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Capstone Mining Corporation's Minto Mine is pictured in Minto, Yukon August 21, 2012. REUTERS/Chris Wattie (CANADA - Tags: POLITICS ENERGY BUSINESS)

CHRIS WATTIE/REUTERS

A new report on the mining sector is urging Canada to streamline worker immigration procedures and boost tax incentives to encourage exploration in remote areas.

The report by the Canadian Chamber of Commerce warns that the country must not sit on its laurels if it wants to hold its lead in global mining, pointing at areas from the equipment supplies sector to bank financing and legal services and infrastructure as places where government and companies can work together to sharpen the nation's edge.

The Canadian mining industry is among the world's biggest, contributing $35.6-billion to gross domestic product in 2011. That same year mining exports were valued at $102-billion, more than 20 per cent of the national total. The Toronto Stock Exchange is the global capital for mining equity and British Columbia has the largest concentration of mining exploration firms anywhere.

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"We have leveraged our metal and mineral endowment not just by extracting and processing raw material but also by creating and selling the knowledge of how to develop these resources," Perrin Beatty, president and chief executive of the Canadian Chamber of Commerce, said in the industry-sponsored report. "What we need now is to ensure that the factors that made us the global leader of the sector are strengthened," he said.

The 50-page report to be published on Wednesday zeros in on five areas where Canada must improve to hold its top spot on the global resource ladder. Areas include: addressing a skills shortage, refining finance and taxation stimulus, stimulating infrastructure investment, driving mining technology innovation; and engage more with first nations.

"While Canada's competitive strength in mining is founded in its unique pool of qualified people, demographics and the larger skills crisis have transformed what was an advantage into the sector's key challenge," the report says.

That point will strike a chord with many because it echoes the warnings of those who forecast a looming deficit in skilled labour of some 140,000 workers over the next decade as new mines are built and workers retire.

The issue is not without its controversy, however, as illustrated by the ongoing drama unfolding around HD Mining International, a B.C.-based company backed by Chinese interests, which has met union opposition to plans to staff its Murray River Coal Project with Chinese workers.

HD Mining announced Monday that 16 temporary foreign workers hired to work on the coal project are returning to China after two B.C. labour groups filed a court action challenging the workers' permits.

The report makes no mention of the case, but calls on government support to ensure employers play a key role in the selection process for an "expression of interest" approach to immigration.

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Experts interviewed for the report, entitled The World's Mining Capital: How Canada Transformed Its Resources Endowment Into a Global, say Canada's tax and finance system, while a key factor in the sector's success to date, must be further refined.

A targeted exploration tax credit should be developed to encourage exploration in remote regions where exploration costs are high, for example the Arctic, the report said. Similarly, it calls for more investment in infrastructure to promote growth in the mining sector as well as across the Canadian economy.

"There are elements of our national effort that cannot be left to the private sector alone," Mr. Beatty said. "Constant innovation is needed to keep Canada's competitive edge sharp as well as deal with increasing concerns over the environmental impacts of the industry. Access to resources and a regulatory regime that effectively protects Canadians without placing undue constraint on industry is becoming increasingly important."

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