the last three years the Government has increased investment in
energy and mineral resource development throughout British Columbia.
The Ministry of Energy and Mines continues to take the necessary
steps to maximize British Columbia's energy potential, by opening
up access to the province's vast reserves of oil, natural gas, coalbed
gas, minerals and coal and hydro-electric power.
At the same time the Ministry takes its responsibility within the
area of environmental stewardship very seriously. The Ministry of
Energy and Mines has taken a significant leadership role in the
areas of clean energy initiatives, mine reclamation, energy efficiency
and pre-tenure planning. The Ministry is also making strategic financial
investments to environmental conservation and protection initiatives
like fuel cell development and research that integrates sound science,
traditional environmental knowledge and resource development.
In June 2003, we announced the Oil and Gas Development Strategy
(OGDS) for the Heartlands, a comprehensive strategy to improve infrastructure,
target royalties, grow the BC based service sector and reduce regulations.
In November 2003, we announced further initiatives to accelerate
OGDS. Strategy actions include initiatives to encourage new basin
exploration; investment in public-private resource road infrastructure;
royalty credits for the use of exploration technology and funding
for education and training.
In September 2003, British Columbia achieved a Canadian record
for petroleum and natural gas tenure sales reaching $418 million.
Of this sale, $360 million is directly attributed to the royalty
changes government made for deep gas and other marginal oil and
gas resources. Oil and gas tenure sales totalled more than
$626 million in total during fiscal 2003/04.
Oil and gas exploration and production are now the largest single
natural-resource generators of direct revenue for the province.
Revenues from crude oil and natural gas were $2.032 billion for
2003/04 — 22 per cent higher than originally forecast and
35 per cent over fiscal 2002/03.
British Columbia has a huge coalbed gas endowment of approximately
89 trillion cubic feet. In order to provide certainty of coalbed
gas ownership to enable development of a coalbed gas industry in
British Columbia, the ministry developed the Coalbed Gas Act
that was brought into force in 2003/04.
The total number of mineral claim units staked in fiscal 2003/04
has increased by 12,000 — 38 per cent higher than
the previous fiscal year.
Revenues from coal tenure fees and rentals totaling $4.1 million
increased by 10 per cent over fiscal 2002/03.
This past year, we prepared enabling legislation to streamline
the administration of coal tenures, reducing regulation and creating
a modern, simplified system for acquiring and holding Crown coal
Government also developed changes to the Mineral Tenure Act
that will enable a new internet-based system for acquiring mineral
and placer claims (Mineral Titles Online) in the province.
The Ministry made significant progress in implementing the government's
energy plan, Energy for Our Future: A Plan for BC. The British Columbia
Transmission Corporation was established and key changes made to
the Utilities Commission Act. Legislation and direction to
implement a Heritage Contract, and ensure public ownership of BC
Hydro's core assets and stepped rates for industrial customers was
enabled. Clean Electricity Guidelines were also established, along
with a process to review energy performance standards for buildings.
In the area of alternative energy and energy efficiency development,
the ministry completed the first phase of the Alternative Energy
and Energy Efficiency Strategy, and established a pilot Community
Action on Energy Efficiency program.
In keeping with Government's deregulation goal, in 2003/04 the
Ministry eliminated 2,244 regulatory requirements, or about 12.7
per cent of its total, providing an overall 27 per cent reduction
in the first two years of the deregulation initiative. This reduction
in regulation saves money, and is more effective and more responsive
to the fast-changing world. The remaining regulations are more
results-based and more flexible to promote competitiveness and innovation
which benefits all British Columbians.
The Government clearly understands the economic potential of the
province's abundant energy resources and the need to remain competitive.
The Ministry of Energy and Mines will continue to lead the way
to a prosperous future, full of opportunity for all British Columbians.
I am pleased to present the details of our success in this annual
report for fiscal year 2003/04.
Honourable Richard Neufeld
Minister of Energy and Mines
Message from the Minister of State
B.C.'s mining industry today provides close to 10,000 direct jobs
and $2.9 billion in economic activity.
Global demand for metals is growing, and B.C. has vast coal and
The recent increase in metals prices provides a unique opportunity
for our government and mining industry. We need to ensure that our
taxation and regulatory environment is globally competitive so that
we can maximize the benefits of British Columbia's world class geology.
By taking advantage of this opportunity B.C. can produce the long-term
benefits in economic and job growth that will result from future
The Premier appointed a Minister of State for Mining in January
2004 to support the long tradition of mining in British Columbia.
In the Premier's letter to the Minister of State for Mining he identified
four key areas for the minister to work on. Strengthening the provincial
geoscience base, market and communicate the industries environmental
and sustainability principles, increase clarity for access to Crown
land, and draft a detailed action plan for mining and skills development.
In September 2003, Minister of Energy and Mines Richard Neufeld
(in partnership with the BC and Yukon Chamber of Mines and the TSX'
s Venture Exchange) traveled to London, England with a mining investment
delegation of representatives from government, First Nations,
exploration and mining industries and financial/investment experts.
This trip has been credited with contributing to the rebound
in exploration spending in British Columbia and also resulted in
the international Mines and Money conference holding its 2004 conference
Amendments to two pieces of legislation, the Coal Act and
the Mineral Tenure Act, were passed in April 2004. The Coal
Act amendments streamline administration of coal tenures for
both government and industry. The Mineral Tenure Act provides
the basis for a map-based claim process and enables the implementation
of Mineral Titles Online. We continued to refine the two-zone land
use system to ensure land outside of parks and protected areas will
be open for mining.
As part of the government-wide initiative to reduce regulatory
requirements, in fiscal 2003/04, we eliminated 468 regulatory requirements
in the mining division alone — about a 9 per cent reduction.
The total reduction for the mining section since the initiative
began is 26 per cent. By the end of June 2004, I anticipate a total
of more than 2,000 (about 38 per cent) regulatory requirements
will have been eliminated. This reduction in regulation saves money,
is more effective and is more responsive to the fast-changing world.
The remaining regulations are more results-based and more flexible
to promote competitiveness and innovation which benefits all British
In the area of geoscience, we participated in the British Columbia
and Yukon Chamber of Mines Rocks to Riches program,
which invests $2.1 million over two years — in partnership
with the federal government, First Nations and industry —
to produce geoscience surveys in under-explored areas of B.C. We
also expanded the province's database for prospectors and industry
by releasing new geological maps of mineralized areas in three significant
areas of the northern part of the province. These initiatives contributed
to a 42 per cent increase in mineral claims staked over the last
British Columbians and the mining industry continue to benefit
from the extension of the super flow-through share tax credit program,
elimination of the provincial sales tax on mining machinery and
equipment, reduction in corporate and personal income taxes and
the streamlining of environmental assessment reviews. These initiatives
have resulted in a continued upswing in exploration spending while
other competing jurisdictions such as Australia, have witnessed
In 2003, mineral exploration spending increased to an estimated
$55 million; mineral exploration in the northwest was double
the previous year's level; mineral claims staking was up by one-third
over the previous year; and mineral production is forecast to be
about $3 billion, up four per cent from 2002.
A 15-member task force was appointed to provide recommendations
on revitalizing the mining industry in BC. These recommendations
will provide the basis for the development of a provincial mining
plan, to be completed by fall of 2004 and implemented over the next
The government's new action agenda for mining will help restore
mining's economic potential and will help generate new investment,
jobs and opportunities to benefit all British Columbians. As
the mining industry rebounds, government will also be working closely
with First Nations to foster partnerships and enhance employment
opportunities in this growing industry.
Honourable Pat Bell
Minister of State for Mining