Timmins struggles with Met closure

A study outlining the full economic blow of the May closure of Xstrata’s Kidd Metallurgical Complex in Timmins is giving local officials ammunition in their fight to shake the province into action.

Commissioned by the Timmins Economic Development Corporation, the study by Burlington-based Econometrics Research Ltd. shows the closure will lead to a province-wide loss of 4,428 jobs and $237 million in wages. It will also lead to a loss of annual tax revenue of $150 million across all levels of government.

Of that total, Timmins is expected to see the loss of 1,162 direct and indirect jobs, with a local loss of $54.5 million in wages.

“The numbers are huge,” says Timmins Mayor Tom Laughren.

“Xstrata makes an announcement of 670 guys and early retire 150, and some of these guys live in the outlying communities so people don’t think the impact will be as big as it is, but this definitely tells you a different story.”

The blow to local contractors and service companies will be “massive,” he says, adding that Ontario Northland alone will lose $8 million to $10 million. In response, the Canadian Auto Workers have called upon the provincial and federal governments to consider an investigation of Xstrata’s business case for closing the Met site. If the company is found to have “little reason” for doing so, the union is pushing for Xstrata’s Timmins mineral assets to be stripped from them.

“The numbers are not just staggering, they’re shocking,” says Ben Lefebvre, Xstrata union chair with CAW Local 599. “How can the government possibly allow Xstrata, a very profitable multinational, to walk away with $2.8 billion in profit they’ve earned this year, and we’re just supposed to roll over and let them do this and take our natural resources in raw form and export our jobs? There’s something wrong with that picture and something has to be done.”

While Minister of Northern Development, Mines and Forestry Michael Gravelle spun through town and met with local officials to gather their opinions, Lefebvre was “devastated” by his response, which came in the form of a letter to the editor in a local newspaper.

In that letter, Gravelle said although the loss of the Kidd Met complex was “nothing short of tragic,” legally forcing companies to process Ontario ore in the province was not the answer.

In a telephone interview, Gravelle says such a move would open up Ontario to retaliatory actions in other countries. As roughly 25 per cent of the feed at Kidd Met flows from out of province, such actions would potentially make the site uneconomic if forced to rely on lower volumes. Pointing repeatedly to his government’s record on investments to the Northern Ontario Heritage Fund, Gravelle says the province remains committed to the North, though he stopped short of outlining any specific plan for Xstrata.

“I would like to see them change their minds and I’ll use every opportunity I can to persuade them to do that, but at this stage, I do not think it is in the best interests of the North to put in a play a situation where we could lose hundreds of other jobs if other jurisdictions reacted to a decision that we made,” says Gravelle.

This attitude fails to provide comfort to Lefebvre, who says current policies already make Ontario a much less attractive place to do business than neighboring provinces.

Laughren says the solution lies in providing regional incentives, with power costs at the top of his list of things the province needs to address. To that end, he’s been working to build a coalition of Northern Ontario political voices.

“What I’ve seen so far in Northern Ontario is people are fed up with how the government is handling our resources,” says Laughren. “When you look at Premier Dalton McGuinty’s plans as to what he’s envisioning for Northern Ontario, with what we see as huge parkland, it doesn’t appear he really wants any heavy industry in the North.”


www.xstrata.com
www.caw599.ca
portal.timmins.ca