Finance Committee on Oct. 17th, 2012

[Tom King]

Perhaps the easiest would be just to look at where it has been successful. For an example, let's take a couple of Inuit bands in Newfoundland and Labrador that have received cheques in excess of $100 million just in this last year as a result of the Voisey's Bay discovery. Take Baffinland: that entire iron ore discovery was primarily funded through flow-through shares, the METC. Also, our whole diamond industry came from that.

So when the government says that it costs $100 million, I think we should ask what the return on that investment is. It has been a significant investment in our remotest regions where aboriginals are impacted the most. It has paid off. There is a reason why we are the number one mining country in the world.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

About the exploration and the people who are enjoying the benefits of the credit, how much successful exploration is there? How long does it take to move a project through to putting ore onto trucks or rail?

[Tom King]

To be honest, for the actual stage of exploration—because you're going to have your grassroots exploration and then you're going to get into pre-feasibility studies—it is not unlikely that it would take at least seven years to determine that you have a reserve in order to bring it into production. It takes seven years and probably another two to three years to actually develop the mine and bring it into production.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

If we are looking at 2000 being the start time, we're probably only now starting to see some of the benefits from that increased exploration.

[Tom King]

Well, some of those.... Again, that was a broad industry. As I say, your diamond industry was in fact found through the flow-through share mechanism, and that's up and running and contributing significant dollars. There have been success stories as we've gone along, but as I say, it really depends upon the region. In fact, if we take all of Plan Nord, where Quebec's big region is, a lot of those mines that they're hoping to bring into production were discovered through exploration programs.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you.

One of the other areas we were focusing on within this pre-budget consultation is some of the demographic challenges, the training challenges. Can you speak at all to that issue in your industry? What do you see as some of the solutions?

[Tom King]

As for where we see the issues, on our side we're looking at the exploration side. We're looking at our geologists and basically the whole engineering side. What you have is a very experienced group that is slowly moving on, and it's a challenge to build those additional resources.

Mercifully, a lot of major mines have focused on this, and they're trying to bring in training programs as well as assist our schools in opening opportunities, but that is the big issue for the mining industry, not only in Canada but around the world.

[The Chair, Conservative, James Rajotte]

You have a minute.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Okay.

Have you found that any of the programs offered to the rural and remote communities are providing support in assisting with the manpower issues?

[Tom King]

A lot of those programs have to be funded by the companies themselves, so they have developed training programs. What's happening is that the various associations are trying to bring in standard programs that can be used by various industries to help develop the skills of the aboriginal people.

Ordinarily in developing a mine in a region where there are Indian bands and aboriginals, one of the requirements is the percentage of employment made of up representatives from those communities. Training is a massive issue for them, and each company is recognizing this and developing programs.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Ms. Glover, please.

[Shelly Glover, Conservative, Saint Boniface, MB]

Thank you, Mr. Chair.

I also want to thank the witnesses for being here.

As I listen to the panel, I hear a lot of different ideas for budget 2013.

I have to admit that I was quite surprised, Ms. Bittman, and actually quite disappointed, that you would come here and use this as an open mike without even having read the submission submitted by your organization.

Nevertheless, I'm going to try to put all of that aside, because Canada faces some pretty tough times. We are still faced with a fragile economy. We remain very, very tepid as far as moving forward goes. However, Canada is doing better than most countries. As a result, we're looking towards budget 2013 to try to continue job growth, prosperity over the long term and, of course, growth in the economy.

Ms. Milner, perhaps you could tell me how you feel about balancing the budget. Do you have any ideas for cost-neutral regulation changes or anything in your industry for budget 2013 that might help us ensure we don't fall behind?

[Alicia Milner]

That's a very difficult question. We've certainly taken the approach to look at return, and return to Canada in a much broader context, which is competitiveness. The threat of having a truck with a much lower operating cost is very real, particularly with the shared border, where most of our population is.

The whole idea of structuring something that is cost-neutral to government is something the industry would be open to. We've certainly discussed the concept of whether you could put a levy on the fuel, for instance, that pays for the end-user to help lower that barrier. That absolutely would not be off the table.

The real point here today is to underscore the urgency to do something—

[Shelly Glover, Conservative, Saint Boniface, MB]

Yes, I agree with that.

[Alicia Milner]

—because otherwise we're going to lose some major investments in Canada.

[Shelly Glover, Conservative, Saint Boniface, MB]

I appreciate that. Actually, your presentation last year was very, very powerful too. That's why I give the opportunity to some of our presenters to also think outside of what has been presented.

But on balanced budgets, do you think that's an important thing that we should continue to work towards?

[Alicia Milner]

Absolutely, and I think what we're proposing is very much in the vein of Canada's economic action plan. This is very focused on a sector that tends not to get much attention, and where you see that the reinforcement is actually on cost-of-goods delivery. I don't have my colleagues with Canadian Trucking Alliance here today, but they would be the first to tell you that not only is fuel their number one cost, but it has escalated tremendously. If we think there's no cost to the Canadian economy from that, I think we're fooling ourselves.

[Shelly Glover, Conservative, Saint Boniface, MB]

Very good.

I'd ask this of Mr. King as well. Aside from the proposals you've made today, which were very interesting—and I've read your submission and I appreciated it—do you have any cost-neutral ideas that might help us to move forward and make things easier in your sector?

[Tom King]

Again, the METC actually helps us make jobs, and it develops us, so it is a payback. I think it is wrong to think of it as a cost to the government. I think if we looked at the return that the government gets, we can see that it is not a cost to the government. If we want to be number one in mining, we have to be there.

[Shelly Glover, Conservative, Saint Boniface, MB]

How important is it to return to balanced budgets?

[Tom King]

It's always important for Canada in terms of how it stands in the global market. As I say, I understand the issues, and I understand that what you're talking about is investing. The issue is, if I don't invest today, it's not as if I can replace it tomorrow. It's a long-term game and you have to keep the markets going. The issue is that it's not something where you can turn the tap on and off.

[Shelly Glover, Conservative, Saint Boniface, MB]

I appreciate that.

I have to say on behalf of the government that it was a very difficult decision that was made when we instituted the deficit reduction action plan. It was a very tough round of many, many meetings. It is not easy to see job losses, but in the interests of Canada we did what we felt was best to reduce the back office in many of these ministries.

I would say that it is simply absolutely misleading to suggest that the government didn't spend the hundreds of hours of time that were dedicated to reviewing the deficit reduction action plan, reviewing every ministry, and actually hiring an outside agency to give us the advice that was provided. I can assure you the government took this very seriously and we still believe that we did what was in the interests of Canadians and of our country.

So I appreciate that: thanks.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Glover.

We'll go to Ms. Nash for a brief round. Then the chair will wrap up with a few questions.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thanks very much.

Ms. Bittman, I just want to ask you a supplementary question.

First of all, thank you so much for being here. You should of course feel free to say whatever your perspective is.... This is a democratic parliamentary committee. Feel free to give whatever testimony you want.

I want to pick up on the issue about outside consultants. The outside consultants my colleague was referring to cost Canadians something in the order of $20 million. I understand that much of the expertise is in fact already contained in our civil service for many of these services that we're going outside of government to provide at the same time that we're laying off the expertise we have within our public service.

I wonder if you can just give me your opinion about what this says about public administration. Because I think what Canadians expect is that their tax dollars are well spent and that we're providing good public administration. Can you comment on that, please?