Mining News

Quebec’s self-inflicted wounds

Posted by Alana Wilson on 3/5/2014 2:14:57 PM

By Alana Wilson

The Globe and Mail featured an interesting article by David Parkinson on the decline of Quebec’s performance in the 2013 Survey of Mining Companies. In it he notes the speed with which Quebec has dropped from the most attractive jurisdiction for mining investment concluding “the government has shown just how little time it takes to turn a key industry against you”. Parkinson cites a number of roadblocks introduced in the just the last year for mining investors including:

  • Passing a new Mining Act which added new commitments to local economic spinoffs and set up potential legal battles with aboriginal communities over their right to participate in the approval process,
  • Increased taxes on mineral production, and
  • Proposed new powers for Quebec-registered companies to ward of hostile takeovers.
“In short, Quebec is distinguishing itself by adding costs, risks and barriers to mining investors – much of it in the name of extracting more tax dollars, more jobs and more benefits for Quebeckers. And it has done so at a particularly inopportune time, as the global appetite for mining financing and investment has taken a harsh turn. Instead of attracting the increasingly scarce dollars, Quebec’s policy shifts have given miners a grocery list of reasons to stay away.”

Other provinces, including BC and Ontario, were also noted to have world-class mineral potential (BC ranked 5th for mineral potential, Ontario 12th) but were limited by regulatory inefficiency and uncertainty.

“Ontario, for instance, ranks considerably lower than Quebec on the policy-perceptions front (28th), bogged down by government indecision over expected changes to mining taxation, uncertainty over native land-claims issues, and political wrangling over funding for desperately needed infrastructure. British Columbia’s ongoing disputes over native land claims and cumbersome environmental assessment process have garnered it an even lower policy ranking, at 32nd in the survey.”

Despite these shortcomings, the author noted that Canada in general remains highly desirable for mining investment with five provinces ranking in the top-20 for attracting mining investment.

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