As we’re all aware, the mining industry’s role in the Yukon economy will be increasing over the next number of years.
With gold prices near record levels and emerging speculations of a new “motherlode” to be found somewhere in the territory, staking and exploration activity are unlikely to slow over the next decade.
As a recent Yukon News article has pointed out, the Conference Board of Canada is predicting 1,000 new jobs in the sector in the next year alone.
It is an exciting time to be in the territory. Especially for those with the ability and training to take advantage of the well-paying jobs that will come with the boom.
Not only that, but there will be increases in the spinoff economy if those employed in the sector continue to live and spend money in the Yukon’s communities.
Yet the territory’s population is far too diverse to survive off of a single industry.
Indeed, in the not-too-distant past the mining industry’s contribution to the Yukon economy was on par with tourism, so it cannot be counted on as consistently the backbone of economic development.
Similarly, pretty much anyone will tell you it is unwise to depend on a single resource or industry, especially in the case of a gold boom, since the price of gold is tied directly to the stock market, which is increasingly a less-than-stable mechanism in these days of speculation and market fluctuations.
That being said, the price of gold is high and the Yukon as a whole can benefit
from it in many ways.
But not if the royalty that the Yukon government collects is only 37 cents per ounce.
Gold is selling at just under $1,700 an ounce right now. The CEO of Newmont Mining Corp, the US’s largest gold producer, recently predicted that it could climb to $2,300 by the end of 2012.
Yet for some reason, the Yukon government and citizens are still only gaining the same amount we were a century ago, when gold was $15 an ounce, less than one per cent of its current price.
Furthermore, the above royalty regime only applies to placer mining claims, and their share of gold is declining.
Much of the new exploration taking place in the territory will come from hardrock mineral claims.
At the moment, the Yukon government only gains royalties from the extraction of hardrock resources once a profit has been made, whenever that happens, if at all (though company shareholders earn profit in the interim).
Is this the best way to go about it, particularly since the environmental effects of mining may be long-lasting, and may, if the mines do not succeed, become the responsibility of future taxpayers to support reclamation efforts?
The territory deserves a larger percentage of the profits gained from the resources coming out of its land. This is only fair.
Not only should this price benefit those being directly employed by the industry, but should also be used to sustain the diverse economy that we currently enjoy.
For example, the communities, which may end up growing in population, must be supported in order to ensure that they have the services and infrastructure to deal with population growth. This must happen without losing track of the social needs of the population so that families can grow in a positive environment, and the people who already live there have access to health and elder care they will need in order to serve out the rest of their lives.
As well, the predictable rising demand for energy across the territory could move away from the need to burn more diesel and instead turn to renewable forms of energy such as wind, solar, and geothermal.
A recent report has shown that the territory has vast potential for geothermal, so let’s take advantage of it.
Third, the arts and music scene that so many of us enjoy could be ensured continued government and community support, so that tourists continue to be inspired to travel here, and outside musicians continue to be interested in touring in the North.
The Yukon Chamber of Mines may say that changing the royalty regime will be bad for the industry, but if Newmont’s predictions are correct, what industry would be scared away when prices could rise another $500 an ounce over the next year and a half?
Besides, investments to support ideas such as these will be enjoyed by all of those employed in the industry who wish to live in the territory.
People tend to move here from down south not just for the employment opportunities à they stay because we have this amazing community, and we can keep and improve on that in so many different ways.
Furthermore, increased royalty revenues would reduce the territory’s dependence on Ottawa for the current two-thirds of the budget that Ottawa currently supplies. And who thinks the federal government would have a problem with that, in these days of supposed need for tight budgets on all levels?
The NDP’s plan to create a Resource Legacy Fund is a smart way of taking advantage of this boom time, in a way that will benefit the population even into the future if prices and mining activity decline.
This territory has incredible potential for a future not based simply around the mining industry, but if that is a particularly strong part of the economy right now, then let us benefit from it in a way that will do so for the long term.
The NDP’s plan does not call for a specific rise in royalties à rather it opens the issue up for discussion with all of Yukon society, since this land belongs to all of us and our future generations.
It is only fair. We love this land. We live here for a reason. Let’s take advantage of it, for all of our sakes.
Robin Reid-Fraser
Montreal