Editorial Paying for municipal services

Mining has been good for the north, but as mines develop it is often difficult to ensure the north keeps its share of the wealth mines generate.

Money spent on wages and services are generally recirculated through the communities in a fairly efficient manner. Many equipment manufacturers are located in the larger centres, but communities like Sudbury, Ont., and Thompson, Man., manage to gain the benefit from those companies’ prosperity, too.

A persistent problem has been the welfare of the communities themselves. Mines are seldom found within municipal boundaries and therefore are not subject to municipal tax assessment. Nevertheless, those communities have to provide a whole spectrum of services largely for the benefit of those mines.

Hemlo is a good example. The communities of Marathon, Manitouwadge and White River house the employees working at three very large mines. The communities had to absorb a large influx of residents in a very short time, provide services such as road maintenance, garbage collection, snow removal, recreational facilities, fire protection and others. Yet the mines are 30 miles or more beyond the municipal boundaries and therefore the communities couldn’t assess them in order to collect taxes.

In effect, the communities had to provide the services but couldn’t collect the money.

The City of Timmins, Ont., found itself in such a situation when Texasgulf discovered and developed the Kidd Creek orebody in the 1960s. Special provincial legislation was passed to expand the city’s boundaries in order to include the mine and the metallurgical site within the city. That created the largest geographic municipality in North America — 36 townships covering 198 square miles. Some of those townships have no residents and no road access, but they’re still part of the city. Some smaller communities such as Schumacher, Porcupine and South Porcupine were absorbed into the enlarged City of Timmins, thereby losing their separate identities and fostering an antagonism that continues to this day.

In larger, better established mining communities, such as Elliot Lake and Sudbury where the mines are actually within the municipal boundaries, assets that are underground and surface assets required to hoist ore are not assessable for tax purposes. Not only does that give the municipalities a much thinner tax base, it also means their tax base is declining as more and more facilities such as garages and repair shops for the mines are moved underground. There have been efforts to avoid some of these difficulties. In Ontario, for example, a system of provincial grants of one form or another has been in effect for years as a means of transferring to the municipalities revenue that the province raises by royalties, income tax and corporate tax.

But it is an unwieldy system. The municipalities are never too sure just what formula the province uses to determine the level of grants. They are never sure from one year to the next whether the grants will continue nor are they sure how much money will come from the grants from year to year if they do continue.

Mining companies have never objected to contributing their fair share to benefit northern communities. In fact, they are often model corporate citizens providing as many services and facilities as they can. Manitouwadge is an example of how a company — Noranda in this case — can create a community that many are proud to call home.

Neither do the provinces want to shirk their responsibilities. However, municipalities clearly need greater control over collecting the revenue needed to maintain the quality of life in northern communities.

Perhaps a grant system is the only viable solution. If so, it should be enshrined in legislation, not left to the whim of government regulation. And the municipalities themselves should be guaranteed some input into the process of deciding what kind of grants might be best and how many dollars the grants should include.

The Ontario government has shown some leadership here. Premier Peterson has vowed to find a satisfactory solution by the end of this year. Government representatives have, in fact, visited mines in Elliot Lake and Sudbury to see the situation, first hand.

It’s not a problem that will be solved overnight, but the Ontario government has done well to move on it promptly. Northern communities are enjoying good times today, but they’re the ones who have to live through the downside of mining’s cycles. It’s tomorrow they’re concerned about.