A Refined Argument: Report of the Advisory Panel on Municipal Mining Revenues – Produced by the City of Greater Sudbury

(Following from Feb/27/2008 City of Greater Sudbury News Release)

In March 2006, the City of Greater Sudbury set up a ten-member Advisory Panel on Municipal Mining Revenues chaired by former Inco vice-president José Blanco. The resulting 64-page report, released in February, 2008, called on Council to, ‘invite the Province of Ontario to enter into negotiations with the city to establish a resource revenue-sharing framework that will ensure a predictable and sustainable revenue stream for the municipality.”

The panel notes that in 1970, major mining companies accounted for about a quarter of local property taxes. By 2005, the mining companies’ share of municipal property tax levies had fallen to just 6.5 per cent.

‘This is a very complex, multi-layered story in which there are no bad guys,” said panel chair José Blanco. ‘The panel members believe it is critical that we learn from the past but look to the future. Our report refines the argument as to why Greater Sudbury should receive compensation for the pivotal role our municipality plays in supporting mining and processing activities in this, the premier urban mining centre in the world.”

The report goes on to say that between 2001 and 2005, municipal property tax revenues from the city’s mining operations declined by 4.5 per cent–a loss of some $20 million over the five years. During that same period, provincial tax revenues from the mining industry grew by 110 per cent. For the federal government, the increase was 78 per cent.

The report outlines a clear and consistent tradition of provincial financial support for the unique needs and valuable contributions of mining communities, dating back almost a century.  As a result of the provincial government’s implementation of the Local Services Realignment in 1998, however, the city lost some $7 million in provincial grants. In the 10 years following realignment, the accumulated loss in revenue amounts to some $80 million, says the report.

‘The City of Greater Sudbury provides much of the valuable infrastructure that give our mining companies their competitive edge,” said Greater Sudbury Mayor John Rodriguez. ‘Roadways are an obvious example. But beyond this, we’ve built a city where talented people want to come to live, work and play. For our city and the companies that are located here to remain competitive, we need to keep investing in our municipal infrastructure. I commend the panel for making such a compelling case for why the province will want to partner with us in securing this city’s future.”

The report notes there are precedents for such revenue-sharing arrangements. Examples include a 1998 memorandum of understanding between the Province of British Columbia and the Peace River Regional District and an Impacts and Benefits Agreement between the Voisey’s Bay Nickel Company–a wholly owned subsidiary of Vale Inco–and the Innu of Labrador.

Members of the panel include: José Blanco (chair), former Vice President of Inco Ltd., City Councillor Joe Cimino (Vice Chair), Floyd Laughren, former Ontario Minister of Finance, Denis Hubert, Collège Boréal President, Sylvia Barnard, Cambrian College President, Cathy Modesto, Surintendente d’affaires et des finances du Conseil scolaire catholique du Nouvel-Ontario,  Ron Mulholland, Laurentian University Associate Professor (Faculty of Management), Ryan Minor, Chartered Accountant, Leo Gerard, International President of the United Steelworkers of America and André Dumais, Bestech Marketing Manager.

The entire report can be found at: A Refined Argument: Report of the Advisory Panel on Municipal Mining Revenues

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