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Source: MAC’s Facts & Figures 2016.
While optimism is slowly but steadily returning to the global mining industry, Canada doesn’t seem to be in a good position to benefit from the increasing number of companies ready to make new and significant investments.
At least that is the conclusion from a report released Thursday by the Mining Association of Canada (MAC), which also warns of the possibility of seeing major exploration and mining investments flow offshore.
“Very simply, Canada is not as attractive as it used to be for mineral investment, and competition for those dollars is growing globally,” MAC President and CEO Pierre Gratton said.
Elimination of federal mining tax incentives, regulatory delays, uncertainty and major infrastructure deficits in northern Canada are all contributing to the country’s declining appeal.
The recent elimination of federal mining tax incentives, regulatory delays and uncertainty, combined with major infrastructure deficits in northern Canada are all contributing factors that can explain Canada’s declining attractiveness, Gratton noted.
The report also highlights the policy areas that Canada needs to pay attention to in order to seize future growth opportunities and re-gain its leadership in mining.
Some of the figures included in the report are quite telling. In 2015, foreign direct investment into Canada’s mining industry dropped by more than 50% from the previous year. In contrast, the country’s resources sector direct investment abroad only experienced a 6% decline.
According the industry body, such imbalance proves that Canada no longer attracts the single-largest share of total global mineral exploration spending, a top place it lost to Australia in 2015. Further, MAC says, no new mining projects entered the federal environmental assessment stage in 2016.
If these trends continue, the association warns, there will be fewer discoveries made and fewer projects to become operational mines in Canada.
Despite the challenges, the sector remains a key contributor to the Canadian economy, employing more than 370,000 people across the country and being the largest private sector employer of Aboriginal people on a proportional basis.
In 2015, the mining industry accounted for $56 billion of Canada’s GDP and minerals and metals accounted for 19% of Canadian goods exports.
MAC’s Facts & Figures 2016.
3 Comments
marpy
A lot of the problems in Canada rest with the provincial and federal governments that do not provide the required support for mining development. A good example is the Ring Of Fire in Ontario which has been stalled for years due to lack of government action in providing infrastructure support and getting permits approved.
Andrew Browne
The mining industry is not alone. The financial markets are deleveraging their positions in canada seeing the tax grabbing Liberals and Socialists at so many levels of government. Watch BC take a hit as their LNG business flounders due to the players involved not wishing to be hijacked by Clark. Notley is the poster child for socialist tax grabs that we have seen over our lifetime. Wynne has taken her province to the point of gasps for air with her tax and spend policies that have bankrupted Ontario. Trudeau is now desperately hoping for something to bail him out of his failed policies, his latest being to use his anti-Trump posture to make him look and feel good. Yet he has done nothing to improve the larger question of economic prosperity. I am sure most global companies are trying to find an exit from Canada until there is a change. Why would anyone deploy capital knowing that the prevailing governments are desperate to impose taxes to finance their agendas.
King Blonde
That´s good to Brazil 🙂