Wabush facing hefty deficit in wake of mine closure

The Town of Wabush says it's short about $600,000 in revenue this year, largely because of the collapse of Wabush Mines — but also because of a tangle with a Crown corporation. 

But the town is also short because it can't tax assets that are now controlled by Nalcor Energy, connected to a pioneering hydroelectric project in Labrador. 

The town — which was founded around the iron ore mine that closed last year — is owed about $500,00 from properties owned by Wabush Mines. 

Mayor Colin Vardy said the town is also dealing with a financial blow connected to the old Twin Falls power plant that was built decades ago to help launch the mining industry in western Labrador. 

The water-based assets of Twin Falls now flow to the Smallwood Reservoir, and have wound up under Nalcor's control. 

"Everybody knows that the town has a balanced budget, so when $113,000 goes missing in revenue, it has to go missing in expenses too," Vardy told CBC Radio's Labrador Morning. 

The money is now considered unobtainable because Wabush, as a municipality, cannot tax a Crown corporation. 

Lost revenue

Vardy would like to see the town compensated by the Newfoundland and Labrador government in lieu of the lost revenue. 

We're just looking to be treated fairly like everybody else- Colin Vardy

"[These are] several blows that we've been dealt in a very short period of time," Vardy said. 

"We know that in other communities when the exact same thing happened, like Bishop's Falls, when the asset got transferred over to the province, they received some compensation," he said. 

"We're just looking to be treated fairly like everybody else." 

Vardy said the province has told the town it will not be reimbursed for the lost revenue.

Wabush is receiving about $3.8 million in compensation from the provincial government due to the closure of Wabush Mines, although Vardy said that's a completely separate issue.