Labrador City budget delayed for a month

It will be another month before the Town of Labrador City adopts an operating budget for 2016, Mayor Karen Oldford confirmed Monday.

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Budget deliberations have always been trying times … but this is different times.- Karen Oldford

The town's budget was expected to be released Friday, but Municipal Affairs Minister Eddie Joyce has granted the town an extension until Jan 31.

"We were really getting down to the wire and recognizing that we were really rushing some of the processes and we needed a little bit of extra time," Oldford told CBC's Labrador Morning Show.

She said the town has been diligent trying to finalize the budget, but with the changing economy it was necessary to meet with officials from the Iron Ore Company of Canada (IOC), and it was evident that wouldn't be possible until the new year.

Major Contributor

We need ensure our business is here for the long term … because everything that they do affects us and vice versa.- Karen Oldford

Oldford added that IOC, which operates the iron ore mine, is the largest single employer in Newfoundland and Labrador and is a huge contributor to the town.

Since the company is outside the town's boundaries, it is not directly taxed but the grant in lieu of taxes make up around 35 per cent of the annual operating budget.

"I mean we're all following commodity prices and recognizing the drastic impact that it has on a business," said Oldford, adding they need to get a handle on IOC's future plans.

"We need to ensure our business is here for the long term … because everything that they do affects us and vice versa."

The town has a contract which compels the company to pay a grant each year, and Oldford said there was never any concern that the money wouldn't come through.

She added that while regular meetings with IOC are common, usually every quarter, they weren't able to meet in December but doesn't anticipate any problem meeting the Jan. 31 deadline.

Challenging times

We do have to be mindful of every penny that we spend.- Karen Oldford

Oldford said these are challenging times and the town will be dropping it's mill rate to offset assessments that are up around 30 per cent.

The town tried to skip the assessment cycle but legislation would not allow for it.

"We recognize that the assessments were done at a time based on a boom and certainly that's not the case here in Labrador west now," she stated.

She added that changing the mill rate will affect people differently depending on their assessments.

"Budget deliberations have always been trying times ... but this is different times," said Oldford, adding the town is really looking for sustainability in its planning.

"We do have to be mindful of every penny that we spend."

Oldford is hopeful that the Bloom Lake mine re-opening will be a benefit for Labrador West.

She is cautious because there's no control over commodity prices, but will continue to work with the provincial government to improve policies and legislation that will protect people working in communities like hers.

"It's time now to have a good hard look at what can be done."