Mining in Canada’s North to double by 2020

Conference Board forecasts overall mining output will grow by 91%, or 7.5% annually, until 2020.

January 28, 2013

OTTAWA—The mining sector in Canada’s North is forecast to almost double its output and employment by the end of the decade – staggering growth compared to the Canadian economy as a whole.

Achieving this outcome, however, will depend on better efforts by industry, governments and communities to address key issues including infrastructure, regulatory uncertainty, skills shortages and Aboriginal rights, according to a Centre for the North report, The Future of Mining in Canada’s North.

The Conference Board of Canada forecasts that Canada’s overall northern metal and non-metallic mineral output will grow by 91% from 2011 to 2020, a compound annual growth rate of 7.5%. In contrast, the Canadian economy is forecast to grow by an average of just 2.2% annually over this period.

The annual gross domestic product of mining in the north, which was $4.4 billion in 2011, is expected to reach $8.5 billion in 2020 (both figures in constant 2002 dollars).

Community engagement and environmental protection has improved in recent decades, and the business climate in Canada has been stable. But impediments to sustainable growth remain.

The report identifies six main issues and potential solutions:

  • Improvements to regulatory processes. A solution to cumbersome regulations and duplication among governments may be to conclude more transparent impact and benefit agreements—allowing companies to accommodate local residents’ needs and give communities a chance to participate in negotiations.
  • Inadequate or non-existent infrastructure. The lack of transportation, energy and communities infrastructure is the biggest obstacle to northern mining development. Companies currently provide much of their own infrastructure – public-private partnerships could relieve them of some of these costs.
  • Shortage of skilled labour. Women, new Canadians and youth are under-represented in the mining industry. The North’s Aboriginal population could supply many new workers, but Aboriginal peoples will require education and training needed to work in mining.
  • Engagement of local and Aboriginal communities. Mining companies need to demystify their activities. Communication that begins at the outset of a project and continues through the life of the mine is vital. So are the settlement of outstanding land claims and the conclusion of resource agreements.
  • Environmental stewardship. Despite a substantial improvement in the industry’s environmental performance in recent decades, communities still have legitimate concerns about the ecological impact of projects on natural habitats and traditional lands.
  • Clarity around mine closure. In addition to implementing sustainable practices during production, the industry must develop plans for mine closure, decommissioning and reclamation – in collaboration with the local communities.

Download The Future of Mining in Canada’s North report here.