Natural Resources Committee on Nov. 21st, 2011

[Dr. Richard Schryer]

I'll quickly point out that it's the implementation that is lacking. The roles and the responsibilities of the boards in the Tlicho government and the decision-making process are clearly laid out in the Tlicho land claims agreement. It's simply that they don't understand their own lands claim agreement, and the issue is that they need some consultation on how to move forward with that.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Calkins.

We go now to Mr. Bevington for up to seven minutes. Go ahead, please.

[Dennis Bevington, NDP, Western Arctic, NT]

Thank you, Mr. Chair.

I want to thank the presenters here, because they do represent the future of the Northwest Territories in many ways. Mining will be a very strong industry in the north, and we all hope that we can solve many of the issues you're facing here. There's no question about that.

You know, I have to say that I served on the original regulatory board for approvals in 2000, when it was first promulgated. In those days we did manage to get through a number of environmental assessments in a very orderly fashion. It has devolved from that point to the situation that we have today. Some of it is capacity, and I think everybody in the Northwest Territories says that. In fact, the federal government this year is reducing the resources available to the board, so we may find that the capacity will actually be even further hindered.

We do need many things attached to that, and I don't want to take the time up with that right now. I wanted to question you a little bit more about some other issues, because you've talked about these quite well.

Ms. Jones, why is the federal government such a large partner with us in the Northwest Territories? Is it because the federal government still collects the royalties and retains the royalties from most of the activities that go on in the Northwest Territories?

[Hilary Jones]

Thank you, Mr. Bevington.

The federal government is a big partner in the development of training and delivery of training for aboriginal people in the north. They were a 50% partner in our last two ASEPs. We're an aboriginal skills and employment partnership program holder. During that last time, they invested $24 million. Our industry invested even more than that in terms of the in-kind and actual cash contributions to delivery.

That's coming to an end on March 31, 2012, and there is nothing coming behind it.

[Dennis Bevington, NDP, Western Arctic, NT]

The federal government is a partner with us, and they're collecting the royalties from the development of the mining industry in the north. Are those royalties going to end for the federal government in March 2012?

[Hilary Jones]

I don't think so.

[Dennis Bevington, NDP, Western Arctic, NT]

No. So they have an active role here that's very important, and it's in their own self-interest. Mr. Calkins talked about where the money is coming from. Well, the money to the federal government for mining development in the north will come—even after devolution, a large chunk of money will return to the Government of Canada—from mining development in the Northwest Territories.

That's part of what we need to have said here today, I believe.

[Hilary Jones]

We can easily say that we can give you billions of reasons why mining is digging Canada out of debt. In order to do that, we have to invest in the north.

[Dennis Bevington, NDP, Western Arctic, NT]

You touched on another matter, Mr. Bubar and Mr. Goad, about the Government of the Northwest Territories investing in roads.

Right now, we're supposed to be a partner with the federal government in the Inuvik-Tuk road, where they're putting in $150 million, and we're still trying to figure out where to get our section of the money from.

The Government of the Northwest Territories announced the other day that they need to get the borrowing limit improved so that they can invest as well in this territory, and right now the federal government controls that borrowing limit. Without the borrowing limit going up, there will be no extra resources for the Government of the Northwest Territories to invest in the roads for Mr. Goad, to invest in the electrical infrastructure to reduce the costs of doing business up there. Don't you think we should be encouraging this federal government to loosen the strings a little bit for the Government of the Northwest Territories?

I'll get you all to comment on that.

[Donald Bubar]

We're not planning to build a road, so that's an infrastructure requirement we're not particularly focused on. I'll let Robin comment on that.

Certainly power is an issue. Increasing the capacity for power generation from the Taltson dam there is important to the overall health of the economy in the north, to be able to attract new investment. Everybody is going to need power to build the kinds of operations we're talking about right now.

How that gets funded is perhaps subject for debate among the politicians. I really don't have a comment on what is the appropriate way to go. Obviously models need to be looked at. Creative models need to be looked at for how that can be most appropriately funded to satisfy the needs of industry up there.

[The Chair, Conservative, Leon Benoit]

Mr. Goad, go ahead.

[Robin Goad]

First of all, resource revenues are basically going to the federal government right now until we have devolution, so the Government of the Northwest Territories is not adequately funded to be able to contribute to significant infrastructure projects. That is a problem. I would support devolution.

On the issue of roads and whether they pay for themselves, I completely agree with your comments that through investment in basic infrastructure you get a return from the resource development. Power is a particular problem because the current structure of the Northwest Territories Power Corporation precludes it from being able to invest in basic power generation and transmission capacity without having contracts. The problem is that with a development of power, for example, you need to invest long ahead of when a mineral project is going to happen. When a project has been determined to be economic, it's often too late to go through the process of environmental assessments and investments in the infrastructure to provide that power hookup. There's a problem with the moneys being available but also with the process.

[Dennis Bevington, NDP, Western Arctic, NT]

I just wanted to make a couple of comments here. One is on devolution. Even after devolution, the majority of resource revenue is still going to go back to the federal government. Devolution aside, that's not going to completely solve that issue, because I think our anticipated return is 5% or something over the cap that we have already in place.

The other side is that the power corporation can't invest as well because it would take the Government of the Northwest Territories over the borrowing limit. They couldn't invest in projects in the Northwest Territories right now because they don't have any financial capacity.

[Robin Goad]

I have a further comment on that. Our Nico development is only 22 kilometres from four hydroelectric dams, yet we're putting in diesel power generation because there is inadequate surplus power from that facility to be able to satisfy the electrical requirements of our mine, and the Northwest Territories Power Corporation cannot invest in expansions under its current structure. By the time they're able to develop new power, it would be too late. Our project will have been depleted.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Bevington.

Mr. McGuinty, up to seven minutes. Go ahead, please.

[David McGuinty, Liberal, Ottawa South, ON]

Thanks, Mr. Chair.

Mr. Bubar, I'd like to begin with some of the comments you made earlier, which you've reduced to writing in your brief. You've raised some important concerns about the regulatory process from a developer's perspective.

Two bullet points really struck me. You said in one: “Unresponsive staff, unwilling to work collaboratively with the developer”. And one of the bullet points following is perhaps even more striking. I think you used language of this kind in your brief; you said “Lack of impartiality in public meetings (anti-development bias)”. What do you mean?

[Donald Bubar]

Well, exactly that.

In other jurisdictions where I've worked, when you're going through the permitting process and you run into specific issues that don't clearly fit within existing precedents or standard practice, you sit down with the regulators and figure out the solution that would allow the project to move forward. We're not getting that kind of collaborative spirit from the regulators within the review board we're working with. We think it should be.

My associate, David Swisher, who's here today, has had some prior experience with another project. He compares the process then, which was with a company called Tamerlane Ventures, with the process he's involved in now with Avalon and finds it completely different in terms of the willingness of the regulators to work collaboratively, just to exchange information to make the process work for everybody's benefit.

[David McGuinty, Liberal, Ottawa South, ON]

When you say there's an anti-development bias in the regulatory process, do you mean there's an anti-development bias across the entire regulatory process in terms of the regulators you're working with?

[Donald Bubar]

In the review board, yes. We referred specifically to the public meetings held as scoping sessions, where the regulatory officer acts as the chair of the meeting. He addresses the meeting and makes remarks. In his remarks, he basically says that the mining company has to prove itself innocent of creating unnecessary environmental impacts. And that's not right. That's a bias that should not be with the chair of those meetings.

[David McGuinty, Liberal, Ottawa South, ON]

If the regulator you're referring to were sitting beside you, what would he say in response to this?

[Donald Bubar]

I'm not sure what he would say.

Mr. Swisher, would you like to comment on that?

[David McGuinty, Liberal, Ottawa South, ON]

I just want to get this right, because this is an extremely important comment you're making. I'm struck by the fact that we have an NDP MP who's a former member, if I understood, of the regulatory process of the board involved some years ago. Are you saying that...? I know you're not saying—at least I hope you're not saying—that you want this regulatory process to be pro-development, and have a pro-development bias. Right?

[Donald Bubar]

No. We just want it to be unbiased.

[David McGuinty, Liberal, Ottawa South, ON]

Okay. I just wanted to clarify that, because it really struck me. Your comments were quite powerful in terms of the language you chose. I guess you deliberately chose it. It's interesting to hear.

I want to go to the second theme, if I could, for the three companies represented here—Avalon Rare Metals, Fortune Minerals, and Canadian Zinc.

Mr. Goad, in your brief you make some very important comments. You say in one bullet point, “Aboriginal Consultation & Rights & Title issues being used extract increasing payments from mineral developers despite government obligation of consultation.” Then you go on to say, at the bottom of your page, that the B.C. government is refocusing from treaty negotiations to economic cooperation agreements and resource revenue sharing with first nations as a possible template for use in other jurisdictions.

So in that light.... And we've talked devolution here, so let's really talk devolution. In the case of Avalon Rare Metals, Fortune Minerals, or Canadian Zinc, are any of these three companies...? Are you involved now in equity participation deals? Do first nations own, in percentage, a part of these companies operating in and around their territories?

Mr. Bubar?

[Donald Bubar]

We are in the process of negotiating an equity participation arrangement with our aboriginal partners. Right now that is our objective, and that's what we think the future is for first nations participation in the mineral economy in the north.