There’s excitement in the gymnastics community in Labrador West, as work continues on a new multi-million dollar recreation complex that will be funded 100 per cent by taxpayers in Labrador City.
But in a twist, the large steel building is being built in neighbouring Wabush on Grenfell Drive, and there are signals the two mining towns might be headed for a standoff when it comes to taxation and regional co-operation.
It will be known as the Labrador West Recreation Complex when it’s completed in 2028, and will become the new home of the Snowbirds Gymnastics Club. The club has been around since the early 1970s and has an enrolment of more than 600 young people.
For years, the club has vaulted from one location to another, so the outgoing town council in Labrador City approved a motion last fall — just one day before the Oct. 2 municipal election that resulted in a big shakeup on council — to award a nearly $12 million contract for the complex to Mount Pearl-based Enercon Builders Inc.
Efforts to entice other branches of government, including Wabush, to share the construction costs were unsuccessful, so instead of putting the project on the shelf, the old council decided to pick up the entire tab.
Since there’s very little developed land available in Labrador City, the former council purchased some prime real estate from a private owner in neighbouring Wabush, just seven kilometres away.
It’s the equivalent of the Town of Conception Bay South paying for the construction of a major piece of public infrastructure in the Town of Paradise.
Labrador City’s outgoing town council approved a motion last fall to award a nearly $12 million contract for the complex to Enercon Builders Inc. (Town of Labrador City)
Construction is progressing, with a concrete foundation slowly emerging from the sandy landscape. But what’s less certain is how the towns will co-operate on matters such as taxation and operational costs when the complex is completed in two years.
Labrador City is an economic juggernaut, with a budget north of $31 million for a population of roughly 8,000 residents.
Wabush has a budget of just over $12 million for a population of roughly 2,000.
The towns have a history of working together on everything from waste disposal to combatting forest fires, and there’s even been discussions over the years about outright amalgamation.
But there’s once again tension following a decision in December by Labrador City’s new town council to slash operational funding for the aging Mike Adams Recreation Complex.
The Mike Adams complex is located in Wabush, and is home to the region’s only public indoor swimming pool, a multi-sport gymnasium, a bowling alley and fitness spaces. But roughly 80 per cent of the users reside in Labrador City, so the former council agreed to a formula that would see Labrador City pay an equivalent amount in operational support. Last year, that figure amounted to $920,000.
Wabush Mayor Gertie Canning applauds the construction of a new gymnastics complex in her town, but she expects neighbouring Labrador City to pay business taxes on the operation when construction is completed in 2028. (CBC)
This year, Labrador City has committed just $250,000, and the new mayor of Wabush, Gertie Canning, is not happy about the decision or the fact it was made without any consultation with her town.
“It was a blow,” said Canning. “We lost $600,000 just before our budget for 2026.”
Canning said the Mike Adams complex “drains a huge amount” of revenue from the town’s budget for a complex that “we keep open for the residents of Labrador West.”
That’s the climate under which the two towns must negotiate a tax agreement for the new gymnastics complex.
Canning describes the new gymnastics complex as “great” and believes it will inject new life into her town’s sporting scene, as well as benefit Wabush businesses through spinoffs.
But she predicts some “difficult conversations” with Labrador City over taxation. It’s her view that Labrador City should pay a business tax to Wabush for the new complex, and there may not be much appetite for tax breaks following Labrador City’s decision to chop funding to the Mike Adams complex.
“We do have a new building going up in our town, and it is a business, so there’s some conversations that need to be had,” Canning said.
Labrador City Mayor Jordan Brown is admittedly lukewarm to a project that will see his town spend millions to construct a new gymnastics complex in neighbouring Wabush. But he says it’s not economically feasible to build the complex in Labrador City because of a shortage of developed land. (Terry Roberts/CBC)
Former Labrador West MHA Jordan Brown was victorious in a four-way race for the mayor’s position last fall, and is admittedly lukewarm to the decision to invest so much of his town’s tax dollars into another community.
During the campaign for mayor, he promised to “review” the plan, but since the contract was already awarded prior to his election, he quickly fell in line after being installed in the town’s top elected post.
“Seeing as this building is going to be used by Labrador City residents and Wabush residents equally, [the former council] decided that this piece of land in Wabush was perfect for the project,” said Brown.
“We didn’t see it as a Wabush or Lab City thing. We saw it as providing a service to the region. I know it’s a very unique situation, but it’s a very Labrador West solution. I think being territorial is very counter-productive to the region.”
As for a tax agreement with Wabush, Brown said “our staff is working on that,” but he’s confident that both towns will find a solution.
He stressed that not-for-profit sporting groups such as the Snowbirds will be using the facility and paying user fees.
Labrador City is borrowing millions to construct the complex, and Brown said he could not rule out a tax increase for Labrador West residents in order to pay the mortgage.
But he said a tax increase is not in the cards “at this moment.”
Meanwhile, if the former Labrador City council had insisted that the new gymnastics complex be constructed inside the town’s boundary, Brown said construction would not be underway today.
“The price would have been too outrageous,” he said.
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