Opinion: At PDAC, Canada is on the clock

At this year’s annual Prospectors and Developers Association of Canada convention in Toronto, there is more on the line than usual.

For the first time in recent memory, the conference, one of the largest mining industry gatherings in the world, looks to be “investor heavy”. 

For years, those looking for finance have been on the wrong end of the supply and demand curve at PDAC, roaming the hallways of the Royal York hotel in search of just enough money to support the summer’s drilling program and a round of drinks in the Library Bar. 

This year, money is rolling into town in the hands of governments, pension and sovereign wealth funds, and strategics, all looking to secure supply chains and, as importantly, divert supply from competing nations and businesses.     

While PDAC is a global event this year, more through happenstance than planning, it is a testing ground for judging whether Canada can deliver on the nation-building promise we have been making to ourselves for the last year.    

International investors are interested, at least for the moment. Why? A few reasons: Our vast resources, critical, rare and otherwise. We are a country that still respects the Rule of Law. Canada is a nation where the sustainability conversation still matters, a point that matters to many, if not all, long-term investors. Our Prime Minister delivered a speech at Davos that grabbed the world’s attention. 

Investable

Global investors seem to be convinced that Canada is investible (again) or at least worth another look. We have a new Major Projects Office with a mandate to support development through consolidating and eliminating regulatory processes. The country has shown it can change economic dynamics—and the price of domestic oil—through delivery of one major project—the Trans Mountain Pipeline Expansion. 

Imagine if we could deliver on three? Ten? Canada is still a relatively safe place to locate a head or regional office, raise a well-educated family and put down roots.     

Whether you agree with the PM’s politics or not, it is clear to those of us focused on leading indicators that he is generating interest as he travels the world and strikes frameworks, if not agreements. Fasken is Canada’s largest law firm and a recognized leader in global mining. As such, we generate a lot of data and we have a lot of conversations. 

Our data tell us that, since the beginning of this year, we are being asked to do more pitches and open more files by prospects and clients in countries the PM has visited. We have had more inquiries for PDAC sessions from investor groups than we have ever seen.

Everyone we speak with understands the diversification and resilience narrative: Canada needs more port capacity in the East, the West and even the Arctic. Canada needs roads, rails and pipes to fill those ports. Canada needs greater productivity and more production to fill those roads, rails and pipes. 

Act now

The world is interested. That interest will only hold for so long. Canada has always had resources. It could always benefit from more production, networks and ports. But for decades capital, including Canadian capital, along with the homegrown lawyers, accountants and bankers who help deploy it, has looked elsewhere. Too much friction in Canada. No returns on the horizon. Uninvestible. 

We now have the world’s attention. The world believes—or wants to believe—our story of trade diversification, a commitment to economic resilience and a promise to get projects done. But we need to move decisively lest capital sense delay and turn its attention, once again, in other directions.      

Prospectors and developers should not mistake this high interest moment for an opportunity to sell moose pasture. This is a sophisticated crowd. U.S. mineral strategy is being led by Special Assistant to the President, David Copley, a mining executive with acumen and a disciplined military officer who served in Iraq.  

The Americans ultimately report to a president who insists on results and who holds them personally accountable. The Chinese likewise. And you can count on the strategics to be. . .  strategic. Quality assets, presented by quality teams with access to, or credible plans for quality infrastructure, will have more options this year.  

Pretenders and the disorganized will be given short shrift and may put the moment at risk for all of us. Communities who hesitate or are disorganized likewise. Global capital is paying attention.

Capital knows

That may not translate into bargaining power. Capital has options and a short attention span. It can quickly lose patience again with a country with a track record of delayed, disrupted and arrested development. It took work and circumstances to turn heads our way. It won’t take much to distract. There are major rebuilds around the world that deserve global capital’s attention and which may promise more predictable returns.  

If nothing else, objective observers can sit back and appreciate the cultural moment over the days to come. The Chinese will be here, negotiating with the patience of Job, planning for the next millennium. The Americans will be here with the patience of Don, insisting on results before the quadrennial.

The Middle Powers and their business communities will be navigating their place between them, with the Canadian government focused on shortening supply chains and turning them inward.  

That is a lot of agendas for a prospector to negotiate. It should make for some interesting chance encounters and awkward moments in the hallways of the Royal York.  

It is a lot for a PDAC cocktail party host to negotiate. Life was simpler when return on investment simply meant profit. Or at least when the more naive among us could believe it did. 

Now we’re negotiating over nation building, while others do likewise. The window is open, but only for so long. We can show a path for deployment, diversify our economy and enhance many lives. Or we can point out the challenges, delay and test global capital’s patience. Canada, we’re on the clock.    

Martin K. Denyes is chair of Fasken Martineau DuMoulin, an international business law and litigation firm based in Toronto, where he has worked since the early 1990s. He advises clients on corporate law, governance and complex commercial matters.