Canada’s Minister of Natural Resources – The Honourable Gary Lunn – Toronto PDAC Speech

Honourable Gary Lunn - Canadian Minister of Natural Resources - Toronto PDAC -Government PhotoGood morning, everyone. Thank you, Pat [Pat Dillon, President of the Prospectors and Developers Association of Canada] for that kind introduction. It’s a great privilege to speak to the largest gathering of mining prospectors and developers in the world.

I want to thank Pat and PDAC for the invitation and also extend a special greeting to those of you who are here in Canada from all over the world for the first time.

Canada is one of the world’s leading mining countries, and our government continues to work with you to ensure we stay at the forefront.

It was a great week last week for both the mining and exploration industry. We tabled our federal budget – there were several investments that will benefit the Canadian minerals and metals sector, both directly and indirectly, and I’ll touch on those in a few minutes.

But first, I would like to step back for a moment. I’d like to provide an overview of the mining sector in Canada: where we’ve been; where we are; and where we’re headed.

As Canadians, we are fortunate. We inherited a landmass rich in mineral deposits of great variety. This has been one of Canada’s greatest assets throughout our history. With the provinces and territories, we are the lucky stewards of this endowment. The choices we’ve made over the years in developing these assets have always reflected our values. And that is true today as much as it was in the past.

It’s about more than just our resource endowment. It’s about generations of talented people, our knowledge and innovation. It’s about collaboration between the federal government, provinces, territories and Aboriginal peoples on the sustainable development of our mineral resources. Taken together, these assets have combined to make us what our Prime Minister calls a “global mining giant.”

In 2006, Canada had the highest single-country share of exploration budgets in the world. Our mineral production exceeds $40 billion per year. Canadian employment in the mining and mineral processing industries is more than 370,000 people.

Canadian exploration, mining and allied industries are operating today in 100 countries around the world. The TSX group, headquartered right here in Toronto, raises over 45 percent of the world’s mining capital.

How was this achieved? Well, it was achieved through a combination of:

     -daring entrepreneurship; 
     -a free market system;
     -supportive programs from governments across Canada; and
     -just sheer hard work.

Now, our becoming a global mining giant isn’t just a story about the past. It involves the things we do today and a plan of what we’re going to do in the future.

Our government pursues sustainable development and seeks to benefit the natural resources sectors by fostering increased economic competitiveness, increased environmental performance and increased safety, security and governance.

Our broad goal is to create a sustainable resource advantage that contributes to an improved quality of life for all Canadians. Through many decades of experience, Canada has learned valuable lessons and has tested what will work and may not. We are proud of the benchmark programs we have adopted, many of which are now or can be used globally.

Recently, we’ve made substantial progress in areas that have been challenges for the sector as a whole. Let me take this opportunity to give you several examples of what we are doing here in Canada that we believe can work in other countries as well.

For example, only last week we opened the Major Projects Management Office in Ottawa. This is an investment by the federal government of $150 million over five years to increase our regulatory efficiency and ensure we create certainty. I also believe that the Major Projects Management Office will increase the integrity of the process.

The MPMO will do a number of things. We have a number of vertical silos in the federal government that proponents had to deal with. Now, they’ll be able to come to a single point of entry to work with all of these different agencies. They’ll have defined timelines. There will be transparency. The public and companies will be able to track these projects on the Web. There will be accountability. And, as I said, I absolutely believe that, by having a focus and knowing where we’re going, we actually can improve the integrity of the process. What it will show is we will have predictability and certainty, which are so important, and with that certainty, industry will be able to attract the investments that are so important.

Another example of how we have found new ways to bolster the exploration of our natural resources here in Canada is through our investment in geoscience. We are proud of our commitment to geoscience and the direct link it has in driving the growth of the mining industry through new discoveries that are made every year. Budget  2008 announced $34 million over the next two years for geological mapping. It will be primarily focused on the North, about a 75/25 split, so not exclusively for the North.

We do know that every dollar we invest in geoscience attracts $5 from the private sector for exploration and results in a $125 investment in discovered mineral resources. So, I think of it as a very, very good investment.

Our budget also committed $20 million over the next two years to carry out data collection activities and legal work to enable Canada to present an effective submission by the end of 2013 to the United Nations Commission on the Limits of the Continental Shelf. This work will help Canada gain international recognition for our sovereign rights over seabed resources, including minerals, oil and gas.

We are providing incentives. We have created a tax regime that will continue to ensure investment in the mineral exploration and mining sector in Canada. By 2012, we will reduce to 15 percent the rate of federal corporate income tax. As of January of this year, we have eliminated the Large Corporation Tax. Canada also has a number of innovative programs. We’ve extended our Super Flow-Through Program, which we all know has been very, very successful in the development and growth of this industry. We have also put in measures in the budget for an accelerated capital cost allowance.

And again, I should give some credit to Pat [Dillon] and the Prospectors and Developers Association. We’ve spoken many times about these priorities. You’ve come to us, as well as other people in the mining community, to let government know how important these programs are and to ensure that we continue them. I’m proud to say, Pat, that we have listened to your great advice. Yes, I think you should give Pat applause.

These things don’t just happen by themselves. They happen when you have industry and government working together with a common vision and a common goal. And, as a result, we saw that great success last week.

We’ve also taken steps to advance research and innovation in the mining sector. We endorsed the creation of a Canadian Mining Innovation Council last fall. This network of industry, academic and government leaders was mandated to develop a pan-Canadian mining research and innovation strategy. Canada needs to strengthen its research excellence and capacity to increase the competitiveness of our sector and advance our environmental sustainability.

Another key factor of success in this industry is partnership. The Government of Canada plans to establish a new framework for Aboriginal economic development by the end of this year. Again, in Budget 2008, we dedicated over $70 million over the next two years to Aboriginal economic measures to support this new framework. Our government will work with Aboriginal groups and other stakeholders to develop a partnership-based and opportunity-driven framework.

Access to skilled workers is fundamental if the industry is to grow. We know there are labour supply challenges in Canada and around the world. To help address this need, our government is working with the Mining Industry Human Resources Council (MIHR), key Aboriginal organizations, mining associations and government departments to develop the Mining Industry Human Resources Guide for Aboriginal Communities. Last March, my colleague Minister Solberg announced $2.5 million in funding to improve recruitment and retention rates of staff in the mining industry.

Issues Related to Environmental and Social Impacts

Now, Canada is a global leader in mining, but we also need to demonstrate leadership on the corporate social responsibility side. Again, we are working with organizations like PDAC and the Mining Association of Canada to ensure the highest standard of practices abroad. I know we’ve had great support from industry as well. Again, I think that Canada can be very proud of this achievement, and we’ll continue to strive to improve.

FIPA Announcement

I’m also pleased to announce today the beginning of negotiations for three additional Foreign Investment Promotion and Protection Agreements, or FIPAs. At present, Canada has 23 agreements in place. And negotiations are now underway with Tanzania, Madagascar and Indonesia. These countries are of rising importance to Canada’s mining sector. The agreements we are negotiating reflect our understanding of the importance of foreign investment as a driver of the mining industry and social and economic development around the world.

But let’s ask ourselves the big question. Where are we going?

While the present-day accomplishments I’ve mentioned have been very helpful, Canadian industry and governments together need to raise the bar to a higher level. To reach this goal, we need to be bolder on a number of fronts.

First, we need more mineral discoveries and mines in production here at home. Our recent investment in geoscience and its strategic deployment with provinces, territories and industry is key.

We will continue to ensure that Canada has a world-leading investment climate for exploration and mining, with competitive tax regimes to encourage investment and environmentally and socially responsible practices.

It will mean utilizing the Major Projects Management Office to improve our regulatory performance at the federal level. But we can’t just be satisfied with where we’re going with that. We need to take it to the next level. We need eventually to get to where we have a single process that eliminates duplication, and where we work with the provinces and territories to improve this process.

Second, we need a strong commitment by both the public and private sectors to mining research, innovation and skills development. This commitment will involve developing and implementing, as I said earlier, a pan-Canadian mining research and innovation strategy. But it has to involve both government and industry targeting investment to reduce our mining footprint and finding newer, greener technologies to be utilized wherever mining is undertaken.

And, third, it will involve work by all stakeholders to enable increased Aboriginal participation in, and benefit from, the sector.

Finally, it will take a commitment from both industry and governments to advance sustainable mining, built on environmental and social responsibility.

These things can’t be accomplished alone. Industry, Aboriginal communities, civil society and governments must continue to work together to maintain our current position in Canada and internationally. To go further will require even more innovation and multi-stakeholder collaboration. Our government is prepared to work with you. Working together, we can be recognized not just as a global mining giant, but also as the world’s leader in sustainable mining.

So again, I want to wish you a very good conference. I have no doubt that by continuing to work together we will succeed. You can count on my unqualified support.

Thank you very much for all of the support you’ve given me.

The Honourable Gary Lunn, P.C., M.P.
Minister of Natural Resources

Prospectors and Developers Association of Canada
International Convention and Trade Show

Toronto, Ontario
March 3, 2008

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