ELLIOT LAKE’S GLAMOROUS RISE AND BITTER FALL – by McKenzie Porter (MACLEAN’S Magazine – July 16, 1960)


This is a candid portrait of the hundred-million-dollar boom town that was built on uranium—the mineral with sex appeal— and of the mesmerized thousands who learned the hard way that it was just another mining camp after all

ELLIOT LAKE IS the most elaborate mining camp ever built, and until recently it was the luckiest. Although it is buried in the northern Ontario bush, half way between Sudbury and Sault Ste. Marie, it looks like a metropolitan suburb.

Moose, bears and wolves peep nervously down from majestic heights of rock and pine upon a hundred million dollars’ worth of fluorescent lights, crescent streets, split-level homes, three – story apartment blocks, cantilevered shopping plazas, breeze-way schools, wide-screen movie theatres, picture-window hotels, functional churches, a lakeshore community centre and the finest hospital north of Lake Huron.

Ed Gibbons, a former editor of the Elliot Lake Standard, once described the town as “a frontier monument to the architectural theories of Le Corbusier and Frank Lloyd Wright,” and he spoke more in wonder than in jest.

Ever since the town was founded, six years ago, most of the twenty-five thousand Elliot Lakers have been among the best-paid workers in Canada, and for the past three years they’ve been among the best housed. They’ve luxuriated in all the comforts of city life, as well as the pleasures of hunting, fishing, sailing, swimming, skating and skiing within ten minutes’ drive of home.

But their balmy days are over.

Elliot Lake was built to meet a boom. There was never any guarantee that the boom would last, and now Elliot Lake faces a bust. A third of its nine thousand miners have been laid off, and the rest will probably lose their jobs in stages over the next six years. Every day moving vans roll out of town. By the end of this year, local merchants say, retail turnover will be down by eighty percent. By 1966, unless an economic miracle intervenes, Elliot Lake may well be the handsomest ghost town on earth.

Why did the builders of Elliot Lake sink so much money in a mining camp? Because, as they readily admit today, they were mesmerized by the propaganda of the atomic age. Barry Allen, a Toronto businessman whose companies could lose the two million dollars they’ve invested in hotels, theatres and stores, says: “We were sucked in by the magic of the word uranium.”

Elliot Lake sits on the largest known deposit of uranium ore in the Western world and, as every schoolboy knows, uranium is the fuel for atomic energy, man’s most modern and widely publicized source of power. The ore body was discovered in 1953 by Franc Joubin, a Toronto prospector, and staked in dramatic secrecy by geologists working for Joseph Hirshhorn, a New York mining promoter. At that time the American stockpilers of cold war atomic weapons were devouring uranium as cats devour cream.

Joubin and Hirshhorn are reputed to have cleared eleven million and thirty million dollars respectively by selling part of their ore interests to mining, companies. After the sales Hirshhorn said exultantly: “Uranium! It’s like sex! It’s got glamour!”

His enthusiasm was infectious. From all over North America and Europe miners were drawn to Elliot Lake by the news that the mining companies had received orders from the United States for more than a billion dollars’ worth of uranium. The ore was to be delivered over the five-year period between 1957 and 1962.

A few experts believed that American demand for Canadian uranium would continue after 1962, for the development of peaceful atomic power. But last November the United States Atomic Energy Commission decided not to take up its post-1962 Canadian uranium options—and Elliot Lake, which produces sixty-eight percent of Canadian uranium and twenty-four percent of world output, was pole-axed.

The mining companies, dominated by Britain’s titanic Rio Tinto Mining Company of Canada Ltd., and including such other giants as Consolidated Denison Mines Ltd. and Can-Met Explorations Ltd., were relatively unperturbed. They had known since 1953 that the volume of uranium sales beyond 1962 was unpredictable. But they didn’t care. They were protected. The U. S. five year contracts were designed to guarantee them the return of their three-hundred-million-dollar investment in the mines plus a reasonable profit.

Nor were most of the working miners shocked or surprised, either at losing their jobs or at Elliot Lake’s misfortune. Accustomed to highly paid jobs of short duration in frontier country, the miners had never anticipated permanent residence.

But the camp followers — the technicians, clerical workers, professional men, storekeepers, hoteliers, amusement caterers, restaurateurs, and others — had been betting on the idea that the uranium boom would go on forever. These were the people who bought homes and businesses in Elliot Lake. And, generally speaking, these are the only groups in Elliot Lake that today are facing a crippling financial loss.

What led them to overestimate Elliot Lake’s future? They contracted the contagious optimism of the Canadian federal government and the Ontario provincial government.

In 1955, when the mine shafts were being sunk, the campsite teemed with miners and construction men who lived in tents, bunkhouses and shacks. Under these primitive conditions labor turnover was naturally high; in one particular month the average job changed hands three times. The mining companies decided that the only way to secure a stable labor force and to fulfill their ore contracts on time was to make decent provision in Elliot Lake for employees’ wives and families.

The mining companies therefore approached the provincial and federal governments for help in building roads and dwellings. Robert M. Winters, president of the Rio Tinto Mining Company (who was, in 1954, a member of the Liberal federal cabinet), says today: “It must be admitted that the help the mining companies received was greater than they had expected.”

In 1954 Ontario’s Department of Planning and Development designed a town site on the most modern architectural lines. During the following three years the provincial government invested nineteen million dollars in an approach highway, paved streets, sewers, water mains, lighting and other municipal facilities.

Don Taylor, the department’s chief planner, says: “Everybody knew that uranium was the ore of the future. We did not want to see Elliot Lake grow up as another mining shack town. At that time most people believed that the demand for uranium would be continuous. So we planned a permanent town site.”

In 1954 the then Liberal federal government decided in principle to advance, through the Central Mortgage and Housing Corporation, a crown company, forty million dollars in first mortgages on individual dwellings and apartment blocks that were to match in standard the NHA homes of metropolitan areas.

David B. Mansur, then president of the CMHC, explains: “The decision was made in spite of the fact that the uranium contracts were for five years only. The shadow of 1962 overhung all the negotiations. But there was a big job to be done at Elliot Lake. Uranium was a precious metal in short supply. It was urgently needed for defense. Here was a climate of optimism about its future, a climate induced by news of peaceful nuclear power developments. There was great confidence that the uranium contracts would be renewed or that other industrial developments in Elliot Lake would justify the cost of the housing. CMHC took a calculated risk.”

Even as the bulldozers and mechanical shovels worked during 1954-57, many economists urged caution on the builders. They pointed out that uranium mines were being discovered in the United States, South Africa and four other countries, and that Elliot Lake’s distinction as the Western world’s biggest single source of supply might soon lose commercial importance.

They emphasized the fact that oil wells were gushing in countries all around the globe, that tremendous strides were being made in the long-distance piping of natural gas, and that remaining hydro-electric resources in North America were fast being exploited. Because all these sources still provided a kilowatt hour of power more cheaply than nuclear fission, the development of peaceful atomic energy was being delayed. In consequence the demand for uranium would soon dwindle, for a time at least.

The most optimistic economists said that peaceful atomic energy would not be in widespread use until 1970. The more pessimistic put the date at 1980. All agreed that if the Americans did not resume their uranium contracts after 1962, Elliot Lake would be threatened with a period of between eight and eighteen years in mothballs.

But the Canadian federal government and the Ontario provincial government decided to ignore the voices of caution. The businessmen who followed the boom to Elliot Lake, elated by profits and fascinated by local bustle, deemed the economists to be suffering from what they called “the five-year phobia.” So up went eighteen hundred model homes and five hundred city-type apartments.

Up went six primary schools, one high school, a liquor store, and a police station. A three-million-dollar hospital and a quarter-million-dollar post office were among many projects to follow at public expense.

Jack Wellard, northern supervisor for Premier Operating Corporation Ltd., a company that spent a quarter of a million dollars on two movie houses, says: “The heavy investments by the two governments convinced businessmen that nothing could go wrong. We entered Elliot Lake with faith in the future.”

So up, too, went three spanking new hotels with thirty bedrooms apiece and plush beer parlors. Up went a hundred stores and seventy service-industry buildings worth a total of twelve million dollars. Up went nine churches, a television station, a radio station, a newspaper printing plant and the community centre given by Franc Joubin and Joseph Hirshhorn.

By 1957, when the first uranium orders were delivered, there were five service stations, six taxi companies, five banks, and forty-odd retailers. The T. Eaton Company and Simpsons-Sears Ltd. opened order offices. The Hudson’s Bay Company put up a large department store. Blahcy’s an aggressive north country food chain, put up the town’s biggest supermarket. Fourteen doctors, three dentists, two chiropractors, two optometrists, five chartered accountants, five insurance brokers, and three real estate agents hung out their shingles.

Even the hard-headed mining companies, operating pits at distances of between three and fifteen miles from the town, were carried away by the aura of permanence — of chrome, foam rubber and concealed lighting. The office block at one mine was fitted with doors of beaten bronze.

Even so. the distinction between the skepticism of the mining community and the hopefulness of the trades people today is clearly visible at the ten giant head frames. Around most of them stand trailer parks. As late as last May, when many laid-off miners had already left town there, were still two thousand trailers in Elliot Lake, the majority of them owned by underground workers.

Many other miners were living in bunkhouses or rented rooms. At one mine employing seven hundred workers sixty percent of the men were classified as “single status.” This meant they were either unmarried or, although married, were living in Elliot Lake alone and sending money to families in other towns.

Last May, Bernice Mondoux, whose husband Val stands to lose a $700-a month job as an underground shift boss, explained the mining family’s philosophy: “We come from Cobalt. We’ve always been miners. My father works underground here.

My husband’s father was killed in a mine. My husband goes from job to job. He goes after the big money in the bush. I follow him when we can find a proper place for the children, like here. But if we can’t, I live in Cobalt or some other place and see him as often as he can get home. When we first came to Elliot Lake we had a trailer. Now we rent this little house from the mining company. But buy a house and settle down? No sir!

“We never expected things to last in Elliot Lake. Things never do last in the mining business.”

Two thirds of the eighteen hundred permanent homes in Elliot Lake were bought initially by the mining companies, which then resold them to employees. Most of them are occupied by surface workers. These workers got into the houses fairly easily. The mining companies advanced second mortgages on the homes, thus reducing down payments to between six hundred and a thousand dollars.

The mining companies also included in the contract a buy-back clause. Under this they agreed to buy back at cost price, less depreciation, the home of any employee who chose to leave their service. Thus the average laid-off underground worker, quitting his rented premises or departing in his trailer, and the average laid-off surface worker, exercising his buy-back rights, loses little capital when he pulls out of Elliot Lake.

There are exceptions, of course. Clyde Olmsted, a mining draftsman, is one. When he went to Elliot Lake in 1958, to join the Stanleigh mine, now in jeopardy, Olmsted’s employers had no homes available. So he bought one of the Elliot Lake homes that were put up by speculative builders (about a third of the houses in town). When he lost his job he was stuck with a twelve-thousand-dollar home he couldn’t rent or sell.

When I saw him in May he was living on his savings and hoping that CMHC would let him off the mortgage hook. He was willing to write off his down payment and monthly mortgage payments as “an unfortunately high rent.” He had only one alternative: to send the keys to CMHC and tell them he was backing out of his agreement.

“I know about ten other guys in my position,” he said, “and that’s what they’ve done. But what will happen? Their credit will be bust and they’ll never get another NHA loan. I might want to buy again sometime so I’m not walking out yet.”

Olmsted’s predicament is shared by some six hundred other home owners who bought from independent builders. They are nearly all the owners of commercial premises or the employees of service industries, and they are the real victims of the Elliot Lake bust.

They had hoped to make big money in Elliot Lake but few did. In 1954-57 the commercial interests competed so hard for sites that land prices soared. When commercial lots in Elliot Lake were auctioned by the provincial government in January, 1955, an oil company paid ten thousand dollars for a service station site, the same amount it paid at about the same time for a site of similar dimensions on Yonge Street in North Toronto.

The Ontario Department of Planning and Development, anxious to develop an attractive town and start drawing taxes, enforced rigorous zoning laws and building standards on storekeepers. “Originally” says Jack Wellard, “a good many of in operated in temporary buildings which served their purpose but the provincial government’s regulations forced us to make large investments in permanent buildings or get out.”

Living costs are high

All these elements, plus long distance transport costs, raised investments above even big-city levels, Jack Elliott, general manager of a tire depot, says: “Despite the four-year boom most of the commercial people are having a tough time paying off heavy mortgages.”

High taxes also offset profits. Ed Gibbons, who recently lost his job as editor of the Elliot Lake Standard, a weekly that now loses money, pays nearly four hundred dollars a year in taxes on an eleven-thousand-dollar home. This is almost twice the amount paid by many metropolitan suburban owners on homes of the same value.

Rents are equally high. In the mine owned apartments they run from $110 a month for a one-bedroom suite to $135 a month for a three-bedroom suite. Hotel rooms are ten dollars a night, or the same price as some single rooms in Toronto’s Royal York. According to Earl Marshall, an insurance assessor who moved from Toronto to Elliot Lake three years ago, living costs are “much higher than they are in the city.”

The long haul by truck puts food prices up. Most of the town’s milk comes from Manitoulin Island, seventy miles away. Moreover, Marshall points out that the Elliot Lake residential zones are two miles from the shopping plazas and up to fifteen miles from the various mines. “There are no bus services,” he says, “so everybody simply has to have a car. Housewives whose husbands use the family car to travel to work often go shopping in taxis. Drivers charge a Hat rate of a dollar for a one-way trip between residential zone and shopping plaza.

As a result saving is difficult. Reginald Clark, an Elliot Lake clothier, said recently: “We are a community with wall-to-wall carpeting and back-to-the-wall financing.” Many tradesmen already have left, among them Harry Landy, who is now operating a Toronto gift shop. He lost sixteen thousand dollars in an Elliot Lake furniture store.

Burdened with heavy debts and diminishing turnover, the Elliot Lake businessmen are in a state of panic. The Canadian government has fought for time for them by persuading the U. S. Atomic Energy Commission to accept outstanding deliveries of uranium until 1966. But this merely means a “stretchout” of the delivery rate of the same volume of uranium, and a more gradual decrease in the work force. By 1966 there may be work in Elliot Lake for fewer than a thousand miners, which means that most of the town’s remaining merchants will inevitably go broke.

The merchants cannot even expect the scanty business that might stem from miners’ unemployment pay. Last May Guy Charron, the manager of the Elliot Lake branch of the National Employment Service, said: “There is no increase here in applications for unemployment insurance. At the moment I have three hundred unemployed on my books, the same number as last Christmas. This means that the unemployed know it is hopeless to look for work here.

The laid-off workers are getting out of town and drawing unemployment pay elsewhere.” The federal government is exercising regulations which permit the transfer of labor at public expense from depressed areas to areas of full employment. “If an Elliot Lake man finds a job elsewhere.” says Charron, “all he has to do is tell the government that he cannot afford to move his family and furniture and the government will pay the bill.” One laid-off miner told me last May: “The government doesn’t even ask to see your bank account.”

This practice resulted in an ironic incident last fall. Twelve miners and their families arrived in Elliot Lake at government expense from Bell Island, a depressed iron-mining region of Newfoundland. A few days later the American government decided it would not take up its post-1962 uranium options. The Newfoundlanders discovered that they had been moved from an old ghost town to an incipient new one. Moreover they said they didn’t “feel at home” in Elliot Lake. They packed up and returned to Bell Island where at least they’d be unemployed among friends.

But most Elliot Lakers like the town, particularly the women, who realize that it is a healthy, safe, and attractive place in which to raise children. Last spring a hundred and thirty-five housewives journeyed to Ottawa and there pleaded with Prime Minister Diefenbaker to find Elliot Lake new enterprises.

Among “make-work” projects now being pressed upon the provincial and federal governments by Jack Gauthier, president of the local Chamber of Commerce, are: the laying out of a provincial park and tourist attractions: the building of a big school for retarded children; the establishment of a forestry research centre; the construction of a school for army provost officers; and the launching of a campaign to attract highly technical new industries that might one day operate on, nuclear power and benefit from the vast local reserve of uranium.

Since Elliot Lake is ninety miles from the two nearest industrial centres, Sudbury and Sault Ste. Marie, its prospects of attracting new industries are, according to many economists, dim.

The mining companies are working to save the town. Robert Winters, president of Rio Tinto, says: “The company’s exploration teams are busy looking for other commercial ore bodies that could be worked from an Elliot Lake base. We have already provided some extra employment by opening a thorium extracting plant and making one of our uranium mines into a copper producer. We are also seeking new uses for uranium.” One new use for uranium, now in the experimental stage, is its application to steel as an anti-rusting element. But neither it nor any other is close to providing revenue or jobs.

Winters believes that Rio Tinto might be able to employ twenty-five hundred people during the 1962-66 period and so keep alive an Elliot Lake community of about ten thousand. Rio Tinto owns eight hundred of Elliot Lake’s houses and according to Winters “will board up the empty ones and hold on to them until the development of peaceful atomic power brings about an upsurge in the uranium market in the Seventies.”

Such faith in the future does little to encourage the local merchants. Few could afford to mark time through even a one-year shutdown of the mines. In their desperation, they point out that Elliot Lake was founded in the days of the late Liberal government. They recall that Rio Tinto president Winters was then Minister of Public Works and that Lester B. Pearson, present leader of the opposition, and MP for Algoma East, the Elliot Lake federal constituency, was then Minister for External Affairs.

They look with suspicion upon the present Conservative federal government’s decision to build a nuclear research centre at Whiteshell, Manitoba, a community standing in a constituency adjacent to that represented by Gordon Churchill, present Minister of Trade and Commerce. The Elliot Lake Standard repeatedly has demanded that this institution be switched to Elliot Lake to help solve its unemployment problem, and repeatedly has hinted that Churchill’s indifference to this suggestion amounts to political retaliation against Winters and Pearson.

Few experts, however, place much importance on the bitterness and hysteria that is implicit in the political recriminations. Ray Jones, an Elliot Lake mine manager, says: “Elliot Lake was built as a permanent town because the forecasts for the inauguration of peaceful atomic power were inaccurate. We still expect uranium to fill the purposes which were envisaged at the time the forecasts were made. There is nothing wrong with Elliot Lake. Only the timing of its construction was wrong.”

Dr. Kenneth Walter, a business geographer employed by Imperial Oil Ltd. to chose service station sites in growing communities, says: “In planning new towns diversification of industry should be the keynote. The one-industry town always stands in danger of becoming obsolete, particularly in this era of rapid technological change and shifting consumer demand. If Elliot Lake is added to the long list of Canadian ghost towns it will be because the planners forgot that it never really was a town. It was only a mining camp.”


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