Indigenous and Northern Affairs Committee on June 10th, 2010

[Todd Russell, Liberal, Labrador, NL]

But if we don't build a deep water port and you build it next to your mine, it will be hundreds of kilometres away from Pond Inlet and they won't get the benefit of the deep water port or year-round shipping.

So we have to think about building those synergies, where the government can invest in infrastructure and it helps the community primarily, but it becomes a residual benefit for developments like yours.

[Greg Missal]

That's exactly right.

[Todd Russell, Liberal, Labrador, NL]

Then you'll have shipping for 12 months. I know it's not a huge community, but when one person wants fruits and vegetables, it can apply right across the board.

[Greg Missal]

That's right.

[Todd Russell, Liberal, Labrador, NL]

It's a similar type of thing for Iqaluit.

[Greg Missal]

That's right, and there's been a lot of talk, as Peter would know, about a deep-sea port being built in Iqaluit. It's hard to make the economics work, even for a city the size of Iqaluit. It really needs a hinge project--something large like the one our company happens to have. Those can be real drivers for projects like a deep-sea port.

[The Chair, Conservative, Bruce Stanton]

Thank you, Mr. Russell. Mr. Lemay, you have the floor for seven minutes.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Thank you. I will wait until you put on your earpieces. Mr. Chair, do not start the clock yet.

[The Chair, Conservative, Bruce Stanton]

I am starting it now.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

No, first they have to get the translation. I always have to keep an eye on you, Mr. Chair!

I will not ask a lot of questions. I prefer that the time be used for the answers. You have the translation? Okay?

Mr. Mackey, I have a question for you. Your presentation did not talk about possible solutions. Actually, I have two questions, and the second is more or less for everyone.

What is being done with respect to alternative energy sources? I see in your presentation a lovely photo of a wind turbine in Rankin Inlet, but I would like to know whether there are other such projects to reduce dependence on fossil fuels, on the 40 million litres of fuel that you transport, which is really something. Are efforts being undertaken in this area or even in hydroelectricity? That is my first question for you, Mr. Mackey. I have another question that I would like all three of you to answer.

You mentioned infrastructure programs; I would like to hear your comments on education, training and employment activities for people, in other words, the Inuit population in the north. I understand they are aboriginals in the Yukon. I would like you to comment on that, as you did not cover it in your presentation. Do you enlist the services of the Inuit? Do you give them training? Are you equipped to provide training, especially in the north? What about the Yukon first nations? I will let you answer, Mr. Mackey. Then I would like to hear from Mr. Missal and Mr. Blake, please.

[Peter Mackey]

Thank you for the question, Marc.

In terms of alternative energy, yes, we've experimented with wind energy, limited to two or three different locations. Some of the challenges or barriers we identified actually led to the failure of those projects. We have put wind energy in places like Kugluktuk, but the windmills didn't have the local expertise available to provide maintenance. The technology was new to the community. We had difficulty integrating it into a small, isolated, local grid, and eventually the lack of maintenance caused the windmills to fail.

In terms of alternative energy as a whole, we're actively pursuing it. But what I have to stress is that every wind energy project we put out causes a rate increase for the community we're in. When you have a community that's paying 75¢ a kilowatt hour, they don't want to see us throw up a windmill or start a hydro project when they know it's going to drive their rates to $1.50 or $2 a kilowatt hour. Some communities in the north already have that rate cost. So when we do a project such as the hydroelectric one we're trying to work with in Iqaluit, if there is any opportunity to seek funding elsewhere, we've gone after that, because that type of funding doesn't affect the rates paid by our ratepayers.

To give you some clarity about what we can do in terms of alternative energy, in our last general rate application we asked our ratepayers for half a cent a kilowatt hour for alternative energy research, development, and implementation. That was turned down by the Nunavummiut and turned down by our utility rates review council. They didn't give us that permission. As a utility, we're not authorized to spend a single cent on alternative energies unless we get funding for it from alternative sources, so that it doesn't affect our ratepayers.

The hydroelectric project we're working on in Iqaluit, where we've done a pre-feasibility four-season study and are ready to move to a feasibility study...we need $6.1 million to do the feasibility study. We haven't received funding for that. We have sent out various proposals for infrastructure funding and nothing has come through. So that hydro project sits where it is until such time as that funding becomes available.

As for the second part of your question about training, we certainly do provide it. As I mentioned in regard to the apprenticeship program, we train these people internally. We provide for them. Typically, to ensure the success of these people, if they have to get education in the south for eight weeks in their first couple of years, we'll send some of our trade staff down with them to ensure that they pass, that they get through. We're interested in the success rate of these people because they become our future employees. We partner with the GN department of education, the apprenticeship division. We're attempting to establish and set up a program for power plant operators, a certification program for Nunavut power plant operators, recognizing that we have them in 25 communities. Mines are going to need them for diesel power plants. We're working with the department of education and trade schools in Rankin Inlet, establishing programs there that we can utilize and partner with them, and we provide the limited funding we can to them. The other aspect of that is that we're going to seek support from mining companies and industry to move these initiatives forward.

Thank you.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Missal.

[Greg Missal]

Thank you very much for the questions.

I'll start briefly by just touching on alternative energy.

Alternative energy use by a project like ours is minimal, mainly due to the fact that we're primarily using large equipment, heavy mining equipment, at the site, which requires fossil fuel, of course. There's really no other technology that exists for that type of equipment use.

At a very preliminary level, we have looked at a river system near the mine site, which looks like it could support a hydro project. However, we wouldn't see ourselves exploring that until we are well into production and are able to start generating cashflows before going down that road. That type of alternative use would probably only serve at our camp facility, for example, which really is a very small consumer of fuels versus the equipment usage for the site and the generator usage.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

What about training?

[Greg Missal]

Pardon me?

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Formation. My second question.

[Greg Missal]

As far as training goes, probably the most noteworthy point is that one of the requirements of almost any mining project, particularly in the north, is an impact benefit agreement—an Inuit impact benefit agreement in our case, of course. The company is working on an impact benefit agreement with Qikiqtani Inuit Association. That's progressing well. One of the main parts of that IBA is employment and training opportunities at the mine site. We will be equipped to do training, as well as the contractors who work for us. One of the main components of any contract that we let for this project will be the Inuit employment content. It's something we take very, very seriously.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Blake.

[Erik Blake]

The situation in the Yukon is a bit different. All the communities, except one, have road access. Old Crow is the only one accessible solely by plane.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

What about training?

[Erik Blake]

In terms of education, a small company like ours doesn't really have the resources to take on trainee staff. But we do participate every year in a program that the Yukon government has for summer students in various fields. Our own company takes engineering students. Their salaries are subsidized by the Yukon government, and we've found that to be a very successful program. It's very rewarding to have university students working with us and having great ideas and stimulating the culture within our company.

[The Chair, Conservative, Bruce Stanton]

Thank you, Mr. Blake. If you could just finish that thought up, we are a bit over time here. I'll let you go ahead and wrap that up for Mr. Lemay.

[Erik Blake]

That's fine. I was just going to say, going back to the infrastructure issue, though we do have road access to every community except Old Crow, you have to recognize that Yukon is the size of France, with a population of 35,000 people. So the cost to the Yukon government to maintain that infrastructure is quite high.

I'll close my comments there.

[The Chair, Conservative, Bruce Stanton]

Okay. Great.

Thank you, Mr. Blake and others.

Thank you, Mr. Lemay.

Now we invite Ms. Ashton, who is joining our committee this afternoon.

Ms. Ashton is the member for Churchill.

Go ahead for seven minutes.

[Niki Ashton, NDP, Churchill, MB]

Thank you very much.

There are a couple of pieces I would like to ask about. As was said, I am the MP for Churchill, so I am familiar to a large extent with some of the challenges facing the mining industry, exploration, and so on in isolated regions. It's obviously a bit different from the situation in the territories, but there are definitely some parallels.

My first question is about infrastructure. Perhaps looking at some of the transboundary issues, what are some of the challenges in terms of transporting what you need up to the territories or to and from? I know certainly our part of the country does quite a bit of work with Nunavut through Churchill, but I'm also wondering across the board what some of the challenges might be in that area.

The second question goes back to education. I'm familiar with agreements that enforce quotas and encourage local hiring, but often the rates of success aren't as high as we would all hope. I'm wondering, perhaps, if you share that experience as well. While commitments are made, perhaps it is challenging to hold on to people locally. What do you see as some of the challenges? Do you see some barriers, whether they are barriers of distance, of communication, or whatever you might see that also ought to be incorporated besides that set program of training? I'm familiar with other factors prohibiting people from continuing on with local employment with companies in their areas, so I'd like to hear your thoughts on that as well.