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Ottawa ponders aid for Northern mines

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Heavy equipment at Agnico Eagle's Meliadine gold mine in the Kivalliq region. photo courtesy of Agnico Eagle

The federal government is examining how it might provide help for the North's largest private employer – the mining sector.

Northern Affairs Minister Dan Vandal says the federal government is considering aid for the struggling mining industry, which is a major employer in the North.
photo courtesy of Agnico Eagle

“We want to make sure that the industry is healthy so that people who live in the North can continue to work at the mines and raise their families in the North,” said Northern Affairs Minister Dan Vandal, who met with representatives of the mining industry last week. “I'm working with the minister of Nature Resources, Seamus O'Regan, on the issue. Let's face it, they are a huge employer in the North.”

The industry is reeling due to many “costs pressures” from the Covid-19 pandemic and an injection of financial aid is needed, according to Tom Hoefer, executive director of the NWT and Nunavut Chamber of Mines.

Production at the mines has fallen, meaning declining revenues, he noted, adding that the NWT's Ekati diamond mine is on temporary care and maintenance status so it's not producing at all.

“For diamonds, (it's a) double whammy because diamond markets are even worse now under Covid effects, meaning less diamond revenues,” Hoefer said. “Remember, NWT was (the) third largest global producer of diamonds so this will have big effects.”

Southern workers, who make up a large portion of the workforce at Northern mines, are being flown in at greater expense on chartered planes because of commercial flight restrictions during the pandemic.

Testing of employees for the virus and paying Nunavut workers to stay home to reduce risk of spread are among other new costs.

Some mining companies are slashing capital projects to rein in expenditures, Hoefer said.

“How will they make this up in future?” he asked. “In addition, as they cut these capital projects, they cut project income for Northern and Indigenous businesses that were going to do the work, passing on the revenue pain to those companies who also feel government Covid measures are not helping with this lost revenue.”

He also pointed out that operating costs in the North are already inflated compared to the south -- the pandemic has only exacerbated that factor.

“The minerals industry is going to need a lot of help coming out of this healthy at the other end of Covid,” Hoefer predicted.

Deborah Harron-Thomson, manager of communications, marketing and stakeholder relations for Baffinland Iron Mines, acknowledged that Baffinland is “actively seeking government support to help offset the additional costs we are incurring as a result of Covid-19 and related mitigation measures,” but on Tuesday she wouldn't specify what aid exactly the company has requested.