Guest Column (October 14, 1991)

At least 25% of Canadians live in rural, often remote, single-industry communities. The 115 communities dependent on the minerals and metals industry alone contributed 4.5% of Canada’s Gross Domestic Product (GDP) in 1990 (in constant 1986 dollars). Mining, forestry and agriculture together contributed almost $60 billion to the Canadian economy, representing about 11% of total GDP. Their dependence on a single industrial sector or employer has made their economies more fragile than economically diversified communities.

Most rural and remote single-industry communities experience a common set of problems, as cited by David Freshwater of Rural Economics at the University of Kentucky. Freshwater, a keynote speaker at an April conference in Coaticook, Que., noted:

— Excess labor supply as capital is increasingly being substituted for labor in the production process;

— A mismatch of employee skills and employer needs as technological developments outpace training;

— Increasing per capita cost of providing services because of people moving out of rural communities thereby eroding their tax base;

— A gradual decline in the price of their commodity, which may threaten their existence;

— Lack of an entrepreneurial base. One-industry towns depend on one major employer who makes most decisions, and provides for most of their needs; — An apparent mismatch between rural industries, such as mining, forestry and agriculture, and what the nation views as its opportunities; and — A growing conflict between rural and urban interests on environmental issues. Rural residents are more directly dependent on resource development for jobs and income than are urban populations.

Many of the problems cited by Freshwater pertain to communities dependent on mining. Excess labor supply is a case in point. The “boom-bust” nature of the mining industry creates a tight labor market during the “boom” years, as mining-dependent communities enjoy a period of full employment. During the downside of the mineral cycle, however, when mining communities are most likely to face layoffs and even mine closures, an excess labor supply situation develops. This problem is compounded when the skill level of these workers does not match the ever-changing requirements demanded in the mining job market.

The mismatch between rural industries and what the country views as its opportunities has implications for mining. The country continues to under-appreciate rural industries. Mining and mineral-related manufacturing employed almost 400,000 people in 1990, and accounted for 18% of our exports, contributing a trade surplus of $11.3 billion to the Canadian economy. While our economy benefits significantly from the contributions of the minerals and metals sector, there are pressures to move away from supporting resource development. Instead, manufacturing and service sectors are seen as future sources of opportunities, making the future of mining-dependent communities less certain.

Environmental concerns have further implications for mining-dependent communities. The mining industry has already undertaken measures to reduce the potentially adverse effect of its activities. However, urban environmentalists continue to challenge the industry to do more. The most immediate challenge facing single-industry communities is the diversification of their economic base. The “bottom-up” approach to local community development, based on community initiative and self-involvement, came across strongly at Coaticook as one solution for mining, forestry and agriculture-dependent communities. Residents want to stay in rural and remote regions, and to maintain and improve their communities. Employment and Immigration Canada’s Community Futures Program was cited often as one program that has helped these communities to help themselves.

Freshwater argued that restructuring of rural, single-industry communities must be built on local community development and self-reliance, not on federal or provincial support mechanisms.

Only those communities that are willing to take matters into their own hands, and can successfully diversify their economic base, will survive. From an article published in Energy, Mines and Resources Canada’s Mining Industry Employment Update, September, 1991.