Natural Resources Committee on June 5th, 2012

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

You talked about one being three.... Is that the one for which you're talking about $300 million to $500 million for development of the project, or is it a different project? You were talking about doing one with a pre-feasibility study and looking for $8 million. Is that a different project?

[Peter Mackey]

That's a project for which we've completed the environmental baseline studies and pre-feasibility study, near Iqaluit. That's the one we are attempting to develop on our own, without a synergistic relationship with the mine. In order to complete the feasibility study, which includes the geo-technical engineering design and the regulatory process, we're looking at $8 million. In a capital budget of $25 million that we have and are using to try to replace power plants, we don't have the $8 million to spend on it.

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

Would that be a lake system or a run-of-river system?

[Peter Mackey]

That would be run-of-river.

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

So you're not talking about—

[Peter Mackey]

Just for clarity purposes, it's not a run-of-river system; we would have a reservoir tied into it.

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

There would be a little reservoir, somewhat like in New Brunswick, where you have a bit of a hybrid and some reservoir.

Let me ask you the question, then. When you look at the situation you had with wind, what do you think the reality is in terms of lead time to develop this project? Do you anticipate any major hurdles in getting a project like this even approved?

[Peter Mackey]

We've done a tremendous amount of work in providing positive feedback in communications, not only with Iqaluit but with all the communities that are in the area. We have tremendous support for the hydroelectric project and a genuine desire from the citizens of Iqaluit to see this proceed. From that perspective, I think it bodes well for us. We've also kept the regulatory bodies aware of our attempts to develop this hydroelectric project. We've done tremendous amounts of analysis in terms of what the regulatory steps are. We have a clarity process map so that we know what needs to be done.

We don't foresee any kind of issue in terms of bringing it to development other than the issue of capital infrastructure dollars to proceed.

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

To turn to Mr. Bradley's point—and I'll bring Mr. Bradley in on this too—you talked a little bit about the stranded investment aspect. Stranded investment is always a concern when you're doing utility construction, because the mining project has a certain life and a utility asset has a much longer life.

Do you see, Mr. Mackey, any issues in terms of stranding of some of the asset you're talking about? I see that in the power purchase agreement you would want to factor this in, but in the development that you're pursuing on your own, do you see any stranded investment issues?

[Peter Mackey]

We do not. Unless the city of Iqaluit is going to disappear within the life of the hydroelectric project, no, we don't see it as an issue, because the capacity that we're earmarking for development is to meet the requirements of the city of Iqaluit on a go-forward basis.

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

And to replace the diesel—

[Peter Mackey]

Absolutely. It's to shut them down.

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

Mr. Bradley, you talked about the project management office. Do you see, from a member's standpoint, when you any talk about the relationship with the major project management office—and there's also a northern major project management office....

We've heard some testimony previously that the northern major project management office may not be as well developed as the regular project management office. What are you and what are your members seeing in terms of these two organizations?

[Francis Bradley]

At a national level as a national association, our dealings have been with the major project management office, not with the northern office. I wouldn't be able to contrast and compare the two. As I said in my comments, since the establishment of the NPMO, we have certainly seen benefits as a result of it, and greater clarity.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Bradley.

We go now to Monsieur Gravelle for up to five minutes.

Go ahead, please, sir.

[Claude Gravelle, NDP, Nickel Belt, ON]

Thank you, Mr. Chair, and thank you to the witnesses for being here today.

My first question is going to be for Mayor Blake. I'm not sure whether I heard correctly, Mayor Blake, so I'm going to ask the question again. Did you say that the funding for the Fort Chipewyan airport was cut?

[Melissa Blake]

It has been discontinued, yes.

[Claude Gravelle, NDP, Nickel Belt, ON]

By whom was it discontinued?

[Melissa Blake]

The federal government made a contribution to that airport in perpetuity, until the recent letter telling us that they would be removing that funding.

[Claude Gravelle, NDP, Nickel Belt, ON]

Do you know how much was cut?

[Melissa Blake]

Do we have a number?

I'm sorry, I don't know what the exact funds were.

[Claude Gravelle, NDP, Nickel Belt, ON]

Can you forward that figure to the committee?

[Melissa Blake]

I absolutely will, yes.

[Claude Gravelle, NDP, Nickel Belt, ON]

And what kind of effect is that going to have on the Fort Chipewyan airport?

[Melissa Blake]

My belief is that funds that get cut will have to be replaced somehow, presumably from the municipality. So either my expenses are going up or the cost of airline travel will be going up to offset what those expenses were.