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Northern Ontario mineral exploration slows to a crawl

Mineral exploration in northern Ontario has been on a steady decline for the past four years, and that's causing some to worry.

Low metal prices, government red tape, jittery investors conspire against exploration industry

(istock)
The prospecting industry is in a downward spiral at the moment. Some say they're pulling out of the industry due to a number of issues. Markus spoke with Minister of Northern Development and Mines Michael Gravelle. 11:26
Mineral exploration in northern Ontario has been on a steady decline for the past four years, and that's causing some to worry.

The executive director of the Ontario Prospectors Association is used to the cyclical nature of the exploration industry, but he said he isn't used to this.

"Exploration in northern Ontario is the lowest it's been, probably since I've been in the business, and I've been in the business 30 years," Garry Clark said.

The Ontario Prospectors and Developers Association's Garry Clark. (Gord Ellis/CBC)

He estimates the number of people employed in the industry is half of what it used to be, when metal prices were up.

Figures from the Ministry of Northern Development and Mines confirm the severity of the situation.

The number of active claims in the province has dropped by more than 16,000 thousand in the last five years.

(Ministry of Northern Development and Mines)

And exploration spending in Ontario is down about $100 million, compared to last year.

The president of the Northern Prospectors Association said the uncertainty is forcing people to leave the industry — and there's fear they could be gone for good.

"You either have to be lucky enough to have the same people come back or train new people," Gino Chitaroni said.

Stimulating the industry?

Despite the downturn, the ministry says Ontario is still the top jurisdiction for exploration in Canada.

The Prospectors and Developers Association of Canada made suggestions on how to stimulate the industry at this week's Energy and Mines Ministers' Conference in Halifax.

PDAC executive director Andrew Cheatle said the government could put in place the mineral exploration tax credit (METC).

"This helps investors [who invest] in what is naturally a high risk sector," he said.

"We're calling for the METC to be doubled and put in place for about three years."

Cheatle said his association is also calling for more infrastructure investment to unlock mineral potential.

Mines minister Michael Gravelle said there's an understanding that junior companies need easier access to capital through flow-through shares and other mechanisms.

"We're also recognizing that we perhaps need to find other ways to help [provide incentives for] the junior mining sector, and we're going to be continuing to work on that."

Challenges for the long term

However, "Ontario remains the top jurisdiction for exploration," Gravelle told CBC News on Wednesday.

British Columbia is second in exploration spending and, together, B.C. and Ontario make up 50 per cent of exploration expenditures in Canada.
Northern Development and Mines Minister Michael Gravelle says Ontario remains the top jurisdiction in Canada for exploration. (Gord Ellis/CBC)

"We're proud of the fact that we've got mines opening up in the province in Ontario this year, as we did last year," Gravelle said.

"But we recognize that what we're looking at is the challenge going through the long term, because it is exploration that makes it happen."

The ministry is working on a review of the industry to make recommendations, he noted. 

And there is talk about a common security regulator.

"We think that this initiative, if it is moved forward, will actually make it more flexible and easier for investment in the country and reduce some of the cost for exploration companies," Gravelle said, adding that talks are ongoing because not all provinces support the idea

Looking futher back, Gravelle pointed out Ontario exploration continues today at a rate higher than it was 10 years ago.

As dismal as the current state of exploration appears, Clark added the future holds promise.

"We're going to come out of this and, you know, we're going to be super busy again," he said.

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