Coronavirus
Economy

Will the federal government step in to help the NWT’s mines?


The federal minister of northern affairs says Ottawa is examining how to help the North’s mining sector get through the Covid-19 pandemic.

Minister Dan Vandal was responding to an earlier letter from the NWT and Nunavut Chamber of Mines calling for the mining industry to receive federal assistance.

The chamber believes the pandemic’s economic disruption could gravely damage the industry, jeopardizing thousands of jobs across the three territories.

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Dominion Diamond Mines, owner of the NWT’s Ekati diamond mine and 40-percent stakeholder in neighbouring Diavik, has already received a bleak assessment from credit rating agency Fitch.

“We know that many, many industries are going through very tough times, including the mining sector,” Vandal told Cabin Radio on Thursday.

Vandal said he had called the Chamber of Mines on receipt of its letter and spoke with the chamber on Wednesday.

“They’ve provided some suggestions on how we can get through this difficult time. We are analyzing the situation and the suggestions provided,” said the minister.

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“We know it’s the role of our government to help the mining sector through this [but] they are not simple solutions.”

Pressed to outline what some solutions might be, Vandal said: “We’re not at that stage yet.”

‘We need allies’

Tom Hoefer is the Chamber of Mines’ executive director. He said Wednesday’s conversation was his first opportunity to address Vandal since the minister took office in November last year. (Vandal is the first federal minister to hold responsibility for northern affairs without any other portfolio.)

“I think he was basically giving us the opportunity to explain [the chamber’s concerns] to him,” said Hoefer.

“First off, he reached out to us, which was good after our letter. He’s in cabinet, so that’s another voice that can speak up on behalf of the minerals industries.

“We need to have allies who can go out and say that this makes sense, there is a real gap here.”

Hoefer wants the federal government to look at tax breaks for the mines to provide some relief during the Covid-19 pandemic, and says the wage subsidy program – currently paying 75 percent of wages for many businesses – needs to be adjusted to include exploration companies.

“Right now it doesn’t as exploration companies are not revenue generators.” said Hoefer, explaining that those companies’ lack of revenue disqualifies them from the subsidy at present.

“It was an unintended consequence, I think,” he said.

Hoefer says the NWT’s worst-case scenario will be if the two diamond mines still operational – Diavik and Gahcho Kué – are forced to shut down because of the pandemic. Ekati, the territory’s third ordinarily operational diamond mine, suspended work indefinitely last month.

There is no suggestion yet of Diavik or Gahcho Kué shutting down, Hoefer said.

The NWT government has declared itself satisfied that the mines are taking sufficient precautions for workers to continue being flown up from the south and granted an exemption from mandatory self-isolation, though the territory last weekend introduced stricter rules all mines must follow .

Besides the mines themselves, Hoefer said exploration “is virtually shut down” and other industries that supply the mines are facing cuts.

“What’s happening is the mines are cutting back any of the projects they were going to invest in and using that money to cover their extra costs due to Covid-19,” said Hoefer. “That has a ripple effect down to other northern businesses.

“The diamond market isn’t very good right now, either, which has thrown a double whammy on it. Unless the government steps in and starts providing assistance, it’s going to be pretty flat.”

Protective gear sent to Indigenous nations

Vandal said on Thursday more than 500 shipments of personal protective equipment have now been sent by the federal government to Indigenous groups and nations across Canada.

A spokesperson was not able to say how many of those shipments had reached the North. Shipments include hand sanitizers, N95 masks, isolation shields, and gloves. Quantities of each per shipment were not given.

“Healthcare funding is going to be key,” said the minister, referring to a $23-million grant issued to the NWT this week to help the territory’s health and social services prepare for Covid-19.

“The first priority is to prevent the virus from getting up there any more than it already has,” said Vandal. “Second is to make sure the healthcare capacity is there if we need that. We’re going to be working closely, monitoring the situation.”

Vandal said the federal cash given to the NWT was not quite “no strings attached” but, he felt, contained enough flexibility to let the territory decide how it would be best spent.

“We realize these are unprecedented times and we need to be creative and flexible,” said Vandal.

“We also realize this is not going to end next week. Communication and consultation will continue.”

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