Labrador West bracing for economic fallout from IOC strike
'This is just a part of being a one-horse town,' says former Wabush mayor Colin Vardy
Just as Labrador West is recovering from a slump brought on by low iron ore prices, businesses in the area are facing another potential downturn caused by a work stoppage at one of the largest employers in the province.
"It's kind of just 'bunker down, watch every penny and just hope the money doesn't run out before the clock stops ticking,'" former Wabush mayor Colin Vardy told CBC.
The strike is now in its second week and there's no resolution in sight. Despite the strike's potential financial toll, workers voted over 90 per cent in favour of it over changes the company wanted to make to their contract. Now the region is in a position where 1,300 workers may soon see their salaries disappear, replaced by $350 a week in strike pay.
'Unfortunately, there are businesses in town that have put all their eggs in one basket and that's IOC."- Colin Vardy
Since Vardy left politics, he's devoted his time to building up his business, which benefits from sales to contractors that deal with IOC. He says he's already seen a drop in business.
"Our reserves are fairly small so the ability for us to weather a storm is much less than a big company but we'll be OK. We'll be around afterwards."
'One horse town'
"This is just a part of being a one-horse town when people are negotiating contracts," Vardy said.
"I think the hardest part this time around is we were just recovering from the crash and there's not a lot of financial reserves around."
Vardy says the economic impact will really start to kick in in the next two to three weeks if the strike continues. He has branched out, though; in anticipation of the strike he took on a janitorial contract with the government.
"We're in a lucky position. That will help float us through the next little while," Vardy said.
"Unfortunately, there are businesses in town that have put all their eggs in one basket and that's IOC so it could be much harder for them than it is for us."
Wait and see
Labrador West is used to the ups and downs of a cyclical economy, said Chamber of Commerce president Toby Leon, but there's no denying the work stoppage is having an effect.
"At the end of the day it's still lost income, and things are slow in town," Leon said.
"Businesses know how to contract and expand fairly quickly but you plan to use your staff as best you can, you get some housekeeping done in the short-term … and you start to plan about what happens if if goes on any longer."
Hope for the best
Labrador CIty Mayor Wayne Button, who runs a chiropractic clinic in town, says there will be a big effect on his business.
"I expect a 40 to 50 per cent drop off rate in my business," Button said. "There's already been a few patients that can't afford to come here and their insurance is actually cut off right now so I understand that."
Button, who describes himself as an optimist, is holding out hope the two sides can come to an understanding.
"There's only one or two issues that they're really far apart on so if they can get back to the table and work that out, this can be resolved pretty quickly," Button said. "Let's hope that's what happens."