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Actions to support Northern Manitoba’s economy need to be driven by the region’s residents: report

The federal and provincial governments can do more to help the beleaguered Northern Manitoba economy in the short term and the long term if they direct resources to the development of community-driven solutions rather than throwing money at companies

The federal and provincial governments can do more to help the beleaguered Northern Manitoba economy in the short term and the long term if they direct resources to the development of community-driven solutions rather than throwing money at companies headquartered elsewhere who are not committed to the region, says a report published by the Canadian Centre for Policy Alternatives (CCPA) Manitoba office.

Authored by Lynne Fernandez, the Errol Black Chair in Labour Issues at the CCPA’s Manitoba office, the report, entitled It’s Time to Give Back to Manitoba’s North, points out that although the total number of job losses announced by Port of Churchill and Hudson Bay Railway owner OmniTrax and Tolko Industries in The Pas aren’t large in overall terms, they represent up to 10 per cent of the populations in those communities and will have trickle-down effects that impact far more people.

“If Winnipeg were to lose 10 per cent of its jobs in one fell swoop, more than 42,500 people would be without work and, of course, income,” says the report. “Not only are workers and their families knocked off their feet, but the local economy suffers. From stores to car dealerships to travel agents to restaurants to babysitters, all kinds of businesses and individuals who rely on someone else’s income to make their own living will feel the pinch. When 10 per cent of the workforce becomes newly and suddenly unemployed, that pinch feels more like a punch. This boom and bust scenario is common in our economic system. Private corporations that cannot make enough profit have no loyalty to the communities they are based in or to the workers they employ. History is strewn with towns that gave up the ghost when companies moved on. On the other hand, there are examples of government bailing companies out just to keep people employed and when corporations such as Chrysler are ‘too big to fail’ it is taxpayers who foot the bill.

“What makes these recent situations doubly difficult is the geographic location in which they are occurring,” continues Fernandez. “Not only did the location make it difficult for non-local companies to operate in, but the smaller economic base makes it tougher for laid off workers to find new jobs. People are tempted to leave these remote communities, causing real estate prices to go down and further reducing the overall economic activity in the region. Eventually the tax base erodes, leaving municipalities with less money to provide services. In fact Tolko pays $836,318 in property taxes to the Town of The Pas. Of this $238,359 is forwarded to the Kelsey School Division and $144,335 is for provincial school taxes. This leaves The Pas with $453,620/year, roughly seven per cent of The Pas’ total municipal tax revenues. To put Tolko’s contribution in perspective, The Pas’ fire protection cost is $409,877/year, and its garbage collection and landfill costs are $423,309. The above figures demonstrate how a downward spiral can start that, if not stemmed, can cause permanent damage.”

While short-term actions like designating Churchill a special Employment Insurance (EI) zone so that laid-off port workers who would not otherwise qualify can collect EI benefits are required, Fernandez says that in the long term, governments need to change their approach to stop the traditional boom-and-bust cycle.

“When private corporations like Omnitrax and Tolko fail despite receiving millions of dollars of government money, it becomes very difficult to make a case for further public support,” the report notes. “There is a role for government to play in regional development and nation building, but it does not entail throwing public money at private corporations that do not and cannot have a meaningful commitment to the north’s people and land,” Fernandez writes. “Billions of dollars of profit have been extracted from the north and enriched people and companies with little or no connection to the region. Whether it be through hydro, mining or logging, First Nations peoples have rarely benefitted from southern enterprise and, up until recently, were not even consulted when megaprojects were planned and implemented—even though the projects destroyed traditional lands and lives.”

Fernandez’s report points to Nisichawayasihk Cree Nation as an example of First Nations taking greater control of their local economies and leveraging payments received as compensation for Manitoba Hydro developments to make themselves more sustainable. The author also says that, in considering solutions, the government needs to consult with the people who already live in Northern Manitoba, particularly First Nations people, who already have suggestions of their own on how to proceed, ranging from First Nations ownership of the Hudson Bay Railway and Port of Churchill to Manitoba Keewatinowi Okimakanak’s 10-point northern economic development plan. 

The report also argues that all Manitobans have an interest in the northern economy becoming stronger.

“Not only do we rely on the resources extracted from the north, but there are many connections between northern communities and cities in the south,” Fernandez writes. “There is a constant movement of peoples from northern urban centres and First Nations to southern cities, and back again. A stronger north would only benefit the rest of the province and country. There is no need for an entire region to remain underdeveloped, but northerners themselves need to drive the change.”

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