Finance Committee on Oct. 5th, 2017

[The Chair, Liberal, Wayne Easter]

Thank you.

Mr. Rowe wanted in earlier on one of the questions.

[John Rowe]

The point that you raised about the mines.... I didn't see it covered.

Back in about 1963 they established Pine Point mine, which created a huge demand for infrastructure. They set up the Taltson hydro system. They set up the rail going to Hay River and on out to Pine Point, and they set up the road infrastructure. Without that mine, none of that infrastructure would be in place. That infrastructure is left in place. The railroad continues to serve Hay River through the port going north, so it helps reduce costs in the transportation of goods. The roadway is now opened up to Fort Smith, and there's access to Fort Resolution. It's enhanced travel arrangements for people, and the power, which has been a long-time infrastructure development. Now we see a need to expand it.

We look at costing these pieces of infrastructure strictly on that one mine and say it's short term, but we have history there that tells us that 50 years later it's good.

[The Chair, Liberal, Wayne Easter]

Just before I go to you, Francesco, on the discussion earlier on infrastructure, I think it was Gary who said there's a preference for infrastructure over investment and tax credits. Maybe I'm wrong on this—I have some familiarity with them because I used them myself in my own operation—and you mentioned earlier, Jack, on investment tax credits, that they would apply more to equipment, technology, and that kind of thing rather than basic infrastructure. Is that what you were thinking on investment tax credits?

I think it was you who mentioned them earlier.

[John Rowe]

That's correct.

The question was whether there was a preference between infrastructure and investment tax credit. Given a specific preference, it would be infrastructure. The investment tax credits go across Canada, so they're not specific to a region, but they would help stimulate all sorts of regions. Here in the north, infrastructure is the biggest requirement.

[The Chair, Liberal, Wayne Easter]

It's critical, but on an operation.... I guess I'm coming from a standpoint of thinking both, because I think investment tax credits can move you to productivity in terms of new technology, innovation, etc., and it isn't actually money spent, it's opportunity lost by taxation.

[John Rowe]

Perceived money lost.

[The Chair, Liberal, Wayne Easter]

Right.

Mr. Sorbara.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Good morning, everyone. Thank you for your presentations.

Mr. Erasmus, the context of the nation-to-nation dialogue our governments are having is something I'm very proud of. I'm not as up to speed as Michael is on a lot of the issues, and I wish I could ask you some questions, but I'm going to fail on that part this morning, because I'm just not up to speed.

One thing I want to ask Gary and Tom, and then you, sir, as well, is about getting the local population involved in the diamond projects that happen. Let's set aside any speed bumps in getting the projects to happen, but how are we doing? As someone who represents a riding attached to downtown Toronto but grew up in northern British Columbia, how are we doing in getting the local population to get the benefits of the natural resources that are bountiful up here in the north?

[Tom Hoefer]

If we turn the clock back about 25 years, before diamonds were discovered here in the Northwest Territories, we had virtually nobody in the aboriginal community working in our mining industry. There were some, but not a lot. We probably had a handful of businesses that could service the mining industry that were indigenous back in those days.

Since diamonds have come along, there's been a really strong effort by companies, indigenous groups, and government to help improve that. Through things like socio-economic agreements, impact and benefit agreements, and actions like that, today we have on the order of about 835 indigenous mine workers, which is about half of our northern workforce. The other half is a fly-in fly-out workforce. It's predominantly non-indigenous. We have almost $6 billion in indigenous business payments from those mines, in constructing and operating them since 1996.

That's a significant burst of growth in the last 20 years. The key is, mines don't last forever, so we need to be finding new mines to replace them so we can sustain that level of employment and even grow it.

The critical factors, then, are training people, to give them the skills. If you look at our education levels here, in the indigenous communities they are lower than in the non-indigenous population. We need to keep that effort on education, and get more people through high school and into the trades and professions, so training is a big opportunity there.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

I'd like to get Mr. Erasmus's take on this, because it's important for me.

[Chief Bill Erasmus]

Someone mentioned this morning—I think it was Gary Vivian—that ultimately the land claim agreements need to be settled. To us, that's the big thing, and I'll speak briefly to it.

In the early 1970s, we took Canada to court on the question of land ownership, which includes the resource revenues. We won in the Supreme Court of the Northwest Territories, where Justice Moreau said that we didn't give up our lands or rights within the treaty process, and that we still had ownership of the land. If you're from B.C., you've heard of the Calder case. It came out the same year. Then, all of the discussion on land claims began.

We're still at the land claims table, since 1973, so it's way overdue. We need to settle this. If we own the land, then let's come to terms with that. We're not about to chase anyone out. We want to settle that, be understood, organize this government, and work with industry and everyone else.

I don't think industry cares who owns the land. They just want to know what the rules are to do the things they're talking about. If we're able to do that quickly, then we can make a lot of progress.

[The Chair, Liberal, Wayne Easter]

Thank you. Yes, indeed that's a long time.

We'll split the five minutes between you, Mr. Albas, and Mr. Fergus.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you, Mr. Chair, and thank you to all of our panellists for their expertise and welcoming comments.

I'd like to go right to the suggestions on page 13 of your brief, Mr. Hoefer, in regard to enhancing mineral exploration. In my region we have two copper mines that have done a great job of promoting a lot of economic development. We have Chuck Fipke, who makes his home in Kelowna. Obviously, he can attest to the importance of exploration and making sure your industry has a stock of inventory ready to go.

When it comes to the three-year extension, because it's going year to year with the exploration tax credit, can you explain why the government should seriously consider moving from to three to five years, because of what that does for your industry?

[Tom Hoefer]

We're joining in on this ask with the Prospectors & Developers Association of Canada, because it's a national ask as well. It's a tentative thing when it's been going from year to year. We're not even sure if we're going to get a year, and it's really important for companies to have that extra help in the risky business of exploring for minerals. This is why the ask is for three, to give some more continuity to planning for companies to be able to go out and explore and be successful. This is particularly important coming out of these last four years, where we've really been in a downturn and juniors have been starting to dissolve because they couldn't raise money and the markets have been so bad. Now there's a glimmer of hope that we're maybe coming off the bottom, so give us that longer-term security.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Having the geoscience done, which is available to anyone to use, as that first step towards investing in that area, I think is a very good recommendation.

When it comes to infrastructure, we're at a low point, as you said—or lower point—in the business cycle so to speak, and so having an infrastructure available.... It would sure be a shame that the next time there's a supercycle or even just an upturn that your region was completely left out just because of the high cost. I certainly appreciate the point about infrastructure and if there are ways for us to advocate for that. Responsive research and development is one of the most important things we can do for our region, so thank you for that.

Mr. Wever, thank you for your presentation. In regard to small business and the proposed tax planning for Canadian-controlled personal corporations, can you just give us an idea of your membership? How many are incorporated? How many operate as a small business?

[Trevor Wever]

Thanks, Mr. Albas.

I don't have that number handy but just....

Sorry?

[The Chair, Liberal, Wayne Easter]

Just send it in, Trevor.

[Michael McLeod, Liberal, Northwest Territories, NT]

It's three hundred and fifty.

[Trevor Wever]

Three hundred and fifty what?

The NWT chamber doesn't have 350. That's the Yellowknife chamber. If we look at the Yellowknife Chamber of Commerce, that's obviously local, and the majority would be sole proprietorship. For our chamber, it would be 75% personal corporations, so small to medium-sized businesses, and then the rest would be a mix between large corporations and sole proprietorships.

[The Chair, Liberal, Wayne Easter]

We'll have to end it there.

Mr. Fergus, you get the last question.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Thank you very much, Mr. Chair.

I have two questions to ask.

The first is for you, Mr. Tuyishime. You mentioned that Franco-People of the North should be able to receive services in French. I would like to hear your thoughts about the importance of having an inclusive economy, so that people may feel comfortable expressing themselves and receive services that are aligned with their desire to evolve in their mother tongue.

My second question is for you, Ms. Wawzonek. The question might seem insensitive at first, but I assure you that it is not. I would like to give you the opportunity to speak on the issue. The funding you receive limits the opportunities you have to provide services to women. How many women cannot benefit from your services? How many of them cannot benefit from them due to lack of funding? Certainly, if two plane tickets have to be purchased every time a woman needs to find safe haven, that represents a lot of money in the end, and you won't be able to serve the entire population.

[Jean de Dieu Tuyishime]

I thank you for your question.

Regarding the importance of French language services, we need to keep in mind that the francophone community is not an isolated community, especially here, in the Northwest Territories, where francophones do not occupy a single area. They are an integral part of the community and participate in its economy.

Regarding the importance of receiving such services, however, we have seen in the past that the majority of francophones that have come here, to the North, from elsewhere, end up staying because they have a job, but also because they can receive services in their language. There are French language schools and services for everyone that comes to work in the mines, for example.

French language services do not only benefit one segment of the population; they also help to promote the integration and retention of people that come here, to the North. Once they have access to these services, it is easier for them to stay and to feel better integrated.

[Caroline Wawzonek]

I appreciate your question, and it's not insensitive at all. It's a responsible use of funds, and I would suggest it is the opposite approach that is used in a non-profit sector. There is always the intent to maximize the opportunity to provide services and funding for women and children, certainly from the perspective of the YWCA, and I believe for any non-profit sector.

I was a director on the board, so I'm not deeply immersed in their financing, but certainly my understanding is that it is always a stitching together of funds. Because of the reporting requirements, you cannot use certain pots of money for operational uses. You cannot use them for capital. You cannot use them for one thing or another, so you're constantly forced to stitch together what you can to make things work. One particular pot of money might allow you to do one thing, and it may only be to use money for a meeting and to bring people in on an airplane, but that is actually pretty rare. The majority of the funding is going to be program-specific and service-specific.

I don't think that's a concern you should actually have.

[The Chair, Liberal, Wayne Easter]

Thank you, Greg, and thank you, Caroline.

I have one last question, really for the mining association. When you go through your charts, there is no question of the amount of potential up here, as well as for hydroelectric development, but my question is how do we stack up? We're not an island unto ourselves. We're part of the globe. Money and capital are mobile. It can go anywhere in the world to develop a mine. How do we stack up as a country, looking at both levels of government, to give the mining industry the opportunity to develop and invest in new mines in the north? How do we stack up compared to the rest of the world?

[Gary Vivian]

That's a large question.

Prospect-wise we're probably at the top of the list. Certainly Canada is a safe haven. Junior mining companies and Canadian funding are probably much safer in Canada than in many other countries. There is no doubt about that.

When you look at the size of Canada, probably almost 60% of the country is essentially either unmapped or misunderstood. When you look at the number of greenstone belts that are in the N.W.T. and Nunavut, the potential of hosting an Abitibi-type style of growth is as good as it is anywhere in the world. Our biggest problem is infrastructure and encouraging companies to come here. It's a well-known fact, and a report that was produced a couple of years ago said that it costs two and a half times as much to do exploration or mine development in N.W.T. or Nunavut.

The potential is huge, but companies look at the cost to operate, and right now it's a disincentive.