EDITORIAL PAGE — NRC’s `strategic renewal’

Natural Resources Canada Minister Anne McLellan, together with other cabinet ministers, has been busy selling the 1995-96 federal budget. So far, it has been a relatively easy sell, as most Canadians are clearly supportive of the overall goal of deficit reduction.

Major spending reductions were announced for most federal government departments, and Natural Resources Canada (NRC) was not spared. The department’s overall resources will decline to $435 million in 1997-98 from more than $1 billion in 1994-95. In the process, as many as 1,450 positions will be eliminated during the period, a reduction of about 28%. All this has raised questions about the future direction of NRC; about the downsizing of the Geological Survey of Canada (GSC); about which programs will be dropped or reduced; and what the framework will be for the future delivery of science and technology programs.

The mining community had hoped that McLellan would shed some light on these matters at the recent convention of the Prospectors and Developers Association of Canada. Unfortunately, the minister had other commitments. It was clear, however, that the budget had failed to address the two most pressing concerns identified by mining organizations. No steps were taken to stimulate domestic exploration spending, nor did the budget allow for improved tax treatment of reclamation funds.

McLellan assures us that these issues are not dead in the water, and that the reason they were not addressed in the budget is because the government was committed to the target of deficit reduction. The overall message of this budget, she says, is to show that “we understand government does not create jobs; private enterprise does.” She adds that the government can no longer afford to provide industry with “subsidies,” such as Mineral Development Agreements.

The government’s new mandate will, in effect, take NRC out of the business of providing direct financial support to resource sectors. Federal involvement in megaprojects will come to an end, and the government intends to consider offers to purchase its 8.5% equity share in the Hibernia project. NRC is undergoing a “strategic renewal” and will, over the next three years, adopt new ways of doing business. For example, GSC will consolidate its regional operations into four laboratories. The number of regional offices will be reduced to 30 from 55, and the GSC of the future will have both an environmental and an economic focus. McLellan also hints that the government might look at ways of “commercializing” parts of GSC; she goes on to say that if the Vancouver mining community is opposed to NRC’s plan to move that city’s GSC office to Victoria, the government might reconsider, provided the industry is prepared to “pay for this service.”

In the future, NRC will conduct part of its business in partnership with stakeholders. But if, for example, the department’s activities serve the needs of a single company, the government will expect that company to pay for those services.

It is difficult to argue with the minister’s premise that the entire role of government must be redefined. At the same time, however, it has not gone unnoticed that governments continue to allocate billions of dollars towards job creation funds, as well as millions towards regional diversification. Ottawa should not forget that it makes good sense to support Canada’s resource industries, which, after 128 years, are still the cornerstone of this country’s economy.