The recently announced agreement-in-principle between Canada and the 28-member European Union on free trade - officially known as the Comprehensive Economic and Trade Agreement ("CETA") - includes important changes for Canada's mining industry. If implemented, CETA would: (i) eliminate foreign ownership restrictions on uranium mining for European investors, (ii) gradually lift tariffs on base metals, and (iii) loosen restrictions on labour mobility. The Canadian government stated that CETA could be implemented as early as 2015. The terms of CETA have not been made public and the technical details have yet to be finalized. It is subject to ratification by the European Parliament, each of the EU's member states and the Canadian government.
Elimination of Ownership Restrictions
Canada's non-residential ownership policy ("NROP"), adopted in 1970, limits non-resident ownership of domestic uranium mines to 49%. There are no ownership restrictions on uranium exploration, but NROP requires non-residents to find a Canadian majority partner to operate a uranium mine. Under CETA, this ownership restriction would be removed for European investors.
The government of Saskatchewan, the only province with producing uranium mines, lobbied for the elimination of the NROP. The policy has also been challenged by interested stakeholders, including Canada's Competition Policy Review Panel. It received renewed attention last year when Rio Tinto, through its take-over of Hathor Exploration Limited, acquired Hathor's mining properties in Saskatchewan's Athabasca Basin. Under the present rules, if those properties went into production, Rio Tinto could not own more than 49%.
Relief From Tariffs and Labour Mobility Restrictions
CETA contemplates the gradual elimination of tariffs on metal and mineral products, such as aluminum, nickel, iron, steel and other metals, and increased labour mobility between Canada and Europe, facilitating short-term cross-Atlantic work assignments.
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