Nova Scotia government must correct bad policy to unleash mining potential

Earlier this year, the Houston government launched a new strategy to boost production of critical minerals, which are “important for renewable energy, food production and healthcare.” But if Premier Houston wants to get serious about increasing mining production and attracting investment, his government must reform the bad policies that are stifling the industry’s growth.

Every year, the Fraser Institute surveys senior mining executives to measure the investment attractiveness of jurisdictions around the world based on their government policies and geological potential. The most attractive jurisdictions tend to match their mineral endowments with a competitive policy environment, or overcome a lack of mineral potential with solid policies. According to the latest survey, in terms of government policy, Nova Scotia is the least-attractive province, ranking 36th out of 86 jurisdictions, with only the Northwest Territories and Nunavut performing worse in Canada.

Given that Nova Scotia is home to 16 of the 31 critical minerals essential for Canada and its trading partners (such as cobalt, copper, lithium or zinc), why does the province rank so low? Again, bad policy.

For example, the Houston government has increased the share of protected land, which is unavailable for economic opportunities including mining. While protecting the environment is a laudable goal, the government must strike a proper balance between environmental protection and economic development. Nova Scotia’s share of protected land reached 13 per cent in 2022, the second-highest share in Canada. And the Houston government wants to reach 20 per cent by 2030.

Not surprisingly, 69 per cent of survey respondents for Nova Scotia expressed concern about the uncertainty around protected land. Similarly, 64 per cent of respondents said the uncertainty concerning environmental regulation is a major deterrent to investment. And 58 per cent of respondents said uncertainty regarding the administration, interpretation and enforcement of existing regulation deters investment in the province. To make matters worse, concern about Nova Scotia’s taxation regime has increased by 42 percentage points this year compared to last year.

Clearly, this uncertainty has hurt Nova Scotia’s mining sector. In 2017, nominal investment in the sector peaked at $202.5 million compared to a projected $33.6 million in 2024, 83 per cent less than seven years ago. Less investment means fewer well-paying mining jobs and less economic activity.

Indeed, the industry generated export earning of almost $500 million in 2022, employs more than 5,000 Nova Scotians and, research shows, pays weekly wages more than 40 per cent higher than the average of all other sectors in the province. Further, according to recent polling, 65 per cent of Nova Scotians support mining for critical minerals, and 67 per cent agree that the mining and quarrying sector plays an important role in economic development in rural areas.

Jurisdictions that combine their geological endowment with a competitive set of policies are the most attractive to investment. As the Houston government develops Nova Scotia’s critical mineral strategy, it must pay special attention to the uncertainty created by regulation. If the government enacts the right policies, it will help unleash the province’s full mining potential and help create jobs and better wages for Nova Scotians.