NRGO Committee Meeting

STANDING COMMITTEE ON NATURAL RESOURCES AND GOVERNMENT OPERATIONS

COMITÉ PERMANENT DES RESSOURCES NATURELLES ET DES OPÉRATIONS GOUVERNEMENTALES

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, November 5, 1998

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[English]

The Chairman (Brent St. Denis (Algoma—Manitoulin, Lib.)): I see a quorum sufficient for hearing witnesses, colleagues, so I believe it would be appropriate to call to order this meeting of the Standing Committee on Natural Resources and Government Operations.

Before I introduce our witness, I just want to mention as a follow-up on an intervention by John Duncan that our plan for November 26 at 11 a.m. is still to have here a delegation representing both the companies and unions from the coastal B.C. forestry region, who will come to talk to us about the pressure they are receiving over their alleged logging practices from the European Community and from the U.S., involving Greenpeace. That will be a very important meeting. I want a good show of strength from our committee on November 26.

Thank you, John, for taking that initiative.

I'm pleased to welcome today, from the Mining Association of Canada, Gisèle Jacob, vice-president of public affairs. Ms. Jacob is here to speak to us and apprise us from the industry point of view about where things stand as far as the Whitehorse Mining Initiative is concerned, which relates to harmonization, the reduction of red tape and regulations with respect to mining regulations.

Welcome to our committee, Ms Jacob. I invite you to speak to us for ten or fifteen minutes or so.

Mr. de Savoye is asking if you have a copy of your brief in French.

Was it just brought to the meeting now?

The Clerk of the Committee: Yes.

The Chairman: Okay. We have a policy that we don't distribute presentations unless they're in both languages, so we would have to deem that not distributed, I suppose, and listen to Ms. Jacob's presentation. Normally it is our practice that we don't distribute documents. All witnesses, in fairness, don't always come with them, but we do our best.

I understand, though, from Ms. Jacob, that the translation is forthcoming from our clerk's office, Pierre. The clerk is having a translation done. I apologize. It doesn't always run perfectly this way.

Pierre.

Mr. Pierre de Savoye (Portneuf, BQ): Mr. Chairman, we have a problem here. My friend here, Ghislain Fournier, is our spokesperson on mining affairs and unfortunately doesn't read or speak English. He will have to listen to your translation without being able to have a hard copy. We are at a disadvantage. As a matter of fact, I would say you are at a kind of disadvantage, mining being an important industry in Quebec. Mr. Chair, I don't know what to say, really.

The Chairman: Let me ask Ms. Jacob. Is this your oral presentation?

Ms. Gisèle Jacob (Vice-president, Public Affairs, The Mining Association of Canada): Yes.

The Chairman: What we have received in writing today, Pierre, will correspond to the oral presentation, so in that sense there won't be a great disadvantage today, I would say, but your point is well taken. We always try our best to do this. We were given this document this morning. The only way around this, if there is unanimous consent, is to postpone the meeting, but maybe under the circumstances, since the oral presentation is the same as the written, we can proceed. Can we?

Mr. Pierre de Savoye: And could we receive a translation as soon as possible so this disadvantage doesn't last too long?

The Chairman: Yes. We will arrange that on a priority basis. Okay, Pierre?

Mr. Pierre de Savoye: Merci, monsieur.

The Chairman: Excuse us, Ms. Jacob, while we deal with a few little points of order here.

Mr. Duncan.

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Mr. John Duncan (Vancouver Island North, Ref.): I just wondered if it was worthwhile to clarify what our clerking circumstance is and whether it's temporary.

The Chairman: It's just for this week. He was needed by the committee for Bill C-43 because of some previous experience. That's all.

Mr. John Duncan: Do you want to introduce our clerk?

The Clerk: My name is Miriam Burke.

The Chairman: I'm sorry, Ms. Burke.

Mr. John Duncan: Thank you.

The Chairman: Okay, Ms. Jacob, please proceed.

[Translation]

Ms. Gisèle Jacob: Ladies and gentlemen, thank you for inviting me to appear this morning. Unfortunately, my presentation is in English only. Given the short notice, I was unable to send you the text of the presentation much before this morning's meeting. However, I would be very pleased to provide more detailed information or answer questions in French if Committee members so desire. I will be following the text of the brief I have brought with me this morning, which is in English only, but I would be very pleased to elaborate further in French at any time, if required.

[English]

Thank you for inviting me to speak to you today on behalf of The Mining Association of Canada. You have requested a presentation on the Whitehorse Mining Initiative, its current status and its future. I'll be happy to speak to you about that.

The Whitehorse Mining Initiative is a major event in the history of not only the mining industry but certainly of government multi-stakeholder consultation processes. One of the government's priorities these days is citizen engagement, and I think as you listen to me speak to you about the WMI, you will agree with me that as a multi-stakeholder process, it was certainly ahead of its time and has become a model in engaging citizens in discussions on a significant sector of Canada's social and economic fabric.

There will be four parts to my presentation today: the history of the Whitehorse Mining Initiative, the highlights of its final agreement, the current status, and its future.

About 10 years ago, The Mining Association of Canada—and I'll refer to it as the MAC—became concerned about a deteriorating trend in public attitudes and public policy in Canada. Most Canadians now live in large cities, remote from any basic production activities, and they know virtually nothing about the sources of our material wealth. Public attitudes reflect this ignorance. Surveys the MAC carried out from 1987 on showed that many Canadians had negative attitudes towards mining. In particular, most said they did not trust the industry or its leaders. Mining was described as a dirty, dangerous industry that didn't care for the environment.

We also polled decision makers, decision leaders in government and the news media, and found even stronger negative stereotypes in these categories of people. We also noticed that government policies began to move in an adverse direction, which supported the trends that came out of our polls.

The result was very predictable. Mining investment in Canada fell dramatically. A two-year study of Canada's business climate for mining, completed in 1992, revealed serious problems. Exploration spending, which had reached a peak of more than $1 billion in 1987, fell dramatically to less than half of that figure by 1990. Capital investment in mining as a share of all investment had also fallen by 50% from earlier years.

At the same time, Canadian companies were increasing their exploration and investment activity outside Canada, notably in Latin America and Asia. These countries pulled investment in through their political and economic reforms. But at the same time, our domestic policy problems pushed investment away from Canada.

By 1992, the Canadian business climate was marked by an atmosphere of public distrust, policy uncertainty and unpredictability. Canada's former reputation as a stable and welcoming jurisdiction was slipping.

The industry responded through its association, The Mining Association of Canada, by initiating three major programs, each with a different objective.

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I'll focus today on one of those three programs, namely, the multi-stakeholder consultation process of the Whitehorse Mining Initiative, but I do want to point out the other two programs that were initiated in response to the negative trend we were perceiving.

The first objective we wished to achieve was to build trust with Canadians. We chose the environment as our field of action. The MAC developed an environmental policy, and endorsement of that policy became a condition of membership in the association. The policy, which was first initiated in 1989, was updated in 1996 and was accompanied by environmental management guidelines that are now part of company policies in managing their environmental programs.

The second objective was to build alliances and to seek accommodation with our stakeholders, with other interest groups. The program we designed to support this is the Whitehorse Mining Initiative.

The third objective was to build momentum for policy change. The method we chose was political mobilization at the grassroots level, and we initiated a program called, up to this year, “Keep Mining in Canada”, which is now known as “Mining Works for Canada”.

I'd like to go back now to our second objective, which was to build alliances. The industry goal in launching the Whitehorse Mining Initiative was to build alliances and partnerships with other influential interest groups. A two-year national consultation process took place between 1992 and 1994 in which various sectors of Canadian society were invited to contribute to a new strategic vision for the Canadian mining industry.

I'd like to point out here that one of the features of the WMI that makes it unusual is that this was not a consultation process initiated and driven by government. Governments have in place policies to consult the public when they develop new programs and new legislation, but this one was driven by industry, and it is an unusual move for industry to do that.

So why did we seek advice from our stakeholders, including some of our critics like labour unions and environmental activists? Why did we want to include them in building a strategic plan for the industry? Well, we expected to obtain several benefits from that. It was a risk, but there were also important benefits to be gained.

We wanted them, first of all, to become more familiar with the industry and to understand it better. We also knew that the industry needed a better understanding of other groups' attitudes, values and expectations. Industry could then use this knowledge to guide its future behaviour and tactics.

We learned that industry needed to modify operating practices and build closer ties to local communities. I guess it's what we now call the “social license to operate”. There was a sense the industry needed that.

Third, we hoped to create partnerships or joint projects with some interest groups traditionally opposed to mining.

Lastly, we wanted other groups to support our efforts to get the changes in policy which would be necessary to improve the investment climate.

The mining industry then proposed the WMI to the meeting of the federal and provincial mining ministers in Whitehorse in 1992 and was supported by these federal, provincial and territorial ministers of mines. The cost of the initiative was shared more or less equally among the stakeholders, especially government and industry, and the total direct cost of the program was approximately $1.3 million Canadian.

About 150 people participated in the WMI process, drawn from six major groups: mining industry executives, federal government officials, officials from several provinces and territories, labour unions representing mining workers, environmental groups, and aboriginal people. These six groups were identified as the prime stakeholder groups as each had a stake in the outcome, namely, the future of the mining industry in Canada.

Though the initiative was proposed by the industry, it was managed co-operatively by all stakeholders. This was sometimes a difficult process to manage, as you can imagine, but it did maintain the goodwill, commitment, transparency and openness of all those involved.

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Discussion took place at five different discussion tables. The leadership council, at one table, consisted of more than 40 members drawn from decision-making levels in each of the major stakeholder groups. Their support was important to the success of this undertaking, and they were expected to agree on a set of high-level principles, to make an effective commitment to WMI outcomes, to implement the agreed changes and, through example, to lead others to implement the findings.

There were four issue groups, each with between 20 and 30 members, again drawn from these same stakeholder groups. There were groups on: environment issues, finance and taxation, land access and land use, and workplace-workforce community issues.

The major outcome or the most visible product of the WMI is the leadership council accord. This one contained a shared vision statement, 16 principles and 70 goals. Each word was negotiated separately. There was intense discussion in arriving at an agreement on the leadership accord.

Within a framework of sustainable development, the accord adopts a strategic vision for a healthy mining industry in the context of maintaining healthy and diverse ecosystems in Canada and sharing opportunities with aboriginal peoples.

Basically, the WMI calls for: improving the investment climate for investors; streamlining and harmonizing regulatory and tax regimes; ensuring the participation of aboriginal peoples in all aspects of mining; adopting sound environmental practices; establishing an ecologically-based system of protected areas; providing workers with healthy and safe environments and a continued high standard of living; recognizing and respecting aboriginal treaty rights; settling aboriginal land claims; guaranteeing stakeholder participation where the public interest is affected; and creating a climate for innovative and effective responses to changes.

In signing the accord, council members made an impressive commitment to support the vision, principles and goals publicly, and to promote their implementation. That was in 1994, four years ago.

Where are we today when it comes to implementing the vision, the goals and the principles of the WMI? As you can well understand, agreement on principles means little unless it is followed up by action. The WMI as a process has led to continuing contacts among those who participated in the process and has promoted a much higher degree of dialogue, understanding and communication among them. This illustrates that in the long run the process of trying to reach agreement is as important as the agreement itself.

The industry has gained partners, if not allies. There are still some disagreements on certain issues, but we have created a process for dialogue. Governments have taken their roles seriously in implementing the WMI. Some ministerial advisory committees and other groups have been set up to continue the dialogue. The federal government has put forward some important policy statements in support of the WMI, and I will cite here the minerals and metals policy that was released in 1996. In July 1998, Natural Resources Canada also released a background paper on protected areas, which, again, reflected the principles of the WMI.

The industry itself has also put in place a number of initiatives that support the recommendations of the WMI. I'll mention a few here. It initiated the creation of a joint management-labour council designed to address training and skills development in the industry. And to increase the mobility of a well-trained workforce, it has entered into agreements with CEGEPs and community colleges to design high-quality, portable training courses for the mining workforce.

The industry is involved in a number of environmental programs. It's working proactively on reducing its emissions through programs like ARET. It is involved in preparing reclamation plans anticipating the closure of mines, whether required by legislation or not. It is involved in many scientific research programs that look into improving environmental performance.

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It continues to be actively involved in habitat and wildlife conservation and has provided to Natural Resources Canada a long list of practices that it is engaged in for conserving wildlife and habitat. The industry has also been a key player in an industry-environment group looking at recommendations for the protection of species at risk and in proposals for the government as it prepares to develop new endangered species legislation.

It has also made great strides in promoting aboriginal involvement in the industry. Companies have hiring and training policies aimed at aboriginal workers. They are involved in cross-cultural, cross-language training. They are encouraging and supporting aboriginal businesses that support mining operations.

These are a few examples of how the principles of the WMI are being implemented in industry.

Where is the WMI going from here? In 1999, it will be celebrating its fifth anniversary, and I think it's important to note that the WMI has attracted international attention. Many people are looking at ways to reduce controversy relating to mining operations around the world and have come to us to explore the possibilities of implementing WMI models of consultation.

We have been asked to speak about the WMI in the United States, Australia and Indonesia. In Brazil, we have been instrumental in the Brazilians setting up a process called the “Ouro Preto Initiative”, building on the Whitehorse Mining Initiative. In South Africa, there's a major consultation process going on, again building on the model of the WMI.

We're very proud that the Whitehorse Mining Initiative has become a model around the world for stakeholder involvement in sectoral strategic planning, and I think it's an important model to remember as the government gets involved in citizen engagement concepts.

Our commitment to the WMI stands, and we hope the other stakeholders will reaffirm their commitment to it also.

Merci.

The Chairman: Thank you, Ms. Jacob.

There's no question that Canadian miners and mining companies are among the best—if not the best—in the world, and that leadership is respected. Notwithstanding that, it's important that we continue to improve on what we do.

I invite John Duncan to ask a few questions first.

Mr. John Duncan: I'll just talk in the same vein as the chair for a minute.

I come from British Columbia. We have a lot of mining exploration and expertise in the province. And right now, a great deal of the best and the brightest have become an export industry, particularly on the exploration front. They're much more likely to meet each other on a street in Santiago in Chile than they are in Smithers, for example.

So I guess I'm viewing this Whitehorse Mining Initiative by looking back to the original objective, which really was to try to remove an oppressive burden of legislation and insecurity of access and tenure rights so that mining could prosper in Canada. What you've described today is a reduction in controversy, but meanwhile we have less players and less mines.

So I'm wondering how much has really changed. I guess we want to talk about what the federal government can do, but I don't see that a whole lot has changed.

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I look at what occurred with some of the diamond play up in the Northwest Territories, and it just so happened that some of that diamond play fell outside of the ongoing aboriginal uncertainty up there. They weren't within the territorial claim, and therefore there was some latitude on the part of the federal government in regard to actually doing something that they couldn't do on 90% of the area up there, for example.

Do you concur somewhat with that? Why are mining and exploration continuing to flee the country? We had the leader from Peru here last week. We have people like him saying, “We don't know what you're doing up in Canada, but whatever you're doing, keep doing it because we're getting a lot of your people helping us out down here.” Why do we have people like him saying that? That's my first question.

Ms. Gisèle Jacob: I think your question would be better directed at government. Certainly from an industry perspective, we believe that the WMI has allowed us to engage in constructive dialogue with our stakeholders.

But if you look at the WMI, there are a lot of commitments, a lot of principles and goals in there, that fall under the purview of many stakeholders, not just the industry's.

And there was a commitment by government to put in place systems, policies and programs that would allow investment to come back. And certainly, exploration expenditures have gone up in Canada since the WMI started. At one point, I believe, in 1993, we were down to $350,000 and we're back up now to $800,000 and something. So there is exploration going on in Canada.

We don't expect changes to occur overnight. We recognize that there are many levels of government involved. We keep promoting the idea of harmonizing regulatory systems, of harmonizing and clarifying land use decisions and policies between the federal and provincial governments. We certainly promote the streamlining of impediments to investment in Canada. And I guess what the industry is saying through the WMI and other processes is that we're willing to work with you to achieve that.

But you're right. There are a lot of promises, a lot of commitments that have been made, and we're looking forward to seeing them implemented.

Mr. John Duncan: Well, that would probably be not a bad thing to address. Do you have a laundry list of commitments government has made that are unfulfilled? If you don't, would you be prepared to create one? It seems to me that happens all the time. And unless somebody is sort of a constant reminder, these commitments are not going to happen.

Ms. Gisèle Jacob: We believe that the minerals and metals policy the Government of Canada released in 1996 is a very good blueprint for federal policies with regard to mineral development in Canada. So certainly that's the one we're focusing on and that we're engaged in working with the government on.

Mr. John Duncan: Okay.

Do I still have some time?

The Chairman: If not, we can always come back to you.

Mr. John Duncan: Very short, okay?

I'm in Campbell River. We have the Westmin mine very close by.

Ms. Gisèle Jacob: In a park?

Mr. John Duncan: The mining association puts out a publication, if I'm correct, and in that publication I read for the first time that Westmin's contribution to British Columbia's economy is the equivalent of our cruise ship industry. I've seen six, seven and eight cruise ships go by during the summer when I'm home. They're very high-profile. Everybody in the urban environment and everywhere else knows about those cruise ships and what they do. I was astounded that the mine in Campbell River, which hardly anybody knows exists, does the same thing for our economy. How do we get that message out there?

The Chairman: Thank you, Mr. Duncan.

Ms. Gisèle Jacob: We're counting on you.

Some hon. members: Oh, oh.

The Chairman: Gerry Byrne, please.

Mr. Gerry Byrne (Humber—St. Barbe—Baie Verte, Lib.): Thank you very much.

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I would like to thank the mining industry association for appearing today. Based on your presentation this morning and the questions that have come forward, I just want to clarify a couple of points.

Mining investment in Canada is actually on the increase since 1994. Is that correct?

Ms. Gisèle Jacob: Exploration expenditures are on the increase.

Mr. Gerry Byrne: So the mining industry is—

Ms. Gisèle Jacob: But—sorry—they've gone down from last year's.

Mr. Gerry Byrne: Okay. Would the mining industry association actually chalk that up, in part, to this particular initiative?

Ms. Gisèle Jacob: Certainly the WMI has improved the policy setting under which mining operates in Canada.

Mr. Gerry Byrne: Is the objective of the mining industry in Canada to clarify roles, responsibilities and actually generate certainty within the operating environment? Is that a major priority?

Ms. Gisèle Jacob: Certainty is a major consideration for all business decisions in Canada. If the rules of the game change or if there are different levels of government with different rules that overlap or that apply in certain areas and not in others, investment will be discouraged. Certainty is a key goal of the industry.

Mr. Gerry Byrne: The WMI has, in my opinion—and, I think, in yours—certainly increased that certainty or generated a process in which the certainty to the industry can be increased and confidence can be regained. It has certainly created an environment in which the public understands and acknowledges the value of the mining industry more appropriately.

What about other initiatives within the current Canadian context of sustaining and expanding certainty? How does the mining association feel about aboriginal and native land claims and their importance to the industry, especially in the context of current draft agreements and agreements? Is it a valuable thing? Is it seen as a negative thing or a neutral thing?

Ms. Gisèle Jacob: I think the WMI does ask for the settlement of land claims to be done expeditiously.

Mr. Gerry Byrne: Yes.

Ms. Gisèle Jacob: It is an important issue for the industry.

I agree with you that the WMI has set the foundation for good co-operation and partnerships and has launched an ability to create good policy in Canada for the industry.

The message I would like to get across to you today is that we need to reaffirm that commitment. It's been sporadic. It's been at different levels. We as an industry are in the process right now of doing an inventory of our activities under the WMI. We're in the process of reaffirming our strong commitment to the spirit of the WMI. And we're hoping that other stakeholders will do that also.

We were the ones who promoted the WMI, but in the end, if you look at the leadership council accord, it is a commitment by many stakeholders, and we want that commitment to be clear from all stakeholders again. Unless they come back together and work together in the spirit of the WMI, we will again be facing a fragmented social, economic and environmental framework within which the industry tries to work and then becomes attracted to other jurisdictions that have clearer frameworks.

Mr. Gerry Byrne: You noted that the WMI is useful to Canadian industry and the Canadian economy and that it promotes the mining industry's activities within the Canadian context.

We've also heard testimony that the WMI is being used as a model in other countries. I'd just like to know from the mining association's perspective if it is valuable to Canadian industry to have consistency, sustainability and a consistent operating standard in other countries? And if so, why would that be of value to the Canadian industry?

Ms. Gisèle Jacob: It levels the playing field. Again, it goes into the area of predictability and certainty.

Mr. Gerry Byrne: Why would it be of value to Canadian industry if foreign countries were to do this? I don't understand. If foreign countries were to adopt the WMI principles, why would that be of value to a Canadian industry?

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Ms. Gisèle Jacob: We're not promoting the adoption of the WMI principles as such. We're promoting the process of bringing together stakeholders that have a stake in the future of the mining industry in their country. The principles they adopt, the visions they adopt, need to be consistent with the country itself and with the investment climate in that country—with the government operations, with the expectations of society in that country. And we're not even promoting the WMI. We're being asked about it. We're being invited to speak about the WMI as a process.

Mr. Gerry Byrne: The simple fact of the matter is that Canadian industry is the leader in the mining industry internationally, and substantial investment occurs from Canadian industry. Is that work in foreign countries of benefit to the Canadian economy? Is that not true? Or is that a false premise?

Ms. Gisèle Jacob: I'm not sure what point you're trying to make.

Mr. Gerry Byrne: The point is—and I don't want it to be my point, but I do want to see if it's true. The simple fact, as I understand it, is that Canadian-based companies doing work internationally require, just as they do at home, a stable environment—

Ms. Gisèle Jacob: Yes.

Mr. Gerry Byrne: —in the host countries. If they don't have that stable environment, they're not making revenues or profits like they should and therefore the Canadian industry and Canadian jobs are jeopardized as well. Is that a fair statement to make?

Ms. Gisèle Jacob: Yes.

Mr. Gerry Byrne: That's great. Thank you.

The Chairman: Okay, Gerry.

Pierre, then Marlene, Dave Chatters and Carmen.

[Translation]

Mr. Pierre de Savoye: Mr. Chairman, I intend to share my time with my colleague, Ghislain Fournier.

I have one simple question for you, Ms. Jacob. We know that a few years ago, governments in both Ottawa and Québec demanded significant amounts of money from investors who had bought flow- through shares. Yet the mining industry is quite dependent on the issue of flow-through shares for financing. Given that governments have withdrawn this option, investors now feel much less secure, with the result that fewer funds are available to the mining industry through this financing option. That has had pretty serious consequences.

Furthermore, if governments have moved in that direction, it is not without reason. The fact is that some financiers were having a field day with the legislation and regulations. Their practices were so borderline, in terms of what was allowed and what wasn't, and they stretched the rules to such an extent that governments finally felt they had to introduce sanctions. What steps have been taken by the mining industry or through the Whitehorse Mining Initiative to ensure that people within the industry are not exploiting the regulations and legislation in order to commit what is essentially fraud, in some cases?

Ms. Gisèle Jacob: I know that the Mining Association and its member companies deplore all cases of fraud when they occur. The Association is not a self-regulated organization. The cases of fraud did not involve members of the Association. The industry has been actively involved in the programs recently put in place by the Montreal and Toronto Stock Exchanges and has been instrumental in developing new procedures with respect to mining shares.

So, we are doing our utmost to minimize the incidence of fraud. As I say, we deplore such occurrences. And this is certainly not something that most Canadians companies are involved in. We are very much in favour of any action on the part of the justice system that would effectively counter fraud.

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Mr. Pierre de Savoye: I'm sure that you understood from my comments that my main point was that you be more proactive.

I will now turn it over to my colleague, Mr. Fournier.

Mr. Ghislain Fournier (Manicouagan, BQ): First of all, I want to thank the Committee for allowing me to ask questions. I also want to thank my colleagues for inviting me. I am the Bloc Québécois critic on mining issues.

Ms. Jacob, having attended the last convention of the Mining Association of Canada in Montreal, I am well aware of the kind of work it does. However, I would like you to clarify your member structure. Do you represent everyone involved in mining in Canada and Québec, in every sector?

Ms. Gisèle Jacob: No.

Mr. Ghislain Fournier: What percentage of the mining industry do you represent?

Ms. Gisèle Jacob: Well, I would have to check the actual figures, but I can tell you that the Mining Association has approximately 40 member companies and about 20 associate members. That figure corresponds to between 80 and 85 per cent of Canadian production, including gold, base metals, copper, nickel, and so on. We do not represent either the mining development or the exploration sectors. There is an association that specializes in mining exploration.

We also have sister organizations in each of the provinces, their members being basically the same as ours. Provincial associations focus mainly on the provincial framework in which mining companies must operate.

Mr. Ghislain Fournier: Perhaps you could give me your opinion on this. I understood you to say that the biggest problem facing mining companies is the environmental issue. What is your take on this? Would you say that federal and provincial environmental laws, particularly as concerns Quebec, are contradictory or that there is a lot of duplication there? Do you have to resolve each issue separately—in other words, dealing first with federal officials, and then with provincial officials—or when you successfully resolve an issue at the federal level, do you at the same time resolve provincial issues most of the time? Or must you get involved in a whole other process?

Ms. Gisèle Jacob: The Association and the Whitehorse Mining Initiative have long been promoting greater harmonization of federal and provincial environmental legislation. There has been a lot of progress in that area over the past five years. For example, as far as environmental assessments are concerned, we now have a joint process in place, and the industry is not subject to two separate environmental assessment processes.

The problem is not so much that the regulations contradict each other, but that there is overlap. Our industry has to meet very costly obligations. It has to prepare reports for both levels of government and receive two inspectors for audits that are practically identical. That results in significant administrative costs. The real issue for the industry is having to deal with two sometimes overlapping systems.

Over the past five years, we have noted an improvement in that respect and a desire on the part of all governments to try to reduce duplication. We are happy to note the progress that has been made. This is an issue that continues to be of concern, and we are closely following any improvements in the area of regulatory harmonization.

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Mr. Ghislain Fournier: I am glad to hear you admit that there is overlap. I am from a region where the economy depends on the mining industry. Where I'm from, we have four major companies: Quebec Cartier Mining, the President of which is a member of the Association; the Iron Ore Corporation, or IOC; Wabush Mines; and Fer et Titane in Havre-Saint-Pierre.

At the present time, exploration is ongoing north of Schefferville. Indeed, my colleague just referred to diamond mines. I was talking to someone who wanted to keep this whole matter confidential, because of the economic issues involved. He told me he was having a lot of trouble with both Departments of the Environment and that he didn't understand why he had to go through the same process all over again with the federal government, once he had been through it with the Quebec government. He said it is causing serious problems, at least for the diamond mine slated to open north of Schefferville, in Quebec, in my own riding. I don't know whether there will be any improvement as far as that goes, or whether you can help to ensure that those negotiations are settled quickly.

Ms. Gisèle Jacob: The issue of regulatory overlap is one of great concern to us. It is something the Mining Exploration Association is pushing very hard on. We are following developments closely, and we very much encourage governments to aim for greater harmonization.

Mr. Ghislain Fournier: Thank you. I don't want to abuse your patience by talking too long. If you have any extra time at the end, perhaps I can ask a few other questions.

[English]

The Chairman: Maybe later, Ghislain. Merci.

In regard to Ghislain's last point, which was something that John Duncan raised, maybe we need a laundry list, a list of objectives there, to ease the road, to allow us as a committee to see where we are a little better. I think the purpose of this meeting—and hopefully of future meetings—will be to see a benchmark, to see where we are, to see if we are halfway there, three-quarters of the way there or one-quarter of the way there.

Ms. Gisèle Jacob: Excuse me. Are you asking me to provide you with a list? Would the list be—

The Chairman: If you can provide a list, through what I know is your good policy office, it would be helpful, I believe. We could then have that and be able to ask the federal officials at some point if it squares with their impressions.

Thank you, Ghislain.

We have Marlene—

Mr. John Duncan: Mr. Chairman, I just wanted a point of clarification on that. Is this minerals and metals policy of the Government of Canada a lengthy document?

The Chairman: We all have it. It's about so thick, in both languages. It's a paper-covered document.

Mr. John Duncan: What do you mean when you say we all have it?

The Chairman: It was sent out a couple of years ago.

Mr. John Duncan: So we don't all have it, because many of the members are new.

The Chairman: I think it went to all members. It was distributed to all members. It was a mass distribution to the—

Mr. John Duncan: Okay.

The Chairman: But you know what we'll do, John?

Can you get extra copies, Jean-Luc? If we can get enough copies, we can do a distribution to all members of House of the 1996 mineral policies of NRCan.

With that, we'll go to Marlene, and then Dave is next.

Ms. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): I appreciate your request that this policy be redistributed. I wasn't here in 1996—

Some hon. members: Oh, oh.

Ms. Marlene Jennings: —and I've only been here in the committee for the last two weeks, so if there was a distribution to this particular committee since 1997, I definitely do not have the policy. I appreciate this request. I'm looking forward to receiving it and reading it.

[Translation]

Ms. Jacob, thank you very much for your presentation, I have a few questions. You may not have the exact figures. If that's the case, I would ask that you send them on to us as soon as possible.

On page 3 of your presentation, you say that in 1988, exploration spending reached a peak of $1 billion and that three years later, in 1990, that had dropped to $350,000. I think you meant $350 million.

Ms. Gisèle Jacob: Yes, my apologies.

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Ms. Marlene Jennings: You also said that spending had increased since, even though there had been a decline this year, compared to last. What does current spending amount to?

Ms. Gisèle Jacob: In 1991, it went as high as $532 million. It then dropped to $385 million in 1992, and increased slightly after that. The latest figures we have are for 1997: we are currently at $804 million. That represents a slight drop compared to 1996, when spending was at $895 million.

Ms. Marlene Jennings: I have a question you may or may not want to answer, or that you may prefer to give only a partial answer to. The Association and the industry as a whole took an initiative five years ago that has had political repercussions, in the sense that there has been a commitment on the part of all stakeholders, including both levels of government, as well as increased harmonization over the last five years, since the current government was elected in 1993. Do you feel that has had a positive effect in terms of bringing about increased exploration spending? Is it possible to draw that kind of conclusion?

Ms. Gisèle Jacob: The Whitehorse Mining Initiative and the commitment made governments and other stakeholders certainly had a positive impact, but—

Ms. Marlene Jennings: That was only one of many factors.

Ms. Gisèle Jacob: Precisely. And those factors include economic issues, international events, and a number of other elements. In the mining industry, we feel that the Whitehorse Mining Initiative and the commitment made by stakeholders as part of that Initiative have resulted in positive spin-offs for the industry.

Ms. Marlene Jennings: Thank you. I have another question. You also say:

[English]

Capital investment in mining, as a share of all investment, had also fallen by 50% from earlier years.

[Translation]

Can you tell us what proportion of overall investment in Canada those kinds of investments represent?

Ms. Gisèle Jacob: I would have to look at my figures. If you like, I can check them at the end of the meeting rather than looking through my papers now. But I want to make my pitch.

Ms. Marlene Jennings: Yes, go ahead.

Ms. Gisèle Jacob: Every year, we produce a publication that presents facts and figures on the mining industry. It contains figures on employment, production, transportation and exploration, and usually a comparison with the previous year. I must have that figure here somewhere. Maybe we can look at it together later.

Ms. Marlene Jennings: Fine. Thank you.

You mentioned that one of your objectives was regulatory and tax harmonization.

Ms. Gisèle Jacob: Yes.

Ms. Marlene Jennings: You also mentioned that in terms of the environment and the regulatory framework, the progress made had had a positive impact, but that those efforts must continue. As far as the regulatory framework is concerned, could you give us an example of the kind of changes that would have had an immediate positive impact, and perhaps a similar example with respect to tax system changes?

Ms. Gisèle Jacob: When we talk about overlap or the need to harmonize environmental regulations, we are talking not only about the federal and provincial governments, but also what occurs within the federal system. Some departments have certain policies which—

Ms. Marlene Jennings: Which have an impact?

Ms. Gisèle Jacob: Yes, which have a negative impact. One example would be Fisheries and Oceans' no net loss policy. I am unaware of the French term. Under this policy, it is difficult to do anything much under a mining development permit. I know that some companies have had to spend a fortune just to move a few fish. That's the kind of thing that has a negative impact on mining development in Canada.

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Another potentially difficult area for the mining industry is the programs put in place to develop wilderness areas. As you know, Ontario has launched a lands for life process; British Columbia has another process in place; the North West Territories are currently developing a strategy with respect to protected areas; for its part, the federal government has its 12 per cent policy. At some point, the industry could be facing the potential withdrawal of 20 to 25 per cent of available lands, simply because of a lack of harmonization between federal and provincial initiatives with respect to protected areas. That is a good example of the kind of thing that is very much a concern for the industry, both in terms of exploration and mining development. As far as the national parks and protected areas policy is concerned, there are major problems when it comes to coordinating federal and provincial action.

As for the tax system, I will have to get back to you on that. That isn't really my area of expertise, and I want to give you an appropriate example. So, if you don't mind, I will get back to you later with a specific example.

Ms. Marlene Jennings: Thank you very much.

[English]

The Chairman: Merci, Marlene.

David Chatters, please.

Mr. David Chatters (Athabasca, Ref.): Thank you.

I have a lot of questions, but I wanted to follow up on what John said and what our chairman said. I think if this meeting is to be productive we need some direction in order to help move the initiative along and make it work.

The Whitehorse Mining Initiative had a lot of good things in it. We in this committee did a follow-up study on the mining initiative in the last Parliament and made a lot of recommendations of support as well.

But in spite of those things, you can go all across the country and look at where the same problems that we talked endlessly about still exist to this day.

Look at the Redfern project in northern B.C., which went through all of the extensive regulatory process and now is threatened with being opened up again because of pressure from other groups. Look at the Cheviot mine in Alberta. That as well went through a good process and is being threatened by the environmental extremists trying to stop it. Voisey's Bay in Labrador was a huge project that could be employing hundreds and hundreds of people and has never gotten off the ground. Why? All for the same reasons that we talked endlessly about in our study and in the Whitehorse Mining Initiative.

In fairness, it's not necessarily all the federal government's problem either; there are some problems with provincial regulations. But to make this Whitehorse Mining Initiative really work for the industry and for Canadians— there is still something that is not working and we as a committee need to know what that is so we can advise the government and try to help move it along and make it work. Otherwise, just talking about it in the terms of your presentation really isn't going to take us anywhere. We're just going to keep on talking forever.

Ms. Gisèle Jacob: One of the things we as an industry realize and are trying to work towards is that those who signed the WMI, those who were part of the process, the 150 or 200 people who were part of it, who were committed to it and worked very hard at developing the consensus vision and principles— We need to spread that commitment. We need to get more stakeholders.

We also need to show how the WMI is being implemented. That was what I saying our industry is trying to do now. As we are coming to the fifth anniversary of the WMI, we're working on an inventory of our support of the WMI, of what individual companies are doing.

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But you're right. We have to keep the spirit of it alive. How we do that, I guess, remains food for thought. We haven't really discussed it as an industry, but we are committed to it. We want the WMI to stand as a vision for the industry in Canada. We're hoping that stakeholders will reaffirm their commitment to it. How that gets done, I guess, is subject to debate.

Mr. David Chatters: In closing, I will just give my own perspective, and I'm going to be pretty frank. My interpretation, my impression, of your organization is that it has a lot of good ideas and does a lot of good work in promoting mining and in educating Canadians as to what mining is all about.

But in looking at the huge obstacles in front of it to make this thing work, one of the greatest roadblocks, for example, is and continues to be aboriginal land claims. I would like to see your organization be more aggressive in speaking out to put pressure on the government to deal with these things and to bring them to finality.

For example, we've spent hundreds of millions of dollars in British Columbia and we don't have a single treaty yet. The mining people I talk to say they won't touch B.C. with a ten-foot pole, that there are all kinds of places all over the world that are much more secure and much more profitable for them.

And as Gerry said, maybe that helps the mining companies because they at least have their people working and they have a payroll, but it certainly doesn't help Canada when the mining industry moves out of Canada.

I'd like to see you react a little more aggressively in pushing your issues.

Ms. Gisèle Jacob: It's noted. Thank you.

The Chairman: Thank you.

Carmen Provenzano, please.

Mr. Carmen Provenzano (Sault Ste. Marie, Lib.): Yes, Mr. Chair, to the presenter, I certainly appreciate the presentation, but there is one thing I'd like to clarify for the record, if I may.

The presentation indicates that the government has adopted the negative stereotype of the industry that prevailed certainly pre-1990. The presentation makes the point that because the government had this negative stereotype, the result was predictable: mining investment in Canada fell dramatically. The point is made that over $1 billion of investment in 1987 fell to about $0.5 billion in 1990.

Now we all know, looking back, that 1990 was a recession year. While your presentation seems to attribute the fall in mining investment during that period to negative stereotyping, I'm just wondering whether you're prepared to allow that there were very many other factors at work which resulted in the reduction of that investment.

Although I appreciate your point, I, for one, have not encountered the negative attitude that relates to that negative stereotype in my dealings with current government. I just wonder if you care to comment on that. I think it's wrong to leave for the record an indication that mining investment in Canada fell during that period and that it was solely attributable to the fact there was negative stereotyping of the industry.

Ms. Gisèle Jacob: Yes, there are many factors affecting investment and exploration in Canada. In the same way, I don't want to give credit solely to the WMI for changing policies that support mining these days. I don't want to attribute all that to WMI in the same way that I would not attribute the decline in investment solely to government attitude.

The point I was trying to make was that polls indicated to us the Canadian public was not supportive of mining. Canadians didn't understand it. They had old stereotypes about it being dirty, etc.

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And often what happens is that government policies reflect public attitudes.

What we were seeing in the late 1980s and early 1990s was a proliferation of government regulations. I'm not necessarily saying that it was just federal regulations, but in regard to national parks we had more protected areas and more wilderness/restricted areas. There were a lot of land policies being developed in the 1990s that were very restrictive in terms of access for exploration. We talked earlier about environmental regulations. We were getting more of them and more possibilities for duplication with the provinces.

Those were the kinds of government programs and legislation being put in place at that time, which, in our minds, reflected some of the biases we found in the Canadian public. And when those biases are there, one of the results is investor nervousness and withdrawal of investment.

I would not want to imply there was a direct or one-on-one link there, but the attitude of the Canadian public, we believe, was certainly reflected in the kinds of policies and programs governments were putting forward, and that in turn had an impact on investment in Canada.

The Chairman: Thank you, Carmen.

John Duncan, please.

Mr. John Duncan: In the House of Commons today, we were debating, amongst other things, the marine conservation bill. That act will give the Department of Heritage the authority to create marine parks that will almost automatically exclude mining, amongst other things. We all have been talking this morning as if mining is a land-based activity, but of course I know that underwater exploration has been done in a very restricted area by the United States, and they have already identified mineral nodules that would basically make them self-sufficient in almost every strategic resource they could want.

So there's a huge resource out there. I don't think there's an awful lot going on at this point in time, but we can look forward to the future. Did The Mining Association of Canada make any representation, express any concerns or take any position on that legislation?

Ms. Gisèle Jacob: Not formally. Has it gone to committee? It hasn't gone to committee yet, has it?

Mr. John Duncan: No, it's at second reading. It will go to committee right away.

Ms. Gisèle Jacob: We were involved in the early consultation sessions that took place, but not to the extent that we've reviewed the bill.

It's a good point; we would need to look at it more closely. Again, it's an example of potential withdrawal of exploration— I was going to say “lands”, but in this case— Yes, that's a major issue.

Mr. John Duncan: Yes, and I think what flows from that is that in all likelihood, the way things operate in the current environment, we'll end up with the government designating areas for parks without ever having done any kind of a survey to determine whether there are minerals there or not.

The Chairman: Are there any other questions?

Maybe we'll have just a short one from me before we adjourn the meeting and thank our guest.

You mentioned, Ms. Jacob—to rephrase your comments—that we need to build towards some kind of five-year review involving the stakeholders that were involved at the outset. To me it would be a good millennium project, if nothing else, because the fifth year would occur just in 1999.

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I'm wondering if, either under the instigation of your association or some other major stakeholder, a conference— I know the first ministers meet every year and the mining ministers meet with Minister Goodale, but I'm wondering if there needs to be—if there isn't such a thing planned now—a major “five-year” conference to bring all the players together. Just the fact that such a thing was being planned would, in itself, I think, build some momentum and some thinking on behalf of all the stakeholders about where they are as part of this, where they are in the process and where they are in relation to where they were four years ago. Maybe that's something this committee can at least instigate others to think about.

With that, I would like to thank you, Ms. Jacob. And please express to your confreres at the association our appreciation for you being here.

We'll no doubt have you and other members of your association appearing before us. Mr. de Savoye has raised the issue of further processing of minerals in this country. I think your membership, specifically, is not involved in further processing, other than the refining and the production of ingots, for example. But to some extent, we certainly want to look at that issue, and you would, hopefully, be involved.

Ms. Gisèle Jacob: Yes.

The Chairman: With that, we stand adjourned.