Yukonomist: Your Northern regulatory adventure awaits!

Yukonomist Keith Halliday

Yukonomist Keith Halliday

“Your Northern adventure awaits!” blared the headline on a recent YESAB assessment officer job ad in the Whitehorse papers.

Never mind the Freudian slip by YESAB recruiters possibly revealing that southern talent is top of their target list, rather than Yukon First Nations or non-First Nations applicants.

Focus instead on the word “adventure.”

It’s not a word that crossed my mind at the last YESAB public meeting I attended.

But they may be onto something. One of the many unexpected things that happened during the pandemic was a major rally in global commodity markets.

Gold was under US$1,500 per ounce in December 2019. Now it’s over US$1,800 per ounce.

Copper was around US$2.75 per pound in December 2019. This week it was over US$3.50 per pound.

Silver went from around US$17 per ounce to over US$25 per ounce.

Even boring old iron ore had a great year, up a startling 75 per cent since before the pandemic. That will be of little solace to the owners of the Yukon’s Crest deposit, said to be North America’s largest, since it’s located in the Peel watershed.

You might have expected gold to surge during a pandemic. The Yukon’s favourite metal is a well-known haven for investors when turmoil strikes. But copper?

Copper is heavily used as wiring in construction and industrial production. So it tends to be a bellwether for the global economy. Despite the short-term economic mayhem caused by the virus, markets now seem convinced that the global economy will recover quickly and keep on growing.

Copper is surging thanks to vaccines, extremely low interest rates and China’s economy returning to full speed. Copper enthusiasts are further buoyed by the prospect of climate change sidelining fossil fuels in favour of electric vehicles and heaters, all of which require lots of copper wire.

The Yukon has plenty of copper potential. Minto has been mining copper for 13 years. BMC’s proposed Kudz Ze Kayah development near Ross River also produces copper.

The adventure promised to YESAB assessment officers may include some blockbuster mining applications.

One could be Casino, the enormous copper and gold property northwest of Carmacks. The company claims it is one of the largest copper-gold deposits on the planet. The mine could have a power system with more megawatts than the rest of the Yukon put together, and process 120,000 tonnes of ore per day through its mill.

The mosquito in the ointment is that, while recent graduates of Assessment Officer School may like regulatory adventure, mining investors do not.

The Yukon Mineral Development Strategy advisory panel just released its recommendations after almost two years of work. One of its six strategic priorities is for the Yukon to have an “attractive investment climate” for mining companies. That means our tax rates, regulatory processes and overall business environment are conducive to running a mining project profitably.

Another priority is to “establish effective, efficient and transparent environmental and regulatory processes.”

These high-level objectives make a lot of sense, although the devil is always in the details whenever you talk about taxes or regulatory processes. So do the report’s other strategic priorities around First Nation involvement in the industry, benefit sharing with all Yukoners, environmental responsibility and workforce training.

The report includes 79 detailed recommendations. These include a complete revamp of our aged mining legislation and regulations, and making sure they are consistent with the United Nations Declaration on the Rights of Indigenous Peoples. The panel recommends this be completed within three years.

Now that the panel’s recommendations are on paper, the next steps are up to the Yukon government.

There is going to be a surge of mining investment around the world in the next few years thanks to the surge in commodity prices. Projects from Kazakhstan to Nunavut will be competing for capital. Every investment banking analyst on Bay Street will know that the Yukon government is planning potentially transformational changes to its mining laws and regulations.

This is a big deal in an industry where lawyers and regulatory analysts spend years arguing over detailed technical definitions that can have make-or-break implications for a project.

Rewriting all those rules and regulations while consulting with First Nations and industry is going to be a mountain of work. Many more officials, lawyers and consultants will have to join the adventure.

The Yukon government will need to run a tight, disciplined and brisk process to get it done in time.

Anyone who remembers the recommendations of 2017’s Yukon Financial Advisory Panel or the 2018 Health and Social Services review panel may be getting nervous by this point.

If the Yukon government runs a sloppy, erratic and slow process, it will mean we lose good projects to other provinces and countries. And our economy becomes even more dependent on government.

The Yukon government created the panel and started this process. The puck is now in the Yukon government’s end of the rink. And the clock is ticking.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He is a Ma Murray award-winner for best columnist and received the bronze for Outstanding Columnist in the 2019 Canadian Community Newspaper Awards.

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