Growth in mining sector reshaping Quebec economy
By Barrie Mckenna
Think of the Quebec economy, and the traditional drivers are energy, forestry and manufacturing. But there’s a new engine in Quebec – mining – and it’s reshaping the economy of both the province, and the country.
Investment in the province’s mining industry is expected to reach $4.4-billion this year, up 62 per cent from 2011. That’s nearly equal to the capital that will be poured into manufacturing ($5-billion), a remarkable 27 per cent of all business investment in the province and represents half of all mining investment in the country, according to a National Bank of Canada analysis of recent Statistics Canada figures.
“That’s never happened before,” National Bank of Canada chief economist Stéfane Marion said in an interview. “It’s a huge growth driver for the province this year, and in the future.”
It’s not the only first. Quebec will lead the country in mining investment this year, outpacing Ontario, Mr. Marion said.
Mining investment is expected to hit $3.7-billion in Ontario, $2.8-billion in B.C. and $500-million in Alberta.
For Quebec, the money pouring into dozens of iron ore, gold, copper and other mining projects could add a full percentage to GDP this year and cause an unexpected boost in royalty revenue for the cash-strapped government. It will also have spinoff benefits for Montreal-area manufacturers, who will help supply mining-related equipment.
But Mr. Marion said there are broader implications. The Quebec economy is starting to look a lot more like the booming resource-rich provinces of the West.
“This is a material change in the industrial structure of Quebec,” Ms. Marion said. “It brings the interests of Western Canada and Quebec into line. It’s not just a pure Western Canada story now. It’s spreading to Eastern Canada.”
Quebec is also positioning itself to capitalize on the growing resource appetite in China and other fast-growing emerging economies, he said.
And the good news: The mining boom is just getting started as Quebec plots its 25-year “Plan Nord” strategy.