The mining industry took $7.4-billion worth of minerals out of Quebec soil in 2014 and handed the government less than $120-million in return.
Let’s do it with all the zeros, just so we are clear. Mining companies earned $7,400,000,000 from stuff they pulled out of the ground, our ground, and paid us $120,000,000 in return. That amounts to around 1.6 per cent of the value of our non-renewable, natural resources and does not include the clean-up bill taxpayers are often stuck with ($1.2-billion at last count), the $22-billion the province is planning on spending in its Plan Nord development project over the next decade, nor the 10-year corporate tax holiday Quebec gives for projects worth more than $300-million.
(Sorry, while fact-checking that last item, I discovered the Liberals have now made it a 15-year tax holiday for projects of $75-million or more!)
Yes, when mining companies take a sufficiently huge bite of our natural resources, we not only charge them next to nothing, we offer them a 15-year tax break!
Even though Quebec has recently upped the ante slightly, mining companies operating here still remit royalties that are about one-third less than the Canadian average of 4.5 per cent. Add to that the general reductions in corporate taxation from 10 years of Tory governments in Ottawa and like-minded Quebec governments and you will begin to understand why our politicians are complaining that the cupboard is bare.
That’s because the job of filling it has been left more and more to the average taxpayer while corporations extract our resources and take their growing profits and sock them away in offshore tax havens.
Remember that the next time the government tells you that we have to live within our means, that we can’t afford to offer our teachers and nurses a wage that keeps pace with inflation or that government austerity measures are aimed at protecting our future.
Remember that the royalties Quebec charges international mining conglomerates to strip away our future — our eminently exhaustible gold, silver, uranium, iron, copper, nickel and zinc deposits — is less than the interest rate you earn on your savings account.
Now before you start moaning about how if we raise mining company royalties they’ll go elsewhere, keep in mind that they’re already paying three times as much in other provinces and even more in other countries, especially for minerals such as gold and other precious metals. We should also keep in mind that most of these are resources that will continue to climb in value, so leaving them in the ground until someone is willing to pay a fair price to extract them isn’t a lost opportunity, it’s an investment that can yield a much greater return in the long run. And a mining company that’s unhappy with our royalty rates can’t exactly pack up the gold mine and move it to the Turks and Caicos.
Governments, however, are under pressure from resource industries to allow them to extract as much as they can as quickly as they can so that their investors — mostly other companies, not the retired couples with a modest stock portfolio you might be imagining in your head — can reap the highest short-term rewards. So these companies spend a fortune lobbying to keep royalty rates down. In exchange, they offer governments like the Couillard Liberals a chance to brag about how they’ve attracted investment and increased growth in GDP and created a few hundred skilled jobs in remote regions.
This is catnip to politicians, who are short-sighted by nature. Which explains why a Quebec government that is crying poverty when dealing with its own employees is refusing to consider any significant changes in the way the province sells its natural resources. Instead of looking at ways to increase revenues without raising personal taxes, Couillard’s treasury board henchman, Martin Coiteux, is looking to squeeze expenses by picking the pockets of public servants, especially the next crop of retirees.
Meanwhile, mining companies are offered a better deal here than they’re getting in many of the world’s less-developed countries, and Quebec Inc. companies like Bombardier are receiving billion-dollar government bailout investments that amount to $764,706 per job to save 1,700 employees on the C-Series jet program.
Quebec isn’t poor. By any measure, it is richer than it has ever been in its history. It’s just poorly managed by men who’d rather cut a welfare cheque than raise royalties on a bar of gold. ■
Peter Wheeland is a Montreal journalist. His sardonic observations about the city and province appear on Cult MTL every week. You can contact him by Email or follow him on Twitter.