Indigenous and Northern Affairs Committee on March 30th, 2015

[Wendy Randall]

Sure.

[Kyle Seeback, Conservative, Brampton West, ON]

I'm not afraid to give my opinion, and understandably so.

[Wendy Randall]

YESAB's role isn't really to have a political opinion on this legislation. We're here to speak to—

[Kyle Seeback, Conservative, Brampton West, ON]

Of course, no. I'm not trying to ask for a political opinion. I'm just....

[Some hon. members]

Oh, oh!

[Wendy Randall]

We're here to speak to the way the implementation of these changes may affect YESAA—as far as we can see. Many of them are so broad and not defined that it's hard for us to even speak to some of those potentials.

[The Chair, Conservative, Blake Richards]

Sir, there are a few seconds left. Would you make it brief?

[Tim Smith]

Very quickly, let me reiterate that the discretion as to whether a project would require an assessment rests largely with the decision body and not with YESAB itself.

[The Chair, Conservative, Blake Richards]

Thank you.

Thank you both for being here and for the information you provided.

We'll suspend the meeting briefly now and set up for our next panel.

The meeting is suspended.

[The Chair, Conservative, Blake Richards]

I'll call the meeting back to order.

Let me ask that the room be a little quieter, please. We'll restart with our second panel of the afternoon.

We have with us from Kaminak Gold Corporation Allison Rippin Armstrong, vice-president of lands and environment. We also have with us from the Yukon Chamber of Mines, Brad Thrall, president; Samson Hartland, executive director; and Ron Light, vice-president of Capstone Mining Corp.

Welcome to all of you.

We'll start with you, Ms. Rippin Armstrong, for the first seven minutes for your opening remarks.

[Allison Rippin Armstrong, Vice-President, Lands and Environment, Kaminak Gold Corporation]

I would like to thank Kwanlin Dün First Nation and Tr'ondëk Hwëch'in council for welcoming us into their traditional territory.

Mr. Chairman and honourable members, thank you for the invitation to appear before the committee to speak to Bill S-6, concerning proposed amendments to the Yukon Environmental and Socio-economic Assessment Act. We appreciate the opportunity because, as a Yukon success story, Kaminak wants to ensure that we are governed by an accessible and stable regulatory regime.

My name is Allison Rippin Armstrong, and I am vice-president of lands and environment with Kaminak Gold Corp. Kaminak is a Canadian exploration company that has owned and explored mineral properties in all three of Canada's northern territories. We are currently focused on exploring and advancing the Coffee gold project located in central Yukon within the traditional territory of Tr'ondëk Hwëch'in.

Kaminak is committed to being a good neighbour to all stakeholders, including Yukon first nations, and to that end has engaged local first nations at every stage of the Coffee gold project. Kaminak continues to work closely with our local first nations leaders and communities to minimize project impacts and to create innovative educational and employment opportunities for first nation citizens. Going forward, Kaminak remains committed to being an industry leader in aboriginal engagement.

Kaminak supports regulatory reform that creates efficiencies, stability, and predictability in assessment and regulatory regimes. Stability and predictability create certainty that influences our investment decisions as a company and also attracts outside investment in our company and in the Yukon territory. That being said, Kaminak is concerned that the process through which YESAA is being amended is creating increased distrust between governments and uncertainty in the assessment and regulatory process for current and future projects in Yukon.

Specifically, the YESAA five-year review resulted in a number of recommendations, most of which were supported by the parties involved in the review, including Yukon first nations. We understand that some of the proposed amendments do not accurately reflect comments and recommendations raised during the five-year review, and as a result, instead of celebrating a historic alignment between the governments and Yukon first nations on most of the proposed amendments to YESAA, Yukon first nations have expressed a common position that they intend to take the federal government to court, if Bill S-6 is passed as proposed.

Kaminak is very concerned about this development, because court cases create assessment and regulatory uncertainty in addition to extraordinary delay, all of which erodes investor confidence.

Investment in mineral exploration and development is very mobile, and Yukon and Canada are competing in a global market. While investment in a low sovereign-risk country such as Canada is attractive to many investment institutions, the reality is that the mineral exploration industry has never been more globalized.

Since 2009 Kaminak has spent $91 million on exploring the Coffee gold project. Recently, Kaminak completed a preliminary economic assessment and transitioned into feasibility, which we aim to complete at the end of this year. A positive outcome could see Kaminak entering the assessment and permitting phase by mid-2016 and on track to build a gold mine by 2019-20.

Our Coffee gold project has yet to enter the YESAA process. If Bill S-6 is passed and challenged in court, the Coffee gold project and our presence in Yukon is uncertain. Kaminak urges the federal government to resume discussions with the first nations to work collectively toward reaching consensus on the proposed amendments to YESAA and avoid a court challenge.

Mr. Chairman and honourable members of the committee, thank you for the time and opportunity to share our views.

[The Chair, Conservative, Blake Richards]

Thank you very much for your remarks.

Mr. Thrall, I assume you will be presenting on behalf of the Yukon Chamber of Mines. The floor is now yours.

[Brad A. Thrall, President, Yukon Chamber of Mines]

Thank you.

Good afternoon, Mr. Chair and members of the parliamentary standing committee. Thank you for the opportunity to provide testimony today on this important legislation.

I'm here today as president of the Yukon Chamber of Mines, as well as in my position as the executive vice-president and chief operating officer of Alexco Resource Corp. With me today, aIso representing the Chamber of Mines and our industry, is Mr. Samson Hartland, who is a director of the chamber, and Mr. Ron Light, vice-president of the chamber and general manager of Capstone's Minto mine.

Let me begin by saying that the Yukon Chamber of Mines and the mining industry in the Yukon support a robust environmental assessment process. Our comments today reflect our belief that the proposed amendments to the Yukon Environmental and Socio-economic Assessment Act will improve the areas of most concern to our industry with respect to the YESAA process.

I would like to address two important proposed sections in this bill that we feel will have the most benefit to mine operators and developers, namely project reassessment, proposed section 49.1, and timelines, proposed section 56.

Let me first start with Alexco's experience in the YESAA process and how it relates to our operations in the Keno Hill silver district. Alexco is a public Canadian mining company. Our primary asset is the Keno Hill silver district located in the traditional territory of the First Nation of Na-Cho Nyäk Dun.

To speak first on project reassessment, the nature of almost all mining districts and operations is that mine plans and ore bodies will change once they go into production according to changes in commodity prices, exploration results, and other cost and operating variables. These changes are generally consistent with current operations, such as an extension of the timeline for the operation of existing facilities or the expansion of current facilities. But under the current YESAA legislation, even if new activities are very similar in nature, new assessments are generally required.

ln the case of Alexco and Keno Hill, we have undergone the YESAA process 10 times over a variety of activities in the past eight years, for activities that are very similar in nature yet have already been assessed. For example, Alexco recently underwent a YESAA designated office assessment for the addition of another similar narrow-vein ore body sitting directly adjacent to and beneath our existing milling facility, a facility that had already been in operation for three years and was in full compliance with all operating permits and licences.

Despite this, the use of the mill for a further period beyond five years was included as part of the assessment for a new underground mine adjacent to the mill, along with the assessment for a new dry stack expansion tailings facility, a facility that had already operated successfully for the past three years.

We have also been required to go back through the entire environmental assessment process, simply to maintain a care and maintenance water licence, to extend the operating period of water treatment facilities from five years to 10 years. These facilities had again successfully operated for several years, but the simple extension of plant operating time required a new assessment.

Similar examples of project reassessment have been experienced at other operating and development projects in the Yukon, including Capstone's Minto mine and Golden Predator's Brewery Creek mine. These are clear examples in which a reasonable decision body could have easily determined that these are not material changes to a project and should not require an additional assessment of the project, and they underscore the importance of proposed section 49.1, project reassessment.

With respect to timelines, we support time limits that include both the adequacy and assessment stages of the YESAA process. Over the past five years, Alexco has undergone a YESAA process four times, specifically for mine development and mine operation purposes.

The adequacy review period of the YESAA process for our latest mine addition has increased fourfold compared with the time required to assess the first new mine and mill in the district. Meanwhile, the overall time required to complete the YESAA process from beginning to end has systematically increased by approximately two and a half times. Currently, the adequacy stage is not included in binding timelines, and our experience has been that this period continues to grow in length and that the adequacy period is used to conduct the assessment outside of the designated timelines.

The current uncertainty in reassessments and continued extensions of the time required for a YESAA assessment have a negative impact upon our ability to efficiently plan and operate our business. By extension, it impairs the competitiveness of Yukon, as a jurisdiction, to assert certainty in mine development and production processes and to attract scarce investment capital.

Finally, Mr. Chair, let me make some remarks on the broader context of the mining community in the Yukon. Nearly all mining operations are developed in a series of phases. In our experience as well as that of other operators and developers in the Yukon, YESAA is not conducive to or aligned with the normal mine operating requirements of sites that are already in operation. At some stage, all current and future mines will undergo normal changes in operations, and the inclusion of these amendments will be important to all current and future operators.

I thank you for your time. I would like to turn over the balance of our allotted time to Mr. Samson Hartland.

[The Chair, Conservative, Blake Richards]

Mr. Hartland, you have about a minute and a half remaining of the time.

[Samson Hartland, Executive Director, Yukon Chamber of Mines]

Thank you, Mr. Thrall.

Good afternoon, Mr. Chair and members of the parliamentary standing committee.

I'd like to follow up Mr. Thrall's comments with some aspects and perspectives with respect to intergovernmental relations.

The Yukon Chamber of Mines enjoys a positive, constructive relationship with all levels of government. Working with federal, first nations, and Yukon governments, the Yukon Chamber of Mines contributes by ensuring that technical and industry expertise is provided to all parties when working towards creating socio-economic opportunities for communities and Yukoners.

Currently, the Yukon Chamber of Mines is working towards the production of an aboriginal consultation and engagement guidebook for proponents, in partnership with the Council of Yukon First Nations, the Government of Canada, and the Yukon government. This work is being undertaken in order to provide clarity on the consultation and engagement requirements of a proponent when looking to conduct activities that occur on traditional territory of Yukon first nations.

The Yukon Chamber of Mines has provided its long-standing support to the settlement of the Umbrella Final Agreement. As Yukoners, we believed that the UFA would provide certainty for industry and was the next step in respect to the evolution of first nations governments. However, as an industry organization we would be remiss if we did not articulate a concern from industry that the erosion of intergovernmental relations among parties to the UFA over Bill S-6 is creating a level of uncertainty that affects the attractiveness of Yukon as a jurisdiction to invest in.

As the trusted voice of mining in Yukon, representing a membership of more than 400, we urge all levels of government to move towards respectful dialogue and to work towards a way by which we can provide socio-economic opportunities for communities and Yukoners while respecting the environment in doing so.

Thank you.

[The Chair, Conservative, Blake Richards]

Thank you very much.

We will now move to our questioning from members. I think what we'll do is go with about six-minute rounds on this segment as well

First we have Mr. Bevington.

[Dennis Bevington, NDP, Northwest Territories, NT]

Thanks very much, Mr. Chair, for your generosity.

Thank you, presenters. I think that what you've said is very valuable to the deliberations here. I hope it carries forward.

Mr. Thrall, you talked about the assessment process.

You have to do the socio-economic work. Environmental assessment in provinces would likely not be part of an environmental assessment act. It's part of the Yukon assessment because the Yukon is a territory, like the Northwest Territories. As territories, we don't have the same wherewithal to make the economic deals with resource developers that people have in provinces.

Do you see where I'm going with this? The socio-economic part of the environmental assessment is stronger here simply because this is the only opportunity Yukoners have really to interact with the mining developers on a legitimate and structured basis to talk about socio-economic issues.

Would you care to comment on that?

[Brad A. Thrall]

My comment would be that most companies operating in the Yukon have an ongoing dialogue with communities and first nations and many stakeholders outside of the YESAA process. I agree that the YESAA process has an important consideration with respect to socio-economic matters, but I would also suggest that most companies that operate in the Yukon in this day and age have those relationships outside the process as well.

[Dennis Bevington, NDP, Northwest Territories, NT]

Do you see that the process requires information on the side involving YESAA? If people are going to make a judgment about the socio-economic benefits of a mining operation, they're going to need more than just the environmental portfolio of the mine or the environmental impacts of the mine. They're going to need to understand how those mines are going to interact with the communities. They're going to have to understand how the mine plan works with the working population of the territory.

These are things that are extremely important, I'm sure, to people who live in the Yukon, as they are in my experience in the Northwest Territories.

When you set timeframes for environmental assessment and you have these more complex socio-economic issues that you must actually work out, do you see that dynamic as a reason that these projects sometimes take a little longer to take effect through the process?

[Brad A. Thrall]

Again, I think our experience within the Keno district and Alexco has been that over time, over the last several years, the legislation itself hasn't changed. What we have seen change are the timelines themselves and the fact that a lot more detail is being brought forward into the adequacy phase of the assessment.

Again, we certainly understand that some projects are larger in complexity than others and will take more time to do an effective assessment on, but we support the timelines to ensure that the adequacy process is not used as the assessment tool itself and that it's included in the overall timelines.

[Dennis Bevington, NDP, Northwest Territories, NT]

In that process, if you don't get the answers you're looking for through enough information and time, do you think sometimes assessors might want to push it up to the next level and open up a larger assessment? If you're dealing with a short timeframe for an office submission and you don't get the information you need, then you may want to look at pushing it up the ladder to a more “executive” situation. Could timeframes therefore actually cause a leap in the height of the environmental assessment?

[Brad A. Thrall]

Well, I certainly think if the proponent comes forward with a complete package of information and the assessors are qualified as well, there's no reason that assessments can't be effective and be completed within the proposed timelines.

[Dennis Bevington, NDP, Northwest Territories, NT]

How do you think we should deal with this? I open it up to Mr. Thrall and Ms. Armstrong.

Do you really see that the government should hold back on this bill until it gets some kind of agreement that can work between the parties?

[Allison Rippin Armstrong]

We believe the bill should be held back until there is agreement. We would like to see the federal government come back to the table, talk to the first nations, and resolve these four outstanding contentious amendments.

[Brad A. Thrall]

I think the position of the Yukon Chamber of Mines is that we support passage of this bill as it sits. We believe it's in the best interests of the industry we represent, so we do urge passage.