Just Not ready

[Topper]

Reef, there is a Minerals Tax on production that varies over the life of the mine. It is initially low allowing the company to pay off its capital investment ($1 - 3B+ in the case of a porphyry copper deposit) and then escalates after that. Out of that come the First Nations share (35% - 40% of the government cut).

Then there is all the taxes on employees, contractors, service company employees, their spending and savings, the good and services contractors and suppliers provide .....

Look at our resource based towns, Williams Lake, Princeton, Kamloops, Prince George, Terrace, Fort Nelson, they aren't pretty but the money flows from them and makes places like Kelowna, Cranbrook, Nelson, Smithers and Vancouver possible.

We often hear the term "value added" in relation to manufacturing and processing. Primary resource industries are value creators for those downstream value adding businesses.

Think of a tree, a logger cuts it down (value created) a mill turns it into lumber (value added) a plant turns it into cabinets (more value added).

In the 90's I was working for one of the world's largest mining companies. I lead a delegation from the Caribbean to demonstrate the value mining can bring to a society. We went to Belize to show them what an exploration site looks like in the jungle and its minimal impact as well as the followup reclamation.

We then went to the Four Corners area of the US where there are several thermal coal mines and electric generating stations feeding Los Angeles. Those mines are 2 mile long strip mines that work their way across the scrub semi desert and reclamation is ongoing as the strip advances. The group was impressed by the reclamation but a kicker for them was the mines are on Navajo lands and at the time the Navajo were receiving about $20m/yr from the mines. They had turned that money into massive agricultural projects and were the largest supplier of potatoes to Frito Lays and one of the largest suppliers of dried beans in the US.

From there we went to Port Hardy BC to see the size of a copper mine that their country had the potential to host giving them an idea of the footprint of the operation. The mine had been closed for a couple of years, reclamation was in full swing and the efforts were distinctly visible. The best part of the tour came from a meeting with the Mayor of Port Hardy. He explained that when the mine started, they expanded City limits to include the mine so they could get property taxes (with that they assumes responsibility for roads/potable water and other normal civic services). The knew the mine had a 20yr life expectancy (it ended up being 22yrs) so they had a good idea of the revenue to the civic coffers from the mine. At mine closure they had a new police staion, a new aquatic centre, a new winter sports complex, a modern sewage treatment facility, $200K debit (it was cheaper to carry then pay the penalty on early payoff) and $2M in the bank. Damn good for a town of less than 10k population.

The Mayor told the group the choice was theirs, squander their revues on new cars and nice offices or invest the money in long range capital projects that help the community.

Belize did the exact opposite of Port Hardy. There was a small oil field discovered. light sweet oil, beautiful stuff. Some Mennonite farmers were running it from the wellhead straight into their tractors. The oil was sent to Venezuela for refining and the Chavez regime had a foreign aid program throughout the region where they gave loans on advanced petro sales to buy UN and other international bodies votes. Ministers were getting new cars every two years (more often if their drunken drivers crashed them). Some Minister's were opening bank accounts in Uruguay. Whenever a cheque from Venezuela arrived each government held riding would host a massive street party with music, free food and free beer with their Party faithful bussed in from around the Country. As the oil reserves fell and the regime in Venezuela weakened, the parties stopped and the people realized they had been duped.

The biggest hindrance to development is First Nations, more specifically their NGO advisors and environmental NGOs combined with an activist Supreme Court (most of it Trudeau appointed).

These NGOs continue to get paid as long as there is a dispute. They have no interest in reaching a resolution. Continued conflict is their business sustainability model.

Did you notice that the recently announced wind farms in the interior have been given an environmental assessment waiver and will not face any scrutiny. They all have First Nation's partial ownership. Did you notice that the newly announced transmission line from Prince George to the LNG plants on the coast have been given limited oversight.

As I noted, BC just shut down the mineral claim staking process in BC. They also just announced a review of BC Timber Sales. This is part of their agreement with the Greens. Furstenau, the Green Party leader, made a name for herself protesting the storage of contaminated soil in a mined out quarry in the Cowichan Valley (BC's main contaminated soil rehab facility is on the mine site in Princeton, they also take in all the bird flu cull carcasses). She is vehemently anti resource industry and Eby just did a deal with them to stay in power.

[Topper]

Did I say this reminds me of the National Energy Policy and Let Those Eastern Bastards Freeze in the Dark

Smith is fighting

https://x.com/ABDanielleSmith/status/18 ... 0771764384

[UWSaint]

Think of a tree, a logger cuts it down (value created) a mill turns it into lumber (value added) a plant turns it into cabinets (more value added).

Topper, this whole post is great, but I wanted to highlight this sentence. I think there's a whole generation of people (younger) who don't understand this is how value creation and enhancement works. And if they understand it abstractly, they fail to fully appreciate the downstream effects of squeezing value creation. I think of it a little like saving & investing money. If you don't seed the brokerage account, you get nothing. If you seed it too small, you don't get the full benefit of compounding returns. None of this is to say that you don't try to "internalize" the externalities from resource exploitation through reclamation and other efforts, but when you tighten the screws too much, economies are wrecked.

When economies are wrecked, poverty increases, health declines, etc etc etc. And options to get out of those circumstances through honest work diminish, the culture loses a belief in self-reliance and the connection between work and wealth disappears. Government dependency increases, as does government itself, all while the tax base flattens or declines.

These NGOs continue to get paid as long as there is a dispute. They have no interest in reaching a resolution. Continued conflict is their business sustainability model.

So true. There was a time when it was hard to make a living doing this kind of "public interest"/NGO work. The "true believer" effect was all there was -- though even that was sometimes enough to fuel continued conflict because the nature of true belief is uncompromising and nonpragmatic. But these days, there's enough money flowing in that direction to attract people to NGO's because its a "safe job" doing "good work." Plus, NGOs are great ways to facilitate corruption. See this thread....

I am no expert on the Canadian economy, but the layman's view from south of the border is that its in a total shambles. Like approaching the point of no return. Its also the south of the border layman's view that Canada is unbelievably rich with natural resources -- plenty to exploit, plenty to preserve, plenty to enjoy. It is Canada's great natural advantage, and when combined with its inherited English legal system, it has all of the makings for an economic dynamo. Technology has only made more of Canada's many resources more readily exploitable; this should be a golden era. Do any Canadians on this board think it is?

[donlever]

The people on the board aren't the issue.

Well most anyway.

Kevin O'Leary preaches what you just said ad nauseum but according to Dude he's anti Canadian because he posed for a photo with a Trump.

[UWSaint]

The people on the board aren't the issue.

Well most anyway.

Kevin O'Leary preaches what you just said ad nauseum but according to Dude he's anti Canadian because he posed for a photo with a Trump.

I know that a lot the people on the board get what's going on in terms of how economies function, but I am wondering whether my word-of-mouth not-really-researched perception about Canada's economic condition and outlook being unusually grim is an accurate perception.

About the US, for example, I would have said the 2008-9 financial crisis was real and impactful, but never seemed chronic or uniquely difficult to recover from. The most recent economy has seemed worse -- inflation generally and price increases due to other factors -- were broadly felt and significantly regressive in effect because it was hitting hardest in fundamental goods and services -- food, housing, energy. But, like the government's structural deficit, it feels like a boat all western advanced economies were floating in. It feels civilizational, not parochial, though I think parochial approaches will ultimately sift out which places will recover and which ones will own nothing and like it.

[donlever]

I have faith (and belief) that we will recover just fine once JT is gone and we can all shift back towards that Centrist area between left and right and decisions are made based on the financial as opposed to "feelings".

Governments are not perfect (obviously, far from) and will always harbour swamp like, narcissist fat cats in it for a Marxist Maserati or Carbon Tax Rolls but as long as we meander back to functional under the guidelines of reaping the benefits (at least some of) that our abundant resources should provide recovery will occur....

[Meds]

I am no expert on the Canadian economy, but the layman's view from south of the border is that its in a total shambles. Like approaching the point of no return. Its also the south of the border layman's view that Canada is unbelievably rich with natural resources -- plenty to exploit, plenty to preserve, plenty to enjoy. It is Canada's great natural advantage, and when combined with its inherited English legal system, it has all of the makings for an economic dynamo. Technology has only made more of Canada's many resources more readily exploitable; this should be a golden era. Do any Canadians on this board think it is?

I agree with this. Too many of our provincial governments, and our current federal regime, have increased social spending nearly to the point of unsustainability all while cutting their own throats by chasing away their own revenue generators. We have given way too much control of our resources to the First Nation groups who comprise roughly 2% of the total population. As Topper points out, they are the biggest reason for our national stall in this area. They are definitely a vulnerable people, and while they were previously exploited by government and developers they are now exploited by the NGO's who are in the pockets of the WEF, Soros Foundation, and the like.....too many of our politicians are also in those pockets.

What O'Leary has said about Canada and the US being a powerhouse duo is spot on. The potential for that is off the charts. A "right-wing" minded economic alliance between these countries is exactly what the elites (and any non-allied nations) fear. Throw in Mexico and the the NAFTA crew would be a juggernaut.

[Chef Boi RD]

Mëds = Benedict Arnold. Traitor! Coward! Guys like Willam Wallace would caber toss you over a Cliff. Do you have no shame? You, Doc, Topper, BCExpat?

[BCExpat]

Mëds = Benedict Arnold. Traitor! Coward! Guys like Willam Wallace would caber toss you over a Cliff. Do you have no shame? You, Doc, Topper, BCExpat?

You're the one that should be ashamed of himself. You are supposedly a business man, yet you support left wing policies that will only hurt your business in the long run. While the rest of us are going to stick it out here in Canada and try to right the ship so to speak, you are talking about just abandoning the country and moving to Italy, because you don't like what is going on here. If you are looking for a coward, just look in the mirror.

[Strangelove]

Chef Boi RD, you called Trumpy Poo a fascist and racist for his nationalism/patriotism.

Well just look at you now!

[Meds]

Mëds = Benedict Arnold. Traitor! Coward! Guys like Willam Wallace would caber toss you over a Cliff. Do you have no shame? You, Doc, Topper, BCExpat?

Why is an economic alliance traitorous?

Actually hoping you will answer that question rationally and not like a troll.

[2Fingers]

Is this question troubling you in your sleep Reef? Just ask the AI: https://www.perplexity.ai/search/how-do ... Ox1YGVCA#0

Thanks 5, that helps a lot. Not my area of interest so I prefer to ask questions.

[2Fingers]

Thanks Tops, quote your long conversation as other can read it. Appreciate the information provided in it and one model on the BC give, amount others, get their piece of the pie.

[Chef Boi RD]

IMG_6574.jpeg (68.19 KiB) Viewed 1219 times

[Topper]

I am no expert on the Canadian economy, but the layman's view from south of the border is that its in a total shambles. Like approaching the point of no return. Its also the south of the border layman's view that Canada is unbelievably rich with natural resources -- plenty to exploit, plenty to preserve, plenty to enjoy. It is Canada's great natural advantage, and when combined with its inherited English legal system, it has all of the makings for an economic dynamo. Technology has only made more of Canada's many resources more readily exploitable; this should be a golden era. Do any Canadians on this board think it is?

Canada is still very much a hewers of wood, miners of ore economy. Yes we have some diversification but you only need to look at Federal transfer payments to know the Provinces with resource based economies are carrying the those who have chosen to either not exploit their resources or don't have a resource base to start with.

We like to talk about how diversified it is but the numbers don't lie.

Here in BC, there is a tradition with the NDP governments to get away from the resource industries, in the 70's by trying to impose an in situ tax of mineral resources, subsequent NDP regimes have succumbed to first Nations and environment interests in over regulating the industry. They do it in a cunning way, on one hand they will grant a permit,within the permit they will impose new conditions to make the project economically impossible.

I remember a small scale electrical generating plant that would use slash and debris from local logging operations in combination with a small amount of coal from a small local mine that was teetering on the brink of shutdown. The wood part appealed to Greens as a way of utilizing the entire tree and leaving liitle wast on the forest floor when replanting but they hated the coal aspect. Thing is you can't generate electricity burning green wood. Too much heat (energy) is used in drying the wood to burn that there isn't enough heat remaining to make electrical generation possible. That is where the coal came in. A certain % of coal and you have enough energy to dry the wood, burn it all and generate electricity. The location was a brown fields site.

The government granted the permit, then they reduced the permissible coal content to make it uneconomic. They could tell industry, "hey we gave them a permit we are pro industry", they could tell the greens, "your concerns were heard and the level of coal was reduced".

A charade.

The few annoying things Canada has that Trump has mentioned in the past. Our dairy industry is controlled by an industry marketing board and quota based. Dairy farmers are paid based on their allowed quota and can be paid not to produce depending on market conditions. Sadly it is a sacred cow and untouchable lest one be willing to commit political suicide. Danielle Smith has mentioned that the Feds and other Provinces refuse to put it on the tariff table like they have Alberta petro products.

Our telecommunications is closed to foreign competition. We have some of the highest cellular rates as a result of a Big 3 pseudo monopoly.