Mining creates jobs, but at what cost?

When a Yukon mine is up and running it is often assumed to be extremely beneficial for local employment. And let's make no mistake, it often is. If a rural Yukon community has a population of 300, and if 30 people get jobs on a mine site, it's a huge econ

COMMENTARY

When a Yukon mine is up and running it is often assumed to be extremely beneficial for local employment.

And let’s make no mistake, it often is. If a rural Yukon community has a population of 300, and if 30 people get jobs on a mine site, it’s a huge economic injection into the local community.

It must be noted that the jobs available in the mines can require quite specialized skills, and this can limit the number of local hires.

It is also the creation of jobs in regions that cry out for them. In communities outside of Whitehorse there tend to be fewer employment opportunities available. This is all well and good, but it takes more than 30 people to run a mine. So where do all the other employees come from?

According to a report done in 2013, back when there were three operational Yukon mines, 67 per cent of mine employees were not Yukon residents. That’s right, two-thirds of the direct mine work force came from Outside.

“Currently there are approximately 468 employees at the three operating mines and 156 identified contractors listed for the Wolverine mine. Of this combined amount of 624 identified positions, 417 or 67 per cent, are currently filled by labour based outside of Yukon,” states Ecofor’s report, Exploring Residency in Yukon, by J. Herkes, J. Mooney, and H. Smith.

Now this is not necessarily a bad thing, especially if you’re one of the workers with a job.

But this statistic must be taken in context of the amount of infrastructure costs that Yukon pumps into mine-related development, and the resulting tax dollars that are often used to clean up the mining mess that is commonly left behind.

Examples of infrastructure costs typically paid for by taxpayers and ratepayers are highway upgrades, power lines, and cheap electricity from the publicly owned energy utility.

Clean up costs are all around us, from Faro to Keno to Wolverine. The cleanup at Faro will cost a billion dollars of taxpayers money.

If one factors in the amount of taxpayer dollars spent on mines, and the fact that only one-third of the jobs go to Yukoners, one wonders if the taxpayer dollars are better spent on more sustainable and environmentally friendly occupations.

Forestry, agriculture, tourism, arts, outfitting and housing construction are all worthy endeavours suitable for receiving those tax dollars currently being spent on mineral extraction.

They would all employ Yukoners and some of these occupations are not as dependent on the boom and bust cycle that characterizes mining. And most of them don’t leave the industrial-sized mess that mining can leave.

Of course it would mean that Outsiders would no longer be able to get jobs in Yukon mines, but why should Yukon taxpayer dollars and the Yukon environment be sacrificed for their benefit?

To build a sustainable economy in the Yukon means creating wealth that stays within the Yukon.

Mining can even have a negative impact on other occupations. Imagine if there was development within the Peel watershed. It would eradicate wilderness tourism occupations, not to mention the ecological value of the region.

Now that is not to say all mining is bad. The Yukon gets a lot (and we’re talking about a billion here) from the federal government every year, and perhaps an argument could be made that this is the way the Yukon repays.

Resource extraction in the Yukon benefits the Canadian GDP as a whole, assuming one is into the “bigger is better” philosophy.

If two-thirds of the mine workers are from Outside, one assumes they are paying taxes in another Canadian province or territory.

That’s all very good and well, but it doesn’t exactly help the Yukon bank balance, even if it does enrich some other jurisdiction’s coffers.

It is important to remember that the Yukon government gets very little in the form of mining royalty income.

In 2013, Yukon received just under $18,000 in placer mining royalties. And in the same year the Selkirk First Nation got $215,773 in hard-rock mining royalties.

The Yukon government didn’t get any hard-rock mining royalties that year.

So it might be prudent to get some money from the Outside mine workers. The Northwest Territories has found a way to address this issue, and that’s through a payroll tax.

Anyone who works there pays a two per cent tax of their paycheque to the government. At the end of the year, if they file their taxes in the Northwest Territories, they get some of it back.

However, if you work in the N.W.T. but don’t reside there, as is the case for a lot of the diamond mine employees, you don’t get it back.

In this way, the territorial government gets a bit of cash from non-resident workers. And it also rewards those who either are resident or choose to become resident in the N.W.T. A similar tax is applied in Nunavut.

Mining can bring benefits to local communities, but those who promise a job bonanza often fail to mention that most mining jobs go to Outsiders.

Factor in the fiscal cost of infrastructure, the potential for environmental damage, the abysmal royalty regime and the possibility that taxpayers will have to pay to close and remediate a mine site: these costs of mining call into question the value of those few local jobs.

Mining, when done right, can be a benefit. It just might not bring as many jobs with it as the promoters would want us to believe.

Lewis Rifkind is the Yukon Conservation Society’s mining analyst.

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