Sudbury to remain a port in the storm: Laurentian professor predicts recession to lift within a year.(SUDBURY)

One of the best tools Sudbury businesses can use to ride out the economic downturn is simple optimism, according to Debbi Nicholson, president and CEO of the Sudbury Chamber of Commerce.

"If we all stay positive and do what we can, the depths will get shallower and shallower," she said.

Nicholson's perspective mirrors one of the central points made by Laurentian University economics professor David Robinson, who gave his predictions for the city's financial future at a packed Sudbury Chamber of Commerce luncheon Dec. 4.

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Hosted in Bryston's On the Park in Copper Cliff, the event both literally and figuratively sat in the shadow of Vale Inco. The company recently announced production cutbacks for some of its Sudbury operations.

Nevertheless, Robinson expects the recession to lift in less than a year.

Using Vale as a baseline, he pointed to the company's actions to put many Brazilian workers on leave with pay, rather than letting them go outright.

As the big mining houses tend to take the longer view, this temporary layoff suggests the recession may ease up in six to eight months at most, he said.

However, consumer confidence has reached a 26-year low, potentially creating a pullback in spending as a result of general fear. This uncertainty can create additional financial challenges that nobody can predict or easily fix.

"The sense is that it's the panic in the markets, the fear in the stock market that's creating fear elsewhere, and you have to wonder how much of that could be avoided," agreed retired architect Blaine Nicholls, who chairs the steering committee for the Northern Ontario School of Architecture.

Although Sudbury has been historically vulnerable to economic change, it stands to emerge from a recession in better shape than most, according to Robinson.

Despite the strong connection to mining, the local economy is sufficiently diversified to emerge in better shape than manufacturing centres in southern Ontario.

What's more, the shutdowns seen in smaller mining operations throughout Sudbury do not represent the city's economic base and the effects should be "marginal," said Robinson.

To begin solving the economic problem, governments should avoid tax cuts as the money saved is typically used to buy electronic goods from overseas, he adds. Instead, they should engage in a kind of "New Deal" where governments invest in capital projects to kick-start the flow of money through regions and communities.

While infrastructure money will likely be doled out across the country as a means of helping stimulate economic recovery, Sudbury's relative health likely means it will not see much of this funding, he says.

Nicholls agreed with the sentiment that it may be up to local governments, companies and organizations to make these kinds of investments, adding that now is the ideal moment to forge ahead with large-scale projects.

"Rather than put it off and say, 'No, we're concerned so let's put a project like that on hold,' I think it's the opposite. I think this is an opportunity where there could be spending on a kind of infrastructure project that strengthens the community and enriches it."

By NICK STEWART

Northern Ontario Business

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