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REPORTING · 19th October 2010
Walter McFarlane
Last week, we received a letter from Steve Connolly Read it Here comparing Kitimat and Elliot Lake. The full version is found on our webpage The following are excerpts from the letter focusing on the most relevant points.

During the second week of September 2010, I had the opportunity to participate in a ‘Discovery Tour’ of Elliot Lake. Previously in the past summer, I had convened telephone discussions with several individuals who had been instrumental for saving the city from a serious population downfall that had commenced almost twenty years ago.

Aside from other visitors, I was also hosted for three great hours of intense discussion with Richard Kinneally, President of Retirement Living Inc. (RTI), and an hour with George Farkouh, owner of Algoma Chrysler (three dealerships in the region), and past mayor of Elliot Lake, from 1988 to 2006. I also met with members of the Museum, Legion, RTI, Churches, Golf Course, tour operators, Tourist Center, and with other citizens, including native folks. I also met with Dan Gagnon, newly appointed as City Manager, who has worked for the municipality for decades.

I have chosen to compare Elliot Lake with Kitimat because of similarity and because I feel that one can learn from how the city leaders of Elliot Lake saved their city. I would like to underline, however, that the manner in which the recovery was done can not be identical to that which Kitimat will need. Also, there are many other cities who have suffered economic decline that have succeeded to recover well, including Gold River, Mackenzie, Tumbler Ridge. Murdockville, Miramichi, etc., and additional valuable information can be obtained from them.

If you want to save the economy of your city, don’t count on the municipal staff to do it. Or the Council. It is paramount, though, that the Council establishes an organization, such as for RTI, that must be operated as a business, separate from the municipality. George Farkouh told me (not news, for sure), “Municipalities are sink holes for taxpayer’s money.” The Council needs to work closely with, and to greatly support, this business function. A talented and credible leader, like for Richard Kinneally, needs to be found to provide the business leadership to attract new folks to the city.

George Farkouh: “You need at least four councilors on the municipal council who can work together. Pay no attention to the others.”

George Farkouh: “Do not combine economic development efforts with one or more other struggling cities. Your city’s own special needs will be compromised. We tried that and failed.”

When I asked George if he could have saved the city without his education of an MBA degree, his response was, “No.”

He also emphasized that it is hugely important to work with the provincial government re economic development. To do so, municipal political and business leaders need to be seen as competent and credible, otherwise the government will focus on other cities also crying for help, but who have got their act together.

Kitimat Scenario

My understanding is that Kitimat will lose about 1,050 jobs since Eurocan’s closing and after Alcan’s staff reduction in a few years. Given, say, a population reduction of four people to one job lost, if no other equivalent industry can be found (most likely), then Kitimat’s population may drop from 9,500 to less than 5,000 … very quickly.

Given the lack of past success to attract new business to the city, and given the now widely renowned dysfunction of Kitimat’s leaders (not just those on the Council), guaranteed to last until at least the next election, the odds of attracting any new significant business in the next five or more years are remote. For the municipal election in the fall of 2011, if the city cannot present a slate of competent like-minded city leaders, then, for sure, the city’s downfall will be fully assured. Capable people will not want to be a part of the dysfunction. People everywhere know this.

Kitimat, I feel, will greatly increase the chances for success if its leaders can focus on attracting retirees. The market is huge and is growing. You only have to attract 4,000 retirees to approximate the recent past economy. The current approach to leave everything to a small, unfunded, volunteer team of well meaning people pales in the shadow of what Elliot Lake has done. I have met with Margaret Sanou, the group’s leader, a truly special person, and she would agree with me.

Barry Pankhurst, head of the School Board, told me that, even now, all elementary schools could be combined into the Nechako School. This is inevitable.

Whether they know it or not, and whether they like it or not, the Kitamaat Village folks will suffer greatly also with the economic downfall of the city. Village leaders need to be concerned, included and involved in the leadership to rescue the city.

RTI’s 1,500 rental units have been the main revenue engine for Elliot Lake’s recovery success. Kitimat will not have the identical opportunity. However, it will not be long before there will be hundreds of vacant residential units sitting idle. These need to be managed collectively in a cohesive manner. Given today’s scenario, with property values guaranteed to drop, any newcomers to Kitimat would be foolish to buy, unless they want to lose money, or wait for much more than a decade to recover their equity. So, most likely, they will rent, making it even more difficult for residential units to be sold and driving their values down even further. Is the sizing of Rio Tinto Alcan’s construction campsite being designed/coordinated with the parallel increasing city vacant residential availability?

The city needs to plan for a guaranteed downfall, much worse than seen to date. Serious, difficult decisions need to be made … immediately. In parallel, focus should be dramatically changed to support Kitimat being a one-industry retirement community. Today’s financial planning most likely does not reflect any of this. Delaying immediate action will greatly exacerbate the situation, not far into the future. Full time resources need to be assigned to this immediately.

Sadly, current council meetings do not even put this top priority on the agenda. Council members should be meeting at lengthy weekly meetings on this topic alone. One has the feeling that they don’t consider it a priority, don’t know where to start and each stubborn member, in the future will blame the failure on the others. Everyone will lose.

Recent council member suggestions, such as to spend money on the Tamitik speaker system, to visit the Gulf oil spill area and to delay municipal service cuts, are all evidence of non-focus on the real priority and that no system of prioritization really exists. The dysfunction amongst city leaders, perceived as close to hatred in some cases, is so entrenched that the city will be forced to endure it for some time to come at great cost. Anyone tuned in to the situation, that I have talked to, would not agree that Kitimat’s leaders are, “ … planning for the worst, and hoping for the best”, because they are simply not planning for the worst. In fact, many citizens feel that no planning is being done.


Given the leadership dysfunction concern of all taxpayers in the city, I strongly recommend that taxpayer’s money not be spent to send anyone to Elliot Lake. It would be far more economical to pay for Farkouh and/or Kinneally to give a presentation to a wide audience of leaders in Kitimat, including key provincial representatives. They are willing to do so.