November 2008

HR Outlook

Mining for opportunities in northern Canada

By R. Montpellier

Mineral exploration has increased significantly in the North, with new records for expenditures in both the Yukon and Nunavut, according to a Natural Resources Canada report. In the Yukon, exploration expenditures increased in 2007 to $130 million and mine development expenditures increased to $72 million. There were 170 exploration projects in the Yukon in 2007, 97 of which exceeded expenditures of $100,000, and in Nunavut, expenditures on exploration increased to $260 million in 2007.

Diamonds and other low-volume, high-value commodities are currently the focus of mineral developments in the North. In order to capitalize on these opportunities, key issues need to be addressed. Among these are investments in geomapping to help focus exploration efforts, infrastructure that supports industry clusters and streamlined regulation that creates a predictable environment for investments. Underpinning these issues is the need to address the shortages of skilled workers.

The federal government recently announced that it would support two efforts that address the challenges of mining in the North. Nine million dollars in funding will be provided to the Mine Training Society (MTS), which operates under the Aboriginal Skills and Employment Partnership program. The MTS is a non-profit society comprised of aboriginal representatives and industry and government partners, which operates in the Northwest Territories. MTS’s mandate includes placing northerners in mining jobs by addressing the training needs of potential mine workers. This current funding will go towards training aboriginal people and other northern residents for long-term employment opportunities.

Additional funding of $66 million was announced for geomapping in the North, which will contribute to creating immediate employment opportunities as well as long-term sustainability of mining jobs in the North. According to the Prospectors and Developers Association of Canada, a dollar spent in geomapping typically generates five dollars of exploration expenses. Thus, exploration expenses in the North are likely not going to recede anytime soon.

This increased exploration will undoubtedly widen the gap between the supply and demand of skilled labour for the years to come. MiHR is working on a variety of tools to help alleviate the skills shortage including: a mentorship program, a speaker’s bureau, career promotional material, a national skills recognition system, standardized training programs, etc. Although the financial contributions from the Government of Canada to support these initiatives are extremely helpful, these efforts could be complimented with a tax credit for fly-in/fly-out (FIFO) work arrangements. Providing employees working in FIFO work arrangements with a tax credit similar to the northern residents’ deductions could help alleviate some of the pressures being felt by the mining industry as a result of the current skilled labour shortage in the North.

Adjustment to a FIFO lifestyle continues to be a major challenge for the mining industry when it comes to the attraction and recruitment of skilled labour. Residents living in what are known as prescribed or intermediate zones in the North are able to claim deductions for the higher costs of living associated with the isolation of the communities they inhabit. The tax incentive also assists in attracting labour from the South to jobs in the North that would not otherwise be considered.

The mining industry currently employs a significant number of workers in FIFO arrangements. Even though the work sites are frequently located in prescribed or intermediate zones, the employees working under FIFO arrangements are often not eligible for the northern residents’ deductions. A FIFO credit could enhance the ability of companies to attract and retain skilled labour. Such measures could ensure those workers are transported in from outside, only in cases where local workers cannot be found. A tax credit of this sort would primarily assist workers and would only provide indirect support to mining companies by facilitating recruitment and retention efforts.

With a combination of funding for skills training for local aboriginal communities, strong support for national initiatives through the MiHR Council and innovative fiscal policies for employees in FIFO work arrangements, the northern mining industry and its workers will undoubtedly continue to prosper.

Ryan Montpellier is the executive director of the MiHR Council. In 2007, Ryan was recognized with a Gold Quill Award from the International Association of Business Communicators for his contributions in raising awareness of the HR challenges facing the Canadian mining sector.

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