Tolko is confident sawmill in The Pas will reopen some day

Tolko is confident its sawmill in The Pas, Manitoba will reopen some day, although it likely won't be in 2010.

It's been a year since Tolko stopped producing lumber in The Pas. The closure put about 100 people out of work.

"We've been quite clear that this is not a permanent closure, and we do intend to resume operations here when the markets dictate that it can be done profitably," plant manager Dave Neufeld said. "From an optimistic perspective, we're hoping that we can restart the sawmill in the spring of 2011."

Because The Pas is far from major domestic and offshore markets, its existence relies on a strong U.S. lumber market.

Four years ago, Tolko nearly closed the sawmill and its adjacent paper mill permanently, until workers at both the facilities agreed to pay cuts. The paper mill is open and Neufeld said it has a full order book for 2010.

Neufeld said the sawmill faces one more hurdle before it can return to profitability.

Last year, the United States slapped a 10% duty on imports of softwood lumber from four Canadian provinces, including Manitoba, for failing to sufficiently lower exports as prices fell.

The duty came on top of an existing 5% fee.

The latest surcharge won't come off until $68 million in penalties is collected. That could take a couple of years to pay off given the slow pace of lumber exports to the United States, Neufeld said.

Read more:

Hope remains for idled mills - Tolko says sawmill at The Pas may reopen, but not this year (Winnipeg Free Press)