Boom Town Blues: Elliot Lake: Collapse and Revival in a Single-Industry Community

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In the s, Sudbury again began a comprehensive consultation process for diversification although there since have been challenges as a result of cutbacks in provincial government funding and downsizing Kuyek and Coumans, Regardless, the City of Greater Sudbury has stabilised around a population of , and is comparatively much more diverse than before. Several provincial and federal government offices have been relocated to Sudbury such as the Canada Revenue Agency and an expansive Northern Medical School.

Other communities, such as Elliot Lake have not been as fortunate. Once the downward spiral is prompted by industry closure in resource communities funding for services and public agencies from higher levels of government becomes increasingly scarce. Often funding formulas for social services such as healthcare and education are based on size with funding allocated to municipalities with greatest anticipated growth.

The historical development of Elliot Lake provides a good summary of the limitations of former purpose-built resource towns which has led to the emergence of more viable resource development options. In such models, work is organised on a roster system in which employees are flown in to the camp from outside communities designated as pick-up points. Employees spend a fixed number of days working on-site followed by a fixed number of days at home.

As well, camps are established with the intention of being temporary sites of extraction rather than permanent. Given the temporary nature of commodities exploration and extraction, several researchers Costa, ; Markey, ; Shrimpton and Storey, have questioned whether such communities should have ever been intended as sites for permanent settlement. The industrial restructuring within the mining sector exposed the limitations of former purpose-built resource towns.

As exploration continues, fly-in mining will likely be the preferred model since it enables more expansive exploration and extraction opportunities into the north given the flexibility of the system which no longer requires workers to live within close proximity of the mine. The rapid growth of long distance commuting models to service new mines is a testament to their new found significance to the Canadian mining industry. A recent surge in diamond mining in the western Arctic likely means that mining will continue to expand further into the northern areas of most provinces and territories, especially in Yukon, Labrador, Nunavut, and the Northwest Territories.

The latter jurisdiction witnessed the recent opening of the Ekati and Diavik diamond mines during the s Kuyek and Coumans, Data indicate that the value of mineral production in the Yukon Territory alone has increased by percent between and Natural Resources Canada, Although the increase is partly due to the opening the Minto copper-gold mine in late , Natural Resources Canada predicts that growth will continue. The jump represents a nearly twelve percent Also, resource camps provide a cost savings to higher levels of government since they do not require high degrees of physical infrastructure investment.

Figure 3. However, Figure 3. Despite the knowledge gap, a recent report from Natural Resources Canada recognised fly-in mining as a system able to contribute to regional development in the north. Specifically, the report stresses that adjacent towns from which labour and supplies are drawn may develop their mining services industry to meet the growing needs of mines operating by way of long distance commuting models Natural Resources Canada, Of the 22 mines profiled in the map, 18 have been in operation since In regions such as the Northwest Territories and northern Saskatchewan, long distance commuting has become the dominant form of mine development ibid.

The specific characteristics of each of the fly-in camps profiled in the map are highlighted in Table 3. Note that despite a common Matthew McDonagh SCARP 13 employment pattern of long distance commuting, many utilise different rotation patterns based on remoteness and size of workforce. Table 3.

Boom Town Blues: Elliot Lake

Asbestos Hill Asbestos Que. Rabbit Lake Uranium Sask. Coal Valley Coal Alta. Cluff Lake Uranium Sask. Camsell River Silver N. Baker River Gold B. Lupin Gold N. Key Lake Uranium Sask. Detour Lake Gold Ont. Salmita Gold N. Lac Shortt Gold Que. Star Lake Gold Sask. Hope Brook Gold Nfld. Emerald Lake Gold Ont.

Golden Patricia Gold Ont. Lawyers Property Gold B. Golden Bear Gold B. Johnny Mountain Gold B. Colomac Gold N. Jasper Gold Sask.

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Matthew McDonagh SCARP 14 Several of the mines employ relatively short rotation patterns with the most common structure being seven days on-site followed by seven days at home. However, several of the mines employ a multitude of rotation periods that are conducive to the remoteness of the mine and number and location of pick-up points. Longer rotation periods are more conducive to pick-up points that are located a further distance from the mine so as to spread the travel time over hours worked.

The ideal rotation structure and number of pick-up points will be discussed in the following sections and help to inform policy considerations as it may help to retain money within the local economy and encourage employment supply from nearby communities. Although data is limited on the current share of mines operating by way of long distance commuting in Canada their rapid growth throughout the s when the industry was struggling is evidence of their prevalence.

It is likely that their use in Canada will continue to grow especially in strong commodity markets and in more remote areas. As communities such as Elliot Lake in northern Ontario continue to adjust to structural changes and transition toward a post-staples economy, short and especially long- range planning issues are likely to intensify as mobile residents migrate to more diversified economies in southern regions. The fact that there has been no new purpose-built resource town since Tumbler Ridge, British Columbia in is not by coincidence.

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The waves of turbulent conditions as a result of industrial restructuring have provided learning experiences among communities such as Elliot Lake. As single-industry towns continue to experience structural shocks and turbulent planning transitions, research is likely to continue. Several researchers i. Saarinen, ; Mawhiney and Pitbaldo, have identified the lack of economic diversity in single-industry communities as a fundamental reason for their contemporary decline.

Specialisation, especially in remote areas, is risky given that there is no variation within the community able to withstand shocks to the economy.

Collapse and Revival in a Single-Industry Community

As such, structural changes and resultant shocks are magnified because the entire community is dependent upon the ongoing operation of a single-industry. The intention of purpose-built communities was to provide infrastructure and community services to a workforce employed in staples extraction indefinitely.

Given the finite nature of resources extraction the model of establishing permanent settlement is flawed. In addition to the volatile nature of resource markets, establishment of purpose-built resource towns has proven very costly, especially considering their temporary nature. Costs are especially great considering that such communities are built with the intention of supporting mining facilities during peak operation. In periods of downtown or resource exhaustion, outward migration results in greater per capita investment that could have perhaps been better utilised.

Moreover, infrastructure costs have shown to be unrecoverable after collapse. The infrastructure costs of permanent settlement were traditionally borne by senior levels of government which helped to subsidise the operations of private firms engaged in resource extraction. Despite the differences in financing between the two models, fly-in camps have demonstrated to have significant cost savings.

Graham projected costs of a hypothetical Australian mining facility employing workers on a five year period to be 23 percent cheaper than permanent settlement. While costs would vary according to government regulations and local context, there seems to be an economic case for the use of fly-in mines which substantiates their growth in Canada and abroad.

While the financing structure of new camps is often exclusively paid for by private firms, the temporary nature of facilities and accommodations in fly-in operations enable the reuse of physical structures. Fly-in models are unique in that many of the physical structure are transferable to other sites once the mine is exhausted or deemed no longer financially viable. Since exploration often occurs in remote locations, permanent settlement is difficult given the issues attracting and retaining top-quality labour within mining facilities and in businesses that support mine operations.

The changing rural economy of Canada is not conducive to settlement in new regions because of the strength of regional growth centres such as Sudbury in Ontario. Such regions are recipients of migration from smaller communities. Purpose-built resource towns were often created from a top-down planning process initiated by a single entity. In the case of Elliot Lake the process was initiated by a private uranium firm and in the case of Tumbler Ridge by the provincial government to service the emerging coal industry.

The intention of master planning a resource town was to create a complete community for workers to service the industry and mine facilities. During this time, new town establishment was subject to few policy restrictions and controls which often led to poor urban environments, which have since been well documented Kuyek and Coumans, ; Veiga et al.

Beginning in the s and onward, there have been dramatic changes to environmental legislation which now require environmental impact assessments for new town establishment mandated by the federal government under the Canadian Environmental Assessment Agency. As a result, new town proposals are now subject to potentially lengthy waiting periods before development may be initiated Jackson and Curry, ; Markey et al.

The uncertainty of the waiting period poses a significant barrier to the industry because of the need to initiate operations quickly. If for example a proposal for new town establishment was made and not approved until several years later, the economic viability of resource extraction may be vastly different due to fluctuations in global commodity prices.

Beyond environmental impact assessments, new towns are subject to evolving design guidelines as regulated by municipal councils which can be costly to facilities with temporary lifespan. Moreover, since camps are often without municipal councils there are little or no bylaws regulating development and design. While cost is a significant barrier to new town development, some provincial jurisdictions have altogether forbidden development in certain locations.

During the s, the Alberta government refused the creation of any new towns in the Coal Branch area west of Edmonton. Since municipal incorporation is dependent upon provincial approval as set out in the Canadian constitution, industry had no choice but to rely on fly-in camps with long distance commuting models Berg, The policy and regulatory environment has also been increasingly subject to influence by first nations groups as consultation processes are strengthened, especially in cases where first nations lay claim to resource rich land. As Markey et al. Matthew McDonagh SCARP 17 In addition to changes in provincial consultation legislation which outline processes pertaining to aboriginal engagement, federal labour laws have provided first nations with a more central role in resource extraction by way of affirmative action provisions contained in resource development agreements.

Purpose-built towns have proven ineffective in including aboriginal groups in resource extraction because they create difficulties in the retention of traditional aboriginal lifestyle. In order to participate in resource development in permanent town establishment, aboriginals have been required to relocate which often meant leaving behind traditional ways of life. Aboriginal hiring provisions will be discussed in greater length in the policy considerations section since together with northern hiring provisions both function as a strategy to help disperse employment opportunities across regional communities to retain development within the north.

Contemporary extraction facilities require only a fraction of labour than in the past as a result of capital substitution for labour. As a result, more flexible work arrangements such as fly-in camps are more useful because contemporary employment levels would be unlikely to support entire new communities. From a labour supply perspective, complete towns are no longer necessary because extraction facilities employ fewer individuals than in the past.

Fewer regional economies would be able to survive solely on the operation of a single mine given the improvements in production efficiency. Instead, northern communities are recognising the benefits that remote fly-in mines may offer to local communities. For example, the Detour Lake gold mine in northern Ontario employed a total of long distance commuting employees from two key cities within the region: Timmins and Cochrane. Although workers represent a small fraction of the total eligible workforce in their respective communities, their positions are well-paying and enable them to participate in their respective local markets.

Each workers income provides purchasing power within their local community help to support other vertically linked businesses. Fly-in operations are made possible by improvements in automation as well as to transportation and telecommunications technology. In decades since the s, there have been vast improvements made to air travel. Now more than ever air travel is both safe and dependable. Shrimpton and Storey, , there are present and future concerns over the rising price of oil which may threaten the affordability of air travel. The potential for rising costs however represent an opportunity for firms to hire from more local labour pools as opposed to larger ones in the south which contribute to fly-over.

Regardless of the potential for rising costs, improvements in automation and the reduction in labour have served to somewhat offset the rising costs of air transportation. Whether this will remain true in the future remains uncertain. The opportunities for air travel were greatly expanded during intense phases of aviation infrastructure improvements delivered during the s and s. During this time, aviation was growing in popularity and viewed as an opportunity to strengthen links with other parts of the globe. Airport improvements were undertaken to enable smaller remote communities to participate in global markets, which facilitated the free flow of ideas, people, and products.

In Canada, this period also represented a time of rapid expansion with Air Canada operating as a Crown corporation. Airport construction was undertaken in remote regions so as to provide for new business opportunities and to enable settlement in more remote communities. The expansive airport construction during this period has since presented an opportunity for new employment opportunities in the north related to fly-in mining. The collapse of the commodities boom in the late s and early s was hard felt in communities such as Elliot Lake which began a trajectory of downsizing and corporate restructuring into and throughout the s.

During and after this period, lower cost operations emerged in overseas markets, especially in South America, where there was comparatively less government intervention and employment laws resulting in real cost savings for private business. As a result, attention was focused on improving productivity and reducing production costs as much as possible in North America. Specifically, firms began seeking out more remote exploration where they could find higher grade deposits Markey et al.

It was during this time in the s that Ontario Hydro cancelled its contracts in Elliot Lake due to the existence of higher grade uranium in northern Saskatchewan. By way of fly-in models, Saskatchewan was able to offer higher grade uranium at comparative prices Mawhiney and Pitbaldo, New remote mining locations provide a competitive edge over traditional purpose-built resource communities in that they require less start-up costs as a result of long distance commuting models.

Isolated mines had shorter extraction lifetimes and smaller work forces as a result of industrial restructuring calling for greater extraction efficiency. Both of these characteristics have proven particularly conducive to fly-in models whereby large start-up costs are avoided or minimised. In the case of uranium extraction in northern Saskatchewan, firms were not required to undergo expensive investments in infrastructure to spearhead extraction.

The temporary Matthew McDonagh SCARP 19 nature of the new mines also was better able to respond to mineral price fluctuations than traditional settlements. Given the comparatively small investment, firms were no longer required to make long term commitments to a particular site. Operations could be expanded and contracted with changes in global prices and as other business needs changed. Research has also suggested that such mines have several operational advantages to the individual firm with respect to labour Shrimpton and Storey, ; Nogas, Fly-in models are comparatively easier in attracting and retaining skilled workers given that fewer family disruptions result from having to relocate to new towns.

Although, research suggests that fly-in camps disrupt traditional family structures and often require several adaptations within the mine workers immediate family as a result of lengthy separations. However, the Rabbit Lake uranium mine in northern Saskatchewan began with a turnover rate of 28 percent when it began operations in which declined to six percent in after employing long distance commuting models Nogas, While the decline in turnover may be in part due to a lack of alternative mining opportunities during the period of restructuring, it too is likely because fly-in camps provide for flexible work arrangements.

Under such systems, workers are no longer required to relocate to isolated and remote settlements in which they have no family or social ties. Without direct oversight, there has been recognition that such developments may have growing negative impacts, especially with respect to regional and community development. While fly-in models have been proposed as an opportunity to retain employment within the regional economies of the north, some camps have demonstrated the potential for fly-over whereby adjacent communities close to mines reap few benefits as labour and supplies are drawn from distant parts of the region or from entirely different provinces.

In addition, fly-in camps present the potential for the north to lose some of its skilled labour. If for example, pick-up points are dispersed over several communities across broad regions, employees are provided with the opportunity to migrate to their preferred settlement which may offer the greatest range of urban services or best lifestyle. The likelihood of this occurring is greatly influenced by the fact that employees bear little to no cost for transportation costs. Northern development is increasingly concentrated as the expansion of regional centres continues at the expense of closure of other communities.

If not properly structured, fly-in mines may serve to expedite this process and stunt development in remote areas. Each issue will be explored in greater detail and used to help guide and shape policy considerations. The result is a lost opportunity for local residents and businesses to participate in the economic benefits provided from a mine.

It also effectively stunts northern development because several localities in the north exhibit high unemployment.

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Without drawing on their skilled labour pools there is little opportunity for economic growth given that alternative businesses opportunities are limited. Fly-in models may have profound impacts on the development of northern regions, especially as they may lead to population decline in smaller communities. Research has suggested that the existence of and potential for fly-over is heavily dependent upon the mine location and structure of the rotation periods and number of pick-up points. Community capacity in remote northern regions remains a large issue with many unable to provide significant pools of skilled labour to staff mining facilities.

The table below highlights the spread of employment by region of residence in seven mines across Canada. Table 5. Johnny Mtn. Golden Bear, B. Golden Patricia, O. Detour Lake, O. Lac Shortt, Que. Hope Brook, Nfld. It is quite evident from the data that mine location and rotation patterns have an impact on employment distribution.

In this case, there is a high degree of fly-over. Markey suggests that the potential for fly-over may be mitigated by structuring development agreements which include provisions that provide employment preference to workers and communities within the local region provided they meet industry requirements.

Since northern communities in the vicinity of mines often exhibit high levels of unemployment and typically have pools of skilled labour there is perhaps an opportunity to incentivise hiring from such communities. The structure of rotation periods and designation of pick-up points may be structured to help achieve such objectives.

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This will be discussed further in section 7. Although the scale of inputs and supplies is vastly different between purpose-built towns, the responsibility of providing infrastructure has changed. In addition to raw materials needed for the construction of shelter, mines require heavy equipment and machinery in order to carry out extraction processes. Transportation to downstream manufacturing facilities also provides opportunity for business in northern communities and enables economic retention. In her work, Saarinen discusses how Sudbury has expanded its mining services industry to broaden the economic base and capitalise on a growing industry.

Similar to fly-over of labour, fly-over of business occurs when a mine purchases a significant amount of inputs from jurisdictions outside the vicinity of the mine. Matthew McDonagh SCARP 22 Ernst and Whinney were commissioned by the federal government to identify business opportunities in the Northwest Territories to help strengthen business in the mining services and exploration sector.

More recent research Shrimpton and Storey, suggests that input purchases are heavily dependent on transportation linkages to the mine in addition to the existence of specialist suppliers. The input purchase patterns of Golden Patricia and Detour Lake gold mines in northern Ontario purchase 88 percent and 80 respectively from within the northern Ontario region. Cities such as Timmins, Thunder Bay, and Sudbury have all significantly developed their mining services industry, which is largely responsible for the heavy reliance on northern Ontario suppliers.

In short, it is difficult to make generalisations based on the purchasing profile of mines given that product origin depends heavily on the remoteness of the mine, transportation linkages to the mine, and the existence of a nearby mining services industry. For example, mines located in eastern Canada derive much of their supplies from European countries because they are purchasers of the ore.

The ships which transport ore to Europe return back with mining supplies for workers ibid. The fly-over business phenomenon is by no means unique to the mining sector and resource extractive operations but rather a reality of a globalising world. Just as there appear to be economic leaks outward from northern economies to suppliers outside Canada there too is evidence to suggest that resource operations in the northern United States and Alaska purchase a significant amount of their inputs from Canadian suppliers ibid.

Matthew McDonagh SCARP 23 While fly-over business is a more pressing issue for mines located in the far north, there is an opportunity for governments to expand the mining services industry in order to meet the demands of a growing sector. Within this realm, northern communities have a competitive advantage over their southern counterparts given their experience in mining and often closer geographic proximity to the mine which requires less long distance transportation.

There have been several cases of lease agreements between federal and provincial governments and mining firms containing equity provisions which stipulate that a certain share of the workforce must be composed of particular groups such as northerners or aboriginals. While the definition of what constitutes a northerner varies between agreements, it represents evidence of attempts to spread equity. The inclusion of employment quotas is often negotiated on a best effort basis Markey et al.

In Saskatchewan, hiring of northerners contained in mines increased from However, the composition can change dramatically, especially when there are pick-up points provided to communities further south of the mine. Since transportation to the site is provided by the firm, individual employees incur little to no individual transportation costs.

Such a structure has demonstrated to have profound implications on the migratory patterns of mine workers. If a firm provides pick-up points to several localities in a region, individuals may choose to locate in different communities with no consequences for transportation costs. This trend has proven most evident in mines which offer pick-up points to both north and south localities. Such trends have profound implications for regional development whereby skilled labour is relocated to more diversified economies in the south furthering uneven patterns of development.

In Saskatchewan, McBain found that 36 percent of northern hires in Saskatchewan uranium mines had relocated to the south over several years.

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There is however an opportunity to mitigate out-migration by structuring shorter rotational periods and limiting the number of pick-up points. Resource firms attempt to spread operational and transportation costs by drawing several workers from single sites. Doing so helps to limit variable costs. As a result, highly-skilled workers are limited in their individual ability to secure travel benefits from distant points.

The Peace River Regional District in the northeast corner of British Columbia is home to a large and growing transient workforce employed in the oil and gas industry. Markey et al. Traditional purpose-built resource towns that do not rely on long distance commuting as well have earned reputations as being rife with substance abuse problems, especially during times of economic downtown and restructuring.

During the closure of the uranium mines in Elliot Lake, the provincial government delivered much assistance to construct an addictions and counselling facility Mawhiney and Pitbaldo, ; Dixon, Costa maintains that the stress on families is especially great during leave times when a family member returns to the mine for a shift.

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Boom Town Blues: Elliot Lake: Collapse and Revival in a Single-Industry Community Boom Town Blues: Elliot Lake: Collapse and Revival in a Single-Industry Community
Boom Town Blues: Elliot Lake: Collapse and Revival in a Single-Industry Community Boom Town Blues: Elliot Lake: Collapse and Revival in a Single-Industry Community
Boom Town Blues: Elliot Lake: Collapse and Revival in a Single-Industry Community Boom Town Blues: Elliot Lake: Collapse and Revival in a Single-Industry Community
Boom Town Blues: Elliot Lake: Collapse and Revival in a Single-Industry Community Boom Town Blues: Elliot Lake: Collapse and Revival in a Single-Industry Community
Boom Town Blues: Elliot Lake: Collapse and Revival in a Single-Industry Community Boom Town Blues: Elliot Lake: Collapse and Revival in a Single-Industry Community
Boom Town Blues: Elliot Lake: Collapse and Revival in a Single-Industry Community Boom Town Blues: Elliot Lake: Collapse and Revival in a Single-Industry Community

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