On Monday, the Parti québécois government announced a new mining royalty regime. Its hybrid proposal combines aspects from two types of royalty systems: profit-based and ad valorem royalties. In this blog post, we will demystify these ways of calculating royalties in order to best analyze the government's choice as well as what its implications are.

Let's start with a small yet important clarification: all mining royalty regimes must deal with the cyclical nature of metal markets, which periodically increase and then decrease. When metal prices are high, mining companies naturally tend to generate more profits than when prices are low. These fluctuations obviously affect royalties.

Profit-based royalties

Canada has an industrial/manufacturing economy because for more than a century governments of every political stripe insisted that natural resources be processed in Canada before being exported. Thus, a forest company harvesting timber on Crown land could not simply export raw logs -- it had to add value to that resource by establishing saw, pulp and paper mills in Canada. We owe the fish processing, smelting and petro-chemical industries to these policies.

Geneva, April 22, 2013 -- The Blue Planet Project is marking Earth Week by raising Canada's violations of the Human right to water with member states at the United Nations in Geneva in advance of the country's universal periodic review (UPR). The UPR was established in 2006 to enable an international review of the human rights records of member states.

Canada's UPR takes place on April 26. Joining us in Geneva are representatives of the Manitoba Keewatinowi Okimakanak (MKO) and the Canadian Union of Public Employees. Together, we are highlighting the range and complexities of water injustices in Canada.