Indigenous and Northern Affairs Committee on June 16th, 2009

[Randy Ottenbreit]

What my comments were intended to indicate is that the absence of infrastructure in the north is something industry would end up paying the cost for, and it ends up increasing the costs associated with—

[Greg Rickford, Conservative, Kenora, ON]

So what kind of infrastructure would you be talking about?

[Randy Ottenbreit]

An example would be that camps, probably 20 to 30 different camps, some of them housing thousands of people, would be required for the project to move forward. There are a number of large landing sites that would need to be constructed, recognizing that the equipment would be moved north on the Mackenzie River, and in order to get to the pipeline right away that would need to be offloaded at a barge landing site. There are airstrips on some locations that would need to be constructed in order to transport people and light equipment to those locations. So those are all examples of infrastructure that in total add to the costs associated with the Mackenzie gas project proceeding.

[Greg Rickford, Conservative, Kenora, ON]

Thank you.

Claire, you similarly mentioned infrastructure at least twice. You were more specific with respect to roads, but in terms of development, I just wrote “infrastructure development.” What kinds of infrastructure did you have in mind as you spoke in the context of the chamber?

[Claire Derome]

I think the two main issues for our industry developing mines in the Yukon are related to road access. The basic reality in mining is that we need to move stuff, whether we're bringing a large quantity of components to extract ore, or, once we've concentrated that ore, if we need to ship it somewhere.

[Greg Rickford, Conservative, Kenora, ON]

Are you talking about primary and secondary roads?

[Claire Derome]

In the Yukon I think we have a good network of primary roads that are well used, but there have been more built to link communities and to allow for the movement of people. What I'm talking about are the roads that give access to those resources and those new emerging mining camps, which tend to congregate in specific areas in the Yukon, like elsewhere, from a geological perspective. If you build a road in an area that is very prospective for a mining development, you will see an increase in exploration activity and you will diminish the cost of operating a mine, and you'll have a much better likelihood of seeing these mines being built and developed. That's the first thing.

The second thing is access to cost-effective power or energy sources, which is a critical component in the Yukon. Actually, we have maxed out our capacity on the electrical grid in the Yukon, so there is no existing capacity there.

[Greg Rickford, Conservative, Kenora, ON]

I want to ask about the U.S. stimulus announcement last week. It's open to anyone, in fact. What kind of impact do you see that having? Where are we at? What does that mean for us?

[The Chair, Conservative, Bruce Stanton]

We don't really have too much time left--maybe 15 seconds or so. Does anyone wish to jump in and respond?

[Randy Ottenbreit]

I don't have any particular response, Mr. Rickford.

[Lou Covello]

I think it will mean that a lot of Canadian consultants will have more work in Alaska. Right now we do a lot of our work in Alaska.

[Greg Rickford, Conservative, Kenora, ON]

That's interesting. Thank you, Mr. Covello.

[The Chair, Conservative, Bruce Stanton]

Thank you very much, Mr. Rickford.

Now we'll go to the second round. We'll begin with Mr. Bagnell for five minutes.

[Larry Bagnell, Liberal, Yukon, YT]

Thank you.

It's great when the three territories come together on a plan. I notice you're presenting us with a plan to do a northern infrastructure study. Coincidentally, it's serendipitous that there's actually a private member's bill before Parliament right now that we might vote on in the next couple of days to do exactly such a study with the federal, territorial, and first nations governments. I assume you would all like us to vote for that.

[Scott Kent]

Having not seen the private member's bill and having sat as a legislator before, I would have to take a look at it before we could comment on that from a Yukon perspective. Anything to encourage the funding of a northern infrastructure study would be welcome. We were planning on using the new northern economic development agency that was announced, I believe, in the last throne speech as the vehicle to do that. Anywhere we could get some money to conduct such a study would be great.

[Mike Peters]

This is my first committee appearance, but I'm not so naive to recommend that you vote for a bill I'm unaware of.

[Larry Bagnell, Liberal, Yukon, YT]

I basically read the whole bill. The whole bill is one sentence, to do a study in the north.

Is there any comment from the Northwest Territories?

The whole bill is basically one sentence, to do a study on infrastructure in the north.

[Lou Covello]

We've been thinking about this a lot. In the last two pages of our handout, one page is a map and the other is a synopsis of those 30 mineral deposits I was talking about and the game plan there. I guess it's a little too late to incorporate that in the bill.

[Larry Bagnell, Liberal, Yukon, YT]

To the Northwest Territories and Nunavut Chamber of Mines, it's the same question I asked the Yukon chamber. Can the federal government help with taxes?

I assume you would like us to extend the flow-through shares mechanism--it's going to expire next year--and to continue future years with geoscience funding. Also, maybe give more credits for drilling close to a mine site so that we don't expand into the environment. That would be a benefit for mining and everyone else.

[Pamela Strand]

Yes, the NWT and Nunavut Chamber of Mines would definitely like the renewal of a flow-through, and a super flow-through. And additional components, such as environmental and consultation, which are required even from a very grassroots exploration, would definitely help the industry.

[Larry Bagnell, Liberal, Yukon, YT]

To the oil and gas industry, I have two questions. First, would you prefer these pipelines to be regulated through the NPA, the Northern Pipeline Act, or the National Energy Board? Secondly, if we hem and haw and regulate for too long, do you think that someone will liquefy the natural gas and take it all out and then Canada will lose the benefit of both pipelines, which could be huge benefits for Canada?

[Randy Ottenbreit]

With respect to the Mackenzie gas project, the regulation that applies to that is the National Energy Board Act. It's not that we have a choice with respect to what the rate is going to be.

With respect to alternative ways to get that natural gas to market, we evaluated that early on and determined that a gas pipeline, as opposed to something like liquefied natural gas, was the preferable way to get natural gas to market.

[Scott Kent]

If I could comment briefly on the Alaska Highway pipeline, it is subject to either of two regulatory vehicles if it is a TransCanada or Foothills project. TransCanada has recently partnered, I believe, with ExxonMobil. It made an announcement last week. And it is working, of course, with the State of Alaska. That would be an NPA proposal. But there's also Denali, which is a combination of BP—British Petroleum—and ConocoPhillips, which would be an NEB or CEAA type of proposal. I think from a Yukon perspective, whichever one goes first will be a commercial decision. There won't be two pipelines built. We would welcome whichever one is preferred.

[Larry Bagnell, Liberal, Yukon, YT]

I've been fighting for years saying that infrastructure funding and other funding in the north can't be on a per capita basis, because there are so few people. We need special arrangements for the north and extra money. I assume that you would all agree with that.

[A witness]

Definitely.