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City getting $3 million annually from Vale in lieu of property taxes over the next four years

Total value of the four-year deal is slightly less than the 2018 to 2021 agreement, but Vale will also give Thompson $2 million for a new pool.
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Thompson City Hall

The City of Thompson is getting slightly less from Vale in the 2022 to 2025 grant-in-lieu agreement with the mining company than it did in the previous one but the same annual amount that it received in each of the last two years.

The agreement, approved by council at their April 11 meeting, will see Vale provide $3 million per year to the city in lieu of property taxes, which the company doesn’t pay because its operations are outside of city limits.

Over four years, that’s $12 million, $2.4 million less than the city received over the previous four years from 2018 to 2021. The city received $3 million each year in the last two years of that agreement and $3.6 million in 2019 thanks to a voluntary $600,000 addition that Vale ponied up. in 2018, the city got $4.8 million.

However, Vale is also providing $2 million towards a new Thompson aquatic centre to replace the Norplex Pool, which was permanently closed over three years ago. In recent months, the company has also provided $150,000 to the city for the purchase of asset management software and $250,000 toward getting homeless people off the streets by providing them temporary accommodations. With those, the total amount of funding the city is getting from the company over the next four years is roughly equal to what it was in the previous four. A five-year agreement in place prior to 2018 saw Vale providing the city $6 million per year, though its operations employed many more people at that time, as the smelter and refinery, permanently closed in 2018, were still in operation, as was Birchtree Mine, which has been on care and maintenance since late 2017.

Coun. Les Ellsworth, who led the city’s negotiating team, said convincing the company to maintain the grant-in-lieu at $3 million per year wasn’t easy and that council wished it could have gotten more.

“We went in asking a lot more than we got,” he said, crediting the strength of the city negotiating team’s arguments with obtaining a better deal than it otherwise might have. “If we had not done the presentation that we did, we would be back here tonight with our tail between our legs looking at something else.”

Coun. Duncan Wong said securing $12 million was satisfactory, considering that the 1956 agreement between the province and Inco, which established the mine and the community of Thompson, limits the city’s leverage and that the next mayor and council should explore finding an alternative way to tax Vale. One of the terms of that agreement is that no property of the mining company, “will at any time be subject to municipal, district, school district or other local government assessment, taxes and rates of any nature or kind whatsoever,”

In a press release announcing the approval of the grant-in-lieu and Vale’s contribution of $2 million toward a new pool, Mayor Colleen Smook said she was glad that Vale recognizes the need to keep investing in Thomson, even though the last several years have been tough on both the company and the city.

“A strong GIL contribution benefits everyone,” she said. “It helps us maintain the services we have, renew our infrastructure and, of course, to get a new pool built These things benefit everyone, including Vale’s employees.”

Vale Manitoba Operations head Gary Annett said the company is committed to Thompson for the long term.

“Our operations have worked very hard to turn around our business over the last few years and attracting the $150 million investment for Phase 1 of the Thompson Mine Extension Project. This new agreement and investment in the pool  demonstrates our continued commitment to the community.”


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