Evidence of meeting #62 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was work.
A video is available from Parliament.
As an Individual
Well, I didn't have a chance to really respond, but I think it's—
As an Individual
—the broad interests of the American economy, not any particular company that's behind it.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
So you believe that this money is definitely going to be funding Canadian foundations for work that will benefit commercial interests, but you have no evidence that this is the case. Yet, this is basically the brush that you're using to—
As an Individual
I'm trying to clarify. I think it's the broad interests of the American economy. It's a good thing for the American economy to have energy security so you don't have the volatility of gas prices with oil due to hurricanes and all sorts of other things. So it's not a specific company that would benefit. It would be the American economy in general. That's what I think is the motivation. If I had to guess, that would be my guess.
Conservative
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Thank you, Chair.
Thank you all for coming. I wish we had more time.
Mr. Blumberg, it might not be money laundering, but it is certainly meddling in our affairs, from what I'm hearing.
Mr. King, you haven't been asked anything yet. I would assume that your organization and the developers as well would be involved. They would take extraction as part of the mining. Would oil extraction be part of that as well?
Co-Chair, Finance and Taxation Committee, Prospectors and Developers Association of Canada
Our membership is made up primarily of the junior exploration industry. We do have some medium producers. It's primarily the Mining Association of Canada that deals with the producing side.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
So you're listening in to this conversation, and it's bizarre when I think that, for instance, we have this incredible opportunity of natural gas in the shale, and we have this need to expand our markets and we're being stopped. I read in the paper recently that as his platform, the mayor of Vancouver was going to stop tankers from moving into the port. I wondered if Canadians knew that. I had a talk with the pilot of one of these ships. In Quebec City where they also take these tankers, they float them in with the tide. There's no such thing as no risk. Yet on the one hand we have a mayor who's going to try to get elected by stopping these things from coming into the port. I suggest what the federal government should do is hand that port over to Vancouver and make it a revenue source, and then see what kind of tune they'd whistle.
At any rate, it's all very frustrating, and it's all bizarre when I hear these things.
I want to give you an opportunity to talk just quickly about extraction, because the other committee that I serve on is foreign affairs, and we hear allegations repeatedly about Canadian companies. You told us just how important they are to the Canadian economy. I want you to just give us those figures again, because I'm not sure everybody heard that. I want you to tell us how much revenue is generated, and just how much you're planning on investing in the Canadian economy, and what that will generate in taxes. Could you tell us that one more time?
Co-Chair, Finance and Taxation Committee, Prospectors and Developers Association of Canada
Certainly. I'd be glad to.
As I said, in 2010 the mining industry employed 308,000 people. We contributed $36 billion to the national GDP. We paid $5.5 billion to governments in taxes and royalties. Over the next decade the Canadian mining industry plans to spend $136 billion in projects on both new domestic projects and expansion of existing mines. It represents phenomenal dollars for the Canadian economy.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Of course, those figures represent Canada, but Canadian mining institutions are right across the globe. I think they're leaders, if my memory serves me right.
What about the impact of exploration and the work that's being done in other countries? How is that generated, and how is it tied into the Canadian economy as well?
Co-Chair, Finance and Taxation Committee, Prospectors and Developers Association of Canada
I want to clarify for members who aren't in mining that the flow-through share regime and the mineral exploration tax credit only apply to exploration in Canada; that's where those dollars go. If you're investing in foreign exploration, that's just raising money on the Canadian capital market, and the expenditures and deductions stay with the company that invests in them. It's a different regime.
But as you say, through the flow-through share mining regime, Canadian investors understand mining probably better than those in any other country in the world, and that's what helps explain why Canada is the mining...etc.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Because my time is almost up, I'm going to give you a quick opportunity to tell us what's happening on Baffin Island. I spoke to Minister Aglukkaq , who represents that area, and she told me some fascinating things.
Tell the committee about Baffin Island.
Conservative
Co-Chair, Finance and Taxation Committee, Prospectors and Developers Association of Canada
A major iron ore property was found on Baffin Island. Most of it was found and funded through flow-through share financing.
That's a huge success story. What has happened now is that major international investors have bought interests in Baffin Island and are in the midst of bringing that entire property into production. It will be a significant and huge thing for Canada.
It's iron ore that's coming out of Baffin Island.
Conservative
NDP
Wayne Marston NDP Hamilton East—Stoney Creek, ON
Thank you, Mr. Chair.
Mr. King, because Mr. Van Kesteren raised this point.... I was going to stay away from it, but I'm our party's human rights critic and I've had before me delegations from the Philippines and from Peru and delegations of indigenous people who say that Canadian mining companies have been involved with pushing them off their lands. In the context of what we're talking about here tonight, this was not a topic I was going to go to, but since Mr. Van Kesteren has raised it, we have an issue being brought to Canadian parliamentarians about corporate and social responsibility relative to our mining corporations.
My understanding is that in the Philippines some 900,000 acres of land have been optioned by the mining companies in contested areas, and in Peru there's almost a similar case.
Are you aware of that, sir?
Co-Chair, Finance and Taxation Committee, Prospectors and Developers Association of Canada
Throughout the world there are always issues involving mining and development. The mining industry itself has really been focusing very heavily on corporate governance, both within the PDAC, which through its e3 has brought out its own program for corporate governance, but also through international organizations. The ICMM is heavily promoting it.
What's happening is that it's an industry that's evolving. Certainly the major players within the industry understand the importance of corporate responsibility—
Wayne Marston NDP Hamilton East—Stoney Creek, ON
I appreciate those comments.
In fact, one delegation was concerned about the fact that Canadian companies appear to be hiring paramilitaries for their security. I'm glad to hear they're looking at these things, because apparently—and again, this was a suggestion from somebody, and I'm not making an accusation here—some of our companies now are getting a lot of foreign ownership with a lesser regard for human rights in other countries than Canada as a whole has.
So if you and your organizations are looking at this, I want to tell you that I appreciate it. Thank you.
Co-Chair, Finance and Taxation Committee, Prospectors and Developers Association of Canada
We are a very strong proponent, and our industry is a very strong proponent of it. We understand the importance of corporate responsibility.
Conservative
The Chair Conservative James Rajotte
Thank you.
I'm going to take the opportunity for a few questions.
Mr. King, I want to follow up on both Mr. Van Kesteren and Mr. Marston.
You should know that a large part of the committee was in Washington. We met with the Inter-American Development Bank, and what we heard from that organization was that Canada and Canadian mining companies were near the top of the list in terms of being ethical and environmentally responsible. In fact, they were saying that we should not be crowded out by other interests in other countries because of the standards that our companies have and have been setting.
I think you should hear that message.
I appreciate very much what you've said about the relationship of the mining sector to the financial sector and its impact. I think sometimes in this country we look at resource sectors in isolation and don't see their relationship to other sectors.
You mentioned something about the TSX. Can you just perhaps re-emphasize for the committee the number of listings on the TSX from the mining sector?
Co-Chair, Finance and Taxation Committee, Prospectors and Developers Association of Canada
Absolutely.
The TSX/TSX Venture Exchange were the number one in equity capital raised for mining in the world. We're number one in listed mining companies. We have 58% of the world's total mining companies listed, and 43% of TSX-listed companies are mining companies. If you compare that with others, the next closest one is the Australian Stock Exchange, which has 700. The New York Stock Exchange has 141. They have the larger companies—the BHP Billitons and everything—in terms of capital, but in terms of numbers, which only speak to the strength of our junior exploration industry.... That's why we have so many listings.
Conservative
The Chair Conservative James Rajotte
I appreciate that.
Let me follow up with another question with respect to the mineral exploration tax credit's extension in this year's budget. If that were taken away and if the flow-through share model were taken away from the mining sector, can you describe what the impact would be, especially on the junior mining sector?
Co-Chair, Finance and Taxation Committee, Prospectors and Developers Association of Canada
People always seem to lump in mining when they see commodity prices and everything. Commodity prices are only helpful if you're a producer. The junior exploration companies are not producers. They rely totally on raising capital in the public markets. You're talking about the initial stage of mining, which has the highest risk.
The flow-through share of finding and the METC help to balance the risk, because it is exploration in Canada and the benefits come back to the Canadian government. You cannot move a mine in Canada to anywhere else in the world, and there are not many other industries that can say that.