Evidence of meeting #18 for Natural Resources in the 43rd Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was mineral.
A recording is available from Parliament.
Liberal
The Chair Liberal James Maloney
Thank you, Mr. Simard. No, you're right on time.
Mr. Cannings, we'll move over to you.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
Thank you, Mr. Chair.
I thank the witnesses for taking the time to come before us today.
Dr. Eggert, you talked about the two ends of the support spectrum: long-term support through education and research, and short-term support through that short-term steering.
We're in a climate crisis. We're facing dominance from China that is frustrating a lot of our efforts to electrify our energy systems. Everything is changing quickly, and we have to act quickly. I'm wondering if you could expand on what policies the Government of Canada could proceed with that would help us make this change as quickly as possible.
Professor, Colorado School of Mines, As an Individual
Yes, I'd be happy to talk about that. Can you hear me?
Professor, Colorado School of Mines, As an Individual
I think you're correct. There's an urgency to deal with things like climate change and, separately, issues of national security that have gotten people like me out of our comfort zone because my bias as an academic is to lean more heavily on government as a facilitator of long-term market solutions. Yet, we're a decade out from what was referred to as the “rare earths crisis” of 2010-11. While there have been some changes in the location of supply chain activity in rare earths and downstream products, the pace of change is slow, which raises the issue of not just should government have a more activist industrial policy, but through what mechanisms?
I think a key role that government can play more specifically is facilitating the transition or deployment of technology that you might call “early stage”, basically private or basic research, to a detailed assessment of feasibility through joint financing of pilot and demonstration facilities.
If one is interested in developing further downstream the commercial activities aimed at battery precursors, for example, anodes and cathodes, or battery manufacturing, I think multinational collaborations among allies and partners are probably the way to work most quickly. This is because the fact of the matter is that certain countries are probably best positioned to undertake the mineral production, and other countries may be better positioned to undertake the downstream processing, which requires not just a good mineral deposit, but also low-cost energy, access to chemical reagents, and other important inputs.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
Thank you.
I'm going to turn to Professor Heffron.
You talked a lot about the importance of a just transition, justice in all these stages. When we're talking about critical minerals and the mining industry in Canada, I think Canada's come a long way in the last 50 years or so in terms of that concept of justice in the extraction of minerals. There's been a lot of progress made on those fronts.
Where we seem to be lagging is decommissioning, a topic that you mentioned. We've had some real horror stories with the decommissioning of some mines. There's the Giant Mine in Yellowknife, which seems now to require investment by this government, the federal government, for eternity to keep it from poisoning the area further. We have the situation of oil wells across western Canada that some companies have set up when they're going into receivership. They set up situations where that fiscal responsibility falls on the government.
I'm wondering if you have any best practice models of policies from somewhere else in the world that have really worked, that have ensured that the cost of decommissioning is put on the project and the company, and not treated as some externality for the public purse to clean up at the end of a mine or oil well's life.
Professor, Global Energy Law and Sustainability, Jean Monnet Professor in the Just Transition, University of Dundee, As an Individual
Yes, there's what's classed as an energy reserve financial obligation where companies have to put money into a bank account so that there are funds there for decommissioning. Irrespective of that company's sale to another company, let's say here in the U.K., the practice has sometimes been that the company would go bankrupt before, or nearly at the end of, the life cycle of the particular mine, and then the obligation to clean up was left with the government.
More and more we see a financial reserve obligation where companies are forced to put in two hundred million three hundred million, or five hundred million—it depends on the size of the project—which should provide insulation from a company's disappearing in some type of bankruptcy and not fulfilling its decommissioning obligation.
The issue of decommissioning comes if Canada wants to expand this industry. If so, the industry is going to need that public support in five, 10, 15, 20 years if the critical minerals industry is to grow and to be relied upon.
Liberal
Liberal
The Chair Liberal James Maloney
Mr. Cannings, thank you.
Now we're into the five-minute round, starting with Mr. Lloyd.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
Thank you, Mr. Chair.
My first question is for Mr. Kucharski.
I'm looking around the world. You talked about inputs for critical mining. We know that one key input is energy: gasoline, diesel, heating fuel for many of these mining sites. I'm looking at countries, such as China, that are subsidizing fossil fuels to the tune of about $18 billion, versus countries like Canada, where we're actually increasing taxes.
We now see that carbon taxes are going to be increasing to $170 a tonne at 2030. Can you tell us how we are going to be able to compete in this industry when we're taxing the inputs and the rest of the world appears to be subsidizing these inputs?
Professor, Royal Roads University, As an Individual
Well, I think you're right that fossil fuels probably would be used for a lot of mining equipment and processing of critical minerals in Canada, although I'm not sure what percentage of the total cost of production is represented by fuel. Certainly if there are opportunities to produce it using clean energy, such as hydro or natural gas—I consider natural gas a cleaner energy—then we should probably do so.
I'm not sure whether we're really at a great disadvantage over other countries relative to the cost of fossil fuels. In any case, there could be some tax provision provided to this industry to help reduce the costs of energy, should that be a significant factor or a barrier to its development. This is all—
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
Are you aware of any cost provisions that are currently in place in Canada?
Professor, Royal Roads University, As an Individual
I'm not personally, no.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
Okay. Thank you.
My next question is to Mr. Eggert.
You're with the Colorado School of Mines, so I'm sure you're very well aware of mining policy, regulations, taxes in the United States. I'm wondering if you can comment on some of the key differences that you see between Canada's jurisdiction and the United States in terms of critical minerals.
Professor, Colorado School of Mines, As an Individual
In the United States, I think the critical minerals issue is viewed principally from a consumer perspective, so it's about supply chain risks and how to mitigate those risks through a variety of approaches. Clearly there's a producer perspective that says consumer risk leads to opportunities for additional domestic production. I would say that the principal difference is really in one of perspective between the U.S. and Canada.
Canada I think has more of a producer perspective: Aren't there opportunities for Canada to get into the supply chain to alleviate risks that customers face? Whereas in the United States, it's in some sense a little more multi-faceted.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
What do you see in terms of getting a critical mineral mine permitted in the United States versus getting it permitted in Canada? What do you see as key distinctions between the jurisdictions?
Professor, Colorado School of Mines, As an Individual
I'm not an expert on procedures and processes in Canada, but, at least by reputation, the process of permitting a new mine in Canada is simpler, less time-consuming, and I would say more predictable than in the United States. That's more of an impression than based on detailed knowledge.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
Is that on a state-by-state basis? In Nevada, I have people telling me they can get permitted in a matter of weeks, where, in Canada, we hear testimony that it takes years to get a mine permitted.
Is that a whole-of-United States perspective, or are some states in the United States better at doing it?
Professor, Colorado School of Mines, As an Individual
Some states within the United States seem to be better at doing this. Arizona, Alaska and Nevada are states that often pop up in surveys, like the Fraser Institute survey of mineral policies and investment attractiveness of exploration, as among the better places to develop mines.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
Why is that? In my few seconds left, why are they better?
Professor, Colorado School of Mines, As an Individual
I think they are more supportive of mineral development and see the economic benefits accruing to the local communities in the states, and therefore, in terms of implementing processes, give a greater priority to making decisions sooner.
Liberal
The Chair Liberal James Maloney
Thank you, Doctor, and thank you, Mr. Lloyd, for sticking to the time.
Next, we have Mr. May, for five minutes.
Liberal
Bryan May Liberal Cambridge, ON
Thank you very much, Mr. Chair.
To start, I want to thank all of the witnesses for being here. It's pretty amazing to see such a diverse panel of expertise, and I wish we had more time with you.
I'm going to focus my questions back to Dr. Eggert. When I was preparing for today, I looked at your background and also at some of the things you mentioned in your opening remarks today. I was very interested in the idea about the Canada-U.S. relationship when it comes to these minerals. Could you elaborate a little more on how you think that could work, specifically in this area?
