Canada’s North attracts mining interest but government policies require reform
It’s a positive sign when two studies draw similar conclusions about the mining sector in Canada’s North—essentially that mining activities in Canada’s North offer great promise for the region.
Firstly, a 2019 Conference Board of Canada report found that mining activities will help see the territorial economies through times of slower global economic growth.
According to the report, Yukon, the Northwest Territories and Nunavut expect to experience combined growth rates of 5.3 per cent in 2019 and 4.4 per cent in 2020. That's compared with 1.5 per cent and 2 per cent across Canada's 10 provinces. Interestingly, the economic growth in the territories is largely driven by the mining sector in Yukon and Nunavut.
Also this year, results from the Fraser Institute’s 2018 Survey of Mining Companies, which surveys miners around the world to determine what jurisdictions are attractive—or unattractive—to investment based on policies and geology, also showed that Canada’s North has great potential in the eyes of mining investors.
Interestingly, all three territories improved their rank in this year’s Fraser report, largely because investors view the North’s mineral potential more favourably. The Northwest Territories rose from 21st last year in overall attractiveness to 10th this year, Yukon rose from 13th to ninth, and Nunavut improved its rank from 26th to 15th.
However, while investors have increasingly positive perceptions of the minerals in Canada’s territories, the policy environment raises some concerns. When considering policy factors alone, all three territories fall out of the top 15 jurisdictions worldwide, meaning the territories could benefit from policy reform.
Not surprisingly, mining investors identified infrastructure issues in Canada’s North as a major area of concern in the survey. In fact, 93 per cent of respondents for Nunavut and 78 per cent for the N.W.T. see infrastructure as a deterrent to investment. More than half of respondents for all three territories see uncertainty about protected areas as a deterrent to investment. And more than 55 per cent of respondents for the N.W.T. and Yukon see disputed land claims as a deterrent to investment.
Regulatory duplication and inconsistencies also seem to be an escalating concern in N.W.T. and Nunavut as the majority of respondents view this factor as a deterrent to investment.
It’s a positive sign that investors are eyeing the attractive geology in Canada’s North. However, additional policy reforms are needed for the region to continue capitalizing on its considerable mineral potential.