Address by Minister Fantino: Government of Canada and World Economic Forum Conference: Maximizing the value of extractives for development

March 2, 2013
Toronto, Ontario

Introduction

Ladies and gentlemen, good morning and welcome.

On behalf of our Government and Prime Minister Harper, it's my pleasure to welcome you to this conference on "Maximizing the Value of Extractives for Development."

I would like to extend a special thanks to the World Economic Forum for co-hosting this important conference.

This is just one in a series of successful events that we have hosted together on extractives and development.

Our Government is proud to partner with an organization that shares our commitment to responsible resource development.

Development that respects those resources beneath the earth of a given country should benefit the people who live above the earth of that country, especially those most in need.

This is something we in Canada have experience in, and today's platform is an excellent one where we can share our experiences with our friends around the world and also learn best practices from you.

As I look around the room, it's great to see so many new and familiar faces from across government, industry and civil society.

Of course that is due in large part to the fact that we have been able to host this conference on the margins of the prestigious Prospectors and Developers Association of Canada Annual International Convention.

I'd like to personally thank them and the Mining Association of Canada for hosting the lunch and reception later today.

I'm so glad you could all make it to Toronto this morning to share your experiences and best ideas on this important global issue.

I hope that our international guests will have the opportunity while you're here to see some of the great sites that Canada has to offer.

While your travel to Toronto may have been lengthy, I'm sure you'll agree that it doesn't compare to the long road to this stage in our discussion about how we can leverage extractives for development.

Extractives for development

Just last November, I spoke at Canada's Economic Club and I indicated that our Government would be placing a renewed focus on promoting private sector partnership in international development.

I have to tell you, it raised some eyebrows.

There was concern that this was somehow a departure from our Government's traditional efforts to help those in developing countries.

Of course, this is simply not true.

One of our Government's priorities is, and always has been, to reduce poverty and deliver tangible results for those who are most in need around the world.

We are not interested in Band-Aid solutions.

We are steadfast on achieving results that are meaningful and sustainable.

We want to help bring millions of people out of poverty by achieving sustainable economic growth.

So that families, communities and ultimately, developing countries can sustain their economies, provide the basics and set out on a path to prosperity.

We are unwavering in our pursuit of this goal.

And it's our duty to explore all partnerships and innovative ideas to meet this critical objective.

The key to long-lasting growth is a vibrant private sector that creates jobs, provides goods and services, and can deliver social services, like health and education.

In 2011, exports of oil and minerals from Africa, Asia, and Central and South America were worth over one point four trillion dollars ($1.4T).

That is more than ten times the value of international development assistance provided to the developing world in the same year.

And it translated into jobs and improved livelihoods for millions of people.

In 2010, the mining sector employed more than 2 million people in the developing world, and an estimated 25 million people worked in informal and small-scale mining.

Trends show that this will only increase, with a wave of developing countries expected to become important resource consumers in the next decade.

We know that a responsibly managed extractive sector can be a game-changer.

It can drive sustainable economic growth, lead to more gainful employment, and provide more resources for families and their communities.

But many resource-rich countries lack the governance, infrastructure and technical capacity to tap the full potential of their natural resources and ensure their population receives the maximum benefit.

We cannot miss this opportunity to do things right.

Canadian experience

As an extractives success story, Canada is well-positioned to help developing countries overcome their challenges and implement their vision for this rapidly evolving sector.

Our own economy was built on the foundations of responsible natural resource management.

This has contributed—and continues to contribute—to our economic and social progress in many ways.

The extractive industry has enabled Canada to build highways, railways, and electrical and communications networks.

It's helped develop clean-energy technologies and create hundreds of thousands of quality jobs at home and abroad.

Including underemployed communities in northern and aboriginal populations.

This isn't to say that our experience with extractives has been perfect—there have been many lessons.

Today, Canada is known as a world leader in extractives because we have done our due diligence.

We've consulted with industry and civil society experts like you in Canada and abroad.

We have worked with many of you to implement environmental laws, safe working conditions, and equitable taxation regimes.

And we continue to listen to all our partners, domestic and international, who have themselves identified the development of their extractive sectors as a priority.

This is the case for Ethiopia, and you will have the opportunity to hear more about this from the Minister of Mines herself.

We had the pleasure of meeting in Addis a few weeks ago where we had a very fruitful conversation, and I look forward to exploring areas for further collaboration.

Building capacity

Let me take this time to tell you a little bit about Canada's plan to enable responsible resource extraction for development purposes.

First, we're working to build the capacity of developing country governments to govern their resources in a sustainable and responsible way.

Any economically, socially and environmentally sustainable resource sector must be built on this foundation.

This means developing clear and consistent mining codes, oil and gas laws, and transparent revenue systems.

It means creating and coordinating policies across various sectors and issues, including human rights and the environment.

And it means strengthening information systems so governments can create, share and apply geological data and plan ahead for their resource sectors.

Canada's work with Peru is an excellent example of this.

I'm tremendously pleased that the Honourable Jorge Merino Tafur, Peru Minister of Energy and Mines, will be here with us today.

Peru's extractive sector has been at the heart of its economic boom in the past decade.

With our government's support, the Government of Peru has implemented mining sector reforms that have assisted in the rapid development of this sector.

These same reforms are now assisting the country's local governments to effectively deliver services like education and health care that have the potential to transform countries and communities, and ensure a brighter future for growing workforce.

Growing business environment

We're also working to grow businesses and improving local economic development.

Extractive industries not only create jobs in the sector, they also generate employment indirectly by stimulating demand for equipment, maintenance, food and other services.

Canada helps small and medium-sized businesses feed into these value chains by providing direct or indirect services to extractive sector operations and communities.

We also help local businesses take advantage of new infrastructure to grow other sectors, like agriculture and service industries, in areas close to extractive industries.

New road construction and improvements related to extractive operations can help farmers get to market faster and decrease distribution costs, putting more money in their pockets.

Maximize the benefits

And lastly, we enable communities to maximize the benefits of the extractive sector.

The fact is: extractives aren't just about the resources in the ground or under the ocean floor.

They are also about the resources above ground.

I'm talking about people.

Many developing countries have a strong demand for skilled workers, but there simply aren't enough of them, despite big labour pools.

We are working to bridge that gap by providing women, men and youth with skills development and training to increase their chances of employment in and around the extractive sector.

For example, by supporting a Plan Canada project that is co-financed by IAMGOLD, we are training ten thousand (10, 000) youth in more than a dozen communities in Burkina Faso so they can compete for higher paying jobs.

This is not simply an altruistic activity – it's good business.

By employing locally, extractive companies benefit by having access to quality, committed, local employees and they become more integrated in the communities they operate in.

Building this local ownership is integral to bridging the social gaps that are all too prevalent in mining communities, both here and abroad.

That is why we also support communities to engage constructively with governments and extractive sector companies.

It's absolutely critical for communities to understand their rights as they relate to the environment, gender equality, occupational health and safety and child labour, so they can express their concerns in a constructive way.

Whether we are building governance capacity, growing businesses, or enabling communities to maximize the benefits of resource development —we also work to improve transparency and accountability by all actors in the value chain.

Institute for extractives

This work will be further bolstered by the new International Institute for Extractive Industries and Development, which Canada's Prime Minister Harper announced the creation of in 2011.

Last November, I announced that the University of British Columbia and Simon Fraser University will host this new institution.

The Institute will harness Canadian expertise to: help developing countries strengthen their fiscal management of the extractive sector to ensure the social development benefits are maximized locally and nationally.

I had the pleasure of visiting beautiful British Columbia last week and met with the leadership of the institute.

I'm pleased to inform you that the institute is coming together quickly.

And I'm hopeful that many of you in this room today will support and benefit from the work of this institute in the future.

This is but one example of our work to enable private sector led development.

Our Government's focus on the private sector brings Canada in sync with the rest of the world.

As you know, this model is being used successfully by development organizations in the United States, Britain and Australia, as well as many emerging economies that have advanced as a result.

Canada is also supporting the new African Mineral Development Centre, which will be the guiding force for implementing the Africa Mining Vision, endorsed by African Ministers.

The Centre will provide technical support to African countries looking to harness the extractive sector for social and development transformation.

Canada is proud to be a leading contributor to this Centre.

As both the Canadian Institute and the African Mineral Development Centre get up and running, we hope to explore opportunities for knowledge-sharing and collaboration between these two institutions.

In the field of international development, strong partnerships mean everything.

Partnership

In order to harness extractives for development, we all need to keep working together—government, industry, civil society and communities—to ensure a sustainable and equitable approach.

First, there must be developing country leadership and political will.

And many government leaders in Asia, the Americas and Africa are paving the way.

Second, extractive companies must be at the table and we are pleased to see so many represented here today.

You are investing in the communities in which you work.

After all, it is simply a good business practice to have a good relationship with the communities in which you operate to ensure a fair return on your investment.

Third, constructive members of the Canadian and local civil society must play an increasingly important role in mining communities in the developing world.

They are an invaluable partner for extractive companies.

They can bring the community's needs and concerns to the attention of governments and industry and bridge gaps like providing skills training so more local employment can be achieved.

Conclusion

These are not minor considerations, ladies and gentlemen.

They are central components of long-term development in many countries and communities around the world, including our own here in Canada.

Before I conclude, let me once again say what a pleasure it is to host all of you here today.

I hope you will enjoy the panels that have been organized for you today.

I trust that you will all take away with you some best practices, new connections and a renewed energy to face the challenges of the developing world through private sector partnerships.

However, it's no longer enough to move forward with our work.

We must also improve our communications with those at home and abroad who may not understand the tremendous opportunity that our partnership holds for those families living in poverty.

I encourage you to share your stories with those gathered here today and also bring your experiences of this conference back home.

After all, if we can create a fair and stable business environment that:

  • encourages investment,
  • fosters transparency and accountability
  • respects human rights and the environment
  • and ensures that people benefit from their own resource wealth,
  • we all win.

This is what our Government is working to achieve and I look forward to working together to make the extractive industry a greater force for positive change in the developing world.

Thank you.