International Trade Committee on Feb. 9th, 2023

[John McKay, Liberal, Scarborough—Guildwood, ON]

Thank you, Madam Chair.

I want to weigh in on the debate about transparency legislation versus due diligence legislation and what's on offer and what's not on offer.

Transparency legislation is what it seems to be, which is that every year a Canadian entity has to examine its supply chain and satisfy itself that there is no slavery in the supply chain. A CEO has to sign a statement to that effect, and if the statement they sign is false, there will be the same impact as there would be if an accountant signed a false statement, for instance. This applies to a certain level of entities all across the country. If you don't file, you're fined and you also expose yourself to various investigations by the Minister of Public Safety.

That's what Bill S-211 is. That's on offer. The third reading and debate are coming up on March 6.

What's being talked about is Bill C-262, which is due diligence legislation, which, as the witnesses have acknowledged, places a very significant obligation on companies. Bill C-262 is, with greatest respect to Mr. Julian, an aspirational bill, because it's not likely to be debated in this Parliament.

If the House is to do anything, the only thing really on offer is Bill S-211.

That being said, there are two countries that have due diligence legislation—Germany and France. Germany's threshold is 3,000 employees. Any company with fewer than 3,000 doesn't have to comply with the legislation. France's legislation stipulates 5,000 employees, or 10,000 worldwide. Those are the companies.

The transparency legislation catches a lot more companies, and it generates information. Maybe, in the fullness of time, you'll be able to move to due diligence legislation.

Due diligence legislation cuts off the vast majority of Canadian companies, because who has 3,000 or 5,000 or 10,000 employees, plus multiple billions of euros in revenues?

That's the essence of the debate. It's not as though I think a bill on due diligence wouldn't be useful for companies. It's just that we're not there yet.

What's on offer is that we go from being, frankly, Canadian laggards to world leaders. Only a couple of other countries have written transparency legislation. They have rewritten it to make it stronger, but it's still weaker than ours. Australia have just implemented theirs, and we jump Australia as well because, again, our legislation is stronger.

The debate here is that, as particularly the witness from the steelworkers and some of her colleagues believe, perfect is actually the enemy of good. I do not take that view and, colleagues, I don't think you should take that view.

Who knows what the life of this Parliament is going to be, but I'd really like it if, following the March 6 debate, it would come to a final vote and we could have something on the books.

May I say that Canadians talk a good talk. Walking the talk is sometimes a little more difficult. This will enable us to actually walk the talk, and it will bring us forward.

I have to say that this legislation has been broadly supported. It's not limited to the mining industry, although it will certainly affect the mining industry. Maybe I shouldn't say it, but the Mining Association of Canada and PDAC, the prospectors and developers, welcome the legislation because it distinguishes them from some of their somewhat unscrupulous competitors. It has considerable support.

In the 31 seconds I have left, I'm going to ask the witness whether she thinks that the good should be the enemy of the perfect, or if she supports the idea.

By the way, before you answer that question, I would support Bill C-263—which, again, is an aspirational bill—and I do think the CORE ombudsperson should have the powers that are in it.

Thus endeth the homily. I thank you very much.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We go now to Mr. Seeback for five minutes.

Go ahead, please.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

The information I have is that 68.9% of Canadian companies' mining assets are located abroad.

Mr. Virani talked about the race for critical minerals. Mr. Sheehan talked about the Ring of Fire. We've been talking about the Ring of Fire for 20 years in this country. To the best of my knowledge, there isn't a single shovel in the ground as we speak.

While in Canada, Canadian mining companies have to subscribe to the most rigorous environmental and human rights standards and indigenous consultations. Shouldn't part of this, then, be that we find a way to make Canadian mining companies actually mine here in Canada, to bring the jobs and the contribution to the GDP here and to make it faster to develop and produce here in this country? Wouldn't that be a great first step to helping not only Canada but the world abroad?

Mr. Gauthier, I wonder what your comments are. After that I'd like to hear from anyone else.

[André Gauthier]

You've touched on a point, because I'm a proud Canadian. When I started, in 1974, there was a boom in the mining industry.

However, there are things we cannot change. It's nature. Nature blessed us with a lot of deposits in Canada, but just to take an example of how nature works for us, there was a big project, Nemaska, on which the Quebec government and the mining industry spent $1.1 billion. They had to sell for $1. Why? It was because it didn't make the cut.

Take the Renard project. Then there is the Éléonore project, which is the proudest discovery that we have made in the last 20 years. The owner of the Éléonore mine took the writeoff from the mine, so they kind of acknowledged to the industry that they would never make money out of that mine.

Now, is it because the mining executives were stupid or were paying too much? I'm not here to discuss that. However, that's the reality of life.

That's why sometimes mining companies go elsewhere to find deposits that are of high quality. It has nothing to do with the local populations. They take everything into account. Even here, where we have plenty of help from the government, and we have flow-through shares, which are working well, and which keep our exploration industry going, that doesn't mean they go to development and to construction because that's where it counts. It's just difficult. It's just nature.

Very often, mining companies abroad are making the profits that allow them to mine here in Canada. However, maybe there are few deposits here. I would say, for example, there are definitely good deposits of nickel and copper, if you look at Raglan or in the Ring of Fire and more in the Sudbury area, but this is just nature.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Ms. Gingrich, would you agree that we should try to create an environment here in Canada such that Canadian mining companies would rather be mining here than mining abroad?

[Meg Gingrich]

We are a mining union. We represent a lot of workers in mining, so we are supportive of development in Canada. We don't want it to happen as a result of a race to the bottom, or by degradation of environmental or human rights or labour regulations or standards. I want to make that clear.

Some of the things we're advocating for here will raise standards in other parts of the world in terms of human rights, environment, labour and so on. That's also a way of helping workers and development here in Canada, instead of saying, “Oh, we can make a bunch of profit abroad where there are lower standards,” or whatever it may be.

It's also important to tie into our trade strategy and foreign investment protection agreements that it should not be easy to import cheap products through trade deals that end up undermining Canadian development and employment, when it's just not attractive to do that here because we have higher standards.

I guess, just to sum up, we don't want to see a reduction in standards here as a way of doing that.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Arya, go ahead, please.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Madam Chair.

Mr. Gauthier, it's a pleasure to have you here.

I'm quite surprised that some of the witnesses are lumping the entire Canadian mining sector in with the mining companies from other parts of the world, with the reported human rights violations that happen in countries in Africa, South America, Asia, etc. I'm not suggesting that every single Canadian mining company is lily white—we do have some black sheep—but many of us sitting comfortably in our homes in the cities may not appreciate the kinds of things you mentioned—the risks the Canadian mining companies face, the capital risks, the logistical risks, the political risks, the physical risks and the environmental risks.

You mentioned how some of the mining companies contribute to education. I was born in a relatively poor country—a developing country. I know how projects like this, when it comes to poor countries, can make a tremendous change in the local economy, not only for our jobs and to put food on the table but also for education and rural economic and health development.

From your experience—and I have worked in several countries—in general—and I'm talking about the slightly bigger companies, not the junior ones—when they go in, will they go in with certain social responsibility too? Have you seen evidence of that?

[André Gauthier]

I respect what you said about the reporting now, and I definitely believe that the mining companies are going in with very important roles for social acceptability and responsibilities. However, the problem the industry is facing is with the local authorities. We're not a government and we cannot act as a government, so we need to work with governments, but very often the government is not so co-operative. We cannot change that. That's their decision. We are there. We are trying. We offer, but on the other hand, that's part of the discussion we have when we're developing a project. Along with the community and the government, we need to find the balance, but sometimes that's just impossible.

For example, there was the Rio Blanco mine junta, and—you're right—that's a problem. The project has been sitting there—and in terms of economics you can look at the numbers—for 20 years now, and just because of social responsibility and acceptability the company made a mistake from the start. It's still there today, and the problem is not resolved.

This, unfortunately, is a fact of life.

[Chandra Arya, Liberal, Nepean, ON]

Mr. Seeback told ELTO that we need more mining in Canada, especially with the critical minerals, etc.

The federal government and the province recently signed an agreement to form the Ontario table to, for example, align the resources and the timelines to shorten the regulatory process, which today may take 10 to 15 years from discovery to actual production.

Can you tell us one or two key things that the federal or provincial governments should do to reduce the timeline from 10 or 15 years to something more reasonable?

[André Gauthier]

I'll tell you and then you'll take those comments out, because I'm a bit embarrassed. No, I say that as a joke.

When we do our feasibility studies, one of the most important values...well, the price of metals is, obviously, and the price of construction infrastructure is, but the biggest influence is the value of the Canadian dollar. If you look at the gold mines today or the nickel mines or the copper mines, that's the biggest factor in a feasibility study. This is while we are blessed with the Canadian dollar being what it is today. Imagine if the Canadian dollar were 10 or 15 cents more. Then you would see a lot of mining companies struggling, even today, so it would be almost impossible to develop them.

[Chandra Arya, Liberal, Nepean, ON]

We know a lot of Canadian mining companies have a lot of operations abroad. I think more than 700 Canadian mining companies have been operating. Obviously, out of that huge number, there are a few that are violating human rights and going for the things that we, as Canadians, don't like, but the vast majority of Canadian mining companies are doing good, and I think it is wrong to paint the entire mining sector with the same brush.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Arya. Your time is up.

We go now to Mr. Savard-Tremblay for two-and-a-half minutes, please.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Gauthier, I would like to come back to the distinction you were making between mining companies that apply Canadian standards and those that may be Canadian on paper, but have “artisanal” methods.

A study commissioned by the Prospectors and Developers Association of Canada, or PDAC, said that Canadian companies are reputed to be involved in 34% of mining companies worldwide.

Are they all artisanal mining companies?

[André Gauthier]

No, certainly not. The PDAC, for example, surely assesses many more exploration companies than operating companies.

Do you remember determined mining expenditures, as they were called, in the good old days? People would do prospecting, but at the same time finance it by mining a tunnel. These are called artisanal companies. They produce, but they don't produce. They pay for their exploration by producing. Some Canadian companies do it when the deposit is rich and allows it.

These companies certainly don't meet the standards as we know them.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

I found the name of the company in Colombia I was looking for: it's Continental Gold, which was sold for $1.4 billion to a Chinese company.

Would you say Continental Gold or Barrick, which has been accused of murder and torture in Tanzania, abusive or “artisanal” companies?

[André Gauthier]

Unfortunately, I cannot comment, and I will not defend Barrick here. I have visited several Barrick sites around the world, including the one in Tanzania, and I can't say that people have committed illegal acts there, such as murder or the like. However, I doubt that the mining operation itself supervised or condoned such things. I would bet on it.

On the other hand, that is not to say that certain things did not happen. I don't know enough about it to say. I have been to mining operations where the situation was difficult. In the case of Barrick, there was a lot of artisanal activity going on above their mine. It's true that it was on their land, but I don't think it was Barrick's activities.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Cannings, you have two and a half minutes, please.

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

Thank you.

I'd like to thank Mr. McKay for his homily and—

[John McKay, Liberal, Scarborough—Guildwood, ON]

Bless you, my child.

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

—for the all the work he's done over the years on this file. I really appreciate that, but I would say that Bill C-262 and Bill C-263 are on offer. They're on offer to the government, because this is what the corporate responsibility sector is saying is what is necessary.

I'd just like to offer the rest of my time to Ms. Gingrich to respond to your comments about the difference between those bills and why Bill C-262 and Bill C-263 will and should produce better results.

[Meg Gingrich]

Sure. Thank you very much.

I think Mr. McKay explained it fairly well in terms of what some of the differences are. It sort of comes down to a difference in the expectation of what's possible right now. I agree that Bill C-262 and Bill C-263 are still possible to pass if we can get the political support for them. I don't think it's a question of them going too far or anything like that. Transparency and a requirement to report are important. Again, I think Mr. McKay has very good intentions, and everything like that, but I think it comes down to what we think is possible. I have high expectations that as a country and as a society we can pass bills like this, which put real responsibility on Canadian companies to ensure adherence to human rights, labour rights and environmental rights across their supply chains, including the subcontractors and so on.

In terms of the CORE, as I've said, that is something we have supported the creation of, but I think that as it stands right now, it is simply not strong enough to be able to do much. We're trying our best to use it in the government sector to see what will happen, and we're happy to try to use what exists, but we always want to try to make things just a bit better for everyone.

[John McKay, Liberal, Scarborough—Guildwood, ON]

I just have a point of order, Madam Chair. I wonder if Mr. Cannings could offer to the committee where C-262 and C-263 are on the Order Paper. That would be helpful to members.

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

I was just about to jump in and say that I don't know where C-262 is. On C-263, I know Heather is way out there. It's—

[John McKay, Liberal, Scarborough—Guildwood, ON]

I think Mr. Julian is also way out there.