The Manitoba government would consider lowering taxes on imported metal concentrate as part of a plan to bolster mining and processing in the province, Growth, Enterprise and Trade Minister Cliff Cullen told local business leaders this week.
Cullen discussed the state of mining in Flin Flon and across northern Manitoba during an address to the Flin Flon and District Chamber of Commerce.
“[In] the mining sector, there’s challenges there, but I think there’s opportunities,” he told 20 guests gathered at the Friendship Centre restaurant on Tuesday.
Cullen said his government is working to improve the regulatory structure relative to the mineral sector. This includes a clearer process around the duty to consult with First Nations on new mining projects.
“We’re in the process of actually consulting with First Nations and the business community in terms of developing what we think will be a more effective framework around the duty to consult,” he said. “We want to make sure we get that right so that we have that consultation package in place, everybody understands the process and there’s a time process factor around that as well. So that’s something we’ve heard loud and clear that hasn’t worked well in the past.”
Cullen said the duty to consult process should be seen as a means to an end.“I think a lot of communities viewed that as, you know, ‘We’re getting paid to consult, so that’s pretty good economic development right there,’” he said. “Our view is the consultation process should not be an economic driver. The economic driver is the results. At the end of the day you want to get a mine established, and that’s where the real economy comes, so that’s our mandate.”
Cullen said the province must also ensure the permitting process for mines is “time efficient” and that there is certainty around land-use regulations.
He said Manitoba currently attracts about two or three per cent of all mineral exploration dollars spent in Canada, down from previous levels as high as
10 per cent.
“I think if we can get the framework right, we’ll get the money back in Manitoba for exploration,” Cullen told the chamber delegates.
“We do have the resources. We just have to make sure we’ve got the people on the ground to go out and find that resource.”
Concentrate tax
Of course once a mine is found, metals must be extracted from its ore. On that front, Rob Winton, then head of Hudbay’s Manitoba operations, said earlier this year that with 777 mine set to close around 2020, the company was examining the possibility of importing metal concentrate to process at its Flin Flon metallurgical complex.
Winton said provincial taxes made it more costly to import concentrate than to process concentrate from Hudbay’s own mines.
Speaking Tuesday, Cullen said he was aware that the concept of a lower tax on imported concentrate had been raised, but he personally had not heard from Hudbay about the issue since his government was elected in April.
He said concentrate taxes could end up being part of a conversation he had scheduled with Hudbay later that same afternoon.
Asked if he is open to the idea of lowering the tax, Cullen said the province could “certainly have a look at that,” but he made no promises.
Colleen McKee, a Flin Flon city councillor, pitched Cullen a couple of ideas to strengthen the local economy.
She proposed a 20-mile radius be established around Flin Flon, Creighton and Denare Beach inside which people could access services from both sides of the border. As an example, she said people who visit this area to fish need two fishing licences because of the border.
McKee also suggested the province heed a proposal once put forth by former Flin Flon MLA Jerry Storie. The idea is to have the government offer residents of one-industry communities insurance on their homes and businesses so that if the economy sours and they have to relocate, they can claim the insurance.
She said this would give people more confidence to buy property in one-industry communities.
Diversification
Cullen also faced questions around economic development from Tom Heine, a retired Flin Flon geologist. Heine said various organizations have tried unsuccessfully to access dollars from a provincial economic-diversification fund for mining-dependent communities.
Cullen said the fund derives revenue from mining taxes and currently contains slightly more than the required minimum of $10 million.
He said this “pretty minimal amount” stems from a decline in mining activity.
But if “monies are going into the fund and nothing’s being drawn out to diversify economies,” Heine replied, “that suggests to me that somewhere something’s evaporating.”
Cullen then directed his deputy minister to obtain for Heine a balance sheet showing how dollars from the fund have been spent over the past 10 years.
When another attendee, Lawrence Gillespie, asked Cullen to name some of the projects the fund has paid for, the minister said he would get Gillespie a list of such initiatives.
Cullen said the province is excited about the future of northern Manitoba and has moved to place the government’s economic-development functions “under one roof” rather than being spread out.
He acknowledged that when it comes to economic development, the province does not have all the answers and will rely on partnerships.
“That’s why we’re out visiting with communities and visiting with people, because we think if we work together in partnership, that will lead to the prosperity of the province,” said Cullen.
Tolko sale?
During his address Tuesday, Growth, Enterprise and Trade Minister Cliff Cullen spoke optimistically about the potential sale of Tolko’s paper mill in The Pas to another company.
“Obviously a very tough situation in The Pas with Tolko, but I know there are some businesses that are having a look at that,” he said. “We’re optimistic and the community is looking forward to working with those businesses to hopefully get them there, to the point where they will maybe purchase the asset. And obviously as a government, we’re there to try to facilitate that as well, and I think that’s certainly a role for us as government.”
While some critics have called on the PCs to bail out Tolko, Cullen said his government is not interested in short-term bailouts because they are “short-term solutions.”
“We’re interested in being there for the long haul,” he added. “So if a business is interested in being here for the long haul, yeah, we’ll partner. If there’s a strategic investment there for us, we’re there. That’s our job.”
Tolko recently announced it would close its paper mill in The Pas in early December. The mill is the single-largest employer in The Pas with 332 workers and another 250 or so contract loggers.
