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Alberta Online Encyclopedia
When Coal Was King
Industry, People and Challenges
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In the industry as a whole, the pattern of ownership was quite diffuse, with many companies in operation. The situation contrasted with that in the Nova Scotia coal industry. There, a process of consolidation had begun in the 1880s, finally leading, after the First World War, to the emergence of a single dominant corporation, the British Empire Steel Corporation (Besco). The industry in Nova Scotia had struggled under much greater production costs than in the West, where the expense of mining, especially on the plains, was relatively small. While high costs encouraged concentration in the Maritimes, the emergence of steel-making there also provided the coal industry with the prospect of a large market, justifying expansion and consolidation.3 No comparable market developed in the West after the early expansion of the railways. The population of the prairies was dispersed and did not support the regional industrial development that would have greatly increased the demand for fuel. For this reason, even the steam coal companies faced limited prospects after the first decade of the 20th century and outside investors did not have the motivation to sink further funds into the industry in order to consolidate it.1

The dispersed nature of control in the coal industry was harmful to operators in several ways. In the Crowsnest Pass, the inability of the various companies to co-operate weakened them in negotiations with labour, particularly in the years before 1914 when the labour movement was growing in influence. This same factor, in the long run, tended to weaken enterprises and keep prices low. In the Pass, the large concerns at Coleman, Blairmore, and Hillcrest vied for the patronage of the CPR. On the plains, the situation became destructive, especially during the Depression of the 1930s when government-sponsored efforts to form producers' cartels were unsuccessful in preventing price-cutting wars. Even before this time, the frequency of failed enterprises was high as developers with limited funds struggled with the costs of excavation and mechanization in the face of uncertain fluctuating markets. After considering the problem in 1919, a provincial royal commission recommended the creation of a body to advise prospective owners on investment and thus forestall further failures. Unfortunately, nothing was done .2

Ultimately, coal producers made decisions in an environment largely controlled by outside forces, especially the railways and the state. The policies of the railways restricted the size of the market and tended to depress the price for coal. By maintaining high freight rates, the CPR, and later the CNR, discouraged the coal industry from expanding into markets in eastern Canada and elsewhere. As major consumers with alternative sources of supply, the rail lines were also able to influence the price of coal. For instance, the CPR forced Alberta steam coal producers to cut prices in 1886 when prices for Pennsylvania coal dropped. In the 1920s, the existence of the American supply was once again used by the CPR and the CNR to force producers to drop prices at a time when the industry was struggling to maintain markets.3

The industry was also vulnerable to the policies of the state. Faced with long distances to markets beyond the prairies, producers would have benefited from a favourable federal government policy encouraging the sale of Western coal. This encouragement might have taken the form of freight subsidies or higher protective tariffs to keep out American coal. However, the tariff was never raised high enough to keep out the foreign product. Subsidies were never great enough to overcome the high costs of transportation.4

Given the restrictions posed by the market and the role of the state, entrepreneurs thus faced a limited range of choices. Their decisions were instrumental in determining the expansion of the industry and in encouraging local development in the vicinity of the various coalfields in the region. As we shall see in the next sections, they also made key decisions regarding technology and the employment of labour. They could not overcome the limitations of their environment, which restricted the scope for expansion. However, the entrepreneurs did play a substantial role in the development of the coal industry in Alberta and southeastern British Columbia, and this important facet needs to be recognized in evaluating coal mining sites.

William N.T. Wylie, "Coal-Mining Landscapes: Commemorating Coal Mining in Alberta and Southeastern British Columbia," a report prepared for the Historic Sites and Monuments Board of Canada, Parks Canada Agency, 2001.
 

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