The province’s Mining Communities Reserve Fund (MCRF), which the City of Thompson has been trying to obtain money from to cope with mining-related economic challenges, isn’t so much an emergency backup for mining communities facing tough times as it is a shell game for government to transfer money to and from itself, recent contributions to and withdrawals from the reserve show.
Since January 2007, the earliest date for which Manitoba orders-in-council – the method by which a portion of mining taxes are added to the MCRF and money for government-approved projects is taken out – are available online, there have been a total of 25 payments into and out of the fund – 10 deposits and 15 withdrawals, with the total deposits during that time amounting to just under $16 million and the total withdrawals about $20,572,300.
Payments to mining communities facing shutdowns and suspensions of mining operations account for only about 15 per cent of the $20 million spent in the past decade or so, with the other 85 per cent going mostly into the province’s consolidated revenue fund to offset costs associated with government-supported exploration and prospecting incentives, as well as to the costs of a geo-mapping project with the Manitoba Geological Survey.
Leaf Rapids has been the biggest beneficiary from the fund among Manitoba mining communities since 2007, receiving about $2.2 million in funding through three separate disbursements. The first was an initiative in partnership with Lynn Lake in 2008, for which the two communities received a total of $450,000 over three years to develop a three-year real estate partnership development with Izumi Outdoors Inc. to set aside houses and vacant lots and construct a show home in Lynn Lake while also training residents in construction. That same year, Leaf Rapids Town Properties Ltd. received $1.9 million over three years to continue operating. In 2014, Leaf Rapids received $75,000 to assist with the continued operation of the Leaf Rapids Community Economic Development Office.
In addition to the partnership with Leaf Rapids and Izumi Outdoors Inc., Lynn Lake received $330,000 over six years to cover the operating costs of its community economic development office, $20,000 to support the development of a business plan for the Lynn Lake Airport, $30,000 to cover operating deficits at the airport in April and May 2013 and up to $78,000 over the first six months of that same year to enable the continued operation of the airport.
Snow Lake was also the recipient of one MCRF grant when it received $120,000 over three years to help cover the operating costs of its community economic development office.
The City of Thompson requested funding from the MCRF in July 2017, though at that time there was no specific project identified on which to spend it. The request generated a lukewarm response from then-acting Growth, Enterprise and Trade deputy minister Dave Dyson, who said that the fund was having trouble meeting its commitments to fund exploration and geoscience programs without going below $10 million, which the Progressive Conservative government contends is the baseline below which funding for any projects can not be approved, though others disagree.
What exactly the city requested funding for has not been made public, and Mayor Dennis Fenske has not yet responded to a request for comments, but apparently the plans did not impress Growth, Enterprise and Trade Minister Blaine Pedersen, who told the Thompson Citizen June 7 that the four-year plan presented to them by the city was inadequate considering the massive changes Vale Manitoba Operations is going through.
However, Dyson, now the permanent deputy minister, told the city in a letter written days before Pedersen’s comments that “we are unable to access the MCRF at this time. The legislation guiding the use of the MCRF needs to ensure its sustainability and the fund is only used if the balance is at least 10.0 M. The Fund does not currently meet that threshold.”
Technically, it does, according to a government spokesperson, who told the Citizen June 13 that the current balance of the MCRF is $11,257,500. The approximate $1.26 million above the $10 million threshold is already allocated to the Mineral Exploration Assistance Program, which the province approved up to $1.5 million per year in the fiscal years 2016-17 through 2018-19 via a July 27, 2016 order in council. Another order-in-council that same day authorized the transfer of up to $100,000 to the consolidate revenue fund to offset costs associated with the Mineral Prospectors Assistance Program.
“In 2017/18 the fund spent $1,059,400,” said the spokesperson in an email. “This was allocated to fulfill obligations under the Mineral Exploration Assistance Program ($1,008,700) & Manitoba Prospectors Assistance Program ($50,700).”
In a June 15 interview, Pedersen said that both the level of the reserve and the short-term nature of Thompson’s plans for money it requested from the MCRF are why his department is turning down the city’s request.
“You can’t just do a short –term fix,” Pedersen said. “[Fenske’s] looking for a quick fix and we have to have more than a quick fix. We’re in this for the long term. Thompson’s in for the long term and so are we.”
Opposition NDP leader Wab Kinew said the province’s shifting explanations of why Thompson can’t access the reserve show that it just doesn’t want to help the city.
“If they wanted to help Thompson with this mining reserve fund they’d find a way to make it happen,” he told the Citizen June 13. “If they really cared to step in and help Thompson right now they would find a way to do it.”
He also disputed the government’s interpretation that the Mining Tax Act doesn’t allow the reserve to drop below $10 million.
“The only part where it says that you can’t access the fund for projects if it’s less than $10 million applies to exploration initiatives,” said Kinew.
The MCRF had a balance of nearly $14 million in July 2016 and was once as high as nearly $16 million in the late 1990s, Pedersen said. The amount of money paid into the fund has dropped precipitously over the last 10 years, to only $86,000 for the 2016-17 fiscal year, when total mining taxes collected by the province were less than $1.5 million, according to an August 2017 order-in-council. By contrast, in 2007, $2.92 million was transferred into the MCRF, which represented only three per cent of nearly $97.5 million in taxes collected under the Mining Tax Act, prior to the maximum yearly contribution to the reserve being raised to six per cent.
