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Thank you very much, Mr. Benoit.
Merci.
It is a pleasure to be here today to address the House of Commons Standing Committee on Natural Resources as you study the question of resource development in Northern Canada.
My name is Pam Schwann. I'm the executive director of the Saskatchewan Mining Association. Joining me today, as already introduced, are Ms. Tammy Van Lambalgen, vice-president of regulatory affairs and corporate counsel for AREVA Resources Canada, and Mr. Gary Merasty, vice-president, corporate social responsibility, Cameco.
The Saskatchewan Mining Association is an industry-funded organization that is considered to be the voice of the mining industry in Saskatchewan. We have more than 40 member companies, including producers of coal, potash, uranium, metallic and industrial minerals, as well as companies carrying out exploration in the province.
The SMA has submitted a brief to Mr. Lauzon, the committee clerk, entitled “Saskatchewan Mining: Global Leaders”, but in the interests of time and your specific interests, after some general remarks the presentation will focus specifically on the mining industry in northern Saskatchewan.
The main points we would like to bring to your attention are these: the Saskatchewan mining industry is a significant Canadian and global mineral producer; Saskatchewan mining companies operate world-class mining facilities; Saskatchewan mining companies are Canadian and global leaders with respect to aboriginal employment and business development opportunities related to their operations; and, an efficient regulatory and strategic policy system will help ensure that Saskatchewan mining operations continue to deliver benefits to Saskatchewan, Canada, and the world.
The Saskatchewan mining industry is a significant global mineral producer. In 2010 we ranked second in Canada in terms of the value of mineral production, with a value of just over $7 billion. We are the world's number one producer of potash, producing about 31% of the global supply, and are the number two producer of uranium. We currently produce about 18% of the global supply, which is down from about 28% of global production in 2005, when we were the world's number one producer of uranium.
Saskatchewan will continue to be one of Canada's leading mineral producers for the years to come. The existing mining operations have announced intentions of more than $43 billion in investment in the next 20 years in their current operations.
I'm going to skip to page 9 of the presentation you have in front of you. There is a mineral resource map of Saskatchewan on it. The remainder of our presentation today will focus on the activity on the northern third of this map. I have a coloured copy that I'm going to put up so that you know what you're looking at.
Predominantly, there's a yellow oval structure on the map showing the area that involves most of our activities, and that's where the uranium production comes from: the Athabasca Basin region of northern Saskatchewan. On pages 11 and 12 of the presentation we talk about uranium production. Mines in Saskatchewan provide 100% of Canadian uranium production. It was valued at just over $1.2 billion in 2010. The mineral production came from three operations: McArthur River, which on the map is shown as number 48, marked by a red dot; Eagle Point; and McClean Lake.
Specifically, the McArthur River mine is the world's highest-grade uranium mine, with average grades of around 20%, compared with a world average that is just under one per cent. It currently provides the majority of Saskatchewan uranium production and itself is responsible for 15% of the world's uranium supply.
There are currently over 25 years of production from existing mines, and there continue to be new discoveries over broad geographic regions of the Athabasca region. On the mineral resource map of Saskatchewan, these include areas such as Cigar Lake, number 45, Shea Creek, on the west side of the Athabasca Basin, number 33, the Millennium deposit, and the Roughrider zone, just to name a few.
Turning to gold production, Saskatchewan currently has two gold producers: long-time producer Claude Resources, whose Seabee mine is nearing the mark of one million ounces of gold production. More recently, in December 2010, we had another mine start-up, which has started producing gold as well.
In terms of exploration, we have healthy mineral exploration expenditures of approximately $270 million forecast for 2011, with $100 million of this targeted for northern Saskatchewan.
While mining and exploration bring benefits in terms of revenues to companies and governments, mining has also been a key driver of economic and social benefits in terms of employment, business development, and school retention.
On page 15 of your presentation, we have some information with respect to northern employment. Mining companies in northern Saskatchewan are leaders in hiring first nations and Métis people at their operations. Cameco is the number one industrial employer of aboriginal people in Canada.
There are over 3,100 mine and long-term contractor employees at the northern Saskatchewan mines, including 660 residents of Saskatchewan's north. In 2010, a payroll of over $90 million was paid to the direct employees, and contractors paid an additional $217 million to their employees; I should say that this is an update from the numbers in the presentation that refer to 2009 information.
Some of the tools that have assisted us in reaching this employment achievement are surface leases and cooperative tools such as the multi-party training plan and northern career quest, an ASEP-funded program. As shown on page 16 of the presentation, northern mining employees make up an increasing proportion of workers in the higher skilled categories, such as supervisory, technical and trades. That is at 39% now, compared to 22% in 1984.
Business development is highlighted on page 17 of the presentation. Northern mining companies have worked closely with northern economic development agencies to incubate successful northern businesses. These successful businesses, such as Kitsaki Development Limited Partnership, which is the economic development arm of the largest band in Saskatchewan--the Lac La Ronge Indian Band--and Athabasca Basin Development Limited Partnership, are now transferring their business skills that were developed in the north into southern mining operations.
Looking specifically at economic benefits derived from northern mines, in 2009 northern mine operations purchased $279 million in goods and services from northern businesses, which is approximately 62% of all goods and services purchased. In 2010, mining companies purchased goods and services worth over $361 million from businesses based in northern Saskatchewan.
I'd like to turn now to some of the key challenges the mining industry faces.
The first one I'd like to speak to is with respect to regulatory effectiveness. As noted by the commissioner for environmental and sustainable development, the federal environmental assessment process suffers from systemic delays and a lack of coordination between federal departments, and focuses on expensive and frustrating processes without being able to demonstrate value to the environment or society.
While Bill introduced improvements to CEAA to address some of these issues, these amendments did not apply to projects subject to Canadian Nuclear Safety Commission authority; hence, most of the projects in northern Saskatchewan will not see the benefits of these amendments. By comparison, in Australia, the federal and state governments completed a review of BHP's massive copper, gold and uranium Olympic Dam proposal in approximately two years. The significant time difference in reviews places Canadian projects at a competitive disadvantage to uranium projects being developed in other countries.
The mining sector also continues to see increasing regulatory engagement, with Species at Risk and Migratory Birds Convention Acts, the Department of Fisheries and Oceans, and regulations related to clean air. Also, the lack of integration of the duty to consult policy between federal and provincial agencies on the same project causes capacity issues for both industry and first nations and Métis communities.
The second issue I'd like to briefly speak to is access to highly skilled and highly qualified people. This is a huge challenge for the mining industry going forward due to retirements and also due to expansion. Programs such as the aboriginal skills employment program, ASEP, have been very beneficial in the past, as has the national sector council's Mining Industry Human Resources Council. Both of these programs are being wound down, or funding has been significantly reduced.
Lastly, the inadequate infrastructure in northern regions affects the competitiveness of the mining sector and also affects the abilities of northerners to effectively participate in employment and economic development opportunities related to mining.
Time permitting, I'll go to page 20 in your program, which shows you some examples of how federal regulations and policy have the potential to drastically affect mineral development in northern Saskatchewan. This relates to Environment Canada's proposed recovery strategy for boreal woodland caribou, which is currently up for public review. This strategy would effectively restrict development in the grey areas shown here, and would eliminate development in Saskatchewan in the blue areas shown: over 30 million hectares and essentially all of the Precambrian Shield area of northern Saskatchewan.
We feel that the model Environment Canada has used is based on incomplete and inaccurate science and on faulty assumptions and professional judgment, particularly with respect to the relationship between the availability of caribou habitat, the high incidence of natural fires in northern Saskatchewan, and the very limited proportion of human disturbance. These types of policies really affect the ability of the mineral industry to move forward.
In conclusion, Saskatchewan is a leading global producer of potash and uranium, although we have lost our number one ranking with respect to uranium. Saskatchewan continues to offer excellent resource potential, with world-class deposits. Mining, directly and indirectly, currently employs over 30,000 people and is poised to employ significantly more in the future as the mining industry invests over $42 billion in the next 20 years.
Saskatchewan mining companies are Canadian. They are world leaders in aboriginal employment and business development. However, key regulatory issues impede growth, without demonstrating an environmental benefit.
With that, I'd like to thank the members of the House of Commons Standing Committee on Natural Resources for inviting us to make this presentation today. We'd be very pleased to answer any questions you may have.
Thank you.
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I don't need English translation, but I might speak in both French and English, if you don't mind. When you speak there, it's okay if you speak in English.
[Translation]
Good afternoon, everyone.
I am honoured to be with you today to discuss a few issues and priorities concerning development and resources in the north, particularly northern Quebec. So I'm going to focus on the situation in Quebec, but there are certainly some parallels to be made with other parts of Canada.
I'm Ugo Lapointe, spokesperson for the Coalition Pour que le Québec ait meilleure mine, a name which isn't easy to translate into English. I wish the translators luck.
Basically, we represent some 20 bodies in Quebec, chiefly union organizations, such as the Centrale des syndicats du Québec, the regional council of the CSN in Abitibi-Témiscamingue and Ungava, a major mining region, and the Syndicat de la fonction publique du Québec inc., which includes technicians and technologists employed by the ministère du Développement durable, de l'Environnement et des Parcs, and the ministère des Ressources naturelles et de la Faune. In addition, there are members of environmental groups like Nature Québec, Ecojustice and Mines Alerte Canada, and citizen organizations from Abitibi-Témiscamingue, the North Shore and other parts of Quebec. In all, the Coalition Pour que le Québec ait meilleure mine has between 200,000 and 225,000 affiliated members.
As indicated by its name, the coalition's aim is for Quebec to look better and not for it to have more mines. Generally speaking, we're in favour of mining development, but we think that some major issues have to be resolved, particularly social and environmental issues. Our mission is to promote much more effective practices, regulations and monitoring on social and environmental levels.
My presentation divides into two or three points. The first one is designed to give you an overview of the situation in northern Quebec regarding mining operations. The second contains three recommendations that I'd like to make to your committee. I hope it won't take too long.
I'd like the chair to tell me how much time I have left.
[English]
I might try to do this partly in English.
What is the context currently in Quebec for mineral exploration and mineral extraction? Basically, as in many other places in Canada and around the world, we are going through the biggest mining boom that our province has witnessed since the beginning of mining.
Essentially, if we look at the past 20 or 30 years, since 2005 we have augmented by many times investment and exploration all through Quebec, as well as the value extracted in the province of Quebec. In 2005, when the price of many metals and primary materials boomed and skyrocketed on the international markets, we went from $200 million in investment and exploration work to up to almost $600 million last year, and for 2011 it should be around the same range.So in five or six years, we went from $200 million to about $600 million in exploration work.
In terms of value extracted in Quebec, the same thing happened. Since 2004 or 2005, we have gone from a gross production value of about $2 billion or $3 billion a couple of years ago to almost $8 billion a year this year. These are massive changes.
So in a few years there have been significant changes, and they're due to global context, global trends, and a massive demand, especially from the big emerging markets such as China, India, and Brazil, to name just a few. In Quebec, the main minerals being extracted, by value, are iron, nickel, zinc, and gold. These are the main cows, if I may call them that, of the mineral industry in Quebec. There will probably be some rarer metals, like lithium, and some other metals, or diamonds, for instance, that will be extracted in the years to come, but they will remain marginal in value compared to the existing extractions I just named.
Those investments and those values also trigger certain issues, such as environmental issues. We're now seeing hundreds of exploration projects throughout Quebec--between 400 and 600 every year. We went from about 15 or 20 mines just a couple of years ago, and now we're back to about 25. We'll go up to about 30 mines, probably, in the years to come. That massive boom is triggering environmental issues. We need resources in both federal and provincial ministries to take care of that mining boom to limit the impact on the environment.
It has also triggered some social issues. Mining is moving further north towards regions inhabited primarily by first nations, and there are still some issues of title rights and first nations traditional rights in some parts of northern Quebec that need to be dealt with and recognized.
There are social issues, because some of this mining boom is translating into a new kind of mining in Quebec, which does large, low-grade, open-pit mines that are often located close to communities, to established communities. Large, low-grade, open-pit mines, because of their size, their impacts on the land, and the noise, the dust, and other nuisances they create, trigger some social tensions in some parts of northern Quebec. That's something to keep in mind.
We need to keep in mind that these are non-renewable resources and that there is a more and more sensitive population that is asking for proper compensation for the extraction of those resources in the years to come, for future generations.
That is basically the context in brief. I think I have only about two minutes left...?
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I would be happy to come back to some of those contextual elements in the discussion afterwards.
If I had to pinpoint some key issues that I think the commission should be concerned about in the weeks, months, and years to come, one that is actually important and that many of my colleagues and the population of Quebec feel concerned about is the question of control of mineral resources property.
There is also the question of extraction and benefits, so more and more, the collective ownership of those resources is becoming a concern. I think Quebec is not alone in this situation.
The Canada-European agreement that is currently being negotiated, I think, could have serious and significant impacts on that particular issue. I think of the recent situation in Saskatchewan with PotashCorp, where the federal government, along with the provincial government, agreed on protecting Canadian interests from a foreign takeover. One wonders if this current Canada-European agreement would allow such a move that was necessary in the case of Saskatchewan's PotashCorp.
The second issue, quickly, which I mentioned earlier, is the necessity to better protect the environment in light of a massive mining boom. The billion dollars that I talked to you about, both in the investments that we are witnessing but also in value extracted, in our opinion also necessitated parallel curves that we should see in the ministries responsible for controlling the mining, exploration, and extraction. Here in the environment, abandoned mining sites are also a concern to many citizens. We need to understand that restoring abandoned mining sites also brings economic activity to regions, so it's not just a question of restoring the environment. It could also be seen as a potentially important economic benefit to the regions that do the work.
Lastly, as I mentioned, first nations issues need to be dealt with. Here, with the “Plan Nord” of Premier Charest, we often hear that first nations all agree with the Plan Nord, but what we don't often hear is that there are some first nations, such as the Innu first nations, who are still struggling with their traditional entitled rights. These should be settled, creating a more stable climate both for communities and the investors.
I will conclude here and open the floor for discussion later. Thank you.
The Chair: Go ahead.
Ms. Tammy Van Lambalgen: Thank you.
We have some good examples concerning the length of time it takes to get an environmental assessment through the cycle, especially for new projects.
Our Midwest project, if you want to compare it with the Olympic Dam experience—which, as Pam said earlier, was from 2009 with an approval within approximately two years—is an open-pit mine, but not a mill, because we would be using existing infrastructure for the milling side. It is just about at its sixth anniversary of going through the environmental assessment process.
The project description was filed in December 2005, and we just recently submitted our final draft EIS. We're probably into the last year. We're anticipating EA approval in the fall of 2012, subject, of course, to the minister's discretion. That will be a seven-year environmental assessment process.
We have spent many hours reflecting on the cause of that and on where improvements could be found. Of course, we are willing to take some responsibility on the AREVA and industry side of the table, but there are many improvements that could be made in the EA process.
Primarily, the lack of a single process is a problem. We have the provincial environmental assessment process and the federal environmental process running in parallel, and although it's a cooperative process, it isn't a single EA process. In addition, we're finding that the multiple reviews in the federal departments are creating new issues each review time.
For example, in our first technical comment period, we received over 300 comments, and in the next one we received well over 200 comments, many of which were new because we had new regulators on the file. We'd like to see a streamlined review process. We're still looking for it to be rigorous and expansive to ensure the protection of the environment, but we're seeking more efficiency.
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I would direct you to a report that we produced in November 2009, which is available on our Web site: www.quebecmeilleuremine.org. This report, which was prepared with Ecojustice, includes some 25 recommendations, which I haven't listed for you today. I could, however, summarize our chief recommendations.
In fact, we are currently experiencing a problem which is not unique to Quebec. Although it is old, the Mining Act of Quebec very often takes precedence over other uses of the land. There the mining regulations need to be cleaned up, since they allow companies to have easy access to the land and to resources. That gives a lot of power to the mining, gas and oil companies in Quebec. It's time to rebalance the forces between businesses, on the one hand, and the communities and regions affected by these activities, on the other.
Concretely, these laws have to include new elements making better development of the land possible. For example, if a municipality or an MRC wanted to promote some type of economic development, the development of a protected area, hunting and fishing or any other use of the land, it should be able to choose this collectively. Therefore we have to stop always giving precedence to the mining companies.
Actually, if you consult the recommendations contained in our report and the briefs submitted to the Commission de l'Assemblée nationale du Québec, you'll find specific measures in this regard.
As far as the environment is concerned, I have talked a lot about the need to reinforce the role of the departments in follow-up and monitoring. It is fundamental. I've also talked about the need to strengthen financial guarantees to ensure complete reclamation of sites. At present, in Quebec, the bill proposes financial guarantee coverage of 100%, or 50% payable the first year and 50% payable within the first three years of operation. This in itself would be progress.
That said, there are other deficiencies from an environmental point of view, particularly with respect to open-pit mining. At present we emphasize the complete reclamation of open-pit mines. We hope that the new legislation will require companies that propose open-pit mines to analyze various scenarios for reclaiming the pit, including a scenario providing for complete refilling. Some companies said in committee that it would be feasible. The important thing is for them to know in advance so that they can include these scenarios in the design of the project.
There is another important environmental issue which I'd like to stress before our time runs out. I said that the Coalition Pour que le Québec ait meilleure mine was generally in favour of mining development. However, we have firm positions respecting two mining sectors, the first being uranium. There are not yet any uranium mines in Quebec, but there is a lot of exploration. At present, a moratorium on uranium is being demanded by over 300 municipalities in Quebec. The Cree are opposed to the Matoush uranium-bearing project. We are also opposed to asbestos. We should no longer invest public money to support this declining industry. I should add that, in both the cases I've just mentioned, namely asbestos and uranium, there are much less dangerous alternatives with fewer impacts.
I could still go on for a long time, but I invite you to read the November 2009 report, which has close to 25 recommendations.
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I'll condense the twenty minutes into two.
I grew up in northern Saskatchewan in a community called Pelican Narrows. My family were fishermen and trappers. That was the primary mode of employment and socio-economic activity. There wasn't a lot of mining. There was some in the very far north with the original uranium mining, but aside from that and forestry, it was living off the land.
Also, having been a teacher, that being my first training, I know that the impacts of development have been positive. Now, there are always concerns, and you have to mitigate those concerns about the impact on the environment, about the social impacts, and about all those other impacts that we talk about and study and look at.
But in the last number of years, we have undertaken a study with an economist from the U of S and have determined through that piece of work that, between Cameco and AREVA, one out of every twenty aboriginal jobs in Saskatchewan is with our companies. We know that there's a two-for effect: every time we hire a northern aboriginal person, another position is created somewhere in the north. Also, there is another position created in the south because they go and buy their trucks, flat screen TVs, and other things in the south.
We know that in the next little while it's going to be a challenge to sustain our 50% aboriginal employment number. We're only seeing about 100 to 125 grade 12 graduates a year. Next year we have to hire about 430 people. If you extrapolate that 10 years, we're going to have a major shortage. The last thing we want--and the first nation and Métis communities have told us that it's the last thing they want--is to be left behind. So the training programs that we just talked about are absolutely critical, starting in the K to 12 system and moving on to the college and university level.
As a bit of a response to MP Trost's question, engineering is one of those positions we'd like to get and simply get it started. We are seeing another 20 to 30 years of activity in the mining industry, so let's just get started. We view the aboriginal community as a competitive advantage.
A voice: Let me add that—