Unit 6: The Northern Economy: Renewable and Non-Renewable Resource Development

Question 1

Identify the common characteristics of resource hinterlands.

Answer 1

• —Far from manufacturing centres.
• —Non-diversified economies focused on primary sector
• —Economic instability
• —Lack of human development

Question 2

What are three reasons why America was attracted to the Canadian market after WW2?

Answer 2

1. Bounty of natural resources.
2. Canadian government openness for investment.
3. Growing population and affluence.

Question 3

Identify and describe three types of boom and bust cycles and explain why they occur

Answer 3

Boom and Busts occur because of shifts in global demand for a commodity.

1. Local: a small mine booms when it gets going but busts when it depletes the resource
2. Regional: Megaproject. Same as local except: A. effect is spread over a larger area and B. the negative and positive impacts last longer.
3. Global. Global economic downturns that cause resource companies to halt production or to close operations, at least until commodity prices increase again.

Question 4

Why are transportation systems more developed in the northern provinces than in the territories? What are the implications of this in terms of northern renewable and non-renewable resource development?

Answer 4

Permafrost means the cost is too high to have a fully functioning highway system and sites are geographically more accessible.

It means that either, development is located in the places with relatively easier access, or private companies have to open pockets if they want to get access to world class resource deposits.

Question 5

Identify the four factors that increase the cost of highway production in the North.

Answer 5

1. Remote worksites lacking support infrastructure
2. Permafrost
3. More expensive to transport materials, equipment, and men to the site.
4. Limited build window since winter arrives faster.

Question 6

Why is the mining in the North of minerals such as gold and silver – rather than lead and zinc – more likely in the future?

Answer 6

They are more valuable materials which helps justify the high transport and extraction costs, making things worth their while.

Question 7

Name Canada’s first diamond mine. What geological factors led Chuck Fipke to drill there.

Answer 7

Ekati Mine.

He followed a trail of glacier run off that led to Lac de Gras’s dark, bedrock shores. The path of sediment was full of lesser gemstones which served as an indicator for diamonds below in kimberlite pipes.

Question 8

List the four sectors of mineral production. Which of these dominate in the Canadian North?

Answer 8

Gold
Iron
Diamonds
Uranium

Gold is the most valuable in cash.

Question 9

Using the Canadian provinces as an example, explain how geography influences decisions about hydroelectric development.

Answer 9

Most hydroelectric power is generated in two geomorphic areas: the Cordillera and the Canadian Shield which have ideal natural conditions for generating electricity: a large volume of water from heavy annual precipitation and terrain with steep drops in elevation.

Without those conditions, you investment will fall short.

Quebec has the greatest potential since its portion of the shield includes a massive reservoir and great river networks attractive to damning.

1. good river elevations for natural drop
2. large lakes, easier to turn into reservoirs
3. high annual precipitation in Quebec

Ontario, comparitively, lacks those geographic advantages.

Question 10

Explain the concept of “multiplier effect” and identify and describe three associated impacts.

Answer 10

The multiplier effect is the measure of the economic impact of a new development, such as a factory or mine, on the local or regional economy. A high multiplier means the region is economically diversifying.

Three impacts:

1. Direct impact on wages, salaries, profits
2. Indirect impact from payments to regional industries supplying goods and services to the new firm.
3. Induced impact which is the increase in payments to retail stores and regional suppliers caused by new incomes leading to increased spending.

Money spent on goods and services outside region = economic leakage.

Question 11

Discuss the Berger Inquiry and its significance to development in the north.

Answer 11

First environmental and social assessment of a major resource project.

Sought out communities to see their thoughts, giving voice to Indigenous peoples and their land claims and concerns.

Four elements of Berger’s Inquiry are present today in modern assessments:

1. Industrial proposals are more carefully scrutinized by the federal/provincial/territorial co-managed environmental assessment and review inquiries.
2. The role of public participation has been greatly enlarged.
3. Hearings are held in the communities affected by the proposed projects as well as larger cities.
4. Environmental issues affecting wildlife/country food now form a prominent part of inquiries.

Question 12

What three factors have led to natural gas becoming an important fuel in Canada and the United States?

Answer 12

1. Concerns about rising greenhouse gas emissions.
2. Current low price of natural gas makes conversion attractive.
3. New technology to easier access reserves of gas makes extraction more viable.

Question 13

Why is permafrost a concern with respect to buried pipelines in the North and what can be done to try and alleviate these concerns?

Answer 13

Going through ground that can free and unfreeze poses dangers. You have to be careful for example about the temperature of the oil. Melt and shift can put pressure on the pipeline joints. Water in melts can seap through insulation on the pipeline and cause erosion. Though one solution is to build above ground on stilts, this has its own ecological objections because it is more disruptive to animal and wildlife behaviour.

Question 14

Mackenzie Valley Pipeline - What’s the Deal with it?

Answer 14

Was a proposed pipeline project through the Mackenzie River Delta in the 1970s. Gained a lot of attention as part of the Berger Inquiry which highlighted the needs to pay proper attention to Indigenous peoples. Pipeline was nixed for ten years. In decades since, development had trouble getting off the ground and ultimately has been cancelled as cost prohibitive at present. Though it was suggested it would provide benefits to the Indigenous peoples of region through jobs and training and stimulus to local economies, those like Berger highlighted how resource projects often provide low percentages in that regard at high disruptive impacts to peoples, like the building of the railway across Canada. Indeed, a low percentage of job creation in resource projects goes to Natives. The case of the pipeline highlights a need to do proper environmental and social impact assessment and recognize their claims.