Resource development and northern communities--an introduction.

Author:Southcott, Chris
 
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Since the end of the nineteenth century, the economic development of northern Canada has relied heavily on resource development. While it is true that the public sector has long been the dominant economic force in the region, in terms of promoting "sustainable" economic development, the extractive resource sector is seen as the major source of future growth. When people talk about what is most likely to keep northern communities alive and to stimulate potential future growth, few people talk about using the public sector. Tourism can be important--especially in areas such the Yukon--but it is generally not perceived to be the potential engine of regional growth. While renewable resource development is seen as a more desirable source of economic growth, and while it is seen as an important support for communities, few believe it can supply the region with the same level of economic benefits as mining and oil and gas developments.

Short of a massive new government expenditure program such as the defence expenditures seen during the Second World War, the most likely source of economic development in the North is the extractive resource sector. Yet this is somewhat problematic for a vision of sustainable economic growth in the region. Extractive resource development is, by its nature, finite. Mineral and oil and gas deposits share the common characteristic of eventually becoming exhausted. They are, therefore, by their nature, not sustainable. How can a region hope to develop long-term sustainability when the dominant sector is not sustainable?

Another problem with trying to support communities based on extractive resource development is that this form of economic development is seen to be problematic for these communities. Mining and oil and gas developments are prone to boom and bust cycles that create many problems for regional communities. Increased drug and alcohol abuse, housing problems, and transiency are all problems associated with the boom period while unemployment, out-migration, and poverty are problems associated with the bust period. In addition to this, many studies have pointed out that most of the long-term benefits of extractive resource development leave the region, whether this be profits, wages, or training benefits. Recently, economists have been pointing out that when benefits do remain in the region, these produce a range of problems that have a negative effect on economic growth--the so-called resource curse.

So why do northern regions continue to look to extractive resource development as a way to promote sustainable development? One main reason is that there are few other options available. The geography and makeup of the region are such that few people believe alternative options are viable. The social economy, tourism, and subsistence activities are all important for northern communities, but they are not seen as being enough to support long-term growth.

Another reason, however, is that the region now has much more confidence than it had in the past, that it can both control the negative aspects of extractive resource development and ensure that more benefits stay in the region. New land claims and self-government arrangements, devolution, new co-management arrangements, new environmental and social impact assessment regulations, and a new sense of corporate social responsibility, mean that there is a greater likelihood that current and future extractive resource development will be done differently than in the past. There is increasingly a belief that the admittedly short-term benefits of extractive resource development can be harnessed to assist in bringing about long-term sustainability. This belief is the basis for the Resources and Sustainable Development in the Arctic (ReSDA) project. Started in 2011, the project, in partnership with regional and community organizations, is mobilizing leading researchers in northern development around the idea of finding out how best to increase the benefits that northern communities receive from resource development and how best to ensure that negative impacts are mitigated.

This special issue of the Northern Review discusses some of the current research on the topic. In particular it highlights some of the work that graduate students involved in ReSDA and related projects are doing.

Natural Resources and Sustainable Growth

Prior to the Second World War, there was little sense of a contradiction between extractive resource activity and sustainable economic development. At the time, it was thought that mining and oil and gas development could lead to a general diversification of the regional economy, which would result in stable growth. Indeed this was one of the original ideas of the so-called staples theory of development. Harold Innis and others pointed out how staples, such as fish, grain, wood, and minerals, could be used to sustain economic growth in frontier regions (Innis, 1936). Watkins would later develop an explanatory model that showed that this sustainability would be achieved through a series of linkages to staples production (Watkins, 1963). Through the use of backward, forward, fiscal, and final demand linkages, frontier regions could develop a diversified and self-sustaining economy--even if the staples production ceased to exist. Indeed, this possibility had already been presented by Jack London in 1900 when he explained how the Klondike gold rush would develop the infrastructure...

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