00:00:00.080Hi, and thanks for being here. Newfoundland and Labrador could be sitting on one of the biggest economic opportunities in the country,
00:00:07.020a jackpot of critical minerals the world is desperate for.
00:00:11.020But instead of booming, investment is failing, projects are stalled, and red tape is choking growth.
00:00:17.300Why is a province with so much potential being left behind?
00:00:21.040Yesterday, I had a chance to speak with Alex Whelan from the Fraser Institute to break down what's going wrong
00:00:25.920and what it would take to turn Newfoundland and Labrador into a global mining powerhouse.
00:00:37.040All right, Alex, let me tell you a little bit about yourself, if you don't mind.
00:00:41.220You are the Senior Policy Analyst at the Fraser Institute, specializing in economics and public policy in Atlantic Canada.
00:00:49.180And recently, you published a really interesting report on Newfoundland and Labrador and the global mining powerhouse that's being left on the table.
00:01:16.060So the report you're referring to is an annual publication of the Fraser Institute, authored by my colleagues.
00:01:21.720And we survey mining investors all over the world.
00:01:24.500In fact, this year, we surveyed mining investors from 82 jurisdictions, countries all over the world, including several jurisdictions in Canada.
00:01:33.620And what we measure in that report is the degree to which mining investors find those individual jurisdictions attractive for mining investment.
00:01:42.140Now, why does that matter to the average person?
00:01:44.860It matters because mining is actually a tremendous economic development opportunity.
00:01:50.800We've made that argument here in Atlantic Canada that certainly in Newfoundland and Labrador, Nova Scotia and New Brunswick, investors have told us there is great potential for economic development, strong paying jobs, investment capital.
00:02:05.200And in fact, and in fact, the mining industry in this region already is a significant part of the regional economy.
00:02:11.840But what investors have told us in the survey is that the region has substantial untapped potential and the government policy is standing in the way of more development.
00:02:23.260What are some of the untapped resources we're leaving on the table right now?
00:02:29.160Certainly, Newfoundland and Labrador is the jurisdiction in Atlantic Canada that investors have identified as the most attractive.
00:02:36.840Critical minerals, especially in the Labrador region, are abundant.
00:02:42.140Demand for critical minerals has been on the rise given changes in battery technology and various elements of the energy transition.
00:02:51.620So Newfoundland and Labrador are certainly a very attractive jurisdiction, but there's significant potential in New Brunswick, in Nova Scotia and right across the country.
00:03:00.980The potential varies a bit by province.
00:03:03.880When you look at Nova Scotia, for example, there's significant potential to mine uranium, something that has been banned for decades in the province, but something where the provincial government recently reversed the ban.
00:03:16.380So that's something we'll be keeping a close eye on.
00:03:18.660And then aside from critical minerals and something like uranium, the three provinces I just referenced all have significant potential when it comes to more conventional types of mining, things like aggregates, gold, gypsum, limestone, salt, et cetera.
00:03:35.300So, okay, now the investment crowd is there saying we'll put money behind mining.
00:03:41.360The resources have been proven to be there.
00:03:44.900What is the government doing to prevent this from happening?
00:03:47.600Where are the roadblocks for this industry?
00:03:51.280Government policy and regulation specifically is a huge barrier for this industry.
00:03:56.660What we hear consistently from investors year after year is that regulation is holding the industry back.
00:04:02.840I think everybody can agree that strong safety and environmental standards must be in place.
00:04:08.600But what investors are telling us is that that is burdensome and it's holding back investment.
00:04:13.660And in a lot of cases, it's simply unnecessary regulation that's doing so.
00:04:18.120If you look at a province like Nova Scotia, for example, you've got the regulatory environment.
00:04:22.400And one key aspect of that is the permitting environment.
00:04:25.220And investors in last year's survey told us that 50% of the time they were waiting for more than 15 months to receive a permit.
00:04:34.480That's the highest proportion of any of the 82 jurisdictions we surveyed.
00:04:39.240Furthermore, 30% of project proponents were having to wait over two years to get a permit.
00:04:45.140So you have the length of the wait and the severe regulatory requirements that these proponents have to tackle.
00:04:52.340And again, it's important to maintain safety and environmental standards.
00:04:56.000It's the excess regulation is what we're hearing that is consistently holding this industry back.
00:05:01.020That's wild because it's not just holding the investment industry back or the buying market out there, holding them at bay for product they would certainly be buying.
00:05:12.320This must have an impact on the economies of these various localities, no matter where it is in Atlantic Canada.
00:05:20.080Like you point out, mining has been a sort of a baseline industry, providing, you know, home economics and households with their lives and lifestyles for many years.
00:05:36.220This must be having an impact on those communities.
00:05:39.820I'm glad you raised home economics because that, I think, is one of the reasons why this is such an important area for public policy.
00:05:46.580Average wages in the mining sector, in my home province here in Nova Scotia, are over $100,000 per year.
00:05:54.740So that's roughly double the average wage in the province.
00:05:58.080So obviously, those types of jobs make a very substantial difference when it comes to people's ability to feed their family and to run their households.
00:06:06.940The industry does currently employ over 3,000 people in this province, and I believe it's closer to 5,000 people in Newfoundland and Labrador.
00:06:14.580So there is a good base level of economic activity there.
00:06:18.260But what the survey tells us is that it could clearly be much higher.
00:06:21.860And what that means for Atlantic Canadians is more of those really well-paying jobs.
00:06:25.920This is a time in which we're trying to find ways to boost the economy.
00:06:31.800We're trying to, you know, find and develop skills.
00:06:35.160Certainly in Ontario and Alberta, in the Atlantic provinces, there's programs in place the federal government has put out there that is meant to develop skills.
00:06:43.700This could be one of those areas that would be perfect to do so, because now suddenly we're tapping into resources, which Canada is rich in, supporting communities, and even bolstering new employment with new skills right here in Canada.
00:07:00.620How does the government justify these blockades, as it seems?
00:07:08.220And you can analyze the merits of various government programs, but I would say the bottom line here is that what we are seeing consistently is that government is an impediment to economic development, especially in natural resources, which has been targeted through a series of regulatory and legislative measures over the past decade.
00:07:26.780Our natural resource industry has been really facing substantial headwinds from the government, really from coast to coast.
00:07:34.360So I think the best thing that government could do when it comes to mining, when it comes to oil and gas, when it comes to other areas of natural resources, really to try to get out of the way, create a solid regulatory framework, a competitive regulatory framework, a competitive tax environment, and then investment funds will flow in.
00:07:52.380But what we've seen over the last decade is unfortunately the exact opposite.
00:07:57.540It's wild to me that we can't just look to how other countries are doing it successfully.
00:08:03.380We always have to build our own framework and infrastructure that is a web of bureaucracy.
00:08:09.880Let's take a look at some other countries that are doing this successfully and apply those same principles.
00:08:14.960The safety standards, the way that we transport or store, the way that we actually handle mining and the carbon footprint associated with it.
00:08:24.240But let's take an example from somebody, another country maybe, that has done this successfully.
00:08:34.140And I would zoom out and I'll make a bit of a macro point for you, Mike, on this, which is the relationship between the size of government and economic growth.
00:08:43.540So at the Institute, we've published research looking at countries all over the world over a long series of time.
00:08:50.980And you ask what makes a country successful, well, we've seen that there's a pretty tight correlation between economic growth and the size of government.
00:08:59.320When you have no government, countries tend to cease to function, can be very dysfunctional, aren't able to provide basic services, security, protective services, et cetera.
00:09:09.220As governments grow as a share of the economy, if they're very small, they tend to substantially contribute to economic growth because those things are badly needed.
00:09:18.940But once you go over a tipping point, government becomes a huge barrier to economic growth.
00:09:23.940And the data is quite clear that in Canada, that's where we're at.
00:09:27.620So our research has shown that the growth maximizing size of government is about 26 to 30 percent of the economy.
00:09:35.400In Canada right now, we're approximately 46 percent of the economy.
00:09:39.480And this is direct government spending at all levels.
00:09:41.540And if you look at my region in Atlantic Canada, we're over 60 percent of the economy in some provinces.
00:09:48.260And so I say that as a big picture suggestion on how can we get more growth, more jobs, a stronger economy in Canada.
00:09:58.240It seems to me that we like to mimic enormous governments when we are we have to remember in this is just opinion right now, Alex.
00:10:07.180And, you know, you can quote me, I think that we need to become a little more aware of ourselves.
00:10:13.240We tend to be on the world stage, the poor kid on the block with shiny shoes.
00:10:20.280And it doesn't make sense when we have all of these resources and we could become an economic powerhouse again, that we just leave them there based on our virtue over, let's say, economic reality.
00:10:34.880If you look at Canada's ranking currently among the 36, 37 OECD member countries, depending which which year you look at, Canada is down near the bottom in terms of economic growth.
00:10:46.700And that means that we're down near the bottom in terms of changes to living standards.
00:10:51.080And the OECD, in fact, is forecasting that that's going to continue to be the case going forward.
00:10:56.320So I think opening up the country for business, opening up the country for stronger economic development is really the key policy change that we need to get out of that rut.
00:11:07.780And as you say, natural resources are just a key driver of that growth.
00:11:13.100But our current position is unfortunate and Canada should be much, much higher.
00:11:17.040Let's zoom back down into the into the resources of Newfoundland and Labrador specifically.
00:11:26.100What are some of the reforms that specifically you think need to happen right away?
00:11:29.900I mean, we can say, OK, government needs to get out of the way.
00:12:00.320Certainly concerns that we hear from investors across the board is uncertainty regarding land claims, particularly vis-a-vis indigenous land claims.
00:12:11.100We hear concerns over protected areas.
00:12:54.040And that's how I felt this reflected on that scenario.
00:12:59.500And it was really great to see a light shone upon it.
00:13:02.700Because otherwise, we're not really going to understand that we have these resources, that we can do it safely, that it can make a difference to the economy of communities that desperately need it, and it can elevate us.