Others emulate mining’s vitality

I am well aware of the enormous contribution of the mining industry to the Canadian economy. Canada is the world’s largest exporter of minerals. Typically, mineral exports account for about a fifth of Canada’s annual export earnings. Employment in the industry totals over 150,000 Canadians.

Despite the turbulence of the last several years, the mining industry has demonstrated a resilience and a vitality that I think other sectors of the economy would want to emulate.

In 1988, minerals and metals production totalled a record $21 billion. Real output per worker has increased by almost 100% in five years. Profitability has improved considerably.

I am also quite conscious of the cyclical nature of the mining industry, but it would seem that you are well positioned to take on challenges that will come your way. I’m thinking particularly of the challenge of integrating environmental considerations with economic considerations, an issue that is of deep concern to Canadians.

Our view is that the private sector, not government, is generally best placed to allocate resources among alternative activities and investments, and that the role of the public sector is to engender a stable and positive climate conducive to industry vitality. Our policies and priorities reflect a preference for this approach. We are not in the business of confiscatory taxation or heavy-handed regulation.

In our Minerals and Metal Policy, introduced a couple of years ago, we emphasized a non-interventionist approach to your industry. Its fundamental message was: “We will support, not detract, from your efforts to improve the prospects of your industry.” You can be assured of the continuing federal commitment to the over-all thrust of this policy statement. It’s a policy that has served the country and the industry well.

Our last Speech from the Throne, in addition to acknowledging the environmental imperative, affirmed that a top priority of the government is the building of a strong, dynamic and productive economy, one that relies primarily on private sector initiative, that is not burdened by a crushing debt, and that is able to compete successfully in international markets. Since nearly 80% of Canadian mineral and metal production is sold beyond our borders, those in the mining industry appreciate the importance of this objective.

And in our latest budget, we demonstrated our determination to cut the federal deficit. Like you, we believe that high interest rates and excessive inflation can be avoided if we can get the deficit down to manageable proportions. The fact is we can no longer afford to allocate colossal s ums of Canadian’s hard-earned dollars just to cover the interest payments on the national debt. As the Minister of Finance pointed out, 20 years ago, only 12 cents of every tax dollar sent to Ottawa went to interest payments; this year, over 35 cents will go to interest payments. Clearly, decisive action was called for.

I believe that, from the perspective of mining in Canada the budget is balanced and fair. You did not get all the policy changes you have asked for, but all sectors of the economy are being called upon to help in the battle against the deficit.

For many industries, including mining, the question no longer is how much more can the government give? Program justification, not program enrichment, is the name of the game these days. Our financial room to manoeuvre has shrunk so much that Ottawa can do little more in the way of incentives.

Having said that, I would also point out that federal government has done a great deal to assist mining in Canada.

Through our trade negotiations with the United States and with our GATT partners, we have sought and continue to seek freer access to international markets for Canadian minerals.

Left untouched by the budget are the Canadian Exploration Incentive Program and the flow- through share financing program. These are very important mechanisms for financing grass roots mineral exploration. I am hopeful they will facilitate the discovery for new metal deposits in the period ahead.

The budget also reaffirmed the government’s commitment to regional development. I have every confidence that mineral development will continue to be viewed as a drawing force of economic development in many rural and remote regions of Canada and that this will be reflected in continued geoscience, technology and market support for industry. In this regard, over the past two months, I have received an overwhelming expression of support for Mineral Development Agreement (MDA) activity from throughout the mining industry and mining communities. Be assured that your message is being heard.

And even after all the changes to the tax regime have been fully implemented, the mining industry will still be in the very enviable position of having the second lowest effective income tax rate of all the sectors in the economy.

I mentioned earlier that your industry will need to come to grips with many challenges in the future, particularly the challenge of environmental protection.

The day is long past when business, in the single-minded pursuit of greater profits, could ignore the damage it was doing along the way. While most Canadians believe that a market-driven economy serves us well, they also expect business and industry to aim for a higher standard than the bottom-line.

The environment is an issue whose time has come. To quote Roy Aitken of Inco, “The 1990’s is going to be the decade of the environment and by the time the year 2000 comes, all of us will be committed environmentalists, like it or not, because the problems are real.”

I think Canadians would agree that it does not make sense to talk about successful corporations in a society whose soils and forests are contaminated, lakes and rivers polluted and air filled with impurities.

The federal government recognizes, as do most business people, that the world is facing an environmental challenge of unprecedented magnitude. For this reason, we have made it clear that, in managing the economy, we will treat environmental issues as priorities not as afterthoughts. No longer can economic and environmental planning proceed along separate paths. We have strongly endorsed the report of the Brundtland World Commission on Environment and Development and its call for “sustainable development” — which holds that the state of the world’s environment, the strength of the global economy and the health of the earth’s inhabitants are inextricably linked.

Now let me make very clear that, in my view and that of the government, sustainable development does not mean no economic development. Rather, it refers to a new kind of development whereby the use of resources and the environment today does not jeopardize prospects for their use by future generations.

To put it more succinctly, it means that our natural resources must be managed for the long-term, in the full knowledge that my children and grandchildren and your children and grandchildren will bear the consequences of the decisions we make.

Environmental considerations must be integrated into business planning and become a required element of any economic development proposal.

It means recognizing that the environment is not the concern or specialty of one sector or group in society. Rather, it is the concern of all of us.

And it means seeing our relationship with the environment not as one of dominance but as one of harmonious interaction.

I am convinced that sustainable development is in the best interests of business. For one thing, taking account of environmental issues at the initial stage of business planning is much cheaper than cleaning up after the damage is done.

Also, there is evidence that ecology-minded companies are being rewarded by consumers in the marketplace. Gaining the trust and confidence of the society which nurtures the business enterprise is the best way to ensure the long-run acceptance of that enterprise by
the wider society.

Looking at it more pragmatically, environmental protection produces economic opportunities. The federal government will be encouraging the expansion of Canada’s environment industry and promoting research and development, not just to find solutions to our environmental problems but also to create export opportunities for equipment, knowledge and environmentally friendly products.

]]>