Canada’s mining sector in jeopardy
As the Fraser Institute’s annual survey of mining company executives (2018) shows, investors think Canadian jurisdictions are attractive for mining investment. Four jurisdictions (Saskatchewan, Quebec, Yukon and the Northwest Territories) rank among the 10 most attractive in the world for mining investment according to survey respondents. But Alberta and Nova Scotia do not make the top 50.
|Overall investment attractiveness (out of 83 jurisdictions) from 2018 mining survey|
|3) Saskatchewan||15) Nunavut|
|4) Quebec||18) British Columbia|
|9) Yukon||20) Ontario|
|10) Northwest territories||30) New Brunswick|
|11) Newfoundland and Labrador||51) Alberta|
|12 Manitoba||57) Nova Scotia|
“Over the past decade, Canada’s leadership in mining has been deteriorating year over year, with no sign of any significant turnaround, and support from governments is absolutely critical to improving this position,” said Pierre Gratton, MAC president and CEO.
MAC notes several worrying trends:
- Over the past five years, Canada has lost its ranking for seven out of 16 commodities for which it had been a top-five producer.
- While Canada remained the world’s top destination for non-ferrous exploration spending in 2017, it continued to cede market share to other jurisdictions including Australia. This marks the sixth consecutive year Canada’s share of international exploration investment has fallen.
- The value of total projects planned and under construction from 2018 to 2028 has dropped by 55 per cent since 2014, from $160 billion to $72 billion.
- Capital investment in the mining sector has declined each year since 2012, with investment intentions for 2018 in line with this trend.
- Only four new mining projects (all gold mines) were submitted for federal environmental assessment in 2017—far below highs seen in 2012-2014.
- In 2016, mining database InfoMine reported that Australia’s identified mining supply sector surpassed Canada’s, bumping Canada to third place. In 2017, this gap expanded with Australia adding more than 200 firms to its list. In 2018, Canada was trailing by nearly 800 firms, only adding two firms year-over-year.
Clearly, governments in Canada overseeing mining jurisdictions must better understand that capital is liquid, and attracting that capital is a constant process of improving the jurisdiction’s attractiveness as a place to invest. Policymakers can use the Fraser Institute’s mining survey to pinpoint policies that may deter investment in their jurisdictions.