North should expect five good mining years

Northern Canada can look forward to five years of good times in its crucial mining industry, suggests the author of a Conference Board of Canada report.

Northern Canada can look forward to five years of good times in its crucial mining industry, suggests the author of a Conference Board of Canada report.

“The expectation would be the next five years should be good years for that sector,” said Len Coad.

The study about the economic potential of the North, finds that spending on mineral exploration has been generally rising across Canada and especially in the North for about a decade. The last two years have seen a strong recovery to more than $2.6 billion, most of which is being spent in the three territories and northern parts of the provinces.

Exploration spending is forward-looking, so it can be used as a rough indication of future investment intentions, the report suggests.

That’s good news for all parts of the northern economy, because mining investment tends to bring with it needed infrastructure such as power generation that can be used by other sectors.

Coad said most of the power stations built in the Yukon and the Northwest Territories were originally built at least partly to supply an industrial project such as a mine.

“Then the system is designed to supply power to neighbouring communities,” he said. “You get the mining projects going forward. They build the power plants. They make the surplus available to local communities. That makes the communities easier places to live.”

The conference board says mining and energy development are likely to be the pillars of all the country’s northern economies for some time.

Coad said the challenge will be to balance the need for local control over land use with industry’s desire for efficient, timely and certain decision-making.

The northern regulatory process has been blamed for lengthy delays in projects such as the planned Mackenzie Valley natural gas pipeline. Studies have suggested major changes to that process that could require opening up land-claim agreements, but Coad said that shouldn’t be necessary.

“The process needs to be improved, (but) there has been progress,” he said.

“I think that most stakeholders would agree that putting the decision close to those affected is a good thing. The mechanism we have in place right now might not be satisfying everyone’s requirements, but that’s not a reason to start all over again.”

Coad said winning developments will be the ones based on clear agreements between industry and local people that spell out what both sides can expect. Smart companies will figure out that they’ll be more successful if they help communities be successful.

“Companies are very quick to assess where they can make the best contribution and build the best relationships with the local communities.”

The study is one in a series of reports the conference board is doing on northern economic development.