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by Alana Wilson of the Fraser Institute
Canada's mining industry is globally competitive, and has long succeeded without much in the way of government subsidies. It even thrived in the last recession by responding to market demand. Yet instead of letting markets drive mining investment in Quebec, the provincial government is bailing out the asbestos industry using taxpayer money -- and this for a product that is harmful to human health.
In recent years, market demand for chrysotile asbestos produced in Canada shrunk dramatically which lead to a halt of chrysotile mining. But instead of letting mines stay closed, taxpayer funds are now being used to gamble against markets and reopen an unprofitable chrysotile mine.
Quebec Premier Jean Charest recently approved a $58-million loan to allow the closed Jeffrey asbestos mine to reopen. This follows months of negotiation and several extensions of the government loan offer to give private partners more time to raise funds. The Quebec government -- and taxpayers across Canada whose federal transfer dollars end up in Quebec's budget -- will now provide financing for two-thirds of what it will cost to renovate the mine so it can reopen.
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