Thank you, Mr. Chair and members of the committee.
In addition to my role as chairman of Canadian Zinc Corporation, I'm also a director and the immediate past president of the NWT and Nunavut Chamber of Mines and a director of the Mining Association of Canada. Both of these organizations represent the Canadian mining industry.
Canadian Zinc owns the Prairie Creek Mine in the Northwest Territories. This is a unique project. It's already built. It's 30 years old, but it has never operated. The mine is a major Canadian resource. It is one of the highest-grade base metal deposits in the world. When it's in production the mine will employ about 220 people, and our objective is to employ about 60% northern residents, of whom a total of 25% would be aboriginal first nations.
The mine has a projected life of 20 years. We enjoy a very good relationship with the local communities. In 2008 we signed a memorandum of understanding with the two closest aboriginal communities, and in 2011 these were converted into impact benefit agreements, which we signed with the Nahanni Butte and the Fort Simpson communities.
In June of this year we signed an important socio-economic agreement with the Government of the Northwest Territories, under which the company and the Government of the Northwest Territories agreed to work together to maximize the beneficial opportunities—job creation, business opportunities, and socio-economic opportunities—that will accrue from the development of the mine.
Recently Human Resources and Skills Development Canada, a department of the Government of Canada, approved the commitment of $3 million for a three-year period under the skills and partnership fund to fund the “More than a Silver Lining” program to provide aboriginal participants with training and employment opportunities in a variety of mine-related occupations. That program has already started.
However, the mine is not yet into production, largely because of the regulatory and permitting regime that exists in the Northwest Territories today. You've heard my colleagues comment on that earlier. When this mine was first built in 1980 it had all the permits necessary, but unfortunately those permits were allowed to lapse, so that in 2000 we had to seek new permits under the new Mackenzie Valley Resource Management Act.
For the last 10 years, Canadian Zinc has been slowly and gradually working its way through the Mackenzie Valley permitting process. During that time we've applied for and obtained seven exploration permits, two water licences, four land use permits, and a road permit.
Various aspects of this project have been the subject of five different environmental assessments by the Mackenzie Valley review board and during all that time we have encountered very significant delays in the issuance of permits. For example, we applied for our water licence in March 2001 and it was finally issued four years and eleven months later in February of 2006. In May 2003 we applied for a land use permit for a road. This was deemed exempt from an environmental assessment by the Supreme Court of the Northwest Territories. The permit was issued four years later, in April of 2007. However, we had to do some repairs to that road, which required a water licence, which was issued in March 2008, making the total period four years and ten months from application to when we could begin work.
In June of 2008 we applied for the permits for operating. These applications have been working their way through the Mackenzie Valley process, and we're hopeful we will get a decision from the review board before the end of this year. But that's not the end. The permits have to come after that, so again, we're looking at another process in excess of four years.
Let me tell you, members of the committee, that were it not for the quality of this ore body, any company would give up and walk away. These delays, which are not unusual as you've heard from my colleagues, are impossible to explain to the investment community in Toronto from whom we have to raise funds. They just do not understand that the Northwest Territories is not an attractive place to invest dollars.
You've heard from my colleagues that mining is and has always been the major economic driver of the Northwest Territories. It contributes more than $2 billion annually and represents about 50% of the GDP of the Northwest Territories. It is a very important industry, but it is an industry that is threatened today. Mines are finite. The diamond mines are probably past their peak and mineral exploration is not strong; in fact, it's in decline in the Northwest Territories.
So if the Northwest Territories is to maintain the considerable benefits that mining brings, we must create an environment that attracts mining and investments. Both public governments and aboriginal governments need to create an environment of certainty for investors. In our industry we operate in a global world. Money is mobile and it will go wherever the reward is best. We must take into account not just the price risk but the project risk and also the social risk. Canada needs to compete for the investment dollars worldwide.
There's no certainty that we can get those investment dollars. We must improve certainty. We must reduce and eliminate the barriers to entry. As you have heard, there are significant challenges with property in the Northwest Territories. The federal government has recognized a need to reform the northern regulatory regime. In the Speech from the Throne of March 2010, the government committed to support responsible development of Canada's energy and mineral resources. The minister said our government would untangle the daunting maze of regulations that needlessly complicate project approvals and replace them with simpler, clearer processes that offer improved environmental protection and greater certainty to industry.
In May 2010 the minister announced an action plan to improve northern regulatory regimes to ensure they would be more effective and predictable and would provide greater certainty to the industry, northerners, and all Canadians. He said potential investors in northern resource projects have faced complex and overlapping regulatory processes that are unpredictable, costly, and time-consuming. These have become barriers to economic investment in the north and economic growth in Canada.
The government has recognized that there are problems and difficulties with the current system and that investment in the north is threatened. The action plan is a step in the right direction, but in my opinion this needs to go faster and further. There are proposals under way to amend the Mackenzie Valley Resource Management Act. I would ask members of the committee, when this legislation comes before Parliament, to make the parliamentary time to get this legislation enacted. It is very urgent.
Industry is anxiously awaiting the enactment of the Nunavut Planning and Project Assessment Act. This bill came before the house but died on the order paper last spring with dissolution. Again, we would ask you to please find the time to get that legislation enacted as soon as possible. It's very important to mine development in Nunavut.
Mr. Chairman, one of the challenges facing resource development in the north is the absence of a champion—an arm of government with the responsibility to promote resource development. For many years, the north has been the only region without an agency responsible for economic development. In 2009 the government announced the creation of the Canadian Northern Economic Development Agency, or CanNor. Inside CanNor, there is a northern projects management office, which is intended to help industry navigate the regulatory process to ensure timely reviews of projects. Here, again, there has been progress, but unfortunately that progress is slow. CanNor does not have any meaningful budget. It is simply taking resources from Aboriginal and Northern Affairs Canada, which continues to be the main regulator in the north, and which continues to have a conflicting mandate with regard to its economic development and its aboriginal responsibilities.
There's no minister for economic development in the north. There's no minister for mines in the north. In fact, there is no minister for mines in all of Canada. We really think there is a need for a champion. This is necessary to ensure resource development in the north.
There government of the Northwest Territories tried to move the investment, and is very supportive of the Canadian Zinc's project and all mining projects. As I mentioned, we have signed a socio-economic agreement with the government of the Northwest Territories. The likelihood of imminent devolution means the responsibility for resource development will fall to GNWT. Perhaps such a situation would be a good thing, but it probably needs to happen quickly. The GNWT does support a balanced approach to developing and advancing economic growth. Devolution, should it happen, will allow the GNWT to make resource development a priority. They should have management control of public lands, water, and mineral resources. Also, they can become the champion for development.
There's an urgent need for action. It's one on which we need to see meaningful progress. My concern is that if there is no improvement in the investment climate in the north for mineral exploration and development, and if there is no significant reforms of the regulatory and permitting process in the Northwest Territories, mining investment capital will decide that the timelines are too long and that there is no certainty, and that capital will go elsewhere. As you've heard today from Avalon—and we'd be the same—those resources, which are undoubtedly there, will be left unexplored and undeveloped, and nobody will reap the benefits.
I have sought to demonstrate today that Canadian Zinc's project offers many benefits to the aboriginal communities, to the Northwest Territories, and to Canada. However, the successful development of this mine, and indeed all mines, requires the active support of government, political leaders, and politicians. Support is needed to improve the regulatory permitting regime, to upgrade infrastructure, to educate and train, to have social programs, and to assist aboriginal communities to avail themselves of the many employment and business opportunities.
The mine industry will play its role. We will do our part. I believe that governments—federal, territorial, and aboriginal—must play the leading role. The successful development of resources in northern Canada needs the active participation of all levels of government and all members of Parliament.
We need champions in providing political support and encouragement and in repeating and delivering a very simple message of support for economic development and support for resource development in northern Canada.
Thank you.