Devastating Mill Shutdowns: What Can Towns Like Mackenzie Do?
By Peter Ewart & Dawn Hemingway
Thursday, June 12, 2008 04:03 AM
Prince George, B.C. - Few towns can take the kind of shocks that Mackenzie, British Columbia, has been hit with over the last year. With the June 11th announcement from Canfor Corporation that its last mill will close its doors this month, every major mill in town has been shut down. Some people estimate that the unemployment rate in the town is approaching 80% or 90%. Clearly, this town of 4200 is in a crisis situation.
But the people are certainly resilient, and this was demonstrated on May 23 when over 1000 people attended a “Save Our Community Rally” in the town. But, as was pointed out by speaker after speaker at the rally, resilience and optimism are not enough. Without major governmental assistance, no town can take these kind of hits without being severely impacted. The equivalent situation down South would be 400,000 or 500,000 people suddenly losing their jobs in Vancouver, and one can only imagine what political and economic chaos would ensue if that happened.
When medical personnel come on to the scene of an accident, one of their immediate tasks is to stabilize the person or persons who have been injured. This can mean stopping any bleeding, hooking up an intravenous to provide the patient with fluids or blood, and so on.
It is the same thing with a town like Mackenzie – the town has to be “stabilized” immediately to stop further deterioration of its economy. Yes, long range plans are important, but when the “patient” is lying on the ground and bleeding profusely, this must be focused on today, not next month or next year.
What does “stabilization” mean for Mackenzie and other forestry-based towns that are facing similar situations? It is not that complicated, although there are those in Victoria and Ottawa who often seem to make it so.
There are two things that need to be done. The first relates to wages and income, and the second is about infrastructure.
Wages and incomes are the “blood” of any community. It is how people keep themselves and their families alive, with food in their bellies, a roof over their heads, and so on.
But it is not just the workers and their families that are kept alive. Local businesses depend upon these workers to keep on buying goods and services. When the income of workers is cut off, everyone in the town sinks.
Now, there is a federal program that has been in place for many years and that is supposed to assist workers when they lose their jobs and incomes. It has been called “Unemployment Insurance” and other names in the past, and is currently called “Employment Benefits” or EI Benefits.
Workers and employers contribute money into the EI Benefit fund every paycheck. Over the years, this fund has mushroomed into the colossal amount of over $54 billion. Critics say that the reason so much has been accumulated in this fund is that government has made it too hard for many workers to access. In any case, successive governments have taken large amounts out of this fund to spend on other things, unrelated to loss of employment.
However, despite the $54 billion surplus, the current EI benefits program does not adequately address the situation that many workers face, including and especially those in towns like Mackenzie. For one thing, many workers in the town who were laid off last year have reached the end of their EI payments. Many more will be cut off in the next few months. The fact of the matter is that EI benefits do not last long enough to deal with a crisis situation like Mackenzie faces.
In the past, the federal government has made exceptions to its EI rules by lowering eligibility requirements and extending benefits for workers in certain regions of the country (Maritime provinces) and certain industries (Maritime fisheries) that have been in crisis because of massive unemployment. As was called for in the May 23 rally, now is the time for the Federal Government to create a special designation for communities like Mackenzie, Fort St. James, and others that have suffered catastrophic job loss, and extend benefits for two more years or until the downturn in the forest industry eases. This will ensure that money continues to flow through the veins of the local economy.
The second “stabilizing” measure that needs to be put in place in towns like Mackenzie has to do with maintaining infrastructure, such as medical, educational, social services, transportation, communication, utilities, and so on.
It is well known that the shutting down of mills has a ripple effect on a community’s infrastructure. For example, the municipal tax base is eroded, as is that of the regional district, thus causing the cutting of services. People leave and the community is depopulated, resulting in provincial government grants being reduced, more people laid off, and so on, in a never ending downward spiral, somewhat akin to the dangerous state of shock an injured person can fall into.
In today’s world, no community can survive without modern infrastructure. If that infrastructure is not there, many current residents will have to leave. In addition, it will be hard to attract new people, as well as new businesses and industries. That is a simple fact. Thus, in a time of catastrophic job loss, such as is now happening in Mackenzie, maintaining infrastructure is a central task for the survival of the community.
The May 23 rally put forward a resolution calling for the provincial government to maintain infrastructure at levels that were in place before the plant shutdowns happened. This means not reducing transfer funds to schools, hospitals, etc. because of population loss, as well as not closing any provincial or federal government service or facility. It also means providing funds to make up for any tax shortfall that the municipalities and regional districts experience because of mill closure or businesses and residents leaving..
Mayors, municipal councils, community leaders and residents should not hang back from demanding from government these two “stabilizing measures,” i.e., extending EI benefits and preserving infrastructure. When a productive, hardworking community like Mackenzie is injured, it is the job of senior levels of government to provide assistance; otherwise what is government for? Such communities have contributed hugely to provincial and federal government revenues over the years. Now it is their turn, and that point needs to be made loud and clear.
Peter Ewart is a writer and instructor, who lives in Prince George, BC. He can be contacted at peter.ewart@shaw.ca .
Dawn Hemingway is a university professor, also based in Prince George, BC.
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Posted by: RUEZ on June 12 2008 6:10 AM