Sunday 25th September 2016

Resource Clips


Perspectives on B.C.

The Fraser Institute and British Columbia’s mining minister discuss provincial policies

by Greg Klein

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Mining and exploration companies headquartered in British Columbia operate all over the world. But what’s it actually like to work in their home province? With coincidental timing, two recent events brought that question to mind. On October 3 the Fraser Institute released a report on B.C.’s mining policies. The next day the province’s minister of energy and mines touted his government’s work to a gathering of 180 industry professionals.

The Fraser Institute based its report, British Columbia’s Mining Policy Performance: Improving B.C.’s Attractiveness to Mining Investment, on past results from an annual international survey of industry executives. The 75-page B.C. study addresses “four barriers to investment”—unresolved land claims, regions declared off limits to mining, environmental uncertainty and regulatory hurdles.

Alana Wilson, one of the report’s three authors, tells ResourceClips.com the provincial mining study is the first of its kind for the Fraser Institute. A Quebec report is scheduled for release late this year or early next.

The organization’s annual mining surveys, she says, “get a tremendous amount of media interest. We also get a lot of calls and inquiries from government ministries around the world asking about our survey methodology, how specific factors are calculated. We know that governments are cognizant of the survey results and pay attention to them. But in terms of translating that into tangible policy changes, I can’t give any specific examples.”

As expected, the report finds B.C.’s unresolved land claims “the single greatest factor deterring mining investment” over the last five years. The authors call on the province to expedite the treaty process, find ways to deal with bands not participating in the process, “develop clearer guidance for third parties to facilitate meeting the Crown’s duty to consult” and discuss policy changes with industry.

Second on the list of concerns is the threat that exploration and mining will be banned from certain regions. Indeed, the Windy Craggy “horror story” continues to haunt the industry. That 1993 New Democratic Party decision saw something of a BC Liberal reprise in 2010, when the government suddenly declared the Flathead Valley off limits to exploration.

Addressing the third barrier, the authors question the credibility of B.C.’s environmental regulations. “Where regulations are opaque and unpredictable, the perception can arise that the process has been politicized, allowing special interest groups or politics, rather than scientific evidence, to guide policy decisions.” In that context the report calls on the province to reconsider its ban on uranium and thorium mining.

Duplication, inconsistencies and federal/provincial overlap make up the fourth barrier. The institute recommends Ottawa “provide greater clarity and consistent application of expenses eligible for Canadian exploration expenses,” and that both levels of government gradually remove “distortionary tax incentives in favour of a single, lower rate of corporate income tax.” Both parties should continue working “towards a single, clear and predictable one project/one process” regimen, the report urges. And, surprisingly given the public backlash that defeated the B.C./federal harmonized sales tax, the authors want the province to re-examine the HST.

Yet they give B.C. credit too. The golden years of 2003 to 2007 were “also facilitated by improvements to the permitting process, including a new online mineral tenure system.” Royalty sharing offers natives “a more active role in benefiting from mining and resource development.” Reporting comments from surveys of previous years, the report quotes unnamed exploration executives who praised B.C. policies.

Several other respondents differed, however, with remarks that are almost beyond the pale. Some examples include “aboriginal land grabs and shaking companies down for handouts and royalties” and “uncertainty related to the first nations ‘veto’ over mining projects.”

But native involvement is an opportunity, not an impediment, the province’s minister of energy and mines said in his October 4 remarks to the Association for Mineral Exploration B.C. Bill Bennett had little else to say about the industry’s greatest concern, even though he repeatedly described his talk as a report, not a speech. Nevertheless his feel-good generalities were warmly received by the lunchtime audience.

He did have some specifics, though. “We’re not going to raise your taxes,” he said to applause.

“We have no plans to change the Mineral Tenures Act with respect to notice or adding to the obligation to consult.”

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