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Good morning to all the members, witnesses and guests. This is the 34
th meeting of the Standing Committee on Aboriginal Affairs and Northern Development.
[English]
Our topic is northern economic development, or more specifically, identifying the barriers and opportunities there are to advance the economic circumstances for Canada's north and for northerners.
Members, this morning we're joined by two departments. First will be Mr. David Boerner, the director general for the Geological Survey of Canada section of NRCan. He will be followed by presentations from the Department of Transport and Infrastructure Canada. We are joined today by officials from those departments: Ms. Guylaine Roy, the associate assistant deputy minister for policy, and Mr. Roussel, director general for marine safety, from Department of Transport; from Infrastructure Canada we have Mr. Taki Sarantakis, the associate assistant deputy minister for the policy and priorities directorate, and he is joined by Samantha Tattersall, director, policy and priorities directorate.
Thank you very much for joining us today.
Monsieur Lévesque, do you have a question?
:
Thank you. It's a great pleasure to be here today.
I have a small presentation in powerpoint that I would like to distribute.
My name is David Boerner. I'm a director general in the Geological Survey of Canada, which runs a number of programs related principally to the geology of Canada. These are related to natural hazards, the offshore marine areas, such things as permafrost, climate change, environmental responsibility, and also, of course, minerals and energy.
Today for the most part I'll speak about the energy and minerals program, which is part of the geo-mapping activity that is an element of the northern strategy. I'd be happy to take questions on elements of this. There may be some questions from outside my particular area, but the focus I'll try to cover today is geo-mapping for energy and minerals.
In front of you is a short deck that describes something about this program. I'm not going to speak to every slide, but I'll try to hit the highlights of what the slides mean.
The first one I'll talk about is slide 3, which indicates that Canada has quite limited mineral and energy production from the north. It shows a graph of the mineral production for 2008.
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Slide 3 shows a graph of the mineral production in Canada. Obviously Canada generates a very large amount of wealth from mineral and energy production. This slide shows a comparison of the mineral production in the provinces relative to the northern territories. You can immediately see that places like Ontario and Saskatchewan produce a fair amount of wealth; some $10 billion was produced last year in those two provinces. When you look at the Yukon, the Northwest Territories, and Nunavut on the right-hand part of the slide, you can see that the production is actually quite a bit lower.
The Northwest Territories stand out at about $2 billion per year. That's almost entirely generated by the diamond industry, which is about $2.1 billion per year, so from a geological perspective, one of the questions that we've certainly asked is why there is such limited production of mineral and energy resource in the north. If I showed you an equivalent graph for energy resource production, you'd see the same thing. It would be dominated by Alberta, of course, but in fact there's very little produced in the north in a proportionate sense.
From a geological perspective, which is our domain, this doesn't make an awful lot of sense. We know there's a very large potential for mineral and energy resource in the north, and yet the production isn't there. What started us thinking about this energy and minerals geomapping program was that we asked what the deficiencies were in trying to promote those economic development opportunities through energy and minerals in the north, because if you can have a couple of diamond mines adding $2 billion a year to an economy in one of the territories, that's quite a significant change in economic circumstances for those people.
Our feeling was there weren't a lot of economic opportunities of the same magnitude available to northerners. From our perspective, some of this is related to the lack of geological knowledge in the area. I'll talk about that in a bit more detail in a second.
Slide 4 shows our estimate of geological understanding in the north represented on a map. Our question was not so much what the available information was but more whether the available information was suitable for industry in terms of making the large-scale investments they have to in exploration.
We coloured the graph two different ways. Green indicates what we thought was an area where there probably was enough information for industry to go in and invest in exploring and developing mineral resources. Pink means we thought that the information was outdated and, for the most part, inadequate for that decision-making process that companies have to face.
You can see that a fairly large area is pink. It represents probably something in the order of 2,000,000 square kilometres of the north, or probably about 60% of the land mass, where we didn't think the geological information was quite up to standard.
I think this is one of the reasons that mineral production in the north is limited; it is simply because the understanding about where to invest is quite limited.
Another one, of course, is transportation infrastructure. If you find a diamond deposit, you can extract a fair amount of wealth in a small volume and a small weight, and transportation becomes a much easier problem to solve because you can fly things in and out. On the other hand, base metals such as lead and zinc have a huge volume and a huge weight, and without an acceptable transportation infrastructure they're effectively stranded resources that won't be developed. Companies are very aware of this, of course. They make decisions based on profit, so they focus on areas where they can extract the value in a way that they can economically justify.
Another aspect in the thinking of all the industry people is, of course, the regulatory situation. They have to be sure of that. They also have to be sure of things like an available workforce in order to provide people to work in their areas.
There are myriad factors, but we certainly felt that one of the basic ones was the understanding of the potential, because if you don't understand the potential for mineral or energy resources in the north, you're unlikely to take on the economic calculations for other factors, such as the regulatory system or the workforce system or the transportation system. That was the basic rationale for the program.
Slide 5 is a bit complicated, but it shows some of our reasons for trying to do this thing. We've found from past economic studies that when we invest a dollar's worth of public money in generating geoscience information, typically industry follows up and spends about five dollars pursuing whatever opportunities are created by that knowledge. Some people misunderstand this number, so I just wanted to be a little bit clear.
Industry never makes a profit until they actually find the resources and start to develop them; by providing this information about geoscience, we basically convince industry to spend more of their hard-earned money, or some of the capital they've raised on the markets, to explore, because they believe it gives them a chance to do a better job at discovering resources.
The analogy that's often used is that the public money that is invested by governments is trying to locate the haystacks; the industry still has to go into those haystacks and find the needle, which is the real prize. That's the goal here. We believe that this kind of work actually stimulates industry to do a fair amount of additional work, and that's the base for trying to create economic opportunities in the north.
Slide 6 talks about what the program was. We think that to provide reasonable geological information over all of the pink area would probably take about ten years and, in our estimate, about $200 million. We had the authority given to us in Budget 2008 and in subsequent announcements for $100 million over five years to begin the work. This is based on a plan of trying to complete the reconnaissance mapping over ten years, but we're going to try to produce a significant part of it and do at least 50% in the first five years.
Turning to slide 7, I want to emphasize that we're not doing this in isolation. We have an advisory structure that puts a lot of technical expertise into our decision making, so that we can be sure we're doing the right kind of science in the right ways. Much of that expertise is shared with the provinces and the territories, which have geological surveys of their own. The other thing we do is listen quite heavily to members of industry, because we have to understand how they make decisions about exploration in order to provide them the information they're going to find useful. We have quite an extensive advisory structure to give that information.
At the very bottom of this slide is something we've begun that is a bit new. We have taken the view that this program needs to leave benefits in the north for northerners. We've also assumed that we don't necessarily know how to do that ourselves in the Geological Survey of Canada or in Natural Resources Canada. So we formed an advisory group of northerners and meet with them at least twice a year to ask their advice about how we can ensure that whatever benefits are created by this program stay in the north long-term and that when the program is over there are still benefits accruing to northerners. I think that's been quite a successful enterprise.
Let's turn now to slide 8. Some of the results of advice we've received from our advisory group of northerners has enhanced our ability to hire local people from communities. We've engaged up to 20 people—it's actually 24, I think, this year—including prospectors, camp assistants, cooks. We've engaged the training societies and colleges in the north to try to get more people involved in this. Part of the thinking is that if we're successful in this, industry will follow and invest in exploration programs, and that people who learn about earth sciences and geoscience and exploration would be as useful to those people who follow us as they would be to us. We're trying to stimulate some thinking that the new economy that is emerging on the horizon requires some people with skills and training to support it.
The bottom part of the slide talks about SSO. I apologize for the acronym; that's a “shared service office” in NRCan. NRCan is starting to change the way it does procurement and contracting in the north to try to involve northerners more in that process. We're actively thinking not just about the lowest price anymore; we're thinking about trying to get northerners into this business, get them aware of how government issues contracts, and make sure that we can deal with northern businesses in a way that makes them fully competitive with the rest of the country. So NRCan is taking steps to be much more supportive of this relationship and not seek purely the best business deal.
Slide 9 shows some of the results we've had from the advice of our advisory group of northerners. We've always gone in and told people what we were planning to do and asked them what information they would like from us. Now we're trying to ask them some more questions about what additional information they might be interested in. Here we have a list of some of the things people have asked us about.
They're quite interested in what's happening with respect to permafrost degradation. They also want to know about resources, hiring local people.... One group asked us about training for cooks, because they anticipated more oil companies coming into their area and wanted to provide catering services to those companies. They wanted to know how to get training to do it. Our job is not really to do that, but we've certainly put them in touch with people who can provide that training.
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I have a tendency to go fast. I'm sorry.
Marine transportation is the mode of choice and a necessity for many communities and resource developments in Canada's north. As such, the government regularly and actively engages industry stakeholders, territories and provinces, northern communities, and other federal departments on northern marine issues. Transport Canada is working to ensure that as transportation grows we have the appropriate regulatory framework in place to ensure that transportation remains safe, secure, and environmentally sustainable.
On August 1, 2009, amendments to the Arctic Waters Pollution Prevention Act came into force. These changes extended the application of the act by amending the definition of “Arctic waters” from 100 to 200 nautical miles to help ensure that ships do not pollute Canadian waters.
Transport Canada is also drafting regulations under the Canada Shipping Act to make the current voluntary vessel traffic reporting system in Canada's northern waters, called NORDREG, mandatory. These requirements are expected to be in place by the 2010 shipping season.
As in other areas of Canada, Transport Canada inspectors provide regular inspections and certification services to ensure the safety of marine and air transportation in Canada's north.
To help deter pollution from shipping in the Arctic, Transport Canada has modernized its three maritime surveillance aircraft, which are now equipped with state-of-the-art remote sensors. Transport Canada's Dash-7 flew its first mission on June 29, 2009, while en route to the Arctic for the shipping season. In total, 188 pollution patrol hours were flown in the Arctic this past summer.
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These initiatives minimize the likelihood that an increase in shipping in the Arctic will put the environment at increased risk.
By proactively modernizing our regulatory regime for Arctic marine shipping, we are laying the basis for safe, secure, and environmentally sustainable growth in shipping in the coming years. We are also working with international partners to improve international standards and regulations for transportation in the Arctic. For example, in 2008 Canada took a lead role at the International Maritime Organization to update the guidelines for ships operating in Arctic ice-covered waters. The resulting polar guidelines will help improve Arctic shipping safety and environmental protection by introducing high standards for vessel construction and operation in all Arctic waters.
The government is also making investments in northern air transportation. Transport Canada administers the airports capital assistance program, which provides funding to eligible airports for capital projects that promote safety, asset protection, and operating cost reduction. Since the creation of the program in 1995, the Government of Canada has provided $22 million for capital improvements to six airports in the Northwest Territories, $10 million for three airports in the Yukon, and almost $30.9 million for 14 airports in Nunavut.
We are also working to assist northern communities in identifying their own transportation needs. For example, in July 2009 Transport Canada hosted a working session in Iqaluit that brought together federal departments, territorial governments, and regional stakeholders. Participants discussed marine transportation infrastructure priorities in the north and strategies for moving forward. They even provided an opportunity for regional stakeholders to consider the existing suite of national infrastructure programs and its potential role in helping to meet their requirements.
Climate change and the anticipated increase in resource development will have an impact on transportation and public infrastructure in the north. Transport Canada is working with the territories and northern stakeholders to prepare for these challenges. For example, through the Transportation Association of Canada, the department is working in cooperation with the provinces and territories to develop a permafrost guide, entitled “Guidelines for the Development and Management of Transportation Infrastructure in Permafrost Regions”. The guide is expected to be published and available in the spring of 2010. It will serve as a compendium of best practices, along with new and emerging technologies, that practitioners will be able to consult when evaluating the construction of new transportation infrastructure, as well as adaptation and mitigation strategies regarding the effects of climate change on infrastructure in the north.
In addition, Transport Canada, in collaboration with the three territories, will carry out a northern transportation systems assessment, which will help identify the transportation infrastructure required to support economic development in the north over the next 20 years.
Finally, the transport, infrastructure, and communities portfolio continues to make investments in the most pressing infrastructure needs identified by northern communities, including transportation. This includes funding under Infrastructure Canada's programs, which my colleague Taki can speak to.
Thank you.
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Thank you very much, Mr. Chair.
It's a pleasure to be here today to talk about Infrastructure Canada's role in the north.
My opening remarks will be very brief to allow time for your questions.
Infrastructure Canada was created in 2002, and since that time we have developed a number of programs that have been largely national in scope, reach, and mandate, but the programs touch every community in Canada.
[Translation]
Through all our initiatives, the intent has been to support projects in every jurisdiction that address a number of different types of asset categories that are key to Canada's well-being, including waste and waste-water systems, public transit, local roads, prisons and broadband.
[English]
The goal over the long term has been to fund public infrastructure that supports a stronger economy, a cleaner environment, and better communities. Since budget 2009, this has been supplemented by the need for immediate economic action to stimulate Canada's economy.
Since 2002, our contributions in the north, and specifically in the three territories, have both increased and become more streamlined.
Under the Building Canada plan introduced in 2007, virtually all Infrastructure Canada's funding has flowed to the three territories through a new initiative called the provincial and territorial base funding program, or the PT base fund. Under this program, over $182 million will flow to each of the three territories. This is roughly ten times what any of the territories would have received had this program been allocated on a per capita basis.
In addition to providing more money than ever through any single program to the territories for infrastructure, this measure is also extremely streamlined and very flexible to meet the needs of the territories. For example, cost-sharing is done on the basis of a plan. Rather than funding each particular project, we request from each of the territories a capital plan, and we fund that plan on its aggregate basis rather than examining each of the projects in great detail.
In addition, this plan is funded on the basis of 75% by the federal government and 25% by the territories. This is in recognition of the lower fiscal capacity of each of the territories in the north, and also in recognition of the fact that infrastructure tends to have a higher cost base in the north, given the relatively low population densities over the wide geographic areas.
[Translation]
I would also note that for the territories we have a general northern infrastructure category. This ensures the adequate flexibility for infrastructure considerations unique to northern needs.
[English]
Beyond the PT base fund and in recognition of their smaller populations and greater needs, the territories are also allocated a set amount of funding under Canada's gas tax fund. In all the provinces, with the exception of Prince Edward Island, the gas tax fund is allocated on a per capita basis. However, the territories each receive a payment of $15 million per year at this time. That, again, is far in excess of their per capita allocation.
In partnership with Canada's territories and their local communities, the Government of Canada and Infrastructure Canada have accomplished a great deal in northern Canada. In the Yukon, for example, we are flowing funding under the infrastructure stimulus fund for the Top of the World Highway, and over $71 million in contribution toward the Mayo B hydro facility through budget 2009's new green infrastructure fund. In the Northwest Territories, we're funding a great deal of highway construction under the PT base fund, including the Dempster Highway, the Ingraham Trail, the Mackenzie Highway, the Liard Highway, and the Fort Resolution Highway. In Nunavut, our highlight project in the past year has been supporting repairs to the facilities for the Arctic Winter Games arena.
These are just a few illustrations of the projects we've funded throughout the territories.
With that, I'd be very pleased to take your questions.
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Yes, I knew this one would come to me. Thank you, Mr. Bagnell, for the question.
When we did Bill in March, we were in front of the Senate Standing Committee on Transport and Communications with the ministers, and we did answer a large number of questions on that particular front.
When it comes to pollution prevention in the Arctic, we mentioned to the SSCOTC committee that we deploy a Dash-7 airplane for the Arctic, and in Madame Roy's speech we mentioned that we had done 188 flying hours on board those planes this year. It's not just a sightseeing tour. We have enforcement officers from both the Department of the Environment and Transport Canada.
Beyond the system in the north for aerial surveillance, which is also supported by satellite imaging, we have during the seasons people who are working in Tuktoyaktuk, where they are deployed. We have also staff in Churchill when ships are there, when foreign vessels are loading grains.
So we have our staff during the seasons who are fully authorized and have the power of pollution prevention officers. But of course we go where there is shipping activity, and there are limited shipping activities during the seasons. On average, we get about 88 vessels doing roughly 188—
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Frozen methane is also known as gas hydrates. It's a poorly known resource, but it's basically methane trapped in permafrost ice crystals. It's known on the land and the sea floor. We've had an active program, particularly some work done in a place called Mallik in the Northwest Territories, to see whether we could have a production test of these resources. It's been relatively successful and we think methane-type resources can be developed.
The challenge right now is that gas prices probably won't support the development of this in the short term, because of things like shale gas. There's actually a surplus of gas resources. We're going to continue studying the problem and try to investigate what it means, because the estimates are quite substantial for the amount of methane that might be available in these resources. As we try to tailor our activities according to the likelihood of economic development in the relatively near term, it will probably not see as much emphasis in the near future, but we're going to keep working on it.
Does that answer your question?
On oil spills under the ice, I really couldn't comment. I'm not an expert in that particular area, the cleanup part. I think you would have to ask someone else.
The final question was on geoscience and how we compare with other nations. Canada has been pretty good about having a good geoscience base. You can see the gap in the north, so we probably haven't been as good as some of the northern nations, but maybe in the past we haven't had to be because we've been so successful in the southern part.
Russia has an enormous effort towards collecting geoscience across its territory. They have thousands of people in their geological surveys. We have about 500. They're investing quite substantially in trying to understand the resources. I think it's debatable which approach is better. We feel confident that we produce good results in these, without necessarily having the huge investment. I think this current GEM program is a really worthwhile investment that will give us a good insight into the resource potential we have in the north.
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The document indicates that Newfoundland has had modern mapping done and this is also the case for Ontario, which borders my riding near James Bay. However, nothing similar is shown for Quebec. That is why I ask the question.
I am now going to move on to Ms. Roy, Mr. Roussel or Mr. Sarantakis.
I am originally from the Lower St. Lawrence, I studied in Quebec City and I worked my whole life in Abitibi. My riding, which goes from Abitibi to Schefferville, borders Mr. Roussel's area. He was born in Saguenay, which, by the way, is where I met my wife.
A gentleman called Mr. Legault, from the Terrebonne area, near Montreal, has a modern vision for development. He has been trying to get a railroad built between Schefferville and the coast of Nunavik. This could be a wonderful opportunity for the people in Nunavut. He has been trying to do this for a long time. Mr. Roussel can confirm that boat travel is a problem whether it is in Nunavut, or Nunavik in Northern Quebec. In fact, it is only possible for a short time each year.
In 2007, if I remember correctly, $33 billion over seven years was allocated specifically to develop road and rail transport in particular. Perhaps it was for something else as well.
Have you received Mr. Legault's application? Have you taken any steps or done any feasibility studies in this regard? Mr. Legault communicates regularly with me. He relies heavily on federal assistance. A number of companies have already shown interest. If the federal government got involved in this project, I feel that it could bring about rapid progress for the nations along the coast.
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Thank you, Mr. Chair. I apologize for coming in late; I was at another committee.
Do you have any programs of study to integrate or encourage aboriginal communities in the territories to work with the Department of Natural Resources or the Department of Transportation, Infrastructure and Communities? We have not been in the far northern Territories for one or two years, but for hundreds of years.
Mr. Boerner said that researchers and scientists are needed. Perhaps the communities there should be empowered to undertake certain studies, as happens elsewhere. I would like to know what all the witnesses think.
It seems that there is no established program, but perhaps it is time for you to about the future. At present, all we think about is getting energy, minerals, diamonds and so on, but we do not think about the communities. If you keep the communities in the dark—excuse the expression, I do not mean to insult anyone—they will stay in the dark.
I find it strange that there is nothing for those communities in the $33 billion that has been allocated for the next seven years.
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Thank you, Mr. Chair, and thank you to the witnesses today.
I'm going to shift gears a little bit. I wanted to delve into energy conservation and the environment, but I think, given my time allotment today, I'll just focus on the environment. If we get enough time, I'll ask some questions about the other topic, energy and conservation.
I'm the MP for the great Kenora riding. We have a lot of similarities with the areas the committee has embarked on studying. Obviously, the southern end of my riding is along the Trans-Canada Highway, but we have communities on Hudson Bay and more than 25 first nations communities that are completely isolated, with no road access. So a number of the issues we're talking about here bear great similarity to our own. So I appreciate Dennis's questions earlier, as they resonate in my riding as well.
I want to focus on the impact of some of these infrastructure projects, particularly some of the larger-scale infrastructure projects. I know there can be challenges in any riding, but up north, and certainly in the territories and beyond, we know that the impact can even be greater in terms of the effects on the migration of animals, on hunting routes, and the like.
With respect to infrastructure, Mr. Sarantakis, perhaps you can comment on whether you're doing some work in a minimal-impact way and on whether that's become necessary. And if so, you could point to a few specific examples, and then I'll move the questioning from there.
Thank you.
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Thank you, Mr. Bagnell.
Thank you to all of our presenters here. If you would, just hang in for a second. We're going to take a suspension here in a few minutes.
Before we do that, I want to first let members know that in your trip binder for our tours to the north, there will be a section included with respect to some of the projects of Infrastructure Canada in particular.
I would also, for the benefit of our witnesses here today, ask that after the meeting you look at the blues. If there are statements that might compel you to respond on some of the commitments you undertook to get back to us on today, it would be extremely helpful that you review them.
There are a couple of items I want to add to that list.
This is for Mr. Boerner. In your deck you mentioned that 65 communities were visited in 2009. If you could give some examples of those communities, that would be great.
Also, Mr. Sarantakis referred to the Top of the World Highway. Is it in Yukon?
Okay. That was just to be sure.
Going back to Mr. Boerner, you mentioned four projects for engaging northern economic development specifically. I wonder whether you could get back to us concerning those. If you have a question, we can clarify it when we're on our very short break here.
Finally, I want to let members know—you have received information on this in advance—that some of the representatives are still in the gallery with us today from the Aboriginal People's Circle of the Public Service Alliance of Canada. They were on the Hill today, and I think some were in the gallery with us.
What we're going to do is take a five-minute recess. We're going to suspend the meeting for five minutes. After that, we must go in camera. So if you wish to, you can say hello to some of the folks who are here today as well as say goodbye to our presenters.
We really appreciate your input and your responses. The testimony will be very helpful in our report.
We will suspend for five minutes.
[Proceedings continue in camera]