08/22/2016 13:03 EDT | Updated 08/23/2017 01:12 EDT

Tolko Industries to shut down in northern Manitoba; hundred to lose jobs

THE PAS, Man. — A forest products company that is the largest employer in The Pas in northern Manitoba says it will shut down in December.

Tolko Industries says 332 workers have been notified that they will be laid off.

CEO Brad Thorlakson says in a release that the business is not “financially sustainable" despite years of trying to improve results.

Thorlakson says Tolko did not make the decision lightly, but it is in the best long-term interest of the company and employees.

The Pas Mayor Jim Scott says the company didn't give him any indication that it was in financial trouble.

Scott says he and council will discuss solutions which may include making a request to the Manitoba government for funding.

"It’s been a struggle here for a number of years, but every indication that we had was that they continued to make the best paper in the world," Scott said by phone Monday.

Scott said he believes the company may have had trouble securing transportation for its products.

"I think we're going to hear they had trouble getting goods from the mill site to the customer," said Scott, who added that getting space allotted on rail cars has always been a challenge.

Thorlakson said the decision to close down Dec. 2 in no way reflects on workers, the community or local and provincial governments.

“Over the 19 years we have been in the community, a great deal of work has been done, both internally and externally, to improve the mill's competitive position," he said.

"We understand that this will be a very difficult time for (workers) and the community, but we cannot continue to sustain the losses at the operation."

Tolko bought the Manitoba Kraft Paper and Sawmill Operations in 1997.

Amanda Lathlin, the area's NDP member of the legislature, said the closure will devastate the local economy.

"We urge the (Premier Brian) Pallister government to act immediately to prevent a crisis in The Pas," Lathlin said. "The closure of the mills will be incredibly stressful for families, who will have a tough time making ends meet without a regular income. It will also hurt many other local businesses and undermine the economic future of the entire region."

Private railroad company Omnitrax, another large northern employer, announced last month that there will be no grain shipments from the Port of Churchill on Hudson Bay this year. The port has employed about 10 per cent of the small town's 800 people during seasonal operations. Omnitrax has not given a reason for the decision.

The MP for The Pas called on Ottawa to step in along with the provincial government.

"This coupled with the closure of the Port of Churchill is further devastating to our North," said NDP MP Niki Ashton. "We have a federal government that says it cares about job creation and sits by while the North bleeds jobs.

"We have a provincial government that is betraying the North. It's time to change course."

(The Canadian Press, CTV Winnipeg)