Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue No. 18 - Evidence - April 6, 2017
OTTAWA, Thursday, April 6, 2017
The Standing Senate Committee on Banking, Trade and Commerce met this day in public at 10:34 a.m. to study and report on the development of a national corridor in Canada as a means of enhancing and facilitating commerce and internal trade; and, in camera, for the considerations of a draft agenda (future business).
Senator David Tkachuk (Chair) in the chair.
[English]
The Chair: Good morning and welcome, colleagues, and members of the general public who are following today's proceedings of the Standing Senate Committee on Banking, Trade and Commerce, either in the room or listening via the Web.
I am David Tkachuk, the chair of the committee. Today is our fifteenth meeting on the subject of our study on the development of a national corridor as a means of enhancing and facilitating commerce and internal trade.
We originally had two witnesses scheduled for this morning. However, the clerk advised us late last evening that unfortunately Stephen Laskowski, Senior Vice President of the Canadian Trucking Association, was ill and at the hospital. We send Mr. Laskowski our best wishes.
We do, however, have by video conference, from Edmonton, Simon O'Byrne, Vice President of Planning with Stantec. Stantec is a provider of professional services in the area of infrastructure and facilities for clients in the public and private sectors. The company's services include planning, engineering, architecture, interior design, landscape architecture, surveying and geomatics, project management, environmental science and project economics for infrastructure, and facility projects.
Mr. O'Byrne, thank you for being with us today at an early hour in Edmonton. Please proceed with your opening remarks, after which we will go to our question-and-answer session.
Simon O'Byrne, Vice President, Planning, Stantec: Good morning. I am happy to present today to the committee. Are you able to see the PowerPoint presentation that I sent yesterday?
The Chair: Yes. We have printed copies of it.
Mr. O'Byrne: I wasn't sure how we can toggle forward, but I will start with the presentation. I will talk quickly about who Stantec is, myself, and also about the national corridor study. I have reviewed some of the work that has been done already, and I will provide comments on it.
Stantec is a company that started in here Edmonton. It is a company that is very focused on creating communities and designing with community in mind in terms of how we operate. We have 22,000 employees globally. We have had 63 years of uninterrupted profitability, and we are a rather large company in the sense that we are one of the 15 largest engineering and architectural firms on the planet. We have about 400 offices worldwide.
We are driven by four key values that define our company. One is putting people first, which is simply focusing on our staff. We are not in the widget business; we are in the people business, and having the best people.
Another is doing what is better together in the sense that we focus on not being a siloed company but rather on having a lot of cooperation within the company and doing what is right.
We are a strong company in terms of our commitment to safety culture and ethics. All of our staff receive hours a year of safety and ethical training. It is a real core part of our business.
Our last key value is that we are driven to achieve in the sense that we are driven to a commitment to excellence.
Stantec has about 18,500 staff in North America; about 2,000 people in Europe and the Middle East; about 1,000 in Asia, Australia and New Zealand; and about 500 people in South America. We are in about 14 different sectors. If this project were to proceed, Stantec has a lot of depth and breadth of knowledge in that area.
I have a couple of roles. One is Head of Planning at Stantec; the other is Head of Community Development across Canada. I have been at Stantec for about 16 years, and I have about 18 years of experience. I have worked on projects and have been the project manager on large, multidisciplinary projects that are similar to what you are trying to do here. The most significant one of relevance to this was the Lower Athabasca Regional Plan for the northeast portion of Alberta. It looked at multi-use trail corridors and how to strike an appropriate balance between development of the oil sands and environmental, social and economic considerations. It was a long-range plan to look at all the different land uses and the numerous tradeoff decisions governing northeast Alberta, which is where the oil sands are located and other important communities and infrastructure.
I have also worked on other large regional plans with similar corridors; for example, around Winnipeg and Edmonton, the capital region plans with respect to both cities.
With respect to this, we have looked at it and there are so many different things to consider in terms of the geographic considerations. We have looked at where the alignment goes. I think what has been prepared in the U of C study at first blush seems logical and makes sense. However, I would recommend that it be looked at in stages.
We recommend strong support for pursuing something like this. I think it is very much in Canada's economic best interest.
I would also recommend that it needs to be done through a cumulative-effects management model of decision making in terms of picking the best route to take through the near North and the Far North.
One of the considerations, of course, is that you are going through the Canadian Shield, principally, and a substantial amount of permafrost. This means all kinds of engineering design considerations. You would need to bust up a lot of Canadian Shield to create the aggregate for all-season roads. The cost to doing that is quite high. You need quite a lot of energy to do that. It needs careful consideration because where you are going is basically where Canada is also water-rich, so you are crossing numerous lakes, creeks and rivers and you have to spend a huge amount of time figuring out how to mitigate environmental, social and economic costs and how to handle those.
You also have to look at some of the unintended consequences. When you develop a corridor like this, one of the things you do is create access, and by creating and opening up access, some of the unintended consequences are that you permit a lot more cut lines to be created for seismic testing and forestry. What happens is those corridors become ways in for people to go hunting, but they also impact species, such as woodland caribou, which is an endangered species in the boreal forest, and that species is vulnerable to wolves. They are okay as long as they are in thick bush, but when you create cut lines, you provide highways into these areas for wolves. Those are the things that can be mitigated, but they have to be done through smart, considerate design.
With all the waterways that you are crossing, you also have to look at how to use best practices so that fish habitat are not mitigated, so you don't have things like hanging culverts, which can prevent fish from migrating.
We also have to look at what happens when you have access. For example, one of the positive things that can happen is that recreational opportunities increase, which also means more tourism opportunities. This sounds great and it is, but one of the trade-offs, if it is not done appropriately, is that you can have erosion in areas where you don't want to have erosion. That is a big consideration.
We also have to look at the linear disturbance and how to pick corridors that would mitigate against having the linear disturbance on the land and land use conflicts.
Of course there are traditional land uses, so presumably the corridor would avoid going through First Nations. However, just because it's not touching reserve lands doesn't mean it's not touching traditional use lands. You have to be very careful to spend a lot of time contemplating traditional use lands and how you disrupt those.
We are a big proponent of the need for the cumulative-effects management approach to decision making. We have a lot of experience doing that. We are not the only firm that does this, but it is a key aspect to making a decision as you think about the consequences to air, land, surface water and groundwater and how to model that in a cumulative-effects approach.
You also have to think about what this means in terms of fire. Where you are adding more humans to the environment, you increase the chance of fire in the boreal forest, but you also increase your ability to fight forest fires. As we have a warmer environment coming to us and much more climate variability, the boreal forest is more vulnerable in the future than it has been in the past regarding forest fires. We can fight those better if we have corridors like this.
As we know, it takes years to create that social licence. It is critical to start early. What businesses need is certainty in order to make an investment. So we strongly feel that a corridor like this is needed, particularly as a means to getting access to tidewater.
The spread right now between Brent and Western Canada Select for oil is about $21 billion a year. That is just the direct spread. If you look at the quantity of oil production in Canada and the current spread between the two prices, if we were selling our oil at Brent prices versus Western Canada Select, we would be selling oil for about $21 billion more a year. If you think about the economic multipliers of selling your oil for that much more, what that means to government revenue and to families in terms of jobs and businesses is enormous. The spread is enormous. If we can get access to tidewater, it makes an enormous difference economically.
It also means that First Nations will receive a lot more opportunities as well. If you look at some of the First Nations in and around the oil sands, they benefit from having numerous First Nations businesses and high levels of employment. For example, Fort McKay has an unemployment rate that is below full participation. In fact, they employ a couple hundred people who are not even part of the reserve because they have so many jobs and businesses related to the oil sands. Those things are only made possible by making investments in big corridors, such as the one Alberta did with Highway 63 upgrades, which really facilitated the development of the oil sands.
We also have to look at what a corridor like this does to providing better access for First Nations. One of the big problems we have in northern Ontario where there is the highest concentration of boil water advisories, those areas have poor access, sometimes fly in, fly out access. So the cost of sending in equipment, technicians, et cetera, is prohibitive. That is one of the reasons that contributes to the boil water problem that we have in First Nations. We can fix that with better access. We can also and increase their probability of having economic development and reduce the cost of providing housing and other essentials.
In terms of resiliency, one of the big focuses we need to consider is how climate change will affect the boreal forest where this corridor will be located. Pine beetles will increase as we have warming, so the health of boreal forest is critical. That also means that some portions of this area that would be harvestable forest may not be harvestable in decades to come if those trees are to be taken out by the pine beetle. Like they did in northern British Columbia around Prince George when the pine beetles were coming, they actually accelerated taking own down the trees. While there was still some value in the trees, they took them down and tried to get ahead of the pine beetles. That same type of consideration has to be made as we think about climate change and resiliency. We also have to think about resiliency as it relates to staffing along the corridor as well.
Economic development is one of the biggest drivers. I think that is self-evident, as you have had multiple days of considering this.
In terms of project delivery and funding, we would definitely recommend a P3 model, not necessarily a traditional P3 model but a variation of that. There has to be some degree of shared risk between the private sector and government, but I would suggest doing this corridor in stages and picking the stages that are the most economically viable, particularly from Alberta and Saskatchewan to the West, to tidewater, and then expand it from there towards Churchill and northern Ontario and the Ring of Fire.
We would look at those corridors where the economics of a P3 model would work immediately. That would be a low-hanging fruit, where you would be able to get money from the private sector more readily. Then look at the different models that could be used in terms of how it could be set up and financed. I can expand on this further if you have questions.
The last slide that I wanted to finish on was about some of the next steps and what is needed in terms of further engineering and planning. Obviously a step like this is a multi-year exercise. It requires a multidisciplinary approach. It requires looking at everything from how you do First Nations and Metis consultation to doing the environmental consultation along this corridor. In my mind, if we could get something like this set up and pave the way so when we do need to build pipelines or 500 kV lines, we would be able to do that in a timely fashion and provide certainty to businesses and provide and capture the economic opportunities available to Canada in the North between our mining, forestry, oil and gas, and energy sectors.
With that, I want to stop and open it up for questions.
The Chair: Thank you very much.
Senator Black: Thank you, sir, for your presentation. As an Alberta senator, I want to underline your comments around the importance of Stantec to the development of Alberta historically. The company is well respected and we are very pleased to have you giving this presentation this morning.
Sir, I take from what you have said that you support the concept that it's complicated. However, from an engineering point of view, do you believe that it could be done?
Mr. O'Byrne: Very strongly I feel that it can be done, but proper analysis has to be done and you have to look at things through a cumulative-effects approach to decision making, which we do. Where you will pick the corridor will be science and evidence based, but there are numerous tradeoffs. Some corridors might have larger environmental issues but don't have social issues and vice versa.
I strongly encourage something like this be done for the Canadian economy. The trouble with something like this is it requires a lot of effort, coordination and political champions. I think the Senate is a phenomenal and great place to start.
Senator Black: When you talk about this concept of a cumulative-effect management process, is that a Stantec term or an industry term?
Mr. O'Byrne: That is an industry term. For example, the energy sector got together and funded CEMA, Cumulative Environmental Management Association, of which the Government of Alberta put in 10 per cent of the funding, and 90 per cent of the funding came from industry. They spent anywhere from $5 million to $10 million on science around the oil sands to look at it holistically rather than look at this new oil sands project in isolation, let's look at it in its entirety. If we add one more, what does that do to the groundwater, to CO2 and NO2, air disturbances and social licence? Look at it more holistically. It is a much more holistic model to doing it. Stantec uses that terminology and has experts in it, but we would not be the only big engineering firm that would have a depth and breadth of experience in that regard.
Senator Black: To simplify what you have just said, starting for me, and for the folks watching across Canada, you are saying that we need to create a big to-do list and then work through the list, checking off what needs to be done and analyzing the effects of the other items on the to-do list.
Mr. O'Byrne: Yes. Because it is such a large project in the billions of dollars in terms of the type of capital that would be invested both in terms of studies and the physical aspect of constructing something like this, I would start in principle by saying this is the general corridor that we would like to examine, and then doing it in the stages that are the most economically viable and expand it incrementally once you have success to build upon. That way, the initial costs are in the millions as opposed to the billions of dollars. I think there would be quite a bit of interest as there was in the CEMA example that I provided, where industry could come to the table. In that example, they were providing 85 or 90 per cent of the funding, and government was doing 10 to 15 per cent. The ROI is excellent in terms of governments spending 10 or 15 cents on the dollar and having huge economic returns
Senator Black: Tremendous presentation, sir. Thank you.
Senator Wetston: Thank you for your presentation. I am an Ontario senator, and want to ask you a question or two about how you see this national corridor concept. We tend to focus a fair bit on the North, which is important, obviously, and the northern corridor. You have spoken about that this morning.
The corridor concept engages virtually every aspect of government federally, provincially, municipally and in that I include the territories, obviously, Senator Patterson. We just came from a presentation in the Energy Committee, which Senator Patterson was at as well, where there was a discussion by officials of a pan-Canadian framework on clean growth and climate change. I am sure you are familiar with that, more or less.
The reason I am asking you this question is it's a huge project with targets, greenhouse gas emissions, and much of what you are describing from the perspective of a corridor concept engages many of the same — not identical — concepts of governments working together federally, provincially and municipally, as well as the territories.
Have you thought about the relationship between a concept like the national corridor, northern corridor, and the concept and work that has gone into the development of a pan-Canadian framework and how they may be related in achieving the goals being set by the government with respect to the enhancement of climate, economic growth and opportunities for Canada?
Mr. O'Byrne: Yes, I have thought about that, and yes, we have thought about how you have a connectivity between the two in terms of the Canadian corridor. I referenced energy because that is an obvious one in terms of having to sell our energy products at Western Canada Select prices versus Brent prices. That is an obvious one in terms of the divergence in prices and the amount of money we are leaving on the table.
But it is also about different types of development in the North. It also is about opening up the North in terms of the ability to do further hydro plants as opposed to burning coal in this country, and the ability to export hydro power to the South. Those types of opportunities open up.
It is not just about energy, forestry or even recreation and tourism. It is also about mining and how it can be done more sustainably. Coming from Ontario, you are very aware of the quantity of minerals this world will need in the coming centuries from the Ring of Fire. The type of minerals that are in abundance in the Canadian Shield in the Ring of Fire are worth — I don't know the precise numbers — hundreds of billions of dollars in terms what is trapped underground. That can be done more sustainably. You look at contemporary mining practices versus how they were done yesterday, and they have progressed a long way. To me, I think you can marry the two and there are a lot of best practices.
If anything, my experience has shown that industry is often well ahead of government when it comes to environmental stewardship. I think government sometimes tends to be rather tentative in the fear of stepping on industry's toes, when in fact industry is fine and comfortable, by and large, with higher environmental standards. They just want to make sure that the environmental standards are equal across the board so that everyone is making investments and decisions with the same conditions. If you are a large or a small player, you are all playing by the same rules, and if the rules set the bar high for environmental stewardship, you can do that.
I think sometimes the industry gets a worse rap than it deserves in some quarters, and I find that there is far more environmental stewardship than people would imagine.
Senator Wetston: Thank you for your response. What you have just commented on makes a great deal of sense to me.
What I am urging both industry and government to do is to work together on these megaprojects to ensure that the public interest and the ongoing economic development of the country is achieved. I see the incredible amount of work the federal government is doing on this particular pan-Canadian framework. My hope is that the work on a corridor, if it has any real merit, if there are any possibilities here in telecommunications, electricity and pipelines, because it has a huge social, environmental and economic impact — and my pitch here, if I'm making a pitch, is that industry needs to urge government. You can do that, I believe, to ensure that they not be siloed in the way they are looking at all of these issues, and work very closely together with industry to achieve this important outcome for the country. I do believe we need it.
Do you have any further comments? I'm not making a speech to you, but I'm hearing and reflecting back a number of the things you're saying.
Mr. O'Byrne: I would agree. I would say that there is a communication challenge. That's one the things the energy industry, for example, has really woken up to in the last five plus years. Fifteen years ago, the emphasis was more on the presumption that the economic interests were so obvious that they felt they didn't have to spend as many resources on communicating the positive benefits of investing in energy.
That has really changed. There is a communication challenge and big gap that has to be bridged between where some of the public is, where industry is and where people are right now. I think that right now there can be terrible amounts of misinformation.
The trouble is that some of these issues are complex. For example, when you start saying that we're going to fix this through cumulative-effects management, when you throw out this type of jargon, you get people glazing over when they hear that sort of thing.
Part of it is finding the language that can be employed, that is accessible to people, so you can communicate the benefits to laypeople and have much more honest conversations.
I also think we do public consultations in a much more sophisticated way today than we did a couple of years ago. In fact, we went from token consultation and engagement to much more earnest consultation today. If you were to look at the Northern Gateway that Enbridge did, the majority of First Nations along the corridor were in favour of it, not opposed to it, but they only got there through a huge amount of consultation, engagement and sharing in the potential wealth and economic opportunities that were going to be created, and then showing people that the technology is there to make pipelines safe, for example.
I think that things are getting better, but I don't know if that message is adequately getting out to the average person in Canada and if it's getting beyond the chattering classes, if you will.
Senator Day: Mr. O'Byrne, since we're all confessing which provinces we are from, I'm from New Brunswick, in the area where the Energy East pipeline would terminate on the tidal waters at the largest refinery in North America.
What I would like to have you explain to those here and those watching is your concept of the corridor. Are we talking something several hundred metres wide, or are we talking about something that is several kilometres wide, and having in mind of social impact of the broader corridor? The less expensive and less complicated it would be, the narrower it would be. Could you tell me what you are thinking when you talk about a northern corridor?
Mr. O'Byrne: To me, it starts with having a right-of-way that in some areas might be as narrow as a couple of hundred metres and in some areas a kilometre or more. It's simply secured right-of-way. Some of it would go through Crown land and some through private land, but a corridor that would have a right-of-way to start with.
It doesn't necessarily mean there is a road going along that entire corridor or pipeline, or 500 kV lines going across the entire corridor, but rather a corridor through a right-of-way that is protected, and that is commonly understood that should there be a pipeline, a road, a power line, that that would be the preferred corridor, and we are doing that in lieu of building it elsewhere.
When we are looking at the linear disturbances on the land, we are concentrating in an area, but we've also concentrated in an area so that other areas are protected. Also, we will pick a corridor that will have the least amount of impact socially and environmentally. To me, it doesn't mean that something is physically built in that corridor, but rather that the protection is there.
If someone wanted to make an investment, maybe a mining company in the Ring of Fire or an energy company that wants to propose a pipeline, that approval process would be months, not a decade. The right-of-way would be protected so that if we want to go ahead with the project, we don't have to do long-range economic modelling to ascertain whether or not it is economically viable and feasible, but rather they can do it much more immediately.
Part of the trouble is that when we are proposing, for example, Energy East, and going to the Irving refinery in St. John's, we have the ability to create thousands of jobs immediately, but because of the type of process we have right now, at best maybe we are creating thousands of jobs in the 2020s. To me, if we have a protected right-of-way and the homework, environmental studies and consultation with people on the corridor has been done well in advance, then we can actually have things shovel ready.
I think we see this evidence across Canada in terms of even how municipalities are doing businesses, whether it's Toronto with the TTC, or places like Edmonton with the Edmonton Transit Service. A lot of organizations are making sure things are shovel-ready. They have done the engineering, planning and consultation, so the second they have the funding, they can immediately go to construction under 12 months of when the announcement is made.
That's where we are going to. We didn't necessarily need that to do that a generation ago, but today we need to do that given the times we live in. To me, that's why it's so incumbent on us to make sure we're thinking about protection of these corridors well in advance.
We're not like some countries that railroad through this type of investment and infrastructure in corridors. They simply strike a decree and it happens. We live in a democracy where we have to have proper consultation and pick corridors based on the science and cumulative-effects management. I think we can do that in Canada. But we need to do that today. We can't put this off. This has been talked about since the 1950s. We're in 2017, and we are still doing a lot of talking. We need to go to action.
That's one the reasons why I propose that we need to get on with it in Canada and do this. But, again, it doesn't have to result in billions right out of the gate. It can start with millions of dollars in starting to do the corridor analysis work.
Senator Day: Thank you. That was very helpful.
I'm thinking that probably the financing, the investment, for these early stages of developing the right-of-way, whether there is an economic imperative at the present time to build something there, you want to get the social licence and the legal permission so that when a company comes in and wants to build something, they can move quickly on it.
Am I right in assuming that you think that first initiative would be government funded in large part?
Mr. O'Byrne: Government funded with the understanding that the government ultimately benefits from both the development of the corridor and the revenue they get from the economic capture in terms of developing. Whether it's a pipeline, forestry, mining, power or recreation tourism, that's captured by government. But government can be doing the first corridor studies. That's really at 10,000 feet. It doesn't necessarily mean having to do it right at the weeds, but rather at 10,000 feet.
What makes sense in the big picture is starting that narrative and then figuring out where the rub points are, if you will, because there will be rub points. Sometimes when there are severe rub points, we have to change the route, but start with creating what would ultimately lead to the legal framework, which is having a right-of-way protected. You then would still have to go in and do the very precise work that would go with that. For example, if it's going to be an all-season road, someone has to do the study where the aggregate will come from for that and some of the engineering details of how you can have drainage in those corridors and things like that. But we wouldn't get to that level. It would be incumbent on a private entity to do that, and governments would create the legal framework to say that this is the protected corridor we all agree on.
The other thing you would have to look at is the different Crowns along the way, whether it's the B.C. government, the Ontario government, et cetera, or private landowners, and determining the remuneration back to them in lieu of having a corridor go through those areas. If Enbridge or TransCanada were to run a pipeline, for example, it would be important for them to have already agreed to terms in relation to rates of pay and the lease per year to the respective owners of that land along the corridor.
Senator Day: You referenced in your remarks the University of Calgary work that has been done. Are you familiar with that?
Mr. O'Byrne: Yes, I've read it. I have a copy right here.
Senator Day: Are we at the stage of having to do more theoretical academic research on these ideas that have been around for 160 years now, or are we at the stage where we need planning engineering companies like Stantec to start doing something and the federal government to start championing this concept because this is across Canada and interprovincial?
Mr. O'Byrne: I think the latter, not the former; it has been talked about and studied excessively, and we need to go from that to action. I think it's so overwhelmingly in Canada's self-interest to do something like this, but we need to do the actual, real study on it now, the proper planning, engineering and environmental science on it to go forward with something like this.
It starts with the federal government on something like this and then talk about the overall national corridor and break it into different stages. You would then work on a stage. You'd work with the provinces so that a province would pay a portion and the federal government would pay a portion.
When it actually comes to implementation of the corridor, the private sector would be doing the heavy lifting. But the governments need to do the initial steps to pave the way for it to happen. The governments have more social licence in picking the corridor than if industry were to do it. The degree of cynicism would be that much less.
Senator Tannas: First of all, let me say it's wonderful to have you here. I love the Alberta "can do'' spirit that's coming across the air waves here.
I'm reminded of a joke that my Irish father-in-law used to talk about regarding some guys in Northern Ireland. A tourist drives up and asks, "How do I get to Galway Bay?'' The two Irishmen confer and turn around and say, "You can't get there from here.'' That is something that I think we've heard a lot as people have tried to wrap their minds around this; this doesn't make any sense because they can't envision it.
On Senator Day's final question as to where we are in the process and who should be engaging on this, you may have seen or read the testimony we heard from First Nations leaders, specifically the head of the First Nations Financial Management Board, who is also heavily involved in the First Nations Major Projects Initiative, that this is the kind of project they should be involved in and in fact potentially initiate. It's a mindset that we don't have. We just said that we need industry involved; we have to have the provinces and private capital, et cetera. This may be the kind of project where the people who should be thinking about this at the very early stages are First Nations, and that was their message to us.
Given that, do you think we should still be a rush to pile in with all our traditional paradigms such as they are on something like this, or should we take a — I don't want to say academic approach — little slower approach?
Mr. O'Byrne: I think that we should proceed forward. I think that there would be scientists from the academic community involved in the analysis of this, but I don't think that we need to have further academic studies on the principle of this. I think the principle of this is pretty sound. To me it makes an obvious amount of sense.
With respect to the First Nations, I think the beneficiaries of this might be First Nations much more so than a lot of other communities. I used the example of the number of people employed on and off reserve by Fort McKay, and I think they have 60 or 80 different corporations involved with them. It's made possible by their proximity to the oil sands.
I look at where we have some of the highest concentrations of poverty in First Nations in Canada and where there is the most dismal access to housing and water, and it's disproportionally the ones that abut this corridor and are in close proximity to this corridor. In northern Ontario, for example, I think that 290 First Nations are on a boil-water advisory and something like half or better than half of them are adjacent to this corridor.
There would be opportunities for getting access to much more affordable equipment for waste water treatment, for housing supplies that are getting vastly cheaper. Quite frankly, as you look at the development and the maintenance of the corridor, and the technicians that would be working on this, the labour force in my mind would disproportionately come from the First Nations communities along here. The corporations that could be set up by the First Nations to do the maintenance of the corridor and be involved in the construction of the corridor is a very obvious opportunity.
Again, I see this starting with government, but very quickly one of the obvious stakeholders would be First Nations along the corridor. I see an enormous benefit socially and economically for First Nations.
Many of the economic opportunities for First Nations right now are really dismal because their access to markets and to investment is really poor, but a corridor like this has the ability to be a game changer for their quality of life economically, socially and from a public health standpoint.
Senator Tannas: Would it be fair to say that we would actually recommend there be work streams involved in the physical engineering and technical aspects of the feasibility of the project, in addition to the political aspects, which are many and varied, and the potential economic development aspects and political development aspects as they pertain to First Nations governments?
Mr. O'Byrne: Yes, that is fair. Companies like Stantec — we're not the only one — have dozens of joint ventures with First Nations where we work with them to share profits on engineering and environmental science projects in the vicinity, not necessarily on reserve but off reserve in the vicinity of traditional lands for a particular First Nation. We have joint venture companies set up to do business with First Nations and share the profits, but also share the knowledge as well in terms of employing First Nations to conduct a lot of the field work that might be done and evidence gathering and consultation and other work that needs to be done related to construction and engineering.
That's the type of model that should be used and encouraged along this corridor as much as possible so that there is a sharing of profits. There is also the sharing of knowledge and technical skills.
Senator Patterson: I'm very pleased to see Stantec here, a great Canadian engineering company with a big footprint in the North.
I'd like you to help me, and us, understand the opportunity we have to move this great concept of a national transportation corridor forward with the current federal government.
About $186 billion is available for infrastructure; $10.1 billion has been announced for trade and transportation corridors, described as trade corridors to global markets, to build more robust trade corridors; and then there is the infrastructure bank, at $35 billion over 11 years, focusing on larger transformative projects.
If we are going to capitalize on this huge amount of available infrastructure money, where does the transnational corridor get funded in these envelopes? You mentioned P3 as well. Have you figured out how the infrastructure bank and the trade and transportation corridor initiative, which seems to be led by the Minister of Transport, fit into the pockets of money? Where do we access funds to build a national corridor?
Mr. O'Byrne: You are multiple steps down the process, and I think you need to back up a bit. With all due respect, it's in the millions of dollars. We have to start with the feasibility studies, picking the proper corridor and the type and size of right-of-way, because it will be different in different jurisdictions. In some areas it will have to be narrower because of where it might abut traditional use lands that are sensitive, or environmental considerations, or simply because there are uneconomically feasible areas like bogs and other things in order to put corridors through. We have to do those initial studies.
Once you have the done the macro study, it is breaking into the staging. That is, what is the sequencing? What are the areas that are immediately able to be developed? That's when you start looking at the P3 models that would be used.
What you are proposing is a few steps down the line. You first have to start with looking at that corridor, for example the one proposed in the U of C study, and determining whether that is the best corridor or if it should deviate. They used a pretty wide paint roller on that map to suggest where it would go; it is not that precise. It is a general location. You would want to be more precise than that.
Once you have the first couple of stages proposed, then it's looking at the P3 of models that could be used, determining the partners that would benefit and the partners that would contribute. In some cases it would be provinces as well.
While all those billions of dollars have been announced through the different ministries, that is a ways away. We have to start with the first part of the process, which is doing the proper planning, the big macro engineering and the consultation on that corridor from a very high level before determining the best vehicle to implement it. Because it could be different in other areas. In some areas you might not be able to do P3 because the numbers might not work for the private sector to step up to the same degree. For example, if it's more for forestry, the numbers are probably not going to be as robust as they would be for a pipeline. In those areas it might need much more weighting toward government versus a pipeline corridor, which could be weighted vastly more toward the energy sector to kind of pay for that; it's not a one-size-fits-all model.
Senator Moncion: Thank you for your presentation. I'm from northern Ontario. I understand and I know how that big territory is and the challenges in the northern part of Ontario. It's a large territory and there are not a lot of people in that territory. We're talking about building somewhere so that the Ring of Fire in Ontario will get the investments out easier.
I sometimes think about this project being so big and about the feasibility study that will come out of it. There are costs and returns. You said earlier that there were billions of dollars coming out of the Ring of Fire. If you look at just building a kilometre of highway, how much does that cost? There is quite a distance that you are going to have to build in the northern part of Ontario.
You are talking about building infrastructure for clean water. You were saying that 180 to 200 First Nations do not have clean water. These things will have to be built. You are also saying that we are going to rely on the natives' workforce to help. I'm thinking of brain power here.
I'm thinking about the costs and the size of this project and how long it will take. I know that you don't know how much, but for me it's a question of costs and returns. Are you absolutely certain that the returns are going to be there for a long time? I'm a bit skeptical about it because of the size, distance and cost.
Mr. O'Byrne: First of all, you eat an elephant in small bites. A project like this is on a huge scale, so you don't do it all at once, which is why it's so important to chop this up into stages and look at the easy, low-hanging fruit. Portions of the Ring of Fire might be the higher hanging fruit.
The development of the Ring of Fire, you have to look at it over a much longer period. It might be decades in terms of when the ROI happens.
The trouble, as we know sometimes with the government or even business, is that businesses sometimes think in shorter segments of time and in terms of what will get me the best ROI in "X'' amount of time. Governments might think in terms of a four-year cycle. The trouble is, doing something that might not yield a return on investment for 10 or 15 years is the challenge. It takes a long amount of time to even do the planning and analysis on this.
The costs for building highways can be high, but it also depends on the standard highway you are building. To me, it's building an all-season road, which is a gravel roadway with appropriate culverts and other things to not impede drainage. It doesn't mean a paved surface, because the cost of doing that is prohibitive in some of those areas. You have a lot of Canadian Shield there. A lot of aggregate is needed in terms of crushing up the Canadian Shield into aggregate to build gravel roads, so it doesn't cost as much.
I don't know how well you know the Far North of Canada — maybe you know it very well — but Stantec has done the engineering and it's almost complete now. The Dempster Highway previously terminated in Inuvik and now it's being extended Tuktoyaktuk. I've flown that corridor in a 50-year-old Cessna, and if there is tough terrain to build an all-season gravel road in, that would be the toughest in all of Canada. And it has been done. Stantec and our partner, the Northwest Territories, have shown that it can be done in any economically feasible way. That's an area where there is not a huge labour force and not an abundance of equipment to get in and out of there easily. It has now provided direct access to the Beaufort Sea for Canada. Previously it was in the Mackenzie Delta and now it goes to the Beaufort Sea. It's not an easy place to engineer a road. But it has been done and is in fact being built right now.
The Ring of Fire portion of northern Ontario is a far more economically superior place to build an all-season road.
Senator Moncion: How long would it take?
Mr. O'Byrne: Well, that all depends on how big the stage is and how much time you're going to take to build a road like that.
If you look at Highway 63, which is built from Edmonton to Fort McMurray, that was twinned. It took a span of five-plus years to twin it all the way from Edmonton to Fort McMurray — and not just twin it; the shoulders on this road, because of the big, heavy loads, are basically the size of a normal highway. It is almost like building an eight-lane highway to Fort McMurray. That was done in five-plus years, and it is an almost 600-kilometre corridor. That was done to a much higher standard than what would likely be built.
The Chair: This was an excellent session. We very much appreciate your participation. Thank you for coming before our committee. We enjoyed it very much.
(The committee continued in camera.)