Deindustrialization of Canada

[Humphrey Bogart]

So this happened in my hometown last week:

Glencore to close Brunswick Lead Smelter in Belledune, N.B., cut 420 jobs

Glencore Canada Corp. has announced the permanent closure of the Brunswick Lead Smelter in Belledune, N.B., resulting in the loss of 420 jobs.

The town’s mayor, Joe Noel, got the news of the closure Wednesday morning in a meeting with officials from Glencore. “It’s a blow to the whole northern New Brunswick area,” he said in an interview. “It’s devastating, but we are resilient people. We will find a way around this, and we’ll do what we have to do.”

More at the link:
https://globalnews.ca/news/6162514/glencore-to-close-brunswick-lead-smelter-in-belledune-n-b-by-year-end/

Yet another large factory with good paying jobs goes the way of the dinosaur in that part of Canada.  A combination of carbon taxes, environmental lobbying and union job action put one the few facilities of it's kind left in NA out of business.

Glencore of course says the Union strike, which has been on going since April, had nothing to do with it but everyone knows that's a lie.  Especially considering they cancelled the recent $60 million in upgrades to the facility and warned the workers the strike was putting the facility in jeopardy.

The Union thought they could take Glencore on because they would never risk losing the license to operate this facility in NA as they would never get another one in the current political climate.  Boy were they wrong. 

This follows the closure of all the paper mills in Northern NB as well as the massive Brunswick Mining Camp.  There is still one mine open that is run by Trevali (which is 25% owned by Glencore btw) but it shipped all its lead concentrate to this particular smelter.  I'm betting it closes in a year or two as it's considerably more expensive to operate than their other holdings in Africa and South America.

End of an era for my family and the region, many of whom worked in the mining industry, including my brother.
Canada is most definitely closed for business.

 

[Navy_Pete]

Watched this happen as a kid growing up in Hamilton in the 80s; at one point something like 100,000+ people were employed at the 2 big steel mills and a few smaller ones (both directly and via subcontractor support). Plus there was all the various shops casting/machining parts for cars and heavy industry.

Most of those are now gone, and the ones remaining have contracted significantly, and Hamilton has become part of the Toronto commuter zone for the kind of white collar jobs that will disappear in the next stock market crash.

Asked the question years ago at an NSS townhall; if we are going to have strategic industrial capabilities (like automaking, shipbuilding etc), why don't we also have strategic considerations for processing the raw materials?  For example, no one in Canada can produce the steel required for our ships, so all had to be ordered internationally.

Get that people don't like the smell and pollution that goes hand in hand with industrial activities, but it seems stupid to have a wealth of natural resources, but have to rely on other countries (including China) to have it turned into a useful product.

 

[Humphrey Bogart]

Watched this happen as a kid growing up in Hamilton in the 80s; at one point something like 100,000+ people were employed at the 2 big steel mills and a few smaller ones (both directly and via subcontractor support). Plus there was all the various shops casting/machining parts for cars and heavy industry.

Most of those are now gone, and the ones remaining have contracted significantly, and Hamilton has become part of the Toronto commuter zone for the kind of white collar jobs that will disappear in the next stock market crash.

Asked the question years ago at an NSS townhall; if we are going to have strategic industrial capabilities (like automaking, shipbuilding etc), why don't we also have strategic considerations for processing the raw materials?  For example, no one in Canada can produce the steel required for our ships, so all had to be ordered internationally.

Get that people don't like the smell and pollution that goes hand in hand with industrial activities, but it seems stupid to have a wealth of natural resources, but have to rely on other countries (including China) to have it turned into a useful product.

The real crazy thing about this is that these are highly skilled tradesmen jobs that are being lost.

Most of my friends and family that worked in the Mining Industry in and around Bathurst all still work in the Mining Industry, they have just become Mining Mercenaries selling their skills to the highest bidder elsewhere, Burkina Faso, Niger, South Africa, Australia, Peru, Ecuador, etc. 

I have no idea how a country with such abundant Natural Resources can neglect it's resource industries so much?

 

[YZT580]

Why?  Does the expression 'fly-over' sound familiar?  Working stiffs are not cool people.  They don't drink latte's and they don't buy the Toronto Star.  Not only that but if you try to shake their hands you will find that they are rough and there is often dirt under their nails.  Although they pay the bills they don't call the tune so often as not, they are ignored and the loss of their jobs and skills doesn't even register.  To the in crowd they are simply unavoidable casualties in the war against global warming.  Most of our industrial jobs are vanishing because of two factors: high energy costs, government restrictions all coupled with high labour costs.  For labour costs think of Caterpillar in Brampton or, the steel mills in Hamilton.  Government has killed the oil industry in the Prairies and high energy costs helped drive GM out of Ontario.

These are the people that, in the states, voted Trump and may become a potent force in Canada if the right leader comes forward. For the people making the choices right now do not represent the majority.

 

[daftandbarmy]

Meanwhile, in 'Amazing Alabama'...


Canadian-based Canfor establishing U.S. headquarters in Mobile

https://amazingalabama.com/2017/01/25/canadian-based-canfor-establishing-u-s-headquarters-in-mobile/

And many other Canada forest companies are jumping ship for the southern states because, guess what, America is great again (and Canada ain't so hot, unless you're a triggered environmentalist).

 

[The Bread Guy]

Meanwhile, in 'Amazing Alabama'...


Canadian-based Canfor establishing U.S. headquarters in Mobile

https://amazingalabama.com/2017/01/25/canadian-based-canfor-establishing-u-s-headquarters-in-mobile/

And many other Canada forest companies are jumping ship for the southern states because, guess what, America is great again (and Canada ain't so hot, unless you're a triggered environmentalist).

To be fair to the rabid environmentalists out there, there's a bigger, more silent elephant in the room with this industry. 

This is far from the first forestry company shutting up shop and/or moving ever since the U.S. started softwood lumber tariffs around the time of the Falklands War. 

Most recently from the U.S. (April 2017), for example ...

The Trump administration is hitting Canada with stiff tariffs of up to 24% on lumber shipped into the United States ...  The tariffs -- also called duties -- ranged from 3% to 24% on five specific Canadian lumber companies. For all other Canadian lumber companies, there's a nearly 20% tariff on exports to the US.  The five firms were: West Fraser Mills, Tolko Marketing and Sales, J.D. Irving, Canfor Corporation, and Resolute FP Canada. West Fraser Mills will pay the highest duty of 24%.  The duties were imposed to create a level playing field for American lumber companies ...

Both Team Blue & Team Red governments since then haven't been able to fully wrestle free for long in spite of trade panels saying, "no, Canadian lumber imports are not hurting U.S. markets".

My read of this is that it's not so much tree-huggers as "Big Wood U.S." being able to twist arms harder and longer than "Big Wood Canada" here.

 

[mariomike]

, America is great again

Amazing. Considering only 46.1% voted to "make America great again".

If 2018 was a referendum on "keeping it great", we saw how that went.

(and Canada ain't so hot, unless you're a triggered environmentalist).

It's cold. But, like many other Canadians, I'm happy to call it home.

This is far from the first forestry company shutting up shop and/or moving ever since the U.S. started softwood lumber tariffs around the time of the Falklands War. 

Good point.

 

[NavyShooter]

I deliberately switched my investment portfolio to focus on OUTCAN - my opinion of our market stability is low.  Some major concerns in our resource industry have echos throughout our economy....here are a couple I've seen in the news recently and have my eye on:

-1600 jobs in the rail sector set to be lost (CP rail I think it was?  This is a HUGE indicator on our economic outlook...rail is a key indicator of our domestic product.)
-Northern Pulp in NS unlikely to meet environmental criteria next month and will likely have to close (the company has threatened this) which will result in hundreds of lost jobs in an area that can ill afford to lose them

I'm not optimistic about our economic future under a 'grow it from the heart' and 'the budget will balance itself' leadership...

NS

 

[Humphrey Bogart]

I deliberately switched my investment portfolio to focus on OUTCAN - my opinion of our market stability is low.  Some major concerns in our resource industry have echos throughout our economy....here are a couple I've seen in the news recently and have my eye on:

-1600 jobs in the rail sector set to be lost (CP rail I think it was?  This is a HUGE indicator on our economic outlook...rail is a key indicator of our domestic product.)
-Northern Pulp in NS unlikely to meet environmental criteria next month and will likely have to close (the company has threatened this) which will result in hundreds of lost jobs in an area that can ill afford to lose them

I'm not optimistic about our economic future under a 'grow it from the heart' and 'the budget will balance itself' leadership...

NS

I don't invest in any Canadian companies, except Utilities and some Real Estate.  Most of my money is parked in the S&P 500 and International Markets.

Any time a railroad is laying off workers, you know things are not good as they are expecting a downturn in products to move.

 

[Bruce Monkhouse]

Amazing. Considering only 46.1% voted to "make America great again".

Doesn't hearing the same song in your head over and over and over again start to drive you insane???

 

[mariomike]

Doesn't hearing the same song in your head over and over and over again start to drive you insane???

I was replying to this,

, America is great again

MAGA belongs in Global Politics.

If you prefer to exchange one-line personal insults, I'll leave you to it.

 

[QV]

MM, considering the US economy is on fire while Canada's is in a death spiral, I 'd say Bruce Monkhouse has a point. 

The US is reaping the rewards of a Trump presidency whether all of the citizens like it or not, and Canadians are losing jobs by the train load across the country.  Both results are directly related to the policies enacted by each respective government. 
 

 

[mariomike]

The US is reaping the rewards of a Trump presidency whether all of the citizens like it or not, and Canadians are losing jobs by the train load across the country. 

I guess voters reap what they sow. 

 

[Underway]

Lot of negativity here.  Canada's economy is not in a death spiral.  Not even close.  However there is a recession coming, including the US as the sugar high of Trump tax cuts run their course and the diet of trade wars begin.

As for NB.  East Coast unionism meets social welfare state and UK pre-Thatcher happens. The province is screwed geographically and has little to no resources that can't be made, bought or dug up elsewhere at much lower cost.  All the youth of NB know this and move to Halifax or head out west.  I highly doubt carbon taxes had much to do with this situation as it was happening well before the current trend to environmentalism.

As for Hamilton.  Stelco (or whatever its called now) is making more steel on their one modern line than they ever did on their four older lines.  Steel manufacturing  is much safer, and faster when its automated.  The city itself has plenty to offer besides a Toronto commute town. That would be doing the place a disservice. I know plenty who are moving back from TO because of jobs, property and the lifestyle is more their speed.  Lots going on in medical research, materials, steel, services, the port is booming again with agriculture shipping etc...

 

[daftandbarmy]

Lot of negativity here.  Canada's economy is not in a death spiral.  Not even close.  However there is a recession coming, including the US as the sugar high of Trump tax cuts run their course and the diet of trade wars begin.

As for NB.  East Coast unionism meets social welfare state and UK pre-Thatcher happens. The province is screwed geographically and has little to no resources that can't be made, bought or dug up elsewhere at much lower cost.  All the youth of NB know this and move to Halifax or head out west.  I highly doubt carbon taxes had much to do with this situation as it was happening well before the current trend to environmentalism.

As for Hamilton.  Stelco (or whatever its called now) is making more steel on their one modern line than they ever did on their four older lines.  Steel manufacturing  is much safer, and faster when its automated.  The city itself has plenty to offer besides a Toronto commute town. That would be doing the place a disservice. I know plenty who are moving back from TO because of jobs, property and the lifestyle is more their speed.  Lots going on in medical research, materials, steel, services, the port is booming again with agriculture shipping etc...

Meanwhile, big capital is heading south (or elsewhere) along with Encana, other big businesses, and the snowbirds:

Jack Mintz: Here’s why investment into Canada isn’t the happy story Ottawa’s telling

Actually inflows have been down since 2013 as foreign capital interest in Canada has fallen off sharply

https://business.financialpost.com/opinion/jack-mintz-heres-why-investment-into-canada-isnt-the-happy-story-ottawas-telling

 

[Altair]

MM, considering the US economy is on fire while Canada's is in a death spiral, I 'd say Bruce Monkhouse has a point. 

The US is reaping the rewards of a Trump presidency whether all of the citizens like it or not, and Canadians are losing jobs by the train load across the country.  Both results are directly related to the policies enacted by each respective government. 

Interesting point there.

The current US budget deficit is 804 billion dollars. Going off of the conventional wisdom of the USA being ten times bigger than Canada, the Canadian equivalent to that would 80 billion dollars, dollar for dollar. If we were to factor in the exchange rate, it would be around 100 billion Canadian dollars in order to have that American economy that is on fire.

 

[Humphrey Bogart]

Lot of negativity here.  Canada's economy is not in a death spiral.  Not even close.  However there is a recession coming, including the US as the sugar high of Trump tax cuts run their course and the diet of trade wars begin.

As for NB.  East Coast unionism meets social welfare state and UK pre-Thatcher happens. The province is screwed geographically and has little to no resources that can't be made, bought or dug up elsewhere at much lower cost.  All the youth of NB know this and move to Halifax or head out west.  I highly doubt carbon taxes had much to do with this situation as it was happening well before the current trend to environmentalism.

As for Hamilton.  Stelco (or whatever its called now) is making more steel on their one modern line than they ever did on their four older lines.  Steel manufacturing  is much safer, and faster when its automated.  The city itself has plenty to offer besides a Toronto commute town. That would be doing the place a disservice. I know plenty who are moving back from TO because of jobs, property and the lifestyle is more their speed.  Lots going on in medical research, materials, steel, services, the port is booming again with agriculture shipping etc...

Firstly, I did not say that carbon taxation was the only thing that caused the decline in industry but it is definitely a factor.

I can tell you that the carbon tax has an effect on industry in NB as it will drastically increase the price of electricity as over 50% of electrical generation in NB is fossil fuel. 

The Glencore Smelter is right next to one of Canada's newest and most modern Coal Power Plants (built in the 90s) it is now probably closing within the next 5-10 years unless the province comes up with a plan to convert the plant to something else (I used to work there btw). 

Between the Orimulsion fiasco, the requirement to completely rebuild the Mactaquac Dam in the near future, the cost overruns of the Point Lepreau rebuild, NB Power is in a long term world of hurt in the next few years. They should have sold the Corporation to Hydro Quebec ten years ago but NBers are stupid so they didn't. 

I used to work for NB Power, all of these issues we are running in to were foreseen 10-15 years ago but politicians do as they always do, kick the can down the curb until we reach critical failure.

I agree with you on Unions though.  The proof is in the pudding, the only factories and mills operating in NB are all Irving Owned or Non-Unionized. 

The Paper Mill in Bathurst that closed in 2005 closed under the exact same situation the Smelter now finds itself, Union leadership threatening strike action under the premise the Smurfit-Stone would never dare close the most modern containerboard plant in NA considering they had just spent $40 million in upgrades, wrong again!

Glencore Smelter is only partially Unionized, the non-unionized employees have all been offered work elsewhere by Glencore with cost-moves, etc to other plants.  The company looks after those who are loyal to it.

Meanwhile, big capital is heading south (or elsewhere) along with Encana, other big businesses, and the snowbirds:

Jack Mintz: Here’s why investment into Canada isn’t the happy story Ottawa’s telling

Actually inflows have been down since 2013 as foreign capital interest in Canada has fallen off sharply

https://business.financialpost.com/opinion/jack-mintz-heres-why-investment-into-canada-isnt-the-happy-story-ottawas-telling

The only jobs that will be left in Canada are service industry jobs.  All the Liberal Artists can work at Starbucks making $15 bucks an hour with their $40k student debt.

A key indicator for me as to the fragility of the current economy is the TSX Venture exchange which is populated mostly by Junior Resource Companies and Tech Startups.  These are the people that pioneer and develop new resources, ways of doing things and are responsible for the Netflix and Amazons in America.

The TSXV for the past five years is the worst performing stock exchange in the World.  Worse than Greece, worse than anywhere.  You cannot raise capital if you are a startup in Canada.

We are going to slowly become much like France, a shitty little country known for Wine & Cheese but not much else.

 

[Kirkhill]

The Glencore Smelter is right next to one of Canada's newest and most modern Coal Power Plants (built in the 90s) it is now probably closing within the next 5-10 years unless the province comes up with a plan to convert the plant to something else (I used to work there btw).

Maybe they can do like the Brits and convert it to burning Georgia pines.

Last year, 6m tonnes of “wood pellets” harvested from forests in Louisiana, Georgia, Florida, Alabama and Virginia were shipped across the Atlantic, to be burnt in renewable “biomass” power plants. This was almost double the 2013 figure – the US “wood pellet” industry is booming.

Demand is largely driven by European countries wanting to meet targets set out in the EU’s Renewable Energy Directive. Half of the pellets exported from the US were used to generate electricity in Britain’s massive Drax power station, which is slowly converting from coal to biomass in order to reduce carbon emissions and claim valuable “Renewable Obligation certificates” for green electricity. So can it really be sustainable to transport wood halfway round the world to burn in a power station?

http://theconversation.com/british-power-stations-are-burning-wood-from-us-forests-to-meet-renewables-targets-54969

Full firing with biomass

In September 2012 Drax Group announced the conversion to full firing with biomass of three of its six units. The first unit was scheduled to be online by June 2013, the second unit in 2014, and the third by 2017; initially a biomass supply had been secured for the first unit. The cost was estimated at £700 million ($1.13 billion), including modifications to fuel mills and boilers and the construction of storage structures and conveyors for the wood pellet fuel. Each unit will consume about 2.3 million tonnes of biomass yearly, requiring an estimated annual total of 7.5 million tonnes in 2017. This is equivalent to two-thirds of Europe's entire energy biomass consumption in 2010, and requires 1,200,000 ha (4,600 sq mi; 12,000 km2) of forest to supply on a continuous basis.[70][71] North America was expected to be the source of the vast majority of the biomass, although some would be domestically sourced willow and elephant grass.[72]

https://en.wikipedia.org/wiki/Drax_Power_Station

The harvestable area required is about twice the area of PEI or 16 % of New Brunswick.

There is a reason why the Prince Bishops of Durham got into the coal business 800 years ago.  The could grow trees fast enough to burn them.

 

[Brad Sallows]

It's an interesting experiment.  What happens when you yank out the reasons communities came to be in the first place - is the local service economy self-sustaining?  This plays out differently depending on community size; at one extreme are the large cities which barely notice the loss of a major employer, and at the other are the company towns.  Either a contraction can be absorbed, or it can't.

 

[Cloud Cover]

We have lost some major strategic industrial and national infrastructure capabilities, and along with that the skills to recover and re-establish the same:

- railway locomotives
- significant reduction in steel production
- forestry is rapidly receding
- do we produce heavy construction equipment, heavy haul transport trucks anymore?
- specialist welding and metal fabrication facilities are shuttering daily. Cannabis grow ops are not anywhere near a suitable replacement for a car factory, a plywood mill or the family farm.

It’s a situation that makes us far too dependent on foreign suppliers, which harms our national self sufficiency and our security.
Not everybody can be a real estate agent, personal support worker, blogger, civil rights lawyer, social worker or software gaming developer. We need industries and people who can build things, and we need these people to come from our own institutions, not from foreign populations.  Our blue collar roots have been outsourced at a time when these things are needed more than ever. Just my 0.02.