With less than two months to go before the municipal budget must be submitted to the province, the City of Thompson is still waiting for a definitive answer from Vale about how much they will be receiving as a grant in lieu of taxes for the 2019 budget year – either $3 million or $4.2 million
“Our quarterly/year-end reporting was delayed due to the events in Brumadinho, but we should be informing the city soon,” Vale Indigenous and corporate affairs manager for Manitoba and Ontario Ryan Land told the Nickel Belt News March 18.
A Vale tailings dam collapsed at the Corrego do Feijao mine near Brumadinho, Brazil on Jan. 25, killing about 200 people and leaving more than 100 missing and also covering 270 hectares of land with mudflow.
Vale Manitoba Operations need to have achieved US$20 million in cash flow for 2018 for the city to receive the higher amount, Land said in January.
“If Manitoba Operations achieves that threshold, we pay an extra $1.2M Canadian by the end of Q1 2019. Based on that trigger, we either pay an additional $1.2 M or we don’t.”
The city is basing its budget planning on receiving the lower amount, said City of Thompson communications officer Kacper Antoszewski in January.
“Because we’re required by the province to provide a balanced budget by May 15, we’re budgeting for the lower amount of $3 million out of caution,” said Antoszewski. “Capital projects have already been planned and received preliminary approval from council, and we’ll be holding consultations with employees, controlled entities, and the public in the coming weeks.”
In 2018 the city received $4.8 million as a grant-in-lieu, though $528,000 was allocated to the general reserve, leaving them with $4.272 million, which equated to about 13.5 per cent of the city’s projected 2018 revenues. If 2019 revenues are equal, Vale’s contribution could be almost the same percentage if the city receives the higher amount or about four percentage points lower (less than 10 per cent of revenues) if Vale Manitoba Operations does not achieve the US$20 million positive cash flow target.
