May 16, 2001

On the recommendation of the Board of Directors of the Cape Breton Development Corporation (DEVCO), the government today approved a plan to begin the immediate and orderly closure of the Prince Mine -- the last remaining coal mine in Cape Breton.

The extraction of the remaining coal and the recovery of equipment is expected to take until the fall to complete.

The decision to close the mine follows a world-wide search resulting in the assessment of 60 potential buyers and exhausting all possibilities of concluding a reasonable sale -- the objectives for which included:

• Fair value for the assets to DEVCO and the government,
• Reasonable employment arrangements for transferred employees, and
• Timely completion of a transaction.

We understand that people and communities of Cape Breton will be hit hard by this announcement. But we want them to know that just as the government has supported DEVCO for over 30 years, we will help the communities and workers affected make the transition.

DEVCO and its employee representatives are being requested to establish an appropriate human resources strategy for the workers affected by this decision.

The two Job Transition Centres, developed following the closure of the Phalen mine, will continue to provide support measures.

To assist the people of Cape Breton adjust to the closure, the government has also committed an additional $28 million to build a more diversified and future-oriented economy in the area.

• $18 million will be allocated to The Cape Breton Growth Fund (CBGF);
• $10 million will be directed to Enterprise Cape Breton Corporation to be invested in the most affected communities.

This brings to $96 million that the government has invested in additional economic development activities on the Island since the January 1999 announcement.

The CBGF was established in 2000 specifically to administer economic adjustment funding provided as a result of the Government of Canada’s decision to withdraw from coal mining on Cape Breton Island.

The Fund’s initial investments have resulted in 1350 created or planned new jobs. It is also working to conclude other investments that will add significantly to this total.

Since 1967, the Government of Canada has invested $1.8 billion in DEVCO’s coal operations The Corporation has accumulated current liabilities of another $550 million, the costs of which will fall to the Government of Canada.