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Editorial: Mineless Flin Flon gets bigger grant-in-lieu than Thompson

Flin Flon getting about 70 per cent of their historical high grant-in-lieu amount from Hudbay for 2023 to 2028, estimated to work out to about $4.5 to $5 million per year.
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Hudbay director of human resources Richard Trudeau and Flin Flon Mayor Cal Huntley shake hands during an event confirming the two sides' deal on a new grant-in-lieu agreement at Flin Flon City Hall Sept. 7.

It would be a stretch to suggest the the City of Thompson is jealous of Flin Flon, given that the last Hudbay mine in the community on the Manitoba/Saskatchewan boundary closed down this summer and the company also closed down its mill this year, meaning Flin Flon is now mostly home to administrative employees of the mining corporation.

In Thompson, at least, there is still a mine and, between a substantial exploration program currently going on and the demand for nickel expected to rise as electric vehicle battery production increases, the potential for more ore to come out of the ground from Vale Manitoba Operations in years to come, though there is no longer a smelter and refinery and the company’s workforce has basically been cut in half from where it was five years ago.

On the other hand, either Hudbay is more generous than Vale or the City of Flin Flon has better negotiators because, despite its smaller population and drastically reduced company footprint, our northern neighbours are still getting about 70 per cent of their historical high grant-in-lieu amount for 2023 to 2028, estimated to work out to about $4.5 to $5 million per year, according to a report from the Flin Flon Reminder and a Hudbay press release. That’s 50 to 66 per cent higher than the annual payment of $3 million that Vale will make to Thompson over the next three years instead of property taxes.

Five years ago, before Vale permanently shut down the smelter and refinery in 2018, Thompson was getting about $6 million per year from the company.

Obviously, the two cities’ circumstances are not completely the same. Thompson has two or more times the population of Flin Flon, which means more properties to tax. As such, it is less dependent on the Vale grant-in-lieu, which makes up about 10 per cent of the city’s annual budget, than the City of Flin Flon is on its grant from Hudbay, which makes up as much as a third of their municipal budget. Hudbay also recognizes that many employees now working in its Snow Lake-area operations still live in Flin Flon, where they used to work, and that it is in their interest to ensure that the city remains an attractive place for them.

And although Vale still makes other contributions to the City of Thompson, having recently provided money to purchase asset management software, and making a $2 million contribution toward construction of a new pool to replace the shuttered Norplex, elected officials and city administration in Thompson would likely have much preferred if they had received $4.2 million from Vale — 70 per cent of the previous $6 million per year — in the last two years of their previous grant-in-lieu agreement, when they got $3 million per year after $4.8 million in 2018 and $3.6 in 2019, thanks to a voluntary top-up of $600,000 that Vale provided, and for all four years of the current four-year agreement. That would have totalled $7.2 million extra dollars over the course of six years, which isn’t anything to sneeze at, even if it’s not a huge slice of their annual budget. As they say, a million dollars here, a million dollars there, and pretty soon you’re talking about real money.

Also appreciative would have been the School District of Mystery Lake, which is more heavily dependent on provincial funding than most of the province’s school divisions. It used to receive a portion of the Vale grant-in-lieu before 2018. After that, however, the city stopped providing a slice of its shrinking GIL revenue pie. The Flin Flon School Division, by contrast, received about $1.8 million per year from the City of Flin Flon under the previous, larger grant-in-lieu agreement, though it and Flin Flon have to hammer out how much it will receive in the next five years.

This editorial first appeared in the Sept. 16 print edition of the Thompson Citizen.