Remarks by The Honourable Joe Oliver
Minister of Natural Resources
to the
Prospectors and Developers Association of Canada International
Convention 2014
March 3, 2014
Toronto, Ontario
Check against delivery
Introduction
Thank you, Glenn [Glenn Nolan, President of PDAC], and good morning everyone.
Well, once again, the Prospectors & Developers Association of Canada has outdone itself. This annual convention is now firmly established as the premier global forum for connecting and collaborating in the global mining industry.
Over 30,000 attendees from 126 countries are here today. So, on behalf of my fellow Canadians, welcome to Canada — the mining capital of the world. The city of Toronto — my home — is the global hub for mining finance. Toronto’s stock exchanges comprised 70 percent of the world’s mining equity capital in 2012, raising over $10 billion. 364 mining companies are listed on the Toronto Stock Exchange, together valued at $381 billion. This city is home to 57 percent of the world’s publicly traded mining companies.
Strength and Stability
But mining has an impact across the country, driving the economies of Quebec, Ontario, British Columbia, Saskatchewan and beyond.
Since 2004, Canada has been the top global destination for mineral exploration investment. And it’s easy to see why. For six straight years, the World Economic Forum has rated our banking system the soundest in the world. Our net debt-to-GDP ratio and our business costs are the lowest among G7 countries. Canada has a triple-A credit rating from all the major credit agencies. And Bloomberg ranked us the world’s second-friendliest country for business.
Because Canada has a first-rate fiscal foundation, we ended 2013 as one of the top-growing economies in the G7.
Over the coming decade, hundreds of major resource projects, worth $650 billion, are slated to come on stream here. Few other countries in the world are bringing on projects of this scale, at this pace.
Your industry employs more than 400,000 people across this country. Mining accounted for 20 percent of the total value of exported Canadian goods — in a nation where one in five jobs are tied to international trade.
That is why I have been travelling around the world to make sure this industry has even more opportunities to succeed.
I was recently in India, where I signed a Letter of Intent for cooperation in iron ore and steel. In China, I signed a Memorandum of Understanding on bilateral investment and green mining. China alone accounts for 40 percent of world metal demand.
Without exception, in each country I have visited one overarching message is clear: the world wants and needs Canada’s vast resources; the world wants to do business with Canada; and the world admires Canada's economic and social success.
Before I continue, let me take a moment to address an issue that is undoubtedly on the minds of many of you. That is the decision to reject Taseko’s proposed New Prosperity mine, a decision which I appreciate some people in the industry are questioning. You know that our government has taken action and has advocated for your industry in Canada and around the world. However, government has a responsibility to balance economic and environmental considerations when reviewing resource projects. New Prosperity underwent a rigorous review process by an independent panel. The panel identified significant adverse environmental effects, very similar to those identified by an earlier panel report in 2010. Based on that finding, the project was not approved. We invite the submission of another proposal that addresses the environmental issues.
Let me emphasize what I hope you know: our government remains committed to supporting your industry, and we are taking action to help you grow.
Responsible Resource Development
This past year has been challenging for many, with capital very hard to come by, especially for smaller exploration companies. But I am confident that the new issue market will rebound, along with commodities prices, as they always have. And our government will help you maximize the potential of Canada’s natural resources.
Let me give you examples of the action we are taking.
Canada is modernizing its regulatory system for resource project reviews. Our plan for Responsible Resource Development strengthens environmental standards, with the goal of world-class protection. At the same time, it is providing certainty and predictability for investors by introducing fixed timelines for assessments and reducing duplication.
Our plan also strengthens Aboriginal consultations. We know the importance of skills, training, and jobs for Aboriginal communities — mining employs more Aboriginals in Canada than any other sector in the Canadian economy. So we want Aboriginal Peoples to achieve long-term benefits from the development of our resources.
Geo-mapping for Energy and Minerals (GEM)
To help companies target new exploration activity in Canada’s North, we have committed an additional $100 million over the next seven years for the second phase of our Geo-Mapping for Energy and Minerals, or GEM, Program.
Prior to the 1880s, most major deposits in Canada were discovered by accident. That was then, and this is now. The modern mining industry simply cannot hope to find gold in a river. When exploring for minerals in the second-largest country on Earth, good geological data helps exploration companies find the needle in a haystack.
Many companies have credited the GEM program for their investment decisions, companies like Stornoway Diamond Corporation — GEM helped them discover kimberlite in Nunavut. And a junior exploration company, Ryan Gold Corporation, used GEM data to find major gold deposits in the Yukon.
Mineral Exploration Tax Credit
In Economic Action Plan 2014, we extended the 15 percent Mineral Exploration Tax Credit, continuing an incentive that some have called the “lifeblood of the exploration industry.” Since 2006, this tax credit has helped junior mining companies raise over $5 billion for exploration. In the struggle to secure capital, it has been a big help, and I am very happy it was extended in this last budget.
Market Diversification
Of course, as any prospector will tell you, it is not enough to get resources out of the ground — you have got to sell them. Market diversification has been one of this government’s top priorities. We have pursued an aggressive free trade agenda abroad. And we are getting results.
We now have free trade agreements with 10 countries. We recently concluded a Comprehensive Economic and Trade Agreement with the European Union, the world’s largest economy. This is a game-changer: the most comprehensive free trade agreement in the history of our nation, more ambitious than NAFTA itself. The EU contains 28 countries, a market of 500 million people and annual economic activity of almost $17 trillion, making it the largest economy in the world.
But that is not all. We are also engaged in negotiations of the Trans-Pacific Partnership, a major Pacific trading bloc.
Moreover, Canada has concluded Foreign Investment Promotion and Protection Agreements with 26 countries. The risks of investing in a foreign country can be high. Our companies need to know their capital will be protected. FIPAs set binding obligations on how governments treat Canadian investors. By setting out clear rules and enforcing them, FIPAs protect more than half of Canadian foreign direct investment and encourage more foreign investment.
Mandatory Reporting
Just as our government has taken action to support Canadian mining, your industry, in turn, must fulfil its responsibility to Canadians.
Mining in any jurisdiction must be undertaken in an honest, open and transparent way. At last June’s G-8 meeting, Prime Minister Harper committed to implementing transparency and accountability through mandatory reporting standards for Canadian extractive companies.
Your industry was proactive in responding to the call for greater transparency, which is an impressive example of enlightened self-interest. The Prospectors & Developers Association of Canada, the Mining Association of Canada, Publish What You Pay and Revenue Watch Institute together formed a Working Group to develop a framework for mandatory reporting standards. That framework was published in January 2014. This working group has informed the Government’s approach, and we thank the Working Group for your contribution to this important initiative.
The Government’s preference is to work with the provinces and territories to implement mandatory reporting standards through the securities regulators. However, let me be clear: we made a commitment, and we will follow through on it. If the provinces do not implement adequate standards, our government will enact federal legislation to move this initiative forward by April 1, 2015. This is not our preferred option, but we will follow that road if necessary.
We are looking at a system based on several principles:
There must be a pan-Canadian approach to mandatory reporting standards. We do not want to see some provinces implement standards, while others do not.
We will ensure equivalency with other jurisdictions in Canada and abroad. In other words, if a province implements standards consistent with the federal parameters, we would recognize its approach.
We will require Canadian extractive companies to publicly report payments over $100,000 to all levels of government, both domestic and international. The standards would capture public and medium-to-large private companies on a project-by-project basis. We want to make it as easy as possible, so we will not create a central database. Instead, we would require that reports be posted to company websites, with the Government and the public notified.
We aim to ensure these standards are low-cost to industry and government and do not put Canadian companies at a competitive disadvantage.
Our government will continue to consult with provinces, Aboriginal groups, industry and civil society to design reporting standards that are practical, effective and ensure equivalency.
We are determined to see this initiative succeed so that citizens of resource-rich nations around the world are better informed and benefit from the natural wealth of their countries.
Conclusion
Let me close as I began: Canada is the mining capital of the world. Mining is indispensable to our government’s priority, shared by most Canadians: creating jobs, growth and long-term prosperity. Mining provides the raw materials to power the world’s economy and our daily lives.
That is why we are working so hard to support your industry, encourage its growth and advance its reputation. And it is why we will continue to look for ways to make Canada an even better place to invest.
Thank you all for your participation, and I wish you a very successful convention.
