Thank you very much, Mr. Chairman and committee members. It is a delight to be here.
I do think you're embarking on a very important study. It's timely, and there's a lot of excitement about the potential in the north and the reality in the north. I think your study is going to be of great assistance to the department and to the government and the ministry. I look forward to your work and encourage you in it. I think it's the cutting edge of some very exciting things, so I look forward to your reports as you go through this.
I'm pleased to be here today to speak to you about economic development in the north and its importance within the government's northern strategy, as well as our recent progress in establishing the Canadian Northern Economic Development Agency, or CanNor.
Allow me to begin by introducing the people with me today: Nicole Jauvin, who was recently appointed Deputy Minister and President of CanNor, Michel Robillard, Vice-President of CanNor — I believe he now lives in Iqaluit —, and Patrick Borbey, Assistant Deputy Minister for Northern Affairs at Indian and Northern Affairs Canada.
The natural resources endowment of the north is tremendous. Estimates place one-third of Canada's remaining resources of conventional petroleum in the north. Private sector expenditures in exploration of the offshore hydrocarbon potential in the Beaufort, for example, will total $2 billion over the next eight years. These activities will also generate significant economic opportunities and direct benefits for the north.
With five mines operating in the north, Canada has become the world's fourth largest diamond producer by volume. More than 30 mines of different kinds could be in operation in the next 15 years, a production increase from $1.6 billion to $10.5 billion, with direct employment booming at over 11,000 people.
Of course, the economic downturn has had an impact up north as it has all over the world, so the recovery will take some time. Mineral prices, with the exception of gold and a partial recovery in the diamond prices as well, are overall much lower than they were a year ago, and private sector investment is down as well. The economic downturn has also resulted in job losses and declining employment and participation rates across the north.
But I believe we do have every reason to be optimistic. The economy will recover, and the resource sector will continue to be the most important driver of economic development in the north. That's why we must ensure that the conditions are right for development, that development happens in a sustainable way, and that northerners are full participants at every step and derive maximum benefits.
The promotion of social and economic development is one of the four cornerstones of our Northern Strategy, which was initially unveiled by the Prime Minister in August 2007 and recently confirmed in the document titled “Canada's Northern Strategy: Our North, Our Heritage, Our Future“, which I and Minister Cannon tabled jointly this summer.
If you haven't already done so, I would encourage you to review the northern strategy documents—I believe we have some copies around today—and visit the northern strategy website at northernstrategy.gc.ca. There is much valuable information about our vision for the north, as well as the many accomplishments and commitments made to date.
There are, of course, four pillars to the northern strategy with which you're familiar: economic and social development, environmental protection, improving and devolving governance, and sovereignty. We've already taken significant action under all four pillars of that strategy. For example, we are procuring new arctic offshore patrol ships and a new polar class icebreaker, the strongest ever in the Canadian Coast Guard fleet. Important work has been done to toughen pollution laws by extending the enforcement zone of the Arctic Waters Pollution Prevention Act to 200 nautical miles, the full extent of our exclusive economic zone.
To help address the problems of inadequate and unaffordable housing, we provided $200 million over two years to support the renovation and construction of new social housing units in the territories, including $100 million for Nunavut, where the need for new social housing is greatest. This is, of course, in addition to the $300 million in the Northern Housing Trust, announced in 2006.
To maximize the economic potential of the North, we have started to "map" northern resources through the energy and mines geomapping program.
To ensure that the conditions are right for development, we are continuing to make changes to the northern regulatory regime through the northern regulatory improvement initiative. I'm looking forward to bringing into the House this fall the legislative proposal for the Nunavut planning and project assessment act, and hope to have the support of committee members on this. I will continue to work with my cabinet colleagues to bring further changes forward. I'm also looking forward to engaging in dialogue with northerners and aboriginal organizations on further streamlining of the regulatory regime to unlock barriers to development.
To help ensure that northerners have the skills required for the growing number and diversity of economic opportunities, we have enhanced the aboriginal skills and employment partnership program. I am pleased to report that three new projects were recently announced for the north, one in each of the territories.
I will turn now to the specific and important milestone of our northern strategy, the establishment of CanNor, the new economic development agency for the north. The government's intention to create CanNor was first articulated in the November 2008 Speech from the Throne. Canada's economic action plan provided $50 million over five years to establish the agency.
I was delighted to accompany the Prime Minister to Iqaluit last August when he officially announced the creation of CanNor, whose head office will be located in Iqaluit. The announcement was the crowning touch on months of work during which staff and I talked to northern residents about the new agency and its operations and structures.
In terms of its mandate, CanNor will promote economic development in Canada's three territories by: first, delivering its own suite of regional economic development programs in the territories; second, coordinating and serving as the regional delivery agent for certain national economic initiatives; third, developing policy and research, and playing an advocacy role to support effective program delivery in the long-term prosperity of northerners.