Natural Resources Committee on Feb. 19th, 2021

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

I would like to ask Mr. Gratton and Mr. London a question. I hope that they can hear me clearly on the interpretation channel. Any time Quebec's mining sector is mentioned, what comes to everyone's mind is the iron ore mines from which the Duplessis government was sending Quebec's iron to the United States for a penny a ton. That's our history, and perhaps the shock and the trauma in Quebec lives on when the mining industry is mentioned.

It makes clear to us the great importance of added value, of secondary and tertiary processing. With critical minerals, my impression is that our interests lie in developing clusters around new technologies and batteries. But are we doing enough of that?

So I would like to ask you whether, in your opinion, the federal government has any helpful strategies for secondary and tertiary processing, for added value? If not, what in your opinion should be done to prevent the critical minerals here from simply being exported for processing?

[Ian London]

Pierre, why don't you go first? I don't get translation somehow.

[Pierre Gratton]

Okay. I was going to suggest that you go first because I was on earlier for five minutes.

My answer would be that we are currently working with the federal government and with Natural Resources Canada precisely to determine the strategies needed to achieve the objectives you have just pointed out. We must create a demand for those products here in North America, not just in Canada, but in Canada and the United States. We must create a demand so that there is a good reason to operate the mines.

I can give you a recent example that involves Natural Resources Canada. The Government of Canada, together with the Government of Ontario, has invested in the reopening of a cobalt refinery in northern Ontario. That is one example. A cobalt refinery that closed a number of years ago has been reopened. That's a very good development.

Since you are from Quebec, let me point out that the Government of Quebec is perhaps the most focused on this issue. Quebec has a very advanced strategy on strategic minerals, not only to find mines, but also to increase the development of the material containing mining products, with the goal of selling them in the United States, in Europe and around the world.

Perhaps my colleague wants to add something. He can actually speak for the downstream work.

Do you want me to help with the translation? He is asking what you—

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Gratton. Your French is very good.

I'm going to ask Mr. Labonté a quick question.

Mr. Labonté, in your presentation, you said that Canada is a supplier of choice. I would like to clarify what you understand by “supplier”. It gives me the impression that we can export these critical minerals without really processing them.

First, I would like a clarification on that. Second, I would also like a clarification on the federal government's strategy in developing value chains for critical minerals.

[Jeff Labonté]

Thank you for your question, Mr. Simard. Your questions are important ones.

Basically, here, we are working on the strategy for the chain with our provincial and territorial colleagues. We have to work from exploration to mine development, to refinery processing, and to development, as Pierre Gratton mentioned. We are working with our partners.

As always, in Canada and in the North American context, there is integration among provinces. Some mines in Quebec are processing the products of mining. In Ontario, processing is done in order to create products for export to the United States. In return, we get things like automobiles and other forms of transportation. So everything really is integrated.

It is important to create a demand for some products and to hold strategic discussions among provinces and our North American partners to study, look for and perhaps identify significant chains. So we are working with the United States on batteries for electric vehicles. We are also working on semiconductors for computers and the advancement of technologies. We are also working on advanced technologies in healthcare.

So, in the course of our discussions with our partners, we have found that in some significant areas—

[The Chair, Liberal, James Maloney]

I'm going to have to interrupt you and stop you there, anyway.

Mr. Labonté and Mr. Simard, thank you.

[Mario Simard, Bloc, Jonquière, QC]

Thank you for your reply, Mr. Labonté.

[The Chair, Liberal, James Maloney]

Mr. Cannings, it's over to you, sir, for six minutes.

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

Thank you.

I want to thank the witnesses again for coming before us today and for their patience.

I'll start with a question, broadly, for Mr. Labonté from NRCan and for PDAC. These critical minerals and metals are often found in very small amounts, I imagine. For instance, in my riding we have the Teck smelter in Trail, British Columbia, which produces mainly lead and zinc. It also produces germanium and indium in enough quantity—it might be a matter of only a few kilograms, maybe 10 or 20 kilograms; I forget the amount—to be one of the major suppliers for the world.

I'm just wondering about the challenge of actually finding some of these critical minerals—perhaps like lithium or cobalt—and the role the federal government could play there. I guess specifically my question would be, what directions and funding the federal government is providing to the Geological Survey of Canada to provide better information for prospectors and other companies to actually find these materials across our big country?

[Jeff Labonté]

Mr. Chair, if it pleases you, I'll start the answer and perhaps allow my colleagues from PDAC to pick it up following that.

[The Chair, Liberal, James Maloney]

By all means, please do.

[Jeff Labonté]

Thank you.

A very important part of the prospect of moving forward on critical minerals is to realize and discover what minerals we have and what their potential looks like.

As you point out, Mr. Cannings, sometimes the critical minerals that are produced are by-products or smaller components of a bigger operation. You have a primary metal or mineral that's being produced, and almost as a sub-item you also have the critical mineral that's produced as a by-product. It's interesting, because in some cases it's expected that those by-products will become the primary products over time and their importance grows.

The government recently, actually, included a renewal of the geoscience program under the Geological Survey, which falls under the responsibility of our department and my sector, of $130-some million over the next seven years. It's called the geo-mapping for energy and minerals program. It works predominantly in the north. Then there's a secondary program called the targeted geoscience initiative, which actually doubles up with the provinces to work in specific areas where we have opportunities to grow.

We also have research programs that are revisiting mining the value from waste, so taking waste or what might have previously been discarded product and materials produced at mining sites and re-mining those materials and extracting more value from them—extracting, for example, from some of the tailings and other elements, those finer materials that are actually quite valuable now in the critical minerals space.

I'll leave it at that for now, Mr. Chair.

[Lisa McDonald]

I'm going to pass this question on to my colleague, Jeff Killeen, our director of policy and programs, who is here with us today.

[Jeff Killeen, Director, Policy and Programs, Prospectors and Developers Association of Canada]

Thank you very much, Lisa.

Thank you for that question, Mr. Chair and Mr. Cannings. I think it's a very valid one.

To put a point on it, you're right, in that many of these types of deposits we're talking about, when we get into critical minerals, can be more challenging to discover, and they can be of smaller scale. I would also echo what Mr. Labonté just mentioned. The TGI and GEM programs, which have been running for a number of years, are instrumental in providing that knowledge base for industry to be able to step off and conduct good work.

Also, when we think about the challenge that's in front of us—when we think of the size of this country and the amount of deposits that may still rest in some of those remote terrigenous regions—there is a real need for more support from the federal government. I think that's particularly why we've landed on thinking about the mineral exploration tax credit and expanding that incentive. It's something that currently exists, and it's something that's been instrumental in making sure there is real, significant capital investment into exploration in Canada each and every year through the METC and the flow-through share regime.

In thinking about trying to spur more investment into these types of potentially smaller deposits and more challenging things to find, it makes sense to consider expanding that incentive, particularly in light of how it is a relatively low-cost item for the government and it's a way to direct retail investment in Canada towards new discoveries. We think that's a simple way to move forward.

We also see where there is a real need beyond just the TGI and GEM programs for further geoscience work, and in particular, as we've talked about, in working with the provinces to a greater degree, to understand where there could be logical centroids or logical places for infrastructure to be developed that maybe can help to bring some of these smaller deposits together and create that upstream production potential that may be lacking right now.

Thank you.

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

Thanks.

How much time do I have, Mr. Chair?

[The Chair, Liberal, James Maloney]

You have just under a minute.

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

I'll just ask a quick question, perhaps for Mr. Gratton, or for anyone who wants to answer. It's more about the international challenges of developing some of these deposits.

I have a graphite mine in my riding. I think we're going to hear from them next week. They have graphite kind of on the surface. You can crush the ore with your hands. It's very easy to develop, and yet they can't compete with Mozambique, for instance, in getting that graphite into production in terms of finding big buyers. This is one of those you mentioned where demand will be going up 500%. I'm just wondering if there are any comments on the help that producers have in getting international partners to move that material.

[The Chair, Liberal, James Maloney]

We have time for a very brief answer.

[Pierre Gratton]

Who would like to answer?

[Ian London]

I don't mind jumping in on some of that. It's something that comes back to the discussion we had before, and that's value adding. If some of those manufacturers that use the graphite in some of the end products are located here, or if it's through Canadian content requirements, that would be incented, but on a raw commodity basis, Canada is going to have some challenges on the value-added side—we know that—because of our metallurgical capabilities. It's not just about resources or new resources, but about how you add value to it.

On some of the other discussions, especially on the minor or smaller-volume critical materials, there are secondary sources. There are streams coming off production facilities right now that can be tapped into and made a value. That's how the Chinese got into the rare earth business. It actually came out of their biggest, richest deposits. The rare earths are an off-product from iron ore mining.

[The Chair, Liberal, James Maloney]

Thank you, Mr. London and Mr. Cannings.

We'll go to Mr. Lloyd for five minutes.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Thank you, Mr. Chair. My questions will be primarily pointed to Mr. Gratton.

Thank you to all the witnesses for their presentations today.

Mr. Gratton, I don't know much about the mining industry, but I do have some friends who are very involved. Making a discovery is one thing, but it takes years to take something from discovery to production. Wouldn't you agree?

[Pierre Gratton]

You got that right. Yes.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Thank you.

Canada has so many great champions in the mining sector, but it seems like they're doing most of their work abroad. We're champions abroad, but in Canada we're not making any major new discoveries. Do you have any comment on that?

[Pierre Gratton]

We have seen over the past decade a gradual decline in our percentage share of mineral exploration spending, which is, of course—