Mines minister promises review of regulations

The newly appointed minister of Energy, Mines and Resources Canada told British Columbia mining executives that his ministry will begin a review of the country’s current regulatory framework for resource development.

At the recent Mineral Economics Symposium held by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) here, Bill McKnight told delegates that a task force will look into the major issues facing the mining industry — namely regulations, access to land and the tax regime.

“We will look at removing or updating regulations with no (environmental) validity,” McKnight said. He noted that the surviving regulations should pass “the competitiveness test” while still ensuring environmental protection. Earlier in the session, a number of mining executives identified various concerns relating to federal and provincial regulations that they believe add to the high costs and uncertainty of mine development in Canada. These include duplication of review processes (federal and provincial), uncertainty on approval schedules, undefined limits to public participation and new proposals based on “zero discharge” criteria that may not be economically achievable with best available control technology. Harlan Meade, a vice-president of Westmin Resources, expressed concern over the new Canadian Environmental Assessment Act (CEAA) because it is “prone” to approval of projects based on zero discharge criteria. Meade said the Act, which is not yet law, includes a requirement to consider what are the benefits of the proposal to Canadians. For example, do we need a new copper mine in the Yukon?

“This aspect of the review process is particularly distasteful to resource companies,” Meade said. “It does not appear to be founded on environmental concerns, but rather to be an anti-development provision.”

Meade said British Columbia’s recent discussion paper on environmental protection also has an “undefined goal of zero pollution,” as well as a host of proposals that could increase direct and indirect taxation by the province and municipalities.

“In addition, our industry is likely to be impacted by government’s proposal to grant native groups co-management rights for environmental protection over land they do not own,” Meade said. He added that these and other proposals will only further contribute to a fleeing of investment to foreign jurisdictions where mine development is welcomed.

Teck Corp. President Norman Keevil also urged government to minimize the time and cost of permitting, “without in any way reducing the level of reasonable environmental protection.”

Keevil also said many of the existing mines in Canada would not be economic if developed under the current regulatory and tax regime, including the Highland Valley copper deposit in southern British Columbia. “In 1970 the project would have shown a healthy rate of return of over 20% and could easily have been developed,” Keevil said. “Under today’s conditions, the rate of return would only be 6.5%. This is obviously unacceptable, no bank would lend against it, and the project would be a no go.”

Keevil said unit operating costs and most other costs kept pace with the increase in metal prices (235%) during the 20-year period 1970-90. But power costs (fuel and electrical power) increased 912% during the period, much of it represented by non-profit hidden taxes such as federal taxes on fuel and the provincial water tax. Capital costs were also found to have increased 319% in the 20-year period, or 36% more than metal prices.

The CIM symposium also featured sessions on land-use and labor relations. Ken Georgetti, president of the B.C. Federation of Labor, urged the mining industry to accord “greater respect and legitimacy” to the organized worker, and to make a greater investment in worker training.

Georgetti said the labor movement shares the concerns of the mining industry that over-regulation will lead to less resource development and fewer high-paying jobs in the province.