Natural Resources Committee on June 7th, 2012

[Peter Jenkins]

Yukon has a very, very active exploration program for oil and gas on the Eagle Plains north of my community of Dawson. It's just off the Dempster Highway. I believe the drilling will take place this fall and winter. They're looking for natural gas.

In the Kotaneelee in southeast Yukon, just south of Watson Lake in the east, there's another field that's actually tied into the grid. In addition to that, there are capped oil wells, which are stranded, north of Dawson City.

As for the forestry industry, we don't have a very good track record in that regard. A previous Minister of Indian and Northern Affairs gave a quota to a company in Watson Lake, which has very good stands of timber. It subsequently was overturned. It resulted in a major lawsuit. I believe the award granted was something like $65 million. I believe it's still under appeal. That federal Liberal minister is no longer. His officials in the Yukon kind of circumvented the whole process.

But we could have a very viable forestry industry.

[Joe Daniel, Conservative, Don Valley East, ON]

Okay.

Your Worship?

[Pujjuut Kusugak]

I can tell you that we have zero forestry back home. The only trees I grew up with were the power poles.

[Voices]

Oh, oh!

[Joe Daniel, Conservative, Don Valley East, ON]

How about tourism or other things that are affiliated, not necessarily mining, that your community could be expanding into for sustainability over the long term?

[Pujjuut Kusugak]

There's been a strong push for tourism. Just in Rankin alone, there's a strong whaling history. In a community south of us, a place called Arviat, formerly known as Eskimo Point, there's a strong push for ecotourism.

In Rankin there's also a meat processing plant. There have been caribou products, char products. We also have a territorial park in our community, Iqalugaarjuup park.

[Peter Tapatai]

Baker Lake is the geographical centre of Canada, and that has been our slogan to try to help attract tourism. I think prior to the mine, we had a lady named Jessie Oonark, a very famous printmaker, who was an attraction for tourists.

The problem is that for anybody to come up to our community, the costs are extremely high. The airfare and the hotel take up maybe 80% to 85% of the cost. Whatever little extra they want to buy in the community, the spinoff...I don't know if it's fair, because I think one industry takes most of the money. If a person from the south came up and wanted to buy something little, a carving or whatever, there's not much left.

Prior to the mine, the main attraction was canoeing. Environmental people and others like to paddle down the Thelon and the Kazan. By the time they come back, they've paddled a long trip. If they want to buy a little souvenir or something, carvings can be pretty expensive.

So I don't know where the funding would be, but arts and crafts is a cottage industry, and Baker Lake is still trying to go.... I think among the young people, not a lot are artists. They're looking to find new work.

[Joe Daniel, Conservative, Don Valley East, ON]

We've also heard from previous witnesses that one of the biggest problems with these remote communities is the high fallout at high-school level and that not many people are actually getting to complete their high school. But those who do get to high school go on like yourselves and become very successful professionally in terms of getting higher qualifications, etc.

Do you have any thought on the teaching process or the teaching style that actually contributes to the reason there is such a big fallout before getting to high school?

[The Chair, Conservative, Leon Benoit]

I have to ask you for a very short answer. Go ahead, please, Mr. Kusugak.

[Pujjuut Kusugak]

Thank you.

Education system style is a very culturally...there was a lot of observation taught and hands-on education. For my parents' and Mr. Tapatai's generation, that was the mode of education. Now it's turning into a very southern style, where you're sitting in a classroom. It's very structured. It's almost a conflicting style of education, which really does contribute to the difficulty and stresses at home and just on the students themselves.

[Peter Tapatai]

We really need good role models. We need good role models to look up to, who will help our youth better understand how education can pay off for their future.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Daniel. You are quite a bit over time.

We have to go to the next speaker on the list.

We will now go to Mr. Bevington for up to five minutes.

[Dennis Bevington, NDP, Western Arctic, NT]

Thank you, Mr. Chair. I am very pleased to be here and to have a chance to have a five-minute discussion with you on a couple of issues.

In the last committee hearing, there was a presentation by Qulliq Energy Corporation, and they talked about the impossibility of the territorial government investing in the hydro project there because of the borrowing limit.

This is a very important issue right now because the federal government, in this budget implementation bill, is bringing in regulations that the federal cabinet can set the conditions for borrowing. One of the key issues was identified in the last meeting, in that self-financing, as in utility companies, is being put under this borrowing limit. So a project like a hydro project, which has a payback to government and is not going to be a burden on government, will be included in this borrowing limit. For Nunavut it is $400 million. For Yukon it is $400 million. So this pretty well takes the two territories, and my territory as well, out of the opportunity to invest in these self-financing projects.

This is a very important question, because the federal government hasn't set these regulations yet, but I have seen copies of these regulations that say they're going to put the self-financing loans under the borrowing limit. Do you think this is a good idea, or do you think our territories should have the ability to invest in projects that provide them a rate of return?

[Peter Jenkins]

The short answer is yes. It was my privilege, sir, to sit on the board of directors of Northern Canada Power Commission for a number of years back in the 1970s, representing Yukon. So the power situation north of 60 is something I'm reasonably familiar with.

That said, to contain the borrowing limit of the various territories in the cap for all of that territory is something that may need to be carefully considered. All you have to do is look at Quebec Hydro and Ontario Hydro as to the amount of their indebtedness. But it gets a rate of return as long as you have a market that's going to service that debt.

The market in the north is very, very fragile, in that if you have a mine shut down it could take away...like the Faro mine, the Anvil mine, which took away about a third of the revenue from the energy corporation, or NCPC in the day. So you have to be very, very careful as to how you structure it, because it can look good one day, but if there is an economic downturn and you only have one or two customers on that grid, you've got a serious problem. It's all about rate of return on your investment.

[Dennis Bevington, NDP, Western Arctic, NT]

Well, in order to borrow money now, the three territories have to go to the private market. Private investors are also very concerned about those rates of return as well. Do you think the determination of the value of the investment is better held in Ottawa or in your individual territory?

[Peter Jenkins]

I would see that as something that's going to have to be decided, given the order of magnitude of the dollars that are going to be involved in the very near future in major hydro projects and major energy-related projects.

Nunavut has a very serious problem supplying energy, and it's going to become more and more acute. It's basically fossil-fuel-based. The Yukon is fortunate; we have a large capacity of hydro.

This is an area that should be carefully examined. The Government of Canada is going to have to play a very pivotal role in overseeing the financing, because that's the whole basis of that field.

[Dennis Bevington, NDP, Western Arctic, NT]

Mayor Kusugak, your community is getting quite large, and of course you're running on diesel gensets. If you look to the Northwest Territories, this summer Diavik mine is erecting a very major wind farm in an area where the wind resource is not even as good as in Rankin. Do you see some hope for renewable energy in your region?

[Pujjuut Kusugak]

We would love to see any way of bringing down costs, for everything, energy especially. The cost of fuel is extremely high.

The advantage other places have is that they have highways that can bring up these supplies year-round. Our shipping season is two and a half months. To be able to bring in all of these building materials for things like windmill farm energy will be quite difficult.

I invite anybody or any company that wants to do a pilot project to come to Rankin or Baker Lake, where there are two mines—one operating and one possible—to see if the cost of energy can be brought down and to see if it's feasible in the north.

[The Chair, Conservative, Leon Benoit]

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

Mr. Galipeau, up to five minutes.

[Royal Galipeau, Conservative, Ottawa—Orléans, ON]

Thank you very much, Mr. Chairman.

Mayor Jenkins, Mayor Kusugak, and Councillor Tapatai, I want to tell you how touched I was to hear your testimony today. We are hardened parliamentarians, and we hear a lot of testimony at this table. You didn't only give us information, you gave us heart, and for that I want to thank you. I want to thank you for the sacrifices you've made to get here.

Mr. Tapatai, I want to thank your city council for trusting you as their delegate here. You've done them proud.

I want to apologize for not wearing one of my silk ties that was made in Baker Lake. When I saw you, I thought, oh, I should have done that. I get more compliments for them than for anything else.

You get your goods from the south through the sealift. It comes in about July, I suppose.

[Peter Tapatai]

It will start coming in July, give or take, when the ice leaves. We'll be done in October.

[Royal Galipeau, Conservative, Ottawa—Orléans, ON]

It is the same thing in Rankin Inlet.

I've visited the capital cities of all three territories, but I've not been in any of your communities.

Ten years ago or so, my wife and I were involved with the Canadian Association for Suicide Prevention, and we organized conferences at Inuksuk High School, in Inqaluit.

Is there a high school in Rankin Inlet, too?

[Pujjuut Kusugak]

Yes, there is. It's called Maani Ulujuk Ilinniarvik, and until recently it was also the regional high school. Many high school students had to come to Rankin, until recently.

[Royal Galipeau, Conservative, Ottawa—Orléans, ON]

I think your member of Parliament went to that school.

[Pujjuut Kusugak]

I can't confirm that.