Canada’s free-trade deal with Europe will smooth the movement of capital and people across the Atlantic, a benefit that could help the mining sector even more than provisions that reduce tariffs on physical metals and minerals.
While the Canada-Europe trade agreement (CETA) will reduce tariffs currently as high as seven per cent on some mineral products, there are many other ancillary benefits that are just as important, federal Minister of Natural Resources Joe Oliver told the board of the Prospectors & Developers Association of Canada on Tuesday.
The EU has promised better market access for Canadian investment, and the deal will “establishing a predictable, rules-based investment climate and provide a high standard of protection for investors,” Mr. Oliver said.
In fact, the investment environment will be improved in both directions, Mr. Oliver said, because there will be no unpleasant surprises. “There will be a sense that [investors] will be treated fairly.” Certainly in Canada, “we will see foreign direct investment increase,” he said.
The service provisions of the deal will also allow Canadian companies to sell expertise in research and development, technical testing and environmental services to European clients, he noted, and new qualification rules “will make it easier for businesspeople in the mining sector to work in the EU and Canada.”
Under current rules, most raw minerals can be exported to the EU without any duty. But value added products – such as steel and aluminum – get hit with tariffs, and these tariffs will be eliminated under CETA. Out of about $20-billion of Canadian metal and mineral products that are exported to the EU annually, only about $2-billion worth are currently subject to tariffs.
Consequently, the most important feature of the free trade agreement is that it will encourage investment in both directions, said Ross Gallinger, PDAC’s executive director.
And making it easier for mining workers to move back and forth will help the industry “because we do have some skilled-trades issues in the sector, and that is an obstacle to getting [projects done] on time and on budget,” he said. Canada also has enormous expertise that can be shared with European companies, so the mobility provisions of CETA could help us “own the podium” in the mining sector worldwide, Mr. Gallinger said.
PDAC president Glenn Nolan said there is currently virtually no junior mining market in Nordic countries, such as Finland, Sweden and Norway and that could be a great opportunity to export Canadian skills and expertise.
CETA will eliminate much of the red tape that kept Canadian firms from trying to enter those markets and made it hard for professionals to get their credentials recognized there, he said.
Mr. Nolan said that European capital – along with money from other countries – could be very helpful in stimulating the struggling Canadian mining industry. The past year has been “devastating” for the industry, partly because of the difficulty in getting capital to finance exploration, he said.