Quarter Billion Is Being Spent To Develop Canada’s Northland

CANDIDAS April 1 1927

Quarter Billion Is Being Spent To Develop Canada’s Northland

CANDIDAS April 1 1927

Quarter Billion Is Being Spent To Develop Canada’s Northland



FEW Canadians realize the extent of the national heritage of latent wealth which is theirs. Almost everyone has a vague idea that great regions remain unexploited, but the facts are not generally known. To some extent, the people of Canada have been content to allow American capital to develop these resources and reap the rewards. That condition is now changing. There has never been a time in the history of the Dominion when Canadian capital has been so readily enlisted for enterprises that are calculated to add to Canada’s wealth. Instead of investing money in public utility companies operating in Brazil, Mexico, Porto Rico, Spain and elsewhere, Canadians are beginning to realize the soundness of investing their funds at home. If more information were disseminated concerning the opportunity within the boundaries of the Dominion the rate of progress would be much more rapid. By concentrating upon these matters the next ten years might easily bring more constructive changes than the past fifty.

Quite an amazing statement was made recently by Cyril T. Young, Superintendent of Development, Canadian National Railways when he remarked that the four largest mining companies in Canada, International Nickel, Consolidated Smelters, Mond Nickel and Hollinger and Lake Shore in the aggregate are paying, at their present rate, more dividend than the combined dividends of all the chartered banks in Canada. This is a significant state of affairs. The mining and smelting enterprises in question have large expansion programmes ahead. Their production, earnings and dividends will undoubtedly expand greatly during the next five years. And the amount of the dividends is not the only noteworthy point. This: is: new wealth—wrested from the earth.. New wealth is clean wealth. There is no taint attached to it. It despoils no* one and! benefits huge communities and the business interests of the entire country generally.

This reference to a section’ of themining industry does not begin to cover the entire field. The development of' hydro-electric power is cheapening the cost of production and making possible the creation of great industries. Power development is making wonderful strides and at the present rate of progress will do much greater things within the next half decade. The pulp and paper industry is marching hand in hand with power. It is largely dependent upon an abundant supply of cheap hydro-electric energy.

The development of these three industries—mining, power and pulp and paper —is creating new wealth in territory that has formerly been considered barren. The country north of the lakes which has been regarded as the weak link in the chain between east and west is demonstrating that it possesses resources nc. to be despised. The railway l.nes that were formerly being operated at a loss are-now able to meet operating costs by reasonof the freight business being supplied by the newly created industries. No business is more profitable for thg railways than the hauling of mining freight.. Et is conr tinuous and involves large tonnage both incoming and outgoing. Unlike the movement of a grain crop which is seasonal, the freight offered by mining and pulp and paper enterprises is evenly distributed over the twelve months. Inasmuch as the railway problem is one of the greatest demanding the attention of the Canadian people, the development of industries that brings business to the carriers is worthy of much consideration.

It has often been said that immigration is Canada’s chief problem. That may be so, but there is no magnet that will attract new population so strongly as growing industries, attractive wages and high prosperity generally. Canada seems destined to experience more genuine progress and sound prosperity in the next decade than during any period since Confederation.

The Value of Industrial Research

AN EXAMINATION of the natural -LA. resources situation should prove profitable. One of the first matters worthy of emphasis is the stress being placed upon industrial research. The greatest object lessons in this regard are those of such organizations as General Electric Company at Schenectady, the United States Steel Corporation'and International Nickel. The last company has been successful in finding commercial uses for its product to compensate for the loss of the armament business that was formerly its mainstay. The success of this effort to change the nickel industry over to a peace time basis is one of the most romantic chapters in the history of industrial research.

Imagine if you can the large industry that has its market completely cut off. It is obliged to find entirely new channels for the distribution of its product. This is exactly the situation in which Internattional Nickel Company found itself after the Disarmament Conference at Washington. With commendable courage it :set about to find new markets. Efforts in this direction have met with such a degree of success that the industry now finds itself in a more assured position than ever before. Producción of the nickel mines in Northern Ontario has amounted to $500,000,000 up to date, and close to $100,000,000. has been paid in ■dividends.

There are other noteworthy instances ■of the advantages of industrial research. The pulp and paper industry of Canada is spending $350,000 this year for research. Such expenditures when wisely made are repaid many times over, in ■economies in production, improvement of product and widening of markets. It has been found possible to use jack pine for the production of newsprint. Since there are large areas in Canada where jack pine is predominant the use of this wood increases the pulpwood reserves greatly.. Canada has the largest stand of spruce known anywhere and this abundant source of raw material combined with plentiful low-priced power will' make the pulp and paper industry greater as time goes on. Only thirty-six years ago Canada’s exports under this category amounted to only $120. In 1926 they exceeded $173,000,000. United States has been displaced from the leadership as the largest producer of newsprint. Canada supplies over one-half of the 3,000,000 tons of paper a year used in the United States. There are 114 pulp and paper mills in Canada and the capital invested amounts to $460,000,000. There is an annual wage bill of over $38,000,000 paid to 28,000 workmen at the mills, exclusive of twice as many employed in the woods and on the drives. Incidentally, Canada used twelve and one-half per cent, of its total production of paper in 1926.

Some doubts have been raised occasionally concerning the possibility of overproduction. Great expansion in mill capacity has taken place during the past five years but the market has broadened to a greater extent than the manufacturers had estimated. Sales of paper increased seventeen and one-half per cent, each year during the four years prior to 1926 and the average yearly increase in production over that period was seventeen per cent. The markets for rayon and cellulose have become important factors in the textile business recently, and Canada occupies a strategic position with regard to their development. Canada to-day is providing fifty per cent, of the pulp used for making rayon silks.

An excellent field for investment has been offered by the great pulp and paper industry. The bonds, preferred stock and common shares of the most important companies have paid many millions to those who have invested their funds. A large proportion of these industries is Canadian owned. However, American organizations, notably the International Paper, have invaded the Canadian field and have threatened to supersede the largest of any of the Canadian companies. The developments of this American organization in Canada are involving an investment, greatly in excess of $100,000,000. Power plants and modern paper mills have been built replacing obsolete equipment in American mills which are being converted to enable other paper products to be manufactured. In a sense that part of the American paper industry is being transferred to Canada where greater resources in cheap hydro-electric power and raw material are available. The company in question is purchasing 100 per cent, of its construction equipment in Canada.

A Quarter-Billion Dollar Program

A LARGE part of the quarter-billion•CY dollar development program now in progress across the north country belt between Manitoba and the Saguenay River is in connection with the pulp and paper industry. A substantial part of the balance is being invested for the production of hydro-electric power. Canada has the distinction of having increased its power development by 245 per cent, in the last ten years, and it now occupies third place per capita in the world, ranking after Norway and Sweden. Canada has 387 horsepower per 1,000 population as compared with 97 in the United States and 18 in Germany. An expenditure of $750,000,000 has been made for the development of 4,290,000 horsepower. Expenditures for power development are being made at the rate of about $75,000,000 annually. Investment in these enterprises is constructive, inasmuch as it makes for a higher degree of national prosperity. There is no question whatever that such investments do much more for Canada and consequently for the individual citizen than investments abroad Capital is needed at home and so long as such a productive field for profitable investment is offered here, Canadians should not look too far afield. Any other course is short sighted.

A total of 32,000,000 horsepower can be developed in Canada according to careful estimates and about 18,000,000 is available in the North Country from the Saguenay River to the Churchill. Some of the mighty rivers of the north surpass Niagara greatly in their potential power resources. On the Nelson and Churchill Rivers for instance there is approximately 3,000,000 horsepower available before providing adequate storage control dams which would raise the total considerably. This contrasts with Niagara’s 1,340,000 horsepower, being developed on both sides of the river. There is room for great expansion before the entire power resources of the country are developed. This will come about eventually because the gathering momentum of industry and economic progress generally cannot be stopped any more readily than King Canute could stop the incoming tide. The 3,000,000 horspepower on the Ontario and Quebec slope of James Bay will not remain unharnessed forever. It is not looking too far into the future to envision the time when future huge power developments will utilize much of the vast supply of energy now going to waste.

A concrete example of the huge I industry that is being created in Canada i as the consequence of wonderful power ! resources is found in the locating of the Aluminum Company of America’s plant on the Saguenay River. About 1,260,000 horsepower is the potential development of the Isle Maligne and Chute à Caron power developments. There will be a total expenditure of not less than $70,000,000 for plant and power on the Saguenay. Bauxite ore will be carried by a fleet of thirty vessels from British Guiana to Quebec. A new city is being located at Arvida and the entire district will receive a great stimulus. This industry was located in Canada in co-operation with the British Government because extraordinarily cheap power was available. It is estimated that the installation cost of the first development was $33.00 per horsepower. After the second installation is completed it is figured that the installed cost will not be more than $26.00 per horsepower. This will be the cheapest large power development on the continent. This has made it possible to offer power to industries at about $13.00 per horsepower. The above instance is a concrete example of the manner in which power development and manufacturing enterprises march along together.

The Expansion in Mining

'T'HE great mining industry is responA sible for a very considerable portion of Canada’s new prosperity. Mineral production was close to $250,000,000—in 1926 and this represents a gain of 118 per cent, over the total in 1911. The expansion during the past fifteen years will afford an idea as to what progress is likely to occur in the next decade. Efforts of prospectors and mining organizations are more intense at present than at any previous time in the history of the Dominion. Activities have spread over a wider area. Capital is more readily enlisted for legitimate mining enterprises than ever before. An increasing proportion of the money required is being supplied by Canadians.

Gold production in Northern Ontario is at the rate of more than $30,000,000 annually. Canada occupies third place in the ranks of the world’s gold producers, and will undoubtedly oust the United States from second place within the next four years. Nearly $60,000,000 has been paid in dividends by gold mining companies since the discovery of Porcupine. In all likelihood the production rate will amount to $50,000,000 annually by 1930. Canada is advancing in gold production at a greater rate than any other country in the world. The Rand in South Africa has about reached its zenith, while Canada is forging ahead steadily, although still far behind the leader. Canadians can point proudly to Hollinger as being one of the three greatest gold mines in the world, which will undoubtedly reach first place within a year or two. Hollinger is still young as mines go. An overwhelming proportion of its ore has been drawn thus far from above the 1,000 foot level. There is every indication, so far as ore goes, that profitable mining can be cariiid on in this remarkable mine to as great depth as it is physically feasible. The former estimated yield of $150,000 per lineal foot of Hollinger is believed to be over conservative but even at this figure there will be an aggregate yield of $600,000,000, down to the 4,000 foot level. There are over 100 miles of underground workings and sixty-five miles of underground electric railways at this remarkable mine. The milling objective of 8 000 tons per day will be attained within about a year according to present *)lans.

This single mine means much to Canadian prosperity. There are 2,500 men on the pay rool receiving over $4,000,000 in wages. The thriving city of Timmins is largely dependent upon Hollinger for its well-being. Whether business is up or down elsewhere the commercial houses of Southern Ontario and of the rest of Canada find that the purchasing power of the North remains constant. That mining purchasing power in Ontario is conservatively estimated at $60,000,000 annually without including dividends. If all the facts were available the above estimate would probably be exceeded substantially. The newest gold camps are in Central Manitoba including Rice Lake and English Brook; in the district of Patricia in Ontario, including Red Lake, Narrow Lake and Woman Lake. There is considerable promise in all these districts.

Things are moving along in the gold bearing districts contiguous to the Temiskaming and Northern Ontario Railway. McIntyre’s new central shaft which is the deepest in Canada has reached its objective of 4,000 feet, and ore pockets are now being provided for 150 feet below the lowest level. The mines in the central part of the Kirkland Lake field are making remarkable progress. Kirkland has taken rank as the greatest high grade gold mining camp in the world.

Developments elsewhere are noteworthy. Reference has already been made to the Sudbury nickel field in connection with the research effort which has done so much for all branches of mining and metallurgy as well as in other fields of industry. The silver mines of Northern Ontario have produced $235,000,000 during the past twenty-two years and have paid $100,000,000 in dividends. South Lorrain and Gowganda are coming into more prominence and Cobalt is not by any means finished.

Great things are expected in the copper gold field of north-western Quebec where four proven mines have already been developed. Others will doubtless be added to the list following one of the most intensive scientific prospecting campaigns ever conducted anywhere in the world. The completion of the Horne smelter in the autumn of this year will bring about the commencement of production in this field, which should ultimately be of great importance, making Canada a real factor in the copper world. A noteworthy feature of the Quebec ores is that besides running high in copper there is an important gold content in the most extensive deposits.

In Northern Manitoba there are large copper-zinc and zinc-copper deposits. Development programs are under way which will involve expenditure of many millions of dollars before they are completed. A huge deposit of copper-zinclead-gold-silver ore in the Sudbury district is being developed by a large and powerful American organization that is especially fitted to handle the treatment of these complex ores. Success is also meeting efforts to prove up the leadzinc deposits of Gaspe Peninsula. All these endeavors point to Canada's great future as a source of minerals upon which industrial greatness is based.