Canada plummets as place for investment in mining industry ranking

Once home to four of the top 10 most attractive places for investment, Canadian provinces and territories have plummeted in the Fraser Institute’s annual survey of mining companies.

Survey was conducted before Teck Resources withdrew from Frontier Mine project

A worker walks underground at Goldcorp Inc's Borden all-electric gold mine near Chapleau, Ont. A new survey of mining company executives shows Canada is becoming a less attractive place for investment. (Chris Wattie/REUTERS)

Once home to four of the top 10 most attractive places for mining investment, Canadian provinces and territories have plummeted in the Fraser Institute's annual survey of mining companies.

"We do this survey every year, but for the first time in a decade, no Canadian province or jurisdiction ranked in the global top 10," said Ashley Stedman, a senior policy analyst with the institute.

The survey asks mining executives to offer their perception of how public policy — on taxation, the environment, and labour, among other issues — affects the industry in more than 80 active mining regions worldwide.

Those responses were combined with a region's overall geological potential to form a score on the institute's investment attractiveness index out of 100.

In 2018's survey, Saskatchewan, Quebec, Yukon, and the Northwest Territories broke the top 10, and all Canadian regions except for Nova Scotia, Alberta and New Brunswick broke the top 20.

Saskatchewan claimed the top spot in the world for its mining-related policy.

But in 2019, every Canadian jurisdiction but Alberta, Nova Scotia, and Ontario, dropped down the list. And in the North, where mining is the main driver of the economy, all three territories dropped more than 10 places.

"Policy and regulatory uncertainty is escalating across the country," said Stedman. "This should be a serious concern for policymakers."

Uncertainty, delays, and lack of transparency

The single biggest drop in the country was in New Brunswick, which lost nearly 20 points on the index over trade uncertainty and decreasing potential. 

But on the policy index, which measures how government policies make investment more or less attractive to the industry, every Canadian region suffered. The N.W.T. and Manitoba scored especially low, dropping 14 and 22 points respectively. Yukon dropped more than 10 points.

According to the survey, uncertainty over land claims and consultation requirements were a major driver of that decline, 

In the N.W.T. and Nunavut, infrastructure was also a concern. Nunavut ranked below Nicaragua on infrastructure; the N.W.T. ranked below Mali.

In Yukon, everyone surveyed said a lack of transparency around the permitting process discouraged investment. The numbers were almost as bad in the N.W.T., where 80 per cent said it was a concern.

There and in Nunavut, uncertainty over which regulations will be enforced is almost as discouraging.

The territories also fared particularly poorly in a sub-survey focused on permitting times.

In Nunavut, N.W.T., and Yukon, no respondents expected to receive their permits in three months or less. In the N.W.T., 20 per cent said they expected it to take two years or more.

Everyone who responded in the Yukon and N.W.T. — and the vast majority of respondents in Nunavut — said permitting times are only getting longer.

"We want to see it as a report card on government policies," said Stedman. "Investors are raising the red flag here that governments need to streamline regulations and provide certainty."

Alberta scores higher, but before Teck Mine

Elsewhere in Canada, the findings are not much better.

In Quebec, which dropped 12 points, and British Columbia, which dropped four, mining executives voiced concern about uncertainty over unsettled land claims, protected areas and environmental regulations.

In Saskatchewan, down 10 points, it was tax policy and regulatory duplication that had executives worried.

The mineral industry did see some silver linings in Alberta, which shot up more than 20 places in the rankings and became Canada's highest ranking jurisdiction on policy alone.

Like in Ontario, mining executives were less concerned about uncertainty over environmental regulations and enforcement following the election of a conservative government in Alberta.

But those numbers don't tell the whole story — Stedman said the 2019 survey doesn't reflect the fallout over Teck Resource's Frontier Mine, a project that was abandoned amid significant public opposition.


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