EDITORIAL PAGE Where we’re coming from

Statistics aren’t usually a good indication of where we’re going, but they can help clarify where we’ve been and what our strengths and weaknesses are. A report from Energy, Mines and Resources Canada’s mineral and metal statistics division summarizes some figures that illustrates one of this country’s greatest traditional strengths — mining.

For one thing, the report shows that the mineral industry — not including oil and gas — contributed $22.8 billion to the Canadian economy in 1990. That’s about 4.5% of the total gross domestic product. It did that while employing about 3.1% of total employment in the economy, an indication of the industry high level of productivity.

The report’s authors, A.B. Siminowski and J. Currie, conclude simply that “In 1990 . . . the mineral industry was able to withstand the effects of the recession reasonably well and continued to maintain its position as a major contributor to the Canadian economy.”

But some other figures in the report indicate that performance in the future may not be easily maintained. In particular, statistics about capital expenditures cause concern that failure to invest in new mines and equipment today will make productivity improvement more difficult in the future.

While capital investment on construction machinery and equipment totalled $6.2 billion or about 4.5% of total capital spending in the economy, it amounted to only a 3.4% increase over 1989 — a decline when inflation is taken into account.

Most of the 3.4% increase was due to a large increase in the smelting and refining sector, in particular Inco’s sulphur dioxide abatement program in Sudbury. Capital spending on actual mining was down by almost 14%. When money is not being invested in new mines and mine development, it means the mineral industry will have difficulty maintaining its contribution to the economy in the future.

And spending on repairs in the industry was down to $4.2 billion from $4.4 billion. If existing operations aren’t buying the drills, the trucks, the materials handling equipment and the multitude of other items necessary to maintain efficiency at a high level, our ability to compete will inevitably decline.

A year of recession such as 1990 is sufficient to explain why capital investment has declined. That is simply part of the business cycle. If that slide in spending becomes a trend, however, and an improvement in the economy fails to bring it back to previous levels, the entire economy will suffer.