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Results: 1 - 9 of 9
Michael O'Shaughnessy
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Michael O'Shaughnessy
2018-09-26 15:15
I'm new to this, so I guess I'll go first.
The Chair: We don't bite. We're a friendly group of people.
Mr. Michael O'Shaughnessy: No problem. I'm looking forward to the discussion.
The Chair: When I put my hand up like that, I'm going to cut you off.
Mr. Michael O'Shaughnessy: I just won't look at you, then.
Madam Chair, members of the committee and fellow witnesses, good afternoon, and thank you for inviting Teck to participate.
My name is Mike O'Shaughnessy, and I'm the director of logistics for Teck Resources, headquartered in Vancouver. Teck is here to address concerns over Canadian competitiveness in reaching export markets.
Teck is a Canadian diversified resource company that exports steelmaking coal, copper, zinc and energy. We employ nearly 8,000 people across the country. We are Canada's single-largest rail user, spending over $600 million annually. We're Canadian Pacific Railway's biggest customer, and a leading exporter to key markets, particularly Asia.
Over the last five years, Teck has exported over $20 billion in products from our Canadian operations to China, Japan, South Korea, India and other Pacific markets. With improved transportation and logistics infrastructure, Teck's export potential also improves, and that supports jobs for Canadians and generates economic activity where we operate.
I would now like to highlight additional steps to improve Canada's rail freight competitiveness and ensure the competitiveness of Pacific coast ports.
Our primary rail recommendation relates to shipper remedies and the need for a sufficient rail data regime that would empower the Canadian Transportation Agency to effectively deliver costing determinations under final offer arbitration. With the recent changes to the Canada Transportation Act, we understand that the agency's mandate requires it to request information in order to conduct costing determinations.
We recommend that the agency clearly confirm that it does in fact receive non-aggregated costing information, and that it does so without being impaired by any public body within the Government of Canada, the railways, or any other person.
Also, we have ongoing transparency concerns that the amended Canada Transportation Act does not compel the agency to disclose details around its costing model or information regarding its processes or methodology for regulatory costing. Simply put, there is no transparency on how the agency determines costs. This contrasts sharply with the regulatory system in the United States.
The U.S. Surface Transportation Board publishes details online respecting the uniform rail costing system, its system for determining railroad costs. We recommend that the government consider adopting a similar data transparency mechanism so that the Canadian Transportation Agency is required to make its costing model processes and methodologies publicly available.
Last, on rail issues, we remain concerned about whether railways are fulfilling their service obligations by taking into account the railway company and the shippers' operational requirements and restrictions. The language that became law under Bill C-49 does not reflect the reality that in connection with the service that a railway may offer, it is the railway that decides the resources it will provide. Those decisions include the purchasing of assets, the hiring of labour and the building of infrastructure. Any of those decisions could result in one or more restrictions. As those restrictions are determined unilaterally by the railway, it is not appropriate that they be used as a goalpost in an agency determination. As such, we recommend making the restrictions themselves subject to review.
The second area I will highlight relates to Canada's support for infrastructure competitiveness. Similar to rail monopolies in Canada, I have serious concerns about the non-competitive business environment of Canadian ports. On Canada's Pacific coast, there are only two publicly accessible major export points for steelmaking coal: Westshore Terminals, located here, and the federally owned Ridley Terminals, in Prince Rupert.
With the potential divestiture of Ridley Terminals, we are concerned about the possibility that both Pacific coast terminals would be owned or operated by a single entity. If both Pacific coast terminals were to fall into the same hands, our cost competitiveness, service levels and reputation would erode even further. We recommend a sale process that is fair, competitive and transparent, and that results in reasonable rates, service levels and open access.
I would like to thank the committee once again for the opportunity to appear before you today and for undertaking this important study. Given the limited time for my remarks, I invite you to read Teck's written brief, which outlines our position in much greater detail.
Thank you. I look forward to the questions.
Sheila Risbud
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Sheila Risbud
2018-04-26 11:25
Good morning, Madam Chair, members of the committee, and fellow witnesses.
It is an honour for me today to be here to present Teck's recommendations on Bill C-69.
My name is Sheila Risbud and I'm the Director of Government Affairs for Teck Resources. Previous to Teck, I worked for the Canadian Environmental Assessment Agency and for Environment and Climate Change Canada where I was directly involved in federal impact assessments. I am accompanied here today by my colleague Mark Freberg, who also has extensive environmental assessment experience in both Canada and Chile. We'd be happy to answer your questions after our presentation.
Proudly Canadian, Teck is a diversified natural resource company.
We are proud to employ over 8,000 people in Canada.
In Canada, we have six steelmaking coal operations, the country's largest open-pit copper mine, a zinc and lead smelting complex, and have interests in several mining development and oil sands projects. We also own or have interest in mines in Chile, Peru, and the United States. In all jurisdictions where we operate, we focus on building strong relationships with communities, indigenous people, and other stakeholders.
We have significant business arrangements in place with Chinese customers and investors, and from our headquarters in Vancouver, we compete with many of the world's largest mining companies. Many of our activities require environmental assessments, and as a project proponent in Canada, we believe that the design and implementation of this legislation is critical. It matters to ensuring the ongoing protection of the environment and it matters as well to the long-term competitiveness of our business and the jobs that depend on our success.
We support the government's effort to strengthen public confidence in the environmental assessment processes and to enhance indigenous people's participation and decision-making. For Teck, the intentions in the government's legislation align with core business values. In many instances, they describe our existing approach to managing our relationship with the environment and the community at large.
New rules that result in greater public confidence in environmental protections will help support and attract investment in this country. However, this represents one part of the challenge as we see it. Project proponents need to know that approval processes will not only be rigorous but can be counted on and result in clear, timely decisions. We're encouraged by many elements within Bill C-69, but we would like to see more emphasis on a predictable process that delivers regulatory certainty for all parties.
This is specially important now, at a time when Canada has seen its share of global mining investments decrease significantly in recent years.
Getting this right can help turn the situation around.
Teck supports the amendments that the Mining Association of Canada highlighted in its presentation to this committee on March 29. Today, we'd like to briefly highlight areas of the legislation that we believe could benefit from additional clarity. I'll focus my remarks on the proposed early planning phase, enhanced indigenous peoples' participation and decision-making, and competitiveness in cost-recovery restructures.
First, let me say that we support the inclusion of an early planning phase. This reflect's Teck's existing approach to engaging early with stakeholders and indigenous peoples, and we believe it should be considered a best practice internationally. However, we're concerned that as currently written, the proposed early planning phase does not identify clear milestones within the 180-day period.
Defining milestones with clear timelines for the various steps would provide certainty and transparency for all parties involved in the assessment. Proponents need to understand what is expected of them in order to adequately meet early planning requirements. Without this clarity, the early planning phase could continue indefinitely.
For example, we recommend that the agency be given set times to deliver the summary of issues document. This is the document that describes the issues that the agency has heard to date and the decision on whether an impact assessment is required. We also recommend that the early planning phase contain a mechanism to incorporate information already collected by a proponent or another jurisdiction prior to the 180-day period.
Incorporating existing information could significantly streamline the process and incent proponents to conduct even earlier positive engagement with potentially impacted communities and indigenous peoples.
I also recommend that sufficient resources be allocated to the new impact assessment agency to manage this early planning phase well, ensuring it has the capacity to meet its expanded consultation obligations as well as to review scientific data and indigenous knowledge.
So, to summarize, while Teck supports early planning, clear and predictable milestones and sufficient resources are required in order to successfully meat this phase's intent of greater transparency and predictability.
Another aspect of this bill that we support is the early and inclusive engagement and participation of indigenous peoples at every stage of the impact assessment process. Teck has very positive experiences from early engagement with indigenous peoples, and we have formalized early, inclusive dialogue into our corporate-wide indigenous peoples policy. We believe this approach contributes to reconciliation while supporting the shared benefits of resource development.
However, this legislation needs to result in clear, consistent practices that governments, indigenous peoples, and proponents can rely on. We hope you will agree that for too long, there has been a positive discussion about the need to do better, but perhaps too little by way of clearly defining how we can make this work.
Teck supports the government's commitment to the adoption and implementation of the UN Declaration on Indigenous Peoples. Currently, however, it is not clear how Bill C-69 will be coordinated with the government's plans to implement the UN declaration, particularly with regard to free, prior, and informed consent. We recommend that the government engage with industry, provinces, territories, and indigenous governments to develop a process for the implementation of the UN declaration, with a focus on achieving complete clarity around what is expected when it comes to the terms “free, prior, and informed consent”.
Teck is also pleased to see crown consultation begin earlier in the impact assessment process. For this process to be successful, however, we recommend that there be clarity on the scope of consultation and the division or coordination of consultation efforts between the crown and the proponent.
Once again, we support the government's intent to meaningfully involve indigenous peoples in impact assessment but seek clarity on how this will be carried out.
We recommend that clear criteria be established that outline when and how the minister will delegate impact assessment responsibilities.
The last aspect of Bill C-69 we would like to comment on is the structure of cost recovery under proposed sections 76 through 80 of the legislation. We recognize that reasonable cost recovery is a standard practice in regulatory and permitting processes, and we have experience with cost recovery regimes. We believe that federal cost calculations must consider integration with provincial fees related to the same project. This would be consistent with the federal government's commitment to coordination with provinces to support the one project, one assessment principle.
We also believe that federal cost recovery should consider any other fees for mining projects under other federal legislation such as the Fisheries Act. Doing so would remove costly duplication and support greater cost competitiveness in Canada. One place to coordinate this would be in the proposed impact assessment coordination plan.
We therefore recommend that the agency should be mandated to coordinate cost recovery with other jurisdictions and other federal departments when costs are included under other legislation.
In conclusion, we want to reiterate Teck's overall support for this government's intent to improve environmental and regulatory processes.
We support the government's efforts in this regard. We are pleased to see that some of our recommendations are being considered in this bill.
We appreciate this opportunity to appear before you today and to highlight further recommendations that we believe provide clarity in Bill C-69. We want to see Canada succeed, becoming a greater destination for global mining investment and a leader in responsible project development, while protecting the environment, advancing reconciliation with indigenous peoples, and creating economic opportunities for all Canadians.
Thank you. I will be pleased to answer your questions.
Mark Freberg
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Mark Freberg
2018-04-26 12:22
Yes, we support the idea that final decision-making should occur at the political level. There needs to be some criteria to set that out. I think we're generally supportive of the approach that's been taken in the act.
Brad Johnston
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Brad Johnston
2017-09-13 12:00
“Adequate and suitable” is currently defined in the act, and in our original submission—and I speak on behalf of Teck in this answer—we asked for one small change to the language, that “adequate and suitable” be based on the requirements of the shipper as opposed to the means of the railway. There's a very specific reason for that, and it goes to when a forecast turns into an order, for a mining company or even a forestry company. In our case, where obviously Canada's an exporting nation, “adequate and suitable” mean that we can export our goods in a timely fashion.
It goes to my comment yesterday. It's not if the trains will come; it's when. That's because in our case or in the case of a mining company—someone shipping copper, zinc, or coal—we have a vessel sitting at a port. That's not an abstract concept. It's as much looking forward as it is reporting on the past. “Adequate and suitable” mean what I need in order to meet my shipments, or my sales, or the delivery of my goods to my customers in Asia, South America, and Europe.
Brad Johnston
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Brad Johnston
2017-09-12 15:35
Thank you very much.
Chair, members of the standing committee, clerk and witnesses, good afternoon everyone.
My name is Brad Johnston. I'm the general manager of logistics and planning for Teck Resources. Today I'm joined by my colleague, Alexa Young, head of federal government affairs.
Thank you very much for the opportunity to discuss Teck's view on Bill C-49. Teck is a proudly Canadian diversified resource company. We employ over 7,000 people across the nation. As the country's single largest rail user, and with exports to Asia and other markets totalling close to $5 billion annually, ensuring that this bill enables a transparent, fair and safe rail regime, and one that meets the needs of users and Canadians is of critical importance to Teck.
Throughout the consultation process leading up to this bill's development, Teck has sought to advance balanced solutions to address the significant rail service issues that all sectors have regularly experienced. Perennial rail service challenges have impacted our competitiveness, our national supply chains' long-term economic sustainability, and Canada's global reputation as a trading nation. To put this into perspective, the direct costs attributable to rail service failures incurred by Teck alone have amounted to as much as $50 million to $200 million over 18-month periods in the past decade. These are added costs, of course, that our global competitors do not incur. Foundationally, we believe the solution is a legislative regime that inspires commercial relations in our non-competitive market, while maintaining the railways' abilities to be profitable and operationally flexible. This solution would benefit railways, shippers, and all Canadians.
At the heart of our recommended solution has been the need for a meaningful, granular, and accessible rail freight data regime. We've also advanced a definition of adequate and suitable service that acknowledges the unique monopoly context in which we operate. Teck has offered what we believe to be the only long-term and sustainable solution to addressing the acute imbalance in the railway-shipper relationship, and that is for allowing for real competition in Canada's rail freight market by extending running rights to all persons, including shippers.
What do we mean by “running rights”? Similar to when competition was enabled in the telecommunications sector in Canada, we mean opening the door to competition in the rail sector—in other words, allowing new entrants who meet specific criteria to run a railway. While disappointed that the introduction of real competition isn't addressed in the bill, more so than in any past legislative review, we're strongly encouraged by the bold vision Bill C-49 represents in many of its provisions. These include new reporting requirements for railways on rate, service and performance; a new definition of adequate and suitable rail service; enhanced accessibility to remedies by shippers on both rates and service; and a prohibition on railways from unilaterally shifting liability onto shippers through tariffs.
We also believe that Bill C-49 achieves the right balance in reflecting the needs of various stakeholders, including both shippers and railways. However, it's our view that to meaningfully realize the bill's intent and to strike the balance we believe it seeks to achieve, some minor adjustments will be required. The amendments we propose are meant to address design challenges that will have unintended consequences or that will simply not fulfill the bill's objectives. Our proposed amendments also address the reality that, due to having to rely on one rail carrier for all of the movement of our steelmaking coal and/or because of geographical limitations, some of the major provisions in Bill C-49 aimed at rebalancing the shipper-railway relationship won't apply to certain shippers, including Teck. For instance, the long-haul interswitching provisions aren't an option for our five southeast B.C. steelmaking coal mines, because this region is amongst the vast geographical areas that the provisions simply do not cover. Further, our recommended adjustments reflect Teck's actual experience with existing processes within the act.
On transparency, Bill C-49 goes a long way to addressing service level data deficiencies in our national rail transportation system, deficiencies that have led to business and policy decisions being made in an evidence vacuum. However, we're concerned that, as written, certain transparency provisions will not achieve the objective of enabling meaningful data on supply chain performance to be made available. Of specific concern is the design of the data-reporting vehicle outlined in clause 77(2).
The U.S. model that is being relied on is flawed and doesn't provide the level of reliability, granularity, or transparency required for the Canadian context. First, as the U.S. model is based on internal railway data that is only partially reported, it doesn't represent shipments accurately or completely.
Further, the U.S. model was created when the storage and transmittal of large amounts of data wasn't technologically possible. With the data storage capabilities that exist in 2017, there's no need for such a restriction in either the waybill system for long-haul interswitching outlined in clause 76 or the system for service performance outlined in clause 77. Note that railways are already collecting the required data.
To ensure the right level of service level data granularity is struck to make it meaningful, and to ensure it reflects the unique Canadian rail freight context we operate in, we recommend an amendment that ensures all waybills are provided by the railways rather than limiting reporting to what is outlined in 77(2).
For the ability of the agency to collect and process railway costing data, we believe the bill will significantly improve the Canadian Transportation Agency's ability to collect and process this costing data, enabling it to arrive at costing determinations to ensure the rates shippers pay are fair and justifiable. This is critical to maintaining the integrity of the final offer arbitration process as a shipper remedy to deal with the railways' market power. However, we're concerned that as written, a shipper won't have access to that costing determination, which defeats one of its purposes.
Under the current FOA model, it's the practice of an arbitrator to request an agency costing determination only when the railway and the shipper agree to do so. However, we witness the railways routinely declining to cooperate with shippers in agreeing to make such a request. Bill C-49must limit a railway's ability to decline this request. To ensure the right level of transparency and accessibility is struck so that remedies are meaningful and usable, we recommend that shippers also be given access to the agency costing determination that comes out of this process.
On level of service, we're concerned that the language offered in Bill C-49 for determining whether a railway has fulfilled its service obligations doesn't reflect the reality of the railway-shipper imbalance, given the monopoly context in which we operate in Canada. In proposed subsection 116(1)(1.2), Bill C-49 would require the agency to determine whether a railway company is fulfilling its service obligations by taking into account the railway company's and the shipper's operational requirements and restrictions. The same language is also proposed for how an arbitrator would oversee the level of service arbitrations. This language doesn't reflect the reality that in connection with the service a railway may offer its customers, it's the railway that decides the resources it'll provide. Those decisions include the purchasing of assets, hiring of labour, and building of infrastructure. Any of these decisions could result in one or more restrictions.
As those restrictions are determined unilaterally by the rail carrier, it's not appropriate for those restrictions to then become a goal post in an agency determination. As such, we recommend either striking out the provision or making the restrictions themselves subject to review.
In conclusion, as the failures of past rail freight legislative reviews have demonstrated, despite good intentions, legislative design is critical to enabling those intentions to come to fruition. Getting this bill's design right with a few minor amendments will help Canada shift away from a status quo that has resulted in continued rail freight service failures and led to a proliferation of quick-fix solutions that have picked winners and losers across industries over the past years.
Again, as the biggest rail user in Canada, we believe this is the opportunity to be bold and to set a new course in building a truly world-class rail freight regime in Canada to the benefit of shippers, railways, and all Canadians. Thank you very much, and I look forward to your questions.
View Linda Duncan Profile
Related to that, I'm wondering if Environment Canada and/or Parks Canada—you can't speak for DFO, for example—has intervened in the joint federal-provincial assessment of the Teck Resources project. That's one of the major oil sands projects adjacent to the park that UNESCO called for Canada to step up to the plate and intervene on.
Rob Prosper
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Rob Prosper
2017-06-12 16:20
I can start.
As you're probably aware, the federal government will work as a team in terms of involvement in the Teck project and review. There's a wide variety of departments that are providing certain types of expertise to that process because they are regulators. Others such as Parks Canada, which is not a regulator in that particular case, provide expert advice to the federal team.
View Linda Duncan Profile
Do the terms of reference for that review already include your concerns that the proponent has to deal with, including the issues that UNESCO has raised?
Rob Prosper
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Rob Prosper
2017-06-12 16:21
The typical process that we undertake is to work through the federal department that's the regulator. We provide our advice through that area. The state of Wood Buffalo National Park, for example, is an important element of that.
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