Mining activity in Canada's north could double in the next decade, says a Conference Board of Canada report, but the forecast appears to undervalue current production and is sprinkled with what ifs and maybes.
The January report forecasts that Canada's overall northern metal and non-metallic mineral output will grow by 91 per cent from 2011 to 2020, a compound annual growth rate of 7.5 per cent. The Conference Board terms that growth "staggering," compared with anticipated 2.2 per cent annual growth in the Canadian economy as a whole for the same time period.
The report projects that the annual gross domestic product of mining in the north will surge to $8.5 billion in 2020 from $4.4 billion in 2011. This estimate appears hopelessly pessimistic: according to the Mining Association of B.C., in 2011 alone the overall value of mineral production for B.C. was approximately $8.6 billion, if sand and gravel extraction are included.
The Conference Board study also identifies potential hurdles to mining growth in the region, including inadequate or non-existent infrastructure and skilled labour shortages. It adds that "aboriginal rights must be respected and communities must be consulted for projects to be developed sustainably." It is the latter caveat that carries the most weight in B.C. where perceptiion of native rights have trumped mining potential in recent years.
Anja Jeffrey, director of the board's Centre for the North, said Canadians need to find the right balance between risk and opportunity in order to maximize the benefits of the north.
"For instance, governments need to be conscious of how changes to the regulatory environment can affect communities and industry," she said. "Strong efforts to ensure a favourable business climate can leave communities feeling vulnerable. Going too far in the opposite direction can act as a deterrent to investment."
