It's widely understood that Canada is Alaska's third-largest market with exports of $242 million in 2004.

But our next-door neighbor is an even bigger source of goods and services imported to the state, $289 million last year.

That's right. Canada accounted for 2,600 direct jobs in Alaska in 2004, while direct and indirect employment generated by Canadian enterprises totaled 7,500 positions in the state with a $330 million payroll.

These are among findings of a new report, "Canada's Impact on Alaska," prepared for the Consulate of Canada by the McDowell Group Inc. of Juneau.

Canadian companies invest millions in oil and gas exploration, transportation, manufacturing, seafood processing, retail and tourism businesses. These ventures range from exploring the Arctic for oil and gas to crafting cold-weather products for Alaska markets to bringing nearly 1 million visitors to the state.

Alaska exports to Canada also create jobs in commercial fishing (22 percent), seafood processing (13 percent), oil and gas (4 percent), manufacturing (3 percent) and other sectors (11 percent).

But nearly half (47 percent), of the state's exports to Canada come from the mining sector. In fact, Canada is Alaska's main source of mining investment, accounting for 76 percent of exploration and development spending in the state's mineral industry.

Between 1981 and 2004, Canadian companies spent a total of $2.3 billion on mining exploration and development in Alaska. In 2004 alone, 27 Canadian companies sank $156 million into more than 40 mining projects across Alaska.

Global leader in mining

"I'm not surprised. Canada is the leading investor in mining ventures in the world," said Steve Borell, executive director of the Alaska Mining Association. "Canada has the history, tradition and understanding of mining in the investment community like no other place in the world."

Indeed. Mining in Alaska and Canada have been linked since the Klondike Gold Rush that began in the 1890s. Today, all of Alaska's major mines and mine projects have key Canadian investors and/or operators.

Red Dog Mine, the world's largest zinc mine, for example, is owned and operated by Vancouver, B.C. -based Teck Cominco. Red Dog has 480 year-round workers and pays nearly $46 million in annual wages.

Likewise, Toronto-based Kinross Gold operates the 411-employee Fort Knox gold mine near Fairbanks.

Alaska's top mine projects, Pogo gold, Donlin Creek gold, Rock Creek gold and Pebble copper and gold, all boast Canadian developers. Teck Cominco will start up Pogo early next years with 250 workers, while Pacer Dome and NovaGold, both of Vancouver, B.C, are working to develop the 27.8-million-ounce resource at Donlin Creek. NovaGold is also moving closer to mining the 1 million ounces of gold at Rock Creek near Nome. Another Vancouver, B.C.-based junior mining company, Northern Dynasty Minerals Ltd. is pursuing the estimated 26.5 million ounces of gold and 16.5 billion pounds of copper as well as silver and molybdenum at Pebble near Iliamna on the Alaska Peninsula.

Because of Canada's dominance in mining ventures worldwide and the considerable expertise of Canadian mining companies, Borell said the major participation of Canadians in Alaska mine project is a real benefit to the state.

"Considering all of the unrest in Third World countries, there are advantages to investing in Alaska for the Canadians such as a common culture and the same language," he said. "We welcome them. The Canadians also provide the investment money. It's an important part of the mineral industry in Alaska. Without it, it would be a sad day indeed."

The full report on Canada's impact on Alaska can be accessed at http://www.anchorage.gc.ca.