Evidence of meeting #11 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 uranium.
A recording is available from Parliament.
5:25 p.m.
Conservative
The Chair Conservative Leon Benoit
Thank you, Mr. McGuinty.
We'll go now to Mr. Anderson.
I'd like to take about a minute at the end, if I could, just to bring something up.
Go ahead, Mr. Anderson.
5:25 p.m.
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
Thank you, Mr. Chair. Interrupt me when you need to.
I would just like to ask a couple of questions about mining royalties again, because we're going to be writing a report later. How do mining royalties differ among the various provinces and territories? How do they compare with each other?
5:25 p.m.
Executive Director, Saskatchewan Mining Association
I can partly answer that question. In Saskatchewan, the royalties differ based on the type of commodity you're mining. Your royalty structure for potash is different from your royalty structure for uranium, which is different from your coal royalty structure. They typically involve a graduated rate based on the price of the commodity. There are also base payments to ensure a stable form of government revenue as well. There are multiple factors and types of royalties.
I'd also like to mention that there are other opportunities, by means of which government is provided revenue outside of the direct royalty and taxation regime, through income tax related to the number of people who are working at the mine, and corporate tax as well, which is outside the royalty stream.
5:25 p.m.
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
It's my understanding that royalties can be applied in a couple of way: on gross production in some situations--and I think Australia focuses on that, as we talked about earlier--and on profit, which we tend to do more here in Canada.
How do royalties in Canada compare with those of the other major mineral-producing countries? Which type of royalty is most effective, in your mind, in protecting the taxpayers and giving the companies competitive opportunities?
5:25 p.m.
Executive Director, Saskatchewan Mining Association
I'm not sure I can come up with a complete answer. The real trick, and the real point that has to be made, is that the royalty structure has to be competitive for that jurisdiction, recognizing that each jurisdiction has different needs from those of even the ownership position of who--
5:25 p.m.
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
Can I rephrase the question? What are the advantages and drawbacks of applying royalties on a gross production value versus profit? Maybe that's a fairer question to you. What are the advantages and disadvantages of the two systems?
5:25 p.m.
Executive Director, Saskatchewan Mining Association
I hate to even take a stab at it. We certainly have our tax specialists, who aren't here today, although I can't speak for Gary.
The issue on the gross production only is that it doesn't have any weighting on the cost. From my own experience with AREVA in the last several years, it's not like our profit margins at the McClean Lake property--which is our mine and is now a shut-down mill--were significant. So if it's just based on a pure pound, it's difficult to recover your costs.
Gary, if you could....
5:25 p.m.
Executive Director, Saskatchewan Mining Association
We could provide more information.
5:30 p.m.
Conservative
5:30 p.m.
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
I have a short question for Mr. Lapointe. We talked a quite a bit about human resources in Saskatchewan. I'm wondering if Quebec is facing those same challenges and what solutions your organization has to deal with them. That's on the number of positions that will be required, especially in the skilled sectors.
5:30 p.m.
Cofounder, Coalition pour que le Québec ait meilleure mine
It will be a significant challenge for the years to come for the mining industry to recruit workers, especially with the boom we're going through. We don't have a specific mandate to deal with that question, but I can make two points quickly.
That's part of the current debate, especially in the northeastern regions where big iron mining is coming down the pike. People are starting to say that if we can't have our people work there and we are relying on international workers--because we're starting to talk about flying Mexican workers or European workers in and out of those mines--then maybe we need to consider waiting to extract some of the deposits and bring in the benefits in the longer term for the regions and the province.
5:30 p.m.
Conservative
The Chair Conservative Leon Benoit
Thank you very much.
Thank you, Mr. Anderson.
Just before we go, I want to remind the committee that we have our regular committee meeting for the first hour on Wednesday. Then we have an informal meeting with the Norwegian delegation for the final hour. It's not a committee meeting as such, but you're all welcome to participate.
We've also had a request from a Russian delegation for some kind of meeting with members of the natural resources committee. The timeframe is between November 22 and 25. We have four witnesses booked for our meeting in that time slot. But if members would like to consider meeting informally with the Russians in some format, I think they would appreciate it. Perhaps you can let me know by e-mail to the clerk. It would be appreciated.
Thank you to the witnesses by video conference.
To the Saskatchewan Mining Association, thanks very much to all of you for your help today. It was very useful.
From Montreal, Monsieur Lapointe, thank you very much. I appreciate it very much. The information you've given has been helpful.
The meeting is adjourned.