Future appears to brighten for BC mining

British Columbia is clawing its way back up The Fraser Institute’s Annual Survey of Mining Companies. For the first time since the survey started a decade ago, British Columbia has breeched the top third in the Policy Potential Index, a composite index of the 14 policy areas examined in the survey.

A crisis in the British Columbia industry inspired the survey. A mining-hostile provincial government refused to level with the people of the province about the perilous state of the industry and the industry itself was too cowed to speak bluntly. Rural and isolated communities across the province had their futures threatened.

It came to a head at a mining conference organized by The Fraser Institute. An important mining executive was exclaiming on the great policy environment the government had created. Fraser Institute Executive Director Michael Walker spoke next and said he didn’t believe a word of what the previous speaker had said.

The room full of miners broke into loud applause, and Mike realized that mining executives feared their companies would be punished by a vengeful government if they spoke the truth. Thus, the mining survey was born to provide a platform for truth speaking.

I have seen this sort of fear. As a reporter I covered the Atlantic fisheries in the early 1980s. Ottawa was wrecking the industry environmentally and economically. Huge subsidies – bizarrely linked to restrictions on quality-improving technology – produced massive over capacity and over fishing. Fishers fished for government money not a good catch. While Iceland built new prosperity on high quality fish, Atlantic Canada’s fishing practices were so hobbled by regulation that the region was reduced to selling fish blocks – damaged pieces of fish pressed together – to fast food restaurants in the United States.

At the beginning of the mining survey, British Columbia always ranked last but it gave the people of the province a real insight into the state of the industry, something Atlantic Canada never got for the fishery until it was too late. A new BC government changed course and the province slowly begin to creep up the ranks – more slowly than many expected. It takes time to change regulations and the attitudes of regulators.

It also takes time to regain trust. Five or 10 years may pass between initial mine exploration, development, and production. Miners need to know that changes for the good are also long term changes. Good policy today doesn’t mean much if it has changed to horrid policy when your mine enters production.

British Columbia and the province’s industry should be congratulated on the progress of recent years but more needs to be done. Some in the industry complain the survey understates BC’s progress, particularly last year’s survey which showed the province stabilizing rather than continuing to rise.

In response, we ran a number of tests. For example, we wanted to see if respondents from outside British Columbia were scoring the province lower that those from British Columbia since that would indicate that outside respondents were reacting to the province’s past rather than its present. Yet, the answers of BC and outside respondents on average had very high correlation numbers.

British Columbia now ranks 20th out of the 68 jurisdictions examined. That’s pretty good actually. But British Columbia still ranks behind all other provinces except Newfoundland/Labrador. PEI is not included in the survey.

Miners are still troubled by a number of areas of high uncertainty: native land claims, wilderness areas, employment agreements, environmental regulations, and regulatory administration, aggravated by regulatory duplication and uncertainty caused by conflicts between different levels of government.

We found strongly divided opinions not just in the questions that asked miners to rank British Columbia but also in the open-ended questions, where some made extremely positive comments and others still remembered the Windy Craggy disaster of the 1990s.

British Columbia has become a good place to mine and to explore. But, more work needs to be done to improve the policy environment. The important thing this government and future governments will need to understand is that a reputation lost is hard to regain. Windy-Craggy comments that still crop up in the survey are lesson on this and will be long remembered even as the policy climate continues to improve.

The future of many rural and isolated areas of the province depends on moving mining policy forward, and avoiding going into reverse.