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.