By Peter Jiang

Edited by Tashyana Davidson and Madeleine Whitestone

The mining industry is a critical component of Canada’s GDP, contributing about 5 per cent to its overall 2 trillion-dollar economy. Though Canada itself is intensely resource rich in critical minerals, half of the 1,423 Canadian mining and exploration companies own mining assets abroad with an estimated value of more than $200 billion in 2022. This presence is acutely concentrated in the Global South and has been heavily scrutinized on the international stage for its disastrous record of human rights abuses, environmental degradation, and tax evasion.

If Canada wants to maintain its global reputation as a leader in the mining sector, greater powers and resources need to be dedicated to existing mining governance institutions like the Canadian Ombudsperson for Responsible Enterprise (CORE). The CORE is an office with great potential to promote and enhance responsible business conduct but lacks the ability to review complaints in an efficient manner and hold businesses accountable.  

The CORE has the mandate to encourage companies to follow international guidelines and advise Canadian companies on ways to develop responsible business policies and practice corporate social responsibility. It investigates human rights abuses in only a few industries: apparel, mining, and oil and gas. Its narrow budget means that its independent investigation process can only be internally initiated based on certain criteria that limit its scope to large, systemic cases with abundant evidence. A CORE investigation itself is only reputationally damaging to businesses. Subsequent criminal charges are dependent on whether or not the Ministry of International Trade decides to pursue legal action against the company. CORE lacks the ability to deter bad practices and incentivize meaningful change in Canadian mining strategies.

The numerous human rights abuses by Canadian mining companies operating abroad tarnish Canada’s reputation and are antithetical to our government’s rhetoric of championing human rights and social justice. Reports from as early as 2003 detail Canadian mining companies’ exploitative labour practices, disregard for local communities, and collaboration with authoritarian regimes. In many cases, it is the local communities that face the greatest harm, often experiencing forced displacements and a loss of traditional livelihoods as big open pits replace their native lands.

One such example is Vancouver-based firm Ivanhoe Mines evicting hundreds of Congolese residents into substandard housing to make way for a mine expansion in 2017. One cannot overlook the inherent power imbalances that exist between Canadian mining companies and the vulnerable nations in which they operate. The CORE will never investigate a complaint into Ivanhoe because it only investigates complaints that started before its formation in 2019.

Mining industry representatives will assert that Canada’s standards are among the highest in the world. Other reports find that major Canadian firms like Barrick Gold have a pattern of large-scale environmental contamination, violations of local laws and codes, and litigious belligerence towards local governments. The CORE struggles to address these complaints because it lacks the ability to compel documents and summon witnesses in its investigations.

This issue of foreign governance extends to the complex web of financial transactions that facilitate these ventures. The prevalence of anonymous owners in extractive industries allows many companies to use Canada as a money laundering destination in what many have hailed as “snow washing.” Natural Resources Canada estimates that Canada is home to almost half of the world’s publicly listed mining companies. When mining companies choose to headquarter in Canada for tax benefits, they deprive host nations of much-needed and deserved revenue while bringing few tangible benefits to Canada. Mining Watch Canada, a Canadian mining watchdog, has pointed out that many foreign companies can ‘headquarter’ a mailbox in Canada with very little presence. It should be under the CORE’s mandate to investigate these tax and ownership loopholes and reinforce the accountability of Canadian mining corporations.

The CORE is a recent initiative that will only see lasting success if it is given the powers and resources to provide meaningful recourse to those that Canadian mining firms have wronged. If Canada wants to stay ahead of other countries in terms of corporate social responsibility in the mining sector, further regulations will help to preserve its competitive advantage on the international stage. By fostering a culture of accountability, Canada can position itself as a leader in responsible mining practices, setting global standards and promoting investment through factors other than the bottom line.

Peter Jiang is a Master of Public Policy candidate at the University of Toronto’s Munk School of Global Affairs and Public Policy. His policy interests include telecommunications, mining, and agriculture. In his free time, you can find him reading biographies on Canadian prime ministers and playing Tetris. Peter holds a Bachelor of International Economics degree from the University of British Columbia.