Mining is a job multiplier in Ontario

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

Because almost 90% of the input costs of mining operations in Ontario are sourced from within Canada, with most of those being local, and 60% of its output is exported, the mining sector is a natural multiplier of jobs. The economists who produced the recent study Mining: Dynamic and Dependable for Ontario’s Future explored, with the use of StatsCan data, some of the upstream linkages of the various inputs for mineral production in this province.

They employed this input-output model to see what impact a $1 billion increase in the value of Ontario’s mineral production, based on OMA members, would have on the economy and employment. In 2011, the value of total mineral production in Ontario was $10.7 billion.

This analysis shows that such an increase would boost Ontario’s GDP by $858 million and Canada’s GDP by $900 million. It also shows that there would be an increase in direct mine employment of 2,421 jobs. Because of the overwhelmingly domestic source of mine inputs, this leads to 1,997 direct jobs in Ontario in sectors such as wholesale trade, professional and scientific, administration, finance, construction, utilities and government. That makes for a total of 4,418 jobs.

Keep going! When the induced impact of $1 billion increase in mineral sector revenues is included, the boost to the provincial GDP surpasses $1 billion for Ontario and $1.1 billion for Canada. In addition, we see 1,942 new jobs created in sectors such as retail, health care, accommodation and food services, non-profit institutions, arts and entertainment, information industries and construction. The induced jobs are derived from where and how the direct and indirect employees spend their pay cheques.

This impact is significant because as this economic study shows the average weekly wage paid in the mining industry in Ontario is 60% higher than the province’s average industrial wage. Salaries paid in the mining support sector (indirect jobs) can be higher because of specialization.

The numbers show that from $1 billion in new mineral revenue there can be generated a total of 6,360 jobs – 2,421 direct, 1,997 indirect and 1,942 induced – in Ontario. All of Canada, but predominantly Quebec and Alberta, benefit from increased mineral output in Ontario. The 2,421 direct jobs in Ontario lead to a higher total of 2,354 indirect jobs and 2,329 induced jobs across the country. The 2,421 positions in Ontario grow to 7,104 jobs in the country. This is a job multiplier of about three. Jobs equal opportunities for people of all skills and abilities.

“The Ontario economy continues its slow recovery from the biggest world economic downturn since the Great Depression. Ontario’s manufacturing sector is struggling to regain lost ground, beset by a strong Canadian dollar and a weak recovery in the United States. Governments are initiating cutbacks at all levels,” said the economic study. “But, with natural resource commodities that the world wants, and if it maintains an atmosphere conducive to investment, Ontario will continue to be pulled ahead by a strong mining industry.”

According to StatsCan, in 2011, Ontario’s mining industry employed 16,067 miners and 7,851 jobs in activities supporting mining. StatsCan employs strict industrial codes. A more broadly inclusive level of employment for the mining sector in Ontario in 2011 was about 27,000.

A full version of Mining: Dynamic and Dependable for Ontario’s Future, which can be downloaded, can be found on the OMA website Mining operations are responsible partners in society. The work on the input-output model in this report by Peter Dungan and Steve Murphy builds upon their findings in Ontario Mining: A Partner in Prosperity Building – the economic impacts of a representative mine, which was completed for the OMA in 2007.