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Steelworker strike having 'profound and serious' impact on Sudbury: economist

The ongoing strike at Vale Inco by nearly 3,000 members of United Steelworkers Local 6500 is having a "profound and serious" impact on Sudbury, according to an economist at Laurentian University.
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A labour dispute at Vale's Sudbury operations have left nearly 3,000 members of United Steelworkers Local 6500 on the picket line since June 13, 2009.

 
The ongoing strike at Vale Inco by nearly 3,000 members of United Steelworkers Local 6500 is having a "profound and serious" impact on Sudbury, according to an economist at Laurentian University.

With workers' incomes sinking from $20 or $30 an hour to $200-a-week strike pay, the city as a whole cannot help but feel the blow of the dispute, said David Leadbeater.

Speaking at Laurentian as part of a three-person panel on the impact of the strike, Leadbeater emphasized how local hardships resulting from the economic downturn will escalate as the strike pushes forward.

Rising bankruptcies are just one example, a trend he said is likely to rise as the strike pushes on amidst economic uncertainty. In a recent report, Industry Canada indicated Sudbury experienced an 83 per cent rise in personal bankruptcies in the third quarter of 2009 from the same period in 2008, soaring from 170 to 317.

Fellow panelist and city business development officer Paul Reid agreed, pointing to local retail sales which have taken "a direct hit," dropping steadily since the strike began.

Regional development slowed through the years when nickel prices were at an ebb, though interest exploded once the price began to rise, said Reid. It drew the interest of larger companies to take up space in the city, laying the groundwork for many the big projects recently built or nearing completion, such as the $23-million, 153,000-square-foot Lowe's which opened in New Sudbury in early December.

Indeed, he said that although it's his view and not the official position of the municipality, "the city rises and falls on the price of nickel."

However, with some diversification in recent years, the city is experiencing a lesser impact from the strike than it would have had in the past, "but it is still a challenging time," said Reid.

Laurentian economist David Robinson echoed this view of a potentially softened blow, suggesting that the seven per cent employment in the mining industry presents a "much smaller" direct impact.

With lower employment and lower global demand, it's perhaps no surprise the strike is having no obvious impact on nickel markets, said Robinson.

Even with Sudburians on strike, nickel prices sank from US$8 per pound in early November to below $7 per pound in December. This leaves the union with lower leverage than may have been available to them in the past, he added.

The lower employment levels also makes the striking workers a much smaller piece of Vale Inco's global framework, making their voices that much harder to be heard, said Leadbetter.

The company has roughly 100,000 employees worldwide, including nearly 40,000 in Brazil.

These challenges illustrate how globalization has failed Northern Ontario communities such as Sudbury, said a clearly frustrated Leadbetter.

Decisions made in Brazil can affect living standards in Sudbury, leading Leadbetter to propose that many such problems could be resolved by having public control over natural resources.

"Sudbury pays the cost of nickel mining, but the city does not benefit," said Leadbeater. He pointed to the degradation of local infrastructure through use by mining firms, echoing the same arguments Sudbury Mayor John Rodriguez has traditionally made for a municipal share of mining revenues.

Nearly 75 per cent of the world's oil wealth is under public ownership, presenting a model that could be emulated for Ontario's resource communities, he said.

While various governments have approved the takeover of Inco Ltd. by Vale, "nobody asked Sudbury," he said. Neither the community nor the local businesses were considered as part of the decision, both of which have been directly affected by the move.

"No one is really fighting for Sudbury in the struggle for economic power, apart from the unions," said Leadbeater.


www.laurentian.ca
www.city.greatersudbury.on.ca
www.local6500.usw.ca