Natural Resources Committee on Nov. 22nd, 2022

[The Chair, Liberal, John Aldag]

That's great. Thank you.

Now we'll go to Mr. Angus for his two and a half minutes.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

I'll turn my comments to Ms. McDonald.

I live in the town of Cobalt. Obviously, critical minerals are a big issue for us. Just over the hill from my house, the first cobalt processing plant is going into operation. Outside Timmins we now have two major nickel deposits discovered. If companies can negotiate fairly with Neskantaga, Eabametoong, Webequie and Marten Falls, then we will have the Ring of Fire in the western part of my region. The critical minerals strategy will have a huge impact on our region.

The question I want to ask you is the impact of the Inflation Reduction Act, because when I talk to people in the mining sector, they're looking at what's happening in the United States. They're talking about making deals in the United States. Does Canada need to pick up its game in terms of addressing the Inflation Reduction Act? We've heard this from some of our witnesses in the mining sector.

It's to make sure that not only are we able to mine the critical minerals, but we are able to get the value-added manufacturing and development from them, as opposed to just shipping them out to other jurisdictions.

[Jeff Killeen]

If I may, Mr. Angus, I would like to take that question. Thank you very much for that.

Are we doing enough? As we mentioned earlier, I think the most recent federal budget of 2022 was a good first step. We're seeing that new tax credit for critical minerals come to bear. That should be a way to usher in more investment in exploration in Canada. That should be a way for us to develop more of a resource base in critical minerals, whether that's rare-earth, cobalt, lithium, graphite or those things that we will need into the future.

To your point about the Defence Production Act, and about the Inflation Reduction Act in the United States, when we think of that critical minerals exploration tax credit commitment, it's an excellent one, but it constitutes about $400 million over five years of forgone revenue by the federal government. It's not an outlay of funds, if you will. Then you marry that or you compare that, if you would, to the Defence Production Act, where the U.S. government may look to invest as much as half a billion dollars into one single project in Canada. That's at the bankable stage to get that to a producing asset—a producing asset that may flow materials to the U.S.

When we think of those two scales, $400 million in a tax credit over five years in Canada versus up to maybe half a billion dollars per project by the U.S. government, we can do the simple math. It suggests to us that, yes, more will need to be done here in Canada so that we can retain more value-added processing activities here and actually see that economic wealth retained here in Canada.

Thank you.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

[The Chair, Liberal, John Aldag]

Now we will go to Mr. Dreeshen for five minutes.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you, Mr. Chair.

Thanks to all our witnesses.

Mr. Nighbor, you mentioned some of the discussions around our two billion trees initiative and so on. I know there's an announcement today describing that. Of course, somehow what's lost in the narrative is the reality of what provinces and foresters have been doing for decades. The industry in Alberta planted more than 100 million trees in 2021 and in Ontario 36.7 million trees. B.C. plants on average 218 million trees a year. Industry is doing that. They are doing their part. It's a great photo op to be able to talk about these things, but the reality is that, as you have indicated, that's just a very small part of what is important as far as the forestry industry is concerned.

Are there other initiatives, such as insect and disease condition control, old-growth forest management, mountain pine beetle and so on, where the government could actually be doing some things that would be more effective?

[Derek Nighbor]

I will start by saying that on the two billion trees program, we do 400 million to 600 million trees a year. It really depends on seedlings. We provided some advice to NRCan up front, because we know that business. We don't want to jam the nurseries. We don't want to have a short labour pool. There were just a lot of practical considerations.

I think it's also important to know that in areas that are scorched by fire, where the trees aren't regenerating, it's up to the provincial governments if it's on provincial land to regenerate. The two billion trees program is doing some good work there. I know that a lot of work has been done in B.C. to get at some of those lands, such as Kelowna and Penticton, that have been really scorched by fire—

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

But haven't these initiatives been done for decades?

[Derek Nighbor]

Not at this scale; I think B.C. has had to do more because of fires, but I do think there.... I don't want to blow by the benefits of the two billion trees program.

On wildfire prevention, the Forest Enhancement Society of British Columbia is doing some great thinning and proactive efforts. Indigenous cultural burning is another huge opportunity. Let's get at the pests fast, but a big reason we get at the pests fast is that we have foresters on the ground who find the pests.

So it's pest and fire risk mitigation, I would say.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much.

I think going back to some of the discussion we had before about misinformation campaigns and deforestation work or degradation, there will always be some group out there saying we want to protect our own industries in our own countries, and we're going to do all we possibly can to make it difficult. Canadians, instead of a standing proud approach, have this “oh, we're sorry” approach. We went after our oil and gas industry and have pretty well destroyed that. In agriculture, GMOs and glyphosates were discussed earlier in terms of the issues and concerns we have there. In mining, I'm trying to figure out how it is in the mining industry we're going to be able to handle the negative press we will be getting from around the world.

I'm glad that in Mr. Angus's riding we will able to see the example of how that is done, because we know that there's going to be a lot of pressure. If we could get to the stage where the management of those sites would be as good as what we have in northern Alberta in the oil sands...because that's what we need to do. We need to make sure that all of the industries would be able to get to that level.

For PDAC, I was at the convention earlier in June, looking at what is required for EV batteries—500,000 pounds dug up in order to get yourself a 1,000-pound battery. Then you have to get it. You have to process it. You have to deal with all the chemicals associated with it. How are we going to get ahead of the environmental groups that are intent on demonizing everything that we have to do with natural resources?

[Jeff Killeen]

I will respond to that, Mr. Dreeshen.

I think, to that concept of winning the hearts and minds of Canadians, I very much welcome it, and we at PDAC would welcome any support from the federal government.

Just talking about the minerals industry, you mentioned mining and, for sure, mining is a part of this process, but the mineral industry is more than that. To be a bit coy, I've used this phrase before. If we looked to oil and gas and called it the “sucking and pumping industry”, we would think of it very differently. I think part of the government's role is to help us bridge this gap with Canadians and help them to understand that minerals are an inherent part of everyday life, whether that's high technology or the cotton shirt that I'm wearing today. It came from a factory; it went on a train; it went on a truck, and I took a piece of public transit to a mall, which is all built out of minerals, to acquire it. It's an essential part of life, and we need to make sure that Canadians understand that inherently.

[The Chair, Liberal, John Aldag]

I understand, Mr. Samray, that you need to jump off now, so when you need to go, feel free to leave the meeting. Thank you so much for joining us today.

The rest of us will continue on.

We're going to go to Mr. Sorbara, who has five minutes.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Chair.

Welcome to all of the witnesses.

I'd like to speak to the individual from PDAC.

Thank you for your testimony and for your organization. I know that all of us have probably already received email notification of the March 2023 PDAC conference that will happen again in Toronto. I plan to be there, and I know all of my colleagues here will be likewise.

You had a few recommendations. You spoke about the eligibility of critical mining expenses, I believe, and supply chain capacity and access to prospective lands in order to undertake mining. Could you elaborate on your comments there? I found them quite insightful.

[Jeff Killeen]

Certainly, I'd be happy to.

When we think of the challenge that's involved with mineral exploration, it's pretty extreme. From the concept of discovery through to production, only about one in 10,000 mineral showings meets the criteria of what would [Technical difficulty—Editor].

[The Clerk of the Committee, Geneviève Desjardins]

Mr. Killeen, you're on mute.

[Jeff Killeen]

Pardon me, thank you. My apologies for that.

To your question, only about one in 10,000 mineral showings reaches production, so there's already an inherent impediment for a mineral explorer looking in Canada to bring a new project to market. We understand that it is a huge hill to climb for mineral exploration in Canada.

When we think of critical minerals, we understand the nature of the geology—I'm a geologist by training. These deposits are likely to be smaller, more disparate or disaggregated, and so will require, in many cases, more projects to make up that production base that was referred to earlier in terms of sourcing.

There are a few things that we need to focus on. We've talked about mineral tax credits, obviously, as one key part, but also, it's super critical to think about the amount of land that we need to reasonably access in a reasonable amount of time to conduct the work to identify those deposit. We feel that the government could make more efforts at doing some of that baseline public geoscience work that we hope can develop that public good, be the evidence for starting to make more land management decisions and be more proactive in identifying areas where mineral explorers can go.

I think some of our forestry colleagues referred earlier to integrating traditional knowledge and cultural values into making land management decisions. That is something that our industry certainly endorses, but we have to make these decisions expressly. We have to figure out where we can go and explore.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you for that information.

I would like to switch to Derek.

It's great to see you.

For the whole forest products industry, having grown up in northern British Columbia, I know how important the sector is to many communities along Highway 16, which goes from Prince Rupert all the way to Prince George and then down through the interior, and how many communities the forest products sector supports in British Columbia.

You referred to GHG reductions, where the forest sector in itself is what I would consider a low-emitting sector and where bigger lemons are able be squeezed in terms of GHG. In your partnership between ISED and ECCC, where would you make your recommendations as to where we can help continue to grow the sector? It is renewable; indeed, wood has always been renewable. I still remember growing up and seeing the tree plantations in different colours in northern British Columbia.

Can you comment in terms of growing the sector and also reducing GHGs?

[Derek Nighbor]

I think we could learn a lot from Sweden and Finland, which are on more aggressive net-zero road maps—Finland for 2035 and Sweden for 2045. They've taken a very full value chain, sector-specific approach to bring policy, regulation, legislation, funding, programs and tax incentives together. In Canada, we haven't quite done it that way. I just wish it were a bit more coordinated, to be honest.

In that, I think the opportunity is twofold. There's the mitigation side, as I said, where we still have some GHG reductions to take care of at our mills, and we need a better path with this government to do that. The other side is the adaptation agenda. The other side of the carbon story is that much of it is beyond our control because there is drought, pest and fire, which are creating a massive carbon problem in this country, and the national adaptation strategy that's still under development is going to be an important tool that we can feed into as well.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

My last comment would be that I know a number of the witnesses today mentioned or cited the Inflation Reduction Act. I'm completely on that page. We did the first large step in the FES in terms of responding to that.

We are seeing companies make announcements in the United States in response to the IRA, and that is serving as a catalyst here in Canada. We need to find our comparative advantage—which I know we have many in many sectors—to continue creating wealth and good jobs.

I look forward to budget 2023, as well, and I will put my input, my thoughts, on that because it is very important that we respond to the IRA.

[The Chair, Liberal, John Aldag]

Thanks.

I'm just going to look to the committee. I talked to people before we started about if we would end at our regular time of 5:30. We do have resources slightly beyond. A number of you did say that you needed to leave as close to 5:30 as possible, so if we are good with ending now, we will do that.

I'd like to take this opportunity to thank all of our panellists, our witnesses today, for being here and for their expertise and the insightful comments they have offered.

Just give me one second, Mario. I'll come to you before I conclude.

There are two quick items. I want to let our members know that on Thursday, November 24, we'll have our final panel of witnesses on this study. I also want to find out.... The supplementary estimates (B) were tabled in the House on Thursday past, so I'm just wondering if the committee would like to invite officials or the minister or some combination thereof to come for supplementary estimates (B).

I'm seeing nods around the table. We'll put out an invitation to the minister's office to see if he's available, and to officials, to see what we can land before we have to report back to the House.

With that, Mr. Simard, I'll turn to you. I know you have a question.

[Mario Simard, Bloc, Jonquière, QC]

We just have a few minutes left, so I'd like to take a moment to put a motion on notice. It will make things easier for the committee going forward. The clerk can send it out to everyone afterwards. I'll read it quickly:

That, pursuant to Standing Order 108(1)(a), an order of the Committee be issued to require the Canada Energy Regulator to produce, no later than December 16, 2022, an unredacted copy of any notices, analysis and recommendations of Canada Energy Regulator relating to the Government’s decision to acquire, expand, operate, and eventually divest of the Trans Mountain Pipeline System, and any other relevant documents; if no such analysis has been produced by the Canada Energy Regulator, that the Canada Energy Regulator provide the Committee with written confirmation.

I think the clerk has the notice of motion. It could make things easier for us going forward. It stems from the answers we received from the Canada Energy Regulator, answers I feel were incomplete and inconsistent in certain respects.

[The Chair, Liberal, John Aldag]

Charlie.

[Charlie Angus, NDP, Timmins—James Bay, ON]

I support my colleague. Some of the questions we heard back from the Canada Energy Regulator did not seem to me to jive with what probably had been negotiated, but I don't know that we have a lot of time, so I would just say that it's a reasonable request. It's part of the information that a member can ask for. I don't know if we even need it as officially, but it is a reasonable request, so I support it.

[The Chair, Liberal, John Aldag]

We'll take it as being put on notice. Thank you for that.

With that and seeing no other hands, folks, thanks for joining us today.

The meeting is adjourned.