Access to land, capital prominent issues in 1991

With 1990 behind us, it is appropriate to review two issues of last year that stood out and are likely to remain prominent in 1991 for not only British Columbia but Canada as a whole — access to land and access to venture capital. Access to land in British Columbia was exacerbated by the provincial government during 1990. The ministries of parks and forests have put in place separate major land use initiatives that will strongly affect the health of the British Columbia mining industry — Park Plan 90 and the proposed Forest Wilderness areas.

In June, the ministry released its Plan 90 for parks, a discussion paper that identified 539 features within 59 distinctive geographical areas or landscapes worthy of consideration as a park candidate. British Columbia currently has 385 provincial parks and 129 ecological reserves, encompassing 5.7 million hectares.

Only 20% of the 2,565 surveyed in a recent study on parks placed acquiring more park land as a first priority, a percentage which climbed to only 36% when second priority was included. Late in the fall, the ministry made public 35 large areas that it believed “have what it takes to become parks,” plus 75 small areas for consideration to meet recreation goals.

In response to the 1986 Wilderness Advisory Committee’s report, the “Wilderness Mosaic,” the British Columbia Forest Act was amended on Aug. 17, 1987, to recognize wilderness as a resource in provincial forests, giving this responsibility to the British Columbia Forest Service. The forest wilderness study areas, proposed late this fall, total 5.4 million hectares in 58 sites, an area equal to that now occupied by provincial parks.

In one giant step, the Ministry of Forests is proposing to move into wilderness recreation in a manner at least equal to that of British Columbia parks. Although the Act states that petroleum and mineral exploration will be permitted in forest wilderness areas, experience to date has shown that a tougher line is being taken by local forest personnel with exploration companies working in these areas. It is abundantly clear that mining exploration companies will be caught up in British Columbia Forest’s efforts to convince that public that they are good guys.

Because the mining exploration community is, in general, not aware of the strength of the environmental movement, and in particular its protectionist segment, the chamber highlighted this sector in 1990. The top 25 U.S. environment groups in 1990 were reported to have a membership of 7.9 million, a staff of 3,900 and a budget of $545 million.

The 1990 British Columbia Environmental Directory, a directory of environmental, peace, union and native organizations, includes 459 listings in 24 separate catagories. Organizations concerned with land use conflicts number 111 with mining the main concern of 30. Vancouver has offices for 170 of the listings, however, 118 other British Columbia communities also host one or more of the organizations listed.

The British Columbia Environmental Network (BCEN) has its counterparts elsewhere in Canada. A new awareness and commitment by our industry equal of that of the preservationist to land use issues must quickly evolve.

The chamber has witnessed metal exploration expenditures in British Columbia increase from $5 million in 1960 to a peak of $215 million in 1988, sliding to $151 in 1989 and forecast to be down only slightly more in 1990. Over this period, the number of mining companies using profits derived from mining operations to explore has dramatically decreased. This, combined with the almost disappearance of the 25% of total pre-flow-through exploration expenditures previously contributed by oil and gas companies, places a great deal more pressure on junior mining companies if Canada is to maintain an exploration effort capable of discovering the new orebodies required to replace our depleting reserves.

Total financing on the Vancouver Stock Exchange, dominated by junior mining companies, has declined from a peak of $1,037.8 million in 1988 to $642.3 million in 1989 with $435.1 million raised in the first 11 months of 1990. The year-end total was forecast to be less than $450 million. During 1990, VSE financing, surprisingly enough, was strongly supported (about $90 million) by private flow- through financing slightly less than in 1989 but down dramatically from the $332.5 million raised in 1988.

The current economic downturn and softening of metal prices, coupled with the loss of the extra incentives of past flow-through financing, indicates that venture capital, difficult as it was for many to find in 1990, will be more difficult in 1991.005 Jack Patterson is the managing director of the British Columbia and Yukon Chamber of Mines.