Although the province’s population has grown immensely during the last century, its economy remains dependent on the natural resources extracted in small towns throughout the countryside.
And at least one of those towns is teetering on the brink of collapse.
The explosion and subsequent end to the Babine Forest Products mill near Burns Lake in January spelled financial disaster for the town. (See “The small town trap” – BIV issue 1188; July 31-August 6.)
Some 250 people were immediately out of work and hundreds more indirect jobs were lost.
In the months since, many of those workers have found jobs elsewhere, but the town faces the very real possibility the mill might never be rebuilt and the local economy could wither.
The village’s 21-year-old mayor, elected less than a year ago, is left to clean up the mess.
“We didn’t just lose the mill; we’ve got an [entire] industry that’s impacted,” said Luke Strimbold.
Strimbold is keen to see the local economy diversify, as is Burns Lake Indian Band chief Al Gerow, Jobs Minister Pat Bell and local tech company owner and chamber of commerce member Ron Zayac.
“The long-term key is diversification,” said Zayac. “We are faced with a community that’s resource economy dependent … there will not be a viable [sawmill] plant downstream, at least for a gap of time.”
So how does a town of 2,000 people rejig its economy for the future? Or can it?
Burns Lake isn’t the first modern community to face an economic slump.
Mackenzie, three hours north of Prince George, faced a similar situation in 2009 when its pulp and paper mill and sawmill shut down amid the recent tecession.
Kitimat, located on the northern coast, was similarly hit hard when its methanol and pulp and paper plants closed.
“It was devastating,” recalled Kitimat mayor Joanne Monaghan. “There wasn’t a house in town that wasn’t for sale. We had families split up because one spouse had to go away to work. It was really a doom situation.”
These types of shutdowns in small-town B.C. have huge impacts on the provincial economy.
B.C.’s softwood lumber exports generated $1.6 billion in value last year, supporting jobs from the forests in the north to ports in Vancouver and Prince Rupert.
In 2011, natural resources (including wood products, pulp and paper, grain, minerals, coal, electricity and natural gas) generated some $27.3 billion in export value, or 83% of total provincial export value.
Most of those materials were mined or manufactured in the north, which then supported transportation, shipping and service jobs in Vancouver.
“The natural resource based economy is critical to British Columbia,” said Bell. “Historically, when natural resources have done well, B.C. has done well. When natural resources don’t do well, B.C. doesn’t do well … we need to continue to stay focused on that.”
And when a mill or a mine shuts down in the north, it sends ripple effects throughout the provincial economy.
The industrial model
Greg Halseth, the Canada research chair on rural and small-town studies at the University of Northern BC, said the problem is that many of northern B.C. towns are modelled on a post-Second World War industrial boom, which saw B.C. build transportation corridors and erect communities to support resource extraction. These industrial centres were meant to last.
“It was really successful,” said Halseth. “For about 40 years, every region, every part of the province grew in every five-year census.”
But in the early 1980s, international trade agreements began to open up previously protected markets in Asia and elsewhere, and advances in shipping technology allowed raw materials to be moved around the world faster and cheaper.
That forced B.C. resource companies to automate their operations, cutting jobs in the name of efficiency to compete with cheap labour abroad.
“As a result of those transitions, economic booms and busts are actually becoming more acute and more frequent,” Halseth explained.
The downturn in the forest sector during the recent recession, for example, drove many Interior loggers and tradespeople toward the oil patch in Alberta where jobs were plentiful.
Just a few years later, those workers remain in Alberta, and B.C.’s forestry sector, which has revived somewhat, is sorely wanting for loggers and truckers.
Mackenzie Mayor Stephanie Killam said the north’s – and by extension B.C.’s – dependency on natural resources has become a set of golden handcuffs.
“When [towns] got hit, that was part of the problem. Nobody had thought beyond the box,” said Killam.
Halseth believes the only way out of this small town trap is economic diversification.
“The bottom line is that they need concerted, local effort,” said Halseth. “They need to develop a sense of creative vision. They have to marry their local assets with their aspirations, and then to be successful they actually do need supportive top-down public policy.”
Diversifying the north
Valemount, Halseth said, is a perfect example.
A decade ago, the town, located west of Jasper in the Rocky Mountains, was dependent on the forest sector.
Community leaders realized the ups and downs of that industry weren’t good for the local economy and decided to start building on local assets such as Valemount’s location along a major shipping corridor and proximity to the mountains.
Valemount now has a year-round tourism industry, new hotels and motels and a market for secondary homes.
The story is the same to the west where Terrace has remodelled itself as a service and supply hub for the northwest, and Smithers has capitalized on its scenery to generate tourist traffic and even attract Hollywood, which filmed the Liam Neeson drama The Grey there in 2010.
Mackenzie and Kitimat have revived their economies in recent years, though they remain dependent on natural resource extraction.
But what about Burns Lake?
Major infrastructure projects such as highway upgrades and a new hospital for the town will generate jobs in the next few years, but leaders in Burns Lake have yet to come up with a long-term diversification plan.
Some local community leaders see tourism, specifically mountain biking tourism, as a future economic draw, while others see the forestry sector and bioenergy as the ultimate answer.
Bell wants to diversify small-town economies not entirely away from natural resources, but away from dependency on one type of resource or manufacturing.
Killam, like many leaders in the north, said southern B.C. often overlooks the contributions of small-town economies, and that it’s ultimately up to the north to change the way it does business.
A diversified northern economy won’t happen overnight, but Halseth is confident that a change is occurring and the cycles of the past won’t be repeated forever.
“The north is already looking different,” said Halseth. “You won’t drive down the highway in the future and just go from sawmill town to sawmill town.” •
By the numbers
83%: Natural resources’ share of total provincial export value in 2011
$27.3b: The value of natural resource exports in 2011 (including wood products, pulp and paper, fish, grain, minerals, coal, electricity, natural gas and other commodities)