THE STANDING SENATE COMMITTEE ON ENERGY, THE ENVIRONMENT AND NATURAL RESOURCES
EVIDENCE
OTTAWA, Thursday, December 14, 2017
The Standing Senate Committee on Energy, the Environment and Natural Resources, to which was referred Bill C-17, An Act to amend the Yukon Environmental and Socio-economic Assessment Act and to make a consequential amendment to another Act, met this day at 8 a.m. to give consideration to the bill.
Senator Rosa Galvez (Chair) in the chair.
[English]
The Chair: Good morning and welcome to this meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources. My name is Rosa Galvez, and I’m a senator representing Quebec. I’m going to allow my colleagues to introduce themselves, but before that, I want to introduce, to my left, the clerk of the committee, Maxime Fortin, and at my right, the analysts of the committee, Sam Banks and Marc LeBlanc.
Senator Seidman: Judith Seidman from Montreal, Quebec.
Senator Neufeld: Richard Neufeld from British Columbia.
Senator Cormier: René Cormier from New Brunswick.
Senator Cordy: Jane Cordy, Nova Scotia.
[Translation]
Senator Massicotte: Paul Massicotte from Quebec.
The Chair: On December 6, Bill C-17, An Act to amend the Yukon Environmental and Socio-economic Assessment Act and to make a consequential amendment to another Act, was referred to the committee by the Senate. This is the committee’s second meeting on the bill. We will be hearing from Government of Yukon officials and industry representatives before proceeding with clause-by-clause consideration.
[English]
Today we welcome by video conference, from the Government of Yukon, the Honourable Ranj Pillai, MLA, Minister of Energy, Mines and Resources and Minister of Economic Development; and Lindsay DeHart, Director of Major Projects Yukon. We know it’s very early for you, so we really appreciate you being with us.
Thank you very much for joining us. Minister, I invite you to proceed with your opening statements, after which we will go to a question-and-answer period. Thank you.
Hon. Ranj Pillai, MLA, Minister of Energy, Mines and Resources and Minister of Economic Development, Government of Yukon: Thank you, Madam Chair, and thank you all for giving us an opportunity this morning to share our thoughts on this very important issue. I will proceed with opening statements so that we have as much time to go to questions and answers.
We can all agree that implementing the Yukon First Nations final agreements with respect and honour is imperative for the success of relationships and reconciliation in Canada. The Yukon government is by far the most active decision body and regulator in the YESAA process, and our experience with this legislation is deep. I thank you for this opportunity to share our experience with this committee today.
While Bill S-6 did enact many of the recommendations for the YESAA five-year review, the four legislative changes in Bill S-6 that Bill C-17 seeks to repeal were carried out without consulting Yukon First Nations in any meaningful way and led to a court challenge in Yukon. Our government, in opposition at the time, questioned the Yukon government of the day often on this very important point.
It is our priority to remove the clauses that have caused friction with First Nations and begin moving forward in our YESAA relationships, and enhance certainty and confidence in the development assessment process in Yukon.
A key pillar for our government is to ensure that the spirit and intent of the Yukon First Nations final and self-government agreements are met. One of the actions we took as government was to engage First Nations in Yukon, one on one and through the Yukon Forum, to advance areas of mutual interest. Resetting the relationships that will govern Yukon’s future is a priority. Bill C-17, which is before us today, is an important and necessary component of this process.
The Government of Yukon has been working with Canada and Yukon First Nations to ensure that the contentious amendments made to this act under Bill S-6 are removed. This started with the YESAA repeal MOU and has culminated in the bill before you now. The Government of Yukon supports passing this bill and enacting it without change as soon as practical.
Additionally, all self-governing Yukon First Nations, the Council of Yukon First Nations, the Government of Yukon and the Government of Canada are implementing a memorandum of understanding, the YESAA reset MOU. This establishes a new and positive working relationship with respect to the future implementation and operation of YESAA.
All of the signatories to this agreement look forward to highlighting the MOU at our next intergovernmental meeting, which will actually be taking place tomorrow here in Yukon. As you heard on Tuesday during your process, the first meetings of that group are to take place in mid-January. The Yukon government is actively playing its role in getting those conversations going, and we acknowledge the hard work being done by Canada and Yukon First Nations on this initiative.
The Government of Canada and the Government of Yukon must act honourably in implementing lands claim agreements. This includes the legislative establishment processes that flow from that, both now and into the future. I’m pleased to work together with the Government of Canada and Yukon First Nations to ensure we have strong environmental and socio-assessment legislation in Yukon, and to design a strong plan for the implementation of the legislation.
I would also like to address concerns that industry groups active in Yukon have made in the course of this legislation proceeding through Parliament. The commitments of these MOUs and this bill are re-establishing confidence in the governance of the YESAA process. Following the passage of Bill C-17, the substantive task of making YESAA work for all Yukoners, as it is written, can be addressed. This is not to be without the valuable input from stakeholders outside of government, including industry groups. These discussions and the development and implementation of new policies or processes cannot be complete, though, without the input and cooperation of the YESAB, the Yukon Environmental and Socio-economic Assessment Board, which will play a role in these renewed relationships.
It is beyond the scope of Bill C-17, but I want to address further now how this process works in Yukon and what we are doing to promote confidence in Yukon as a great place to work and invest.
This government wants to make Yukon an even more attractive location for responsible mining. We know that access and working with Yukon ground is challenging, with seasonal windows. We are actively developing, alongside our First Nation partners, a new generation of access to mineral-rich areas, with a goal of facilitating more investment and opportunity for Yukoners and businesses, providing an ability for Yukon’s mineral industry to advance and thrive, with broad support and regulatory clarity critical to our economic well-being.
Our hope is that these changes in Bill C-17, together with the agreement on future implementation of YESAA, will resolve any outstanding legal matters that were before the courts and will provide a positive path forward.
On behalf of the Yukon government, I would like to thank the Government of Canada for bringing forward these changes. Thank you.
The Chair: Thank you very much.
Please, senators, keep your question preambles short, and please, minister, keep your answers direct to the question.
Senator Massicotte: Thank you very much. I have two questions. You made some comments about the previous revisions of the act, or amendments to the act, and you’re saying that was done with the approval of only some key parties -- I assume First Nations — the result of a court challenge and so on. I was probably a member of this committee when we approved that, but I forget somewhat.
People don’t purposely make mistakes. I’m sure, even if it was the previous government, the intentions were valid and, in their opinion, the right thing to do. Refresh my memory. You disagree with that now; you want to make amendments to that.
Why were those amendments made previously? What was the result of that court challenge? What was wrong with that thought process? Obviously what they thought was good you’re saying wasn’t so good. Give me a bit of background on that, if you could.
Mr. Pillai: Absolutely, senator. I know we’re having a few technical glitches. I believe I’ve had an opportunity to hear your full question, but if I miss something, please correct me and I’ll add in.
The overall perspective in Yukon, as you’ve heard from the councils and Yukon First Nations and certainly from our government, is that there was definitely dialogue that came from the industry, and at that point there was definitely a process that was under way and there was interest in looking at some modernization or improvement of legislation. Certainly throughout the process there was an ongoing active dialogue that took place between the stakeholders.
The general understanding that I have and that my colleagues have —in opposition at the time and now in government and with our dialogue with Yukon First Nations — is that in the latter hours of that process, some language was brought to the table that had not gone through the rigour and the conversations that the majority of the work had gone through. So inevitably, I’ve heard the term “table drop” for some of the amendments that were identified. I guess the road to hell is paved with good intentions.
Certainly the conflict that this approach caused in Yukon can still be felt today. I’m sure that in the other testimony you’ve heard this week that probably resounded from some of the stakeholders. I believe there were some elements of work that the governments involved. Of course, it was a federal piece of legislation and the understanding was that the architects of that work also represented government officials here, and maybe from your chamber. Through that process the legislation was crafted, but regarding some elements of that, the Yukon First Nations feel they didn’t have an opportunity to dialogue and therefore they breach the process.
That, of course, led to the legal challenge. I don’t have the legal background to go through where that process is now, but I guess the term is it’s in abeyance, and at this point in time the groups that have undertaken that legal challenge are waiting to see what the response will be from the process that we see under way now and that we’re all involved in.
Senator Massicotte: My second question may be further to that. I suspect maybe that’s the reason a certain process was taken some years ago.
I gather we’re going to hear witnesses this morning from the mining industry, a gentleman from Alexco, Mike McDougall, and so on. They’re basically saying, “We appreciate this process, and we want everyone to buy in, but process is process.” They’re worried about the result of all this, that it might cause some undue complications with permits, undue delay when you amend slightly, and you want to expand your territories a bit.
Are their concerns valid? If their concerns are valid, while the process is great, economically there may be a major negative to your economy. What’s your response to those comments and concerns?
Mr. Pillai: I feel for industry because while I respect the fact that they’re just trying to move their projects along, they’re trying to ensure that they’re good corporate citizens; the mining sector is a fantastic group of individuals that lead those service sector companies, and what they contribute to the Yukon does not go without great respect from Yukoners and the people involved.
I feel for them because I believe there were definitely valid concerns, and they brought those to the forefront. The process that was used to address some of the concerns was flawed. That’s really what we’re talking about. When we look at that process and the outcome of that, it has led to uncertainty.
If the dialogue we’re having today and that theme is talking about whether we believe that this process would have a negative effect on the economy, of course, this is of great concern to me as Minister of Economic Development as well as Minister of Energy, Mines and Resources. Part of my mandate is to have a thriving sector.
So when we look at this particular case, some of the outcomes are going to be challenging. When I look at the total field of challenges ahead, I think to myself, would I rather have uncertainty with my relationships with government, industry and First Nations? I believe that’s the most important thing to look at to ensure we have a vibrant sector.
Will this piece of legislation maybe cause some challenges? Potentially, but hopefully this morning we’ll talk about our path forward. As I spend time, whether in Vancouver or Toronto, across North America, talking to investors in major companies that have invested in Yukon, the real concern is what is the relationship with your self-governing First Nations and your First Nations governance?
Over the last year, it has been a real focus of our government. Within two months of taking office, we signed another working MOU with all self-governing First Nations, and that signalled a reset of our relationship. What we saw was a 30 per cent increase in investment from what was projected in January to where we are now in the mineral sector.
I think that is the key to a long, sustainable process. We can talk a bit more this morning about some of the process going forward, and I absolutely respect the comments you’ll hear today. But once again, the industry has been caught in a process here where they just want to move their projects forward, but the architects of this didn’t take into consideration the potential collateral damage of the process that was used, which is sad.
The Chair: Thank you very much, minister.
Senator Seidman: Thank you, minister, for being with us today. When we heard testimony on Bill S-6 in 2014, the Premier of Yukon at the time, Darrell Pasloski, testified.
He said:
. . . it is becoming increasingly clear that changes to this legislation before you today are essential in order for Yukon to remain a competitive place to do business.
So my question to you is, has something changed? Do you disagree with that statement by the former premier?
Mr. Pillai: We’re certainly a competitive jurisdiction. I think when you look at what makes a competitive jurisdiction, many elements are taken into consideration. The regulatory process absolutely is one of them. Of course, the mineral richness, infrastructure, capacity -- and paramount to that is always, in a modern conversation about resource extraction, the relationships with First Nation governments.
Speaking to that, I think we must always work on improving our regulation, our legislation and our certainty. Truly, for us this is one element of policy that affects the industry. It’s the assessment piece. But also, in the department I have the honour of leading, Energy, Mines and Resources, or with Ms. DeHart, who is here with me, we also have a regulatory body in the Yukon government. The key is that we’re constantly looking at how we can improve that, as well.
So it’s a constant process, and I think it’s key to always be improving the regulatory process, whether at the territorial level or the federal level.
I’ve hosted round tables over the last year, and at some of those round tables we’ve had some of the key leaders in the investment industry in North America when it comes to the mining sector. What we’ve heard when we talk about competitive advantage, as we’ve seen other processes under way, specifically on the West Coast, and regarding some of the challenges concerning pipelines going through the regulatory process, is that the one-window approach that YESAA has provided us certainly resonates with the investment industry. And to be open, they really don’t key on the last 24 months. They just talk in general about understanding that this regime is something that’s favoured when you look across the country.
Once again, when I speak with CPOs who have led processes in the United States — which also depends on the state — previous to the current regime, because we’re seeing changes in the regulatory structure in that country, Yukon was favoured. Can we improve? Absolutely. But I think as we look to improve the process, we have an obligation and a signed treaty, and we need to make sure that we have a process that is followed.
We can’t lose sight of the fact that if you use the wrong process to get to improvements and you follow that path, you really have taken a few steps back versus a few steps forward.
Senator Seidman: Do I have a minute to follow up?
The Chair: Yes.
Senator Seidman: I’m inferring from what you just said that you might not disagree with what the former premier said about the previous legislation, but it’s the process that you’re having trouble with and that caused trouble in the Yukon.
If that’s the case, then will you work on and support new language as soon as possible in order to cover those provisions that have been taken out of the legislation?
Mr. Pillai: One of the most important next steps, which is part of the work we’ve been doing, is to provide an opportunity for the stakeholders to get back to the table. Part of my role is to ensure that the concerns and interests of industry are also voiced at that table.
We’ve committed to the Yukon government, the Government of Canada and Yukon First Nations to moving back to the table in January to start a discussion about how to move forward and to look at all the aspects of YESAA to see where we can improve. We all feel we can review some of the elements of this and potentially improve on things, and I’m sure things that were not touched upon will come up in that process as well.
Regarding specific elements of the previous legislation, I think that when you look at certain aspects, such as timelines, I would have specific concerns with some of the information and testimony on that based on what I’ve seen and heard in this role right now.
Yes, I believe that moving forward we’re absolutely committed to working on a path forward and to improving continuously. Of course, in our MOU conversations there are elements and triggers for an appropriate process of continuous review -- so from time to time to go back to the table and improve the tools that we have to make this the most competitive jurisdiction in the country, which is essentially our goal.
The Chair: Thank you.
Senator Wetston: Minister, thanks for the work that you do. Obviously, we hope the untapped resources of the North continue to be developed.
I’m not going to ask you to answer this question, but I wonder whether you’ve had an opportunity to look at the corridor report that was provided by the Banking Committee a couple of months ago. If you haven’t seen it, I thought you might want to have a look at that.
Senator Patterson: That’s out of order.
Senator Wetston: Frankly, I’m just providing some information, Senator Patterson.
Moving right along to a point that might be in order, speaking about the act here, I wanted to ask you a question about the relationship between removing the delegation of ministers’ powers and binding policy directions, which is obviously in the legislation.
Can you explain the rationale for those particular amendments?
Mr. Pillai: It would be out of place for me to get into trying to define the intent without being party to some of those discussions at the time. I believe you’re referring to the responsibilities being delegated at the territorial level in terms of efficiency, in this particular case.
Once again, I have to go back to the fact that you really have to make these decisions with all parties at the table and make sure that the work that you table in the end has gone through the rigour and the appropriate process to ensure you have that buy-in and support for the content that goes forward. That’s part of the challenge here.
Yes, there was definitely some concern about that. But once again, I’ll leave it that that was my understanding. Maybe Ms. DeHart wants to comment on that.
Lindsay DeHart, Director of Major Projects Yukon, Executive Council Office, Government of Yukon: Good morning. Yes, in support of what the minister has said, for the purpose of efficiencies and looking at delegation, the Yukon government’s position at the time was just trying to provide an opportunity to have efficiencies with the federal government and Yukon First Nations in some of the more administrative aspects of the act.
Speaking specifically to delegation, as the minister had identified, through this recent MOU, we are restarting and setting a relationship to move forward. That does not necessarily provide policy direction to the assessment board, but it is an opportunity for the parties to come together and discuss YESAA issues collectively. As noted, the assessment board would be included in those conversations.
Senator Wetston: So you indicated that industry always wants to move projects forward. I guess that makes some sense to me, but often stakeholders and government regulations can create barriers to moving forward. I’m not sure if that’s what you were implying, but I’d like to ask you.
My sense — and I’ve often said this before — is that government intervention basically should be at a rate that industry can endure. Can your industry endure the circumstances that you’re facing with respect to this legislation?
Mr. Pillai: I believe so, absolutely. I think the key is that what we’re enduring now is a series of conflicts that we inherited. Certainly, that’s part of the work that I’ve had to focus on. We’ve had a series of legal challenges based on policy decisions over the last number of years. Part of what I need to do, and what I do when I’m speaking with industry and others, is to explain that our government has changed the approach in how we work with our First Nations partners.
To date, we are one of the most promising locations in the world for investment, and that is seen by the partners that we have now coming into our territory. For the first time in the industry’s history, we have some of the most prominent mining companies in the world, and in the last 12 months many of them have appreciated our approach. When you start to see Barrick, Newmont and companies such as this start to enter and invest in Yukon, which we’ve seen, that shows that the approach we’re taking is the right one.
We’ve had to endure some of the challenges that we see. We have just completed a process that was an existing legal case that went to the Supreme Court of Canada. That just concluded in the last couple of weeks, so that’s another process behind us, and we can continue to move on. This piece of legislation is one of the last pieces, so we can put it behind us and continue to move forward, all of us together, and build a sustainable industry.
Senator Patterson: Good to see you, minister.
I’m the critic for the bill, and I want to say that I totally understand that the parties and key stakeholders are saying, “Pass the bill without amendment. It will help create certainty.” I understand that. “It will make the litigation go away,” which has probably put a chill on investment, but it also leaves some very big questions. Section 49.1 and subsection 56(1) are going to go away with this bill. You’ve got some major projects enmeshed in the regulatory process, and the policies in place governing these issues prior to Bill S-6 are now going to be in place.
On the time lines, I heard the Council of Yukon First Nations at the last committee saying that 15- to 18-month timelines are not enough. They seem to talk approvingly of the 34 months it took to approve the Mactung project.
Now, with this bill, N.W.T. and Nunavut are going to have in place provisions that will clearly not require major environmental reassessment for minor project changes, and they will have timelines in place that Yukon won’t have.
First, do you agree with my analysis that there are some big questions — some big holes now that have to be filled — as we obligingly pass the legislation that will create peace in Yukon? Second, what is your government’s timeline for putting in place policies and regulations to replace these provisions? I know a meeting is starting in the new year, but do you have a timeline? The same parties took eight years to do a five-year review of this legislation, and as a committee, if we pass this bill on good faith, as recommended by stakeholders we respect in Yukon, we need to know what is lying forward and how you will fill these holes that I believe the passage of this legislation creates.
Mr. Pillai: Thank you, senator. It’s great to see you again this morning. We’ll probably have an opportunity to meet up again at some of the mining conferences this year. I appreciate your words on this.
I agree. I have reviewed some of the statements as well and your perspective on this very important piece of legislation.
There are a few things there that I’ll try to unpack and speak to, and try to provide you with an appropriate response from our territorial government on this piece of legislation.
First, I would say that when we look at the process under way, and we talk about timelines — I’ll start with those — part of the challenge and conversation we’ve had with the federal government is ensuring, first of all, that Yukon First Nations, which are party to the process, have the appropriate resources to undertake these assessments. That’s key. I don’t believe we have seen it, whether it be the previous federal government — and now, as we move forward in the understanding that the First Nations need to be able to engage in the process and be able to do it appropriately and meaningfully.
Let me give you an example. Right now, I know you would probably be privy to the fact that we are an extremely favourable jurisdiction for development. We have self-governing First Nations in particular areas that have potentially maybe one or two staff members in a lands department, but they may have close to half a billion or a billion dollars in capital expenditures that are potentially under way in projects. So they have multiple processes under way, and they have to engage in this process of ensuring they have the ability to assess and review the materials put forward.
In many cases, that work is done internally, but also it is subcontracted to specific subject matter experts, and there is a cost to that. First, I would say there is a broader discussion when it comes to timelines that has to be taken into consideration. It’s not just about investment money being mobile; it can move -- it’s not loyal to a jurisdiction. We all take that into consideration, but when there is a project in a particular traditional territory, we have to ensure that the nations involved have the resources to appropriately undertake assessment and engage in that. When a particular company comes into the region and wants to build a $500 million project, we have to ensure we have the ability for everybody to get their proper process.
Second, are there some challenges ahead? At this point, as I understood the question, do I believe we have a gap in language or a gap in process? When you look at the history of YESAA, the story is not all one of challenges. It was very favourable legislation when it was brought into place, and there were definitely some bumps the industry felt and saw in the latter years before this legislation.
I wish we could just get to a point where we could make the problems that have happened over the last couple of years go away and have language that all groups feel comfortable with, but the reality is that there has been a real challenge to the trust between some of the stakeholders. We had a great meeting during our geoscience conference, which was our industry conference this fall. Some of the people you have heard from and some you will hear from were party to that conversation. It was a great opportunity to get all the stakeholders in a room together. The Yukon Chamber of Mines, whose members will be speaking with you today, provided that opportunity and platform, and I thank them for it. We engaged the grand chief. The Council of Yukon First Nations engaged. The Mining Association of Canada was at the table. The executive director of YESAB was at the table. Ms. DeHart, who’s here with me today, was at the table. We had industry representation — essentially all the players that have to come together to have a discussion about how this legislation would affect it.
We heard a very clear and distinct position tabled by the grand chief, and I think you most likely heard it on Tuesday. The position, as I understand it from Yukon First Nations, is that until the bill is passed and until the wrongs are righted, we are in a position where we are not going to be able to move forward the way we want to.
Getting everybody to the table, trying to improve and language and then passing something — I don’t see it as an option. I believe people would like to take a different route here, but I don’t think that that route is available to us. It has been clear: With the mistakes and the breaches of trust that have occurred, the only way to improve and heal is to see this piece of legislation move forward.
Will that give us some challenges? Potentially. Are we ready to engage in improvement of the legislation, and are we willing to sit with the industry and our stakeholders to try to improve the legislation at the territorial level? Absolutely. Those are all things we are ready to do. But we’re coming in and inheriting the situation. And at this point, I haven’t had the opportunity to get all those players together because at the time of taking office, we were already embroiled in this legal challenge.
The Chair: Thank you very much, minister.
Time is running, and I still have three senators to speak, so please, no preambles and short answers.
Senator Neufeld: Maybe a quick answer. When were you first elected? When did the government change in the Yukon? How long ago?
Mr. Pillai: It was 2016.
Senator Neufeld: As I understand, the federal government, around two years ago, signed the MOU to actually facilitate what is taking place now with the change in legislation. So it’s three pages, pretty straightforward, four issues that are being dealt with. In the time that your government was formed, did you have discussions with the federal government about transition processes, as my friend Senator Patterson asked about, because I think that bothers me; I think it bothers industry a whole bunch. How are you going to transfer that, and how long will it take to actually get regulations in place? I asked that of the minister, and obviously I didn’t even get an answer of “it could be this long.” The answers I got were zero. They didn’t know.
Do you have any idea how long it will take to put regulations toward these four issues that are in this three-page bill so that industry actually feels comfortable investing, as you say, the billions of dollars in the Yukon, which I think is great? I think it’s a concern for all of us, and I know that it’s a concern of yours. You have demonstrated that. But give me more comfort about how hard your government will work on putting forward transition and regulations so that industry can feel comfortable investing their money.
Mr. Pillai: I think the reset MOU is paramount. I really feel that we need to ensure the federal government engages with us in a full and meaningful way and that the federal minister commits to that, whether it be from the resources or the stakeholders or to ensure that we have language that can be worked on that will help industry, as well as First Nations, to ensure that the efficiency of this process and the effectiveness is improved.
Part of our challenge, senator, is that in order to have those conversations, we need everybody back to the table. I think we can review the existing legislation and look at it with stakeholders for ways to improve it. The legislative agenda at the federal level is robust, and getting back to that level, I can’t speak to that as I'm not representative of the federal government. But certainly we want to work with our stakeholders here right away to ensure that we can look at our regulation in the Yukon and how we can improve the language.
At this level, we want to look at our legislative agenda as quickly as possible so things that happen over the next number of years, but at the federal level that would be a different conversation altogether. I still think we can have a promising jurisdiction for investment still using the framework that was in place previously.
Senator MacDonald: Good morning minister.
I’m sure you’re familiar with the challenges of creating long-term employment and raising revenue in some of the more remote regions of the country, but it is a challenge in many provinces as well. The Yukon, like other territories and my own province of Nova Scotia, depends on transfers from the federal government to sustain the administration.
I asked the minister and the government officials a question the other day, and I did not receive a response. I would like to ask you, as the Minister of Energy, Mines and Resources and Minister of Economic Development in the Yukon, can you tell the committee how much was transferred to the Yukon last year in the territorial funding formula in your recent budget?
Mr. Pillai: Without getting into specific numbers, I believe that the standard number — and I could be off by a percentage point, senator — is that we are usually looking at approximately 90 per cent of the total budget that would be coming to the Yukon. I think that in the last number of years, the percentage of own-source revenue produced in the Yukon has decreased but certainly an overwhelming majority of the funding that runs the Yukon government comes from transfer payments. It might be between 85 and 90 per cent. I apologize; I don’t have that in front of me right now, but our focus is increasing the own-source revenue, and we feel a responsibility, as Canadians and to Canada, to increase and diversify our economy to ensure we have a larger role in carrying out our part in this economy.
Senator MacDonald: You don’t know the actual number?
Mr. Pillai: No, I don’t have the exact number.
Senator MacDonald: Nobody seems to know the number.
The Chair: You asked that question to the minister, too. At this point, maybe you can send it.
Senator MacDonald: In terms of the revenue you are raising yourself from royalty revenue, from mineral development, do you have a number for those, and are those numbers increasing or are they declining?
Mr. Pillai: The numbers over the last number of years from royalty revenues have been very low. We have one producing mine at this point in time. It sits on Category 8 land, which is specific land that is owned by and is overseen and held by one of our self-governing First Nations. So the majority of royalties are held by that nation. At this point, the remaining royalties that we receive would be from the placer industry. But certainly we have seen a decline, and I believe that is likely connected to the commodity cycles.
[Translation]
Senator Dupuis: Thank you, Minister. You talked about your efforts to attract investors to Yukon. This is my question. We discussed the changes to the legislation, which, in 2015, industry saw as essential and so were made; today, we are hearing a different story. My concern has to do with the ability to offer investors a context that affords some level of certainty. Do these investments currently being made in Yukon predate 2003? What stands out about Yukon’s 2003 environmental legislation is that the legal framework differs from that of Canada’s provinces but is, nonetheless, clear, stipulating that agreements with First Nations override any conflicts with the act. The provisions I’m referring to are section 3, Consultation, and section 4, Final agreement prevails.
I was curious as to whether you would agree that it does indeed provide some certainty that allows you to attract investors, or whether you felt the opposite was true.
[English]
Mr. Pillai: Whether it be our existing government, the previous government, territorial governments in the Yukon — if I understand the question correctly — I always reflect on the fact that our self-governing nations and our modern treaties are very progressive, and we feel that we lead the way in the country with these agreements.
The understanding from all governments is that this is something we feel is a great advantage, and we have a sense of certainty that is built on those treaty foundations. I would say yes, absolutely if I understand the question, and please correct me if I have missed that.
Senator Cordy: I have a quick question, minister, and thank you for being here at what is very early in the morning for you.
Will the changes in this bill create more stability in the Yukon for investment by companies?
Mr. Pillai: Thank you, senator. It’s good to see you again. Yes, I can’t say it enough that our perspective is that the First Nations relationships are so key. When we travel to mining investment and when we are sitting together and round up in Vancouver in January speaking about what is happening with the mining sector, we’ll be sitting there with our First Nation partners.
This process will bring an overall certainty, and I believe that the relationship with our First Nations governments is paramount when we talk about certainty. We will improve the legislation, we will get through the regulatory piece, and we will continue to work on all those aspects.
We have just crafted an agreement in partnership with our First Nation governments for half a billion dollars in new access roads. In order for our government to partner and build those access roads to unlock the mineral potential in Yukon and provide money for own-source revenue, we need good relationships. This bill is just one block in building a foundation that will lead to a sustainable industry.
The Chair: Thank you very much.
Welcome to the second portion of this meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources. We are continuing our study on Bill C-17, An Act to amend the Yukon Environmental and Socio-economic Assessment Act and to make a consequential amendment to another Act.
My name is Rosa Galvez and I’m the chair of this committee. I will ask my senator colleagues to introduce themselves when they have questions.
We will start by hearing from witnesses in the industry by video conference from Whitehorse and Vancouver. In Whitehorse, we have Samson Hartland, Executive Director, Yukon Chamber of Mines; and Jonas Smith, Executive Director, Klondike Placer Miners’ Association, and he is accompanied by President Mike McDougall. Also joining us by video conference is Brad Thrall, President, Alexco Resource Corp., and here in Ottawa, from the Mining Association of Canada, we have Brendan Marshall, Vice President, Economic and Northern Affairs.
We will start by hearing from our witnesses in Whitehorse.
Mike McDougall, President, Klondike Placer Miners’ Association: I’m Mike McDougall, President of the Klondike Placer Miners’ Association, and with me is our executive director, Jonas Smith.
It is my pleasure to appear before you today to provide testimony regarding Bill C-17. The Klondike Placer Miners’ Association represents Yukon’s founding industry of approximately 160 family-owned placer mines across the territory.
This year, our small but vital industry is on track to produce almost $90 million in gold. This has a profound impact on our small jurisdiction, which is otherwise dominated by the public sector.
The bulk of the economic activity resulting from our operations benefits the small and rural communities with limited private sector opportunities. I want to be clear at the outset that we fully support the First Nations' participation in the management of Yukon resources and expect our public governments to meet the consultation obligations set out in the constitutionally entrenched self-government agreements.
We also fully respect the important government-to-government discussions that are trying to reach consensus prior to engagement with other stakeholders, but in our view, the time to engage our industry is now.
The placer industry is the largest single client of the designated office-level of Yukon Environmental and Socio-economic Assessment Board and as such we take great interest in this bill and its predecessor, Bill S-6, and expect to be fulsomely engaged in any and all developments regarding its evolution.
The Klondike Placer Miners' Association has appeared before a number of committees of the houses of parliament over the years, as has Mr. Smith in his capacity with the Yukon Producers Group. In every instance, we have supported the amendments that Bill C-17 proposes to rescind and, in particular, the legislated timelines and exemption from reassessment provisions.
The proponents of this bill have suggested that its passage will restore certainty; however, with respect, our view is the contrary. While we appreciate the political commitment made by all parties to revisit the matters of timelines and reassessment, the fact remains that there is currently no schedule to conclude those talks.
Should Bill C-17 pass as it stands, there will absolutely be a period of uncertainty in the interim, and it’s our view that the investment climate and opportunities for Yukon citizens will suffer as a result.
We are aware that these provisions have their criticisms. Regarding the prescribed timelines, it has been asked why the timelines are required in legislation when the YESAB’s internal policies already meet or succeed them. I would respond with my own question: If the board is meeting or exceeding them, what’s the problem enshrining them in legislation?
We have heard concerns that some feel First Nations do not have the capacity to participate adequately within these timelines, but again, if the board is already meeting or exceeding them, why are we talking about timelines and not addressing First Nation capacity to participate? In fact, First Nation capacity funding is one of the outstanding issues that remain unresolved from the act’s five-year review. We urge the federal government to address this deficit.
Furthermore, while YESAB staff endeavour to meet their internal timelines, they’re not always successful. Also, assessment is but one step in the project-permitting process, which is fraught with many other opportunities for delay.
As such, having hard and fast timelines at this stage will only improve matters for all participants in the process.
With respect to the exemption from the reassessment, section 49.1, the criticism we have heard is that decisions could potentially be made that affect First Nation’s traditional lands without their input. Yet, as discussed in your honourable members’ hearing earlier this week, a memorandum of understanding was signed in April 2016 that formally included First Nations in the decision-making process regarding when an exemption from reassessment would be granted.
Over 100 proponents' projects from both mining and municipalities have been through this collaborative process, and approximately two thirds have been exempted from unnecessary reassessments via section 49.1. When public resources, including First Nations', are not consumed with needless reassessment, capacity is freed up to work on more significant matters. This serves to address my previous point of First Nations’ ability to effectively respond to project applications within the currently legislated and board-policy-implemented timelines. Opponents of Bill S-6 argued that its amendments would result in an adverse effect on the environment, but as I pointed out, dozens of projects have been exempted from reassessment with full First Nation participation because of the April 2016 MOU.
The YESAB is meeting or exceeding the timelines legislated in Bill S-6 in the vast majority of cases. Has the environment been compromised as a result? Of course not.
Madam Chair, we are not immune to the reality of the situation. We acknowledge that the federal, territorial and First Nation governments are committed to passing this bill as quickly as possible, but we would ask you to consider our perspective. The rescinding of the timeline and reassessment provisions without having replacement language in place beforehand will be a step backward in public policy.
We appreciate that this bill will advance reconciliation, and we accept that it will ultimately pass, but we strongly urge you to address its coming into force. All parties have committed to developing replacement language as quickly as possible, but there is no schedule for the completion of those discussions. For certainty in the mining industry, we strongly urge you to consider delaying the bill’s coming into force until this mutually developed language is finalized and agreed upon.
We understand this dialogue is to start early in the new year. We are asking for a mechanism to hold all parties accountable to its conclusion. As the largest client of YESAA, the Klondike Placer Miners’ Association expects and looks forward to being a part of those discussions as soon as possible.
Thank you for this opportunity.
The Chair: I know we are having problems with the translation. I apologize. It’s because of the bad quality of the audio.
Does somebody else from the group in Whitehorse have a statement? Please go ahead.
Samson Hartland, Executive Director, Yukon Chamber of Mines: Senators, it’s good to see you again. I am the Executive Director of the Yukon Chamber of Mines. We’ve been in front of this committee a number of types with the various iterations of this bill and its predecessors.
The Yukon Chamber of Mines is Yukon’s oldest chamber organization, created in 1943. We represent over 400 members in various sectors in the Yukon’s mining economy — everything from service supply companies to prospectors and explorationists, et cetera.
When I entered the position five years ago, we created a five-year strategic plan that identified key pillars in Yukon’s mining economy. As vetted by Yukoners at various orders of government and various sectors of Yukon’s economy, they were ranked in order of importance. First Nations engagement and relations came out on top for a reason.
When we participated in Bill S-6, Bill C-17’s predecessor —
The Chair: I’m sorry, but we have to make sure the translation works. That is, unless my francophone senators agree that we can continue only in English.
Senator Massicotte: How about the French audience?
The Chair: Exactly. That’s what I’m asking.
Maxime Fortin, Clerk of the Committee: There is an audience; it’s televised.
Senator Fraser: Chair, it’s really important that the Parliament of Canada conduct its business in both languages. It is also important that we hear from these witnesses. I don’t think we have a written statement from Mr. Hartland, but we have written statements from all the other witnesses. If necessary, this committee can rely on those, because I’m sure that’s where they make the arguments they care most about. But I don’t think we can continue hearing from witnesses if we don’t have adequate translation.
The Chair: Yes.
Senator Massicotte: I can take two minutes to tell you what they’re going to say.
The Chair: We are going to switch to Vancouver. Maybe the audio works better. We are going to work with the Whitehorse connection. Is this okay with you?
Mr. Hartland: Madam Chair, can you hear us?
The Chair: Yes, we can hear you. The problem is the translation.
I’m going to go ahead with the person in Vancouver.
Brad Thrall, President, Alexco Resource Corp.: Good morning. Madam Chair and committee members, thank you for the opportunity to appear today and provide some industry perspective about this important legislation.
I’m the President of the Alexco Resource Corp. and Chair of the Yukon Producers Group, which represents eight prominent mining and service and supply companies operating in the territory. Alexco is a Canadian mining company and owner-operator of the Keno Hill Silver District north of Whitehorse in the traditional territory of the First Nation of Na-Cho Nyak Dun. I want to use my valuable time today to discuss the importance of the reassessment provision, section 49.1, that is within the Yukon Environmental and Socio-economic Assessment Act and its potential repeal if replacement language is not put in place.
There has been much discussion about the collaborative framework and process that was announced 10 months ago, which was to be in place and used to address the repeal of these important provisions in Bill C-17. Alexco supports a collaborative framework between First Nations, Yukon, Canada and industry to develop replacement language, but we, along with many others in the industry, are concerned that, to date, there has been little progress in moving forward with this process, and there appears to be no commitment as to the timelines to establish this process.
Repeal of these provisions without this framework ready to go will perpetuate economic uncertainty, it will negatively impact the competitiveness of the Yukon, and it will diminish economic and social opportunities for all Yukoners.
Alexco’s Keno Hill Silver District had more than 30 underground silver mines from 1913 until 1989, and it was the second-largest silver-producing district in Canada. In 2006, when we purchased the bankrupt and environmentally compromised district, it was a significant and environmental liability for Canada.
We distinguish ourselves from other resource companies in that we also founded an independent environmental remediation firm, Alexco Environmental Group, or AEG, which specializes in brownfields site cleanup and all aspects of environmental management and permitting. Our work to clean up legacy liability in the district has been conducted through a contractual relationship with Canada, and to date, Alexco has invested more than $22 million and shares in ongoing costs with the federal government. All this investment offsets Canadian taxpayer liability.
We are also a recent producer of silver, lead and zinc from the district and are actively planning to resume production in 2018 pending a successful outcome of additional assessments under YESAA.
Once back in production we will employ over 200 people, which is a significant number in our small jurisdiction. Our annual payroll alone will be in excess of $35 million. There will be numerous contract and business opportunities for First nations and local service providers and enhanced opportunities to support and reflect the social, cultural and environmental values of the community and its citizens.
Madam Chair, we are no strangers to YESAA. We have been through the YESAA process 11 times in the last 10 years, and we are currently going through YESAA for the twelfth and thirteenth times as we speak. I believe our experience in the development assessment process, our relationship with Canada and the environmental cleanup of legacy liabilities plus our mining experience in Yukon make us exceptionally qualified to participate in this important discussion.
The current legislation allows proponents of certain projects to apply to the decision body — usually the Yukon or First Nation government — under section 49.1 so previously assessed projects can proceed without the need for reassessment, therefore avoiding duplication.
Under the existing legislation, slight modifications to operating plans, which are a reality of mining, would generally not require a complete project-wide reassessment. However, if Bill C-17 is passed without replacement language, they would, even though there is no significant environmental or socio-economic impact and no change in the production stream.
Small changes to operations could be dealt with as simple licence amendments and subsequently help ensure sustainable jobs and a sustainable business.
Please understand that we firmly support a rigorous environmental assessment process for new projects and when fundamental changes are made to existing projects. However, small changes to a mine plan or environmental facilities should not require a back-to-square-one assessment. If set back to the previous legislation, uncertainty will prevail, and investment, jobs and benefits and opportunities for residents and communities will be compromised.
Madam Chair, since YESAA was amended, nearly 100 projects have been granted the opportunity to modify permits and licences without having to undergo full reassessment. These projects are not limited to mining and include municipalities and First Nation governments as well.
In our view, the reassessment provision has served exactly the purpose for which it was designed. It has increased efficiency at all levels of government, it has substantially reduced or eliminated duplicative assessments and it has reduced cost to the taxpayer while placing Yukon on a competitive footing with other jurisdictions.
We believe the proper path forward is for all parties involved — Yukon, Canada, First Nations, municipalities and industry — to progress immediately to finalize the collaborative framework process and to mutually develop replacement language to preserve the reassessment and timeline provisions.
Passage of Bill C-17 without replacement language or a clear, concise and expedient process to place to establish this framework will set the Yukon back on its growth path since devolution in 2003.
I thank you for your time.
The Chair: Thank you very much, Mr. Thrall.
We’re going to continue with Mr. Marshall.
Brendan Marshall, Vice President, Economic and Northern Affairs, Mining Association of Canada: Thank you, Madam Chair. I am ready. I was born ready. Just kidding. Seventh inning stretch for some serious proceedings this morning.
Before I begin my remarks, I just want to say that 11 years ago I had the privilege of getting my start professionally as a staffer in the Senate, so I have a lot of respect for the work that you do and for the work that Senate committees do, and I guess an understanding that’s different from an important place that is in many respects misunderstood by many Canadians. So thank you for the opportunity to participate this morning.
For the record, my name is Brendan Marshall. I’m the Vice President, Economic and Northern Affairs, at the Mining Association of Canada.
Mining is the largest private sector driver in Canada’s North, employing approximately 8,500 people, and that accounts for one in every six jobs roughly. Direct GDP contributions in the Yukon, the N.W.T. and Nunavut are approximately 13 per cent, 18 per cent and 21 per cent respectively in 2016; however, the value potential is even greater.
Our research indicates that upwards of 15 mines could start or restart production in the territories in the next decade, with total life-of-mine investment exceeding $35 billion and the potential for even more high paying jobs in the region.
Yukon’s prospects are looking up. Major mining companies such as Goldcorp, Barrick, Newmont and Agnico Eagle are investing in exploration and project development in the territory, the arrival of which could be a tremendous economic boon to the region.
It’s no wonder. It's a geologically attractive region with a strong history of mining on the backdrop of recent and positive infrastructure investments by governments who are working together to deliver needed economic development. The opportunities for Yukon’s indigenous communities, the Yukon government and the Government of Canada are significant, with the potential for Yukon to become a major mining jurisdiction in Canada and globally.
MAC appreciates that for this to happen, positive relationships with Yukon’s indigenous communities are critical. The Canadian mining industry has long recognized the importance of meaningful engagement with indigenous Canadians. Since 1974, mining companies have supported indigenous economic reconciliation long before it was in vogue. The signing of nearly 500 individual agreements with indigenous communities and partners, some 400 of which remain active today, has had a transformative effect on many communities. Those agreements have generated employment, skills training and in some cases royalty or direct equity shares. All the while, companies also pay taxes and royalties to provincial, territorial and federal governments.
Some Yukon examples include the following Victoria Gold signed a Comprehensive Cooperation Benefits Agreement with the First Nation of Na-Cho Nyak Dun for the Eagle Gold project; Western Copper and Gold has an agreement with the Selkirk First Nation; and Goldcorp has agreements in place with Tr’ondëk Hwëch’in First Nation and White River First Nation for the Coffee Project. All are delivering economic benefits to communities.
Focusing on Bill C-17, MAC respects the tripartite process between federal, territorial and Yukon First Nations governments. It’s a process that we as an industry are not part of, but the outcomes of which we are stakeholders to. Indeed, we commend both the territorial and the federal governments for their efforts to rebuild lost trust with their First Nations partners, as when this trust is broken those governed suffer, and our sector is among those governed.
While MAC understands and respects the on-the-ground realities that led to the development of Bill C-17, as a national association, it is our obligation to advise of broader implications and impacts on our industry of such decisions.
Rescinding section 49.1 reviews of non-significant modifications or reassessment, as it’s commonly referred to, will carry potentially negative impacts for the Yukon mining industry and the broader territorial economy. While we have been advised by territorial representatives that a workable solution is possible even if section 49.1 is rescinded, we live in constant reminder of our members’ experience under the previous regime, which was often problematic and prohibitively costly to all parties involved, including local communities, and ultimately resulted in no greater protection to the environment.
Let me describe with a real example what happened under the regime we are at risk of returning to. MAC is aware of one mine, a YESAA-permitted mine, where the following areas that had already been assessed required reassessment under the former law when that company sought an expansion under the former YESAA process. These include socio-economic impacts, hydrogeology, geochemical characteristic of current tailings and waste rock, current operational water management and an entire access road that had been in place for over 20 years.
The consequences were significant. The surface mining operation was interrupted for more than six months, resulting in layoffs. The company in question experienced reputational damage in local communities and significant economic damages due to lost time and start-up costs, which were magnified by market losses due to the persistent drop in copper prices during the period when the mine was inactive. Most significantly, however, it resulted in reputational damage to Yukon and Canada as a destination for mineral investment, a memory the industry acutely recalls and which serves as a basis for our concern with the proposed legislative package and the prospect of a return to this regime.
Unequivocally, MAC is not suggesting that projects or any components thereof should be able to circumnavigate the permitting process. Let me be very clear on that point. What we are strongly recommending, however, is that any component of any project that has already been assessed and permitted and is not impacted by a proposed expansion to a project scope should not be reassessed. This should be the same at the development or expansion stage of a project. No other jurisdiction in Canada does this. Why should Yukon?
On this basis, we recommend the following: Make provision for section 49.1 reviews of non-significant modifications or reassessment amendments to be rescinded only after an 18-month period following the date of legislative enactment. The proposed delay would provide time for meaningful consultation to take place so that the merit and importance of the measure as currently enacted could be properly assessed with all affected stakeholders.
Or failing that, in the event that a delayed implementation is not possible, strike a consultation process at the earliest practicable moment so that the merit and importance of the measure as currently enacted could be properly assessed with all stakeholders and a policy or other solution that preserves the spirit of the current practice can be put in place.
Thank you for your time. I would be pleased to take any questions you may have.
The Chair: Thank you very much. We’re going to ask questions to the four witnesses. I will give privilege to the critic of the bill, Senator Patterson.
Senator Patterson: Thank you, Madam Chair. I think the problem we have here is that although there are recommendations that there be a delay in implementation or in the coming into force of the bill, that could only be done by an amendment to the bill, I’m advised by our legal adviser. Delaying the coming into force would require an amendment to the bill. With no coming into force provision in the bill, the bill would come into force with Royal Assent.
So, with respect to the industry folks who have spoken today, your advice that we should delay the coming into force will throw us right against the advice of federal and territorial ministers and First Nations who say you have to pass the bill without amendment before any conversation takes place.
So I think we are forced to follow the advice of the Mining Association of Canada that we strike a consultation process at the earliest practical moment and move quickly forward.
Now, it seems to me — and I’d like to ask Mr. Thrall about this — that Minister Pillai told us about one of the realities that is causing the delays with timelines and maybe also problems with the reassessment process. He said quite frankly to us that First Nations are challenged with engaging in projects. They have few resources. He said sometimes they have one or two people in their lands department. They’ve got to evaluate a huge project, half a billion dollars or more.
Mr. Thrall, you’ve worked with the Na-Cho Nyak Dun on your great project, and congratulations on what you’ve done and the jobs and royalties you’re contributing to the Yukon and Canadian economies. Would you have a comment on whether First Nations need to be better supported to develop capacity to engage and make this process efficient and timely? Would you have a comment on that?
Mr. Thrall: Thank you, senator. Yes, I think my comment would echo what you’ve stated. If you look at our relationship with Na-Cho Nyak Dun — I made the example that we are in our thirteenth assessment — that’s just one company within the traditional territory of Na-Cho Nyak Dun. There are many other companies.
So when you add all of the activity together within Na-Cho Nyak Dun’s territory, it is a significant strain on their resources, on their capacity. They do have budget constraints, like we all do. I do think that’s an important topic that needs to be addressed, that First Nations do need the capacity, the support, the funding if they’re asked to continually be part of this process, which is a very important process.
Senator Patterson: I’d like to turn to the representatives of the placer miners and the Yukon chamber who spoke to us and be straight up with you here. I got your clear message that you strongly urge us to address the date of coming into force of the legislation. We need a mechanism to enforce timelines. There will absolutely be a period of uncertainty, you said, while this replacement language is being developed.
But I have to put it to you: As I just said, addressing the coming into force means an amendment to the legislation. Even as the critic of the bill, I don’t feel bold enough to stand up to the Government of Canada, the Government of Yukon and the Council of Yukon First Nations and say we’re going to disregard your clear advice to pass this bill without amendment.
Do you understand the dilemma we face as a committee? Would you agree that what we should be doing, if we are indeed to pass the bill without amendment, is making strong recommendations — we call them observations here in the Senate when we make a report on legislation — that a priority be given by all parties to developing a timeline for developing replacement language, and perhaps that the committee be informed of progress in that regard, and even perhaps that we address the capacity for First Nations issues that have been raised so clearly by the minister and Mr. Thrall? Would you accept that this is the only option we have right now?
Mr. McDougall: Thank you, senator. I do agree with your observation. I apologize for my naivety in terms of legislation development in Canada. However, I do think that what you propose is workable for us. I think it’s key that the language be developed as soon as possible with consultation with industry, and I also agree with your observation that the First Nations need to be properly and fully funded to engage in this process. Samson, do you have anything to add?
Mr. Hartland: Sure. Thanks for the opportunity. We’ve been working with our partners at the Yukon government and the federal minister’s office as well as the Council of Yukon First Nations on exactly that -- a timeline moving forward. We know that since we came out to support the passage of Bill C-17 about 10 months ago, there’s been very little progress on establishing a timeline since then. In any event, we do understand and respect that those negotiations and those discussions take time between orders of government, and at some point industry will have that opportunity to be at the table.
We’ve had commitments from the federal minister saying that once amendments have been made, the department is going to work with Yukon First Nations, Yukon government and stakeholders such as your organization to review these issues in order to identify possible short-term administrative or long-term legislative solutions. We also received the same commitment from Grand Chief Peter Johnson, who responded to our concern about reassessments and timelines saying, “I’m convinced we can resolve these issues by way of constructive discussions.”
We’ve continued to have those kind of constructive discussions informally over those 10 months, but we look forward to a firm schedule moving forward that we can clearly articulate to our membership and the industry at large, to bring some certainty to the fact that these issues will be worked on and there is a commitment to work on them within a prescribed a period of time of some sort.
The Chair: I want to repeat what you said for the sake of translation. What I heard you say is that it is extremely constructive that all the stakeholders have this opportunity to sit down around the table. You have agreed with the observation made by my colleague, Senator Patterson?
Mr. Hartland: That’s correct.
The Chair: Thank you.
I have a question: You know your laws are changing a lot, and all of you have mentioned on many occasions the lack of technical skills and research in technical resources. In the example that was given, they say that there was a need to redo hydrogeology, the geochemical characteristics of current tailing and waste rock, current operational water management and an entire access road that had been in place for 20 years.
Can you please confirm that this is not going to stop with our legislation? These are major changes, and some things are going to need to be re-studied, re-dimensioned and revised because of the major changes, in particular with respect to permafrost and roads.
Could the reason be that sometimes delays are needed, or that you cannot just circumvent these new realities?
Mr. Hartland: I’m sorry, Madam Chair; is that question directed at anybody in particular?
The Chair: Yes, because you are the engineers in the mining industry. Maybe Mr. Thrall in Vancouver can comment on that.
Mr. Thrall: Yes, thank you, Madam Chair.
The example that Brendan gave was a different company, but I can give you the experience we have had. What we are suggesting is that the reality of mining is that once a mine is put into place, whether it is an underground, narrow-vein mine or a large, open-pit copper or gold mine, the fact is there will be changes. Commodity prices and operating costs change; it’s just the nature of the industry.
What we have experienced is that as we progress through our mine plans, we will have minor changes, but under the previous legislation, without the reassessment provisions, there have been a number of times where existing facilities that are needed for the future have been caught up in reassessments.
Examples are a dry stack tailings facility and the location of a mill, where there has been little or no change whatsoever in these facilities but they have undergone assessment again.
Those are the types of examples that concern us with respect to the loss of the reassessment provisions.
I would agree that there are likely going to be other significant changes as the mine evolves that do require further study and reassessment. But our experience is that the vast majority of expansions are similar to what we have already done, and a number of those types of facilities should not be caught up again in another assessment.
[Translation]
Senator Dupuis: Thank you. I would like to pick up on what the president of Alexco Resource Corp. just said about changes and types of changes. If I understand correctly, things inevitably change as a mining project progresses, and I think we can all appreciate that. While some changes are minor, others are major, and others, still, affect your actual work, in other words, the implementation of the project as it evolves. Some changes depend on external factors, such as climate change. What I am trying to understand is whether any consensus exists in the mining industry as to what constitutes a minor change versus a major one. It may be another term that you use, but you see what I am getting at. I am talking about the difference between a predictable change -- one that may even be known at the outset of a project, once it has been assessed and approved -- and a bigger, more significant change. Is there any industry consensus on those concepts?
[English]
Mr. Thrall: Thank you. I can follow up on that.
I would suggest there is a lack of consensus across not only industry but even within the assessment branches as well as the regulatory permitting authorities on what definitions of terms like “significant” really are.
That is an area that needs to be addressed going forward in the legislation so that everybody has the same definition of what a significant change is. It can be a subjective term, and many people have different viewpoints on what that might be.
Mr. Marshall: That raises the important point that the mining industry is complex. I would suggest it is probably appropriate that there is not one black-and-white definition of what significant versus non-significant is, because the reality is that every project is different. Every project’s geology is different and every project’s climatic reality is different. There are myriad complexities that come to bear on the ability of a company to do mining in a responsible way.
In the regulatory process, when a project is moving forward for permitting, that project has a scope. With respect to the project proponent’s proposed scope, that can be used as a measure for that particular project through which to assess the degree or extent to which a proposed change is materially significant or not.
To think that we can have one very cut-and-dried measure or yardstick through which to assess the materiality of significance of a proposed change is not the appropriate model. I would just suggest that the degree of complexity requires a degree of per-project assessment.
[Translation]
Senator Dupuis: Given your answer, Mr. Marshall, I have another question. Actually, I was not trying to figure out whether there was a desire to lay out in the legislation what constitutes a significant change versus a minor one. I’m trying to get a sense of the reality on the ground. Here, too, in the Senate, it could be said that every senator is different. Let’s say that we have a whole called the Senate, and that we have to deal with a certain reality, a certain understanding, certain factors and certain elements. I am trying to get a sense of what goes on in your industry. No matter the industry, occupation or profession, varying levels of importance are attached to activities when it comes to their execution. Clearly, a certain number of different projects share some general level of activity. When you move beyond that, past those factors, you are dealing with another project or one that has been significantly altered. At a practical level, does that sort of agreement exist in your industry? I don’t mean in terms of setting out definitions in the regulations or act, but in terms of that reality on the ground.
[English]
Mr. Marshall: I don’t think that I can answer the question any more clearly than I tried to in my previous response.
You’ll get different proponents who will have different projects that will have different vantage points on which they will progress toward either an assessment or a reassessment. I’ll try and give a high-level example to build on the case that was presented earlier whereby, in Alexco’s example, they wanted to move the mill on their site. This is me hypothetically speaking about a project I’m not perfectly familiar with, but if all they’re going to do is move the mill from location X to location Y, they are not going to be accelerating the rate of mining, they are not going to be producing a greater volume of tailings, they are not going to be changing the scope of the project, it’s really a question of moving one piece of infrastructure to another place on the site plan, that arguably would not have an environmental impact. So you could look at that as an example of how this isn’t a significant change relative to the proposed scope of the project.
Another example could be that with this proposed expansion it will significantly accelerate the rate of mining; it will have a change to the requirements for waste management and require a different degree of tailings facility or an increase in volume of storage or something along those lines. There could be a considered view that that is a significant change to the original project scope and that it may merit a greater level of scrutiny.
Again, I would underscore that our view on this is we are not seeking to circumnavigate the regulatory process. That is not our view in this exercise whatsoever. What we are trying to do is reduce the extent to which previously assessed pieces of a project that do not have a material change to the project’s scope are not required to progress through an assessment again. That results in increased capacity from First Nations, increased capacity from YESAA, increased cost in time to the company.
We have seen examples where a process that resulted in no improvement to the environment from the current impacts of the project in its current state resulted in a significant cost to the territory, to the company, to the local communities, and that’s a situation or circumstance that we would really like to be able to avoid in the future.
The Chair: Thank you very much for that clarification.
Now I want to thank all the witnesses for their insightful presentations and this conversation. Your availability to answer our multiple questions is much appreciated.
[Translation]
Now we can proceed with our clause-by-clause consideration.
[English]
It’s public, so everybody can stay and hear this.
Senator Patterson: Point of order, Madam Chair?
I would suggest we can consider the clauses as a whole so as to allow the committee time to consider observations, if it’s agreed that we pass the bill without amendment.
The Chair: Yes, it’s agreed. Can you propose this?
Senator Patterson: You can do them as a group.
[Translation]
Senator Dupuis: Do we have the document that goes along with the clause-by-clause study?
[English]
The Chair: Do you have a copy of the bill?
[Translation]
Senator Dupuis: Normally, committees have a document that helps with the clause-by-clause study. Do we have that document?
The Chair: No, we do not.
Senator Dupuis: The next time, would it be possible to obtain that document along with the agenda indicating that we are to proceed with clause-by-clause consideration? Thank you. That’s exactly what I wanted.
[English]
The Chair: Is it agreed that the committee proceed to clause-by-clause consideration of Bill C-17?
Hon. Senators: Agreed.
The Chair: Shall the title stand postponed?
Hon. Senators: Agreed.
The Chair: Shall clause 1 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 2 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 3 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 4 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 5 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 6 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 7 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 8 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 9 carry?
Hon. Senators: Agreed.
The Chair: Shall the title carry?
Hon. Senators: Agreed.
The Chair: Shall the bill carry?
Hon. Senators: Agreed.
The Chair: Thank you.
Does the committee wish to consider appending observations to this report?
Hon. Senators: Agreed.
The Chair: Does the committee wish to go in camera for the discussion of the observations?
Hon. Senators: Yes.
The Chair: Unanimously.
(The committee continued in camera.)
(The committee resumed in public.)
The Chair: Is it agreed that I report this bill, with observations, to the Senate?
Hon. Senators: Agreed.
The Chair: Agreed. Thank you very much. This is my first experience.
Senator Massicotte: I’d like to make a comment, and I’m glad to say it in public.
As most of you probably don’t realize, because time slips by, this will be the last meeting of the Energy Committee by our famed Senator Fraser. Not only has she been part of this committee for maybe a year or a-year-and-a-half and has contributed very much, as we’ve seen this morning, but she’s contributed immensely to this institution for a long period of time. She’s one of the foundations, in my thinking, of the good work we do.
I formally, on behalf of all of us, want to thank you for your commitment, your engagement and your honesty. I think you’ve been a phenomenal senator. I think you’re the pride of the Senate, and I want to thank you very much on behalf of all of us.
Hon. Senators: Hear, hear!
The Chair: I want to wish you all a very happy Christmas. Enjoy the holidays, because I think they’re going to be very short. See you in February. Thank you very much.
(The committee adjourned.)