A joint-venture agreement between Canadian Kraft Paper Industries Limited (CKP) and Swampy Cree Holdings (SCH) combined with concessions by unionized workers and a regulatory change by the provincial government have resulted in the sale of Tolko Industries Ltd.’s pulp, paper and saw mill facility in The Pas to American Industrial Acquisition Corporation (AIAC).
The deal was announced Nov. 10, less than a month before Tolko was scheduled to shut down the paper mill on Dec. 2, putting about 330 people out of work.
CKP is an affiliate of AIAC and SCH is an economic development corporation owned by eight First Nations communities.
“We want to recognize the vision and hard work of the Swampy Cree Tribal Council (SCTC), through the leadership of the board of Swampy Cree Holdings,” said William Raedle, senior vice-president of AIAC, in a news release. “We are honoured by their collaboration with us and look forward to working with them to promote economic, cultural, environmental, and community objectives.”
SCH board member and Opaskwayak Cree Nation Chief Christian Sinclair said the joint venture brought Manitoba into the 21st century reality of First Nations collaboration with industry.
“We are pleased to welcome AIAC and CKP to Manitoba and look forward to working closely with them for our mutual benefit,” said Sinclair.
The government of Manitoba passed a statutory regulation after AIAC announced its intention to buy Tolko’s Operations in The Pas. It provides the company with a three-year exemption from making solvency special payments that would otherwise have been required under the Pension Benefits Act regulations for the Tolko pension plans.
“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 Premier Brian 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.”
The Town of The Pas agreed to provide a three-year hiatus on property taxes for AIAC and unionized employees agreed to a 10 per cent wage rollback.
“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. 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.”
AIAC is a United States-based industrial group consisting of 63 manufacturing sites in 16 countries that have about 9,000 employees combined and annual revenues of about $1.6 billion. It was built up over the past 20 years by acquiring and operating former divisions and subsidiaries of companies including Boeing, Merck, Siemens, United Technologies, Lockheed Martin, Kodak, Johnson Controls, Raytheon, Moog, Novellis, Ahlstrom and Jabil Circuits.
