THE BLOG

Disputed Land Claims The Greatest Deterrent To B.C. Mine Investment

02/06/2015 06:35 EST | Updated 04/08/2015 05:59 EDT
imperialmetals.com

More than 10,700 British Columbians were employed in the mining sector in 2013 with an average salary and benefits totalling $114,600. That same year, the mining industry contributed $511 million in revenues to the B.C. government. However, the industry faces an uncertain future.

Depreciated commodity prices, a tough financing market for juniors, and a slowdown in global demand will make it difficult to attract mining investment in the near-term.

Last week the B.C. government announced that it will establish a Major Mines Permitting Office to streamline the permitting process for the industry. But a lengthy permitting process is not the biggest policy issue hampering mining investment in the province. That distinction belongs to disputed land claims -- the greatest deterrent to investment in B.C.

According to the Fraser Institute's Annual Mining Survey, in terms of pure mineral potential, B.C. ranks in the top five most attractive jurisdictions in the world. However, when government policy (or lack thereof) is added to the equation, B.C. starts to lag behind similar jurisdictions.

Why? Disputed land claims. In 2013, 70 per cent of survey respondents stated that disputed land claims were a deterrent to mining investment. And almost a third of respondents said that uncertainty on this issue was either a strong deterrent to investment or a reason to simply not invest.

Conversely, less than 50 per cent of respondents considered regulatory duplication and inconsistencies to be a deterrent to investment.

Based on survey results, the B.C. government should focus, first and foremost, on providing land certainty by addressing the nearly 50 land claim negotiations in B.C. Furthermore, in light of the Supreme Court of Canada's Tsilhqot'in decision, unless there is more certainty around B.C. lands, streamlining the permit process could become irrelevant as mining companies decide not to apply in the first place.

The court's decision states that once aboriginal title has been recognized, project development requires the consent of the First Nation that holds title to the land. If a mining permit is approved on land that later becomes aboriginal title land, and the project is not supported by the First Nation holding title, then the government "may be required to cancel the project... if continuation of the project would be unjustifiably infringing."

In fact, since the release of the Tsilhqot'in decision, some B.C. First Nations have already attempted to halt projects under the banner of aboriginal title. For example, the Neskonlith First Nation issued an eviction notice to proponents of the proposed Ruddock Creek mine in Northern B.C., claiming that the mine is located on aboriginal title land.

The Gitxsan First Nations served eviction notices to logging companies, sport fishermen, and CN Rail to vacate their traditional territory along the Skeena River, while citing the Tsilhqot'in judgment. With this level of uncertainty in B.C., it's not surprising that more than 70 per cent of investors are thinking twice before investing in B.C.'s mining sector.

If the government is serious about stimulating investor confidence in the mining sector, they need to address the land certainty question. One day, unless more certainty is provided, there may be no one for the new Major Mines Permitting Office to issue permits to. And with an industry that provides $511 million in revenue to the B.C. government, more than 10,700 high-paying jobs for British Columbians, and the most private-sector jobs for aboriginal people, it would be a mistake to let the mining industry falter.

This piece was co-written by Taylor Jackson, Fraser Institute policy analyst.