Subcommittee of the Standing Committee on Finance on Bill C-38 Committee on May 28th, 2012

[Pierre Gratton]

Timelines are helpful and bring a rigour to the process. There are certainly opportunities within those timelines for federal officials to request new information. That's two years of government time, or one year under a comprehensive study, not the whole time. But I think timelines help bring rigour and discipline, and that's important to us.

[Stella Ambler, Conservative, Mississauga South, ON]

And they bring some certainty for industry.

[Pierre Gratton]

Yes.

[Stella Ambler, Conservative, Mississauga South, ON]

Thank you.

I asked an earlier witness what percentage of the project investment—in your case, bringing a mine to production—is devoted to the environmental assessment process.

[Pierre Gratton]

I'm not exactly sure what dollar figure I would attach to the actual cost of bringing it forward. I would say that for junior mining companies, inefficiencies in that process can cost them the project completely. That's why timeliness and predictability are important to smaller companies. For larger companies, it helps them make informed business decisions.

[The Chair, Conservative, Blaine Calkins]

Ms. Rempel, you have five minutes, please.

[Michelle Rempel, Conservative, Calgary Centre-North, AB]

Thank you, Mr. Chair.

I'll start by talking about the CEAA funding process. Some of my colleagues have suggested that resources weren't provided, but in fact the funding was renewed and increased in the last federal budget. I just wanted to put that out there to begin with and note that Mr. Gratton's comment on that was correct.

Mr. Gratton, you talked about how this bill might improve environmental assessment. Perhaps you could also talk about improving environmental protection. The act strengthens the federal government's ability to follow up on environmental assessment requirements. Could you comment on that and on how you think some of your member companies will respond to those new requirements?

[Pierre Gratton]

Yes. Actually, this is a feature that you'll find at the provincial level. In B.C., for example, environmental assessments come with conditions—in some cases, many conditions. This is an example of the federal government catching up to the provinces and bringing forward this attaching of conditions to environmental assessments. Those can be very significant, and they are—it's one of the other features I was going to mention earlier—one of the ways in which this legislation actually enhances environmental protection.

[Michelle Rempel, Conservative, Calgary Centre-North, AB]

Great.

Now, I'm sure that some of your member companies obviously participate in international jurisdictions, not just in Canada. They have projects across the world. As far as stringency is concerned, how would you compare these new regulations to those of other jurisdictions around the world? On the other side of that question, perhaps, with the streamlining included in there, does that now provide Canada with a competitive advantage as far as investment is concerned?

[Pierre Gratton]

Well, we often look to Australia as a principal competitor of ours, and they've been able to complete environmental assessments in as little as six months to a year, or sometimes a year and a half. This brings Canada more in line with Australia, which is obviously something we welcome.

[Michelle Rempel, Conservative, Calgary Centre-North, AB]

Just to go back to my earlier question, do you feel that the level of stringency provided for in this component of the bill is on par with or exceeding that of other similar jurisdictions around the world?

[Pierre Gratton]

As I and other witnesses have said—including witnesses earlier this evening—I don't believe that these changes in any way.... It's all about process. It has nothing to do with the quality of environmental assessment. On the extent to which there are measures in here that you could say do affect the quality of review, I think it enhances them, such as what we were just talking about—the enforcement decision statements.

[Michelle Rempel, Conservative, Calgary Centre-North, AB]

Do you anticipate that your member companies will now be able to engage in a lower standard of environmental planning due to the changes in these regulations?

[Pierre Gratton]

Lower? No, certainly not.

[Michelle Rempel, Conservative, Calgary Centre-North, AB]

Wonderful.

Something that some of my colleagues might not realize is the impact of the regulatory process on junior mining companies. I think a lot of time has been focused on the larger companies, but perhaps you could speak a little bit to how a lack of predictability and timeliness can affect the business planning cycle and affect investment capital, specifically for start-up companies, for the junior companies in this country.

[Pierre Gratton]

Yes. Junior companies are by definition companies that don't have operating mines, so they don't have cashflow. They're dependent on raising investment capital in order to finance these projects. As I think we all know, particularly in these times, investment capital can be quite jittery, so time slippage or an uncertain regulatory environment can seriously impact the ability of junior mining companies to raise capital and then to continue to advance a project.

I can give you examples of where junior mining companies ultimately have to sell in order to have their project completed because they simply run out of time and resources.

[Michelle Rempel, Conservative, Calgary Centre-North, AB]

I notice that your association also is the largest private sector employer of aboriginal peoples in Canada. Can you perhaps expound a little on how these changes to the regulatory process with regard to predictability and timeliness might affect that workforce?

[Pierre Gratton]

Well, it's one of the issues that I wanted to touch on earlier, so thanks for that.

First of all, this legislation does enhance and put new resources into aboriginal consultation—the crown's consultation. Now, in industry, obviously, good companies consult early. They start at the very beginning and they continue it.

But the crown still has an obligation to meet. What we have found at both the federal and provincial levels is that governments often consult communities, including aboriginal communities, a multiplicity of times, and often on discrete elements of a project instead of the project as a whole. So it leads to consultation fatigue, and it also prevents communities from fully understanding what it is they're dealing with.

I see these changes and new resources as potentially enhancing the quality of consultation that will take place at the community level, including with first nations. I think that might actually help and support our industry in building those relationships, because it will contribute to a better understanding of what the projects really mean.

[The Chair, Conservative, Blaine Calkins]

Thank you very much.

Thank you, Ms. Rempel. Your time is up.

Mr. Chisholm, please.

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

Thanks very much.

You know, there's no question that we don't want to unnecessarily create problems for junior mining companies and their investors and so on, nor do we want to contaminate a lake or a stream and kill fish, right?

[Pierre Gratton]

Of course.

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

To a degree we have to find a balance there.

I do have some concerns. I'm really pleased that the government has been able to make you happy and the three people here happy, and a couple of other presenters in our earlier session are thrilled with the bill as it relates to the extraction industries. But I think you would acknowledge that there seem to be a lot of other people, and Mr. Julian talked about the town halls that we've had across the country.... Not everybody has been involved in direct consultations with the government on this, and increasingly, as people find out what's wrong here or what's in the bill, they're very concerned.

Would you not agree that that's going to create a problem? If you're happy with this, you may get this bill through and get these changes through, but if a great deal of society out there is as concerned as they appear to be, do you not run the risk of legal challenges from first nations communities, for example, from municipalities, from others who do not feel the government has given this whole process due diligence? You talk about certainty, but does that not create some uncertainty?

[Ward Prystay]

CCA is pleased with the legislation because of the regulatory process certainty it provides. It lays out the steps and the environmental assessment processes and provides timelines so that we can predict, looking forward, how a project will proceed.

The scoping of an environmental assessment, the consultation requirements, those are all established by the government staff working on the ground with each individual project, and those are always project specific. We look at the changes to the act in combination with the land use planning objectives that exist within certain areas, with crown policies for land, with the permitting processes that exist. We don't anticipate there's any reduction of environmental protection or environmental stewardship—

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

Mr. Prystay, I don't mean to interrupt you, but you're missing my point. That is, you think it's great, but increasingly as other groups find out about this and what is being proposed, they're not very happy.

If we don't have a process where people can examine this, can have input, can make suggestions, and can feel that they're going to get their suggestions dealt with, you're running the risk of getting this bill through, getting the changes you love, but running into real problems down the road when you and the government try to implement.

Is that not the case, Mr. Gratton?

[Pierre Gratton]

I would say the current system creates lots of problems, and there's a lot of uncertainty on the landscape. We face litigation from environmental groups and first nations currently. I would suggest—