Natural Resources Committee on Nov. 1st, 2016

[Ken Neumann]

Thanks for that question. As I said in my testimony, at one time we used to have MITAC, which was a training advisory committee in which government unions, workers, and communities were part and parcel, no different than at CSTEC. It was very successful.

Unfortunately, the previous government discontinued that, and I think that was ill-advised because it did a tremendous amount of work for the mining industry. We saw the significant downsizing of the steel industry back in the 1980s and what we were able to do with that. We were able to clean up that industry and make sure that the companies have the necessary skills. For that reason we think there's a role for the government to play with respect to training.

We wouldn't have those things that happened at HD Mining in northern British Columbia with the temporary foreign workers. There are very many able people who can take these jobs. These are good decent jobs. It's an opportunity for Canadians to be trained.

I think we need to go back to a sectoral council, as we had in the past. If it's not broke, they take it away. It had a tremendous amount of benefit to us in the mining industry and to the companies we represent. Unfortunately, the government had a different view of it, and it has gone by the wayside. I think it's to the detriment of Canada and the industries that we represent.

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

Okay. I'll just turn to Mr. Batise.

You mentioned that capacity funding was an important issue, as was the capacity within your communities. Could you comment on the education needed within your communities to have people who can work in this industry and work in the whole process? What role can the federal government play in providing funding, both for the capacity and for the education?

[Jason Batise]

Thank you for the question.

First, in terms of the formal education piece, we know that through AANDC the programs have been capped at 2% for the longest time. Our young people continue to struggle to enter formal post-secondary streams. Communities are sorely lacking in resources just for that piece. We would encourage the government to have a look at increasing those budgets for communities.

Specifically to mining, we do access some special program funding through NRCan and some other resources available to us from the federal government, but again it's never enough, at least in our case. We've looked into places like the Borden gold project in Chapleau, where communities are at about 90% unemployment. We have young people between the ages of 20 and 35 who are stranded, who have no hope. There is not a lot of industry in that particular town. We really do need a significant investment from the federal government to bring those folks up to speed, just in terms of job readiness programs, never mind learning how to handle a jackleg drill or how to do the actual job at the site. It's just preparing people to enter the workforce. That's our first step in training the folks.

Again, we would look to the federal government to increase those budgets that we have available. We have had some success in accessing funding, but it's lacking. I understand the SPF program that we're currently applying for is oversubscribed this year across the country and there's been a delay until January with respect to our applications. The mine is looking to open and go underground in February, and we're sitting and waiting for a decision on applications.

[The Chair, Liberal, James Maloney]

Thank you.

Mr. Tan is next .

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

Thanks, Chair.

I prepared some questions for CMC, but Mr. Adamson has left, so probably I will have to share my time with my colleagues.

My question is for Mr. Batise.

I'm very glad to find out from your presentation that the first nations communities are enjoying a positive impact from the benefit agreement in terms of increased employment, business, education, and infrastructure.

I want to focus my question on education. I know my colleague and other committee members have already asked questions regarding education for indigenous people, but I want to focus my question from a different angle on undergraduate studies and even higher education.

I know the mining industry is a very significant employer for indigenous people. However, as some witnesses have indicated, most of these indigenous workers are hired to do the field work, so we should find a better way to help the indigenous people to gain greater access to more value-added jobs as scientists or engineers or even as professionals to participate in the decision-making process. Education is the key.

One witness from a university that has a mining research program that addresses mining in indigenous areas, and they have large federal funding, stated that fewer than 5% of their students are from the local indigenous communities or even from all indigenous communities. That's not enough.

Some witnesses suggested that we need to improve our early childhood education, which is good, but it takes years or even one or two generations to see the difference, to see the impact. I know there are come colleges that have been created to mostly recruit indigenous students to have education and they provide training programs, but again most of their graduates are technicians or technologists or trained skilled workers.

Can you recommend any policy ideas that the government or the mining sector developers can apply to encourage more talented indigenous people to enrol in post-secondary or even higher education in the areas that are being looked for by the mining industry?

[Jason Batise]

You mentioned that right from pre-school we all know the deplorable conditions our communities are under with respect to the entire education systems that have long produced troubles for our community members.

I'll come back to the thrust of my discussion this morning. Part of our agreements create wealth for our communities. This wealth is being driven back by our leadership into scholarship programs, into post-secondary funding, into access to the programs and jobs at the higher level, the value-added jobs. That's where we want to be too. The blue-collar work is fine. We certainly take every advantage of all the job opportunities available. However, it's our goal to have our folks sitting in the boardrooms and at the executive positions within the mining companies.

The other thing that our agreements do is open those opportunities to our communities. We have direct conversations with those mining companies about how our folks can participate at the executive level. For the most part, those companies are encouraging us to do that. I think it looks extremely good for the industry if they can promote indigenous participation at the highest levels of their management.

We work closely with the training institutions, both universities and colleges. Through federal grants and programs, we could perhaps amend the systems to include special access programs for first nations citizens looking to access mining programs. We have the Haileybury mining school located close to our communities. There may be a way to connect us to training institutions.

I think there are a number of opportunities, again driven through a direct conversation between our communities and the industry.

[The Chair, Liberal, James Maloney]

Mr. McLeod is next.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Mr. Chair.

I have really enjoyed all the presentations. I think some very good information was presented here today.

I'll continue along the same line of questioning.

Mr. Neumann, you talked about the need to focus on aboriginal people and you talked a lot about impact benefit agreements. I'm from the Northwest Territories, and we just had a mine open up. Gahcho Kué Mine opened up with the support of four aboriginal governments, all of which signed impact benefit agreements. They go such a long way in giving comfort to the communities that they'll have oversight, they'll have training. All of these agreements spell it out. There's too much history of agreements that were not documented, and they go kind of sideways when the mine takes off.

They did a good job. Gahcho Kué has an interesting name. It means place of big rabbits in the aboriginal language. The mines have been an economic driver for us in the Northwest Territories. They do a pretty good job.

Mr. Batise, you said that we need to get indigenous people working. We have huge populations, in Manitoba, Saskatchewan, Alberta, and Northwest Territories, Nunavut. We have over 150,000 unemployed aboriginal people sitting in the communities. Most aboriginal peoples don't migrate to where the work is. They'll stay in the communities.

We have a huge challenge. Sometimes the answers lie in small things. A lot of people in the communities can't go to work because they have a criminal record or they are not able to get a pardon. Mobility is also an issue because they can't get from one community to the mine. Perhaps it's literacy, low levels of reading and writing skills, or even basic necessities such as housing. It's all these things.

How do we solve that? How do we work towards resolving that issue?

[Jason Batise]

That's a difficult question to answer in 30 seconds, but I'm going to have to try.

For our communities, we've tried to produce some pre-employment training programs that lead into the jobs. One of the things we're dealing with is substance abuse. Goldcorp has one of the highest standards of safety policies and procedures that they use on their sites. There's a zero tolerance for substance abuse. They're subjecting our community members to random testing, and there is a high failure rate. Through our agreements, we're asking for some leniency in that regard.

The same thing goes for education levels in certain jobs. Maybe there could be a relaxation of corporate policy, from a grade 12 standard to a grade 10 standard. That's provided the individuals or the applicants can prove they can actually do the job, whether it's literacy or those other requirements. We're not trying to dumb things down, but we're certainly trying to create avenues where, for good reasons, our community members haven't been able to reach thresholds that perhaps corporate policy is looking for.

[The Chair, Liberal, James Maloney]

Thank you.

Go ahead, Ms. Stubbs.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you, Mr. Chair.

Thanks to all the witnesses for your testimony today.

I'll come back to you, Mr. Batise, so that you can expand on more of what Mr. McLeod was asking in a couple of specific questions.

I hope that we have time with Mr. Mell, because the ability for 375,000 people to remain employed in the mining sector in Canada and to increase those numbers depends on the ability for these projects to be financed and developed in the first place. I hope that you'll have some time to expand more on the issues that you were discussing in your presentation.

Thank you for confirming the importance of the mineral exploration tax credit in your discussion about the flow through shares. Given the starkness of what you've presented to us today, about the more than 1,000 mineral explorers with the highest risk and the least financing available—which is really the foundation of the mining sector and the 100 developers and the 200 producers beyond that—I think it's very important for us to get a sense from you if you have any reflections on any other specific financial measures or tax incentives that could be considered, either federally or provincially, to enhance investment in mining exploration in the first place and also long term mineral development, and if you have any views on global competitiveness or reflections from other jurisdictions that legislators in Canada may want to consider.

[Trent Mell]

For me, in reference to our industry, we have a new generation of enlightened mining executives who share a lot of those views. At the Young-Davidson mine, for instance, 81 out of 600 workers are from one of our IBA partner agencies or other first nations. That's 14% of the workforce, and we can always do better. I think his comments around workplace entry programs, free education, and whatever we can do to get more geologists, engineers, and executives from aboriginal communities can only be helpful for our industry.

With respect to your question around what more we can do, I'm hopping on a plane in about five hours, and I'm heading to Zurich for an investor conference. About half of the issuers giving presentations are going to be Canadian miners and Canadian juniors, who are there talking to Swiss funds and Swiss family offices about their projects and their investment theses. My role there is to try to broker those relationships to bring investors into Canada and into these stories.

Investors want to invest in Canada. It's no secret that it's a desirable location, geopolitically. Yes, as was outlined earlier by Mr. Lapointe, the good stuff isn't found in the western developed world. The higher grade stuff is in Colombia and elsewhere, but Canada has a great reputation for excellence, not just with raising capital but also with execution.

I think where we are lacking—I don't say lacking; it's a collected effort—in policy and effort is around innovation. We've spent the downturn spending a lot of time talking amongst ourselves around things like putting more tailings underground, as part of paybacks, which helps build recoveries to solve an environmental footprint issue, as well as providing ventilation on demand so that we're not consuming energy to provide oxygen where there are no employees in an underground stope.

Innovation is huge. There's a great deal of effort being undertaken in the Sudbury area by a number of lead agencies. I would say, in addition to just providing the incentives to encourage investment into Canada, because we are a high cost jurisdiction relative to most of the world, I think anything around innovation and education could only be helpful, because I think we have a long way to go in the mining sector to improve upon mining methods and techniques that have been in place for decades.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you.

Mr. Batise, I'd welcome you, if you could, to let us know any specifics about any particular projects or impact benefit agreements that you'd like to expand on and also about the socioeconomic benefits to your communities.

[Jason Batise]

I noted that previous testimony was done on the Borden gold project, where they're planning an electric mine, Canada's first electric mine. That mine is actually about five kilometres from one of the communities of the Wabun Tribal Council. As a matter of fact, the mine footprint goes underneath the lake where we draw our drinking water for our first nations' water treatment facility.

Socio-economic conditions at Brunswick House are horrid. With the downturn in the forestry industry in Ontario for the last 20 years, it's been an awful market. They experience from 90% to 95% unemployment, high incidences of drug abuse, social issues, low education achievements.

However, the good news is the Borden mine and our conversations with Goldcorp at that mine are providing a whole lot of hope for that particular community. The community members are completely engaged, from the youth to the elders, in working alongside Goldcorp in developing the agreement, and not only just developing the agreement but working immediately to start education programs, to start understanding some of the social impacts of substance abuse. How do we work through those issues, with Goldcorp, to get the people to work there?

Our expectation is to have at least 50% employment from the communities in that area from our first nations. Again, we worked early, often, hard. Goldcorp is a great partner of ours. We have two existing impact benefit agreements at other sites in the Timmins area with them. We're continuing that success at Borden.

[The Chair, Liberal, James Maloney]

Thank you.

Mr. McLeod, you're up next for five minutes. I think this is going to be the last—

[Michael McLeod, Liberal, Northwest Territories, NT]

Mr. Chairman, I'm going to share my time with T.J.

I just have one issue I want to raise with Trent Mell from PearTree. It's around the mineral tax credits and the flow-through shares.

I've had opportunities to talk with different mining companies in my riding, and also with the PDAC people. In the north the cost of developing is very high. We need incentives. I'm being told that we need either investment in transportation infrastructure, or else the mineral tax credit or the flow-through shares to continue.

Could you maybe tell us a bit about what the effect would be if we allowed the mineral exploration tax credit to expire on March 31?

[Trent Mell]

Thank you for your question, Mr. McLeod. It's a good one, because I think if the METC were to expire, there would be the two parts.

Of course, you have the super flow-through credit, as you talked about. That's the early stage. That's the discovery stage. Pick your name—Goldcorp, Agnico, Barrick, Hudbay—these companies are not doing the early-stage greenfield exploration activity. They're spending their money enhancing their operations, building out the next generation of mines. They are not discoverers.

It is a real feeder system. That 1,000-plus bucket I showed at the beginning of the Lassonde curve are the ones that are going to find the next generation of mines. Without the super flow-through, our capital—and it is a global capital pool—will go elsewhere. It will go to South America, it will go to Asia, it will go to Africa, and we'll be disadvantaged. There is a reason that a half of the world's mining companies list in Canada, and the flow-through is an important part of that. That contributed to the creation of a centre of excellence, not just at those mine sites, actually, but also on Bay Street, and Howe Street, and in Calgary.

If you look at the executives, the bankers, the lawyers, the engineering firms, all of that, you see a lot of the money that flows across this country, urban and rural, starts with mining. We need that incubator, that risk capital to come in to help keep us going for generations to come.

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

First of all, I'd like to thank everybody for being here today. It's certainly been an interesting session and a broad cross-section of witnesses.

I just have a quick question for Mr. Batise. I was wondering if you could follow up on your comments at the end of Mr. McLeod's question earlier around the education and substance testing guidelines for first nations in regard to mines. I'm just interested if you could elaborate on that a bit.

I'm 100% behind inclusion of more first nations peoples in all these projects, but I'm not sure I'm getting where you're going in regard to the lowering of minimum required testing for anybody who works at a mine site, as it's a safety hazard. I'm just wondering if you could elaborate on that a little more.

[Jason Batise]

First of all, perhaps it's not just a complete exclusion. Goldcorp's policy now is one strike and you're out.

Maybe you could build in some leniency around treatment programs or around some sort of re-entry program whereby the employee could demonstrate that they've taken the incentive to go and get treatment, and reintroduce themselves to Goldcorp as kind of a changed employee. Maybe there could be additional monitoring programs whereby health and safety reps keep an eye on those employees, and perhaps there could be further mandatory drug testing of that employee.

Again, we're not looking to create unsafe workplaces. That's certainly not the point here. We know that there is rampant substance abuse in the communities. If that's the threshold we're trying to get over, if it's just a simple Goldcorp.... By today's standards, I'm afraid too many of our folks will fail at the outset, and there won't be any additional avenues for them to re-enter.

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

Right. I understand that part of your reasoning, but personally, as somebody who has come from business and has managed a large number of employees, I'd be very cautious about the type of culture you'll create within a working environment if you set two different standards for aboriginal versus non-aboriginal people, especially as it pertains to something that can be as inflammatory as drug testing in a work environment.

[Jason Batise]

To be honest with you, through our agreements, we are setting two different standards. Our agreements set out specific principles around which our communities participate with the projects. Our communities are top of mind. They're on our traditional territories. We have the right to engage with the proponent in the best way possible for our communities, and in some cases it does create a bit of a double standard that's necessary, in our view, to align us with the rest of Canada. If those things have to happen, our chiefs will support those ideas.

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

I totally agree with you on the co-operation agreements and the specific measures set out in those agreements that set a different standard. In terms of safety, that's something completely different than the traditional allowances made in order to allow the two levels to work together.

That was all I wanted to follow up on. I do get where you're coming from, though. Thank you.

[The Chair, Liberal, James Maloney]

Go ahead, Mr. Massé.

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

Thank you, Mr. Chair.

My question is for Mr. Lapointe.

You've made headlines in recent years because of legal issues with Pétrolia. You settled them out of court, and so much the better. We're very familiar with you because you've done a great deal of work in the industry as a whole.

In general, what are the three winning conditions for Canada to have a good mining industry?

[Ugo Lapointe]

Thank you for the question.

Canada has issues that are specific to it and that are not the same abroad. If we must look at the Canadian situation and identify three key issues, as I did somewhat in my presentation, we need to be aware that we have bigger and bigger mining sites with more and more mine waste. The dikes and dams retaining the waste are now up to 200 metres high. We'll pass this legacy on to future generations of Canadians for hundreds of years.

The government must create all the necessary incentives to ensure the infrastructure will be stable for centuries to come. The industry will be the first to tell you that it's a huge technical and financial challenge and that assistance is required to address the challenge. It's a major issue. We're talking about hundreds and hundreds of mines across Canada.

The second issue is a social matter and it concerns the rights of the first nations. A regulatory framework or policy must be created that makes things clear with regard to information, consultations and maybe even consent in a nation-to-nation relationship with the first nations.

As we see today, in general, most Aboriginal people want mining development. However, they want it done properly for their communities on a social, environmental and economic level. The United Nations Declaration on the Rights of Indigenous People, or the UNDRIP, provides good guidelines from which the government could draw inspiration.