Natural Resources Committee on Oct. 25th, 2016

[Marc Serré, Liberal, Nickel Belt, ON]

Thank you, Mr. Chair. I just wanted to follow-up on a few things.

Harold, I just wanted to congratulate you and Laurentian University for taking the lead on the metal earth project. As you indicated, it received $109 million, and it's the only federally funded project across Canada from NSERC in the mining industry. That's something that I think is important to note.

Because this project is important, you have an individual.... I just wanted to ask you a question about Mr. Harquail. Some of you may know that he provided a personal donation to this project of $10 million, just to show how important it is. Has Mr. Harquail followed up? Are you looking to see how it could be worked with other institutions and integrated within Canada to share the knowledge you're gaining right now?

[Prof. Harold Gibson]

Yes, David Harquail generously provided $10 million to the department of earth sciences, which is now the Harquail school of earth sciences, and metal earth. He provided the dollars before he knew that we were going to be successful with metal earth. He saw the need to support mineral exploration research centres, and the one at Laurentian, especially, to be successful.

We cannot just have individual research done. There's research done by individuals at every university, but to do the big science projects that tackle major problems, we need research centres. David Harquail saw that, and he also saw the need to train the next generation of geoscientists. That's why he saw us.

We are moving forward with other companies now in metal earth. I would like to say that metal earth is not a seven-year wonder. We want to see that it continues beyond that. We're now looking at using industry dollars to leverage government dollars through NSERC—hopefully there will be more dollars in that pot—or direct funding from government to leverage those industry dollars. This would enable programs to be run that are parallel to metal earth, that don't leverage metal earth dollars but run parallel and tackle those same problems, so we can continue to have mineral exploration research done at this scale in Canada.

We're in the process of doing that. We have four companies now interested in participating, in addition to the companies we have.

[Marc Serré, Liberal, Nickel Belt, ON]

Thank you.

Mr. Pakalnis, I just want to ask about the first nations aspect. Mr. McDougall indicated consulting and talking to first nations, but then we also talked about—as did your presentation—the ownership aspect, the engagement, and how our first nations should be partners. Consulting is probably the old way of doing things. Now we need to move towards a new relationship, to look at how they can be part of the mining project. I just wanted to get your comments on what we could do better on that, and linked also to the Ring of Fire.

[Vic Pakalnis]

Let me start and others can join in.

I'm glad you brought up the Ring of Fire. Basically, that's a major opportunity, but we've had an impasse. We need to move more quickly on these kinds of developments. If we can't unlock that logjam, and there's federal-provincial and inter-ministerial...it's a quagmire in terms of getting a permit to mine. It has to have the support of the first nations, who could benefit amazingly in what can happen up there, but we need to resolve the mistrust that I think has happened over the years. I think it's happening.

We did some work for the Assembly of First Nations on building a resource centre that would be trusted by the first nations. If you're negotiating these various deals, sometimes it depends on who's on either side to be able to make the deals. As I mentioned, both at the Mining Association of Canada and the Ontario Mining Association—I'm a member of both—there's a great realization that the relationship has changed. It's improved.

On my board of directors, I have Glenn Nolan from Noront, who's one of the greatest guys. He used to be the president of PDAC, the prospectors and developers, and he is first nations himself. He's a vice-president at Noront. They're starting the first operation. I think they're going to show the model of how to move forward.

The federal government has to come in with the partners there, the 13 first nation communities, to figure out the go-forward plan so that we don't miss the next boom cycle. If we miss that, basically, there are other areas in the world that are already working really hard. We're going to miss a major opportunity, and it won't come for another decade or two.

[The Chair, Liberal, James Maloney]

Mr. Pakalnis, please don't take this personally, but I'm going to have to stop you there.

Thank you, Mr. Serré.

Mr. Cannings, you have three minutes.

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

I would like to ask Mr. McDougall about the follow-up on the carbon tax issue. I'm from British Columbia, as is Mr. Strahl, and we've had a carbon tax there since 2008. When the government introduced the tax there, they made it revenue neutral by reducing the corporate income tax so that companies such as those, if this were the model in Yukon, would receive a concomitant drop in income taxes. That way the carbon tax could provide the market signal to spur innovation and spur moving to less carbon-intensive operations, if they could.

You talked of members who are trying to do good things in that regard. I wanted to know if you think that would be a model that would work because, from my understanding, the federal government is looking to B.C. as a model for the carbon tax, if provinces bring that on.

You mentioned that Yukon is unique. I believe there is some placer mining in Atlin, though I don't know how those operations are faring there, but if they are they've been operating under that carbon tax for the last eight years.

[Mike McDougall]

That's right. Currently we are paying a certain amount of carbon tax in British Columbia because, of course, trucking firms are bringing the product that we consume up through B.C.

In answer to your direct question, yes, some form of...because we can't pass our tax on since we sell an international commodity. Our gold is sold and always priced on the international and we can't pass any costs on. Any costs accrue to our bottom line.

Any opportunity for governments to either charge us a tax and then rebate it to us in either equal part, as you say, as a reduction in income tax or, more importantly, as an incentive in some other form to try to reduce our use of fossil fuels, understanding of course that we're never going to be able to go to a total battery, much as we'd like to. We have to use the fuels.

I would say yes to some form of being able to provide incentive but not to penalize the industry for the total amount of the tax.

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

I understand. That's the model we've used in British Columbia and, in my opinion, it has worked quite well.

The levels of emissions have been rising in the last couple of years, since the government has stopped raising the carbon tax incrementally, but when we've been talking to other industries here, each representative of those industries has said that a carbon tax is the first step and the simplest economic step to achieving some sort of reduction in our carbon emissions. I was wondering if this kind of model would work for you.

[The Chair, Liberal, James Maloney]

I'm going to give you 30 seconds to answer that, then we're going to have to stop.

[Mike McDougall]

The challenge is that we can't pass our costs on, so we need to have an encouragement rather than a penalty. We need to have it as an incentive to comply, rather than just a straight tax on the industry.

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

The reduction in corporate income tax would help.

[Mike McDougall]

Part of it would help.

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

Thank you.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Cannings.

Gentlemen, thank you all very much for joining us today. I apologize I had to keep interrupting, but that's my job at this end of the table.

Your evidence will prove very helpful to what we're doing today. Again, on behalf of the committee thank you for coming today.

The meeting is adjourned.