[reprinted from the Ottawa Citizen, December 7, 2002]
BY GORDON PEELING
Canadian mining is an important contributor to our country's social and economic prosperity. It is one of the few sectors in the economy where Canadian companies dominate internationally, a position established through growth, innovation, ingenuity and highly skilled workers. And Environment Minister David Anderson noted recently that Canadian mining companies have become "environmental and social industrial leaders both in Canada, and internationally."
Joan Kuyek of MiningWatch Canada and Mark Winfield of the Pembina Institute would like you to believe otherwise.
Their Nov. 23 article, "Stop Throwing Money at Destructive Mines," is designed to give the impression that Canadian mining is not worthy of governments' or society's support. Not surprisingly, their arguments, drawn from a recent report they co-wrote titled Looking Beneath the Surface, are based upon carefully selected information designed to put the Canadian mining industry in the worst possible light.
Let's look at what is really taking place.
A major user of high-tech products, mining counts among the most productive and innovative sectors of the Canadian economy. Minerals and metals exports contribute $35 billion to our economy. Our industry employs 375,000 men and women through all stages of production, in urban, rural, remote, northern and aboriginal communities. Canadian mining's knowledge, expertise and products are sold around the world.
Thousands more directly depend on mining. For example, mining accounts for 67 per cent of total volume handled at Canadian ports and about 61 per cent of freight from total rail revenue for our domestic railway system.
Ms. Kuyek and Mr. Winfield correctly point out that direct employment in the metal mining portion of the industry has declined, but ignore the fact that this is largely due to investments in leading-edge technology (such as teleremote mining), supporting high tech innovation and indirect employment, research and development across Canada. Further, their claims are distorted by comparing two opposite points in what has been a very difficult economic cycle (1994: high, and 2001: low). They also ignore the fact that employment in other segments of the mining industry, such as diamond production and oilsands development, has grown considerably. And they dismiss the often regional and local significance of the opportunities created by mining: Over its 30-year projected lifespan, the Voisey's Bay nickel-copper-cobalt mine is expected to create thousands of jobs for the people of Newfoundland and Labrador, including the Innu and Inuit.
Ms. Kuyek and Mr. Winfield argue that the mining industry is not taxed enough, and that so-called special tax provisions and "subsidies" should be eliminated. However, in their report, they only looked at mining royalties, ignoring what companies pay in federal corporate tax, provincial corporate tax, capital tax, sales taxes, etc. (resource-sector companies, for example, representing 4.5 per cent of GDP, account for 12 per cent of the Large Corporation Tax). In fact, according to PriceWaterhouseCoopers, the industry's effective tax rate for the life of a mine is 40 per cent, one of the highest of any industrial sector in Canada. Their report also fails to acknowledge that special tax provisions exist for all sectors of the Canadian economy, in recognition of their distinct circumstances, risks and global competitive circumstances.
In one of their most specious arguments, MiningWatch and the Pembina Institute list as "subsidies" world renowned institutions like the Geological Survey of Canada (GSC). The GSC is engaged in scientific activities that benefit all Canadians, including environmental base-line research, climate-change monitoring and natural-hazard mapping. This argument is equivalent to suggesting that the Bank of Canada is a subsidy to the banking industry.
Finally, the article highlights the environmental costs associated with the reclamation of orphaned and abandoned mines, but fails to mention that: a) this "mining legacy" was the result of an earlier era of low environmental knowledge, awareness and sensitivity when mines operated according to the rules of the day; b) the mining industry supports financial assurance requirements to ensure that no mines today are opened that cannot be reclaimed; c) the mining industry is working with MiningWatch and others on a national advisory committee on orphaned and abandoned mines.
The objective of the MiningWatch/Pembina Institute study was to conduct a "full cost accounting" of the mining industry, incorporating social and ecological costs associated with mining. A worthy objective, it must be done accurately and honestly and should simultaneously consider the treatment, performance and interdependence of other sectors. Unfortunately, the study and the Nov. 23 article have left Canadians with a distorted and dishonest portrayal of an important Canadian sector.
Gordon Peeling is president and CEO of The Mining Association of Canada.