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Archived - Extractive Industries: The Canadian Advantage at Home and Abroad
Canada’s oil and gas and mining companies are key drivers of the Canadian and global economies.
With interests in more than 8,000 properties, both in Canada and in over 100 countries abroad, Canadian companies in mining and mineral exploration alone account for almost half the world’s activities in this sector. These companies, many of which are small- and medium-sized enterprises, have built a world-renowned reputation based on Canadian know-how in exploration, engineering, extraction, development and financial management. When extractive resources are developed and managed in an economically, socially and environmentally responsible manner, job creation is facilitated and sustainable economic growth can occur in countries and communities where they are operating.
Within this context, resource-rich countries are increasingly seeking to learn from Canada’s best practices in the development and management of their extractive sector, as they look to capture the potential of their own natural resource endowments. The Canadian Extractive Sector Strategy articulates a strong vision for Canada’s response to these countries by bringing to bear a broad range of commercial, diplomatic and development efforts.
The extractive sector, which includes oil and gas and mining companies, generated $174 billion in exports for Canada in 2013, accounting for over 39 percent of total domestic exports. In the mining sector alone, nearly 3,200 suppliers of equipment and services support the industry.
As well as creating jobs and growth today in Canada and around the world, Canada’s extractive sector is also making a large contribution to this country’s long-term economic security. In the case of mining (including some downstream activities), payments to Canadian governments (federal and provincial) in the form of taxes and royalties totalled $18.9 billion from 2008–2012. The mining sector’s economic footprint also extends to the financial sector. Specifically, from 2008 to 2012, 39 percent of global mining equity and over 70 percent of all global mining equity financings were handled through the Toronto Stock Exchange and the TSX Venture Exchange — more than through any other stock exchange in the world. The mining sector’s financial strength helps to sustain private pension funds and the Canada Pension Plan.
The Canadian Extractive Sector Strategy sets out a framework to ensure greater coherence and more effective implementation of efforts to advance the interests and opportunities for Canada’s extractive sector abroad. Guided by stakeholder consultations undertaken in 2013 and informed by the enhanced Corporate Social Responsibility (CSR) Strategy for Canada’s Extractive Sector Abroad: Doing Business the Canadian Way, the Canadian Extractive Sector Strategy coordinates efforts, including through support provided by the government of Canada’s “economic diplomacy,” to help generate business success and fuel prosperity for Canadians as well as host governments and local communities abroad. The four pillars of the Canadian Extractive Sector Strategy, as well as highlights of each pillar, are set out below.
Securing and preserving access to international markets for Canadian business including by:
- reinforcing the commitments of the Global Markets Action Plan to advance trade and investment agreements, especially Foreign Investment and Protection and Promotion Agreements (FIPA) to provide companies in the extractive sector the confidence they need to invest and conduct their operations;
- advocating for an improved environment for responsible business activity in the extractive sector abroad, including through international bodies such as the G7/G20, and via bilateral partnerships with resource-rich countries; and,
- leveraging domestic policies and programs in support of the Canadian extractive sector abroad, such as the Global Opportunities for Associations program to help Canadian organizations and companies create new business opportunities in key financial, technical and industrial sectors.
Transforming business opportunities into business successes including by:
- Providing the on-the-ground support of the Government of Canada through its economic diplomacy to leverage opportunities abroad;
- positioning Canada as a partner of choice and an attractive destination for foreign direct investment, and facilitating an expansion of investment by Canadian extractive sector companies abroad;
- branding and promoting Canada and Canadian extractive companies leadership and excellence in responsible resource management through the Responsible Resource Development Initiative, both at home and abroad; and
- increasing training for Canadian Trade Commissioner Service officers in the extractive sector so that they can continue to deliver targeted and sustained assistance to facilitate increased commercial opportunities for Canadian companies.
Sustaining the business environment and local communities including by:
- working with host governments to enhance their capacity to manage the development of their own natural resources for economic, social and environmental sustainability, thereby helping to reduce poverty;
- promoting transparency and accountability in the international extractive sector;
- growing businesses and improving local economic development through economic diversification and local value creation;
- enabling communities to maximize benefits from the extractive sector to promote inclusive growth and community empowerment, including training and skills development;
- improving resource governance in resource-rich countries to create a more predictable and stable business and investment environment for Canadian companies; and,
- building on the enhanced CSR Strategy to strengthen and focus Government of Canada efforts to help extractive companies incorporate CSR into their practices. Incorporating CSR and reflecting Canadian values, better positions Canadian companies to succeed and reinforces Canadian leadership and excellence in responsible business practices.
Producing economic benefits for Canadians including by:
- promoting the global leadership and expertise of the Canadian extractive sector so that Canadian-based supply and service firms supporting domestic oil and gas and mining companies can also succeed in international markets;
- supporting the extractive sector so it can be an engine for value-added jobs in research and development and for increased Canadian investment in innovation; and,
- continuing to support a productive Canadian extractive supply chain, with a focus on small and medium-size enterprises.
In addition to the CSR Strategy and the Canadian Extractive Sector Strategy, other government initiatives to foster leadership in social, environmental and economic performance by the extractive sector include:
- the Extractive Sector Transparency Measures Act which will require companies to report specific payments made to any level of government in Canada or abroad;
- initiatives to improve natural resource governance in developing countries so they can maximize the economic and social benefits from oil, gas and mining development, including the Extractive Industries Transparency Initiative (EITI) and the Intergovernmental Forum on Mining, Minerals and Metals and Sustainable Development; and
- creation of the Canadian International Resources and Development Institute, (formerly the Canadian International Institute for Extractive Industries and Development), which aims to help developing countries build their natural resource management strategies to maximize the benefits of natural resources for their citizens.
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