Joe Oliver, Canada’s Minister of Natural Resources.Peter Power/The Globe and Mail
Joe Oliver doesn't have many answers for the pain that miners are feeling.
As he headed to the Prospectors and Developers Association of Canada convention in Toronto, the federal Minister of Natural Resources recognized the prevailing disease – a lack of access to capital – but could not offer much in the way of a cure.
"We understand it's a challenging period for the junior exploration sector," he said in an interview prior to the conference. "We're trying to be helpful, but there are market forces at work that are global in nature."
Instead, he stressed the importance of the mining industry to Canada. He trumpeted what the government has already done to streamline project reviews, and to create a stable investment climate. He also unveiled new maps and geophysical data from a long-running government program, and an update to the government's "Exploration and Mining Guide for Aboriginal Communities."
Useful stuff and laudable, to be sure, but it's far from a solution to the question on the minds of the people who run small mining companies, which is: How on earth do we get the money we need to survive in a market where we are treated like plague victims? Nor does a new edition of a how-to guide answer the bigger questions on aboriginal relations, such as ensuring that Canada does not become a land where all resource development is tangled by blockades and protests.
Nobody's suggesting the government should get in the business of providing money to miners. But mining advocates have been pushing for another extension to the Mineral Exploration Tax Credit, which makes flow-through shares more attractive and can help exploration firms raise much-needed cash. The tax credit has been extended on year-by-year basis for a decade. It costs about $100-million a year, the government estimates.
Mr. Oliver said miners aren't asking for much in the way of help, other than on that "one issue." So can the minister commit to that in the federal budget that should be coming down later this month? No.
"I can't forecast that," Mr. Oliver said in an interview, adding that it is Finance Minister Jim Flaherty's responsibility. "The industry has been very clear they would like to see it extended permanently. It's one of the sets of recommendations that have been presented to the Minister of Finance. But I can't comment on budgets."
What about a stronger federal stance on protests that slow developments, such as the blockade of the ice road to the Northern Ontario diamond mine run by De Beers? In that case, protesters ignored a judge's first order to open the road and police dragged their feet on intervening. De Beers may launch a lawsuit to cover the costs of the lost use of the key supply route to the Victor diamond mine.
Alas, Mr. Oliver wouldn't go there either.
"I can't comment on that one specifically," the minister said in an interview. In general, Mr. Oliver said Canada needs to ensure that we give as good as we get when it comes to the rule of law. But that is as far as he would go.
"Clearly, when we operate in foreign countries, we are very interested in a rule of law which is predictable and fair," Mr. Oliver said, pointing to the two dozen foreign investment promotion and protection agreements the government has signed. "It's always a mutual agreement. So we want to be able to afford legal predictability here as well as asking for it."
He called for miners and communities that run into disputes over development to resolve things privately.
"A businesslike approach, hard bargaining, but a businesslike approach can really be tremendously beneficial for everyone," he said, adding that "the industry has got to be an important part of that dialogue and ultimately those commercial arrangements. It has become a very high-profile matter recently. Sometimes it can be dramatized, but there are fantastic opportunities here so I'm hoping we can achieve them for everyone's benefit."
Mining has always had the aura of a business for risk-taking individualists – the lone prospector heading into the wilderness in an all-or-nothing bid for riches. If Mr. Oliver's comments are any indication, the industry is going to have to make it on its own through the current desert of capital markets and the tangle of community relations.
(Boyd Erman is a Globe and Mail Capital Markets Reporter & Streetwise Columnist.)
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