This text is part of the special section Mines and natural resources
Mining drives the economy of several regions, such as Abitibi-Témiscamingue, thea Côte-Nord and Nord-du-Québec, in addition to greatly supplying the caisses of Québec, by royalties paid. A manna which should not, however, make us forget the repercussions environmental issues which, if left unchecked, could cost the province dearly.
The mining industry has never brought so many benefits to the province. “It is still $1.8 billion in contributions to the state coffers in 2020, including $632 million (M$) in mining royalties, calculates Josée Méthot, president and CEO of the Quebec Mining Association ( AMQ). We contribute more than 30% of the GDP [produit intérieur brut] regions like Côte-Nord and Abitibi-Témiscamingue! »
Mining royalties quintupled in the province between 2014 and 2020, from $121 million to $632 million, report says Economic benefits of the mining industry in Quebec in 2020 of the AMQ. In 2021, royalties reach a new record, with $926 million paid to the Quebec Treasury.
Josée Méthot mainly attributes this increase to the increase in the price of raw materials. In 2020, more than 87% of royalties came from the province’s gold and iron mines, two materials whose market price — which is calculated in US dollars — has increased in recent years.
Mining companies must pay mining taxes based on their profit margin, explains Josée Méthot. Some mines also reap more profits when they have finished paying for their infrastructure and are able to exploit their deposit more efficiently, adds the expert. Until the last budget, mining royalties were paid into the Generations Fund and used to reduce the province’s debt. Since the last budget, they have funded personal income tax reduction.
The economic heart of the resource regions
In Abitibi-Témiscamingue, more than 4,000 people worked in the mining industry in 2020, which is equivalent to 30% of jobs in the region, calculates the AMQ in its biannual report. In the same year, the mining sector provided 28% and 25% of jobs respectively in Nord-du-Québec and Côte-Nord. In all regions, the QMA calculates that each direct job in the mining industry generates more than one indirect job in the province.
These spin-offs radiate all over the province, explains Josée Méthot. Many industrial workers come from metropolitan areas; they will thus reinvest their income in their groceries, their house or their automobile in the region where they live, she illustrates. “Although it is located in the regions, the mining industry has economic spinoffs everywhere in Quebec, because it has workers and suppliers who live everywhere in Quebec, mainly in the major centres,” she says.
The benefits of the mines could also continue to increase over the next few years, the province having adopted a plan for the development of critical and strategic minerals for 2020-2025. “With the enthusiasm for critical and strategic metals, the government’s desire to position Quebec for the production of these metals, our legislative and regulatory framework, our current social and environmental practices, I think that Quebec is very well positioned to meet the requirements of responsible procurement policies, clean raw materials”, believes Mr.me Methot.
Of 33 projects in development, 18 concern metals, such as lithium, graphite, copper, zinc, nickel or rare earths, reveals the latter. In fact, graphite production has almost doubled, going from more than 6,500 tons to more than 12,000 tons between 2020 and 2021, according to the AMQ. “I see the future with a very positive eye,” says Josée Méthot.
Towards what transition?
In Val-d’Or, the co-responsible for the national program of MiningWatch Canada and co-spokesperson for the Quebec Coalition better mine has better mine is less optimistic. “There is such economic domination of the mining sector that it prevents the emancipation of economic diversification,” believes Rodrigue Turgeon, pointing to the fragility of an economy based on the performance of metals on the market. He also deplores the transfer of mining royalties from the community to individuals.
“At the climatic level, is it correct to continue for decades to put all our eggs in one basket and to have a whole society that revolves around an extractive industry? he asks, concerning the development of the mining sector in the province. There is no questioning of the mining industry. We are in a logic of expansion and addition and not of transition. »
Only 3.5% of metals are recycled, while we are dependent on virgin minerals, he laments, highlighting the lack of investment in a more circular economy of metals, and towards a more responsible use of them. this. He gives as an example the extraction of gold, a large portion of which is used to make ingots or jewelry, a use that he considers unjustifiable in the context of the climate crisis.
“It’s the siren song of the economic spin-offs of the mining industry,” he sighs, highlighting the great absence from the economic analysis of the industry: environmental externalities. “We are talking about very broad impacts on the air, on the water,” he says, recalling that the cost of restoring hundreds of mines abandoned by companies that have declared bankruptcy now falls on the Quebec government.
Faced with the race for critical and strategic metals aimed at accelerating the energy transition, Rodrigue Turgeon is worried: are we asking the right questions to achieve a real transition?
This special content was produced by the Special Publications team of the Duty, relating to marketing. The drafting of Duty did not take part.