A vote on a letter of understanding (LOU) with Vale Canada regarding municipal tax and funding arrangements for 2022-2025 that was scheduled to take place at the Feb. 28 Thompson city council meeting was removed from the agenda and will now be voted on later, likely this month.
An amendment to remove the item from the agenda was approved by council at the outset of the meeting on Monday.
“We’re anticipating further information from the granter and I recommend bringing it back [to a] meeting late March,” said city manager Anthony McInnis, who suggested the last-minute agenda change.
A memo to council from McInnis, originally dated Dec. 3, 2021 and updated Feb. 25, said discussions about the LOU between the city, Vale and the School District of Mystery Lake have been going on over the last several months and that the agreement has been approved by Vale’s board of directors. The memo also said that the agreement has been finalized and that council has been kept informed about it at in-camera meetings, though it did not provide a dollar figure indicating how much Vale Manitoba Operations, whose facilities are located outside of Thompson city limits, will pay in lieu of municipal property taxes though what is known as a grant-in-lieu.
In September, Mayor Colleen Smook and then deputy mayor Kathy Valentino were chosen as members of the team responsible for negotiating the deal with Vale, along city councillors Brian Lundmark, Andre Proulx and Les Ellsworth.
The minimum amount Vale is required to pay is set out in the 1956 agreement between Vale’s precursor Inco and the province of Manitoba based on the number of workers employed at the company’s Thompson operations. The practice has been to negotiate an amount above and beyond that minimum.
Vale had more than 1,300 workers on their payroll at the end of 2017, just before the previous four-year grant-in-lieu agreement was finalized, but cut more than 400 jobs over the course of the next year, with the smelter and refinery closing permanently in the summer of 2018. In 2020, 143 positions were cut in Thompson as a result of a comprehensive organizational review. United Steelworkers Local 6166, which represents hourly Vale workers, now has fewer than 600 members.
The grant-in-lieu agreement that expired at the end of 2021 saw the City of Thompson receive $14.4 million over four years – $4.8 million in 2018 and $3 million in each of the next three years along with a $600,000 voluntary payment in 2019. That was nearly $10 million less than over the last four years in the previous five-year agreement, which saw Vale provide the city $6 million per year.
Vale has recently made a pair of cash contributions to the city and associated entities, including $125,000 for the city to purchase asset management software and $250,000 to the Thompson community wellness and public safety committee for a new shelter in place program (SHIPP) at the former University College of the North campus building that will eventually house a sobering centre.
