I'm very glad to be here and to have had the invitation to come to talk to you.
I will just explain a little bit about who I am. I'm Tom Paddon. My interest in the north comes about honestly, in that I'm from Labrador, from a very small community. I'm now living in Toronto and wistfully looking at the north from time to time, but now in my new job I get to go up there.
As background, and perhaps important in understanding my motivation, my parents were medical missionaries in the north, and my grandparents were medical missionaries in the north. My attachment to the north comes from a personal interest first and foremost, rather than a professional one. However, as the CEO and president of Baffinland Iron Mines, I'm also attached work-wise to the north.
We're currently pursuing the development of a rather large iron ore project at Mary River at the northern end of Baffin Island in Nunavut. This is a project that we are pursuing in two phases. The first is an approximately $700-million development, and it's part of a larger approximately $5-billion development. It makes for a large project in Canada's north, the largest currently under consideration.
We are doing this through the required processes. We have been through the Nunavut Impact Review Board process for about four and a half years and have received a permit to move forward, concluding an impact and benefit agreement with the Qikiqtani Inuit.
Previously I was involved in another project, Voisey's Bay in northern Labrador, that had some success in reconciling aboriginal interests in the area with the desires of the developer to find some mutual success.
Lastly, I'm on the board of ArcticNet, which some will be familiar with. It's a collaboration of science, industry, and aboriginal organizations looking to pursue meaningful scientific research across Canada's north.
That's the perspective from which I speak: a blend of those three.
Through all of those activities in recent years, I've come to the conclusion that domestically we have yet to realize the full potential of what can be achieved by the natural alignment that is possible among industry, the national government, and regional interests, particularly aboriginal interests. There is huge potential for mutual success. Development, when it is done with that in mind, will ultimately be successful on a number of fronts.
This concept of aligned interests driving mutual success recently became more broadly spread in terms of how this concept could be interpreted internationally, which I guess is the purview of the committee and perhaps is why I'm here today. Recently, I began to be very interested in the concept of a multi-sectoral transnational Arctic business organization, an Arctic business council, for want of a better label.
This led to participation in a gathering in Reykjavik about six months ago with some like-minded people, primarily from business, but from a number of other fields as well, who debated over a period of a couple of days the value and the potential for coming together in some sort of, as I say, multi-sectoral transnational organization that could interact appropriately, and in particular with the Arctic Council.
We recognize the Arctic Council as an important organization that's growing in importance and significance. What we considered was the ability to provide an interface between the Arctic Council and the business perspective and to do a number of specific things.
One would be to inject a fact-based narrative into the public perception of what is actually occurring in the north. It is the case that development in the north has been taking place for many decades. In general, particularly in Canada, it is being pursued responsibly, under stringent requirements, fully involving aboriginal people. It's being pursued in a way that is perhaps different from the way in which it is sometimes portrayed, as a free-for-all in the Arctic, which is simply not the case.
So the importance of balance in the public consciousness of what is actually occurring in the north occurred to us, but more factually the ability to share best practices. Canada has been the developer of many best practices about how to undertake things in the north.
Additionally, there is an enormous amount of research that companies are conducting as a result of environmental assessments, environmental effects monitoring, and socio-economics effects monitoring on what would be best deployed in a collective and collaborative manner rather than simply in the more regional pockets in which it's currently contained.
We had come to the conclusion that a number of us could pursue this just in general dialogue with those we're in contact with. I've spoken to representatives of the federal government on the issue a number of times, obviously fully aware that the Arctic Council's presidency is passing to Canada. I believe there's potential for a common agenda to pursue a concept such as this, given that the United States, our good neighbour, is following us in the presidency.
We had considered the best way to pursue such an organization, recognizing that there were three options. We could try to develop something that was fully stand-alone and brand new, which of course would require some maturation of the organization over some period of time. We could work to develop some kind of affiliation with a pre-existing organization that had a platform for Arctic engagement, and have a business-specific initiative of that. But in my perspective, the optimal approach would be to engage directly with the Arctic Council and suggest that the Arctic Council have, as a facet of its organization, a business-specific consideration, given the importance of what is happening in the north and the need for it to be carefully considered by the member states of the Arctic Council.
That has been the suggestion. There have been a number of discussions with the federal government in Canada, but also with like-minded people in business in other countries with their national governments also, to propose such a path forward.
It is certainly an informal gathering and an informal suggestion. There is no particular ownership of the idea. It is simply a suggestion that it would be an appropriate path forward to ensure that a realistic business perspective is brought to considerations of the Arctic Council while at the same time ensuring that the value of the activity and the responsible manner in which it should be undertaken is shared amongst the Arctic states.
I think that's about ten minutes.
I think that to some degree the possibility exists through the sustainable development working group of the Arctic Council, which has as part of its purview appropriate development considerations.
I think it goes a little further than that. It wasn't in isolation that the concept of some sort of an Arctic business council was put forward. It wasn't only as a function of interacting with the Arctic Council. It was also, as I say, to share broadly best practices and to inject a fact-based narrative as to what's actually occurring.
But I do think there is an opportunity to share with the Arctic states the opportunity for synthesizing an improved approach. Industry is involved in developing infrastructure, for instance. Just using Canada as an example, industry is involved in developing infrastructure and frequently has to do it on its own in the north. We know that, within Canada, an issue of public interest is search and rescue in the north. There has to be the possibility of an aligned interest between people who live in the area and who have an interest in good search and rescue service, and industry, which is, in our case, building an airstrip at the far end of Baffin Island, an interest that is in turn aligned with the public interest in providing a sensible service at an economically affordable cost.
I think that conversation can be broadened. I think industry, business in general, is in a particular position to engage in that kind of conversation with the northern states as to how best we can achieve answers to industry's interest in developing responsibly and state interests in addressing issues of public importance. I think there's an opportunity there.
Particularly in the area that I'm working in, Canada enjoys fully resolved Inuit land claims, which provide an important set of guidelines to proponents of projects about what the rules are.
Going beyond that, the investments required for large resource developments are significant at the front end. It is a long game. It's important to have the ability to operate your business in the long term, and therefore a significant part of that is predicated on having good relationships.
So we have two things. One is the rule book, as it were, and two, any wise business will realize the need for having successful relationships. That leads us to that alignment of interests such that our success, as industry, is understood to be success on the local front. Local success, communities that are stronger and have well-educated employees who are able to work safely and responsibly, will provide the basis for a long-term successful business.
Given that we're just starting the Baffinland project, I'll talk a little bit about the Voisey's Bay project, or just my experience with it. We engaged in negotiations of impact and benefit agreements. We saw land claims come in and be finalized with the Innu and the Inuit of Labrador. We had codified our commitments around how we would ensure that benefits flowed, as well as involve both aboriginal parties in the environmental effects monitoring and collaboration on education, issues on cultural challenges, and all of these other things.
When I left that particular operation, a little better than half the workforce was aboriginal, and people were progressing to more senior positions within the company. I think it was felt by all parties that it had been a success.
Given that there was a revenue stream supporting activities not relating to mining, which both aboriginal groups could dispose of as they wished, there were educational opportunities and there were employment opportunities. It was kind of a success, I think, on those fronts.
I think with the benefit of the structures that Canada has put in place, those kinds of results are achievable. It's not the case in all states. Canada is an extremely good place to make your investment, because the rules are clearly understood and well known.
North of 60, the approach to environmental assessments is different than it is south of 60. In fact, the in Canada is actually the minister responsible for the environment north of 60.
The process is one that falls from the Nunavut Land Claims Agreement that was settled some time ago between Canada and the Inuit people of what is now Nunavut. It provides for an integration of federal responsibilities with regional interests, under the auspices of an institution of public government called the Nunavut Impact Review Board. There is another institution of public government that is also involved, the Nunavut Water Board, but the primary process is undertaken by NIRB.
To put it into perspective, our review through the NIRB process began in March of 2008 and concluded on December 28, 2012. It's a four-and-a-half-year process. It's extremely stringent. I've been through the CEAA process and a provincial one as well, the NEAA. I can tell you that development north of 60 is very carefully considered.
It's a very stringent process, as it should be, given what we're doing and where we're doing it. It's a very inclusive process. The communities in the primary area of activity are thoroughly engaged, to the point where they can sometimes feel they're over-engaged, in that there are a lot of meetings. But it's absolutely crystal clear at the end of that process that there has been a thorough discussion, not just on the physical environment but also on the social environment and the ways in which the project might address it.
Thank you, Mr. Paddon. This is very interesting stuff.
I get pumped when I hear this kind of stuff, and I'll tell you why. Whether you believe in some divine providence or just celestial luck, this is an incredible time. Had we had access to the north—and I think you would agree with this—100 years ago, 50 years ago, even 25 years ago, we wouldn't have had the responsibility that we acknowledge today is part of that. We wouldn't have settled a lot of our...such as the Inuit claim.
I've begun a process of visiting Canadian mines—I hope to visit yours as well, maybe this summer—and I see how essential the whole mining and extraction industry is with relationships with first nations people, because we need them. Again, had we had this opportunity 25 years ago, we would have done that all wrong, too.
I just see some incredible, exciting things happening in the north. Even if we talk about global warming, we would not have had the.... Well, we wouldn't have had the technology, but there's also the fact that there will be more ice-free water there, which makes it possible to extract these things. I don't think 25 years ago we would have entertained mining in Baffin Island. Yet here we are today, at the cusp of, I understand, the richest iron ore deposit in the world.
Am I right when I say that?
Right up there, so...great things.
Then there's the impact and the possibility of being a light to some of these other nations, as Mr. Dechert was saying, and the fact that we can show the way to do it right: how to do it right with the environment, how to do it right with first nations people, and just how to gain maximum benefit for everyone.
I don't have much time and I'm doing all the talking, so I'm going to hand it over to you now. I want to know about the benefit to the Inuit and the impact on the environment. We need to know that. We're mining where trees don't grow, so I want to know how you finish off these projects.
In terms of transportation of materials, when I went to Baffin Island back in 2006, there was one road in Iqaluit, and I think that was to.... Well, there was one to a gravel pit as well, I think.
Just very quickly, in terms of environmental impact of this particular project, it's of particular interest in that there's no processing, so there are no tailings ponds and no chemical additives or anything else. It's very simplistic, because as you say, it's a very high-grade ore and a very large deposit. It's simply a matter of mining, crushing, taking it to a port, and then shipping it out. In terms of environmental impacts, those have been carefully looked at through the Inuit-driven and -governed Nunavut Impact Review Board.
In terms of the benefits, I think we usually associate the benefits with jobs. Jobs are an important part of it, but I think there's a broader collaboration, which is to provide for stronger communities in the north. Companies are very interested in having long-term success. Long-term success is best found if you can have vested local interest in ensuring that you are successful.
So we want to see stronger communities, well-educated, healthy communities that can participate in the projects and ensure their viability over the long term. There's a natural alignment there, and we should all take advantage of it.
In terms of how it can be exported, I think one of the things that Canada can point to is that this is a very well-developed, mature, safe place to make investments that frequently measure in the billions of dollars. Industry is interested in those kinds of contexts rather than ones that might be subject to greater change.
It is an enviable situation to have, and we should make sure that people understand that it's something to aspire to.