Notes for a Speech by
The Honourable Joe Oliver, P.C., M.P.
Minister of Natural Resources
Mining Day on the Hill Luncheon
Economic Council of Canada and Mining Association of Canada
November 22, 2011
Check against delivery
Good afternoon, ladies and gentlemen.
Let me start by thanking the Mining Association of Canada and the Economic Council of Canada for the invitation to speak with you today.
I also want to congratulate the Mining Association and its members for organizing this event.
It's a great occasion to recognize just how much this industry contributes to our prosperity — and why it's important that we all work together to make sure this sector continues to succeed.
As you know, I recently returned from a week-long trip to Japan and China. My main objective was to help broaden and deepen Canada’s trade and investment relationship in two of the world’s largest economies.
In meetings with senior political and business leaders, I promoted Canada’s potential for investment, exploration and development, and the opportunities for Canadian mining companies to do business in the Asia–Pacific. I addressed the China Mining Congress and Expo, which is the premier international mining event in the region. About 4,000 registered guests attended.
Interestingly, the PDAC attracts about 30,000, but we’re Canadians — so no boasting here.
The key political and business leaders I met in both Asian countries are watching closely as Canada speaks with prominence and credibility on the world stage as a mining and energy superpower. Whoops, I’ve done it again. But it’s impossible not to boast when talking about our natural resources.
Canada can and is willing to help provide Asia with the resources it needs to fuel the rapid pace of its economic expansion.
Mining is one of the great Canadian success stories, and it's a story that needs to be told.
That's what I'd like to talk about today. To put it simply, the mining industry plays a pivotal role in our economy, as it has since the birth of our nation.
I also want to tell you how our Government is working with the industry to make sure it continues to be recognized as an international leader — enhancing Canada's status as a prosperous, innovative, responsible citizen of the world.
The importance of the mining sector
For Canada, there is no question that mining has been one of the keys to economic stability for decades.
- mineral production contributed $35.1 billion to our GDP;
- Canadian mineral production was valued at $41.2 billion;
- Canadian mineral exports accounted for $84 billion; and
- 21 percent of our total exports came from minerals.
If you ask me, that last number may be the most impressive.
Mining and mineral processing are directly responsible for the jobs of well over 308,000 Canadians. Thousands more work in related industries.
You of course know these facts, but I am talking to a broader audience. So, you won’t mind if I let them know as well.
The industry contributes billions of dollars in taxes and royalties to government every year — $35.1 billion in 2010 and $18 billion to our trade surplus, for example. These funds support everything from education, to infrastructure, to health care.
Canadian mines produce more than 60 minerals and metals — from aluminum to zinc.
We're the world’s biggest producer of potash, and we're in the top five for a dozen other minerals and metals, including diamonds.
Almost every province and territory is involved in mining and has seen a surge in exploration and mining activity.
For example, the Ring of Fire in northern Ontario is an emerging mining region, where 26 exploration companies have mineral claims covering almost 500,000 hectares.
Analysts estimate that there are $50 billion in qualified resources for chromite and $10 billion for base metal and platinum group metal deposits.
Almost $10 billion in new capital expenditures is already underway in Ontario.
The Province of Quebec announced the Plan Nord strategy last May. It is an $80-billion, 25-year plan to integrate the development of northern Quebec’s vast resource potential in an environmentally sustainable manner, while improving the socio-economic conditions of the province’s northern residents.
For Canada as a whole, the mining industry is predicting total mining investment over the next five years could be as high as $137 billion.
And exploration expenditures this year alone are expected to top $3.1 billion.
International Mining Presence
But what’s happening in Canada is only part of the story.
I'm sure many Canadians would be surprised at just how big a presence Canada’s mining sector has in the world.
Canada is recognized for its leadership in all areas of mining — from mine design, extraction and processing to mine closure and rehabilitation.
We're experts in financing. Almost 60 percent of the world’s publicly listed mining companies are listed in Canada — companies that are responsible for as much as one-half of all global equity raised for mineral development. As a former investment banker, I find that really impressive.
Canadian exploration and mining companies are now operating in more than 100 countries around the world — with total assets of $109 billion outside Canada.
Allow me to put all these impressive statistics into the context of what they mean to the Canadian economy.
As we are all aware, prosperity is an uncertain proposition at the moment. Canada is not immune, but we do continue to outperform most other developed nations.
Because of our strong economic and fiscal fundamentals, Canada came through the global downturn of 2008 and 2009 a lot better than most.
Because we had a solid foundation, our Government was able to deliver an unprecedented fiscal response to protect Canadians from the worst of the downturn. We were able to do that without painting ourselves into a fiscal corner. In fact, the Government remains on track to eliminate the federal deficit over the medium term.
There are some 600,000 more Canadians working today than when the recession ended in July 2009.
We are the only country in the G7 to have gained back all of the jobs and all of the economic output lost during the downturn.
The International Monetary Fund predicts that Canada will be one of the G7's leaders in economic growth this year and next year.
We are in a position of strength today because our Government made sure we were in a position of strength before the recession ever happened. And today, Canada’s debt-to-GDP ratio is the lowest in the G8.
We benefited from a prudently regulated banking system and from competitive corporate tax rates — helping investors see this country as an attractive place to do business.
In fact, in its annual ranking of global economies, Forbes Magazine recently named Canada as the best place in the world to do business.
Government support for mining sector
For Canada to thrive and prosper in this period of global financial and economic uncertainty, we will need a vibrant, entrepreneurial mining sector as a partner.
That’s why our Government continues to encourage a broad suite of market-motivated and forward-looking policies to attract investment.
Taxation is crucial.
Canada now offers the lowest overall tax rate on new business investment in the G-7.
We’ve implemented measures to help ensure access to credit and capital financing.
We’ve extended the 15 percent Mineral Exploration Tax Credit for another year to March 31, 2012, and we’ve extended the accelerated capital cost allowance on machinery and equipment.
We're also committed to making sure the infrastructure is in place to support the growth of the industry and to get its products to the global marketplace — from the Asia–Pacific Gateway to northern roads to the Northwest Transmission Line — to name just a few.
Our Government is firmly resolved to maintain the stability and flexibility required to sustain growth. But there are some challenges to which we are responding.
We have recognized from the beginning that regulation is an area where Canada must become more competitive.
We took the first steps in 2008, when we set up the Major Projects Management Office — designed specifically to make reviews more timely and predictable.
After its third year of operations, the Office now manages over 70 project reviews, representing about $120 billion in investment in communities across Canada. About half of these projects are in the mining sector.
With Budget 2010, we implemented a number of targeted amendments to the federal environmental assessment process.
I’ve heard from mining industry representatives that these changes are resulting in reduced delays on mining project reviews.
We're making real progress, but system-wide challenges remain. For example, clear timelines from the beginning to the end of the regulatory process are needed to support investment and planning decisions.
We will continue to engage provinces, territories and industry on ways to meet these challenges.
The ultimate goal is simple: one project, one review. Timeliness is crucial, and the need is urgent.
Supporting northern development
With regard to the North, we have established a separate Northern Project Management Office to bring the same whole-of-government approach to regulatory issues.
Much of Canada’s plentiful resource wealth — gold, silver, copper, zinc, diamonds and oil and gas — can be found in our vast northern lands.
There is the potential for $8 billion or more in new mine investment in the Northwest Territories and Nunavut within the next five years.
We’re also keenly aware of the untapped Canadian potential in rare earth elements.
Although Canada does not currently produce any rare earth elements, my department’s mapping efforts have helped mining exploration companies to identify potential sites.
Canadian companies are currently working on several projects that have significant concentrations of rare earth elements in their ore. These companies may be able to begin production by mid-decade.
Canada’s dynamic and innovative mining industry is helping us realize that potential. After all, your industry has been one of Canada’s economic cornerstones since the early days of our country.
Another area where we are working closely with the mining industry is promoting and investing in programs that encourage the development of the skilled workforce the industry needs to continue growing.
We put special emphasis on ensuring Aboriginal Canadians have meaningful opportunities to participate in the mining sector.
The mining sector employs more Aboriginal Canadians than any other industry. It is vital to some 150 rural, northern and Aboriginal communities across the country.
The Meadowbank Gold Mine in Nunavut is a good example of a new generation of northern mines bringing direct benefits to Inuit communities while engaging in environmentally responsible resource development.
In fact, more than 39 percent of the mine’s current workforce is Inuit. Meanwhile, mine construction and operations contributed more than $1.26 billion to the community and northern-based suppliers over the past three years, and in 2010 the mine dispensed about $10 million in royalties to the Inuit.
In the summer, I joined the Prime Minister’s annual tour of the North. The Agnico-Eagle gold mine reduced unemployment from over 40 percent to 2 percent. The mayor of Baker Lake told us he knew those two guys, and he wouldn’t hire them either.
The Diavik diamond mine is another positive example. The company has recruited two thirds of its operating workforce — nearly half of which is Aboriginal — from local communities.
This is a win-win situation — the mining industry gets the skilled employees it needs, and Aboriginal Canadians qualify for good jobs that allow them to contribute to and share in Canada's prosperity.
We've seen excellent results from the work we do with northern communities and our industry partners through initiatives such as the federal Aboriginal Skills and Employment Partnership, and the Aboriginal Skills and Training Strategic Investment Fund.
We’re seeing excellent employment results with another federal initiative, the Geo-mapping for Energy and Minerals program, or GEM, to which we committed $100 million over five years.
The results of the GEM program are benefiting Northerners through enhanced economic opportunities and jobs from the exploration and development of new energy and mineral resources.
We know that for every dollar that we invest in geoscience, the private sector spends five times that amount in exploration.
GEM is modernizing the geoscience knowledge base in our North and is the key to unlocking the North’s economic potential.
In its first four years, the program has delivered impressive results — 24 regional geophysical surveys and 424 publications have been released. We are already seeing significant use of this new GEM information by the private sector.
It is well recognized that major, new mineral deposits in Canada are most likely to be found at depth, not at the surface.
Our government has committed $25 million through renewing the Targeted Geoscience Initiative to develop next-generation geoscience knowledge and innovative techniques — the knowledge and techniques the exploration industry needs to search more effectively for these deep mineral deposits.
In partnership with provinces, territories and partners from industry and academia, we are working in areas of known mineral potential with the intent of lowering risk and stimulating private-sector resource exploration.
Minimizing the industry's environmental footprint is also an essential element of our Government's commitment to ensure Canadians enjoy the full benefits of the potential for growth in the industry.
We continue to work with industry in the implementation of our Government's Green Mining Initiative. Our ultimate goal is to leave behind clean water, rehabilitated landscapes and healthy ecosystems.
Promoting responsible mining at home and abroad
The Canadian mining companies present here today do more than provide jobs for thousands of people in other countries. They are increasingly recognized for their contribution to socially responsible growth in the developing world.
With its Towards Sustainable Mining strategy, the Mining Association of Canada has been a key supporter of the Corporate Social Responsibility Strategy that our Government launched in 2009.
The E3-plus program for responsible exploration that was established by the Prospectors and Developers Association of Canada also continues to draw attention and expand.
And of course the Canadian Institute of Mining, Metallurgy and Petroleum hosts the Corporate Social Responsibility Centre of Excellence. It helps ensure that Canadian mining companies are world leaders in that respect.
As a complement to our combined actions, the Prime Minister recently announced the creation of the Canadian International Institute for Extractive Industries and Development to help support and build natural resource management capacity in developing countries.
I strongly believe that the future global success of the mining sector will depend on its ability to meet high principles.
For people in many countries around the world, the mining industry is the face of Canada.
Together, Canadian mining companies invest millions of dollars in a wide range of programs in host countries, and I am happy to recognize their contributions to enhancing Canada's standing around the world.
If I can leave you with one thought today, it would be this — Canada's mining industry is a great Canadian success story, and it's a success for all Canadians.
As it has been throughout our history, the Canadian mining industry continues to be one of the great engines of our national prosperity and a major contributor to our quality of life.
As a global giant, mining continues to build Canada's international reputation for innovation, for social and economic justice, and for a commitment to environmental responsibility.
Our Government believes in Canada's mining industry. We remain committed to putting in place the programs and policies that will strengthen its foundation for growth in the future.
From tax policy, to regulatory improvement, to innovation, to investment in geoscience, we demonstrate that commitment every day.
Our Government wants this industry to succeed.
Canada needs this industry to succeed.
And I am confident it will succeed — that the success of our mining industry in the future will be even greater than the success we celebrate today.
Thank you very much.