With Steel Going Soft - How Can a City Like Sault Ste. Marie Survive?

Last Thursday - civic leaders in Sault Ste. Marie delivered a stark and sobering message - if they are not paid the 26 million dollars owed to the city in property taxes by the financially strapped Essar Steel Algoma - expect 'draconian' alternatives for residents.

Draconian may seem harsh, but Essar's levy represents a quarter of all property taxes the northern municipality takes in.

Citizens could see many changes, and none of them good.

They include:

Laying off at least 80 to 150 employees (representing 20 per cent of city staff).

Seriously reducing if not altogether shelving infrastructure projects which could put federal and provincial funding opportunities at risk.

Borrowing to make up for the past, current and future shortfalls.

Or a tax increase of up to 20 percent.

Each option is a bad one.

But what does this say about cities that rely on one industry or source of revenue for most of its taxation? Is Sault Ste. Marie a victim of a one-trick economy? Is Essar Steel Algoma, which is a subsidiary of a global and multi-billion dollar steel empire simply strong-arming local governments? And in the past, Ontario's auto-industry has seen bailouts and support by Queen's Park - is that an option?

There are many questions and scenarios, and that is where Cambrian's experts can help.

Jari Sundholm is a Professor of Business at Cambrian College. He has worked and taught in both Canada and Europe over the last 20 years and is an expert in the fields of international business, economics, and operations management. Jari is available to speak with media regarding this very important subject regarding Sault Ste. Marie and Northern Ontario's economy. Simply click on his icon to arrange an interview.

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