EDITORIAL PAGE (November 04, 1991)

A recent report on Canadian competitiveness by Harvard professor Michael Porter cites this country’s reliance on natural resources as one of the country’s economic problems. Prosperity has come easily from exploiting our bountiful minerals and forests, so Canadians have never needed to hone the entrepreneurial skills that are now becoming essential.

That is hardly original thinking. Similar observations have been made for more than a century when Canadians were first referred to as mere “hewers of wood and drawers of water.”

What is different is that Porter doesn’t turn up his nose at our resource industries. While other “experts” seem to resent the idea of Canadians getting dirt under their fingernails by digging up minerals, Porter recognizes that resources have given Canada a golden opportunity to build a broadly based economy.

Nickel producer Inco Ltd., for example, is cited in Porter’s report as an example of taking a leadership role in mining and using it to develop more advanced uses for its products. And the British conglomerate ICI Ltd. established its world headquarters for explosives here because of our strong mining companies and its leadership in explosives technology. Canadian resource companies have contributed more than their fair share to the national economy over the years while competing against companies that enjoy lower labor costs, less government regulation and fewer environmental restrictions.

It’s time the more glamorous industries of this country look to the resource industries to find out how things are done right.

From the Emergency Gold Mining Act to Mineral Development Agreements and depreciation allowances in the federal Income Tax Act, mining industry associations have a solid record as a lobby group. They haven’t always got the results they wanted, but through various organizations at various levels they have kept the concerns of their members reasonably high on the political agenda without alienating political partners.

The organizations that have lobbied for the industry, however, have never stepped in to act as advocates for any particular mining company in trouble. The hands-off approach is proper given an equal partnership between mining ventures and the Crown, but when laws unbalance that joint venture and promote an adversarial approach, individual mining companies would welcome their support to equalize the two sides.

Junior companies today face the threat of being bullied into submission by well funded special interest groups allied with government agencies that seem to be accountable to no one. Matachewan Consolidated Mines is one such small company. It and two other companies are being subjected to provisions of provincial environmental legislation that essentially presumes guilt. Tailings from the company’s property in northern Ontario spilled into the Montreal River last year. Since then, the environment ministry has spent $1.5 million cleaning up the site and billed the three companies for the work. The work is more than Matachewan can afford, but it has no control over how, if, when or where the money is spent. Nor does it have any avenue of appeal if it considers the money to be misspent.

The mine met all requirements when it operated. It abided by all the rules that were applicable. Now, it finds itself subject to new rules imposed retroactively.

Responsibility for the tailings should be shared among all those who benefited from exploiting those mineral resources — including the province which received taxes on its profits.

Matachewan seems destined to suffer a slow and painful death at the hands of government regulators. The company has shelved any plans to discover or exploit new mineral wealth. It is simply struggling to survive as it is sucked deeper and deeper into the quagmire of legal proceedings stemming from the reverse onus of Ontario’s environmental laws.

If the mining industry has any intention of standing up for its own, including financial support, the case of Matachewan Consolidated Mines might be a good place for it to start.