Natural Resources Committee on Oct. 25th, 2016

[The Chair, Liberal, James Maloney]

Thank you.

Mr. Cannings.

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

Thank you all for coming here today.

I want to start with both Mr. Pakalnis and Mr. Gibson, because you both brought this up, about first nations capacity and education. I wonder if you could comment on the role the federal government should be playing in increasing access to education from elementary school on up to post-secondary for first nations. We've heard from many witnesses how important first nation communities are to the mining industry, how people are working and there is very good co-operation.

The subject keeps coming up again and again, so I wonder if both of you might want to comment on that.

[Vic Pakalnis]

First of all, it has to be on many levels. There has to be revenue sharing with the first nations community both federally and provincially. I know that we're looking at it through the Mining Association of Canada and also the Ontario Mining Association has recommendations to the Ontario government on this subject. It starts right at the grassroots. If you've never been subjected to engineering or mining, how do you know it's something that you want to get into?

Part of the aboriginal access to engineering that Queen's University, for instance, developed was getting into the kindergarten, grade 1, grade 2, grade 3, having materials, activity books explaining how the world works, that if you can't grow it you have to mine it. The whole of civilization depends on having a properly executed mining sector. It also would be helpful to create some incentives at the universities and colleges to be able to give access. Some of the high schools that are in the rural areas.... I come from a rural high school and frankly when I went to McGill I had a heck of a time with the math and physics. It's just the quality of education that sometimes is found, so you need to have access programs. The best one that I saw when I was looking at these is probably at the University of Manitoba.

As far as what the federal government can do, it is to incent those kinds of access programs, provide financial assistance to master's and Ph.D. programs in the type of research that we're doing in geology and in mining engineering, and other fields. I have to tell you that MIRARCO has been given $5 million over two years to help build capacity within first nation communities in Ontario so that they can take advantage of the cap and trade to maybe convert from diesel to other sources, all of these kinds of things. What I think we're doing in Ontario could be done on a federal level. It could be done nationally as well. I think this is a great opportunity for the first nations, if we do it right.

[Prof. Harold Gibson]

I would like to build on what Vic has said. You've really asked a very difficult question and there's no single solution. Let's start at the very beginning. I think the very first starting point, as Vic said, is that indigenous people have to have co-ownership in the resources. With co-ownership, like for all of us, comes responsibility. Once we're given responsibility it becomes important. This filters down into the first nation communities.

What we're seeing right now is that the earth sciences—what I specialize in, geology—should be a 1:1 meld with the first nation communities because it's understanding the earth. I'm a geologist and what I study is earth's history and earth as it is now. Then they can bring their traditional values to this. But it's not important to them. If you look at most first nation students they're going into law, some into the environment, into business. They're not being drawn to this sector whatsoever. I can't find students from first nation communities to take on the projects that I have in science. It's a real concern of mine and it shouldn't be that way. They need to be partial owners of those resources. If they take responsibility, they become important to the first nation communities. Their children realize that, and then we can move forward. That is the first step. Then we need to have programs that allow them to enter into streams at universities and colleges, really important access programs, and I think that's really important.

In the metal earth science research project—it's not an outreach program; it's a science program—I want my young post-docs, my Ph.D. students, my master's students, my bachelor's students to go into first nation communities and excite them. I don't want old guys like me going in to tell them about the careers in the mining sector. I want young kids to go in and get them fired up, but they need to have that at home and it has to have value. When you have ownership it has value. That I would say is a fundamental step.

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

I would just like to follow up about the metal earth project. One of the biggest employers in my riding is the Teck smelter in Trail.

[Prof. Harold Gibson]

Yes.

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

It's one of the biggest lead-zinc smelters in the world, as you were saying. I'm just looking at your graph and lead and zinc seem to be the ones in deepest trouble. I know they're getting most of their stock right now from Red Dog in Alaska, and I believe the Selwyn Basin would be a possible source of more lead and zinc.

[Prof. Harold Gibson]

Yes, it would be.

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

You talked about metal earth and you talked about the scale of mapping. What is the scale of the metal earth research project? What would that cover and how long would it take to do?

[Prof. Harold Gibson]

Metal earth is a start. Even though it's $104 million, it's still a start. We have a long way to go.

The metal earth initiative seeks to understand how metals were concentrated during our planet's evolution. That's the scientific goal. The applied goal is to understand the processes responsible for differential metal endowment. We have vast areas of Canada's north and far north that are geologically similar but do not have the same metal endowment. They don't have the same metal concentration.

What metal earth aims to do is to understand why, and then to provide industry—and this is where the innovation comes in, and it's fundamental—knowledge converted to tools to target the most prospective areas, and to take a vast area of Canada's north and far north and be able to say that we can narrow it down to these areas to explore. That also helps governments with their policies.

Essentially that's what metal earth is meant to do. It's a start. It's not going to be the end; it's the beginning. It's the first time we've ever had the funds to undertake this project, one of this magnitude in Canada. It's only seven years, but we want to build it and we want to sustain it. That's what it's about. We want to be able to provide industry...so they can go in, and use new techniques and new tools. The surveys can collect the appropriate data.

We may not be collecting appropriate data during our surveys up north to actually help industry, but the whole idea is to understand why deposits are there and how to target them. We're going to be working mainly in northern Ontario and Quebec, but we're also going to be working in Nunavut and NWT in this first seven-year phase.

[The Chair, Liberal, James Maloney]

Thank you, Professor Gibson. I'm going to have to cut you off there.

Gentlemen, Mr. Lemieux is going to be asking questions next.

Mr. Lemieux.

[Denis Lemieux, Liberal, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Chair.

I would like to thank the witnesses for their presentations this morning.

My first question, which is for Mr. Gibson from Laurentian University, is sort of along the same lines as the question my colleague Mr. Cannings asked.

Clearly, we need to give priority to research in mining to help the mining sector in Canada. Your university launched a research initiative over seven years to help the mineral industry to make investments in exploration. An investment of nearly $50 million was awarded by the Canada First Research Excellence Fund.

Could you tell us how this investment is important for your exploration research program at Laurentian University?

[Prof. Harold Gibson]

I didn't get any of the translation, I'm sorry.

[Vic Pakalnis]

It's how you're going to use the Canada first excellence research fund to further exploration in Canada. How are you going to use that?

[Prof. Harold Gibson]

We plan to look at four different activities. The first activity is large-scale controls on ore deposit formation. Then we're going to get into transect scales, much closer scales than deposit scales, and then data-analytic scales. The key premise behind metal earth is understanding endowed versus less endowed. Research is going to begin, again, at various scales in endowed areas, where we have known metal resources and have an understanding of the geology and all the features responsible for that metal endowment. We'll be doing geological, geochemical, and geophysical surveys.

The idea is to produce MRI-like images through the crust, just like when your spouse is going for an ultrasound. Sound waves bounce back and you see your new child. We want to visualize the earth in that manner, but apply geology and geochemistry to it, so we have a complete view, a virtual MRI, of endowed areas. Then we're going to go to areas where it's geologically similar, but less endowed, and we're going to measure and do the same rigour of science there, so that we can do a comparison. This has never been done in the research before, mainly because we haven't had the dollars to do it.

By making that comparison, we'll be able to identify the key features that are responsible for metal endowment and then we can understand the processes and develop new tools to explore. These tools will certainly be usable in our Far North where the geology is the same, but we just don't know it as well, and although they are developed in Canada, they will also be used globally.

This endowed versus less endowed comparison will provide us with the criteria we need and the new tools to export exploration to Canada's north and Far North. That's how we plan to use it. At the same time, we're going to be training 80 post-graduate students, 107 bachelor students, and 80 post-doctoral students. These will become the next generation of leaders in mineral exploration research in Canada.

Metal earth is a consortium of 21 partners. We have five universities besides Laurentian. We have six geological surveys in all the areas as partners, representing 70% of Canada's land mass. We have industry and we have research centres, so this is a consortium. This is about building the strength we need. This cannot be done at any one single university. It cannot be done by any individual. This is why we need research centres where we can build the teams to undertake these types of problems. This is a consortium that's built and a consortium that will last. That's how metal earth will address this problem in the first phase, over the first seven years.

I hope I've answered your question.

[Denis Lemieux, Liberal, Chicoutimi—Le Fjord, QC]

This interests me a lot, actually, since I'm an engineer by training, too.

We were speaking earlier about first nations.

Of the 80 students you will train at the master's and doctoral level, how many first nations people are you expecting?

[Vic Pakalnis]

How are you going to make sure you have first nations people among the students you have?

[Prof. Harold Gibson]

That is a difficult question.

Basically, the pool of first nations students who are available is very small. We're going to do our best to hire qualified first nations people, but the number of students at the undergraduate level in earth sciences across Canada is very low. We will be advertising for them. We'll be specifically looking for them. We're making that effort.

But this gets back to the original question of how we attract first nations students into these areas. We will be doing that from a science perspective. For all these positions requiring training at the the bachelor's, master's, and Ph.D. level, we'll be preferentially targeting first nations students and equity in general.

In the field, we will be consulting with first nation communities and trying to have them help us with our collection of field data, but that's of limited scope in this project. At the advisory board level, we will be building an advisory board—the metal earth project just got the announcement of funding on September 6, so we're still building—and we plan to have first nations representation on our advisory board to help us move forward in that direction.

On the operational side, we have an indigenous access outreach program committee, which will be staffed by first nations people and our people, to try to operationally incorporate as many first nations people as we can into the operations of the metal earth project, on the ground in their traditional lands.

Again I would state that we really need to attract more first nations people into the earth sciences and into mining in general. The numbers are very low, and that makes it very difficult for us to fill these positions, or even some of them. I would estimate that we will probably fill fewer than 5% of these positions, because people aren't going to be available. This can't happen again. We need to have first nations representation in these areas.

[The Chair, Liberal, James Maloney]

If you have another question, I'll give you a bit of extra time because of the difficulty we had with the translation.

[Denis Lemieux, Liberal, Chicoutimi—Le Fjord, QC]

No, that isn't necessary.

[The Chair, Liberal, James Maloney]

Mr. Barlow.

[John Barlow, Conservative, Foothills, AB]

Thank you very much, Mr. Chair.

I want to thank all the witnesses for taking the time to be with us today. You have provided some great information from across the country. It's great to have such a diverse group with us today.

I want to talk initially with Mr. McDougall and Mr. Smith by picking up on some of the questions my colleague had, specifically about some of the numbers. You weren't able to do the math, but I did some quick math for 100,000 litres of fuel. The numbers we've seen show that diesel will go up about 14¢ a litre by the time the carbon tax is fully implemented, and I don't know whether this will include B.C.'s own carbon tax or whatever the Yukon will do, if anything.

For your family operation, that's an additional $14,000 a year, and up to $280,000 a year for some of the larger mining companies. That would be money that could very well have been invested into innovation or other projects and research but now will not be available to be invested. We've heard from other stakeholders over the last couple of weeks that the carbon tax is going to make the difference in determining whether or not they actually proceed with projects, proceed with expansion, or even put a shovel in the ground, and that some projects simply will not happen because the economics aren't there.

What was the level of consultation with your group from the federal government before implementing the carbon tax, if any? Was there some consultation with the mining associations in the Yukon before moving ahead with the carbon tax at the federal level?

[Mike McDougall]

Our organization, the Klondike Placer Miners' Association, has had no consultation on it. The broader umbrella group, the Yukon Chamber of Mines, may have, but I can't speak for them. Certainly we've not been consulted on it.

[John Barlow, Conservative, Foothills, AB]

I appreciate what Mr. Pakalnis said about not having to go cold turkey and about having some great innovations. We've heard from both of you that they're on the horizon, but we still need these resources to get us to that horizon. I don't see why we have to put punitive taxes on the existing industry now and still pretend that we're not doing innovation and research. That doesn't make a lot of sense to me.

Mr. McDougall, you said in your presentation that you would look at options to facilitate research and innovation other than a carbon tax. We have other programs in place: flow-through shares, a mining exploration tax credit. What would be some options other than a carbon tax? Would it be tax incentives? What would be some options other than a carbon tax that in your opinion would achieve the same goal but not be a punitive tax on the industry?

[Mike McDougall]

Thanks for the question.

Currently, just to back up a bit, there are no carbon taxes implemented in the Yukon at this point. In terms of alternatives to a carbon tax, I mentioned things like low-interest loans to upgrade equipment for more fuel efficiency. That would be one of the ways. Another is to allow us an accelerated capital cost allowance on the new equipment purchases. Those have been used in the past and could be used again.

There could also be low-interest loans for micro-hydro or for solar. Some of our operators have, at personal expense, invested in solar panels. They use a cogenerator, a small diesel generator to back up their solar. That is effective but it has large capital costs. There could also be pilot projects with new technologies, if we have innovative ways of developing our ground, of exposing our resources, something that we haven't come up with yet; but it goes more to what my colleagues have been speaking about in research and development.

Finally, there could be educational programs so that we can disseminate that information to our miners. We're a wonderful, industrious bunch but we're also really hard to get to. It's really important to communicate these innovations to our miners.