Year In Review – Sudbury’s Economy: Boom to Bust? – by Bill Bradley

Northern Life, Greater Sudbury’s community newspaper, gave Republic of permission to post Bill Bradley’s article.

Greater Sudbury’s economy went from boom town status in 2008 to layoffs and growing fear in the community. Mining executives like Xstrata’s Mike Romaniuk, and Vale Inco’s Fred Stanford had been bullish on the future. “The world simply can’t get enough nickel,” said Stanford Feb. 6th at a Chamber of Commerce luncheon.

But by the early fall, a stock market crash started a series of layoffs in local mining companies and service and supply companies. Retired miner, Laurie Chartrand, 63, from Chelmsford, said he was down $25,000 from the stock market crash and knew some who had lost $200,000. He had a novel idea.

“We need the government to start a voucher system for those who have lost money like myself so we would have the ability to buy the cars that use our metals,” said Chartrand.

Residents also told councillors repeatedly they were now concerned over the city embarking on expensive public projects. On Oct. 21, the city’s much touted legacy projects (sports complex and arts centre) were narrowly defeated by seven councillors. They cited the city’s worsening economic situation and lack of grassroots support from all parts of the city, for their vote against them.

But Laurentian University economist Dave Robinson, Laurentian University commerce professor Jean Charles Cachon and Dick DeStefano, executive director of the 95 member mining supply and service association, SAMSSA, said the outlook was not all that bleak.

Robinson has stated that most mining companies are in it for the long-term and will try and hang onto their skilled employees as long as possible to be ready for an upturn. Cachon has said that the major mining companies and the smaller service and supply companies still had sufficient cash to weather the downturn. DeStefano said many of his members had diversified into other markets and sold internationally or were experienced in preparing for downturns. Some were even hiring.

Cachon added he thinks this downturn is not as dire for the local economy. “The long-term outlook still looks good. Companies have to be careful about layoffs because there still is a 90,000 gap of mining workers. We still will see some downsizing, but at Vale Inco, 30 per cent of the workforce could retire. Once the upturn happens they could go back to work and double dip, be paid on top of the pensions. That is good for the retail economy.”

One small mine operator, Ursa Major Minerals, which has an open pit nickel operation west of the city, is optimistic about the future. “Because we are open pit our costs are lower. We will be one of the first operations to start up again once prices move back up,” said Gus Garisto, media relations officer. “Fuel costs are down by half. That is a positive first step for us.”

Cachon noted that up to 40 large chain stores could locate in the city over the next five years, citing the expansion at the four corners on dozens of acres as an example. And there is stability from other sectors.

“Sudbury has become the centre of the north in the past 25 years. We have three post secondary institutions. Enrolment has grown in the past and is stable now,” he said. Past Laurentian University president Judith Woodsworth said on May 1, the university contributes $303 million annually economically
to the city. Government services have also located here, helping to diversify the economy, said Cachon.
Boom Goes Bust

  • Ursa Major announces Oct. 9 suspension of pre-production at Shakespeare Nickel open pit project near Webbwood with layoff of 40-50 employees, including contractors.
  • First Nickel announces Oct. 19 shutdown of production and layoff of 140 employees of 160 at Lockerby Mine.
  • FNX announces Oct. 21 layoff of 307 employees (59 staff and 248 hourly) at Levack Mine and suspend production ofnickel ore from its McCreedy West mine so as to concentrate on copper and precious metals instead.
  • In late November Vale Inco reduces by attrition 40 office and technical Steelworkers Local 2020 members.
  • In late November Xstrata Nickel reduces by attrition 35 office and technical Steelworkers Local 2020 members.
  • Xstrata announced Nov.13 shutdown of Craig and Thayer-Lindsley Mines, seeking early retirement for 250 employees.
  • Xstrata nickel bonus cut for third quarter.
  • Vale Inco nickel bonus reduced for third quarter.
  • Vale Inco announces Dec. 4 temporary closure of South Mine and postponement of the Copper Cliff Deep project.
  • Vale Inco announces Dec. 5 Vale Inco placements for 30 Cambrian College students cut for January.
  • Vale Inco and Local 6500 discuss Dec. 19 displacing contractors with redeployed union members.
  • Possible layoff of 1,000 members of SAMSSA by spring if conditions do not improve. Already 300 layoffs by December compounded by new Vale Inco financial system delaying payments to companies by six months.