Province withholding access to mining reserve due to city’s short-term planning, says trade minister

Recently, one of the biggest points of contention between the City of Thompson and the provincial government relates to the Mining Community Reserve Fund.

Thompson’s city council first approved a resolution to seek this funding last July 17, but so far they’ve received no money and very little information from the province.

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However, during the general inquiries portion of council’s June 4 meeting, former United Steelworkers Local 6166 president Les Ellsworth said Growth, Enterprise and Trade Minister Blaine Pedersen told him while in Thompson April 30 that city has not presented them with any substantial plans on how to use that money.

“And the government is not about give you money from a fund without a plan,” said Ellsworth. “So I’m quite concerned as a citizen, also being a part of an organization that spends a lot of money helping to lobby the government.”

Pedersen said during a June 7 interview with the Thompson Citizen that the city has only presented them with a four-year plan for the Mining Community Reserve Fund, which he views 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.”

Fenske, who was not at the June 4 council meeting, said June 8 that there’s no way the city can reasonably plan beyond a four-year period, since there are too many economic variables to take into account.

This includes the fluctuating price of nickel and the amount of money they will receive through Vale’s grant-in-lieu (GIL) agreement, which already dropped by 20 per cent from last year’s level this year and will drop to half of the 2017 level for the next three years before being renegotiated once more.

“It’s framed in a four-year window because that’s the life of the GIL. The GIL may change four years from now,” said Fenske. “Nobody’s going to commit beyond four years and nobody can say what it will be beyond four years because nobody knows. And if they do they’re lying, because there’s no certainty.”

Fenske went on to say that Pedersen and the provincial government in general haven’t done a great job communicating with the City of Thompson when it comes to this subject. This includes Pedersen’s April 30 trip to Thompson, whenFenske said the minister neglected to formally meet with members of council.

“They didn’t talk to us. They weren’t willing to meet with us. How would they know that we didn’t have a plan to present to them?”

The Mining Community Reserve Fund was created in 1970 under the Mining Tax Act and is intended to assist mining communities that are affected by partial or complete mine closures.

It is funded by a transfer of up to six per cent of taxes paid by mining companies. When the total amount in the reserve exceeds $10 million, excess amounts may be used to encourage exploration projects or to assist people affected by mining suspension through loans.

At the time of Thompson's initial request for money from the fund last summer and prior to transfers following the 2016–17 fiscal year, it had a balance of about $12 million and total expenditures of less than $2 million the 2016–17 fiscal year, including $1,388,000 for the Manitoba Exploration Assistance Program, $357,000 for the Manitoba Geoscience Advantage Program, $85,000 for the Manitoba Prospectors Assistance Program, and $10,000 for the Town of Lynn Lake.

Fenske said he will publicly respond to a letter sent from Pedersen’s office on this matter during the June 18 council meeting.

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