The Pas tries to save paper mill by offering Tolko a major tax break

The mayor of The Pas isoffering a massive tax relief to the owners of a nearby paper millin 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 fallout, so we are going to take the lead and we are literally going to attack," Mayor JimScott told CBC News.

The town of 5,500suffered a hugeblow in August when Tolko Industries announced they would close themill on Dec.2and layoff more than 300 workers.

• Tolko Industries' departure from The Pas 'almost like a death blow,' mayor says

Mayor Jim Scottsays 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 taxesfrom the area school division.

The Pas mayor says he hasn't received a response yet fromTolkoexecutives. The companysaid it will provide CBC with a statement later today.

With a Dec. 2deadline looming, Scott says the community hadto find ways to delay the closure of the mill so that they couldget a long-term plan in place.

The town has developed a response team and they've also begun working ona number of initiatives, including:

• Hiring an external consultantto work with stakeholders and provide constant presence on the issue.
• Reducingoperational costs of running the town by identifying efficiencies and savings,though not laying off staff.
• Working with the provincial government and federal government's Western Economic Diversification departmenton future plans for the town.

Scott says the looming Dec. 2closure meant they had 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 Dec. 2," said Scott. "So what we've suggested is we will put up some money that will help and you can continue operating the plant beyond Dec.2."

Scott saidcommunity leaders believe it's better to give Tolko approximately $2.6million in tax breaks over three years while keeping the annual payroll to local mill works,whichScott estimates at $37 million.

The tax breaks will involve some serious belt tightening on behalf of the community and Scott says the town has asked the province of Manitoba for help in developing an asset management plan.

The Pas and other northern communities havesuffered multiple economic blows this summer. Denver-based OmniTrax Rail laid off port workers in Churchill and has cut rail shipments to the community. That move created job losses in The Pas at OmniTrax rail yard facilities.

• OmniTrax under fire in Churchill after company closes port

Then in late-August theAseneskakCasino announced it was looking to relocate to Winnipeg.

Manitoba Minister of Growth, Enterprise and TradeCliff Cullen said he and other government officialswill be in The Pas next week to meet with local politicians and business leaders about a northern economic development strategy.

"Our government is working with the town of The Pas to identify long-term, sustainable options for northern development," Cullen said in a writtenstatement.