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July 14, 2015

City and Province Proposal to keep Paramalat expansion in Winnipeg a win for Agribusiness Industry

City, Province and Parmalat reach agreement in principle to contribute $5.61M to service lands that will support jobs and local processing, increase marketability of neighbouring city-owned industrial lands

Released: 3:09 p.m.

Winnipeg, Manitoba - In a report considered at a special meeting of the Standing Policy Committee on Property and Development, today, the Winnipeg Public Service recommended that Council approve the sale of the City-owned land to Parmalat Canada Inc. for the expansion of a new fluid milk processing plant in Winnipeg.

Subject to approval by City Council and Provincial requirements, the new location, south of St. Boniface Industrial Park, would replace the current aging facility in St. Boniface. Parmalat Canada Inc. has critical timelines to commence construction of its new facility in order to meet its increasing production demands.

“I am very pleased that the proposed agreement with Parmalat sets their business up for success right here in Winnipeg and that Parmalat will lead development in the industrial park as the catalyst to attract further industrial business to set up as we partner to service the area,” said Mayor Brian Bowman. “I also want to thank Premier Selinger and our provincial partners for joining the City in contributing to ensure we keep Parmalat's business growing in Winnipeg for many years to come.”

Of the $8.2M of servicing costs, $2.59M will be offset by sale proceeds. In regard to the balance of the servicing costs of $5.61M, negotiations with the Province of Manitoba and Parmalat have reached an agreement in principle.

“The Government of Manitoba is pleased to have worked closely with Parmalat to strengthen their production here in Manitoba with a significant new processing plant,” said Ron Kostyshyn, Minister responsible for Agriculture, Food and Rural Development “Parmalat has become a global leader in food production working closely with the Dairy Farmers of Manitoba and this increase in food processing capacity in Manitoba will strengthen the provincial economy and bring good jobs to our province.”

It is proposed that City would front-end the City and Provincial share, and will recoup the amortization and interest cost on this amount from all applicable incremental property and business taxes generated by the new Parmalat plant for up to 18 years. This could be accelerated once other lands within the park are sold.

The proposed sale of the subject site to Parmalat benefits the City in many ways, including but not limited to the removal of an industrial operation, and reduced noise levels from within an existing residential area, increased the marketability of the balance of the City-owned lands in the industrial park with at least five potential Purchasers interested in specific sites including TEAMS Transport, a local truck transportation firm interested in approximately 10 acres in the Industrial Park for relocating and expanding a truck terminal, warehouse and offices.

The Report will be considered at a Special Meeting of Executive Policy Committee tomorrow morning at 9:00 am and if approved, will be considered by Council for approval.

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Last update: July 15, 2015