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Amidst the tidal wave of modern political hypocrisy, it can be hard to identify all the ridiculous acts deserving of scorn. Drinking from a fire hose of about-faces inevitably means Canadians will not savour every drop. The recent proposal from Swiss-headquartered Glencore to take over Vancouver-based Teck Resources is a case in point.

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Whenever we are confronted with such abrupt turnarounds in previous attitudes on a potentially emotional issue it is valuable to take a step back and ask ourselves the essential questions. In this case: one, based on past activity who should we ultimately trust more in their intentions? Glencore or the government? Two, do we still believe in the free market system? And finally, why isnt Teck the one acquiring companies all over the world?

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Who we should trust in their stated intentions is an easy one. Whether one agrees with Glencore as a company or not, their motivation is naked and simple: profit and shareholder value. One can filter any statements and actions through that framework and understand what their motive is likely to be. Glencore sees future value in Teck, notably its coal resources, and so it wants to make it part of its global empire. End of story.

The governments rhetoric is much less clear. Having spent the better part of their term bashing natural resources, particularly oil, the Liberals seem very belatedly coming to the realization that our energy does need to come from somewhere, and that somewhere will be electricity.

The issue is that electrification requires minerals and minerals mean you need miners; not exactly the constituency most environmentalists tend to love. Open pit mines arent pretty and even underground mines must disrupt some of the surrounding area to work. Thats the reality of an extraction industry. The other stark and for some uncomfortable reality is that there is no electrification without miners. Anyone believing otherwise is an enviro-irrealist.

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Teck Resources is a world leader in mining, specifically copper and zinc, as well as steelmaking coal, and so, perhaps, the government truly has come to suddenly value that home grown capability. However, losing a company headquartered in Canada also looks terrible politically. This is a muddy question, currently impossible to parse. Should we believe in a long-term commitment to mining from Justin Trudeaus Liberals? In theory Id love to, but anyone involved in the mining industry for any length of time has more than enough government-induced PTSD to take the seriousness of this commitment du jour with an extra helping of freshly mined salt.

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Canadas, and indeed the worlds, success is based on a free market system with minimal government intervention. So, much as I personally want Teck Resources to say put in Vancouver a city all too bereft of head offices compared to, say, Seattle I ultimately believe in a free market more. In that, Glencore is doing nothing improper or evil. They are using the free market to unlock value in a company they believe has more potential when integrated into their corporation than the two do separately. It remains to be seen if they are correct, but the basic mechanism is one to be supported and one which Pierre Poilievres Conservatives should support, not deride. There are emotional reasons to stop Teck leaving Vancouver and I share those emotions, but logic and a belief in the free market must ultimately win out.

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In a more certain regulatory environment with a supportive government it is not hard to imagine homegrown Canadian miners more willing to invest in Canada first, exporting their expertise and being the ones acquiring companies in other countries. We have the resources and ability to extract our minerals better than anyone, our government all too often simply doesnt want to.

Recent developments offer possible glimpses of light at the end of the mining tunnel. Initiatives such as the Canadian Critical Minerals Strategy and tax incentives for exploration are positive developments for Canadian miners. In that, we should acknowledge that farcically late though the government may be, its still better than never. The impact will nonetheless be slow. The current timelines of 10-15 years to take a mine to production will not change overnight and any visible impact could easily be more than a decade off; do we, as a country, have the will to see through our new vision so that in 2035, Canadian companies are the acquirers, not the acquired?

National Post

Adam Pankratz is a lecturer at the University of British Columbias Sauder School of Business.

The rest is here:
Adam Pankratz: Wait, so now the Trudeau Liberals care about mining companies? - National Post