Hey there, time traveller!

This article was published 4/11/2016 (1418 days ago), so information in it may no longer be current.

After weeks of bad news, residents of The Pas finally received some good news Friday — and there may be even better news on the horizon.

Workers at the Tolko paper mill in The Pas have voted in favour of allowing prospective new owners a three-year exemption in making pension payments.

Union officials have said the prospective buyers, American Industrial Acquisition Corp., have indicated as recently as last week a positive outcome of that vote will clear the way for the transaction to acquire the plant in The Pas to be finalized.

Jim Scott, Mayor of The Pas, said, "This is awesome, wonderful news. It’s an unbelievable bullet we have a dodged."

In late August, Vernon, B.C.,-based Tolko had announced it was closing the kraft paper mill Dec. 2, claiming after years of efforts the company was unable to "improve the mill’s competitive position."

Tolko is the largest employer in The Pas, with more than 300 workers.

News of the mill’s closure came on the heels of Omnitrax Canada announcing it was cutting rail freight service from The Pas to Churchill to one train per week from two.

Also in late August, Aseneskak Casino in nearby Opaskwayak Cree Nation (OCN) announced its intention to move within the next two years, putting 147 local jobs at risk. In late October, the IGA grocery store in OCN announced it was shutting down, throwing 47 people out of work.

Last month, Tolko workers voted to accept a 10 per cent wage rollback for five years with the potential new employer, which is to be called Canadian Kraft Paper Industries Ltd. As well, the Town of The Pas has agreed to grant the prospective new owner a tax exemption for the next three years. In 2015, Tolko paid $453,000 in those municipal taxes.

Paul McKie, national representative of Unifor, whose members represent the majority of the 320 Tolko workers, said, "We’re extremely pleased the plant is not closing and will continue to operate under a new owner."

Officials from American Industrial Acquisition Corp. and Tolko were not available for comment Friday, but there is widespread expectation a deal to acquire the plant is now imminent and could be announced as early as Monday.

Premier Brian Pallister said he is now "guardedly optimistic" a deal can now be done to save the mill. He called the pension vote a "key step."

"I’m really, really proud of the workers. They’ve had a tough time. They’ve had real uncertainty," Pallister said in Brandon, where the Progressive Conservatives are holding their annual general meeting.

"I’m also proud of government staff who have been working diligently to do our very best to get the security back in the lives of these people (mill workers) that they deserve to have."

Bill Henderson, a former longtime employee of the mill who was hired by The Pas Community Development Corp. to help with the community response, said it’s the workers and the town who deserve credit for making concessions.

"We were looking for a sustainable solution," said Henderson. "There there were a lot of people who put a lot of effort into making this work."

The vote on the pension-solvency payment schedule was not tied to the transaction but is part of the regulatory requirement in Manitoba when any relief in solvency-payment schedules is sought. Members of the pension plans must vote two-thirds in favour, and there were four separate votes involved in this case — members of both Unifor and United Steelworkers pensions plans as well as the retirees and others who will eventually collect pensions from both those unions.

Brandon Ellement of Ellement Consulting Group is the actuary and administrator for both the pension plans.

"If there was no risk involved, there would not have been a vote," he said.

He said both of the pensions were in good shape on a going-concern basis. But according to the legislated methodology to calculate pension solvency, the company would have been required to make annual solvency payments of about $10 million for five years.

The province has allowed a three-year moratorium for the new owners, but then the solvency deficiency must be paid off in five years. Ellement said in three years’ time, the solvency deficiency may be less or more than it is today.

Bond-market fluctuations affect pension solvency, and other market conditions could certainly affect the plant’s commercial viability in the future.

— with files from Larry Kusch

martin.cash@freepress.mb.ca