I must say that Thunder Bay was one of our favourite spots to stop in our trip across Canada last year. We started in St. John's, Newfoundland, and drove all the way across and, 7,700 kilometres later, back into Victoria. Thunder Bay was a highlight.
Good morning, Mr. Chair and committee members. My name is Gavin Dirom. I'm the president and CEO of the Association for Mineral Exploration, or AME for short. On behalf of AME's 400 corporate members and 4,000 individual members, I'm pleased to present to the House of Commons Standing Committee on Natural Resources concerning the future of Canada's mining sector.
AME represents mineral explorers and developers operating or based in British Columbia. We are the hosts of the well-known Mineral Exploration Roundup conference held in Vancouver at Canada Place every January.
Mineral exploration is the lifeblood of the mining sector. Clearly, without exploration there would be no mineral deposits discovered and thus no mining. Through high-tech and low-impact geoscience and modern exploration techniques, members of AME discover the rare mineral, metal, and steel-making coal deposits that may be mined for the basic materials we all use on a daily basis. The greener economy of the future will absolutely be dependent on these materials.
But British Columbia, just like the rest of Canada, competes in a highly competitive open trade environment. Mineral explorers and developers are price-takers, not price-makers, and are therefore subject to the basic fundamentals of global supply and demand.
Even with the application of very prudent fiscal restraint and cost-cutting measures, the industry is still weathering one of the most extreme and sustained downturns in history, resulting in bankruptcies, layoffs, and cancelled or delayed projects. Many members of AME are struggling to stay afloat through these difficult times, regardless of the recent market price increases for gold, zinc, nickel, and steel-making coal. While some confidence is returning to the industry, it is limited, and there remains a high degree of uncertainty going forward with respect to the depth and the substance of the current price increases.
Globally, overall financing for the industry dropped by almost 40% between 2007 and 2015, while financing for exploration has fallen by more than 90%. After years on top, Canada no longer attracts the largest share of global mineral exploration investment, having conceded first place to Australia in 2015. In fact, Canada's share has fallen from 21% in 2007 to just 13.5% in 2015, and NRCan has predicted further investment declines for Canada in 2016. In British Columbia, mineral exploration expenditures have declined from a high of $680 million in 2012 to $272 million in 2015.
In the B.C. context, the province has hundreds of exploration projects that could be spurring more regional economic development. B.C.'s fundamentals are very strong, and it is well positioned to take advantage of its geographic position on Canada's Pacific coast and its access to Asian markets. The province has world-class metal, mineral, and steel-making coal deposits, and further discoveries are likely, but only with continued exploration.
It's the junior exploration companies that often take on the highest risk in the mineral development cycle, with less than one in 1,000 making a discovery leading to a mine development. Junior exploration companies, unlike major companies that have an operating mine and a source of revenue, need access to capital to fund and sustain mineral exploration projects, especially the early-stage greenfield projects that are required to replenish the nation's base metal reserves that are being depleted.
B.C. continues to host 58% of the mineral exploration and mining companies listed on the exchanges, but the ranks are thinning. Over the past three and a half years, the number of companies headquartered in B.C. has declined by 26%, from 962 to 708 companies. While the drop in commodity prices and company mergers are important factors, these are not the only reasons behind this decline. Other contributing factors include costly and excessive securities regulations to keep a public company listed, increasing costs to explore and develop mineral resources, and uncertainties about mine development even after the discovery of a minable deposit.
Unlike many other industries in Canada, mineral exploration and mining strongly align with a broad range of Government of Canada policy objectives. The government made helping the middle class a centrepiece of its 2015 platform, and the mining and oil and gas industries offer the highest average weekly wage of any industry in Canada.
Another key government priority is to promote economic development for aboriginal peoples and communities. The industry is already the largest private sector employer of aboriginal people in Canada and has generated significant economic opportunities that are often codified in agreements, such as impact-benefit agreements with companies, as well as mineral resource sharing and economic and community development agreements with the provincial government of B.C. Such agreements, taken together with active government consultation and industry engagement, have been important to the success of mineral exploration and development in B.C. and across Canada.
Given the rise in some commodity prices, AME believes that now is a very important time for governments to take policy steps that support the exploration industry to attract more investment and encourage future mineral development in Canada, while strengthening partnerships that advance socio-economic opportunities and support environmentally responsible use of our shared lands.
Therefore, I offer AME's perspectives and recommendations on the following three fundamental policy issues important to building and maintaining a successful mineral exploration and development industry in Canada.
Number one is to work together to attract investment. AME welcomed the extension of the federal mineral exploration tax credit through to March 2017, as announced in the budget. The METC is a 15% non-refundable tax credit on eligible expenses. In a B.C. context, the METC for investors is harmonized with the provincial mining flow-through share tax credit to further encourage private investment, resulting in a combined tax credit for an individual resident in B.C. of approximately 32%.
AME is supporting the Prospectors and Developers Association of Canada and calling on government to renew the federal METC for one year. Along with the PDAC, AME is calling on the government to maintain flow-through share financing, which is currently part of Finance Canada's tax expenditures review.
Flow-through shares play a critical role by creating an incentive for investors to allocate the risk portions of their portfolios into mineral exploration. In fact, flow-through shares accounted for more than two-thirds of all exploration-focused financing on Canadian exchanges over the last decade.
In the past, Finance Canada has estimated that the flow-through share system stimulated $3 in exploration for every $1 in forgone tax revenue. Supporting flow-through shares and the METC will keep investment dollars in Canada. Removing these important tax incentives at a time when the industry is still recovering from arguably the worst down-cycle in decades, could have a crippling effect on the recovery of the industry.
These incentives support the discoveries of new deposits, and advance the development of mining projects and the creation of socio-economic opportunities across the country. They support and benefit remote and aboriginal communities where natural resource development is the only source of jobs and economic opportunity, infrastructure and skills development, and community capacity building.
Take note that “without flow-through, we would never have discovered Ekati—and there would be no diamond industry in Canada today.” That is from Chuck Fipke, discoverer of Ekati.
AME also welcomed the federal government's intent to proceed with changes to the definition of Canadian exploration expenses, CEE, in the Income Tax Act to include expenses incurred for environmental studies or community consultations.
AME joins PDAC in supporting the establishment of clear, bright-line tests to determine which expenses qualify as CEE, and in updating the 2007 guidelines to provide such clarification, with the ultimate objective of making these guidelines part of regulations under the Income Tax Act.
Number two is having fair access to land to explore and security of tenure. B.C. is underexplored and vast, covering over 944,000 square kilometres, but mineral exploration and mining have affected less than 0.05% of the provincial land base. As is the case throughout Canada, sub-surface resources in B.C. are managed by government in the public's socio-economic and strategic interest, for the greater good of all citizens, aboriginal and non-aboriginal.
Exploration activities are low-impact to the environment and temporary in nature. Unlike most other natural resources, minerals are hidden and require scientific research and the testing of large tracts of land in order to find a hidden deposit. Throughout large areas of B.C., access to mineral and coal resources is eroding, contrary to earlier policy pronouncements by government and public land use plan commitments.
Today, nearly 18% of B.C. is off limits to exploration, and a further 33% is open only under limited conditions. AME understands that over time, lands may be closed for reasons of environmental protection or for other societal reasons deemed to be in the greater public interest. As well as important environmental values, the socio-economic values of developing hidden sub-surface resources must also be considered when deciding on land closures or restrictions that impede responsible mineral exploration and regional economic development.
Therefore, AME strongly encourages the federal government, when in any such land access and use discussions with provincial governments and first nations, to meaningfully consider the overall socio-economic benefits of mineral exploration to B.C. and Canada; the costs of policies, regulations, and legislation to explorers and developers; the ability to acquire and hold secure tenure; the building of investor confidence; and the maintenance certainty for explorers to have fair and timely access to land to responsibly explore for hidden deposits.
Number three is an efficient and effective environmental assessment process. Protecting the environment and health and safety are very important to AME and our members. An efficient and effective environmental assessment process is critical to the success of the industry.
AME supports the 2013 memorandum of understanding between Canada and British Columbia on the substitution of environmental assessments that arose out of the Canadian Environmental Assessment Act of 2012. The MOU describes how the two parties will work together, and recognizes that each government has a robust environmental assessment process, including meaningful consultation with aboriginal groups and timelines for government review and decisions.
Substitution means that an environmental assessment could be led by either the B.C. Environmental Assessment Office or the Canadian Environmental Assessment Agency, assuming the project triggers both provincial and federal laws or responsibilities. In theory, this reduces wasteful and unnecessary duplication. Importantly, as stated in the MOU, the governments of B.C. and Canada wished to “provide clarity and predictability for all participants in substituted environmental assessments and facilitate efficient use of resources in the timely delivery of those assessments.”
Currently there are 13 mine projects in either pre-application or review stage in B.C. Six of the 13 are in the pre-application stage and seven are in the review stage, including two in the coordinated or substituted process. On December 12 AME will be presenting in Vancouver to the expert panel review of environmental assessment processes. We will appreciate the opportunity to provide at that time more perspectives and recommendations about the environmental assessment process.
On behalf of the members of AME, thank you very much for your time this morning.
Thanks, Mr. Chair and standing committee.
We did circulate information on the producers and the advanced projects in northwest Ontario—that's really our focal point today—with Thunder Bay as a hub, as a key driver and locale for working with the exploration and mining industry in northwest Ontario.
This is a great opportunity to speak on the heels of Mr. Dirom, who presented things with a B.C. focus. There are some commonalities as we move forward.
With respect to northwestern Ontario, we are certainly an economic driver from the standpoint of the gold production site, producing roughly 19% of Canada's gold. We anticipate that number to rise. We have currently four producers. That number will rise with five new companies in production in the next four years to get us into the 23% or 24% range, as new producers come on in Quebec, the Northwest Territories, and British Columbia.
We also have 12 to 20 advanced exploration projects.
I must paraphrase and really clarify where we are right now. A lot of these discoveries, including the five new mines coming on to supplement the four existing—and again these are huge economic drivers for the economy of northwestern Ontario—were discovered, in most cases, during the run-up of 2004 to 2011, in terms of metal prices, particularly led by the gold market.
We also have hundreds of grassroots projects, not unlike the situation in British Columbia, that are stalled, that have been caught in the five-year downturn of 2011 to 2016. We're seeing some hints of moving out of that with lithium and gold prices moving. Right now we're also a palladium producer, so gold, copper, nickel, and palladium will be in our future, in our headlights. Discovery to production is roughly a 15-year to 25-year journey.
I will give you an idea of two of the major economic impacts before us now. New Gold, with a producer just outside of Kamloops, but also bringing in one of Canada's newest gold mines, four hours west of Thunder Bay in the Fort Frances area, is a billion-dollar investment. Greenstone Gold, northeast of Thunder Bay, is a $900-million investment. Its feasibility study will be out very shortly. And certainly there's the Ring of Fire.
I'll turn it back to Iain on that issue at this particular point.
Let me move on to a couple of infrastructure areas.
One of the challenges we have in the northwest—and although it's regulated by the province, there is a federal role to play in this—is the provision of electricity to these emerging mine sites. While some of these are relatively close to the grid and can be accessed at a reasonable price, others are hundreds of kilometres away from the existing hydroelectric infrastructure. Under Ontario's rules, the proponent must pay the cost of building the transmission lines. This is a change since the mid-1990s. Before that, the ratepayers as a whole would pay for the expansion of the infrastructure, and then obviously the user would pay through their rates.
We've been pressuring the Ontario government to make a change in this, but from the point of view of financing for the development of mines, if this kind of infrastructure can be included as one of the eligible components for any of the federal programs, that certainly would make it easier. As John mentioned earlier, one mine is costing $1 billion to develop and a second one, $900 million. If in addition to that they have to raise another $400 million or $500 million to build the transmission lines, that can be a deal breaker in terms of whether the mine will go ahead, and so we need some support there.
For areas such as the Ring of Fire, where we know that, while one or two companies are in play right now, there are 14, 15, or 20 different known deposits in likely mine sites, it's really essential that the federal government work directly with the provincial government, the first nations in the area, and the mining companies to develop a utility corridor, if you like, that includes ground transportation, telecommunications, hydroelectric, and in some cases even natural gas, to ensure that these areas can be fully accessed not just by the big companies and those with deep pockets, but by the small companies that can take a smaller development and bring it to the fore.
I'll get John to talk about the road transportation to the Ring of Fire.
Certainly, succinctly put, the deposits in the Ring of Fire, whether they be KWG or Noront's chromite deposits or the lead project, which was the Eagle's Nest copper-nickel deposit that Noront wishes to develop by an east-west road, without access, are not deposits. They are not economic mineralized zones that can be mined at a profit, the true definition of a mineral deposit, and that is the concern. That is a stall point. The lack of common ground between indigenous communities, both levels of government and the people of northwestern Ontario and industry to go forward is the stall point at this point.
I'd now like to delve into the finance side. I appreciate Mr. Dirom's remarks on the flow-through share, the Canadian exploration expense piece as well as the mineral exploration tax credit. Just by way of background, our recommendation would be that these two sister programs under flow-through shares be extended nationally for a three-year period, if not put in place permanently. They're certainly a boon to exploration. Mr. Dirom touched on a few of the basic observations from this program, and I'd like to touch on them as well, and some other quick points that embed the notion.
Over the last 10 years, junior exploration companies that have spent the high-risk money have made 70% of the discoveries in Canada. That 70% figure stands out again. The junior exploration company sector has accounted for 70% of all financing raised by exploration companies in recent years as well. Certainly the junior exploration sector relies on those discoveries.
If the ultimate form of flattery is theft of an idea, Australia, in 2016, adopted the METC program and rolled it into their flow-through system, and it really is one of the reasons they have become the top jurisdiction for exploration in the world.
Those flow-through funds must be spent in Canada. They are really a boon to economic development in northern and remote communities, including those with indigenous people.
Speaking of indigenous people, I believe there's a real opportunity for the Prospectors and Developers Association of Canada, the Ontario Mining Association, AME BC, and the Mining Association of Canada to work with government and work with industry to promote the sector more fully, in a more fulsome manner, and to have that tied to economic development, strategic planning, and land-use planning within communities including aboriginal communities, and to really illustrate the opportunity for a career and a business development opportunity. We're seeing 87% of business contracts pre-qualified and then awarded on the back of the New Gold project or the Greenstone Gold project, two of Canada's newest gold mines, flowing to indigenous companies and businesses. It's a huge number. We're seeing employment levels at 23% of the Musselwhite mine, one of the earliest collaboration impact benefit agreements in Canada, which has been renewed four times. Those employment numbers again are at about 23%. There's 32% direct workforce employment at the New Gold site, at that particular location, even though their production does not start until mid-2017. So these are great models that should be shouted from the rooftops and used as case examples to illustrate the value proposition and the opportunity.
My last piece is on the Geological Survey of Canada and geoscience to stimulate exploration. One thing we've seen in the last few years is an erosion of the overall budget for targeted geoscience initiatives, even though we're in TGI-5 now with respect to the Geological Survey of Canada program. There's a requirement, simply put, to have sufficient funding for mineral deposit studies, regional geophysical programs, working on third-dimension structural and crustal studies, and advanced geochronology—that is, the age-dating of rocks—which really contribute to discovery rates and really elevate that proposition in Canada.
Thank you, Mr. Rusnak, for the question.
Certainly in my role as project manager of mining services with the economic development commission, I'm on the footprint of that project on a regular basis and deal with its mine general manager as well as the key indigenous groups that have impact benefit agreements. We're at the point now where we have five agreements in place, and up to nine first nations communities as well as the Métis Nation of Ontario have agreements, and that's still a work in progress.
I meet on a regular basis with these various groups, and have tours onsite to deal with pre-qualification and requests for proposals. The aboriginal business groups typically are forming new entities, direct partnerships, or they're directly assigned to development opportunities as this mine and mill are being built.
There are three ways they engage, and on a regular basis I'm dealing with, for example, Rainy River first nation and Naicatchewenin—the two enhanced impact benefit agreement recipients—as well as Rainy Lake Tribal Contracting as they, on a regular basis, have a committee that reviews documents in a committee setting with AMEC and New Gold, who are the folks who let these contracts. I also visit the site on a regular basis to monitor this progress to make sure things are on time and on budget.
Interestingly enough, 60 days prior to any other industries receiving RFP information or RFQ information following pre-qualification, that information flows to the communities. We're working hand in hand to try to up those numbers with respect to having businesses to sustain after the project ends, which is one of the goals.
Bob Gallagher, the former president of New Gold, was brought to Thunder Bay by our office to speak to a room of 150 people last summer. This led to further business relations with aboriginal communities and companies going forward on the project. It's quite clear that, in line with the values and ethics packages that Mr. Gallagher speaks to on his Kamloops operation, the New Afton deposit, as well as this and three other mines in other continents, he wants to have those businesses sustained well after that deposit is mined out in 20 years. That's his goal, and I feel the entire company is living through that, and we're working with that as well.
Iain mentioned a figure of $70 million. As of last week, over $80 million of business money has flowed to Thunder Bay companies. We have great firms. To give you an example, a firm that Mr. Rusnak would be familiar with is TBT Engineering, with Rob Frenette. Three years ago it formed a brand new aboriginal company in conjunction with TBT Engineering to work on the initial survey work for tailings ponds, for road realignment, and for secondary highway realignments, just as one example.
Thank you for the question. I appreciate the opportunity to talk about clusters and opportunity.
Certainly on the service and supply side, out of Thunder Bay and northwestern Ontario, the Thunder Bay Chamber of Commerce, the northwestern Ontario chamber, or NOACC, and the Thunder Bay Community Economic Development Commission have worked hard on the supply and service side for not just mineral exploration but the full mining cycle, I would say, or mining sequence—exploration, development, production, and closure—and have companies aligned under that particular set of opportunities, driven by specific projects, either the existing mines or the new mines that are breaking through.
There is also a strong cluster through Lakehead University and their Centre of Excellence in Sustainable Mining and Exploration. That centre has just been formed in the last three years. It is designed to look at opportunities. To give you one example in which I see innovation going and research through their engineering department—and this is one of dozens of examples, but let me just highlight the one—they're adapting forestry-based chemicals now to replace petroleum-based chemicals in a number of the mill flotation operations within certain aspects of circuits for North American Palladium and the Goldcorp Musselwhite mine as well.
That engineering department is pushing on that piece. They've also signed a strategic alliance with Queen's University to grow that particular hundred-year-old-plus school and roll it into opportunities in northwestern Ontario, to work in a collaborative sense around that piece of clustering.
I might also mention that one of the pieces we see—and this fits into the opportunities for indigenous communities in the business world in general—is having communities, including first nation communities, take advantage of the mining readiness strategy that Thunder Bay and Fort William First Nation are partners on, this particular piece that rolled out in 2013.
We live and breathe through that in a variety of themes, including cluster development, on a regular basis. That's our template, our model for moving forward. We're now seeing other jurisdictions, including Colombia, Ecuador, and other parts of northern Ontario modelling the same type of strategy. We're hearing this through consulting groups, etc. To me, it's the ultimate form of flattery. It's an opportunity to position oneself for a path forward.
I would also mention that we were very successful just in the last two months under the First Nations-Community Economic Development Initiative, CEDI, put out by the Federation of Canadian Municipalities. We, the Fort William First Nation and Thunder Bay, were successful in a bid with a regional footprint into the northwest, as one of four of 82 paired applications for that program. We're now starting another three-year journey on that particular piece, which will fit nicely into our mining readiness strategy and give us a plan forward specific to industrial lands.
The focal point is 1,100 acres of industrial land called the railway lands, part of the first nations settlement that straddles the community of Thunder Bay and Fort William First Nation as an urban first nation community. That's the target area to develop industrial land. We already have six tenants on that particular site, on those 1,100 acres. That number is going to grow over the next three years as we become more strategic. We're very excited to work with FCM; we see this as a huge opportunity.
There are other specifics as well wherein we're seeing innovation. North American Palladium is using an example from northern Quebec—again this case example piece is powerful—to look at replacing propane, a significant cost. I'll remind the panel that about 35% to 38% of costs for an operating mine in Canada can be energy costs, and those can be for heating underground, typically with propane; they can be for electricity to run your mill, your crushing components, and your mine trucks, etc. It's a big price tag. If you can reduce some of that and use biomass to replace propane—and it has been done at the Hecla mine, Casa Berardi, in northern Quebec, and in northwestern Ontario. We're looking at it as well.
As well we're looking at opportunities around battery usage, another cluster piece that has come out of Sudbury, a very mature sector of various research groups. From that cluster we're learning in northwestern Ontario as well about the opportunity to use battery power to replace diesel underground, to deal with emissions, to deal with costs, and to push through that piece.
Thank you to all of the witnesses for being here and for your comprehensive and eloquent presentations.
I have a pre-political background in policy development around the full value chain of oil sands and heavy oil development, and skilled trades education. I've really valued learning more about mining, specifically.
This might be a little weird to say, but I find the mining industry to be inspirational. I'm astounded at the pioneering spirit, the risk-taking, and the benefits that are developed in the sector. I speak, I think, for all of my colleagues here. I want you to know, at least on my part, I'm committed to doing anything I can as a legislator to help further the sustainability and all the benefits the mining sector provides in Canada.
I appreciate the comments on the extension of the METC. I had the opportunity to rise in the House of Commons prior to the budget and ask them. I urged the government to extend the METC and the flow-through share provisions, so I was happy to see that. Thank you for your comments. That is an important fiscal measure.
I would welcome all of the witnesses to make any brief comments about any additional tax incentives or fiscal measures that might be helpful for investment and mining development.
I wonder, Mr. Dirom, if you might expand, for the benefit of all of our colleagues here, on one issue we haven't touched on yet.
When I met with your organization in March, in B.C., I learned about the concerns around some boundary issues with Alaska. My understanding is that the Alaskan government participates sometimes in regulatory reviews of B.C. mines and that they can put pressure on top of the already rigorous regulatory process. Of course, we know that the major industry players in the United States frequently put pressure on Canadian industries, and that the American government occasionally uses those conflicts to negotiate with the federal government.
I wonder if, for the benefit of all of us and for our information, you can provide us some context for that, and maybe just inform us about any of the issues your industry faces from American interventions in the regulatory review process.
Thank you, Ms. Stubbs, for that question.
I would offer that the industry I represent is full of incredibly dynamic, hard-working, inspiring, and proud folks, but realistic. They are dreamers, but it's realistic optimism, I think, and that's the difference.
With respect to the transboundary relations between Alaska and B.C., obviously they're based on the transboundary waters. There are five major rivers that flow from B.C. into Alaska—so the Alaskans are downstream, as it were.
I think it's a very important and serious matter to be discussed. The reality is that there are potentially many mining projects in the northwest area of British Columbia; however, as I think was mentioned earlier by one of the other witnesses, projects move slowly. It's often a 10- to 15- to 20-year process, and it's not as if all those projects are actually going to come to fruition any time soon—certainly not all at once.
I think it's one of these things that we do engage in as a province, and of course, then, as a country, respectfully with our neighbours, and we work to understand what their concerns are. I think that has been happening. The Government of B.C. signed an MOU with Alaska over a year ago. Now it's a statement of co-operation, which I think speaks to that neighbourliness and working to involve neighbours in projects of concern. I think the concerns are reasonable, and they need to be addressed in an appropriate manner.
I know the companies involved in the area—for instance, Seabridge's KSM. They've had a very rigorous environmental assessment process that involved, of course, both B.C. and the Canadian government, and they had significant input from Alaskan regulators at both state and national levels.
There has been input in the past, and I think the statement of co-operation now formalizes, essentially, processes and efforts that had been under way. If there are improvements to be made, I think that's all the better. It's making sure we have a good dialogue with respect to first nations as well, tribes on the Alaskan side and first nations on the Canadian side. It's borderless for them in many respects, and it's important that we can take that into consideration.
l think it's heading in the right direction. I think the implementation of the statement of co-operation will be one to watch and one to be supportive of over the coming year or two.
Thank you very much for the question. It's an extremely important one and it's one that has occupied a lot of us for a lot of years now.
How we move this project forward is a very complicated. On one hand, you have all of our desires to see economic activity, but on the other hand you have all of our desires to make sure the first nations are fully engaged in deciding about the future of their territory. At some point, someone has to decide that we need to put infrastructure in place. Once our consultations, by which I mean the formal sense of the obligation to consult and accommodate, have been completed, somebody needs to move forward. It's our understanding that of the four first nation communities in the Ring of Fire, only two at this point in time are interested in having a year-round road connection to their communities. And that's fine. The last thing we need to do is to impose any kind of new infrastructure on a community that doesn't want it.
However, there needs to be a way and the federal government with the fiduciary responsibility needs to take the leadership to say, okay, we've done all the consultation. We understand where it shouldn't go. Let's start doing the detailed plans to put the east-west road in place. I say east-west road for two reasons. One is that the winter road particularly follows that route, and the other is that the one mine that is ready to go needs a road as opposed to a rail line. As well, Pickle Lake and Sioux Lookout are already service centres for those areas, and it's logical to make the connection there.
The federal government needs to say, okay, we've done all of our consultation, but it's time to move forward and let's go hand in hand with the province. They've put on the table a billion dollars that needs to be matched, and as I mentioned in my opening comments, that's not just a road but it's a transmission line corridor, it's a fibre-optic corridor, it's a full service corridor, and that will open up the Ring of Fire to a lot more detailed drilling, detailed environmental assessments, and moving forward, actual development, which will be a boon to those four communities whether they're connected by the road or not.
The other thing, and I go back to an earlier comment from a member of the standing committee, is that the road must be built to service those communities as the prime purpose. The transportation of the materials in and the transportation of the ore out need to be accommodated, but the safety and the provision of services to those communities is uppermost.
I first want to say that I take it at face value, and in good faith, when we sit around this table and we all say that we share the same values and want to see the sustainability of natural resources development in Canada.
I have to speak on behalf of the more than 100,000 Albertans I represent in Lakeland. I represent a riding that spans the province from Bruderheim to the Saskatchewan border. The communities there are completely and totally dependent on oil and gas development, on heavy oil development. I represent a riding that is just south of the oil sands. The result of the tireless efforts and world-renowned technological achievement in unlocking the development of those resources has underpinned the economy of the entire country for decades. Those efforts have resulted in revenue that has been distributed to every government in Canada and has increased the standard of living for every Canadian in every community.
The people in my riding are facing almost unprecedented economic devastation, and this is already a year in, in terms of the destruction of people's entire livelihoods. There is concern about their futures, about their own sustainability and that of their families, their communities, and our province, like I have never seen in my lifetime. I have heard from many people who have gone through the transitions that Alberta's economy has gone through historically, and they tell me that they have never seen such a prolonged downturn, with no light at the end of the tunnel.
I meet with people in my riding nearly every day, with grown men sitting across the table from me and breaking down in tears because they're losing everything. It absolutely behooves us here to make sure that we understand the impacts of this carbon tax on natural resources development.
It is unconscionable to me that we would even be prepared to say, well, this isn't the right time. This is an issue for us as federal representatives precisely because it hasn't been left to the leadership of provinces and territories. It is an issue for us precisely because before there was a debate in the House of Commons, and before there were negotiations with federal, provincial, and territorial leaders, the stood up in the House of Commons, pre-empted all of that, and said exactly what would be happening to every Canadian and in every community from coast to coast to coast, with no debate among any of us representing our various regions, our people, and our communities, flying in the face of false promises about consultation and understanding unique challenges in different jurisdictions, and flying in the face of all this rhetoric about understanding the human consequences of the job losses and the economic downturn in Alberta.
This carbon tax will disproportionately harm and potentially destroy remote northern rural communities. It will be devastating to Canadians who depend on this sector to feed their families and who do so much for all of Canada. It will have disproportionate impacts right across the country, not just in Alberta, although obviously I represent an area which I and the people I represent view as being under attack. The people I represent believe that this federal government does not understand the scale of the devastation going on here, and that not only is this federal government barely doing anything about it but this federal government is actually making things worse.
I'm sure that all of us sitting around this table, as human beings, really are devastated and concerned about what is going on. I'm sure that all of us, as human beings, are going to say that we had better know what the impact is of this cash grab, which in B.C. hasn't had an impact on emissions reductions. In fact, emissions have increased every year since 2010 in B.C. Economic growth in rural B.C. is almost completely stalled, and there has been no significant reduction in gasoline purchases there.
If this government is going to say that there's a linkage between the carbon tax and emissions reductions, then you need to prove it. If you're going to undermine the competitiveness of Canada as the only country that is imposing a carbon tax on itself in the context of the U.S. and the top six major oil and gas countries in the world, and if you're prepared to put us at such a significant international disadvantage while adding costs to people who are literally losing their livelihoods every day, then we'd better well have a debate about it.
The federal government has been clear enough on what the potential costs are for us to estimate. We know the floor you're at, which the Prime Minister has dictated. We know the scale-up amount he's also dictated. It will happen after the next federal election, so Canadians won't actually see the full cost and scale of this decision until after the next time the Prime Minister goes to get re-elected. That's cynical at best, and maybe underhanded at worst.
So we'd better have this debate. I believe every person sitting around this table thinks that's important. I urge you to support this motion.