An aerospace company is set to invest millions of dollars in Watson Lake where it plans to manufacture airplane floats for distribution to world markets.

Responding to questions from the Star Wednesday afternoon, Premier Dennis Fentie said his government was approached by Glen Ernst, the owner of CAP Aircraft Float Products, several months ago, when Ernst expressed an interest in investing in Watson Lake.

'The proponent came forward some months ago with this proposal,' said Fentie, whose riding is Watson Lake.

'His company, as I understand it, holds the necessary licensing, certificates and (Transport Canada) approvals,' Fentie said.

'He's from the United States and he's looking for a location for this particular manufacturing initiative.

'We're very pleased, at least initially, that he's looking at Watson Lake. I think the hangar that exists there from the Second World War is very compatible with this type of manufacturing and that's sparked his interest.'

Fentie said the talks over the manufacturing plant have also involved the Liard First Nation.

'The discussions I've had to date have included the Liard First Nation, and I understand the proponent themselves have been engaging in discussions with the first nation all the way along.'

Ernst said in an interview Wednesday evening in Whitehorse that he chose the Yukon because of its geographical location. He also feels Watson Lake has all the amenities he was looking for for his operation.

'The location, next to Alaska, north of British Columbia, on the Alaska Highway with shipping ports at Skagway for the Asian and Australian markets is beyond ideal,' he said.

'Watson Lake has the infrastructure, the large hangar, paved runways, a lake with a ramp, a ready-and-waiting labour force and the Alaska Highway.'

Ernst said he has been very impressed with the reception he's received in the territory. He is looking to get his operation started as soon as possible, indicating the iniative could be in operation later this year.

He said the company in Watson Lake, should it go forward, would be called CAP YUKA Aerospace.

'First of all, I'd like to say that I've been really impressed (with the process) from the premier's office right on down. It has been outstanding.

'This extremely pro-business attitude of the Yukon government and the tax incentives makes this an extremely exciting and viable operation,' Ernst said.

'These floats have a world-renowned reputation for integrity, stability and are noted for their speed ... (and) we already have these products all over the world,' he said.

Many float plane owners are actively seeking replacement parts for their aging aircraft, he added.

'And dealing with the first nation has been a pleasure,' he added.

Ernst said he cannot comment on the details of the initiative or tax incentives at this point but will release details in the coming months.

Ernst, an American resident and Canadian citizen, also said he's pleased that his recent acquisition of the historical CAP company could be moved to the North.

'This technology originated in Canada and then was sold out of Canada to the United States. I was able to make an acquisition and successfully return it to Canada.'

Fentie said Ernst's proposal is exactly the kind of thing his government has been trying to encourage. The premier said he believes the project's economic spinoffs would be good for Watson Lake and all Yukoners.

'This is the kind of thing that we as a government want to see,' he told the Star.

'We're looking at private-sector investment coming from outside the territory, investing here in the Yukon and establishing an economic engine.

'It would be a tremendous boost for (Watson Lake). I think it's fair to say we have some other potential in the region that would allow us to move into manufacturing; forestry is another example.

'We want to encourage this kind of thing. Manufacturing, especially when you're talking about value-added, is a huge boost to our economy,' Fentie said.

CAP was originally started in Canada in the 1950s. It produced aircraft parts, including the floats for float planes, worldwide.