Natural Resources Committee on Oct. 3rd, 2011

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Day.

Mr. Calkins, please go ahead, for up to five minutes.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thank you, Chair.

This is very interesting. I'm new to this committee, but I've spent a lot of time on the fisheries and the environment committees, and so I want to talk to you about a few things.

I'm an Alberta guy. I appreciate the fact that we have jurisdiction over our own resources there, very much so. I'm not going to go down that road, but I understand a lot of the problems when it comes to economic development, sustainable development, exploitation, and so on. Sitting on the environment committee for as long as I have, I constantly hear from various officials. I get it, whether it's an infrastructure project in my constituency or a mining development in the constituency, whether it's for coal-fired electrical generation, whatever the case might be. The regulatory process for environmental impact assessments is sometimes the bottleneck when it comes to getting some projects done and off the ground in a timely fashion.

You mentioned in your opening remarks that timeliness in the north is critical. We have two seasons in Canada: we have winter and the construction season. I'm going to ask you straight up how long these regulatory processes take. For example, if a new diamond mine were going to pop up some place up in the north, from start to finish, what are we looking at insofar as a timeline to get the various permits in place is concerned, to get this thing up and off the ground so that investors can see some results? What part does your department play in that process?

How has your department...? I'm not going to ask you to assess the capabilities of other departments; I don't think that's fair. But do you see any ways of streamlining or improving these things so that we can get both results we're looking for: the protection of the environment, but at the same time the economic opportunities that come with mining and exploration?

The second question I have for you is this. As I say, I grew up on a farm in Alberta. I can't tell you how many times we've had an oil and gas company come across and do a seismic test on our farmland. Now, of course, they don't share that information. One company does not share the information with another company; it's proprietary information. They may be looking at different depths, et cetera.

One hundred million dollars sounds like a lot of money, but not when you take a look at the vastness of the Canadian north. What is $100 million really going to tell us about where the various prospects are for metals and mining and so? How much of the repository of information is that going to fill up, in particular, where there are some voids or lack of knowledge right now?

And what does industry give back to us? Does it pay for that information? Is it publicly accessible information? When industry goes out and does any of its work in lieu of or on top of the information that it gets from the Government of Canada, does it provide any information back to us? Are there any agreements when it comes to sharing this information, or is just simply that we provide the service to industry and it goes about and does what it wants to do and we never hear from it again?

[Anil Arora]

First of all, it's nice to meet a fellow Albertan.

Your questions are numerous, and I'll try to answer them. My colleagues, I can tell, are jumping to get in there too.

First of all, you asked whether there is a set formula for how long a project takes from start to finish. Every project is unique and distinct according to its location. Unfortunately, natural resources occur where they do; and we have to go to them rather than the other way around. If there's plenty of water around, that poses a problem. If there's no water around, that poses a problem. Obviously, we've talked about infrastructure, weather, and availability of energy. All of those things play a unique part in the government's assessment, if you like, and the weighing of the economic potential with all of the various environmental and socio-economic impacts that go into realizing that project.

The way our system works is that the provinces own the resource and make the decision about whether they want to proceed or not. It's when that project hits specific elements of the federal government's responsibility that we get involved. Whether it's navigable waters, fish and fish habitat, or explosives that are going to be part of that particular project, it's when those triggers get hit that a series of processes come into play. Depending upon the impact the project will have, we have three categories of the degree to which we're going to do that assessment: it could be a review; it could be a comprehensive study; or it could be a full panel review. There are three grades of assessment, depending upon—

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Who decides that?

[Anil Arora]

There are some strict criteria in terms of the level of impact. We can certainly get into a little bit of the criteria for each of them.

Essentially that's our trigger. We, as governments, can play a direct role as per the responsibilities ministers have, where they have a regulatory function and actually have to give an okay for something to proceed, or where we, as a federal department, are going to provide expertise, such as the kinds of scientific and other expertise we've talked about.

Yes, it is a complicated process, but we want to make sure that we get the balance between the economic, the environmental, and the social aspects right.

There are many times when the economy dictates how long the project will continue. These projects are highly capital intensive, and in many cases, they'll start in a particular cycle. They may have to put the projects on hold until their investors come back onboard. Typically—and I'm being very out there—a project may take about four or five years from the time they see the potential to the time of the permitting actually going ahead.

Now, Natural Resources Canada has taken on the lead role through the creation of something called the Major Projects Management Office. In the north, north of 60, there's an equivalent structure called the Northern Project Management Office, where they've set a target of halving that time.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

You're working on your service-level agreements based on an increase in revenue.

[Anil Arora]

Exactly.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

That's where I'm trying to go with this.

[Anil Arora]

Within the federal family, right at the highest level, the deputy ministers sit together once a month and go through every single major project that's on the slate, and they ask some very tough questions, all the time respecting the authorities within the Canadian Environmental Assessment Agency, or the National Energy Board, or the CNSC. Those authorities are still there. This is more of a coordination role. But certainly, Natural Resources Canada understands the importance of timing. It understands the importance of making sure that these projects don't face any unnecessary delays.

Now remember, provinces have their own processes that go on top of these, because they ultimately are the owners of the resource. It's only where the triggers come into play.

[The Chair, Conservative, Leon Benoit]

I am going to have to cut off this back and forth.

Mr. Calkins, if you want to pursue it later, we're about halfway through our question time, so there is a good chance that we'll get back to you.

I go now to Madame Gravelle...Monsieur Gravelle—

[Some hon. members]

Oh, oh!

[The Chair, Conservative, Leon Benoit]

—who has, I believe, one question maybe, and then we will go to Monsieur Lapointe.

I had a bit of a brain freeze there.

[Claude Gravelle, NDP, Nickel Belt, ON]

I just want to assure the chair that Madame Gravelle is in Nickel Belt, nowhere near Ottawa, and she doesn't look a lot like me. She's much prettier.

I have one question, and I want to share my time with Mr. Lapointe.

There was much controversy in 2010 over the government's plan for seismic testing in Lancaster Sound. Communities were worried not only about the effects of seismic blasting on marine life, but also there was the perception that the government was mapping oil and gas deposits within an area that was supposed to become a marine conservation area.

In December 2010, Minister Baird announced that all testing had been cancelled. Can you tell me if there are any current plans for new tests? And if there are, what measures have been taken to protect the marine life, and what consultation has been conducted with communities?

[Anil Arora]

Unfortunately, it's not in my area of responsibility for two reasons: oil and gas falls under my colleague's responsibility, and when Brian Gray is here, again, I think he could answer your question in terms of the seismic work that's under way and the kind of consultations they did with the communities and the follow-up to that. I'm just not aware of it. If I were I'd be happy to share it. I'd rather my colleague do that.

[Claude Gravelle, NDP, Nickel Belt, ON]

Okay.

[The Chair, Conservative, Leon Benoit]

Thank you.

Monsieur Lapointe.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you Mr. Chairman.

I believe it was Ms. Flood who raised the concept of

the closing of mining would be at the front end of the process. If I understood what you said, it was something close to that.

In actual fact, how is the cost of closing a mine assessed? Is it the responsibility of Natural Resources Canada to do so and to hire the evaluators? I understand the principle. However, how is that included in the exploration costs, the dividends, and so on?

[Ginny Flood]

I won't go into much detail, but for the most part--

forgive me, I have to speak in French.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

If it is going to be quicker in English, I can use the interpretation, that's okay.

[Ginny Flood]

No problem.

As for closing a mine, we really follow the advice from industry, from the sector, and the proponent.

However, there are often consequences on fisheries, navigation or other areas. In those specific cases, we try to come up with a plan to compensate the fishing or shipping industry. That is part of the closing plans.

That said, the responsibility of closing mines really rests with the provinces. However in the case of mines north of the 60^th parallel, the Department of Aboriginal Affairs and Northern Development has that responsibility.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

It is that department that sets the standards with regard to the costs involved in closing mines? Are they the ones who have to determine the anticipated costs? Is it up to the provincial government or the territories to establish that when such and such mine is closed, the real costs should be such and such an amount?

[Ginny Flood]

I am going to pass the question on to Patrick.

[Patrick O'Neill]

I'm familiar with the regime north of 60. Before a mine gets permitted at the front end, the mining proponent has to prepare and submit a mine remediation and closure plan to the environmental review board. That is done by the proponents, and usually involves third-party engineers who have to sign it off. So their accreditation as professional engineers is at risk if the material isn't up to a satisfactory level.

That is usually tabled in the public consultation process, where it can be peer-reviewed by others in the community or detractors of the development on the opposing side. Those mine-site remediation and closure plans use prevailing third-party costs associated with certain projects and certain aspects of the project, so they come up with a very market-linked price tag to return the project to a pre-mine state.

Once that remediation and closure plan is accepted, you usually post financial bonds for reclamation security. In the case of north of 60, they are held by the Department of Aboriginal Affairs and Northern Development Canada. They are supposed to cover the full cost of reclamation of the site.

We're trying to avoid the experiences we had with previously contaminated sites. There are some in the north that are quite famous now. There's a Treasury Board policy that the taxpayer is not to pay the freight costs associated with cleaning up closed mines, abandoned mines, and those sorts of thing. That's all done at the front end.

In the case of the diamond mines, they are ISO-certified companies, so they're probably among the best operators in the world. Even in those cases they have posted hundreds of millions of dollars in reclamation security.

[The Chair, Conservative, Leon Benoit]

Thank you Mr. Lapointe.

Mr. Anderson is next for up to five minutes.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Thank you, Mr. Chair.

We talked a little about the jobs that are already being created in the north, and some of the indirect jobs as well. Has the department done any work on the future employment demand that's going to be created in the north? It seems that it's going to be substantial. Are we part of any planning? What numbers are they looking at in five or ten years from now, in terms of what the demand might be?