Supporters of more public research spending on geoscience urge government to correct Budget oversight

Backers of a major geological mapping program are urging the Liberal government to find start-up funding from its existing fiscal framework after an apparent “oversight” that resulted in the initiative being ignored in the recent federal Budget. After five years of preparation and encouragement from federal officials, the geoscience community was stunned when the Budget failed to provide funding for the Canadian Geological Mapping Strategy (CGMS) program.

Rather than responding to the request for $250 million over 10 years, the Budget opted to renew funding for the Targeted Geoscience Initiative (TGI) even though it was not high on the Natural Resources Canada (NRCan) wish list. The decision to back TGI instead of CGMS was acknowledged as an inadvertent omission by NRCan minister John Efford last month in Toronto when he addressed a meeting of the Prospectors and Developers Association of Canada.

“This was an oversight because we took it through the necessary programming right through the government process into the budget system,” said Efford. “I clearly thought and understood that this was going to be addressed in the Budget … I have already met with the minister of Finance ... Don’t give up on this yet. Give me another short while and hopefully I will be able to come back and make you feel ... a lot more comfortable.”

CGMS is designed as a successor to TGI, significantly expanding the scope of publicly funded geological mapping, particularly in the north where huge tracts of land remain unmapped. The proposal is also notable for its regional approach and the keen interest of the provinces and territories, which are willing to match federal contributions.

GAPS IN GEOSCIENCE KNOWLEDGE AND CAPACITY

It’s widely acknowledged that there are major knowledge and capacity gaps in public geoscience data and capacity, resulting in unrealized mineral, oil and gas exploration and subsequent production. Mineral and metal reserves, for example, have declined dramatically in recent years and without new mapping activity, a major contraction in economic activity could occur.

CGMS was designed to confront the gaps and a detailed implementation plan was developed after extensive consultation with provincial and territorial governments as well as the university research community and industry.

Various associations are stepping up to push the government to reconsider its CGMS oversight, including the Mining Association of Canada (MAC). It released a statement following the Budget to express its “surprise and disappointment” over Ottawa’s failure to support CGMS, declaring that “the federal government’s indifference to the mapping program is a major concern”. The statement was followed up with a March 24/05 letter to Finance minister Ralph Goodale asking for immediate funding to permit “a modest launch of this important program” and full support in future Budgets.

Several explanations have been floated for the CGMS oversight, but the most plausible scenario is that no new initiatives beyond the Budget’s priority themes received funding.

“In the Budget, a decision was made that, in order to find the money for big ticket items, any new proposals that were not on the list and had a renewal of existing program option, the renewal took place. No one was pushing for TGI. That’s just what they gave us,” says Pierre Gratton, MAC’s VP sustainable development and public affairs. “(CGMS) had pretty broad support from the centre — PCO (Privy Council Office) and Finance — and there was support from the provinces … We had all done our homework. So when the Budget was announced we were all stunned. Something must have happened at the highest levels of Finance.”

Gratton says that during Goodale’s tenure as NRCan minister, he instructed departmental staff to develop the CGMS proposal as part of a national strategy to address concerns over declining mineral reserves and other issues.

In the meantime, TGI was funded for three years in 2000 “as a ‘down payment’ on CGMS” and renewed for two years in the 2003 Budget at a level of $5 million annually. Assessment of TGI shows that the program has been very successful in opening up new areas for exploration and leveraging private sector dollars.

LEVERAGE FACTOR HIGH

It’s estimated that every $1million spent on the public geoscience knowledge base leverages $5 million in private sector exploration spending, and leverages even more if a deposit goes into production TGI alone is estimated to have achieved a leverage ratio of nearly 1:1. rising to nearly 2:1 if in-kind data contributions are factored in.

CGMS is expected to leverage equal amounts of funding from the provinces and territories, injecting $500 million into public geoscience spending over a 10-year period. That level of funding would effectively double the rate of production of geoscience maps and data “of greatest relevance to mineral and energy exploration.” Resource industries that stand to benefit the most include those involved in the recovery of unconventional oil and gas, mining districts in remote, rural and northern communities and new frontier resource development.

“The federal contribution is critical to trigger other funding which was ready to go. It’s a real disappointment,” says Gratton. “Mineral reserves are at historic lows. We are not in a crisis yet but we can see it from here. We need new exploration. There’s a risk of seeing this felt in mining, the smelter industry, the exports they generate and the contribution to the balance of trade.”

Now that error has been determined as the cause for CGMS’s failure, all parties are working to secure interim funding to jump-start the program with about $10 million until the 2006 Budget.

“Minister Efford has been very public in his support of CGMS and he will work with his Cabinet colleagues to make it work,” says Dr David Scott, program manager in the DM’s office of NRCan earth science sector branch. “We’re optimistic and we want to move ahead as best we can. But we’ll have to see what sort of machinations come out of the Finance department.”

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