Ford Government favours mining friendly approach
With the seemingly anti-development Liberal government firmly in its rearview mirror, domestic and international mining companies are looking forward to a new regulatory regime in Ontario under Doug Ford’s PC government.
The Fraser Institute, world-renowned economic thinktank, provides annual glimpses into jurisdictional attractiveness. The Institute Survey of Mining Companies rates 91 jurisdictions around the world based on their geologic attractiveness for minerals and metals and the extent to which government policies encourage or deter exploration and investment. Finland ranks as the most attractive jurisdiction in the world for mining investment, followed by Saskatchewan. Quebec and Ontario are rank in the top ten globally.
On one of the dimensions of permit-times that the institute asked respondents to assess—how long it takes to receive the necessary permits — 85% of respondents in Quebec, 71% of respondents in Ontario, and 61% of respondents in British Columbia indicated that they received the necessary permits in six months or less. Canadian jurisdictions, on average, performed better on this measure when compared to competing jurisdictions.
Notwithstanding the relative attractiveness for Canada, Ontario has slipped over the years.
Mining Life wanted to ask two questions of Ontario’s new Mines Minister Greg Rickford. He didn’t have time to speak with us so his Press Secretary provided these responses to our two questions.
1. Ontario has seen a steady degradation of its standing as an attractive jurisdiction to conduct exploration and development. What is the government’s plan to reverse this trend and what specifically does Minister Rickford intend to do to lead this process?
Ontario is fortunate to be rich in mineral resources, supporting our renowned mining industry. Mineral production in Ontario supports 26,000 direct jobs and 50,000 mineral manufacturing and processing jobs. Ontario’s mining industry is not only a major economic engine in the north, but it supports local economies across the province and is a key driver of the provincial economy as a whole. We are committed to supporting our mining industry, and we are committed to unlocking the incredible opportunities that exist in our northern regions.
Ontario was once the leader for mining exploration spending in Canada. In 2017, the province fell to second place and is expected to remain in second for 2018. Ontario can – and must – do better. Our government will work with industry and Indigenous partners to address key issues facing Ontario’s mining and exploration sector, including cutting red tape and curbing energy costs.
2. One of the common challenges facing exploration companies in Ontario is over-regulation. Is the ministry actively reviewing those regulations and if so, please be specific about the regulations that are identified as most concerning?
Our government will continue to take concrete measures to make Ontario open for business, grow the economy and help create and protect good jobs in northern Ontario and across the province. Ontario is lowering taxes, reducing regulatory burden and making life easier for people and businesses who want to invest in the north. Part of our plan to make it easier to do business in Ontario is establishing a special mining group that will focus on speeding up regulatory approvals and attracting major new investments. We look forward to insight from the group that will help us cut red tape and drive new mineral development.
IAMGOLD CEO Stephen Letwin has some insight. In a presentation to the Timmins Chamber of Commerce in late 2018, he told reporters afterwards that permitting in Ontario is a slow, grinding process.
“I am not going to turn this into a political talk but anything you could do to help us in the permitting with the government is welcome,” Letwin told the chamber audience.
“The one concern I have as a Canadian is that we get bogged in the mass of regulations.
It’s not to take away from the need to be environmentally friendly or the need to work with our partners, but it really seems to take a lot longer today and it’s a lot more expensive to get projects going.
“The problem is when you extend a project over time, you become vulnerable to price swings. That can hurt you quite badly,” he said, adding that gold mining can be difficult.
IAMGOLD will be spending more than $1 billion at Coté Lake before earning a cent. In a news release, the company said the initial capital cost will be $1.4 billion.
“I think it is a generic concern because we have seen delays. We haven’t encountered too many delays so far. I’d say it has been about a six-week delay in some of our stuff. I am not going to name names, but it is always a concern of mine when it comes to a project this size that it is not going to move as quickly as you want it too,” Letwin said.
“You know if we call on our business partners to help us, we will be specific about what we’re seeing and why we need the help.”
Premier Doug Ford raised eyebrows during the 2018 Spring election when he suggested he was prepared to drive a bulldozer himself up to the Ring of Fire area in order to get that multi-billion-dollar mining project underway.
When it comes to transparency Ontario still lags behind. When the Fraser Institute asked about transparency in the permitting process, 50% of respondents in Ontario, 48% of respondents in British Columbia, and 40% of respondents in Quebec cited a lack of transparency as a deterrent to investment. In contrast, only 9% of respondents in Sweden and Western Australia saw the level of transparency as a deterrent to investment.
This is an area where many Canadian jurisdictions performed poorly compared to their counterparts in the United States, Australia, and Scandinavia.
As with transparency, a number of the jurisdictions in the United States, Australia, and Scandinavia outperformed many of the Canadian jurisdictions in providing confidence that the necessary permits would be granted. On this measure, Quebec and Ontario perform better than British Columbia, and Western Australia performs better than all three jurisdictions. Specifically, in Quebec and Ontario, 90% and 88% of respondents indicated that they were either highly confident or confident that they would receive the necessary permits, compared to 73% in British Columbia.
According to the Ontario Mining Association, OMA there are:
- 38 mine sites operating in Ontario; Nickel, gold, copper, zinc and platinum group metals, Diamonds, salt, gypsum, talc, calcium carbonate, nepheline syenite and other industrial minerals
- Ontario is the largest producer in Canada of gold, platinum group metals and nickel, and the second largest producer of copper. The province is also a major producer of salt and structural materials.
- Mining benefits all areas of the province, providing a broad scope of employment and entrepreneurial opportunities.
- Ontario is one of the safest mining jurisdictions in the world and mining is one of the safest industries in Ontario, achieving a 96% improvement in lost time injury frequency over the past 30 years.
- Value of mineral production in Ontario was $9.9 billion in 2017.
Newly-elected Timmins mayor George Pirie, the former CEO of Placer Dome Canada, feels Timmins is one city that still has enormous potential.
In his opening address to citizens and the new council, Pirie outlined a number of possibilities.
“Our mining sector will continue to prosper as there is no better place to explore than from a base in Timmins. There is no better place to locate your mills, refineries and smelters than here in Timmins. There is no better administrative center than here in Timmins from which to run your gold, base metal, battery metal, diamond or ferrochrome operations from,” stated Pirie.
Pirie added, “Our energy sector is unlimited with geothermal potential in our deep mines and frigid cold air in the upper levels. Why is this potentially important? Because the largest single cost in the cloud computing world that mines big data is air conditioning. Is it possible to attract these companies to Timmins? Well I can only ask why not, Sudbury has a neutrino laboratory.”