Madam Chair and members of the standing committee, good morning and thank you for the invitation to appear before you today, and provide some industry perspective about this important legislation.
My name is Brad Thrall. I'm the president of Alexco Resource Corp., and I'm urging deferral of Bill C-17's passage until all affected and interested parties can deliberate, and mutually determine language to preserve the reassessment and timeline provisions currently within the Yukon Environmental and Socio-economic Assessment Act. Repeal of the reassessment and timeline provisions, as anticipated in Bill C-17, without replacement language ready to go, will perpetuate economic uncertainty, and will negatively impact the competitiveness of Yukon, and will diminish economic and social opportunities for all Yukoners.
First, I'll provide some background about Alexco. We are a Canadian mining company. Our primary asset is the historic Keno Hill silver district north of Whitehorse in the traditional territory of the first nation of Na-Cho Nyak Dun. The district was the site of more than 30 underground silver mines from 1913 until 1989, and was the second largest silver producing district in Canada.
Alexco distinguishes itself from other resource companies in that we also founded an independent environmental remediation firm, Alexco Environmental Group, or AEG, which specializes in brownfield site cleanup as well as all aspects of environmental management and permitting.
In part, because of our demonstrated expertise in northern mining reclamation prior to 2005, Alexco was selected as a preferred purchaser of the bankrupt and environmentally compromised assets of Keno Hill from Canada in 2006. At that time, the district was a significant environmental liability for Canada. Since that time, our work to clean up legacy liability in the district has been conducted through AEG in a contractual relationship with Canada, and to date, Alexco has invested more than $22 million, and shares ongoing costs with the federal government. All of this investment offsets Canadian taxpayer liability.
Alexco has also been a recent producer of silver, lead, and zinc from the district, and we are actively planning to resume production in 2018, pending the successful outcome of additional assessments under YESAA.
Currently, we have 80 employees, including a significant number of Yukoners and first nation citizens as part of our mine development program. We anticipate further expanded business and employment opportunities for Na-Cho Nyak Dun citizens, and for residents and contractors in the village of Mayo once permitting is completed.
Once back in production, we will employ over 200, and our annual payroll alone will be in excess of $35 million. There will be significant contract and business opportunities for Yukon and northern business and service providers, and enhanced opportunities to support first nation and community events and initiatives that reflect the social, cultural, and environmental values of the community and its citizens.
We are no strangers to the YESAA process. We have been through this YESAA process 11 times in the past 10 years, six times on the mining side of our business, and a further five times on the environmental cleanup side. In addition, we anticipate making applications for another three assessments under YESAA within the next three months alone.
I believe our experiences in the development assessment process, our relationship with Canada and the environmental cleanup of legacy liabilities, plus our mining experience in Yukon make us exceptionally qualified to provide some real world context for this important discussion.
With this in mind, we are focusing on two specific sections of Bill C-17: project reassessment, section 49.1 of the act, and timelines, section 56(1) of the act.
We can also contrast our experience after YESAA was amended in June 2015 with our experience prior as a measure of the success of the current legislation which, as you know, includes the reassessment timeline provisions. The current legislation allows proponents of certain projects to apply to the decision body, usually Yukon or first nation governments, under section 49.1, to allow a project to proceed without the need for reassessment. This allows previously assessed projects to proceed to the authorization process without duplication.
The reality of mining is that during the process, new or extensions to existing ore bodies may be identified, and these discoveries may require slight modifications to mine operating plans. Under the current legislation, these modifications would generally not require a complete project-wide reassessment. However, if Bill C-17 is passed, they would, even though there is no significant environmental or socio-economic impact and no change in the production stream.
While in production between 2011 and 2013 under the former legislation, Alexco proposed to add to our mine production stream two new deposits adjacent to our existing operations. No significant changes were contemplated. Regardless, permitting required a new project-wide reassessment, which occupied 221 days of YESAB's time and jeopardized the sustainability of our district. Under the existing legislation, small changes to operations could be dealt with as simple licence amendments and could subsequently help ensure sustainable jobs and a sustainable business.
Similarly, in 2014, Alexco was again fully reassessed for production from a third new deposit, and this reassessment included a duplicative assessment of our already licensed and operating mill, which took another 298 days of YESAB's time and resources.
On the environmental side of our business, we were required to go back through an entire environmental assessment to maintain a water licence to extend the operating period for various water treatment facilities. Ironically, these same facilities were mitigating historic environmental liability, but this simple extension required 134 days of YESAB's time to assess the entire project yet again.
Please understand that we firmly support a rigorous environmental assessment process for the Yukon, for new projects and when fundamental changes are made to existing projects. However, small changes to a mine plan or to environmental facilities should not require a “back to square one” assessment. If set back to the previous legislation, uncertainty will prevail, and investment, jobs, benefits, and opportunities for residents and communities will be compromised.
Regarding timelines, the current act includes a provision, subsection 56(1), that limits the time for a proponent's application to be completed through the process. Passage of Bill C-17 would repeal this provision, allowing this period to revert to being an undefined and unlimited period.
Over the eight years before YESAA was amended and over the course of 10 assessments, some of which were duplicative, the time period required to deem our project proposals adequate has increased more than fivefold. In contrast, our 11th assessment in 2017, under the amended legislation, took less than 20 days for adequacy. We expect that in part this is due to the lessened workload of YESAB's designated office resulting from YESAA's amendment in June 2015.
Since YESAA was amended, there have been approximately 100 applications under section 49.1, and of these, nearly two-thirds have been granted by the decision body. Projects granted the opportunity to modify permits and licences without having to undergo full reassessment are not limited only to mining, but include Yukon municipalities and first nation governments as well.
In my view, the reassessment provision has served exactly the purpose for which it was designed. It has increased efficiency at all levels of government. It has substantially reduced or eliminated duplicative assessments. It has reduced cost to the taxpayer while placing Yukon on a competitive footing with other provinces and territories—and globally, I might add.
Based on Alexco's experience and our knowledge of others in the resource and environmental sectors, we believe that passage of Bill C-17 will materially harm Yukon's competitiveness as a destination for resource capital. It will create uncertainty and will hinder our territory's economic growth relative to other jurisdictions in Canada, directly and negatively affecting training and employment for Yukoners and a company's ability to invest in social, cultural, and health and wellness initiatives for Yukon first nations citizens and all Yukoners.
Madam Chair, we believe the proper path forward is to delay this bill until all parties involved—the Yukon government, first nations, municipalities, and industries beyond just mineral exploration, such as tourism, for example—have the chance to mutually develop replacement language to preserve the reassessment and timeline provisions. Passage of Bill C-17 without replacement language will set the Yukon back on its growth since devolution.
I thank you for your time.