Natural Resources Committee on Nov. 1st, 2016

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Thank you.

Mr. Chair, do we have some more time?

[The Chair, Liberal, James Maloney]

You have 30 seconds.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

I've a really long question for Mr. Neumann. I'm quite impressed with the panel of witnesses. I'll send my questions so he can answer them later.

[The Chair, Liberal, James Maloney]

Thank you.

Mr. Barlow, you're next.

[John Barlow, Conservative, Foothills, AB]

Thank you very much, Mr. Chair, and thank you to our witnesses for being with us today and providing some outstanding information.

I'm going to direct my questions to Mr. Adamson. I know you have a tight time schedule, so I will try to get you in before you have to leave.

Earlier this year I had the opportunity to tour the North West upgrader in Alberta, which is the first refinery built in Canada since 1984, focused on carbon capture. I want to talk to you a bit about carbon capture.

You mentioned the Containment and Monitoring Institute and the Carbon Capture and Conversion Institute. However, I thought it was interesting that after the Liberals announced the carbon tax, the Province of Saskatchewan released its white paper on climate change, which included some information on carbon capture technology being the direction in which we should go. Carbon taxes aren't going to allow us to reach our goals. They'll be punitive, if anything.

Then a federal report came out indicating that British Columbia will see a 32% increase in greenhouse gas emissions between 2013 and 2030, despite the fact that B.C. has a carbon tax. Therefore, I think carbon capture is a direction in which we need to go. Once the North West refinery is up and running in the next couple of years, it will redirect 1.2 million tonnes of carbon dioxide through the Alberta Carbon Trunk Line and redistribute it to orphan wells and enhance the life expectancy of some of those wells.

In your presentation today, you talked a bit about the need for additional funding. This is not something the private sector can do on its own. In your expert opinion, how close are we to having carbon capture in the mining industry? We've heard a lot of testimony from our witnesses that the future of Canada's mining industry is becoming more and more directed toward remote areas. Is this something that is within reach? Can we have carbon capture as part of the mining industry? What do we need to facilitate that technology and that innovation?

[Richard Adamson]

Thank you for the question. It's excellent and covers a lot of different things that I'd love to respond to. In fact, Chris Bataille and I responded in The Globe and Mail to Mr. Wall's proposals.

Absolutely, carbon capture technologies, whether that's storage or utilization, are going to be critical, especially to decarbonizing the industrial side of our economy. Decarbonizing the electricity sector can be done by a number of different pathways, but the industrial side is much more challenging.

The types of technologies we're looking at on the mining side are not conventional carbon capture and storage, but making use of the mine tailings themselves as the destination for the carbon dioxide in mineral form. Essentially, the tool kit that I referred to that Greg Dipple and his team have developed ranges from improvements of practice without a significant change to the capital investment—simply operating procedures—to much more intensive types of activity.

Some of the processes can be implemented relatively quickly. One needs to sit down and look at the overall operations of the mine to find the minimum impact approach and the lowest cost—the low-hanging fruit, if you will—and where the other opportunities are for perhaps larger impact but with some capital investment. There's a spectrum of types of approaches.

To give you a quick example, the mine tailings will naturally react with carbon dioxide out of the atmosphere to create carbonate, but if you deposit the tailings rapidly, then the tailings coming in next will smother the reactions on the earlier tailings, meaning that if you build up your tailings rapidly, you wind up with much less than the total potential uptake. If you instead change your practice to deposit your mine tailings in different areas and switch locations more frequently, you actually open up the opportunity to increase the amount of carbon dioxide uptake without substantially changing your operating costs.

There are a number of those types of practices that can improve performance, and the level of impacts and things such as that will really require some field testing.

When I talk about the cost, it's really the cost of getting reasonable scale pilot testing done. I look at cost from an R and D perspective, not from an operating mine scale, so when I say “substantial”, I'm talking in single-digit millions, not billions.

[John Barlow, Conservative, Foothills, AB]

This is the first time in our study, I think, that we've talked about carbon capture in mining. Certainly we hear it in the oil and gas sector. Are we too early in this process, Richard, or have there been some studies on a larger scale? If we can use this technology for GHG emission reductions in a typical mine, what is the potential there, or are we not that far along yet?

[Richard Adamson]

Greg and his team have done those types of studies for specific example mines, because the mineralogy is different and the mining operations are different at different mines. It wouldn't be easy to come up with a one-size-fits-all answer, but Greg and his team have answers for a number of mines, both in Canada and in Australia, that can be used as examples.

[John Barlow, Conservative, Foothills, AB]

Is the biggest GHG issue with mines the diesel being used in the mines, or is the actual operation of the mine the focus of some of these projects?

[Richard Adamson]

It depends on the mine operation. If you're isolated and dependent on on-site power generation and that type of thing, then that can be a major contributor. If you're grid-connected, that changes your emissions profile substantially. It varies from mine to mine.

[John Barlow, Conservative, Foothills, AB]

Thank you.

[The Chair, Liberal, James Maloney]

Thank you.

I see Mr. Lapointe is here.

Mr. Cannings, why don't you ask your questions, and then we'll go to Mr. Lapointe, just in case you have some questions for Mr. Adamson.

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

Can I do it the other way around? I have questions for Mr. Lapointe.

[The Chair, Liberal, James Maloney]

Sure, that's fine.

Mr. Lapointe, are you ready?

[Ugo Lapointe, Canadian Program Coordinator, MiningWatch Canada]

Certainly.

[The Chair, Liberal, James Maloney]

Welcome, and thank you for joining us. You have the floor.

[Ugo Lapointe]

Good morning, everyone. My name is Ugo Lapointe. I work for MiningWatch Canada, as the Canadian program coordinator.

MiningWatch is a non-profit organization based in Ottawa. We have a mission to promote better environmental, social, and economic practices in mining in Canada and abroad.

We can discuss for a long time the different mining issues that concern Canada currently, but we wanted to highlight two key issues, and mostly one this morning. This morning the main point we want to discuss is that the global mining industry, as we can see now, is growing at an unprecedented rate. It's really significant, the trends we're seeing, not only over the last decade but really during the last 50 years. We need to keep those global trends in mind for future public policy-making in Canada.

I will explain why it's important to keep those global trends in mind when it comes to environmental issues, particularly as it pertains to Canadian mines in Canada.

It is useful to adopt a historical perspective when considering gold mining and gold consumption globally for the last 160 or 170 years. Looking back, you can see an exponential increase in metal consumption, particularly since the 1980s. Iron, copper, and nickel have all seen exponential growth globally.

The main mining jurisdictions in Canada are Saskatchewan, Ontario, Quebec, British Columbia, Newfoundland, and Nunavut. We see over the last 10 years significant growth. Over the last two years, there has been a slowdown in the mining industry. Even with that slowdown, however, we're still about twice as high as we were 10 years ago, to judge by investments in projects in these provinces and territories over the last 20 years or so.

There are many drivers for this growth, but I will highlight only the main ones.

Population growth is a major driver, and consumption growth comes with it. This is taking place largely in the urban centres of the world. City-building and urbanization, particularly in developing countries, whether it's China, Brazil, or India, account for the use of massive amounts of metals such as iron, nickel, and copper. Over the last 50 years, the urbanization trend has been major. People are moving to cities in China, and we see cities of a million people springing up every year, almost every month. This activity requires massive amounts of metals.

Transportation is the other major sector. With transportation, we're talking about road infrastructure, including the transport modules such as cars, boats, and airplanes. You name it.

When you look at the statistics, you see these are the main drivers.

Of course, when you start looking at other specific metals like gold or a commodity like diamonds, these are very peculiar niches that are more in the aesthetic consumption and financial sectors. The point is that there are major trends of global growth that are linked to a whole bunch of what we call base metals, which are linked to city and population growth, and then there are other subsectors that we need to consider when we think of public policy for the future.

Another major trend that I want to highlight with you this morning is the fact that we're seeing lower and lower grades; in other words, all across the planet and on different continents, the mines that we're mining today are not as rich as the mines that we used to mine.

This graph represents trends in countries on four continents—the U.S.A., North America, Australia, South Africa, and Brazil—for gold mining over the last 170 years or so. All across the planet we are seeing that in the gold mines that we mine today, grades of gold are a few times lower per tonne of rock extracted.

There are two main reasons that explain those trends. One is that, yes, we mined the richest ore body that we could find first, and actually those trends are also observable in Canada in many instances. The other trend has to do with technology. Today we're able to mine lower-grade mines that we were not able to mine before.

Why is this trend important for us today? This means that when we mine today, for the same amount of metal that we produce, we generate far more mining waste than we used to. The mines are becoming bigger and bigger and the mine waste that we need to deal with—the tailings and even the energy or the water that is needed—has significantly increased in relation to the same amount of metal that we produce. There are significant environmental and social issues related to that.

In particular this morning I just want to highlight three main issues. I'll focus only on one, because I won't have time to explore all of those. The three main issues that are linked to the global trends I just mentioned—the mine waste and tailings that are generated by those mines today—are massively challenging technically, financially, and environmentally. Socially what we see as well is a trend towards more and more projects getting into sensitive areas where we did not formerly go. Those sensitive areas trigger community responses that are often in opposition to projects.

We need to consider this trend, because it has an impact on the mining industry in Canada and it will continue to have an impact. In our opinion, Canada should develop a solid public policy in response to this specific trend. Indigenous people's rights in particular are a key issue. Economically the costs of cleaning up those sites is increasing because of the size of the sites, but there is also the matter of liability when some of those sites are abandoned by mining companies and the cleanup costs end up in the lap of the government or the taxpayer.

One example that you see illustrated is that of the 2014 mine spill in Mount Polley. This was the biggest mine spill in Canadian history, with 25 billion litres of mine waste spilled into the surrounding waters. Today we are still dealing with the aftermath of that spill. That is linked to what I was saying earlier: we need to deal with bigger and bigger mines and more and more mine waste and mine tailings sites. Doing that is a technical challenge and a financial challenge.

The dams that we build today, which can be 40 metres or up to 100 metres high, represent a huge risk, in our opinion, for the government, for taxpayers, if those constructions are not well done and if they end up under government responsibility for the next century. They need to be well designed, well operated, and well maintained, and they need oversight and financial securities to make sure that taxpayers don't have to pick up the tab if something fails.

Mine spills are not unique to the Mount Polley spill of 2014. We've seen other mine spills. We've counted at least 10 to 15 mine spills in Canada over the last 10 years. These are just examples of a few of them.

The point is that tailings management, mine waste management, and the associated risk of spills is of major concern. It's a concern that will continue to grow as the mines become bigger and bigger and we have more and more mines. There is a cost associated with them.

[The Chair, Liberal, James Maloney]

I will have to ask you to wrap up, if you can.

[Ugo Lapointe]

Yes.

We saw spills in the U.S.A. last year, and Brazil as well.

What are the solutions? What could be the government role? In our opinion, there are probably at least three main areas where government could help to reduce those risks or prevent those risks.

The first one is possibly to support a research program for what we would call responsible consumption. Raise public awareness about other options that Canadians have to try to have positive impacts on reducing at the source those risks by promoting responsible consumption options. Similar to what we've done in the climate change debate over the last decade or so, we think we also need to think about the responsible consumption of metals and promote that Canada-wide.

Second, financial securities are very important. Governments, including the federal government, have a major role in ensuring that site cleanup remediation financial securities are in place before mines open to make sure we have the money in place in case the company goes bankrupt or in case the company is not any longer able to clean up those sites.

Linked with financial securities is what we would call a national security pool for spills. That's a major gap right now in current regulations and policies. We see it in the gas and oil industry. There are examples we could look at. In the mining industry, there is a need for a national security pool for spills.

[The Chair, Liberal, James Maloney]

Mr. Lapointe, you'll have to wrap up.

[Ugo Lapointe]

Finally, there are regulations and incentives that could be put in place. The first point is that we could promote certain types of minerals. To give you a clear example, just so you understand it, we should stop asbestos mining in Canada and promote best available technologies with different programs, different incentives, fiscal incentives, to help reduce those risks or prevent those risks.

On that note, I thank you.

[The Chair, Liberal, James Maloney]

Thank you.

Go ahead, Mr. Cannings.

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

I'd like to thank you all for being here today.

Mr. Lapointe, one of your themes was responsible mining in terms of environmental regulatory processes. The government is undergoing a review right now of various aspects of that. I just wondered if you could expand on CEAA, the Canadian Environmental Assessment Act, and the lost protections of the Fisheries Act and Navigation Protection Act. I'm wondering what your views are on those and what you would like to see the government do.

[Ugo Lapointe]

I'll do my best to answer this question, but to be honest, it's my colleague, Jamie Kneen, who covers that file. He's actually in another hearing on this specific topic today. I'll just mention quickly that in our opinion, of course the CEAA was damaged in 2012 by the omnibus bill. At the least, we need to come back to what it was before.

I think there's also a growing understanding, even in industry, that some of those 2012 changes may not have been for the best in the end, in terms of processes of consultation, information, and social licence.

One of the major issues we have seen is that before, we had a clear understanding of which projects were subject to a review process. There were also options for more regular panel reviews, which are more rigorous reviews. Right now, that clarity is being taken away with more discretionary powers on the part of the minister. The criteria are more problematic and blurry. It is at the discretion of the minister which projects will eventually be subject to those more rigorous reviews.

With regard to the Fisheries Act, it's the same thing. Different groups all across Canada have called for a return to what the Fisheries Act was before the 2012 omnibus bill.

I think there may also be room to improve the Fisheries Act. I'll just point to one example in connection with the Mount Polley spill in 2014. The maximum fine that this spill could trigger is $12 million, and the maximum fine ever given under the Fisheries Act in Canada is $7 million. That is not a proper incentive, in our opinion, for the proper enforcement of our laws and protection of our waters. Those fines need to be reviewed to create a more proper incentive for companies to follow.

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

I'll turn to Mr. Neumann.

You were talking about the importance of education within the mining sector. I know the steel workers and other unions have always been involved with training their members to take part in these industries. I'm just wondering if you could comment on the role of government and your union in that education process, especially with regard to the sectoral councils that you briefly mentioned.