Canadian Mining Town [Sudbury] Hits Bottom – by Michael T. Kaufman (New York Times – August/1984)

This article was originally published in the New York Times on August 13, 1984.

SUDBURY, Ontario, August 13, 1984 – the Manoir Bar sits on the floor of a valley that was gouged out by a meteor millennia ago. Until two months ago the men drinking in the Manoir worked for two large companies and earned some of the highest industrial salaries in Canada digging and processing the ore churned up by the meteor.

Now, over beers, they tried to explain to themselves and to a visitor how this recently prosperous city had become the place with the highest unemployment in Canada, in the northern hemisphere and, some said, in the industrialized world.

Last month the two giant nickel and copper companies around which ;this city of 135,000 grew, shut down operations and furloughed their workers because their stockpiled supplies far exceeded the demands of industrial users in the United States and Europe.

The 1,250-foot stack at Inco, which in flush times propelled acetic smoke all the way to Nova Scotia, now stands dormant like a stele from a lapsed civilization. The 13,000 miners and mill workers who in recent years have earned salaries averaging from 20,000 to 40,000 Canadian dollars a year, or about $16,000 to $32,000, are either using up the last of their vacation pay or are living on $200 a week in unemployment benefits, so called poky checks.

The Problems Are Awesome

In statistical terms, the problems here are awesome. The data-collecting branch of Government reports that unemployment in Sudbury stands at 21 percent of a workforce of 62,000, compared with the national figure of 10.9 percent. But Mel Soucie, the chief regional economist for the Employment and Immigration Division of the Federal Government, says that since this tabulation does not count those who are still technically receiving vacation pay but who are jobless and without immediate prospects of work, the real figure is 40 percent.

“I can see it going to 50 percent before the end of the year.” Mr. Soucie said in an interview in his office, “and the only thing that can reverse the trend is a drop in the interest rate in the United States, which I can’t see taking place no matter how much we might wish it.”

But in contrast to the dismal statistics, the mood at the Manoir Hotel was surprisingly jubilant if a bit bewildered.

“Hell man, its still summer and most of the men are enjoying their fishing and their beer,” said John Gignac, a young miner and former labor leader who was being kidded for having brought a new video recorder last week. Like many people here, Mr. Gignac is a second-generation miner and has pride in his community.

“We’re kind of a joke in Canada with a lot of people coming and writing things about the desolate moonscape and the slag heaps like we were the armpit of the continent,” said Mr. Gignac. “This is a fine place with all kinds of people cooperating – Italians, Ukrainians, French Canadians, Finns – and I like living here and I hope my three kids will live here when they grow up.”

‘Nothing Wrong With Sudbury’

“There’s nothing wrong with Sudbury,” he said. “What’s in a mess is the economy, not just here but around the world.”

“You blame the world economy but I got to blame the companies and the Government,” interjected Andy Artindale, who has worked for the last 14 years for Inco, the larger of the two companies.

“I know they are in trouble and had to shut down but they invested a lot of millions in operations in Guatemala and Indonesia that they’ve had to put in mothballs,” Mr. Artindale said. “They made the money here and they made stupid investments elsewhere. They should have put the money back here where it was made and doing something to diversify away from this one-industry situation.”

“You know, I don’t exactly love management, Andy, but how does the guy who miscalculated the world metals market differ from one of our sucker friends who went ahead and sighed a mortgage that he won’t be able to meet now?” asked Mr. Gignac.

Bad to Worse to Awful

“The difference is that the guy that miscalculated on the mortgage only hurts himself and his family while the company’s mistakes hurts all of us and the guys who made it are probably still going to be eating pretty good restaurant food in Toronto,” replied Mr. Artindale.

“You got a point,” said Mr. Gignac.

Actually, both Inco, which for years dominated the world nickel market, and the somewhat smaller Falconbridge Nickel Mines Limited have suffered cuts in their administrative staffs as things turned from bad to worse to awful.

Not only has the worldwide recession cut the demand and the price of nickel and copper, but in the case of Inco the at least temporary writing off of its investments in Guatemala and the losses from a venture involving the manufacturing of batteries in the United States resulted in the company reporting a net loss in 1981 of $469.5 million, the first loss in 50 years. The company’s debt has grown to $1.35 billion. Falconbridge, which used to employ some 4,000 workers here, is losing less but also has enormous fixed costs while earning no income.

One of those sharing the beers was Mick Loewe, a Nebraska native who came to Canada to avoid military service in Vietnam and stayed on to become a citizen. He lives in Sudbury where he works as a freelance writer. “You know,” he said, “Sudbury is really a microcosm of the Canadian economy. Sudbury is what people mean when they tell you that Canada is part of the third world, exporting raw materials to markets whose prices fluctuate beyond our control or influence.”

No Remedies Seem Possible

Mr. Loewe, who calls himself a Marxist, echoed the views of Sid Forrester, a spokesman for Inco, and Mr. Soucie, the Government economist. Mr. Forrester emphasized that in the current crisis there was nothing either management or labor could do to improve the situation.

“The point is,” said Mr. Soucie, “that here in Sudbury we are far more integrated with the U.S. economy than with the Canadian economy. In Canada generally we can’t have any monetary policy of our own that could offset or counteract the decisions of your Federal Reserve Board.”

In the suburban tavern, the conversation was clearly less pessimistic. The men conceded that they were protected to a large extent by the cushion of social welfare benefits that are far more extensive than in the United States. Almost all the idle workers are entitled to at least 52 weeks of unemployment checks of $200. In addition, Inco and Falconbridge are paying about $50 a week in supplemental payments to the furloughed workers. Then there are the child welfare payments that are paid by the Government to all parents. A family with  three children may receive as much as a $100 a month in such grants. For the old and the poor there is a system of rent subsidies and the elderly have their municipal taxes paid by the Federal Government.