How Justin Trudeau will shape Canada’s mining future

Justin Trudeau is making his mark on the country’s mining associations. They have welcomed him into office and he has promised more funding for exploration and education in the sector, as well as reforming relationships with First Nation communities. There is also hope that the Liberal party will have an impact on the rights of workers in foreign Canadian mines. But can Trudeau balance these policies with his proactive environmental stance?


Justin Trudeau

Canada has some of the richest geology on Earth, with more than 60 minerals and metals being mined from its land. This has made it one of the largest mining nations in the world, ranking as one of the top five countries globally producing 11 of the world's major minerals and metals.

Mining contributes $54bn to Canada's NDP and supplied nearly 20% of the value of Canadian goods exports in 2013. So, unsurprisingly, mining is an industry that the country wants to maintain.

Since Liberal Prime Minister Justin Trudeau won the election this year, mining associations have been welcoming him into office, acknowledging the big role he will no doubt play in preserving Canada's mining history.

Policies and promises

The Mining Association of Canada's (MAC) president and CEO Pierre Graton congratulated Prime Minister Trudeau on his victory, as the new leader of a party with a strong legacy of investing money in mining.

"We welcome the opportunities the new government will bring to ensure that the mining industry continues to benefit communities across the country, meet expectations of Canadians with respect to the environment and social performance, and maintain its role as a key contributor to Canada's economy, both domestically and internationally," Graton said.

Many of the liberal policies and commitments put forward by Trudeau are of particular interest to Canada's mining industry. These include promises of investing in innovation, building infrastructure and training people to work in the sector, as well as more funding for frontier mining.

For example, Trudeau announced plans to spend $200m on developing clean technologies for forestry, fisheries, mining, energy and farming. He said this would boost economic growth by creating more jobs in Canada's industries.

"Trudeau also pledged to extend the Mineral Exploration Tax Credit by three years."

Trudeau also pledged to extend the Mineral Exploration Tax Credit by three years and introduce a further 25% credit for Northern and remote projects.

The 15% mineral exploration tax credit (METC) was put in place by the previous Liberal Government in 2000. It has helped Canadian miners raise billions for exploration projects, which encouraged investment in the struggling industry.
Furthermore, Trudeau has allocated $200m to train workers and $50m for the Aboriginal Skills and Employment Training Strategy (ASETS).

There are already 380,000 people across Canada working in mining and mineral processing industries, so it is welcome news that money is being invested in expanding the industries and creating more jobs, so the country can remain a major player in the global markets.

Saving the environment with clean-tech

The environment is an important topic for the Liberal party, and once elected, Trudeau put climate change and green energy at the forefront of his agenda.

"Canadians expect their government to be responsible around climate change and addressing the impacts of the environment we're facing around the world right now," Trudeau said after the swearing in ceremony. "Canada is going to be a strong and positive actor on the world stage, including in Paris."

During the introductory talks at the COP21 Paris climate change debates in 2015, which he was alluding to, Trudeau promised that Canada is serious about addressing climate change and reducing carbon emissions. So, keeping a beneficial mining industry must be balanced with finding innovative ways to generate the masses of energy these mines use.

"The Government of Canada is committed to growing the Canadian economy and protecting the environment," said the representative for Natural resources Canada Danica Vaillancourt. "The sector is an important economic driver and employer in hundreds of communities across the country."

A proactive environmental policy may prove detrimental to miners, particularly in coal. The Mining Association of Canada says the Canadian mining industry practices the highest environmental standards and that its industry is a recognised leader in responsible mining.

However, if coal mines start to be progressively shutdown and replaced by greener sources of energy, many workers may find themselves out of a job. This is something that Trudeau can't avoid, so the way in which Canada adapts to clean energy will be vital.

Trudeau will, for example, have to ensure the creation of new jobs in the clean energy sector to replace the ones lost in the fossil fuel industry.

Another major hurdle will be navigating a low price environment, as a global downturn in commodity prices has also affected all major producers, including in Canada, but the long-term outlook is positive, says Vaillancourt.

"The government will work with the provinces and territories, industry, indigenous communities and other stakeholders," she said. "To focus on innovation, the development of clean technology and strengthening the regulatory process to ensure a prosperous, resilient and sustainable exploration and mining sector as commodity prices recover."

Rebuilding relationships

More support for Aboriginal Canadians is also a key part of Trudeau's vision for the future of Canadian mining. The Prime Minister has pledged to provide them with education and skills training in the sector, as well as assuring that spending will be equalised between public school boards and those run by indigenous peoples.

"We need to get First Nations education right, and that means making sure that First Nations have control over their education," Trudeau said. "We're talking about $0.5bn a year invested in First Nations education for a total of $2.6bn over four years of our mandate."

"More support for Aboriginal Canadians is also a key part of Trudeau's vision for the future of Canadian mining."

MAC has expressed its support of the First Nations projects, stating that it sees indigenous people as a major part of the future mining industry.

"We were pleased to see that the Liberal party has recognised the importance of responsible development of our natural resources to Canada's current and future prosperity," said Graton. "We are committed to working collaboratively with government, aboriginal communities and other stakeholders on any new policies relevant to our sector."

Lumbered with a bad reputation

While mining associations are pleased with a liberal government and hoping for a valuable future for Canadian industries, there are still issues to address. Canada has faced criticism over human rights violations, particularly in Latin America and Africa, and this new government is thought to be the one to start addressing it.

Trudeau and his party have voiced their support of regulating the practices of Canadian mineral and fossil fuel companies that operate abroad, to ensure they follow international human rights standards, such as protecting workers.

Canada's mining reputation had suffered under former Prime Minister Stephen Harper, when he opposed legislation modelled on the US Alien Torts Claims Act that would have permitted lawsuits to be made against Canadian companies responsible for major human rights violations, or environmental damage abroad.

The Conservatives and opposition MPs also defeated Liberal party member John McKay's private members bill in 2009, which would have withheld diplomatic and financial support from companies found responsible for abuses abroad.

Canadian companies have been accused of uprooting communities, causing environmental damage and violence against workers. At the Barrick Gold mine in Tanzania, over twenty people have been killed in the past decade by security forces hired by the mine, or bribed policemen.

Mckay said that the newly elected leader would start improving Canada's reputation in this sector.

"One of the clear takeaways from the election and the defeat of Mr Harper was that Canadians had an almost cathartic reaction to [becoming free of ] Mr Harper's increasingly negative image of Canada," he said. "We have a herculean task to restore Canada's international reputation."

Before the election, Trudeau promised he would launch an immediate, public review of Canada's environmental assessment processes to better serve the interests of the public and generally make the mining industry more transparent.

Canada's mining future

The Liberal party's impact on the mining industry is likely to be positive, with decision-making based on scientific facts and evidence, and consideration of the public's interests.

Trudeau may have been welcomed into office by Canada's mining associations, but he now faces the challenge of maintaining the country's valuable industries, while sticking to his environmentally friendly policies.

In particular, mining companies will have to adjust to having their practices scrutinised, whilst starting to use technologies that reduce the environmental impact of mining.

Canada's mining industry and its workforce will have to wait to find out whether it can be harmonised with Trudeau's environmentally friendly and humanitarian policies, for a profitable future.