Newfoundland and Labrador should unleash province’s mining potential
Mining is a major contributor to Newfoundland and Labrador’s economy. Iron ore, nickel, copper, cobalt, gold, pyrophyllite, limestone, dolomite and other commodities account for more than 8 per cent of the province’s GDP. The industry provides income for more than 8,200 families, represents more than 30 per cent of the province’s total exports, and has great potential for expansion as global events shift demand for many minerals.
However, according to a recent study published by the Fraser Institute, which measures the investment attractiveness of mining jurisdictions worldwide by surveying senior executives in the mining industry, Newfoundland and Labrador is dimming in the eyes of mining investors. Specifically, the province fell from 8th place in 2020 (out of 77 jurisdictions) to 21st in 2021 (out of 84), due in part to government policy.
Given the importance of the industry, the Furey government should take immediate action to address this decline. Survey respondents pointed to four different aspects of the province’s mining policies.
First, 47 per cent reported a negative perception about socioeconomic agreements and community development conditions, which includes local purchasing requirements or supplying social infrastructure such as schools and hospitals. Second, 42 per cent of survey respondents reported an increasing negative perception about the uncertainty around protected areas such as archeological sites. Third, 32 per cent said that regulatory duplication and consistencies were a deterrent to investment in the province. Finally, 32 per cent of respondents said the quality of infrastructure deterred investment. Consequently, in addition to its decline in the worldwide rankings, Newfoundland and Labrador now ranks sixth—behind Saskatchewan, Quebec, the Yukon, Ontario and British Columbia—among provinces in mining investment attractiveness.
But there is some good news. According to survey respondents, Newfoundland and Labrador (alongside Ontario) ranks first for “transparency” with 83 per cent reporting an ability to secure the necessary permits for exploration in six months or less. Moreover, 100 per cent of investors reported being “confident or highly confident” that permits will be granted once regulatory requirements are met. In this regard, while geology is unchangeable and given by nature, competitive policies can help encourage investment.
Private investment in Newfoundland and Labrador’s mining industry plays a central role in economic growth and job creation. While the province experienced a decline in investment attractiveness this year, it has a strong mineral endowment, the envy of many other jurisdictions around the world. Ultimately, it’s up to the provincial government to boost the economy and create jobs while meeting growing world demand for minerals. To achieve this win-win scenario, the government must enact more competitive policies to unleash Newfoundland and Labrador’s mining potential.