Evidence of meeting #4 for Natural Resources in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was mining.
A recording is available from Parliament.
Conservative
Richard Martel Conservative Chicoutimi—Le Fjord, QC
All right, but does it change if the company is far from the energy source?
I assume they really need to focus their operations close to where the resource is extracted and processed.
Am I wrong?
Chief Executive Officer, Champion Iron
Proximity to the resource is an advantage for mining sectors. For example, the Labrador Trough is so close to the electron source that a small-scale project can be undertaken using the power lines. As a result, much of the energy that's used comes from Churchill Falls or the surrounding area.
Liberal
The Chair Liberal Terry Duguid
Mr. Martel, we're going to go to Mr. Singh who looks like he has a response to your question.
Mr. Singh.
President and Chief Executive Officer, Western Copper and Gold
I was just going to add that, generally speaking, our mines are not in industrial centres. My colleague at Champion Iron is blessed by having hydropower close by, which is a clear advantage in Quebec. Our mines are in remote places and, oftentimes, especially in the north, we need to tie them with transmission.
Our project works off of LNG. I think LNG has a role to play in providing the power to do the things we need to do, but certainly as a country, we need to find and invest in power generation and transmission. If we're going to open up these corridors and access these critical minerals, that is going to play a huge part in the next 30 years of our lives.
Power generation and transmission will have, in the next 30 years, the role that oil had for the last 30 years. It's definitely a place in which we need to invest.
Liberal
Claude Guay Liberal LaSalle—Émard—Verdun, QC
Thank you, Mr. Chair.
Thank you very much, witnesses, for being with us today. Thank you for agreeing to answer our questions.
Earlier, we discussed Bill C‑5, which has been passed. This bill offers many advantages for large projects. It provides for a simplified review process and a predetermined two-year deadline for meeting all the conditions necessary for a project to proceed. We agree that this applies to projects designated as major national projects.
That said, not all of your projects necessarily fall into this category.
However, the Prime Minister has announced the list of projects and critical minerals that will be considered in the future.
In theory, this means that it applies to each of your companies. We hope to be able to apply the spirit and approach of Bill C‑5 on critical minerals.
How do you see this? I’m sure you’ve read Bill C‑5 and wondered how it might apply to your projects in your respective companies.
How should we ensure that this can work for a set of projects related to critical minerals?
How can we ensure that we do a good job of applying Bill C‑5 to each of your projects?
Head of External Relations and Social Performance, Newmont Canada, Newmont Corporation
Mr. Guay, thank you for your question.
In the case of British Columbia, the province has been able to substitute their environmental assessments with the Impact Assessment Act. That's a crucial starting point, such that we don't have overlap in terms of jurisdictions.
The other thing is that two years of that includes ECCC's end of schedule 2 and the Fisheries Act authorizations, because that's actually a very significant permitting requirement. If it includes that other work, then those can happen concurrently. That concurrent work is extremely important, certainly to stay within the two years. The two years is ambitious. I think it's welcome news to investors and to multinationals operating in Canada.
Third, as the response to Bill C-5 is on whether these are in our best interests from an indigenous perspective, or whether these are overriding our rights, etc., you can see that we really need to engage the nations. In the case of the Tahltan, as I've said, the shared decision-making and work that the province has done to really strengthen the governance of the Tahltan central government has improved their perspective and acceptance of natural resource development. They see that natural resource development actually moves in parallel with reconciliation. I don't think that's the case elsewhere. I think there's a lot of work to do with respect to getting the nation in that position to be ready to work to advance resource development.
Thank you.
Liberal
Chief Executive Officer, Champion Iron
Another interesting aspect is the planning done by certain authorities. Admittedly, this can be more complex for isolated projects. However, in the case of large projects and certain regions where there are several mining projects, such as the Labrador Trough, if work were done in advance to identify the conditions necessary to obtain a permit, things could move even faster.
We have seen this kind of approach elsewhere in the world, and it works relatively well. It is not a question of lowering standards, but rather of working collaboratively within the framework of Bill C‑5.
Anything that could avoid duplication of approval applications would be welcome. This issue has been one of the most complex elements in recent years. Bill C‑5 gives us hope that the time required to obtain permits will be reduced.
President and Chief Executive Officer, Western Copper and Gold
Mr. Chair, I would say it's a start, and it's an important start. The comment was made that the Major Projects Office and Bill C-5 streamlining these big projects may be meant for some of the larger projects, but they are also the more complex. Projects like ours have a big footprint. We need to walk through them carefully. We are advancing the largest project that the Yukon has ever seen, so it makes sense to take that level of rigour and complexity and handle it slightly differently.
Hopefully, to your point, in time that will flow down to everyone's benefit. We're not trying to or asking to make this easy. It shouldn't be easy. We're just asking for it to be a little less hard, a little bit more straightforward and a little bit more efficient. Oftentimes, we find in our processes that it's not first nations and the indigenous who are slowing down the process. It's interdepartmental. It's different organizations asking similar questions and bogging things down, or asking questions in phases that don't apply to them.
Honestly, I think a layer of efficiency and discipline can go a long way. All that flowing into the development of the Major Projects Office I'm very optimistic about. Obviously, they have to get started and working. If we can resource and fund those types of initiatives well and resource our departments so that they have the talent, experience and people to do the work that's required of them, that's really how we move things forward. We're not going backwards, I don't think, as a country and throwing out our level of care for the environment and indigenous, and nor should we. I think the mining sector has come a long way in the last couple of decades. It's more about embedding efficiency and discipline and having the right people in the right seats to do the work.
Liberal
Bloc
Mario Simard Bloc Jonquière, QC
Thank you, Mr. Chair.
I will continue the discussion started by my colleague Claude Guay.
Although I am not particularly in favour of Bill C‑5, far from it in fact, I believe that certain elements could be implemented.
Mr. Cataford, I don’t know if it was with you or someone else that I discussed a mining project, but I was told that simply moving a storage site for reasons of efficiency meant that studies on the effects on certain fish had to be redone, even though the new site was less than a kilometre from the old one. I therefore conclude that you must comply with certain standards and specifications.
I would like to know one thing, and I think it would also be interesting for the committee to know more. Perhaps our analysts could provide us with this information.
I suppose you have to take into account both funding and standards.
On several occasions, we were told that it was very difficult to get past the prefeasibility study stage because, if I understand correctly, governments do not provide financial support for it. So, according to what someone told me, it was like crossing the valley of death, and many projects did not make it to that stage.
Can you give us more details, step by step, on the various procedures you have to follow when copper ore or other minerals are discovered?
I don’t want to add to your workload, but could you send the committee a document summarizing what the financial steps are, on the one hand, and the steps concerning the standards you have to follow, on the other?
In addition, do you have any ideas on how we could help you overcome some of the difficulties you are encountering in starting a project in terms of standards, while respecting the environment—I understand and agree with what Mr. Singh said—and all that this implies in terms of social acceptability?
I invite all witnesses to respond to this question.
Chief Executive Officer, Champion Iron
Thank you for the question.
There are probably two answers, depending on whether you are a start-up or a going concern.
For our part, we have projects in operation, but also new projects in development.
Take, for example, our KAMI project, located on the Labrador border. This project could produce approximately 9 million tons of high-purity iron per year, which could increase Canadian production of this type of iron by about 20%.
To date, we have invested approximately $100 million in this project and have yet to obtain the permit to proceed. I therefore understand the complexity of financing the pre-feasibility stages of a project. As we are an operating company, we invest in our growth budgets to finance these stages.
Having access to the various funds allocated for critical minerals would therefore certainly be advantageous for us. Recently, high-purity iron was added to the list of critical minerals.
Chief Executive Officer, Champion Iron
Currently, we do not have any tax benefits, but we are working to obtain them. It would certainly be beneficial for us to obtain them for high-purity iron. This would also enable us to develop other resources.
Bloc
Mario Simard Bloc Jonquière, QC
Okay.
Gentlemen, we would be grateful if you could send us a document outlining the steps that must be taken as soon as a deposit is discovered.
I will now return to what I said earlier about financing.
I have spoken to some people, and I know that minerals are on the list of critical minerals without companies receiving a tax benefit. This raises the question of what the list is for.
As I understand it—we discussed this—the Department of Finance, which makes these kinds of decisions, will have to align itself with this.
That said, I am interested in what you said earlier about pension funds and the distinction that was made. After 1990, the law was changed. Before that date, investments had to be 90%, whereas after that, they had to be 25%.
Can you elaborate on that?
President and CEO, Cantex Mine Development Corp.
The regulation around the investment of the pension funds changed progressively from 1990 through to 2005. In 1990, 90% of their funds had to be invested within Canada, and that was reduced and reduced through to 2005, when there was no minimum amount that needed to be invested domestically.
Bloc
Mario Simard Bloc Jonquière, QC
I have no idea what happened between 1990 and 2005. Are you talking about an obligation to invest in Canada, or measures encouraging these funds to invest in certain types of projects, such as mining projects?
Was there simply an obligation, prior to 1990, to invest in Canadian projects of any kind, or were there specific provisions regarding minerals?
President and CEO, Cantex Mine Development Corp.
I believe it was just domestic projects. There was no specification for mining. They could have invested in real estate or any commodity.
Liberal
President and Chief Executive Officer, Western Copper and Gold
Mr. Chair, I was going to add really quickly that Mr. Ulansky's point is very important. As a Canadian, I am sometimes offended by how little our pension funds—our own funds—get reinvested in our sector in Canada. Some of that is normal. We've tasked these people with securing our retirement futures, and they're making the best investment decisions they can. In some ways, they should be left to do that, but I think there's an opportunity to both allocate those funds smartly and allocate them in a way that benefits us as Canadians as well.
They certainly seem to keep finding the mining sector a bit too risky, but infrastructure, which we've all talked about, is a layup in terms of where we should allocate and marry those funds. That infrastructure then being able to bring on the mining projects and make them easier to accomplish is a mutually beneficial spiral. That's one place where I think we should spend some time and focus.
Liberal
The Chair Liberal Terry Duguid
Colleagues, thank you.
Thank you, Mr. Singh.
Before we start our third round, we'll pause for five minutes, get a coffee and stretch. Witnesses, you can do the same. Be back here just before 25 after.
Liberal
The Chair Liberal Terry Duguid
Colleagues, we have time for two rounds. We're going to have to reduce the time a little in the fourth round. I'm suggesting, instead of five minutes, we have four minutes for each and then Monsieur Simard will have two minutes instead of two and a half. We should finish a little after one, so close to on time.
We're going to start with Mr. Rowe.
Mr. Rowe, you have five minutes.