Fixing a Fragmented Regulatory System
Regulator Provides Canada
with a Golden Opportunity
By Rod Thomas
In July of this year, the respective ministers
from the Governments of Saskatchewan and New
Brunswick agreed to join Ontario, British Columbia
and the federal government to establish the
Cooperative Capital Markets Regulator (CCMR),
and more recently Prince Edward Island has also
signed on. This is all welcome news for the Canadian
economy—particularly for Canada’s mineral
exploration companies, who require efficient capital
markets to raise the money they need to discover the
minerals and metals that make modern life possible.
While Canada is currently the best country in the
world when it comes to helping mineral exploration
companies raise money, it is becoming increasingly
difficult to raise capital on Canada’s stock exchanges.
The annual cost of being a publicly-listed company
raising capital, for example, can amount to around
$200,000 and it’s a recurring expense. The problem
with that is that almost 60% of mineral exploration
companies listed in Canada had working capital
balances below $200,000 as of August 2014.
Now is the time for other provinces to join
the five that have already signed-on to the CCMR
so that Canada can finally harmonize its capital
market regulations and facilitate greater access to
capital for an industry
that employs more than
400,000 Canadians and is an
integral part of our country’s current
and future prosperity.
From Dawson City to St John’s, exploration
activity generates enormous economic opportunities,
and finds the mines of the future. Eighty per cent of
significant mineral discoveries in Canada over the last
five years, for example, have come from so-called
“junior” exploration companies—small, dynamic,
entrepreneurial companies that take on the high-risk
task of looking for new mineral deposits.
While mining will continue to play an important role
in Canada’s economy into the distant future, Canada
should be mindful that competition from Australia, the
United Kingdom and emerging countries is increasing.
Last year, Australia and Canada both attracted 13%
of global exploration expenditures, a narrowing of
Canada’s substantial lead in previous years.
Capital markets play a fundamental role in the
success of Canada’s junior mining companies, and
the regulations governing capital-raising have a
direct impact on the amount of capital that can be
raised. Much like high-tech start-ups, most junior
Prospectors & Developers
Association of Canada
The national voice
of Canada’s mineral