Ontario Provincial Policy Statement 2005 As much of the mineral aggregate resources as is realistically possible shall be made available as close to markets as possible.(Posted Jan2007)
Close to Market - Makes Good Economic Sense
“Aggregate” is the collective term used to describe crushed stone, sand, and gravel materials. Aggregate is used to build roads you drive on, houses you live in, schools your children learn in, offices and factories you work in, and hospitals you get treated in. Aggregates are used to make glass, cement, steel, and even makeup and toothpaste.
The Ontario Provincial Policy Statement 2005 says:
“2.5.2.1 As much of the mineral aggregate resourcesas is realistically possible shall be made available as close to markets as possible. “
Having aggregate resources close to market makes good economic sense.
The following excerpts from the Ontario Ministry of Natural Resources web site1, illustrate the significant economic importance of having aggregate resources close to market.
“…It is estimated that over 50% of all aggregate produced in Ontario is used by public authorities for the construction and maintenance of the public infrastructure such as roads and bridges.”
“The cost of transportation is estimated to be approximately 60% of the total cost of aggregate. Therefore, the economic value of an aggregate deposit is based not only on the quantity and quality of the deposit, but also how close the deposit is to its final destination.”
“Aggregates provide the basis for a $30 billion construction industry that employs 270,000 people in Ontario. The aggregate industry is estimated to directly employ 7,000 people. In addition, more than 34,000 people are indirectly employed in sectors such as transportation and equipment.”
“Ontario has benefited from accessible aggregate resources, thereby providing affordable infrastructure and housing costs. The wise management of aggregate resources and balancing of resource interests will ensure a continued close to market supply.”
Since the existing Nelson Quarry started in 1953, it has produced more than 120 million tonnes of aggregate to build Burlington, Halton and the western GTA areas. The proposed extension would provide another 36 million tonnes of much needed crushed stone supply to a growing GTA.
Transportation Impacts
It is estimated that to get that quantity of aggregate brought to the GTA from the next closest area of significant aggregate reserves, it would cost an additional $162 million at today’s transport cost. As OMNR notes, public authorities use about 50% of all aggregate that is produced in Ontario so the additional cost of bringing in aggregate from further afield would significantly tax the public coffers.
Heavy trucks have a greater impact on traffic congestion and travel delay time than passenger cars do. This is because of their greater road space requirement for length, acceleration and deceleration. Similarly every excess kilometer the trucks travel adds to road wear and maintenance costs. Hauling the same quantity of aggregate from a greater distance, would add unecessarily to these costs.
Importing aggregate from further away using rail, highway or water has been examined by the Province before and it was concluded that close to market aggregate supply is in the public interest. To be effective, the rail transportation system would require substantial infrastructure investments in excess of $400 million (1980 Dollars), consume almost twice as much fuel as the local supply system and would affect numerous people from rail line relocation and heavy traffic on the rail lines2. Since 1980 a lot of the existing rail lines have been sold and converted to public trails.
Shipping aggregate by rail and water is generally not economically viable due to the extra costs and delays incurred in delivering the aggregate from the quarry to the loading facility, loading the ship or rail cars, off-loading the aggregate, and reloading onto trucks for delivery to the job sites. In most cases the distance that trucks would travel for the loading and final delivery segments is the same or greater than the distance that would have been traveled if the aggregate source had been located close to market in the first place.
Construction Industry Impacts
The construction industry relies on getting as much work done as possible during the work day, usually working from daylight to dusk. Most aggregate operations ship during the same long hours but if aggregate used in the construction work has to come from further afield it takes longer for the first loads to arrive on site each day. This delay adds to the cost of projects and extends the time needed to complete them.
As OMNR notes, aggregates provide the basis for the $30 billion construction industry. It is in the best interest of the construction industry to have a sustainable, competitive aggregate industry that it can rely upon for the supply of its most widely used building material. Having multiple suppliers of quality aggregate in given geographic area leads to a good, competitive marketplace and promotes production and delivery efficiency. By 2010, there will be only one supplier with significant reserves in the Region of Halton. By 2016, even that one supplier will be running out.
Nelson Aggregate Contributes to Local Economy
In addition to employing 48 full time people at the Nelson Quarry, we also purchase significant amounts of parts, equipment and services from local suppliers. Over the expected 18 year life of the proposed extension to the quarry we expect to purchase or pay (in today’s dollars):
·$198 million for supplies and services
·$8.1 million for municipal taxes
·$4.1 million for aggregate license fees (65% goes to the City and Region)
Despite paying significant tax dollars annually, the company also sponsors and donates to numerous community endeavors. We believe it is important to be good corporate citizens and give back to the community as much as possible.
