Mining Towns and the New Hinterland Crisis

LabourEconomic CrisisGlobalization

Canadian mining towns have always been sharply affected by the periodic booms and busts of capitalism. They have also experienced closures from the depletion of ores and shifts to new regions of exploitation. Since the 1980s, mining towns, especially hard-rock mining towns, have been subjected to a new and more fundamental crisis: a long-term, absolute decline in mining employment.

Compared to the peak employment of around 70,000 in 1974, there are fewer than 30,000 metal-mining jobs today. Overall employment in the mining industry is now under 46,000, less than half its historical peak.

This long-term decline in mine-industry employment occurs in the post-1970s historical context of globalization, in this way differing from the earlier generation of post-war hinterland crisis that devastated agricultural towns. The crisis is engulfing other resource-dependent towns, notably in forestry and fishing, as well as rail towns.

Boosting and Promoting

The declining social and economic condition of mining towns is not a priority for the federal government–apart, that is, from acting as booster and promoter of mining towns as sites for resource exploitation, a role encouraged specially by Natural Resources Canada (NRC).

Ottawa is not even clear about how many mining communities exist. One NRC study based on 1991 census data identified 128 “miningreliant communities.” In 2001, an NRC fact sheet proclaimed vaguely, “more than 100 communities … depend on the minerals industry.”

My observation is that industry and government estimates of miningtown populations reflect what is at stake. Numbers are inflated when the mining corporations or governments want to show how important mining is (promoting tax breaks or policy support) and diminished when the question is “social dumping” (like claims that the numbers are too small to warrant special programs).

The Life Cycles of Mining Towns …

Mining towns vary a great deal in terms of their life cycles. Some die (classic ghost towns, like Sandon); some transform slowly (the Crow’s Nest); some are superceded more or less dramatically by resorts, retirement housing, prisons, or other large-scale projects (Fernie, Grande Cache, Elliot Lake, or more dramatically in the U.S., Aspen, Telluride, Grants); and some decline to a lower scale while still mining or attempting to attract mining (Sudbury, Timmins, Kirkland Lake, Val-d’Or). Whichever kind, in recent decades mining towns in decline tend to carry a particular legacy in impoverished economic, cultural and environmental conditions, which continue long after mines close, and whether or not mining returns.

The largest single set of mine closings during the 1990s occurred at Elliot Lake, Ontario, a city once touted as the “uranium mining capital of the world.” Over six years of mass layoffs, from 1990 to 1996, four mines were closed and Elliot Lake, a city with a population of about 14,000, lost over 4,000 mining jobs.

… And Their Patterns of Decline

Research on the mass layoffs at Elliot Lake identified a pattern of decline common in many mining communities. While enjoying growing or stable employment, the town had lowerthan- average levels of dependence on transfer payments and poverty. However, after closures, unemployment and poverty flooded the region.

Unemployment rose to over 50 per cent, a range often experienced in northern First Nations communities. Elliot Lake’s employment income fell by more than half. The requirements for UI (now spin-doctored to EI), worker’s-compensation (now spin-doctored to WSIB in Ontario) and social-assistance use increased rapidly. For women, social assistance became the single most important social program, indicative of federal downloading to the province. In addition to cash transfers, tax revenues plummeted and, after an initial flurry of activity, several federal, provincial and municipal services were closed or cut.

Despite obfuscating boosterism, for most workers and their families, that downward direction was never in doubt. Transfer-payment dependency now rose to among the highest in the country. In the years that followed, as some workers found jobs elsewhere and others exhausted their benefits, the total amount of transfer payments declined. So did most workers’ incomes. A minority of workers found some other work in the area, albeit with wages much lower, less secure and nonunion.

Where there was concerted management to speak of, the overriding principles of “managing the crisis” referred not to social needs, but to cutting costs and political stability–so as to let down (“adjust”) the workers and community gradually.

In principle, needs-based provincial social programs like social assistance could also provide a floor of protection for many individuals and families in devastated areas. In reality, as the weight of the layoffs were grinding into Elliot Lake, Mike Harris’ Conservative government swept to power provincially and, tanked up on class prejudice, slashed social assistance rates by 22 per cent.

But the provincial Conservatives were not alone in contributing to the impoverishment of mining towns. It was during these same years, when mining towns like Elliot Lake were being shaken out, that–with the supine complicity of Liberal backbenchers, several of them from mining areas–Paul Martin re-engineered UI in ways that hit harshly at hinterland workers and communities. The Liberal government knew at the time that the changes would have a negative effect on workers in mining. The effects were actually calculated and presented to a parliamentary committee.

The Canadian Labour Congress estimates that over the decade of the 1990s UI coverage of unemployed workers fell from 77 to 42 per cent for men and from 70 to 30 percent for women. The coverage figure is almost certainly lower for hinterland areas, even if one accepts as a base Statistics Canada’s insulting underestimates of hinterland unemployment.

An Undeclared National Emergency

These two trends, cuts to mining employment and to social program standards, have combined to leave mining towns with an array of problems that, if they occurred on the same scale in Canada’s largest cities, would have been declared “national emergencies.” Many thousands have been forced to leave their homes and communities. Housing stocks have been boarded up, demolished, or transported out. Unemployment and poverty have swelled, incomes have become even more polarized and unions have been weakened–or eliminated. Public schools, college programs, libraries, pools, parks, airports and transit systems have been closed or cut back. Many older, productive workers, men and women, have been forcibly “retired”–cashiered–and regularly face demeaning ageism as they seek re-employment. Professionals have observed a deterioration in terms of mental health and addictions, social isolation and suicide, probably provoked by despair. Families, including those with children, have been scarred, many ruptured permanently. Unprecedented numbers of women and children have been driven to the guaranteed poverty of social assistance. Working-class youths’ prospects have been downloaded to working in fast food and hanging out in the cultural wasteland of malls blighted by bad design and bankruptcies.

Census population reports tell a small part of the story. Canada’s mining and resource towns are most prominent among communities with major declines in population between 1996 and 2001. A small selection of the pan-Canadian range, not necessarily the hardest hit, includes: Cape Breton (-7.6 per cent), Bathurst (-6.4), Val-d’Or (-7.1), Rouyn-Noranda (-8.6), Kirkland Lake (-13.0), Timmins (-8.0), Sudbury (-6.1), Greenstone (-13.3), Thompson (-7.8), Flin Flon (-8.0 ), Grande Cache (-13.8) and Tumbler Ridge (-51.0).

Of course, local boosters, usually among the towns’ business elites and their business and political clients, often claim the situation is not so bad. They can and do assiduously point to positive achievements–a new small business here, or a main-street beautification project there, or a public library provided with new computers, a senior’s housing project, a successful curling bonspiel, and so on. Given what many mining towns have been going through, these and other less conspicuous efforts, including by union activists, do deserve recognition and support. But with every effort to prettify and diminish the extent of the crisis afflicting mining towns, they also deny and devalue the experiences of many of their townspeople present–or driven away–and contribute to the alienated and corrosive political conditions that weaken too many mining towns.

A Hard-Edged Force for Globalization

As the northern hinterland crisis deepens, the mining industry continues to expand and consolidate internationally. UN and U.S. official statistics indicate that world metal mining output is still climbing. Canadian-based mining transnationals are among the largest in the world and are exploiting the labour and resources of most regions of the world: Inco has massive investments in Caledonia and Indonesia; Falconbridge in the Dominican Republic, Chile, Ivory Coast and Russia; Teck Cominco in Peru and Brazil; Placer Dome in Chile and South Africa; Barrick in Peru and Tanzania. The list is long. Despite oodles of rhetoric about corporate responsibility, Canadian mining transnationals have been a hard-edged force for globalization and, given their heavy investments in Latin America, early and leading advocates of the FTAA. Environmental organizations like Mining Watch Canada and its international and provincial affiliates have done a great deal to expose their environmental and human-rights abuses.

While Canadian mining production has shifted internationally, most of the decline in domestic mining employment has been through technological change, “lean” production managerial techniques and closure of less profitable mines. This results in a major increase in productivity, estimated to be nearly twice the business-sector average. Not suprisingly, the gains are not being shared with most workers and mining towns. Rather than using the productivity gains to cut the working week, phase out health- and community-destroying shift work and radically improve safety and environmental conditions, the mining corporations expanded elsewhere, enriching their biggest shareholders and lavishishing salaries in the millions upon their executives–dollar amounts larger than the entire social and cultural budgets of most mining towns.

Underlying the new hinterland crisis is a fundamental shift in wealth and power in favour of mining-industry transnational corporations and away from labour and resource towns. Mining corporations have rarely had deep roots in the areas they exploit, but the greater mobility of capital and its capacity to deplete ore bodies more rapidly has increased their power to threaten workers and towns with closures and layoffs.

Once a militant core and centre for fundamental social change, the labour movement in mining has stagnated and declined under Cold War division and embedded business unionism. The level of unionization in mining has now fallen below 50 per cent. There is not even company-wide bargaining, let alone industry-wide bargaining. When Inco at Thompson was out on strike, Inco at Sudbury continued its production, even increased it. When Falconbridge recently tried to break the Mine Mill Local 589/CAW local at Sudbury, a key element of corporate strategy was bringing in feed from their still operating Raglan mine. This situation not only hurts workers, it costs mining towns dearly.

The Labour Movement and the Hinterland Crisis

The labour movement still has a long way to go to come to grips with this situation. Neither the CLC nor the United Steel Workers of America—currently the largest union in mining–have serious policies dealing with the crisis of mining jobs, let alone mining towns and the hinterland crisis. Nor have there been major initiatives to work with Aboriginal peoples to settle land claims that cover large areas of hinterland Canada and that have often been used by resource corporations and right-wing governments to divide hinterland populations.

For years, policies have tailed behind the corporate-government strategy of accepting closures and downsizing while negotiating severance packages and “adjustment.” The USWA has emphasized tripartite sectoral councils for “adjustment,” following the long-standing model of the federal Industrial Adjustment Service. Much can be debated about this type of effort, especially in a regional context; however, that debate may be hoisted on its own petard as the councils themselves have been undercut and downsized by the Liberals’ devolution of training to the provinces.

CLC leaders and some affiliates talk of “just transition” without seriously asking to what and to where? For a larger and growing portion of workers, especially in hinterland areas, adjustment and transition means lower living standards, less security, poverty and moving away.

Capitalism has changed and, with it, the vulnerability of “communities.” Prior to the 1970s, in the course of the three post-war decades of rising capitalist prosperity and employment, one might possibly have seen tangible prospects for rapid transitions for workers as a whole following closures or layoffs. If these prospects ever existed, they certainly do not exist today for many, and probably most, workers in hinterland areas.

Whose Policies? Whose Future?

There are many socially progressive policies and programs available to the labour movement and allied groups for local-level economic development. Some have precedents in traditional gas and water socialism, others in the cooperative movement, others in community economic development initiatives. As well, there are exciting technical and social possibilities for change in approaches to the hinterland environment, culture and communications. These can offer alternatives to such short-term and divisive measures flung out by desperate councils, like casinos, garbage importation and disposal, the sale of public land for cottages, luxury (eco-)tourism, free-trade zones, prisons, relaxed mining and environmental regulations, and tax breaks to outside fast operators.

But the major, unavoidable obstacle remains: the grip on hinterland towns of transnational corporate power, first and most directly of the mining and resource transnationals. To protect and transform mining and related jobs and environments that still exist, reorient economic development and renew municipal democracy, hinterland Canada requires a new framework for economic and social development that restricts the power of TNCs and recoups to local areas a significant portion of resource rents and profits. Second, and in tandem, there needs to be a strengthening of the public-sector services, augmented and redistributed to provide genuinely equal access to hinterland towns, particularly in such areas as health care, education, culture and communications.

As a starting point, the labour movement could look seriously at demanding federal and provincial legislation to compel mining and resource corporations to negotiate impacts and benefits agreements with local municipalities for resource extraction and primary processing operations in their areas. These must include sharing of profits with the local area, environmental and labour provisions, public disclosure and public ratification.

David Leadbeater teaches economics at Laurentian University in Sudbury.

This article appeared in the September/October 2004 issue of Canadian Dimension .


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