May 2011

New MAC president poised for national stage

Pierre Gratton vows to push back on “regulatory creep”

By Thom Loree

Pierre Gratton said he will focus on regulatory harmonization and human resource challenges | Photo courtesy of Normand Huberdeau/NH Photographes Ltée

What a difference 12 years can make. When Pierre Gratton was first appointed to the Mining Association of Canada in 1999 as vice-president of sustainable development and public affairs, the dot-com bubble was about to burst and mining was considered a sunset industry. The emphasis then was on diversification and away from the traditional resource sector.

Since then, the resource sector has rebounded (notwithstanding the crisis of 2008) and mining is once again in vogue. All in all, it is a promising time for the industry – and for Gratton in his new role as president and CEO of MAC. Before this appointment, he had served as president and CEO of the Mining Association of British Columbia since 2008.

“During the dot-com era, it was tough getting any kind of attention in Ottawa,” recalled the 46-year-old Montreal native. “But the world has changed. People now realize that there is essentially one economy and it’s neither old nor new, neither traditional nor hi-tech. There’s also a greater recognition that mining, capital-intensive as it is, drives the high-tech industry. Mining companies are constantly looking at ways to improve efficiency and deal with environmental challenges.”

Gratton is confident that the fundamentals are in place for a long-term upward cycle. “We’ll continue to see dips, sure, but the dips could end up being better than the peaks were 10 years ago,” he said. “One thing is certain: this is a new era. The prime minister has referred to Canada as an ‘energy superpower.’ When he says that, he is mainly referring to the oil sands, which are largely mining operations. What Canada is, in fact, is a mining superpower.”

Whereas in the past, MAC focused primarily on domestic matters, its mandate has expanded to include international concerns. “The global issues with which the industry is wrestling with have become more prominent and complex, whether they are trade, human rights or corporate social responsibility,” Gratton noted.

In 2004, Gratton played a pivotal role in developing MAC’s award-winning initiative Towards Sustainable Mining (TSM), which set out performance indicators that MAC members are required to implement and report on annually. Today, TSM is being used at advanced exploration projects both at home and abroad.

“The program has advanced to the stage where it is really about implementation,” explained Gratton. “A growing number of our Canadian-based member companies are applying TSM to their off-shore projects and this, in turn, means greater credibility and support. As a result, Canada’s mining companies are being recognized worldwide for what they’re doing in the area of corporate social responsibility.”

Efforts by MAC and other industry organizations to persuade government to cut the corporate income tax rate have recently met with success. At the beginning of this year, the tax rate was lowered to 16.5 per cent from 18 per cent, and further reductions are expected. What this means, said Gratton, is that the mining industry’s concerns about tax rates have been largely addressed.

With tax competitiveness essentially a fait accompli, MAC has turned its attention to regulatory improvements. “We’ve started to make some headway in that area,” said Gratton. “For example, amendments to the Canadian Environmental Assessment Act have put the Canadian Environmental Assessment Agency in charge of comprehensive studies, eliminating a lot of the delay and uncertainty that existed before.”

Gratton cautioned against what he termed “regulatory creep,” that is, the continual expansion of the federal government into provincial jurisdictions. “The emphasis now is on building greater provincial-federal harmonization, avoiding duplication, and generally having more thoughtful, consistent and workable regulatory regimes,” he explained.

The latest challenges facing industry are what Gratton referred to as “good problems,” the problems associated with success. “As the industry expands in response to rising commodity prices, we are going to see a greater focus on Canada’s infrastructure – transportation and energy – to make sure we can get our products to market efficiently and cost-effectively,” he said. “And we are going to have to intensify our efforts in getting more people interested in working in mining. The human resource challenges we are already facing are only going to intensify.”

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