Mine closure would leave giant hole
Tax money and payroll would be sorely missed if Con and Giant shut down

Dane Gibson
Northern News Services

NNSL (Mar 12/99) - Yellowknife's school infrastructure, the arena, swimming pool, and ball parks. Mayor Dave Lovell says look around, and you'll find much of our municipality was built on direct taxes paid by Giant and Con mining operations.

What Lovell doesn't want to see is a midnight run that burdens taxpayers with a $250-million environmental cleaning bill and five per cent of the town hitting the road or unemployment line.

"We get $500,000 a year in taxes (from the mines) and we have very few expenses attached to that," Lovell said.

"If we lose $500,000 out of our revenue base there's no associated expenses that will leave with that money. The municipal taxpayer will bare the burden of that."

He said estimates to clean the environment up after Giant closes is around $250 million. The liability that represents will be easier to collect if the mine is operating. Otherwise, it will be up to the federal government to deal with.

Exploring ore bodies already identified and discovering new sources of ore may be the only ways to extend the life of the mines.

"The fact is the only reason Giant will continue to operate is if they can turn a buck," Lovell said.

"I believe they're marginally profitable now but in order to keep going they'll have to keep developing."

Currently, the GNWT and the city jointly sponsor a program that gives money to Royal Oak Inc. to extend the useful life of the mine. The GNWT contributes $5,000 per employee, the city $500.

Giant Mine didn't pay its taxes this year which further complicates the situation.

"The hook city council is on right now is whether to say that (Royal Oak) owes us money so we can't give them any or to say we need this mine to operate for the benefit of the community," Lovell said.

"Economic development depends on attracting new business but your first line of defense should be your existing businesses."

Lovell is the first to admit the mines can't last forever but says neither should they leave a community suddenly. Con and Giant together employ around 400 people. Closure means 50 or 60 less families in Yellowknife, 50 or 60 more houses on the market, fewer consumers and a smaller tax base.

"What I'd like to see is an orderly shut-down over a number of years and I'd like to see a phasing out plan that addresses the environmental issues at the same time," Lovell said, adding it's not all "doom and gloom."

"They don't represent 60 per cent of the workforce, they represent five. Our economy is diversifying, but I've always thought the change would be gradual. If a shut-down occurs overnight, it will have a real and immediate impact on this community."