Mr. Speaker, we appreciate the spirit of cooperation that exists in the House. I am sure that is due to you being in the chair.
I am pleased today to introduce Bill C-15, An Act respecting the exploitation of the Donkin coal block. This bill demonstrates once again that our government is committed to building a stronger, safer and better Canada.
We are committed to encouraging economic development in all regions of this country and to create job opportunities for all Canadians, regardless of where they live. For the people of Cape Breton, Bill C-15 would help to create that opportunity for economic development.
I will begin by explaining the resource, the Donkin coal block, that the legislation deals with. The Donkin coal block is a large, economically promising coal vein located off Cape Breton Island. In fact, it is the last major undeveloped subsea coal resource in the Cape Breton region.
It has been described as the largest undeveloped coal resource in all of eastern Canada. Both the province and the federal government have obligations regulating the development of the Donkin coal resource block, including labour, health and safety matters.
The immediate objectives of the bill are to facilitate the provincial management of the mine by Nova Scotia and to provide a clear regulatory regime to govern its development. This legislation would also allow both levels of government to retain their current positions with respect to regulatory jurisdiction.
Beyond these immediate objectives, however, a larger purpose is being served. The legislation would provide Cape Breton with an opportunity to advance its own economic development. It does so by facilitating a return to Cape Breton's time honoured industrial tradition of mining coal.
Some very clear benefits will follow the development of the Donkin mine. To begin with, mining will once again bring good jobs to this traditional mining region of Canada. The development of the Donkin mine is forecast to create 275 direct and up to 700 indirect jobs.
Development of the mine could also mean hundreds of millions of dollars to the provincial economy in salaries, equipment and goods and services. Three hundred million dollars is expected to be spent in start-up investments alone and coal royalties will be in the range of up to $5 million annually.
Finally, the development of the Donkin will help stabilize the tax base of this community for many years. If it gets to the development stage, we expect to see at least 10 years of operations.
Coal was first mined in Cape Breton 322 years ago. The island was settled because of coal and coal mining was its livelihood for hundreds of years. Most of this mining was done under the bottom of the sea with the greatest subsea extension out from shore being almost four miles.
In the mid-1980s, the Cape Breton Development Corporation, DEVCO, spent $80 million to dig two exploratory tunnels from the shore out to the face of the Donkin block. However, the mine was never brought into production. The tunnels were sealed and flooded to avoid pumping costs. DEVCO closed its last Cape Breton mine in 2001.
Since the closure of the last mine on Cape Breton, energy prices, including coal prices, have dramatically increased. This and newer technology, such as clean coal technology and carbon capture and storage, have renewed interest in coal as an energy source and renewed interest in the Donkin project.
There are numerous advantages to the Donkin site. For example, the Donkin block is located in a proven mining district with a long history of safe and successful extraction. The block appears to have sufficient size, potential and access to domestic and international markets for industry to stand on its own financially. The passage of Bill C-15 will help to determine whether this is so. Nearby there is a local workforce with extensive underground coal mining experience, a workforce that welcomes the return of coal mining jobs.
The block is near a railway connection and two deepwater ports equipped to export coal to an international market.
Finally, the Donkin site has a valuable asset in the two exploratory tunnels which are already driven to the face.
Nova Scotia announced a call for proposals to develop the Donkin coal block in 2004. A year later, a company by the name of Xstrata was announced as the winning bidder. The Xstrata Donkin Coal Mine Development Alliance began to evaluate the potential of bringing the Donkin mine back into production. It was at this point at which a considerable challenge arose. It was clear that if Xstrata or any company decided to proceed with development there would be confusion and uncertainty over regulatory jurisdiction because both the Governments of Canada and Nova Scotia have ownership claims to the offshore.
It was also clear that Xstrata Donkin Coal Development Alliance would soon face major decisions on whether to proceed with development or not. Because regulatory matters affect cost and planning, Xstrata was in need of certainty over the applicable regulatory regime before its decision could be properly made.
Both the governments of Canada and Nova Scotia shared an interest, as they do today, in seeing further economic opportunity in Cape Breton. Therefore, both governments sat down together to find a solution that would provide Xstrata with a clear regulatory regime that would permit development to proceed, if that decision was made, and to do all this without jeopardizing either government's claim to jurisdiction.
The bill before us today is that solution. Essentially the bill permits existing provincial laws regarding matters such as labour standards, labour relations, resource development and occupational health and safety to be incorporated into federal law. The administration of these laws is then delegated to the province of Nova Scotia. This will permit a clear and single regulatory system to be established for Donkin Coal Development. It will also permit both levels of government to retain their current positions with respect to regulatory jurisdiction while facilitating the economic development of Cape Breton Island. This is a solution that works for everyone.
The bill also provides that all Donkin coal and coal bed methane royalties will be collected by Nova Scotia and remitted to the Receiver General for Canada. A remittance in that same amount will then be turned back over to the province. In other words, the province will receive the benefit of all royalties if the mine goes ahead.
The components of this bill may appear complex, but their intent is quite simple. The bill provides Cape Breton, and Nova Scotia, with greater opportunity for economic development. It permits the development of the Donkin mine to proceed under an appropriately designed regulatory regime and it facilitates provincial management of the endeavour.
It is important to emphasize that Bill C-15 does not guarantee the development of the Donkin mine. It guarantees that the decision to proceed or not to proceed will be free from any uncertainty regarding regulatory matters.
I would emphasize that Bill C-15 is an outstanding example of cooperation. It is an example of cooperation between governments to fulfill a common interest in seeing the development of the Donkin mine.
By introducing this legislation, the government is demonstrating its commitment to the economic development of the Cape Breton community and to Nova Scotia as a whole.
Bill C-15 applies directly to the development of the Donkin mine, but our government has also taken national initiatives to support the mining sector. Since coming to office 21 months ago, our government has taken consistent action to reduce the tax burden on Canadian businesses, including those in the mining sector.
Our mining sector presents extraordinary opportunities across Canada and our government will help seize those opportunities by providing a single window for major projects approval. The major projects management office provides a single point of entry into the federal government for the approval of proposed projects. This is going to improve our ability to apply our world class environmental standards while increasing regulatory efficiency.
Before I finish, I would like to acknowledge the hard work of my colleagues, the hon. member for Central Nova and the hon. member for South Shore—St. Margaret's and the support they have given in moving this file forward.
I would now ask all hon. members to support the opportunity that the legislation represents.