MEJIA, HILL: BC's NDP... first they make life harder for oilmen, now it's miners

Julio Mejia and Tegan Hill are economists with the Fraser InstituteBeginning on March 26, thanks to a new policy from the Eby government, the province will consult with First Nations before deciding whether or not mining companies can claim or “stake” land for mineral exploration. This new rule, which adds a major hurdle to the permit process and increases uncertainty in mining exploration, will further deter investment in British Columbia's mining sector and hurt the province’s already struggling economy.Specifically, under the new rule, before the B.C. government approves or denies any mineral claim, it will consult with First Nations to assess how the “claim may impact their rights and title, including those related to culture, spirituality, environment, and economy. Where specific concerns arise, the Province and First Nation will discuss how to address any such concerns.”Not only does this add a major step to the exploration process —particularly in areas with multiple First Nations groups — but it requires companies to publicly disclose where they plan to “stake” before they receive permission, which is like forcing a company to give away trade secrets. And this new rule is only the latest investment-killing move by the Eby government, which last year suspended previously-issued mining permits in parts of B.C. and effectively gave First Nations the power to negotiate agreements with mining companies to remove the suspensions.Based on results from the latest survey of mining executives, more uncertnaity is the last thing B.C.’s mining industry needs right now. The survey measures the attractiveness of jurisdictions based on their mineral potential and government policies. Currently, while B.C. ranks as the 17th-most attractive jurisdiction in the world for mineral endowment, it ranks 32nd out of 86 jurisdictions in terms of government policy, making it the second-worst performing province (only Nova Scotia fares worse).Why?According to the survey, 68 per cent of respondents for B.C. said uncertainty around protected land deters investment compared to only 26 per cent for Saskatchewan, the second-most attractive jurisdiction worldwide on government policy (and the most attractive Canadian jurisdiction). Similarly, 64 per cent of respondents for B.C. said uncertainty due to disputed land claims deters investment compared to 37 per cent for Saskatchewan.Not surprisingly, permit approvals are also a problem in B.C. Specifically, 39 per cent of respondents said permit wait times exceed seven months — the longest reported wait time of any province included in the survey. To make matters worse, according to 50 per cent of respondents for B.C., permit approval times have either “somewhat” or “considerably” lengthened over the past decade.And remember, this survey was conducted before the B.C. government’s new First Nations consultation requirements, which will create even more uncertainty in the province and further deter investment, with British Columbians paying the price.Consider the significance of the mining industry in B.C. In 2022 (the latest year of available data), the mining industry injected $3.7 billion into local economies across 200 municipalities and First Nations communities, primarily through the sale of materials, goods and services used in the mining process, with a total estimated economic impact of $18 billion. Also in 2022, the mining sector directly contributed $3 billion in revenues to municipal, provincial and federal levels of government.In 2023, the industry generated export earnings of $21 billion, representing 37.8 per cent of B.C.’s exports. And crucially, the industry provided income for more than 16,000 families and paid wages/salaries well above the average. Less mining investment means less economic activity, lower incomes and fewer jobs for British Columbians, including in remote and rural areas that can ill afford to lose investment.Premier Eby’s new mineral staking rules will further delay the development of new mines, and may kill some exploration projects before they break ground. The mining companies will simply look elsewhere for minerals, which means many British Columbians — and many Indigenous communities across the province — will lose a key source of income. If the government wants to avoid this outcome, it should swiftly reconsider its new staking rules.Julio Mejia and Tegan Hill are economists with the Fraser Institute.

MEJIA, HILL: BC's NDP... first they make life harder for oilmen, now it's miners

Related Stories