Natural Resources Committee on June 21st, 2012

[Gordon Macdonald]

I think the biggest, from a northern perspective, is to have some flexibility. Don't try to look at a solution that fits all of Canada the same way. I think the north has some different applications. So build in the flexibility to come up with flexible solutions that work locally, and particularly to address local concerns.

[Jody Kuzenko]

I couldn't agree with that more.

Having done a regulatory pathway on fish habitat with a one-size-fits-all approach, it's no different from first nations consultation. It won't work.

I think government needs to build a framework and a path that enables industry, local communities, and aboriginal groups to come up with solutions inside some defined boundaries. But a one-size-fits-all approach won't work in that circumstance.

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

Okay, thank you very much.

Ms. Briño.

[Karina Briño]

It would be the same. Site-specific is important to us, and also very clear definitions as to what that means.

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

Yes, a regulatory framework gives us a little bit more flexibility to do that.

Ms. Briño, in your presentation you said that 59% of your net revenues are coming from coal. I was interested to see that number. As well, 5% is thermal, and 95% would be for steel and....

Where is the market for those two, because I've been reading a lot lately that, especially in the U.S., there is a big dynamic in the big coal-producing states like West Virginia and Kentucky that actually with coal use for electricity generation going down quickly, a lot of jobs are being lost. I'm trying to look at the long-term prospects for coal in B.C. Typically, do you see it as positive because the coal is going to be used for steel?

[Karina Briño]

The story in British Columbia right now is coal, primarily metallurgical coal. We produce a minimal amount of thermal coal, and it goes to the U.S. For met coal, our primary customer is China. China and the Asian markets are really the places where our product is going.

We have tremendous potential in the northeast. It is being looked at. We have several projects in process right now. Most of the southeast operations right now are looking at expanding or are revising their opportunities for expansion. So coal will continue to be one of the primary commodities in B.C.

Metal production is going down. We've had a couple of mines shut down. With some of the new ones coming up, metal production will increase, but the story will continue to be coal.

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

As a follow-on to that, have you seen a difference in the regulatory process for the different kinds of mines, whether they be coal or other metals or something else?

[Karina Briño]

Certainly our members are getting a lot more savvy in terms of anticipating what's going to be asked of them as they enter the regulatory process. So I think we are doing a better job of producing as much upfront information as we can.

There is still the tendency to be asking for information at a very early stage when it's not really available or when we won't even know the information until much later in the process. There are still some inconsistencies and some issues in the process, and not necessarily in the legislation.

What we're focusing on right now is having a very clear understanding of what the new legislation says so that when the regulations are built, we can anticipate how to better fit that model.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Allen.

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

Thank you.

[The Chair, Conservative, Leon Benoit]

We go now to Ms. Liu, for up to five minutes.

Go ahead, please.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Thank you to all the witnesses.

My questions are mainly for Mr. Amos.

We know that climate change has had a big impact on the Beaufort Sea in particular. We have seen a record number of storms over the past decade, more than all the storms over the past thousand years. In terms of development in that area, can we be sure that we are keeping in mind that the climate is changing a great deal?

[Prof. William Amos]

In northern communities, climate change effects are being felt day after day. There is the permafrost. The ice in the Beaufort Sea is melting, thereby changing the habitat of animals and fish. As a result, the region’s economy is changing, because ships can now pass through there. Those changes have an impact not only on the environment but also on the culture and economy.

Northern governments and the federal government are faced with a big challenge. They have to develop an infrastructure that enables us to adapt to those changes. In light of available funding, the north cannot adapt to those rapid changes.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

In your presentation, you talked about the spill in the Gulf of Mexico. What lessons can we learn from that? What can we learn from the environmental assessment process in that incident?

[Prof. William Amos]

That is a good question. The presidential report that was produced after the spill had a number of major conclusions, but the most obvious conclusion we can all draw is that deregulation was one of the main causes for that incident.

Whether we are talking about environmental impact studies or authorization and permit processes, if the regulation processes are eliminated regardless of other protection standards, Canadians are going to pay the price, not only in the communities affected by the spills, but also for restoring the environment.

Companies definitely have legal responsibilities. For instance, BP will have to pay $40 billion. We will see what is going to happen with that lawsuit. At any rate, investing in the industry regulation process is definitely worthwhile.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Thank you.

My colleague Mr. Strahl talked about the deadlines for environmental assessments. In your view, what are the main reasons that delay environmental assessments? Is it because of consultations or other factors?

[Prof. William Amos]

I think that Ms. Briño's answer gave us a rather clear idea of the problems we have seen, in particular the fact that companies were sometimes not really ready to get involved in the environmental impact assessment process.

Often companies have come unprepared for an environmental impact assessment. This isn't necessarily large multinational companies; they are typically well prepared. Oftentimes companies, particularly the smaller ones, haven't done all the necessary studies and are requested by panels to go back and provide complete information so that their project can be assessed. That is what causes delays.

There is great politics being played right now around the impact of consultation on timelines. Clearly, that issue is centred around Northern Gateway. Leaving aside that particular issue, it is not consultation that is slowing processes down. Oftentimes it is companies that simply haven't done their homework prior to the environmental assessment process being undertaken.

[The Chair, Conservative, Leon Benoit]

Okay.

Thank you, Ms. Liu.

We now go to Mr. Daniel for the final round of questioning.

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

Thank you, Mr. Chair.

My question is for Mr. Amos.

Forgive my ignorance, but I was wondering if you could use the term “social licence”. Could you define that? Who has defined that? How are these organizations implementing that?

[Prof. William Amos]

Thank you, Mr. Daniel. It's a good question.

Social licence is one of 2012's most popular buzzwords. It falls, I think, into the category of terms like “responsible resource development” and “sustainable development”, which are eminently political and which these representatives of associations and companies are best positioned to define. Ultimately, it comes down to communities, be they local, regional, or national, and individuals buying into the social, economic, and environmental upsides of the projects in question. If there isn't buy-in, then ultimately, the project is going to cause more friction, and it's going to generate a net negative result in the eyes of the public.

It's impossible for anyone to say that a given company or a given project has social licence according to metrics X, Y, and Z. There are certainly processes available, particularly certification processes. Ms. Kuzenko mentioned the GRI process. There are different processes available that may help companies garner what is perceived to be social licence. But ultimately, it's a perception issue.

I think it behooves this present government to understand that strong federal environmental regulations underpin such social licence to operate.

Right now, I would suggest, looking forward to a storm cloud on the horizon, we are well aware that there are plans afoot to dismantle, in significant ways, the Species at Risk Act. There will be companies and industry associations that will say very candidly that the dismantling of the Species at Risk Act is going to impact negatively their social licence to operate, because there are going to be international observers, as well as local people, who will ask what's happening to the environment. They will ask how the federal protection regime is ensuring that we don't see the extinction of species X, Y, and Z when this industrial project is presented.

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

Presumably it's beyond just the environmental when we're talking about social licence.

Are there any comments from any of the others?

[The Chair, Conservative, Leon Benoit]

Ms. Briño, go ahead, please.

[Karina Briño]

My preference would be to talk about social responsibility as a component of sustainability. On industry's part, I believe that we are definitely committed to our corporate social responsibility. But I would also like to suggest that government has a social responsibility and communities have a social responsibility. To Mr. Amos's point, I think environmental organizations also have a social responsibility when it comes to economic development and how we do that responsibly.

The concept of social licence, I agree with you, is the flavour of the day, but we don't really know what that means. Do we need permission to be socially responsible? I'd like to turn that around and say let's come to the table and figure out how we actually get this done. None of us is interested in creating a mess. Collectively, we're all interested in figuring out how we create more value and opportunities for Canadians in general.

[The Chair, Conservative, Leon Benoit]

Mr. Macdonald, go ahead, please.

[Gordon Macdonald]

The only comment I'd add is that “licence” makes it sound as if it's something you can actually obtain. I think it's something we all have to earn every day in our jobs. It's a tough business to be in, and it's an ongoing relationship with civil society that has to occur.