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Standing Committee on Indigenous and Northern Affairs


NUMBER 127 
l
1st SESSION 
l
42nd PARLIAMENT 

EVIDENCE

Monday, November 5, 2018

[Recorded by Electronic Apparatus]

  (1535)  

[English]

     I call the meeting to order. Let's get down to business.
    Pursuant to Standing Order 108(2), we are conducting a study on northern infrastructure projects and strategies.
    Before we get started, I want to point out that Canada is in the process of truth and reconciliation. It's not going to be instant, but it's important for all of us to reflect on our history and recognize that we're here on the unceded territory of the Algonquin people. Many of us work in different ridings and projects across Canada, and it's a way of respecting and moving forward on reconciliation.
    I'm very pleased to have you here. I want to outline the rules very quickly—
    The rules about what?
    I'm just addressing the panellists so that they know they have 10 minutes to present, and then we'll be into a series of questions and answers from the MPs. Thank you.
    Agnico Eagle is here. We heard about their project previously, but now we actually have the company in front of us. I welcome you to our committee.
    Thank you, committee members, for allowing us to present here. It is such an opportunity.
    I have a slide deck I'm going to go through. You are going to hear the very positive and unique story of what is happening now in Nunavut.
     I'm Dominique Girard, Vice-President, Nunavut, for Agnico Eagle. With me is Mélissa Desrochers, our Director of Government Relations.
    Agnico Eagle is the biggest gold producer in Canada. We are one of the top 10 mining companies in the world. We have been in the mining business for 60 years. We have more than 10,000 employees.
    As you can see on the map, our operations right now are mainly in Quebec, Nunavut, Mexico and Finland, but we are exploring everywhere.
    Today I'm going to talk more about our Nunavut projects. You can see the location on the map. Meadowbank is the first project we started, in 2007. We've been operating there for the last 10 years. Amaruq, which is 50 kilometres northwest of Meadowlands, is going to extend the life of the mine until 2026. Meliadine is the one we are building right now.
    As you can see, in Nunavut the only way to access projects is by air or by sea.
     We've been there for 10 years, so we've developed good experience with community relations, exploration, construction and operation. We see Nunavut as having long-term potential. We have a good partnership with KIA. Last year we signed three IIBAs. We also have an MOU with the Government of Nunavut. Our vision is to be there for a long time and to have our mine managed by the Inuit. That won't happen in a few weeks. It's going to take time, but it is our goal.
    As well as using local contractors, why not use local, renewable energy? This is where we're going. This is the vision.
    What have the successes of the last 10 years been? The biggest success we have had has to do with training and developing capacity. Right now at Meadowbank, over the last 10 years, around 30% of our employees are Inuit, which is a good achievement. We've worked a lot on the entry-level positions, and also on the apprentice positions, where we've succeeded in qualifying five Red Seal technicians. Now we're looking to develop more leaders, so we've hired adult educators, and we're doing pairing programs with supervisors to go down that path. To have our mines managed by Inuit, we need to develop more leaders.
    As to the socio-economic aspect, we're investing $1.6 billion from 2017 to 2019 to build Amaruq and Meliadine, and I'm proud to say today that we're getting close to the end. The projects are on time and on budget.
    What will it look like? Two mines will operate with 2,000 employees, of whom one-third will be Inuit. We are currently at 15% of Nunavut's GDP, and we'll maybe go up to 20% or 25% with the ongoing Meliadine project.
    In terms of challenges and opportunities, as you heard from different speakers, it is costly to live there, as well as to operate a mine. I will not spend a lot of time on the remoteness or the communication issue. I would like to go to the energy topic.
    We are spending, or bringing by boat, 130 million litres of fuel per year to operate and to generate electricity for our projects. The cost of electricity is 26¢ to 27¢ per kilowatt hour, which is five or six times more than what we have down south. We are producing greenhouse gases equivalent to 70,000 cars per year. This is the situation right now. There is currently no alternative in Nunavut, but this is what we're looking for.
     To put in perspective the consumption of power in Nunavut, I'm going to talk about the power line. If I look at the path of the power line, the community, all together, is going to need 4.6 megawatts. Our two mines are going to need 40 megawatts. We're a big player, a big client. We are happy to be part of the solution to the energy issue in Nunavut.
    We've looked at many projects for five or six years now, because we see that there is potential. There are different study phases—from exploratory, to scoping, to pre-feasibility studies, to feasibility studies. The project is de-risked as we have more information on the technology.
    The ones we've looked at are the SMR, the small modular reactor; the power line; the wind; the microgrid project; hydro, which is an in-river turbine; and also LNG. We spent over $500,000 to study LNG, but in fact it's not the one we're pushing right now. The one we see on the fast-track mode is the microgrid. I'm going to give you a bit more information on that.
    Let's start with the best long-term solution, a power line starting from Manitoba and going to Nunavut, to Kivalliq. This is the best long-term solution. This is the silver bullet. We are very excited about it, and we are working closely with KIA and Barrick, with the support of the Government of Nunavut.
    There are some aspects that we need to secure for that project. First, we need to know and to understand the cost at the end of the line. Right now we're paying 26¢, 27¢, and the price needs to be better than that. The other question is when the project is going to happen—the study, the permitting, and then the construction.
    An important thing is the life of the mining projects. Meadowbank is already in operation. It's going to stop in 2025. Meliadine is going to go up to 2031. The top project, the Manitoba power line, will take, in our view, four years of permitting and three years of construction. The project could happen, if everything goes well, in 2026, when Meadowbank is going to be closed. The one we think should happen faster, in that portfolio, is the microgrid wind tower. Every year that project is going to run we're going to save 12 million litres of fuel with six wind towers, which represents approximately 7,500 cars per year that we're going to save in greenhouse gas.
    I've talked about the best long-term solution, but the best interim solution is wind power. That could provide a clean, local and independent source of power by 2022.
    Nunavut needs impactful initiatives right now, because we need to secure the load for the future power line. If there's no mine anymore in 2026, 2027, who's going to consume the power and make that project happen? There is action necessary right now to reduce greenhouse gas. As well, we see the wind microgrid as being owned and managed by Inuit. With the benefits of that wind microgrid, we could develop capacity and infrastructure.
    In brief, Agnico supports the power line and fibre optic feasibility study to outline the schedule and the costs. Right now there is momentum. As QEC, Qulliq Energy Corporation, mentioned here two weeks ago, we see the energy solution more as a portfolio. It's not just one solution; a microgrid and the power line are part of it.
    Thank you.

  (1540)  

[Translation]

    Thank you.

[English]

    Madam Chair, may I ask a question rapidly?
     You'll ask questions afterward.
    Listen, we see the document in French; I want a copy.
    Ah, oui. I think we've got it. It's a good point of order.
    Thank you.
    I'm sorry. You should have had it, because it was available, absolutely.
    We're going to move on to the second presenter, Brendan Marshall, for the Mining Association of Canada.
    Welcome. You have 10 minutes to present.
     Thank you. Thanks for the opportunity to participate in this important consultation process.
    My name is Brendan Marshall. I'm the Vice-President for Economic and Northern Affairs at the Mining Association of Canada.
    MAC is the national voice of Canada's mining and mineral-processing industry, representing more than 40 members engaged in exploration, mining, smelting and semi-fabrication across a host of commodities.
    Mining is the largest private sector driver in Canada's Arctic, employing approximately 8,500 people. That's one in every six jobs, or 8% of the total territorial population. These numbers expand when the Arctic regions of Manitoba, Quebec, and Newfoundland and Labrador are incorporated.
    Direct GDP contributions in Yukon, the NWT and Nunavut are approximately 13%, 18% and 21% respectively as of 2016. In recent years, mining companies have invested and are investing, or have committed to invest, more than $9 billion in the region.
    Per capita, mining is the largest industrial employer of indigenous Canadians. Further, mining companies have signed 455 agreements with indigenous communities since the year 2000, detailing how the benefits of responsible resource development are to be shared to ensure that communities profit.
    In a region with few alternative economic development opportunities, the mineral industry has continually demonstrated its capacity to support inclusive economic growth. To illustrate, the diamond mines in the Northwest Territories have generated significant employment and business development opportunities for Arctic communities since the beginning of production. For example, 44,000 person-years of employment, of which 50% is northern and 25% is indigenous, have been generated, as well as skills training and assessment for more than 3,800 people, nearly 17% of the total territorial working population in 2017. Capital and operational expenditures totalled $18.6 billion, of which $13.1 billion has been directly invested in the north, and $5.6 billion has been invested in the regional indigenous business community. Community contributions and social investments have exceeded $100 million in that period.
    Looking forward, the potential is even greater. As of August 2018, MAC was advised by CanNor that 26 projects are currently in the NPMO pipeline, exceeding $18.5 billion. However, 13 of them are without access to an all-season road.
    Currently, domestic legislative and regulatory processes with implications for project permitting and costs persist, while recent supply chain failures have damaged Canada's reputation as a reliable trade partner. Further, recent tax reform in the U.S. has significantly enhanced that jurisdiction's investment competitiveness over Canada's.
    The impact of this uncertainty has been felt by Canada's mining industry, where investment has dropped more than 50%, or $68 billion, since 2014, amid a strong price rebound for many commodities over the last three years.
    The government has been considering action to bolster competitiveness. MAC has two recommendations about how the Arctic should fit into this package.
    The first is to strengthen Arctic people and communities. It is well documented that significant gaps in human development indicators exist between indigenous and non-indigenous Canadians. The territories host the highest per capita demographic of indigenous peoples of any subnational jurisdiction in Canada. As such, more so than for any other region in the country, strengthening Arctic people and communities means advancing indigenous economic reconciliation.
    Further, significant research has underscored the primacy of employment generation as a driver to improving quality of life indicators and social development. As such, to meaningfully advance indigenous reconciliation in the Arctic, the government should make provision for the development and implementation of a bold regional macroeconomic development policy that prioritizes responsible resource wealth development and employment generation as a primary means of advancing social development and closing the disparity gap between Canadian and Arctic indigenous human quality of life indicators.
    There's a real opportunity to create a positive institutional legacy by ensuring the unique needs and realities of Arctic peoples are given the appropriate policy consideration. Paramount in achieving this is building off the region's existing strengths and opportunities.
    The second recommendation is with respect to infrastructure. Key to making any macroeconomic development policy successful is addressing the region's infrastructure deficit.

  (1545)  

     One of the largest factors influencing mineral investment decisions in Canada's Arctic is heightened cost. Industry research and the “Levelling the Playing Field” report indicate that it costs two to two-and-a-half times more to build the same base or precious metal mine off-grid in the north compared to the south. Notably, 70% of this cost premium is directly related to the Arctic infrastructure deficit.
    To date, infrastructure investment decisions that recognize northern challenges and opportunities through the trade and transportation corridors initiative and the Investing in Canada plan have been welcome, though the need is far greater than the funds allocated. MAC is aware that the northern allocation—the $400 million under the TTCI—was oversubscribed by greater than five times. It is also of concern that the Canada Infrastructure Bank may not recognize Arctic realities, which potentially limits the utility of this institution to address northern priorities.
    Enabling additional mining development in remote and northern Canada is inextricably linked to the government's indigenous reconciliation and climate change agendas, and the Arctic infrastructure deficit is the single largest barrier to mining development in the region.
    To address this, government should, as an immediate action, renew the TTCI in budget 2019, including the $400-million northern allocation. As a long-term dedicated solution, it should recognize the unique challenges of remote and northern regions through a stand-alone Arctic infrastructure investment fund based on the Alaska Investment and Development Export Authority, or AIDEA.
    Thank you for your time. I'd be pleased to take any questions that you may have.

  (1550)  

    Thank you.
    Our final presenter is Glenn Priestley of Northern Air Transport Association.
    Hi, Glenn. Please begin any time you're ready.
    I'd like to thank the committee for giving NATA the opportunity to participate in this important study on northern infrastructure and strategies.
     This briefing will be focusing on four specific aviation infrastructure issues for consideration by the committee. We're going to be looking at aviation weather information, airport infrastructure, runway approach aids, and aviation labour and skills needs. All four of these issues are critical to providing essential services to communities with little or no access to other means of transportation. All four issues are important to the economic development of northern and remote Canada.
    Perhaps a bit of a background, I think, would be useful.
     The Northern Air Transport Association's membership is representative of all aspects of northern and remote air operations, including scheduled passenger service, on-demand charter, helicopters, and specialized operations, including internationally renowned medevac and firefighting services.
    NATA was formed over 40 years ago to support the economic development of northern and remote Canada with safe, sustainable air transportation services.
    The management of operational system safety is a complex and daily issue for northern air operators and stakeholders.
    Attached to the written brief provided to the committee is a map of Canada that I thought was useful to understand the challenges air operators face daily.
    Northern operators must find solutions to operational problems that simply do no exist in southern Canada. Examples include long-range flight planning, limited weather information, and airports with minimum runway standards.
    However, we also boast that a unique aspect of northern and remote aviation operations are the commercial partnerships with many first nation and Inuit groups. Pride of ownership and recognition of the diverse cultures creates a special bond between the air carrier and the customers that does not exist elsewhere.
    The goal of this presentation today is to highlight four specific aviation infrastructure issues for consideration by the committee. There is a specific focus on technological advancements that present the opportunity to improve operational efficiencies and mitigate environmental impact, as well as offer solutions to address the challenge of developing a northern-based workforce.
    The first one I'd like to brief you on is aviation weather reporting.
    Accurate weather reporting for both destination and alternate airports is vital to operational system safety. NATA supports the goals of the federal government's Transportation 2030, a strategic plan for the future of transportation in Canada. Investment in new technology will improve system safety. Improved infrastructure will increase service reliability to northern and remote communities. Advancements in automated weather observing systems can enhance weather reporting capabilities, and in some cases may modify the role of the human observer. However, there is a need to keep engaged a local workforce capability as a desirable goal of a human resource development plan and system safety consideration.
    The second item I'd like to bring to your attention is airport and runway infrastructure.
    There are numerous recent reports that have identified the need for lengthening and strengthening northern and remote runways, including the July 2017 report of the Standing Committee on Transport, Infrastructure and Communities and the May 2017 Office of the Auditor General's report on civil aviation.
    The standard for runway lengths at northern airports was set in the 1970s at 3,500 feet. With the subsequent change in equipment and regulatory and safety standards, that length is no longer appropriate. The lack of adequate runway length limits aircraft size, and therefore load-carrying capabilities, which adds to the overall cost of living and increases the stress on the environment.
    Northern airport locations have near-ideal conditions for a night illusion called the “black hole effect”. The only way to mitigate this illusion is with high-quality runway lighting. Most remote airports do not have REILs, runway end identifier lights, nor do they have high-intensity lighting. The minimum standard for runway lighting must include ARCAL-controlled REILs, PAPIs, and high-intensity lights. PAPIs are approach lights that give you visual indications that you're above the ground properly.
    Runway navigational approach aids are the third thing I'd like to bring to your attention very quickly. Identified, again, in almost every recent report on northern aviation infrastructure is the need for more satellite-based instrument approaches and improved runway lighting systems to enhance operational reliability. There's no bad person to the story. Nav Canada, the navigations provider, is doing an excellent job. Transport Canada is trying its best. I just really wanted to bring the importance of these to the committee. Operators providing essential services are forced to use technology and navigational procedures that are outdated, which increases operational risk.
    I have a story that I want to pass on to you. Remember, northern and remote Canada isn't just north of 60°; it's north of about 50°. Many parts of Canada are very remote, and this story comes from Sioux Lookout, just to let you know, from a very experienced operator: “There are a number of remote communities that have marginal instrument approaches that need to be improved on. The current approaches at these airports have a significantly higher risk associated with them. These approaches rely on NDBs, non-directional beacons, that do not provide nearly as much or as accurate information as a modern global positioning system, or GPS.

  (1555)  

     “In many cases, these approaches also require flight crews to complete a “circling approach”. While technically meeting all required regulatory standards, they are universally considered high-risk approaches. These approaches also have higher visibility and ceiling requirements, meaning that in poor weather, there's less chance of a flight being able to land; hence, marginal approaches are not only a safety concern for the crew and the aircraft, but they also increase the times a remote community is cut off from emergency and essential services due to weather considerations. The minimum approach standard at all remote airports needs to include a GPS/LPV.” “LPV” means localizer performance with vertical guidance.
    Finally, and I think the most importantly, those three issues are well known and are brought up in other studies, but it's an increase in the northern and non-traditional workforce in aviation that I'm really interested in right now. That's because, on October 2 and 3, the Minister of Transport gave the opening address to an aviation labour shortages forum. His remarks highlighted the importance of developing a competent aviation workforce to ensure the system's safety.
    The minister also addressed the challenge of attracting the next generation of aviation workers, especially non-traditional people such as females, indigenous people and other under-represented visible minorities. While the forum focused primarily on flight crew shortages and solutions, for the northern and remote aviation stakeholder there is a shortage of personnel for all aviation-related occupations, and some we don't even have names for yet because of the changes in the technology.
    There are various barriers that need to be considered to develop a program that will be successful in attracting, training and retaining northern youth for aviation-related occupations. Training methods need to be sensitive, because, as discussed at the aviation shortage forum, it's problematic for students to have to leave their home and community to go to a school far away for a long period of time. There is an opportunity for more industry-sponsored, federally funded, on-the-job mentoring and training, customized for specific cultural needs and company-specific skill development requirements in the north. This is the type of program that provides awareness and increases individual confidence, and it should be supported with federal funding with greater direct community engagement.
    I did research on this committee, as I always do, and some of the past speakers were so inspirational. I like this one from an earlier witness:
When there is investment in the people who live there, it's a fantastic opportunity for the growth and development of our communities. Money gets invested in...communities. The people who live there are...able to give back to the communities. They provide better for their families. They're able to give more to the community. They have a better, more enriched life. They have higher self-esteem. It's...much healthier for the people in their own communities.
    There is a need for a northern and remote aviation labour skills committee of regional stakeholders, including service providers, regulators and territorial representatives, to conduct aviation needs assessments to develop a specific labour skills strategy for northern and remote areas of Canada.
    NATA’s 43rd northern and remote aviation conference is taking place April 28 to May 1 in Yellowknife. This important discussion on northern and remote aviation infrastructure will be continuing with an airport development workshop that's now planned, as well as a focus on the recruitment of a northern and more diverse aviation workforce. We hope this committee will come and join us at our conference.
    Thank you very much for your time today.
    Thank you very much.
    You have been efficient in your presentation, so it's given us a little bit more room for questions from MPs.
    We start out with MP Mike Bossio.
    Thank you very much, Chair.
    Thank you so much to our presenters for being here today. This is very informative, once again, as all of these sessions on northern infrastructure have been. We know there's a gap there, and it's a big gap.
    I want to talk to Mr. Priestley about training.
    In my riding, there are the Mohawks of the Bay of Quinte and the First Nations Technical Institute, where they have a hanger and a training school for aviation pilots, mechanics, navigators and the like. Every student who graduates is hired.
    One of the big differences they've been able to make goes right to what you were saying about cultural understanding. When people come out of their communities to get that training, the biggest problem is that they leave before the training is completed because they miss home. FNTI has great success at keeping students in the program because of their understanding of the cultural needs of their students.
    In addressing what you were talking about in connection with building, would you say that's the example that you would hold up as the right kind of institute that would be beneficial in the north, even as an expansion of the program at the MBQ?

  (1600)  

    I'm a big fan of FNTI. I'm aware of the program. It's been around for a while.
     It has.
    It provides a lot of the pilots for Air Creebec.
    It's part of the solution. What we're looking for is an east-west solution, and we think we have one out of Whitehorse.
    We now have an aviation college in the north, with Alkan Air. They're making a proposal to operators for a mentoring and internship program. That's something we haven't had, and the idea is that a company in Yellowknife will sponsor it. They will choose, screen, recruit and sponsor a student for on-the-job training. Then there's going to be some type of a streaming program, possibly with other schools, and in this case, Whitehorse.
    Do you have an idea of the number of pilots and navigators and maintenance people that you foresee will be needed over the next decade in the north?
    I have an idea. What we don't have are good statistics.
    In preparation for that forum, I did a labour market analysis on all three of the northern territories. It was only the NWT that could give numbers. It looks like they'll need about 70 new pilots a year, starting now.
    That's the thing about the north in my business. We're not talking about hundreds, as you can do in other places in Canada; quite often, we are talking dozens to satisfy specific jobs. However, it's not just pilots. We also need mechanics. We need ground personnel, because the airports are suffering as well.
    I really think there's an opportunity for on-the-job training, and job shadowing seems to be an idea that is gaining strength.
    There are a lot of other questions that I'd love to ask, but I know our chair was looking for some time, so I'm happy to share my time with her.
    Please go ahead.
    Thank you so much.
    I have two questions.
    The first one is to Agnico Eagle.
    Could you provide us with how much tax or revenues you send to the federal government on an annual basis, perhaps from the time of the initial construction, where a lot of people came in to build your infrastructure, and ongoing? If you could, include not only the income tax portion, but corporate tax and any other tax that you might be sending to the federal government.
    Unfortunately, I cannot answer for the corporate tax, but we could provide the answer later.
    Thank you.
    For our Meadowbank project in Nunavut, in fact I don't think we've paid tax, because we've never made money on that one. We did a writedown of $1.2 billion on this, and we're still creeping up from that.
    You don't pay corporate tax, but all of your workers pay income tax, and probably very generous amounts.
    Yes. There's going to be $66 million in payroll paid to Inuit when we have both projects.
    I know we're going to pay over $4 million to the Nunavut government in property tax. There are 2,000 employees with salaries of over $100,000 per year, and all of them are mainly coming from Canada.
    Brendan, did you want to work on that question?
    Yes. I could provide a bit of supplemental information.
    There's a common misperception in the industry that the greatest value that a company can bring is through tax and royalties. The reality is that 80% of the value that companies generate on average, according to our studies, is through procurement.
    MAC does a study annually on...I think it's 12 companies with 60 operations. I don't have the data for this year, but last year I think it was that over 90% of the wealth generated was through local procurement, and 80% of that procurement is done in the host country, oftentimes as close to the local communities as possible.
    While we can talk about the importance of tax and royalties, which are important, there are significant other wealth generation opportunities that mining operations bring.

  (1605)  

    My second question is to the Mining Association of Canada.
    You indicated that the Canada Infrastructure Bank funding model would not perhaps be the best model for Arctic infrastructure programs.
     Do you see that it could be amended in some way, or are you talking about a separate fund to be created? You could maybe give us models for both.
    You only have 30 seconds.
     Sure.
    Very quickly, I don't think it's possible to amend it easily, because the CIB was designed to attract private dollars with public investment. Dollar for dollar, you're not going to get as high a return in the north as you are in the south. We just heard that.
    There's a reason the north isn't built—it's because it's very expensive. If we want to build the north, we have to design a fund that recognizes Arctic realities, speaks to them, and allows investment to move forward on that basis. It has to be independent. It has to be distinct.
    I need to give up our time, but if you have anything specific, send it in for the committee. We might be able to use it in the report.
    Questioning now goes to MP Cathy McLeod.
    Thank you, witnesses.
    I need to take a minute before I get into my questioning, because I think it's critical. I gave a notice of motion the other day. It is very time-sensitive because of the ability to get information back. It was looking in the BIA, that massive 802-page document. Within it there are actually three stand-alone bills. They are the First Nations Land Management Act, the First Nations Fiscal Management Act, and the addition of lands to reserves act.
    I was simply suggesting that our committee.... The finance committee cannot do due diligence. If you look at Bill S-3, you see there were lots of challenges with Bill S-3, and it took the work of a committee that knows the file to do the job to make sure that this was appropriate.
    It's a simple motion. I'd ask that we quickly vote on it so that we could get to the important business of the study we're doing. As I say, it's our committee, doing our due diligence, around three pieces of legislation embedded into a BIA. I want us to at least be cognizant of what's happening and be able to make recommendations. I'd like to move that.
    All right. I have MP Viersen and MP Bossio. Let's try to keep our comments really tight because of course we have guests here to talk about infrastructure.
    Thanks, Madam Chair. I'd like to support my colleague's motion here for sure.
    One thing I'd really like to hear about from the officials is how this got into the BIA, where it came from. It wasn't mentioned in the budget whatsoever, and so it seems to have been kind of sprung on us. I looked through the 800 pages and had a look at some of these things. They look like good pieces of legislation.
    The other thing is that I haven't had a chance at all to interact with some of the first nations in my riding that this will affect. I know several of them are trying to add lands to their reserves. I wanted to know if this was going to be helpful to them. It would be nice to hear from them at this committee.
     I ask my colleagues to definitely support my colleague's motion here.
    Go ahead, MP Bossio.
    As much as I respect my colleague Mrs. McLeod, on her motion, my own personal view is that we have a lot of great subjects that we want to discuss as a committee, and the clock is ticking. The finance committee is going to study this bill and all the aspects of it. None of it was referred to our committee as it was to other committees. I'm on the environment committee, and a number of very specific issues were referred to that committee.
    I don't want to take up a lot of time and I'd really like to get to the questions again, so I will not be supporting that motion.

  (1610)  

    Go ahead, Mrs. McLeod.
    Thank you.
     I found it very strange that finance did not refer it to us, which makes me even more worried about what they're trying to hide in these 802 pages. With that, I would like to call the question if we could, and we will move on to the questions.
    Okay.
    (Motion negatived [See Minutes of Proceedings])
    I would like to share my time with Mr. Waugh.
    Go ahead, MP Waugh.
     I was up at Meadowbank in January and February. Thank you, Mr. Girard. You weren't there at the time, nor was Ms. Desrochers. It was -65°, but that's beside the point.
    How much money did you spend on that 110-kilometre road?
    Up to now, we have built 200 kilometres of road in Nunavut, so we have the longest road. It is approximately $1 million per kilometre, so it's $200 million.
    Has there been any federal government money?
     Zero. It was all on our own.
    Your company has paid the bill on this road. How much was it again?
    It was $200 million.
    It was $200 million.
    We paid everything on our own.
    You're flying employees in and out from Quebec. We've talked about the issues—and I'm going to get to you in a moment—with the runways. It's a big issue in Baker Lake. Can you talk about that?
    Do you mean about the runways?
    Yes, the runways. Sometimes you're coming in twice a week.
    We have, in fact, 10 planes a week going to Nunavut from Montreal and Abitibi. Five of them are going to Meadowbank and five of them are going to Meliadine. We are using the municipality airport at Rankin, but we have our own airport at Meadowbank.
    Are you exempt from the carbon tax? You mentioned emissions equal to 75,000 cars per year that you're trying to keep out. With the carbon tax, we're hearing the big emitters are going to be exempt. Are you one of the companies that will be exempt?
    It's not all fixed yet, but we haven't heard anything about the exemption right now. On the electricity side, it looks clearer now. The base was going to be done using a genset with LNG, which we cannot use, because logistically you cannot bring LNG up north. We're going to pay for electricity beyond what we could do with the LNG genset.
    As for the mobile equipment, this is still a discussion in the wings. That one is not clear.
    I know you've talked about windmills and you've talked about everything, but the caribou could be affected, right?
    That needs to go through the process—
    That's going to take years.
    We are used to those types of processes. That is going to take time. We already started the environmental assessment. As we look to build those towers close to our project, almost all the environmental assessments have been done. We need to go through consultation, as with other projects.
    I'm amazed at how quickly you have built that mine.
    It is something special.
    It's one to see. I would recommend to everyone here, if you ever have time, to go to Nunavut to see it.
    I saw first-hand that the length of the runways was an issue. You've hit everything that I saw on inadequate runways. Planes that are supposed to get to Arviat, Whale Cove or Chesterfield Inlet don't arrive. Surprise, surprise, right? It's a big issue up there. It's a big issue when they need these planes to come in with materials. Could you comment on that situation? I saw first-hand that two planes didn't come in the day that I was at Chesterfield Inlet.
    It's a daily thing. There are 117 airports north of 60°. Only 10 are paved, and out of those 10, only five are well paved. The other five need to be repaved, so it's a big issue.
    There are solutions out there. We have a project under way right now in which we're starting a test of alternate runway surfaces, but that's a big project. That's a long way down the road for an aluminum surface, just to share with you one large project.
    Since the infrastructure is now also being affected by climate change, we have to look for other solutions as well for these runways. One of the biggest problems is, of course, the damage that it's causing to the airplanes. Whatever airplanes are being used by these mines, they're all 35 years old if they're using jets. There's only one jet, a Boeing 737-200, that can land on gravel runways, so it's a problem.

  (1615)  

    Mr. Marshall, to you for MAC, Agnico has deep pockets, maybe the deepest pockets up north. What are you going to do for the little miners that want to invest up there? What infrastructure do they need to compete?
    There are a number of opportunities. Agnico is a senior, mature company with a lot of operations. TMAC has a single gold mine operation that just began production last year. It is quite fortunate that it's proximate to tidewater. If it were not the case, they might not be operating today.
    Infrastructure is really the key to bringing down the upfront capital costs of mining in the north. If we use Agnico Eagle as a case study, it has a 3,400-kilometre security-of-energy supply chain. Ships leave Becancour, Quebec, and sail around Newfoundland to Hudson Bay. The mine built a floating port, a tank farm, and 200 kilometres of road just to be able to then actually build the mine site. Ten years in, they haven't made any money.
    That's a remarkable thing that should not be lost on the group of people sitting around this table. How many companies are willing to do that, to create wealth for the benefit of others while not actually generating a benefit for themselves? That is a very remarkable situation.
    Yes, I know.
    What can we do to turn other companies, small companies, into the next generation of Agnico Eagles? We need to bring those projects into a space of economic viability. The single largest thing that can be done to achieve that is to reduce the infrastructure deficit. If we don't, we will continue to see high-value, low-volume commodities in the north, and that is all. We will not see base metals developed.
    No, and then you've got the carbon tax coming.
    We will not see these types of projects move forward.
    The carbon tax just adds cost, right?
    Carbon pricing is a unique circumstance in the north. MAC has consistently called for northern recognition with respect to carbon pricing.
    As an association, we support carbon pricing as the most effective means of reducing carbon by giving firms the maximum level of flexibility, but you need to have a behaviour that you can switch to. If you put a price on carbon but there is no place for that price signal to transition towards and no fuel on which to diversify, then there's going to be a limited effectiveness to it. We recognize that. We're hopeful the decision-makers will recognize that.
    It's like I said with respect to the Arctic Research Infrastructure Fund: The north is unique, so you need unique policy situations to deal with that reality. It's the same with carbon pricing, it's the same with infrastructure, and it's the same with almost any other policy consideration that you can think of. We cannot continue to map “south of 60” solutions onto the north and expect to have the same outcomes. It hasn't worked historically and it won't work in the future.
    Questioning now moves to MP Rachel Blaney.
    Thank you, Madam Chair, and I thank all of you for being here with us today.
    One of the things we've heard several times during the study is the need for housing. Could I give each of you a few moments to talk about the impact the lack of housing is having on the work that you do?
    Can I start with you?
    It has a major impact. That starts with the kids staying at school for two extra hours. It also affects our employees. Sometimes employees are happy to go to sites to have a break, to have a room close to the camp where they can be by themselves. When they go back to the house and there are 15 members, how can they rest? How can they focus on their study and do their homework when they are in an overcrowded house?
    We see a challenge also to move employees from one community to another one. There are no houses available, and the prices are very high, so one of our biggest challenges is turnover. Why? They don't necessarily have their basic needs met when they are back in their community, and housing is a big one. I think having a better housing system will also help with the turnover rate at the site.

  (1620)  

    I think I'll answer that question a little differently. I am going to talk about one of the reasons I don't think the current design of the Canada Infrastructure Bank is going to work for the north.
    The reason, as I've been advised by decision-makers who led the transition team, is that there's a public interest test, and that public interest test will be deemed to have been passed when the subnational jurisdiction meets a particular capital requirement relative to the particular project in question.
    When we consider that 89% of Nunavut's territorial operational budget is already derived from Finance Canada, from the Government of Canada, and when we consider, as I mentioned earlier, the disproportionate gap in human quality-of-life indicators for northerners, particularly for northern indigenous peoples.... If you were the territorial government and you were required, with very limited resources, to make a decision about where you were going to invest that limited pool of capital, and you have extreme housing needs, are you as a government or would any of you as a territorial premier say, “Sorry; we're going to invest in building this road to this mine site, but we're going to put the housing on hold”? There is absolutely no way that you would do that, because that would be tantamount to political suicide.
     It's for that reason that we don't think the territories are on equal footing with respect to provinces that have a tax base to access funds in the Infrastructure Bank. We think they'll be less able to meet that public interest test. There's that aspect.
    The other component, as I mentioned earlier, is that dollar for dollar, everything costs more in the north. Even if you dangle that carrot of public funds to try to direct private capital into a particular project in the north, all else being equal, if that same project were in central Canada, the return would be greater despite the public funds.
    Therefore, you can see there's this twofold barrier to the north having equitable access to that fund to build infrastructure in the north.
     It's a very good question.
    Most of the northern operators have company-owned housing now. We had to do that. You name the operator, and they have spent millions in developing crew houses.
    Crew houses have one or two people, no more, in a room. They're people who are sent from anywhere in Canada, paid to fly up to the place where they're based, whether it's Yellowknife, Iqaluit or Rankin. It is two weeks in and two weeks out.
    It's important at this time on this committee to emphasize the impact of southern assumptions. Another part of government was putting rules into effect on pilot flight time and duty time. Because they didn't measure the impact on society, we would have had to double the number of pilots in Iqaluit. We don't have room for them. It would have taken us five years to build the accommodations alone. There's an example of other parts not doing enough consultation with northern Canada.
    I will finish one final point. Recently, we had an aircraft—I believe it was Swiss-based—that had a problem and had to land in Iqaluit. All of a sudden.... There are 250 people in that community. We ran out of room really quickly. That's just a big airplane and a big international story. We had something similar, again, in Baker Lake. We literally had people staying in houses and whatnot because there is no housing infrastructure. That's something to think about as we go forward, with the change in international flight patterns and going transpolar.
    Thank you.
    Glenn, I'm going to stick with you for a second. I really appreciate what you said about on-the-job mentoring and training. Could you speak to how the federal government could support this kind of training to keep people in their communities?
    I know I come from nowhere near the northern and remote areas, but still I come from remote communities, and retention is one of the biggest challenges. If kids go too far away for education, they don't come back. We're always looking at ways to keep people—and young people specifically—in the community.
    Could you talk about what would be helpful for you, federally?

  (1625)  

    As a representative for the northern communities, I don't want to come across as a know-it-all, but I have an excellent board that gives me great guidance, and we recognize that we have to partner with the northern communities. There has to be more on-the-job training. There's more mentoring. I have seen it's more of a cultural way of life to bring the young people into the job, whatever the job that's being done.
    I don't think we've done that as well as they have in the past, because we depended on the north-south migration, which has disappeared, ironically. People would learn in the south and go to the north for a couple of years, as we say. They would finally learn how to fly them, after they learned how to break them for a couple of years. They'd finally get good at it and then they'd leave and then that whole thing goes on again.
    We don't have that north-south migration. We're having to find the solutions, and we're finding them. Air Inuit, for example, has a Sparrow program in which they go into communities and a pilot mentors and becomes...I don't want to use the words “big sister” or “big brother”, but it's that type of mentoring. They go into that community on a regular basis. They now have 13 Inuit flight captains through that program, to give you an idea of what we're doing.
    Okay. The questioning is now moving to MP Yvonne Jones.
    Thank you, Madam Chair.
    I want to thank my colleague MP Rusnak for sharing time with me today.
    My riding is in Labrador, in the subarctic region of Canada. It's primarily lands owned by Inuit and first nations people. Of course, I can relate to everything you're all saying here today because I live the experience as well.
    We have huge mining operations in my riding. My first question is going to be around that.
     When you look at the cost today of developing a mine in the northern region of Canada versus the south, what are we looking at in terms of cost differential? Do those costs include all of the necessities to run that operation, whether it be roads, ports, rails, electricity, and those kinds of things that are going to be important pieces of infrastructure?
    For my second question, you've talked about building 200 kilometres of road for your mine. I'm not sure when that was. How long ago was that? Are there programs out there today that would fit better with mining operations and infrastructure investments? If not, how could the Government of Canada be doing this differently? Our objective is always to create sustainable jobs and a better economy for northerners in Canada and for the people who live there. If there's a way that we could be doing that, in addition to what's already happening or instead of some of the things we're doing, I'd like to hear about it.
     Maybe I could start.
    The cost—and this is a number from the MAC—is two to 2.5 times higher, including capital costs and operating costs. It's about that much.
    It's 200% to 250%.
    Okay. Thank you.
    What that means is.... Let's say that in Quebec, ore body at 0.5 grams per tonne could be economically viable. In the north, it would need to be a minimum of 1.5 grams, but even that's too low. The fact is that the gold and the minerals are locked into the north because it's too expensive to mine them.
    With regard to the second question.... Sorry. I missed it.
    It was about the investment you made.
    The first 100 kilometres was done between 2007 and 2010 from Baker Lake to Meadowbank. Then we did 30 kilometres in 2013 from Rankin Inlet to Meliadine. Last year we built 70 kilometres from Meadowbank to Amaruq.
    I'm going to build off that question and the response that Dominique offered. I'm going to do it by telling a little bit of a story.
    In my recommendation, I referenced AIDEA because you asked what the government could be doing differently. AIDEA is the Alaska Industrial Development and Export Authority. It's a state-owned investment bank. It was capitalized in the late 1980s with about $300 million or $350 million. Its assets now exceed $1.5 billion a year. It leases for operation both of Alaska's deep-sea ports. It financed a road and a port, which may sound familiar to folks around this table. It financed a road and a port that catalyzed the viability of the Red Dog lead-zinc mine.
    Red Dog is a mine that was developed by Cominco. It's currently owned by Teck Resources, which is a Canadian company. It's one of the richest zinc mines on the planet. Even despite that, it was not economically viable to build that mine without some form of support to put that infrastructure in place. It's been operating for almost 25 years. It has generated literally multiple billions of dollars of economic activity. It has a benefit-sharing agreement with all 13 Alaskan indigenous communities. It is a remarkable success story.
    In Canada, we have a lead-zinc mine in Nunavut. It's called the Izok Corridor Project. It's not a mine yet. It's another relatively rich, known lead-zinc deposit. It's been known since the 1960s. It also needs a port and a road. It has not been developed because it has not received support to actually develop that port and that road, and there has subsequently been zero economic activity around or related to that particular project.
    Where is Canada's AIDEA? Where is that institution that takes that exact same situation that we saw in Alaska that took a project that was not viable and put the pillars in place that allowed it to move forward through flexible financing, long-term loans, escalators on repayment, etc.? Where is that model for our north?
    We talk a great deal about how there is so much potential, how there is so much opportunity, how there are resources out there, how there is gold in those hills, but we're not doing very much substantive work to actually pull them out of the ground in a responsible way to grow wealth and share that with communities. We need to do more, and we can. We just have to choose that this is what we want to do.

  (1630)  

    We're going to end on that recommendation.
    Thank you so much for coming in, for taking the time. We know that you've travelled, some of you far, to come here. We appreciate it very much. Your comments will build the report that will be presented to all MPs and to all Canadians. We really appreciate your participation. Thank you.
    We'll take a short break and then we'll have our second panel.

  (1630)  


  (1635)  

     We'll get started again and welcome those who are here.
    I believe we have, by video conference, a representative from Yellowknife.
    A voice: No, it's Whitehorse.
    The Chair: Oh, it's from Whitehorse. I'm so sorry. I know that's a big taboo up north. Forgive me.
    We welcome you. You will have 10 minutes to present. After the presentations are done, we'll move to questions from the members of Parliament until we run out of time.
    I want to indicate to members that MKO, from Manitoba, has technical difficulties and will not be participating today.
    We have two presenters. Let's get started with Curtis Shaw, the President of Northwestel Inc., who is coming to us from Whitehorse, Yukon.
    Welcome. Go ahead.
    Thank you, Madam Chair.
    Northwestel appreciates the opportunity to speak to you here this afternoon as part of your study on northern infrastructure projects and strategies. We are very hopeful that this will result in initiatives that continue to improve the quality of life and economic prosperity for the residents of Canada's north.
    As a little about Northwestel, Northwestel is the incumbent telecommunication service provider in northern Canada, serving 120,000 Canadians in 96 communities throughout Yukon, the Northwest Territories, Nunavut and northern British Columbia. Our geographical operating area encompasses 40% of Canada's total land mass, but only 0.4% of the Canadian population. Just by way of context, 70% of the communities we serve have fewer than 500 residents.
    Northwestel maintains approximately 5,000 kilometres of fibre optic cable and 8,000 kilometres of microwave radio, and we operate in some of Canada's harshest and most remote locations.
    Our corporate and operational headquarters are based in Whitehorse in Yukon and Yellowknife in the Northwest Territories. We also have a regional office in Iqaluit and provide local employment in more than 15 northern communities. We are one of the largest continuous private sector employers in the north, with over 500 employees living and working here. Unlike many companies operating in northern Canada, our senior leadership team, our operational presence and most of our telecommunications equipment is resident north of 60. Approximately 12% of our workforce self-identifies as indigenous, and we have eight joint ventures with indigenous businesses and institutions.
    Northwestel is a significant economic contributor in the north. Our annual direct economic impact is about $170 million a year in terms of salaries, operations and capital investment. Cumulatively we have invested more than $800 million in telecommunications infrastructure across northern Canada. Northern indigenous suppliers are often significant beneficiaries of this investment.
    Northerners deserve fast, reliable, cost-comparative telecommunications, and we strive to meet those objectives in a world where standards and expectations are growing at an unparalleled speed. We are proud of our efforts to modernize telecommunications in the north and we've partnered with federal, territorial and indigenous governments on bold nation-building infrastructure investments across our region. These partnership agreements and joint ventures have occurred to meet the needs and capacity of our communities, unlike traditional P3 models, which are not always well suited to northern projects.
    Yukon was the first jurisdiction in Canada to provide high-speed Internet to every community in the territory, and by the end of next year we will have successfully brought broadband Internet to our entire operating area, except for one community. The one community that doesn't have service is Bob Quinn, in British Columbia. It's a community with fewer than 10 houses.
    Northerners benefit most when the private sector partners with government to access funding envelopes dedicated to northern and rural telecommunications infrastructure. This has been, and continues to be, an essential way to address the unique challenges of Canada's north, our limited access or small population base, and limited human and financial resources. It's especially true for small fly-in communities. By working in partnership with various governments, we've managed to make real progress towards providing Internet services and Internet rates across the north that are comparable to those offered in southern Canada.
    One of the successes I'd point you to is our modernization plan, which is a $230-million investment between 2013 and 2018. All 60 communities that are served terrestrially, meaning either by fibre or microwave, now have 4G smart phone capabilities and broadband download speeds between 15 and 250 megabits per second. We've also provisioned 14 satellite-served communities with smart phone 4G capabilities and broadband speeds ranging from 2 to 5 megabits per second.
    Most recently, with the support of ISED's Connect to Innovate program, our Tamarmik Nunaliit project will provision all 25 Nunavut communities with 15-megabit-per-second broadband and 4G LTE smart phone capabilities by the end of next year.
    The Mackenzie Valley fibre link is another recent example of private-public collaboration. In 2017, the Government of the Northwest Territories, Northwestel and Ledcor provisioned 1,200 kilometres of fibre between McGill Lake and Inuvik in the Northwest Territories. This investment brought high-speed Internet at lower prices to the Mackenzie Valley and facilitated improved government programs, services and economic development opportunities.
    As the Government of Canada looks north and identifies investment priorities, it should focus on projects that demonstrate public benefit and leverage investment by, and opportunities for, the private sector. When developing public policy and program funding models, please consider the precarious nature that many northern businesses face given high input costs, increased global competition and limited growth opportunities.

  (1640)  

     Public funding for initiatives that instigate direct competition with the private sector creates instability and discourages private investment. Financial support for infrastructure with broad public benefit that spurs economic growth makes doing business more affordable in the north, and so a high quality of life for all northerners should be the priority.
    Investments in telecommunications connectivity are absolutely important, but so are investments in transportation and electricity. These have tremendous impact on our cost of doing business and the cost of service provision to our customers. Transportation and travel costs are among the most significant inputs to Northwestel's operations. We service 96 communities that are spread out over 40% of Canada's land mass. In the most extreme case, Grise Fiord is 1,500 kilometres from the nearest hospital in Iqaluit and 400 kilometres to the nearest community, which is Resolute. Distances increase the cost to serve these communities.
    A lack of transportation options is also a significant cost input for any company operating in the north. Forty-three of our 96 communities do not have year-round road access, and of these, 30 have no road access at all. For business, that means equipment and supplies must be barged in on a sealift, in the case of the eastern and northern Arctic. Limited commercial flights into and out of communities often means air charters are required for both routine and emergency repairs.
    I can give you an example. In some communities, if we have a phone line that's broken in a residential home and we charter in an aircraft, it could be $15,000 or $20,000 just to fix a phone line.
    Electricity is another significant cost input for us. Our commercial power costs in the north are significantly higher than in the rest of Canada and 15 times higher than equivalent consumption bands in Quebec. In Nunavut, commercial rates can be as high as $1.11 per kilowatt hour. Rates in Nunavut are expected to go up, with rates in Iqaluit increasing until they're equal to the rates in the other communities.
    While commercial power rates in the Northwest Territories and Yukon are lower than in Nunavut, they're nearly double the national average and climbing at a higher rate than inflation. As electricity is a key input to broadband service delivery, continued rate increases place upward pressure on residential and business Internet rates.
    In addition to commercial power, our network's remote locations require us to generate our own power at 81 sites where we have no commercial power access. Thirty-six of those are accessed by helicopter only, meaning we have to sling diesel fuel in on helicopters to power the sites.
    Improving broadband is not as simple as just needing more fibre, increasing competition or regulating prices lower. Distance, geographical challenges, high input costs and low population density make it challenging to find a business case for telecommunications service providers to recover their investments.
    This challenging business case is made significantly more adverse by structural mechanisms that drive market conditions. Examples are the requirements to provide wholesale access. Unlike most southern jurisdictions, there are simply not enough customers and not enough revenue from local services in the smallest communities to support one service provider, let alone two or more in communities that are forced into competition for facilities access that directly impacts future private sector investment.
    Achieving CRTC's 50-megabit target will require significant public-private partnerships in fibre to the home, 5G, long-haul terrestrial fibre, long-haul subsea fibre—for example, between Nuuk in Greenland and Iqaluit in Nunavut—or investments in technologies such as low earth orbit satellites in the coming years.
    Government programs also need to consider redundancy concerns in rural and remote regions of Canada. Businesses and consumers rely on the Internet 24-7, and any service outage can have significant health, safety and socio-economic implications.
    Closing the infrastructure gap between the Arctic and the south will require hundreds of millions of dollars in infrastructure development and strong collaboration between all levels of government, indigenous organizations and the private sector. This is the only way that Canada will meet its economic and social potential in the Arctic.
    As one of Canada's largest permanent private sector employers in the north, I know first-hand how the infrastructure gap impacts the cost of doing business and our ability to be competitive. To shrink this gap and support social and economic development in the north, we have four recommendations.
    The first one is to allocate specific funds that address the northern infrastructure deficit and that recognize the unique characteristics of operating here and the high cost of infrastructure development in the north.
    Second, when considering major infrastructure investments, consider the broad benefits of the initiative both today and into the future. Frequently, public funds are allocated based on the business case for a single project outcome—a road, a hydro dam, a line of fibre—when in fact most nation-building initiatives support multiple social and economic benefits, and if considered in their entirety with potential partners, could include efficiencies and cost savings in preparing northern Canada for tomorrow.

  (1645)  

     Third, if northern Canada is to be fully engaged in the digital economy with reliable data and Internet services comparable to the south, public broadband programs must set aside funds specifically to build infrastructure and address redundancy concerns in remote and rural locations in Canada.
    Finally, the government should look to abandon any obligation for subsidy recipients in Canada's north to offer wholesale access; instead, promote affordability through retail price commitments.
    Thank you, Madam Chair. I'd be happy to take any questions the committee may have.

  (1650)  

    Thank you.
    Now we go to our visitors who are here in Ottawa. We have the Nunatsiavut Government from Nunavut.
     We're very happy to see you here. We met you earlier and I know that Yvonne is one of your representatives. You have 10 minutes to present your presentation, and then we'll get into questioning.
     Madam Chair and members of the standing committee, thank you for inviting me to present to you today. It is indeed my pleasure to be here to speak on behalf of the Labrador Inuit and the Nunatsiavut Government.
    We represent about 7,200 Labrador Inuit. The Nunatsiavut Government came into existence on December 1, 2005, with the signing of the Labrador Inuit Land Claims Agreement. We are the first Inuit region in Canada to achieve self-government.
    I am here today to talk to you about some of the infrastructure needs we have in our communities, but first of all, I think it's important to put things into perspective.
    As in other northern regions, there is a huge infrastructure gap in Nunatsiavut compared to other areas of the province and indeed the country. One could attribute this deficit to geography and the fact that we are isolated from mainstream Canada, higher construction costs for our projects, limited transportation links to and from our region, a shorter building season, and at times weather that can present many challenges.
    The biggest challenge as we see it, however, is a lack of willingness on the part of both the federal and provincial governments to provide the necessary financial resources to help close this infrastructure gap. There needs to be a new way of thinking, a bold vision for the future, one that will see major capital investments in Nunatsiavut and other northern regions that will enable further economic activity, which in many respects will improve the lives of our people.
    There's the Nain airstrip. Nunatsiavut's five communities are serviced year-round by air, primarily by Twin Otter aircraft, and seasonally by marine freight and passenger vessels. There are no road links to Nunatsiavut or between Labrador Inuit communities.
     Modern infrastructure is a core component of a competitive economy. If we are to grow, real investments in both social and physical infrastructure are required.
    Take the airstrip in Nain, for example. It's one of the oldest airstrips on the coast of Labrador. Pilots often have a difficult time landing because of crosswinds, and it is not equipped to accommodate night landings. The Nunatsiavut government has been lobbying for years for a new airstrip for Nain. The community continues to expand. Future growth will result in increased air traffic, further compounding the problems that currently exist.
    We also anticipate a steady increase in tourism traffic to Nunatsiavut and the Torngat Mountains National Park, with Nain being the main staging point or gateway to the park. A new modern airstrip capable of handling aircraft larger than Twin Otters would help stimulate economic development and reduce air transportation and freight costs. The cost of a new airstrip at a different location is estimated at over $50 million. A high percentage of that cost would be associated with a road link from the community.
    Last December, Indigenous and Northern Affairs Canada provided the Nunatsiavut government with funding to investigate the potential extension of the Nain runway, considering new navigational technologies. That report has been completed, and it confirmed the existing airport is in need of immediate repairs in order to maintain some level of safety and that a new airstrip in a different location is required.
    Capital investments are required from both the federal and provincial governments in order to ensure the community of Nain has an airstrip that is safe. Consideration should also be given to ensuring the airstrip facilities in the other four Labrador Inuit communities are able to accommodate larger aircraft—again reducing freight and passenger cost as well as helping to stimulate economic development—and have basic infrastructure such as running water and working toilets.

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     Regarding marine infrastructure, while improved and enhanced airstrips are important to advancing economic development, the sea is still our highway, yet we continue to have a substandard marine service that has been plagued with problems for many years.
    Following an RFP process that we had some serious concerns with, the Government of Newfoundland and Labrador awarded a 15-year contract for the supply of a new marine vessel to service our region. Despite reassurances from the province that the new vessel will provide a better service, we remain skeptical, mainly because we feel that the RFP failed to address many of our long-standing concerns, particularly with respect to existing marine infrastructure, and was developed without any involvement by or consultation with the Nunatsiavut government.
    The new vessel will handle both passengers and freight. Right now, the communities are serviced by two vessels. With the one vessel, there will be more congestion at the current port facilities. The new vessel will operate out of Happy Valley-Goose Bay, which also lacks adequate port facilities or suppliers of goods and materials.
     Many businesses in our region have long-standing relationships with suppliers in Newfoundland. Goods have been shipped from the island for decades, but now will be shipped from Happy Valley-Goose Bay, where we know the cost will be much higher and the quality far lower, especially if goods have to be trucked in from the island.
    Some of the strongest and earliest impacts of climate change are being felt throughout Nunatsiavut. Sea ice coverage in the northern Labrador Sea along our coast declined 73% over the last 40 years. Extreme weather conditions are predicted to become more common in the future, creating a very real need for improved sea travel safety.
     Nunatsiavut communities are willing to embrace new technologies and practices, yet are more keenly aware than others that change within the region requires careful planning and great attention to how our way of life and our environment will be affected. The promotion of safe Arctic shipping, the development of highly responsive life-saving search and rescue operations and the expansion of more reliable telecommunications infrastructure are keys in helping us adapt to climate change.
     The number of ships sailing along the north Labrador coast is on the rise and will continue to increase as northern shipping routes are developed and expanded. That is why it is extremely important that we promote the development and enhancement of marine infrastructure in our communities. At the same time, we have to ensure that proper mechanisms, rules and technologies are put in place to reduce the chances of marine disasters. A disaster at sea along the Nunatsiavut coast would be devastating.
     Addressing shipping challenges in the Arctic will require a global effort by those who are coveting the Arctic's resources and its potential for shortened transportation routes. All levels of government have to work together to promote safe shipping activities, increase search and rescue capabilities and mitigate the impacts that will arise from resource developments on and off our shores.
    Regarding housing, I am pleased to note that over the past three years the Nunatsiavut government, with its own-source revenue and some significant funding transfers from Ottawa, has been able to start to make a significant contribution towards dealing with the Nunatsiavut housing crisis. The Nunatsiavut government has completed a six-unit prototype complex in Nain, which is now occupied by three young families and three seniors. We have constructed one multi-unit complex in Hopedale, with a priority to provide for families whose children may be in care or going into foster care as a result of a lack of adequate housing.

  (1700)  

     Construction of an identical complex in Nain will begin this fall. These complexes are—
    I'm going to ask you to wrap up, because 10 minutes have already passed. Try to come right to your conclusions. We'll get your brief, and it will be put in as part of our evidence, but please wrap up.
    Okay. Thank you very much.
    On energy security, Madam Chair, our goal as a government with respect to economic development is to create an environment that encourages self-reliance, prosperity, employment and entrepreneurship. We focus on research, short-term training opportunities, business planning and community development.
    Despite our efforts, we are still limited in our ability to flourish, mainly because our region is energy insecure. In January of 2017, we released the Nunatsiavut energy security plan, a proactive and sustainable development approach to meeting the energy and security needs of our communities—
    Mr. Lampe, we have to wrap up. Sorry.
    Thank you, Madam Chair.
    We'll get back to you with questions, so maybe you can continue to make your points at that time.
    It is question time now. We start with MP Yves Robillard.
    I will share my time with Mrs. Jones.

[Translation]

    I want to thank the witnesses for their excellent presentations.
    My first question is for the people from Nunatsiavut.
    In your opinion, how could the north stop the economic leakage of federal funding when it comes to infrastructure projects?

  (1705)  

[English]

    I'm not exactly sure if I understand your question. How can we slow down the leakage? In my opinion—and I think we've made it quite clear—there is a great lack of infrastructure. If you look at housing or in regard to airstrips and things like that, these are services that we don't have, that are not up to the standards of any other part of Canada.
    To me, it's not how we can stop the leakage. I think it's Canada's responsibility. Our people deserve no less than any other Canadians.

[Translation]

    How can the Arctic policy framework address investment and procurement opportunities in the north?

[English]

    I'm not involved in that, Johannes, Arctic infrastructure.
    I think he's asking if there's enough funding going into important areas.
     How is the strategic...I don't know how to say it. Could we have it translated?
    For our translator, I'll repeat it again.

[Translation]

     Comment le Cadre stratégique pour l'Arctique peut-il aborder les possibilités d'investissement et d'approvisionnement dans le Nord?

[English]

    In our opinion, it hasn't looked at the supply. We're lacking in marine infrastructure, there are no roads and we don't have adequate airstrips. I don't know how else to answer your question.
    I'll try to answer it.
    The Nunatsiavut government is a new government. We are 13 years into self-government, and so we have not been able to apply for funding opportunities to help us with our infrastructure issues. Labrador has been in existence for some time, but the infrastructure that the Province of Newfoundland and Labrador has provided for the northern Labrador communities is outdated and old. We are here today to seek support in getting the state-of-the-art or new infrastructure other Canadians enjoy across Canada.

[Translation]

    Okay.
    How does our procurement in the north contribute to the economic growth of companies and communities in your region?

[English]

    Are you talking to Yellowknife or Whitehorse?
    It's to anybody.
    All right. Would you like to respond quickly to the question by video conference?
    I think generally that a lot of the funding that we see gets matched by the territorial government and essentially the private sector. I think we look for programs in the private sector in the telecommunications area where we can get territorial government funding and then also have private sector capital that goes into a project.
    We have examples in Yukon and the Northwest Territories, and most recently Nunavut, in which there's a multiplier impact on funding. In the telecommunications area, that's one of the formulas that seems to have worked quite well in trying to bring funding to the north and get the maximum potential for northern residents.

[Translation]

    Thank you.

[English]

    We're moving to MP Jones.
    Thank you.
    First, I want to thank President Lampe, Minister Mitchell and Mr. Shaw for being with us today.
    I think your messages are falling in line with what we've heard from most presenters we've had at our committee, which is that there is an infrastructure deficit across the north, whether it's in communities or in business investment and opportunity.
    Here is one of the questions I want to ask the Nunatsiavut Government today. Knowing that federal transfer dollars normally go though the Province of Newfoundland and Labrador and that the priorities for the province are set there, including the northern region, how do you feel about how that fiscal formula works? Could we do it in a way that would be more effective for Inuit governments in the north?
    I would like to hear your views on that particular piece.

  (1710)  

    We only have one minute left.
     Thank you, Yvonne.
    In simple terms, we as Nunatsiavut are now starting to deal directly with the federal government, and that is, for us, a much better way of dealing with the infrastructure needs that we have in Nunatsiavut.
    When the Province of Newfoundland and Labrador provided funding for infrastructure or needs for the communities in northern Labrador, we got lost within the general populations of Newfoundland and Labrador. It was a challenge to get to the housing needs, and right now we are in a housing crisis because we could not get the funding that we needed to help northern Labrador, Nunatsiavut.
    It's the same for marine services infrastructure. As I said earlier, those opportunities were also lost within the general terms of the provinces. They were for health care, social needs and things like that. We are just starting to come out of those dire needs that we have had over the years.
    The questioning moves to MP Arnold Viersen.
    Thank you, Madam Chair.
    Thank you to our guests for being here today.
    Mr. Shaw, I was just wondering about what drives your business, particularly in Yukon. How do you take on projects? How do you make those decisions?
    Typically, if you look at our revenue base, you'll see it's one-third residential, one-third government business, and then one-third wholesale. That is generally how our revenue is structured. When we look at a business case, we look at all the revenue potential. We look at the capital costs and the ongoing costs for maintenance in the investments.
    Some of the investments we make in long-haul fibre have longer payback periods of 10, 12 or 15 years. In the case of a residential service in a community, we try to look for an economic return on those projects, and typically government funding has helped fill in those shortfalls when we've identified a shortfall.
    Generally, that's how we approach the business in all the different territories where we operate.
    When you talk about this wholesale bit, who would be some of your clients?
    From a wholesale standpoint, we have companies like Telus, we have AllStream, we have SSi Micro and we have Iristel. We've got big national global players that are serving banks and government departments. Then we have smaller wholesalers that are serving more regional interests in the north. Wholesale is a fairly large piece of our business as an organization.
    How does the resource development that happens, the mining and oil patch stuff, drive your business?
    The resource sector is interesting. The mining industry, predominantly, is satellite based. We've provided a diamond field microwave service to the diamond mines outside of Yellowknife. The resource industry does peak at times. Obviously, we had northern B.C. with shale gas that we ran a number of microwave links into. Here in Yukon, Victoria Gold is under construction right now, and we have a hybrid fibre microwave connection into the site.
    Those mining investments have helped us smooth out our financials over the years when one region may be booming and another region may be a little more economically pressed.
    Right now, I'd say that the Yukon revenue outlook looks a lot better from a GDP and a mining and a resource sector standpoint. Northwest Territories and where we operate in northern B.C. are a little more pressed and a little more muted from a GDP growth standpoint.
    We're fortunate that we cover four different regions and we can balance the economics out region by region.

  (1715)  

    You talked about these microwave outfits. That's a temporary thing, is it not, for the life of the mine, so to speak?
    Typically a microwave investment made for a mine might be 10 or 15 years in duration. The diamond field microwave length that we have north of Yellowknife is constructed with a 15- to 20-year life. Once the mines go under remediation and start shutting down, we'd remove those towers and bring the land back to its original state.
    Are there any communities that are near there that could piggyback off that, or usually not?
    Typically there are not. On the diamond mines themselves, there is really no population of consequence leading out to those mines. The Victoria Gold example in the Yukon is basically a spur off a community link that we have, so there is really not much benefit to the mass market population.
     Other than that it brings you into the territory in general.
    Absolutely. It catches the general economic growth.
    You need a backbone to bring it back home, kind of thing.
    Yes, that's correct.
    You talked about transportation costs being a large part of your business. Have you noticed any impacts of the carbon tax on your business operations?
    Not yet; it's forward looking. The carbon tax impacts two facets of our business. One is obviously the cost to generate power at our prime power sites where we're consuming diesel, and obviously commercial power that we purchase. The third thing in the north would be really the cost to our employees, the cost of living. Our average northern employees have to heat a home. In some of our jurisdictions it's below freezing for eight or nine months of the year. It's something that we're monitoring right now, looking at how we deal with the cost of living increases that our employees are faced with.
    Do you see your company growing dramatically in the next 10 years in the northern regions?
    Generally, the company has grown kind of in parallel with northern economic growth. In some years it's been growing faster in previous areas, such as Yukon, for example. In Nunavut, we're investing quite heavily right now. We are seeing growth on the horizon for the next three or four years, but obviously in the telecommunications industry there are competitive pressures and new entrants, such as LEO satellite, so the landscape will shift quite dramatically over the next five or six years.
    Are you participating at all in the low-flying satellite technology?
    We're in discussions with a couple of providers today about the potential. We're not directly investing in that market. It may be something we partner with, or we might work out a supply arrangement in the future.
    You mentioned the Mackenzie Valley connection line. Could you explain what that is a little bit more?
    A number of years ago, the Government of the Northwest Territories went through a P3 tender process to build a fibre line from the southern part of the Northwest Territories up to Inuvik, which is north of the Arctic Circle.
    There were a couple of things the government wanted to do. Number one, they wanted lower costs for residents from a telecommunications standpoint. Number two, they wanted to be able to serve space agencies that were co-locating dishes in Inuvik for international space centre traffic. We have the European space centre there. We have the Swedish space agency co-located there. They typically are putting these satellite dishes in for telemetry, GIS mapping and weather mapping. The nice thing about Inuvik is that it's located on the other side of the world from some of these European space agencies. That was another driver for the network.
    When they put the network in place, there was a tender that we were awarded with Ledcor. We formed a partnership with Ledcor and we ran 1,000 kilometres of fibre network to Inuvik, and we're maintaining that fibre network on behalf of the Government of the Northwest Territories for the next 20 years. It was an example of a public-private partnership coming together, a competitive tender process, obviously with various benefits for the communities along the route and then obviously all the economic diversification that they were looking for in Inuvik.
    The questioning now moves to MP Rachel Blaney.

  (1720)  

    Thank you, Madame Chair.
    Thank you all for being here with us today. I'm going to start my questions with President Lampe and First Minister Mitchell.
    Thank you so much for your presentation. One of the things you talked about in your presentation was that you were starting to see a little bit of work being done around housing. We've heard again and again about the huge challenges for these regions around housing. Could you just tell us a little bit about what the gap looks like and how long you think it's going to take for you to fill in that gap?
    Thank you.
    This question will go to Minister Mitchell.
     Thank you for your question. That's one area that I hope I can give you some answers on, because I'm responsible for housing.
    When we did our original housing needs assessment before we got this federal funding from the federal government, there was no identified funding for our region and what we were getting from Newfoundland and Labrador Housing Corporation was a really small amount. There was none identified for Inuit specifically.
    When we did our first needs assessment, I think there was a need for something like 190 homes. We had a lot of overcrowding and things like that, but in the last number of years, we've spent at least $1 million a year on housing repairs. As President Lampe mentioned, we have the prototype in place and we're using the data that we collect from that to develop our own building codes and standards. We've done our risk assessment, our needs assessment, and we looked at a housing delivery agency model. We took a bill to the House and we're looking at passing a housing bill to deal with everything.
    Right now, we do have another unit that we started in Nain to help children in care or children who would otherwise be taken into care because there's still a lot of overcrowding.
    We've been moving along. We do two different home repair programs and we would have built another seven-plex this year, but one of the challenges that we face is the land that's available to build on and good building land. We are starting to make a significant difference in our communities.
    Thank you for that.
    You also talked about energy security and some of the challenges you have there. Could you expand a little bit, as we didn't get to hear that part of your report?
    The Nunatsiavut Assembly tabled a bill. We have hired a consultant to look at the energy needs that we have in Nunatsiavut—not just to look at the needs within the communities, but also what would be environmentally friendly. We're looking at getting away from the diesel generation, which Nunatsiavut communities have become dependent on, and to look at new ways that we could harness the natural elements, like wind and solar energy. We are working with the Province of Newfoundland and Labrador and different agencies to help us move forward on this issue and to make energy efficiency more affordable for Labrador Inuit.
    Right now it's moving forward in a positive way, and we feel that we want to accomplish something that will help not just Labrador Inuit, but also other Canadians.
    That's for the broader community as well.
    In your report, you also talked about climate change having a fairly significant impact. In terms of infrastructure, what kind of impact is climate change having on the infrastructure that you have, knowing that you already have a deficit? How is that working out?

  (1725)  

    The best answer that I usually give to people who ask questions is “Come and see”. As I said, for air transportation and marine service for Nunatsiavut, like other Canadian communities, we want to move forward with the new technologies that are happening for the southern parts of Canada and people who want to come to our region. We're not ready, so until we get the infrastructure that can be provided for us, right now all we can say is that we're not ready, so provide us with the infrastructure that is needed within Nunatsiavut. You are welcome to come.
     What I'm hearing you say is that if you don't have the infrastructure, there's a lot of opportunity that you can't capitalize on because you simply don't have the resources.
     Yes, exactly. Minister Mitchell could add to that.
     Yes, I wanted to add something.
     We were talking about the Nain airstrip and the need for an airstrip. I think one of the effects of climate change on our airstrip in Nain right now is that with the permafrost, the culverts for the airstrip drainage are not working properly, and there's a lot of erosion.
     That is an effect of climate change, as you can see, and it is now affecting the airstrip. Some maintenance or repair needs to be done right away. When you land on the airstrip, you can feel it and see it.
     We have the report that we presented today and will present to Minister Garneau tomorrow. We'll have the photos there.
    Thank you.
    We have only about four minutes, and I understand that I have a chance to share this time with MP Hunter Tootoo.
    Let's split it. You start, and I'll wrap up.
    Maybe I won't stop, Madam Chair. Thanks.
    Voices: Oh, oh!
    I'm being generous, but I have a gavel.
    I appreciate it. Thank you very much.
     Welcome. It's good to see you again.
    In listening to your stories, it seems like it could be our premier saying the same thing for Nunavut. It's one thing the Inuit have in common, I guess. We've been ignored for far too long by the federal government.
     I guess you want to talk about the infrastructure deficit. I can totally relate. We're in the same kayak, if you want to say that, right? Do you think the federal government needs to focus more directly with the Nunatsiavut government, the Nunavut government and the governments of the jurisdictions to come up with something to address that infrastructure deficit insofar as what your priorities are and in dollars that will actually get something done quickly?
     Thank you, Hunter.
     You're absolutely right. Building a relationship is very important. We are starting to make that progress in building a relationship with the Government of Canada. Talking about what needs we have with a government that cares and is able to help and support those needs, whether it's for Labrador or Nunavut, is very important.
    Thank you.
    All right. For you, Mr. Shaw, I have five questions in a series, and you only have about a minute to respond.
     Number one, what's the cost of fibre per kilometre? Number two, is it possible to upgrade satellites? Number three, would it help to add more satellites so that we can have service in the Arctic? Number four, do we need forwarding dishes, or is there some other temporary mode of improving the signal reliability? Finally, I think I heard you say that you had some confidence with regard to low-altitude satellites.
    You have 60 seconds.

  (1730)  

    The cost for fibre per kilometre is a tough one to answer. It ranges. We have some low precedents in areas along railways that we can trench. When you work in the High Arctic, it's really quite costly. I can provide the committee with that off-line.
     In terms of upgrades to satellites, typically satellites are designed so that they are not upgradeable. Once they're in orbit, you can't upgrade them.
    On new satellites, absolutely: the Nunavut project is using a brand new Telesat satellite, a Telstar 19 Vantage. It's providing 10 gigabits per second over Nunavut. We've actually 20 times the capacity in that territory. The satellite industry is evolving, so adding new satellites is absolutely a yes.
     In terms of dishes, typically the bigger dishes have better received signals. We have some very large dishes in the north, some 10- to 12-metre dishes. With some of the new technology that's coming out, we're putting in four- or five-metre dishes. They are smaller. There's a lot of innovation on the dish size.
     In terms of LEO, the big advantage we see with LEO is high bandwidth and low latency. Right now, the geosynchronous satellites we have result in a half-second communication delay. The new LEO satellites coming out will eliminate that delay. They give you an almost fibre-like experience. Those are some of the things that we're working on in the LEO front.
     I'm pretty optimistic that if these plans materialize, in three or four years you will see a change in the telecom landscape in northern Canada.
     That's very impressive. Thank you for that information. We really appreciate it.
    Thank you for taking time out of your day and for travelling all the way to Ottawa.
    Thanks to all of the MPs for the insightful questions.
    The meeting is adjourned.
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