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EDITORIAL: Inuit investment in mining needed – Nunavut News

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The Hope Bay gold mine in Nunavut was recently acquired by Chinese gold mining company Shandong Gold Mining.

As Canada’s resource industry is rocked by the fallout from Covid-19, the foreign mining firm has scooped up Hope Bay from TMAC Resources for what is likely a good price, despite suspicious timing, creating what Tom Hoefer, executive director NWT and Nunavut Chamber of Mines, has called “good news for everyone.”

Not everyone is happy though as the purchase has generated a national debate around Arctic sovereignty and Canada’s dealings with China.
Geo-politics authors, federal MPs and a former CSIS director have been weighing in on the issue and recently so has Rylund Johnson, a Yellowknife MLA in the NWT’s legislative assembly.

“China has no interest in seeing our rare earth metals developed or any mine compete with their own if it comes to that … If Canada had real economic development corporations and gave the North’s Indigenous development corporations meaningful capital, then we could actually own some of our own resources as a country,” stated Johnson online in response to the article “Chinese ownership of Nunavut’s resources stokes unease,” in the May 25 Nunavut News.

Johnson, we believe, has hit the nail on the head.

What mining in the North in general lacks is proper Inuit investment.

Mining represents a huge opportunity for Inuit to have a stake in the development happening on their land. If the federal government had read the tea leaves and positioned itself to support Inuit-owned development corporations, there could have been an alternative to selling to the opportunistic Chinese-government-backed SD Gold.

Like it or not, Canada is a resource nation but it currently seems entirely unable or unwilling to properly position itself to manage these resources.
As it was clear with the Wet’suwet’en disaster in British Columbia, colonial governments are not effectively dealing with Indigenous governments. While there was a clear communication failure on the federal government’s end, there is also a persisting lack of clarity on resource development throughout the country.

National unity is at an all time low and it is not hard to see that resource development is at the heart of the issue.

From pipelines being blocked in B.C. to separatist flirtations in Alberta over oil to the lack of exploration in the territories, Canada and its politicians seem unable to strike a balance between environmental responsibility and developing a national economy.

This fog of confusion has completely shaken investor confidence in Canada and now the mining community can’t help but be relieved that at least someone is willing to invest in Canada’s North, even if it is from a company controlled by an authoritarian communist dictatorship.

There is risk on both ends of this deal: the risk of a deal not happening at all and all those jobs for Northerners going belly-up and the risk of a bad global actor getting its hooks into Canada’s resources and Arctic sovereignty.

It seems the North wasn’t left with much choice.

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Community and Business Leaders Call for Federal Investment in Offshore – Canada NewsWire

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ST. JOHN’S, NL, July 7, 2020 /CNW/ – Today, community and business leaders, as well as supporters throughout Canada, are united to send a clear message to the Government of Canada that action is needed to attract investment in the offshore oil and gas industry and help thousands of Canadians get back to work. Over 80 leaders have spoken out today about what the offshore means to them and their organizations. Read their comments here.

Over the next 10 years, the estimated loss to the province due to deferment and loss of oil and gas exploration and development projects could be substantial:

  • $11 billion in provincial revenues impacting programs, infrastructure, education and health care throughout communities in Newfoundland and Labrador;
  • $59 billion of total provincial GDP;
  • 90,000 person-years of employment, resulting in significantly lower consumer spending in retail, restaurants, real estate, and other services; and
  • The province’s best opportunity to be an international clean growth leader and oceans technology hub.

The world is moving towards a low carbon economy. Newfoundland and Labrador’s offshore oil and gas industry represents one of the lowest carbon per barrel footprints in the world. Greenhouse gas emissions can be further reduced by making immediate investments in the development of lower carbon fossil fuels. Reducing global emissions by providing the world with Newfoundland and Labrador oil to help supply increasing global energy demand is a valuable contribution to the fight against climate change.

Newfoundland and Labrador’s offshore oil and gas industry fully supports protecting the environment, reducing carbon emissions and working with governments to meet provincial, national, and international emissions reduction targets. Through its commitment to lower carbon and clean technology, the offshore oil and gas industry will be a catalyst for clean growth innovation. The technologies developed will also accelerate the diversification of the province’s economy. The Newfoundland and Labrador approach mirrors that of Norway, a global environmental leader, which has steadily increased oil and gas production since 2012 due to its government’s policy of stimulating exploration and development while simultaneously taking significant actions to move to a low carbon economy and developing new clean technologies that are being exported worldwide. Newfoundland and Labrador can lead Canada’s energy future and make Canada a global clean growth leader like Norway.

The importance of the oil industry to the economy of Newfoundland and Labrador cannot be overstated with an estimated 30 per cent of GDP, 13 per cent of labour compensation and 10 per cent of employment (over the 2010 to 2017 period). As of March 31, 2020 there were 6,390 people directly employed on NL offshore oil and gas development projects while thousands more were employed in supporting industries.

All Canadians are encouraged to join with the over 80 leaders who are today calling for support for the offshore. Learn more at www.weareNLoffshore.ca/supportNL.

SOURCE Canadian Association of Petroleum Producers

For further information: Ken Morrissey, Senior Advisor Communications, Research and Policy, Noia, M: 709-725-5172, E: [email protected]; Jill Piccott, Advisor, Communications and Policy, Canadian Association of Petroleum Producers, M: 709-685-4812, E: [email protected]

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Virus crisis exposes tensions over tighter controls for investment funds – The Journal Pioneer

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By Huw Jones

LONDON (Reuters) – Britain’s market watchdog is resisting calls for stricter rules on investment funds, putting the regulator at odds with the Bank of England which wants tighter controls to prevent them becoming a source of contagion in financial markets.

The BoE has said these funds may need stronger controls after the turmoil triggered by the coronavirus pandemic exposed their potential threat to financial stability because unlike banks they do not hold reserves of capital.

Britain’s commercial property funds, for example, had to stop investors asking for their money back on a daily basis when extreme market volatility hit in March after economies entered lockdown.

Money market funds, a key source of short-term funding for companies, could have become a source of “contagion” during a COVID “dash for cash” had central banks not eased a liquidity crunch, the Bank of England said last month.

“How do we deal with the risks posed to financial stability by the structural tendency for money market and some other open-ended funds to be prone to runs, without having to commit scarce public money to costly support facilities?” the BoE said.

But Britain’s Financial Conduct Authority does not want to rush to impose tighter rules because investment funds can be an important source of cash for companies coping with the crisis.

“We are still very much in the context of a continuing health crisis,” Nausicaa Delfas, head of international at Britain’s Financial Conduct Authority (FCA), told Reuters.

“It’s important that we recognise that the non-bank sector is critical in enabling recapitalisation of companies to promote growth and recovery from the pandemic,” Delfas said.

“This is definitely looking to the medium and longer term.”

She said global and UK regulators are studying how the financial system operated during the early months of the crisis to see how banks, market infrastructure as well as non-banks functioned collectively under extreme stress.

The tension between central banks and securities watchdogs over regulating funds is not new, having surfaced in 2015 when the International Organization of Securities Commissions (IOSCO) torpedoed an attempt by the Financial Stability Board (FSB) to impose bank-like rules on big asset managers.

“The discussion has calmed down quite a lot since then and there is a recognition of the need to be fully informed,” a financial market source said.

The FSB referred to an April statement which said that while the pandemic has highlighted potential vulnerabilities in non-banks, it was important to reap the benefits of the dynamic sector and apply existing recommendations.

The FSB will update on its thinking next week.

The BoE noted in a Financial Policy Committee statement in May that “underlying issues need to be addressed once the immediate problems have passed.” The Bank has said it was in “close contact” with other authorities outside Britain.

An update on funds is expected on August 6 from the BoE.

But a senior funds industry official said Brexit and lack of global consensus on what should be done, leaves Britain with only limited room to reform a cross-border sector on its own beyond making a “noise.”

LOCAL PROBLEM?

Some regulators have noted there has been no global run on funds to indicate a systemic problem, one financial market source said.

March market volatility pointed to problems in the commercial paper market – used for short-term financing – rather than with the money market funds themselves, the source added.

This source said that about 95% of fund assets suspended globally in the pandemic were in UK property funds and that was because of an inability to value assets in extreme conditions.

Before the crisis, the shuttering of a flagship UK open-ended equity fund run by then star stockpicker Neil Woodford had created a sense urgency in Britain for fund industry reform.

But fundamental reform of money market and other open-ended funds like Woodford’s will be tough for Britain because 8,317 of 10,930 of those sold in the country come under European Union law, which Britain can no longer influence since Brexit.

And Britain’s finance ministry has said that there are no viable UK alternatives to EU money market funds in the short or medium term.

“Any action on sterling money market funds in the UK will likely be in the form of additional requirements on EU money market funds being sold in the UK,” said Sean Tuffy, head of market and regulatory intelligence at Citi Securities Services.

(Reporting by Huw Jones. Editing by Jane Merriman)

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Virus crisis exposes tensions over tighter controls for investment funds – The Guardian

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By Huw Jones

LONDON (Reuters) – Britain’s market watchdog is resisting calls for stricter rules on investment funds, putting the regulator at odds with the Bank of England which wants tighter controls to prevent them becoming a source of contagion in financial markets.

The BoE has said these funds may need stronger controls after the turmoil triggered by the coronavirus pandemic exposed their potential threat to financial stability because unlike banks they do not hold reserves of capital.

Britain’s commercial property funds, for example, had to stop investors asking for their money back on a daily basis when extreme market volatility hit in March after economies entered lockdown.

Money market funds, a key source of short-term funding for companies, could have become a source of “contagion” during a COVID “dash for cash” had central banks not eased a liquidity crunch, the Bank of England said last month.

“How do we deal with the risks posed to financial stability by the structural tendency for money market and some other open-ended funds to be prone to runs, without having to commit scarce public money to costly support facilities?” the BoE said.

But Britain’s Financial Conduct Authority does not want to rush to impose tighter rules because investment funds can be an important source of cash for companies coping with the crisis.

“We are still very much in the context of a continuing health crisis,” Nausicaa Delfas, head of international at Britain’s Financial Conduct Authority (FCA), told Reuters.

“It’s important that we recognise that the non-bank sector is critical in enabling recapitalisation of companies to promote growth and recovery from the pandemic,” Delfas said.

“This is definitely looking to the medium and longer term.”

She said global and UK regulators are studying how the financial system operated during the early months of the crisis to see how banks, market infrastructure as well as non-banks functioned collectively under extreme stress.

The tension between central banks and securities watchdogs over regulating funds is not new, having surfaced in 2015 when the International Organization of Securities Commissions (IOSCO) torpedoed an attempt by the Financial Stability Board (FSB) to impose bank-like rules on big asset managers.

“The discussion has calmed down quite a lot since then and there is a recognition of the need to be fully informed,” a financial market source said.

The FSB referred to an April statement which said that while the pandemic has highlighted potential vulnerabilities in non-banks, it was important to reap the benefits of the dynamic sector and apply existing recommendations.

The FSB will update on its thinking next week.

The BoE noted in a Financial Policy Committee statement in May that “underlying issues need to be addressed once the immediate problems have passed.” The Bank has said it was in “close contact” with other authorities outside Britain.

An update on funds is expected on August 6 from the BoE.

But a senior funds industry official said Brexit and lack of global consensus on what should be done, leaves Britain with only limited room to reform a cross-border sector on its own beyond making a “noise.”

LOCAL PROBLEM?

Some regulators have noted there has been no global run on funds to indicate a systemic problem, one financial market source said.

March market volatility pointed to problems in the commercial paper market – used for short-term financing – rather than with the money market funds themselves, the source added.

This source said that about 95% of fund assets suspended globally in the pandemic were in UK property funds and that was because of an inability to value assets in extreme conditions.

Before the crisis, the shuttering of a flagship UK open-ended equity fund run by then star stockpicker Neil Woodford had created a sense urgency in Britain for fund industry reform.

But fundamental reform of money market and other open-ended funds like Woodford’s will be tough for Britain because 8,317 of 10,930 of those sold in the country come under European Union law, which Britain can no longer influence since Brexit.

And Britain’s finance ministry has said that there are no viable UK alternatives to EU money market funds in the short or medium term.

“Any action on sterling money market funds in the UK will likely be in the form of additional requirements on EU money market funds being sold in the UK,” said Sean Tuffy, head of market and regulatory intelligence at Citi Securities Services.

(Reporting by Huw Jones. Editing by Jane Merriman)

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