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Manitoba mining takes deep hit

Province drops in Fraser Institute survey's ranking of investment attractiveness

TREVOR HAGAN / WINNIPEG FREE PRESS FILES</p><p>The mining industry in Manitoba is facing significant downsizing. Vale closed a nickel mine in Thompson last year and will be closing its smelter later this year.</p>

TREVOR HAGAN / WINNIPEG FREE PRESS FILES

The mining industry in Manitoba is facing significant downsizing. Vale closed a nickel mine in Thompson last year and will be closing its smelter later this year.

Hey there, time traveller!
This article was published 22/2/2018 (335 days ago), so information in it may no longer be current.

As if things couldn’t get any worse for the mining industry in Manitoba, its ranking in an annual survey on investment attractiveness has dropped dramatically.

In the Fraser Institute’s annual Survey of Mining Companies, which is being released today, Manitoba fell from second place among 104 jurisdictions last year to 18th place among 91 this year.

The survey asks industry players for their views on all sorts of policies from taxation, various types of regulations, availability of skilled labour, political stability, socioeconomic agreements/community development and uncertainty concerning environmental regulations and protected areas.

Not surprisingly, Canadian jurisdictions regularly rank high in the survey, which has been conducted annually since 1997. Manitoba has ranked as high as No. 1 in the past.

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Hey there, time traveller!
This article was published 22/2/2018 (335 days ago), so information in it may no longer be current.

As if things couldn’t get any worse for the mining industry in Manitoba, its ranking in an annual survey on investment attractiveness has dropped dramatically.

In the Fraser Institute’s annual Survey of Mining Companies, which is being released today, Manitoba fell from second place among 104 jurisdictions last year to 18th place among 91 this year.

The survey asks industry players for their views on all sorts of policies from taxation, various types of regulations, availability of skilled labour, political stability, socioeconomic agreements/community development and uncertainty concerning environmental regulations and protected areas.

Not surprisingly, Canadian jurisdictions regularly rank high in the survey, which has been conducted annually since 1997. Manitoba has ranked as high as No. 1 in the past.

But uncertainties over the future of the carbon tax regulations in Manitoba, the current debate about the potential dramatic rise in Manitoba Hydro rates and ongoing uncertainties about protected land and the consultation process with First Nation communities has apparently soured survey respondents about the province this year.

Andrea McLandress, executive director of the Mining Association of Manitoba, is no fan of the Fraser Institute survey, but doesn’t dispute the findings which show the level of concern that currently exists in the way the industry views doing business in Manitoba.

"The methodology would likely not hold up to scrutiny," McLandress said. "In actual fact, not a lot has changed since last year."

That would call into question the reasonableness of the fall from second to 18th place in one year. But McLandress was also able to articulate a long list of issues in Manitoba that the mining industry is not pleased about.

"There is a pretty great deal of uncertainty in a number of areas," she said.

The industry in Manitoba is currently facing significant downsizing. Vale closed a nickel mine in Thompson last year and will be closing its smelter later this year. HudBay is facing the end of the cycle for its long-standing large mine in Flin Flon, as well as a much smaller one in Reed Lake.

But McLandress is referring to things like the mining tax rate in Manitoba, which is higher than in Ontario or Saskatchewan, and she said the industry has grave concerns about a potential 7.9 per cent increase in Manitoba Hydro rates, as well as future uncertainties about a carbon tax in Manitoba that’s different than the rest of the country.

"If you are a big institutional investor, or a Chinese or Indian investor, would you look for potash in Manitoba or Saskatchewan? Lithium in Manitoba or Ontario?" she said.

"That’s one quick and easy illustration right there."

In the policy perception index part of the survey, which is a report card to governments on the attractiveness of their mining policies, Manitoba dropped from sixth to 27th, the biggest decline of any Canadian jurisdiction, and that was after five years of progressive improvement.

Survey respondents said political instability, taxation regime and socioeconomic agreements/community development conditions were deterring investment.

Ken Green, one of the authors of the report, said they are used to criticisms about the way the survey is put together, but he said the Fraser Institute stands by the findings.

"The thing is, we are measuring something. We are not opining on anything," he said.

"We are measuring the actual sentiment or perceptions of the people who invest in mining. If the government wants more investment in mining these are the people, theoretically, they will have to convince."

There is no doubt the provincial government is aware of the challenges in the sector. Mining development is seen as a key future economic development piece, especially in the north.

The Look North report on economic development in northern Manitoba, said, "If you are looking for a ‘magic bullet,’ then mining could still very well be it, albeit one that is slow to deliver."

Ron Evans, chief of Norway House Cree Nation is co-chairing a task force with former Progressive Conservative cabinet minister Jim Downey, to develop a new provincial mineral development protocol with First Nation communities.

He said their work is going well, maybe even too good, as more and more communities are wanting to get engaged in the discussions.

"There is a snowball effect," he said. "We have been meeting with stakeholders including First Nations leadership. Now there is an expectation that we visit more communities which is becoming even more challenging."

A recent exploration agreement signed between Newfoundland-based Altius Minerals Corp. and the Bunibonibee Cree Nation of Oxford House is seen as a strong step in the right direction.

Lawrence Winter, Altius’s vice-president of exploration, said, "Not every province helps out the way Manitoba did with us."

martin.cash@freepress.mb.ca

Martin Cash

Martin Cash
Reporter

Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.

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History

Updated on Thursday, February 22, 2018 at 10:15 AM CST: Adds report

12:42 PM: Fixes fact box.

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