Natural Resources Committee on Nov. 23rd, 2011

[Tom Hoefer]

If you look at the Northwest Territories...I'm going to give you an example. When the three diamond mines were built in relatively rapid succession, there was a strong opposite-side push for protected areas. There was this big fear of big land grabs by the mining industry. So there's a protected area strategy in the Northwest Territories now, and it's probably seen about $20 million invested in it in the last 12 years. It actually works very closely with communities. It creates community advisory groups, and their whole purpose is to go out and protect land. In that same territory, we don't have an economic development strategy. We don't have a mineral strategy. Nowadays, we look at the territories and say, “Well, look at all that land that's being proposed for protection.” It was a marketing strategy that worked very well if you put $20 million into it. The opposite to that side, the balancing side, wasn't there.

So I would say if you started to put money into working with communities on the economic development side, into how they could improve things and develop businesses and get that knowledge as well, if you put $20 million into it over the next ten years, you would start to see success there as well. But there's a gap.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

That takes me to my next question. We talk about the permitting, and in the last couple of meetings there have been a lot of horror stories with respect to the permitting and the lack of transparency or definition.

I know one of the projects that's going on in my riding. They just got a terms of reference for an EIA. They're going to prepare their EIA for the year in question, and then there will be a year after that. So it seems they've set some pretty decent timelines.

I'm led to understand that we have significant issues on the timelines. What is that doing to the development? Are we at risk of seeing our private investment capital go elsewhere just because of the delays? Are we going to see that, and as a result see a slump in our GDP in the north as well as our tax revenue?

[Tara Christie]

We're at great risk of losing investment capital. Newmont is a global company. The capital will go to the best projects in the world. So the projects in Canada have to compete with those other projects. If all the factors combined mean that projects in another part of the world are better projects, whether because of the rate of return or the ability to put them into production within a timeline that makes sense, that's what is going to happen for global companies.

The same is true for Canadian companies. Many of our Canadian companies are working all around the world, too. If they can't permit a project within the timeline of a cycle or have a reasonable expectation of when that project will be developed, they're likely to go elsewhere.

[The Chair, Conservative, Leon Benoit]

Mr. Scherkus.

[Eberhard Scherkus]

In the financial world in which we find ourselves today, a lot of the financial analysts are fund managers, and they have a quarter-to-quarter window. So it either works for them or they don't work. They're willing to invest the money, or they don't. If they see something that is open-ended or a black box, they will not invest the money. They'll wait for a decision. It may be in two years or four years, but in the meantime that capital gets allocated elsewhere.

[The Chair, Conservative, Leon Benoit]

Mr. Murphy.

[Brent Murphy]

From the exploration point of view, we recently went through a permit renewal for our company. It took us 14 months, and we're a junior mining company. That's 14 months that we could have spent working on the ground. We've invested over $50 million over the last three years in our project. Of the exploration dollars that have been spent in GNWT over the last year—$83 million, which represents a significant decrease—our company, Seabridge, has spent 25%. I would rather spend our dollars elsewhere, to be quite honest.

[The Chair, Conservative, Leon Benoit]

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

Monsieur Lapointe.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Chair.

I would like to come back to the issue of the very long delays for obtaining environmental permits. Do the environmental analyses really take that much time? Is this what is causing delays in getting the projects done? We have heard a number of times that it sometimes takes up to four years for some projects to get their permit, which seems huge.

Is it the environmental analysis or the administrative process that's causing these delays in the procedures? Are these delays justified from a scientific point of view? For example, do we need three years to determine whether this species really goes in that space or is it simply administrative?

[Eberhard Scherkus]

I'll answer you in French.

For us, I would say that it's an administrative problem. It's not because of the data collection; it's the duplication and repetition of public hearings. We are wondering why we shouldn't hold a public hearing where all the stakeholders could ask their questions instead of putting the same questions three times to different organizations.

For us, in the case of the Meliadine and Meadowbank projects, it was strictly an administrative issue. Sometimes, yes, there are technical and data collection issues, but 80% of the time, it is an administrative issue, in our opinion.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

It's the administrative side that is repetitive.

[Eberhard Scherkus]

Exactly.

[Tara Christie]

I would add that duplication of process is absolutely an issue.

Jurisdiction is another issue. The assessors do their work, and the regulators usually wait until the assessors have done all of their work before starting anything. There could be some concurrent processes where the regulators are doing work in advance to reduce some of those processes, or taking the opportunity to use some of the public processes that are done during assessment to advance the work they need to do with the public.

So some concurrence and less duplication of process would definitely help the situation. It would not change the technical level of the review. The science is there. Industry can deal with the technical issues. The work is just dragged out for administrative purposes.

[The Chair, Conservative, Leon Benoit]

Mr. Merritt.

[John Merritt]

Other people here may have more information, but it's my understanding--without taking away from the comments about particular delays--that the time requirements for assessment of projects in the Arctic are very similar to what you see in the provinces in Canada.

That might be good news or bad news. It's probably bad news for the mining industry, but I think it's important to put the Arctic in some kind of perspective compared to what happens in the rest of the country.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Allow me to imagine the best possible scenario. In an ideal world, if we did a reliable scientific analysis, established parameters, made solid environmental recommendations, planned a reasonable consultation time with the inhabitants, the local aboriginal peoples, had a very efficient administrative process, came up with something that respected the environment, that fulfilled the consultation duties with the aboriginal peoples of those areas, how much time would all that take? Let's imagine the ideal world and a very efficient administration that follows the rules. I'm not talking about disorganized environmental results or conducting unmethodical consultations. How could that be done? Under what parameters?

[Eberhard Scherkus]

We are operating mines in the mountains in Chihuahua state in Mexico. This is the third mine we are building, and the process takes about 15 months. We will be able to follow the file on the Internet to see how it is progressing. So we never wonder where we are in the process.

We have another operation in Finland's far north, in Lapland. The authorities in Lapland are very strict, and it takes a year to a year and a half to complete the process.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Cheechoo—I hope I'm pronouncing your name correctly—do you think a year or a year and a half is sufficient to fulfil our duties when it comes to consulting the aboriginal peoples? Obviously, all the information on environmental investments needs to be on the table. Under those circumstances, does that seem to be a reasonable time frame?

[John Cheechoo]

It think it would be reasonable if the proper Inuit representatives, organizations, and communities were consulted fully, as per their agreements that have been signed off. If they've reached that particular threshold, there's no reason why there should be a repetitive sort of process after that.

You see a lot of these issues in other areas—not just in mining, but also in wildlife management. Consultations go on for quite a long time because of legal ramifications and requirements, not only from the agreements themselves, but from legal actions that have been supported by the Supreme Court of Canada.

So there's a lot of complexity around those issues on rights and implementing the agreements. It depends on who you talk to. If you're talking to Inuit with a land claim wrapped around that activity and land area, then you're talking about a process that's in place. But if it were a lot more streamlined, it would still reflect and respect those land claim agreements. I don't see any problem with it being done that way.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Lapointe.

In response to an earlier question, Mr. Merritt said he thought the process took about the same time in the north as in the provinces. I saw some heads shaking. Does anybody want to respond that?

Mr. Connell.

[Larry Connell]

Yes. Typically in southern Canada it will vary. In a lot of the provinces, like Quebec and Ontario, a two-year-long environmental assessment process does work. There have been some extensive ones in B.C., and we all know where they've gone into court cases, which don't fit that average. But in Nunavut you can guarantee that you cannot get anywhere through that process in under four years. It is definitely longer in the north.

I was at a meeting in Rankin Inlet just two weeks ago, where the Kivalliq Inuit Association spoke to the Nunavut Impact Review Board, and even they said that this process needs to be streamlined, that there are too many repetitious steps in the middle, and that we can make it more efficient.

[The Chair, Conservative, Leon Benoit]

Thank you.

Mr. Murphy.

[Brent Murphy]

In the Northwest Territories the most rapid assessment I believe has been three years, and some have dragged on over seven to eight years. So it is a very lengthy, complex process.

[The Chair, Conservative, Leon Benoit]

Thank you.

Mr. Lizon, up to five minutes, please. Go ahead.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Thank you very much, Mr. Chair.

We're talking about so many topics. I have a slightly different perspective on mining. I worked in the coal mines, and I can tell those who have never been in a mine that it's not necessarily the job that people line up for, especially those who have experienced it. For those who try it, it's very difficult and challenging to work in the mines. On top of this, you have other challenges working in the north.

My question is for all of you. Would you have any specific recommendations that you would like to tell this committee, or forward to this committee, that we can address on the issues that were discussed? We're doing studies on the exploration of the minerals in the north, and there are issues of human resources, regulatory processes, and others. Do you have any specific recommendations that you would like to address?