Toward a Northern Development Strategy

 Lindsay Staples

AS THE "DISMAL SCIENCE", economics has produced some dismal "truths". Northern policy makers have uncritically cast some of these as basic assumptions for advancing or justifying their vision of northern development.

 The Yukon has long been a laboratory for narrow economic theorizing and abstract policy making; a succession of governments have set new directions in defining their agendas for development. With few exceptions, they have done so without consulting the territory's residents and with little consideration for the costs and benefits that development holds for local people. There has been little attempt to understand the conditions and attendant relationships that have allowed Yukoners to weather the bad times and prosper during the good. Economic development planning has often been no more than the identification of opportunities for commercial exploitation with the arrival of the next boom.

As a consequence of this approach, those who have remained behind during the "busts" have had to fend for themselves and depend on their own resources. The strategies they have adopted for their economic survival-strategies that have enabled them to maintain their homes in their local communities-have largely been ignored by politicians, public officials, and academics alike.

The Yukon 2000 economic planning exercise can be viewed as an attempt to break with this tradition and to identify those strengths and features of the Yukon economy upon which a long-term development strategy can be built-one extending beyond the most immediate cycle of economic boom and bust. In a refreshing departure from past practice, Yukon 2000 abandoned from the outset any interest in drafting a grand design or "northern vision" to take the territory into the 21st century. Rather, the approach has been to build a regional strategy from the lessons of local initiative and community development.

 In a territory of just 25 000 people in 17 communities, it is surprising that Yukon 2000 is the first economic planning exercise to understand and define the economy from the "ground up". Given that the opportunity exists to consult every economic interest across the territory, it only speaks to the centralist arrogance of past planning models that this opportunity was never seized until recently.

 Out of this approach Yukon 2000 has produced a new and broader understanding of how the Yukon economy works. At the same time, some old assumptions about northern economic development have been re-examined and shibboleths laid to rest.

 The catalyst for Yukon 2000 was the perceived need for a unique regional response to a political problem common in Canada's hinterland economies: how to maintain the economic benefits associated with resource-based export industries while minimizing the often disruptive effects of external market conditions and outside ownership and decision making. Put another way, Yukon 2000 emerged out of a desire to smooth out the crests and troughs of the economic seas associated with cyclical, boom -and- bust, resource- driven economies.

Boom and Bust

 The Yukon is no stranger to a turbulent economy and a rough ride. Indian elders in the Yukon remember two "rushes". The first was resource driven: the discovery of gold on Bonanza Creek in 1896, which brought 60 000 gold-seekers to the territory two years later. By 1900, the population of the territory was around 27 000, of which 3000 were Indians. By 1912, it had declined to 6000 Indians and whites, and, by 1921, to just over 4000 people, where it remained for the next 20 years. Almost as quickly as it had begun, the human tidal wave subsided, leaving in its wake a native subsistence economy, which, although changed, remained the mainstay of the Yukon's Indian population.

 The second "rush" was state driven. Between 1942 and 1945, 34 000 U.S. soldiers and civilians pushed the Alaska Highway through the Yukon as a strategic counter to the threat of Japanese invasion. Following completion of the highway, the population  of the Yukon fell dramatically. The effects of this state-generated boom were significant. The Indian subsistence economy was seriously altered and negatively affected by growing dependence on a highly unstable cash supply. As the new road system permitted access to once-remote regions, settlement patterns changed, and fish and game were seriously depleted through increased hunting pressure.

 Through the 1950s and early and early 1960s, government attempted to lay the base for a frontier industrial economy with a series of capital works projects, including construction of the Dempster Highway under the Diefenbaker government's "Roads to Resources" programme. Later, in the 1970s, a series of private- and public-sector initiatives fuelled another boom: the territory's hard-rock mines were operating at full capacity, the promise of a Dempster-Alaska Highway gas pipeline seemed a reality, and the National Energy Policy was generating a frenzy of onshore and offshore oil exploration.

 But in the early 1980s, the Yukon again slipped into recession. Low world metal prices closed the Cyprus Anvil mine in Faro, and by 1982 the Yukon's two remaining hard-rock mines had closed as well. In that same year, the historic White Pass Railway made its final run. The Yukon population fell 12 per cent between 1981 and 1983. Unemployment climbed more than 15 per cent in 1985, almost 5 per cent above the national average. The Yukon came to depend heavily on transfer payments from Ottawa. Government became the leading sector of the economy.

Hidden Strengths

It is the recent experience of this recession and the deep historical awareness of past ones that significantly affected the Yukon 2000 exercise. The Things That Matter: A Report of Yukoners' Views on the Future of Their Economy and Their Society is a thoughtful and solid rejection of the "economy-in-waiting" approach, of dependence on the next motherlode or Beaufort Sea gusher. It represents the collective opinion of a region seeking to maintain and enhance an economy "as if local people mattered". It is an assertion of the value of certain features of the Yukon economy that have been ignored or misunderstood in the past Moreover, it strongly suggests that many of the features once considered counter-productive to the development of an industrial economy maybe the very features of strength that will provide for more stable development in the future.

 The Things That Matter identifies flexibility, diversity, and self-reliance as enduring characteristics of the Yukon economy. Rather than trumpeting full and full-time employment as the leading goals of an employment strategy, the report observes that it is a range of part-time and seasonal employment opportunities that has allowed many Yukoners, especially in rural Yukon, to adapt effectively to changing economic conditions and to spread their financial risk across a number of different job markets, including self-employment in home production.

 For many rural families, flexibility and diversity in employment are keys to an economic formula that has allowed them to remain in their communities over several generations. Part-time, periodic, and seasonal work permits more control over time and allows many individuals to reduce their dependence on cash by producing, rather than purchasing, goods and services for themselves and their households. This form of self-reliance is not something introduced from without, but is a conditional feature of an economy that recognizes the value of non-monetary productive activity. The recognition by economists and policy makers of a non-monetary sphere of productive activity has been slow in coming, especially in northern Canada. If its value has been understated or considered outdated or antiquated, this is due in no small part to an exaggeration of the benefits of industrial development and a wage economy. The northern industrial economy has masked, until recently, both the narrow dependency it creates and the rationality and efficiency of subsistence activities. In the mid-1970s, the Mackenzie Valley Pipeline Inquiry recognized the "mixed economy" of the North. By this, it referred to the coexistence of two economies: an industrial economy and a subsistence, or non-wage, economy. The relationship between these two economies was acknowledged to be a complex and fragile one, and not well understood.

Ten years after Justice Berger's inquiry, little is known about the Yukon's subsistence economy. But The Things That Matter offers new and important recognition of the important role that subsistence activity plays as an economic safety net for many people-particularly Indian people-in the rural Yukon economy. It observes that there is a special fit and balance between limited wage-labour opportunities, which provide cash to meet the costs of subsistence production, and the time required for subsistence activities themselves if cash requirements and the need for wage work are to be kept in check.

 The report makes strides in understanding that this balance between wage and non-wage work, particularly as it applies to subsistence, lies at the centre of the Yukon Indian economy. As a distinct and separate component of Yukon economic life, the Indian economy encompasses a unique organization of social and cultural life, which rests, to a significant degree, on the family and the household. The strength of this economy is intimately tied to the stability of traditional Indian institutions and social organizations. In acknowledging this relationship, the report suggests that Indian economic development must be better understood by government and the private sector, otherwise, even the best of intentions could produce extremely harmful results for families and communities.

 The report does not restrict its recognition of the value of non-wage activities to subsistence but considers also the contribution of non-paid household and volunteer activities. To a large extent, women dominate these activities, which, like subsistence, have been historically undervalued. The public and private costs of many social services are made affordable through volunteer work in these areas; without adequate time and flexibility, the economic and social benefits associated with it would be lost. As a result, either the quality of life would go down or the cost of living would go up. In many Yukon households and communities, stability depends on how private- and public-sector institutions support and encourage initiative in non-wage activities. The report observes that Yukoners recognize the value of these activities, and it challenges these institutions to do the same.

 The roles of the private and public sectors are also considered in the discussion devoted to the mixed economy. Yukoners hold the view that government should be more than an instrument of last resort. Government has a special role to play in maintaining and contributing to a balanced economy and in the resolution of interests competing for capital, labour, and natural resources. As an employer, government contributes as much as 40 per cent of the Yukon's jobs, and it can act as an influential force in a labour force strategy that meets the differing needs of Yukon communities and provides the flexibility required by their residents.

 These findings and others present an economic picture of the Yukon that is more diversified, self-reliant, and adaptable than past portrayals. Many of these features have existed in spite of public policy initiatives that have assumed a narrow economic base resting on private-sector resource extraction industries, large government transfer payments in times of severe economic hardship, and a process of centralized planning and decision making. Yukon 2000 reveals that if the idea of "balanced development" applied to the North by the federal government in the 1970s is to be meaningful-and less a bone for competing economic interests to gnaw-then a broader range of economic actors must be recognized and supported. The message from Yukon 2000 is that this not only makes good sense politically, but economically as well.

Reducing Vulnerability

 Mining will continue to play an important role in the Yukon economy. In the good times, it has contributed as much as 40 per cent of the Gross Territorial Product, and the small, family-owned precious metal operations have contributed as much as 75 per cent of all income from mining. But historically, our expectations of the mining industry have been exaggerated; often to the exclusion of other interests, they have created an unnecessary vulnerability and dependence on global markets and, in some cases, large foreign interests.

 The non-wage economy, subsistence activities, and import substitution strategies for food, fuel, and construction materials can increase the Yukon's economic self-sufficiency and provide a measure of stability from externally induced shocks. What is required is strong public-sector support and encouragement for participation and new initiatives in these areas.

 Finally, government must better recognize how its resources can be used more imaginatively in job creation and employment strategies, more effectively through a sharing of responsibilities and decision making with local institutions, and more generously through support for subsistence activities. In acknowledging the diverse mix of economic activities in the wage and non-wage sectors, government can play an important role in achieving a more cooperative and beneficial relationship between diverse economic interests.

These are the lessons and the challenges of Yukon 2000. The economic booms of the past are the stuff of grand adventure, great stories, and magnificent legends. But for the people who choose to stay beyond the booms, to make a home, to raise a family, to pursue work they find meaningful, they offer little attraction and much disruptive hardship. As an exercise in consensus building, Yukon 2000 has produced new insights into old problems, and an understanding that conditions once perceived as weaknesses can be strengths. The challenge for Yukoners will be one of building on this consensus and, where there is conflict, recognizing the broader costs of decisions and actions that undermine the social and economic stability all communities desire.

Lindsay Staples is a public policy and resource management consultant in Whitehorse and a member of CARC.