The New Staple State: Political Economy and Public Policy Regimes in Canada’s Primary Industries

Part IV: The New Political Economy of Extractive Industries: Minerals and Forests

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Part IV: The New Political Economy of Extractive Industries: Minerals and Forests

Chapter IX: Shifting Foundations: a Political History of Canadian Mineral Policy - Mary Louise McAllister (Waterloo)

In the past few decades, the Canadian mineral policy arena has seen some significant changes. Mining, long a staple of the Canadian political economy, pillar of national policy, and a leading producer and exporter of minerals in the world, has been encountering new challenges. Political players have multiplied, economies diversified, and policy issues have grown in complexity. These developments may appear to be of seismic proportions to members of the mineral industry worried about an increasingly uncertain and unpredictable investment and operating environment. New competitors in an increasingly open world market, such as those in Latin America, presented a serious challenge; they offered rich, readily accessible deposits, an inexpensive labour force, and welcoming governments anxious for the investment dollar to build their developing economies. In the closing years of the 20th century, the industry was increasingly alert to the dangers of being labelled a “sunset industry”. The tertiary sector had begun to elbow its way onto government agendas, capturing attention and offering intriguing new possibilities associated with a post-staples economy.

Mineworkers, the backbone of the Canadian mineral industry, were becoming concerned about the growing use of automation and robotics which was replacing jobs or requiring workers with new skill sets in applied science and computer operations. Labour organizations had to develop strategies for dealing with a new phenomenon referred to as long-distance commuting (LDC) where workers were flown into remote mine operations for weekly or bimonthly work shifts. Meanwhile, non-governmental organizations, worried about the continuing and cumulative impact of mining, had very different preoccupations. They dismissed the industry’s competitive concerns, observing that if the mineral wealth is there, exploration dollars and investment will follow. Canada’s new diamond mines offered such evidence (see Chapter 12). Environmental and social organizations argued that the primary industry continued to be supported by governments, so much so that public commitments to sustainable development and local, democratic decision-making were often not realized in practice and represented very little in the way of meaningful change.

Yet change is happening. A historical review of the Canadian mineral economy, and the policy environment that has supported it, reveals that notable adaptive strategies have taken place in governing institutional regimes and industrial relations in recent decades. References to corporate social responsibility, community partnerships, total cost assessment, and sustainable ecosystems are now part of the popular lexicon in industry and government documents. As Russell has observed, advocates of post-Fordist, ‘new work relations’, emphasise what they see as trends towards worker empowerment and democratization (Russell, 1999: 167). Skeptics might acknowledge that significant global changes are happening but the results are anything but empowering for worker and communities. Moreover, they might note that despite measures put in place in various mines, such initiatives have done little to lessen the overall adverse and cumulative, global impact of mining on the environment. Global and domestic economic and political imperatives continue to overshadow ecological, community and other social considerations.

Unquestionably, the Canadian mineral industry is finding itself operating within, and reacting to, an environment consistent with that of a mature, advanced staples economy as discussed by Brownsey and Howlett in the first chapter of this text. Such an economy has been defined as one that is still primary resource- dependent, but more diffused and diversified than in the past (Howlett, 2003: 47). Nevertheless, the mineral industry remains an important element of Canadian economic activity with all the associated social, industrial, environmental and political implications.

Promising Prospects: Staples and the nascent mineral industry

And they built the mines, the mills and the factories for the good of us all. For they looked in the future and what did they see. They saw an iron road runnin’ from sea to the sea” Gordon Lightfoot, Canadian Railway Trilogy”
From the Eastern cod fisheries, to the forestry and fur trade, through to the prairies’ agricultural wheat basket extending to the western gold mining rushes, Canada’s economy, society and technological development have been firmly rooted in the staples producing industries, as famously noted by political historian, Harold A. Innis. As Gordon Lightfoot’s Canadian Railway Trilogy illustrates, the public interest has long been associated with resource development. The early developers and decision-makers saw the building of railways, industries, and the extraction of resources as an important part of the Canadian national policy and the key to nation building.

Mining is one of the world’s oldest professions and will likely continue to take place in some form as long as people need minerals—that is, indefinitely. Before European contact, Amerindians had a sophisticated economy with trade taking place throughout the extreme reaches of the North American continent. Minerals played an important role in trade extending back many thousand years B.C. Obsidian, copper, flint and other minerals were used for tools or weapons (Dickason, 1992: 78). After the Europeans arrived, early settlers used various minerals for building materials. Mineral exports are reported to have begun in 1643 when New Brunswick shipped coal to England (Udd, 2000:1).

The mining of iron ore and gypsum came soon after. Gold was discovered in Quebec in the early 1800s. Numerous major discoveries occurred between the mid-1880s and the turn of the century including that of gold, which caused prospecting rushes British Columbia, and Yukon, asbestos in the Eastern Townships of Quebec, and, the huge copper-nickel deposits discovered in the Sudbury Basin during the building of the CPR Railway (Cranstone, 2002: 10-11). After silver was discovered in Cobalt Ontario, the area soon became one of the world’s largest producers. Angus and Griffin note that, “By 1910 the money that had come out of Cobalt had dwarfed any other silver operation in North American history and had surpassed the money made in the Klondike rush…The infant steps of Canada’s powerful mining industry were made in the narrow shafts of cobalt” (Angus and Griffen, 1996: 20). The Canadian mineral industry was well launched.

Industry did not achieve this alone. It relied on the development of other primary industries and new technologies, supportive governments, and the labour of prospectors and mine workers. As Harold Innis once noted, railways built to open up agricultural areas led to the expansion of metal mining in Northern Ontario (Innis, 1936: 321). With the construction of the railways linking communities together (an important component of the First National policy), mining companies were able to ship their ore more efficiently to market (Udd, 2000: 7).

In his well-known staples thesis, Harold Innis used the forces of production such as capital, markets and technology to explain the evolution of Canadian resource development. Wallace Clement added a class analysis in his discussion of mining, suggesting that while the staples thesis emphasised the importance of the technology (in this case railways) used to get the raw resource to market, it is “equally important…. to recognize that the ensuing ‘technical division of labour’ is infused with relations resulting from the ‘social division of labour” (Clement, 1981: 19). Clement argues that capital dominates labour using technology and the ways in which it organizes work. In those early years, the future pattern of mining and industrial relations took root. A dynamic tension between industry and workers continues to be played out in today’s post-staples economy. Technology is still a pivotal tool with which mining development and productivity is achieved although its form has lead to different impacts on industrial relations.

At the turn of the 20th century, the rapid growth of the industry generated a huge demand for labour leading to the formation of labour unions in attempts to gain better wages which at the time amounted to a little over $2 a day with board for the best paid workers. Companies were very powerful both in terms of establishing mining camps, determining wages and living conditions. “In 1906, the Nipissing Company discharged a miner from Montana for attempting to organize a union and leading mine operators decided not to employ union men…” (Innis, 1936: 323). A strike in 1907 was largely unsuccessful, which according to Innis, indicated the growing importance of capital and a concomitant decrease in the influence of labour (Innis, 1936: 323). Government legislation, however, did play a role in improving labour conditions. In February 1914, government legislation instituted the 8 hour work day and a Workmen’s Compensation Act came into effect in 1915.

Governments were heavily invested in the promotion of the mineral industry from setting up the Geological Survey of Canada (GSC) in 1842 in order to provide geological information to support the exploration industry. The goal of undertaking a geological survey was closely associated with nation-building “based on the realization that the development of an industrial economy in Canada -- an economy that could compete with those in Europe and the United States -- would depend to a considerable extent on a viable mining industry (Vodden, 1992). As primary resource ownership was originally assigned to the provinces under the Canadian constitution (with some exceptions) provincial governments have actively promoted mineral development.26 In Ontario, early government initiatives were primarily directed toward promoting the legal rights of prospectors and miners and offering exploration incentives. The first Bureau of Mines was established in 1891. The 1906 Mines Act was directed towards establishing a stable, standardized legal environment that would encourage the establishment of mining. This act governed Ontario through much of the 20th century. As H.V. Nelles has observed, “Promotion, embracing the improvement of access to resources, the extension of financial assistance wherever necessary, and the provision of information and technical education, was the public contribution to resource development.” (Nelles, 1974: 110)

Scientific management, business, and liberalism heavily influenced the political culture of public and private organizations in the early 20th century. The mineral industry prospered in this environment, garnering the attention of decision-makers and economic leaders alike and setting political agendas. The era was characterized by the discovery of numerous, rich ore deposits. Sudbury’s huge deposits, for example, ultimately led to the 1916 incorporation of the International Nickel Co. (INCO), which would shortly become the world’s primary producer of nickel. In Toronto, the establishment of the head offices of mining companies lead to the institution of the city as a leading international financial centre in mining.

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