Indigenous and Northern Affairs Committee on March 26th, 2015

[The Chair, Conservative, Blake Richards]

That takes us to Ms. Jones for the next seven minutes.

[Yvonne Jones, Liberal, Labrador, NL]

Thank you very much.

I want to thank our guests this morning for being here and for their presentation.

Obviously, we've had lots of discussion on different bills regarding Nunavut in the last year, and one of them that I know you guys are happy about is the devolution piece. I hope that with the devolution, you'll start seeing improvements in your infrastructure and more investment in your territory, because I know that has been a significant issue for you.

This morning, with regard to this particular bill, it is my understanding that as you look at large-scale development projects within the territory, you are seeing some regulatory changes taking place. My question, first of all, is about the amendments that we are looking at here in Bill S-6 right now. Are they being proposed at the request of the Nunavut government, or is this something that is being presented directly by the federal government or the Government of Canada?

[William MacKay]

It's a federal bill, and I think the impetus was the regulatory improvement initiative generally, which is also a federal initiative but something that the Government of Nunavut supports. As for the specifics of this bill, a lot of the proposals come from other federal legislation, environmental legislation that exists in the south and parts of the north. It is very much part of a federal environmental initiative that's nationwide. To answer your question, no, these were not proposed by the territorial government.

[Yvonne Jones, Liberal, Labrador, NL]

Were you involved in the consultation around this bill, and did you sit at the table with the Nunavut Impact Review Board to seek their input and address their concerns? It seems that they have some concerns that they are expressing here. I am wondering how your government feels about that and whether you've had an opportunity to address those concerns with them.

[Gabriel Nirlungayuk]

We were consulted several months ago as this proposal was drafted. The draft bill was sent to the premier back in May. Overall, given the limited scope of the amendments and the fact that they are consistent with other federal environment legislation, we don't have any concerns. However, in Nunavut, we work very closely with other co-managers. We'd like to have a co-management body. We were directly consulted. The proponent you are speaking about will be appearing before you. I would be very interested, too, to hear what their concerns are.

[Yvonne Jones, Liberal, Labrador, NL]

I guess one of the things we're looking at here is the time period required by the applicant to provide information.

In the past was this an issue? Was it a problem that was continuously being identified? What would be the rationale right now for the Government of Canada to want to make changes to that particular part of the bill?

[William MacKay]

I think that's something that industry has been pushing for generally, to have timelines so they can have an idea of at least what the outside limit is of how long an application will take.

With respect to this bill in particular, I didn't draft the bill, but I believe the timeline was arrived at so it would fit with the rest of the process.

In Nunavut under the federal legislation, an applicant comes to the Nunavut Planning Commission, and it determines whether an application is in compliance with the plan. It moves on from there to the Nunavut Impact Review Board, which does an environmental assessment. At the same time the Nunavut Water Board has to issue a water licence.

So under the Nunavut Planning and Project Assessment Act, there were timelines put in for that process, and the Government of Nunavut's support of this was that it felt that the Nunavut Water Board had to have some sort of time limit as well in order for it to fit in with that process and the timelines and that overall process, which involves the three bodies pretty closely.

We heard from the Nunavut Water Board about its concerns, about that timeline, and I'm sure the witnesses will relay those to you, but the Government of Nunavut generally supports a timeline.

If this timeline is sufficient or not, we don't really have a view on that, but we do support timelines specifically.

[Yvonne Jones, Liberal, Labrador, NL]

I guess that brings me to my next question. Are there any examples of projects that have been extended over a long period of time because they couldn't get the proper approvals or permitting? If so, just so we get a good understanding of why this change would be proposed, what would be some of those examples?

[William MacKay]

I've had anecdotal evidence. I don't know any specific examples, but the Nunavut Chamber of Mines will be appearing this morning and its representatives would have a better idea. They represent the proponents, so they might have a better idea of any frustration that's been expressed with respect to the length of time. I haven't heard any.

[Yvonne Jones, Liberal, Labrador, NL]

Okay.

This brings me to a question with regard to an issue that was identified by the Mining Association of Canada. That was the additional requirements for recovery of cost that was related to the water licensing, and whether it adds to the financial challenges or not.

Do you share the concerns it has with regard to this issue? What it expressed is that the Mining Association of Canada would allow federal and territorial regulatory agencies to charge back their own costs under—

[The Chair, Conservative, Blake Richards]

Ms. Jones, your time has actually expired, but I think there's enough of a question there that we can very briefly let the witnesses respond.

[Gabriel Nirlungayuk]

Cost recovery is a model adopted by many regulators in Canada, but we don't believe it is appropriate for Nunavut. The cost of resource development in Nunavut is already significantly higher than in southern Canada. Cost recovery would be a disincentive to investment.

The minister is given the power to seek recovery of government's cost. This discretion should be used sparingly, and project proponents should be notified before the regulatory review begins whether the minister will be seeking recovery of the government's cost.

[The Chair, Conservative, Blake Richards]

Thank you very much.

That ends our questions for this morning. We want to thank both the deputy minister and the acting assistant deputy minister for being here this morning on behalf of the Government of Nunavut.

We will briefly suspend now so we can set up for the next panel.

The meeting is suspended.

[The Chair, Conservative, Blake Richards]

We'll call the meeting back to order.

We have with us for the next portion of the meeting, from the Nunavut Impact Review Board, Elizabeth Copland, the chair, and Ryan Barry, the executive director. We also have, from the Northwest Territories and Nunavut Chamber of Mines, Elizabeth Kingston, the general manager, and Adam Chamberlain, director. Joining us by teleconference as well we have, from the Nunavut Water Board, Thomas Kabloona, the chairman and, as an individual, Teresa Meadows, legal counsel.

What we will do now is to move to opening statements, and we'll begin with the Nunavut Impact Review Board. Then we'll move to the Chamber of Mines and the Nunavut Water Board.

I'll turn it to the Nunavut Impact Review Board.

Ms. Copland, you have 10 minutes and the floor is yours.

[Elizabeth Copland, Chair, Nunavut Impact Review Board]

Thank you very much. Good morning. Ublaahatkut. Ma'na.

Good morning, everyone, and thank you for this opportunity to appear before you on behalf of the Nunavut Impact Review Board. My name is Elizabeth Copland. I am the chairperson of the Nunavut Impact Review Board and with me today is Ryan Barry, our executive director.

We have provided the committee with a written brief setting out our comments with respect to Bill S-6, An Act to amend the Yukon Environmental and Socio-economic Assessment Act and the Nunavut Waters and Nunavut Surface Rights Tribunal Act. Knowing that your time is limited, the focus of my opening statement will be to highlight the key aspects of our submission and to make ourselves available for any questions.

As a member of the Nunavut Land Claims Agreement transition team, I have been involved with impact assessment in Nunavut since 1994. I have served several terms with the Nunavut Impact Review Board for a total of about 17 years. I have chaired a number of public hearings for the NIRB, including the Jericho diamond mine project, the Doris North, Meadowbank, and Meliadine gold mines, and recently, the Kiggavik uranium ore mine project and the Baffinland Marry River iron ore project.

Throughout my time with the NIRB we have worked closely with the other institutions of the public government established under the Nunavut Land Claims Agreement, including the Nunavut Water Board, which is why we have an interest in the amendments proposed under Bill S-6.

Accompanying me today is Mr. Ryan Barry. Ryan has worked with the board for about eight years in various technical capacities, including as director of technical services since 2011. Throughout his career with the NIRB he has worked closely with the Nunavut Water Board and spearheaded a number of specific coordination initiatives, including the jointly-developed detailed coordinated process framework that coordinates the Nunavut Impact Review Board's impact assessment process during the review of major development projects and the Nunavut Water Board's water licensing process.

At the outset I would like to remind the committee that the regulatory regime established under the Nunavut Land Claims Agreement is unique and consists of a single integrated resource management system for land use planning, impact assessment, and land and water licensing in the Nunavut settlement area. Within this unique structure, the NIRB and the Nunavut Water Board work cooperatively to ensure NIRB's project assessment process informs, but does not duplicate or limit the Nunavut Water Board's licensing process.

Reflecting the importance of our ongoing collaborative and cooperative work with the Nunavut Water Board, the NIRB has commented on two aspects of Bill S-6 only. The first area of comment relates to those amendments that the NIRB sees as having the potential to affect the NIRB's processes because the NIRB and the Nunavut Water Board processes intersect and are coordinated or integrated, and this area will be the focus of my remarks today.

The second area included in our written comments simply affirms the NIRB's support of the Nunavut Water Board's written submission that identifies the issues external to the Nunavut Water Board, such as board member appointments and third-party capacity issues that have the potential to adversely affect the Nunavut Water Board's ability to meet the prescribed timelines proposed under Bill S-6. The NIRB can confirm that our board has experienced many of the same challenges as we have also experienced delays in our impact assessments arising from these same factors.

I'll now move on to the NIRB's comments on Bill S-6. The board is pleased to see that one of our comments on a preliminary draft of Bill S-6 was incorporated in the text of Bill S-6, but because of this issue it's important to coordinate initiatives. I will mention it briefly.

In our review of the preliminary text of the bill, we identified that the prescribed timelines established in the bill needed to be revised to reflect the timing of our coordination initiatives between the NIRB and the water board.

In addition, with regard to the preliminary draft of Bill S-6, we also commented on our concerns with the implementation of potential cost recovery only at the stage of water licensing. This issue remains outstanding in the current bill.

The NIRB recognizes the rationale and desirability of implementing a cost recovery regime, but notes that there is currently no mechanism for cost recovery during the NIRB's impact assessments of projects. Consequently, with cost recovery only being implemented at the water licensing stage, a proponent may have a direct financial incentive to ensure that the bulk of technical review, community consultation, and intervenor involvement take place during the impact assessment stage of project review rather than at the water licensing stage where the applicant could be responsible to pay for these activities under the cost recovery provisions.

To limit the financial incentive for a proponent to front-load the responsibilities onto the NIRB part of the integrated regulatory process, the Nunavut Impact Review Board has suggested that a consistent approach to cost recovery should be developed and implemented across all phases of Nunavut's integrated regulatory regime, including land use planning, impact assessment, and licensing.

In closing, the board thanks the honourable members of the House of Commons Standing Committee on Aboriginal Affairs and Northern Development for this opportunity to appear in your presence to comment on Bill S-6.

If you have any questions, I'd be glad to answer them.

Thank you very much.

[The Chair, Conservative, Blake Richards]

Thank you very much.

We'll move now to the Northwest Territories and Nunavut Chamber of Mines.

Ms. Kingston, you'll be making the presentation. The next 10 minutes are yours.

[Elizabeth Kingston, General Manager, Nunavut, North West Territories and Nunavut Chamber of Mines]

Thank you very much, Mr. Chairman. We appreciate the invitation to come to speak with you today.

The NWT and Nunavut Chamber of Mines is the industry association and leading advocate for responsible and sustainable mineral exploration and development in the Northwest Territories and Nunavut.

My name is Elizabeth Kingston. I'm the general manager for Nunavut. My office is based in Iqaluit. With me today is Adam Chamberlain, who is a member of our board of directors.

Exploration and mining is the foundation of Nunavut's economy and is playing a significant role in the growth of Nunavut's GDP. Next to government, it is the largest contributor to the northern economy, and becomes even larger if you factor in associated mining industry spending on construction and transportation. lt is the largest private sector contributor to the economy of the north.

Operating in Nunavut is not easy, however. Companies face a unique set of challenges that more centrally located businesses and industries in Canada do not have to face, by virtue of their proximity to both physical and non-physical infrastructure. These challenges derive from the characteristics that define the geographical region itself: remoteness, severe Arctic weather, undeveloped infrastructure, and sparse populations.

Companies in Nunavut face significant costs to build their own infrastructure, much of which is already in place or is more accessible with southern projects. Companies must also invest additional sums in these regions to train and educate, attract and retain, and transport and house our workers.

These factors combine to make exploration and mining substantially more expensive than in most of southern Canada. Any company operating in Nunavut has a much harder time attracting investment, because investors are well aware of the challenges associated with operating in our territory.

Given the limited opportunities for social and economic development, and with Arctic sovereignty as a strategic national consideration, the principles of economic growth and efficiency should be prioritized when guiding government policy towards the mining industry, particularly for our companies operating in remote and northern Canada. That is why the work that you do to create new legislation that helps provide process and investment certainty in Nunavut is so important.

And that brings us to today's meeting. We support a number of the legislative changes proposed by Bill S-6; however, we have a number of concerns and comments, which will focus on part 2 of the bill, respecting Nunavut waters.

The first concern is cost recovery. As we understand it, cost recovery for the consideration, renewal, amendment, or cancellation of a licence is proposed, to align Nunavut with the Canadian Environmental Assessment Act.

Industry strongly opposes new cost recovery measures, as they are a clear disincentive to investment in the north. Cost recovery represents an added impediment to an already costly operating regime. Introducing these measures now will only serve to further dampen investor interest in our territory. We recommend that cost recovery either be removed from the legislation or that it not be invoked at this time.

The concept of administrative monetary penalties is new to the north and is creating unease, as there are a number of aspects with this clause of the proposed legislation that require clarification. Monetary fines, in and of themselves, do not present a problem to good operators. However, extending the period of uncertainty from two to five years after a non-compliance incident could discourage investment without offering additional environmental protection. As well, the proposed amendments to the offences and punishments under the current scheme differ from the current version of the Mackenzie Valley Resource Management Act. We recommend that this section be changed to be more closely aligned and consistent with MVRMA.

Recently, staff at Aboriginal Affairs and Northern Development Canada created a policy direction on the definition of water used in exploration that is unnecessarily stringent and will delay projects and increase costs for proponents as they try to address it. A new interpretation of the water used, specifically to include circulated water utilized for no other purpose than to prevent pipes from freezing, is now considered a use under the act. This change in policy was made with no consultation with industry, and no transition period for its application has been applied to Nunavut's advanced projects.

The current standards by which type A and type B water licences are defined needs to be reviewed. In particular, the threshold of 300 cubic metres per day for a project moving from a type B to a type A licence requirement needs to more accurately coincide with the transition of a project from exploration to development. The act and regulations should also demarcate between “exploration” and “mining” by requiring type A licences for mining and type B licences for larger exploration projects.

Double bonding occurs in cases in which a licensee must provide financial security to more than one payee to address the same or related reclamation requirements. Industry is pleased to note the addition of proposed section 76.1 as a positive step towards addressing the issue of double bonding. However, we note that security management agreements would be formulated only on a proponent-driven, case-by-case basis. Successfully resolving the double bonding issue entirely will help to support Nunavut's growing reputation as an attractive investment destination for the many mineral development projects that are located on both crown and Inuit-owned lands. Our recommendation is to broaden section 76 to clarify what elements security management agreements should contain.

Establishing time limits for the evaluation and approval of water licence applications will allow for more predictable and timely reviews.

The inclusion of an express power for the Nunavut Water Board to issue 60-day extensions to water licences is entirely consistent with the Nunavut Land Claims Agreement. However, it seems that the option currently under consideration is to permit extensions only on the recommendation of the minister. In our view, this decision should be made by the Nunavut Water Board, as the considerations that would need to be weighed in determining whether an extension should be granted are well within the expertise of the Nunavut Water Board's technical staff.

It is important that water licences address environmental risks associated with mining processes as well as respond to community and socio-economic issues.

We agree that water licences should be issued for the life of the mining operation, with scheduled periodic reviews to ensure that water-related requirements are addressed, in distinction from the current costly process of a full re-application and review process every few years.

To conclude, mining provides to the north a major economic advantage, and it is already creating significant community benefits. Nunavut hosts a very high mineral potential and can support world-class mines and world-class opportunities.

We support Bill S-6, but with recommendations to ensure that it can be an incentive for increased mineral investment in Nunavut and we look forward to future dialogue with the federal government as the accompanying regulations are created.

That concludes my presentation. Thank you.

[The Chair, Conservative, Blake Richards]

Thank you very much.

We'll move now to our guest joining us by teleconference, the Nunavut Water Board.

Mr. Kabloona, I assume you'll be making the presentation.

[Thomas Kabloona, Chairman, Executive, Nunavut Water Board]

I have a slide presentation.

Good morning, and thank you for this opportunity to appear before you on behalf of the Nunavut Water Board. My name is Thomas Kabloona. I am the chairman of the Nunavut Water Board and I am from Baker Lake, Nunavut. I have been with the board for many years, commencing with my first term in 1998, and I have been the board`s chair since 2006.

With me today via teleconference is the Nunavut Water Board's outside legal counsel, Teresa Meadows, with the firm Shores Jardine LLP. Teresa has been legal counsel to the board since February 2010 and has represented the board on the working group that reviewed these proposed amendments commencing in January 2014.

Next is slide 2. We have provided the standing committee with a written brief setting out the details of the board's comments regarding Bill S-6 [Technical Difficulty—Editor].

[The Chair, Conservative, Blake Richards]

Mr. Kabloona, we seem to have lost you at least momentarily. Would you just say a couple of words to see if you're still with us.

[Thomas Kabloona]

I'm still here.

[The Chair, Conservative, Blake Richards]

We've definitely got you back. If you want to resume your presentation, I think we're okay.

[Thomas Kabloona]

Okay, thank you.

Knowing that your time is limited, the focus for our testimony today will be to provide you with additional context and insight regarding our work and to highlight three key areas of discussion that the proposed amendments to the Nunavut Waters and Nunavut Surface Rights Tribunal Act raise for the board. The focus for our comments today will be on the aspects of Bill S-6 that apply to Nunavut.

To begin with I will give you a brief background to the board. As slide 3 indicates, the Nunavut Water Board was established under the authority of article 13 of the Nunavut Land Claims Agreement, also called the NLCA. The board has responsibility and power over the regulation, use, and management of fresh water in the Nunavut settlement area. We are part of the integrated regulatory system established under the NLCA that commences with the review of proposed developments, such as mines, hydro projects, major infrastructure such as ports and roads, for their conformity with the land use planning requirements of the Nunavut Planning Commission. Then the Nunavut Impact Review Board considers the potential environmental and socio-economic effects of the proposed development.

Once those institutions of public government have indicated that a development can go ahead, the Nunavut Water Board gets to work to consider whether to issue a licence for a project for any required use of fresh water or any associated deposit of waste that may enter into fresh water.

Over the years the board has worked on a number of coordinated initiatives with our partners in the regulatory process to minimize duplication, to streamline our process, and to engage with stakeholders, including Inuit organizations, government agencies, potentially affected communities, and members of the public. It is the board’s overall impression from the regulated community, members of the public and our other stakeholders, that although there are challenges to the capacity of all parties within the existing system, which Teresa will talk to you about from the perspective of the Nunavut Water Board in a few moments, in general, the structure of the regulatory system in Nunavut works well.

Slide 4 gives you a quick overview of the legislative base that further defines the board’s structure and processes in addition to the NLCA. In April 2002 the Nunavut Waters and Nunavut Surface Rights Tribunal Act came into force, and this is the act that Bill S-6 now proposes to amend. In April 2013, following consultations by Aboriginal Affairs and Northern Development and public hearings conducted by the board, the Nunavut waters regulations came into force, completing the remaining piece of the regulatory puzzle for the water board by replacing the statutes from the Northwest Territories regulations that had been brought forward in the absence of Nunavut-specific regulations.

Turning to slide 5, and with that context in mind, I would like to share the board's general views on Bill S-6 before passing the floor to Teresa Meadows to outline our specific comments on three key areas. As you would expect, the Nunavut Waters and Nunavut Surface Rights Tribunal Act is our governing legislation. The board is very interested in whatever changes are proposed. So in January 2014 when the board was first contacted about participating in a working group that was considering changes to the act, our executive director and legal counsel actively participated in all meetings and provided several written comments and submissions throughout the process.

In September 2014 the board provided written submissions and the board's former executive, Damien Côté, and I appeared before the Standing Senate Committee on Energy, the Environment and Natural Resources to speak about Bill S-6.

As we indicated before the Senate committee, the board has always been supportive of efforts to ensure that our regulatory structure enables its processes to remain transparent, efficient, integrated, timely, and responsive, and our comments reflected these goals in a number of areas, including, among others, the public notifications associated with administrative monetary penalties and the public registry system. A number of the specific issues raised by the Board during this participation were considered, and have been to some extent reflected in Bill S-6, so we are supportive of the amendments in general.

Teresa, I'll pass it on to you.

[Teresa Meadows, Legal Counsel, Shores Jardine LLP, As an Individual]

Thank you, Chairman Kabloona, and thank you to the chair of the standing committee and honourable members.

My apologies that we are unable to attend in person. I know that it creates some difficulty. I hope that people will stop me if they are unable to hear me, but I will proceed on the assumption that you can hear the disembodied voice at the other end of the phone.

I intend to cover in more depth three key areas of the Board's comments that remain unaddressed in the current draft of Bill S-6. As Chairman Kabloona mentioned, we have been involved in the process. I know that committee members are concerned about consultation. I can say that we were consulted commencing in January 2014 and that we did have some significant changes made to the text of the bill prior to its presentation in the Senate and the current iteration that's before the committee.

I would like to refer to the specific comments that remain unaddressed, including discussions on the term of the licence or the amendments to section 45; time limits or sections 55.1 and 55.6; and security, which would be section 76.1 in the amended bill.

With respect to term of licence, right now, as described in item 2.2.2 of the legislative summary of Bill S-6, in the proposed section to replace the existing section 45, the Board is expressly authorized to issue licences in certain circumstance that would exceed the current 25-year limit and extend—

[The Chair, Conservative, Blake Richards]

Sorry, for my interruption, Ms. Meadows, but we have arrived at the time allotted for the presentation. We did have a couple of hiccups, which used a bit of the time we allotted to you, so maybe what I will do is allow a minute or two for both of you to wrap up the remainder of your presentation. I do see you have some slides left, but maybe you could take the next minute or two to wrap up as quickly as you can.