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The Pas Tries to Save P&P Mill by Passing 840k Tolko Tax Break

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The mayor of The Pas, Manitoba, Canada, is offering massive tax relief to the owners of a nearby paper mill in an effort to stave off a closure that could cripple the town's economy. "We can't just sort of sit back and see how things fall out, so we are going to take the lead and are literally going to attack," Mayor Jim Scott said to CBC News (Ottawa, Canada) reporters earlier this week.

The town of 5,500 suffered a huge blow in August when Tolko Industries announced that it would close the mill on December 2 and lay off more than 300 workers.

Mayor Scott told CBC News that the town offered $840,000 a year in tax reduction for three years, but there are still details to be worked out, including getting consent to use taxes from the area school division. The Pas mayor said that he hasn't received a response yet from Tolko executives. The company said it would provide CBC with a statement after its initial report, but so far there has been no edit or update to the article..

With a December 2 deadline looming, Mayor Scott said that the community had to find ways to delay the closure of the mill so that they could get a long-term plan in place. 

The town has developed a response team and they've also begun working on three key initiatives including:
  1. Hiring an external consultant to work with stakeholders and provide constant presence on the issue.
  2. Reducing operational costs of running the town by identifying efficiencies and savings, though not laying off staff.
  3. Working with the provincial government and federal government's Western Economic Diversification department on future plans for the town. Mayor Scott said the looming December. 2 closure means they have to act fast. 
"We are trying to find a way to continue to make paper. It's very difficult to get that done by [Tolko's] deadline of December 2," said Mayor Scott. "So what we've suggested is we will put up some money that will help and you can continue operating the plant beyond December 2." 

The mayor said that community leaders believe it's better to give Tolko approximately $2.6 million in tax breaks over three years, while keeping the annual payroll to local mill workers, which Scott estimates at $37 million. The tax breaks will involve some serious belt tightening on behalf of the community and the mayor said that the town has asked the province of Manitoba for help in developing an asset management plan.


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