Yes.
The Mining Association of Canada is the national voice of the mining industry. We have three or four dozen full members, which are the larger mining companies that you're aware of, and around 30 or 40 associate members, which include some engineering firms, some financial firms, and some environmental firms, etc.
As you can see from the first table, it's a fairly large industry, contributing about $42 billion to Canada's GDP. These figures are for 2007, which is the most recent year available. We produce a document called Facts & Figures, which I believe you have. If you don't, we have some copies here in both French and English that contain a number of these pieces of information.
Let me touch very quickly on a couple of these points.
The industry pays around $10 billion per year in taxes and royalties to Canadian governments. It makes exploration expenditures, to which Mr. Baird, my colleague, will speak in more detail, of about $2.5 billion to $3 billion per year. The industry contributes about 19% of Canada's goods exports. It employs around 360,000 employees. There is also a significant supply network that feeds into this industry: around 3,000 companies supply goods and services to Canada's mining industry. For example, in the railroad sector, the industry accounts for about 55% of Canada's freight rail revenues. And there are a good number of mines, obviously.
Interestingly, in this sector there are strengths in every Canadian region, right from the east coast through Quebec, Ontario, Manitoba, Saskatchewan, Alberta, B.C., and northern Canada. Each region has different strengths in this industry. We can certainly talk to that in more detail.
The Toronto Stock Exchange has also carved out a very strong niche in the mining sector. Companies internationally tend to go through the Toronto Stock Exchange for their financing, both large companies and others: the TSX has also carved out a very strong position for helping smaller and medium-sized companies raise financing.
Touching quickly on some of the issues that are facing the industry, I'll talk to mineral prices and the global recession on the next slide.
It's a very important industry in terms of relationship with the aboriginal communities. It's the largest private sector employer of aboriginal Canadians. This tends to be a relationship that works very well. Our industry association, for example, about a month ago signed an MOU with the Assembly of First Nations, and we have a work plan associated with it. That's an important area. There is probably potential to do more with aboriginal Canadians in terms of future employment and future skills.
That leads to the next point. There is going to be a human resources crunch in this sector, as in many other sectors in Canada. Something like 65% of our geoscientists will be over the age of 65 over the next decade, so there is a need to fill that skill gap. Overall the sector's human resources council estimates that about 60,000 to 90,000 new workers will be needed in this sector by 2017. I think those figures are adjusted to reflect the happenings of the past half year.
Mineral reserves are an issue for this industry. Canada's proven and probable reserves of base metals and some others have gone down over the last quarter century. There's a need to reverse that and turn it back up. We can talk about that in more detail.
A number of obstacles face the global supply of minerals. There is the potential, actually, for significant price spikes over the coming years if some of these supply obstacles are not addressed. I can talk more about this in the questions and answers, but this relates to regulatory barriers, in Canada and internationally.
There is a need for infrastructure. Some of the projects being developed internationally require 600-kilometre railroads, etc., to bring them to market. To some extent, mining companies are in the infrastructure business as well, especially internationally. That introduces some challenges and some obstacles to bringing these projects on stream quickly.
I'll talk about the slide on the next page and walk you through what has happened on the mineral price scene. This table highlights six different minerals and metals, and it really tells three different stories.
It shows the strong growth in mineral prices that occurred between 2000 and 2007 right across the board. A lot of that is obviously driven by demand for infrastructure and manufacturing strength in China. That growth continued in general until halfway through 2008.
The second story this table tells is the significant price collapse that occurred from last fall to earlier in 2009. Copper prices fell by about two-thirds, zinc by two-thirds, nickel by over two-thirds, etc. Gold is in its own world to some extent and on its own trajectory. Gold prices remain very strong.
A third interesting story is that there has been a slight turn-up in the last couple of months in mineral prices, with some exceptions. In aluminum, the supply-demand balance is still not there to start turning prices up, but in other base metals prices have gone up. That leads us to have a fairly optimistic picture going forward.
In terms of the present situation, companies are adjusting to mineral prices. One of their fundamental roles is to adjust operations to reflect mineral prices. These prices are generally global prices; they're derived through international trading exchanges. Mining companies have been adjusting their supply. Some countries in particular have been managing their debt loads and trying to get them in line to ensure their future prosperity.
Natural Resources Canada has set up a desk to try somehow to tabulate the mining cutbacks that have taken place. They have found about 23 cutbacks announced in the past six months. These are companies we're familiar with. Vale Inco in Sudbury will be scaling back production this summer for a couple of months. ArcelorMittal on the north shore of Quebec will have the same kind of scale-back through the summer. A couple of the diamond mines as well will be scaling back production. It's really aimed at trying to get supply and demand back into balance.
The oil sands development has been moderating, and some could arguably view this as a positive thing. Certainly there was a very frenzied development over the past few years in that segment, and it is now coming back into more of a moderate development. I think there is a sense that costs are getting brought down, and there is a basis for future growth as well.
As I mentioned, exploration spending was about $3 billion last year. It's projected to be only about half of that this year, with pretty much a non-existent flow-through share market through the first quarter of 2009. The exploration sector has been hit quite significantly.
I'm going to leave the last slide for the question-and-answer session, so the final slide I'll talk about will be the global outlook.
As I mentioned, equipment backlogs and wait times are coming into balance. Ironically, these are some of the positives of a recession. We were in a situation a year ago in which companies were waiting up to a year or longer for items such as tires. Some of that is being brought back into balance.
Input costs are decreasing as well. There is a sense that the stimulus spending taking place in Canada, China, the United States, and elsewhere will help drive mineral and metal prices. As I mentioned, there has been a turn-up in some base metal prices in the last couple of months.
Long term we are very optimistic. The market potential in countries like China is just staggering. There are about 95 cars per 100 people in the U.S., but in China there are about two cars per 100 people. That gap will probably never be closed, but it will be narrowed. There are other, similar indicators; for example, there are 20 times more personal computers per capita in Canada than in China. These items contain many metals and minerals. Those kinds of indicators will narrow over the coming decades. It's our sense that we're in a bit of a pause now, not in a downturn. We're in a pause of a cycle that is going to continue and have very strong growth for decades to come.
The next bullet point is on China and India. It's not just going to be in base metals. These countries are moving towards more of a feed-intensive, protein-based diet, which means a need for potash. Canada is the number of one provider of that.
For nuclear power, there is a lot of investment in nuclear reactors in China and elsewhere, which means uranium. Canada is the top provider of uranium. Infrastructure and manufacturing growth will lead to more base metals demand, and as their middle class grows, it is going to lead to more demand for diamonds and gold and other items associated with middle-class growth.
As I mentioned, there is a stickiness on the supply side both in Canada and especially globally. That has the potential to contribute to significant mineral price increases in the coming years. Gold prices remain very strong. Gold companies have a lot of cash and are raising money and will probably be on a mergers and acquisitions kind of path over the coming years as well.
I'll leave the last slide. It talks about some of the remedies and asks--the ways through which government can help support the recovery. I'll leave that for the question and answer session.
Thank you very much.