Winnipeg, Manitoba / Winnipeg (Manitoba)
---Upon commencing on Tuesday, September 17, 2002
at 8:35 a.m. / La conférence débute le 17 septembre
2002 à 8 h 35
HON. MARYANN MIHYCHUK (Minister of Industry, Trade and Mines, Manitoba):
Good morning, everybody. I would ask everyone to take their seats, please, so that we can get the session started.
Welcome. We are very pleased to see you and to welcome you to Winnipeg, Manitoba. We hope that you have had a safe and pleasurable trip and visit.
Bonjour to everyone. It is our pleasure to be hosting you here today for the mineral section of the Energy and Mines ministerial meeting.
Unfortunately, our federal representative, Minister Herb Dhaliwal, has been called away on a personal emergency and cannot be with us today.
It has been just over one year that Mines Ministers met, and that was in Quebec, which hosted a beautiful event. Since that time the world has changed. That's true for every country in the world, including ours.
I want to thank you for coming to the 59th annual meeting of the Mines Ministers.
The mining industry plays a vital role in the lives of all Canadians. In Manitoba, as in the rest of Canada, mining continues to create jobs for highly skilled workers and contributes in a very large and significant way to our economy and to our high quality of life.
Recognizing the importance of the mining sector to the Canadian economy, it is therefore disturbing to note some recent indicators of the health of this industry.
Over the past 25 years Canadian reserves of base metals have declined dramatically. Copper reserves have declined by 56 per cent, nickel by 38 per cent, and zinc by 67 per cent. At the same time, exploration investment in Canada has declined by over 40 per cent since 1997.
This is not a sustainable trend for the mining sector in Canada.
In Manitoba, concerns with the long term viability of the industry are underscored by the dramatic impacts of recent mine closures. These closures have affected the communities of Lynn Lake, Leaf Rapids and Bassett. For the first time since 1963, employment in this sector has dropped below 4,000 individuals.
We as a government are keenly aware of the importance of sustainability in the mining sector and its effect on the communities that it supports.
It is my sincere hope that our discussions today will allow us to identify strategic opportunities to meet the challenges of a new century of mining here in Canada.
Before we begin the formal part of our agenda, I would like to remind all participants that following each presentation this morning there will be an opportunity for questions and discussion. Questions and comments will be entertained from ministers first, followed by industry representatives seated at the table. Time permitting, questions will be open to all delegates on the floor.
I would like to introduce the deputy minister of Natural Resources.
George, do you want to say a few words?
MR. GEORGE ANDERSON (Deputy Minister of Natural Resources, Canada): Thank you very much. I am substituting, as you know, for Mr. Dhaliwal. He has unfortunately gone back to Ottawa. He has been cancelling a number of things, including his trip to Japan, which was meant to start tomorrow. So I hope you will understand the special circumstances of Mr. Dhaliwal's not being able to be with us, but it has to do with family matters.
We are looking forward to a very good discussion. I can second the comments of my co-chair in terms of the importance of the industry and the focus that we would like to bring to it.
J'attends une très bonne discussion lors de la journée, et je suis très content d'être ici. Merci.
HON. MARYANN MIHYCHUK: Thank you very much.
I will call on the secretariat to give us instructions. She will tell us how things are going to work.
MS JOHANNE KASZAP: Thank you.
Good morning, everyone. It is with great pleasure that the Canadian Intergovernmental Conference Secretariat provides its services to the 2002 Energy and Mines Ministers' Conference in Winnipeg.
I would like to make some brief comments regarding administrative and technical arrangements made for this meeting.
Our services include the provision of simultaneous interpretation. In this regard, I would like to remind all delegates to activate and deactivate their microphones before and after they speak to help the interpretation services.
Proceedings can be received in the following manner through your server: le français au canal 2, English on Channel 1, and the floor on Channel 0.
I would like to ask all delegates to leave their receivers in the room at the end of the meeting.
Veuillez prendre note que les délibérations d'aujourd'hui sont enregistrées et que le secrétariat conservera les bandes sonores dans ses archives comme document intergouvernemental pour une période de trois ans.
Le bureau du secrétariat est situé dans la salle Arrow. Vous pourrez obtenir nos services en contactant Marjolaine Proulx.
The secretariat office is located in the Arrow Room. I invite you to use the secretariat telephone numbers for your incoming voice and fax communications. These numbers can be found on the back of your conference pass.
Messages received will be posted on the message board located at the entrance of the conference room.
To place a call, you can use the telephones installed in the delegates' lounge in the west ballroom.
Please take note that cellular phones should be turned off during the meeting.
There are also some computers giving access to the Internet installed in the delegates' lounge.
Vous trouverez dans la salle une table pour les documents et les présentations. Tous les documents de la réunion seront affichés sur le site web de la conférence vers midi.
All documents will be posted on the conference website.
I would like to remind you that social events will depart from the entrance door of the Fairmont.
We will be pleased to help you in any way we can during the conference. We wish you a very successful conference.
L'HON. MARYANN MIHYCHUK: Merci.
We will now go around the table, and I would ask ministers to introduce themselves.
It is my understanding that Ontario and Quebec are leaving early in today's agenda, so, for that reason, given the importance of those two jurisdictions to mining in Manitoba, I will provide a bit more discretion in the timing that we allow for this. Normally it is a fairly brief introduction, but if ministers wish to make a brief statement, I think that it would be important hear, especially from those two jurisdictions that unfortunately will be leaving us before the closed session.
I would turn to Quebec.
Mme RITA DIONNE-MARSOLAIS (Ministre délégue à l'Énergie du Québec): Merci.
Rita Dionne-Marsolais, ministre déléguée à l'Énergie du Québec et députée de Rosemont, une circonscription de Montréal.
Pour l'instant, madame la présidente, si vous me permettez, je vais attendre quelques présentations avant d'avoir des réactions.
L'HON. JEANNOT VOLPÉ (Ministre des Ressources naturelles et de l'Énergie pour le Nouveau-Brunswick): Jeannot Volpé, ministre des Ressources naturelles et de l'Énergie pour le Nouveau-Brunswick.
HON. RICHARD NEUFELD (Minister of Energy and Mines, British Columbia): My name is Richard Neufeld and I am Minister of Energy and Mines for British Columbia. My constituency is in northern British Columbia, a constituency called Peace River North.
MR. LAWRENCE SPANNIER (Deputy Minister of Industry and Resources, Saskatchewan): My name is Larry Spannier. I am the Deputy Minister of Industry and Resources, representing Minister Eldon Lautermilch, who unfortunately had to return to Regina last night to deal with some pressing issues.
HON. LLOYD MATTHEWS (Minister of Mines and Energy, Newfoundland and Labrador): Good morning. My name is Lloyd Matthews. I am the Minister of Mines and Energy, St. John's, Newfoundland; St. John's North District, M.H.A.
HON. JIM ANTOINE (Minister for Resources, Wildlife and Economic Development, Northwest Territories): Good morning, everybody. My name is Jim Antoine. I am from the Northwest Territories. I am the Minister for Resources, Wildlife and Economic Development. My constituency is called Nahanni, which is the southwestern corner of the Northwest Territories.
MS ROSEMARY KEENAINAK (Sustainable Development for Nunavut): My name is Rosemary Keenainak and I am representing Minister Akishiku(ph), who unfortunately had to go back due to a family emergency as well.
HON. SCOTT KENT (Minister of Energy, Mines and Resources, Yukon): My name is Scott Kent. I am the Minister of Energy, Mines and Resources for the Yukon government. I represent the riding of Riverside in downtown Whitehorse.
MR. KEN SMITH (Deputy Minister of Energy, Alberta): Good morning. My name is Ken Smith and I am Deputy Minister of Energy for Alberta. I am representing the Hon. Murray Smith this morning, who could not be here.
HON. TIMOTHY OLIVE (Minister of Natural Resources, Nova Scotia): Good morning. My name is Tim Olive and I am the Minister of Natural Resources for Nova Scotia. I am a member of the legislature from Dartmouth South.
HON. JIM WILSON (Minister of Northern Development and Mines, Ontario): Jim Wilson. I am the Minister of Northern Development and Mines for Ontario.
Madam Chair, I don't have much to say at this time, other than that I will be ably replaced. I have to go back to a cabinet meeting, which I didn't expect I would have to go back to. So I am not sure if I will still be the northern development minister at the end of the day, but it is starting off all right.
--- Laugher / Rires
I will be replaced ably by my deputy minister, Cameron Clark.
It is good to see many of you again at this annual conference. It is good to see some of the new ministers here.
Thank you, Madam Chair.
HON. MARYANN MIHYCHUK: I am MaryAnn Mihychuk. I am the Minister of Industry, Trade and Mines, and I represent the riding of Minto, which you all passed through from the airport coming downtown.
MR. GEORGE ANDERSON: Our first substantive item of the morning is a presentation by the Mining Association of Canada, and I will turn to Jim Carter to introduce the issue.
MR. JAMES E. CARTER (Chairman, Mining Association of Canada, and President and Chief Operating Officer, Syncrude Canada Ltd.): Thank you.
MR. GEORGE ANDERSON: Perhaps we should do a tour de table of our industry representatives.
Steward, would you like to start off?
MR. STEWARD GENDRON (Voisey's Bay Nickel Company Ltd.): I'm Steward Gendron of the Voisey's Bay Nickel Company.
MR. DOUG HORSWILL (Teck Cominco): Doug Horswill. Teck Cominco.
MR. STEPHEN ORR (Barrick Gold Corporation): I'm Stephen Orr and I'm with Barrick Gold Corp.
MR. PETER R. JONES (Hudson Bay Mining and Smelting Co. Ltd.): I am Peter Jones, with Hudson Bay Mining and Smelting.
MR. JIM POPOWICH (Fording Coal Ltd.): I'm Jim Popowich, with Fording, and I am Chair of the Coal Association.
MR. JIM CARTER (Syncrude Canada Ltd.): Jim Carter. Syncrude Canada.
MR. GORDON PEELING (Mining Association of Canada): Gordon Peeling. Mining Association of Canada.
MR. BILL MERCER (Noranda Inc.): Bill Mercer. Noranda.
MS. EIRA THOMAS (Navigator Exploration Corp.): Eira Thomas. Navigator Exploration.
MR. BILL FERGUSON (Tantalum Mining Corp. Ltd.): Bill Ferguson. Tantalum Mining Corporation of Canada.
MR. GRAHAM NICHOLLS (Ekati Diamond Mines): Graham Nicholls. BHP Billiton Diamonds.
MR. DEREK PANNELL (Noranda Inc.): Derek Pannell. Noranda.
MR. RICHARD ROSS (INMET Mining Corp.): Richard Ross. INMET.
MS. RITA MIRWALD (Conmeco Corp.): Rita Mirwald. Conmeco.
MR. GEORGE ANDERSON: Thank you very much. As you can see, we have very impressive representation from industry here today, and a good cross-section of different aspects of industry, and we are looking forward to their contribution.
Now I will turn to Jim Carter, who will introduce the presentation of the Mining Association of Canada.
MR. JAMES E. CARTER: Good morning, ministers, ladies and gentlemen. I am Jim Carter, President and Chief Operating Officer of Syncrude Canada Ltd., and I am also Chair of the Mining Association of Canada.
I thank you for giving us the opportunity to reinforce the key messages contained in our submission.
Remaining competitive and maintaining our dominant position in an increasingly competitive global market requires partnership and support from all levels of government and action to resolve the important policy challenges facing our industry.
The need to act now cannot be overstated.
Today I will touch on our industry's economic situation and how our record on productivity and innovation has helped us to weather protracted economic downturns.
We will also discuss the federal innovation strategy and our strong desire to be partners in this very important initiative.
We also wish to call your attention to two urgent matters affecting our industry which require your immediate attention: the need for a globally competitive tax regime and the Kyoto Protocol.
In a separate presentation, Bill Mercer, Chair of the Prospectors and Developers Association of Canada, will address issues of concern to the exploration community.
Graham Nicholls, Vice President of External Affairs for BHP Billiton Ekati and Co-chair of the Industry-Government Overview Committee, will then talk about the need for ministerial support for investment in northern geoscience and for swift action to implement the Kimberley Process.
Last year we focused on the need for an internationally competitive investment and tax regime. We also highlighted the opportunity for increasing aboriginal participation in mining, the need for gold sector support, and for progress on orphaned and abandoned mines.
These issues have not disappeared, but we have made some progress.
Mining taxes have been reduced in several provincial jurisdictions. Important changes to the Canadian Environmental Assessment Act, which are now being examined by Parliament, should make the federal assessment more efficient, timely, effective and less costly, thereby improving Canada's investment attractiveness.
There has been progress to improve the northern operating environment to ensure that there is adequate funding for infrastructure and geoscience. Working with our stakeholders, we have taken important steps to address the legacy of orphaned mines.
You should also be aware that we support the gold sector recommendations, which have been presented to ministers for your consideration, but there are still major issues unresolved.
First, a few words about the state of our industry.
Early last year, although the Canadian economy was booming, our industry suffered a protracted recession, exacerbated by the September crises. There were exceptions, in that some companies reported stronger earnings; the result of concerted actions to reduce costs.
Unfortunately, though, the recovery was short-lived. Most minerals and metals missed the upside of a full price cycle.
While some prices have recovered slightly, most remain well below their five and ten-year averages.
This situation is expected to remain through to the end of the year, with the hope that the base metal sector is poised for stronger growth.
Our challenge is compounded by a shift in mining investment toward countries with high geological potential, low production costs, and a new generation of more favourable, globally competitive fiscal and regulatory policies.
Canada is slow to realize this. It is no longer good enough to be as good as our global competitors. We must do better than that.
Through it all our industry continues to be an important contributor to Canada's social and economic well-being. The list that you see on this chart highlights much of what you already know about our industry. We are an important engine of economic activity and growth in this country and, like all global competitors, our industry success is directly linked to its significant investments in research, innovation and productivity.
Recognizing and understanding this connection is now even more important in light of the federal government's timely initiative to manage knowledge as a national asset, to fill critical gaps in Canada's innovation capacity and to leverage the role of innovation in the Canadian economy.
This strong foundation cannot be taken for granted. We must work to strengthen it and build upon it as we face tough global competition for a limited pool of investment dollars.
We are pleased that the Government of Canada has taken a more inclusive approach to the global knowledge-based economy by recognizing that all industries, from natural resources to manufacturing to services, are contributing to Canada's competitive advantage. In setting the right business and regulatory environment, the government has to develop an approach that is bold, assertive, action oriented, and cognizant of multi-stakeholder interests and competitive challenges.
We are prepared to play a role.
To improve our chances of succeeding, we believe that the government needs to create a globally competitive tax system, commit to improve the investment climate, provide a cutting edge regulatory and policy environment, and step up efforts to eliminate barriers to innovation and competitiveness.
Our industry is fully engaged in the process. We will actively work with government to perform the industry analysis, to identify key innovation priorities, to develop recommendations, and to draw up practical and manageable plans of action for our sector.
The federal innovation strategy is an excellent opportunity to overcome the many critical policy challenges facing our industry, particularly those issues which go to the heart of creating an attractive and competitive investment climate in Canada and a globally competitive domestic mining industry.
I would like to share with you an example of how one regulatory approach needs to be carefully re-examined.
While federal and provincial government policies support the notion of recycling and the sustainable use of minerals and metals, current regulations limit recycling because many recyclable materials are caught in regulations that have to handle hazardous waste destined for landfill, inhibiting their use as a recycling feed.
The social, environmental and economic benefits of metal recycling are huge, but new and proposed amendments to existing federal regulations threaten to perpetuate or increase regulatory barriers, further undermining the viability of the recycling industry and the potential for enhanced recycling access in Canada.
At risk in the short and long term is the viability of key Canadian smelters.
The growth and sustainability of the domestic metal recycling industry hinges on governments' ability to create a regulatory environment that encourages further investment and innovation.
In sharp contrast, measures that put up barriers, increase costs or limit access to recyclable materials discourage recycling, encourage waste disposal, and drive investment and jobs to the United States and elsewhere. We need to change course on this now.
Taxation remains one of the key factors in attracting mineral investment in Canada. Progress has been made by most provinces and territories, including a recently announced tax credit on exploration by the Government of Quebec. We applaud these jurisdictions. Unfortunately, we have seen little progress by the federal government to extend the corporate tax reductions announced in Budget 2000 to the resources and mining sectors. To this issue I now turn.
The Canadian mining sector, unlike most sectors of the Canadian economy, pays three levels of taxation. First there is the federal corporate income tax, then we pay provincial corporate income taxes, and we pay provincial mining taxes.
The average federal-provincial-territorial statutory rate in the mining industry is 54.7 per cent, compared to 32.4 per cent in the manufacturing and processing sector.
While most investors focus on statutory rates, we do recognize that statutory rates are only part of the equation. Several federal and provincial tax measures apply to mining, including the resource allowance, investment tax credits, federal and provincial capital taxes, the provincial mining tax holiday, and provincial processing allowances, which have had the effect of either increasing or reducing the tax paid by the companies from the statutory rate to the effective rate.
To ensure that we include all federal and provincial tax measures, PriceWaterhouseCoopers provided a life of mine analysis to reflect the average life of mine tax for a typical Canadian gold mine, and the graph shown concluded the following.
The statutory rate is at 54.7 per cent, as you can see on the left-hand side of the chart.
The current PriceWaterhouseCoopers gold model average tax rate is 39.9 per cent.
The average tax rate, if we were to apply the 7 per cent rate reduction received by manufacturing and processing, would go to 35.3 per cent. The average tax rate with a 7 per cent rate reduction, but no resource allowance, would bring it back to 45.9 per cent.
The average tax rate with the 7 per cent rate reduction, no resource allowance, plus the full deductibility of provincial mining taxes would see it go to 42.8 per cent. And the average tax rate with a 7 per cent rate reduction, no resource allowance, and 50 per cent deductibility of provincial mining taxes would see it at 44.1 per cent.
Similar results were provided for the copper analysis and, clearly, the only competitive benefit to our sector is the full rate reduction of 7 per cent.
If you refer to the previous chart you will see a line across it that shows manufacturing and processing at 32.4 per cent. So, clearly, getting it down to 35.3 per cent, with the 7 per cent rate reduction, is the competitive benefit that we need to realize.
You also have at your table a handout on the provincial tax rates, because this analysis used an average aggregate for Canada. In that handout you will see the breakdown.
In addition to corporate taxes on profits, many governments continue to rely on capital taxes and other non-profit taxes. Capital taxes are inequitable. They lack efficiency and fairness and simplicity, and are not used by our competitors because they impede growth. In fact, Canada is the only G8 country to impose a tax on capital.
Mining is a capital intensive industry, with a highly cyclical business pattern. Capital taxes are profit insensitive, they hit us during downturns, they kill jobs, and they are a disincentive to productivity and innovation.
This is the third Mines Minister's Conference in as many years in which we have raised our tax concerns. Reform is needed now.
We ask that you put us on equal footing with the other sectors of the economy and reduce our federal corporate tax rate. The existing provisions for mining must be retained in recognition of provincial tax authority, the nature of the depleting resource, and the cyclicality of our industry.
If Canada wants to be the prime choice for investment and have a clear North American competitive advantage, further reduce the federal corporate tax rate to 17 per cent, as suggested by the Canadian Chamber of Commerce.
The provinces need to do their part as well. All governments, for example, must work together to eliminate all capital taxes, such as the province of Alberta has done.
We live in a rapidly changing global economy. We support Finance Minister Manley when he states that "we need to create advantages in areas where Canada can take on the world and win."
I would now like to turn to another important issue -- the uncertainty surrounding the Kyoto Protocol, Canada's commitment to ratify it by the end of the year, and our concerns about our ability to compete.
Achieving Kyoto will be a very difficult challenge for Canada, given the ambitious targets and time constraints imposed by the protocol. In trying to meet this commitment we must collectively ensure that we do not underestimate the constraints of available technology, nor the effects on domestic competitiveness and investment.
For many years our industry has worked hard to improve existing processes, to reduce greenhouse gas emissions, and to improve energy efficiency at its operations. We have found that improved energy efficiency provides substantial benefits, including the potential to reduce costs and to increase productivity.
Continued R and D is crucial and needs to be further supported to capture the opportunities of improved energy efficiency, and to further stimulate innovation and productivity.
On our own and working with others, we have improved existing processes through research and development and the deployment of innovative energy technologies.
At Syncrude, for example, continuous improvement in technology for the extraction and processing of oilsands has helped us to reduce our energy consumption by 40 per cent at our new Aurora mine. These and other actions will result in a 2 per cent per year reduction in CO2 emissions, per unit of output, for a total 42 per cent reduction by 2008.
Indeed, our sector has a stellar energy efficiency record and has made a major contribution to Canada's climate change strategy to date.
We can and we will continue on this path, as price takers and lower energy consumption improves our competitive position.
We are prepared to implement practical and economically feasible measures that can build upon the progress which we have achieved to date, but we believe that the Kyoto Protocol is only one of the avenues available to combat the problem of climate change, and we believe that the Kyoto Protocol has inherent flaws that risk, if not managed properly, putting our sector at a significant competitive disadvantage.
The fact that some countries are not subject to the provisions of the Kyoto Protocol is an enormous concern to our industry, our cost competitiveness and our ability to maintain our share of export markets. This is a significant risk to our industry.
Our industry is a price taker, facing intense global competition from producers in countries with less stringent or no Kyoto-related emissions reduction obligations. We do not have the ability to pass cost increases on to our customers.
I refer you to the chart in our Mines Ministers' submission which lists Canadian mineral and metal commodities and which lists our principal competitors and whether or not they are signatories to Kyoto. As you will see, in virtually all instances our sector is competing against countries that will not have to bear the potential burden of higher energy costs imposed by Kyoto.
The chart, based on a study conducted by Brook Hunt, a global minerals and metals consulting firm, illustrates the dramatic effect that Kyoto will have on the Canadian non-ferrous smelting and refining sector; a cost disadvantage which would be difficult to overcome in an increasingly competitive global marketplace; a cost which our competition will not have to incur.
We need to get it right. We urge the Government of Canada to conduct a sound analysis of the social, environmental and economic costs and benefits of achieving Kyoto, including the impact on investment and the global competitiveness of our industry.
Future investment is at risk. We urge the federal government to establish an industry-government working group to provide the detailed economic analysis needed to make more informed decisions, including practical alternative approaches to respond to the climate change challenge.
To sum up, Canada's status as a global leader in the mining industry and in terms of Canadian productivity is a major achievement. The global minerals industry is fiercely competitive, and domestic factors that discourage investment have created a significant competitive challenge.
Most provinces have taken action recently to make their jurisdictions more tax competitive, and they should be commended. Further action, however, by all governments is needed to preserve Canada's global leadership in mining.
Our leadership position also requires industry to work with governments to bring in more practical and feasible measures to tackle the issue of climate change, and we need to seize, not ignore, obvious opportunities to deliver win-win economic and environmental benefits by acting on issues such as the promotion of recycling.
We urge Mines Ministers on the occasion of the 59th Annual Mines Ministers' Conference to act on our recommendations and to work with us to sustain Canada's leadership position in the field of mineral exploration, mining development, mining research, and development in mine services industries.
We thank you for the opportunity to present to you today.
MR. GEORGE ANDERSON: Thank you very much, Mr. Carter. That was an extremely clear and focused presentation.
I will open the floor to comments from the ministers or representatives of the provinces.
Who would like to lead off in terms of comments or questions?
Mme RITA DIONNE-MARSOLAIS: Merci, monsieur Carter. C'était une présentation très intéressante et j'apprécie que vous ayez souligné les efforts que le Québec a faits en matière fiscale pour appuyer la relance de l'industrie.
Vous soulignez un certain nombre de défis. J'en commenterai deux. D'abord je crois aussi qu'on vous appuie dans cette démarche pour que la fiscalité fédérale des corporations soit allégée, bien sûr, et on partage cette vision-là.
Pour ce qui est du protocole de Kyoto, vous savez que le Québec appuie cette ratification. Nous avons déjà depuis '96 commencé à travailler avec les différents secteurs industriels pour trouver des solutions.
On le voit plus de notre côté comme étant une occasion d'innover, même si dans les cycles difficiles comme celui que l'industrie traverse, il faut peut-être mettre des efforts un peu plus soutenus. C'est plus exigeant aussi, bien sûr, mais je crois que votre idée de créer un groupe de travail avec l'industrie pour réussir ce virage par rapport aux changements climatiques je crois que c'est une excellente initiative et certainement le Québec l'appuierait.
Nous croyons beaucoup au Québec à cette coopération et à des échanges soutenus dans l'intérêt commun.
Pour ce qui est du recyclage des matières dangereuses, j'ai un autre commentaire qui m'est venu en vous écoutant. Je vais essayer de le retrouver parce que je l'avais noté. C'est toujours un peu difficile de faire la conversion français-anglais. Ce n'est pas évident.
Mme RITA DIONNE-MARSOLAIS: Alors encore là, nous appuyons les revendications de l'industrie pour que le règlement fédéral qui se discute là-dessus, qui est en élaboration, dissocie l'importation des matières recyclables de la disposition des déchets dangereux et que les dispositions applicables au recyclage des métaux et minéraux favorisent le développement de nos régions ressources.
Je crois qu'au niveau de l'industrie minière, le Québec a démontré, et démontre encore, son intérêt. C'est une industrie importante pour nous. On essaie de travailler étroitement avec l'industrie et nous serons toujours ouverts pour trouver des solutions dans l'intérêt du développement de nos régions.
MR. GEORGE ANDERSON: Merci, madame Dionne-Marsolais.
Would anyone else like to contribute at this juncture?
HON. SCOTT KENT: Thank you very much, Mr. Chair, and thank you for that presentation.
In the Yukon Territory we certainly recognize the importance of having a competitive tax regime when it comes to the exploration and development of the mining industry. We have a 25 per cent mineral exploration tax credit that we apply to exploration dollars. It has been extended for a year, to April 1, 2003, of course, and my department is working on an overall tax strategy as we work toward the April 1, 2003 date.
I am pleased to announce that Yukon has successfully negotiated the devolution transfer agreements, where the responsibility for Yukon minerals, lands, forestry and waters will be transferred to the care and control of Yukoners as of April 1, 2003. We are quite pleased with that and we look forward to being as competitive as possible, with not only our fellow jurisdictions in Canada, but also around the world.
The Yukon will take a very active role in being on the cutting edge, as far as taxation and regulatory processes. We look forward to those opportunities.
Briefly, with respect to your concerns with Kyoto, I believe that if any of you were here for yesterday's session of energy ministers, it was fully discussed at that time. And in the Yukon we agree that there has to be an understanding of what the implications are: where we are going; will it put us at a competitive disadvantage; and, indeed, will it accomplish the goals of addressing climate change.
Those things Canadians need to know, and we will continue to work with our colleagues in Alberta, British Columbia, Saskatchewan and elsewhere to ensure that Canadians have a good understanding of Kyoto and its implications.
MR. GEORGE ANDERSON: Thank you, Mr. Kent.
British Columbia. Mr. Neufeld.
HON. RICHARD NEUFELD: Thank you.
Just to bring some people up to date who may not be aware of the tax changes that British Columbia made for the mining industry -- for industry in total -- they are substantial. Not only has Alberta eliminated its corporate capital tax; for your information, British Columbia has, too. We have no corporate capital tax any more. We have reduced our corporate tax to become more in line with our competitors in Alberta, and we have actually removed the sales tax from machinery and equipment for the mining industry and the oil and gas industry.
I think those are substantial changes, in the hopes that your industry can start to come back in British Columbia, and in Canada as a whole, to what it once was. That is our goal.
We have also reduced personal income taxes to encourage people to live in British Columbia.
The finance minister, Gary Collins, has taken quite a large step at the taxation end of the problem in British Columbia.
We have also, through the Ministry of Energy and Mines, begun a program of changing the regulations in the legislation that the mining industry has to work under.
Gary Livingstone, from the mining association, tells me that we have come a long way. That doesn't mean that we are at the end, but we have only been there for just over a year.
However, I think that some of the changes we have put into place in legislation will certainly help your industry.
The Kyoto issue, as Scott talked about, is a huge issue with our province, and hopefully with all other provinces in Canada. If you look at the cost of implementation, the difference there will be from now to post-Kyoto for zinc smelters, copper refineries and nickel plants should be a strong message, I hope, to the federal government that we should be careful what we sign because it will affect Fred and Martha dramatically -- Fred and Martha being the citizen on the street, the taxpayer, the person who works in these industries that we want to provide jobs for -- and well-paying jobs out of the mining industry.
It is a serious issue. I won't go into another speech about the Kyoto Protocol, but I think that the federal government yesterday heard loud and clear again our concerns in British Columbia, and I hope that any action that is taken at the end of the day will take into consideration some of the serious aspects that this could have on our economy and our country in a competitive fashion.
Thank you for your presentation. It was well done.
I will take back to the minister of finance your graphs in relation to the different provinces about taxation, and we will continue to work on that.
We will also continue to work with the federal government, through the Ministry of Finance, to see if we can't change some of those approaches also.
MR. GEORGE ANDERSON: Thank you, Mr. Neufeld.
Mr. Smith, from Alberta.
MR. KEN SMITH: In your chart on the Kyoto Protocol you identified the time to get it right, some suggestion about sound analysis, and a call for an industry-government working group at this stage in the process.
I wonder if you could tell me how you expect that to work in relation to the timetables which you understand currently the federal government is following.
MR. JAMES E. CARTER: I think, really, what we are suggesting here, Ken, is that what we would like to do is make sure that industry has a voice at the table up until the point that something happens, if it does get ratified. We still want to be there to have some influence on the outcome.
We have very little knowledge right now of what is going to happen to the various sectors and regions of Canada, because we just don't know how it is going to be applied.
In the absence of having that knowledge, I think that most industry associations are taking the position that we need, at least, to be at the table to try to have some influence on the outcome, so that there isn't any undue hardship on either an individual part of the industry or a geographic sector.
UNIDENTIFIED SPEAKER: Sometimes there are reports that consultation has been active and ongoing with industry on Kyoto by the Government of Canada. Are you saying that you haven't been engaged at this point, or are you saying that the material available to date just isn't adequate to respond properly?
MR. JAMES E. CARTER: We have been engaged, as other industry associations have been, but it is still lacking an awful lot in the way of detail and understanding of how it is going to be applied, what kinds of credits are going to be given by early action, and how the whole system is going to work.
People are trying to create their own scenarios to see what impact it would have on their various industries, based on assigning a value to carbon, which essentially boils down to a tax at the end of the day, because it is going to put a price on carbon, and trying to measure the impact that will have on the outcomes of their business.
Even though we participated, we really haven't seen yet how it is going to apply, and it is that uncertainty, I guess, that really is causing our concern. It is that uncertainty that will frighten away the investor as well. At the end of the day that's what it is all about, really being able to attract investment to the country and have investment for these very large capital projects which the mining industry and, indeed, the oil and gas industry undertake to do.
MR. GEORGE ANDERSON: Thank you.
Mr. Popowich, do you want to supplement that?
MR. JIM POPOWICH: If I may, Mr. Chairman. Thank you.
We as the coal industry have been heavily engaged in the consultation process -- the discussions that have been taking place. One of the difficulties we have found is that, in trying to understand what the costs are or might be, it is done at a very macro level and doesn't get down to what the businesses themselves, suppliers and so on, may see. As a result, it is very difficult for us to help anybody understand that, even internally in our own organizations.
There is another element to this, too, and that is, as you go forward, and if you sign on to the Kyoto Protocol, what we are talking about is Kyoto 1. If you go beyond that, there is a new compliance period going to 2016. We haven't even thought about that one, or even discussed that one. So it is very, very difficult to get around to: What does all of this mean on a go-forward basis?
So, from the coal industry, we see some very, very serious difficulties with this.
I would like to leave you with one thought on this. We have talked about competitiveness. If you want to look at competitiveness, it is the single biggest driver to efficient emissions. And if you want to talk about consultation, you have to get into the business of looking at what industry has done and how we may go forward. Because a lot of good things, as Mr. Carter said, have been done. So maybe we should look at the past and see what the future will bring us.
Thank you, Mr. Chairman.
MR. GEORGE ANDERSON: Thank you for those comments.
I thought that I would hold the federal comments until the end of the provincial interventions; however, I will say that I was with Mr. Dhaliwal in Calgary the other night. We had dinner with various representatives of the petroleum producers and, just on this issue of uncertainty, people were saying "What does it mean? We have run scenarios all the way from 15 cents to $3 a barrel." We recognize the need to come to terms with that, and I will come back to that a little later.
Mr. Horswill, would you like to comment?
MR. DOUG HORSWILL: I would like to underscore the good work that Mr. Neufeld's government has done in British Columbia. It has really been welcoming. We are actively exploring in the province again as a consequence.
In terms of specifics on Kyoto, we have attempted to analyze the situation for our Trail smelter, and what we see is a cost between $5 million and $25 million a year, at a facility that is projected...
... $200 million investment in a gas-fired facility that could either be located at Trail, British Columbia, or 15 kilometres south across the border.
The issue -- ratification and so on -- will be a very big factor in where we locate that investment.
MR. GEORGE ANDERSON: Mr. Antoine.
HON. JIM ANTOINE: Thank you.
I just want to make some quick comments. First of all, I would like to thank the industry for their presentation.
As you know, mining is a very important sector for us in the Northwest Territories. Since diamonds were discovered there, it has really resulted in a boom to the economy in the Northwest Territories.
Mining has always been a very important sector for us in the Northwest Territories, and it will continue to be so.
As the Northwest Territories, we are not where Scott and the Yukon are yet. We are still talking about negotiations with the federal government in terms of devolution -- control over our natural resources, under the care of the people of the Northwest Territories. We are initiating that discussion now.
So we are not there in terms of tax regimes and so forth; not where Yukon is going to be. So we can, as the Government of the Northwest Territories, do little to effect change to the mining tax legislation in Canada, except if there is a will by ministers here to pursue the finance minister on this, and, on your behalf, we would be happy to join in that effort.
In respect of territorial corporate tax, the Government of the Northwest Territories also reduced its corporate tax rate from 14 per cent to 12 per cent in June to try to give an advantage to industry up there.
In terms of global warming, we have always said publicly, and for the record I will say it once again, that in the Northwest Territories we see what is happening to the environment with our own eyes. In our lifetime we have seen the melting of the permafrost and the ice roads, and shorter seasons and so forth. We actually see it.
The people we represent in the Northwest Territories want to see something done about it. The only vehicle that has been out there for us to try to do something about it on the world stage has been the Kyoto Protocol. That is the only vehicle out there. Nobody else is putting forward anything else to try to get other countries to comply.
We are trying to do something about it. In our jurisdiction, people are telling us to support the Kyoto Protocol. We would like to see it ratified.
However, after talking to Minister Dhaliwal yesterday, we also have concerns about the costs of doing this ratification and what it is going to mean.
For me, the whole process is a long process. We cannot solve the issue in one heated meeting or two. We need to work together. That is what we said yesterday that we would do. Minister Dhaliwal said that he was going to talk to the industry about due diligence in the process and trying to satisfy our concerns. I would like to give him that opportunity, a chance to do it.
We don't know at the end of the day how this whole initiative on the Kyoto Protocol will unfold, but at least it is a step in the right direction in trying to do something about global warming. People in the north -- the majority are aboriginal people. We spend a lot of time on the land. We hunt, we fish and we trap. The economy is still there. I am also responsible for that sector of our society, so we have to listen to the people.
The environment, of course, is very important to aboriginal people. The message to us is to take all necessary steps to see what we can do about global warming.
I just wanted to say that on those two particular items. Thank you.
MR. GEORGE ANDERSON: Thank you, Mr. Antoine. I think that Mr. Neufeld would like to come back.
HON. RICHARD NEUFELD: Thank you.
I have some comments on the remarks which Doug Horswill made with respect to costs and some of Teck Cominco's plans in the future.
Maybe, Doug, for the information of people here, you could tell me how many people are employed at your smelter in Trail and what the average salary would be for those people who work in that smelter, as close as you can get.
It's interesting when you talked about a gas-fired plant going just south of the border from Trail. So the gas-fired plant -- the capital construction -- I guess I could understand from that that all of those dollars, those construction dollars, those jobs, the taxation revenue for the province of British Columbia and Canada, would take place just south of the border in the good old U.S.A., and likely electricity would come back to British Columbia, to be consumed in British Columbia.
I would like you to tell me where you think the greenhouse gases will go from that plant that is just a mile or so south of the border. Is there an invisible wall up there that keeps it just south for those folks who don't sign on to the Kyoto Protocol? Or, does it actually come north into Canada and the province of British Columbia?
UNIDENTIFIED SPEAKER: I think that's what is called a lob.
--- Laugher / Rires
MR. DOUG HORSWILL: Why do I get the feeling that I am the meat in the sandwich?
--- Laugher / Rires
We are just under 2,000 people. The average wage is probably around $60,000. That's direct. There is a lot of contract work and so on done at the facility.
Yes, the wind blows probably in both directions, just south of the border or just north, but it is a fact and location decisions are going to be driven by economics on a project like that.
MR. GEORGE ANDERSON: I am watching my watch and we are going to have to move on.
Dr. Pannell, you wanted to say something, and then I think, if I might, I will speak for the federal government. Then we will move on to the next presentation, unless there is a province that wanted to speak which hasn't come in.
M. DEREK PANNELL: J'aimerais revenir sur le point qu'a fait la ministre Dionne-Marsolais.
Premièrement, j'aimerais reconnaître publiquement l'effort que la province du Québec a fait dernièrement dans le dossier de l'exploration. Vraiment ça allège un peu la fiscalité surtout dans ce domaine-là et c'est bien apprécié. Vous pouvez voir que l'industrie est prête à répondre aux initiatives que vous êtes en train de faire dans ce domaine-là. Donc je pense aussi qu'ailleurs on peut répondre à des initiatives de même.
On the Kyoto Accord, perhaps more generally first, you could give a practical, one-company perspective, maybe.
Mr. Chairman, you mentioned at the beginning that the resources in Canada, for example, had reduced -- I think that 56 per cent was the figure you gave. In fact, at Noranda, Falconbridge's reserves during that same period, I think, have increased substantially. Now, unfortunately, it is not within the province, within the country, or within the provinces here, and that is because a lot of the capital expenditures that we have made have been outside Canada, and I think that is very unfortunate for Canada.
But the point that many people have made is that the industry is very capital intensive, and for capital to be employed effectively we need a certain degree of certainty and less risk.
Certainly, the taxation issue is one which does need to be addressed. We are, in Canada, in the lower quartile in terms of taxation.
The Kyoto Accord -- I think that we have an excellent record as an industry in trying to reduce greenhouse gases. We already have the encouragement. There is no question that we have been, I think as an industry, very, very proactive in that area. But the way the Kyoto Accord is now before us, I think, does give us a lot of uncertainty, and hence does not encourage capital investment here as opposed to competing areas.
Finally, I would like to touch on the recycling area, which concerns us particularly as a country. We have opened up four recycle businesses and facilities in the U.S. We have none now in Canada, to a large extent, first, because of the market in the U.S., and, secondly, because of the legislation that discourages recycling in Canada in some of the most efficient operations in the world. I think that is a real shame and it needs to be addressed, as I think Mr. Carter said. It could go hand in hand with the very vibrant industry -- primary industry that we have here.
We have gone through recently, with Noranda, a shutdown of one of our smelters. We spent a lot of money trying to keep it going. We did have a recycle business there. That has shut down. But our other smelters are also in a very precarious position because of the tax and because of recycle, and particularly because of the uncertainty of Kyoto.
MR. GEORGE ANDERSON: Thank you very much, Mr. Pannell.
If I may, I will make a couple of comments in response to the submission on behalf of Mr. Dhaliwal and the federal government.
First of all, on the issue of recycling, which we have just heard about, we recognize the problem in the federal government and we are trying to overcome it in discussions with the Department of Industry and the Department of the Environment, and we will keep an eye on that one.
Taxation issues, obviously -- I very much appreciated in the presentation the focus that was put on innovation. As you know, we will be coming back to these issues in due course at our meeting in Vancouver.
What Mr. Dhaliwal and the department have been trying to do within the federal context is to situate these industries very much as the kinds of industries they are -- very innovative, knowledge-based industries -- but with a special recognition to the fundamental issue of how capital intensive they are and the nature of innovation in these industries, which is quite different from the nature of innovation in, let us say, the R and D based industries which are trying to create new products. The commodity industries have their own special challenges, and they are price takers on their commodities, to the extent that they are commodity-based industries.
I took your comments to be focusing on competitiveness issues and the investment climate. Obviously, two key aspects of that are the tax question and the Kyoto issue. On the tax issue, we have had a very good dialogue with the industry. There was a special study, as everybody knows, in terms of how that would affect the mining industry. There was a similar study done for oil and gas. We are fully seized of that.
Part of the difficulty on the mining side, of course, is that the mining industry doesn't see all of these things from a single point of view. Different changes have different implications for different companies. So there are questions of trade-offs.
But the Department of Finance, and I would say, more generally than that, the decision-making instances of the federal government, are seized of this and I expect that we will be back to you relatively shortly, in some manner or other.
I think I can also say that when we do come back it won't be "take it or leave it", it will be a sense of where the federal government is going, but with some room for discussion -- a strong sense of where the government is going, but with some room for discussion.
On Kyoto, this was, as people said, yesterday much discussed. I think all I can say today is that there is, clearly, a recognition within the federal government of the need to have a very intense focus on the issues around industry as it relates to ratification.
The Prime Minister will be speaking tomorrow in Calgary. He will be meeting with a number of industry representatives in Calgary, not just oil and gas, tomorrow. I will be with him.
Then, we will be following that up with some early meetings, starting on Thursday, with industry.
But we do recognize the need for a very focused dialogue with industry, not just on ratification, because ratification is only part of the issue, but on the particular measures that the government would be proposing in relation to industry -- what they might be; how they might work; what their competitive impacts might be.
It is not going to be easy. This is an extremely complex subject. I don't expect people to thank us for some of what we are going to propose, but the issue is, can we find a way of moving forward on Kyoto but at the same time do it in a way which recognizes the need to maintain the competitiveness of these extremely important industries.
HON. MARYANN MIHYCHUK: Now is the time to move on to the 9:30 submission by the exploration sector, and I turn over the microphone to Bill Mercer from the Prospectors and Developers Association of Canada.
MR. BILL MERCER (President, Prospectors and Developers Association of Canada and Chief Geologist, Noranda Inc.): Good morning, chairs, honourable ministers, ladies and gentlemen. The PDAC is very grateful for the opportunity to address the Mines Ministers' Conference.
Prior to giving the PDAC's brief, it is my pleasure to announce a departure from previous years. PDAC is bestowing four merit awards. These awards will be handed to the recipients during the luncheon following this open session, so we kindly request that applause be withheld until then.
These four awards, which we have named the "Claim Tag" awards, are given in recognition of government achievements with respect to the exploration sector.
The four tags correspond to the four posts which delineate the corners of a mining claim.
Starting at the number one post, which is traditionally in the northeast corner, on the upper right of maps, the number one tag and our top award goes to la belle province, Québec. This is for delivering Canada's strongest geoscience support and most innovative financing programs for the exploration sector.
Quebec is the only province to be significantly ahead of its geoscience expenditure commitment on a long term basis.
Whenever explorationists meet, access to land is a frequent topic of discussion. Manitoba is always referred to as the model, as this province has the best multi-stakeholder implementation program for protected areas in the country.
The number two tag, therefore, goes to our host for this meeting, the province of Manitoba.
Compensation is not a solution to access to land problems, but even a growing body of NGOs see it as doing the right thing to those whose jobs are impacted.
For its implemented policy and procedures in compensating claim holders whose claims are effectively taken to create protected areas, the number three tag is awarded to the Yukon Territory.
Two federal government departments, Natural Resources Canada and the Canada Customs and Revenue Agency, are recognized for their partnering arrangements with the PDAC. The awareness programs to explain the temporary investment tax credits for grassroots mineral exploration to the business community were a first for us. The farther west these sessions have been given, the more interest there has been.
Astonishment was expressed that "People from Toronto and Ottawa have actually come to talk to me, to help me?"
So now that the fourth tag has been attached to the number four post, claim staking is completed for 2002. We are looking forward to giving out awards in 2003 to others.
For the oral presentation today we have focused on access to money and access to data. The other two issues -- land and work -- are addressed in the PDAC's written brief.
The recommendations made here in relation to access to money refer to the investment tax credit for exploration, or ITCE. The PDAC recognizes that Mines Ministers do not have direct lines of accountability and responsibility for taxation and monetary policy and legislation. However, we do count on your support around the respective cabinet tables.
Therefore, before we discuss the specific recommendations, we would like to quickly review where we see the state of exploration in Canada at present.
This graph shows the total spent on exploration in Canada over the past 30 years in millions of dollars. The blue bars represent the major companies, and the red bars the junior companies. The main features to note are, firstly, the broad cycle from the low in 1970 through the high in 1988 to the present low; secondly, the three superimposed cycles of about 10 years' length, driven by metal prices and the general economy; thirdly, the fact that the present time is an all-time low since 1971 and is the only trough that lasted more than one year, being in fact at least three years long to date.
In each of the previous troughs, within one year of the bottom expenditures were bouncing back up.
Lastly, note also that the junior company expenditures are increasing as the major company expenditures are decreasing, giving an approximately level total in the last three years.
This diagram, which is a little bit complicated, is for Canadian major and junior companies, and it has two main features: the per cent of exploration expenditures spent in Canada versus overseas on the left-hand side, and the absolute amount spent in Canada.
The histogram bars are the per cents, and the lines are the absolute amount spent in Canada.
Note the following features:
In terms of absolute amounts, the majors have decreased their expenditures in Canada over the past three years. We believe that the number for 2001 will show little change.
The juniors have increased their expenditures in Canada in absolute amounts, coinciding with the introduction of the investment tax credit for exploration.
And the percentage spent in Canada reflects the same information, with the majors showing little change in the past five years, after a dramatic decrease in the early nineties. But the juniors have shown a dramatic increase in the past two years, again likely reflecting ITCE.
The conclusions to take from this are that ITCE is working to increase the proportion spent in Canada and the absolute amount spent in Canada, and the role of the juniors is increasing in exploration in Canada. Governments need to be aware of that.
Flow-through funding is a proven success, as can be seen from the $27 billion Canadian diamond business. The ten years from the eighties flow-through to the diamond production success is simply a reflection of time of the process involved.
The PDAC calls on ministers to support the extension of the ITCE program past the presently planned termination date of December 2003. The program was designed to encourage junior companies in enhancing exploration activity in Canada. In order to support this, we realize that ministers need to know that it is working.
Can we tell if it is performing yet?
This graphs shows the cumulative amount of Canadian exploration expense, or CEE, funding raised in financings in each year since 1998. The amount included in CEE is all financings by companies that are flow-through, enhanced or not.
We can see that prior to the start of ITCE in October 2000, financings reached, typically, about $70 million at year end. The first full year since the start of ITCE, 2001, shows an amount of $160 million by year end.
The ITCE program has been slow on the uptake because of a lack of knowledge and understanding. The partnered information sessions on the program have certainly helped to overcome this. However, it can be concluded from this graph that ITCE assisted the industry in raising about $80 million in additional funding in 2001. So ITCE is working.
There are four changes of a technical nature which we believe would make the program sufficiently attractive to create the kind of lift or pump priming that the program was intended to deliver. These four components are, firstly, to allow the buy period for investors to coincide with the RRSP season and go into the end of February of the following year.
Secondly, companies should be able to designate between 10 per cent to 15 per cent of the money raised to be eligible to pay for hard dollar costs of raising capital, such as prospectuses, offering memorandums, broker sponsorship fees, listing and disclosure costs.
Thirdly, allow bona fide mining companies, or operating companies, to participate in share purchases on the buy side. This would enable larger companies to finance juniors and encourage further exploration within Canada, as opposed to overseas.
Fourthly, in the last year of this temporary program the existing 365 day look-back rule should be kept in place, rather than reverting to the zero day look-back rule of the early 1980s.
The early termination look-back rule of 60 days in the eighties caused many problems with overheating, non-compliance and unsafe working conditions, which neither industry nor, presumably, governments would like to see happen in this case.
Putting the original target for ITCE in perspective, we show here the same graph of the financings, but with the scale changed and the original $300 million annual target clear.
The PDAC believes that the industry needs time to reach the target, and that extending and enhancing the program will enable this.
The ITCE program works, but it has not worked as quickly as hoped toward raising the kind of money necessary to sustain exploration levels. Extension and fine tuning of the program are required for this.
There are currently two applications before securities commissions by companies wishing to operate a third tier stock market in Canada. One application is by the CNQ, and the other is by the TSX for the J2 market.
PDAC has responded to the calls for comment on CNQ, and we are awaiting a similar opportunity for J2. It is premature to champion one application over the other at this time, but we do request that the Mines Ministers lobby their cabinet colleagues and regulators to encourage and facilitate the recognition of a third tier stock exchange or other secondary market facility.
As well as being important to small exploration companies, a third tier market will be important to start up high tech and other innovative companies, thus fitting well with the federal government's innovation strategy.
We are now moving to access to data.
In 1999 the PDAC, in co-operation with the federal, territorial and provincial governments, completed a study entitled "Funding of Government Geological Surveys: How much is Enough?" We are now issuing a report card on the governments. Unfortunately, the report card reads, as many a schoolteacher has written, "Could do better."
This graph shows in the red bars the targets agreed to by ministers and government surveys at that time in 1999. The blue and green bars are the subsequent expenditures.
Incidentally, qualifying expenditures for this study were bedrock mapping, surface mapping, geochemistry, geophysics and field investigations of mineral deposits where maps were produced. Desk-based studies did not count.
It is clear, with the exception of Nova Scotia, Quebec and Ontario, that governments are not meeting their targets for geoscience. Only Quebec exceeds its targets through its regular budget. In Ontario, "Operation Treasure Hunt", a temporary program, was the only thing enabling Ontario to meet its targets.
Once the temporary programs cease, then only Quebec will exceed the targets set. To date it has done so at a 136 per cent average per year.
There is good news. The co-operative mapping strategy has been extremely important. At least we have the program, even though not everyone is meeting the targets.
The PDAC is appreciative of the efforts of the Hon. Ralph Goodale in the past with these initiatives.
Although the targeted geoscience initiative and "Operation Treasure Hunt" are temporary, they are important and they are appreciated.
This briefly summarizes the discussions and the process in relation to geoscience since 1998. The bottom line is that all ministers agreed to seek new funding within their respective jurisdictions.
But things are not all rosy. The PDAC is very nervous about the trend in B.C. and what it means for geoscience in that province. It is not clear that the model the B.C. government is trying will succeed to deliver the necessary products and services.
The loss of TGI, the targeted geoscience initiative, will take the federal government considerably below the 1999 agreed target.
It is questionable whether the Ontario government will meet its agreed target after "Operation Treasure Hunt" ceases.
It is possible that in one year's time all jurisdictions except Quebec will be failing to meet their obligations under the co-operative mapping agreement of the Mines Ministers' Conference of 1999.
We would like to remind the ministers that geoscience mapping is an investment, not an expenditure.
What are the ministers going to do about this failure to meet targets, and what can we do to help them?
Finally, I would like to leave the hon. ministers with the following points.
In the near term it is necessary to accelerate the exploration recovery that is starting tentatively in Canada. This would be through support for the extension of and adjustments to the investment tax credit for exploration, ITCE, program.
In the longer term we expect governments to live up to their commitments for geoscience, and wish to see the plans for how this will be achieved.
Thank you for the opportunity to speak. We look forward to working together on helping us both reach the goal of opening new mines in Canada.
HON. MARYANN MIHYCHUK: Thank you very much.
I open the floor to questions or statements from ministers.
Mme RITA DIONNE-MARSOLAIS: D'abord merci beaucoup pour à la fois les fleurs et le pot. Merci pour le bulletin. Effectivement on s'inquiète nous aussi du faible niveau d'investissements, mais quelques réactions à vos besoins.
D'abord l'accès au fonds. Vous avez mentionné l'importance d'avoir accès au fonds. Vous savez que les provinces ont une juridiction exclusive sur le commerce des valeurs mobilières et pour le Québec c'est très important de protéger, bien sûr, nos investisseurs.
Je crois qu'on peut harmoniser les réglementations des différentes autorités canadiennes en matière de valeurs mobilières et c'est à cela que le Québec travaille sans nécessairement favoriser une seule commission. Je pense que c'est dans l'intérêt du Québec pour des raisons assez évidentes.
Pour ce qui est de l'accès aux données, je pense qu'il y a des efforts exceptionnels qui ont été réalisés pour acquérir des connaissances dans des territoires peu connus, et pour nous c'est un moyen que l'on privilégie pour générer des investissements privés.
Vous savez aussi que le jalonnement sur cartes c'est le moyen que nous avons retenu pour faciliter le jalonnement, mais j'aimerais ajouter par rapport à ces ententes de données, et notamment au niveau des accords géoscientifiques et intergouvernementaux, que le Québec n'est pas d'accord, bien sûr ce n'est pas une surprise, à l'empiétement par le gouvernement fédéral de son champ de compétences que l'on considère exclusif, bien sûr, sur la propriété et la gestion des ressources minérales sur le territoire du Québec.
Donc on ne participe pas à cet accord géoscientifique intergouvernemental, mais néanmoins on pense que nous devrions obtenir la part des crédits qui sont alloués par le gouvernement fédéral et qui devraient revenir au Québec parce que nous avons quand même une stratégie québécoise de cartographies géoscientifiques agressive, pour utiliser votre expression, audacieuse. Je ne sais pas si en anglais on traduit ça par ´ bold ª, mais en tout cas je pense que notre stratégie donne des résultats puisqu'on fait des choses et on a quand même de bons éléments dans le bulletin que vous nous avez donné.
Ensuite, l'autre commentaire que je voudrais faire qui m'apparaît important par rapport toujours à l'accès des données, on est prêts à participer à l'effort canadien de coopération pour les stratégies de cartographies géoscientifiques conformément à l'entente qui avait été conclue en l'an 2000 et qui avait été négociée avec Ressources naturelles Canada.
Donc on est prêts à partager de manière coopérative, mais plutôt en partenaires égaux, ce qui n'étonnera personne, je crois.
Enfin, par rapport à l'accès au territoire qui est aussi une revendication, ou une demande en fait de l'industrie, c'est vrai que le Québec a, cette année notamment, en fait tout récemment, en juillet 2002 nous avons adopté un plan gouvernemental avec comme objectif de protéger une superficie du territoire québécois.
Notre objectif est de protéger 8 pour cent du territoire québécois d'ici 2005, mais je tiens à vous assurer que le ministère des Ressources naturelles du Québec va prendre les mesures nécessaires pour que les territoires qui possèdent des ressources minières, pétrolières, gazières et hydroélectriques soient quand même, si ce n'est pas entièrement exclus, mais qu'on en tienne compte certainement et qu'il y ait des mesures prévues pour minimiser vraiment l'impact de cette stratégie sur le développement de ces ressources.
En ce qui concerne la protection de l'environnement dans le secteur minier, je crois que nous souhaiterions que le gouvernement fédéral reconnaisse la compétence exclusive du Québec. C'est une priorité également pour nous, et même si cela pose des défis très importants on en est conscients.
Alors je termine un peu là-dessus. Pour ce qui est de l'accès au travail, je ne sais si vous faites référence à l'accès aux ressources humaines, mais à toutes fins utiles nous avons au Québec des ordres professionnels dont le mandat, bien sûr, est de protéger le public.
Encore là, nos ordres professionnels travaillent d'ailleurs très fort à l'harmonisation des professionnels de la géoscience -- je pense qu'on peut s'exprimer comme ça -- et qu'il est préférable de travailler à l'harmonisation qu'à l'uniformisation de tout ça, mais dans le respect des compétences de chacune des provinces.
Encore une fois, merci de l'honneur et des félicitations. Ça fait plaisir à voir.
On vient juste de me demander combien ça nous a coûté. Ça nous a coûté des mesures fiscales, sans doute, mais c'est au bénéfice de tous les Québécois.
HON. MARYANN MIHYCHUK: The Honorable Scott Kent, from Yukon.
HON. SCOTT KENT: Thanks very much, MaryAnn, and on behalf of Yukoners I thank you for honouring us as one of your top claim stakers for the year 2002.
I just want to respond to some of the access issues that you talked about -- access to money.
You have the full support of the Yukon government when we look toward harmonizing the securities -- or working toward a unified security system. Anything that we can do to reduce red tape -- a dollar that is not spent on red tape is a dollar that you can spend on further exploration, and, from a Yukon perspective, we are fully in support of that, and anything that we can do to assist you in that effort, I would be pleased to work with you and the PDAC on that.
As far as access to land, the award that you gave us is for the compensation policy that we put in place when we released the Yukon mine plan at Cordilleran(ph) in January. I am hoping that we never have to use it, quite frankly. I am not all that excited about compensating people to buy out economic opportunities for Yukoners, but I realize that it is a very important safety net that industry was seeking, and we were pleased to be able to develop it and deliver on it. Again, I thank you.
With regards to our protected areas strategy in the Yukon, I recognize the frustration of industry. The Yukon is a very small place. I only have about a thousand constituents. It is like being a politician in a fish bowl somewhat. We are very accessible up there, and approachable, regardless of where we are.
The Government of Yukon is reviewing the protected areas strategy that we have. We have slowed it down. I want to work with Mike Power from the Yukon Chamber of Mines and Sherry Gardner from the B.C.-Yukon Chamber of Mines to develop something that works for everyone, with a view to a balanced strategy, and continue to take their interests forward at the Yukon cabinet table when it comes to the protected areas strategy.
Finally, just touching on geoscience, I believe that we will be talking further about northern geoscience as we review the northern Mines Ministers' part of the agenda, which is next.
We are proud of the Yukon geology program, which is a territorial-federal program that is celebrating its 10th anniversary this year. We are very proud of the work they do, and I will endeavour to continue to scrap it out at the cabinet table to find funds to supplement our geoscience initiatives in the Yukon.
MR. GEORGE ANDERSON: On behalf of the federal government, I would like to make a couple of comments on the tax issues.
As you know, there has been work going on between the federal government and the provinces on harmonized tax credits linked to flow-through shares. These tax credits have proven to be a lifeline for junior mining exploration companies in recent times.
We have taken note of the several recommendations you have made on improving the tax system, including the extension of the temporary ITCE and the look-back period. Those, as you know, are supported by the intergovernmental working group that we have on this.
The other technical recommendations are being looked at by officials.
These issues will be part of our discussions with the Department of Finance as we go into the budget period. At the same time, we are working with the Department of Finance and the Canada Customs and Revenue Agency on the issue of the income tax designation of a Canadian controlled private corporation.
These are very much on our active list, and we are very conscious of the contribution that the measures, particularly flow-through shares, have made in the last little while.
On the geoscience issues, congratulations to Quebec and Ontario, particularly to Quebec for their efforts and accomplishments. This is an important area. It goes back to what I was saying earlier about the relationship of knowledge and the innovation agenda. And I think that we will try in our discussions, interdepartmentally and in cabinet, to put it in that context. This is part of the knowledge economy for Canada.
We are aware that we have a deadline approaching on the temporary initiatives, so that is obviously an immediate focus.
You will be aware, as well, that we face a number of other pressures in relation to our geoscience. Obviously the interests of the mining industries are extremely important, but we are also facing pressures in relation to natural hazards, groundwater and so on. So there will be elements of balance that will have to be factored into that.
This is very much part, again, of the discussions we will have around innovation as we prepare for -- not the Speech from the Throne so much, but the decisions that will be made over the course of the fall and the spring.
HON. MARYANN MIHYCHUK: Jim Wilson, Ontario.
MR. CAMERON CLARK: I am Cam Clark and I am sitting in for Jim Wilson.
I am glad to see that your paper did recognize the important contribution that "Operation Treasure Hunt" has made on the geoscience front. We in Ontario certainly appreciate the importance of funding geoscience activities in the province, and particularly the mapping programs that we have been engaged in over the last four years.
To that end, we are looking very carefully at ways to continue to enhance that program, and I think that has been reflected in a number of decisions we have made recently. One was to fund a fairly extensive mapping program of the Nipigon Plate, which we funded through the Northern Ontario Heritage Fund, and we are seeking funds wherever we can to do this. The price tag on that was $3.5 million.
I should also note that we have funded the OMET program, the Ontario Mineral Exploration Technology Program, to the tune of about $8 million, to try to continue to provide the kind of energy that this program needs.
There are a couple of other points that I want to make, particularly with respect to the issue of access to land. I know that this has been a significant issue, and it is certainly well referenced in your paper.
I want to highlight the fact that Ontario has developed a land use planning tool, called the Provincially Significant Mineral Potential Index, to identify mineral potential. We call it PSMP. I think the point that I want to make, and I think it is important to the Ontario situation, is that the PSMP index will be used in future land use planning initiatives to be sure that land use decisions consider mineral resource values in an appropriate and consistent fashion. We think that this will be very, very important as we continue to address issues of access to land and establishing parks and protected areas.
HON. MARYANN MIHYCHUK: From Manitoba's perspective on these issues, I would like to indicate that we support your request and will continue to lobby for an extension of the flow-through share credit. We support the tier 3 securities market. We also support the harmonization of the securities system.
In terms of land access, we are proud of our record. We want to thank you for your recognition of that.
Manitoba to date has protected 8.3 per cent of the province, with an additional 5.3 per cent being supported for protection through consultation.
To date, and we hope forever, the process ensures that no existing mineral tenure is compromised.
We want to thank you for that recognition.
In addition, we continue to struggle with mapping. I understand the importance of geoscience, obviously, but we are facing extreme pressures in provincial jurisdictions, particularly within the areas of health care, education and social services -- and the strong call for reduced taxation.
Some jurisdictions have chosen, for instance, to reduce geoscience, and if industry then responds by picking up the mapping and opening mines, that sends a fairly strong signal that perhaps this is an area in which there is some flexibility.
Manitoba doesn't agree with that approach. In fact, we have been increasing the budget for geoscience. But I can assure you that it is a very, very difficult position.
As we see our mines close, it is difficult to explain to the finance department how we should increase our support for more exploration.
So everybody get out there. The big one is right there in the next hill; right?
I do have a question for the PDAC. Do you support paper staking?
I look forward to the answer for that question.
Is there a little controversy in that?
Apparently, as a professional geologist, I am anxious to work everywhere. That's no surprise. Fortunately I have a semi-permanent job right now, but in the future we look for mobility -- easier access to other jurisdictions. As you know, geologists travel across Canada, and that is one of the issues. We are also quite cheap, so we want to keep the fees low and provide greater access.
I look forward to your comments on paper staking. Thank you.
MR. BILL MERCER: I have been told to take the fifth amendment on that.
--- Laugher / Rires
HON. MARYANN MIHYCHUK: All right.
I have the Northwest Territories wanting to come into the debate. I believe the agreement was that we would do ministers first and then do industry.
Jim, go ahead.
HON. JIM ANTOINE: Thank you. I want to make a few comments on behalf of the Northwest Territories. I would like to thank the Prospectors and Developers Association of Canada, PDAC, for their presentation.
I want to quickly comment on your access concerns.
In terms of access to money, as you know, in order to do geoscience -- and just for the information of people here, in the Northwest Territories we have geoscience activities. They started in March of 1999.
Our Department of Resources, Wildlife and Economic Development and the Geological Survey of Canada and the Department of Indian Affairs and Northern Development signed an MOA, a memorandum of agreement, on government geoscience program co-ordination in the Northwest Territories. Under this agreement a number of areas of co-operation were defined, including the support of a common geoscience office. This office is known as the C.S. Lord Northern Geoscience Centre, which is located in Yellowknife. Through the centre our department of RWED and DIAND and the GSC conduct geoscience in the Northwest Territories.
In the Northwest Territories we don't have our own source of revenue. We have grants every year from the feds, and we raise the rest by taxes. So our budget is very limited, but what we can afford we have been putting into this process for the whole Northwest Territories.
The centre has a number of different staff, and they have a number of different programs that they are currently working on. I just want to say that whatever we can afford at RWED we are willing to put into the centre.
It is a very well used centre. We have excellent staff, and we are prepared to do work in the north.
In regards to concerns about access to money, again, we look at the effectiveness of ITCE in the Northwest Territories, and we are told that the available data suggests that ITCE has a positive impact on exploration in our territories. Our exploration trends are in accord with those happening elsewhere in Canada.
I would like to say that we would like to support the recommendation for keeping ITCE in place for an additional year, which will further assist mining companies in raising finances for exploration.
We would currently like to support the recommendation of this working group.
Access to land -- in the Northwest Territories we have a number of land claims and self-government arrangements being negotiated as we speak. In the Dogwood area they have initialled their final agreement, so we are closer to certainty there.
However, DIAND is the regulatory authority for the subsurface mineral rights there. Therefore, our government, we try, but we can do little to effect change. We have to work with DIAND.
However, the Government of the Northwest Territories has a protected area strategy that I know has raised some concerns with PDAC in the past. I would like to say that we want to provide clarity and certainty and consistency with respect to which lands will be candidates for protection.
We would like to work with all the stakeholders, like I said in the conference last year in Yellowknife. That is how we want to move forward on this.
HON. MARYANN MIHYCHUK: Stephen Orr, from Barrick Gold.
Have you seen the Golden Boy? I think it is almost a hazard, it is so bright.
MR. STEPHEN ORR: Thank you.
Before you concluded the morning session I wanted to comment. Two years ago the Mines Ministers formed an industry working group on gold. In 2001 you mandated that this working group support or participate in the pursuit of research to see what we might be able to do in the development of new uses of gold.
Over the last year we have completed a report, which has been prepared to better define what the current situation is and the amount of contribution we are getting from Canadian industries on stimulating research and development on new industrial uses for gold. Today I would like to formally table that report for your consideration.
HON. MARYANN MIHYCHUK: Thank you very much. We appreciate that.
HON. TIMOTHY OLIVE: Thank you very much, Madam Chair.
Nova Scotia's position on the protected areas strategy -- I would like to say that it has been implemented. Basically it allows for in-holdings in protected areas in cases where mineral title predates the establishment of the protected area, which is a very important issue in Nova Scotia.
It allows for limited compensation for out-of-pocket expenditures, but does not provide for compensation for the value of the mineral rights.
Madam Chair, I would like to highlight the fact that we have an integrated resource management process in Nova Scotia which provides input from all the stakeholders in land use decisions on crown land. This provides an opportunity to balance the needs and values of all the resource users, which is very important to us because of our limited amount of crown land in the province.
I would also like to tell the forum that Nova Scotia was the first province to implement map staking throughout the province, which allows mineral claims to be acquired without physical access to the land above them. That, as well, as been a very important step forward.
On the issue of ITCE in Nova Scotia, we have not taken any measures to top up the ITCE, but we certainly would not oppose its extension, as recommended. It is a federal budget program and a federal responsibility, but we certainly would be in support.
Thank you very much.
HON. MARYANN MIHYCHUK: Thank you very much.
At this time our agenda calls for a short break. So I will call for the break and we will resume at 10:30.
--- Upon recessing at 10:20 a.m./Suspension à 10 h 20
--- Upon resuming at 10:41 a.m./Reprise à 10 h 41
HON. MARYANN MIHYCHUK: I would like to call everyone into the room. Take your seats. We would like to continue the meeting, and we have some time for discussion.
I hope that everyone had an opportunity to make their phone calls, grab a cup of coffee and do what they needed to do.
I understand that Bill Mercer actually wants to take another attempt at paper staking, or maybe something else. I just wanted to point out that you can't take the fifth because you are not in that country. So you will have to try a new strategy.
I am sorry. You need to wave us down if you need to make a few more comments.
If the room is willing, Bill wanted to make a couple more points as a summary to that unit, and then we will move into the stakeholders' session.
Is that reasonable?
All right. We will take silence as a yes.
MR. BILL MERCER: I will try to be quick and not hold up the session.
On the subject of map staking, it is obviously a contentious issue between the low-cost prospector versus the companies that have the capability of communicating quickly with wherever claim maps are available and finding out what grounds are available and so on.
Some jurisdictions have dual systems. As I understand it, Newfoundland, for example, allows a prospector -- or, actually, I think it is any resident of Newfoundland -- a certain number of claims that they can physically stake during the year, but they also have map staking.
I used to work in B.C., and B.C. had a dual system. I don't know if they still do now, but dual systems can work.
The issue around non-map staking is when you have a prospector who is in a remote area and finds something interesting. It is not easy for him, necessarily, to get to where the maps are available and find out whether somebody already owns the ground and so on.
I don't know if that answers that part of the question.
I would like to make more comments about the securities issue and harmonization. The PDAC is very careful to not use the words "national securities regulator", or something of that kind. We feel that the country has to do something about how securities are administered across the country.
Australia we view as our biggest competitor. They have solved the problem in Australia. The states had jurisdiction over securities, and they have worked together with the federal Australian government to solve that problem. If Australia can solve it, I don't understand why Canada can't.
Some elements in Australia are looking at trying to bring in flow-through funding. If they solve the securities harmonization issue and get flow-through funding, they will really be competing with us.
We are also competing with places like London, with the AIM exchange, which also is, in effect, harmonization within Britain.
On the land issue, I want to say that the PDAC recognizes that protected areas are there and are going to be there. The PDAC board has voted to accept the concept of protected areas. So we are not against protected areas; what we want is for the process to be open and transparent, and for the process to be to the benefit of Canadians in the long term, in that areas with mineral potential should not be locked up forever. We believe that you can preserve the necessary ecological environments and so on without locking up mineral resources.
It is unfortunate that in Ontario they brought out their mineral potential index after they finished the "Lands for Life" process, which didn't really help us very much.
On the subject of taxes and health care, education and social security, we have to remember that it is operating mines and smelters and things like that that pay the taxes which pay for education, health care and so on. So what you need are discoveries to bring new mines that will pay for these benefits that the people want, as opposed to not having discoveries and paying for them in some other way.
I think that Eira wanted to make a comment about her view of the flow-through program.
MS. EIRA THOMAS: Thank you, Bill.
Very briefly, I wanted to reiterate, as a representative of the junior mining industry in this country, that the Focus Flow-through Campaign has been absolutely essential in saving our industry, but we are not completely out of the woods yet. It is very expensive for junior companies to do business in this country, so we really want to emphasize the need, one, to extend the program, and, two, to make the changes that have been requested.
Importantly, flow-through, while it certainly helped us and saved us in the last year, we can't spend flow-through dollars on things like overhead and getting us through the regulatory regime and dealing with unharmonized securities regulations across the country, which mean a very high cost of doing business. So we definitely support the view to look at harmonizing our securities regulations across the country.
HON. MARYANN MIHYCHUK: Thank you very much for those comments. We are now going to move into the Northern Mines Ministers' Conference and Discussion.
MR. GEORGE ANDERSON: I would invite Graham Nicholls to introduce the item. Graham is the Vice President of External Affairs of the Etaki Diamond Mine and he will speak to us about the conference which was held in April.
The virtue of chairs is measured in terms of whether the trains are running on time, and the trains are a little late at the moment.
MR. GRAHAM NICHOLLS: Thank you, co-chairs, ministers, ladies and gentlemen. On behalf of the mining and exploration sector operating in the north, we thank you for the opportunity to speak to you today. What I would like to do is brief you about the work of the industry-government overview committee, or IGOC, which is made up of the territorial governments, DIAND, the mining and exploration industries, and aboriginal representatives.
I am here as a late replacement for Jim Exel, President of the Etaki Diamond Mine, who was unfortunately detained on other matters. Jim is the co-chair of the IGOC.
Canada's north offers tremendous potential for diamonds, precious metals and base metals, but we must work hard to improve the regulatory climate if this potential is to be realized.
The industry-government overview committee was formed to identify the barriers to sustainable resources development in the north and, working together, to remove or reduce them.
One of the critical barriers to new development which I will touch on today is the lack of geoscience information. No surprise.
The need for reinvestment in northern geoscience is crucial if we are to hope to take advantage of the north's mineral potential and address its environmental challenges.
The first annual meeting of northern Mines Ministers' conferences took place in Yellowknife in April of this year. This was a very positive development, for it was recognized how northern prosperity and mining go hand in hand.
The benefits to northerners are many and varied -- jobs, training, education, literacy, higher living standards, support for local infrastructure, and other territorial projects. The list goes on. Mining is a real backbone for the territorial economy.
The benefits of northern development are also widely shared. Northern operators are committed to high levels of local and aboriginal contracting and employment, but the rest of Canada remains a major supplier of goods, services and expertise. For example, a recent study revealed that the three NWT diamond projects alone will, over the course of their operation, contribute almost $2 billion and $3 billion in GDP and over 20,000 and 42,000 jobs to Alberta and the rest of the country respectively.
This translates into $233 million in additional tax revenues to Alberta, $633 million to other provincial jurisdictions, and over $1 billion to the federal government. And, of course, the more the north prospers the less it relies on transfer payments from southern Canada.
Let's take a snapshot at northern activity. Looking exclusively at diamonds in the NWT, it is remarkable to think that by 2006 we can have three diamond mines producing about 12 per cent of the world's gem-quality stones, or $1.6 billion annually in exports.
Already the territories' two diamond mines have catapulted the economic growth rate in the NWT ahead of Alberta and Ontario. The diamond rush in Nunavut could well bring similar benefits to that territory.
One of the most significant evolutions in Canadian mining, however, is its connection to aboriginal communities. This connection is most dramatic in the territories.
Indeed, the mining industry is a key part of the solution to many of the social and economic challenges facing Canada's first peoples.
As this slide shows, our industry values the many partnerships that continue to be created between operators and the aboriginal communities.
Indeed, we can predict that in the not too distant future the concept of "us" and "them" will disappear, insofar as our industry is concerned, as aboriginal participation in mining and exploration becomes a dominant feature of northern economic activity.
Northern opportunities, however, are being hampered by a challenging regulatory regime beset by inconsistent and inefficient permitting and environmental processes, and inadequate funding for fundamentals like geoscience and infrastructure.
The IGOC was formed in 2000 to begin to address these concerns. We have made some progress, as this slide indicates, and we recognize that many of these challenges stem from the newness of the regulatory regimes in place in the territories, these regimes having come about as a result of recent land claims agreements. However, there is much work to do, and we cannot let this be an excuse for inaction.
The passage of the Nunavut Waters Act was a big step forward. However, Nunavut's legislative framework is still incomplete. The new boards and agencies in the NWT and Nunavut recently received additional funding, facilitating stronger staffing, but inconsistent application of legislation continues to be a major source of frustration. And without major investments in infrastructure, key projects, such as Isok Lake, for example, will never advance.
Now let me turn to the topic of geoscience.
At the meeting in Yellowknife last April of the northern Mines Ministers, Minister Nault challenged the IGOC to develop short, medium and long term strategies for northern geoscience. These strategies are being finalized right now, and this fall we hope to engage the support of key federal and territorial ministers, including ministers of finance, to allocate the necessary funds to start the process of reinvestment.
Why invest in geoscience? We have already talked about that at some length today. The benefits are too numerous to mention. Geoscience is one of the building blocks of a modern nation, and the territories are way behind the rest of the country in geoscience information.
A 1999 study showed that the territories account for at least 40 per cent of the gaps in Canadian geoscience knowledge. It has been estimated that at the current rate of expenditures in the NWT, for example, it will take more than 100 years to complete basic coverage.
The national average expenditure per square kilometre was $10.91. In the Yukon, NWT and Nunavut, the expenditures were $6.33 per square kilometre, $1.98 and $1.62 respectively. Even more disturbing numbers emerge when looked at on a per capita basis.
The lack of attention to geoscience is mind boggling when you look at its multiplier benefits. Every million dollars invested stimulates approximately $5 million in private sector exploration, which, in turn, generates $2 million in tax revenues. These multipliers are strongest when the areas are least known, such as the territories.
A recent cost benefit analysis by Stanford University showed that government investment in the 1998 South Baffin Integrated Geoscience Mapping Project had a tenfold multiplier. And the multiplier does not take into account that huge discoveries like Ekati, Diavik and Snap Lake eventually result.
As ministers of mines you know the importance of geoscience. I ask that you use any formal and informal means to press for increased northern geoscience funding to the co-operative geological mapping strategies, including the need for greater collaboration with provincial and territorial surveys and the GSC on transboundary issues, where a lot of potential exists.
Before I conclude I must raise an urgent issue for Canada's primary and secondary industries, and this refers to the Kimberley Process.
All Canadians are concerned about blood or conflict diamonds which are being used to finance terrorism and civil wars, particularly on the African continent. In a clear demonstration of global leadership, Canada has been an active participant in the Kimberley Process to develop an international certification system for rough diamonds, which will protect consumers and fight the trade in conflict diamonds.
Earlier this year Canada committed to implement the Kimberley Agreement. To fulfil its commitment, legislation must be passed by the end of this year, which will enable the international certification system to be implemented by Canada.
Other countries will be ready, but as legislation is yet to be introduced in Parliament, it is not certain that Canada will be.
Unless systems are set up to certify Canadian rough diamonds, Canada's diamond industry will not be able to sell its products in export markets. Our industry could be seriously affected, including major losses in sales and impacts on Canada's balance in trade.
This not only has to do with exports of rough diamonds from producing mines such as Ekati; it would also affect the secondary gem and jewellery industry, as well as exploration programs where rough samples need to be taken overseas for processing and valuation.
It is very important to the Canadian diamond industry, but it is also important from the standpoint of Canada's reputation in the international community. We, therefore, ask Mines Ministers to write to the Prime Minister of Canada to impress upon him the urgent need for legislation and to use any available opportunities to encourage its expeditious progress through the legislative process.
The north has a key role to play in ensuring that Canada's global leadership in mining will be maintained in the years to come, supporting the specialized and highly competitive mining and exploration sector found coast to coast, in rural and urban centres. This will ensure that we are successful in addressing other issues, such as employment, training, education and literacy, and economic diversification, because mining is the building block for them all. But we must, first, improve the regulatory climate in the north and provide the certainty and predictability of regulatory decision-making that our industry and communities of interest require, and we must invest in infrastructure and geoscience information.
MR. GEORGE ANDERSON: Thank you very much, Graham.
Comments or questions?
Mme RITA DIONNE-MARSOLAIS: D'abord, merci pour la présentation. Je pense que c'est excellent comme cible par rapport aux objectifs que nous poursuivons aussi au Québec, et votre présentation aussi sur l'importance de développer le nord rejoint beaucoup la vision du Québec par rapport au nord du Québec.
Le gouvernement du Québec a signé des ententes avec les communautés inuits et cris justement dans un contexte de participation avec elles au développement du nord du Québec.
Par rapport à cette loi pour ce que vous appelez le Kimberley Process, je pense que pour nous c'est aussi très important. On sait qu'au Québec il y a eu certaines découvertes, enfin certains résultats d'exploration favorables et que dans ce contexte-là nous sommes certainement favorables à ce qu'il y ait un code d'authentification des diamants canadiens aussi, mais par contre on souhaiterait que cette identification-là soit volontaire et que le logo utilisé, bien sûr, reflète le lieu d'extraction.
Les objectifs sont les mêmes que ceux que vous poursuivez, mais la ressource appartient aux provinces, et dans ce contexte-là on voudrait avoir une voix à ce chapitre-là.
On appuie aussi votre proposition que la reconnaissance d'un diamant qui provient du Canada ne se limite pas seulement à l'extraction de la pierre, mais qu'on inclue aussi là-dedans le taillage et le polissage.
Enfin, j'aimerais peut-être souligner que ce code dont vous avez parlé aurait avantage non pas à être régi par un organisme comme le Bureau de la concurrence, mais plutôt par un organisme qui s'apparente plus au Conseil canadien sur les normes qui déjà compte des représentants des provinces et des territoires et ça serait probablement plus opérationnel, je crois, dans le respect des responsabilités des provinces.
Encore là, félicitations pour votre présentation et merci.
M. GEORGE ANDERSON: Merci, madame Dionne-Marsolais.
HON. SCOTT KENT: At last year's meeting in Quebec City I met with the deputy minister for the Northwest Territories and the minister for Nunavut to try to get the northern Mines Ministers' conference back off the ground, and we are very pleased that the meeting did take place in Yellowknife. Unfortunately, I was unable to attend, but I understand that you had very good discussions.
I mentioned earlier the devolution of federal responsibilities to the Yukon, and we are, again, very excited about the opportunities that that will present us, especially on our ability to be more responsive to industry while maintaining a strong responsibility to the environment in the north.
We agree with you that the north is the place where eyes will go for resources for oil and gas, for base metals, precious metals and diamonds. We are excited about the opportunities in the north, and the geoscience initiatives are very important as well -- as important as any other basic infrastructure that people in the southern jurisdictions take for granted. We fully support those initiatives, as well, in getting geoscience dollars to northern jurisdictions.
I should also mention that although our principal federal department that we deal with will change as of April 1st to Natural Resources from the Department of Indian Affairs and Northern Development, we still look forward to attending and being a part of these northern Mines Ministers' conferences as we look to enhance the infrastructure and opportunities north of 60.
With that in mind, I am pleased to announce that on May 15, 2003 we will be hosting the northern Mines Ministers in the gold rush town of Dawson City, in central Yukon, and we look forward to anyone coming to attend. We will show you some good Yukon hospitality.
MR. GEORGE ANDERSON: Mr. Antoine.
HON. JIM ANTOINE: Thank you, Mr. Co-chair. I just want to make a few comments. First of all, I would like to thank Graham Nicholls for his excellent presentation on the outcome of what happened at the northern Mines Ministers' conference that we had in Yellowknife. I was fortunate enough to co-host that with Minister Bob Nault, the DIAND minister.
As you all know, the Northwest Territories is still the same as Yukon until next year, and also Nunavut. In terms of mining, Bob Nault -- the federal minister of DIAND has responsibility with Natural Resources Canada.
So I think it was a good move on their part, prior to acquiring this portfolio in November, that Minister Scott Kent and counterparts from the Northwest Territories and Nunavut reactivated the northern Mines Ministers' conference, because all three territories have a lot in common. We have a lot of resources. We have a lot of opportunities up there in terms of exploration and possible base metals and diamonds and so forth. We are rich in resources, so we have common areas on which to talk to each other about how we could do things better and more efficiently.
We bring the message here to this Mines Ministers' meeting of our concerns.
I would like to thank Graham Nicholls, once again, for bringing it forward.
In terms of diamonds, as you all know, the Northwest Territories government has a certificate program that we have negotiated -- the different companies that were able to acquire rough diamonds from BHP, they are negotiating with Diavik to have rough diamonds available to try to create a secondary industry in Canada, rather than seeing all of our rough diamonds leave this country to be processed in other lands. We would like to see them try to create a secondary industry.
You talk about how many spin-offs mining leaves in Canada, to taxpayers and so forth; we also want to further extend those spin-offs by creating a secondary industry of manufacturing diamonds in the Northwest Territories, as well as in Canada. I think that the ministers that have potential for diamonds in their jurisdiction should look to the Northwest Territories. We have four years of experience, maybe up to ten years, in understanding and learning about the diamond industry, which is a really exciting, new industry out there. Once you take the rock out of the diamonds, it is a whole different ballgame. It is a very fascinating industry.
If we as Canadians are able to create a secondary industry, I think that we will have further financial spin-offs for our economy.
With the certificate program we are able to track a diamond from the mine to the polishing and the cutting, and we certify it. There is a premium, I understand, in the diamond industry, to the certificate program.
The Kimberley Process is a good one to try to have the world diamond industry make sure that the blood diamonds or the conflict diamonds are not in the mix; that they don't come into Canada or into our industry up in the Northwest Territories.
I just wanted to make a few of those comments. Merci.
MR. GEORGE ANDERSON: Thank you, Mr. Antoine.
Are there other comments?
MR. RICHARD ROSS: I thought that it might be helpful at this point to bring to the attention of the ministers a little bit of the case study.
We are the owners of the Isok Lake project in Nunavut. We will all have many decisions to make over the coming years with respect to that property, but to bring you inside the boardrooms of mining companies, if you look at Canadian returns on equity over the past year, five years or ten years for the mining sector, it has been zero.
If you look globally, those returns are somewhere between 6 per cent and 9 per cent.
So, clearly, in Canada something is different. When we sit in front of our board and we bring projects like Isok to the table, we need to convince our board that we can get a return on equity that is globally competitive.
That is strongly influenced by taxation policy and also by the uncertainty with respect to costs that Kyoto can bring.
I would just like to reiterate that this isn't just theory. There are real life projects, real life case studies that we are all going to be facing over the coming months and years. And we, of course, strongly support the comments which were made by Mr. Carter this morning.
MR. GEORGE ANDERSON: Thank you very much.
The federal government is extremely conscious of the broader benefits that are associated with the resource potential of the northern territories. You mentioned the impact on the Canadian economy. It also plays through to the federal fisc, and the support we have to provide for the territorial governments.
A key priority for the government is aboriginal economic development, and there will be announcements on that coming forward in due course.
This particular file sort of intersects between three or four of our preoccupations: innovation, aboriginals, the fiscal state of the government. So it is very much on our agenda and we are very conscious of it.
In the interests of time, I won't go through everything on the Kimberley Process, but I think most of you know that it is in hand and we are moving forward. There will be legislation quite shortly, and it will be flexible in terms of how it plays out at the provincial level.
We are late, so I will leave my comments at that. Thank you.
HON. MARYANN MIHYCHUK: Thank you.
We are going to be moving into the stakeholder presentations and the question period. The theme this year is "Sustainable Development of Mining in Canada".
I understand that the process is that individuals will have three minutes to present, followed by seven minutes for a question period.
We are moving a little bit into our break time. Lunch begins at 12:30, so we have some flexibility.
I would like to call the first presentation, "Mining and Sustainability in Canada: The Top Two Priorities", Tony Hodge and Dave Reynolds from the International Institute for Sustainable Development.
MR. REYNOLDS: Thank you very much, minister and co-chair, and ministers and ladies and gentlemen. Thank you for the opportunity to present to you this morning.
As the minister said, I am the president of the International Institute for Sustainable Development. We live here. Our office is right next door, as a matter of fact.
We would like to tell you very briefly about our experience with the mining industry in a project called "Mining, Minerals and Sustainable Development".
This was a project which originated from an idea of Sir Robert Wilson, the chairman of RTZ, and was financed by 26 of the major global mining companies through the World Business Council on Sustainable Development.
The business council, in turn, asked IIED in London, an independent British think tank, to undertake and co-ordinate an arm's length report on the relationship between mining and sustainable development.
Preparation of the report took more than three years. It involved more than 100 workshops, public hearings, research papers, and five regional studies. My institute undertook the regional study for North America, which we are in fact launching today.
You have in front of you the first of the prepublication copies.
I would like to thank a number of people around this table who helped support the work of MMSD North America, and most particularly Richard Haworth and Natural Resources Canada.
The project produced a weighty report -- and this is how weighty -- which was presented to the Toronto Conference of the Global Mining Initiative in May 2002. It led to the Toronto Declaration, which incorporated many of the recommendations of the overall global report.
We also reported to the World Summit on Sustainable Development two weeks ago in Johannesburg, to an audience of more than 250 people. Now, when you consider that there were 20,000 people in Johannesburg, that doesn't sound like a lot, but we discovered that 250 people was a large audience for Johannesburg.
The presentation was led by the chairman of the Assurance Group, a prominent South African politician, and Mike Gilbertson, the CEO of BHP Billetin.
There was also a presentation by Andy Vickerman of RTZ, and in the business day at Johannesburg, which was a full day devoted to business and corporate social responsibility, Sir Robert Wilson of RTZ presented the results of the study.
There are 11 principal recommendations. They have been passed on both to the companies and to the newly formed ICMM in London.
Now, minister, if I may, I will turn to Tony Hodge, who will describe for you the North American part of the process, which is the report you have in front of you.
MR. HODGE: Thank you very much, David.
In North America our implementation process covered a period of about one year, leading up to the report that you have before you now.
In the interest of time and the three minutes that we have been allocated, I am going to skip past our discussion of process and the various tasks, which are well covered in the executive summary of that report, which you can refer to, and move directly to highlighting some of the recommendations, which is what really brings us here today.
Without a doubt, throughout North America in the many meetings we heard that the top priority, which came back time and time again, was to put in place a system to deal with the legacy of abandoned and orphaned sites and the issues of closure.
Interestingly, as I quickly skimmed the briefs that you have received today, the Northern Association of Community Councils, Mining Watch, CARC(ph), the Mining Association of Manitoba and the United Steelworkers all touch on this issue. In fact, it is the one seen through all of these that needs to be addressed and given priority.
It is also an opportunity -- because this nut has not been cracked in any country around the world -- it is also an opportunity for Canada to show some very real leadership.
In our brief to you we identified what I call the second priority, and that is to do with achieving a more collaborative working relationship between the industry and government, and all of the communities of interest that are implicated in mining and mineral activities.
We have identified a number of opportunities to move forward in a collaborative spirit. These are highlighted in the table that is on the screen behind you, and is in the single sheet tucked into the report.
I have copies of this table for all of the other participants here, and I will distribute them after our participation.
I want to highlight three of these. In each case we have made a recommendation for how to proceed. We have also identified what I have called a convening organization to move forward with these recommendations with other communities of interest.
The first one I want to highlight is the issue of addressing the distribution of costs, benefits and risks related to mining and mineral activities -- the equity issue.
Underlying the submission ...
... statement as saying: "We want to share in this."
The concern for distribution is a second priority that we heard loud and clear through the MMSD process, and it is a very, very difficult public policy issue.
We suggest that we move forward with that, and in this case the International Institute for Sustainable Development, with which we are associated, has agreed to convene some follow-up activity.
The second one I want to highlight is also emphasized in the report that was put to you by Noranda. It is the recycling issue.
Here is a win-win, focused public policy issue, where people, whether they be environmental groups or whatever, are saying: "We want more recycling, but we want the health of Canadians to be protected." There has to be a way through this public policy issue to a more efficient treatment of it.
Finally, I want to touch on the issue of learning support and tell you that this is a greying industry. Because of the difficulties of the past decade, the young people are no longer coming. A poignant statistic, which happens to be for the U.S. but is reflected here in Canada, is that in the year 2000, of 2.5 million graduating high school students, in their standard aptitude tests, only 300 indicated any interest in mining whatsoever. Only one of six explorers in Canada is under the age of 40.
The issue of human resources is profound. Of course, this is the message that is put to you in the brief from the University of Manitoba.
It is terribly important to work on this and, in the case of North America, the CIM working with their sister organization in the U.S. has also agreed to convene some follow-up work on this.
There are six other issues that we have identified in this report. They are all, I think, as high a priority. We need to see action and follow-up.
The tenth one of these says: "Let's work together to put in place a mechanism to track progress on all of these issues." And I look forward to working with the people in this room on creating that follow-up mechanism.
Thank you very much.
HON. MARYANN MIHYCHUK: Thank you.
Are there questions for the presenters?
Mme RITA DIONNE-MARSOLAIS: Sans donner de questions, je pense que par rapport au partenariat avec l'industrie le Québec a déjà une tradition à cet effet-là, et je pense que c'est la seule façon de trouver des solutions à des problèmes qui sont très complexes, notamment ceux que vous avez soulevés dans votre rapport.
Vous avez aussi soulevé dans le rapport l'importance à la restauration des sites miniers. C'est aussi chez nous un sujet très difficile, mais très important, et nous voulons tout mettre en oeuvre malgré certaines difficultés ponctuelles en ce moment, mais tout mettre en oeuvre pour qu'on puisse laisser un héritage positif au niveau de ces sites-là aux générations futures.
Je réitère ce que vous avez dit concernant l'équilibre entre le recyclage des métaux et la gestion prudente des déchets dangereux pour protéger l'environnement.
Le recyclage des métaux c'est très important par rapport à l'industrie minière dans certaines régions où les sites s'épuisent et je pense qu'il faut que la législation ou la réglementation qui viendra tienne compte de cette réalité-là et qu'il faut gérer le volet par rapport à la protection de l'environnement de manière très ferme et très claire et les deux sont compatibles. Je pense qu'il faut le dire.
Encore là, nous croyons au Québec, et je pense qu'on l'a démontré, que les problèmes de l'industrie, ou les enjeux que vous soulevez dans votre rapport, ne peuvent être résolus que dans une coopération très étroite avec l'industrie, et dans le respect des objectifs de chacun et des priorités de chacun.
Alors je vous remercie beaucoup de ce rapport-là en fait.
MR. CAMERON CLARK: First of all, on behalf of Ontario, I would like to commend you for your efforts, and I look forward to having an opportunity to read these reports in more detail.
I did want to highlight a number of initiatives that Ontario has been and is involved in. The first I would note specifically with respect to the legacy of the past, which is a major concern for us, as I think it is for all jurisdictions.
Ontario is currently completing a four year, $27 million program designed to reduce priority abandoned mine sites in Ontario. We feel that this has been an extremely successful program, and, of course, we are working very hard in the business planning that we are doing now to find ways of extending that funding into the future.
Ontario is also, I think, recognizing the important role that partnerships working with industry can play in this regard, and is negotiating with the Ontario Mining Association to develop a memorandum of understanding to carry out jointly funded rehabilitation work on abandoned mine sites to improve the image of the industry, and, of course, to address these issues.
We feel very strongly that working in partnership with industry is extremely important, and I think it is an expectation that the public has as well.
Finally, we are also evaluating the concept of adopting good Samaritan legislation that would protect volunteers that assist with the clean-up of abandoned sites from assuming ongoing liability through their good actions. We think that this will be necessary -- or there is a good likelihood that it will be necessary to bring the kind of partnerships together that we feel are an important part of this initiative.
HON. MARYANN MIHYCHUK: Northwest Territories?
HON. JIM ANTOINE: Thank you, Madam Co-chair. I would like to thank the gentlemen for their presentation on sustainable development.
I have a question. What we heard from industry today is what is going on today and what will happen in the future, but mining has happened in the past and there is a legacy of abandoned mines and arsenic trioxide that is stored under Yellowknife and those sorts of problems that we have, that are there, caused by mining and so forth.
In the Northwest Territories, the liability is really unclear because of DIAND and Natural Resources -- that whole area.
Since you are doing this work, what can you tell me about how things should progress from here on in that regard.
UNIDENTIFIED SPEAKER: Thanks for the question. It allows me to offer two comments.
I didn't mention before in terms of the legacy issue the work of the national advisory group on orphaned and abandoned mines, which Christine Kasicki(ph) from Manitoba is chairing. This is an extraordinarily important initiative and deserving of significant support in the years to come.
The issue of abandoned mines is a classic, tough sustainability issue. From a dollar perspective, you mentioned a $27 million program in Ontario, and it is laudable and appreciated. The Ferro(ph) Mine alone, in the Yukon -- the costs of abandonment are now up into the $200 million to $300 million range. These are big, big resources that we are talking about, and exactly at a time when the health care problems that you mentioned earlier are on the plate of cabinets across the country, and the social issues, and all the other infrastructure problems and so forth.
This is a terribly difficult issue for liability issues for companies today and for governments today. As it turns out, as many of you know, the liability that the feds assumed with strategic metals in the second world war now puts them in both an owner and regulatory position on this issue, which is a tough, tough issue.
The work of the national advisory group on orphaned and abandoned mines is now undertaking work which I hope will allow them, a year or two from now, to really come to grips with the liability and dollar issues. Nowhere is it more poignantly demonstrated than in the Northwest Territories, where on the one hand the diamond industry is bringing hope to people there in a way that they have never had, and on the other hand the arsenic under Yellowknife, the runoff from Port Radium and the associated problems with that hangs -- and I now quote from Cindy Gillday(ph) -- "Hangs like a black cloud over us in how it touched our people."
This is a tough issue. It is a classic sustainability issue. If the mining industry can deal with this issue, it will do more to further the application of sustainability concepts in other industries than anything that any other industry can do.
HON. MARYANN MIHYCHUK: Thank you. We have used up the time allocated for this portion, and we have two other presenters, so I would now like to call on Gail Wailenands(ph) from the Canadian Nature Federation: "Manitoba's Protected Areas Commitments", "The Mining Sector Consultation", "Working Toward Sustainability."
UNIDENTIFIED SPEAKER: Madam Chair, if I might, we are very familiar with Gail's work in protected land areas, so I wonder if she would mind stating her linkage to mining in a broader sense.
HON. MARYANN MIHYCHUK: Thank you.
Go ahead, Gail.
MS. GAIL WAILENANDS: That was a very artful preemption.
--- Laugher / Rires
Good morning, everyone.
There is sort of a joke in this. I learned in an industry and conservation organization workshop in 1977, from George Miller, whom many of you would know, that there is actually a link, other than these last five years of working with the mining industry in Manitoba to establish protected areas. George took a great deal of glee at telling the story while I slid under the table in that workshop, but I understand that he was right on the history, and he was right in his point to those of us who spent three days in Victoria talking about protected areas, the concerns of the industry and the technical base.
So the point of the preemption is that the first national Mines Ministers' conference where industry was invited was held in Saskatoon, Saskatchewan, in 1978, and it was my father who got the idea, as minister of the government of the day, that industry should be at these meetings.
So thank you, and good morning.
I do have a couple of quick comments, and I will try to make the very best use of the time available.
The first is obvious, and that is that congratulations are due to the companies, junior and major, in Manitoba, the participants in the industry associations, and the staff in both of the Government of Manitoba departments who have been working on this consultation with the WWF and the Canadian Nature Federation since late 1997.
Congratulations in particular are in order because there are nine million acres of public land in Manitoba which are currently ranked 1, as it is termed in this consultation in Manitoba, with pending withdrawal in place for protection from industry and from other development also.
So the award this morning makes sense to me.
There are a couple of little, small comments that I have been asked to make. I am a little lonely in the room today, but we wanted to make sure that people here, and the ministers in particular, were aware that there are two other events coming up in terms of the environmental community. One is an international conference that starts later this week in Winnipeg, and then there is another one two weeks later.
So there was real difficulty on the part of those organizations to be able to be here. I know that in your kits you have submissions and documents instead, but I wanted to basically say that it is a good idea, and most of my peers are quite conscious of the fact that the conservation and environmental communities have been participating in the last three years, and I hope you continue to do that.
The full presentation will obviously be on the website, and the main documents are in your kit, so I am not going to go through how we do this technically. It is there for you.
There is a set of maps, also, on the back table.
What we thought we would do instead is basically try a very rapid fire and pointed, if you will, discussion about what it takes to undertake the kind of consultation and joint work on a successful basis that we have been up to here for a few years.
We will try the first overhead, and when we get down to the end of that we will take a quick look at a couple of maps.
"Primary elements in the kinds of partnership and consultation that involve at least three communities of interest." In the case of Manitoba, they, of course, are the departments of government, the industry companies and associations, and the environmental organizations that are participating.
What we are trying, though, today to do is go beyond just this case, just this situation, and see what we can put out there for thought, in terms of how to arrive at the kind of success we have in Manitoba.
These elements always have to be both operational -- and consensual -- and public policy based. They are like two tracks running through everything we do.
Again, much of what is in front of us here is quite self-evident.
Respect for all parties, with everyone working for the same goal -- the public policy goal -- and on the same deliverables is essential.
Identifying and acknowledging the role of each party, with mutual agreement, then, on the operational standards and procedures, is an essential base for what we do.
There needs to be a common responsibility to jointly support and deliver on the public policy goal under review, under discussion, and/or where the tech is being applied to that public policy goal.
The work plan must be joint and then based on that dual, shared technical base.
It is a funnily obvious thing to say that more than one source of expertise, more than one source of technical information, used jointly, is essential to success.
All of the information and work products are accessible to all parties.
Agreement among the parties to the consultation about record keeping -- gee, minutes -- record keeping on decisions, recommendations made jointly, and all internal and external communications.
If you think about consultations that you have struggled with, I think you will find that some, but not all, of these common elements may have been in place.
Another obvious one is transparency and a public record of your decision-making.
Then, through a long haul, over a long timeline, maintaining the focus on the technical procedures and the operational procedures. And they are different. Operational is the information trail, the tracking, how the working relationships function, how the planning functions, how the work plan is arrived at. The technical, of course, is that basis for the decisions.
Anyone in the environmental community will have the next one as an obvious, again, but it is an essential element for at least a three-party consultation, and that is to maintain the capacity, the technical support, the resources, the funding, the staffing. To maintain the commitment in these areas allows the parties to continue to work together.
One of the quick side comments that might be made about Manitoba in this respect is that we are always told that we are a little unique, and I think that many people in the industry in this province took a great deal of, to their credit, risk when the decisions were made in 1996 and 1997 to start to work together.
We do another thing a little different in Manitoba, also, in terms of protected areas establishment, and that is that there is a memorandum of understanding between the grand chiefs and the land use ministers in the province, renewed and extended by the current government, in regards to First Nations communities and the principles and standards essential for consultation regarding their role for protected areas.
What I would like to do is look at two maps fast. The first one would be the one that has mostly green on it.
This map is from the Mines Branch and Minister Mihychuk's department staff and the Geological Survey Branch, and it reflects in dark green all of the protected areas in the province now.
If you wink for a second and go back to 1990, all that dark green goes away, except for Riding Mountain National Park.
So we went from under 500,000 hectares in the province protected to 5.5 million hectares protected by 2001.
The lighter green is what we call "rank 1s". The ranking system for decisions in the consultation was identified and designed by industry, largely, with a fair bit of initiative on the part of Jamie Robertson from Falconbridge.
So that's green and green closed to mining.
The second map is mostly turquoise. It is a slightly different way of looking at the same thing. In this instance you have the 130 -- and at this scale they are not all visible in southern Manitoba, but the 130 areas of special interest in the province under review for protected status, and then you have turquoise on the rank 1s again -- the light green on the previous map.
I am going to stop there, other than to say that it has been great to hear the discussion and the comments concerning protected areas today.
HON. MARYANN MIHYCHUK: Thank you, Gail.
Are there any questions or is there any discussion on the presentation?
UNIDENTIFIED SPEAKER: Gail, the company I represent has worked with you or participated with you in the protected areas initiative. Could you comment on the MOU you have with the First Nations and your work with them in that regard, please?
MS. GAIL WAILENANDS: Certainly. Again, we were trying to basically stretch this and talk about consultations overall and things that are common, so thank you for the question.
This MOU is from 1998, a couple of months after the formal technical sessions in the mining sector consultation began. It came into play and was drafted as a result of joint work between the World Wildlife Fund Canada, which I represented in the province during the 1990s, and the Cree consortium in northern Manitoba, based on a set of conservation principles where, then, the grand chiefs in the north put text in respect to requirements and consultation and protocols in place.
We work, then, through our office. We host the meetings of the staff working group under this MOU and help maintain the record keeping and the access to information.
It is an unusual government-to-government MOU, if one was to think of it as that, because all correspondence -- everything in the paper trail from the Government of Manitoba to First Nations or environmental organizations under this MOU -- is available to all of the parties to this MOU.
One of the unique things that bridges these two -- and thank you, again, for the question -- is that in Manitoba there are full map sheets. We just looked at a couple of quick briefing maps, but there are full-size mapping sheets of the province -- a suite of four of them -- updated once a year, which, for instance, under the First Nations MOU, are then made available to every band office -- the First Nations map, that is, to every band office in the province. The mining sector map sheet goes throughout the industry; the forestry sector map the same.
There is a variety of things that are quite common in these elements to successful consultation that we try to keep at play and keep operational in terms of the First Nations work.
UNIDENTIFIED SPEAKER: Thank you, minister.
I just want to make a comment in support of much of what Gail has said. We very much agree with those principles, and we have, in a modest way, followed along at the national level with that example in discussing with the Canadian Nature Federation what we think is an appropriate park boundary for the North Bathurst Island. We hope that we have had some influence with our partners in reaching out to communities of interest. That process is not complete, but that is one example.
We have also developed a partnership with the Canadian Nature Federation to look at --
You may recall the eco-integrity of parks report of a number of years ago which said that in a number of instances mining was a threat to the eco-integrity of parks, and we have engaged in a joint research project with the Canadian Nature Federation to better understand that situation, to see where there are real issues that need to be dealt with on the part of the industry.
We just received that report at the start of this month, and we will be assessing it.
But I can't emphasize too much the need for the outreach and the building of trust and partnerships. For us, that has been a very productive way to go forward. And when I say the "association", it comes right down to the individual companies.
We would very much emphasize the points that Gail has raised today.
MS. GAIL WAILENANDS: If I may, I would like to make a small comment about environmental organizations and environmentalists. You work with, you deal with, and/or write a lot of letters to them. The preference on my part, and all of my peers and colleagues, is to congratulate. All of us would have that motivation and that preference to want to regularly wave the flag and congratulate the government in our jurisdiction for protected areas decisions arrived at through appropriate consultation and a good technical base.
That is really what the aim is, and working on it together is the idea.
HON. MARYANN MIHYCHUK: Thank you, Gail.
The next presentation is: "Geoscience and Canada's Innovation Strategy: Smart Tools and Human Resources for a Vibrant Resource and Environmental Industry." Brian Shriner, the Canadian Geoscience Council.
MR. BRIAN SHRINER: Thank you, Minister Mihychuk.
I would like, first of all, to thank the ministers for this opportunity to present the position of the Canadian Geoscience Council regarding the contribution of geoscience to the innovation strategy.
We have already heard that this is fairly friendly company. I think that geoscience is expected or is respected by most people here as a very fundamental contributor to the mining industry, and the energy industry for that matter.
What I would like to do is highlight a few items from our submission, just to point out how geoscience can support the Canadian innovation strategy.
First of all, the Canadian Geoscience Council is a federation of 10,000 practising Canadian geoscientists across the country. We are an umbrella organization for many of the associations and societies. We have representatives from industry, from universities, from other agencies and so on. So there is quite a broad representation.
Looking at Canada's innovation strategy, there are many discussions going on at the present time with industrial sectors in the various regions across the country about innovation, and we have made contributions in various veins.
One thing that we have noticed is that geoscience is not specifically recognized, and that may be in part because geoscience supports a lot of these other activities and is integrated into many of our initiatives. It doesn't stand out on its own.
But what I would like to leave you with today is the message that smart geoscience can help to meet the goals of the innovation strategy.
We often talk about innovation, and we talk about IT, information technology. That is the current jargon, I guess. But, really, information technology is merely information transfer, and the information part is what is required.
Geoscience knowledge can contribute a tremendous amount of information. It also generates wealth and reduces economic, environmental, health and safety risks.
I will give you a few examples to illustrate the major contribution that geoscience knowledge makes and how it can help innovation.
I will keep this fairly brief. I thought we were allowed a little longer, but that's fine.
One good example is the Hibernia oilfield, offshore Newfoundland. It is about a $12 billion project. One of the major technologies is horizontal drilling, which enables the production of reservoirs from very small fractured areas. It is amazing, because the drill bit can be monitored in St. John's, 300 kilometres away.
I am not very familiar, but I am very knowledgeable about this horizontal drilling. It was developed in western Canada, as many of you know, and my organization -- the Saskatchewan Research Council -- was fundamental in getting it started. It is great technology, and over the ten years it has become absolutely incredible, when you think about how these drill bits can be migrated through these very small reservoirs and so on.
The other thing we have to understand is that the technology is great, but we have to know what that geological framework looks like. Otherwise, we don't know where to drive the drill bit. In other words, if you don't have a map of the road, you don't know where to go.
So we certainly need a very good understanding of the whole three dimensional picture of those subsurface conditions.
That begs the need for 3D immersive visualization, and I hope that some of you have had an opportunity to experience some of these facilities, where you go in and put on a set of 3D glasses and these images are projected, and you become immersed in this whole atmosphere, this whole image.
At first glance you might say "Wow, this is a nice toy and a nice animation of things", but, in fact, it provides us with a tremendous insight into what these reservoirs and deposits really look like.
There have been many success stories about how ore bodies and, in particular, petroleum reservoirs have been found, and the drilling has been targeted precisely because of that understanding.
So 3D visualization is really a fundamental need, I think.
Sudbury, Ontario is another good example. Two million dollars per year of ore is produced in Sudbury. Once again, subsurface conditions and understanding them is critical.
The other element there is that robotics is being used increasingly to reduce the safety problems and prevent accidents and so on in the mine sites.
This is something that is also going to be used in Saskatchewan. The Scar Lake Mine will be mined robotically and remotely, once again to prevent any hazard to the mining people.
The Bathurst mining camp is another example. It's a half billion dollars per year. It employees 2,000 people directly, but the reservoirs are dwindling. We heard right at the opening of this meeting this morning that mineral production in Canada is gradually diminishing year by year, and we need to reverse that trend. One way to do that is to understand better what the 3D -- what the subsurface environment looks like.
We are doing some things -- the multi-faceted ex tech(ph) geoscience research programs. The one for Bathurst is in particular illustration here, but there are many others across the country. I am familiar with the one in Saskatchewan, looking at the uranium deposits there. These are a step forward in our advancement of the understanding.
There are many more examples -- the smart mining of potash and uranium. I mentioned that a little bit. Both the potash and uranium companies in Saskatchewan are very interested in 3D visualization capability. That is one thing they see as enhancing their developments in the future.
Bathometric mapping is very fundamental for laying pipeline in geotechnically stable areas and avoiding environmental problems. And there are lots of other examples. Gas hydrates, I think, is probably the one that is the most exciting or the most in the forefront right now. We know that we have some deposits off our coasts. A lot of work needs to be done in terms of what sort of resource is really there, what is the potential for recovery, how are we going to do that smartly, without damaging the environment and sustaining development.
So that is a real opportunity that is going to take a lot of geoscience contribution.
What can government do to enhance the role of geoscience in innovation? I will just give you a couple of key points here that I think governments can help with.
First of all, traditional geological mapping is still very important, as we heard from many contributors this morning. But, in addition to that, we really need to look at the high resolution imaging of the upper two to three kilometres of the earth's surface.
I think that providing that information, once again, for the 3D models, for the visualization, is the next step forward in the contribution of geoscience to our understanding.
Of course, the training of students is fundamental. We are going to need bright, new people who can understand this new geoscience realm, if you like, and actually contribute and produce that information.
We are facing retirements in many areas in the industry and the surveys and academia, and those roles need to be replenished. So the training of students is a very fundamental capacity also.
We also need to look at the contribution of public funds toward new geoscience research. We need to accelerate new methods and new ideas and push the forefront of technology faster to contribute more to the industry.
I think that we have been using traditional methods for a long time and we need to move forward and develop some new, more modern and more multi-dimensional techniques to contribute to developing new deposits.
The competitiveness of Canada and Canadian industry in geoscience depends on the use and development of smart new tools. I mentioned some -- the horizontal wells and so on. We need new software, and, of course, bright people.
I think those are the major contributions that geoscience can make, and it can be a major contributor to the geoscience community and also to the innovation strategy for the country.
I will leave it at that, considering that the timeframe is relatively short. I would be pleased to entertain questions, if there are any.
HON. MARYANN MIHYCHUK: Thank you very much.
Are there questions or comments to the delegation?
HON. TIMOTHY OLIVE: Thank you, Madam Chair. Just a comment.
Nova Scotia recently -- I guess along with Madame Dionne-Marsolais in Quebec, we are probably the last two provinces to pass geoscience legislation to recognize professional geoscience. We are very proud to have been able to do that.
The issue related to that, however, would be that I think it is important that we improve the mobility and incidental practice of geoscientists across the country. That is something which this group certainly should probably have a look at, now that we are all on board across the country. I just thought that I would bring that up, Madam Chair.
HON. MARYANN MIHYCHUK: Are there any other comments from ministers?
MS. RITA MIRWALD: Thank you.
I just want to underscore some of the things that Brian was saying. I am speaking on behalf of the Canadian uranium industry, which is, of course, all in Saskatchewan these days. We certainly are a vivid illustration of the very direct link between investment in geoscience and social benefits, because were it not for innovative technologies, we would not be currently mining the largest and highest grade uranium deposit in the world at McArthur River. There is another one onstream at Cigar Lake. And the immediate translation of a benefit to northerners from this mining is that we employ about 50 per cent northerners at our operations, with a goal of 67 per cent, and we also stimulate a lot of northern business and spend tens of millions of dollars in northern Saskatchewan.
So I think that geoscience is not an abstract academic exercise; it is a very practical investment in innovation that leads to direct social benefits in mining, and I want to underscore that to the audience here. These investments pay off handsomely in many, many ways.
HON. MARYANN MIHYCHUK: Thank you very much, Brian.
Do you want to summarize?
MR. BRIAN SHRINER: Just by coincidence, I would like to say something about the comment from Nova Scotia about the mobility of geoscientists across the country. I have been involved with the Canadian Geoscience Council, but also with the Canadian Council for Professional Engineers for many years, and mobility across the country has been an issue for engineers for a long time.
I must say that the geoscientists have made a more rapid progression in terms of that mobility across the country, and in some ways, I think, that engineers need to take a look at.
What it is pointing out, I think, is the innovation of the geoscientists. They are willing to do what is necessary to make it happen, and that is a good example of how they work together.
I want to make a comment on what Rita was saying, too. The 3D geoscience centres -- there is one in Sudbury now, and a very good one; and Calgary, with the oil industry, has had these visualization centres for a long time. Sudbury has one now. B.C. is getting one very soon, if it is not up and running already. And we are hoping that Saskatchewan will have one that can support the potash and uranium industry someday.
So I think this is going to be fairly common technology at some point, but we need to provide the geoscience information to feed these big models. They take a tremendous amount of information and it is going to take a lot of effort to bring us to that point where we can really utilize it to the best use for finding new deposits and protecting the environment and so on.
HON. MARYANN MIHYCHUK: Thank you very much.
I want to comment on Brian's identification of 3D centres. Manitoba actually has an operating 3D centre -- a virtual reality centre -- and I would encourage industry or academics to take advantage of that. It is located in the eastern Winnipeg area. It has not been, actually, utilized by the geoscience industry until now. So we are hoping that that tool will be valuable to our industry and that people will take up your interest in that venue.
I want to thank you for presenting.
I would remind ministers and the audience that we actually had 16 presentations presented to this Mines Ministers meeting, and we have a number of the presenters here in the audience. The presentations, if you don't have them already, are available at the side table. You can get copies, and please do.
In addition, there are a number of members from these groups here today, and I would ask those representatives, if you are in the room, to stand.
We have the City of Thompson here with us. Is Bill here?
Bill is there. So if you would like to talk to Bill about Thompson...
The Canadian Fertilizer Institute is here.
Noranda-Falconbridge on recycling.
The University of Manitoba.
The Canadian Council for Aboriginal Business.
The National Aboriginal Business Association.
The Mining Association of Manitoba.
Dale will represent Ed.
--- Laugher / Rires
The Northern Association of Community Councils of Manitoba.
Are they here?
They are not in the room at the present time.
The United Steelworkers of America.
A representative is also here at today's meeting.
I want to thank each and every one of you for the work you did in putting together your papers. All of us, as ministers, are very interested in them and will have time to read through your submissions and learn more about the mining industry.
There are a couple of more announcements.
Lunch has been moved up to 12:15 p.m.
With respect to the closing remarks, first I will ask George to make his, and then I will have a few comments as well.
MR. GEORGE ANDERSON: I won't say anything, other than it has been an extremely interesting morning. I think that the presentations we have just been through demonstrate the extent to which this is an industry in full transition and reinvention of itself. There is lots that will come out of that in terms of government agendas and industry agendas over the coming months and years.
HON. MARYANN MIHYCHUK: Thank you.
I also want to thank everyone and indicate that I am pleased that we have had a frank discussion; that, indeed, the statistics are a little shocking. As we talk about mining in crisis, I think that is becoming more and more a reality. If Canada wants to have a sustainable industry, we need to find a way to be competitive.
I will be asking ministers to consider commissioning a global competitiveness study for our analysis as to how we can ensure that we do have mining in Canada and that we don't go down the same path as the United States or Europe or other countries that have no mining at all any more.
It is important for us to take care of abandoned mines, but I do enjoy cutting ribbons at new mines.
There is an important lesson to be learned, and I think that it is, indeed, a very important sector to us historically and can be in the future. Our first step is to understand our Canadian competitiveness, to get a handle on that, and now with the issues that Kyoto brings as well, I think that the timing is urgent and that we move forward to ensure that we are here in another 30 years celebrating Canada's mining success.
I want to remind ministers that we will have a private reception for Ministers only at 1:45 to 2:30, which will be in the Wellington Room, and then we will be coming back to this room to discuss a number of national initiatives. We hope to deal not only with what has been done in the past year, but looking toward the future.
L'HON. JEANNOT VOLPÉ: Avant que l'industrie -- je pense que cet après-midi ça va être une rencontre juste au niveau ministériel, et je pense qu'il y a des choses intéressantes qui ont été mentionnées ce matin. Juste pour que l'industrie soit consciente qu'il va y avoir quand même un suivi cet après-midi, j'aimerais énumérer des choses qui ont été mentionnées ce matin et que le Nouveau-Brunswick va certainement faire un suivi, mais je pense que tous les ministres aussi vont faire un suivi.
When we are talking about plain revisions to the federal legislation dealing with the import and export of recycled material, I will be discussing it this afternoon, but I just want to explain what we will be doing as a province.
It was mentioned here this morning that it is very important to New Brunswick, and probably also to Saskatchewan, that there be the designation of salt in potash as a toxic substance. We will be discussing that this afternoon.
The other issue that we heard about this morning is the termination on December 31, 2003 of the enhanced flow-through share program. I would like to say a few words -- maybe two minutes.
First, there is a federal-provincial subcommittee of the intergovernmental working group on the mineral industry which is reviewing the proposed changes to the export and import of a hazardous waste regulations, and New Brunswick is chairing that committee.
The committee, following consultations with the Canadian recycling industry, has identified some very serious concerns with the proposed legislation. These concerns, if not addressed, will place the Canadian recycling industry at a distinct economic disadvantage to their foreign competitors, resulting in a substantial additional financial burden and loss of access to a considerable volume of recycled material.
La circulation ordonnée et efficace des matériels recyclables est essentielle à la survie à long-terme de la fonderie de plomb du nord du Nouveau-Brunswick.
Il s'agit d'une préoccupation de premier ordre pour le Nouveau-Brunswick. Le comité a formulé des recommandations qui résoudront les problèmes associés à la législation.
I will recommend this afternoon that a joint government-industry committee be formed to review these recommendations to ensure that they meet industry concerns.
Ces recommandations seront présentées au ministre des Ressources naturelles Canada et à celui de l'Environnement afin de considérer sérieusement l'inclusion de ces recommandations dans le règlement.
Enfin, nous sommes d'avis qu'il est prématuré de mettre un terme le 31 décembre 2003 au programme Améliorer des missions d'actions accréditives -- ´ flow-through shares ª.
L'Association des prospecteurs et développeurs du Nouveau-Brunswick nous a demandés d'appuyer une prolongation du programme au-delà de cette date. Le secteur de l'exploration visant les minéraux autres que l'or et les diamants n'a pas encore démarré. Pour cette raison, nous avons besoin d'une prolongation du programme Améliorer afin qu'il soit toujours en place lorsque les prix des métaux seront à la hausse.
Ce que je voulais mentionner c'est que ces choses-là sont des choses que vous avez mentionnées ce matin, qu'on reconnaît sont très importantes, sont très importantes pour le Nouveau-Brunswick mais je pense pour toutes les provinces canadiennes. Il va certainement y avoir un suivi cet après-midi même si l'industrie ne fait pas partie cet après-midi des discussions. C'est sans doute des discussions qui vont être intéressantes où les provinces vont demander au fédéral des actions dans les prochains mois.
Alors merci beaucoup pour vos présentations.
En terminant, ce matin je n'ai pas pris la parole trop souvent, mais je peux vous dire que le Nouveau-Brunswick est aussi une province très ouverte à l'industrie minière. Il y a eu plusieurs choses intéressantes qui ont été faites au Nouveau-Brunswick au cours des dernières années.
J'écoutais tout à l'heure, et c'est pour ça que j'avais demandé une question à la ministre du Québec, j'ai dit : Quel montant d'argent avez-vous mis pour recevoir un tel ´ award ª, si on veut ce matin. Je pense qu'il faut réaliser que pour des provinces un peu plus petites, lorsqu'on compare ces montants-là, je pense qu'il faut souvent y aller aussi par capita parce que si on regarde le montant total du budget d'un gouvernement comparé à un autre gouvernement, c'est souvent des choses qu'il faut prendre en considération.
L'autre chose, je pense qui va avoir l'appui des provinces de l'Atlantique c'est qu'on a parlé aujourd'hui des zones protégées. Le Nouveau-Brunswick, avec l'industrie minière, a eu un très bon record et l'industrie minière a été inclue dans le processus de zones protégées au Nouveau-Brunswick du début.
On a réussi à mettre de côté les ´ land claims ª, si on veut, qui étaient déjà en place. Donc on a un bon record. Mais là aussi il faut prendre en considération que les provinces atlantiques sont couvertes à la grandeur. Ce sont tous des terrains disponibles. Le Nouveau-Brunswick est la province la plus rurale au Canada. Donc il y a un réseau routier qui existe à la grandeur de la province.
Ça peut être des fois un bénéfice et des fois ça peut se tourner contre nous autres. Le Nouveau-Brunswick a 50 pour cent de ses terres qui sont des terres privées. Donc lorsqu'on parle de zones protégées et qu'on se compare avec des provinces qui ont 90 pour cent de terres publiques et de terres privées -- excusez, 50 pour cent au Nouveau-Brunswick, lorsque d'autres provinces ont 90 pour cent de leurs terres qui sont des terres publiques et qu'elles ont des zones nordiques, si on veut, je pense que c'est plus facile aussi de mettre des zones protégées en place.
La province du Nouveau-Brunswick et les provinces maritimes sont couvertes à la grandeur, sont gérées à la grandeur. Donc c'est un défi beaucoup plus grand, si on veut, de ce côté-là.
Merci pour le temps que j'ai eu pour expliquer un petit peu la position du Nouveau-Brunswick.
HON. MARYANN MIHYCHUK: Thank you.
Are there any further last comments before we adjourn for lunch?
Hearing none, thank you very much.
Thank you for coming out.
--- Upon recessing at 12:10 p.m./Suspension à 12 h 10