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The cynicism and depravity of Toronto’s extractive economy
It was not until recently that I learned that Toronto is the financial headquarters of the global mining industry. It is possibly our best-kept, and deepest, darkest secret. For the 8 percent of our city that works in finance1 that fact is too obvious to talk about, while for the rest of us the wizardry that goes on at Bay and King strikes us as so sophisticated that we never think to ask. “Banking” is usually what people say when they talk about the city’s economy, as though banking plucks money out of thin air. In fact, in Toronto’s case, banking plucks money out of the ground, and so does the closely connected Toronto Stock Exchange. Seventy-five percent of mining companies globally are headquartered in Canada, and about 60 percent are listed on the TSX.2 Over 1,600 mining companies are listed on the Exchange,3 although only about forty extractive projects are ongoing in Ontario.4 The TSX’s own website boasts that 70 percent of the equity capital raised for mining globally last year was raised in Toronto.5 Few, if any, other capital markets around the world are nearly as specialized in a single industry as the TSX. It is in many ways impressive that such a gargantuan creature remains so discreet, but there are certain clues that lay hidden throughout the city. One of these is the Mining Hall of Fame, which is located at College Street and McCaul, and where we are invited to appreciate the fact that “Canada has been blessed with an abundance of natural resources, and also has been very fortunate to have
Toronto Region Board of Trade. “Finance Cluster.” http://www.bot.com/AM/Template.cfm?Section=Finance_Cluster&Template=/CM/HTMLDispl ay.cfm&ContentID=7854 2 Alain Denault and William Sacher. Imperial Canada. (Vancouver: Talonbooks, 2012.) 16 3 TSX Inc. “Global Leaders in Mining.” http://www.tmx.com/en/listings/sector_profiles/mining.html Accessed July 22, 2013. 4 Denault and Sacher, 1. 5 TSX Inc. “Global Leaders in Mining.”
people with the ability to convert these resources from potential assets into useful products at a price others are willing to pay.”6 Among the inductees are men such as Frederick Archibald, whose innovative work in uranium enrichment was a “key component” in “the building of the world’s first atomic bomb.”7 There is also Roland Kenneth Kilborn whose “achievements in the mining industry are numerous, chief among them Canada’s largest open-pit coal mine…and most of the country’s asbestos mines and plants.”8 All 140 of the inductees are men, and, with the exception of three of the “Klondike Discoverers,” all are white. Another clue is the annual conference of the Prospectors and Developers Association of Canada, which I attended in early March, and which, with 30,000 attendees from all over the world, is the largest corporate mining conference in the world. The attendees take over twenty of Toronto’s downtown hotels, and during their four days here spend millions of dollars at our restaurants, bars, and strip clubs. By dusk they can be seen near Bay and Front, shuffling from one establishment to the next, their rolling briefcases in tow and their lanyards flapping in the wind; but throughout the daytime they remain hidden in the titanic caverns of the Metro Toronto Convention Centre. Located a stone’s throw from the CN Tower, the Centre is almost entirely underground, and in square footage is larger than ten football fields.9 The instant I arrived I was being handed free stuff by almost everyone I met. My satchel came with a few pens, a water bottle sponsored by Osisko, two coupons for complimentary shoe shines, four coupons for complimentary beers, and about five pounds of glossy brochures. The booths of every engineering company, junior exploration firm, and geological survey offered candies, pens, notebooks, and,
Canadian Mining Hall of Fame. “Welcome.” http://mininghalloffame.ca/ Accessed July 22, 2013. 7 Canadian Mining Hall of Fame, “Frederick R. Archibald,” http://mininghalloffame.ca/inductees/a-c/frederick_r._archibald Accessed July 22, 2013. 8 Canadian Mining Hall of Fame, “Roland Kenneth Kilborn” http://mininghalloffame.ca/inductees/j-l/roland_kenneth_kilborn Accessed July 22, 2013. 9 Metro Toronto Convention Centre. http://www.mtccc.com/imapdata/mtcc.swf Accessed July 22, 2013.
primarily, brochures. The Brazilian Geological Survey offered free espresso and some of the corporate booths offered free beer, which the men swarmed around like ants on an abandoned peach. People were friendly. By the end of it my satchel contained several business cards; an overview of mining prospects in Nunavut; surveys of global exploration and investment trends; a report entitled “Planning for Profits” sponsored by Eagle Hill Exploration, (“Vision. Gold. Results.”); a miniature CD-ROM containing a guide to investment in China’s Mineral industry that would not open on my computer because my software was evidently out of date; maps of every gold mining project in Alaska, the Yukon and the Kirkland Lake area; and a series of brochures from the Mongolia Ministry of Mining promoting the emergence of large-scale coal extraction there. The most striking find came from the booth of the U.S. Geological Survey, whose material was entirely about extractive prospects in Afghanistan. The CD-ROMs and phonebook-thick glossy reports – detailing the country’s deposits of gemstones, iron, magnesite, chromite, copper, lithium – expressed appreciation for the generous support of both the Department of Defense and USAID. +++ The drinking began immediately after the Convention Centre closed at 5:30, and the drinks were almost always free. My first evening there everyone flocked to the Steam Whistle brewery, where the mostly-female staff of bartenders poured pint after pint for the mostly-male crowd. The next night I invited myself to a restaurant at Bay and Adelaide, where McGill University was holding a fundraiser for its forthcoming mineral exploration program, and where I again got drunk for free. But most of the debauchery took place at the Royal York hotel. Portly old men walked through the foyer with tall, glistening escorts at their elbow. Dozens of taxis idled in front as men smoked cigars by the revolving doors. I met a man who was drinking a can of beer with his right hand and holding two more in his left as
he explained how he had engineered the large-scale extraction of coal from the shores of New Brunswick in the early seventies. I met a woman, like me in her mid twenties, who had spent the previous summer prospecting a gold formation in northwestern Ontario and who, when I asked how much her team expected to sell if for, shrugged and without the slightest trace of smugness or irony said, “probably for hundreds of millions of dollars.” I also met a man who exclaimed about five times that the Dow was killing him that day as he nervously checked the markets on his phone. I have heard rumours of men playing games of poker through the night with nuggets of raw gold and mounds of cocaine and multiple hookers on hand, and while I never saw such a thing with my own eyes, after having witnessed the culture of PDAC I am a definite believer. On the third day of the conference I left a function for the U of T geology department at the Royal York and biked to a community centre in the east end. A lecture was being delivered that evening by a Mayan Q’eqchi’ woman from eastern Guatamala named Angelica Choc, who alongside Amnesty International had brought a case against Toronto-based HudBay Minerals to the Ontario Superior Court for atrocities committed between 2006 and 2009 – a time when the company and its affiliated corporations were attempting to displace the Q’eqchi’ villagers from the site of its Fenix nickel mine. Our twenty-person audience sat in silence as she described through a translator how HudBay security guards had murdered her husband and systematically gang raped eleven of the women in a neighbouring village before burning it to the ground. “No puedo entender como estos hombres pueden tener corazon,” she said as she wiped tears from her eyes. “I do not understand how these men can have a heart.” +++ When we talk about Canada’s colonial history, when we talk about atrocities committed by white Canadians against indigenous people, or about the Canadian government having “blood on its hands,” we have learned by convention to speak in the past tense. But what has not changed is that forced displacement persists
on the margins of capitalism; that we are exploiting people and places that are otherwise made invisible to us; that our public discourses pay only scant attention to the acts of violence that are being orchestrated by some of the wealthiest members of our society. The narrative recounted by Angelina Choc is hardly unique. In El Salvador, violence and death threats against mining opponents have exploded since the Vancouver-based company Pacific Rim began prospecting for gold at the site of its El Dorado project nine years ago; in 2009, seven outspoken opponents of the mine and their affiliates were murdered in targeted killings.10 Last year in Mexico, two activists opposed to MAG Silver’s mine were murdered in Chihuaha; two others opposing Fortuna Silver’s mine in Oaxaca were also murdered; and an encampment protesting Excellon Resources’s mine in Durango was burned to the ground by company-affiliated groups.11 On May 16 2011, seven Tanzanian villagers were shot and killed by police and security guards at Barrick Gold’s mine in North Mara, and two weeks later ten local women reported that they had been gang raped by the mine’s security guards.12 That same year, accusations emerged that security guards at Barrick’s Porgera mine in Papua New Guinea had also perpetrated multiple gang rapes – allegations that CEO Peter Munk dismissed by stating that “gang rape is a cultural habit” there.13 The pattern is clear. In fact, a study commissioned by PDAC in 2009 and leaked to Mining Watch found that Canadian mining companies are connected to
Richard Steiner. El Salvador – Gold, Guns, and Choice. The El Dorado gold mine, violence in Cabañas, CAFTA claims, and the national effort to ban mining (International Union for the Conservation of Nature, February 2010.) 17 http://www.walkingwithelsalvador.org/Steiner%20Salvador%20Mining%20Report.pdf 11 Jennifer Moore and Gillian Colgrove. Corruption, Murder and Canadian Mining in Mexico: The Case of Blackfire Exploration and the Canadian Embassy. (Mining Watch, May 2013.) 4 http://www.commonfrontiers.ca/Single_Page_Docs/PDF_Docs/May05_13_Blackfire_Embassy _Report_2013-05-02_ENG%20%20final.pdf 12 Geoffrey York. “Claims of sexual abuse in Tanzania blow to Barrick Gold.” The Globe and Mail, May 30, 2011. http://www.theglobeandmail.com/news/world/claims-of-sexual-abuses-intanzania-blow-to-barrick-gold/article598557/ 13 Michael Posner. “Peter Munk’s reflections on being a winner.” The Globe and Mail , February 18, 2011. http://www.theglobeandmail.com/news/national/peter-munks-reflections-on-being-awinner/article567172/?page=all
approximately four times more conflicts than the next most destructive country, Australia.14 But attempts to bring these kinds of atrocities to court have faced serious obstacles. Given that it is almost never Canadians holding the guns, but locals who are employed by them – both as official security guards or covert thugs – it is often difficult to prove that the onus lies with the company. The most important case in the Canadian courts to date surrounds a massacre at Anvil Mining’s copper mine in the Congolese region of Kilwa in 2004. Following an uprising against the mine, Anvil flew in a brigade of Congolese soldiers, who – despite a total lack of armed resistance – massacred between 70 and 100 people, including several women and children, and detained and tortured several others.15 In January of last year, the Quebec Court of Appeal ruled that the case could not be heard in Canada, and in November the Supreme Court refused to hear an appeal.16 This situation is unlikely to change without legislative action, and the latest attempt on that front – Bill C-300, “An Act respecting Corporate Accountability for the Activities of Mining, Oil or Gas in Developing Countries” – was defeated in Parliament in November 2010.17 +++ That modern extraction takes place on the geographic margins of the society that might otherwise hold these businesses accountable is only one character trait that lends itself to the sociopathic attitude demonstrated by Peter Munk, the Canadian courts, and Parliament. It is also ephemeral, and therefore shortMining Watch, “Suppressed Report Confirms International Violations by Canadian Mining Companies,” October 18, 2010. http://www.miningwatch.ca/news/suppressed-report-confirmsinternational-violations-canadian-mining-companies Accessed July 22, 2013. 15 Mining Watch. “Anvil Mining and the Kilwa Massacre, D.R. Congo: Canadian Company implicated?” June 16, 2005, http://www.miningwatch.ca/anvil-mining-and-kilwa-massacre-drcongo-canadian-company-implicated Accessed July 22, 2013. 16 CBC, “Supreme Court won’t hear appeal in Congo massacre,” November 1, 2012. http://www.cbc.ca/news/canada/montreal/story/2012/11/01/quebec-anvil-mining-appealrefused-supreme-court.html Accessed July 22, 2013. 17 Penelope Simons and Audrey Macklin, “Defeat of mining bill is a missed opportunity,” The Globe and Mail. November 3, 2010. http://www.theglobeandmail.com/report-onbusiness/industry-news/energy-and-resources/defeat-of-responsible-mining-bill-is-missedopportunity/article4348527/ Accessed July 22, 2013.
sighted; it is environmentally destructive; and it is dominated, from top to bottom, by men. At the same time, extraction is essential to so many of the things we do in our day to day lives and that, I think, is what makes it such a deeply uncomfortable subject for most of us. +++ The story of how Toronto became the hub of international extractive finance begins when Toronto was still a fledgling colony desperate to encourage white settlement of the Canadian hinterlands and build a economy distinct from the financial centres of London and New York. Mining was extolled as the industry that would carry western Canada into an age of progress and prosperity, and therefore needed to flourish unencumbered by taxation or regulation. “It is upon the prospector and the miner,” wrote the Monetary Times in 1906, “rather than the home seeker, that the New Ontario must depend to increase in population and wealth.”18 Exactly to what extent the prospector and the miner have built Ontario is an open question, but what is clear is that the industry’s early growth gave rise to an unprecedented culture of libertarianism and fraud. From the 1860s onward, the provincial government made various attempts to tax the industry, but faced such staunch resistance from its wealthy leaders, who complained that mining was so difficult, required so much exploration, and encompassed so many dead ends that it was more deserving of carte blanche license to prospect, if not subsidies. “Mining men,” writes Henry Nelles, “were the leading advocates of non-partisan political leadership to reduce government spending, pare the public debt and debt-producing social services, and restore public confidence. … In a literal sense they were frontiersmen; certainly their personal habits and the values they
H.V. Nelles, The Politics of Development. (Hamden, CT: Archon Books, 1974) 121
espoused were of the frontier. … Above all, men such as these resented government, likening it to a great leech which sucked at the vitals of business with its taxes and burdened initiative with a crushing mass of regulations.”19 Mining began in Ontario with the extraction of iron ore at Marmora in the 1820s and scattered projects persisted in the subsequent years, but it was not until the 1860s, with an influx of American capital and industrial technologies, that the industry got off the ground. By that point, speculative profiteering and scams were already beginning. Following a short-lived gold rush in the Lower Canadian town of Chaudière in 1864, the Commissioner of Crown Lands Alexander Campbell noted that “the only persons that have made any money there have been the speculators on the delusions of others in the price of lands.”20 The same thing would occur only four years later, with a minor gold strike north of Madoc. Thousands of vagrants rushed to the site of Eldorado, Ontario, and prospectors immediately began selling stocks to gullible investors at the hastily established Toronto Stock & Mining Exchange.21 But two years later the encampment had turned out nothing of value and by 1880 it was already a ghost town. Other encampments did succeed, however, and throughout the final three decades of the 19th century, under the generous terms of the 1869 General Mining Act, the industry extracted about $33 million in gold, silver, copper and nickel from ground in Ontario without paying a cent to the government in royalties.22 The Toronto Stock Exchange was formally incorporated in 1875, and in 1899 a consortium of brokers established the Standard Stock and Mining Exchange.23 Both were characterized by minimal taxation, weak regulation, and scams. “By the turn of the century,” writes Christopher Armstrong, “worthless stock in fly-
Nelles, 437 Ibid, 22 21 Christopher Armstrong, Blue Skies and Boiler Rooms. (Toronto: University of Toronto Press, 1997) 11. 22 Nelles, 23 23 Deneault and Sacher, 97
by-night undertakings was being peddled by smooth-talking con men who, it was said, did not scruple to offer a simpleton shares even in the blue sky above.”24 Given the absence of oversight and the uniquely speculative nature of the industry these brokers were dealing in, Toronto became a hub of complex swindles and abstract financial innovation – a trend that persisted after the two exchanges merged in 1934.25 “To stay competitive,” write Alain Deneault and William Sacher, “the TSE opened its doors to mining companies with unsavoury reputations. Share prices rose and fell in arbitrary fashion, touching off resounding collapses that were easily identified with insider trading.”26 On occasion hucksters were arrested and new regulations drawn up, but new schemes would crop up in no time. “Arrests may come and arrests may go,” mused one when a leading broker was arrested for fraud, “but the mining exchange goes on forever.” 27 +++ The boom-bust pattern of Eldorado has played out dozens of times since the 1860s. Even where valuable deposits were found, the industry never delivered significant revenues to the government. In the northern town of Silver Islet, for instance, silver extraction began in 1868 and throughout the subsequent sixteen years delivered millions of dollars to the American owner of the mine. But when it was finally abandoned he returned to New York City, the workers went on their way, and the government had nothing to show for itself.28 Similarly, Sudbury was the world’s leading source of nickel beginning in the 1880s. Production was dominated by another American, who also became extravagantly wealthy, while all that Ontario had gained, in Nelles’s words, was “an ugly scar on the
Armstrong, 6 Deneault and Sacher, 96 26 Ibid, 97 27 Ibid, 108 28 Ian Drummond, Progress Without Planning. (Toronto: University of Toronto Press, 1987) 54
landscape.”29 In 1903 a railroad construction crew hit silver at the town of Cobalt. The stampede of wildcat miners was soon followed by a stampede of capitalists from Toronto and New York. The town rapidly became the fourth largest producer of silver in the world, and within three years $8 million in silver had been shipped out of the town – again, to virtually no public avail.30 In 1888, Ontario premier Oliver Mowat appointed a commission to address the problem of how to collect royalties from the industry without chasing it away. The report they released two years later, to his chagrin, was overwhelmingly proindustry, favouring minimal taxation and increased public funding for prospecting and railroad construction. “As long as the mineral development in Ontario continues to depend largely upon investments of foreign capital, and especially of American capital, a liberal policy must be followed,” wrote the commissioners. “Mining lands must be not less free here than in the United States, where with the single exception of New York there is neither reservation nor royalty.”31 The legislation introduced by Mowat’s government in 1891 made a weak attempt at imposing a tax on mining profits, but by 1900 protests from the industry had led the government to abandon the idea altogether. Light rental fees were imposed, but 45 percent of them went toward the new Bureau of Mines, which had a mandate to support the business by, for instance, renting out expensive drilling equipment and conducting geological surveys.32 With the legal procedure of mining in disarray, the new Conservative government of Ontario set out in 1905 to establish a new legislation. To help them do so, they invited 113 delegates, all businessmen in the extractive sector, to Toronto in December of that year, and within months had passed the Mines Act – an openentry legislation that remains on the books today and allows mining companies to lay claim to minerals sitting under virtually all public land, some private land, as well as First Nations reserves. Its environmental regulations could hardly be
Nelles, 25 121 31 Ibid, 27 32 Ibid, 125
looser, and often the government is left to clean up the mess of an abandoned mine.33 +++ What is striking to me about this history is just how quickly Toronto locked onto the track of extractive profiteering that it continues to ride today. In 1861 the city had a population of only 45,000 and no capital market whatsoever. Within three decades it had become, as Ian Drummond puts it, the “focus for speculative trading in mining stocks, not only by Ontarians and other Canadians but by the British and Americans as well.”34 It was a combination Ontario’s rush to catch up to its rivals in the east and its uniquely powerful mining lobby that gave rise to the laissez-faire approach of its government in those years. Ultimately, that ethos has served to benefit the global extractive industry to a far greater extent than Ontario itself. It has certainly done more to attract speculative venture capital to the TSX than it has done to bolster employment or public revenue. By World War I, several large-scale extractive projects in iron, nickel, and silver were indeed underway, and the province had become the largest producer of mineral wealth in the country – a title it still retains.35 But the industry was fitful and deceptive, characterized by more disappointments than bonanzas. Even by the early 1940s, when Ontario was producing more than half of Canada’s total metallic-mineral output, only 1.6 percent of Ontarians were actually employed in the sector.36 Little has changed since then. In fact, all of the trends that were put in motion in the 1860s have only become more exaggerated since. Today well under 1 percent
Maureen Carter-Whitney and Justin Duncan, Balancing Needs, Minimizing Conflict: A Proposal for a Mining Modernization Act, (Canadian Institute for Envronmental Law and Policy and Ecojustice: October 2008) i 34 Drummond, 74 35 Government of Ontario, Modernizing Ontario’s Mining Act: Finding a Balance, (Augst 2008) 36 Drummond, 72
of Ontarians are employed directly in mining.37 The economy of northern Ontario continues to rely largely on extraction, but any surplus revenues and spin-off jobs have always gone back to the sources of capital in Toronto and the United States. Likewise, public revenue has never reaped much from the sector. The most recent numbers indicate that only 0.16 percent of the province’s total revenues come from logging and mining combined.38 On top of that, the province donates tens of millions of dollars every year to the industry through development projects at the Ministry of Northern Development and Mines. The TSX itself, with its market capitalization of $2.2 trillion,39 has been the only real success story, but even it has made virtually no direct contributions to public coffers, as there exists no financial transaction tax in Canada. (Market capitalization is the full value of the stocks traded on the exchange. For scale, Canada’s entire GDP in 2012 was $1.4 trillion.40) Large-scale speculative scams also persist. Often they have been based on phony data of deposits that never materialize – such as the 1997 Bre-X scandal – but sometimes they are simple pyramid schemes. The most extravagant example in recent memory centres around a Toronto-based dentist-turned-hedge fund manager named Otto Spork. In 2008 Spork was running the most lucrative hedge fund in Canada and drawing up plans to sell Icelandic glacier water to China by carting it through the northwest passage in defunct oil tankers, but in December of that year the Ontario Securities Commission indicted him for fraud, revealing his hedge fund to be an elaborate Ponzi scheme. With the exception of a couple reported sightings, his whereabouts have been unknown ever since.41
http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/labr67g-eng.htm Statscan. “Consolidated provincial and territorial government revenue and expenditures, by province and territory. (Quebec, Ontario, Manitoba” http://www.statcan.gc.ca/tablestableaux/sum-som/l01/cst01/govt56b-eng.htm Accessed July 22, 2013. 39 TMX Group. “A Capital Opportunity: Mining.” http://www.tmx.com/en/pdf/Mining_Presentation.pdf 40 Statscan. “Gross domestic product, expenditure-based” http://www.statcan.gc.ca/tablestableaux/sum-som/l01/cst01/econ04-eng.htm Accessed July 13, 2013. 41 McKenzie Funk, “Glaciers for Sale: A global-warming get-rich-quick scheme,” Harper’s Magazine, July 2013. 28-37
+++ The process of extraction has a consistent trajectory. It begins with the appropriation of the most accessible deposits and moves on to the less accessible. As time goes on, the process becomes more expensive, larger in scale, more capital-intensive, and therefore more socially stratified. The less accessible the resource is, the more capital-intensive its extraction. In that sense, it is the structure of the geological formation itself that determines the social structure that surrounds its extraction. The process of extraction alters the geological formation, and the social structures of extraction need adapt accordingly – over time becoming more hierarchal, more economically stratified, and more disciplinary as they simultaneously become more environmentally destructive. Today, this increasingly destructive trend can be seen in open-pit mining, the tar sands, and in fracking. What is terrifying to me about these incipient technologies is that they are so effective at squeezing out tiny deposits of a resource that they render almost any piece of land a potential site of extraction. As production meanwhile struggles to stay abreast of growth in global markets, those resources only become more and more valuable. That visionaries such as Otto Spork have begun to financialize water in the same way that metal, oil, and gas have been financialized – whilst our methods of extracting metal, oil, and gas are simultaneously destroying the water table – implies to me that capitalism, despite its obvious contradictions, is not inexorably going to collapse if it is left to its own devices, but is likely to continue expanding and reentrenching itself. +++ “Historically,” wrote Max Weber, “the company that jointly owned a mine itself also took charge of excavating the mineral ore through collective work… Later, as the systematic working of a mine came to require significant additional resources for that end, the property-owning group gradually separated off from the working
group.”42 Cobalt is a strong example of this pattern.43 Initially known as a “poor man’s camp,” its superficial silver deposits allowed vagrant men to establish their own small claims and extract the ore independently.44 Within a few short years, however, the miners needed to delve deeper underground, and in order to do that they needed organized labour, engineers, steel, timber, roads, electricity, cyanide, arsenic, dynamite, and lawyers. For that they needed capital, and Toronto and New York are where they went to get it. As large corporations bought out the smaller outfits in order to undertake increasingly ambitious extractive projects, the social structure of the camp became more economically and politically stratified. Given the ultra-liberal acceptance of industrial development, the miners who resided in the town had only a fraction of the political clout of the corporations that employed them. Brokers and investors would visit to ensure things were running smoothly – typically arriving in first-class railway cars filled, as Stephen Leacock put it, with “smiling negroes and millionaires with napkins at their chins”45 – but they never stayed long in the town, which was mostly built out of tin and plywood and had no sanitation facilities or running water.46 Water was, in fact, a perennial problem in the town. As mining interests, small and large alike, campaigned against all forms of taxation, the municipality lacked the resources to establish even a sewage treatment plant. “Most people believed that their lives would intersect with Cobalt for a few months at most,” write Douglas Baldwin and David Duke, “so there was little or no concern for infrastructural planning or long-term vision.”47 Residents were forced to defecate in pits and slapdash outhouses. The main sewer flowed directly into Lake Cobalt, the town’s primary source of fresh water, and would occasionally overflow,
Deneault and Sacher, 89 Drummond, 60 44 Douglas O. Baldwin and David F. Duke. “‘A Grey Wee Town’: An Environmental History of Early Silver Mining at Cobalt, Ontario,” Urban History Review 34 (Fall 2005), 73 45 Nelles, 121 46 Baldwin and Duke, 75 47 Ibid, 72
leading sewage to seep under people’s homes and collect in open cesspools. The lake also became the repository for millions of tons arsenic, mercury, cyanide, and other tailings. The few clean streams were monopolized and potable water was sold at exorbitant rates, leading several residents to draw, as one doctor noted during a visit in 1905, from some “very questionable springs.” “If nothing is done, then in all human probability there will be a severe outbreak of disease in and about the settlement,” he wrote.48 The municipality was running major deficits and struggled to raise tax revenues from the industry; business resisted these efforts and the provincial government was unhelpful and unsympathetic to the problem.49 In the summer of 1909 – the same year the town experienced a devastating fire and a typhus outbreak that infected at least 1,100 people and killed 6750 – the Cobalt Nugget ran a headline pleading for investment in public works: “Return to Cobalt Some of the Trillions Taken Away,” it read.51 By 1913, the silver was already so sparse that Sir Henry Pellatt, the president of the Cobalt Lake Mining Company, decided to spend $1 million draining Cobalt Lake so that his company would be able to access the ores lying buried underneath it.52 The town – whose population was nearing its peak of 10,00053 – was never compensated for the loss of its primary source of fresh water, but by then the lake was so heavily polluted that nobody objected. “In short,” write Baldwin and Duke, “the history of Cobalt demonstrates how rapid urbanization for resource extraction could generate both wealth and power, and human misery and environmental deterioration.” 54
Ibid, 81 Ibid, 77 50 Ibid, 82 51 Ibid, 76 52 Charlie Angus and Brit Griffin, We Lived a Life and Then Some: The Life, Death, and Life of a Mining Town. (Toronto: Between the Lines, 1996,) 29 53 Andrew Hind and Maria Da Silva, “Visit to Cobalt has a silver lining,” Toronto Star, May 15, 2008. http://www.thestar.com/life/travel/2008/05/15/visit_to_cobalt_has_a_silver_lining.html Accessed July 22, 2013. 54 Baldwin and Duke, 72
Toronto was meanwhile awash in the money being made from Cobalt. Moreso than any other mineral strike, it was Cobalt that solidified Toronto’s connection to the industry. It had finally brought American and British capital into Canada en masse and it was yielding significantly more than the short-lived Klondike gold rush of the previous decade.55 With the construction of the Tamiskaming & Northern Ontario railroad, writes Nelles, “A pleasant train ride united Toronto physically and psychologically with the booming mining frontier.”56 Cobalt additionally provided Toronto-based investors with the capital they required to establish other major operations – for instance, in the gold mines at Porcupine, Timmins, and Kirkland Lake.57 As these links became more firmly established, the industry more organized and the government more pliant, extractive capitalists and brokers formed a new political and cultural elite in Toronto. The fixation on money was present at almost every tier of the extractive process. It came with the territory of the business – and in that sense the life of the capitalist was no less petty than that of the greedy hick who arrived on the frontier, rifle in hand, to prospect for bullion. Discussing early extractive magnates, Nelles writes, “Events in an enormous game of international Monopoly had made these men suddenly rich beyond ordinary comprehension. For some, an extreme individualistic ideology performed the psychological function of legitimizing windfalls or fortunes gulled from their fellow men. Whatever the hidden psychological reasons, it seems clear that much of the doctrinaire laissezfaire outlook of the mining industry was grounded in the strident self-confidence and individualism that universally accompanied the growth of the industry.”58 This was a process of capitalization and environmental destruction that did not merely reconfigure the social structure of the mining camp, but the social structure of Toronto as well; a process that brought the ideology of the frontier to the core.
Ibid, 71 Nelles, 121 57 Drummond, 59 58 Nelles, 436
The story of Cobalt, today an economically depressed community of about 1,000, is undoubtedly a sad one. And yet the story is hardly more tragic than that Henry Pellatt, one of its major profiteers. A quintessential robber baron, Pellatt epitomizes everything that was celebrated in imperial Canada. The son of a Toronto-based stock broker, he was educated at Upper Canada College and through his teens became a competitive runner. In 1879, at the age of 20, he set a world record for running a mile in 4 minutes and 42 seconds. At 24 he joined his father on the stock exchange, and from there he went on to become one of the wealthiest men in Canada, building a fortune mainly in hydro electricity and railroads. By the time he established the Cobalt Lake Mining Company, he had begun building the largest private residence in Canada, Casa Loma. When his father died in 1913 he took control of the family estate and, in the words of his biographer, “cheated everyone in the family out of their rightful legacy.” In the ensuing years, however, he was found to have been engaging in fraudulent trading practices; some of his investments failed; and after having built his castle and donating lavishly for several years to the Canadian brigades his finances began to disintegrate. He was eventually forced to abandon his beloved mansion and move in with his chauffeur, and by the time of his death in 1939 had only $85 to his name.59 There are sad stories among some of the winners, as well as the losers, of this game. +++ “In every epoch the ideas of the ruling class are the ruling ideas,” wrote Karl Marx in 1846. “That is, the class that is the ruling material power of society is at the same time its ruling intellectual power. … Insofar as they rule as a class and determine the extent of a historical epoch, it is self-evident that they do it in its entire range.”60
John Goddard, “Sir Henry: Casa Loma king lived in a world unto himself,” Toronto Star, August 9, 2010. http://www.thestar.com/news/gta/2010/08/09/sir_henry_casa_loma_king_lived_in_a_world _unto_himself.html Accessed July 22, 2013. 60 Karl Marx, Selected Writings, (Cambridge, MA: Hackett Publishing, 1994), 129
Mining is the business that built the skyscrapers at Bay and King, which absorb the money as it cascades into the city, as though from out of the clear blue sky, before rippling outward through downtown and toward Ajax, Markham, Brampton, Burlington. It is what puts money in the pockets of our businesses’ patrons, and it is what drives growth and gentrification. In reading this history, it has been hard to avoid the thought that in subtle but pervasive ways it is the ideology of extraction that governs Toronto – that, in catering to this economy whilst simultanously ignoring it we have absorbed its values and aesthetics; that at a subtle but important level we have subjugated ourselves to an industry that is uniquely peevish, cavalier, and sociopathic. It is hard to avoid the thought, for instance, that the persistent short-sightedness that plagues City Hall is related, if obliquely, to the short-sightedness of men like Henry Pellatt. The same attitude seems to exert itself in the city’s persistent habit of destroying its oldest and most beautiful buildings for the latest architectural fads, its pattern of building cookie-cutter subdivisions over our best agricultural land, its formidable opposition toward taxation and its inability to even build a functional public transit system. That these myopic habits have been hard to grow out of should, perhaps, not be surprising in a city that has been built on the hundreds of ghost towns that Canada has generated in its brief history, and thousands more across the globe.
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