Thank you very much for the opportunity to appear and participate in this important hearing.
Mining contributes approximately 3.5% to Canada's GDP. That was $56 billion in 2016. It directly employs 370,000 workers, and indirectly employs almost another 200,000. Proportionally, mining is the largest private sector employer of indigenous peoples nationally, and that's with employment poised to increase.
The government has contributed positively in recent years with policy development and investments supporting the growth of Canada's mining sector. These include exploration via the extension of the mineral exploration tax credit, northern infrastructure development with road investments in the Yukon and the NWT, and commitments to address challenges that shippers face in Canada's rail freight market.
Looking ahead, proposed investments also hold promise, including the infrastructure bank, the green infrastructure fund, and innovation cluster funding. Simultaneously, however, certain policy initiatives are causing uncertainty and affecting Canada's attractiveness as a destination for mineral investment. To ensure that the mining industry's contribution to Canada's economy remains robust, a competitive and predictable domestic investment and regulatory environment are key.
Ongoing reviews of federal environmental legislation will have critical implications for the future of Canada's mining industry. Most significant is the review of the Canadian Environmental Assessment Act. It is critical that these reviews result in an effective, timely, and coordinated regulatory process, from the pre-environmental assessment to the post-EA permitting phase, with meaningful consultation. For example, inadequate capacity to support the transition of the 2012 amendments to the Fisheries Act cost our members delays and, in some cases, millions of dollars in additional consulting fees to interpret the new requirements. Ensuring that regulatory agencies and relevant departments have the requisite capacity to adequately perform and carry out their responsibilities is essential to this end.
Mining is northern Canada's largest private sector economic driver and indigenous employer. Enabling additional mining development in remote and northern Canada is inextricably linked to the government's indigenous reconciliation, climate change, and broader social and economic development policy objectives in the region. To date, infrastructure investment decisions that recognize northern challenges and opportunities through the trade and transportation corridor initiative and the investing in Canada plan have been welcome.
The next step is to recognize specific consideration for northern challenges and opportunities in the Canada infrastructure bank. Including a northern specific fund or allocation within the CIB is also supported by the National Aboriginal Economic Development Board and the Canadian Chamber of Commerce.
On the climate change front, in addition to supporting a revenue-neutral price on carbon, MAC underscores the need for a climate change policy to ensure that the competitiveness of emissions-intensive and trade-exposed sectors be sensitive to changing economic and geographical realities and minimize compliance burden. Approaches that fail to address these concerns risk creating carbon leakage that will diminish Canadian competitiveness with no global net gain in greenhouse gas reduction. That's a lose-lose scenario. MAC also believes that the government has given itself important tools to support Canada's transition to a lower carbon economy. We welcome the commitment to invest $1.2 billion to support innovation in mining and other resource sectors.
The government's innovation superclusters initiative is timely. By harnessing the collaborative strength of Canada's mining ecosystem to accelerate significant and sustained innovation in energy, water, and land use, CLEER, a consortium of national and regional mining and supply companies and organizations, has the potential to support the sustainable growth of Canada's mining sector; enable the development, adoption, and export of clean energy and water technologies; and grow Canada's global-facing mining supply services sector.
On the tax front, MAC was pleased that this committee recognized that the reduction or elimination of several mining tax credits in budgets 2012 and 2013 reduced Canada's global mineral investment competitiveness.
What's more, Canada remains out of step with other jurisdictions in respect to other levies and rules. Consistent with our tax expenditure review submission, MAC recommends, one, that dividend withholding tax be phased out; two, that substantial shareholder exemption for corporate reorganization performed by Canadian or foreign groups be tax free; and three, that all mining tax payable should be deductible regardless of the year in which it is paid or whether it is deemed payable post-audit.
Thank you for the opportunity to speak with you today, and I look forward to answering any questions you may have.