

Area residents worried

The Pas is located about 521 kilometres by air northwest of Winnipeg.

CBC News spoke with a number of residents in The Pas on Tuesday, with all of them having some kind of connection to the Tolko mill, including current employees, family members and friends.

Some said they're worried about what their homes will be worth after the mill closes, or whether they can keep up with their mortgage payments, while others are concerned about how local businesses will fare.

"On Dec. 3, there'll be 332 people that won't be getting up and going to work in the morning," Scott said.

"A lot of them own homes. Are they going to sell them? Are they going to move away? What can we do to help out?"

In Moose Lake, about 100 kilometres to the east, resident Flora Rideout said a number of people from her community drive to work in The Pas every day, and local children grew up aspiring to work at the Tolko mill.

"When we drive by Tolko at five o'clock, you see the vehicles coming out of there, the workers coming out ot there," she said. "I'm just thinking and praying for all of those people."

First Nation fears 'far-reaching effects'

The news has also shocked members of the Opaskwayak Cree Nation near The Pas.

"This is going to be devastating to our community. That's our number one employer in our area and it's going to have far-reaching effects," said Joan Niquanicappo, OCN's general manager.

Niquanicappo did not have specific numbers on OCN members employed at the mill, but she said people from the First Nation work there as truck drivers, electricians and heavy equipment operators.

Tolko's announcement and the reduction of freight rail service in the province's north will affect a lot of people in the area, she said.

"I'm sure they are in a state of shock right now. I know the Town of The Pas, the [Rural Municipality] of Kelsey, OCN, we've been working together for a while now to look at our area, and I know that this is going to be the number one topic for plans to move forward," she said.

"What are we going to do now? How will we get back on our feet? We were just taken aback here."

Niquanicappo said the three local governments will need to talk with governments and Tolko to see what's possible to support the affected employees and keep jobs in the community.

'We're going to get through this'

Scott said while it would be nice for federal and provincial governments to help save the Tolko mill, he also wants to show them The Pas's potential to survive.

"We would like to invite Premier [Brian] Pallister to come up, have a look at our community and show him that we do a lot more here than just make paper," he said.

"This is going to hurt. This is going to be incredibly painful. But you have to know the people of The Pas when I say that we're going to get through this.… It's not going to be easy, but government needs to see that we believe in ourselves, that we can see our way forward and wherever that may take us, what they can do to assist us in that."

Scott said while many northern communities depend on one industry, The Pas is fortunate to be home to several other sectors.

"We have a large hospital. A number of people come from outside areas to come to our community for their health care. Education plays a big role — we've got a large school division, we have the University College of the North. These are big employers," he said.

"We also have a strong agriculture component and we are a service centre for about 25,000 people. This is where people come to see their doctor and their lawyer and get their lumber and buy their car and do all those sorts of things, so we need to find ways to build on that."