Indigenous and Northern Affairs Committee on Nov. 5th, 2018

[The Chair, Liberal, MaryAnn Mihychuk]

I call the meeting to order. Let's get down to business.

Pursuant to Standing Order 108(2), we are conducting a study on northern infrastructure projects and strategies.

Before we get started, I want to point out that Canada is in the process of truth and reconciliation. It's not going to be instant, but it's important for all of us to reflect on our history and recognize that we're here on the unceded territory of the Algonquin people. Many of us work in different ridings and projects across Canada, and it's a way of respecting and moving forward on reconciliation.

I'm very pleased to have you here. I want to outline the rules very quickly—

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

The rules about what?

[The Chair, Liberal, MaryAnn Mihychuk]

I'm just addressing the panellists so that they know they have 10 minutes to present, and then we'll be into a series of questions and answers from the MPs. Thank you.

Agnico Eagle is here. We heard about their project previously, but now we actually have the company in front of us. I welcome you to our committee.

[Dominique Girard, Vice-President, Corporate Branch, Nunavut, Agnico Eagle Mines Limited]

Thank you, Madam Chair.

Thank you, committee members, for allowing us to present here. It is such an opportunity.

I have a slide deck I'm going to go through. You are going to hear the very positive and unique story of what is happening now in Nunavut.

I'm Dominique Girard, Vice-President, Nunavut, for Agnico Eagle. With me is Mélissa Desrochers, our Director of Government Relations.

Agnico Eagle is the biggest gold producer in Canada. We are one of the top 10 mining companies in the world. We have been in the mining business for 60 years. We have more than 10,000 employees.

As you can see on the map, our operations right now are mainly in Quebec, Nunavut, Mexico and Finland, but we are exploring everywhere.

Today I'm going to talk more about our Nunavut projects. You can see the location on the map. Meadowbank is the first project we started, in 2007. We've been operating there for the last 10 years. Amaruq, which is 50 kilometres northwest of Meadowlands, is going to extend the life of the mine until 2026. Meliadine is the one we are building right now.

As you can see, in Nunavut the only way to access projects is by air or by sea.

We've been there for 10 years, so we've developed good experience with community relations, exploration, construction and operation. We see Nunavut as having long-term potential. We have a good partnership with KIA. Last year we signed three IIBAs. We also have an MOU with the Government of Nunavut. Our vision is to be there for a long time and to have our mine managed by the Inuit. That won't happen in a few weeks. It's going to take time, but it is our goal.

As well as using local contractors, why not use local, renewable energy? This is where we're going. This is the vision.

What have the successes of the last 10 years been? The biggest success we have had has to do with training and developing capacity. Right now at Meadowbank, over the last 10 years, around 30% of our employees are Inuit, which is a good achievement. We've worked a lot on the entry-level positions, and also on the apprentice positions, where we've succeeded in qualifying five Red Seal technicians. Now we're looking to develop more leaders, so we've hired adult educators, and we're doing pairing programs with supervisors to go down that path. To have our mines managed by Inuit, we need to develop more leaders.

As to the socio-economic aspect, we're investing $1.6 billion from 2017 to 2019 to build Amaruq and Meliadine, and I'm proud to say today that we're getting close to the end. The projects are on time and on budget.

What will it look like? Two mines will operate with 2,000 employees, of whom one-third will be Inuit. We are currently at 15% of Nunavut's GDP, and we'll maybe go up to 20% or 25% with the ongoing Meliadine project.

In terms of challenges and opportunities, as you heard from different speakers, it is costly to live there, as well as to operate a mine. I will not spend a lot of time on the remoteness or the communication issue. I would like to go to the energy topic.

We are spending, or bringing by boat, 130 million litres of fuel per year to operate and to generate electricity for our projects. The cost of electricity is 26¢ to 27¢ per kilowatt hour, which is five or six times more than what we have down south. We are producing greenhouse gases equivalent to 70,000 cars per year. This is the situation right now. There is currently no alternative in Nunavut, but this is what we're looking for.

To put in perspective the consumption of power in Nunavut, I'm going to talk about the power line. If I look at the path of the power line, the community, all together, is going to need 4.6 megawatts. Our two mines are going to need 40 megawatts. We're a big player, a big client. We are happy to be part of the solution to the energy issue in Nunavut.

We've looked at many projects for five or six years now, because we see that there is potential. There are different study phases—from exploratory, to scoping, to pre-feasibility studies, to feasibility studies. The project is de-risked as we have more information on the technology.

The ones we've looked at are the SMR, the small modular reactor; the power line; the wind; the microgrid project; hydro, which is an in-river turbine; and also LNG. We spent over $500,000 to study LNG, but in fact it's not the one we're pushing right now. The one we see on the fast-track mode is the microgrid. I'm going to give you a bit more information on that.

Let's start with the best long-term solution, a power line starting from Manitoba and going to Nunavut, to Kivalliq. This is the best long-term solution. This is the silver bullet. We are very excited about it, and we are working closely with KIA and Barrick, with the support of the Government of Nunavut.

There are some aspects that we need to secure for that project. First, we need to know and to understand the cost at the end of the line. Right now we're paying 26¢, 27¢, and the price needs to be better than that. The other question is when the project is going to happen—the study, the permitting, and then the construction.

An important thing is the life of the mining projects. Meadowbank is already in operation. It's going to stop in 2025. Meliadine is going to go up to 2031. The top project, the Manitoba power line, will take, in our view, four years of permitting and three years of construction. The project could happen, if everything goes well, in 2026, when Meadowbank is going to be closed. The one we think should happen faster, in that portfolio, is the microgrid wind tower. Every year that project is going to run we're going to save 12 million litres of fuel with six wind towers, which represents approximately 7,500 cars per year that we're going to save in greenhouse gas.

I've talked about the best long-term solution, but the best interim solution is wind power. That could provide a clean, local and independent source of power by 2022.

Nunavut needs impactful initiatives right now, because we need to secure the load for the future power line. If there's no mine anymore in 2026, 2027, who's going to consume the power and make that project happen? There is action necessary right now to reduce greenhouse gas. As well, we see the wind microgrid as being owned and managed by Inuit. With the benefits of that wind microgrid, we could develop capacity and infrastructure.

In brief, Agnico supports the power line and fibre optic feasibility study to outline the schedule and the costs. Right now there is momentum. As QEC, Qulliq Energy Corporation, mentioned here two weeks ago, we see the energy solution more as a portfolio. It's not just one solution; a microgrid and the power line are part of it.

Thank you.

[The Chair, Liberal, MaryAnn Mihychuk]

Thank you.

[Yves Robillard, Marc-Aurèle-Fortin, Lib.]

Madam Chair, may I ask a question rapidly?

[The Chair, Liberal, MaryAnn Mihychuk]

You'll ask questions afterward.

[Yves Robillard]

Listen, we see the document in French; I want a copy.

[The Chair, Liberal, MaryAnn Mihychuk]

Ah, oui. I think we've got it. It's a good point of order.

[Yves Robillard]

Thank you.

[The Chair, Liberal, MaryAnn Mihychuk]

I'm sorry. You should have had it, because it was available, absolutely.

We're going to move on to the second presenter, Brendan Marshall, for the Mining Association of Canada.

Welcome. You have 10 minutes to present.

[Brendan Marshall, Vice-President, Economic and Northern Affairs, Mining Association of Canada]

Thank you. Thanks for the opportunity to participate in this important consultation process.

My name is Brendan Marshall. I'm the Vice-President for Economic and Northern Affairs at the Mining Association of Canada.

MAC is the national voice of Canada's mining and mineral-processing industry, representing more than 40 members engaged in exploration, mining, smelting and semi-fabrication across a host of commodities.

Mining is the largest private sector driver in Canada's Arctic, employing approximately 8,500 people. That's one in every six jobs, or 8% of the total territorial population. These numbers expand when the Arctic regions of Manitoba, Quebec, and Newfoundland and Labrador are incorporated.

Direct GDP contributions in Yukon, the NWT and Nunavut are approximately 13%, 18% and 21% respectively as of 2016. In recent years, mining companies have invested and are investing, or have committed to invest, more than $9 billion in the region.

Per capita, mining is the largest industrial employer of indigenous Canadians. Further, mining companies have signed 455 agreements with indigenous communities since the year 2000, detailing how the benefits of responsible resource development are to be shared to ensure that communities profit.

In a region with few alternative economic development opportunities, the mineral industry has continually demonstrated its capacity to support inclusive economic growth. To illustrate, the diamond mines in the Northwest Territories have generated significant employment and business development opportunities for Arctic communities since the beginning of production. For example, 44,000 person-years of employment, of which 50% is northern and 25% is indigenous, have been generated, as well as skills training and assessment for more than 3,800 people, nearly 17% of the total territorial working population in 2017. Capital and operational expenditures totalled $18.6 billion, of which $13.1 billion has been directly invested in the north, and $5.6 billion has been invested in the regional indigenous business community. Community contributions and social investments have exceeded $100 million in that period.

Looking forward, the potential is even greater. As of August 2018, MAC was advised by CanNor that 26 projects are currently in the NPMO pipeline, exceeding $18.5 billion. However, 13 of them are without access to an all-season road.

Currently, domestic legislative and regulatory processes with implications for project permitting and costs persist, while recent supply chain failures have damaged Canada's reputation as a reliable trade partner. Further, recent tax reform in the U.S. has significantly enhanced that jurisdiction's investment competitiveness over Canada's.

The impact of this uncertainty has been felt by Canada's mining industry, where investment has dropped more than 50%, or $68 billion, since 2014, amid a strong price rebound for many commodities over the last three years.

The government has been considering action to bolster competitiveness. MAC has two recommendations about how the Arctic should fit into this package.

The first is to strengthen Arctic people and communities. It is well documented that significant gaps in human development indicators exist between indigenous and non-indigenous Canadians. The territories host the highest per capita demographic of indigenous peoples of any subnational jurisdiction in Canada. As such, more so than for any other region in the country, strengthening Arctic people and communities means advancing indigenous economic reconciliation.

Further, significant research has underscored the primacy of employment generation as a driver to improving quality of life indicators and social development. As such, to meaningfully advance indigenous reconciliation in the Arctic, the government should make provision for the development and implementation of a bold regional macroeconomic development policy that prioritizes responsible resource wealth development and employment generation as a primary means of advancing social development and closing the disparity gap between Canadian and Arctic indigenous human quality of life indicators.

There's a real opportunity to create a positive institutional legacy by ensuring the unique needs and realities of Arctic peoples are given the appropriate policy consideration. Paramount in achieving this is building off the region's existing strengths and opportunities.

The second recommendation is with respect to infrastructure. Key to making any macroeconomic development policy successful is addressing the region's infrastructure deficit.

One of the largest factors influencing mineral investment decisions in Canada's Arctic is heightened cost. Industry research and the “Levelling the Playing Field” report indicate that it costs two to two-and-a-half times more to build the same base or precious metal mine off-grid in the north compared to the south. Notably, 70% of this cost premium is directly related to the Arctic infrastructure deficit.

To date, infrastructure investment decisions that recognize northern challenges and opportunities through the trade and transportation corridors initiative and the Investing in Canada plan have been welcome, though the need is far greater than the funds allocated. MAC is aware that the northern allocation—the $400 million under the TTCI—was oversubscribed by greater than five times. It is also of concern that the Canada Infrastructure Bank may not recognize Arctic realities, which potentially limits the utility of this institution to address northern priorities.

Enabling additional mining development in remote and northern Canada is inextricably linked to the government's indigenous reconciliation and climate change agendas, and the Arctic infrastructure deficit is the single largest barrier to mining development in the region.

To address this, government should, as an immediate action, renew the TTCI in budget 2019, including the $400-million northern allocation. As a long-term dedicated solution, it should recognize the unique challenges of remote and northern regions through a stand-alone Arctic infrastructure investment fund based on the Alaska Investment and Development Export Authority, or AIDEA.

Thank you for your time. I'd be pleased to take any questions that you may have.

[The Chair, Liberal, MaryAnn Mihychuk]

Thank you.

Our final presenter is Glenn Priestley of Northern Air Transport Association.

Hi, Glenn. Please begin any time you're ready.

[Glenn Priestley, Executive Director, Northern Air Transport Association]

Thank you very much.

I'd like to thank the committee for giving NATA the opportunity to participate in this important study on northern infrastructure and strategies.

This briefing will be focusing on four specific aviation infrastructure issues for consideration by the committee. We're going to be looking at aviation weather information, airport infrastructure, runway approach aids, and aviation labour and skills needs. All four of these issues are critical to providing essential services to communities with little or no access to other means of transportation. All four issues are important to the economic development of northern and remote Canada.

Perhaps a bit of a background, I think, would be useful.

The Northern Air Transport Association's membership is representative of all aspects of northern and remote air operations, including scheduled passenger service, on-demand charter, helicopters, and specialized operations, including internationally renowned medevac and firefighting services.

NATA was formed over 40 years ago to support the economic development of northern and remote Canada with safe, sustainable air transportation services.

The management of operational system safety is a complex and daily issue for northern air operators and stakeholders.

Attached to the written brief provided to the committee is a map of Canada that I thought was useful to understand the challenges air operators face daily.

Northern operators must find solutions to operational problems that simply do no exist in southern Canada. Examples include long-range flight planning, limited weather information, and airports with minimum runway standards.

However, we also boast that a unique aspect of northern and remote aviation operations are the commercial partnerships with many first nation and Inuit groups. Pride of ownership and recognition of the diverse cultures creates a special bond between the air carrier and the customers that does not exist elsewhere.

The goal of this presentation today is to highlight four specific aviation infrastructure issues for consideration by the committee. There is a specific focus on technological advancements that present the opportunity to improve operational efficiencies and mitigate environmental impact, as well as offer solutions to address the challenge of developing a northern-based workforce.

The first one I'd like to brief you on is aviation weather reporting.

Accurate weather reporting for both destination and alternate airports is vital to operational system safety. NATA supports the goals of the federal government's Transportation 2030, a strategic plan for the future of transportation in Canada. Investment in new technology will improve system safety. Improved infrastructure will increase service reliability to northern and remote communities. Advancements in automated weather observing systems can enhance weather reporting capabilities, and in some cases may modify the role of the human observer. However, there is a need to keep engaged a local workforce capability as a desirable goal of a human resource development plan and system safety consideration.

The second item I'd like to bring to your attention is airport and runway infrastructure.

There are numerous recent reports that have identified the need for lengthening and strengthening northern and remote runways, including the July 2017 report of the Standing Committee on Transport, Infrastructure and Communities and the May 2017 Office of the Auditor General's report on civil aviation.

The standard for runway lengths at northern airports was set in the 1970s at 3,500 feet. With the subsequent change in equipment and regulatory and safety standards, that length is no longer appropriate. The lack of adequate runway length limits aircraft size, and therefore load-carrying capabilities, which adds to the overall cost of living and increases the stress on the environment.

Northern airport locations have near-ideal conditions for a night illusion called the “black hole effect”. The only way to mitigate this illusion is with high-quality runway lighting. Most remote airports do not have REILs, runway end identifier lights, nor do they have high-intensity lighting. The minimum standard for runway lighting must include ARCAL-controlled REILs, PAPIs, and high-intensity lights. PAPIs are approach lights that give you visual indications that you're above the ground properly.

Runway navigational approach aids are the third thing I'd like to bring to your attention very quickly. Identified, again, in almost every recent report on northern aviation infrastructure is the need for more satellite-based instrument approaches and improved runway lighting systems to enhance operational reliability. There's no bad person to the story. Nav Canada, the navigations provider, is doing an excellent job. Transport Canada is trying its best. I just really wanted to bring the importance of these to the committee. Operators providing essential services are forced to use technology and navigational procedures that are outdated, which increases operational risk.

I have a story that I want to pass on to you. Remember, northern and remote Canada isn't just north of 60°; it's north of about 50°. Many parts of Canada are very remote, and this story comes from Sioux Lookout, just to let you know, from a very experienced operator: “There are a number of remote communities that have marginal instrument approaches that need to be improved on. The current approaches at these airports have a significantly higher risk associated with them. These approaches rely on NDBs, non-directional beacons, that do not provide nearly as much or as accurate information as a modern global positioning system, or GPS.

“In many cases, these approaches also require flight crews to complete a “circling approach”. While technically meeting all required regulatory standards, they are universally considered high-risk approaches. These approaches also have higher visibility and ceiling requirements, meaning that in poor weather, there's less chance of a flight being able to land; hence, marginal approaches are not only a safety concern for the crew and the aircraft, but they also increase the times a remote community is cut off from emergency and essential services due to weather considerations. The minimum approach standard at all remote airports needs to include a GPS/LPV.” “LPV” means localizer performance with vertical guidance.

Finally, and I think the most importantly, those three issues are well known and are brought up in other studies, but it's an increase in the northern and non-traditional workforce in aviation that I'm really interested in right now. That's because, on October 2 and 3, the Minister of Transport gave the opening address to an aviation labour shortages forum. His remarks highlighted the importance of developing a competent aviation workforce to ensure the system's safety.

The minister also addressed the challenge of attracting the next generation of aviation workers, especially non-traditional people such as females, indigenous people and other under-represented visible minorities. While the forum focused primarily on flight crew shortages and solutions, for the northern and remote aviation stakeholder there is a shortage of personnel for all aviation-related occupations, and some we don't even have names for yet because of the changes in the technology.

There are various barriers that need to be considered to develop a program that will be successful in attracting, training and retaining northern youth for aviation-related occupations. Training methods need to be sensitive, because, as discussed at the aviation shortage forum, it's problematic for students to have to leave their home and community to go to a school far away for a long period of time. There is an opportunity for more industry-sponsored, federally funded, on-the-job mentoring and training, customized for specific cultural needs and company-specific skill development requirements in the north. This is the type of program that provides awareness and increases individual confidence, and it should be supported with federal funding with greater direct community engagement.

I did research on this committee, as I always do, and some of the past speakers were so inspirational. I like this one from an earlier witness:

When there is investment in the people who live there, it's a fantastic opportunity for the growth and development of our communities. Money gets invested in...communities. The people who live there are...able to give back to the communities. They provide better for their families. They're able to give more to the community. They have a better, more enriched life. They have higher self-esteem. It's...much healthier for the people in their own communities.

There is a need for a northern and remote aviation labour skills committee of regional stakeholders, including service providers, regulators and territorial representatives, to conduct aviation needs assessments to develop a specific labour skills strategy for northern and remote areas of Canada.

NATA’s 43rd northern and remote aviation conference is taking place April 28 to May 1 in Yellowknife. This important discussion on northern and remote aviation infrastructure will be continuing with an airport development workshop that's now planned, as well as a focus on the recruitment of a northern and more diverse aviation workforce. We hope this committee will come and join us at our conference.

Thank you very much for your time today.

[The Chair, Liberal, MaryAnn Mihychuk]

Thank you very much.

You have been efficient in your presentation, so it's given us a little bit more room for questions from MPs.

We start out with MP Mike Bossio.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Thank you very much, Chair.

Thank you so much to our presenters for being here today. This is very informative, once again, as all of these sessions on northern infrastructure have been. We know there's a gap there, and it's a big gap.

I want to talk to Mr. Priestley about training.

In my riding, there are the Mohawks of the Bay of Quinte and the First Nations Technical Institute, where they have a hanger and a training school for aviation pilots, mechanics, navigators and the like. Every student who graduates is hired.

One of the big differences they've been able to make goes right to what you were saying about cultural understanding. When people come out of their communities to get that training, the biggest problem is that they leave before the training is completed because they miss home. FNTI has great success at keeping students in the program because of their understanding of the cultural needs of their students.

In addressing what you were talking about in connection with building, would you say that's the example that you would hold up as the right kind of institute that would be beneficial in the north, even as an expansion of the program at the MBQ?

[Glenn Priestley]

I'm a big fan of FNTI. I'm aware of the program. It's been around for a while.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

It has.

[Glenn Priestley]

It provides a lot of the pilots for Air Creebec.

It's part of the solution. What we're looking for is an east-west solution, and we think we have one out of Whitehorse.

We now have an aviation college in the north, with Alkan Air. They're making a proposal to operators for a mentoring and internship program. That's something we haven't had, and the idea is that a company in Yellowknife will sponsor it. They will choose, screen, recruit and sponsor a student for on-the-job training. Then there's going to be some type of a streaming program, possibly with other schools, and in this case, Whitehorse.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Do you have an idea of the number of pilots and navigators and maintenance people that you foresee will be needed over the next decade in the north?

[Glenn Priestley]

I have an idea. What we don't have are good statistics.

In preparation for that forum, I did a labour market analysis on all three of the northern territories. It was only the NWT that could give numbers. It looks like they'll need about 70 new pilots a year, starting now.

That's the thing about the north in my business. We're not talking about hundreds, as you can do in other places in Canada; quite often, we are talking dozens to satisfy specific jobs. However, it's not just pilots. We also need mechanics. We need ground personnel, because the airports are suffering as well.

I really think there's an opportunity for on-the-job training, and job shadowing seems to be an idea that is gaining strength.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

There are a lot of other questions that I'd love to ask, but I know our chair was looking for some time, so I'm happy to share my time with her.

Please go ahead.

[The Chair, Liberal, MaryAnn Mihychuk]

Thank you so much.

I have two questions.

The first one is to Agnico Eagle.

Could you provide us with how much tax or revenues you send to the federal government on an annual basis, perhaps from the time of the initial construction, where a lot of people came in to build your infrastructure, and ongoing? If you could, include not only the income tax portion, but corporate tax and any other tax that you might be sending to the federal government.

[Dominique Girard]

Unfortunately, I cannot answer for the corporate tax, but we could provide the answer later.

[The Chair, Liberal, MaryAnn Mihychuk]

Thank you.