Facts and Figures 2008 – A Report on the State of the Canadian Mining Industry

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Facts and Figures 2008 – A Report on the State of the Canadian Mining Industry

by NationTalk on September 8, 20081216 Views

The Canadian Mining Industry—Activities and Key Issues

The mining industry is an important contributor to Canada’s economic strength. The industry employs 363,000 Canadians in mineral extraction and in the value-added smelting, fabrication and manufacturing areas. The industry’s $42 billion contribution to Canada’s gross domestic product includes $10 billion in mineral extraction and $32 billion in mineral processing and manufacturing.Internationally, Canada is one of the world’s leading mining countries and ranks among the largest producers of minerals and metals. The industry accounts for 19% of annual Canadian goods exports. Key exports include iron and steel, aluminum, nickel, copper, gold, uranium, coal, potash, zinc, diamonds and iron ore. Exports of these products ranged from $1.9 billion to $14.5 billion in 2007. Consequently, an estimated 70% of Canadian port volumes and 55% of rail freight revenues are generated by the mining industry. As well, some 3034 suppliers provide expertise to the industry, including hundreds of engineering firms, environmental firms, and legal and financial firms. Canada was the leading destination for global exploration spending in 2007, receiving 19% of world spending, followed by Australia at 12% and the United States at 7%.

While the industry is important at the local community level, it also contributes to the economy of Canada’s larger cities. Toronto is the world’s leading city for mining finance—the TSX handled 80% of worldwide mining equity transactions in 2007. Vancouver is home to the world’s leading cluster of exploration companies, while Montreal houses important aluminum and iron ore companies. Edmonton has become a global centre for oil sands expertise and Saskatoon for uranium and potash. Mining is also the largest private-
sector employer of Aboriginal Canadians and stands to offer increased opportunity to this segment.

Mining and its related industries are important contributors to federal, provincial and territorial coffers. According to a recent study for MAC, the industry paid $8.15 billion in taxes and royalties to federal and provincial/territorial governments in 2006. Including the fourth stage of activity would add a further amount of around $2.5 billion. These payments increased significantly in 2006 and have likely continued to increase in 2007.

Average weekly wages and salaries in the mining industry were $1213 in 2007—a level that was 30%, 29%, 24% and 22% higher than that of workers in the construction, manufacturing, forestry and finance sectors respectively. This gap has widened over the past year, reflecting the industry’s relatively buoyant price and profitability situation.

Canadian mining companies are active investors in research and development— companies invested a total of $538 million in 2006. Statistics Canada reports that some 4600 R&D employees work in the mining and minerals industry, higher than totals for the agri-food, oil and gas, electrical equipment and automotive sectors, and close to the level of the aerospace and pharmaceutical sectors.

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