by Greg Klein
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If British Columbia’s mining and exploration sector needed a massive jolt of reassuring news, they got it May 14. The pollsters were wrong, the pundits were wrong and the winners might be as surprised as the losers are disappointed. Although the popular vote was close, the BC Liberal party won an historic fourth term, handily defeating the New Democratic Party.
Or did the NDP defeat themselves? Adrian Dix, the party’s choice for new leader 13 months ago, was widely considered an NDP hardliner. He played a prominent role in B.C.’s last NDP government, which is blamed for the “dismal decade” of 1991 to 2001, when the province’s economy tanked despite robust performance in other parts of the country. For possibly the first time in its history, B.C. saw a significant exodus of job-seekers. In addition to low metal prices and Bre-X, exploration and mining were hammered by NDP policies. As the BC Liberals like to say, when the NDP governed “two mines closed for every one that opened.”
More recently, Dix tried to soften his image. But he remained vague about his intentions even though—or because—he leads arguably the most extreme left-wing party in mainstream North American politics. In several conversations with ResourceClips prior to the election, exploration and mining company executives spoke with dread of another NDP government.
Now, it turns out, they needn’t have worried. But apart from removing a widely perceived threat, what exactly does a BC Liberal victory mean to the sector?
That’s not easy to say. Mining didn’t play a prominent role in the election, despite the efforts of four industry organizations behind the Vote Mining campaign.
If you look at the debacle with HD Mining, no one even thought of employing first nations people.—Stephen Hunt,
western Canada director of the
United Steelworkers union
Moreover, under Christy Clark’s leadership the once business-friendly party has shown policy confusion and a lack of conviction. Her government never explained its rejection last October of Pacific Booker Minerals’ TSXV:BKM proposed Morrison copper-gold-molybdenum mine, which received a favourable environmental assessment report. The company launched a lawsuit in April after spending about $30 million on the project, including over $10 million on the decade-long environmental process.
When news broke that HD Mining plans to staff its proposed Murray River coal mine exclusively with Chinese underground workers, the BC Liberals couldn’t say enough good words about the scheme. The government knew that Chinese interests had similar plans for other B.C. coal projects since at least 2007.
Even under Clark’s more capable predecessor, policy wonk Gordon Campbell, the BC Liberals could sow uncertainty. A sudden ban on uranium and thorium exploration in 2009 led to a $30-million out-of-court settlement for Boss Power TSXV:BPU.
By the BC Liberals’ first 10 years in office, BC Hydro built up at least $2.2 billion in deferred debt that’s expected to reach $5 billion by 2017. The burden calls into question the public utility’s ability to build infrastructure and provide inexpensive electricity to homes, businesses and industry.
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by Greg Klein
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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.
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