Natural Resources Committee on Oct. 20th, 2016

[The Chair, Liberal, James Maloney]

Good morning everybody.

Before I do introductions, I understand Mr. Strahl would like to say something.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Thank you, Mr. Chair.

I don't want to take time away from our witnesses or interrupt the meeting, but just to let you know, I do have a motion on notice that I do not intend to move if we go in camera. For your planning purposes and for the purposes of the committee's, I'd like my motion to be dealt with in a public session. I won't take time from the witnesses or from the committee, but I want to let you know that I intend to move the motion at a time when we're in public.

I'll let you proceed with the meeting.

[The Chair, Liberal, James Maloney]

Thank you.

Good morning to our witnesses.

We have Mr. Dirom, from the Association for Mineral Exploration, British Columbia. We also have two witnesses from Thunder Bay, Mr. Angus and Mr. Mason.

I should acknowledge that there's a particular Thunder Bay bent to this meeting today, because it's not just the two of you, we also have Mr. Rusnak, who is the member of Parliament for Thunder Bay–Rainy River, and I was born and partially raised in Thunder Bay, before I moved to Toronto. Of course, we have Mr. Serré, from northern Ontario, so there's a definite northern Ontario bent to this meeting today. I welcome all of you, and thank you for attending.

In terms of process, I'm going to open the floor to the three of you to speak for up to 10 minutes each, and then it'll be turned over to the committee members for questions. You're welcome to deliver your remarks or answer questions in either official language.

Again, thank you for attending, and I will now open the floor to the three of you. I'm not sure that we have a speaking order, but Mr. Dirom, perhaps you can start us off.

[Gavin Dirom, President and Chief Executive Officer, Association for Mineral Exploration British Columbia]

Thank you very much.

I must say that Thunder Bay was one of our favourite spots to stop in our trip across Canada last year. We started in St. John's, Newfoundland, and drove all the way across and, 7,700 kilometres later, back into Victoria. Thunder Bay was a highlight.

Good morning, Mr. Chair and committee members. My name is Gavin Dirom. I'm the president and CEO of the Association for Mineral Exploration, or AME for short. On behalf of AME's 400 corporate members and 4,000 individual members, I'm pleased to present to the House of Commons Standing Committee on Natural Resources concerning the future of Canada's mining sector.

AME represents mineral explorers and developers operating or based in British Columbia. We are the hosts of the well-known Mineral Exploration Roundup conference held in Vancouver at Canada Place every January.

Mineral exploration is the lifeblood of the mining sector. Clearly, without exploration there would be no mineral deposits discovered and thus no mining. Through high-tech and low-impact geoscience and modern exploration techniques, members of AME discover the rare mineral, metal, and steel-making coal deposits that may be mined for the basic materials we all use on a daily basis. The greener economy of the future will absolutely be dependent on these materials.

But British Columbia, just like the rest of Canada, competes in a highly competitive open trade environment. Mineral explorers and developers are price-takers, not price-makers, and are therefore subject to the basic fundamentals of global supply and demand.

Even with the application of very prudent fiscal restraint and cost-cutting measures, the industry is still weathering one of the most extreme and sustained downturns in history, resulting in bankruptcies, layoffs, and cancelled or delayed projects. Many members of AME are struggling to stay afloat through these difficult times, regardless of the recent market price increases for gold, zinc, nickel, and steel-making coal. While some confidence is returning to the industry, it is limited, and there remains a high degree of uncertainty going forward with respect to the depth and the substance of the current price increases.

Globally, overall financing for the industry dropped by almost 40% between 2007 and 2015, while financing for exploration has fallen by more than 90%. After years on top, Canada no longer attracts the largest share of global mineral exploration investment, having conceded first place to Australia in 2015. In fact, Canada's share has fallen from 21% in 2007 to just 13.5% in 2015, and NRCan has predicted further investment declines for Canada in 2016. In British Columbia, mineral exploration expenditures have declined from a high of $680 million in 2012 to $272 million in 2015.

In the B.C. context, the province has hundreds of exploration projects that could be spurring more regional economic development. B.C.'s fundamentals are very strong, and it is well positioned to take advantage of its geographic position on Canada's Pacific coast and its access to Asian markets. The province has world-class metal, mineral, and steel-making coal deposits, and further discoveries are likely, but only with continued exploration.

It's the junior exploration companies that often take on the highest risk in the mineral development cycle, with less than one in 1,000 making a discovery leading to a mine development. Junior exploration companies, unlike major companies that have an operating mine and a source of revenue, need access to capital to fund and sustain mineral exploration projects, especially the early-stage greenfield projects that are required to replenish the nation's base metal reserves that are being depleted.

B.C. continues to host 58% of the mineral exploration and mining companies listed on the exchanges, but the ranks are thinning. Over the past three and a half years, the number of companies headquartered in B.C. has declined by 26%, from 962 to 708 companies. While the drop in commodity prices and company mergers are important factors, these are not the only reasons behind this decline. Other contributing factors include costly and excessive securities regulations to keep a public company listed, increasing costs to explore and develop mineral resources, and uncertainties about mine development even after the discovery of a minable deposit.

Unlike many other industries in Canada, mineral exploration and mining strongly align with a broad range of Government of Canada policy objectives. The government made helping the middle class a centrepiece of its 2015 platform, and the mining and oil and gas industries offer the highest average weekly wage of any industry in Canada.

Another key government priority is to promote economic development for aboriginal peoples and communities. The industry is already the largest private sector employer of aboriginal people in Canada and has generated significant economic opportunities that are often codified in agreements, such as impact-benefit agreements with companies, as well as mineral resource sharing and economic and community development agreements with the provincial government of B.C. Such agreements, taken together with active government consultation and industry engagement, have been important to the success of mineral exploration and development in B.C. and across Canada.

Given the rise in some commodity prices, AME believes that now is a very important time for governments to take policy steps that support the exploration industry to attract more investment and encourage future mineral development in Canada, while strengthening partnerships that advance socio-economic opportunities and support environmentally responsible use of our shared lands.

Therefore, I offer AME's perspectives and recommendations on the following three fundamental policy issues important to building and maintaining a successful mineral exploration and development industry in Canada.

Number one is to work together to attract investment. AME welcomed the extension of the federal mineral exploration tax credit through to March 2017, as announced in the budget. The METC is a 15% non-refundable tax credit on eligible expenses. In a B.C. context, the METC for investors is harmonized with the provincial mining flow-through share tax credit to further encourage private investment, resulting in a combined tax credit for an individual resident in B.C. of approximately 32%.

AME is supporting the Prospectors and Developers Association of Canada and calling on government to renew the federal METC for one year. Along with the PDAC, AME is calling on the government to maintain flow-through share financing, which is currently part of Finance Canada's tax expenditures review.

Flow-through shares play a critical role by creating an incentive for investors to allocate the risk portions of their portfolios into mineral exploration. In fact, flow-through shares accounted for more than two-thirds of all exploration-focused financing on Canadian exchanges over the last decade.

In the past, Finance Canada has estimated that the flow-through share system stimulated $3 in exploration for every $1 in forgone tax revenue. Supporting flow-through shares and the METC will keep investment dollars in Canada. Removing these important tax incentives at a time when the industry is still recovering from arguably the worst down-cycle in decades, could have a crippling effect on the recovery of the industry.

These incentives support the discoveries of new deposits, and advance the development of mining projects and the creation of socio-economic opportunities across the country. They support and benefit remote and aboriginal communities where natural resource development is the only source of jobs and economic opportunity, infrastructure and skills development, and community capacity building.

Take note that “without flow-through, we would never have discovered Ekati—and there would be no diamond industry in Canada today.” That is from Chuck Fipke, discoverer of Ekati.

AME also welcomed the federal government's intent to proceed with changes to the definition of Canadian exploration expenses, CEE, in the Income Tax Act to include expenses incurred for environmental studies or community consultations.

AME joins PDAC in supporting the establishment of clear, bright-line tests to determine which expenses qualify as CEE, and in updating the 2007 guidelines to provide such clarification, with the ultimate objective of making these guidelines part of regulations under the Income Tax Act.

Number two is having fair access to land to explore and security of tenure. B.C. is underexplored and vast, covering over 944,000 square kilometres, but mineral exploration and mining have affected less than 0.05% of the provincial land base. As is the case throughout Canada, sub-surface resources in B.C. are managed by government in the public's socio-economic and strategic interest, for the greater good of all citizens, aboriginal and non-aboriginal.

Exploration activities are low-impact to the environment and temporary in nature. Unlike most other natural resources, minerals are hidden and require scientific research and the testing of large tracts of land in order to find a hidden deposit. Throughout large areas of B.C., access to mineral and coal resources is eroding, contrary to earlier policy pronouncements by government and public land use plan commitments.

Today, nearly 18% of B.C. is off limits to exploration, and a further 33% is open only under limited conditions. AME understands that over time, lands may be closed for reasons of environmental protection or for other societal reasons deemed to be in the greater public interest. As well as important environmental values, the socio-economic values of developing hidden sub-surface resources must also be considered when deciding on land closures or restrictions that impede responsible mineral exploration and regional economic development.

Therefore, AME strongly encourages the federal government, when in any such land access and use discussions with provincial governments and first nations, to meaningfully consider the overall socio-economic benefits of mineral exploration to B.C. and Canada; the costs of policies, regulations, and legislation to explorers and developers; the ability to acquire and hold secure tenure; the building of investor confidence; and the maintenance certainty for explorers to have fair and timely access to land to responsibly explore for hidden deposits.

Number three is an efficient and effective environmental assessment process. Protecting the environment and health and safety are very important to AME and our members. An efficient and effective environmental assessment process is critical to the success of the industry.

AME supports the 2013 memorandum of understanding between Canada and British Columbia on the substitution of environmental assessments that arose out of the Canadian Environmental Assessment Act of 2012. The MOU describes how the two parties will work together, and recognizes that each government has a robust environmental assessment process, including meaningful consultation with aboriginal groups and timelines for government review and decisions.

Substitution means that an environmental assessment could be led by either the B.C. Environmental Assessment Office or the Canadian Environmental Assessment Agency, assuming the project triggers both provincial and federal laws or responsibilities. In theory, this reduces wasteful and unnecessary duplication. Importantly, as stated in the MOU, the governments of B.C. and Canada wished to “provide clarity and predictability for all participants in substituted environmental assessments and facilitate efficient use of resources in the timely delivery of those assessments.”

Currently there are 13 mine projects in either pre-application or review stage in B.C. Six of the 13 are in the pre-application stage and seven are in the review stage, including two in the coordinated or substituted process. On December 12 AME will be presenting in Vancouver to the expert panel review of environmental assessment processes. We will appreciate the opportunity to provide at that time more perspectives and recommendations about the environmental assessment process.

On behalf of the members of AME, thank you very much for your time this morning.

[The Chair, Liberal, James Maloney]

Thank you very much, Mr. Dirom.

I'll turn the floor over to Thunder Bay.

Mr. Angus, you have the floor.

[Iain Angus, Vice-President, Northwestern Ontario Municipal Association]

Good morning, Mr. Chairman and members of the standing committee.

Thank you for this opportunity to participate in your deliberations. We want to give you a sense of northwestern Ontario and what the mining industry currently means to us and will mean to us in the future. We want to highlight some of the key issues in which governments at the provincial and federal level have a role to play in facilitation of this potential growth.

While northwestern Ontario has a long history of mining, it really has been the forestry industry that has dominated the region's economy for over a century—until, that is, the crash of a few years ago, which saw this region lose 10,000 well-paying jobs in a dozen or so small and large communities across the northwest. We now have only three functioning pulp and paper mills instead of nine in seven different towns. Our sawmills are down to six from a high of 13 or so. Any recovery in this industry has happened...and with the uncertainty around the softwood lumber agreement, we are quite nervous these days.

I also want to add that a recent study initiated by the Northern Policy Institute for the North Superior Workforce Planning Board has predicted that over the next 25 years we will lose a population of 50,000 people. That includes 25,000 people to fill jobs just to keep the economy going the way it is. We have a real challenge in front of us.

I want to turn now to John Mason. He will give you Northwestern Ontario Mining 101 to set the stage as to why this industry needs your support and the support of the Government of Canada.

John.

[John Mason, Project Manager, Mining Services, Thunder Bay Community Economic Development Commission]

Thanks, Iain.

Thanks, Mr. Chair and standing committee.

We did circulate information on the producers and the advanced projects in northwest Ontario—that's really our focal point today—with Thunder Bay as a hub, as a key driver and locale for working with the exploration and mining industry in northwest Ontario.

This is a great opportunity to speak on the heels of Mr. Dirom, who presented things with a B.C. focus. There are some commonalities as we move forward.

With respect to northwestern Ontario, we are certainly an economic driver from the standpoint of the gold production site, producing roughly 19% of Canada's gold. We anticipate that number to rise. We have currently four producers. That number will rise with five new companies in production in the next four years to get us into the 23% or 24% range, as new producers come on in Quebec, the Northwest Territories, and British Columbia.

We also have 12 to 20 advanced exploration projects.

I must paraphrase and really clarify where we are right now. A lot of these discoveries, including the five new mines coming on to supplement the four existing—and again these are huge economic drivers for the economy of northwestern Ontario—were discovered, in most cases, during the run-up of 2004 to 2011, in terms of metal prices, particularly led by the gold market.

We also have hundreds of grassroots projects, not unlike the situation in British Columbia, that are stalled, that have been caught in the five-year downturn of 2011 to 2016. We're seeing some hints of moving out of that with lithium and gold prices moving. Right now we're also a palladium producer, so gold, copper, nickel, and palladium will be in our future, in our headlights. Discovery to production is roughly a 15-year to 25-year journey.

I will give you an idea of two of the major economic impacts before us now. New Gold, with a producer just outside of Kamloops, but also bringing in one of Canada's newest gold mines, four hours west of Thunder Bay in the Fort Frances area, is a billion-dollar investment. Greenstone Gold, northeast of Thunder Bay, is a $900-million investment. Its feasibility study will be out very shortly. And certainly there's the Ring of Fire.

I'll turn it back to Iain on that issue at this particular point.

[Iain Angus]

A few years ago, the City of Thunder Bay commissioned a mining readiness strategy. It looked at what the impacts of mining development would be not just for the City of Thunder Bay but also for northwestern Ontario. This report examined the impact of 10 mines coming into production in the northwest. It concluded that the impact on GDP, on an annual basis, would be between $1.5 billion and $2 billion; it would create between 8,800 and 12,400 ongoing jobs; and government revenue would be anywhere from $451 million to $831 million per year—a significant economic impact on our community.

John mentioned New Gold in the Fort Frances-Emo area. There are $70 million's worth of contracts that have come to businesses in the city of Thunder Bay to help support the development of that mine. That's just one example of the economic impact. It's really essential for this region, to enable it to recover and grow.

John, it's back to you.

[John Mason]

Thanks, Iain.

With respect to issues and recommendations, we'd like to drill down now on some specifics, and there will be some commonality and some complementary language we've heard from Mr. Dirom that will be reflected in our words as well.

I'll start with the federal-provincial environmental assessment process. September was the start of that review. I would encourage the standing committee to really look at the opportunity for balance. Regarding the rigour that New Gold went through in the Fort Frances area—again to focus on that project—it was the first project in Canada to go through the 2012 new and improved environmental assessment process. It went through a full provincial and a full federal review.

Regarding the language with respect to the set-up for the review that's under way now, which started in September, I would caution that, going forward with these projects, economic development and industry's requirements should be balanced with those of the environment and environmental groups, and with what's required by aboriginal communities and the regions of Canada as well. That balance is really imperative so that these projects will mature and be economic drivers to benefit all Canadians.

[Iain Angus]

Let me move on to a couple of infrastructure areas.

One of the challenges we have in the northwest—and although it's regulated by the province, there is a federal role to play in this—is the provision of electricity to these emerging mine sites. While some of these are relatively close to the grid and can be accessed at a reasonable price, others are hundreds of kilometres away from the existing hydroelectric infrastructure. Under Ontario's rules, the proponent must pay the cost of building the transmission lines. This is a change since the mid-1990s. Before that, the ratepayers as a whole would pay for the expansion of the infrastructure, and then obviously the user would pay through their rates.

We've been pressuring the Ontario government to make a change in this, but from the point of view of financing for the development of mines, if this kind of infrastructure can be included as one of the eligible components for any of the federal programs, that certainly would make it easier. As John mentioned earlier, one mine is costing $1 billion to develop and a second one, $900 million. If in addition to that they have to raise another $400 million or $500 million to build the transmission lines, that can be a deal breaker in terms of whether the mine will go ahead, and so we need some support there.

For areas such as the Ring of Fire, where we know that, while one or two companies are in play right now, there are 14, 15, or 20 different known deposits in likely mine sites, it's really essential that the federal government work directly with the provincial government, the first nations in the area, and the mining companies to develop a utility corridor, if you like, that includes ground transportation, telecommunications, hydroelectric, and in some cases even natural gas, to ensure that these areas can be fully accessed not just by the big companies and those with deep pockets, but by the small companies that can take a smaller development and bring it to the fore.

I'll get John to talk about the road transportation to the Ring of Fire.

[John Mason]

Thanks, Iain.

Certainly, succinctly put, the deposits in the Ring of Fire, whether they be KWG or Noront's chromite deposits or the lead project, which was the Eagle's Nest copper-nickel deposit that Noront wishes to develop by an east-west road, without access, are not deposits. They are not economic mineralized zones that can be mined at a profit, the true definition of a mineral deposit, and that is the concern. That is a stall point. The lack of common ground between indigenous communities, both levels of government and the people of northwestern Ontario and industry to go forward is the stall point at this point.

I'd now like to delve into the finance side. I appreciate Mr. Dirom's remarks on the flow-through share, the Canadian exploration expense piece as well as the mineral exploration tax credit. Just by way of background, our recommendation would be that these two sister programs under flow-through shares be extended nationally for a three-year period, if not put in place permanently. They're certainly a boon to exploration. Mr. Dirom touched on a few of the basic observations from this program, and I'd like to touch on them as well, and some other quick points that embed the notion.

Over the last 10 years, junior exploration companies that have spent the high-risk money have made 70% of the discoveries in Canada. That 70% figure stands out again. The junior exploration company sector has accounted for 70% of all financing raised by exploration companies in recent years as well. Certainly the junior exploration sector relies on those discoveries.

If the ultimate form of flattery is theft of an idea, Australia, in 2016, adopted the METC program and rolled it into their flow-through system, and it really is one of the reasons they have become the top jurisdiction for exploration in the world.

Those flow-through funds must be spent in Canada. They are really a boon to economic development in northern and remote communities, including those with indigenous people.

Speaking of indigenous people, I believe there's a real opportunity for the Prospectors and Developers Association of Canada, the Ontario Mining Association, AME BC, and the Mining Association of Canada to work with government and work with industry to promote the sector more fully, in a more fulsome manner, and to have that tied to economic development, strategic planning, and land-use planning within communities including aboriginal communities, and to really illustrate the opportunity for a career and a business development opportunity. We're seeing 87% of business contracts pre-qualified and then awarded on the back of the New Gold project or the Greenstone Gold project, two of Canada's newest gold mines, flowing to indigenous companies and businesses. It's a huge number. We're seeing employment levels at 23% of the Musselwhite mine, one of the earliest collaboration impact benefit agreements in Canada, which has been renewed four times. Those employment numbers again are at about 23%. There's 32% direct workforce employment at the New Gold site, at that particular location, even though their production does not start until mid-2017. So these are great models that should be shouted from the rooftops and used as case examples to illustrate the value proposition and the opportunity.

My last piece is on the Geological Survey of Canada and geoscience to stimulate exploration. One thing we've seen in the last few years is an erosion of the overall budget for targeted geoscience initiatives, even though we're in TGI-5 now with respect to the Geological Survey of Canada program. There's a requirement, simply put, to have sufficient funding for mineral deposit studies, regional geophysical programs, working on third-dimension structural and crustal studies, and advanced geochronology—that is, the age-dating of rocks—which really contribute to discovery rates and really elevate that proposition in Canada.

[Iain Angus]

Mr. Chairman and members of the standing committee, in conclusion, it's essential for northwestern Ontario that we get this right. At a time when we have been hit hard by the loss of much of the forest industry, at a time when we are seeing the populations of our smaller communities shrink, and at a time when the indigenous population of northwest is growing quickly and looking for real opportunities to thrive, we need government support to ensure that those mines that John Mason spoke about become a reality.

We'll be happy to respond to any questions you may have, particularly in areas that will assist you in further understanding the situation in our region.

Thank you for your time and attention.

[The Chair, Liberal, James Maloney]

Thank you, gentlemen. I appreciate the testimony of all of you.

I'm now going to open the floor to questions.

Mr. Rusnak, you're on deck.

[Don Rusnak, Liberal, Thunder Bay—Rainy River, ON]

Thank you for your presentations, which were enlightening in part.

I'm glad that you brought up the New Gold project, which is in the far west of my riding. You mentioned that they're doing 87% of their contracts with indigenous-controlled or indigenous companies. I've been there twice now, and the relationship with the communities out there is just amazing.

I guess my first question is this. In terms of the Northwestern Ontario Municipal Association and the Thunder Bay Community Economic Development Commission, what have you been doing to engage indigenous people and indigenous organizations from your level?

[Iain Angus]

John, I'm going to let you start, and then I'll fill in.

[John Mason]

Thank you, Mr. Rusnak, for the question.

Certainly in my role as project manager of mining services with the economic development commission, I'm on the footprint of that project on a regular basis and deal with its mine general manager as well as the key indigenous groups that have impact benefit agreements. We're at the point now where we have five agreements in place, and up to nine first nations communities as well as the Métis Nation of Ontario have agreements, and that's still a work in progress.

I meet on a regular basis with these various groups, and have tours onsite to deal with pre-qualification and requests for proposals. The aboriginal business groups typically are forming new entities, direct partnerships, or they're directly assigned to development opportunities as this mine and mill are being built.

There are three ways they engage, and on a regular basis I'm dealing with, for example, Rainy River first nation and Naicatchewenin—the two enhanced impact benefit agreement recipients—as well as Rainy Lake Tribal Contracting as they, on a regular basis, have a committee that reviews documents in a committee setting with AMEC and New Gold, who are the folks who let these contracts. I also visit the site on a regular basis to monitor this progress to make sure things are on time and on budget.

Interestingly enough, 60 days prior to any other industries receiving RFP information or RFQ information following pre-qualification, that information flows to the communities. We're working hand in hand to try to up those numbers with respect to having businesses to sustain after the project ends, which is one of the goals.

Bob Gallagher, the former president of New Gold, was brought to Thunder Bay by our office to speak to a room of 150 people last summer. This led to further business relations with aboriginal communities and companies going forward on the project. It's quite clear that, in line with the values and ethics packages that Mr. Gallagher speaks to on his Kamloops operation, the New Afton deposit, as well as this and three other mines in other continents, he wants to have those businesses sustained well after that deposit is mined out in 20 years. That's his goal, and I feel the entire company is living through that, and we're working with that as well.

Iain mentioned a figure of $70 million. As of last week, over $80 million of business money has flowed to Thunder Bay companies. We have great firms. To give you an example, a firm that Mr. Rusnak would be familiar with is TBT Engineering, with Rob Frenette. Three years ago it formed a brand new aboriginal company in conjunction with TBT Engineering to work on the initial survey work for tailings ponds, for road realignment, and for secondary highway realignments, just as one example.

[Iain Angus]

Mr. Chairman, through you to Mr. Rusnak, John really does speak for the role that the City of Thunder Bay plays in this. The CDC is, for lack of a better word, an agency of the City of Thunder Bay.

So with regard to NOMA, as, in effect, an advocacy group on behalf of the northwest, our role has been to continue to pressure the Ontario government primarily in terms of making sure that it understands that we know that the only way the northwest is going to thrive is if the aboriginal community is a full participant in it. We continue to put pressure on the Ontario government with regard to access to the Ring of Fire and moving forward with that file.

[Don Rusnak, Liberal, Thunder Bay—Rainy River, ON]

I bring up New Gold again, because I myself am trying to get representatives from the company and two or three of the first nations it is involved with to present to either this committee or our Liberal caucus on how companies and first nation groups can work together in a positive way that benefits everyone.

I keep touting this relationship. Oftentimes we see roadblocks with resource development projects, and the public and others think that first nation groups don't want any development, but that is not the case. They want smart development that doesn't adversely affect their communities or their way of life. This project, which I have witnessed for the last four years, has been extremely positive and perhaps could be used as a model for the Ring of Fire.

Just last week, we were in Thunder Bay with the Minister of Innovation, and we met with Matawa chiefs. This is the group of indigenous communities who would be most affected by any development in the Ring of Fire area. They brought up many concerns, including roads and infrastructure. They made it clear that they want infrastructure for their communities first—that any spending of money in that area has to focus on them and their needs, which are absolutely astronomical, before or instead of just building a road for a mining company.

The economic development agency works with mining companies and other proponents in the region. Have you been assisting or working with any first nations on their particular wants and needs in the Ring of Fire area?

[The Chair, Liberal, James Maloney]

We are running short on time. I'll give you half a minute to answer that question, if you can.

[John Mason]

Certainly, from executive director David Paul through to specific communities, yes, that has been the case.

Further to your recommendation on using case examples to illustrate the opportunity, rather than a theoretical piece, I fully support that notion. In fact, the technical committee from the Matawa communities, just in the last 10 days, had a tour of the New Gold open pit and the mill. I think Christine Kaszycki, from the Ring of Fire secretariat, and the key folks in the nine Matawa communities have been engaged already on that piece as a demonstrator.

Thank you.

[The Chair, Liberal, James Maloney]

Mr. Strahl, go ahead.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Thank you, Mr. Chair.

Thank you to our witnesses for their presentations.

Mr. Dirom, I understand you are actually Gavin Dirom the Third, and both your grandfather and your father also served to promote the mineral industry in British Columbia. I've met your father at previous AME BC events, and I want to thank you for your multi-generational service to our province and our country.

We had Pierre Gratton in, the president and CEO of the Mining Association of Canada. The Mining Association has indicated that it supports a carbon tax—or a price on carbon, however you want to message that—but it also says that it wants “a level playing field for emissions-intensive trade-exposed industries.”

Do you share that perspective? Do you think mining counts as an emissions-intensive trade-exposed industry that should perhaps be considered differently as we have this national conversation?

[Gavin Dirom]

Thank you for the question, Mr. Strahl.

The short answer is yes, although I must declare that AME does not have an official position with respect to climate action, climate policy, carbon pricing, and so forth. I say yes because, given the experience with the carbon tax in British Columbia, and the fact that the cap-and-trade system didn't come into play, that does support, I think, Mr. Gratton's position and the Mining Association of Canada's position that, without that side of the equation, it's not a fair and balanced system in place right now for trade-exposed industries like mining. The short answer is yes, but we don't have an official position on that.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Okay.

You mentioned, and it's been mentioned by most presenters, actually, support for the METC the CEE, and the flow-through shares. As someone who has been on the government side and is now on the opposition side, while I appreciate the recommendation that they go to a three-year or permanent nature, I'm not sure what the natural resources minister would have to announce at the PDAC conference or put in his budget every year to make the Mining Association of Canada give them a positive stakeholder quote.

Maybe you can talk to me about how it would benefit mining in British Columbia and across the country to have that certainty on a more permanent basis. Certainly governments, the Conservative government and the Liberal government, have—again, at budget time—come forward with this, right before the previous year expires, and it makes for a great announcement. We did it; they've done it.

What does that uncertainty do? Is it a kind of wink-wink, nudge-nudge thing whereby the mining companies and the mining association just assume it's going to be there?

[Gavin Dirom]

It's always a danger to make an assumption like that. In AME we're very supportive of having the review of the current incentives. It's always a healthy thing to do.

I believe the finding that Finance Canada will arrive at is that these are very good incentives that have been developed and will continue to be potentially modified in the future. In terms of alternatives, there really hasn't been one that's been shown to do any greater good. To the point made earlier, Australia is now adopting a lot of these measures and is in fact gaining the investment that used to come to Canada. We have a competitive issue there to address.

These incentives, frankly, inspire confidence in the investor, and that's one thing we have been obviously lacking over the last few years. To make a change now would be just that much more detrimental.

It doesn't mean, of course, that industry isn't open to improving these incentives or modifying them over time. That should be and always ought to be something to be taken into consideration, but the timing is terrible, to be blunt and frank. We're open to ideas and other approaches.