The Politics of Deindustrialization in Canada

by Lauren Laframboise

In early February this year, Canopy Growth announced that it would close its cannabis flower production plant in Smiths Falls, Ontario. The facility was located at 1 Hershey Drive in the former Hershey chocolate factory that had once been a major employer in the small town. After Hershey’s closed in 2008, a subsidiary of Tweed Inc. (now Canopy Growth) purchased the plant in 2013 and invested $1.5 million to retrofit the chocolate factory to produce cannabis. After the Canadian government legalized the drug, Tweed Inc. raised $15 million in start-up capital, expanded their team, and filed for public listing on the TSX Venture Exchange. While the cannabis industry was on an initial high after legalization, the market hasn’t quite panned out as business executives had hoped.

When Canopy Growth announced the closure and 350 layoffs in the small town, a CTV news article reported that Smiths Falls residents had a feeling of déjà vu. “I think a lot of people are just confused,” said Ryan Bennett, who grew up in Smiths Falls. “Like why now after all the investments, the projects, that kind of things? Obviously it’s a business decision.” But it wasn’t just Hershey’s and Canopy that had left town. The former “chocolate capital” turned “pot capital” had seen several other major employers close up shop over the years. The Frost & Wood Company closed its plant in 1955. Then RCA shut its doors in 1979. Shortly after the announcement of the Hershey’s closure in 2007, Stanley Tools ceased its operations in 2008 and, beyond the manufacturing sector in healthcare, the Rideau Regional Centre closed in 2009. In total, these closures represent well over two thousand layoffs in a town of just nine thousand people.

Hershey Chocolate Factory in Smiths Falls, Ontario, shortly before closing. Photo by Adam Gerhard. Creative Commons.

Smiths Falls residents have been caught in the middle of a particularly relentless cycle of employment booms and busts in the last few decades. But the town’s experience relates to a broader shift in the postwar Canadian capitalist economy that has profoundly affected working-class communities across the country. Starting in the mid-1960s, manufacturing has represented a steadily decreasing proportion of Canada’s total economic output while the service sector (healthcare, transport, retail, tourism, finance, communications, tech, etc.) was (and still is) on the rise. This large-scale shift has been called different things over time: economic restructuring, tertiarization, and deindustrialization. There are many reasons that these changes have happened, including the rise of free trade after the Second World War, the deregulation of finance in the 1970s, and the ensuing economic crises since then.

The transformations of the late 20^th century have had major impacts on the way we work and live. Manufacturing represented a big proportion of unionized workers in Canada, but as factories closed and the industrial workforce shrunk, organized labour saw their memberships steadily decrease. Although Canadian unions generally fared better than their American counterparts, private sector unionization rates have also steadily declined in Canada. As union power weakened and employers attempted to make cuts to stay competitive, working conditions worsened in the industrial workplaces that remained. Private sector unions have tried to break into the newer workplaces of the service sector, but corporations like Starbucks, Amazon, and Wal-Mart have developed brutal union-busting strategies. At the same time, we’ve seen rising income inequality hitting the lowest-paid sections of the workforce, often racialized and immigrant workers, hardest.

While the word “deindustrialization” might suggest an undoing of the older industrial economy, what it really represents is yet another series of transformations in the long history of capitalism. As was the case during the rise of industrial capitalism in North America, deindustrialization is profoundly intertwined with the settler colonial state’s ongoing occupation and decimation of Indigenous lands and resources. As Lianne C. Leddy has shown, industrial production is responsible for extremely high levels of toxicity in Indigenous communities like Serpent River First Nation. These toxic legacies will not be going away any time soon, even after plants close and the jobs are long gone.

As a framework, deindustrialization can help us bridge the structural economic forces that can feel far away and outside of our control with the very real and often devastating experiences of layoffs, shutdowns, and closures. These “business decisions”, as Bennett put it, have ripple effects that extend far beyond the last shift.

This post begins a special series for Active History with researchers affiliated to the Deindustrialization and the Politics of Our Time (DéPOT) SSHRC Partnership project. This series will put industrial decline into historical perspective, exploring the wide-ranging legacies of deindustrialization, including environmental degradation, corporate restructuring, urban redevelopment, and energy transitions. While examining the past, the posts in this series pose important questions that can better help us understand and imagine our collective futures. These articles offer a preview of some of the research that will be presented at this year’s DéPOT conference on “The Politics of Industrial Closure,” taking place in Mi’kma’ki (Sydney, Nova Scotia) and hosted by Cape Breton University later this month.

From June 9 to 19, The Politics of Deindustrialization in Canada series will feature posts from the following authors:

• Historian and writer Liam Devitt begins the series by sharing their oral history research with queer Cape Bretoners on their experiences of the island’s deindustrialization, confronting the politics of return and finding community outside of the city.
• Nicholas Fast, PhD candidate at the University of Toronto, traces the high rates of COVID infections and deaths in Canadian meatpacking plants to the industry’s reorganization and deindustrialization in the 1980s.
• Eliot Perrin, PhD candidate at Concordia University, delves into his family history to explore the relationship between mining, urban development, and Franco-Ontarian community life in Sudbury, Ontario.
• Anna Bettini, postdoctoral associate at the Calgary Institute for Humanities, raises key questions about the future of the oil and gas sector in Alberta. Writing from an ethnographic perspective, Bettini mobilizes interviews with Albertans to explore the limitations of retraining programs to transition workers to the renewable energy sector.
• Peter Thompson, professor in the School of Indigenous and Canadian Studies at Carleton University, takes us back to Atlantic Canada in Pictou County, Nova Scotia, where the recent closure of the Northern Pulp mill has sparked heated debates about industry, settler colonialism, and environmental racism. Through the history of two monuments along the Pictou waterfront, Thompson debunks common myths about Nova Scotian history as the “birthplace of New Scotland.”
• Steven High, Principal Investigator of the DéPOT project, concludes the series with a reflective piece considering deindustrialization as a failed “just transition.”

Lauren Laframboise is a PhD student at the Centre for Oral History and Digital Storytelling in the Department of History at Concordia University. Her research explores the impacts of deindustrialization in the apparel industry in Montréal and New York City.