Indigenous and Northern Affairs Committee on May 16th, 2019

[Neil McCrank]

All I've said is that what I was talking about at the round table and what came out at the round table was discussed with some of the leaders, and they thought these were reasonable recommendations. That's all I can say with respect to that.

With respect to the constitutional issue, I made it clear that I thought that probably in reopening the treaties there would have to be firm consultation with and agreement from the aboriginal communities. That was clear in my mind and it was in my report.

[Michael McLeod, Liberal, Northwest Territories, NT]

I have one quick question. This issue was raised by Mr. Campbell here today.

There are three pieces to this legislation, and I think we all agree that we don't like the super-board part. There are other regulatory points for which we're hearing support. Mr. Campbell said, though, that he was objecting to the cost recovery portion of it.

Why did you feel that it was necessary to include it in this bill?

[The Vice-Chair, Conservative, Cathy McLeod]

I'm sorry, you'll have to wait for your next round. I'm tougher with time than your normal chair.

I believe you will get another round, but I'll move this over to MP Kevin Waugh.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Thank you, Madam Chair.

I just want to say to Mr. Brooks that I take offence to companies that have licencing agreements and it takes them years to get going.

I'm going to tell you that in my province, BHP Billiton has spent nearly $4 billion on a mine that has yet to produce in the community of Jansen. This could take five years. It could take longer. They had their annual meeting this past week. Companies have invested billions of dollars and the fact that the date set for the current mine or project isn't going to be met doesn't mean they don't care about it. Your reference is a little disturbing up north.

I have the same thing in my province. BHP is an Australian firm; you know it. It's the biggest miner in the world. They have sunk $4 billion into my province. They probably want it up this year. It probably isn't going to produce until 2026—whatever. The fact that legislation says they should be up doesn't mean they haven't done their due diligence and spent billions of dollars.

I want you to comment on that, because in my province it's a heated discussion right now. This company from Australia has pumped $4 billion into our province in the past seven to eight years.

[Mark Brooks]

I wonder whether you can tell me how much the oil companies in the Beaufort have spent on their exploration licences—the ones that are about to expire.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

I don't know that. They have previously spent, I'm sure, billions of dollars—

[Mark Brooks]

Right. There's a reason that we have—

[An hon. member]

[Inaudible—Editor]

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Well, in the last five years before then.

He's had his time.

[The Vice-Chair, Conservative, Cathy McLeod]

Order. Let's have no side discussions, please.

Mr. Brooks, would you...?

[Mark Brooks]

I thank you for your question because I think it's a really important one.

The CPRA under this legislation sets a time limit for the exploration permit for a reason. It's nine years. You may not think that time limit is long enough, but that is the law. When a company bids on a licence, they commit to doing work within that nine-year time frame, and they commit a deposit, which amounts to a quarter of their intended expenditure. As I say, for one of Imperial's licences alone that is $400 million. They have not spent anything near that commitment. Under the terms of the legislation, if they don't do the work within the nine-year time limit, they have to forfeit that deposit.

We're simply saying that this is the process that should be carried out, because the CPRA does not allow for term extensions to these licences.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Mr. Campbell, I'm going to move to you now. You talked a little bit about the national interest. We know that companies up north—you talked about it—spend three or four times more than they do in so-called southern regions of this country. In terms of the national interest, can you explain the significance of this for northerners?

[Joseph Campbell]

I'm not too sure what you're referring to in terms of the national...?

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

I'm talking about the national interest—this clause in here.

[Joseph Campbell]

I've talked about the northern interest, which is obviously a national interest also.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

There's uncertainty. Is that right?

[Joseph Campbell]

Yes.

Our belief in the chamber and among the mining companies working in the north is that there has to be a commitment by the federal government, with a national interest—a national vision—of how we're going to develop our north.

If you go into the Yellowknife Airport, drive to the road at the end of the entrance and look north, there's nothing all the way to the coast. That is a huge inhibitor to development in the north, and it restricts the ability of northerners to actually get benefit from the resources they have. We need to have a vision for being able to bring those interests in.

In particular, if we look at green metals—as I mentioned before—there's a reason there are only diamond mines in the Northwest Territories now. It's that we can carry the product out in our back pocket. If I want to get into any kind of a development where I'm trying to mine for lithium, other rare earths or cobalt—and there's a mine that's actually going through the permitting process that has a cobalt primary element—these are mines that require transporting bulk commodity back out of the north. I cannot do that without infrastructure, so my hands are tied.

When I said it's a dream for us to participate in the green economy, I meant that without infrastructure it's a dream, and that's not even touching on energy. Every mine in the north is run off diesel fuel. Every remote community in the north is run off diesel fuel. You cannot expect us to be running a green economy when we have to pour diesel into our generators to keep them going.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Thank you for that.

I'm going to move to Mr. McCrank. Thank you for the work you did some 10 years ago, entitled “Road to improvement”.

I guess you are here today because that's what happened back then, and now this current government wants to go back to the four boards. I'd like to hear your thoughts around that—the work you did on the local input and the structural and process changes—if you don't mind.

[Neil McCrank]

Thank you for the comment on my report.

Until about a week ago, I had not heard of C-88. This was new to me. I have not kept up-to-date on what's going on in the north since I did this report some 11 or 12 years ago, beyond what I mentioned about having appeared before committees.

I don't know all of what's in C-88, but I know there is an attempt to roll back the land and water boards to where they were. Let's be clear what my recommendation was. My recommendation was, number one, to finish the land use plans, because in my view that is where the local community has the greatest effect on future development.

[The Vice-Chair, Conservative, Cathy McLeod]

I'm sorry, Mr. McCrank. The seven minutes are up, but hopefully you'll have another opportunity to finish that.

To get all our rounds in, we need to move on, but certainly, send a message if you can.

We'll move on to the NDP, with Mr. Cannings.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I'll let Mr. McCrank finish up on that. I just wanted to frame it, in that it seems to me, in reading your report, that you had a couple of options regarding the restructuring piece.

Option one was where you would eliminate the regional boards, but it included a fundamental restructuring that would require the agreement of all parties. I think there was actually a line in your report that said this is maybe desirable but would be very difficult to achieve. Then you had option two, which was just to amend the act but keep the regional boards. You've mentioned that they might have somewhat different tasks or mandates from what they have now.

However, in C-15, the previous government took your option two but eliminated the boards, and I think that's why we are here today. I'm just wondering if you could comment on that.

You said that your first recommendation, obviously, was to finish the land use plans. Do you think C-15 was premature in that it didn't wait for all that hard work to be done before proceeding with this restructuring?

Perhaps you could also finish your comments on why we are here today. You said the local groups were largely in favour of what you were proposing, yet as soon as C-15 came out they were in court. Obviously there was some disconnect there. I'd just like your comments on that situation.

[Neil McCrank]

Thank you for that question and for framing it the way you did. You are absolutely correct. The notion of the land use plans had to be primarily the first job done by the government. Once that was complete, then something had to be done with the regional boards. That was my view. Whether they were eliminated completely or left with an administrative function in each area, those were the two options.

I was not consulted with respect to Bill C-15, if there was some dysfunction related to my recommendation as the bill proceeded. However, there's no question that in everything I said and everything I recommended, I indicated I thought it would be a very difficult row to hoe and that if we didn't start the restructuring, including making sure the land use plans were completed early, we'd be doing that 10 years later.

Here we are, 10 years from when I made that report, and we're still not there. These are long-term projects, but it was clear in my mind what the role would be for the super-board, if you want to call it that, as a very professional regulatory body that deals with the kinds of issues I talked about. If the government wanted to leave the administrative function in the local treaty areas, that was an option that was open to it.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

I'm going to move on to you, Mr. Brooks, and try to get some more information on what you were saying.

Your main point, it seems, is that the existing licensees were not covered by this moratorium. They had an obligation to undertake work, which seems to have been eliminated after a year of consultation. I don't know if you want to speculate on what went on behind those closed doors, but would these companies feel some concern about future moratoria under Bill C-88, and then feel the ground rules have changed?

How do you think their positions have changed, and is that why the government did this? If they were still allowed to go ahead and do their work—do their exploration, if they had found significant resources—could they still develop them under the present situation? Why do you think it's unfair that they don't have to fulfill their obligations? Are there any future concerns that they might have?

[Mark Brooks]

I can't speculate on what went on. I would have loved to know what went on behind closed doors during the one-year private consultations between the government and industry. WWF Canada made requests to Indigenous and Northern Affairs to try to find out. We wanted to participate or at least find out the results of those consultations, but we just know what the public knows in terms of the announcement in October 2018: that the licences would be frozen and the rights to those resources would be protected.

As a result, I can't say, and that's why I say in my presentation that this appears to be.... We can only speculate on what we know, and what we know is that oil prices have been too low to make oil and gas profitable in the Arctic. There's some disagreement on this, but the break-even point seems to be around $100 a barrel, and we're nowhere near that.

You're absolutely correct, though, and I want to emphasize this once again. The moratorium applied to new licences only, and that meant there would be no new parcels available for bid. However, there were already, as I say, 11 exploration licences and dozens and dozens of significant discovery licences in the Beaufort and High Arctic region, which companies were free to continue their work on. Significant discovery licences have no terms. They're unlimited, so companies have as much time as they like. As I said, the exploration licence term is nine years, but there is nothing in this moratorium that prevents a company from doing work on those licences.

As I say, exploratory licences may accede to significant discovery within their existing permit timelines, so we don't know why the government is introducing this new authority of national interest. It appears that it's being used to extend the terms of these licences, and then, as I say, this coincides with the Canada Gazette four-year issuance of new licences.

[The Vice-Chair, Conservative, Cathy McLeod]

We only have a very short three minutes for our last round, which will go to MP Jones.