Thank you, Mr. Chair and members of the committee, for the opportunity to appear as a witness and address the standing committee this afternoon. I'm certainly pleased to be here.
My name is Ryan Montpellier. I am the executive director of the Mining Industry Human Resources Council, also known as MiHR. MiHR is a public-private partnership between the federal government, through the HRSDC sector council program, and the Canadian mining sector.
As I'm sure a number of you are aware, earlier this year Minister Diane Finley announced changes to the sector council program and changes to the funding for our organization. Although this will have a fairly significant impact on the Mining Industry HR Council going forward, we are exploring all options to mitigate against this loss of funding. We do plan on continuing to identify and address the HR challenges facing the mining industry.
But on that note, that's not why I'm here today. I'm here today to provide a bit more information that I think will be relevant to you in regard to the labour market situation facing the Canadian mining industry and specifically to talk about the importance of aboriginal people in mining. I'd also like to highlight one specific program of the council, which is called Mining Essentials, a very innovative way in which the mining industry and aboriginal people are working together to gain the critical skills needed by the sector.
On that note, today the Canadian mining industry is really facing the perfect storm. According to the Mining Association of Canada, the industry has almost $140 billion in new mining projects, either for expansion or for new projects in the permitting stages. This rapid expansion of the sector will put significant pressure on an already strained labour market.
The mining sector is also not immune to the aging of the Canadian workforce. In fact, approximately 40% of the current mining sector workforce today is over 50 years old, making it one of the oldest sectors in Canada, and about a third of the industry will be eligible to retire in the next four years.
Further compounding this challenge are the industry's challenges in attracting youth. Youth continue to hold negative perceptions associated with the mining industry; the stereotypes of what the industry may have been 50 years ago still are felt today in our schools.
All of this translates into a very daunting challenge for the mining sector: the need to recruit approximately 115,000 new people over the next 10 years. That is based on a very moderate growth scenario. If that $140 billion in the permitting stages actually comes to fruition, the number of people needed by the mining industry will quickly top 150,000.
How do we address this challenge?
The industry really needs to take a two-pronged approach. The first strategy is to make better use of all potential sources of supply. This means continued efforts to attract, recruit, and retain youth, women, new Canadians, aboriginal people, and older workers. Also, mining companies will need to continue to maintain and expand their investments in training and develop people in proximity to their mine operations. For the most part, as all of you know, these are in rural and remote communities.
The trend over the past 10 or 15 years has been the creation of a fly in and fly out workforce, or a commuter workforce. Although there are benefits to that and it can be a very effective solution, it is a very costly model. Turnover is much higher in these situations. It also causes significant social challenges with respect to family life.
There's simply a better solution, and that is to attract people and develop people locally and have them share equally in the economic benefit of the mine operations.
The second way of approaching this challenge is going to be through productivity increases. Increasingly, industry will need to rely upon improved investments yielding productivity gains. Investments into new equipment and technology will lead to less people requirements but will mean that the individuals the mining sector needs will need a much higher skill set. This is something the industry is challenged with today.
As I mentioned earlier when listing the number of potential sources of supply, I highlighted aboriginal people. This is one of the key pillars and strategies of the mining industry to address its skills challenge.
As you all know, several mining companies operate their mines in close proximity to aboriginal communities. In fact, the mining sector is the largest private sector employer of aboriginal people. Approximately 7.5% of the current national mining workforce self-identify as aboriginal people, and that's 2006 census data. From our analysis, that number is closer to 10% today. This represents somewhere between 17,000 to 20,000 aboriginal people currently employed. My understanding is that you heard earlier in the week from Cameco. Cameco is one excellent example of a mining company leading the charge in this area. They're not the only one, but they're certainly doing some excellent work at attracting and retaining aboriginal talent.
Today, there are over 175 agreements between aboriginal communities and mining, mineral, and exploration companies. Many of these agreements have very specific targets with respect to employment. However, one of the key challenges that mining companies are facing in fulfilling those employment targets is finding the right people with the right skills at the right time. There are certainly challenges with respect to essential skills and work readiness.
In that regard, any investment that can be made to increase the level of essential skills in rural and remote communities, and in aboriginal communities particularly, would be a wise and strategic investment. To that end, the ASEP program in particular has yielded some very strong results for the mining sector in the past decade, and we would certainly encourage the next version of the ASEP program to continue to have the education to employment link that was so prevalent in the ASEP program.
Finally, I would simply like to highlight one specific example of an innovative program that I think would be relevant to the work of this committee. The program is called Mining Essentials. It is a pre-employment, work-readiness training program targeting aboriginal youth. Mining Essentials is a partnership between the MiHR Council and the Assembly of First Nations, and was developed in 2010 and the early part of 2011 under the guidance of a broad steering committee, including not only first nations, but the Métis and Inuit, and also including representation from the mining sector, aboriginal trainers, and a number of other stakeholders.
The purpose of this program is to increase the involvement and engagement of aboriginal people in the mining and exploration sector by providing work-ready and essential skills training needed to gain meaningful employment. The program teaches skills using industry examples, industry tools, industry documents, and industry situations. However, they teach these things using traditional aboriginal teaching methods and aboriginal culture. It's an innovative and customized approach to pre-employment mine readiness. The training requires delivery partnerships between mining companies, mine trainers, community leaders, and aboriginal elders, and it takes a holistic approach to essential skills and work readiness training.
The first four participating sites produced a 70% success rate, and the majority of the graduates have moved on to gain employment or to pursue further education in the mining sector. Already, in the latter part of this year, and in 2012, there are nine different training institutions across Canada—including community colleges, ASEP recipients, and aboriginal training centres—that are adopting mining essentials and will be training this across the country. We expect several others will be joining shortly as well.
On that note, if you want more information on any of these programs, I invite you to visit the www.aboriginalmining.ca or the council's website at www.mihr.ca.
Thank you once again for the opportunity, and I certainly welcome any questions.