“Money” was the word on the industry’s lips last week as the federal, British Columbia and Ontario governments brought outlined their spending plans for the future. A mining-friendly government helps keep our industry healthy, so let’s take a look at what we can look forward to.
First out of the gate on March 2 was the Throne Speech from Ottawa. In it the federal government promised to develop a clearer process for project approval and a commitment to both Northern development and Aboriginal Canadians.
The speech was lauded by Mining Association of Canada (MAC) president Gordon Peeling, who said, “These issues in today’s Speech from the Throne will enhance the contribution that the mining industry can make to all Canadians by improving the investment climate, bringing efficiency and clarity to our regulatory processes and strengthening our skilled workforce.”
The federal government also promised in the Throne Speech to liberalize foreign investment rules in Canada if other countries will do the same. That move would allow foreign companies such as France’s Areva, a partner in several Saskatchewan mines and projects, to increase its holdings beyond 49% and, hopefully, spur its investment in Canada’s uranium industry.
Later that day BC Finance Minister Colin Hansen weighed in with a “stay-the-course” budget. The Mining Association of British Columbia (MABC) said the move toward a harmonized sales tax (HST), central to the provincial plan, is welcome.
“The HST will improve BC’s tax competitiveness, attract new investment, improve productivity and create jobs,” said MABC president Pierre Gratton. “To proceed with implementation, despite some public concern, is the right thing to do for British Columbia.”
The BC budget had both good and bad news aimed at the mineral industry. The province announced funding cuts for the Ministry of Energy, Mines and Petroleum Resources. That’s bad. But funding levels for the Environmental Assessment Office have been maintained. That’s good because it allows the review of major projects to proceed without undue delays. Also good is the commitment to renew the provincial mining flow-through tax credit for another three years.
The federal budget came down on March 3. Finance Minister Jim Flaherty declared, “Canada’s rich mineral resources represent significant economic opportunities. Promoting the exploration and development of these resources offers important benefits in terms of employment, investment and infrastructure, especially for rural and remote communities.”
He got that right, and the budget bears him out.
Again, MAC said it supports the federal budget. It noted positive measures such as renewal of the Targeted Geoscience Initiative with a focus on developing new ways of finding deeper mineral deposits, extension of the 15% Mineral Exploration Tax Credit, continued investment in the Aboriginal Skills and Employment Partnership Initiative and the Aboriginal Skills and Training Strategic Investment Fund.
“On balance MAC views the federal budget 2010 as being appropriate for the times as global economies recover from turbulence,” said Peeling. “We are encouraged by several initiatives mentioned both in the Speech from the Throne and the federal budget that recognize the significant contribution that the mining sector can make to the Canadian economy.”
Following a year after the dismal end to 2008, when the world’s financial framework showed signs of imploding, no government is giving away money to an industry that is recovering nicely, thanks to rising commodity prices. But both BC and the feds realize that the future of mining relies on its ability to raise capital, and they are supportive of that.
Ontario, by contrast, just doesn’t seem to get it. In the provincial Throne Speech, Premier Dalton McGuinty rolled out his government’s Open Ontario Plan.
“Your government also knows that Northern Ontarians face particular challenges,” he said, “and that the global recession has had a deep impact in northern communities.”
After lauding the Victor diamond mine, the first in the province, McGuinty promised to build on that success in the Ring of Fire, pointing to “one of the largest chromite deposits in the world” located there. He ignored the vast potential of the region to host other base metal and diamond discoveries.
McGuinty’s message was mixed. On one hand he promised to work with Aboriginal communities and mining partners to fully realize the Ring of Fire’s potential. On the other hand he promised to protect 50% of the northern Boreal Forest. As previously stated, that means withdrawing it from mineral exploration.
Perhaps McGuinty is misguided. He doesn’t seem to realize that one chromite deposit will not secure the future of Ontario, and that by exploring only half the North, the industry will not discovery more world-class deposits in very soon.
The Ontario budget has yet to be delivered, but if it is as short on specifics to support the province’s mineral industry as was the Throne Speech, Ontario is going to be this country’s leading (trailing?) have-not province.