Does the new regime signal a new regimen for mining?
by Greg Klein
Next Page 1 | 2
Providence and politics have made Quebec one of the world’s most favourable mining jurisdictions. But yesterday’s provincial election might cause concern to industry players and investors alike. The new Parti Quebecois government wants to scale back a northern infrastructure program, curtail foreign takeovers and introduce an Australian-style royalty scheme.
The big question is whether the PQ can gain needed support for its agenda. The separatist party won 54 seats, nine shy of a majority government. The Liberals came close with 50 seats but lost their nine-year hold on power. A new party, Coalition Avenir Quebec (Coalition for Quebec’s Future), took the spoiler’s slot with 19 seats while Quebec Solidaire picked up just two seats.
Outside the province, media campaign coverage focused on the PQ’s dream of forming an independent country. Election night was marred by a man in a housecoat who shot two people at the PQ victory celebration, killing one of them.
Mineral exploration and mining figured strongly in the month-long election campaign.
The separatist issue, always present in Quebec, doesn’t look especially prominent now. During the campaign PQ leader Pauline Marois stated she won’t call a sovereignty referendum unless she’s sure of success. Two August polls showed support for separatism dropping from 40% to 28%, a far cry from the 49.4% who voted to leave Canada in a 1995 referendum. But Marois, a political veteran with 31 years’ experience who held 14 cabinet posts in the PQ government that ruled from 1994 to 2003, has other means of pushing the party’s left-wing nationalist policies.
She wants to “redo” Plan Nord. The massive northern infrastructure program was intended to be former Liberal premier Jean Charest’s legacy. Charest talked of spending $2.1 billion of public money on an economic dynamo that would attract a total of $80 billion in private and public investment over 25 years, creating 20,000 jobs in mining, hydro-electricity, forestry and tourism above the 49th parallel, an area covering 72% of Quebec’s territory. Marois, while not opposing Plan Nord, says $2.1 billion constitutes a giveaway to private companies.
If there were giveaways in Charest’s plan, however, they flowed in different directions. The Liberals’ Bill 65 would have designated 12% of the land north of 49 exempt from development by 2015. That percentage would have increased to 20% by 2020 and 50% by 2036. Quebec’s National Assembly didn’t find time to vote on the bill before the election.
A key economic plank of the PQ platform is Marois’ tax and royalty regimen. She wants a 5% royalty on all minerals extracted, regardless of a company’s profit. And speaking of profits, she’s following the Down Under example by proposing a 30% tax on all mining profits above 8%, which she estimates would extract an additional $388 million from miners over five years.
Next Page 1 | 2
Pages: 1 2