Mr. Speaker, I would like to address the House concerning this motion that the government should
consider revitalizing investment in mining exploration in Canada by providing fiscal incentives.
Let me begin by thanking the hon. member for Abitibi for bringing this matter before the House. The Government of Canada acknowledges that it is important for all Canadians to recognize that mining will continue to be a key sector of the Canadian economy for generations to come.
On behalf of the Minister of Natural Resources, I am pleased to have this opportunity to be able to tell the House about the measures that the government is presently taking to maintain or increase the economic and social benefits Canadians derive from the mineral and mining exploration sectors.
Mining directly contributes $20 billion to the national economy every year and creates more than 300,000 jobs for some 115 communities throughout Canada. It has significant benefits in almost every other sector of our economy. How many Canadians know, for example, that toothpaste has five minerals in it or that sunscreen contains zinc? How many Canadians think of the mining industry when they add salt to their food or when they switch on their computers or start their cars?
Simply put, without mining and minerals many of the things we take for granted today would not exist. The World Bank recently released a new report ranking all countries on the basis of total wealth. That report ranked Canada as the second wealthiest nation in the world when taking into account our vast natural resources.
Mineral exploration is fundamental to a healthy mining sector. We are witnessing a significant improvement in the fortunes of the Canadian mining industry, thanks in part to recent increases in spending on mineral exploration. Total exploration expenditures for 1994 were $630 million. This total represents an increase of $150 million, or 32 per cent compared to exploration expenditures in 1993. Moreover, the favourable trend is continuing, and spending could approach $675 million in the current year.
The amount of flow through share financing to support mineral exploration in Canada has been on the rise since 1991, when it totalled $40 million. This indicates the increasingly positive prospects for the mining industry in Canada. Flow through shares financing totalled $80 million in 1994 and is projected to be between $80 million and $90 million this year.
There are other facts that demonstrate a turnaround for the industry. This year it is expected that 14 new mines will be opened and that 11 mines will be reopened, representing a net gain of some 700 new jobs. This year could be one of the best years for mining since 1981 in terms of mine openings. Preliminary data indicates the outlook for 1996 may be even brighter. In addition, figures concerning Canada's base metal reserves have been increasing recently. The Voisey Bay nickel discovery in Labrador has been cited as one of the world's richest. There has been tremendous interest and investment in diamond exploration activities. These are just a few of the highlights of healthy recent activity by the industry that is stimulating a number of benefits and jobs in particular.
Let me now turn to the role of the federal government in the mining and minerals sector. The Government of Canada made some very difficult choices in the budget, which were made for the benefit of the country in the long term and did not include any new tax incentives for any sector of the Canadian economy, including mining.
Although we cannot afford any new incentive programs, Canada is still one of the most generous countries in the world when it comes to encouraging mining exploration activities. At the federal level all exploration and preproduction development expenses are fully deductible. In recognition of the special needs and risks of resource development, the flow through share financing instrument allows those deductions to be transferred to individual investors.
Provincial governments, as the resource owners, also have an important role to play in encouraging mineral exploration. Over the past few years a number of them have taken steps to promote exploration activities by introducing new tax incentives. Since the provinces have primary responsibility for determining the pace of activity within their jurisdictions, these steps are highly appropriate, in my view.
We believe the mining industry has a strong future in Canada, but we are also aware the industry faces challenges. During the last federal election the Liberal Party was the only political party to release a detailed plan outlining its commitment to the mining industry. That commitment still stands.
Working closely with the provinces, we will continue to support and encourage the mining sector in Quebec and in every other province and territory across Canada. One of the best ways to do this is to reduce the long term structural impediment to mineral investment. Many of these impediments were identified by the Whitehorse mining initiative, an unprecedented multi-stakeholder initiative that led to a common vision for Canada's mining industry through shared principles and goals. The federal government was a full participant in this 18-month exercise.
To help develop an action plan to address the Whitehorse Mining Initiative issues that fell within federal jurisdiction, the Minister of Natural Resources has established an advisory committee composed of representatives from the mining industry, labour, aborigi-
nal and environmental groups. One of the committee's first tasks will be to provide commentary and advice on the sustainable development and minerals metals issues paper that was released for discussion in September in Vancouver.
The Government of Canada has already taken several steps to address the most fundamental industry concerns. For example, in the 1994 budget we introduced a deduction for mine reclamation trust fund contributions. In "Building a More Innovative Economy", our government-wide plan for economic growth and job creation, we identified six major sectors of the economy that will benefit from substantive long term improvements to the federal regulatory regime. One of the six sectors is the Canadian mining industry.
Mining sector areas under active consideration include changes to the administration of the Fisheries Act, land use and related decision making, the definition of waste, regulatory regimes north of 60, regulatory impact analysis, and toxic management. As well, important improvements on the issues of overlap and duplication may be achieved through the harmonization initiative of the Canadian Council of Ministers of the Environment.
We believe that the less costly and more efficient regulatory regime that we are trying to achieve will lead to an improved investment climate that is respectful of sustainable development principles. I emphasize our commitment to environmental protection will not be compromised.
The Government of Canada is already making an effective contribution to improve the conditions that are required to ensure that exploration activity will continue to rise in this country. The harmonization of environmental assessment regimes between federal and provincial orders of government and regulatory reform measures through the "Building a More Innovative Economy" initiatives are real and meaningful efforts to reduce overlap and duplication. The goal is to provide stable and predictable conditions that will attract more investment for mineral exploration and for economic activity throughout Canada. The result is that this activity will stimulate new opportunities in Canada and help to put more Canadians back to work.
The Government of Canada is confident that the prospects for mining in Canada will continue to improve and that mining will realize the full potential of Canada's rich geology in a manner that is consistent with the principles of sustainable development. As a result Canadians will be able to enjoy the many benefits that come from a strong mining industry for many generations to come.