Natural Resources Committee on June 21st, 2012

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

I have one quick follow-up question on that. Quite often when we have heard from witnesses, we've all been talking about what I would call the lower-level jobs. What are your companies doing in particular to promote—not promote in terms of a job—to actually ensure that some of these indigenous peoples actually get opportunities in supervisory and management roles?

[Jody Kuzenko]

I'll take that one. We have a very specific example at our Voisey's Bay operation. For the first time we have just promoted an Inuit individual to the level of manager. We specifically target these people for outside-work-hours education in our Voisey's operation. That's one of the things we're doing to ensure that people aren't relegated to lower-level positions just because of their social status.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Daniel.

We go now to Mr. Trost for up to five minutes.

Go ahead please, sir.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Thank you, Mr. Chair.

A very interesting phrase was used by Ms. Kuzenko when talking about Vale's use of capital, and that was capital paralysis. I was thinking in particular that you're an international company, so here's a question for you. When it comes to allocating resources around the world—wherever it is, whether Brazil or Toronto—and they sit down and say they're going to spend x number of billions of dollars. How much does regulatory paralysis come into the decisions as far as allocating capital goes? When they go through the process to decide where they're going to put the money for the next mine, where in that process are regulations?

[Jody Kuzenko]

I would say the two considerations are inextricably linked. When a company decides that it wants to spend significant dollars, particularly in a global economy that's a little bit uncertain at the moment, we require a regulatory framework that provides some certainty of compliance now and compliance in the future. So if we have an air emissions framework that sees this perpetual movement down to zero when we're making a $2 billion investment in our Sudbury operations, and we have a provincial regulatory framework in that domain that is extremely complex and extremely uncertain, and the federal government come in with its BLIERs, for example, that creates a lot of uncertainty when you go to a board of directors and you say, “Can I please have $2 billion?” and they say “For what?” and you say, “To retrofit our smelters so that we're compliant with the law”, and they say, “After that's spent, will you be compliant?” and you say, “I don't know”. That's the kind of paralysis I'm talking about, and that's the kind of certainty we're looking for from government at all levels.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

One of the things, of course, is in comparison to what?

You've had experience around the world. We have political stability in Canada. Putting a project in Venezuela will have its own set of challenges. In comparison to other jurisdictions in the world, how does Canada rank? Internally, have you had different experiences inside Canada? Someone expressed to me a couple of days ago that what the government is really looking at doing is taking the Yukon model and expanding it to the entirety of the rest of the country.

Have you had experience with very productive jurisdictions in Canada? What jurisdictions around the world have you had productive regulatory experiences with?

[Jody Kuzenko]

I would say in answer to your first question, to give credit where credit is due, Canada ranks relatively well in terms of government and regulatory frameworks around the world. We have a stable political framework.

We're going into countries in Africa. It's a lot more unstable there. There's a lot more uncertainty politically and from a regulatory perspective. Brazil is the same. There's a lot of regulatory layers that need to be navigated through.

I would say our experience is that while Canada does require improvement, certainly it is one of the leaders in the pack.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Mr. Macdonald, you have a mine up and running in the Northwest Territories. From the last three witnesses we've heard that Yukon, the Northwest Territories, and Nunavut are three different planets, with Yukon being where people, by and large, have seen the best experiences.

From your experiences in the Northwest Territories, what would you change? Based on your experiences and the history of your business there, what would you recommend be changed as far as regulations and the way the federal government deals with regulations are concerned?

[Gordon Macdonald]

I think the biggest challenge in the Northwest Territories is the role of Aboriginal Affairs and Northern Development Canada and whether it's being devolved or when it will be devolved to the Government of the Northwest Territories.

Right now, Aboriginal Affairs and Northern Development Canada has had a central role in just about every regulatory decision. They either need to take a very strong leadership role and clarify the regulatory process, or devolve it to the Northwest Territories and help them create the same thing. I think they need that certainty of who's driving that ship. I suspect that's why Yukon has been successful.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Have you had any experience in any jurisdiction other than the Northwest Territories with Diavik, or have you stuck to the one project?

[Gordon Macdonald]

That's the only project within Rio Tinto. I have worked in Alberta on regulatory environment.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Okay.

In your other experiences with other companies you haven't had any jurisdiction experience.

[Gordon Macdonald]

No.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Okay.

I have one last question for the Mining Association of British Columbia.

You're somewhat different from the territories. From your experience, does it work well between the province and the federal government with jurisdictional overlap? Are we at the proper place where we are now, or are changes such as moving to, again, the Yukon model what you would like to see more of for British Columbia and the British Columbian industry?

[Karina Briño]

Absolutely. The mining sector in British Columbia has been talking to both levels of government, the provincial and federal governments, for a very long time about what we used to call harmonization. There is tremendous duplication in the process. A lot of the time even the same experts, the same scientists, are looking at the same information with a different requirement in terms of whether they're reporting to the provincial level or the federal level.

This is something we're very encouraged to see. I believe it's actually going to allow the experts to be more focused in their review of the projects, because they won't be going back and forth between themselves. It's going to be one review for that particular project.

We're certainly encouraged to see how this is going to be rolled out and implemented. It isn't 100% clear to me that we have the answer to how it's going to be decided, as to whether it's going to be a federal or provincial review, but part of the opportunity we have going forward is to have that conversation.

We're very much interested in seeing that one-window approach. Yukon does provide a very good example for that. We do have a different reality in B.C. with first nations. I think there are 203 first nations that we have to work with. The Yukon model is not necessarily that easily transferable to British Columbia, but the concept is something that we support.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

There's a scalability.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Trost.

We go now to Ms. Ashton for up to five minutes.

[Niki Ashton, NDP, Churchill, MB]

Thank you very much.

I wanted to pick up on your comments, Ms. Kuzenko. I'm very encouraged by your clear commitment to ensuring the creation of value-added jobs at Vale in Thompson, in light of the announcement that took place, of course.

I just wanted to go back to a couple of points you raised. In fact, the ore from Voisey's Bay that has been processed is less than 50% of the Thompson operation. The rest is actually ore from Thompson itself. While we all agree that Labrador should be able to process its own ore, we believe that Manitoba should process its own on its own territory, of course.

With respect to emissions, as you might know, the idea of working in Manitoba makes good business sense because of the reliance on hydroelectricity. Therefore, there are much lower carbon emissions than in other jurisdictions. Of course, added to that is a very competitive price. They have some of the lowest electricity costs in the world, frankly. These are some of the things Vale knew they were taking on as a result of buying out Inco. They were definite selling points for Inco for many years, and we'd like to see them continue to be as Vale continues to work in our communities.

I don't want to pre-empt the discussion. The Premier of Manitoba is actually going to be in Brazil this week meeting with the CEO of Vale. He will be echoing the message that value-added jobs are so critical.

Here we are talking about mining in the north. If we're talking about the importance of employing people, including aboriginal people, let's be frank. Beyond actually mining underground, some of the best jobs are value-added. They are less so in the service sector. Maintaining these value-added jobs allows for employment opportunities for people—aboriginal and non-aboriginal people—in northern Canada.

What I'd also add before going back to my question is that we're seeing serious commitments from other mining corporations. Hudbay has made incredible investments there in terms of a zinc find and the quick development of a mine just dozens of kilometres down the road from Vale. So there are a lot of opportunities to partner. There are a lot of opportunities to look at how value-added jobs can be maintained.

To what extent is Vale prepared to commit to not only ensuring value-added jobs but to sitting down with the province—recognizing that resources are actually under provincial jurisdiction—and the city about the mechanics of finding a solution, a solution being value-added jobs at a Vale operation in Thompson, Manitoba?

[The Chair, Conservative, Leon Benoit]

Ms. Kuzenko, go ahead, please.

[Jody Kuzenko]

Now there's a leading question.

I would say that if your minister is speaking with our CEO this week, that demonstrates a commitment to sitting down and having a dialogue. I'm aware of many conversations that have taken place with the Thompson community, the government at the municipal level, and the government at the provincial level in which we have again and again reiterated our commitment to maintaining value-added jobs in the city of Thompson. I don't believe that the smelter and refinery shutdown is the beginning of the end of our Thompson operations. I sense that this may be a catalyst for some of the concerns.

I am slightly concerned about this notion that resources produced in a province need to be smelted and refined in that particular province. I think that a province holding onto those resources drives some unintended consequences, shall we say, from our perspective federally or nationally. I think that kind of logic could be problematic.

When I was talking about air emissions, I wasn't talking about GHG specifically. I was talking about SO₂ and nickel and CEPA toxics. While that certainly wasn't the primary driver for shutting down the smelter refinery, it was a consideration.

So yes, open dialogue is an important part of what we do. We're not forecasting job losses as a result of the shutdown. As we say, we're moving gracefully into a mine-mill operation. We'll continue to dialogue with the community and governments at all levels to make that go.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Ashton, your time is up.

We go now to Mr. Strahl for up to five minutes.

Go ahead, please, sir.

[Mark Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

Thank you, Mr. Chair.

And thank you for recognizing me even without a tie this morning.

[The Chair, Conservative, Leon Benoit]

Now I have to take it back. Next.

[Voices]

Oh, oh!

[Mark Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

Being from British Columbia I'm not a regular member of this committee, but I'm happy to be here today with the Mining Association of British Columbia here. My riding has the Bralorne mine up in the northern part of that. There's talk of the reopening of Carolin mine in the Hope area because of the price of gold. Definitely the people of Hope are hoping for that because they've seen, as natural resource jobs have dried up over the years, an actual reduction in the number of people living in their community. So there's great hope in the north of my riding for economic development from natural resource development, and certainly they've welcomed the changes in Bill C-38.

I wanted to talk to you about the National Energy Board review process. We've heard, on the long end, things like the Mackenzie Valley pipeline, and how many years that took to go through. I'm wondering if you can give some examples of the lengthy National Energy Board review process and whether you think that 24 months is a sufficient time for public input, scientific review, industry input, and what effect that will have on the mining industry in British Columbia.