Government supported needed to restore competitive edge in mining: report
The Mining Association of Canada (MAC) released its annual Facts & Figures report, with this year’s data showing that the country’s competitiveness “continues to erode,” and that it is essential for government to take action to reverse this trend.
“Over the past decade, Canada’s leadership in mining has been deteriorating year over year, with no sign of any significant turnaround, and support from governments is absolutely critical to improving this position,” said Pierre Gratton, president and CEO of MAC. “Over the past several months, we have been encouraged by initiatives put forth by federal and some provincial governments in recognition of the challenges our industry faces, including the decision to renew the Mineral Exploration Tax Credit for a five-year term, enhanced Accelerated Capital Cost Allowances and in the recently released Canadian Minerals and Metals Plan, all of which should help reverse current trends. However, this is only a start and we look forward to further action.”
The new Facts & Figures report highlights a number of worrying trends, including:
- Over the past five years, Canada has lost ranking for seven out of 16 commodities for which it had been a top-five producer;
- While Canada remained the world’s top destination for non-ferrous exploration spending in 2017, it continued to cede market share to other jurisdictions, including Australia. This marks the sixth consecutive year that Canada’s share of international exploration investment has fallen;
- The value of total projects planned and under construction from 2018 to 2028 has reduced by 55 per cent since 2014, from $160 billion to $72 billion;
- Capital investment in the mining sector has declined each year since 2012, with investment intentions for 2018 in line with this trend;
- Only four new mining projects, all gold mines, were submitted for federal environmental assessment in 2017 – far below highs seen in 2012-2014; and
- In 2016, InfoMine, a mining database, reported that Australia’s identified mining supply sector surpassed that of Canada’s, bumping Canada to third place. In 2017, this gap expanded with Australia adding more than 200 firms to its list. In 2018, Canada was trailing by nearly 800 firms, only adding two firms year-over-year.
“One of the most pressing issues of concern for Canada’s mining industry is the fact that investment in new mining projects has fallen, highlighting the fact that our country’s economic prospects are uncertain. Australia, in contrast, continues to make significant inroads in mining, and in 2017, FDI (Foreign Direct Investment) in Australia was $315 billion, or 37 per cent of the country’s total. In Canada, by contrast, mining FDI was $28.2 billion, or 2.5 per cent, of the total,” said Gratton. “Much needs to be done to boost our domestic and international competitiveness in order for Canada to reclaim its position as the global leader in the mining sector.”