Fraser Forum

Nunavut’s policy perception is hampering mining potential

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Nunavut’s policy perception is hampering mining potential

Mining investors are growing increasingly concerned about the policy environment in Nunavut. According to a recent survey—which measures the investment attractiveness of mining jurisdictions worldwide based on government policies and geological potential by surveying senior executives in the mining industry— Nunavut’s appeal to mining investors is fading.

The territory has a strong history related to mining. When back in the 1950s the caribou populations faced dire living conditions due to the collapse of Arctic fox fur prices, the North Rankin Nickel Mine (NRKM) became the first in Canada to employ First Nation's people, offering the security of regular wages and fostering economic resilience. While NRKM ceased operation in 1962, discoveries of iron, gold, diamonds and critical minerals have increased the territory’s mining potential. As a result, the mining sector has served as Nunavut’s economic backbone, encompassing the largest proportion of its exports by a significant margin, providing almost one in every five jobs and higher-than-average wages for the local population.

The historical importance of mining, however, did not stop the territory from experiencing a substantial drop in the current Investment Attractiveness Index, which considers both policy factors and mineral potential. Nunavut fell from the 28th position (out of 84 jurisdictions in 2021) to the 41st position out of 62 in 2022, primarily due to policy. In terms of policy factors alone, Nunavut now ranks 55th out of 62 jurisdictions, making it the sole Canadian jurisdiction featured in the list of the 10 least-attractive jurisdictions worldwide in this regard.

In particular, investors pointed to several policy factors that hamper Nunavut’s mining attractiveness. For starters, 89 per cent of respondents identified both the uncertainty regarding protected areas and the state of the territory’s infrastructure as deterrents to mining investment. Similarly, 83 per cent of survey respondents indicated that the state of the territories’ community development conditions— which encompasses local purchasing requirements and the provision of social infrastructure such as schools and hospitals—is a major barrier to investment. Finally, 79 per cent of respondents pointed to regulatory duplications as a significant deterrent to investment.

Nevertheless, there are reasons for optimism. When considering Nunavut’s geological potential alone, the territory improved its ranking from 26th (out of 84 jurisdictions in 2021) to 13th out of 62 in 2022, possibly due to recent discoveries of iron, copper and diamonds along the Artic coasts, and gold deposits—indeed, some scientists note striking similarities to the world’s most significant sources of gold.

The mining sector plays a crucial role in Nunavut’s economy and history, with great potential for the future. Given that Nunavut found itself among the least-attractive jurisdictions in terms of policy factors in 2022, Premier P.J. Akeeagok should pay close attention to concerns raised by mining senior executives. If Akeeagok’s government takes the necessary actions to align Nunavut’s strong mineral endowment with a more competitive policy environment, the local mining industry will help meet the growing global demand for minerals, create and sustain well-paying jobs for the territory’s population, and honour its proud history of mining.

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