Manufacturing-reliant communities struggle to find new identities

Lindsay Jolivet

Dawn Quinn sits among relics of the past in her antique shop and salon as she discusses the painful recent history of her embattled hometown, Smiths Falls.

During her 40 years as a hairstylist, she’s always heard the chatter from locals in this community, from success during its days as the chocolate capital of Ontario, to the sense of loss when the town lost 1,700 jobs in a few short years. 

“Devastation. People were just totally so upset, so nervous,” the business-owner and town councillor says.

“It was like they weren’t sure where they were going to go, what they were going to do. It was like ‘we’ve worked at the Hershey plant for so many years and now it’s gone? How can we still survive?’”

Until six years ago, Smiths Falls’ Hershey factory employed 550 people. Its vats of swirling chocolate and sugary treats drew thousands of sweet-toothed visitors.

But in 2007, Hershey announced it was leaving Smiths Falls. That decision, which followed the closure of the provincially-run Rideau Regional Centre and led many smaller manufacturers to shutter, left the town economically unstable and with fewer tax dollars to support its community.

Several years later, the former chocolate plant still stands vacant on Hershey Drive, its parking lot empty and rust covering the white silo bearing the company’s name.

Since the closures, Smiths Falls has replaced only about 150 of its lost jobs at best.

Quinn says the changes in Smiths Falls are not unlike hers in the hairstyling business. When haircuts stopped becoming a frequent ritual, with customers coming in once a week or more, she expanded her shop and began to sell antiques, processing sales with a clang on a vintage cash register. Now customers can not only get a trim, but buy old cameras, clothes, furniture – even a cow’s skull if they like.


And Quinn says it’s time a changing Smiths Falls found solutions as creative as hers.

“We put all our eggs in one basket. We looked at manufacturing and industrial and we didn’t worry about the tourism,”she says.

Quinn says Smiths Falls needs to become a “destination,” marketing the cafés, quaint shops and friendly atmosphere that lay like hidden gems within its streets.

“People don’t realize and it’s our fault because we haven’t gone out to tell them. So we’re the people that have to get busy,” she says.

The small size of towns like this one, with a population of 8,878 at the last census, makes recovery difficult. Small towns and rural areas in Canada and the United States are seeing a general trend toward population decline that stands out in contrast to national population growth – with cities gathering up most of the people power.

According to economist Fazley Siddiq at Dalhousie University, that trend is altering the population landscape of North America, and it has damaging potential for some communities.

“Canadian municipalities and rural areas could clearly start failing if the declining population continues," Siddiq says.


A global problem

Improved technology for agriculture, manufacturing, fishing and other industries that sustain rural communities have created shifts – and the effects spread much farther than North America.

"A lot of these global technological changes underlie this problem that you describe is happening around the world,” Mark Partridge, an economist at Ohio State university, said.

Here’s a selection of the trends in small towns and rural areas worldwide:

Lots for a buck in Australia

About 38 per cent of Australia’s population lives in its major cities, Sydney and Melbourne. Next door in In New Zealand, Christchurch, Auckland and Wellington have absorbed 49 per cent of the population and most immigrants move to these bustling cities. Small towns are taking creative measures to entice people to the countryside. Richmond, Queensland, population 827, recently tried to gather up more population by selling lots for $1 each – less than a bag of chips at the town’s supermarket – and a promise to build. Struggling Canadian towns have done it too, including the rural municipality of Pipestone, Manitoba, where lots have sold for $10.

China: Empty cities

About half of China’s population lives in cities, many of the rest living off the land in agricultural settlements. Two decades ago, the proportion of city-dwellers equalled less than a third, but by 2050, the percentage of the population living urban will be more than three quarters, according United Nations estimates. Now the country is building towering metropolises – some of which stand in ghostly emptiness – and forging plans to move people from their rural homes in the hopes of spurring national growth through urbanization. China has built it, but will they come?

Burundi and rapid urbanization

In 2010, Burundi had the lowest percentage of urban-dwellers in the world at 10.6. However, this country is among the list of places, largely in Africa, that also have the world’s the fastest growing city populations. Severe poverty and conflict have complicated urbanization in this country that relies mostly on agriculture, but in 2008, the government of Burundi established a policy for national housing and urbanization to help ensure the growing urban population would have the infrastructure and affordable housing it needed.

Rural France is for tourists

Ah, the French countryside, a land of romance and wine. But a study released several months ago found the price of property in rural France had tumbled downward in recent years. While some have suggested British homebuyers might swoop in and buy up rural lots as second homes, or retirees might fill the void, many French residents told the BBC’s Emma Jane Kirby that if their villages weren’t propped up by a hoard of wealthy tourists, they were rotting away. They said unemployment was rising in these areas and young people were leaving to find work, seeking new lives in Bordeaux or Paris.


- Lindsay Jolivet

The last census states the population of Smiths Falls declined by 2 per cent between 2006 and 2011, in contrast to a national growth of 5.9 per cent. Its population averages even older than the rest of our aging country, and the town recently joined an initiative to draw in immigrants who overwhelmingly tend to live in large cities.

A total of 1,023 residents in this county – Lanark – relied on welfare in June, according to the Ministry of Community and Social Services, and the mayor of Smiths Falls, Dennis Staples, says about half of them live in his community.

Staples has spent most of his life in his hometown of about 9,000 people. He had already in been mayor for more than a decade when Hershey closed its Smiths Falls factory along with five others in North America, leaving some of 3,000 employees out of work.

“We were known as the chocolate capital of Ontario. Now that Hershey is gone that no longer exists, so we’ll just have to go forward and find another niche for us,” Staples says.

Smiths Falls recently invested $350 million into infrastructure, mostly funded by the federal and provincial governments,which contributed to developments such as a new high school, a water treatment plant and an arena complex.

Staples says those investments have drawn other investments into the community, from major retailers including Walmart and Target. A local developer has purchased the former Rideau Regional Centre and is converting the building into a residential complex.

Still, the jobs are missing here and elsewhere, too; manufacturing losses in particular have struck Cornwall, London and Windsor among areas throughout Ontario’s manufacturing sector as well as the United States area known as the Rust Belt.

Newton, Iowa, more than 1,600 kilometres away, was once the home of Maytag Corporation, a town that proudly boasted its title as the washing machine capital of the world. However, the same year Hershey announced it would move production to Mexico, Maytag also moved much of its production to Mexico, closing the manufacturing plant in Newton and sending this Midwestern town’s economic prospects plummeting.

“We had some restaurants close. We’ve had a few retail businesses close,” Newton Mayor Mike Hansen says.

The end of washing machines and dryers slashed 2,000 manufacturing jobs in this town of 15,000, and so it seemed, hung the town of Newton out to dry.

“The community has always been known as the washing machine capital of the world – as Maytag company – that’s been our brand. Well, that’s not the case any longer. So the effort is to come up with anew identity and to market that to the world,” he says.

But here, too, the population has seen a slow decline in recent years, dropping by three per cent since 2000.

“There’s always a concern when they’re going the wrong way, when you’re not able to expand your community and expand your opportunities here,” Hansen says of his town’s population statistics.

“Quite frankly, there’s a great amount of energy expended just maintaining what you have here."

The number of people living in metropolitan cities during the last 50 years grew from 45 to 70 per cent in Canada and 63 to 84 per cent in the U.S. As a scholar of population trends, Fazley Siddiq finds those numbers concerning.

"What worries me is that this will reach a point where the dangers will start increasing rapidly," Siddiq says.

"You say, 'Well what's going to happen?' Well, in the U.S. you're seeing bankruptcies and so forth, and they have more limitations for borrowing money. We will see drastic slashing of services and provincial governments forcing amalgamation."

People don’t realize and it’s our fault because we haven’t gone out to tell them. So we’re the people that have to get busy.
— Smiths Falls business owner Dawn Quinn

Other towns within Lanark County have amalgamated in recent years, but Smiths Falls remains a separate township.

Similarly, Newton's streets haven't emptied out and the town hasn't declared bankruptcy. In fact, Hansen says his town has replaced about 1,900 of the 2,000 jobs it lost with a new wind energy manufacturing plant, the Iowa Speedway and other new industries.

However, Mark Partridge, an economist at Ohio State University and the former Canada Research Chair in the New Rural Economy at the University of Saskatchewan, says even small towns that are doing well now could struggle as urbanization continues, even if “fail” might be too strong to describe the effect.

“I don't think so much of failing of towns, it's more like they slowly disappear, they slowly wither away,” he says.

“The reason for them to exist was often an era of the late 19th century and they're just no longer needed in the modern economy.”

Many factors are operating at once to create the shift; we have an increasingly service-oriented economy that drives young, educated minds to the big city in search of a different lifestyle or work they can't find at home.

“Cities are definitely the primary engine of growth on both sides of the border. All the data supports that,” Partridge says.

Technological improvements for farming, mining and energy reduce the number of people who need to work in those industries and the others move to the city. In manufacturing towns, cheaper costs have driven some companies elsewhere.

“Rural areas, all in the 1960s, 70s had areal advantage over cities because they had low-wage labour, low land cost. And now the problem you would face is you can do this a lot cheaper in China or Vietnam than you can in rural southwest Ontario or rural Ohio,” Partridge says.

Or in Hershey and Maytag’s case, Mexico.

Partridge says that while Canada has stepped in more actively in struggling areas, the U.S. has been more passive, letting local economies alone to grow or decline. Yet the trends persist in both countries, suggesting they’re immensely hard to reverse.

“It says if the Canadian public and the Canadian policy-makers want to intervene they're going to have to put in a lot of resources, and they're going to have to come from places that are doing relatively well. They have to ask is it worth that cost?”

Another option?

The smell of chocolate is long gone from the Smiths Falls Hershey Factory, but a new smell might emanate from within its walls soon – marijuana.

The medical marijuana company Tweed says it plans to purchase the vacant factory pending Health Canada approval for its grow-op, and use 180,000 square feet of the 470,000 square-foot space.

Tweed, which has already listed its address at 1 Hershey Drive in Smiths Falls, says the operation will create 20 jobs in the community, and in the future, the workforce could grow to 100 or more full-time employees.

- Lindsay Jolivet

Newton’s new wind blade factory, helped by a federal tax incentive, helps provide the country with tools for green energy, but the investment of resources hasn’t cured all of Newton’s economic difficulties.Hansen says workers who switched from washers to wind are making much less money on average than they did at Maytag.

He says Maytag paid manufacturing workers about $18 to $20 an hour, while most of the new, smaller manufacturing companies in Newton offer only about $13 to $16 an hour.

“There’s been a dramatic loss in hourly wage for manufacturing jobs but we believe we’ll gain that back over the years.”

In Smiths Falls, Staples says the town is promoting itself as a bedroom community for Ottawa, about 75 kilometres away,though it competes for commuters with other smaller communities that surround the city. He adds that Smiths Falls will also continue to chase some of its bread-and-butter industries from the past – manufacturing.

“Hopefully we might be able to attract some new manufacturing that will create those conditions for good economic growth and development here in Smiths Falls,” he says.

And that’s the message these municipal leaders stress constantly – hope for the future and plans for renewal.

They say they’ll chug forward despite the forces that work against them, filling vacant buildings and attracting new jobs to keep the wheels of this slice of small town North America turning year after year, whether it’s chocolate, washers or something else entirely rolling off the conveyor belts.

(Photos courtesy The Canadian Press/Yahoo Canada News)