N.L. could learn from Que­bec

The Telegram (St. John's) - - LETTERS - Mark Mora­bito, chair­man and CEO Alderon Iron Ore Corp. Van­cou­ver

To say that the past few years have been tu­mul­tuous for the Cana­dian min­ing sec­tor is putting it mildly; the num­ber of shut­tered mines, mass layoffs and lost in­vest­ment due to a sharp down­turn in the mar­kets has ex­acted a toll on count­less com­mu­ni­ties through­out the coun­try.

Af­ter a six-year de­cline that ap­pears to have bot­tomed-out in 2015-16, com­modi­ties are now on the uptick, and with it, the po­ten­tial for ma­jor job cre­ation and eco­nomic devel­op­ment. With this resur­gence in the in­dus­try, min­ing com­pa­nies that have po­si­tioned them­selves strate­gi­cally dur­ing the lean years, and that have also aligned with sup­port­ive gov­ern­ment poli­cies, are now in a strong place to suc­ceed.

In a free mar­ket en­vi­ron­ment, a co-or­di­nated re­la­tion­ship be­tween the pri­vate and pub­lic sec­tors is vi­tal for our col­lec­tive eco­nomic well-be­ing. And given its level of in­volve­ment from tax­a­tion to reg­u­la­tion and ev­ery­thing in be­tween, gov­ern­ment de­ci­sion-mak­ing can ei­ther make or break cer­tain sec­tors of our econ­omy. Strate­gic in­dus­try/gov­ern­ment part­ner­ship is an ar­range­ment that, when work­ing well, can de­liver pros­per­ity to its peo­ple; when it is not, it can re­sult in poli­cies and de­ci­sions that cre­ate loss of con­fi­dence from in­vestors and job cre­ators, lead­ing to dis­as­trous con­se­quences and lost op­por­tu­ni­ties.

As the chair­man and CEO of a multi-bil­lion-dol­lar iron ore project that is based in Labrador and strad­dles the Que­bec bor­der, I can only look long­ingly to the prov­ince of Que­bec and its gov­ern­ment that well un­der­stands the crit­i­cal re­la­tion­ship be­tween the pri­vate and pub­lic sec­tors. While New­found­land and Labrador is as pros­per­ous in its abun­dance of nat­u­ral re­sources as its pro­vin­cial neigh­bour, un­like Que­bec it has failed to re­al­ize any­thing close to its po­ten­tial for the in­dus­try. Its cit­i­zens and econ­omy are suf­fer­ing as a re­sult; un­em­ploy­ment is the high­est in the coun­try and the eco­nomic fore­cast for the prov­ince re­mains bleak.

It does not have to be that way. Those em­ployed in min­ing en­joy the high­est wages and salar­ies of all in­dus­trial sec­tors in Canada with an av­er­age an­nual pay of more than $100,000. In 2014, min­ing not only con­trib­uted $57 bil­lion to Canada’s gross do­mes­tic prod­uct, but pay­ments made to the federal and pro­vin­cial gov­ern­ments to­talled more than $71 bil­lion in taxes and roy­al­ties over the last decade.

The Que­bec gov­ern­ment has rec­og­nized that the min­ing sec­tor is a key com­po­nent of the prov­ince’s econ­omy, that, when sup­ported by sound pub­lic poli­cies, not only stim­u­lates job cre­ation, but also en­sures pros­per­ity for its cit­i­zens. Que­bec’s Plan Nord bet heav­ily on the re­turn of a ro­bust min­ing in­dus­try, at a time when the bot­tom was still fall­ing out. The plan called for strate­gic in­vest­ments in pub­lic in­fra­struc­ture and a re­newed part­ner­ship with in­dus­try. As a re­sult of its gam­ble, the prov­ince has ob­tained badly needed for­eign and do­mes­tic in­vest­ment, and has paved the way for more jobs, growth and devel­op­ment.

There are many re­cent ex­am­ples of how this long-term vi­sion and part­ner­ship with in­dus­try have paid off, not just for the gov­ern­ment, but for work­ers, tax­pay­ers and cit­i­zens of Que­bec. Through an agree­ment with Tata Steel, the Gov­ern­ment of Que­bec pledged $175 mil­lion in sup­port of a di­rect ship­ping iron ore project, and in re­turn re­ceived a $1-bil­lion in­vest­ment from the com­pany, along with the cre­ation of 550 well­pay­ing jobs. Cham­pion Iron and Re­sources Que­bec part­nered to­gether in a $26-mil­lion fi­nanc­ing ar­range­ment for the Bloom Lake mine as­sets, giv­ing new life to that project and pro­vid­ing badly needed jobs for the re­gion, as well as en­vi­ron­men­tal recla­ma­tion of the area. Re­sources Que­bec and Ma­son Graphite, also con­cluded a $13-mil­lion ar­range­ment last year for the con­tin­ued devel­op­ment of the Lac Guéret graphite mine near Baie-Comeau. Stornoway Di­a­monds, with $325 mil­lion in sup­port from both Re­sources Que­bec and Caisse de dépôt et place­ment du Que­bec, was able to fi­nance the con­struc­tion of the $1-bil­lion Re­nard Di­a­mond Project in the James Bay Re­gion. And those are just a few ex­am­ples. The ac­tual list could fill sev­eral pages.

Que­bec, by its ac­tions and its deeds, should be held up as a model. When long-term plan­ning and sound poli­cies are put into prac­tice, Que­bec has proven it can yield great re­sults; a stark con­trast to that of its north­east­ern pro­vin­cial neigh­bour.

While New­found­land and Labrador is as pros­per­ous in its abun­dance of nat­u­ral re­sources as its pro­vin­cial neigh­bour, un­like Que­bec it has failed to re­al­ize any­thing close to its po­ten­tial for the in­dus­try.

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