The high cost of jobs in Cape Breton

CHRIS WOOD December 2 1985

The high cost of jobs in Cape Breton

CHRIS WOOD December 2 1985

The high cost of jobs in Cape Breton

This month the Sydney Steel Corp. (SYSCO) will fire up its coke ovens for the first time in two years, sending a cloud of smoke over the working-class Cape Breton neighborhood of Whitney Pier. It will also add sticky black tar to the 750,000 tons that already clog Muggah Creek, the narrow inlet of poisoned water running between the plant and the tree-lined side streets leading to Sydney’s Battery Point. Health officials have already blamed the pollution for the elevated rates of cancer and respiratory diseases found downwind from SYSCO’s smokestacks. And some people

in Sydney claim that the startup of the coke ovens may mean even more death and disease. But it will also produce 50 jobs. And in a region in which work has been chronically scarce, the tradeoff is accepted.

Ottawa is making a renewed effort to bring sweeping change to the historically disadvantaged region. Last spring Industry Minister Sinclair Stevens assured Cape Breton business leaders that with the unveiling of Finance Minister Michael Wilson’s May 23 budget the island had become “the most desirable place in Canada to invest.” Stevens predicted that new federal tax incentives would lead to a flood of private investment to rejuvenate a region in which millions of public dollars had been spent over the past two decades supporting failing industries.

So far, Wilson’s tax measures have produced only a trickle of new private funds to the area. Revenue Minister

Elmer McKay, standing in for Stevens who is recovering from heart bypass surgery in October, said last month that new business ventures in the region-including a $8.7-million lobster processing plant and a drapery plant expansion—would inject $10 million in new investment into the region over the next six months. Local experts said that the investment would create only 150 new jobs in a region that has the highest unemployment level in the country, with 23.3 per cent of the 68,000-member work force jobless. Said Thomas Teuwen, managing director of VISION, a group that promotes

economic revival in Cape Breton: “It’s only a drop in the bucket in relation to the 20,000 to 25,000 jobs that need to be created.”

Still, Cape Breton has clearly become a test case for __

Tory policies on regionBeale: ‘credibility’ al development. The region’s future may also provide a clear indication of whether private firms can succeed after successive Liberal governments—which directly granted millions of dollars to designated companies—failed to revivify the region. “This is the proving ground,” declared Elizabeth Beale, chief economist with the Atlantic Provinces Economic Council,

“not only for what policies will work” but

for Stevens’s “own credibility in regional development.”

Death by obsolescence has been forecast repeatedly for Cape Breton’s two biggest industries: its coal mines and the Sydney steel plant. Both were taken over by governments—coal by Ottawa and steel by Halifax—in 1967, but in recent years both industries have suffered from declining demand. As well, a fire in the spring of 1984 in one of the coal mines and another at a Glace Bay fish packing plant last January, left 2,000 people without work. Not only that, but Ottawa announced in the May federal budget that two money-losing heavy-water plants operated in Glace Bay and Port Hawkesbury by Atomic Energy of Canada Ltd. would be. closed, and 600 jobs will disappear.

A ragged handprint of rock, forest and water reaching out from the eastern tip of mainland Nova Scotia, Cape Breton is marked by scenery that makes it a popular summer tourist destination. But the island’s spectacular natural beauty overshadows I the area’s endemic povg erty. Typically, the main t street of Port HawkesZ bury on Cape Breton’s S south shore is an unfocused commercial strip

where vacant lots and a

used furniture exchange separate fastfood restaurants and down-at-theheels shopping plazas.

The strain on the island’s social fabric is reflected in the growing demand

_ for social worker Marie

MacAdam’s one-woman crisis counselling service at Sydney’s St. Rita Hospital. Alcoholism, drug abuse, family violence and suicide are among the worst problems. “In the past 10 years it’s gone steadily downhill,” said MacAdam. “In the past five it’s been awful.” In one recent 18-month period mental health workers recorded more than a dozen suicides in the neighboring communities of Sydney Mines and North Sydney. Still,

efforts are being made to lighten the oppressive atmosphere. Author Silver Donald Cameron is planning a threeweek arts festival to be held in Baddeck next summer and hopes to attract such world-class musicians as Joni Mitchell as well as lesser-known regional talent.

Experts familiar with Cape Breton’s long economic decline are skeptical that Prime Minister Brian Mulroney’s government strategy for revitalizing Cape Breton’s withered economy will succeed. Under Wilson’s budget proposals—which have still not been passed by Parliament—businesses may claim a tax credit equal to 60 per cent of eligible investments in Cape Breton against income earned anywhere in Canada. Combined with other incentives offered by Stevens’s department of regional industrial expansion (DRIE), the tax measure effectively reimburses investors by up to 84 cents of every dollar invested in Cape Breton. But Glace Bay’s Lome MacLeod, Nova Scotia president of the Canadian Union of Public Employees, described Ottawa’s measures as “more of the same old game of vague promises, short-term Band-Aid solutions and temporary jobs.”

Since May DRIE’S Halifax office has been receiving an average of 12 inquiries a week. According to Robert Boutilier, DRIE’S director of operations for Nova Scotia, “We’re working on about 50 that could translate into plants.” Until recently, only two small expansions, worth less than $500,000, by existing Cape Breton firms could be traced to the incentives. As well, Magna International Inc., a Markham, Ont., auto parts maker announced in July that it would build factories in Cape Breton employing 240 people. But Magna’s investment was conditional on additional federal assistance with transportation costs, which so far has not been forthcoming.

In the meantime, McKay has indicated that Ottawa is considering the recommendations of a task force made up of business and community leaders on the area’s economic prospects. In September the committee said that tax incentives were ineffective and it urged instead that Ottawa spend as much as $600 million over the next several years to stimulate the region’s economy. Among other proposals, the committee urged Ottawa to support a variety of public works projects ranging from forestry to modernization of the Sydney Steel Corp. Said Teuwen: “We expect to hear something when Stevens gets back on his feet.” For the people of Cape Breton Island, that cannot be too soon.

CHRIS WOOD in Halifax