Closure of giant XL Foods meat plant triggers economic crisis for Alberta city

The little city of Brooks, about a two-hour drive east of Calgary, doesn't define itself as a one-industry town. Its web site talks about its ties to farming, ranching and oil and gas.

But the indefinite shutdown of the giant XL Foods cattle-processing operation, which employed some 2,000 people in the community of 13,500, has dealt a major blow to Brooks' economy.

The giant Lakeside slaughterhouse, the second-largest in Canada, has been closed since late September, when authorities pulled its operating licence two weeks after U.S. inspectors found meat from the plant was tainted with potentially deadly E. coli bacteria.

[ Related: Wildrose leader's tweet over dumped XL beef sparks debate ]

The contamination caused U.S. authorities to bar imports from the plant and triggered a massive recall of beef products on both sides of the border.

So far, 16 people people in four provinces have been reported sickened from eating the meat and the plant's Edmonton-based owners are facing a wave several lawsuits, The Canadian Press reported last week.

Meanwhile, the Calgary Herald reported Monday that XL was already fighting an eight-year-old suit involving a Winnipeg boy allegedly disabled after eating hamburger tainted by the same strain of E. coli that caused the shutdown.

All of which adds to the uncertainty in Brooks, the Globe and Mail reported. A steady stream of laid-off XL workers have been leaving town to look for other jobs, drying up the stream of wages that pours steadily into the local economy. They can't afford to wait around weeks for unemployment benefits to kick in.

"A lot of people are living paycheque to paycheque," Brooks businessman Ken Grewal told the Globe. "It will definitely affect the community. It will affect every single business. We are a small community. We are not a big city."

Last week, XL handed over management of the plant to a U.S. subsidiary of Brazilian-based JBS S.A. on a temporary basis, with an option to buy XL's operations.

[ Related: XL Foods dumps tonnes of meat at landfill ]

Brooks Mayor Martin Shields said it's hoped the change of management will help facilitate reopening of the plant, while a takeover would put it on a firm footing for the future.

"We know they're window shopping," Shields told the Globe, referring to JBS USA.

The export market is crucial to the giant plant's viability.

"People don't understand how intertwined the cattle industry is with that border out there," Shields said, noting Canadian beef can be exported on the hoof for processing in the U.S.

"There are so many live cattle being shipped across the border in the last 10 days. Every long-haul liner that can move in Western Canada and in the Western states is moving today with cattle in it."

At a meeting on Saturday, local Alberta MLA Jason Hale urged the the Canada Food Inspection Agency to expedite Lakeside's restart.

"This is a crucial time in our industry," Jason Hale said. "We need to ensure that this plant does reopen."

For now, Brooks has to cope with an estimated loss of more than $100,000 a day in wages, with only 55 per cent of that covered by unemployment payments, the Globe noted.

Many XL employees are immigrants who often send money home to their families, leaving them with almost no cushion for a crisis like this.

[ Related: Agriculture Minister faces more criticism amid growing XL Foods beef concerns ]

Meat cutter Kemel Abdella told the Globe he used to send about $200 a month to his ailing mother in Ethiopia.

"Right now, I have no choice. I can't give," he said, adding he's worried now about covering his own expenses such as rent, utilities and auto insurance.

"I pray to God every morning that XL will open. Even this month, I don't know how I'm going to handle it."