Story originally published in the Cape Breton Independent
Beginning on November 1, many of the economic benefits from the snow plowing and litter removal at Wal-Mart’s Spar Road store shifted off-island to Ontario. It was on that date that Wal-Mart’s corporate headquarters in Mississauga, Ontario terminated its contracts with local Sydney contractor Delio’s Property Maintenance Services and outsourced the snow plowing to an Ontario company.
Since the Wal-Mart store on Spar Road opened in 2006, Delio’s Property Maintenance Services has cleared the snow in the giant retail outlet’s parking lot during the winter and removed litter from the property year-round. But on October 1, owner Paul Delio received word from Wal-Mart’s corporate headquarters that both contracts would be terminated at the end of the month.
“They just terminated the contracts and said they were going in a different direction,” says Delio.
That “different direction” will result in the profits generated from plowing Wal-Mart’s property leaving Cape Breton and winding up in the pockets of Ontario-based GMC Solutions. The Cape Breton Independent was unable to determine at this time whether or not GMC Solutions also received the contract for litter removal. However, as is the case with the Wal-Mart store itself, GMC will hire local workers but the profits generated will not remain in Cape Breton to be spent in the local economy.
While a confidentiality clause prohibits Delio from revealing how much his company was being paid by Wal-Mart, he says that six of his workers have been impacted by the cancellation. “I’ll try to incorporate them into other jobs I have,” he says.” But it will mean fewer hours for them.”
Meanwhile, GMC Solutions has no physical presence in Cape Breton and is searching for a local firm to perform the snow plowing at Wal-Mart. According to the manager of the Spar Road Wal-Mart, Wayne Wrathall, “All decisions relating to contractors are made by corporate headquarters. They haven’t informed me yet who will be plowing our property.”
To add insult to injury, GMC recently contacted Delio in an effort to hire his company as a sub-contractor to perform the snow plowing it had performed for seven years at a fraction of the cost that Wal-Mart had previously paid, which would likely translate into lower wages for the workers. Delio rejected the offer.
While large box stores such as Wal-Mart have been touted as job generators in Cape Breton, they often drive smaller locally-owned enterprises out of business. In recent weeks, both the Coop Basics food market and Yazer’s clothing store have announced they are closing. Both businesses have operated in Sydney for over 70 years.
Michael Lang, co-owner of Yazer’s, recently pointed to the popularity of box stores and Internet shopping as part of the problem. “We’re going to see more of these kind of old downtown, family-run stores going out of business,” he said.
Often the job gains from attracting large box stores are negligible, or even in the negative, when job losses from closed businesses are thrown into the equation. And while large retailers can offer lower prices to consumers, they ultimately prove to be a net drain on local economies because they ship profits back to their corporate headquarters and shareholders. In contrast, the profits of locally-owned businesses often remain in the community where they help support the local economy.
Wal-Mart’s corporate headquarters did not respond to interview requests made by the Cape Breton Independent. Meanwhile, Delio’s now has to continue without its Wal-Mart contract. “I didn’t give them any reason to fire us,” says Delio. He didn’t have to. Large corporations like Wal-Mart exist to serve the needs of their shareholders, not the people of Cape Breton. And that often requires draining wealth from the local economy.
Author: Garry Leech is a member of the J. B. McLachlan Media Collective.
