Premier says Thompson can’t get mining reserve money because previous government depleted the fund

Reserve was at $13.9 million in March 2016, just before last election

Manitoba’s premier says the reason his government can’t give Thompson any money from the Mining Communities Reserve Fund (MCRF) to help offset revenue losses as a result of a mine, smelter and refinery closures is because the previous government let it drop below the minimum $10 million threshold.

 “The fund was allowed to depreciate,” Premier Brian Pallister told Arctic Radio News while in Flin Flon Aug. 8. “It deteriorated down below the level that the legislation that was set by the previous administration put it at which was $10 million. Once it gets below $10 million, you can’t give money.”

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However, an order-in-council from March 31, 2016, less than three weeks before Pallister’s Progressive Conservatives ousted the NDP after 17 years in power, showed that the balance of the fund was an estimated $13,919,000, about half-a-million dollars more than it stood at nine years earlier in 2007, when it was $13,390,281. About $1.8 million was spent in 2016-17 on prospecting and exploration assistance programs and the Manitoba Geoscience Advantage Program, as well as $10,000 for the Town of Lynn Lake. That left a balance of $12,147,000 as of August 2017.

The City of Thompson requested funding from the MCRF in July 2017. 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.

In June of this year, the MCRF balance was $11,257,500 and just over $1 million was spent in 2017-18 on mineral exploration and prospector assistance programs.

Growth, Enterprise and Trade Minister Blaine Pedersen said during a June 7 interview with the Thompson Citizen that the city had only presented them with a four-year plan for the MCRF, which he viewed as inadequate given the massive change that’s happening with Vale’s workforce reductions.

“What the government has asked [is], ‘What are Thompson’s plans in the long term?’” said Pedersen. “Because this is a long-term shift for Thompson and Vale, with the smelter being gone, and we need some sort of an idea of where they are and Mayor [Dennis] Fenske was either unable or unwilling to discuss what happens after that.”

Dyson, by then 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.”

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.”

At a council meeting three days later, Fenske said the city had asked for $100,000 from the MCRF in 2018 and $1 million per year in each of the following three years. He also said it was unreasonable to expect a plan looking more than four years down the road because the Vale grant-in-lieu agreement, which sets out how much the mining company pays the city instead of property taxes, only runs until 2022.

The province believes they can’t distribute money from the MCRF if its balance evens out to less than $10 million but NDP leader Wab Kinew said this threshold only applies to exploration initiatives, not contributions for mining communities.

Kinew said Aug. 15 that the opposition party was disappointed not to see money for Thompson from the MCRF or other sources in the budget implementation and tax statute amendment act (BITSA) – legislation to put budget promises into effect – presented that day.

“I hoped to see money for Thompson to help the community thorough the challenges that Thompson’s facing right now,” said the NDP leader. “We’ve been talking with people in the community and leadership as well about the mining reserve fund. The government could have put provisions in BITSA to specify that they were going to use the mining reserve fund to help the people of Thompson. They could have just put a dedicated pot of money in to help northern communities like Thompson with job losses and yet we didn’t see anything in this budget implementation bill that is going to help people in Thompson and people in the north so it’s a missed opportunity. I think it’s very clear that the government isn’t making northern jobs its top priority. You would hope that a democratically elected government would listen when there’s not just an opposition party but people and community leaders in Thompson pushing on an issue like this. You’d hope they’d listen and yet by not putting it in the budget bill that they released today it’s just another sign that they’re not responding to the challenges that Thompson is facing.”

Thompson PC MLA Kelly Bindle said in his July 27 MLA Report in the Nickel Belt News that Thompson didn’t qualify for MCRF funding.

“Although our government recognizes Vale has significantly reduced its labour force with the closure of the smelter and refinery, and has converted to a load-out facility, this scenario does not meet the required criteria for the City of Thompson to qualify for funding through the Mining Community Reserve Fund (MCRF),” Bindle wrote. “Provisions in the Manitoba Mining Tax Act regarding the MCRF stipulate that MCRF funds become available to encourage mineral exploration, and help people in mining communities where ore deposits have been depleted. Fortunately, that is not the case for Thompson, as there are substantial proven ore deposits remaining.”

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