Labrador West: 'We really don't see where the end might be'

Paula Williams came to Labrador West six years ago, timing her arrival with the beginning of an iron ore-fuelled economic boom that soon became the talk of the country.

She landed herself a job with the local health authority, and her spouse also found steady work.

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Three years later, they purchased a mobile home at the height of the market for $225,000, believing their future was set.

Now she feels trapped in this isolated region on Labrador's western border. 

Not long ago, her spouse lost his job and moved back to Happy Valley-Goose Bay, in central Labrador.

She wants to follow him, but there's a problem. She can't sell the mobile home that fetched such a steep price just three years ago.

She had it on the market for six months. Not one call.

"I've decided I'm better off staying here and waiting it out until the economy improves," Williams told CBC News this week.

A widespread sense of uncertainty, fear

Williams is one of many caught in a steep downturn in iron ore markets, the one industry that sustains the neighbouring towns of Labrador City and Wabush, which have a combined population of roughly 10,000.

With one operation, Wabush Mines, closed and another, the Iron Ore Company of Canada's sprawling mine and processing operation in Labrador City, at risk, there's a widespread sense of uncertainty and fear in this region.

Talk to anyone here, and they'll say they've never witnessed such a devastating collapse, following such an impressive boom that lasted from 2009 to 2013.

The local housing market, for example, was as hot as any in the country not too long ago.

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If you had property to rent or sell, you could expect to make some unimaginable profits. Many did.

But the market has practically crashed. One real estate agent estimated the number of homes for sale at 300 units, and several subdivisions have stalled.

Rents have also tumbled, with a tenant in one 100-unit apartment complex saying the building is now 40 per cent empty.

Northern Property, a large real estate trust with a long list of property holdings in the region, is now offering a summer special that includes lower security deposits and free lodgings for the first month.

A social worker who helps those with special needs find housing told CBC News the situation was critical a few years ago, but now there are multiple options, at much lower prices.

A business community on edge

The signs are just as troubling in the business community.

When someone comes to the office at H. J. O'Connell Construction Limited in Labrador West these days, they are not greeted by a smiling face at the receptionist's desk.

You want assistance?

Ring the bell on the desk, and wait to see if anyone in the largely empty office heard it. 

The company's workforce has been trimmed by about two-thirds.

O'Connell has been involved in the region's iron ore industry for four decades. But you wouldn't know it by visiting its operations near the Wabush airport.

A rock crusher is operating nearby, but that's another company doing work on the runway.

A lone excavator is moving some dirt in the background, but most of the big metal monsters are parked, and that means they're not making money for one of the largest construction companies in eastern Canada.

It's an unwelcome situation for O'Connell vice-president Terry Curran, a Montreal native who has worked in Labrador for many years.

"This is for sure a deeper and longer … recession if you will, for the industry. And we really don't right now see where the end might be," Curran told CBC News during an interview on Tuesday.

It's eerily quiet at the mall

Curran predicts the slump could last for at least another two years, and that's not want business owners at the Labrador Mall want to hear.

These days, the shopping centre is quiet … eerily quiet.

The Co-op recently closed, leaving just one grocery store in the region. A restaurant owner said her business is down by about 30 per cent, and many of her staff have moved on because of dwindling tips and reduced hours of work.

The owner of a ladies' fashion store, when complimented on her businesses, offered a polite thanks and added, "All I need now are people."

It's the same situation down the hall at Ann Marie's Flowers, where owner Sharron Clark is facing a 10 per cent rent increase this fall, steadily increasing freight costs, and the slowest sales in the nine years she's been involved with the business.

When asked if she fears for the future of her business, she said "time will tell."

She said people are just not spending because of persistent rumours about the fate of the IOC operation, and fears that it may suffer a similar fate as nearby Wabush Mines, and Bloom Lake just across the border in Quebec.

Clark said she's OK for now, but is pinning her hopes on an economic turnaround.

"If this keeps up? I don't know. Five years, I would say, and I'm gone."

Not all doom and gloom

It's an unnerving situation for town leaders like Labrador City Mayor Karen Oldford. But she's confident the area will weather this storm.

She said the Labrador Trough is a rich ore deposit, and the area boasts a highly skilled workforce and supply sector.

She believes markets will rebound, and other projects on the horizon, including the much-touted Kami Project, and the potential of the Julienne Lake ore deposit, will be developed.

"I have no doubt that there's still another rich history here of 50 years or more beyond what we currently have," she said.