Good morning, Mr. Chair and members of the committee. I want to thank you for this opportunity on behalf of the Mining Suppliers Trade Association Canada. I'm Phil Cancilla and I'm the President of the Board of Directors for the association.
My opening statement today will provide a brief overview of our association and its members, highlight some of the key findings from a study that we participated in showing how the mining suppliers are an important part of generating employment in the mining ecosystem, and finally, how Canada's engagement on free trade with the Mercosur free trade agreement is important to the Canadian mining supply and services sector.
MSTA Canada is the national voice for the Canadian mining supply and services sector, and for the past 35 years the association has supported its members in connecting them to opportunities to grow their businesses in the mining industry across Canada and around the world. In terms of government activity and decision-making, we hope to serve our members' interest under two guiding principles. The first principle would be the reduction of complexity and uncertainty in doing business through more efficient processes and a clear understanding of timely outcomes. The second principle is to have an increase in access to opportunities to do business. This can be in the form of opening markets or a reduction in barriers to trade. It is this second principle that aligns with Canada's participating in the Mercosur trade agreement.
Our approximately 280 corporate members are located across the country and supply the entire mining industry spectrum from mining exploration, resource development, mine design and construction, mine operations and refining, to reclamation and closure. Most of these companies are small to medium-sized enterprises. I will elaborate more on the demographics of mining suppliers in the second portion of my remarks. Overall it has been estimated that there are approximately 3,700 companies across Canada that consider themselves mining suppliers.
I would like to highlight one important aspect on our focus as an association, which is export. With Canada representing 0.05% of the global population and 1.4% of the world GDP, we are, by all accounts, a trading nation to ensure economic prosperity. It is with that perspective that there is great opportunity for the Canadian mining supplier network by just following the Canadian exploration and mining activities abroad, let alone international mining customers. In the mining industry, the “made in Canada” brand is recognized around the world for its safe, reliable, environmentally sound, and productive solutions.
I now turn to our study. The Conference Board of Canada characterized the mining 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.” To help better understand and clarify this hidden sector, MSTA Canada participated in a pan-Ontario mining supply and services sector economic impact study.
There are three key findings from this report that I would like to highlight here today. The first finding is that the mining supply sector is a widely varied group of companies that were grouped into three categories: 58% categorized as mining equipment suppliers and services, and 13% categorized as mining contract services. The two categories are what most people think of as typical mining supply. However, it is the remaining 31% that typically get overlooked. These are, for example, financial services, accounting companies, law firms, environmental services, and information technology firms. The second key finding is that almost 88% of these companies surveyed are categorized as small or medium-sized enterprises, and 70% reported exporting out of Canada, so free trade agreements are meaningful to the mining supply and services sectors.
The final finding I'd like to highlight from the study is in terms of direct employment. The mining supply and services sector represents two and a half times as many jobs as the mining companies employ themselves. This is an important point because, as mining is a great economic developer, the mining supply and services sector across Canada is and will be an important generator of jobs.
Our final point is directed toward the Mercosur free trade agreement that contains Argentina, Brazil, Paraguay, and Uruguay. Brazil and Argentina are considered the two most important countries that the Canadian mining supply and services sector targets with its exporting and marketing efforts. We also consider Paraguay and Uruguay potential emerging markets for exploration and mining.
To help understand why, our research has shown that the Mercosur free trade agreement hosts over 538 active exploration and mining projects. In addition, there are more than 61 Canadian-based exploration and mining companies active within the Mercosur member countries, which have ownership in 27% of these active projects. This data shows why MSTA Canada encourages Canada to consider being a member of the Mercosur free trade agreement.
Thank you for your attention.