Bruised businesses feeling the sting of Lab West downturn
Small business owners in Labrador City and Wabush are being bruised and battered by the economic calamity that is blanketing these one-industry towns, and some have already fallen victim to the downturn in iron ore prices.
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If you're peddling hotel rooms, alcoholic beverages, office space, all-terrain vehicles and more in Lab West, chances are you've had better days.
There are plenty of grim stories to be told, like the one involving Julie Cayouette and her business, Sweet Sensations.
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The little chocolate and sweets boutique in Labrador City is closing its doors in May. The store also specializes in home decor and kitchen items.
Cayouette purchased the business three years ago, hoping it would allow her more flexibility with raising their young daughter.
She also hoped to carry on the legacy began by the previous owners, and one day to pass it on to her own daughter.
"In all seriousness, I've cried a lot in the last little bit," said Cayouette.
"It's something I grew to be very passionate about. I love this store."
Struggling to cope
Sweet Sensations is just one of the casualties of the bust that is hammering Lab West.
Jenine Janes, an accountant originally from Bonavista, is also a victim of the downturn.
Her business exploded over a 10-year period. She outgrew several offices, and finally decided to construct an 8,000 square foot professional building worth $2 million.
In all seriousness, I've cried a lot in the last little bit. It's something I grew to be very passionate about. I love this store.- Julie Cayouette
When she started the project a couple of years ago, businesses were lining up to rent space, but then the bottom dropped out.
A dentist had negotiated a lease to occupy a portion of the building. Only a signature was needed to cement the deal, but it fell apart at the last minute.
She said it was her first "Oh my God moment," and it cost her a $700 legal bill.
Since then, she's had many more "Oh my God moments" as she struggles with the possibility of having to walk away from it all, or try and weather the economic storm.
No mood for partying
It's much the same story for Ann Augot, owner of the K-Bar in Labrador City.
People in this area are known to work hard, party hard and spend lavishly when times are good.
But that's not the case anymore. The spending spree started to slow down more than a year ago, and the area suffered a major blow when Wabush Mines closed in 2014. Bloom Lake, another iron ore mine across the border in Quebec, also fell silent.
The axe fell again earlier this month when the Iron Ore Company of Canada, owner of the last operational mine in the area, announced 150 layoffs.
The K-Bar has long been a draw for those looking to celebrate. During the boom years, lineups were common, with up to 400 people crowding the bar every weekend.
Since last fall, however, activity has been sliced in half, said Augot.
She said those who have lost their jobs are in a financial no-man's land, while many of those lucky enough to still be employed are saddled with hefty mortgages.
She said the cost of living in an isolated area of Labrador is also taking a toll.
Augot said if things don't pick up in the next couple of years, she may be forced to close her business.
Lonely and worrying times
It's a startling possibility for many business owners. Making it all the more troubling is the depths to which the area's economy has fallen in recent years.
There was a time when Lab West was making headlines for different reasons. There were labour shortages, a housing boom and impressive amounts of iron ore being scraped out of the ground.
The vacancy rate was practically non-existent, and in some cases, people were moving to their cabins and renting out their homes for thousands of dollars every month.
For Elaine Philpott, manager of the Two Seasons Inn in Labrador City, those days seem so long ago.
"A year ago to make a booking you needed to book at least two to three months in advance to get a room. Right now, you can just walk in and get a room anytime," said Philpott.
And if you're in the business of selling high-priced recreational vehicles such as snowmobiles and ATVs, these can be lonely and worrying times.
Until Wabush Mines actually closed, then I think people just sort of wanted to believe the best and not the worst. So therefore, when they did close, it was devastation absolutely.- Elaine Philpott
Activity at businesses such as City Auto Parts in Labrador City and Hewlett Minpaco Ltd. in Wabush has tailed off.
Both companies have laid off some employees, and more may be cut loose soon.
Philpott said it's hard to remain upbeat.
"Until Wabush Mines actually closed, then I think people just sort of wanted to believe the best and not the worst. So therefore, when they did close, it was devastation absolutely.
"I think you realize that, OK, we're in a mining town and I guess Wabush Mines closed, Bloom Lake closed, so I guess IOC can close as well. No matter what, everything relies on the mines here," she said.