Reality check—B.C. does not enjoy ‘strong investment’ in mining sector
In its recent throne speech, the British Columbia government touted the province’s “high environmental standards, skilled labour, and partnerships with First Nations” that help attract “strong investment from around the world,” while pointing to the mining sector. However, the notion that B.C.’s policy environment is attractive for mining investment does not correspond with reality.
Consider investment. Capital investment in B.C.’s mining industry averaged $988 million annually between 2015 and 2019. Due largely to COVID-19, capital investment in 2020 was $910 million—a 15 per cent drop compared to 2019. However, in stark contrast to Ontario, Quebec and Saskatchewan (the other three large mining provinces), B.C. has not been able to return to pre-pandemic investment levels. Investment in B.C.’s mining sector was just $720 million in 2021—21 per cent less than in 2020 and 27 per cent less than its 2015-2019 annual average.
So, why are other mining provinces able to attract more investment than B.C.?
Our latest Annual Mining Survey, which tracks the perception of senior executives in the mining industry to determine which jurisdictions are attractive (or unattractive) for investment based on government policies and geological potential, sheds some light.
Despite investors highly rating B.C.’s mineral potential (the province ranked 10th out of 77 surveyed jurisdictions in 2020), they indicated that the province’s policy environment was a drag on its ability to attract investment. In fact, the B.C. ranked 41st (of 77) on policy factors alone, the second-worst performing province after Manitoba.
In particular, two policy factors continue to significantly hamper the province’s mining competitiveness—uncertainty concerning disputed land claims and protected areas. Indeed, 78 per cent of respondents for B.C. indicated that the uncertainty around disputed land claims deters investment (province ranked 73rd out of 77 on this policy factor).
And 75 per cent of respondents indicated that uncertainty around protected areas discouraged investment in the province (B.C. ranked 74th of 77 on this policy factor). Put simply, B.C.’s policy framework around disputed land claims and protected areas remains one of the most uncompetitive in the world according to senior executives in the industry.
Clearly, the B.C. government can’t solely rely on the province’s mineral potential to attract investment. In reality, policy factors matter to investors. If the Horgan government hopes to attract the investment required to develop these resources, it must resolve ongoing policy issues.