Natural Resources Committee on June 19th, 2012

[Dennis Bevington, NDP, Western Arctic, NT]

I might say that devolution without the fiscal capacity is very limited. Without every province in this country having the capacity within itself to invest in its own territory.... This is something I think we've had a discussion about.

Dr. MacDonald, I found your presentation on the socio-economic impacts of the recent diamond mine development in the Northwest Territories very accurate and very complete.

With respect to the regulatory system, we did a research paper that looked at what people in the Northwest Territories said about the regulatory system. We found that no one was coming out and saying that we needed to consolidate the boards. That wasn't an issue. In fact, most people who spoke up on this, throughout the whole territory, including the territorial government the one time they spoke on their position, said that they don't need to consolidate the boards and that it's not a good idea. Is that your understanding of what the general situation is in the Northwest Territories?

[Dr. Ginger MacDonald]

Thank you for the question, Mr. Bevington.

That's my understanding. The boards that do exist, which have grown out of the land claims authorities, have strong technical expertise. They bring in people who are harvesters. People who know the land are on these community-based or government-based boards. The boards are elected or appointed by the aboriginal authority and by the GNWT. And co-management is working. They're making solid decisions. They have excellent scientific backup and excellent indigenous backup on both scientific knowledge and indigenous science.

The appetite for making a super-board, or one board, is simply not there in the north. I think it may well quash the expertise that exists and that has grown up very strongly in the area. I see the boards on their own. Each has grown up on its own and is very much a regional board that is managing specific and particular issues in that region. Each is building excellent aboriginal capacity and non-aboriginal capacity to manage the issues.

Where are they going? They've built policies. They've managed to work together. They've managed to coordinate among themselves and have designed excellent and leading policy that other countries are looking to for northern capacity and northern governance.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Bevington.

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

[David McGuinty, Liberal, Ottawa South, ON]

Thank you, Chair.

Good morning, everyone.

Can I turn to you, Dr. MacDonald, for a second? You made some comments about companies and their responsibility with respect to environmental assessment processes. I didn't completely understand what you were saying about companies driving up stock prices. I guess they are sort of whipping the market into a bit of a frenzy and are putting a lot of pressure on the EA process. I didn't quite follow what you said afterwards. Can you help us, from your experience, understand what you meant by that?

[Dr. Ginger MacDonald]

Certainly, and thank you for the question.

Junior mining companies are dependent on capital that's raised through the stock markets. In order to access them, they have to have a series of press releases that raise good news. These are generated through good news that emerges in any form. Currently, I find that many of the mining companies that don't have secure access to capital through banking, which maybe have a project that isn't so far along, use the process of regulatory environmental assessment to generate good news.

So they enter it too early. That generates press releases. They continue to have a steady stream of press releases that continue to generate good news, and they put the pressure on the regulatory system to be timely, to push forward even though they're not ready to describe their project accurately, because they're not far enough along in their own planning for the issues that were raised here—power, transportation, access to the deposit, the description of the deposit itself, and the way they're going to get at the deposit.

So that puts pressure on everybody around them to respond and to move in a system where we're not responding to good information. Right now I'm dealing with an example in which a company can't give strong answers on critical issues with respect to water quality or critical issues with respect to closure, because they simply entered way too early and they haven't gotten far enough along and they don't have enough information on the nature of the deposit or on the nature of the rock they're dealing with to give us good answers. As a result, there they are in the regulatory system, and they'll have their certificate before they have an accurate description of their project.

[David McGuinty, Liberal, Ottawa South, ON]

So they whip the market into a frenzy to raise the capital. They put inordinate pressure on the regulatory body. The regulatory body responds by saying okay, let's go, and the companies are not prepared to actually comply, which leads to delays, right? Is that what you're saying?

[Dr. Ginger MacDonald]

Yes.

[David McGuinty, Liberal, Ottawa South, ON]

Is this a frequent occurrence?

[Dr. Ginger MacDonald]

With junior mining companies, it is, absolutely.

[David McGuinty, Liberal, Ottawa South, ON]

Can you name the case we're talking about now?

[Dr. Ginger MacDonald]

Well, one of them's been in front of you. Fortune Minerals has been in front of you and they have a case in which they're not able to describe those two issues—water quality and closure. It's absolutely clear that they don't have the answers on those areas. We're dealing with them in an environmental assessment this minute.

[David McGuinty, Liberal, Ottawa South, ON]

You mentioned there were well-established studies and evidence to suggest that a lot of the delays were in fact proponent-caused. I think you mentioned that it was a little strange for you to see a government or just the dialogue fixating on timelines when a lot of the evidence seemed to suggest that, again, these delays were proponent-led.

Do you have any evidence or research you can forward to this committee so we can rely on it?

[Dr. Ginger MacDonald]

I'll send the reports that have been done in NWT. There's the NWT audit, which has a line on that.

Also, the Mackenzie Valley Environmental Impact Review Board had an external peer review, which suggested, along the same lines Mr. Bevington was suggesting, that the system is working just fine and that any delays have been associated with either the developer or have been delays at the back end associated with having everything being done in the north and then sitting on a desk in Ottawa. So there are those kinds of things.

[David McGuinty, Liberal, Ottawa South, ON]

Let me jump ahead to another subject.

You did a guide in 2010 on the IBA community toolkit, which I commend you for. It's a fantastic piece of work. Let me ask you, though, in terms of the mature, 21st-century approach to doing deals with aboriginal peoples, would you agree that it's time for project proponents to begin a lot of dialogue and negotiation on the basis of the premise that equity participation will be forthcoming?

[Dr. Ginger MacDonald]

That's a great question.

Equity participation is something we're seeing in some deals. I recently published a paper on the five different financial models associated with these kinds of agreements—impact and benefit agreements—and equity participation is one of them.

It depends. Equity participation comes with risks, and sometimes an aboriginal government cannot enter into those risks. If you need a secure stream of funding to support urgent needs, such as dealing with housing or youth suicide, for example, which is a key issue, you need secure funding that's there dependably each year. Equity participation cannot guarantee that, because of the risks. So it depends on what the government needs. I think mature governments are looking at agreements, assessing what their funding stream is, the dependability of their funding stream, and then turning to the agreement possibilities and selecting the adequate one. But certainly we are seeing equity participation as an option these days.

[David McGuinty, Liberal, Ottawa South, ON]

Do I have another minute, Mr. Chair?

[The Chair, Conservative, Leon Benoit]

You have a minute and a half, Mr. McGuinty.

[David McGuinty, Liberal, Ottawa South, ON]

Thank you very much.

Mr. Miltenberger, recently, and repeatedly, the Premier of Alberta has called for an energy strategy for the country. The Prime Minister's response has been, and I quote, “I don't know what she's talking about.”

Your territory has pursued, or you're coming forward with, an energy plan. You talked about hydro interconnected links. You talked about solar. You talked about natural gas wells and the role there. You talked about biomass, hydro, and wind.

The territory, I assume, participated in the energy ministers meeting about a year ago in Alberta—which we've heard neither hide nor hair of since. Do you think there's a real opportunity for Canada to come together, between provinces and territories, with the federal government, to actually have an adult conversation about energy?

[The Chair, Conservative, Leon Benoit]

Minister Miltenberger.

[Michael Miltenberger]

Thank you.

We're of the opinion that there is a need for two things. There's a need for a national energy strategy, which has been articulated a number of times. At the same time, you can't look at energy separate from water. There's a need for a national water strategy as well.

As you look across the country and you look at all the pressing issues, those two are enormously linked. The premiers have sat a number of times now, and they've all had the same opinion about energy. I've been making the case, and I've been environment minister now going on seven or eight years, about the need for a national water strategy.

So I think there is a role for the provinces, territories, and the federal government to come around the national table to plan collectively.

[The Chair, Conservative, Leon Benoit]

Just before we get to the second round, the first five-minute round, I do want to say that I'd like to leave 10 or 15 minutes at the end of the meeting to talk about the potential for travel in the fall and the report and things like that. That's just in the eventuality that we don't meet on Thursday as planned.

Starting the five-minute round, Mr. Anderson, go ahead, please.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Thank you, Mr. Chair.

I'd just like to ask you, Minister Miltenberger, is corporate manipulation of the regulatory process a major concern of your government? This is something new that we've heard this morning, and I'm just wondering about that.

[Michael Miltenberger]

The concern for our government, of course, is tied to devolution and timeliness. We know that where we see the constraints, we recognize that the federal government is moving on regulatory reform. We see, as I've indicated, regulatory reform as being tied to devolution. Once northerners can have control, and the decisions are made in the north... If you look to how it worked in the Yukon, that issue has been resolved satisfactorily.

I'm not that familiar with the issue raised by Dr. MacDonald.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

I want to go back to something Mr. Allen had talked a little bit about—namely, the specifics of educational training and bringing folks into the workforce who perhaps haven't had the educational opportunities that some of the rest of us have had.

Minister Taptuna addressed it a bit from his perspective, and I'm wondering if the other two of you who Mr. Allen had asked would just talk for a minute or two about how you see that playing out in your part of the world; how you think we can bring 400,000 possible job opportunities to folks who need to receive the education and training in order to participate in those; and how you see your territory carrying that out.

Then, Ms. MacDonald, how do you see that taking place in the north? This has been a recurring theme of our conversations as well.

[The Chair, Conservative, Leon Benoit]

Minister Miltenberger.