Why is the Mining Industry on a Federal Lobbying Spree?

Canadian mining companies are desperate.

That’s about the only possible conclusion to be drawn after monitoring the federal lobbying database for more than eight months.

Since the election in October, companies such as Teck Resources, Rio Tinto Canada and Iamgold — mining the likes of gold, copper, uranium, coal and diamonds — have racked up 164 “registered communications.”

Such meetings have involved MPs 78 times, ministers 16 times and chiefs of staffs another 20 times.

Even those impressive efforts pale in comparison to the Mining Association of Canada, which has met with federal officials in 123 separate meetings.

(For some context, that number matches the combined number of meetings that three heavyweight oil and gas lobby groups — the Petroleum Services Association of Canada, the Canadian Association of Petroleum Producers and the Canadian Fuels Association — have had in the same span of time: 52, 45 and 26, respectively.)

The Prospectors & Developers Association of Canada has chipped in another 30 meetings; all together, lobby groups representing the mining industry have totalled 173 meetings.

That means that since October 19, mining companies or associations (excluding oilsands operations and mining for industrial minerals such as potash) have lobbied federal office holders 337 times.

And that doesn’t include communications relating to the “enforcement, interpretation or the application” of legislation, meaning the actual number is likely far higher.

Mining Companies May Be Nervous Due to Environmental and Indigenous Priorities

Jamie Kneen of MiningWatch Canada suggests two things may account for the high number.

For starters, companies and associations “may be a little bit nervous” about the new federal government.

Prime Minister Justin Trudeau and his cabinet have indicated an interest in environmental reviews, a nationwide carbon tax and at least symbolically respecting Indigenous rights.

Compounding such possible changes is that the industry is “in a bit of a crisis globally.” Iron ore prices, copper and gold prices are down. And massive trade deals such as the Trans-Pacific Partnership (TPP) loom on the horizon, something mining companies certainly have an interest in.

“Commodity prices are down,” Kneen says. “The customary level of relationship and support they have from the government is that much more important. And that affects everything from royalty and taxation rates to access to land and permits and so on.”

South of the border, a new report by Western Values Project noted that five mining companies, including the massive Peabody Energy, spent $95 million on lobbying U.S. legislators prior to their respective bankruptcies.

Kneen also said a lot of lobbying efforts were put into seeing an extension on the controversial mineral exploration tax credit, which was granted in the federal budget.

Lindsay Tedds, tax policy expert at the University of Victoria, has argued the mechanism “only serves as a tax planning tool for wealthy investors,” leading to high-risk investments. It costs taxpayers between $40 and $150 million per year.

Why is the #Mining Industry on a Federal Lobbying Spree? https://t.co/F7s7JWsDgq #cdnpoli #bcpoli #Alaska pic.twitter.com/gvWXXus6kf

— DeSmog Canada (@DeSmogCanada) July 5, 2016

Mining Companies Coping With Plummeting Credit Ratings, Allegations of Tax Avoidance

Domestic metal mining activities might not draw quite as much attention as the oil and gas industry, but there’s certainly lots going on.

The Mining Association made waves in April when it called for a national carbon price, although Kneen suggests “there wasn’t a lot of substance to it” as it didn’t make any commitments to any particular form of carbon pricing.

Regardless, he says it was a “very politically astute” move. And the industry certainly could use some good press.

The uranium giant Cameco Corporation is currently facing serious allegations of tax avoidance. Teck Resources’ credit rating continues to plummet due to low commodity prices (it’s currently sitting at a B3, in the realm of “high credit risk.”)

The annual conference hosted by the Prospectors & Developers Association of Canada, held in early March, witnessed a far smaller attendance than in previous years. Barrick Gold is under fire for five cyanide spills in Argentina.

Ontario and Quebec Beefed Up Mining Regulations in 2013

Some provinces are slowly beefing up their mining legislation: in 2013, Quebec increased taxes, environmental regulations and protected areas, and made the review process more rigorous while limiting expropriation opportunities. Ontario also tweaked its Mining Act, but Kneen says it didn’t go very far.

“Ontario did a reasonable improvement on access to land so it was no longer possible for people’s property to be drilled without them even knowing about it,” Kneen notes.

The pressure on mining companies is increasing. But there’s still enormous growth potential for the industry: in 2013, the Conference Board of Canada predicted a 91 per cent increase in mineral output in Canada’s North between 2011 and 2020.

The Liberal government will have plenty of time before then to augment regulations, taxation, carbon pricing regimes and concepts of Indigenous sovereignty.

If the first nine months of its term is any indication, mining companies and associations will have plenty to say about such matters.

Image: Teck Resources