Natural Resources Committee on Sept. 27th, 2016

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

With your mention of power in rural Ontario, I'm going to move to Mr. Mullally, and your company's great work, it seems, in moving towards electrification of your operations, especially in Musselwhite.

I've read articles. One says that, “Musselwhite Mine gets its electricity from an existing but inadequate 115kV line to Pickle Lake and a private190-kilometre extension of that line to the mine site.”

I could go on with the details, but I just wonder how those existing infrastructure challenges affect your operations, and whether this is some place the federal government might—

[John Mullally]

We're fed off northwestern Ontario. If you talk about the energy supply...and there's little in northwestern Ontario. We're in northwestern Ontario, in Red Lake and in Musselwhite. That's a 400-kilometre, what they call, single radial line. It goes out 30 times a year. It's very poor supply.

I'd be remiss if I didn't mention a project that we were involved in from 2012, which is called Wataynikaneyap Power. Now it's a wholly owned transmission company. It'll eventually be power operated and owned by 20 first nations along with.... Of course they have the backing of an infrastructure company, etc.

Goldcorp's role was to bring power through a large transmission of 220 KV up through to Pickle Lake. We brought the first nations that have the need to bring power, not just more power, just some power to diesel-dependent communities.

Goldcorp's intention was to bring the communities together to get aligned. Then we handed it off. It was a 50-50 JV, now it's a wholly owned company called Wataynikaneyap. I know probably some of you are aware of this. It'll really make a dramatic difference in northwestern Ontario.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thanks. I was going to mention Wataynikaneyap, but I didn't know how to pronounce it.

I want to move on. You operate primarily in Ontario but also, you mentioned, in Quebec, in Éléonore. Could you comment on your experiences in those two jurisdictions, Ontario and Quebec, and if there are any differences that might be instructive for us?

[John Mullally]

First would be infrastructure. Quebec has a plan. It's called Plan Nord. They have a plan to help and support the deployment of infrastructure in the north.

Second, electricity, not just infrastructure but the fact that you've got supply to the north, and a lot of supply. So you see there's quite a lot of development in northern Quebec.

People speak about the differences between the Cree from Quebec and the Cree and Ojibwa from Ontario. There are differences. The Cree grand council has been working with Hydro-Québec since 1974. There are differences between all the communities that we work with, but that's one that people do speak quite a lot about. Both communities, both provinces, are accommodating. Again, those are great places to mine. Challenges exist, but those continue to be places where we reinvest.

[The Chair, Liberal, James Maloney]

You have 30 seconds.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Just quickly then, Mr. Mullally, on UNDRIP and free, prior, and informed consent. You work in Chile where that is in place. I just wondered if you had any comments on Canada's.....

[John Mullally]

I was going to say earlier, we rely on our relationships with the communities. We build relationships so we understand the community's traditional way of living, what their expectations are, and so essentially that's the way we go about our business.

As I've said, it lacks the other stuff because there's no common understanding of how these things are deployed, let alone Supreme Court decisions. That would be part of the same. A principled policy framework that lays out essentially, for instance, even just the identification of communities, the impacted communities, because those are things that the communities themselves would like. They're surprised by certain others that are part of the catchment or a part of a specific...that are impacted by a project.

A policy framework that would provide certainty and an understanding would just become more of a business process for us, and then we'd continue to go about the most important part for us, to develop the relationship and include our communities in whatever procurement and employment, environmental consultation in all aspects, as they are today. That is the way it is most effective for Goldcorp.

[The Chair, Liberal, James Maloney]

Thank you.

Mr. Serré.

[Marc Serré, Liberal, Nickel Belt, ON]

Thank you, Mr. Chair.

I'll be sharing my time with Mr. Tan, who has the first question.

[Geng Tan, Liberal, Don Valley North, ON]

Thanks.

I agree with Richard. I don't think China is continuing to build that many thermal coal stations. Instead, I think they are going to build 60 nuclear stations, so I think that probably there is a need for us to sell more yellow cake to China.

I want to finish my question with Pamela.

We talked about a lower commodity price and the survival of companies. However, on your slides, you also mentioned the positive long-term fundamentals. In your opinion, what will the mining industry look like in Saskatchewan in the next five, 10, or 15 years?

[Pamela Schwann]

Our reserves for both potash and uranium are significantly longer than that.

I would hope that the policy framework allows us to continue to have mining. I would expect that we will continue to have more uranium mines, although we can certainly ramp up production on the existing ones more than they are; we would just need the appropriate CNSC licences.

Certainly we've had new uranium discoveries in the Athabasca Basin. Cameco's millennium deposit would be ready to go if we could get some SARA certainty on that. There are also exciting new discoveries on the west side of the Athabasca Basin. That would mean great employment for communities like La Loche that really need some employment and business anchor.

We'd also see additional potash mines producing at a sustainable rate. We continue to see coal as an important part of our portfolio. We hope that companies like Goldcorp might come into Saskatchewan and start looking at some of our prospective gold areas.

I should say rare earths too. We have rare earth potential, and that's going to be an important thing in the future.

[Marc Serré, Liberal, Nickel Belt, ON]

Before I ask the question, Ms. Schwann, I want to clarify one of the comments you made earlier about policies and legislative challenges, regulatory review. You mentioned those challenges of the past decade.

Is that what you were referring to over the last decade? Just a yes or no.

[Pamela Schwann]

Yes.

[Marc Serré, Liberal, Nickel Belt, ON]

Thank you.

Going back, one comment is on having Goldcorp and Saskatchewan look at the innovation you've done related to first nations. I've heard often of the collaborative agreements that you've put in place that are leading edge across the country, in both northern Ontario and Saskatchewan. I want to thank you for your leadership on that. Many in the mining industry are looking at copying some of the work you've done over the last decades on this.

My question is more related to the mining industry and the potential we have to grow the economy. When we look at a single mine versus clusters, ecosystems, we know in northern Ontario and in Saskatchewan we have existing clusters.

How can we expand the clusters we have right now to create more of those spinoff jobs in the mining and supply industries and export products around the world?

I'll get back to the issue of electricity and battery after. I just want to get both of your sense of what we can do as a government and industry to expand the clusters and make them more of an ecosystem, to create more mining and supply jobs and exploration and export across the world?

[Pamela Schwann]

I'll take the first shot at that.

I think if we talk to anybody in exploration, the best place to find a new mine is next to an old mine. There were some incentives in place that would help to offset some of the expenses for deep drilling. A lot of the reserves are now more and more at depth, and it becomes uneconomic at a certain point to drill.

In mining, we use the term “brownfield”, which means an existing mine site. Perhaps looking at developing some mechanisms that.... Maybe it's through a regulatory review, that if it's within a certain area, you don't need to undergo a five-year-long assessment process. Or maybe it's a financial incentive that looks at incenting brownfield exploration. That might be one way to facilitate more of that cluster approach that you're speaking about.

[John Mullally]

If I go back to what I said in the presentation around accelerating commercialization and adoption, I think, Sudbury, in particular, and Rouyn-Noranda, are places that have come along in terms of the evolution of the industry. As things have changed, because of the skills that are in those clusters, they've sort of changed and are leading the way.

I think we are starting to see significant signs that the time is now to turn to real, clean technologies; automation; bringing people away from the face; and lots of things that you see in the Sudbury basin as well.

To look at mining as a relic of the past is not going to support the clusters. I think this is an important industry to support, and the faster that things are commercialized....

Some technologies exist, but I think that places that already have the base of skills there are in a position to supply internationally. We see lots of those opportunities with groups like the Canadian Mining Innovation Council, or CMIC, when coordinated with industry, the OEMs, and academia. We have our finger on things that are going to reduce our impact on water, deploy even more clean technology, make us more productive, improve health and performance, and improve environmental performance.

[The Chair, Liberal, James Maloney]

Mr. Barlow.

[John Barlow, Conservative, Foothills, AB]

Thank you very much, both of you, for being here.

Ms. Schwann, I'm really impressed to see that you have maple leaves you collected from a lawn somewhere. Are they to take home to Saskatchewan?

[Pamela Schwann]

They're a present, actually.

I used to live in Ottawa when I was student.

[John Barlow, Conservative, Foothills, AB]

When I had my family here the first time I was first elected, the first thing they did, too, was to collect maple leaves off the lawn.

I want to talk about an article you had on your website called “The Challenge of Managing Carbon Emissions in Saskatchewan’s Mining and Mineral Sector”. My understanding is that it was posted as a response to the Liberal government's recent announcement that they may well impose a federal carbon tax on provinces if they don't meet their emissions targets.

You come from Saskatchewan, where your premier has been vehemently opposed to a carbon tax. You've also done some work in your industry to reduce your GHG emissions on your own through industry, without having to have emissions targets or caps imposed on you.

Could you talk a little about what the negative impacts on your industry would be if a federal carbon tax were imposed? Is this something that your industry has talked about? If your premier has said that he does not want a carbon tax provincially, what would it mean if a federal carbon tax were imposed on your province and your industry?

[Pamela Schwann]

That's a tricky one.

The report that you mentioned said that there is no best way to do it. There needs to be some flexibility, depending on the local environment and the local economy, in terms of the best way to incent GHG reductions, which is what everybody wants to do in the end. It's just a question of the pathway there. I think what this paper is saying is that there are multiple pathways to the end goal, not just one.

As an industry, particularly with potash and uranium, we are not able to pass on to the markets any carbon taxes that we might be incurring. It's just not possible, so we need some protection of trade-exposed sectors, like we have with Saskatchewan. That's something that we're very cognizant of and something our premier is very cognizant of as well, because, of course, oil is another one of our big exports. That's another one where we have to take the global price. We can't pass on the cost of carbon taxes. That's the big sensitivity.

[John Barlow, Conservative, Foothills, AB]

From your perspective, would that make your industry in Saskatchewan uncompetitive on the global market in potash and uranium?

[Pamela Schwann]

Unless there's some way to ensure that other countries supplying those products are also having to pay that, I think it would make it more difficult.

[John Barlow, Conservative, Foothills, AB]

That's a really good point. I appreciate you mentioning that.

Certainly, in discussions I've had with other people in the mining industry, there is also a concern that we've seen these new restrictions put on the oil and gas sector, in terms of upstream GHG emissions. There seems to be a real concern from the mining industry that they're next, in terms of having to account for the upstream GHG emissions.

Is this something that your industry in Saskatchewan is concerned about?

Maybe, John, you could touch on that, as well.

Are you taking steps to bring that into consideration in your long-term planning? What impact would that have on your bottom line?

[John Mullally]

Do you mean upstream, from our suppliers?