:
Thank you very much, Mr. Chairman.
To you and members of the committee, thank you very much for the invitation to attend. I had the opportunity yesterday to speak to some of my colleagues in Parliament, but I also had a chance to meet with a Chamber of Commerce round table that looked at the growingly important interface between the concerns of first nations and aboriginal people broadly and the resource industry across the country.
Many of you who know me will know that this is a surprising statement: I will try not to make this in any way, shape, or form a partisan or contentious presentation. I have had the opportunity in the last several years, since leaving Parliament in 2013, to work on behalf of first nations in a number of negotiations across the country, including in British Columbia, Manitoba, and Ontario. I have also been, for the last two years, a visiting professor at the University Toronto, where I teach indigenous law and public policy issues.
The thrust of my remarks is the following. The difficult reality is that ever since 1867, the resource issue has focused on the provincial governments. The Supreme Court has just reaffirmed this in a decision involving the Grassy Narrows reserve. The Supreme Court has made it clear that the provincial government is as much the crown as the federal government with respect to resource development.
At the same time, the federal government has key jurisdiction because it is directly involved, under section 92, to take responsibility for issues affecting aboriginal people. Those responsibilities were confirmed when Parliament repatriated the Constitution in 1980, in particular because of section 35, which is the section of the Constitution that affirms Parliament's recognition of aboriginal rights and title. That has led, as you know, to a whole range of Supreme Court decisions since 1980 that have made clear the responsibilities to accommodate and to consult with first nations before resource development takes place.
Finally, we have the existence of the UN Declaration on the Rights of Indigenous People, which Canada has signed. The other significant legal reality or policy reality is that in their report, the truth and reconciliation committee made it clear—it was one of their clear recommendations—that the UN declaration should become the basis of Canadian public policy as it relates to relations between first nations and the crown.
All of this is to say that we're living in a world in which the question of how to successfully engage first nations is the key to future resource development. Putting my policy wonk hat on, I'd say that when the great developments occurred, for example, in my own province of Ontario, in the north, the discovery of nickel in the Sudbury basin, which was an extraordinary bonanza in terms of its implications.... It's been in existence for over 100 years and it's still going strong. That development took place without any participation by indigenous people. It took place without any recognition of their rights or title. It very much excluded them in terms of the impact of the development. The resources and revenues from those developments were never shared with first nations.
We can't do business like that anymore. The challenge we face, and I can tell you that this was very much an item of discussion in the chamber meeting I attended, is that there is now an obligation on the part of the crowns, both federal and provincial, to continue to clarify what they mean by “engagement” and what they think the terms of engagement should be.
I would make the observation that from my experience, large companies have the capacity and the means to engage with first nations. Their record of doing so, it has to be said, is improving. In terms of the known structure of creating impact benefit agreements, going onto reserve, talking directly about the need for sharing of benefits, a respectful negotiation—that is all happening in some very important and significant cases. It's important for us to recognize that. But as the members of this committee will know, mining is a business in which prospecting and exploring are carried on by much smaller companies, and staking claims is usually carried out by smaller companies. They don't have the means and they don't necessarily have the capacity to conduct the kind of engagement with first nations that's required.
It has to be said that from my experience, across the country there is a considerable difference of opinion between first nations, smaller companies, and the provincial crown as to what is the appropriate method of consultation. I think that's an area in which the federal government has a clear role to play, not in the sense that the federal government's power or authority is total, but in the sense that the federal government can't now ignore its responsibilities because of its constitutional authority, and frankly because the federal government has said this is the direction in which we want to go in terms of the process of consultation. That carries with it a responsibility to really be engaging with the provinces and first nations about how that is going to be done. It's not going to be easy. It's not easy, because as I've said, it's a contested area. But it's quite essential.
I've had the opportunity to work particularly in the last three years in northern Ontario. Without getting into the details—I don't want to take more than my allotted time—nine first nations in the Matawa tribal council have signed a regional framework agreement with the provincial government, and negotiations to make further progress are carrying on.
We have indicated to the federal government, and this is another opportunity for me to do so, that we would like to find a more effective way of engaging with the federal government in terms of the Ring of Fire. Both the predecessor government and this government, I would say, have taken an interest and have shown an interest, but we're now at a point where we need a further degree of engagement. That's something we've been making clear.
[Translation]
Furthermore, I thank the committee.
[English]
It has been a year since many of you have been elected. I congratulate you and wish you well. It's always a great honour for me to return to this place and to see the people who are working hard for the public. I really do continue to relish my days in the House of Commons, even though some of you may have more mixed memories than I do.
Voices: Oh, oh!
Hon. Bob Rae: Thank you very much for the opportunity.
:
Thank you.
Merci beaucoup. Good morning, everyone.
I'd like to thank the chair for the opportunity to appear today. I have with me my colleague Sheilagh Murphy, assistant deputy minister of lands and economic development at Indigenous and Northern Affairs Canada.
My responsibility, as the assistant deputy minister for northern affairs, principally involves the three territories and the structures therein. Today my remarks will focus on our role in mineral development in the north, principally the mandate for northern development and its regulatory responsibilities, which arguably are a bit different from other parts of Canada.
There's a gentleman I believe you may have heard about in academic circles, a gentleman by the name of Dr. Ken Coates. He is involved with the Macdonald-Laurier Institute. He has written quite a bit about the relationship between indigenous players and government. One of his many theses that he refers to is how the north can actually provide a lesson to the rest of Canada with respect to relationships with indigenous peoples and industry.
[Translation]
Mineral development in Canada's north is important to northerners and all Canadians. Mining and related activities are the largest private sector employer of Indigenous peoples and the largest private sector contributor to territorial GDP.
[English]
Mineral resource development has played an integral role in opening up the north. Mr. Rae remarked upon the Sudbury experience. Going back even further, it started with the Klondike gold rush in the Yukon in the late 1800s; to over the past 50 years, gold mining in Yellowknife and the development of its hydroelectricity capacity; to the building of the railroad in Hay River for the Pine Point lead-zinc mine in the Northwest Territories; to the present-day mining of diamonds in the Northwest Territories, making Canada the third-largest value producer of diamonds in the world.
Current gold mining activities in Nunavut also have the potential to be transformative, with the development of areas that have high potential to be mining camps' equivalent to the Abitibi belt in Ontario and Quebec, which has produced precious and base metals for over 100 years. With this type of sustained development can come important legacy infrastructure that Nunavut desperately needs, such as the Manitoba to Nunavut infrastructure corridor, development of green hydroelectric power to replace Nunavut's current dependence on diesel, or a Yellowknife to Arctic coast “road to riches” that can facilitate other discoveries, and enable sustainable mineral development for generations to come.
[Translation]
Through the Department of Indian Affairs and Northern Development Act, the minister is responsible for the economic and political development of the north. More specifically, the minister is directly responsible for resource management, including lands, waters, minerals, and oil and gas, in Nunavut, in the same manner as provincial governments in the south.
[English]
The minister exercises these responsibilities in the management in two ways: first, through the issuance of rights for land, minerals, gravel, and oil and gas; and second, through policy development and decision-making in the regulatory process.
Mining development on crown lands in Nunavut is managed pursuant to the Territorial Lands Act and its related regulations, including the Nunavut Mining Regulations. These regulations deal with mineral tenure and royalties on mining, and are administered by the department.
The northern regulatory regimes were created to ensure responsible resource development in a remote region while providing for environmental protection. Each northern territory has its own resource management regime depending on its particular political development.
In the Yukon and the Northwest Territories, the administration and control of lands and resources was transferred to the respective governments through their respective devolution agreements. Territorial legislation was passed to regulate the transferred responsibilities.
Nunavut has a single land claim agreement, which the Inuit of Nunavut and Canada signed in 1993. This agreement establishes the regulatory regime for project development and the establishment of five boards to manage these projects. Those boards deal with the following five areas: land use planning, environmental assessment, water rights issuance, surface rights disputes, and wildlife management.
These co-management boards and institutions of public government are tremendous examples of how indigenous peoples and communities are meaningfully engaged through all the stages of mineral development. At their core are the principles of the land claim agreement that was signed.
Nunavut is unique in that Inuit are the largest freehold landowners in the world. Their Inuit-owned lands represent approximately 20% of the two million square kilometres that make up Nunavut, over which they have surface rights of 20% and subsurface rights of 2%. During the negotiation of the Nunavut Land Claims Agreement, the subsurface land parcels were selected for economic potential based on advice provided by geological consultants. As a result, approximately 70% of the active mining leases are located on 2% of the Inuit-owned lands with the subsurface rights. This offers tremendous opportunity for economic development but also presents a great challenge due to remoteness and lack of infrastructure.
[Translation]
As I have briefly outlined, the department has a role in northern mineral development, from political evolution through to devolution and land claims, and we retain responsibility for lands and waters, including improving the environmental assessment regimes.
Thank you for your time. I look forward to the discussion.
:
Good morning, and thank you, Mr. Chairman, for the opportunity to speak today.
I would like to share some of the steps taken by Indigenous and Northern Affairs Canada to improve first nations participation and benefits gained from mining projects.
The federal crown has a fiduciary obligation towards Canada's indigenous peoples. An important component of this obligation is meaningful consultation and accommodations surrounding the management of first nations lands and resources. I would also add that resource extraction near first nation lands and traditional territories benefits from meaningful consultation.
Number 92 of the Truth and Reconciliation Commission's calls for action calls upon the corporate sector to adopt the United Nations Declaration on the Rights of Indigenous Peoples, and to apply its principles, norms, and standards to corporate policy and core operational activities involving indigenous peoples and their lands and resources.
[Translation]
As a country with a strong legacy of the rule of law, Canada is well-positioned to operationalize UNDRIP's call for free, prior, and informed consent in a manner that ensures long-term benefits for all parties involved.
[English]
In Canada the majority of reserves are located south of 60. The federal government regulates on-reserve mining primarily through the Indian Act and the Indian Mining Regulations. Mining represents an important area of economic development for first nations. Over 500 aboriginal communities are situated near Canada's biggest oil, gas, forestry and mining projects. The mining industry has signed over 350 negotiated agreements, and it is one of the largest private sector employers of aboriginal people.
[Translation]
However, these figures represent only a small portion of the potential benefits to First Nations.
[English]
Although approximately 50% of Indian reserves have mineral potential, first nations typically do not own the rights. The minerals are generally owned by provincial governments, who lease the development rights to mining companies. A typical mining development on reserve involves private companies, provincial governments, one or more indigenous groups, and the federal government.
In 2012 a first nation-INAC working group examined the issues surrounding on-reserve mineral exploration. The recommendations pointed to the benefits that could be realized if the process on reserve mirrored the provincial regime. The working group also underscored the importance of training, skills development, and access to capital.
Based on these recommendations, INAC published new permitting guidelines. This year, INAC will finalize a new directive that will clarify the issuance of mineral permits and designations for mineral exploration. While the Indian Mining Regulations will continue to be used for exploration, it was recommended that the First Nations Commercial and Industrial Development Act be used to regulate active mines
An example of a modern on-reserve mine is the Muskowekwan First Nation's potash project, which proposes to use the First Nations Commercial and Industrial Development Act to incorporate by reference provincial regulations. Members demonstrated their support with a positive vote under the Indian Act land designation process. During construction, it is anticipated that a thousand jobs will be created, and that throughout the 50-year span of the mine, the first nation will earn approximately $80 million per year.
[Translation]
This approach raises the benchmark on how mining projects should proceed on reserve lands.
[English]
Of course, the settlement of land claims is complementary to the success of the mining industry. Through negotiations, progress is being made through Canada's specific and comprehensive claims policies. Mining projects on or near first nations lands would be subject to environmental assessment pursuant to the Canadian Environmental Assessment Act, 2012. Mines are specifically identified under the regulations designating physical activities. They would therefore require a comprehensive environmental assessment overseen by the Canadian Environmental Assessment Agency.
In addition, Canada has statutory, contractual, and common law obligations to consult with aboriginal groups. Our department has developed guidelines that provide practical advice and guidance to federal departments in determining when the duty to consult may arise and how it may be fulfilled. The department facilitates mining activities near first nations lands through supportive programming. One example is the strategic partnerships initiative. Launched in 2010, this initiative has supported over 400 aboriginal communities and organizations in pursuing natural resource and economic development opportunities. It has developed over 100 new partnerships and leveraged nearly $100 million in additional funding from other sources. It has been a key funding vehicle for aboriginal communities in both the Ring of Fire and the Labrador Trough.
Industry is responding. According to the Mining Association of Canada, a number of project proponents are working collaboratively with indigenous communities by establishing impact benefit agreements. This is a step in the right direction.
To finish, I would like to note that the overall conduct of how mining projects proceed, on or near first nations lands, is related to their success. Government and industry must ensure meaningful engagement, up to and including shared benefits with the community.
[Translation]
Thank you again for the opportunity to speak today.
I will be happy to answer any questions you may have.
:
My view would be that the federal government engagement needs to be coordinated between departments much more effectively than it has been. First nations have to fill out forms every time they file for an application, whether it's for FedNor, INAC, the Department of Health, or whatever it is. It's becoming quite burdensome on communities, because they simply don't have the capacity to engage as much as they're being asked to engage. That is one of the practical challenges being faced.
I think the problem goes back to the fact that, under the crown's interpretation of the treaties, lands were surrendered to the crown, whether federal or provincial. In the case of Ontario, it's provincial. That's not the interpretation of any of the treaty chiefs now, as you will know if you talk to any of them in Ontario or right across the country, all the numbered treaties. So one of the ironies is that there's actually been better experience in engaging with the companies and with governments outside the treaty territories, which means we had more breakthroughs in Quebec and British Columbia, for example, and in the territories, as Stephen has pointed out, than we've had in any of the provinces that are covered by treaties. As you know, most of the landmass south of 60 is covered by the numbered treaties.
So I really think it's crucial for the federal government, without getting too complicated about it, to begin to address this problem with the provinces on a really practical basis, to say, look, we have this issue of engagement; we have the view of the first nations that their scope and jurisdiction extends well beyond what the crown has historically considered to be the case; so we have to create a new partnership.
I'll just give you an example. As Stephen described, they have co-management boards in Nunavut and in the Northwest Territories that are dealing with huge issues of land management. There's no such institution in Ontario. Now, there may be, as a result of the regional framework—we may be able to get there—but like all negotiations, they take a lot of time.
Therefore, I would suggest, respectfully, that the federal government could start to look at some particular developments in the old numbered treaties and ask how it can actually make some better progress and improve the relationships. Frankly, these are the poorest people in the country. If you look at who are the worst-off people, you'd have to say it's the people who are living in remote communities in the provinces where neither government has been particularly determined to exercise its responsibilities. We have to figure out a way to do it better. That means a much greater engagement by the federal government in working with the provinces.
The provinces are critically important. They have the revenue from all the resource development. They have the historic jurisdiction in controlling and managing land, and hunting, resource issues, fishing, and all of that. There's MNR and MNDM. These are big ministries in Ontario. They have huge responsibilities. We really have to move to a new relationship in terms of how that works out. I think the federal government has to be at that table in helping us to do that.
Thank you to all of you. It's good to see you again.
Mr. Rae, you said you didn't want to be political, but I'm sure the history books will show that your leadership paved the way for 's large majority government. We thank you, obviously, for your service to the country in your previous elected capacity and now for continuing to try to facilitate some development for the people you're working for.
I want to focus on the United Nations declaration. I was the parliamentary secretary to the Minister of Aboriginal Affairs when the initial TRC report came out. We were fairly surprised that the Liberal Party at the time right away said that they were going to adopt every recommendation in the TRC report, including, most significantly, UNDRIP, and that one of the recommendations is not only that Canada sign on but that they enact it and basically make it effective in Canadian law.
As you know, the previous Conservative government initially didn't sign, and then did, with the caveat that it was aspirational and that they couldn't see it working with section 35 and our constitutional framework. We've since seen that has said that adopting the whole thing into Canadian law is now unworkable and simplistic.
I have a couple of questions. First, do you think we can adopt UNDRIP into Canadian law, given the current constitutional framework, as was proposed by the TRC and promised by the government in the election campaign?
The second question is perhaps a little more complex. The Supreme Court has ruled that there is a duty to consult and accommodate, where necessary. I think industry has come to grips with that. As you've said, certainly the bigger companies are trying to meet that standard when they can understand it. Free, prior, and informed consent in UNDRIP is a different standard, I would argue, and I know you have said that it's a key principle of the UN Declaration on the Rights of Indigenous Peoples.
The Boreal Leadership Council has said, for instance, “It must be noted that FPIC cannot exist where a people does not have the option to meaningfully withhold consent.” It sounds like a veto in common layman's terms. has said that FPIC does not constitute a veto.
There is a lot there. In your opinion, does FPIC constitute a veto over projects that do not have the consent of first nations on their traditional territory, and do you think UNDRIP can be implemented completely, as has been suggested, within the Canadian context?
:
I think we only have a restricted period of time. I'm not using that as a way of excusing not answering the question. I will try to answer it, but it is part of a longer discussion.
The first thing I would say is that within its own jurisdiction the federal government can of course implement UNDRIP. It's entirely within its jurisdiction to do so, but the reality is that the phrase “Canadian law” also includes the provinces as well as first nations, and so far no province has come forward to say that they are going to implement UNDRIP in whole.
My own personal view is that the UN declaration has to be seen as part of a whole range of approaches to first nations issues, in which, frankly, Canada has been very much a participant for the last 50 years. We've seen extraordinary developments in our own country with respect to first nations participation, involvement, consent, and so on. We obviously have to look at our own particular approaches that we've taken under Canadian law, and under the Supreme Court of Canada's quite complex journey that they have taken the country on with respect to the meaning of section 35, and how section 35 implies self-government and implies other inherent rights that are in place.
I don't believe you can have successful development in the traditional territories of the first nations without their consent. I don't believe it's practical to do it, I don't think many companies would want to do it, and I don't think any government would want to impose something on a people who simply don't want that development to take place. My experience has been that in most circumstances people want development to take place as long as it's development that's responsible and sustainable and they can be fully involved and engaged in it.
I think there has to be a real engagement by the federal government and the provinces with the first nations to take the country on a journey to greater clarity with respect to what is involved in this engagement and in the principle of free, prior, and informed consent. I think we will get there. I'm confident we'll get there, but it will take much greater engagement than we've seen so far.
The Federal Court decision in the Northern Gateway case, I think, is a clear indication from the courts that you have to get this engagement right. There are many instances—and that's probably the most high-profile one we can think of—where the courts have said “you just didn't meet the standard”, and that's the standard we have to meet.
I know the phrase “veto” gives everyone a lot of concern, but, practically speaking, even the smallest companies I've dealt with in the far north of Ontario say that if people don't want them there, they're not going there, because they can't physically function there if there's ongoing opposition from people. Look at the dispute around Muskrat Falls in the last two weeks. Given the level of confrontation and the difference of opinion, the fact of the matter was that there had to be a resolution. You need to find practical solutions to these things without seeing it as a decision that's always going to be decided by the courts.
I think we're moving to the point where it's governments that are going to have to take more of these decisions and be further engaged in that.
:
Good morning. Thank you very much, Chair.
Thank you to the Standing Committee on Natural Resources for the invitation to participate. It's a great pleasure to be here this morning to provide you with my words about how Canada could support innovative and sustainable solutions to create economic opportunities for all Canadians in the mining sector.
First, let me recognize that today I'm speaking on the traditional lands of the Algonquin people.
I think we had a great overview by the Honourable Bob Rae, Sheilagh, and Stephen on the legal and public policy side of this discussion currently going on in Canada. I hope to offer a bit more of a pragmatic solution about how we start achieving some of these realities that we want to achieve in Canada.
Let me introduce myself. My name is Sean Willy. I am a vice-president for Des Nedhe Development corporation, an English River First Nation economic development corporation. In my current role I am embedded with our first nation-owned public affairs firm, Creative Fire, which has done substantial work with a few large resource companies—PotashCorp and Cameco, to name a couple.
I am also co-chair of the Canadian Council for Aboriginal Business and chair of the highly successful indigenous training partnership program Northern Career Quest in northern Saskatchewan, which has been funded through the skills partnership fund through ESDC. Over the last three years, Northern Career Quest has trained 1,800 people in northern Saskatchewan, with over 1,600 of those finding employment. That's an employment rate of 92%.
I am also on the board of the Aboriginal Human Resource Council. Last but not least, I was part of the creation and the first chair of the aboriginal affairs committee within the Mining Association of Canada.
Of most importance to me, however, is where I come from. I was born and raised in Canada's north. I was born in Inuvik, Northwest Territories. I've lived in Fort McPherson, Northwest Territories; Rankin Inlet, Nunavut; and Yellowknife, Northwest Territories. I am a member of the North Slave Métis Alliance, with strong connections to my Métis and Denesuline ancestry.
I grew up in a family with a Dene mother and a mining executive father, so a lot of the discussions we're having now on duty to consult and free, prior, and informed consent happened at the kitchen table as I grew up.
Voices: Oh, oh!
Mr. Sean Willy: I'm proud to say that I started in the gold mines of the Northwest Territories at 17 as a local indigenous hire. Why did they hire me? Well, in the Northwest Territories resource companies were forced to hire local indigenous people as part of their permits. I began a long and healthy career in the mining industry. In my career, which I started as a labourer, I was an underground worker, diamond machine sorter, workforce development coordinator, labour relations specialist, human resources superintendent, corporate responsibility manager, and finally director of corporate responsibility of Cameco Corporation.
At Cameco I was part of a team that led all indigenous community engagement activities in Canada, the United States, and Australia for all uranium projects. This led to innovative approaches to indigenous engagement strategies and plans. It included negotiating five community-based agreements in Canada and Australia and creating a leading-edge indigenous-driven legacy trust fund in northern Saskatchewan earlier this year.
One of the successful community agreements we negotiated and signed was with the Denesuline community of English River First Nation, 600 kilometres north of Saskatoon, for whom I now work through their economic development arm. English River First Nation has had a long history working with the uranium industry in northern Saskatchewan. Like any relationship, it has its ups and downs, but it's always moving forward. What English River saw was an opportunity. The community leaders, the elders, the chief and council, and community members saw that the world wanted and needed the world-class uranium deposits found in their traditional lands. They knew they could support this development and better their communities through the creation of businesses geared to work with the uranium mining companies.
Over the past 25 years, this has evolved into Des Nedhe Development. Just so you know, “Des Nedhe” means “important river” in Dene. That's the Churchill River that runs through northern Saskatchewan.
Des Nedhe is one of the most progressive tier-one aboriginally owned and driven entities in Canada. Des Nedhe is comprised of four distinct business pillars. The first is a retail and property division comprised of a 135-acre urban reserve bordering Saskatoon. This contains a gas station, convenience stores, and commercial property. In addition to this, we have property in Beauval, Saskatchewan. We have a gas station and store there. This borders some of the satellite reserves of English River. We also have a store within the home reserve of Patuanak, northern Saskatchewan.
The second pillar, and really the heart of Des Nedhe, is its industrial division. This includes the first English River company, Tron construction and mining. Tron was really created to do everything for the mining industry. It focused on concrete work, electrical, instrumentation, and construction. It has grown substantially in a good and progressive partnership with the uranium industry in northern Saskatchewan, but it has grown to secure additional work with Saskatchewan's potash mining industry.
In addition to Tron, Des Nedhe built a local consortium comprised of numerous first nations and Métis communities throughout northern Saskatchewan to secure all the development mining for Cameco's mining operations. This partnership has provided strong socio-economic benefits to many of the communities near Cameco's operations. Lastly there's Minetec, a mine supply company that supplies anything that the Saskatchewan mining industry requires, from nuts and bolts to toilet paper.
But to mitigate against the risk of putting all Des Nedhe revenues within the uranium industry, Des Nedhe has pursued a strategy to invest in some of Saskatchewan's blue-chip companies. In 2014 Des Nedhe purchased a majority interest in the already-mentioned Creative Fire, whose 20-year experience in corporate services essentially raises the bar in Canada on what is an aboriginal service firm. With clients such as Federated Co-op, Cameco, Canpotex, the City of Saskatoon, and PotashCorp, Creative Fire offers Des Nedhe a new revenue stream and new employment opportunities for our indigenous owners.
In addition to Creative Fire, in 2015 Des Nedhe, in partnership with Peter Ballantyne Cree Nation, purchased 60% of JNE Welding, a large, well-respected fabrication welding firm in Saskatoon. JNE provides services to a number of large clients who require steel. This includes potash, uranium, oil and gas, and manufacturing industries.
The last business segment of Des Nedhe is the recently created SAGE Power, which is a 100% renewable power company that, when partnered with our other Des Nedhe group of companies, becomes the only indigenous vertically integrated renewable power company in Canada.
Des Nedhe is a leading example we are proud to represent, which highlights what can be achieved when local first nations are engaged and partnerships are created and developed within the mining industry.
One of the questions posed within this standing committee is this: how we can ensure that indigenous peoples and communities are meaningfully engaged through all stages of mineral development and production? In my experience, the great majority of indigenous communities are not against resource development, even though it may be portrayed this way. In my discussions from coast to coast to coast, I see that indigenous people want to be treated as partners, not a regulatory check box. Our communities want to ensure that their views and inputs are incorporated throughout the development of mineral resources, especially when it comes to environmental planning, monitoring, and into decommissioning. The bottom line is that indigenous communities will support mining development, but not at the expense of a poor environmental stewardship plan.
At the core of this discussion is “how”. In my experience, the key is to create community-driven input and build that relationship right from the start. Yes, we need the policy and we need the legal framework, but I would ask you to also remember the young boys and girls out there who just want the opportunity for a job. Sometimes we get stuck in rhetoric around the law and around public policy, which are great long-term objectives, but value to Canadians is created when we hire people in local communities who are currently on social assistance. You hire individuals, you give them an opportunity on a drill rig, or during exploration, or a labour position at a gold or uranium mine, and they start paying taxes into the system. So they turn into a net positive for everybody in this country from a GDP angle.
As mentioned above, environmental stewardship is key, but of most importance is how you engage the community. A robust community engagement plan will flesh out both parties' intents and long-term objectives. In most instances I've seen, companies and communities may even find shared objectives. A good example of this is in northern Canada. When a community and company sit down, you might flesh out how road access is important to company and community, so how do you work together on investments, on P3 ideas, to provide a road that would lower cost of living in the community and also make the deposit more accessible?
These shared objectives will lead to socio-economic benefits that will be shared. These include creating pillars such as workforce development, which essentially means the training, education, and employment of local indigenous people. In Canada the mining industry has been a strong champion in the employment of thousands of indigenous people like me. Many have gone on to strong careers. Not only employment but supportive education, through scholarships and the support of pre-employment training programs, provide opportunities to future generations.
Second is business development, where community and company come together to discuss and plan on how to provide mining service contracting opportunities to local indigenous communities. We have found that investment in local aboriginal business plans is the best way to close the gap on socio-economics, as it not only spurs additional employment but also provides communities with own-source revenues.
Third is community investment. This can take many forms, from straight revenue-sharing via impact benefit agreements to annual budgets where company and community work together to fund community projects like education, culture, elder projects, or youth projects.
Last, we come back to environmental stewardship. As mentioned before, it is key that indigenous input is captured throughout the process—but how? Programs such as joint committees, elders traditional knowledge workshops, and youth engagement sessions are all great tools to ensure that community input is obtained. Leading-edge programs in Canada go so far to provide all the decommissioning work directly to the closest indigenous community as a business opportunity, so that they have a stake both in the opportunity of the clean-up but also to monitor the progress.
:
Thank you for having me here. I'm the president of KWG Resources, which is one of the two junior exploration companies that are still left trying to develop the Ring of Fire.
Canada's oil sands are located deep inside desolate territories inhabited mainly by indigenous people. The oil sands are valued at better than $2 trillion. When the price of oil collapsed recently, so did the Canadian dollar.
Environmental impacts are a major concern for the development of the oil sands. Industry and governments have spent in excess of $100 billion in developing the oil sands, and they are projected to contribute to the Canadian economy for the next 170 years.
Now, Canada also has the rich mineral reserves of the Ring of Fire, which is similarly located deep inside desolate territories inhabited mainly by indigenous people. They live in isolated communities on the periphery of the uninhabitable James Bay lowlands, which are only accessible by winter roads. The Ring of Fire's development could be the catalyst that invites these first nations to be part of the fabric of our society.
The major mineral in the Ring of Fire is chromite. We estimate that there is as much as $600-billion worth of chromite buried there. Industry and government have thus far spent only about $1 billion in developing the Ring of Fire. However, I believe that development of the Ring of Fire can be the next large and major driver of the Canadian economy. I estimate that it could add 2% to our GDP, or $35 billion annually, for each of the next hundred years and probably beyond. How so? Well, about two-thirds of the world's chrome is sold to the Chinese, who produce about two-thirds of the globe's stainless steel. Only a few months ago, we paid for a contingent of nine Chinese engineers to visit the Ring of Fire for a feasibility study to build and finance, in China, railroad access to the Ring of Fire.
This area of the Canadian north is a large part of a hemispheric ecosystem above the 50th parallel, which contains one third of the planet's trees. They filter our carbon emissions. Peatlands, such as those hosting the Ring of Fire, are in fact the most efficient carbon sinks in the world. On the other hand, China and its steel industries have been acknowledged as major polluters of the atmosphere. However, they are working hard to clean up their act. This past February they signed a joint declaration with Canada on a clean technology co-operation agreement. Canada, mainly in the north, is a generator of substantial carbon credits, and China has an obligation to the world to balance its pollution with carbon credits.
The Ring of Fire can clearly be developed, in co-operation with the 24,000 indigenous people of the northern communities of Hudson Bay, by using clean technology. Alternatively, we can do it like we always have: using old technology and old transportation methods, all of which contribute to global warming, interfering with the delicate ecosystem of what today is pristine topography.
Elon Musk was born to a Regina native mother and attended Queen's University in Kingston before this Canadian export moved to Silicon Valley to eventually found Tesla, and now SpaceX, while continuing to try to make an ecological difference in the world. Our company developed a clean technology for the beneficiation of chromite using natural gas, which is up to 80% more environmentally friendly than current electric arc technology. The CANMET lab of Natural Resources Canada is currently testing our technology and doing excellent work with remarkable results. Commercializing this process will enable Canada to be the world's lowest-cost producer of ferrochrome.
The Ring of Fire needs $3 billion in financing for development, mainly for transportation assets for an ecologically friendly thoroughfare through the tundra to the rail connections in the south. So the stage is set. President Xi of China needs our chrome and he needs our carbon credits. Our Prime Minister and government have obligations to preserve the environment, obligations to our indigenous peoples, and you all are pledged to continue Canada's growth and prosperity.
I ask you, therefore, to entreat to present to President Xi an elegant solution, which can impact Canada for the next 100 years. China will buy chrome from the Ring of Fire over a 100-year buying program. Such a commitment from China will thus finance the total development of the Ring of Fire, and we will give China chrome and carbon credits in exchange. China and Canada will win much international attention for such a trade.
Now back to Elon Musk. KWG is working with Elon, through one of his incubators, on a possible ground-breaking solution for transport of the ore and people to and from the Ring of Fire. We call it the Ring of Fire hyperlink project. The Government of Canada is supporting, according to the press, a Hyperloop called TransPod to be built between Toronto and Montreal. Think of the old department store pneumatic vacuum tube that used to deliver invoices, and then instead imagine ore and people in those capsules.
Toronto Life magazine says that in 50 years the city will have 13 million people, and a Hyperloop will deliver them to Montreal in 30 minutes. I would contend, though, that we should look after our obligations to the indigenous people first. Only 36% of them are graduating from high school. We would propose that a most elegant, efficient, cost-effective, and environmentally friendly use of Hyperloop technology is to build a hyperlink from the Ring of Fire to Nakina in northern Ontario.
As an ancillary to bringing out the chromite, it would create jobs and an ecotourism that couldn't possibly exist except for this kind of game-changing infrastructure technology. Of course, this requires a trade-off study as an alternative to our China railway current feasibility study for the building and financing of a traditional railroad.
Ladies and gentlemen, I think I've answered your questions. I've defined for you a growth strategy for 100 years that has the potential of the Alberta oil sands and will contribute at least $35 billion in GDP growth and a cumulative $3.5 trillion in long-term economic activity, in my opinion. I've defined the leverage that we have in controlling the exclusive and giant source of the only chromite in the western hemisphere. And China needs our resource. We believe they are willing and anxious for Canada's co-operation to allow them to buy chrome and so finance it. We believe only has to ask for the order.
Mr. Chairman, you and I share a friendship with a stockbroker, and that's their rule number one: you have to ask for the order. I think we are at a situation in the relationship between our countries where only has to ask for the order.
I've defined for you two technologies with dramatically positive environmental impacts that will deliver to China and Canada global admiration for using clean technology to develop a new mineral supply source. I've given you a program that will benefit the indigenous people, who we've isolated in these remote territories, and which are now environmentally critical to the survival of the planet.
In closing, I would ask you to perhaps bring me back with all of the scientists, executives, and financiers who would like to participate in this kind of development of the Ring of Fire, together with the leaders of the indigenous communities in the surrounding James Bay lowlands. Then let's have a rendezvous and talk it all out. I can tell you most emphatically that they are all very, very willing. They just need to know that you care. We would hope that the would sit in on our rendezvous. We commit to you to also invite native son Elon Musk.
Thank you.
Good morning, Mr. Chair and members of the committee. I want to thank you for the opportunity to speak to you today on behalf the members of the Canadian Association of Mining Equipment and Services for Export, or CAMESE. My name is Ryan McEachern. I am the managing director of the association.
In my opening statement today, I would like to first provide a brief overview of our association and its members; second, highlight some key findings from a study we participated in that shows how mining suppliers are an important part of generating employment in the mining ecosystem; and finally, illustrate important areas the government should support so the Canadian mining sector has a strong foundation for future growth and continues to be a world leader in the mining industry.
CAMESE is the national voice for Canada's mining supply and services sector. Over the past 35 years, the association has supported its members in connecting them to opportunities to grow their businesses in the mining industry across Canada and around the world. Our approximately 300 corporate members are located across the country and supply the entire mining industry spectrum—mineral exploration, resource development, mine design and construction, mine operations and refining, and reclamation and closure. Most of these companies are also small to medium-sized enterprises, or SMEs.
I will elaborate more on the demographics of mining suppliers in the second portion of my remarks, but overall it has been estimated that approximately 3,700 companies across Canada consider themselves mining suppliers.
Although I will focus on Canada today, I would like to make note of an important aspect of our efforts as an association, which is export. With Canada representing approximately 0.05% of the global population and 2.5% of the world GDP, we are by all accounts a trading nation. With that perspective, many of our members' activities include an export component, because there is great opportunity for the Canadian mining supplier network in the international market. Aside from the international customers, there is plenty of opportunity just following Canadian exploration and mining activity abroad. Currently, there are over 2,000 Canadian exploration and mining companies operating outside Canada, with projects in 120 different countries.
That said, there is considerable opportunity for significant growth inside Canada, as highlighted by the Mining Association of Canada, which identified about $145 billion of potential new mine investment over the next 10 years.
I now turn to our study. A report by the Conference Board of Canada characterized the mining supply and services sector as “a multi-billion-dollar, widely varied industry in Canada and around the world, yet it is a 'hidden' sector that is not directly measured or tracked”. To help provide a better understanding and clarity of our hidden sector, CAMESE participated in the pan-Ontario mining supply and services sector economic impact study, which was carried out by PricewaterhouseCoopers and supported by the Ontario Ministry of Northern Development and Mines, Natural Resources Canada, and the Mining Association of Canada.
There are a few key findings from the study that I would like to highlight today. The first finding is that the mining supply and services sector is a widely varied group of companies. The study grouped the mining suppliers into three major categories: 58% were categorized as mining equipment, supplies, and services, and 13% were categorized as mining contract services. These two categories are what most people think of as typical mining suppliers. However, it is the remaining 31% that were categorized under “consulting services and other” that typically get overlooked. These are, for example, the financial services, accounting companies, law firms, environmental services, and information technology firms.
The second finding relates to this latter group, which shows that although a third of the mining supply and services are located in northern Ontario, where most of the mines are located, 20% are located in the greater Toronto area. The mining supply and services sector is not just a northern Ontario story. Mines in the north generate economic activity in the south.
The third key finding is that almost 88% of the companies surveyed would be categorized as small or medium-sized enterprises. With that, 70% reported exporting outside of Canada. This is consistent with our membership demographic across Canada.
The final finding I would like to highlight from the study is that in terms of direct employment, the mining supply and services sector represented, at the time of the study, 68,000 employees, or two and a half times as many jobs as mining companies employ themselves, and as a result contributed approximately 77% of the same direct GDP contribution to Ontario as the mining companies.
This is an important point because, as mining is a great economic engine to develop remote areas of our country where many indigenous communities are located, the mining supply and services sector across Canada is and will be an important generator of jobs for these remote areas and, in particular, a generator of employment opportunities for indigenous communities.
Finally, I would like to highlight areas that the federal government should support or should continue to support, which will provide a strong foundation for future growth of the Canadian mining sector and will continue to have Canada as a global leader in the mining industry, because with a strong mining sector, there is a strong mining supply and services sector supporting it.
First, we believe there should be a continuing support of flow-through financing and the mineral exploration tax credit, as highlighted by the Prospectors & Developers Association of Canada. These are key levers to support and encourage early-stage exploration and discovery, which is the front-end driver of mine development. PDAC noted that “Finance Canada has estimated that every dollar of flow-through financing generates $2.60 of exploration related expenditures in Canada, with much of those funds supporting exploration near remote and Aboriginal communities”.
We support the investment in infrastructure to reduce the cost of developing mines in the north. The Mining Association of Canada, in conjunction with PDAC, published a report showing how mines in the north cost two to two-and-a-half times more to develop than a similar mine further south. We also support the idea proposed by MAC of an arm's-length infrastructure investment bank, similar to Alaska's infrastructure bank, which, through its investment in the road and port, was key to getting Canadian miner Teck Resources to build the Red Dog mine.
In addition, we support any efforts to provide certainty of timelines and to reduce process bottlenecks in bringing a mine to production.
Last, to stay a global leader in the industry, we believe the government should support funding proposals such as the industry-led Canada Mining Innovation Council's “Towards Zero Waste Mining” strategy, which is asking for $50 million over the next five years. This proposal will involve close collaboration with mining suppliers, and it will be instrumental in the creation of innovative solutions to improve how we mine deposits and for Canada to continue being a world leader in mining.
Thank you for your time and attention. I look forward to your questions.
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It's the first time in history that chrome, or chromite the mineral, was discovered in the western hemisphere in quantities sufficient to be mined economically, but it goes way beyond that. It is such a large deposit that we can say, even with the little information we have from drilling from surface, that there is a century's worth of mineral there for a large percentage of the world's consumption. You don't want it all, you don't want to be the only supplier, but you want to certainly have a share of the market.
The chromite becomes ferrochrome, and ferrochrome becomes stainless steel. You can't have stainless steel without chrome. There are grades of stainless steel that also have nickel. You can have stainless steel without nickel, but you can't have it without chrome. Stainless steel is about one part chrome and four parts iron.
The world is using ever more stainless steel. For those of you who have had the pleasure of driving on the Gardiner in Toronto, you can see what happens when you use things that do rust, in rebar and.... Our infrastructure just falls apart. Most of the world has gone to a standard of requiring, in new construction of high-rises, bridges, everything, a standard of using stainless steel in reinforcing bar. So it's a metal that will be with us for the foreseeable future.
Traditionally chromite was a byproduct of mining of platinum and palladium in South Africa, so they have huge reserves, but it's different from what we have. They are challenged in that over the last many decades, almost a century, they have invested in a substantial capital plan to refine their chromite into ferrochrome, using electricity. They don't have that electricity to use anymore; they're very challenged. It's an opportunity for Canada to use another method, which that particular part of our industry knew about 50 years ago, and this is what's called “direct reduction”. It doesn't become gas or liquid, it stays in a solid state. The natural gas is the source of heat. Direct reduction of chromite into ferrochrome is a much, much more efficient and environmentally friendly process.
We have a chance here to create an added-value product of ferrochrome. We don't consume it here, but we can export it to where it is consumed. That's tremendously good business for Canada. We would be exporting a small part of our huge blessings of natural gas, and on an annual basis a small part of our huge blessings of chromite.
In mining, as my colleagues can tell you, you can count on the fingers of one hand the mineral occurrences in recorded history that could produce economically beyond a few decades, let alone a century, and perhaps a second century. That's the Ring of Fire. It's phenomenal.
I know, from my time spent in China, that they're very enthusiastic about developing Canada as a source of supply, as an alternative to where the supplies currently come from. They typically buy concentrate or pellets from other places, partly refined material, and then they bring it into China and they use expensive coal, expensive electricity, expensive coal-generated electricity—dirty, dirty processes—to turn it into ferrochrome in China. They're very attracted to the opportunity to participate with us in developing this much better and much cleaner alternative.
I was astonished and very pleased when I saw that at COP21 the leaders of our two countries signed this declaration on using clean technology. That just fit hand in glove for the Ring of Fire opportunity.
I apologize—I can go on for hours, as you can see—but that's it, in a nutshell.