Environment Committee on March 28th, 2018

[The Chair, Liberal, Deb Schulte]

Thank you.

Ms. McDonald.

[Lisa McDonald, Interim Executive Director, Prospectors and Developers Association of Canada]

Thanks very much.

I'm Lisa McDonald, and I'm the interim executive director with the Prospectors and Developers Association of Canada. I'm joined here today by my colleague, Lesley Williams, who's our director of policy and programs.

I'd like to thank you for the opportunity to be here today to provide input on behalf of the mineral industry on Bill C-69. Our comments will focus mainly on the aspects related to impact assessments.

PDAC is the national voice of Canada's mineral exploration and development industry. We represent over 7,500 members from Canada and around the world. As the trusted representative of the sector, PDAC encourages leading practices in technical, operational, environmental, safety, and social performance.

Just briefly about the mineral exploration industry, it is a staged process of information-gathering with the hopes of discovering an economically viable mineral deposit, which is a little bit like looking for a needle in a haystack, quite frankly. Junior exploration companies do the bulk of this work in Canada. These companies are small. They have limited budgets and timelines. Most do not generate revenue and fund their activities by issuing shares. While some exploration companies may sell promising projects to mid-tier or major mining companies in order to take them through the assessment process and to be mined, a number of junior companies initiate the assessment process themselves.

Our remarks today will cover a brief overview of the mineral industry, two proposed amendments to Bill C-69, and comments on some of the key provisions in the act.

The value of Canada's mineral industry cannot be overstated. The mineral exploration and mining industry makes vast contributions to Canada. From remote and indigenous communities, rural areas, to large cities across Canada, it generates significant economic and social benefits for Canadians.

Our industry contributes more than 3% to the GDP. Valued at $89 billion in 2016, mineral exports accounted for 19% of Canada's total domestic exports. The industry employs nearly 600,000 workers across Canada, and it is also the largest private sector employer of indigenous people in Canada, and is a key partner of indigenous businesses.

That being said, the Canadian mineral industry faces fierce global competition for investment. In fact, Canada is starting to fall behind its competitors in a number of areas, indicating its decline in attractiveness as a destination for mineral investment. From 2012 to 2016, there was a prolonged downturn where investment in the sector severely declined around the world. Investment has started to return and has strengthened globally, however, in Canada mineral investment has stagnated and it is not recovering as substantially as in other jurisdictions.

A number of factors affect the decisions made by investors about where to invest, and by companies about where to explore and mine. Investment, both foreign and domestic, is particularly sensitive to legislative and policy changes. These generate uncertainty and unpredictability. An unpredictable, complex, and inefficient regulatory regime that is not well implemented will increase risk and deter investment and, consequently, exacerbate the waning of the Canadian mineral industry's competitiveness.

In order for the Canadian mineral sector to regain strength, we are proposing two amendments to the legislation that are critical to our industry.

We are proposing that the committee consider amendments regarding transition. Bill C-69 proposes that when the impact assessment act comes into force, projects that are being assessed under CEAA 2012 would have their assessment continued under the new act, unless they are in the final phase of the process. Industry recommends that the transition provisions be amended so that projects being assessed under CEAA 2012, or those that will enter the process before the coming into force of the new act, must be allowed to continue under CEAA 2012 unless the proponents specifically request the transition. This amendment to transition is critical. Otherwise, it would be extremely disruptive and cause uncertainty for industry, which will ultimately have a negative impact on investment.

Our second proposed amendment relates to the assessment of uranium mines and mills under the new act. We recommend that, similar to any other designated mining project, designated projects that are uranium mines and mills should undergo agency assessments with full access to provisions for co-operation with provinces and indigenous groups.

In its current form, Bill C-69 would preclude co-operation and agency assessment for all designated projects that are regulated by the CNSC.

With respect to the provisions, we understand that critical regulatory policy decisions remain to be developed with regard to the implementation of the new act, and these could materially influence the assessment process for project proponents.

We would like to briefly offer comments on some of the other key aspects proposed in Bill C-69. In general, we support Bill C-69 expanding the scope of factors and effects to be assessed, but there are potential implications to be considered. This expansion of scope will result in significant increases in the amount and type of information required and studied in project assessments. This could exacerbate the time and cost burden. Of particular concern are the ways that this will impact the ability for exploration companies to advance good projects.

Further, the collection, analysis, and weighting of impacts related to these diverse areas can also pose challenges. Views on whether an economic or social impact is positive or negative can be subjective and difficult to quantify. The weighting of various impacts is also not straightforward, particularly in the absence of any plan or guidance on how the various factors should be considered. The new process will require very clear, transparent guidance outlining the impacts that will be considered, the methodologies for the way these elements will be studied, and the weighting of impacts against each other.

With respect to cost recovery, PDAC urges careful consideration in terms of its implementation. Fees required should be transparent and predictable, and proponents should not bear undue burden of the costs for the assessment process. Some jurisdictions already have cost-recovery mechanisms for permitting and assessments. Imposing additional fees for the federal process would mean a duplicate cost for what is ideally intended to be one process, one assessment. This is particularly critical for junior exploration and development companies because, as mentioned before, they have very limited funds and generate no revenues.

Cost recovery, at a minimum, should have a clear, predictable, reasonable set fee per assessment; be linked to various guarantees, including timelines of process; and exclude out-of-scope costs such as policy development or regional assessments.

With respect to timelines, Bill C-69 proposes legislated timelines for project assessments, a provision that PDAC strongly supports. Clearly defined timelines are essential for the certainty that proponents and investors require, leading to a predictable, timely process. PDAC recommends that timelines should allow for alignment with the assessment process of other jurisdictions and enable co-operation, with the objective of one project, one assessment. We also recommend that the factors for suspension of timelines be clearly defined, and limited to specific circumstances to avoid endless delays and undermining predictability.

The mandatory early planning and engagement phase, if designed and implemented well, could provide more clarity for proponents and predictability for the process. That said, some important elements to consider are that officials must have the resources, both human and financial, to provide a proponent with a forward-looking permitting plan. Early planning could adversely impact proponents, particularly mineral exploration companies, as it could require various studies earlier on in the process than previously through CEAA 2012.

Proponents must have the ability to amend the project during the planning phase in response to indigenous and community feedback without having to restart the process from the beginning.

Bill C-69 outlines a more prominent, formalized role for indigenous peoples and traditional knowledge in the assessment process. PDAC supports meaningful participation by indigenous communities in project development and throughout the life cycle of a project. The mineral industry, as a leading practice, builds strong partnerships and seeks input on aspects related to their projects, and also guarantees economic opportunities for indigenous communities. As such, much of what is in Bill C-69 reflects the reality of current practice in the mineral exploration industry.

Furthermore, Bill C-69 proposes that the new agency would coordinate crown consultations and require, by statute, the consideration of potential impacts on indigenous rights. PDAC supports the crown or its delegated authority taking responsibility for fulfilling its duty.

We urge government to assess and outline its requirements for consultation and accommodation with indigenous peoples, to develop a transparent consultation plan that conforms to the tenets of consultation as articulated by the courts, and to assume its responsibility in the process, including for related costs.

[The Chair, Liberal, Deb Schulte]

Can I get you to wrap up?

[Lisa McDonald]

A strong and globally competitive Canadian exploration and mining sector will be well positioned to deliver local, regional, and national benefits.

[The Chair, Liberal, Deb Schulte]

We're hearing the bells right now, so I have to get agreement from the committee. I'd like to hear the last witness before we break to go vote, if you don't mind.

Let's have Mr. Wojczynski.

[Eduard Wojczynski, President, Canadian Hydropower Association]

Thank you, Madam Chair.

I'm Ed Wojczynski, president of the Canadian Hydropower Association. With me are Genevieve Martin of BC Hydro, who is chair of our regulatory processes working group, and Pierre Lundahl, our chief consultant with the Canadian Hydropower Association.

The CHA is the national voice of the hydro power industry. It represents generators, manufacturers, engineering firms, and construction companies. Hydro power, as I think you probably already know, supplies over 60% of Canada's electricity. It is our largest generation source, and has made Canada's electricity system one of the cleanest, most renewable, and most reliable in the world.

Hydro power has virtually no greenhouse gas emissions, and it has a key role in achieving Canada's climate change targets. Studies indicate that to meet our 2030 and 2050 commitments, Canada needs to electrify the economy and further reduce the greenhouse gas emissions of the electricity sector, among other measures. This means doubling or even tripling electricity generation by 2050 through a major expansion of hydro power, in concert with wind, solar, maritime, and geothermal power.

Our industry is up to the challenge. Canada still has vast amounts of hydroelectric resources that can be developed. For this to happen, though, Canada needs a predictable and timely project review process that engages all stakeholders and indigenous peoples and has the confidence of the public. Bill C-69 will, in the view of CHA, bring us closer to that objective.

CHA generally supports the bill, but there are some important improvements that are still needed. We are pleased that a number of the suggestions we made in response to the government's 2017 discussion paper are in the bill.

The bill has many good elements, but today we will focus on further suggestions to improve the process. We will later provide the committee with a written submission commenting on several areas of the proposed legislation, and we will suggest specific amendment wording in that submission. We will also provide comments on revisions to the Navigation Protection Act, which we have some concerns with as well. This afternoon, we would like to highlight five recommendations on the impact assessment act.

First, focus the act on projects of national significance. Second, include guidance to the minister when she or he is thinking of applying the act to a non-designated project. Third, guide the ability to extend timelines. Fourth, set a time limit for the establishment of panels. Finally, provide the minister or the agency with a more explicit authority to issue a notice of commencement when a party is taking an unreasonable amount of time to respond, or refuses to respond or participate during the planning phase.

I would like to turn now to the first of these five items. The proposed impact assessment process, with its broader scope, two-phased approach, and large number of decision points, will be more challenging to manage and more complex than what we have today. It will call on specialists from many different areas. It will have to coordinate work from many departments and agencies. It will have to accommodate a large number and a broad variety of intervenors.

The complexity and overall effort required by governments, indigenous peoples, stakeholders, and the proponent argues strongly for focusing the act only on large projects of national significance. We suggest that this be added to the act's purpose statement, to assist in interpreting the bill. This would also guide development of the designated project list.

Large projects of national significance tend to be ones that have more impact than small projects. They involve more public concerns and expectations for a major review. Their proponents would be more likely to be able to manage the complexity and rigorous demands of the process. Projects of that scale already take time to develop and are managed by experienced teams with access to wide-ranging expertise.

If the regulations designating physical activities cast too wide a net, there are two risks. First, medium and small projects with significant benefits and minimal impacts might not be pursued. If the regulatory costs are unpredictable and potentially too large, and the review outcome is uncertain, then the financial viability of entire classes of projects could be undermined.

The other risk is that legislation leads the government to use its regulatory resources inefficiently. These smaller projects, with only minimal impacts, are likely already subject to provincial environmental assessment mechanisms. There are also federal statutes to protect various aspects of the environment such as the Migratory Birds Convention Act, the Species at Risk Act, the Navigation Protection Act, and the Fisheries Act, which is currently being made more stringent as we speak.

Turning to the second recommendation, the impact assessment act would also give the minister the discretion to assess a project that is not on the designated project list and thus would otherwise not qualify for review. Some sort of provision to this effect is necessary, and CHA supports that, but apart from the impact on indigenous rights, there are no criteria in the act to guide the minister's discretion.

As currently drafted, the minister may order an assessment on the basis of her opinion on adverse effects or on the basis of public concerns related to these effects—and that makes sense—but there's no explanation of the procedure or considerations that would help form that opinion. This is inconsistent with the goal of greater process transparency.

CHA recommends establishing criteria in the act to guide the minister's discretion. Our written submission will suggest specific criteria similar to those the government is already utilizing in development of the designated project list regulation. If it's good enough for the project list regulation, it's good enough to put in the act.

Geneviève Martin, my colleague from B.C. Hydro, will take over.

[Geneviève Martin, Regulatory Chair, Canadian Hydropower Association]

Thank you, Ed.

The next recommendations I'm going to speak to are going to echo what my PDAC colleague Lisa McDonald said so eloquently. Thank you.

Turning to our third recommendation, the act contains timelines for various phases of the assessment process. The minister would be able to effectively stop the clock should the proponent not provide the necessary information within the timeline required by regulation or other prescribed activities not be completed. This is reasonable, but we suggest that the impact assessment act provide the minister with more guidance about the circumstances that would justify this suspension of statutory time limits.

The minister may also give notice of a deadline extension of up to 90 days, and the Governor in Council may extend the original extension an unlimited number of times. Unforeseen circumstances might indeed arise when an extension would be justified, however we believe and recommend that similar to the requirements for the minister when extending the deadline, the Governor in Council should provide reasons for the extension to ensure it is applied in a rigorous and transparent manner.

Our fourth recommendation is as follows. The act provides up to 45 days for the minister to decide to refer a project for a panel review, however no time limit is provided for the next step where the minister establishes a panel with its terms of reference to undertake the review. We recommend the act establish such a timeline.

Here is our fifth and final recommendation. The act allows for 180 days with possible extensions for the planning phase. Many parties must be involved: other federal regulators, departments and agencies, provincial governments, indigenous governments and entities, stakeholders, and the general public. The proponent must be forthcoming with information to meet the 180-day deadline, however failure by other parties to participate in a timely manner has the potential to result in a decision by the minister to extend the timeline.

CHA supports the minister's ability to suspend timelines, should that be required, to facilitate input from diverse groups or for other appropriate reasons, however we suggest that should a party take an unreasonable time to respond, or even refuse to participate, the minister of the agency be given explicit authority to issue a notice of commencement. This would provide a balanced mechanism to ensure that all parties are engaging in good faith.

In conclusion, I would like to reaffirm the hydro power industry's support for the government's objectives in the impact assessment act. We support the assessment regime being rigorous, transparent, respecting the rights of indigenous peoples, and being based on thorough, evidence-based analysis to ensure sustainable development in Canada.

A rigorous process that has public confidence is essential to earning our social licence to operate.

Once again, we would like to thank you for the opportunity to address you this afternoon.

[The Chair, Liberal, Deb Schulte]

Thank you very much for everyone's introductory remarks. They're very much appreciated.

I think I will get one questioner for six minutes before we have to go, so let's start with Mr. Rogers.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

First of all, Madam Chair, I want to thank the presenters for being here today and giving a sure perspective on this legislation.

In particular, I want to ask a couple of questions related to Newfoundland and Labrador's offshore oil and gas; some of the issues have been raised with me and my fellow MPs.

I'll ask these couple of questions, and then maybe CAPP in particular might be able to address some of these points.

One of the complaints that my fellow Newfoundland and Labrador MPs have heard consistently regarding the 2012 legislation is that the C-NLOPB was not properly recognized for its role in environmental assessment.

First, from your perspective does this new legislation meet the needs of your organization by ensuring that the C-NLOPB's expertise is recognized?

Second, in other jurisdictions like Norway and the North Sea, we're told the exploratory joint permits are much faster. Are you confident that this legislation will lead to a faster process in which the C-NLOPB, as life-cycle regulators, will have authority over smaller projects like exploratory wells, once CEPA has completed the strategic environmental assessment?

[Paul Barnes, Director, Atlantic Canada and Arctic, Canadian Association of Petroleum Producers]

Thank you. I'll try to answer the questions there.

On the first one with respect to whether the new bill recognizes the offshore petroleum boards, there is some recognition for the boards, both boards, when it comes to the review panel, but in some other aspects of the act, there isn't. For example, the act talks about regional environmental assessments, and there's no wording in the act that gives any role for the offshore petroleum board in that process.

Even when it comes to the review panel process, in which the boards are recognized and have, potentially, an opportunity to provide two seats on the panel, they are only two seats out of five. They are recognized, and they may potentially play a role there, but it's not a full role, obviously, for the boards; it's in co-operation with the agency and some others who will be part of the panel.

With respect to your second question, and that is exploration drilling and whether it will be faster than the board process, the answer is simply no.

Exploration drilling, exploration projects, if they are on the designated project list, the way the legislation is currently worded, have to go through a review panel process. That is a process that could be as long as four years, which is extremely long for an activity such as an exploration drilling program. In the world and other global offshore jurisdictions, the average is about six to nine months to get an environmental assessment process through. That would be the typical process if the offshore petroleum board had been reviewing that type of activity in the past.

Concerning the new bill, as to your question whether it will be faster than the board process, the answer is no; it will be quite a bit longer.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Madam Chair, I'll pass the time—

[The Chair, Liberal, Deb Schulte]

Go ahead, Will.

[William Amos, Liberal, Pontiac, QC]

Thank you for your testimony. It's appreciated, and I appreciate how each of your respective industries are focused on this issue, and it's a matter that you've invested significant time and effort into.

I think it's a fair statement that our government believes that the public trust needs to be restored. I note Mr. Abel's comment that restoring public trust is a priority for CAPP. However, I'm not really getting a sense of just how seriously CAPP is taking this issue of restoring public trust.

Just to start, is there agreement on the idea that there has been a loss of public trust in the regulatory system as it currently exists?

[Terry Abel]

I don't believe that, broadly, Canadians have lost as much trust as might be suggested at times, but having said that, the trust of the communities that we work in is vitally important to us. You have to understand that, not only do we develop resources in and around those communities, we live and work in those communities. Those communities are part of our industry and, in fact, where our resources occur and where those projects get developed, our industry is the lifeblood of most of those communities, so we take that very seriously. We have, through all the processes that lead to approvals or decisions for projects to proceed, engaged in every process honestly and committed to those processes. We have worked with those processes, and we'll continue to do that.

To your question, do we take that seriously? Absolutely, we take that seriously. Do I believe that all stakeholders have no faith in the process? I do not believe that to be the case.

[William Amos, Liberal, Pontiac, QC]

That's fair. I don't think that anyone has suggested that there is no faith in the process. I think what has been suggested is that there has been a significant loss—

[Ed Fast, Conservative, Abbotsford, BC]

Time is up.

[The Chair, Liberal, Deb Schulte]

It wasn't yet, but it is now.

Will, your time's up, sorry.

We have almost 14 minutes. Let's do one more round.

Mr. Sopuck.

[Robert Sopuck, Conservative, Dauphin—Swan River—Neepawa, MB]

Mr. Bloomer, I was struck by your opening remarks when you said it's difficult to imagine that a new major pipeline could be built in Canada under the impact assessment act. I was writing like mad when you were listing some of the impediments to pipeline constructions. You talked about the tanker ban, new methane rules, new fuel standards, bitumen transportation regulations off B.C., greenhouse gas regulations, UNDRIP, and the massive international competitiveness we're facing.

Of course, I would add to your exhaustive list the proposed new fisheries act that's coming on, the proposed navigable waters act, and then layered on top of all this are provincial processes. I was struck by the very direct words you used, “the toxic regulatory environment”. That is an astonishing statement in my view, “toxic regulatory environment”.

Mr. Bloomer, I'd like to ask you directly, do you believe that there will ever be another major pipeline project approved and constructed in Canada again?

[Chris Bloomer]

Well, as we said in our statement, we don't see how Bill C-69 is going to lead to major new projects being proposed and developed in Canada.

[Robert Sopuck, Conservative, Dauphin—Swan River—Neepawa, MB]

So is it likely that there will never be another pipeline constructed, approved, in Canada again under this process and with all of the impediments that are in place right now?

[Chris Bloomer]

My mother always said, “Never say never”, but in the current environment we can't see how one is going to be proposed.

[Robert Sopuck, Conservative, Dauphin—Swan River—Neepawa, MB]

That's a fair comment.

In my early years as a biologist, one of the things I worked on was the Mackenzie Valley pipeline assessment. That underwent 25 years of process, and nothing happened.

Mr. Bloomer and Mr. Abel, you talked about people in community. Mr. Bloomer, could you talk about the positive impact that pipelines have on various industries, for example, steel? What's going to happen to the people who want to take up welding and are depending on pipeline jobs? What will be the effect on the trades, on good union jobs, on communities?

What does your statement that it's highly unlikely the pipelines will ever be built mean in terms of people and communities?

[Chris Bloomer]

Let's put it this way, there are two aspects to look at. One is that the potential capital investment in the transmission pipeline industry is around $170 billion, when you look at the various projects that have been proposed and the potential. When you trickle that down to local communities and the trades and so on, it's a pretty big economic impact.

The second piece is that without having access to new markets to maximize the value of our resources and maximize the development potential of our resources going forward, that's hundreds of billions of dollars of potential loss to Canada. You can't overestimate the potential impacts.

[Robert Sopuck, Conservative, Dauphin—Swan River—Neepawa, MB]

I have compressor stations in my own constituency. In some municipalities, those pay half the property tax bill. So this particular bill, and the approach of this particular government, will have real and costly human impacts. I'm reminded, to confirm what you just said, that Geoffrey Morgan wrote an article on February 20 with the headline, “Pipeline shortage to cost the economy $15.6 billion this year”. One does wonder how many public services could be purchased with this $15.6 billion, but it's evident this government simply doesn't care about that.

Ms. McDonald, I was incredulous at the point you made that we have commodity prices increasing around the world—you said that; I know you did—but at the same time, investment in Canadian mining is going down. How is that possible?

[Lisa McDonald]

Just as a point of clarification, it's not decreasing; it's stagnating. It's not increasing. The recovery is not at the same rate as it is in the rest of the world. There are a number of factors that would figure into that, and one of them is that regulatory uncertainty is a challenge. There are a number of other challenges that our industry faces, particularly with activities in the north—the lack of investment into infrastructure in the north to access where those deposits are. All of the easy-to-find and easy-to-mine deposits have been found, and that activity has taken place.

We're challenged on a number of fronts here in Canada, but certainly the regulatory regime is a factor.