Evidence of meeting #10 for Natural Resources in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was technology.
A recording is available from Parliament.
5:10 p.m.
Conservative
The Chair Conservative Leon Benoit
Thank you, Mr. Allison.
Thank you, Mr. Morrison, for your answer.
Mr. Stewart, you have up to five minutes.
5:10 p.m.
NDP
Kennedy Stewart NDP Burnaby—Douglas, BC
Thank you, Mr. Chair.
I have two questions. I'll start with Mr. Kolebaba.
I'd like you to elaborate on how the lack of treaties in NWT has slowed down your company's explorations.
5:10 p.m.
President and Chief Executive Officer, Diamonds North Resources Ltd.
That's a good question. I'll start with Nunavut, where the land issue is settled. What happened there is that the different communities took ownership of certain parcels of land. The parcels of land have then been surveyed, and now we look at a map and know who owns what land. When we go to do an exploration, there is no opposition.
If you go to NWT, there are no boundaries drawn yet. There are many boundaries potentially to be drawn, but many of them overlap, so you have different communities saying that it's their land. We see it all as crown land. As soon as we set a foot out to do work, we have 18 communities all coming back at us saying that they own that land.
So it gets tied up. We have a number of projects that are essentially subject to force majeure because nobody can make a decision on what goes next.
5:10 p.m.
NDP
Kennedy Stewart NDP Burnaby—Douglas, BC
I was wondering how that ties in with the cost for your company. You are operating in some of these areas with clouded title, and there is a duty to consult, I believe, as well. How does it work? Also, could you give us some idea of the cost it adds to your operations?
5:10 p.m.
President and Chief Executive Officer, Diamonds North Resources Ltd.
Yes, I'll give you a really good example. We used to do a lot of work on Victoria Island, where there is a boundary that came right through the middle of a project. On one side it was Nunavut, and on the other side was NWT. For the same permit, just to do some drilling of several targets—which is fairly low impact, with a small footprint—what took us, say, three months and about $5,000 took us 14 months on the other side and probably cost closer to $80,000 or $90,000, just to get the very same permit.
So it's a very significant difference.
5:10 p.m.
NDP
Kennedy Stewart NDP Burnaby—Douglas, BC
Mr. Gingerich, you also mentioned working with first nations in the north. Is this something you have come across as well?
5:10 p.m.
President and Chief Executive Officer, Advanced Explorations Inc.
Yes. We operate right now exclusively in Nunavut, where the land questions have been settled. There is a framework that is very effective. Our problems there come from the fact that, as we have empowered Nunavut and this transition has put more authority into it, it doesn't have the capacity. Now what we're seeing is that INAC—which is, again, the federal government—still has the jurisdiction, and we're now caught between the reality of what it is and what we'd like it to be. Unfortunately, this is causing us to basically watch our permitting process just go sideways.
It is impossible now to function as you would in the south. The way Keith and I would both start is basically that we would find a target. We would then drill it, we could permit it, and we would get it done within a month or two.
I can't get a permit for four months. My season is only four months long, so this forces me to lose a year in exploration. My investors, who are looking, of course, at a return on capital, need news. They need to see the upside if I am to go back to raise new capital. It's impossible to meet the investor requirements now, because another company will say, “Why don't you go south where you can operate more efficiently?”
It's a problem.
5:10 p.m.
NDP
Kennedy Stewart NDP Burnaby—Douglas, BC
Am I right to guess that you're not going to NWT just because of the clouded title?
5:10 p.m.
President and Chief Executive Officer, Advanced Explorations Inc.
I have worked internationally in many countries. I was with Noranda. Permitting issues and land issues are so fundamental. if you have jurisdictional risks or land tenure risks, no investors want you to go there. It's a huge impediment to investment.
5:10 p.m.
NDP
Kennedy Stewart NDP Burnaby—Douglas, BC
Thinking of value added in the north, let's say that you've had some propositions in which you've said you would put some roads in and you have some additional tax incentives—those are the kinds of things you're asking for. We're talking about pure extraction here, but I'm wondering whether you can envision a time when we might have other industry located in the north that makes use of the products you're extracting.
I'll leave that open.
5:10 p.m.
President and Chief Executive Officer, Advanced Explorations Inc.
I'll answer.
That goes to what I was saying before with power; you saw the cost of it in the north. You couldn't compete in Ontario if you were facing those energy costs.
The real reality of the north right now is that it will be born out of the growth in resources. You need big-value projects to carry the burden. But if you can lower the costs of operating and if you have coastal areas--because there are benefits in logistics--then you can create....
One of our plans is to actually put an industrial park in our development if we can get the power costs down. We're on the ocean and we're close to Hall Beach. But in order to get that industrial park, we still need to get low power costs. Without that, no projects and no new industry can effectively survive in that environment.
5:15 p.m.
Conservative
The Chair Conservative Leon Benoit
Mr. Stewart, your time is up.
You can give a very short answer, please, Mr. Kolebaba.
5:15 p.m.
President and Chief Executive Officer, Diamonds North Resources Ltd.
The other benefit is to the community itself. There are communities up there that are fly-in, fly-out. If there was additional infrastructure, that would lower their burden. They would be a lot more self-sufficient. The government funds a lot of that transport.
5:15 p.m.
Conservative
5:15 p.m.
Liberal
David McGuinty Liberal Ottawa South, ON
Thanks, Chair, and thanks, gentlemen.
Mr. Morrison and Mr. Gingerich, in both of your presentations you used the expression “use it or lose it”. Since that statement was uttered by the Prime Minister, a lot of people have come to me and said, “Yes, use it or lose it--or potentially abuse it”.
Mr. Morrison, I'm trying to get a sense of your technology and your experience. In the case of Gedex, it's fabulous technology, by the sounds of it. In your presentation, the only applications I heard about related to use in “petroleum, mineral and sovereignty purposes”. Interesting.
And Mr. Gingerich, you said in here, “'Use it or lose it'; you must first know what it is in order to use”.
I want to get your sense of whether we really know what it is and what's going on. Both of your presentations have been corralled to traditional natural resource discussion and debate, right? It's stuff we're going to dig up, stuff we're going to drill for, stuff we're going to convert perhaps, and stuff we're going to sell. But I want to get a sense of....
For example, in your case, Mr. Morrison, with your technology, you say here, “A gravity gradiometer can map through rock, ice and under water to depths exceeding 10 km.” That's incredible.
Can your technology track the beluga whale? Can it monitor the activity of straddling stocks in the Arctic Ocean? Can it take snapshots about the effects of drilling, for example, on shorelines? Can it examine and help us understand the state of play of the tundra? For example, how many boreholes are there? What is the overall carrying capacity? How many have been backfilled with concrete? How many cutlines have been cut throughout the Northwest Territories in the north? What are the overall effects of those activities on carrying capacity?
Perhaps you could just give some thought to that, and then you could come back to me on it.
To Mr. Gingerich, in terms of knowing what it is, isn't it important for us to know, as a country, more than simply mineral potential and fossil fuel potential? What about biodiversity? What about species at risk? What about flora and fauna?
We continue to corral the debate here in this old Canadian hewer of wood and drawer of water context. In Costa Rica now, they're negotiating with the top three pharmaceutical firms for bioprospecting. They know that the future is going to be about the DNA--who has it, who doesn't have it, and what we can do with that DNA in terms of bioprospecting.
I don't hear any talk on that from major technology and investment players. I'm not saying you should be in this business, but I want to get a sense from both of you, if I could now, on how you see this application of technology and potential beyond minerals and oil and gas.
5:15 p.m.
Conservative
The Chair Conservative Leon Benoit
You have about 45 seconds each to answer.
Go ahead, please, Mr. Morrison.
5:15 p.m.
Chief Executive Officer, Gedex Inc.
I don't believe I used a “use it or lose it” quote, but I'll try to answer the question anyway.
Within a ten-minute context we have to focus our message, and our message is the benefits of this technology in this application. Our technology will focus exploration efforts in areas where it should be focused, and minimize environmental impact and activities in areas where it should never be in the first place.
That's a huge win-win for everyone. It stops wasteful expenditure. It moves companies very quickly to true answers in terms of prospectivity. They can also give governments, both local and national, guidance on options as to how to develop the north.
So our technology is information-rich. As to what you do with that information, it's up to all the stakeholders to determine, but--
5:20 p.m.
Liberal
David McGuinty Liberal Ottawa South, ON
Can you track a straddling stock of fish in the Arctic Ocean?
5:20 p.m.
Liberal
David McGuinty Liberal Ottawa South, ON
Can it be made to apply to use for that kind of research and data? No?
5:20 p.m.
President and Chief Executive Officer, Advanced Explorations Inc.
Actually in a previous life, as I said, I did head a research project with NRCan, which was to build a satellite to help map the north. To use it or lose it, you have to know what you have.
The purpose of mapping has land use planning considerations. I'm actually involved with the first nations in the Ring of Fire. I have a first nations company. In Ontario, we know they're in this segregated...a certain per cent of the land has to be set aside through a land use planning process. The problem is that people are making decisions on what land will be good for exploration or good for biodiversity without having the database.
So the mapping.... When we go mapping, although we map the rocks, you do gather all the information.... So yes, maybe we don't do the whales and the fish, but from the surface biodiversity—because we are sight-limited types of technologies—we do provide that information, which can be used both for setting aside parks and deciding which areas are amenable to mineral exploration, or oil and gas, or biodiversity habitats.