EDITORIAL — Fraser Institute blames government policies — B.C. rating lowest in Canada

Mineral-rich British Columbia has been rated “the least attractive” province for new exploration investment by a Fraser Institute survey of senior and junior mining companies operating in Canada.

The B.C. government may shrug off the news that the next-worst rated regions in the country, the Northwest Territories and Prince Edward Island, were rated three times more attractive than B.C., based on each province’s public policy environment. After all, the Fraser Institute has never found much to like about left-of-centre governments.

But to dismiss these findings as right-wing rhetoric would be foolish. The results reflect the views of 52 companies, which manage exploration budgets, spent both in Canada and abroad, of more than $467 million. Those companies, however, spent only $141 million at home, only 16% of total world exploration and development dollars spent in Canada.

The companies polled were asked to rate, on a scale of one to six, the provinces on 10 factors, including: levels of taxation; provincial environmental regulation; duplication of federal and provincial regulations; uncertainty about protected areas; mineral potential; relative attractiveness of mineral deposits in other regions; labor regulation; government policy (legislative clarity, policy climate, etc.); infrastructure; and socio-economic agreements.

B.C.’s policy climate was panned. The majority of respondents (92%) rated land claims uncertainty as a “strong deterrent,” whereas 89% said uncertainty about protected areas “deters exploration.” The province’s environmental policies were rated as a “strong deterrent” by 79% of respondents, and 70% said B.C. government policy deters investment. Taxation and regulatory overlap were viewed as “strong deterrents” by 62% of respondents, and 58% described labor regulations in the same terms.

Alberta received the highest rating for its policies, with an overall score of 90 out of a possible 100 points. But Mother Nature did not do her bit, as 50% of respondents rated Alberta’s mineral potential as a “strong deterrent” to investment there. Surprisingly, New Brunswick and Nova Scotia rated higher than Manitoba and Quebec, both of which are viewed as pro-mining provinces. Ontario ranked sixth.

The companies also rated each province’s mineral potential. The province thought to have the highest potential, the Northwest Territories, was given a perfect score of 100. Ontario took second spot with a respectable 96, followed by the Yukon (83), Quebec (75), Newfoundland (71), British Columbia (54) and Manitoba (54).

British Columbia tumbled again, however, to second-last spot, on the “investment attractiveness index.” That index combines ratings on mineral potential and policy to create a ranking of the ability of provinces to attract new investment. The province considered “most attractive” to new investment is Ontario, owing to its high mineral potential and middle rating in terms of policy. Quebec is the second-highest-rated province, again because of its high mineral potential and reasonable policy. Yukon rates third (despite its eighth-place rating on policy), owing to its excellent mineral potential, followed by Newfoundland and Manitoba.

While the provinces may not be able to do much about their mineral potential, they can — and should — do more to attract investment. Of the companies polled, seniors spent only 25% of their budgets in Canada. The trend-setting juniors, on the other hand, spent 51% of their budgets in the country. It appears many have found that there’s no place like home.