On the Level (March 16, 1992)

This country is sorely in need of some new mines — big ones. But what in the world will it take to turn the industry around?

Over the years it has learned to cope with the cyclical nature of the business. While metal prices will almost certainly rebound, will our own industry be able to bounce back in this changing world, for it’s a whole new ball game today?

Natural resource industries, for years the driving force of the Canadian economy, are heavily dependent on competitive global export markets. But now they face sharply higher environmental costs and numerous other costly government-imposed regulations and hurdles.

Little wonder mine seekers are shunning the Canadian north as never before. But it’s sad to see their highly developed exploration expertise (the world’s best) driven to the U.S., Mexico and various South American countries where the investment climate is much more attractive.

Worse, this exodus comes at a time Canada badly needs the economic priming natural resources could supply if given half a chance.

Ontario, once mine makers’s darling, is now at the bottom of the totem pole with exploration at the lowest ebb ever, a spot it will likely hold until Premier Bob Rae’s anti-business, pro-union socialist administration is thrown out. Just wait until the business world gets the full impact of coming changes in Ontario’s Industrial Relations Act — the very reverse of the U.S., where union powers are dwindling.

About as bad is the anti-mining climate in British Columbia, where the industry is taking a terrible beating under another New Democratic Party government. With high taxes and a whole maze of regulations seemingly designed to stifle mining and forestry, it now takes years and millions of dollars just to obtain approval to develop a new mine there. “Environmental assessments are not really what extremist critics are after,” says W.J. Wolfe, past president of the British Columbia & Yukon Chamber of Mines. “They want these projects stopped. How much uncertainty can the mineral tenure system tolerate before resulting in a massive flight of investment capital?” (Falconbridge just announced it is closing its Vancouver office and moving it to Chile.)

And now, casting a further pall over the mining industry and indeed the Canadian economy are the aboriginal peoples’ sweeping demands. Ovide Mercredi, who heads the Assembly of First Nations, shocked the Quebec legislature demanding everything but the kitchen sink, including “distinct society” status at least equal to Quebec and self-government over virtually the entire north country. About the only thing he doesn’t seek is taxes. Should Quebec separate from Canada, he warned, it could not expect to take aboriginal people and their land with it. “We say it is not up to Canada or Quebec to determine that they can assume sovereignty over us. The First Nations are not the property of either.”

Who, pray, would pay for the justice system, police force, health, welfare, education and child care now being demanded?

Already over governed, over-taxed and over its head in debt, Canada simply could not carry such a cost for 500,000 non-tax-paying status Indians. And there are another 500,000 non-status Indians likely to be heard from. And perhaps the Inuit. That this kind of money could come from mineral royalties is wishful thinking. Under those conditions it is highly unlikely that the North would be seeing many new mines.

Nor are relations with our big neighbor to the south all peaches and cream these days. That country, too, is heavily in debt and its largely military-based economy slumping. Each day points to a growing America-first line, spelling more protectionism from our biggest trading partner. — M.R. (Mort) Brown is the Publisher Emeritus of The Northern Miner.