The Resilient City

Hope For Resource-Based Communities

Canso, NS
Source: Town of Canso

Around the world, resource-dependent communities are vulnerable to industry closures that devastate their economies and social structures. Whether they depend on fishing, mining, forestry, agriculture or energy, these towns are subject to resource depletion, cyclical shifts in global commodity markets, economic restructuring and changes in government policy that make them prone to boom-bust cycles or threatened with a final industry closure. They share the same plight because most tend to rely too heavily on a single industry for jobs and economic viability rather than diversifying or broadening their economic base. As a result, industry closures around the world have similar effects on rural communities: catastrophic job losses, a crippled economy, the social upheaval caused by the flight of residents to better opportunities elsewhere, declining property values, and a struggle to maintain service levels and the local infrastructure. Industry closures are accelerating rural depopulation and hastening rural decline while at the same time increasing population, economic and social pressures on urban centres that become the destination of choice for the rural population.

Despite different political, economic and social structures, communities around the world may find that they can benefit from learning more about each other's experiences in addressing the crisis of industry closure in small communities. As industry closures touch almost every aspect of rural and small town life, communities can share their stories to better understand these changes. They can begin a dialogue that leads to positive actions that meet the challenges and take advantage of the latent opportunities created by these changes. This dialogue could become a vital part of a larger restructuring process because it will complement the traditional urban planning focus on the pressing issues of urbanization and urban industrialization. Paying more attention to managing the transition of rural communities could ease some urban pressures while improving the economic sustainability of rural regions. Strategies for managing resource community transition may also be applicable to larger scale natural and human-caused disasters, such as floods or civil wars.

The research done for this paper has focussed primarily on the Canadian experience, teaching community stakeholders many valuable lessons about how to manage the transition from industry closure to community recovery. Through this research, Canadians have learned that a constellation of factors, ranging from geography and access to roads to demographics and the availability of high technology, can have an influence on whether or not their rural communities can recover and thrive after experiencing an industry closure. The research underscored the uniqueness of each community and the individuality of each community's response, yet found that the shared nature of the crisis led naturally to a shared range of ways to manage community transition management strategies. In turn, analysis of the management strategies employed in Canada the led to the development of common themes useful in supporting the transition management of many Canadian communities regardless of the factors influencing recovery, the resource industry involved or the community's location. For example, the research found that all communities could benefit by planning for industry closure prior to the event, receiving early warning of closure, determining the factors that could influence recovery, supporting collaboration between all actors, implementing a range of actions, providing time-limited financial resources and defining transition management success individually for each community, among other measures.

The recognition that lessons learned are partially or wholly replicable between communities in Canada has sparked an interest in the potential for replication beyond Canada's borders for the benefit of the global community. Clearly, not all of Canada's strategies can be applied wholesale to rural communities around the world facing similar challenges. While the challenges may indeed bear a resemblance, the capacity to respond will vary considerably from country to country – governmental systems differ, underlying economic conditions widely diverge, social structures are not the same. Nevertheless, some of Canada's learning may provide valuable insights and could be replicated or adopted in some form by other jurisdictions to support their communities as they address their own unique circumstances and needs.

In particular, researchers believe that four strategies form the core of the Canadian experience. In the following, the four strategies will be defined and will then be illustrated as they were applied in the case of Tumbler Ridge, British Columbia, over the period from the town's inception in 1981 to today:

Effective transition management anticipates and plans for industry closure as a normal event in the life cycle of industry. Resource-based industries, particularly those focussed on non-renewable resources have a natural life that depends on shifting global markets and ends when the resource is depleted or the costs of extraction outweigh economic viability. Community stakeholders should recognize this from the inception of the industry and begin planning for shut-down even as the industry is starting up. Instead of responding to a closure announcement, actors should expect it and prepare for it as a normal event in the industry's life. This pushes forward the time-frame for transition management actions from the post-announcement to the pre-announcement phase of the recovery cycle and acts as a catalyst for earlier economic diversification. It will also reduce the shock and trauma of industry closure by setting in place mechanisms to support workers and the community, and by preparing economic and social alternatives that contribute to community stability.

Provincial decision-makers made a series of key policy and design decisions as they planned Tumbler Ridge before its founding to weather the cyclical nature of the world demand for coal. These planners:

Established a local government framework for the town from its inception: Using British Columbia's ‘instant town' legislation, planners established Tumbler Ridge as a municipality with a fully elected council and conventional political, administrative and social relationships to avoid the problems of the company town model in which a town survived only at the whim of the company. Tumbler Ridge was designed to function as the central town in a larger surrounding territory. This choice of a single townsite avoided the creation of several smaller settlements that would have had the character of worker-oriented campsites or dormitories rather than of a genuine town with accumulating social capital. The regional town concept allowed planners to choose the most advantageous location for the town and to exercise care in community planning.
Prepared a comprehensive plan that anticipated the eventual decline of the coal resource: Town planners recognized that the demand for a resource commodity like coal is cyclical and that the supply of the resource itself would eventually run out. With this in mind, they made decisions that would support the town's stability. One such decision involved creating large municipal boundaries that encompassed the industry sites. This unusual step meant that the industry paid municipal property taxes while in operation, contributing substantially to municipal revenues that could be used to provide services or saved as contingency funds during an economic downturn. Planners also appointed a social planning director to incubate the community's social capital by developing the social networks and organizations vital to a healthy community.
Established functioning land, housing and commercial markets in the town: Planners used a mixed model for development, assigning roles to the government, company and private sectors. In doing so, they ensured that Tumbler Ridge had a functioning property market where home and land owners had a stake in both property values and the community, making them more inclined to remain in town during an economic downturn. The local government had control over raw land and therefore considerable influence over the town's growth and development. This paradigm avoided the company town model in which a company owns the housing stock and rents it to workers who, in turn, develop little attachment to the community because of their lack of property ownership.
Planned to deliver provincial government infrastructure and services: The provincial government's infrastructure decisions determined much of the town's character. For example, British Columbia decided to ensure that Tumbler Ridge was not located at the end of a single road; instead it can be accessed from two directions. Additionally, they worked to establish a rail connection so that coal could be shipped to ports and markets. Important provincial services, such as schooling and health services, were made available as residents began to arrive and have been offered in the town ever since, giving Tumbler Ridge instant credibility and remaining as an attraction to new residents.
Managed risks: Looking ahead to a future decline of the coal industry, British Columbia entered into an agreement with coal companies to guarantee some of the government's investments in the community. For example, the companies guaranteed the town's infrastructure debt without having to directly pay for it. Also, in a fairly innovative move, the government established a contingency fund, put away for a later day as a buffer against a downturn in the coal market.

Restructuring resource-based communities after an industry closure requires collaborative efforts between all stakeholders. This study recognizes that every country exercises jurisdictional authority uniquely and Canada's federal model, where jurisdiction and power is constitutionally divided among national and subnational parliaments, is not globally applicable. How ever, all can adhere to the principle that resource-based communities in transition are best supported through the collaborative efforts of all stakeholders rather than over-emphasizing the influence of single actors taking action independently. Keeping in mind the uniqueness of individual countries' jurisdictional complexity, this report suggests that transition management responsibilities could be broken out in the following pattern in a collaborative effort to support resource-based communities in transition:

national governments: set policy direction and prepare regions/communities for impacts
subnational governments: facilitate planning; help communities anticipate and prepare for industry closure and coordinate collaboration and funding from all actors
local governments: encourage and support collaboration on behalf of the local community, while taking responsibility for managing local issues arising from closure
departing industries: communicate intentions clearly and provide support to directly impacted workers and the community
community organizations: provide practical support

Comprehensive planning for Tumbler Ridge provided the community with a bank of physical, social and political assets to enable a successful restructuring after the closure of the major industries. The community had nearly 20 years of experience with effective local government with strong administrative and political leadership. It had built strong extra-local support through its close political, administrative, social and economic connections to other communities in northeastern British Columbia. The quality of the community facilities and the high levels of social cohesion meant that there was a strong core of people who were committed to the community and who wanted to stay in spite of the loss of the major employer. They were willing to work with local elected officials to engage senior governments, develop a transition plan and implement it.

All levels of government collaborated to form a Community Revitalization Task Force to identify and develop economic opportunities. Of particular note, the task force worked to maintain a stable population and property tax base by acquiring surplus housing through the Canada Mortgage and Housing Corporation and the company, then selling it through a housing corporation established by the district. Together, they developed a community transition plan, and hired consultants to determine ways in which the economy could be diversified. The town also reached collaborative agreements with the Municipal Finance Authority to retire the town's debt and with the provincial government to maintain the town's infrastructure and service levels. These actions were facilitated by the contingency fund established at the town's inception.

Implement a Wide Range of Actions. Although industry closure is usually a sudden and often unexpected event, managing a community's transition to recovery is a complex process that takes many years. There are no quick fixes and no simple, single pathways to success. Instead, communities around the world facing similar dilemmas can adopt an interrelated range of actions that support transition management and recovery, including the following:

planning and implementing economic diversification strategies
providing incentives for industry and resident relocation to communities
determining and maintaining an appropriate level of public services during a period of adjustment
stabilizing municipal finance, administration and local service delivery
providing worker support, and
maintaining high community morale

Tumbler Ridge's early planning for diversification reaped many benefits during its recent economic downturn, laying the foundation for a wide range of actions aimed at balancing local government revenues and expenditures while continuing to make Tumbler Ridge an attractive place to locate. A key initiative has been marketing the community as a place to live and invest. This has involved a financial strategy founded on stabilizing property tax revenues by marketing virtually all of the community's surplus housing stock to maintain 100% occupancy, retiring the municipal debt so that 47% more revenues can be fully dedicated to providing attractive services, and developing an economic diversification strategy that expands the initial focus beyond coal to tourism, oil and gas, and regional service provision.

Protecting municipal services and reaching an agreement with the province and the federal government to maintain other services have been important actions needed to ensure the town remains attractive to new residents and communicates its will to become sustainable. As well, the town developed the infrastructure necessary for future economic diversification, such as the airport and an industrial park, and enhanced amenities such as a community swimming pool and a golf course to make the town attractive to continuing and new residents.

All stakeholders must expect to provide an appropriate level of time-limited financial support to resource-based communities in transition. In most cases, an industry closure will have a significant financial impact on a community in lost employment income that would be spent locally and lost municipal taxation. This is especially so in countries, like Canada, where local governments are supported largely by own-source revenues. Short-term financial investments from all stakeholders can allow a community time to adjust without creating an unhealthy dependence on outside financial resources. These investments could honour the community's past contributions to the region's or country's economic vitality, ensure that previous investments are not lost and support communities to take advantage of new opportunities, reach their full potential and break out of a culture of dependence over the long-term. All levels of government need to work together to develop a coordinated strategy for managing local revenues and expenditures while spreading investments over time.

In Tumbler Ridge, the key to financial solvency lay in ensuring stable property taxes, eliminating $10 million in long term capital debt and convincing the provincial government to honour its 20-year commitment to maintain a contingency fund established in anticipation of a downturn in the coal industry. The community was convinced that if it received this level of support it would be able to maintain its legacy of high quality services and take advantage of economic opportunities without senior government subsidies. This is now paying dividends as the community is now experiencing growth as a base for oil and gas exploration and development and the revival of the coal industry.

Next Steps

This research project came into being because of the interest and initiative shown by the Ministers responsible for local government in Canada who wanted more information on how small, resource-dependent communities manage their transition following an industry closure. The authors of this paper hope that the results of this work will encourage other countries to resolve to better understand the dynamics of community transition within their own context. As well, communities undergoing a continuum of experiences including the closure of resource or manufacturing industries, natural disaster and human-caused catastrophes might also find areas of overlap as they contribute their own experiences to this dialogue. These combined efforts could be used as the basis for discussion at subsequent sessions of the World Urban Forum.

Renewed Hope

Rural and urban communities both share the dilemma of needing to achieve sustainability within the context of rapid change, yet rural communities have, so far, been left behind in most discussions of sustainability. This paper is a first step in building interest in rural sustainability, an issue that has received less attention than it should. As communities around the world are confronted with shared questions about how to survive industry closures and succeed despite them, there exist many opportunities to share solutions by opening a dialogue about rural sustainability. Communities and countries can offer their stories and lessons learned so that others can build on this collective wisdom to find practical solutions of their own and contribute new ideas that would, in turn, be helpful to others. As this dialogue gains momentum, more can be done to give resource-dependent towns hope for the future so that they can thrive and prosper as resilient communities.

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