I'm Brendan Marshall, vice-president, economic and northern affairs.
I used to work for an MP so I appreciate the work that you do. Sometimes this can be a misunderstood place, but rest assured, I think the work that you're doing is very important for our country.
Thank you for the opportunity to appear before the committee and participate in this important pre-budget consultation process.
The Mining Association of Canada, or MAC, is the national voice of Canada's mining and mineral processing industry, representing more than 40 members engaged in exploration, mining, smelting and semi-fabrication across a host of commodities.
In 2017, mining contributed $97 billion to Canada's GDP, employed 630,000 workers and accounted for 20%, or $97 billion, of Canada's overall export value. Proportionally, mining is the largest private sector employer of indigenous peoples. Canada leads global mining finance, with the majority of the world's public mining companies listed on the TSX.
Historically, the sector has helped build Canada, both literally and figuratively, as it holds an important space in our cultural fabric. Canadian mining is broadly recognized internationally for best practice, and our knowledge and expertise are widely sought.
In recent years, however, the sector has faced challenges in attracting investment. The value of total projects planned and under construction from 2018 to 2028 has reduced by 55% since 2014, from a total of $160 billion down to $72 billion. Only four new mining projects were submitted for federal environmental assessment review in 2018. They were all gold mines.
Over the last five years, Canada has lost more ground than it has gained in the commodities for which it is the top five global producer. In 2017, capital spending in the Canadian mining industry accounted for 4.4% of Canada's total. That's a value of $11.7 billion. That's down 0.5% year over year, and it's the fifth consecutive year that capital spending has fallen.
At a time when global mining investment is increasing, Canada is not keeping pace. While much work remains to be done, budget 2019, building off measures in the 2018 fall economic statement, proposes several measures to begin to address the challenges our sector is facing.
In Canada's north, mining is the largest private sector driver, directly employing 8% of the total territorial population. However, it is much more expensive to operate. It costs two to 2.5 times more to build the same precious or base metal mine in the north than in a centrally located region, and 70% of this cost differential derives from the infrastructure deficit.
The future of Canada's mining industry lies increasingly in remote and northern regions but will remain unrealized unless we close the infrastructure gap. Commitment to renew the allocation of the national trade corridors fund to arctic and northern regions by $400 million is good news and a direct response to a MAC recommendation.
Further, the creation of a universal broadband fund, capitalized at $1.7 billion and further leveraging more than $3 billion through the Canada Infrastructure Bank, is also welcome. Enabling universal high-speed Internet access in rural, remote and northern communities and industries helps to improve operational efficiencies at mine sites and reduce costs.
On the innovation front, the proposed immediate tax deductibility of certain zero-emission vehicles is a positive first step to further enabling electrification in the mining industry. Looking forward, MAC commits to working with Finance Canada and Environment and Climate Change Canada decision-makers to broaden the provision to include all vehicles deployed at mining operations, including above-ground and below-ground heavy equipment.
Further, $100 million to the strategic innovation fund in support of the activities of the Clean Resource Innovation Network, or CRIN, is welcome. This investment will support groundbreaking clean tech and emission-lowering solutions leading to cleaner energy production from source to end use.
On the investment competitiveness front, Canada's tax regime has fallen behind international competitors in recent years. Budgets 2012 and 2013 reduced or eliminated several direct and indirect mining-related tax credits. Most recently, the U.S. Tax Cuts and Jobs Act reforms significantly reduced Canada's mining tax competitiveness vis-à-vis the U.S.
The 2018 fall economic statement proposed several measures that will enhance the investment competitiveness of Canada's mining and metal manufacturing sectors. These included the accelerated investment incentive, which will enable miners to write off three times the eligible cost of newly acquired assets in the year the investment is made; extending the mineral exploration tax credit for a five-year term, bringing greater investment certainty for early-stage mineral exploration; and allowing businesses to immediately write off the full cost of clean energy equipment.
While MAC supports continued improvements to Canada's mining tax competitiveness, including bringing dividend withholding tax in line with our competitor jurisdictions, more than anything, the measures establish a positive platform to build from.
Thank you for the opportunity to speak. I look forward to answering any questions you may have.