Mayor visiting Vale Inco head office in Brazil

BY BILL BRADLEY

Mayor John Rodriguez will meet with senior executives at Vale head office in Brazil this week. The purpose of the trip is to build stronger ties with Greater Sudbury’s largest private sector company, stated a City of Greater Sudbury news release.

Rodriguez will visit Vale operations in Vitòria and Linhares, Brazil and will meet John Carlos Coser, mayor of Vitòria.
However, Rodriguez will not be asking Vale for more help with the city’s municipal infrastructure.

“The company pays mining taxes to the province, not to us, except for property taxes. What we want is a bigger share of the province’s take,” said Rodriguez in an interview Monday with CBC Radio.

The mayor will also not be asking Vale to slow down on its downsizing and demolition of above ground facilities, which can be taxed by the city.

In the City of Greater Sudbury the major mining company’s share of the city’s property tax levy has fallen from 25 percent in 1970 to 6.5 percent in 2005, according to a report presented to city council Feb. 27.

The report said municipalities have, for decades, petitioned the provincial government for a payment in lieu of the fact they cannot tax underground infrastructure.

Jose Blanco, former vice-president with Inco, said in his presentation of the report to council that tough times in the late 1970s and ‘80s forced his company to cut costs to survive; laying-off many workers and demolishing buildings that were no longer needed.

“If it makes economic sense for them to tear those buildings down then I cannot blame them for doing so. It means our property tax share is declining but we are after more of the province’s share of the taxes,” said Rodriguez.

Some mining analysts think Rodriguez should be using the trip to ask for a better deal.

“If Rodriguez is going on a junket to Brazil why not confront the company on the extra costs the company is causing to local infrastructure like roads,” asked Joan Kuyek. She is co-ordinator of Mining Watch, a non-profit organization based in Ottawa. Kuyek said mining companies do not pay a lot of taxes to the province as it is.

“A study by the Ontario Mining Association indicated the mining industry in Ontario paid $131.9 million in taxes on gross sales of $4.082 billion in 2003. The royalty looks high but after all the deductions a Price Waterhouse presentation in 2006 pointed out they paid a rate of 4.9 percent,” said Kuyek.

Cities with nearby mining activities across Canada are grappling with increased pressure on city roads and other infrastructure, said Kuyek. The trip to Latin America  is being paid for by the city and will cost taxpayers $15,000 for the mayor, the head of the economic development department  and another staff person.