Rules and procedures a pain
Regulatory duplication among biggest investment deterrents
Fact file: The rankings
On policy potential, the NWT rank tied for 29th out 31 jurisdictions. Only Wisconsin and B.C. were worse. Nevada, New Brunswick and Alberta were best. Fraser Institute calls this index a report card to government.
On mineral potential, a region's geological attractiveness, the NWT tied for second with Chile behind Ontario. P.E.I., Maine and Wisconsin were ranked lowest.
For investment attractiveness, NWT ranked 16th out of 31. Nevada, Ontario and Chile were tops with P.E.I., Wisconsin and B.C. ranked lowest.
24 per cent of the companies consider regulatory duplication and inconsistencies a strong deterrent to investing in the NWT. Worst was B.C. at 64 per cent.
19 per cent said environmental regulations were a strong deterrent to investing in the NWT (Wisconsin 78 per cent).
33 per cent of the companies said land claims were a strong deterrent. B.C., Newfoundland and Yukon were higher at 84, 48 and 35 respectively.

Doug Ashbury
Northern News Services

NNSL (Dec 21/98) - When it comes to investing in mining in the NWT, many resource companies cite regulation duplication, as well as inconsistencies in the rules, as a deterrent to exploration.

According to the just-released Fraser Institute mining survey, 24 per cent of resource companies that filled out the survey said government rules and procedures were a pain when it came to aiming investment dollars at the North.

B.C. was worst with 62 per cent of the 85 companies that responded -- this group spent $1.5 billion on exploration last year -- to the survey.

When it comes to companies investing in the NWT, "one of the largest concerns is getting through the environmental assessment," said Laura Jones, the institute's director of environmental studies.

The permitting process involves the Department of Indian Affairs and Northern Development, as well as other federal entities, Fisheries and Oceans and Natural Resources Canada.

When 24 per cent of respondents said the regulatory environment is a strong deterrent "that's a signal that should not be ignored," Jones said.

"Companies are not opposed to meeting strict environmental policies (but) they object when the rules change and they are not clear," Jones said.

Another thorn for companies is the timeframe of the environmental assessment process.

Some 35 per cent of the survey's respondents said six months to permits is acceptable. Another 34 per cent said within one year would be appropriate.

From project submission to final permitting, the BHP process was three years and seven days. Diavik anticipates it will take about 19 months for its permits.

"The kinds of things Diavik is going through tell the story," NWT Chamber of Mines executive director Mike Vaydik said.

"They are entrenched in a review process that is not established and there are time-line questions," he said.

Diavik, aiming to be the NWT's second operating diamond mine, is amid a comprehensive review as it seeks permits to build a mine.

But the BHP Diamonds-Dia Met Minerals Ekati project underwent a panel review.

A panel review for one and a comprehensive review for the other could lead to questions about the process itself -- not whether one or the other is appropriate.

Provincehood could be the only solution, Vaydik said.

DIAND is doing its best, but the NWT feels the full weight of federal rules, he said.

"In the provinces, provincial laws move in. Here, we deal with different federal agencies. Yukon (because it is a territory) also has the same problems," he said.

"I think we need to harmonize these federal regulations. If we had provincial status, we would be more likely to have harmonization."

And, said Vaydik, the water is likely to get muddied even more with the coming of the Mackenzie Valley Resource Management Act, due to get Royal Ascent soon.

When will the various boards, called for in the act, be up and running is among the hundreds of questions "we are getting," Vaydik said.

On the upside, the NWT, with Chile, is ranked second after Ontario when it comes to mineral potential index which rates a region's attractiveness based on geology.

Last year, the NWT ranked first in mineral potential.

Despite its extremely attractive geology, the NWT ranking in the survey's policy potential index was bottom of the barrel. The North ranked third last out of 31 jurisdictions.

The policy potential index is a composite index that measures the effects on exploration investment of government policies including taxation, environmental regulations, duplication and administration of regulations, land claims, protected areas, infrastructure, labour and socioeconomic agreements.

Only Wisconsin and B.C. ranked worse than the NWT when it came to the policy potential index. Wisconsin has a "virtual moratorium on mining," Jones said.

The survey is based on responses from 85 North American mining companies (61 juniors and 24 seniors).

Participants -- the Fraser Institute sent the survey to 280 mining companies -- account for exploration expenditures of $1.5 billion. They represent $476 million, or about half, the total expenditure in Canada for gold, diamonds and base metals.

As well as Canadian provinces and territories, the survey includes 17 U.S. states, Mexico and Chile.

The Fraser Institute is a Vancouver-based think-tank.