Devco Railway - Creation of DEVCO

Creation of DEVCO

In 1966, DOSCO (then a subsidiary of the Hawker-Siddley Group) announced that its mines had only 18 years of production left and concluded that expense of opening new underground mines in the Sydney Coal Field would be too expensive. The company made its intentions clear that it would be exiting the coal mining business within months.

In response to a vast public outcry in industrial Cape Breton County, the Minority government of Prime Minister Lester Pearson announced J.R. Donald would head a Royal Commission of Inquiry into the Cape Breton coal industry, with hearings held in 1965 and 1966. The Donald Commission recommended that a federal Crown corporation be established to acquire and manage DOSCO's coal operations, with the aim being to slowly wean the Sydney area economy off the coal industry.

"Future planning should be based on the assumption that the Sydney mines will not operate beyond 1981."

On July 7, 1967 the Cape Breton Development Corporation, or DEVCO, was established to operate the mines in the interim, while phasing them out throughout the 1970s and, at the same time, develop new economic opportunities for the surrounding communities. On March 30, 1968 DEVCO expropriated DOSCO's coal mines and the S&L, settling for a payment of $12 million. At the same time, the Government of Nova Scotia took over the operation of DOSCO's integrated steel mill in Sydney, renaming the operation Sydney Steel Corporation, or SYSCO.

The S&L was reorganized as the Devco Railway.