Feds are key to making mining work in the North

Samson Hartland The Yukon Chamber of Mines is engaging in the 2015 federal election to ascertain party and candidate positions on Yukon's resource-based economy. We have submitted questionnaires to all four candidates and have publicly released the resul

COMMENTARY

by Samson Hartland

The Yukon Chamber of Mines is engaging in the 2015 federal election to ascertain party and candidate positions on Yukon’s resource-based economy. We have submitted questionnaires to all four candidates and have publicly released the results. In order to provide context to those responses, the Yukon Chamber of Mines will outline key priorities for the industry as we face uncertain times.

The mining industry is one of Yukon’s largest private sector employers and is the largest private sector contributor to Yukon’s economy, contributing close to $400 million dollars and accounting for 18 per cent of Yukon’s real GDP. These economic benefits permeate all sectors of Yukon’s economy, from the knowledge sector to tourism, government to retail, the service and supply sector and a myriad of small businesses.

Positive legacy benefits from mining are experienced by all who live here. The communities of Whitehorse, Dawson City, Mayo, Keno City, Faro and the power and transportation infrastructure that connect them and other Yukon communities are in one fashion or another a positive legacy of mining. So much of the infrastructure, as well as the recreational and cultural features which enrich our lives today, are the legacy of mining and exploration activity in Yukon.

However, we all know there are some challenges to be faced ahead while experiencing a downturn in the global economy, coupled with geo-political uncertainty here at the territorial level.

The good news is that we have an ability to reverse uncertainties through increased research, consultation and a harmonization of the regulatory process, in order to ensure we remain a competitive and attractive jurisdiction to invest in once the markets do turn around.

The questions we have asked Yukon’s four federal candidates fall into the following categories: First Nations relations and engagement, infrastructure development, and investment attraction.

 

First Nations relations  and engagement

The Yukon Chamber of Mines has advocated over the past year for all orders of government to work respectfully and collaboratively on resolving issues outside of the court room. Through the Umbrella Final Agreement and devolution, the federal government still maintains a pivotal role in the development of Yukon’s resources. Numerous Yukon First Nations, the Yukon government, and the federal government have all indicated they are supportive of resource development. However, the ever evolving legal landscape has made it challenging for proponents to navigate. What is unclear is how exactly the federal government meets its obligations associated with the duty to consult. To date, it has evolved through court decisions, and this method of governance is costly in both time and money, and damages existing relations between all parties.

 

Infrastructure development

Earlier this year the Yukon Chamber of Mines co-authored a report with the Prospectors and Developers Association of Canada and Mining Association of Canada entitled “Level the Playing Field.” In it, readers learned that the cost of developing a mine in Canada’s North is inherently more expensive than our southern counterparts due in large part to a lack of critical infrastructure such as energy and roads. In fact, mines in Yukon cost twice as much for producing gold mines, and 2.5 times more for other base metals over southern counterparts. Operating costs were also 30-60 per cent higher. These costs are a barrier to investment and render numerous projects uneconomic. The report recommends an increase to the Mineral Exploration Tax Credit for northern projects as well as numerous other tax incentives, in order to “level the playing field” for proponents.

 

Investment attraction

At the 43rd Annual Yukon Geoscience Forum and Trade Show this November, the Alaska Industrial Development and Export Authority will be providing a presentation on their successful infrastructure investment bank. Created in 1967 by the State of Alaska, they are a quasi-independent self-funding entity which provides loans and guarantees for major infrastructure projects and provides a return on investment for Alaskans. The fund began with seed funding of $100 million (which has since been repaid to the state) and has grown to $1.33 billion today. The incredibly successful model has supported projects such as the Skagway Ore Terminal, which is 100 per cent owned by AIDEA, the connection of the Red Dog Mine to a transshipment facility and numerous other resource development projects which faced challenges getting resources to market.

Yukon is ranked No. 1 in the world for its mineral potential and geological occurrences, beating out jurisdictions such as Alaska and Australia. Therefore, it is incumbent upon us and all orders of government to ensure that we are an attractive jurisdiction to invest in, while profiling Yukon as a leading example of how to balance environmental protections along with mining development.

A healthy mining industry positively impacts the lives of all residents of the Yukon. It is therefore key that each candidate demonstrate their knowledge and understanding of how the industry should move forward, at a time where the federal government is embroiled in legal battles which impede industry progress.

The federal government should support, regulate and be a partner to local governments, industry and First Nations, rather than an opponent in the courts.

Please visit www.yukonminers.ca to learn more.

Samson Hartland is the executive director of the Yukon Chamber of Mines.

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