The looming closure of a pulp and paper plant in The Pas, Man. has people in a nearby community fearing the worst.
Tolko Industries, the largest employer in The Pas, announced in August that it will be closing its kraft paper mill in December because the operation is not financially viable.
Tolko employs more than 330 people, but more than just those employees could be forced to find new jobs.
Some people living south of The Pas have also started bracing for an uncertain future.
Spruce Products Limited, a sawmill in Swan River, Man., sells wood chips to the Tolko plant, which are used in the production of kraft paper.
Spruce Products president Ward Perchuk said the sale of those wood chips accounts for 40 per cent of his company's gross sales.
If Tolko closes, Perchuk worries Spruce Products could face a similar fate.
"The potential is the whole business could become unviable," said Perchuk. "Since 1942, we've been going strong and weathering all the storms that came our way, but this one's a little different and a lot more worrisome than anything we've faced in the past.”
The company survived the housing crisis in the United States in 2008, when lumber prices plummeted. But with the Pine Falls paper mill now closed, Spruce Products is running out of places to sell its wood chips. Dryden, Ont. has a pulp and paper mill, but Perchuk said freight costs to ship into northwestern Ontario would chisel away at profits.
Spruce Products employs about 75 people.
Perchuk worries for more than his own employees; the Tolko closure, he said, could create a domino effect in the province's forestry industry.
"That impact, it goes well beyond The Pas," said Perchuk. "It'll be felt all the way from Thompson down to Roblin, Man. I'm estimating it's somewhere in excess of 1,500 people."
University of Manitoba economics professor Fletcher Baragar said the multiplier effect could mean anywhere from two to five jobs may be affected in the region for every job lost at Tolko.
“Over a period of time you will see, for every hundred jobs lost in the mill itself, you might have anywhere from 200 to 400 in the larger region as a whole.”
Baragar said forestry and logging accounts for a very small fraction of Manitoba’s total GDP. The industry, he said, has been in decline for several decades. But Baragar said that doesn’t minimize the impact it will have on the region around The Pas.
“The harvesting of the forest products, the transportation of the forest products – that’s often done by smaller firms, independent contractors, temporary contractors and that’s quite important in terms of supporting other types of work in that region.”
All of this is very troubling news for Swan River Mayor Glen McKenzie.
"It's pretty dramatic. It's a real concern to us. The job loss, and the economic impact," said McKenzie. “All the businesses that deal with the forest industry would be very severely impacted by the Tolko shut down."
Despite the dismal outlook, Perchuk hasn't given up hope.
"We're very optimistic a buyer will come forward," he said. "We really have to call on the province to do all they can to facilitate some new ownership in The Pas."
McKenzie said the town of Swan River wants to help any way it can.
"The fact that Swan Valley was founded by people wanting to farm and people wanting to work in the forest makes us want to try and save that industry," said McKenzie. "It's a part of our heritage."
