Work stays were the mines are

This year, the Vancouver-based conservative think-tank sent out questionnaires to some 3,000 exploration and mining companies and received responses from executives and managers in 658 of them.

If there can be said to be a bottom line in the survey, it is the Policy Potential Index (PPI) - a ranking arrived at by blending the points received for regulatory regimes, land-use policies and levels of taxation, among other things.

For the second straight year, Quebec landed at the top of the PPI heap, meaning that it scored the highest overall on what the institute calls "a report card to governments on the attractiveness of their mining policies."

Wyoming was second, Nevada third, Alberta fourth, and Newfoundland and Labrador fifth, with New Brunswick, Manitoba, Chile, Saskatchewan and Ontario rounding out the top 10. The Northwest Territories and Nunavut achieved the lowest Canadian grades on the PPI and placed 38th and 42nd, respectively.

All in all, not a bad performance, but governments in Canada can and should be doing more to encourage mineral extraction, says Rob McEwen, a Toronto-based mining executive and one of the most respected voices in the industry. McEwen is the guy who built Vancouver-based Goldcorp Inc. from a collection of small companies with a market value of $50 million into a mining giant worth $8 billion.

These days, McEwen is chairman and chief executive of U.S. Gold Corp. of Toronto, which is exploring and developing properties in Nevada and Mexico.

"We need to get permitting done faster," he says. "We've burdened mining, like a lot of other industries, and made it less responsive. You've got provincial bodies, federal bodies and municipal bodies all claiming part of the process.

"You don't want to railroad things through," McEwen adds. "There are ways of safeguarding the environment and local communities and getting the job done."

Mining inevitably disrupts ecosystems and usually disfigures the landscape. It is one of those industries, like whaling and seal hunting, that environmentalists love to beat up on.

But McEwen argues that we need to find a better balance between natural and economic ecosystems - especially these days when the world economy is in the tank and in danger of staying there for a while.

"Right now, all kinds of people are crying for help," he says. "It's like trying to stamp out fires. But the bigger issue is: How do we create more jobs? You don't do it by doling out money to industries that are failing. Most won't survive."

Mining would be a much better bet - not for handouts, but as a job creator. First, the current slump will end and demand for minerals will rebound. In fact, the Fraser Institute survey concludes that: "The world may face a shortage of raw materials and skyrocketing commodity prices as the world moves past recession and into renewed growth."

Second, mining requires large capital investments and it is a technology-intensive business. "The technology we have developed could be sold around the world," says McEwen. "Look at the air and water pollution in China. What we're doing at minesites could have direct applications there."

The loss of hundreds of thousands of manufacturing jobs in recent years - in large part because work has been outsourced to China, India and other low-wage countries - has devastated whole communities and shaken the economic underpinnings of southern Ontario. The nice thing about mining jobs is that they are geographically captive. They can't be moved.

Besides those it employs directly, the industry creates demand for lawyers, accountants, investment bankers, brokers and insurance companies. "It has been said that for every dollar invested in a mine you get $2 benefit in the rest of the economy," says McEwen. "One dollar in the service sector generates about $0.70 in other activity."

He also contends that other types of developments - like shopping malls - may generate more pollution than mines - think of acres and acres of parking lots filled with automobiles spewing greenhouse gas emissions, but get a much easier ride politically.

"It can take a horrendous amount of time to get a mine permitted," adds McEwen. "You have to jump through enormous hurdles. That may have been fine when the world was flush with economic activity and credit was available.

"Today money is scarce. Governments should be saying we need to attract investment capital. We have to compete with the rest of the world. This is not the time to be scaring money away. It may take 10 to 15 years to bring it back."

(D'Arcy Jenish can be reached at jenish@businessedge.ca)