Human Resources Committee on March 25th, 2014

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[The Chair, Conservative, Phil McColeman]

Thank you very much, gentlemen, for your time. Thank you for being here.

We'll now pause until the next round.

[The Chair, Conservative, Phil McColeman]

Welcome back.

We're continuing the second hour of our meeting number 16. For the next hour we're grateful to be joined in person by Ms. Heather Kennedy, vice-president of government relations, business services with Suncor Energy. Also from Suncor we have Ms. Mary-Pat Campbell, manager for stakeholder and aboriginal relations.

Joining us by way of video conference from Toronto we have Ms. Leanne Hall, vice-president, human resources at Noront Resources Limited, along with Mr. Semple, the chief operating officer of that company.

We welcome you to our committee, and to the second hour of testimony and questioning. Let's begin with the representatives from Suncor. I'm not sure whether one is going to speak and share time, but it looks as if it's going to be Ms. Campbell. So would you begin for ten minutes, please.

[Mary-Pat Campbell, Manager, Stakeholder and Aboriginal Relations, Business Services, Suncor Energy Inc.]

Good morning. My name is Mary-Pat Campbell and I am the manager of stakeholder and aboriginal relations for Suncor Energy based in Calgary, Alberta. Together with my colleague Heather Kennedy, and on behalf of Suncor, we'd like to thank you for the opportunity to share and participate in the work that you're doing to better understand opportunities for aboriginal persons in the Canadian workforce.

In 2011, Suncor began implementing an updated aboriginal relations policy and the policy reflects Suncor's triple-bottom-line approach to development where energy development provides economic prosperity, promotes social well-being, and preserves a healthy environment. Part of this vision involves working in collaboration with Canada's aboriginal peoples to develop a thriving energy industry that allows aboriginal communities to be vibrant, diversified, and sustainable.

Over the years, Suncor has worked closely with aboriginal communities to identify business opportunities that help us to tap into local skills and expertise. We recognize that supporting aboriginal businesses and communities is about more than just purchasing goods and services. It also requires working collaboratively with our aboriginal partners to build the winning conditions that result in mutually beneficial economic development.

It is our key belief that people and communities affected by our activities should have the opportunity to benefit from energy development. And after much review, reflection, and consultation, Suncor has developed an aboriginal economic collaboration strategy that focuses on four key objectives: proactive aboriginal business development: maximizing procurement and commercial activities; respectful relationships and capability development: building capacity within Suncor ourselves as well as with our aboriginal business owners; community-driven economic development: encouraging entrepreneurship in communities; and meaningful partnerships and collaboration: learning from others and sharing in our success.

Suncor will continue to implement this strategy over the next five years and we believe it will provide enough flexibility for our business units to work towards our strategic objectives and encourage innovative thinking in consultation with our aboriginal partners every step of the way.

Also, having a clearly defined strategy includes measurement, and through that we will closely track and report on our progress.

Id like to spend a few minutes just to tell you some of the examples of work that continue to evolve from this strategy.

Currently we have aboriginal business liaison roles dedicated to our oil sands operations in the regional municipality of Wood Buffalo, Alberta. These liaisons work closely with our local aboriginal businesses, understanding their companies' growth plans, assessing our own procurement needs, and working those opportunities to contracts.

Since 1992, we have spent more than $2 billion on aboriginal businesses, $1 billion of that just in the last four years alone.

Suncor is equally proud of our involvement in business incubators, resource centres to foster entrepreneurs within the community, which in turn help to eliminate the need for social income support. The first of these incubators was in Fort McKay and the second is currently at the Tsuu T’ina First Nation near Calgary. Each model is slightly different, reflecting the needs of the community. In addition to funding, Suncor employees volunteer their time, sharing their expertise in areas such as building business plans, marketing, proposal building, and even certification programs.

On the retail side, Suncor—through our Petro-Canada brand—has partnered with first nations to develop retail stations on urban reserves. Petro-Canada's venture with the Peter Ballantyne First Nation, as an example, has become one of the busiest retail sites in Prince Albert, winning business of the year from the Prince Albert and District Chamber of Commerce.

Related to our second objective, respectful relationships and capability development, Suncor has been involved in various training programs that help to support aboriginal people entering the workforce. From Suncor's experience, it's important to look at the programs that support aboriginal people at all levels of the education spectrum, from secondary to post-secondary.

We are encouraged by the amendments to the first nations education policy, which should allow for greater flexibility to meet community needs and provide more opportunities for a culturally based approach.

The one area of aboriginal education that struggles with financial support is programming to help the unemployed and underemployed aboriginal people. We've been told that some of the largest challenges are actually navigating the system, understanding the programs that are available to aboriginal people, and linking the often fragmented process to building a comprehensive training plan. That is where aboriginal skills and employment training strategy support comes into play. ASETS provides funding for a number of aboriginal organizations, including our own Athabasca Tribal Council in Wood Buffalo, where we operate. In 2003, Suncor partnered with Athabasca Tribal Council in a three-year skills development program that was extended for an additional one and a half years. The program saw up to 80 clients go through with 20 of those students receiving placement at Suncor for the work experience aspect of the program.

There are a number of learnings we'd like to share now. Upgrading must become a base component of the program. Often clients who graduated from grade 12 at regional high schools still required upgrading. Life skills programming is also an additional requirement. Clients often had limited experience outside of their home community in understanding work, and non-aboriginal culture was also a challenge. Healthy living programs are an important component of the academic programming, in addition to providing ongoing support to clients when moving from the academic programming to the work experience piece. Managing attrition and expectations for the program completion should be considered early as they can impact on program costs.

The one learning that I'd like to stress from our experience with the program is the success of clients who were placed with small to mid-sized local aboriginal businesses working at Suncor. Suncor offered subsidies to these small businesses to take on the students for the work experience part of the program. This arrangement provided the greatest program success rates, and the clients thrived. Local aboriginal businesses understood the challenges the clients were facing. They could provide individualized care and nurturing and a bridge between aboriginal culture and work culture.

Going forward, to increase the relevance and success of ASETS programs and graduates, we would recommend that the programs take a holistic approach, providing academic upgrading, counselling, life skills, goal planning, cultural sensitivity training, and other requirements such as drivers' licences and WHMIS training. ASETS programs should include the student completion of GED or upgrading of high school courses on top of employment and life skills training. The upgrading should reflect requirements of post-secondary training programs. Further to post-secondary training programs, ASETS program holders need to partner with appropriate regional post-secondary institutions to ensure that there's a progressive element to the training. Complementary work experience should leverage aboriginal role models through work placements with aboriginal businesses, or by establishing a mentorship element to the program. Aboriginal youth often cite that they were unaware of possible careers and opportunities. A mentorship aspect could help to address this barrier. Ease of use and access, as cited earlier, must be a key consideration for any such programming.

Suncor's aboriginal relations policy envisions a relationship where those affected by Suncor's operations share in the benefits of development, specifically through business development, training, employment and community investment. Ultimately, we want vibrant, diversified, and sustainable aboriginal communities working together for mutual economic benefit.

The aboriginal skills and employment training strategy helps to bridge the funding gap to ensure that the unemployed and underemployed segment of the aboriginal population can gain the necessary education and skills to participate in the workforce. ASETS is a necessary program for aboriginal peoples and must continue to see federal funding support.

In conclusion, developing and implementing individualized programs are simply not Suncor's areas of expertise. Our experience has shown us that collaboration, partnership with community, educational institutes, and industry will result in the programs with far better success rates.

Suncor encourages the Government of Canada to keep ASETS, to improve the programs available, and to create partnerships that will be part of creating equality for aboriginal people in Canada. There are real opportunities in our operating areas. Growth projections and employee demographics all point to a shortage of trained and capable employees in the future, and increased alignment between these programs and the projected employment demands will result in greater opportunities for aboriginal peoples.

Thank you for your time.

[The Chair, Conservative, Phil McColeman]

Thank you very much.

Now we move to the representatives from Noront Resources Ltd. Please proceed for 10 minutes.

[Paul Semple, Chief Operating Officer, Noront Resources Ltd.]

Thank you for inviting us today.

My name is Paul Semple. I'm the chief operating officer for Noront Resources. Leanne Hall, our vice-president of human resources, is with me today.

I'll give you a quick overview on Noront. We're an innovative junior mining company that is committed to excellence and aboriginal inclusion in our projects. We believe in responsible development. Our projects right now are located in northwestern Ontario in the Ring of Fire, approximately 700 kilometres north of Thunder Bay, Ontario. We have been involved up there for over seven years and have spent in excess of $200 million exploring for base metals: nickel, platinum, and copper. We have an advanced project, the Eagle's Nest mine; we're going through the permitting and are in the process of developing it. We expect that project to start construction next year. With completion of construction in early 2018 there's a forecast of an 11-year mine life. With exploration targets we expect the project to go for at least another decade or so.

The capital costs we're talking about for our project are about $600 million to $700 million. That is exclusive of infrastructure that would be shared between the local communities. We expect our project would employ 400 direct jobs and about 1,200 indirect jobs during operations and construction.

The Ring of Fire is located in the middle of Nishnawbe Aski Nation. The project is surrounded by 15 first nations communities. The closest non-first nations community is Pickle Lake, which is about 300 kilometres away. Very early on, we recognized that a successful development in this part of the country would require a significant relationship and partnering with the local communities. The communities suffer challenges that are not unique to first nations communities. They are pretty severe in that part of the world where we are dealing with communities with 90% unemployment. We started early on working on a model on how we would engage with the communities and use and integrate them as part of our business development plan. Based on the close proximity and the available labour pool, we saw that this was not only a responsible initiative to development but also good business for us.

Noront is a small, developing company. We have about 26 full-time employees right now. We have self-identified aboriginals at all levels in our organization from senior officers to labourers in the field. As we grow our project, we've worked on a workforce development study whereby we identified all the jobs we have. We've been looking at what levels of skills and training we need. About 60% to 85% of the jobs are low to middle level and are trainable for our workforce who come from the local labour pool. Another 15% would be mining professionals, accountants, and other professionals, which would be further down the road from first nations capacity building.

One of the programs we looked at early on was that if we were going to be successful in engaging and creating opportunities for the local workforce, we needed to start a training initiative much earlier in the process than after the project was built and then try to create opportunities for people only in the operations. We saw that the construction period is a critical part of training and developing that workforce so we've been pushing training initiatives as early as possible.

In 2009 we started a community industry educational initiative, which we call the Ring of Fire training alliance. That is an agreement that was signed in 2012 among us: Noront Resources, Confederation College, and KKETS, which is the training arm of the Matawa tribal council. The key objective of that was to define sustainable work paths for interested community members. Those might be in the mining industry. We've identified about 127 different professions that are involved in one way or another from accountants to pilots to miners to lawyers to nurses to pilots to teachers, and the list goes on. Under this, we've been working on work assessments. We've gone into the communities. We've assessed more than 330 Matawa First Nations community members, and more than 160 members have completed the first days of their mining essentials and mining readiness program. We're proud to say that there's a graduation rate of 83% from that program.

We've done nine of these programs directly in the community. We're gearing up for the next phase, which deals with training in occupational skills, environmental monitoring, camp support, cooking, underground core, common core, underground drilling, heavy equipment operation, and the trades.

We are integrating the contractors who are involved with us into the program. Those contractors who are not willing to work with us on training initiatives—so that at the end of the day we will have a trained capable workforce—are not high in our procurement priorities. We've entered into partnering agreements with numerous tier-one mining contractors.

With regard to where we are and what we can do better, for the duration of the current programs, the SPF funding will be out there only until March 31, 2015, so we see that as a challenge for us. We look at the ongoing training reaching out long into the future and continuing to provide opportunities in our operations and other planned operations in northwestern Ontario. We need some flexibility in the process. There is a huge push to create jobs instantly. At the end of the programs, we obviously would like to do that, but sometimes there are permitting issues and things like that which are out of our control. We can't necessarily create the jobs because we're waiting for permits to go through the process, which takes longer than we expect. That isn't really a failure of the training process; it's a failure and a challenge of the permitting process. Tying those two together is a challenge.

The funding for these programs is challenging. We have been able to secure federal funding of $5.9 million for this initiative, but we have yet to see any money from the province. Then we get into the question of harmonized integration of programs for training of trades and what should be federal dollars and what should be provincial dollars.

The last thing I would say is that I believe we've taken an innovative approach and an early approach, but doing that has come at a cost of having a lengthy program with a lot of red tape and bureaucracy, maybe because what we're trying to do doesn't quite fit into any box.

It took us three years and 25 revisions to our proposal to get this through and to start the program that we're now seeing the benefits of. With the deadline and the sunset of this program coming, it's a shame to see those efforts wasted. We believe we have the right initiative. We believe we have a successful program. We hope this will get extended and continue to advance a program that's beneficial both to us and to the communities in which we intend to operate.

Thank you.

[The Chair, Conservative, Phil McColeman]

Thank you, Mr. Semple.

Now we'll move on to our first round of questioning. Madam Sims will begin.

[Jinny Sims, NDP, Newton—North Delta, BC]

Thank you very much.

I want to thank both teams for their presentation. My first round of questioning is going to be directed more towards the Suncor representatives.

I was very impressed with your integrated approach to development in the aboriginal areas and the way you have included businesses and have fostered a very diverse growth in the communities, with your very close links on the ground and your very localized type of development. One of the things that we do know and that we hear over and over again is that when we're working at skills development with our aboriginal communities, the closer to home, the better. Also, it can't be aimed only at skills development that can be used for a short term. There has to be a way of doing that ongoing skills development and also fostering other businesses in the community so that there is sustainability long after.

I also note that you fully see a critical role for ASETS in order to make a link between the businesses and the unemployed and underemployed, which is very critical. As I mentioned earlier, although you don't mention it, there is a lot of work that will need to be done even during the high school years and in the elementary years as well.

One of the questions I wanted to ask you is, do you provide child care? We've heard about the significant need for that if we want to engage more women. What percentage of women do you have amongst your recruits?

[Heather Kennedy, Vice-President, Government Relations, Business Services, Suncor Energy Inc.]

At Suncor, 23% of our workforce is female. Considering the mining and resource nature of our business, that's pretty high. We target a lot of female employees.

We offer child care at our head office in Calgary. We don't offer it at our various sites, but we do, through our community arm, support local child care. In Fort McMurray and Fort McKay, 15 years ago there was a child care crisis in those communities, and we actually were a leader in working with the community—aboriginal and non-aboriginal, in the case of Fort McMurray—to find the right people to provide that child care and to support it.

We think it's far better that those who are experts in something like child care provide it, but we can play a role in funding where required, and, more importantly, in bringing the right people together to make sure it happens. We are very aware of all of the child care availability in all of our operating sites but generally prefer not to provide it ourselves.

[Jinny Sims, NDP, Newton—North Delta, BC]

No, and I think the fact that you support child care in the communities is really important. I would say that your percentage is a great start, but we have a way to go. I'm sure you're working on that as well, because you know that quality child care is one of the primary barriers for women not only in entering the workforce but in then playing a critical role in the workforce on an ongoing basis.

What percentage of your workforce currently is aboriginal? Are they represented in the full spectrum of your different departments? In other words, that's not just at entry-level jobs but all the way up to senior management.

[Mary-Pat Campbell]

For Suncor as a total we're just under 3% aboriginal employees through the self-declaration process. Within the oil sands operations in Wood Buffalo, that percentage is actually 4.8%. There's a larger representation within the Wood Buffalo region, the area where we've been operating the longest. As for the management level, the representation is predominantly more in the unionized workforce, but we do have some at the management level. But you're exactly right, in that it starts to get smaller as you go up into the leadership programs, so that is one area of focus for us.

[Jinny Sims, NDP, Newton—North Delta, BC]

Yes, that was my next question. What kinds of plans have you made to foster the aboriginal workers' opportunities to work their way up once they're in the workforce and after you've put them through the skills training? Because once again, I'm looking for equity. In other words, how do we support so that it does happen and it's not just a dream?

[Heather Kennedy]

I'd like to first add a little bit to Mary-Pat's response and then answer your question.

Many of you may know that at Suncor, while we have 14,000 employees in Canada, we also have 10,000 to 15,000 contractors who are routinely and regularly hired as part of our operation. To help understand our influence in aboriginal employment in particular, and as it turns out, females in non-traditional roles, we've actually started recently to require all of our contractors to report on that, and we've started to set some targets, currently on apprentices, but we are considering whether we spread that.

So we are looking to make sure that our broader employment influence actually feels.... We understand how many aboriginal people we hire through our entire hiring spectrum, which is close to about 30,000 people.

I would also point out that we actually have a board member who is an aboriginal person, Mel Benson. Many of you may know him. He has been on our board for years and has been very influential and helpful in creating relationships for us and also making us aware of some of the challenges and opportunities.

I think one of the key areas for us—I will actually get to your direct question in just a moment—one of the barriers that we found internally at Suncor to promoting non-traditional people into management was our own employees' perspectives. So we have for the last few years put all of the relevant employees through some aboriginal awareness training, which we think has been very helpful to help them understand some of the cultural norms and some of the individual traits of the aboriginal history, and so on. That was an important barrier for us to remove internally, and when we look at our management programs to promote people through management, we have targeted areas for women and for aboriginal people. So we have programs that monitor who they are and monitor their opportunities, and I think this has been successful. To date we have improved our management presence, both aboriginal and female people, quite a bit. It's a targeted program that we use, but it is based on skill, so it's not gratuitous. We want you to do well. We want you to succeed when you get there. We want you to feel that you add value when you do get there, but we do certainly keep track and create opportunities for you.

[The Chair, Conservative, Phil McColeman]

Thank you.

We go on to Mr. Butt for five minutes.

[Brad Butt, Conservative, Mississauga—Streetsville, ON]

Thank you very much, Mr. Chair.

Thank you to both sets of witnesses for being here.

I just want to start at the outset by saying that Suncor has a major presence in the city of Mississauga, my home community, and we're very proud of the great corporate citizenship that you've shown. You're great sponsors of many events in our community and have been great corporate citizens. We're delighted to have you here in particular today, and I want to start with a question to Suncor, and then my second question will be for both.

I was quite intrigued by your testimony that you were putting as much if not more emphasis on creating aboriginal entrepreneurs and small businesses that you actually contract to versus hiring of direct employees. I want you to expand a little bit on your strategy of encouraging small businesses that are actually owned, operated, and run by the aboriginal communities where you are operating versus direct hires who will work for Suncor directly. Is there a deliberate strategy in that? Are you looking at certain numbers where you're trying to encourage the entrepreneurial side versus the direct employment side, and what are the positive results of both sides of that?

[Mary-Pat Campbell]

I think what you're seeing is actually a symptom of us listening to our communities and listening to what the community members want. I think you'll see, particularly in Fort McKay, a huge level of entrepreneurship. It's really community-driven. The community has wanted to start their own businesses and work independently, and through listening and understanding what the community wants, that's the right partnership for us. We're seeing that again in other communities too. So it's largely taking direction from the community and where their focus is. I think that is probably the biggest driver.

I think the other thing that we're very conscious of at Suncor is that positive and successful outcomes for community members are positive for Suncor, regardless of whether or not they're employees at Suncor. So we know that a community member who chooses a vocation that means he or she won't be directly employed by Suncor usually comes back and influences the community in a positive way. So that's a win for all of us. So that's another aspect, I think, of the entrepreneurship kind of support that we have, because we know it's going to be a win in the community, and therefore it's going to be a win for everybody involved.

[Brad Butt, Conservative, Mississauga—Streetsville, ON]

I have a supplementary question to that. You mentioned that one of the things you were encouraging is for members of the community to operate retail Petro-Canada gas stations, and of course those of us in Ontario are very familiar with Petro-Canada gas stations. Is that as a franchisee? Are they actually running it? Is it their own franchise and then they're running that gas station as part of the Petro-Canada chain? Is this how that works?

[Mary-Pat Campbell]

It's more of a franchisee type of arrangement, absolutely, where the first nation is actually a partner in running the gas stations.

[Brad Butt, Conservative, Mississauga—Streetsville, ON]

This will be my last question, because I know I'll be running out of time.

Tell me a little bit about your challenges, and maybe Noront can start first and we'll let Suncor speak as well. Tell me about some of your challenges around the local recruitment of aboriginal people in the communities in which you're operating. Are you having excellent uptake? Are you finding it difficult to recruit locals who want to work for your organization or contract to your organization when you're operating in those communities? Just give me a sense of your success on recruitment and if there are any challenges around that and what you're doing to address them.

Maybe Noront can start.

[Paul Semple]

Thank you.

I think the interest, especially from the youth, is incredible. Everywhere we go, every community we go into, people are looking at how to get involved, how to capitalize on a development, how to create a career, how to become a professional. We're inundated with those requests.

One of the things we also are doing as a new company is we don't have any fixed rules on what we want to do so we're taking a “ let's create businesses rather than create jobs” approach, as well. We're looking at partnering with other companies that are in that space, that have successful joint ventures, and using that for the capacity building that will create not only entry-level jobs, but progression into management levels with companies like ATCO, ABB, and Aecon, these types of contractors.

Maybe Leanne can add something specific on the recruiting.

[Leanne Hall, Vice-President, Human Resources, Noront Resources Ltd.]

I think when we look very specifically, we received the SPF funding through our aboriginal partner in August of last year. We went out to the communities and we started recruiting and doing the assessments. There were 330 people who came forward in the first round and we were immediately able to put 160 people into training. I think this is a tremendous success and, as Paul was mentioning before, with an 83% success rate, so community members do want to participate.

Speaking to a subject that's near and dear to my heart, which is increasing the number of women in the natural resources sector, over 28% of those candidates who have gone through the successful training program are women. There are great numbers there and, again, we start at a young age. We start looking at making investments at the age of six into the community. There's a program we engage called Mining Matters. We teach them about the essential elements of rocks, minerals, and mining. So we start from the age of six and we have all these different career progression pieces to allow people to take an interest in the mining sector and business development.

[The Chair, Conservative, Phil McColeman]

Thank you.

We move on to Mr. Cuzner for five minutes.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Great. Thanks very much.

If I could, Ms. Campbell, I'll ask a couple of questions and then get out of the way and see how much of the five minutes is left at the end of the round. You mentioned some specific changes to the ASETS program, that you believe would be of great benefit if they were included in the program. I'm going to ask you to identify them.

To Heather, and probably to Noront as well, I thought Cory McPhee was pretty candid in the last group of witnesses when he said some of the older ASETS didn't do a really good job with some of the first nations stuff, and they're better at it now with the new play they've just opened in Sudbury. I know that Suncor has been committed to trying to get it right and continually do better with first nations communities, and we heard that through the Syncrude testimony here as well.

So when some of the newer players go into a newer community it's about sharing the range of opportunity that tumbles when you come in to develop a mining play. You guys are way past that now. If anybody doesn't know about the opportunities with Suncor and Syncrude in Fort McMurray, then they've been living on another planet. I guess it's probably a constant reassessment of where you are, but I would think that anybody who's motivated to get involved in the industry and to earn a living from the industry is probably already there.

Is Suncor around 7% aboriginal right now?

[Mary-Pat Campbell]

It's 4.8% in the Wood Buffalo region.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

I'm sorry, I don't know where I got the 7%.

Does it get tougher the further you get into it? If so, how do you readjust your sales?