Human Resources Committee on March 25th, 2014

[The Chair, Conservative, Phil McColeman]

Good morning.

Welcome back, members of Parliament.

Ladies and gentlemen, this is meeting number 16 of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities, on Tuesday, March 25, 2014. We're continuing our study concerning opportunities for aboriginal persons in the workforce.

Today we have another robust split panel of witnesses. In the first hour, from Vale, we are joined by Mr. Cory McPhee, vice-president of corporate affairs, and Mr. Bob Carter, manager of corporate affairs. We're also joined by Mr. Colin Webster, director of aboriginal, government, and community relations for Canada and the United States at Goldcorp Inc. From Rio Tinto, we have with us Mr. Jay Fredericks, director of environment, communities, and regulatory affairs.

Welcome, gentlemen.

Our procedure is that each of you as entities will have up to 10 minutes to present. Then we will go around the table with questions.

Let's begin. I'm not sure which of you will be speaking, but let's go with the representatives from Vale. If you're splitting your time, that's fine too.

[Cory McPhee, Vice-President, Corporate Affairs, Vale]

I'll be speaking, thanks. I'm giving into age, so I need these....

Thank you very much.

Good morning, Mr. Chair, and honourable members. Thank you very much for this opportunity to present to the Standing Committee on Human Resources and to participate in this important discussion on aboriginal employment.

I'm pleased to be able to present today on behalf of Vale together with my colleague, Bob Carter, from our operations in Newfoundland and Labrador, and to contribute our experience to the committee's work both as an active employer of aboriginal peoples and as an industry partner in the process of program development. Achieving sustainable employment opportunities for aboriginal peoples in Canada requires multi-faceted partnerships and commitment from industry, government, and aboriginal leadership alike.

As a mining company, Vale recognizes the obligation it has to ensure that aboriginal communities participate in and benefit from the development of resources on traditional lands. Employment is one of the most important and enduring means of building the partnerships that deliver mutual benefit.

Wherever we do business in Canada, Vale engages with local aboriginal communities. The need for skills development and employment training is a focal point in many of those discussions, whether it be in preparation for employment at one of our facilities specifically or in preparation for employment in the community at large. There's perhaps no better example of the results that effective collaboration can deliver with the appropriate partners, participation, and commitment than at our mine site in Voisey's Bay, Labrador. I'd like to focus on that experience today as I believe it provides some excellent learning for the work this committee is considering.

While there is no one-size-fits-all solution to exploring partnerships, it's equally true that past success can help guide future success. In that context, our experience at Voisey's Bay provides important insights into the factors and the groups that are essential to effectively and efficiently shaping programs and developing models to enhance opportunities for aboriginal employment across Canada.

Allow me to begin with some background. In the late 1990s, Vale, which was then Inco, acquired the rights to develop a significant nickel deposit at Voisey's Bay. In 2005, the construction of the development was completed. The Voisey's Bay deposits are located on the traditional lands of the Innu and Inuit of Labrador. Given their rights over these lands, Vale entered into impacts and benefits agreements, IBAs, that set out how the land would be used and the benefits that would accrue to the Innu and the Inuit.

The subsequent development of this resource has resulted in billions of dollars in investment benefiting all levels of government and most importantly, transforming the economic prospects of the residents in adjacent communities. Beyond generating 5,000 jobs during construction, the operations currently employ around 500 people on a permanent basis.

From the outset, Vale, the federal government, and our aboriginal partners had an explicit focus on economic development that delivered both direct employment and contracting to aboriginal businesses and built capacity for the long term. This common commitment among partners delivered an outcome that sees greater than 50% aboriginal direct employment at Voisey's Bay operations, levels that Vale maintains to this day.

During the construction phase of the mine's development from 2002 to 2005, Vale awarded $515 million in contracts to aboriginal businesses. Since operations began in 2005, the company has flowed more than $1.2 billion in contracts to aboriginal businesses to support the ongoing operations of the mine. On a continuous basis, more than 80% of our contracts are with aboriginal owned or operated businesses.

This combination of an impressive retention rate of aboriginal employees and consistent follow-through on commitments has created an enduring relationship between Vale and our aboriginal partners. The involvement of the federal government in providing training support was a key component of the success experienced during the initial phase at Voisey's Bay. Federal support for training was essential to enabling job readiness and eventually putting people to work.

The skills and training program developed and implemented at the time was called the joint employment and training authority, JETA. It was a pilot program that became a model for future training initiatives in Canada. The JETA partners worked together to ensure that training was timely and focused on entry-level job skills that ultimately led to employment. More than 1,100 people received training support through JETA, establishing the foundation upon which Vale could build a successful recruitment and employment program, a program that has created long-term jobs for residents of local aboriginal communities over the past decade. The success of this training initiative has been widely recognized by governments and industry.

The successes in Voisey's Bay are many. We are proud to have partnered with the federal government, as well as the Innu and Inuit, to develop a training and employment model that has brought benefits to all. Collaboration, consultation, and early alignment among the partners unlocked extraordinary opportunity. This success is relevant as we look to the future. In the coming years, Vale plans to move ahead with developing the underground deposits at Voisey's Bay. This will extend the life of the mine as well as the employment horizon by decades.

In employment terms, developing the underground is expected to produce more than 800 construction jobs, and an additional 400 permanent jobs when underground mining begins in late 2019. There is clear opportunity ahead of us, but from an aboriginal employment standpoint it involves a new challenge. The employment needs for the underground phase are different from those of the current surface operation, and very technically driven. All parties require significant lead time to develop the skills required to work underground.

In anticipation of these needs, Vale has already begun to engage its aboriginal partners in discussions to determine the metrics, the structure, and the timeframe for taking on the training challenges associated with this next phase.

Our objective and our desire is to build on the extraordinary results we achieved together in the first decade by developing the Voisey's Bay resource as a foundation for the future, to deliver the same lasting benefit from the underground to all those with a stake in its success.

We are understandably proud of the accomplishments at Voisey's Bay and are working hard to achieve similar successes in our other operations.

In Thompson, Manitoba, for example, we have an integrated mining operation located in a region with a serious underemployment issue. In this remote northern location, Vale struggles to maintain its employment base despite the fact that certain surrounding communities have high rates of unemployment. We have encountered several barriers to aboriginal employment in particular.

We have launched a northern employment strategy in Thompson and seen some encouraging results with increasing hires from surrounding northern communities, but there remains a significant deficit of essential skills among the aboriginal communities, making it difficult to get candidates into Vale's recruitment and selection pipeline. Also, the lack of workplace and social readiness, often developed through pre-employment opportunities, presented barriers to the recruitment of aboriginal peoples.

I don't believe Vale's situation in Thompson is unique in the mining industry, and this is an area where we believe the federal government has an important role to play. Equipping aboriginal communities with access to appropriate and high-quality essential skills training will go a long way to complement the recruitment and selection programs that many mining companies have in place.

Together the private sector, government, and local communities can develop approaches that will ultimately produce rewarding, skilled jobs in the communities where people live. Ultimately, this is something we all want.

Thank you again for the invitation to speak to the committee today. We welcome the opportunity to contribute to the committee's efforts in this area, and we remain at your disposal as you develop your recommendations. Thank you.

[The Chair, Conservative, Phil McColeman]

Thank you, Mr. McPhee, and thank you for keeping it under the 10 minutes.

Now we'll move on to Goldcorp. Mr. Webster.

[Colin Webster, Director, Aboriginal, Government & Community Relations, Canada and United States, Goldcorp Inc.]

Thank you, Mr. Chair.

Mr. Chair and honourable members of the committee, we at Goldcorp are pleased to have been given the opportunity to testify at the hearings of this committee on the very important subject of opportunities for aboriginal Canadians in the workforce.

Mr. Chair, as you and other honourable members will know, Goldcorp, a Vancouver-based and proudly Canadian company, is one of the largest gold mining companies in the world, with operations and development projects here in Canada, the United States, Mexico, and other Central and South American countries. As our name suggests, our operations are almost exclusively in the mining of gold rather than other precious metals.

At the core of our business strategy are responsible mining practices that are reflected in all our activities. We have a robust corporate social responsibility regime and human rights policies and we adhere to the vision of “Together, creating sustainable value” everywhere we mine.

Insofar as our domestic operations are concerned, we currently have four Canadian mines, three in Ontario and one in Quebec. Two of our Ontario mines are located in the communities of Red Lake and Timmins; our Musselwhite mine is a fly-in remote mine located approximately 480 kilometres north of Thunder Bay. We are also developing our Éléonore mine in the James Bay area of northern Quebec, scheduled to enter commercial production later this year.

Goldcorp has some 16,000 employees and long-term contractors across its worldwide operations. In addition, we also have many short-term construction-related contractors providing various supporting functions to us.

Approximately 40% of our annual production in 2013 was from our operations here in Canada, and roughly the same proportion applies to our employees.

No matter the geographic location, all of our Canadian mines are currently engaged directly with local aboriginal communities on industry-related employment and business opportunities. Mr. Chair, I would like to take this opportunity to share with you some insights into our ongoing partnership with the Cree at our Éléonore mine in Quebec.

Since 2011 we have had in place a collaboration agreement with the Cree Nation of Wemindji, the Grand Council of the Crees, and the Cree Regional Authority. Under the provisions of this agreement, a large number of Cree-owned and -operated businesses are providing us with a wide range of construction-related and site support services, including large civil works, road construction, and camp services. Furthermore, currently we have 475 Cree from the territory working at the site, 226 of whom are employed in the operations and 269 in construction.

I certainly do not want to speak on behalf of the Cree nation. However, I would submit that, thanks in some measure to the James Bay and Northern Quebec Agreement of 1975 and to subsequent investments in the area, the Cree now enjoy a large pool of business and a critical mass of skilled labour in many areas compatible with the needs of our operations.

This is the kind of model we would like to replicate at some of our Ontario mines. However, even though a large number of aboriginal people living in the local neighbouring communities are eager to find good employment and to provide a better future for themselves and their families, neither sustainable strategic training opportunities nor infrastructure is sufficiently available.

As one example within the area of infrastructure, we at Goldcorp have entered into an agreement with 18 first nations communities in northwestern Ontario to develop a company called Wataynikaneyap Power, which when developed will bring additional and reliable grid power initially to Pickle Lake and then further north for the connection of remote first nations communities and possible future industrial developments.

Currently we are a partner in the project, with provisions whereby Goldcorp will surrender its interests and become a client of this new power company, which would then be led by the first nations.

Remote communities not presently connected to the electrical grid would enjoy plentiful and reliable electricity in the manner that most of us take for granted. Currently, some of these communities are connected to unreliable power lines, while others are reliant on expensive and equally unreliable local diesel-generated power for their needs. This is hardly the kind of standard we would expect in an energy-producing country such as Canada.

In the area of training opportunities, we recognize our role in the skills development of our existing employees. We strongly believe in the continued technical and professional growth of our people in order for them not only to become integral to Goldcorp's success but also to become major contributors to the development and ongoing success of their respective communities. However, in certain development forums—as one example, within the area of entry-level skills—we must recognize our shortcomings, in that we are foremost miners and not educators.

Mr. Chair, given the challenges ahead for our industry and the enormous opportunity that Canada's aboriginal communities present, we are here today to provide the following for consideration: that together with the provincial authorities, the government should consider a long-term strategy designed to increase job readiness training, technical and business skills, and other such opportunities, enabling a greater number of aboriginal people to participate in the economic opportunities across the entire mineral development spectrum; second, that the ongoing support of government infrastructure be provided to ensure that training needs are met and to ensure that training continues long after our needs for labour have been satisfied.

Here at Goldcorp, we would welcome opportunities to work more closely with governments on both initiatives.

Mr. Chairman, Goldcorp is proud of its relationship with aboriginal people both in Canada and abroad, and we're continuing to strive to do even better. As a member of the Kitigan Zibi Anishinabeg, near Maniwaki, Quebec, I for one am proud of our company's efforts to date, but I also see the significant opportunities that lie ahead for industry to engage aboriginal people. We are pleased with the initiative of this committee, and we are looking forward to your report and recommendations you will make to the government.

In conclusion, Mr. Chair, I would like to thank you again for the opportunity to testify. I am looking forward to your questions and those of the honourable members.

[The Chair, Conservative, Phil McColeman]

Thank you, Mr. Webster, and again you were well under the 10 minutes.

We will move to Mr. Fredericks.

[Jay Fredericks, Director of Environment, Communities and Regulatory Affairs, Rio Tinto]

Thank you very much, Mr. Chair and honourable members.

I'm proud to be here today representing Rio Tinto. While we are considered a leading mining company, we also continue to learn from our experience and that of others.

Rio Tinto is one of the largest integrated mining companies in the world, with approximately 66,000 employees. We are a world leader, operating in 40 countries, with significant investments in Canada. In fact, Canada is Rio Tinto's second largest asset base after Australia.

In Canada we have a diverse commodity mix—aluminum, copper, diamonds, potash, uranium, and iron ore—as well as other exploration activities across the country. We also own significant infrastructure assets, including rail, ports, and hydro power generating facilities in Quebec and British Columbia. As a world leader, we own state-of-the-art technology and are continuously seeking innovations to improve productivity and environmental performance as a means to reduce operating costs and also to secure our social licence to operate.

Our strategy is to maximize total shareholder return by investing in and operating large, long-life, low-cost expendable operations that can sustain strong returns throughout the cycle. In delivering our strategy, we recognize the value of building strong relations with communities, governments, and key stakeholders and of seeking mutual benefits through our approach to sustainable development and our focus on safety.

I'm proud to work for a company like Rio Tinto, which is considered a leader in sustainable development. We recognize the value of sustainable practices, and this is integral to the way we work. A key component to being a leader in sustainable development is our commitment to the communities where we operate. We strive to benefit local communities. This may mean providing social benefits, such as health, education, and environmental management programs, or economic benefits, such as business development and employment training.

Community engagement is based on employment and economic participation, and we prefer sustainable long-term benefits. In May 2012 there was a summary report put out by Canada's Public Policy Forum, which was attended by Jacynthe Côté, the chief executive of Rio Tinto Alcan. It was noted that a central theme of the discussion concerned the need for better education and skills training among aboriginal peoples, especially amongst the youth.

A clear and well-defined challenge is facing the resources sector in the coming decade. This relates to the looming labour shortages, with estimates of the need for up to 400,000 new jobs over the next 10 years. Over the same period, approximately the same number of aboriginal Canadians are expected to enter the labour force. Considering that many of these jobs will be created on the doorsteps of aboriginal communities, there is an opportunity on both sides for significant gains in the form of jobs for skilled workers.

We can improve the employment and business opportunities of members of our host community. Contributing to local economies where we operate is a priority for Rio Tinto. As an industry whose very existence depends on retaining that crucial social licence to operate, it is clearly in our collective best interest to shoulder our share of corporate social responsibility. Support for job training and talent development is a win-win part of the equation.

Rio Tinto emphasizes diversity in the workforce and is committed to providing employment and career development opportunities to indigenous people in areas where we operate. And we have successes.

In 2012 around 7% of our Australian employees were indigenous Australians. Rio Tinto now ranks as the largest private sector employer of indigenous Australians. These mutually beneficial arrangements not only contribute to local economic growth and community well-being but also provide a stable talent pool for our operations.

In Canada we are seeking opportunities to increase our aboriginal employment across all our businesses. This will build on the success at Diavik, with approximately 25% aboriginal employment.

We also recognize that some of the greatest successes result from partnerships involving governments, communities, and the private sector in which each party bears responsibility and works together towards common objectives.

In summary, then, mining is a complex business requiring long-term investment. Mining often takes place in more remote regions, where our nearest neighbours are often first nations or Métis communities. This makes the sector a natural fit for engaging and working with first nations in partnership with these communities and government agencies. Discipline is required in managing capital, and we need to continuously seek ways to improve performance. At the same time, we must operate in an ethical and socially responsible manner that is underpinned by seeking ways to promote and demonstrate our commitment to sustainable development.

Thank you, Mr. Chair, honourable members. As another witness here said, I look forward to responding to your questions.

[The Chair, Conservative, Phil McColeman]

Excellent.

Thank you, gentlemen, for your brevity this morning. That will allow for more questions.

I won't take up any more time and will pass it over to Ms. Sims for the first round. These are five-minute rounds of questions.

[Jinny Sims, NDP, Newton—North Delta, BC]

Thank you very much.

I really appreciate the presentations from all three of you.

I think I heard some common threads and one of the common threads I heard was the need for the federal government—as well, you mentioned provincial governments and you yourselves—to play a role in the skills development of our first nations people, including our Inuit and Métis.

I heard about the skills deficit, as one of you put it, and also the need for basic skills training at the entry level. I have to make a comment that we also need to take a look at what happens from K to 12, and there is a need for significant investment in K to 12. This is where I always get into equitable funding. I think we have to take a serious look at how much we are investing in our K-to-12 education sector in our first nations communities, how that funding is generated, and the need for equity at this stage to make sure that we tackle the many challenges.

It's not just in the northern communities. We just have to look at the state of some of our schools and also some of the learning conditions for our aboriginal students in the north, and we could all be doing better at every level of government. The federal government has a role to play.

My specific question is for Goldcorp. Please feel free to expand on this.

You talked about the need for a long-term strategy for aboriginal people and you talked about your own Cree training centre. As you set up this training centre, I want to know what kinds of factors you took into consideration. For example, I'm taking a look at how you did the framework for your recruitment. Secondly, did you provide child care? Did you take a look at doing pre-entry work with the community as well before they entered the so-called pipeline?

[Colin Webster]

Certainly, talk a little bit about our experience with the Cree.

In terms of our relationship with the Cree, to their credit, they were adamant that they would provide us with employees who were work-ready, and they took ownership of it themselves. They set up the training programs with their institutions that already existed. So they've provided us with candidates who are ready for employment within Goldcorp.

They've worked with the Cree human resources development, with the Cree School Board and they have set up training programs, with our input in terms of what kinds of skill sets they needed, in terms of what kinds of jobs are available. They initiated that program two or three years ago, in fact, and we already have candidates who have come out of those programs and are working for us today.

Really, the communities took ownership of it, and they used their institutions and dollars that they put in themselves and dollars that they received from the various governments to set up the training programs. All of the support systems around that, they brought to the table with us.

[Jinny Sims, NDP, Newton—North Delta, BC]

What about the ongoing infrastructure you talked about?

[Colin Webster]

I'm not certain what infrastructure you're referring to.

[Jinny Sims, NDP, Newton—North Delta, BC]

When you said there needs to be ongoing support and investment in infrastructure—

[Colin Webster]

Okay, certainly.

I was speaking there more in terms of the Ontario context.

One of the challenges we face, particularly with remote communities, is that they don't have things like power. They don't have grid power. They don't have the ability to expand their communities because they're limited by their existing diesel capacity. That's one instance where we're working with them to bring grid power there, to the north. If you don't have things like grid power, it's hard to set up a training institution for their communities to attend training courses at, where they can better themselves and then leapfrog into the industry.

We've identified that there could be a regional initiative there, where there are remotes in northern Ontario and northwestern Ontario, particularly where there could be some sort of regional training strategy there that is hinged to the industry needs.

In terms of the sustainable and strategic part of it, there has to be an understanding that the industry isn't just about mining. The industry is about exploration. It's about development. It's about construction, operation, and closure. So there is a wide range of activities in the mineral development sequence. They happen over a long period of time.

If you look at the industry and where the jobs are in the industry, they're not all the same jobs in each phase of development. There has to be an understanding of where those jobs are, when they happen, and where they are geographically. If you look at that context, then you will know where the need is.

To me, the other part is the community need, the community dynamic, what the community brings to the table. Not all communities are the same. Not all communities have the same resources. If you can map the communities, where they are in terms of where they want to go to in human resources development, then you can bring the two together and say, “Okay, we have this many people in this community who are job-ready this year, next year, or the year after, and they want to get into the mineral development industry.” Now you've painted the landscape. Then you can set up what I think are more focused and probably more beneficial training dollars and training infrastructure to support that.

[The Chair, Conservative, Phil McColeman]

Thank you.

Mr. Armstrong, you have five minutes.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Thank you, Mr. Chair.

I want to thank you all for being here today.

Mr. Fredericks, you talked about Rio Tinto being the largest private-sector employer of aboriginals in Australia. What programs does the federal government in Australia have, working in relationship with private business to provide training for aboriginal people? Are there things they do in Australia that we don't do here in Canada that you would suggest we take a look at?

[Jay Fredericks]

Offhand, I would say the programs are fairly similar. It also comes down to corporate focus.

At Rio Tinto we have made employment of indigenous peoples, or aboriginal peoples, a focus going forward for the corporation as part of our corporate social responsibility. We have worked extensively with the federal government in Australia and also the local communities, and have been able to achieve some successes that way, similar to the activities we've undertaken at the Diavik operations.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

In Australia, as in Canada, what role do you play in training? Do you have a training program that Rio Tinto puts forward whereby you recruit and actually provide skills training for young aboriginals? Do you do that overseas, or is that something you rely on Canadians to do?

[Jay Fredericks]

In almost all our operations, we have in-house training programs to upgrade skills. We try to, as I said, operate in conjunction with the local communities and the local governments to optimize the training programs to the skill sets that are needed.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

So to provide the curriculum, you do it in conjunction with a local municipal-level government and the federal government as well as the provincial government. There are four players in developing curriculum and training.

[Jay Fredericks]

Yes, essentially, and if you look at the model of the Diavik program in northern Canada, there are a number of groups involved there.

We have the local communities that are identifying individuals for the training programs. You have the regional or territorial governments that are working on providing funding, and working with the educational institutes to develop the programs. As well, then, activities for Rio Tinto include things like providing on-the-job training as part of the skill process, and operating the in-house educational upgrades so that an individual who may come in at an entry level doesn't need to stay at an entry level. They can work towards entry into things like trades, education, development of supervisory skills, or other activities.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Basically you're looking for entry-level workers with basic skills like showing up, for good employees who are able to get along with others, and teamwork. Once they get to you, you're able to provide them with the actual skills they need to do the actual job.

[Jay Fredericks]

It's a combination of both. We look at the individuals. There may be individuals in the communities who can benefit from some pre-apprenticeship training before they come into Rio Tinto. Each individual is a unique entity with their own set of skills and abilities, so it's important to develop what you might call a modularized program where an individual can go into the program at a level appropriate to their skills so they're not backtracking or being placed in something where they're destined to fail.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Thank you.

How much time, Mr. Chair?

[The Chair, Conservative, Phil McColeman]

You have 30 seconds.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Mr. McPhee, could you respond really quickly, because I have only a few seconds. I was interested in your $515 million in contracts and your $1.2 billion in contracts for first nations companies. I'm assuming those companies didn't exist before your arrival in Voisey's Bay, so how were you able to support them to ramp up so quickly?