Mineral exploration spending expected to plummet this year in Nunavut, Yukon
Nunavut faces biggest predicted drop but still tops Yukon and N.W.T.
Natural Resources Canada predicts companies' spending on mineral exploration and deposit appraisal overall in the Yukon, the Northwest Territories and Nunavut will plummet by 32 per cent in 2016.
The three territories combined are expected to see $266 million in spending this year, compared to $389 million in 2015. Nationally, spending will fall by 18 per cent.
Back in 2013, Nunavut alone had nearly as much investment as all three territories are predicted to see this year. This year it's expected to see the biggest year-over-year drop among the territories with spending estimated at $109.9 million compared to $215.1 million in 2015 — a decline of 49 per cent.
Spending in the N.W.T. is expected to remain virtually the same (around $100 million) as last year and the year before while Yukon could see a drop of 23 per cent to $56.4 million.
Natural Resources Canada's estimates for 2016 are based on early questionnaires sent to companies asking them how much they plan to spend. The numbers are continually reworked over the course of the year as companies actually spend their money.
In the North, the summer months — when conditions are more hospitable to drilling — are key indicators and not accurately reflected in spending estimates until much later in the year.
N.W.T. 'still isn't sorted out after devolution'
The Fraser Institute released its annual survey of mining companies earlier this month, ranking 109 jurisdictions worldwide based on how factors such as taxation and regulation affect exploration investment in each jurisdiction.
Paradoxically, considering its predicted drop in investment this year, Nunavut rose slightly on the report's investment attractiveness index to 23rd from 34th. The report quotes an anonymous commenter saying "recent events with the Nunavut Planning Commission have created a significant challenge to meeting timelines as this group has not followed its own procedures."
Yukon, the highest ranking territory on the investment attractiveness index, dropped to 12th place from sixth last year. The report quotes a commenter from an exploration company saying boards such as YESAB "often outsource expertise to consulting firms to advise the board on the adequacy of proponent submissions, and the information requests and demands from these consultants and the board are strangling the industry at what should be a planning level study."
The N.W.T. dropped significantly to 35th place from 15th place on the investment attractiveness index. "A recent first phase exploration program that included five to 10 exploration drill holes of shallow depth was pushed to environmental assessment after 12 months of consultation and negotiations with government and First Nations," said a commenter from a consulting company, referring to a project near Behchoko, N.W.T., that was ultimately dropped by Husky Energy.
Yet another commenter said the N.W.T. has "an ineffective regulatory system that still isn't sorted out after devolution."
In the legislative assembly recently Premier Bob McLeod said the territorial government wants to speed up a review of the Mackenzie Valley Resource Management Act, a major piece of legislation that governs the territory's land and water boards, and which was not passed down from the federal government after devolution.
"We, during devolution, agreed with the [federal] government of the day that they would review the MVRMA within five years. We would make a representation to move that up faster with this new Government of Canada," he said.