I'm honoured to be here to contribute the view of the Canadian mining supply sector to your deliberations on the benefits of Canada joining the Pacific Alliance as a full member.
Good afternoon everyone. I am pleased to be here today representing Canada's mining supply sector. My presentation will be in English, but I would be delighted to answer questions in French.
My message for you today is really quite simple.
I will speak fairly slowly so the interpreters are able to translate clearly.
Given the relative lack of domestic capacity of emerging nations to supply a modern mining industry, Canadian mining supply firms would benefit from freer circulation of goods, services, capital, and persons within the countries of the Pacific Alliance.
The Canadian mining industry is an important investor in all of Chile, Peru, Colombia, and Mexico, and Canadian mining suppliers have followed our investors into these markets. I would venture to say that in 100 countries or more, our mining industry is the number one commercial manifestation of our nation.
In terms of trade, mining supply is, or can be, the leading edge of the wedge for Canadian exporters in many countries. Putting it another way, I doubt there is another Canadian industrial sector that dominates international trade and investment more than our mining sector, including its suppliers. Before I tell you more about our views on the benefits of freer trade with the countries of the Pacific Alliance, I would like to take about one minute to tell you something about the association that I manage and the sector that it represents.
Founded in 1981, CAMESE, which is the Canadian Association of Mining Equipment and Services for Export, is a not-for-profit trade association existing to assist Canadian companies in exporting to the worldwide mining industry. We are a collective global marketing effort to enhance the mining world’s understanding of the excellence of Canadian mining technologies and services. CAMESE has more than 330 member companies located across Canada.
Now I'll talk about the sector. The Conference Board of Canada has characterized the mining supply and services sector as “a multi-billion dollar, widely varied industry in Canada and around the world, yet it is a 'hidden' sector that is not directly measured or tracked”.
There's some indication that there are as many as two jobs in mining supply for every job in mining.
The mining supply and service sector comprises a wide range of consultants, manufacturers, and engineering and service companies, including mining-specialized divisions of all the major banks, brokerages, and accounting and legal firms. There are as many as 3,000 firms across Canada offering mining-specific products and services.
Looking at export markets, in descending order of priority of market areas for the mining supply and service sector, Latin America is currently number one, followed by Asia-Pacific, U.S.A., Africa, Eastern Europe, and the CIS, the Commonwealth of Independent States, in that order. Indeed, Latin America is a key market area, and that brings us to Chile, Peru, Colombia, and Mexico. I have prepared one-minute capsules on the booming markets in each of these four countries. I would have liked to insert this information now, but in deference to my 10-minute time limit, I would be pleased to tell you more about these opportunities if there were a pertinent question.
No doubt this committee has access to the statistics of what has happened under the free trade arrangements with these countries. The statistics that I have seen point to solid increases in business, such as in Chile, where over the 15 years of the treaty the number of Canadian enterprises exporting to that country doubled to over 1,300. The number of different products exported from Canada also doubled over the same period and our major export to Chile shifted from cereals to machinery.
In all of these countries, I feel it is fair to say that the advances in Canadian import penetration have been led by equipment and services used in the mining industry.
Canadian suppliers are not new to the markets of the Pacific Alliance. Since 1995, for example, CAMESE has organized Canada pavilions at mining exhibitions for our exporters to exhibit their products and services in these countries. Over the past 18 years we have done this 18 times in Peru, 17 times in Chile, eight times in Mexico, and once in Colombia. Every time our exhibitors attend these shows, they find new business.
In conclusion, the Canadian mining industry and its suppliers are indeed the major Canadian commercial presence in all four countries of concern to us today, just as they are in many countries around the world.
Currently, Canada has agreements regarding preferential trade arrangements and investment protection with each of the four members of the Pacific Alliance. CAMESE is not in a position to determine whether we are best off with these individual accords or within a bloc of countries. We'll leave that to this committee and to our trade negotiators to decide.
However, we note that the Pacific Alliance aims to give preferential treatment over a wide range of goods and services with a minimum of 90% of goods being tariff-free. Perhaps this would be a better situation for us than we now have under four different relationships. A freer movement of people and broader recognition of professional credentials that might come within a trading bloc, as well as the harmonization of standards and rules, would certainly be an advantage to our exporters.
We imagine that immigration may be an issue. On this we refer to the labour market studies of the Mining Industry Human Resources Council. They predict that the Canadian mining industry will need 100,000 skilled new workers by 2020. Where are these people going to come from?
The Pacific Alliance countries would be an excellent source of such labour. Their educational and training standards are improving all the time. Also, local people are already employed by Canadian companies learning our way of doing mining, and these people might want to transfer to work in Canada.
In closing, without having told you of the major opportunities that exist in all four of these markets, the Canadian mining supply and services sector has a good deal to gain and little to lose through freer trade and investment with the countries of the Pacific Alliance, and with other emerging nations as well.
I thank you for your interest in our position on this issue.