Thank you very much, and good morning everyone. Thank you for the opportunity to be here.
My name is Pam Schwann, and I am president of the Saskatchewan Mining Association. Our association consists of mining and exploration companies that are active in Saskatchewan, and the names are indicated on the screen.
I want to give you a snapshot of the current Saskatchewan mining industry. We're a global mining leader. The annual Fraser Institute Survey of Mining Companies has identified Saskatchewan as the number one jurisdiction in Canada, and number two in the world in terms of investment attraction, based on the factors of the region's geological and policy framework.
We have the world's highest grade potash and uranium deposits that offer us a clear geological advantage. However, a number of policy factors, including ongoing regulatory reviews and related regulatory uncertainty, land access, political stability, and lack of clear policies, are resulting in a decrease in confidence that Canada offers an attractive environment for mineral investment.
In terms of mineral production, Canada is the world's leading miner of only two commodities, uranium and potash, and 100% of both of those commodities now come from Saskatchewan. We produce 30% of the world's potash, and 22% of the world's uranium. Within Canada, Saskatchewan is the number two jurisdiction in terms of the value of mineral exports, and we are leading in terms of indigenous employment and business development.
In terms of exploration, Saskatchewan is number four in Canada for mineral expenditures. In 2015 we had $213 million in expenditures, dominated by uranium and potash, with only minor base metals, gold and diamonds.
Mining, short and simple, is a pillar of Saskatchewan's economy. There are over 30,000 people directly and indirectly employed by the industry, and it comprises 6% of provincial GDP.
The map really shows the jurisdictions where uranium mining occurs in the Athabasca Basin, where potash is located, coal mining is along the south border of Saskatchewan with North Dakota and Montana, and base metals and gold are in the middle.
In terms of mining and public support, one of the refrains we are regularly hearing is the need to regain public confidence. I felt it was very important to share with you public polling data from Saskatchewan that indicates that nine out of 10 residents are supportive of the mining industry, including 50% who are strongly supportive. Additionally, 84% think that the mining industry is very important to Saskatchewan. That's based on a poll of 1,000 Saskatchewan residents.
Certainly, a key to this support is that EA reviews and licensing hearings in Saskatchewan are inclusive. Indigenous communities and leaders are encouraged and supported in participating, and no community or individual has been denied the opportunity to participate. Short and simple, there is confidence in the regulatory process in Saskatchewan throughout the life of a mine.
With respect to indigenous relationships and economic outcomes, mining is one of the few sectors that delivers jobs and economic growth to indigenous people in Canada. A recent paper by Blaine Favel and Ken Coates offered that the resource sector is at the vanguard of reconciliation with indigenous people in Canada. We think this is particularly true in Saskatchewan where there is a decades-long constructive relationship with indigenous people.
Mining provides wealth creation, economic development opportunities, and improved educational outcomes in the communities that have systemically high poverty rates. In 2015, 45% of all northern Saskatchewan mine workers, 1,526 people, are of first nations or Métis heritage. This represents a payroll of $107 million a year. One in every five jobs in northern Saskatchewan is directly related to mining.
In 2015, $388 million worth of goods and services were purchased from indigenous-owned northern companies or joint ventures. That represents 41% of all goods and services purchased. Mining operations in southern Saskatchewan have also more recently focused on engaging indigenous people as employees and as suppliers in building educational economic capacity in indigenous communities.
With respect to indigenous relationships, environmental stewardship, and community engagement, community engagement is a continuum throughout the mine life cycle, from exploration to EA reviews, to mining and decommissioning. Community participation occurs through monitoring vehicles such as collective benefit agreements, IBAs, surface lease agreements, northern environmental quality committees, the eastern Athabasca regional monitoring program, and the eastern Athabasca working group.
In terms of the state of mining in Saskatchewan, between 2008 and 2015 over $25 billion was invested in the Saskatchewan mining industry. However, I think everybody is aware that we're shifting gears right now and we're seeing a retraction in commodity prices resulting from reduced growth in China and India and also undisciplined global production from state-owned enterprises that has produced surpluses and driven commodity prices down.
The graph shows you this significant decrease in commodity prices for uranium, from a high of $138 U.S. a pound in 2007 down to $25 a pound today. Prices for potash declined from a high in 2008 of $873 per metric ton down to $213 per metric ton today.
However, the long-term fundamentals that underpin the Saskatchewan mining sector are strong. They are simply that the world's growing population needs more quality food and clean energy on a reduced land base. That's how potash, uranium mining, and carbon capture and sequestration technology being developed in Saskatchewan are part of the solution to feeding the world and providing clean energy to the world.
That's a snapshot of where the Saskatchewan mining sector has been. What I'd like to talk about is what the future holds, which is what you're interested in now, as well.
We believe the Saskatchewan mining industry can be a primary contributor to the government's key priorities of developing a clean energy economy and indigenous reconciliation.
Nuclear power generation currently provides 11% of the world's electricity. Saskatchewan has the highest grade uranium mines in the world. We have a natural advantage in contributing to nuclear power generation. The McArthur River and Cigar Lake mines provide 20% of the world's uranium—two mines provide 20% of the world's uranium—to fuel clean energy and reduce global GHG emissions.
A recent study has also confirmed that uranium mining and milling activities contribute only a very minor amount to the total GHG, making nuclear one of the cleanest energy options for the world's growing population, particularly in densely populated countries.
In terms of carbon capture and sequestration, we do mine coal in Saskatchewan. It's used for thermal power generation, and it's our primary baseload power. When the federal regulations with respect to coal thermal generating stations were introduced a few years ago, our governments invested heavily in carbon capture and sequestration. It's successful. It's working. In Saskatchewan, one million tonnes of CO2 was captured from Boundary Dam just this past year. That's the equivalent of taking 240,000 cars off the road. Saskatchewan has a population of just a million people, so that's a very significant amount.
With China building one new thermal coal plant every seven to ten days, as well as additional nuclear power generation capacity, CCS technology will be required in the world.
In terms of indigenous relationships, as a Canadian and global leader in the participation of indigenous people and communities in mining, Saskatchewan has a portfolio of best practices to help close the economic and social gap between indigenous and non-indigenous people. The best practices are exemplified by the recent collaboration benefit agreements signed by Cameco and AREVA with northern communities impacted by northern mines and include workforce development, business development, community engagement, environment stewardship, and community investment.
In the slides, you can see some of the high-tech mining that occurs at Cigar Lake. You can see as well an individual from the Hatchet Lake Band doing some water quality sampling that's part of the eastern Athabasca regional monitoring program.
In terms of clean technology, Saskatchewan mining operations continue to reduce the energy and water intensity usage as well as GHG emissions through initiatives such as heat recovery cogeneration. We're also early adopters of technology, such as continuous mining—all our potash mining is done by continuous mining—remote control mining, such as is done at Cigar Lake and McArthur River with the high-grade uranium mines, and the use of electric vehicles. All the person carriers, used by the potash companies for their underground mining are electric now. We have a manufacturer of electric vehicles based right in Saskatoon, with Prairie Machine and Parts.
Challenges to our sector that might prohibit it from being able to contribute to its potential in the future include a number of items. Regulatory review is one. We've undergone constant review of federal environmental legislation in the past decade, and it's contributing to investor uncertainty. This includes multiple reviews of CEAA, the Fisheries Act, metal mining effluent regulations, and navigable waters legislation.
Mining activities are bearing a disproportionate amount of regulation compared with their footprint and with other sectors. For example, mining contributes less than 4% by sector of GHG, yet it's being identified as something that's required in the CEAA reviews.
As to the Species at Risk Act, there are conflicting recovery strategies with a species-by-species approach, and no permanent mechanism is available. It's in the regulations, but the bureaucracy has not developed any way that a permit under SARA can be utilized. We have at least one mine in Saskatchewan that has decided not to proceed due to uncertainty with respect to the Species at Risk Act. That represents over $2 billion in investment, and 400 long-term jobs.
Access to land is important for us as well, and there are challenges on that front.
Regarding access to capital, flow-through financing is critical for junior companies. It has led directly to mine discoveries in Saskatchewan, such as the Santoy gold mine, or discoveries with additional investment, all the while creating employment and business opportunities in a robustly regulated environment.
There is a need to continue to develop indigenous relationships within a constitutional framework. The duty to consult and accommodate is supported by the mining sector, and while there are challenges with it, we're managing to work our way through it. However, introducing concepts such as UNDRIP and FPIC into the CEAA review process introduces confusion and uncertainty with indigenous communities, governments, and industry. Nobody knows what they mean, everybody has a different understanding of what they mean, and they are raising a lot of uncertainty. Ultimately this may result in an erosion of the progress made with the mining sector and indigenous communities, as we've seen in Saskatchewan.
Ensuring a culture of safety is of utmost importance to our members. The legalization of marijuana is regarded as a very serious safety issue within the mining sector. I can't really underscore that enough.
Regarding rail transport capacity and service, Saskatchewan potash is a leading customer of the rail service, and ensuring rail capacity as well as timely service has been an issue in the past. Unless it is addressed in the current CTA review, it will continue to be an issue when potash exports increase.
Finally, in summary, mining is a pillar of Canada's current and future economy. Multi-billion dollar investments are made by mining companies with long-term vision. While this is a particularly challenging commodity cycle, the long-term fundamentals remain positive for Saskatchewan's mining industry. We have a natural advantage because of our geological framework. Mineral resources can't be shifted to other jurisdictions like manufacturing opportunities can.
Saskatchewan contributes to the government's clean energy priority both within Canada and globally through uranium mining and CCS development. Let's make sure our policies enable us to leverage our natural resource advantage while at the same time reducing global GHG emissions.
Saskatchewan mining addresses the government's priorities of indigenous reconciliation through our demonstrated and leading practices. To achieve the government priorities of clean energy and indigenous reconciliation and to capitalize on our natural mineral resource advantage, it is critical to develop and implement a competitive policy and legislative framework to complement our geological framework.
The committee's work in advancing this position is welcome, to ensure the sector continues to contribute to Canada's economic and social well-being for generations to come.
Thank you very much.