The Long Haul
A new report from OSSGA and the Ontario Chamber of Commerce outlines the many costs of far-from-market aggregate
by: Sarah B. Hood
In 2011, hundreds of protesters marched to Shelburne, Ontario to protest a proposed quarry on Highway 124. In 2012, a widespread ongoing public protest blocked a “mega-quarry” that had been planned for Melancthon Township. More recently, environmental groups are opposing a quarry in the Cataract area, near Caledon. Meanwhile, people across Ontario are calling for more and better housing, hospitals, roads and rail lines. For the average citizen, this may not seem like a contradiction, but anyone connected with the building industries knows that nothing gets built without aggregate.
In fact, the Greater Toronto Hamilton Area (GTHA) is a hungry consumer of aggregate, using about 73 million tonnes annually while producing just 25 million tonnes, and demand is projected to rise by 1.5 billion tonnes by 2041. Where will it all come from?
To answer that question, OSSGA commissioned a comprehensive study from the Ontario Chamber of Commerce. The resulting report, The Long Haul, Examining the Implications of Far-From-Market-Aggregates, looks at the place of aggregate within the economy of the GTHA, as well as current and future supply needs, and calculates the cost of sourcing aggregate from farther away. The findings clearly reveal the significant economic and environmental benefits of licensing quarries close to the GTHA.
“We are very pleased with the report,” says OSSGA executive director Norman Cheesman, who sat on the steering committee. He says the aggregate industry does not have a very high profile with the general public, so “it’s taken the provincial government a while to realize that we have to take action to protect this sector. This is something that the public perhaps doesn’t appreciate. With the increase in immigration and the need for Canada to bring people in, we’re going to need to build infrastructure.”
“We knew that there was a housing supply crisis and a need to build many new houses – the big question at the time was how and where,” adds Kevin Powers, managing principal at Project Advocacy Inc., who helped to co-ordinate the project with the Chamber of Commerce. “But to us, the more fundamental questions are: where are we going to get the aggregate to build this and is it available?”
The Long Haul offers some answers. It looks at the value of Ontario aggregate, both upstream (in aggregate production) and downstream (in such industries as construction and the manufacture of concrete and cement). The upstream figures alone are impressive: “In 2019, the $1.7 billion of new production generated by the aggregate industry translated into an estimated $2.9 billion in total gross output, $1.6 billion in GDP, $806 million in labour income and 13,400 jobs in Ontario.”
In addition, this activity provided various levels of government with some $150 million in tax revenues. Downstream activities brought about another $103 million into tax coffers, and resulted in “an estimated $3.7 billion in gross output, $1.8 billion in GDP, $1 billion in labour income, and 14,000 jobs.”
The Long Haul also examines the economic implications of “far-frommarket” aggregate, meaning the expected costs of sourcing aggregate farther away from its end users. The report shows that the 25 million tonnes of aggregate produced annually in the GTHA travels an average of 35 kilometres to market. What would happen if that quantity of material had to be brought into the area from farther afield? Given the locations of the closest alternative extraction sites, the average travel distance would increase to about 110 kilometres, costing an extra $169 million, more than double current transportation costs.
This would mean higher costs for many public-sector projects. The report demonstrates that it would add nearly $300,000 to the cost of building one kilometre of a four-lane freeway, about $6.2 million to the cost of an average subway extension project, $510,000 to the cost of an average hospital build, and about $55 million to the cost of maintaining Toronto streets for one year – 1.4 per cent of the city’s current annual spending on infrastructure.
ENVIRONMENTAL IMPACT
The environmental implications are considerable, and it is not surprising that with so much extra hauling, aggregated sources far from the market take a big toll on the environment, including the addition of approximately 89,000 metric tonnes of GHG emissions. The report points out that “by 2030, when the carbon price reaches $170 per tonne, the added emissions will cost more than $15 million.”
“This is not sustainable for the province’s plans for affordable housing or emissions targets,” Cheesman said when the report was released. “This is why we have been asking for a public policy review to remove restrictions from closeto-market aggregate, while fully enforcing the rigorous provisions of the Aggregate Resources Act, the Endangered Species Act, the Environmental Production Act and the 21 other pieces of legislation the industry must comply with.”
According to Powers, “The environmental case is an important one, because most of the time the opponents of new quarries will say that quarries are bad for the environment and they should be placed elsewhere, but elsewhere you’re still going to be digging for aggregate, and the environmental cost is even greater.”
“In the GTHA, many of the communities that are opposing new aggregate applications are the same ones that have declared a climate emergency,” Powers adds, “and it’s important for them to realize that a climate emergency doesn’t just mean making bike lanes. It means making tough decisions for the climate.”
Finally, The Long Haul provides a case study of the cost implications of closing just one quarry in the GTHA – the Nelson Aggregate Co. Burlington Quarry – which produces dolostone and is currently awaiting a licence to expand. The study postulates that if Nelson does receive the licence for expansion, “it will continue to operate and produce its base annual extraction volume of two million tonnes of aggregates. If it is unsuccessful, it would close and no longer produce any aggregates.”
In order to supply the area with a similar quantity of dolostone, the study shows that over the following 10 years, “the total incremental transportation costs generated as a direct result of Nelson quarry’s closure will amount to $206.3 million.” In addition, “diesel fuel consumption amounts to 5.8 million liters over 10 years… translating into nearly 16,000 metric tonnes of CO2 emissions.”
Furthermore, the closure of the business would come with a cost for the City of Burlington, since the Nelson quarry currently employs 109 individuals directly and indirectly. “From a revenue standpoint,” the report notes, “a licence approval for Nelson quarry is estimated to generate over $320,000 annually for the City of Burlington and over $125,000 for the greater Halton Region through property taxes and aggregate levies.”
“What is most surprising is to see the impact that not licensing just one quarry has downstream,” says Powers. “Over the course of 10 years, supply falls off the cliff – just because of one quarry. So, the takeaway from this study is that to meet the challenge of the housing supply crisis, this government needs to continue to license new quarries close to where these houses are being built.