Natural Resources Committee on Oct. 3rd, 2011

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

He would be in the best position.

We got a reply concerning a potential agreement among 13 Northwest Territory councils. I believe that Mr. O'Neill referred to a model—the Alouette model—which could be used as an example. What is that potential model like?

[Patrick O'Neill]

The board's structure north of 60 is a function of the comprehensive land claims. To the best of my understanding, the chief federal negotiator who was appointed had to initiate a round of consultations with first nation groups. It's something they negotiated with the federal government at the time of their claims to come to a more streamlined model.

I believe my colleagues at Aboriginal and Northern Affairs Canada would be better positioned to give you an update, because they're working on their northern regulatory improvement initiative.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Perhaps I didn't understand you well through the interpretation, but you referred to a potential model and I believe I heard you say that it is called “Alouette”. What are you referring to exactly?

[Patrick O'Neill]

In the Inuvialuit settlement region, the ISR, they have their own environmental assessment regime. Most people in industry, particularly the oil and gas industry, would comment that it's a much easier system to navigate. It has its own reasons for that, whether it's the first nations' perspective toward development or issues like that, but it seems to work better, to my understanding.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Lapointe.

Mr. Lizon.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Looking at the map on page 6 of your presentation, it looks as though there is big potential for further exploration and development of minerals that have not yet been tapped into.

Can you expand on what impact this will have on the north, and is there an estimate of the number of new projects that can be developed there?

[Anil Arora]

To say today that we have a really good picture of the overall potential of the north would be premature. As I was saying earlier, something like 60% of the territories in the north don't have the level of detail in terms of geoscience as we do in the south. Now we're doing something about it. We will be investing $100 million over the next decade or so to try to bring it up to the same level.

As I said, that's going to provide the private sector with the kind of information it needs to look at to see where the prospects are. You can already see where there are some prospects. We have a vibrant diamond industry.

Through Baffinland and L'Anse aux Meadows, we're seeing the exploitation of Mary River, a huge iron ore deposit. We are looking at investment somewhere in the $4 billion to $6 billion range on a project that will last 100 years. It's going to look at the kinds of investments in ports and infrastructure and vessels and so on.

My feeling is that this is the future for Canada. It is an area where we're going to put a lot more emphasis to learn about the geological potential. And then with the kind of investment in infrastructure and other things, how do we turn that geological potential into economic potential? I think we're just at the beginning of knowledge in this area.

But as you can see, and as I was saying earlier, 14 out of the 48 projects under way are in the north. I think it shows the kind of interest in the north and the desire to do some more detailed work in the north and to explore and exploit the potential there.

[Ginny Flood]

I can add to that. I'll just give you the example of the Meadowbank project. It's about 340 jobs, a 10-year project that's worth about $457 million. A number of other projects are coming in the longer term. Mining projects range in size, but that's a fairly average project.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Because these projects are in the north, there are challenges that don't exist in many parts of the world, including many parts of Canada. It's a vast area.

You were asked about where we sell the products, but I will ask how we ship the products.

A question was asked about the infrastructure cost. Do you by any chance have any estimates as to how much the infrastructure development for these proposed projects would cost different levels of government or, really, the taxpayers, regardless of which coffer the money comes from?

[Anil Arora]

Again, it really does depend on each project. Take, for example, Mary River, the one I mentioned earlier on Ellesmere Island. This is a massive project, a very rich deposit. It's probably the richest deposit in the world, both in terms of quality as well as quantity.

We're talking about this company investing in a new class of ships that are going to be able to break through the ice all year round and come into the inlet, and then in an efficient way being able to transport that bulk material to Europe, for example. You have some very interesting infrastructure. Building railroads on permafrost and keeping that kind of railroad going all year and trying to keep it from sinking, if you like, are the kinds of challenges there are. Every project has its unique characteristics. In this case it's going to be the private sector, for the most part, that invests in this kind of infrastructure.

Where we see a cluster of individual projects, where there's no business case for industry to be able to do that, that's where governments are going to have to start to look at it. We have examples of that, for example, in northern B.C., or what we're talking about in the Plan Nord or the Ring of Fire. Governments look at the benefits of investing that make an entire suite of projects economically viable as opposed simply to being geologically viable, because of the returns to us in revenues and royalties and taxes and so on.

As for trying to come up with a figure for the entire north, it's a bit premature. I think we have to look at it in a clustered way—and that's where we are. In fact, at the last energy and mines ministers' conference, there was agreement among ministers to start to look at the clusters around the country, at how we go from this geologic potential to economic potential. That's the kind of work we're doing.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Lizon.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Are we out of time? Is my time up?

[The Chair, Conservative, Leon Benoit]

You're finished. You're toast.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

I'm toast, okay.

[The Chair, Conservative, Leon Benoit]

As in, fini, finito, but good try.

Now we go to Madam Day, for up to five minutes.

Go ahead.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Thank you Mr. Chairman.

My first question concerns page 2 of your document. You talk about sustainable development in the far north. I would like you to define what you mean by sustainable development.

[Anil Arora]

I apologize, but could you repeat the question?

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Yes.

On page 2 of the document, in the first line of the first paragraph, you say that Natural Resources Canada contributes to sustainable development in the north. And so I am asking you how you define sustainable development.

[Anil Arora]

Of course, the term “sustainable” is quite subjective; the word “sustainable” does not define all of the concrete aspects or measures involved.

By and large, the intent is to have a project that will ensure a balance between economic potential and environmental repercussions, and provide future opportunities for the communities, which will be able to derive benefits from these projects for a longer timeframe than that offered by mines, for instance. If we invest in infrastructure, it will stay in place much longer than a mine would. We can also invest in workers' education, which is also something that will last much longer than a mine.

So we want to invest in a sustainable way in this type of project and there are examples of them everywhere.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

So the investments that will be made there will be like a legacy you will be leaving to future generations.

I would like to ask you a second question. You talked about the possibility of a railway being built right on the land. We know that the permafrost is fragile in the far north.

What are the technical challenges you face in building a solid structure, one that will endure without damaging that part of our planet?

[Anil Arora]

There are certainly challenges with regard to our projects in the north, that's a fact. In our laboratories, we work with the communities, industry, and the territories and the provinces, of course, in order to find solutions to minimize and even eliminate negative impacts. Thanks to technology, we have examples of cases where alternatives were found. We invest in projects with industry.

In our sector, there is a project known as the Green Mining Initiative. Ten million dollars have been allocated to projects with other stakeholders to find ways of minimizing negative impacts. We are making progress currently.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

What are the challenges?

[Anil Arora]

As we already mentioned, among these challenges are water quality, impacts on biology, on organisms; how to reduce the amount of energy that is needed to break down rocks; waste reduction, etc. As I already said, we have come up with some very interesting solutions.

I will give you the example of a project that was carried out in Sudbury, but the concept can be applied elsewhere. They combined the waste from a mine to that from the city of Toronto, for instance, in land that had not been used before; afterwards, they grew plants to be used in the production of biofuel. In short, they used two types of waste in a field that had never been used before and thus had little value, and this led to something concrete that we will be able to use to reduce energy consumption.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

You said that exports derived from the development of our natural resources were mainly to the United States, but that there were developments involving China and Europe in this area.

Could you tell us—and I am not asking you for an exact figure if you don't have it to hand—what percentage of these resources stay here in Canada to be processed and have value added?

[Anil Arora]

Of course, we process several products in Canada. I don't have the exact figure. The fact remains that we are a part of a free market and that in that context it is up to industry to determine if that is really worthwhile. We have also carried out studies. Where copper is concerned, we have determined that it is more profitable for Canada economically speaking to only do the mining extraction, and not do the rest, the subsequent processing. The case was not exactly the same for all of the minerals. We work with industry in order to find ways of adding value to resources here in Canada. We have managed to do so in certain situations.

Be that as it may, you are correct: in many cases we can't process the products either because of the cost of energy, the cost of labour, transportation, infrastructure, and so forth.