Course:CONS200/2020/Current socio-economic and environmental impacts and future concerns of mining and oil development in Northern Canada

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The complexity of mining and oil development in Northern Canada shows the intricacy of community and industry. Illustrated through past and current case studies, social, economic, and environmental impacts are discussed and are concluded with future concerns.

Case Study

Case Study: Northwest Territories Uranium Mine 1930s-40s

The Uranium and radium mines in the Northwest Territories by Port radium re-opened in 1942 and was then nationalized in 1944 by the Canadian Federal government to supply Uranium for the allied atomic bomb project. To handle the Uranium, the company hired unskilled indigenous workers to load and unload Uranium ore. This project was brought to light by representatives of the Sahtu Dene, which are an indigenous group from the Great Bear Lake region of the Northwest Territories. After great efforts, the Sahtu Dene representatives secured an agreement with the Canadian government to take on a joint historical, scientific, and epidemiologist studies.[1] These are some of the results they found:

  • The company had little care for the safety or health of the indigenous workers as they were handling dangerous radioactive material in far from secure, burlap sacks. Later they found the ore handlers had high rates of cancer. They also reported long lasting psychological impacts on the community due to the social and economical changes that the mine brought to the Sahtu Dene people. The benefits of the mine went to private capital and the Canadian state, yet the impacts disproportionately impacted the local people and environment of the Sahtu Dene people.[1]
  • The company not only put the lives of the indigenous people at risk but the environmental as a whole. The toxic, and radioactive waste was deposited directly into the Great Slave Lake, local potholes lake and on land near Port Radium.The experience of the Dene people highlight a reoccurring history of "nuclear colonialism". This is the process of nuclear mining, nuclear waste, and testing has been done on indigenous land. Using the limited territory left to the indigenous people as the "sacrificial landscape".[1]

Case Study: Nanisivik Mine, 1976–2002

Canada’s first Arctic mind zinc mine. The agreement for the mine included 16.7 million grants and loans from the Canadian government and in return they would receive 18% equity interest and the mine would operate for 12 years with at least 60% of the workforce as Inuit people. Approval was given before any environmental or socio-economic studies were done. A Nanisivik town was created, with employees from southern Canada and surrounding Inuit communities who moved on site with families. In the mine community of 300 there was a health center,school, community center with all sorts of activities, RCMP and the general store. Most employees worked 6 days a week for 91 days and 21 days off.[2]

    • Inuit training and employment were only partially successful because the 60% Inuit employment rate signed in the Strathcona Agreement was never achieved. The highest rate of Inuit employment was 30% during mine construction, and 28% during mine operation, which declined afterwards.[2]
    • Overall the total personal income during employment amounted to C$1 million annually. Yet when the mines closed the economic loss was substantial and was a shock to many members of the community.[2]

Polaris Mine, 1982–2002

The Polaris lead Zinc mine is the farthest north a mine has been, located 100km north of Resolute. This mine opened only 6 years later than Nanisivik but operated quite differently. Unlike Nanisivik, it conducted many environmental studies before starting construction.  They did not want to develop a community dependent on one resource thus decided upon a fly in fly out approach. The employees worked a 63 day shift with 28 days off.[2]

  • Unlike Nanisivik they did not specify an Inuit employment rate, and in total employed less than 30 inuit people.[2]
  • Like the Nanisivik Mine there was a substantial short term economic gain by employees and members of the community, but it had little long lasting effects.[2]

Case Study: Resource Curse in Relation to Athabasca Oil Sands

Athabasca Oil Sands: Largest bitumen deposit in Northern Alberta
  • The mining of oil sands in northern Canada is locally attributing to the poverty of indigenous communities while globally growing the economy. This brings about the issue of the “resource curse”, having impoverishment in an area that has so many resources that positively contribute to the country’s economic growth [3].   
  • The only major oil sands mining industry in the world resides in Canada. Almost half of Canada's oil production comes from northern Alberta. The largest bitumen deposit being the Athabasca deposit [3].
  • The land in northern Alberta still plays an important part the livelihoods of many First Nation communities but mining has restricted their access to the land [3].
  • "Questions about the health of water resources and the consequent effect on human health of the Mikisew Cree and Athabasca Chipewyan communities have drawn a great deal of public and celebrity attention" (Parlee, 2015)[3].
  • Potential solutions to remedy the "resource curse" in the Athabasca Oil Sands according to Parlee are informal resource-sharing arrangements, business contracts with community organizations or corporations and impact and benefit agreements [3].

Social Impacts


The cumulative impacts of the expansion of the mining industry, highlighted in Alberta’s oil sands in Fort MacMurray, Alberta, shows impacts of region specific projects and their interactions at a wider scale[4]. The stresses on both municipal and provincial infrastructure and services by the population influx due to industry expansions are illustrated through First Nation’s economic development of diverse enterprises, such as heavy equipment rental, building contracting, catering, and an airline[4]. Such success of Indigenous communities yields socio-economic benefits, highlighted in jobs and opportunities, however there is prevalent instability of such mining projects due to opposition of the mining industry[4]. As mining is the most scrutinized resource development industry in Canada, opposition to mining projects by environmental groups, many of which who are backed by philanthropic foundations, creates instability for local economies and thus, local livelihoods[4].


During the major collapse of oil prices in 2014, an unexpected and economically devastating event, oil prices decreased over 70 percent[5]. During this recession, the region of Fort McMurray, the heart of Alberta’s oil sands, saw a double in unemployment rates, from 4.6% to 8.2% over the span of 6 months, as well as “significant layoffs, reduced working hours, and decreased average weekly earnings”[5]. Such high unemployment rates yielded negative impacts on mental health, highlighted in certain sociodemographic groups such as “male sex, Caucasian ethnicity, own home ownership, higher levels of education and employment”[5]. Although this data shows peaks in specific sociodemographic factors, a main limitation includes the variety or lack thereof of individuals assessed, such as the majority of individuals being of Caucasian ethnicity and others of differing backgrounds being of a decreasing proportion of those seeking services[5]. Although the data was collected from the employed and unemployed populations both before and after the recession, the cause of utilizing community mental health services increased after such hardship related to the recession[5]. The generalization of impacts in mining municipalities and Indigenous communities is the high rate of unemployment and low rate of social inclusion among residents[6].

Varying Community-Industry Communication

Although there are many negative impacts of mining on local communities in Northern Canada, there has been a great improvement in relations and communication between community and industry. Benefit and development agreements, honoured by the inclusive communities within mining developments and implementations, show the importance of communication and cooperation[6]. Studies in British Columbia show the recognition of mining companies maintaining good relationships with First Nations, noting;

“there is increasing recognition of Aboriginal / Indigenous rights and title.... In Canada, rights of consultation and accommodation have been defined by courts and are now generally part of the legal approval and project review processes ... This has meant that community impact benefit agreements are increasingly being negotiated with Indigenous communities, especially in regions with unresolved land claims”[6].

The dependence on mining industries, local and Indigenous communities to develop community-company relations varies from projects and regions[6]. Although studies show a seemingly larger proportion of communication between mining companies and Indigenous groups before project implementation, routine communication during and after construction and operation can decrease, and at times become obsolete for longer time periods[7].

Perceptions for Participation

The participation at a local scale for northern communities is shown to affect the perceptions towards mining development[8]. Studies in Northern Saskatchewan show four models of variables regarding public participation in mining development and decision making[8].

  1. Demographic Control: Sex, age, level of education, and indigenous identity. Females with higher level of education and indigenous respondents are less likely to perceive mining positively[8].
  2. Environmental Attitudes and Social Norms: Long-term environmental goals should always be prioritized over short-term interests. Those who are in favour of mining are more likely to perceive mining positively[8].
  3. Local Actor Influence: Those who perceive local actors as influential in the decision making processes are more likely to perceive mining as positive[8].
  4. Veto Power: Those who are more likely to agree that local communities and Indigenous communities should hold veto power over mines and mining development are less likely to perceive mining as positive[8].

Decision making locally provides communities with the information to be included in the process[8]. Sex and geographical position are most influential in attitudes and perceptions towards mining[8]. Common attributes such as Indigenous identity, younger individuals, and the higher educated are generally against mining[8].

Economic Impacts

Economic History

1990 Athabasca Oil Sands

As the history of colonialism in Canada has been quite recent in the time scale of humanity many are still being affected by our fresh history. In the 1970’s there was an understanding that what was happening in northern Canada was a form of internal-colonialism [9]. These communities in the northern Canada have felt the unevenness of economic growth in Canada. We can begin by separating the Country into to economic parts. The southern most parts of Canada have been treated as the “core” where the majority of cities are, and the northern parts of Canada have been seen as the “periphery” with less population [9]. The unfortunate outcome of this model is that the core often has political and economic power over the periphery. This has led to the extraction of resources to progress the core, as the periphery communities are left at a loss with boom-bust economies and environmental consequences [9].

This model can be compared in part to the global economies which have dense wealthy populations which rely on the resources and labor of poorer countries. On this large global scale, we can see the impacts of colonialism are affecting the northern Indigenous people of Canada. There have been arguments made that the Indigenous communities are being treated with a lens of colonialism by being seen as a work force which is able to be hired when needed at low wage [9]. As the indigenous people of Canada gain more rights and respect the traditional ways of resource extraction have been forced to change as they do not equally benefit the communities which have to deal with the consequences of resource extraction.

Economic Growth for Companies

As the world shifts to care for the social and environmental affect resource extraction may have there is an increase in governance protecting northern landowners. In general, this is causing companies more difficulty in setting up resource extraction. Conventional approaches to mining are no longer viable as this shift takes place [10]. The future considerations for development are becoming more influenced by factors other than profit, and stakeholders can change this discourse by their support for those companies gaining social backing (2012). However, these changes in profit margins can affect the industry and economics as mining requires a high capital investment, and this can lead to explored sites often not reaching mining development (2012).

Economic Growth for Communities

In the recent years there has been policy implemented which is intended to help northern Canadians economically progress from the extraction of resources. After the 1970’s many Indigenous communities begun signing Comprehensive Land Claims which was a treaty with the government intended to give communities greater rights to land and resources [9]. The extracting companies must now negotiate with the Indigenous people affected by resource extraction. Companies and indigenous communities are commonly creating impact and benefit agreements (IBAs) [9]. This is intended for communities to give consent to extraction in exchange for hiring Indigenous workers and monetary compensation [9].  

The mining in these regions of northern Canada have been known to cause economic instability locally, as well as other social implications [10]. Stakeholders have helped with change as they demand more sustainable use of the land [10]. Protests and lobbying have also helped to cause a need for mining sectors to obtain a Social License to Operate (SLO) to have this they must have continues approval from the community [10]. There are also Corporate Social Responsibilities (CSR) which are used to obtain a SLO. It gives some responsibilities for companies to not only think about shareholder profits [10]. Companies may be inclined to invest in CSRs as it could help in the end with overall profits as the company’s public persona is kept in good standing [10]. It is however, not yet seen that these measures are causing the internal-colonialism to decline significantly [9]. In the long run the economic stability of these communities has not been largely changed, and especially when compared to the communities of southern Canada.  

It is also shown that the Polaris mine and Nanisvik mine provide us with more examples of community economic impacts from mines. There were great short-term economic benefit for the community, but once the mine was closed the impacts became negative. In some cases, the standard of living improved, and allowed some long term companies to continue and survive.

Regarding the Nunavut agreement the economic growth of the Inuit is not seeming to help with their long-term share of wealth, and the idea of extracting resources from the ground is still considered to be a colonial act [9]. The boom-bust nature of extraction causes the smaller towns which only have a single industry to be susceptible to economic crisis [9]. As corporations compete for more profits, they cause an unfortunate race for the indigenous communities. This causes the corporations to have power over indigenous leaders, and they can leverage their investment to negate environmental demands or larger shares [9]. Overall, wealth distribution in the North has not changed significantly and the wealth from the resource extraction is still largely leaving the communities affected socially and environmentally.

Environmental Impacts

A visual representation of the environmental impacts of mining and oil development

Environmental impacts vary amongst different extraction mining sites all across Canada. Many resources that are extracted through mining produce diverse emissions that impact each region in different ways. In Northern Canada, most mining sites are specifically for metal extraction [11]. It is crucial to identify the impacts and vulnerabilities to different communities to change environmental conditions for the improvement of economic and socio-cultural wellbeing [11].


Historically, mining has had obvious threats to northern Canadian communities such as air, water, and land pollution, as well as “disturbance of animal migratory patterns” [12]. Scientific knowledge about mining effects on the environment did not exist until the 20th century [12]. There are various examples in Northern Canada of abandoned mines, leaving the surrounding ecosystems with lasting environmental impacts [12]. For example, in the 1950s, an abandoned diamond mine in Yellowknife had contaminated various freshwater resources with arsenic trioxide leading to the death of a child [13]. Today, almost 240 thousand tons of arsenic trioxide exist under that old mine, due to workers collecting the dust for storage in hopes that the mine would reopen [13]. Additionally, due to an abandoned complex in Faro, Yukon, “there are nearly 70 million tonnes of tailings on-site and 376 million tonnes of waste rock… [containing] toxins that are believed to adversely affect humans, plants, and animals in the area” [12]. Abandoned mines pose a great threat to northern communities because the tailings’  heavy metals can leach into the soil and vegetation near mining sites [12].

Current and Future Concerns

Direct detrimental impacts to the environment include tailings, waste rock, air pollution and greenhouse (GHG) emissions [12]. “Tailings are the product of the mineral extraction process…that contain harmful contaminants such as mercury, lead, arsenic, cyanide, cadmium, and nickel” [12]. Proper storage and treatment of tailings are necessary to prevent any possible impacts to the environment. Such contaminants pose major risks to local wildlife, vegetation, and natural bodies of water [12]. Acid mine Drainage (AMD) poses threats to local bodies of water as sulphides react with rain and air and create acidic drainage which is all due to poor management [12]. Finally, air pollution and GHG emissions are produced primarily from diesel-run machinery needed for mining, and transportation to and from remote Northern regions.

A biodiversity decline has become great concern for governments and local communities due to impacts from mining sites in Northern Canada [12]. Additionally, construction of mine sites, roads, tailings storage, and heavy metal leaching can have major effects on animal populations [12]. A study performed near the Ekati Diamond Mine in the Northern Territories showed effects on aquatic biota in the span of 20 years in nearby and distant lakes. This is an example of water contamination due to runoff that could also be affecting ecosystems outside of lake habitats [14].

“Because Aboriginal people remain the demographic majority in many areas in northern Canada… often they bear the brunt of any negative consequences associated with mining” [13]. “Aboriginal communities often faced long term environmental legacies and health threats from operating and abandoned mines, including heavy metal contamination of soil and water, radiation exposure, and scarring of the local landscape due to pits [13].

Arsenic contamination has been an ongoing issue in the Yellowknife Great Lakes due to the gold mining operations [15]. However, the rates have decreased since many mining industries have altered their smelting operations to mitigate such detrimental impacts in the region [15].

CAST STUDY EXAMPLE: The Uranium mine is an example of how harmful a mine can be for the environment. Especially when the harmful radioactive waste is allowed to be deposited and left in lakes and land nearby. Whole ecosystems can be permanently damaged as radioactive material is extremely toxic. Many abandoned mines are located/near Indigenous land or key hunting and fishing land. The pollution and waste left from  theirMany indigenous groups like the Sahtu Dene people have acted on the issue by environmental justice activism, yet it has been proven to not be easily fixed.


Many of these abandoned sites have already begun remediation work; however, the “Natural Resources Canada (NRCan) estimates that there are nearly 10,000 orphaned or abandoned mining sites in Canada today, and all require varying degrees of remediation” [12]. The Northern Contaminated Sites Program (NCSP) committed to rehabilitate abandoned mines in the Yukon, Nunavut, and the Northwest Territories [12].

Future Concerns

Depletion and Economic Cost

The cost of oil extraction is dependant on resource quality. Companies sell low-cost, high quality resources first then as those deplete, high-cost, low-quality resources are produced and sold. Given this information it follows that oil prices will go up in the future while the quality of the oil the industry produces will go down as resources are depleted (Méjean & Hope, 2013)[16].

Unconventional oil production is rapidly expanding in Canada and although synthetic fuels are not expected to play much of a role in oil production in the short term, they are projected to have a significant production potential in the long term (Kjärstad & Johnsson, 2009[17]).

Mining and the impact it has on the environment can ultimately negatively affect the economy. For example, if we do not do anything to mitigate climate change it could cost the global economy 20% of GDP by 2050 (Ford et al., 2010)[18].

Social Cost

Looking into the future there will be a decline in conventional oil production therefore; alternate fuels such as synthetic crude oil will need to be produced. The social cost of CO2 emissions from this production will have considerable impact on the total costs of synthetic crude oil (Méjean & Hope, 2013)[16].

With the increase of outside labour forces for mining near the small communities of Northern Canada, there are many detrimental social costs that can be predicted. Language and culture can be affected as well as community health due to increases in sexually transmitted infection (Davison & Hawe, 2012)[19].

Oil Extraction

Environmental Cost

Bitumen is a non-conventional oil resource that requires an upgrading process that adds hydrogen and/or removes carbon. As conventional oil depletes, bitumen production is becoming more and more common. Bitumen recovery and hydrogen generation uses large amounts of natural gas that is responsible for over half of CO2 emissions that come from mined bitumen (Méjean & Hope, 2013)[16].

The current decline in sea ice cover is likely going to prompt further mining exploration and developments in Canada’s north which will further degrade the surrounding environment (Prowse et al., 2009)[20].

It is important to identify these negative impacts that mining has on the environment now because the current changing environmental conditions will have a significant effect on social and cultural welfare as well as economic viability later on (Ford et al., 2010)[18].


Oil and mining are a large important part of the Canadian economy. However, the northern location of the resources and the inequalities involved with extracting and compensating communities in a fair manner is difficult. The impacts on these communities is increasing social inequality for many indigenous communities. The industry standards for development and extraction are beginning to change. Though, there still needs to be more work done to create an equal and just use of land in northern communities.


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