Alana Wilson is a senior research analyst at the Fraser Institute’s Global Centre for Mining Studies (miningfacts.org)
Canada’s mining industry is globally competitive, and has long succeeded without much in the way of government subsidies. It even thrived in the last recession by responding to market demand. Yet instead of letting markets drive mining investment in Quebec, the provincial government is bailing out the asbestos industry using taxpayer money – and this for a product that is harmful to human health.
In recent years, market demand for chrysotile asbestos produced in Canada shrank dramatically, which led to a halt of chrysotile mining. But instead of letting mines stay closed, taxpayer funds are now being used to gamble against markets and reopen an unprofitable chrysotile mine.
Premier Jean Charest recently approved a $58-million loan to allow the Jeffrey asbestos mine to reopen. This follows months of negotiation and several extensions of the government loan offer to give private partners more time to raise money. The Quebec government – and taxpayers across Canada whose federal transfer dollars end up in Quebec’s budget – will now provide financing for two-thirds of what it will cost to renovate the mine so it can reopen.
Even before this bailout was announced, the mine struggled and operated infrequently in recent years. All other Canadian asbestos mines have closed; the last one was shuttered in November. In January, LAB Chrysotile Inc., the other remaining asbestos miner in Quebec, filed for bankruptcy.
The demise of Canada’s asbestos industry reflects a declining global demand for asbestos driven by health concerns. The World Health Organization estimates that 107,000 people die each year from asbestos-related lung cancer, mesothelioma and asbestosis from exposure to asbestos in their workplace. Although chrysotile, the type of asbestos mined in Quebec, is relatively less harmful than other types, the key word is “relatively.” All asbestos is considered carcinogenic by the WHO.
Even if chrysotile can be safely mined and handled in Canada, the European Union and more than 40 countries have deemed it too dangerous and have prohibited its use. Whether or not the health concerns are real, the global market has shrunk. Taxpayers should not be required to subsidize uneconomic activities, let alone carcinogenic ones.
Yet governments have refused to stop spending our money. Between 1984 and 1997, Ottawa provided nearly $20 million to the Chrysotile Institute, a not-for-profit organization that provides training and promotes the use of chrysotile internationally. Government support came in the form of $250,000 per year to the institute as well as an additional $10,000 per year for representatives to attend workshops and conferences in support of the chrysotile industry. The feds also spent an estimated $575,000 in an unsuccessful case to have the World Trade Organization overturn France’s ban on asbestos.
Aside from this federal support, Quebec provided $200,000 per year to the Chrysotile Institute.
For the rest of this article, please go to the Montreal Gazette website: http://www.montrealgazette.com/business/asbestos+bailout+your+dollars+well+spent/6954088/story.html