News Releases

News Release - Manitoba

November 10, 2016

PROVINCE OF MANITOBA OFFERS CONGRATULATIONS ON SUCCESSFUL COMPLETION OF SALE OF TOLKO INDUSTRIES MANITOBA OPERATION


Sale Allows For Continued Operation of Kraft Paper Mill in The Pas, Protects Jobs: Premier

Premier Brian Pallister today congratulated all involved in the successful completion of the sale of Tolko Industries Ltd.’s (Tolko) Manitoba operation and assets to Canadian Kraft Paper Industries Limited, a company affiliated with American Industrial Acquisition Corporation (AIAC). 

“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,” said Pallister.  “We offer our congratulations to all those who have worked so diligently to bring this deal to a close in the best interests of all Manitobans.  The collective efforts of both the purchaser and seller, Swampy Cree Holdings, the Town of The Pas and the mill’s past and present employees are to be commended.” 

Tolko had announced its intention to close the mill by Dec. 2 but received a letter of intent from AIAC in September to acquire the assets and liabilities of the Tolko Manitoba Kraft Paper Unit and Solid Wood Business Unit.  The government of Manitoba subsequently passed a statutory regulation to support and facilitate the acquisition and continued operation of the kraft paper mill in The Pas.  Detailed and collaborative discussions between all key stakeholders continued, and have now resulted in this creative solution, the premier noted. 

The regulation provides temporary relief through a three-year exemption from making the solvency special payments that would otherwise be required under the Pension Benefits Act Regulations for the Tolko pension plans in Manitoba, subject to fewer than one-third of the members not receiving a pension, and fewer than one-third of the pensioners and other beneficiaries objecting in writing after receiving proper notice.  These conditions have now been satisfied. 

According to the deal reached today, current Manitoba employees will transition to Canadian Kraft Paper Industries Limited and will maintain operations going forward. 

“Our government is committed to the creation of conditions throughout Manitoba that will encourage investment and economic development in all regions of the province, but particularly throughout those areas of the north that have either been neglected or have seen unsuccessful short-term subsidies and unwise taxpayer-funded bailouts provide little benefit for their communities,” said the premier. 

“We are pleased to have been able to play a part in facilitating an agreement that will allow for the preservation of jobs that might have otherwise been lost in The Pas and surrounding communities, supporting investment in job-creating businesses and fostering Indigenous engagement and opportunities, while maintaining our responsibility to the taxpayers of Manitoba.” 

The sale will also preserve a significant corporate tax base within the community and is a positive development for the broader social and economic development of northern Manitoba, the premier noted. 

“This private-sector driven solution is consistent with our government’s commitment to the responsible use of taxpayer funds as well as our focus on long-term and sustained economic impacts and opportunities,” added Pallister.  “Our government is preparing to launch a forward-looking and proactive Northern Economic Development Strategy to unleash the region’s true potential.” 

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