Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 16 - Evidence - September 30, 2014
OTTAWA, Tuesday, September 30, 2014
The Standing Senate Committee on Energy, the Environment and Natural Resources, to which was referred Bill S- 6, An Act to amend the Yukon Environmental and Socio-economic Assessment Act and the Nunavut Waters and Surface Rights Tribunal Act, met this day at 5 p.m. to give consideration to the bill.
Senator Richard Neufeld (Chair) in the chair.
[English]
The Chair: Welcome to this meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources. My name is Richard Neufeld. I represent the province of British Columbia in the Senate, and I'm chair of this committee. I would like to welcome honourable senators, members of the public with us in the room and viewers all across the country who are watching on television. As a reminder to those watching, these hearings are open to the public and also available via webcast on the sen.parl.gc.ca website. You may also find more information on the schedule of witnesses on the website under ''Senate Committees.''
I would like to introduce the deputy chair of this committee, Senator Massicotte from Quebec. I will now ask senators around the table to introduce themselves.
Senator Wallace: John Wallace, New Brunswick.
Senator Black: Doug Black, Alberta.
Senator Seidman: Judith Seidman from Montreal, Quebec.
Senator Lang: Dan Lang, Yukon.
Senator Ringuette: Pierrette Ringuette, New Brunswick.
Senator Mitchell: Grant Mitchell, Alberta.
The Chair: I also would like to introduce our staff, beginning with our clerk, Lynn Gordon, and our two Library of Parliament analysts, Sam Banks and Marc LeBlanc.
Today, we are continuing our examination of Bill S-6, An Act to amend the Yukon Environmental and Socio- economic Assessment Act and the Nunavut Waters and Nunavut Surface Rights Tribunal Act, which was introduced in the Senate and received first reading on June 3, 2014.
For the first segment of our meeting, it gives me great pleasure to Samson Hartland, Executive Director of the Yukon Chamber of Mines. When you're done, sir, we will go via video conference to Stuart Schmidt and Randy Clarkson of the Klondike Placer Miners' Association from the Yukon. Third, but certainly not least, from Alexco Resource Corp., we have with us Clynton Nauman, President and CEO.
We will listen to opening remarks from everyone and then have questions from the senators. We have one hour for this portion.
Mr. Hartland, please go ahead.
Samson Hartland, Executive Director, Yukon Chamber of Mines: Thank you for taking the time today to listen to our presentations. I thought I would take this brief opportunity to provide a bit of history with respect to the Chamber of Mines.
We were formed in 1943. We serve 350 members from all walks of life — everything from fully producing mines, to the prospector in the creek, and the service supply companies that feed into those companies and those activities in the Yukon.
To make the most of senators' time and everyone else watching here today, we would like to get into the reasons why we support this bill. There are three aspects that have been a part of our submissions and our activities as part of the consultation that AANDC has undertaken with respect to the bill.
First and foremost are the definitive beginning-to-end timelines. That was probably the most important aspect of this bill to our membership. The definitive beginning-to-end timelines create certainty and allow for consistency from coast to coast to coast for proponents, regardless of where they are doing business — in the Yukon or N.W.T. It is so important for proponents to have consistency and regularity when dealing with and preparing for their project activities.
That said, adequacy review is something that fell into that. Adequacy review is an aspect of the timeline that in the past — in the current iteration of the YESAA — did not account for timelines. The clock would only start once an assessment started, not once an adequacy review started. So what we've seen in the last few years, certainly with the act being very much a hallmarked piece of legislation — very progressive when it was first introduced as part of the UFA — is a very punitive type of interpretation, especially when it comes to the adequacy review stage.
From a proponent's perspective, the adequacy review should be the adequacy of an application, not necessarily the adequacy of a project. There is plenty of time to be able to go through the adequacy of a project and the specific aspects through the assessment process, but increasingly we have seen the continual use of a front-end process to fully go through the gamut of a particular application. That's one aspect.
I would be remiss if I did not talk about the how the Yukon Chamber of Mines and the industry have been extremely supportive of First Nations communities. We have a great working relationship with all levels of governments, including First Nations governments. We have an MOU in place with two of those First Nations governments now, the Tr'ondek Hwech'in and Na-cho Nyak Dun, — and have been big supporters of the Umbrella Final Agreement and its provisions. We believe it was the right thing to do for Yukoners, and it was also a progressive evolution of First Nations governments. So we do enjoy great working relationships with First Nations governments, as well as communities throughout the Yukon.
One specific aspect of UFA that I think resonated the most or was the most respective for non-beneficiaries is section 12.1.1.7 of Chapter 12. It calls for the creation of development assessment legislation that:
. . . avoids duplication in the review process for Projects and, to the greatest extent practicable, provides certainty to all affected parties and Project proponents with respect to procedures, information requirements, time requirements and costs. . . .
It is with this in mind that we certainly want to be able to provide some of the best practices and concepts to be incorporated as part of this review. Another one of those would be the triggers for reassessments. Proposed section 49 is in respect to this.
In terms of reassessments, you will hear from some of the proponents today. In fact, one of the Yukon proponents is here beside me and can speak more authoritatively; he has a more direct experience with triggers for reassessments. What we hear from the proponents is that the threshold is very low for triggers for reassessments. In their view, project proponents are being assessed to death. We believe this is where section 49 will help alleviate some of that and assist in not needing a review for non-significant modifications to a particular project.
Following that, the policy direction of proposed section 121 is to be provided by the federal minister. If you were talk to proponents, they would say that there is YESAA, the overarching body, the ex-com level. Then you have these district offices throughout the Yukon, various communities like Dawson City, Haines Junction and Mayo. A proponent may say, ''We go to one designated office and get one decision, a particular type of analysis or timeline, and then we go to another district office and there is this lack of consistency where it's being interpreted differently and timelines are affected as a result.'' As a result of that, it affects the economics and the certainty about a project moving forward in the territory. We believe that new section 121 will help to alleviate that — potentially.
We have always been under the understanding that YESAB — the board — has always had the ability and wherewithal to develop a policy in-house. We hope and we understand that proposed section 121 is not necessarily something that would be abused or used with great regularity but in the hopes that it helps clarify the roles. Because DOs at times will say, ''We are the final authority on any decision or any project,'' as opposed to the proponents' perspective of from exactly whom are they deriving their authority? Is it from the act? Is it from YESAB that has the final say? Is it a DO? And whose responsibility is it to draft policy to help move things along?
All this is to say that, overall, we are supportive of Bill S-6 for the reasons listed above, but also I think it provides for consistency when dealing with projects in different jurisdictions, as well as for certainty for project proponents.
With that, I think I will probably leave the rest of the time for questions and other witnesses. Thank you.
The Chair: Thank you very much, Mr. Hartland.
Next, we will go to the folks we have in Whitehorse. Thank you for being with us. I believe Stuart Schmidt has a presentation to make. The floor is yours, sir.
Stuart Schmidt, President, Klondike Placer Miners' Association: Thank you very much. Thank you, Samson Hartland, for your good presentation.
Good afternoon, ladies and gentlemen and honourable senators. My name is Stuart Schmidt. I am President of the Klondike Placer Miners' Association. With me, on my right, is Randy Clarkson. He is our executive director. I apologize for not being able to come to you in Ottawa, but it is a very busy time of year for us up here.
The passage of Bill C-6 is very important to us. YESAB has had a profound effect on our industry, and we believe the changes proposed in this bill will help to improve the act.
Our organization, the Klondike Placer Miners' Association, represents over 100 family-based operating mines in the Yukon, as well as all of the service and supply members that we have. For over 130 years, our industry has been the most reliable generator of employment and economic wealth. We operated through the Great Depression, and we operate through all of these metal and stock market cycles.
The placer industry has made contributions to the infrastructure and culture and lifestyle of Yukoners. We produce over $60 million of gold every year, with at least 2.5 times that in spinoffs. Much of our operations are done in remote communities. We are the largest non-government employer in the Dawson City area. You will find more large-scale heavy equipment in the placer gold fields than anywhere north or west of Fort McMurray. Only water and gravity is used in the processing of placer gravels. There are no chemicals, such as mercury or cyanide, used.
We also contribute to the tourism aspect of Yukon because tourists come to Yukon to see placer mining and look at the history.
Without exception, we are privately owned and financed and the majority are family owned. For this reason, we're not subject to the vagaries of share price.
I'm a fourth-generation placer miner, and my children and grandchildren also work with me. I employ 24 people, and there are 11 members of my extended family that depend on this industry.
We have been very heavily regulated in the last 20 years, and modern regulations cover all aspects of placer mining, including water discharge and reclamation standards. The regulatory and assessment burden for placer miners is high, and the inception of YESAB has added another level of complexity and dramatically increased the time required to obtain permits.
The placer industry has more experience with YESAB-designated offices than any other industry or working group in the Yukon. Recent statistics on the YESAB website show that placer assessments are 38 per cent of the designated office assessments since the inception of YESAB.
As for proposed subsection 49.1(1) on reassessments, our industry is heavily burdened with repeated YESAB reassessments for minor amendments and renewals of ongoing projects that we believe have no significant changes. This adds costs and times for the proponents — us — for First Nation governments and for the Yukon territorial government, where they should be devoting their resources to projects that are new and/or of more impact.
In summary, we think this amendment to allow decision bodies to make the determination as to whether a project that needs a renewal or amendment must be reassessed is a very important aspect of these changes.
I think Mr. Hartland did a very good job on timelines. Placer projects generally have a designated office evaluation, so that's an area in which we are concerned with timelines. In recent years, there has been a further increase in timelines, with some licence renewals expiring as they wait to go through the YESAB office. This means that some mines are left in a state of limbo. They can't operate. They have to go through care and maintenance, and for a small, family-based operation, this is a considerable burden to go through a mining season without actually being able to mine. We feel that nine months for a designated office evaluation is still too long and that the timeline for a placer assessment should be less than three months as the decision document and regulatory phase will be additional four to six months.
On policy direction, proposed section 121.1, we believe is the most important point. There appear to be inconsistencies between designated offices, as Mr. Hartland mentioned. Recently, we have seen increasingly complex and more numerous information requests, leading to further delays and increased costs. This is all in spite of no new changes to legislation and regulation. Designated offices sometimes ask for more information than is strictly required for environmental and socio-economic assessment, and this leads to recommendations more in the form of regulation and legislative changes than there should be. We believe that there may be times when policy directions should be given to the board and that this is an important amendment to the act to allow consistent interpretation and efficient implementation of YESAA. We understand that this direction would have to be consistent with YESAB, the UFA and self-government final agreements, which we support.
As for delegation to the territorial minister, proposed section 6.1, we welcome that idea that the federal minister might delegate the ability to give direction to the territorial government. Devolution has been important to bringing decision making home to the Yukon. It allows us to communicate with local decision makers who understand the issues and communities, and it's preferable to having to communicate with Ottawa. No offence.
Additionally, as to lack of procedural fairness, the procedures of YESAB-designated offices for seeking views and information we believe do not follow the rules of procedural fairness and natural justice. There is no opportunity for proponents to address last-minute interventions, and most interventions are last minute. The designated offices often make recommendations based on information and advice acquired outside of the process of seeking the public's views, with no opportunity for proponents to respond. We really believe that there should be an opportunity for proponents to respond to concerns raised by the public.
In conclusion, we support the bill. We hope the Senate will re-examine the timelines and consider an additional amendment. We urge all of the parties to work together to improve how YESAA is implemented to make it more efficient, less cumbersome and not unnecessarily expensive and time consuming for proponents. The work does not end with these amendments. They must be followed by a commitment from all parties to work effectively.
Thank you very much for this opportunity, and we welcome questions.
The Chair: Thank you, Mr. Schmidt.
Lastly, we'll go to Mr. Nauman from Alexco Resource Corp.
Clynton Nauman, President and CEO, Alexco Resource Corp.: Good afternoon, Mr. Chair and members of the standing Senate committee. I would like to thank you for the invitation to appear before you today and comment on this important legislation. Alexco Resource Corp. is here today to convey support for Bill S-6, specifically the proposed amendments to the Yukon Environmental and Socio-economic Assessment Act, or YESAA.
Alexco is a Canadian mining company. Our primary asset is the historic Keno Hill Silver District located centrally in Yukon and within the traditional territory of Na-Cho Nyak Dun First Nation. We distinguish ourselves from other companies in the resource sector in that we also own an independent environmental remediation group, the Alexco Environmental Group. Partly because of our demonstrated expertise in mining reclamation, Alexco was selected as the preferred purchaser of the bankrupt assets of Keno Hill from Canada in 2006. At the time, Keno Hill represented a significant legacy environmental liability. Our reclamation programs in the Keno Hill Silver District are carried out by our environmental group in association with Canada.
To date, Alexco has invested more the $20 million in these various programs and continues to share in ongoing costs with the federal government. All of this investment offsets Canadian taxpayer liability.
Alexco has been a recent producer of silver, lead and zinc from the Keno Hill district and plans to go back into production pending a successful outcome of a current environmental assessment under YESAA and other authorizations that key off YESAA.
We realize that we are delivering this testimony today at a time when we are currently undergoing another of many environmental assessments. In fact, our current environmental assessment is the tenth YESAA assessment of our various projects at Keno Hill since 2006: five assessments on the exploration, development and mining side of our business; and an additional five assessments on the environmental cleanup side of our business.
I believe our relationship with Canada, our contribution to the environmental cleanup of legacy liabilities and our experience in the resource extraction industry in Yukon make us exceptionally qualified to provide you with some real- world realities and business impacts for this policy discussion.
With this in mind, we are offering comments on three specific sections of this proposed bill: project reassessment, section 49; timelines, subsection 56; and policy direction, section 121.1.
First, project reassessment: The nature of many ore deposits is that during the mining process, new or extended ore bodies will be identified that require slight modifications to the operating approach. The current act requires us to undergo a complete reassessment of our production process, including previously assessed aspects each time this happens, even though there are generally no or few changes in the production stream.
For example, following re-establishment of commercial mining operations in 2011, Alexco proposed to add two new deposits to our production stream. These deposits have the same geology or would be delivered to an already licensed mill, and the potential environmental effects of the additional production would remain unchanged from prior operations. No material changes were required.
Regardless, development and production from these new deposits, as well as several elements of the already licensed project, were all reassessed. This process occupied 221 days of YESAA time and resources. Under Bill S-6, one would hope that a small change to our operations such as this could be dealt with as a simple licence amendment.
On the reclamation side of our business at Keno Hill, we have also been required to go back through the entire environmental assessment process simply to maintain a water licence to extend the operating period of water treatment facilities from five years to ten years. These facilities are in fact preventing environmental impacts from the historic mines in the district, but the simple extension of plant operating time required 134 days for YESAA to reassess the project. This is another clear example where a reasonable decision body could easily have determined that this is not a material change and should not require an additional assessment of the project.
Make no mistake; we support the need for an environmental assessment process for new resource development projects and where fundamental changes are being made. However, small changes to a mine plan or time extensions for water treatment plants should not require a ''back to ground zero'' assessment, especially when the environmental record of these facilities has been excellent.
Therefore, we support the need for section 49 in this bill, which would provide for a decision body to act to avoid reassessments where there is no significant change to a project.
Secondly, timelines: We support time limits for both the adequacy and assessment stages of the YESAA process. I can give a simple example of Alexco's experience. Over the past five years, Alexco has undergone the environmental assessment process — the YESAA process — four times, specifically for mine development and mine operations purposes.
My purpose here is not just to discuss the requirement for repeated assessments but also to point out that our experience during the most recent five-year time frame is that the adequacy review period of the YESAA process has increased four-fold, to 116 days in our latest application. Meanwhile, the overall time required to complete the YESAA process from beginning to end has systematically increased approximately two and a half times, to an estimated 291 days in our current application.
In fact, between the production and cleanup projects our company has undertaken in the last eight years at Keno Hill, over three years has been spent in some stage of the YESAA process. Clearly, the issue of timelines and both adequacy and assessment periods needs to be addressed to restore certainty to the assessment process.
The current uncertainty has had a negative impact on our ability to efficiently plan and operate our business, and by extension, it impairs the competitiveness of Yukon as a jurisdiction to assert certainty in the mine development and production process.
Thirdly, policy directions: We concur with the proposed amendment to give the federal minister the ability to issue binding policy direction to the YESAA board. In Yukon, once a mining project or undertaking has been assessed through YESAA, a mine requires two additional licences, a quartz mining licence and a water use licence. For the most part, projects on the reclamation side of the ledger also require similar authorizations.
Alexco's experience over the last eight years and ten environmental assessments has shown that although the legislation has not changed, the interpretation of the YESAA board's mandate has greatly changed. The scope of assessment undertaken by YESAA has gradually expanded over time, in some cases moving into water discharge criteria and standards, which we view as a clear water board mandate.
The proposed amendment to set policy direction is an important amendment to the legislation, if only to ensure that the assessment and permitting bodies in Yukon operate efficiently without overlap and duplication of the specific mandate for each organization.
Finally, Mr. Chair, if I could just make some remarks in the broader context of the mining community in Yukon, nearly all mining operations are developed in a series of phases. In general, the YESAA process is well suited to the assessment of greenfield mines or development projects. YESAA, however, is not conducive to or aligned with the normal mine operating requirements of brownfield sites.
Simply stated, in Alexco's experience, it was much easier to assess and permit the initial development of mine operations at Keno Hill than it has been to sustain our operations. This has been due in part to the continual reassessing and re-permitting of routine changes to mine plans that do not alter the effects on the environment.
This permitting uncertainty, following establishment of mining activity, has, in my view, harmed the competitiveness of Yukon as a destination for mining capital. Passage of this bill will help restore confidence in the regulatory regime and hopefully sustain the economic growth path that Yukon has achieved since devolution.
Honourable senators, Mr. Chair, as a leader of a company engaged in the responsible extraction of minerals in Yukon, I urge the expeditious passage of Bill S-6.
I thank you for your time.
The Chair: Thank you very much, Mr. Nauman. Now we'll go to questions.
Senator Massicotte: Thank you to all four of you for being with us tonight. It's much appreciated. You obviously have on-hand real experience, so your comments are very credible and important to us.
All of you put quite a bit of emphasis on the timing constraints or timelines or deadlines in your project assessments. You all make the argument this is very important to you, which I can certainly appreciate.
I also note, as you all probably know, that First Nations are basically against the time frames. They say they are not necessary. They hate the fact that it may cause a cursory and superficial review of your applications.
Meanwhile, the premier of the province noted there are existing timelines already at the board level. In fact, to his knowledge, all projects in recent years have satisfied that time frame; therefore, there has not been a problem with that issue.
Why is it such an issue when there are time frames already in place and they've been respected? Why is it that those time frames don't apply to the proponent, only to the provincial or regulatory side, and the proponent can take years to do so while the regulatory bodies are waiting for others to respond? Is it fair and is it adequate?
Mr. Hartland: Thank you for the question, Senator Massicotte.
I think, first and foremost, I'd start with your examples of YESAA and how they are meeting those timelines and time frames from their perspective already.
The average timelines that YESAA puts out there for beginning-to-end review is strictly for the review and does not account for the adequacy review of an application. What has happened here is adequacy review has never been defined, nor has it ever been subject to the timelines in the policy directives that you speak of.
I thought about bringing an exhibit, but if you look at the flow chart of the review timelines imposed by YESAA, you will find that with adequacy at the front end, because it's not defined or definitive, there's the ability for somebody to go in through an adequacy review and review timelines imposed by YESSA. With adequacy at the front end, there is the ability, because it is not definitive, for somebody to go through an adequacy review, deal with information requests, go back through that process, and it can end up being this infinity time loop at the beginning of a whole process, as soon as you go through the door and hand in that application. That adequacy review was never encapsulated as part of those timelines. So proponents can find themselves being assessed, and there is this ''front-ending'' in the process where regulators and everyone else have taken ahold of that aspect and started assessing a project before the clock actually starts.
Senator Massicotte: Why does that time frame not include the proponents? Why is the time required by the proponent excluded from any time limitation?
Mr. Hartland: Excellent question. Proponents certainly have a vested interest in assuring that their project moves forward in a timely manner. If you were to ask the majority of proponents, they are as interested in expeditiously dealing with their applications as anybody else. That's not to say that the assessors or the regulatory bodies aren't in the same boat, but for that certainty and consistency with the various pieces of legislation like CEAA and others, this essentially makes it the same across the board.
The Chair: Would anyone else like to comment?
Mr. Schmidt: Yes. I would like to say that the proponents are sometimes stunned by the questions asked and really don't know how to answer questions that they never possibly conceived of. I don't understand why we would want to force the proponent to have timelines when they are the proponent. If the government were the proponent and I was judging the government, then I suppose I should have timelines. How can you imagine asking the proponent to have timelines? All YESAA does is put it on a shelf, and it sits there until the proponent comes up with the answers they want.
The Chair: I think that is very good.
Next, we will go to Senator Mitchell.
Senator Mitchell: Thank you very much, gentlemen. That was very informative.
Mr. Hartland, I am interested in your comment about the fact that there are two MOUs with two First Nations. Could you tell us what generally is involved in those MOUs, how they facilitate dealing with those groups and what the difference is in dealing with First Nations that don't have an MOU? What is the MOU and how does it work?
Mr. Hartland: Thank you for that question, Senator Mitchell.
The MOUs that we have in place essentially are the willingness to work together on issues of mutual interest.
I do not speak for the First Nations throughout the territory, but if you were to speak with them you would find they are supportive, generally speaking, of development on their traditional territory, given that it is done responsibly, with respect and early engagement. That is really the key when dealing with First Nation communities.
We have endeavoured to work with these First Nation communities and put together a best practices guide which outlines early engagement and respectful relations that we then disseminate to our membership and to proponents who are looking to do business in the Yukon and essentially bridge those relationships between industry and First Nations.
There are two that we have in place right now, as a start, and we are endeavouring to approach all 14 First Nations throughout the Yukon and act as that conduit, as I have mentioned earlier, between industry, First Nations and moving development and project proponents' proposals forward.
Senator Mitchell: My second question is to Mr. Nauman and Mr. Schmidt. It focuses on the idea of reassessment.
Mr. Schmidt, you pointed out it is onerous to have to do reassessments on minor amendments. What is an example of a minor amendment?
Mr. Nauman, you expressed the same concern. I am not arguing with that, and you used the concrete example of the proposal to add two new deposits to your production stream. Were those two new deposits geographically in the same area? Are they underground? Are they a bigger hole somewhere else? Can you give us an idea of what ''minor'' means?
Mr. Schmidt: Thank you for the question, senator.
In my view, an example of a minor amendment would be that perhaps I have a mining operation and a group of claims, perhaps 50 claims that comprise a water licence. I purchase one small claim adjacent to this and want to add this on to my water licence. I am then forced to go through an entire YESAA reassessment.
Mr. Nauman: In a similar vein, senator, as it goes to Alexco's experience, yes, the ore deposits that we mine at Keno Hill are proximal, juxtaposed to each other, broadly scattered around a central milling facility. The geology and mineralization from deposit to deposit are very similar, and more importantly, the host rock in which the deposits occur is generally the same. So there really is no change to the environmental impact or effect from moving from one deposit to another.
At Keno Hill, deposits are relatively small, so the requirement to move from one deposit to another is necessary.
In our current circumstance, we are in an assessment process for a deposit we discovered which is essentially next door to our processing or mill facility and a few hundred metres away from an already permitted ore deposit that is or has been in development.
Senator Black: Thank you all for being here. It is extremely interesting, and I think it is fair to say we have picked up your point of view.
I would like to give you all an opportunity, please, if you want to make any suggestions to the committee of further amendments that you might like to see to streamline operations and assist the economic development of Yukon that you have spoken to.
Mr. Nauman: If I can lead off, I think that the question encompasses a larger aspect of business in the Yukon than just YESAA. I think YESAA is a robust, diligent process. It is an excellent process that has somehow morphed into something that has become much more difficult than it should be.
The real key to greater efficiency and protection of the environment and for the public good in Yukon is better harmonization between the three levels of government that, at the end of the day, are the authorities that govern this process between the federal government, the Government of Yukon and First Nations.
Be aware, as I am sure you are, that the only part of the regulatory process that is the responsibility of the Yukon government is the quartz mining licence. The other two processes, YESAA and the water licensing process, will take significant harmony between the federal government and the Government of Yukon.
Senator Black: Thank you very much for that. Can that be solved statutorily, or is that an issue of intergovernmental cooperation?
Mr. Nauman: I am not an expert, but I think the aspect of intergovernmental cooperation would be extremely helpful.
Mr. Hartland: I, too, echo Mr. Nauman's sentiments when it comes to the harmonization of not only the environmental assessment process but also the waters licence and the quartz mining licence.
If you were to ask a project proponent right now what the timelines are on all of those aspects from beginning to end and getting a project under way, it could take anywhere between potentially two to five years, depending on the complexity of the project and those aspects.
With that in consideration, these aspects are all separate from each other. First you go through an environmental assessment. There is an example of a proponent who has gone through the environmental assessment, a two-year process, I might add, and consequently was unsuccessful in getting a waters licence. That is not a fault of the environmental assessment process itself, but it is key to keep in consideration that if there is a way to have these assessments and regulatory and permitting regimes run concurrently, that would be fantastic. As Mr. Nauman indicated, if there is a way to have those levels of government work together in order to make Yukon a competitive regime in which to invest, that would be great for Yukoners and Canadians at large.
Further to that, I want to indicate the great work that has been undertaken by Aboriginal Affairs and Northern Development Canada in the development of these statutes. We are looking forward to working on the regulations that will come as a result of the potential passage of this bill. With that in mind, we certainly know that this is a great first step with more work to come.
Mr. Schmidt: I would second Mr. Nauman's and Mr. Hartland's recommendation.
[Translation]
Senator Boisvenu: First of all, thank you very much for being here. Your briefs are very interesting. As a former public servant in the Ministry of the Environment in Quebec, I get the feeling I am listening to the same stories as the companies in Quebec used to tell me about delays.
Clearly, environmental regulation is one of the factors that affect competition between countries and provinces. When a business decides to invest in exploration or development, it is going to assess the costs imposed by environmental regulations, so as to choose a location where the regulations will not stand in the way of profit, but facilitate it.
Have you had any discussions with your mining colleagues from other provinces, particularly mining provinces such as Quebec and Ontario? How is the environmental and bureaucratic red tape in your region, given the regulatory interpretation and enforcement model?
How would you rate your competitiveness, as compared to other provinces such as Quebec and Ontario? I do not know if my question was clear, Mr. Nauman.
[English]
Mr. Nauman: Thank you for the question, senator. I am not an expert in either Ontario or Quebec, but I can tell you that over the course of the last several years, maybe five or six years, the burden on the permitting side of the equation in Yukon has incrementally increased. That is a result of this lengthening of timelines in the environmental assessment part of the process.
In 2010-11, when we placed our first mine into production, we went through the adequacy review period for environmental assessment in about 30 days, and the entire environmental assessment for the project was about 120 days. At that time, Yukon was as competitive if not more competitive than any other province and territory in Canada.
It is my view, although I'm not party to specifics province by province, with a quadrupling of some of those timelines, the Yukon has fallen significantly behind other provinces and territories. As you know, of course, the CEAA legislation itself has been modified and left YESAA behind. That is why we are urging the passage of this bill expeditiously.
Mr. Schmidt: I would like to add that the people I represent are married to the Yukon and we are married to this province. We have no possibility of divorce. We have no choice. We can't really compare to other parts of Canada because we are individuals who have all their lives, all their assets, married to this process. For us to look at the rest of Canada or the rest of the world is relatively meaningless. Everything we have is here, so this process is very important to us.
[Translation]
Senator Boisvenu: Mr. Nauman, you gave a few examples of projects where the environmental assessment process really held things up. Currently, does the bill include a major change that will require other environmental studies, or will that be done through negotiations with the regional government?
[English]
Mr. Nauman: Yes, there is constant dialogue between the various parties in the Yukon and the Yukon government relative to most of these issues. I would have to repeat that the crux of this issue needs to be solved between the various levels of government, primarily the federal government and the Yukon government. Hopefully private enterprise, people like ourselves and other miners in the Yukon, can be part of that dialogue and discussion.
Senator Lang: I want to welcome our guests here today, especially those that I am assuming are in Whitehorse on video. Are you, Mr. Schmidt and Mr. Clarkson?
Mr. Schmidt: Yes, we are.
Senator Lang: To show you the importance of these timelines, my understanding is that it is snowing there today. Is that correct?
Mr. Schmidt: It is snowing very hard, yes.
Senator Lang: Just to follow up on that point, when a decision is being asked for in respect of going into something like mining, that reflects why it is so important that it is done expeditiously. With placer mining, when it starts to snow and you get the water freezing, you obviously come to the end of your season, so time is important. Time is not your friend.
I would like to go to Mr. Nauman, and perhaps other witnesses can respond to this. In your testimony, you pointed out the number of assessments that you had to go through to go to each individual anomaly. So everyone understands this, if you have not been to the Elsa, Keno area, it is a mountain range that goes along a valley, and it has been mined since the turn of the 1900s. It has been one of the biggest silver/lead producers in the world over its life, and it continues to have a life. The reality is that when you have an assessment for a particular mine, an anomaly, it's over here, and then it might come to an end and there is another anomaly maybe 300 feet over. This is all one particular area. This is not going from one end of the Yukon to another. The mining is in a very closed-in area.
I want to go into the question when you talked about assessments. This is about jobs, people and First Nations businesses. This is about a small community that, in Mr. Nauman's case, is right next door and relies in respect to a project such as his.
Could you elaborate as to how important the mining of Keno Hill is to that particular area, the number of jobs and what it means to First Nations?
Mr. Nauman: Thank you for the question, Senator Lang. I know the senator and his family have deep roots in the Keno Hill Silver District, as do a lot of other people across Canada and around the world, from the phone calls that I get.
Keno Hill, when it is in operation with Alexco, directly employs 100 or 110 people, something in that range. In addition, we would have 60 to 70 contractors at any one point in time. When in production, the mine is employing anywhere between 160 and 200 people.
About half of our employees are generally Yukoners, primarily from Whitehorse, Mayo and other scattered communities around the Yukon; and about 25 per cent in total are generally First Nations or First Nations-related people.
So it is very important to us to be able to reestablish mining operations here.
In our current circumstance — and pointing to a previous question in terms of the seasonality in the Yukon — we are currently undergoing a environmental assessment that began in December last year. It is still not complete. Based on the timelines that we had experienced in the past, we were anticipating that we would be through that assessment and the subsequent permitting process by the middle of summer. At that time, we were looking forward to hiring 20 to 30 Yukoners, and a significant number of those would be local and First Nations people.
We find ourselves now heading into winter without having the assessment completed, although it is anticipated to be completed imminently, but still with the permitting process to go through, and having our entire planning cycle impacted by this delay. We're looking at mid-winter operations and employment of people versus starting in the summer. It raises serious issues in terms of employment and spinoff opportunities in the Yukon, so putting more certainty in this process, as Bill S-6 will help do, is extremely important.
The Chair: Does anyone else want to comment?
Mr. Hartland: If I could take this opportunity, I have been provided with a number of briefs from a number of companies that are members of the Chamber of Mines. One of them resonated with Senator Lang's query. This one is a Brewery Creek project in Yukon. In 2002, Brewery Creek closed due to low gold prices. At the time, it employed 150 people in a community of 1,500. Significant community benefits were provided by that project.
In 2009, they looked to reinvigorate the project again. They had been going through their processes and working with the community and the resident First Nation communities. They submitted a proposal to a YESAB district office in 2013. The district office used the adequacy review period to solicit comments from regulators on whether the submission should go and be bumped up to the executive committee. Subsequent to that, in February, it was declared a new mine, even though it was an existing one and was permitted previously, and issued an order to go to an executive committee review.
Interestingly in this case, both the company and the First Nation came forward in support of the project and sought a reversal of that decision. The First Nation community came forward and supported the project proponent and said, ''No, let's not bump this up. It will cost more time and money. It is a pre-existing project. Why can't we go through the DO review stage?''
Because of the increased time and cost — in a down market, I might add — they laid off the employees that they had, which was 30 people. This is a company that had financing in place; the project was expected to contribute significantly to the revenues of Canada, the Yukon, and the Tr'ondek Hwech'in, which was the First Nation involved here. It employed 200 people in construction and over 150 employees in operations, which was not including contractors. This was in a small, rural Yukon community.
The effects of such an introduction in changes, we hope, will alleviate any experiences similar to this one.
The Chair: Mr. Schmidt, would you care to respond?
Mr. Schmidt: Yes, I would. Thank you, Senator Lang, for that question.
It is even more dramatic from my perspective when it is a small, family mining operation — and I have seen a few of these — where their water licence is coming due a year in advance. They start to go through their application. They end up being held up in the adequacy part of the YESAB application, and they don't know whether they will get their water licence the following year.
So what do they do with their fall stripping? Up here, we have permafrost. You have to be working a year or two in advance on the ground with your mining. Sometimes people end up not doing the appropriate work, because they are uncertain whether they will be able to mine the following year. It is quite difficult for small miners or small operations, as well as larger operations.
Senator Ringuette: Mr. Schmidt and Mr. Nauman, both of you have indicated to us that you are looking at additional claims as minor adjustments to your operations. What would be an average area of a claim?
Mr. Schmidt: Placer claims and hard-rock claims are different sizes. A placer creek claim is 500 feet by 2,000 feet, and an adjacent placer claim, called a bench claim, would be 500 feet by 1,000 feet. In the particular case that I was thinking about, the previous claim had been under a neighbour's water licence. It also had already gone through the YESAB process before it became part of their water licence. So when I purchased that claim and wanted to add to my water licence, it would have to go through a YESAB review again.
In that particular case, it was just a piece of mining ground that was already part of a different mine, and we were just shifting the ownership. It was really just changing the registered ownership of the claim and not anything else about it.
Mr. Nauman: At Keno Hill, six claims have been staked since the early 1900s. They come in various sizes, but they would not exceed the size of a placer claim.
In our case, it is not necessarily adding claims; it's simply changing our operations or modifying our mine plans within claims that we already own and on which we are operating.
Senator Mitchell: This wasn't mentioned, but there are changes to the environmental review process in the way that it will consider cumulative effects. Currently, cumulative effects are projects that are actually operating or being built, and cumulative effects will now involve projected projects or anticipated projects, which is good from an environmental point of view. However, it raises the question of how that will be defined.
Have you been involved in the thinking process or the process of working that through, or is it still at pretty rudimentary stages?
Mr. Hartland: We have certainly gone through the revisions with a fine-toothed comb and then juxtaposed that against the act itself. We have gone through it, line by line.
You raise an interesting point, Senator Mitchell. It is still in the beginning stages as to the definition of what is likely to have environmental effects. That is still open to interpretation.
There are examples across the country that bring us in line with CEAA and other pieces of legislation where this has been tried and true and should provide for some consistency, at least at the level at which it is provided for in the act.
The Chair: Mr. Nauman, do you have any comments that you would like to add?
Mr. Nauman: No. I think that addresses my thoughts.
The only additional comment I would have is that in the current circumstance it is not necessarily the environmental output, if you like, of a process that's being affected that requires a reassessment. In other words, a reassessment can be triggered by something on the front end of the permitting process that doesn't necessarily have any impact at all at the final end or the discharge end of the production stream, if that's clear.
However, the more robust and the more diligent the environmental process is, then the greater confidence I think everybody has in the process, and certainly the corporations that are working do. It's in the best interests of the social licence that the corporation is trying to achieve to have it as a robust, diligent process, but not one that has triggers that are so low that an entity has to go through the process numerous times without affecting the environment at the back end.
Mr. Schmidt: I think Mr. Nauman and Mr. Hartland responded very well, so I will second what they had to say.
Senator Black: You made an interesting point earlier, Mr. Hartland, which I did not fully understand. I had assumed that, in the Yukon, you have what I would refer to as a single-window regulatory process. I understand I would be wrong.
Mr. Hartland: That is correct, senator.
Senator Black: Would you want to comment on that in greater detail?
Mr. Hartland: Having touched on it earlier, just make sure that I'm clear, there is a single-window approach when it comes to the environmental process itself but not a single window approach for a proponent when looking to implement a project in the Yukon. There are a number of steps, let alone pieces of legislation, that a project proponent is subject to. In the Yukon, there are a multitude of pieces of legislation, everything from the Waters Act, the Quartz Mining Act, the Placer Mining Act, the Wildlife Act, the Historic Resources Act, land use regulations. There are a multitude, everything from federal down to territorial levels of legislation and safeguards for projects in the environment. When you put all that into perspective, there are project proponents who have talked about the number of permits that they are required to obtain for their project to move forward, and it numbers in the dozens.
The Yukon — all of its land mass — is safeguarded. The environment is protected through these various pieces of legislation, including YESAA, first and foremost, obviously born out of the Umbrella Final Agreement, in partnership with First Nations. All communities and community members have a shared responsibility in ensuring that projects are safeguarded against any sort of environmental impacts.
When I talked about the timelines, I said that YESAA is one process, and it's linear. So you have YESAA, and then you apply for your water licence. Subsequent to that, you apply for your placer licence or for your quartz mining licence.
It doesn't end there. There are continual checks and balances, compliance and inspections. Any good corporate citizen who wants to be able to conduct business in the Yukon is going to require that social licence and needs to be responsible and to engage early with First Nations. It is a very complex web, and there are many safeguards. I think Senator Lang will speak to this as well.
Further to that, it's a very small, tight-knit community. It's generational, as Mr. Schmidt alluded to. It is family businesses, and we are all in it for the long haul. We are not looking, as part of these changes and improvements to the act, to in any way diminish the environmental protections that exist. We just want to ensure that Yukon remains competitive on the world stage because this is a global economy, especially the mineral resource sector.
Senator Lang: I want to follow up on Senator Black's question about harmonizing the various areas of responsibility that a proponent has over and above the YESAA process, and I refer particularly to the water board.
From a realistic point of view, is it feasible and possible that if policy direction is given, a proponent may go in for an environmental assessment and still proceed with these water licensing provisions at the same time so that that time can be utilized to go for most of the approvals in a more efficient timeline? Is that feasible?
Mr. Nauman: In my view, that certainly is feasible, especially during the adequacy process. I can't think of any particular reason why those two processes, being the environmental assessment process adequacy period and the water licensing adequacy period, should not be parallel to each other or at least only lag one another by a small period of time.
The current circumstance, as we've discussed at length here, is you go through the adequacy and assessment process on the environmental side, and then you have to go through the adequacy process with water board to do the same thing. The water board is a quasi-judicial body.
I would comment that tomorrow, the Yukon government is implementing new guidelines for the water board that do actually limit the adequacy period for proponents.
The Yukon government has gone the first step in that process you're talking of, but bringing those periods parallel to one another would certainly assist the industry in general.
Senator Lang: I want to follow up on the adequacy requirements with respect to required timelines. It has been stated by at least one of the witnesses, if not two, with respect to the fact that the rules seem to differ between office to office as to what is required to meet adequacy.
Going forward, looking at this legislation and knowing that regulations will have to accompany this to put it into effect, how do you see these various district offices operating with the new policy direction that is being directed as far as this legislation is concerned? Will the rules be the same in Watson Lake as in Mayo?
Mr. Nauman: In my view, that is the responsibility of YESAB, the board itself and the chairman, to ensure that there is consistency and a uniform approach to assessments across the territory.
The Chair: I wonder if Mr. Schmidt would like to comment on either of those questions.
Mr. Schmidt: Yes.
I guess it depends on how that direction is given to the designated offices. I guess that's going to be worked out in the future as long as there is the ability of the main office to give some direction. I guess we'll have to work that out as time goes on.
Senator Lang: I have one further question. It's probably a question you don't want to answer.
Will there be enough staff available for YESAB and the various other aspects of their responsibilities to do the job that we're asking them to do in an expeditious matter so that they can meet your concerns and demands and, at the same time, meet the responsibility of the legislation?
The Chair: Yes or no?
Mr. Hartland: I would say yes, based on what we've heard from YESAB itself.
Mr. Nauman: I concur.
The Chair: Mr. Schmidt?
Mr. Schmidt: Yes, I believe they have enough staff. It's a matter of what their job description turns out to be after they are given direction. If we can cut down on the amount of reassessments for minor changes or virtually no change but the ownership of a claim or something like that, they'll have much less work to do much of the time. So I think it should be quite possible for them to do so with their current staff.
The Chair: I want to thank the gentlemen from Whitehorse for attending, answering questions and for your presentations, and I want to thank both witnesses in the room here tonight for helping us with this bill.
It now gives me great pleasure to welcome, during the second portion of this meeting, from the Nunavut Water Board, Thomas Kabloona, Chair, and Damien Côté, Executive Director.
I will leave it with you gentlemen to make your presentations, and then we'll have questions. The floor is yours, sir.
Thomas Kabloona, Chair, Nunavut Water Board: Good evening and thank you for this opportunity to appear before you on behalf of the Nunavut Water Board. My name is Thomas Kabloona. I'm the Chair of the Nunavut Water Board, and I'm from Baker Lake, Nunavut. I have been with the board for many years, commencing my first term in 1988, and I have been the board's chair since 2006.
Appearing with me today is Damien Côté, Executive Director of the Nunavut Water Board. He lives in Gjoa Haven, Nunavut, which is the head office of the Nunavut Water Board. He has been with the water board since July 2012.
We have provided the committee with a written brief setting out the details of the board's comments regarding Bill S-6, An Act to amend the Yukon Environmental and Socio-economic Assessment Act and the Nunavut Waters and Nunavut Surface Rights Tribunal Act. However, knowing that your time is limited, the focus of our testimony today will be to provide you with additional context and insight into our work and to highlight three key areas of discussion that the proposed amendments to the Nunavut Waters and Nunavut Surface Rights Tribunal Act raise for the board. The focus of our comments today will be on the aspects of Bill S-6 that apply to Nunavut. To begin, I will give you a brief general background of the board.
The water board was established under the authority of Article 13 of the Nunavut Land Claims Agreement, also called the NLCA. The board has responsibility and power over the regulation, use and management of fresh water in the Nunavut settlement area.
We are part of the integrated regulatory system established under the NLCA that commences with the review of proposed developments such as mines, hydro projects, major infrastructure such as ports and roads for conformity with land use planning requirements by the Nunavut Planning Commission, then consideration of the potential environmental and socio-economic effects of the proposed development by the Nunavut Impact Review Board.
Once those institutions of public government have indicated that a development can go ahead, the Nunavut Water Board gets to work to consider whether to a licence to the project or any required use of fresh water and any associated deposits of waste that may enter into fresh water.
Over the years, the board has worked on a number of coordinated initiatives with our partners in the regulatory process to minimize duplication, streamline our processes and engage with stakeholders, including Inuit organizations, government agencies, potentially affected communities and members of the public. It is the board's overall impression from the regulated community, members of the public and our stakeholders that although there are challenges to the capacity of all parties within the existing system — which Damien will talk about from the perspective of the Nunavut Water Board in a few moments — in general, the structure of the regulatory system works well.
I would like to give you a quick overview regarding the legislative base that further defines the board's structure and processes in addition to the NLCA.
In April 2002, the Nunavut Waters and Nunavut Surface Rights Tribunal Act came into force, and this is the act that Bill S-6 now proposes to amend.
In April 2013, following consultation by Aboriginal Affairs and Northern Development and public hearings conducted by the board, the Nunavut Waters Regulations came into force, completing the remaining piece of the regulatory puzzle for the water board by replacing the sections of the Northwest Territories regulations that had been brought forward in the absence of Nunavut-specific regulations.
With that context in mind, I would like to share the board's general views on Bill S-6 before passing the microphone to Damien for comment on three key areas.
As you would expect, as the Nunavut Waters and Nunavut Surface Rights Tribunal Act is our governing legislation, the board is very interested whenever changes are proposed. So in January of this year, when the board was first contacted about participating in a working group considering changes to the act, our executive director and legal counsel actively participated in all meetings and provided several written comment submissions throughout the process.
The board has always been supportive of efforts to ensure that our regulatory structure enables the board's processes to remain transparent, efficient, integrated, timely and responsive. Our comments reflected these goals in a number of areas, such as time limits, cost recovery, security arrangements, public notifications associated with administrative monetary penalties, and the public registry system. A number of the specific issues raised by the board through its participation were considered and have been to some extent reflected in Bill S-6, so we are supportive of the amendments in general.
Damien Côté, Executive Director, Nunavut Water Board: Mr. Chair, senators, thank you. I intend to cover three key areas that, from the board's perspective, remain unaddressed in the current draft of Bill S-6.
First is the matter of term of licence, or the proposed section to replace the existing section 45. It's proposed by way of context that the board be expressly authorized to issue licences in certain circumstances that exceed 25 years and extend them to the whole of the ''anticipated duration'' of the appurtenant undertaking. The issue here from the board's perspective is that there is an absence of regulatory definition of what ''anticipated duration'' means and without consensus amongst regulators and enforcement authorities regarding precisely when an undertaking has reached that end, i.e., no longer requires a water licence, the water board will be required to develop a working definition of anticipated duration on a project specific basis.
There are, of course, potential consequences to that. Without additional clarity on that term, the board does not see that it would be in a position to add additional certainty to the regulatory sector in Nunavut. The idea of life-of-mine licensing may have merit, but if it is not defined properly, it adds ambiguity as opposed to doing the contrary.
I'll give you examples: Does the life-of-mine, or the duration, end at the time of reclamation or at the end of reclamation? Or, rather, is it when operations have ceased but when monitoring keeps persisting on site? Or is it simply when the site has been abandoned and there is no more water use or deposit of waste? It is unclear where that line is drawn, and it is, therefore, unclear for the purposes of water licensing when the end of life is reached.
By the way, there are two current cases before the board, namely, the Polaris project and the Nanisivik project that are in these sorts of circumstances, at the end of life.
The second issue is on time limits. Hearing the previous presentations and the witnesses who preceded us, it is a topic of interest. For us, it is the nine-month time limit proposed under proposed section 55.2. Generally, the board does not have any issues with time limits; however, the board does have concerns with the imposition of time limits that do not recognize that a number of factors beyond the board's control can and regularly do affect the board's ability to process applications in compliance with proposed time limitations.
I'll you give you some examples, starting with board appointments. The board has no control over appointments. Indeed, they are conducted by other agencies, the department of Aboriginal affairs and Inuit organizations. That said, when the board faces vacancies in a very high number, it risks and occasionally does lose quorum. The issue, of course, is in the absence of quorum, a decision maker has a bit of a problem, namely, is unable to make a decision. An example is we currently have a vacancy — perhaps it is exceptional and perhaps it is not — that has been vacant for 725 days, and the board in December 2012, for a short period, lost quorum. When a set timeline is imposed on a board that is unable to render decisions, it is a factor that is outside of the board's control.
A second example is with respect to funding, and there are two aspects to that. The board very much depends on a project-by-project funding, and in this case we're talking about the type A. They are larger projects. However, we do not have any control over the availability of that funding nor do we have any control over the timing of the receipt of that funding. Here, again, those are factors external to the board's control. In the past, the board has experienced delays in receiving that funding, which, in the context where a timeline exists, would have proven difficult.
Next, of course, is our own capacity. That, as you can imagine will have impacts on the board's ability to meet timelines. For context, it's worth noting that the operation of this board has been strained considerably over the last decade. In 2001-02, the board issued 18 licences. In 2012-13, the board issued 86 licences. We're talking here of an increase of 470 per cent over a period of 10 years or so. Considering that each new licence issued also comes with administrative requirements in the form of annual reporting, in the form of water fees that are paid yearly by licence holders and that the board administers and collects, each additional licence issued becomes part of the accumulation of licences that have administrative burden and needs, and the board must attend to these above and beyond the new licensing that it issues yearly.
It's worth noting and observing that over the same time period, during which the board went from 18 to 86, the board's resourcing, meanwhile, has remained fairly stagnant. The board does benefit from an inflationary adjustment yearly and has benefited from increases occasionally, but nothing nearly as much as the increase in its workload. That too, senators, as you can imagine, has impacts on a board's ability to meet timelines.
In particular, I draw your attention to proposed sections 55.31, 55.4 and 55.5 where a number of suspensions of time limits are anticipated. The issue for a board is to administer the multitude of ''pause'' buttons on those timelines across a multitude of files without having a surplus of capacity to be able to handle that additional administrative burden.
The next issue is with respect to the capacity of other stakeholders. The board is beginning to notice that there are limits on the extent to which stakeholders such as government agencies, Inuit organizations, local hunters' and trappers' organizations and community representatives are able to acquire expertise to participate in a meaningful way in a regulatory process. In contrast to other parts of Canada, this committee may know there is currently no participant funding that exists for Nunavut. Therefore, these various stakeholders, which are critical to the regulatory process, are left with very little to work with to ensure their participation and that their voice is heard. This limitation constrains their ability, therefore, to respond to the board during the regulatory process and may require them to need more time. Here again, due to no fault of the board itself, delays can and do occur. With the imposition of a timeline, one wonders if those voices will still be heard.
The last item is with respect to coordination initiatives. The bill recognizes that time limits may be paused during coordination with certain organizations, such as the Nunavut Impact Review Board, Nunavut Planning Commission and so on. However, there are other regulators, such as the National Energy Board, the Canadian Nuclear Safety Commission and other agencies, with jurisdiction over the assessment of projects outside of the Nunavut settlement area that have the potential to be included in the process given the potential trans-boundary impacts of some projects. Here, again, the board will be faced with an obligation to fulfill an involvement with respect to trans-boundary issues, yet be at the mercy of timelines and agencies that are not currently anticipated in the text that is before you. Including, as a way forward, additional suspension of timelines under the proposed bill may go some way to alleviate that external factor.
Senators, the last item I hope to draw your attention to is the issue of security. The proposed changes to section 76 will allow for the minister, the applicant or licencee and the designated Inuit organizations to enter into a written agreement to address security, one that the board may then take into account. The board recognizes that this may greatly assist in addressing a problem that has been identified — and I believe this committee has heard about — called double bonding or over-bonding. The board welcomes this change.
However, the board is unclear with respect to the intended mechanism to allow it to revisit security in accordance with the periodic review allowed for under proposed paragraph 76.1(1)(b). In particular, how is the finality of the board's determination with respect to the total amount of security intended to be balanced with the board's ability to revisit security arrangement? For example, is a security review and potential adjustment to the amount of security that must be furnished under the licence intended to constitute an amendment to the licence that would be subject to a public hearing? In other words, we are talking about a periodic review but, in terms of the board's involvement in that periodic review, under the current language, one would contemplate a potential amendment that could theoretically trigger a public hearing.
Mr. Kabloona: In closing, I would like to express the board's sincere appreciation to this committee for the opportunity to speak to you today. The board also appreciates the invitation to participate in the working group concerning the development of these amendments. The board looks forward to a continuation of this positive working relationship with all the interested parties as Bill S-6 progresses through to eventual implementation.
Subject to your questions, this concludes our presentation.
The Chair: Thank you very much, gentlemen. We will now go to questions. I will defer to the deputy chair, Senator Massicotte.
Senator Massicotte: Thank you for being with us today; it is much appreciated.
In your presentation, you made it very clear that your opinions and priorities were heard. In fact, you thanked the working group, I heard you very clearly, and you recommend approval of Bill S-6. Meanwhile, you go on to make four additional comments where matters could be perfected or about constraint or irritants, for example, lack of definition. The issue of security is lack of clarity.
Having said that, did you raise those issues with the working group? What was their response? Why doesn't the legislation provide for those irritants or constraints?
Mr. Côté: As the chair noted, we were very much part of the working group and very much contributed to that working group all throughout and indeed are quite satisfied with how well some of the issues we raised were heard and were responded to and in many respects integrated into the current text. Those items that we highlight today for your benefit are some that perhaps weren't integrated to the degree that we had raised previously or that we raised and provided further clarity on today before you.
On the whole, we are quite satisfied with the process. However, there are these residual issues that we view as quite important and are raising to your attention in your review of this text.
[Translation]
Senator Massicotte: Were the irritants raised in the working group? Following that process, was there some follow- up?
Mr. Côté: I would not want to call them irritants.
Senator Massicotte: Let us say imperfections.
Mr. Côté: Yes, some of them. I did not come here with a complete and specific analysis of what was raised or not raised. I can say that generally those things were raised right from the outset, and as I explained earlier a majority of issues were really integrated into the discussions.
However, for reasons unknown to me, certain points were not included in the final text you are studying currently.
Senator Massicotte: Was it because the working group disagreed with the changes or because the department rejected your recommendations?
Mr. Côté: Senator, you are probably more familiar than I am with the machinery of government. We spoke out on a few issues both in writing and verbally. We saw the results afterwards, but as you can see, they were not 100 per cent.
[English]
Senator Mitchell: I am interested in the capacity issue. I think you inferred largely it is money, given that your work is building. Is it also a question of finding people who have the background or capability to do the work?
Mr. Côté: Historically, and I have been there for a short period of time, it is my understanding that attracting the right skillset was very much a challenge in the past. Without the benefit of having carried out some thorough analysis on this, it has been my experience that, in the last few years, there is a certain attraction to the North. It is in the news quite a bit. I think a lot of people wish to settle in the North. In terms of attracting the right capacity, it is always a challenge, but it has improved from what I can see on a day-to-day basis in terms of being able to successfully attract those who we wish to hire.
Senator Mitchell: Clearly you would be one of those. I don't want to put your boss on the spot, though.
My second question with respect to capacity is your concern that stakeholders — government agencies, Inuit organizations, local hunters and trappers and so on — don't have the financial capacity. That is a complicated problem. How would you propose to solve that? Are you suggesting that there should be government funding to support interventions or interveners?
Mr. Côté: Thank you for the question. It is a large problem. It is one that I assume will have many solutions, targeting various aspects of the issue.
I mentioned in my remarks the participant funding issue and how Nunavut is pretty much alone in not having the benefit of having access to participant funding. It is, of course, as well, when it comes to government agencies, a problem that I cannot speak to.
We have noticed in recent years that it is becoming increasingly difficult to get the various experts that we turn to at the table. The board ultimately is a tribunal that collects evidence, and it needs to hear from the right experts. When it does not, it raises a concern not only for the board but for the process as a whole. I don't think anyone stands to gain when that happens. It does start at the point of getting the right people at the table. We have heard from various government agencies that that is proving to be difficult.
Senator Mitchell: Anticipated duration: You could see where that that would be a term that might require not speculation but actual experience to work through. To some extent, that will be, by definition, of the future. Is there experience elsewhere in the country that you are aware of where that has been defined and applied in this way? I should perhaps know that, but I don't.
Mr. Côté: That is a good question. Again, we don't have the benefit of a full analysis of what has been done elsewhere. It is our understanding there are cases where this has been defined more clearly, relatively speaking, than in Nunavut, where it is not defined at all.
We hope to learn from those experiences, but on a policy item such as this, in many respects, much like this act, we are not the legislator. So in many ways we look to the legislator to fill those gaps so as to provide us with the certainty we need to discharge the process itself.
Senator Black: Thank you very much for the tremendous presentation.
Could you please help me understand how you would like to achieve the balance on timelines? We've all heard the concerns you have around the imposition that timelines impose upon the board. We are also cognizant of proponents' points of view around the timelines needing to have some kind of control. How would you suggest that gets balanced for your board in Nunavut?
Mr. Côté: On the matter of the timelines, throughout the board's existence, the track record will show a fairly consistent turnaround time for licences. Although the regulators get all the finger-pointing and receive most of the blame because it does appear like timelines are under their control, in practice it is our experience that a lot of the delays are experienced because the board is not receiving the material it needs, proponents are not yet at the stage where their studies are completed, or other stakeholders take or need more time due to capacity issues to provide the board with what the board needs. Those are factors that are outside of our control, as we noted.
With respect to how the board can play a role in overcoming those, I believe the board does its best, or certainly tries, to provide guidance material, reference material, how to go through a process, what you will need, et cetera.
Going beyond that, the board has to be quite careful about the degree to which it involves itself with other proponents or stakeholders. The board is an independent body and must remain neutral. So we can't fill out the water board application for the water board on behalf of someone else, for example. There is only so much the board's jurisdiction will allow us to do, however much we would like to help sometimes.
Senator Wallace: Mr. Côté, regarding the concern you have about being able to fund public hearings, it would seem from what you say that it's a bit of a challenge now and you have a concern of what that might be with additional responsibilities the board might have.
Can you explain more about how these public hearings the board now conducts take place, given the vast distances in Nunavut? How do you conduct public hearings so that stakeholders have an opportunity to appear? As you say, the board may require expert witnesses to appear and provide advice.
How does it work right now? Coming from the southern areas, we see it on a completely different basis. Could you give us a bit more detail on how that does and could work?
Mr. Côté: Sure.
For the record, to clarify, the board doesn't necessarily struggle with respect to holding public hearings, in the financial sense. There are occasionally delays that can impact timelines, though. I wanted to provide that clarification.
With respect to logistics or the aspects that you were asking about, senator, pursuant to the act, the board will have to reach out to the community or communities most affected by a project. The board benefits from scientific evidence and traditional knowledge in equal doses. To determine the community or communities most affected, one would look at science — perhaps a watershed — and determine which community or areas are within that watershed. However, traditional knowledge may suggest that a herd of caribou will be drinking from a water stream and be impacted by this project. Therefore, with that in mind, another community might be impacted.
So first we identify where we go. Then, when we get there, it is the expectation of the board that the experts also appear before the board, as a court would have it, to provide evidence to the board.
Let's not forget that the context we are in here is one where oral tradition is very much the way that a member of the public would convey evidence to the board. A member of the public or an elder, in particular, has, under our rules, the ability to interrupt the process at any given time out of respect, culturally, for the Inuit traditions. They will not arrive with a report or scientific evidence; they will stand up, possibly tell us a story or explain how things were back in a certain era, and convey to the board a whole other dimension that the board takes in, as it does scientific reports from Environment Canada, the Department of Fisheries and Oceans and AANDC. Then it renders a decision, balancing all of that.
It is typically done in person with everyone in attendance. That's the idea, and that's the hope.
Senator Wallace: So the financial issues that you've raised and how that might impact a public hearing, the hearings are held where the issue is at hand and the people in that area are able to participate. So it's not a matter of them having to travel great distances without resources to get there. Is that correct? It is really more of an issue of having the funds to hire the expertise that the board might need to make a decision?
Mr. Côté: There are two sides, senator. There is occasionally the wish from these groups to hire that expertise on the scientific side to contribute, and that might be something they are not able to do.
But in the case of a project that is well known — the Mary River project — the board did wish to hear from members of various communities, given the magnitude of the project. The board then took it upon itself to hear from an elder and a youth representative from five communities, a woman representative and someone from the hamlet of these communities. In doing that, it at least had some voices from five communities all at the same site. The alternative, of course, is that the board will go to the five communities.
In terms of cost effectiveness, both cost something additional to get those voices at the table. One is cheaper, and in this context the board viewed it as a justified way to collect those voices.
The board could also and has the discretion to go to other communities as well, but in that particular example, it did not; it brought them to the hearing itself.
Senator Patterson: I would like to welcome the witnesses.
I would like to share with the committee that Gjoa Haven is 68 degrees north latitude and is 1,900 kilometres north of Edmonton. It was located there because the fathers of Nunavut wanted to spread the jobs around. The water board was put there.
I want to say that I think it's commendable that the board has attracted competent people to live in a very remote location on King William Island, not too far away from where Sir John Franklin lost his crew. It is also where, I think, they have a good reputation for engaging successfully with industry and community. I just wanted to make that opening comment.
I will try to be precise, but I would like to ask questions about the issues raised.
First, on the concerns with the life of a project, I believe you do have the authority under the act to review a licence at any point in time. Could you not issue your own guidance as to the definition of when a project ends for the purpose of a licence?
Without trying to put too much into this question, would it not be possible for you to develop your own guidelines with respect to your concerns about the time limits for the purpose of the double-bonding issue that you raised? Could you not develop your own guidance on those points, perhaps in conjunction with industry and the ministry? You are engaged with them, which is commendable. Could you solve those issues yourselves?
Mr. Côté: The life of mine issue, as we note in our notes and presentation, the board can and will have to fill a gap where a gap exists. It does have discretion and the ability to do that. However, it would be perhaps the board's preference to not add further ambiguity that it needs to fill. If the board had to choose between the two — filling a gap or not having a gap at all — I think there is a relative benefit to the latter. That, in essence, is the point we are trying to communicate. The board has no choice but to fill that gap in this context, because if the board is to issue a life of mine, it will have to do something to provide a bit more certainty on that.
With respect to the double bonding and guidance or procedures that the board could adopt, the board has already adopted a procedure in the Mary River licence wherein, for the first time, the board used this periodic review. This piece of legislation before you, we have already gone there in some respects because the board does have the discretion to do so.
However, the board submits its recommendation to the minister on a Type A licence and on this particular licence, while I can't speak for the minister, the correspondence we received would suggest that the approach that the board took on this particular matter of periodic review was not necessarily enthusiastically received.
With that in mind, and with the text before you today, we are raising this point largely as a consequence of that correspondence exchange so as to ensure that, when the board does develop these procedures to fill these gaps, they will be well-received by the ministry or otherwise.
Senator Patterson: I am sure the minister or his officials are listening. Thank you for that.
I fully understand your concerns about delays in board appointments, board funding and the issue of capacity of participants. You also mentioned coordinating initiatives with other federal trans-boundary agencies. I wish we would fix those with a legislative amendment, but I think the reality is — and I would ask you if you would agree — that these are all administrative measures that are not usually spelled out in legislation. I think it is great that you addressed them here, but there are ways of addressing them with your interface with the ministry. Would the same not go for participant funding?
Mr. Côté: Participant funding is an issue that exists not only with the water board but also with NIRB and others. The board is the custodian of the process and wishes to ensure that the process is done as it ought to be done. It is inevitable that the board will have a concern as long as those it wishes to hear from are unable to speak. In this case, we have identified that what is interfering with their full and meaningful participation is the participant funding.
We could explore a model to go case by case, project to project, but I am not sure that gives the assurance to those who we wish to hear from and the stability and anticipation of funding. It would seem to me that there would be, at every turn, a need to solicit that extra funding in order to fund these parties. It would raise the question of who is expected to do that: Is it the parties themselves? Is it the board on their behalf? If it is the latter, then does that work with respect to the board's neutrality? There are a lot of question marks there.
For us, the big concern is nine months. We are, in many respects, at the mercy of these groups and their participation to ensure that the process unfolds smoothly. If any of these, in many respects, essential contributions are delayed in any way, the board is at the mercy of those events. Under the current provisions, the board will have little control over that. It will reflect poorly on the board to have to request from the minister an extension to the timelines in this sort of scenario.
Senator Patterson: But I don't hear you suggesting a legislative fix for that. You want to draw it to our attention and to the department's attention, but I don't think you can legislate financial support easily.
Mr. Côté: I believe that is what I mean. Those are contextual factors that one needs to be mindful of.
Senator Patterson: I know that a 10-year implementation contract is being negotiated as we speak and I don't think the negotiations have concluded. It has put you under some financial pressures to which you have alluded. However, do I understand that the federal government recently offered a retroactive increase to your budget that may have significantly improved your funding levels? Am I right about that?
Mr. Côté: On that particular matter, I am somewhat limited in the answer I am able to provide. I think it is known that there is a negotiation that is ongoing with the Nunavut Implementation Panel. The board has been involved and provided information to that panel. It is my understanding that those negotiations are ongoing. We have received signals, but we understand that they are still ongoing. We are hopeful and waiting for the outcome of that process.
Senator Patterson: Okay. We wish you well.
The Chair: Thank you, gentlemen, for your presentations and for your responses to the questions. I think it was very good.
Just one point before we break so that you know. Not this coming Thursday, but Thursday, October 9, there will not be a meeting in the morning, so you can put that in your calendar.
Thank you again, gentlemen.
(The committee adjourned.)