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Paul Bourque is executive director of the B.C. Securities Commission.
Mining: An argument can be made for less regulatory red tape, but there are greater challenges right now
In his letter (Red tape bleeding life from B.C.’s resource opportunities, Oct. 28), Mark Redcliffe argues that regulatory costs and “red tape” are exacerbating the present economic challenges faced by the junior mining industry. While he is correct in stating that the current difficulties in raising capital has left many firms “on the precipice,” it is not correct to attribute the cost of compliance as the primary cause.
For many years, British Columbia has enjoyed an international reputation as a mining centre of excellence. The province is home to more than half of Canada’s mining exploration firms, and has the largest concentration of such firms in the world. With
more than 2,400 companies involved in supplying services to this industry and over 29,000 people employed in mining and its related sectors, it is without doubt a significant contributor to the B.C. economy.
Because of its critical importance, the BCSC wants to better understand the reasons for the recent downturn. We have been speaking with industry about what can be done to support its recovery over the coming years.
At our recent industry conference, Capital Ideas, the BCSC brought together a panel of experts to discuss the numerous challenges facing this sector. We also commissioned a KPMG study that looked at the causes of the downturn. Junior mining executives were interviewed on a confidential basis to get their thoughts on the current state of financing in the industry. While the study did not interview a representative industry sample, it does provide a good indication of the general concerns of junior mining executives.
It came as no surprise that the panelists and those interviewed for the study agreed that the junior mining sector is experiencing what may be the most severe downturn in the industry’s history. Many firms are facing a combination of low cash deposits and depressed commodity pricing that has pushed them into survival mode.
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