[Recorded by Electronic Apparatus]
Tuesday, March 26, 1996
.1110 
[English]
The Chairman: I call this meeting to order as we continue with the committee's study of the environmental regulations in the mining sector.
I'm pleased to welcome today, from Keep Mining in Canada, Eileen Wykes, program coordinator; Mayor Vic Power, Mayor of the City of Timmins; and Dennis Prince, director of international exploration for Falconbridge Limited.
I suspect you'd like to make opening comments. Then we'll turn to questions from committee members. Welcome, and please proceed.
Ms Eileen Wykes (Coordinator, Keep Mining in Canada): Mr. Chairman, members of the standing committee and guests, I apologize up front that I will be speaking in English.
With me is Gisele Jacob from the Mining Association of Canada. She can respond in French. This invitation was so quick I was not able to provide a French translation, but I will do so for all members.
Thank you very much for this opportunity to speak to you about Keep Mining in Canada. I am the project manager of the campaign. It's certainly a privilege and an honour to be here today. I appreciate this opportunity to tell you about the origins of the campaign, to bring you news about the support it has attracted across the country and to tell you some of the campaign activities we've planned for this year.
Sharing the podium with me today is Mayor Victor Power, Mayor of the City of Timmins, Ontario. Mr. Power was the first of more than 130 mayors and reeves across Canada to recognize the potential for the Keep Mining in Canada campaign when it was launched in 1993. Now Mayor Power and his fellow mayors are helping to raise the profile of mining issues so vital to the future of 150 communities scattered across the country.
Also joining me today is Dennis Prince, director of international exploration for Falconbridge. Dennis also serves as one of Keep Mining in Canada's outstanding ambassadors. He brings extensive experience in many parts of Canada and abroad, and can speak from firsthand experience about the need for Canada to remain competitive in the global arena.
The people I did not bring with me today are the very ones for whom I speak. They are the 80,000 people who are directly employed in the mining industry, the 300,000 others whose jobs reflect the health of the mining industry, and nearly 1 million people who live and work in mining communities from Cambridge Bay in the high Arctic to Voisey Bay on the east coast to Campbell River on Vancouver Island in the west. These people were our first contacts when the campaign was launched. One of my hopes today is that I might convey to you how passionately they feel about these issues and how committed they are to seeing them resolved.
Some of you have asked me who sponsors Keep Mining in Canada, how the campaign got started and what it aims to achieve. That's a good place to start my presentation.
Keep Mining in Canada originally was sponsored by the Mining Association of Canada, and it still is. That's the tip of the iceberg, because people are devoting their time and effort to it far beyond that original sponsorship. It's funded by association members, 145 mining companies, but after it was launched it was adopted by the Canadian Mineral Industry Federation. That's actually an umbrella group. Under the Canadian Mineral Industry Federation there fits Mining Association of Canada, Prospectors and Developers Association of Canada, the Canadian Institute of Mining and Metallurgy and its 60 branches the country, as well as provincial and territorial mining associations. Some of these organizations now are also helping to fund Keep Mining in Canada.
I think the point is that the campaign's strength is the fact that it is so broadly based in its support. The mining industry, for the first time in the history of Canada, is able to speak with one voice.
.1115
I know you've heard about Keep Mining in Canada before. You all get our monthly newsletter, Mining Caucus Update. Some of you were members either of the standing committee when I spoke to the committee in November 1994 or of the Liberal rural caucus, which Mayor Power, ambassador Maureen Jensen and I addressed last summer.
Now, on the one hand, I'm a little embarrassed if you have to hear me speak again. On the other hand, I'm really not. There in fact has been virtually no substantive change in the investment climate in Canada since those occasions. So from that point of view I'm not embarrassed.
Let me tell you a little bit about the history of the campaign. It arose in response to the need to encourage investment in exploration and development in Canada. In the process of doing that, we aim to raise awareness of the economic and social importance of mining and to explain the challenges mining faces not only to government but also to the general public.
In the the past, we'll admit, mining has not been vocal. It's been out of sight, out of mind. Not surprisingly, few people know that mining is a huge $20 billion industry. It accounts for 16% of Canada's exports. It accounts for 60% of the materials transported in Canada by rail or through our ports.
In Toronto it represents 20% to 30% of the trading on the stock exchange. It's an industry that spends $100 million a year on research and development. It pays a higher average salary to its workers than any industry in Canada. It's a world leader in mining technology. The Mining Association of Canada was the first organization in the world to have an environmental policy, one to which its members adhere.
Canada has been a world leader in mining in many respects, but it's been largely taken for granted. Times have changed. Today mining's future is threatened. As recently as 1991 Canada was number one in the world in terms of its ability to attract investment in exploration spending. Now it's number four. In 1995, for the very first time Canadian groups spent more on exploration in Latin America than they did at home. Since exploration spending today is a predictor of mining's contribution tomorrow, this is a very alarming statistic.
Yes, of course there are rich deposits in Chile and Indonesia, where some of those investment dollars are going, but there is a lot of evidence that there are still elephant finds in Canada. Voisey Bay certainly attests to that claim.
The fact is, the investment climate for mining in Canada is no longer competitive. According to the Metals Economics Group, Canada accounted for 35% of the world's non-ferrous metals and mineral exploration spending in 1988. That's 35%. By 1990 Canada accounted for only 24% of world spending. In 1994 that number had fallen to 14%. Dennis Prince told me this morning that it's fallen to 12% in 1995. That's from 35% to 14% in less than a decade.
Clearly, Canada's ability to compete in the global arena has been severely curtailed. While other countries have been aggressively courting investment, Canada has fallen behind. Administrative red tape, cumbersome tax procedures and regulatory duplication are all producing uncertainty and delays and inhibiting Canada's ability to compete, exactly as you concluded in your interim report last December.
.1120
Having said that, let me hasten to assure you I'm not here to whine. I'm not here to ask for tax breaks or incentives. I'm not here to ask for any reduction in environmental standards. On the contrary, the mining industry remains committed to environmental standards that are the highest in the world. We also intend, and have demonstrated the intention, to work cooperatively with government to solve the problems at hand.
As George Miller emphasized in his address to you last week, the Mining Association of Canada has been a very constructive partner in discussions with governments and stakeholders, as demonstrated by the Whitehorse Mining Initiative. In the spirit of the WMI, Keep Mining in Canada offers a twelve-point plan to make Canada a more attractive investment destination.
I've sent you all a copy of the twelve-point plan and the backgrounder for it, so I will not belabour those points. George Miller also addressed them in significant detail, particularly the regulatory reform issue, when he spoke to you last week. Our priority of the issues listed in the twelve-point plan is the issue of streamlining federal and provincial environmental regulations.
At this point I want to let you know that the public is on side with our position on this issue. I have a few statistics from Decima Research on this subject.
We learned from our research that 82% of the general public agree that it is important for the federal government to create a climate for mining in Canada; 58% of the public believe federal and provincial policies and regulations currently discourage mining companies from investing here, and 94% of the public think it's important for the federal and provincial governments to develop one coordinated approach to approvals. So we know that in resolving this issue we have the public, and you have the public, on your side.
People in mining communities understand this issue too. They can't recite the Fisheries Act, I'll grant you that, but they do understand the concept of cutting red tape, eliminating overlap and duplication, reducing unnecessary costs. They also understand this represents a threat to their livelihoods.
The Keep Mining in Canada campaign has given them a voice. Prospectors, developers, mining company executives, miners, mining associations, chambers of mines, suppliers, mayors of mining towns, local chambers of commerce, stand together on this issue.
I've brought a short video to show you people in mining communities explaining in their own words what mining means to them. They all wanted to be here, but we'll have to rely on this medium for them to communicate directly with you. This is only five minutes in English, five minutes in French. Bear with me. I think it's a worthwhile investment of your time.
[Video Presentation]
.1135
Ms Wykes: We always try to be positive and constructive, but since that film was made, in 1993, there has been a growing sense of frustration. We read the far-reaching goals in the Whitehorse Mining Initiative. We read the 1994 report of the Standing Committee on Natural Resources and its nine recommendations. We read Building a More Innovative Economy, published by John Manley, and heard his promise to streamline regulations. We read the outstanding interim report this committee published last December. In every case we took heart, but in fact no significant steps forward have been taken and I have to tell you your constituents are very discouraged. I'm going to give you just one example of that kind of passion before concluding and turning the meeting over to Mr. Power.
We designed a phone week last November. John Manley's deadline of December 5, 1995, was fast approaching. We gave everybody across the country the phone number of John Manley and said ``here's the week; ask him when he's going to deliver on the promise''. Just to give you an inkling of how passionately people felt about that, I'll use the example of Tumbler Ridge, British Columbia. The mayor got our fax, made a flyer, had it distributed door to door in the entire town, gave a phone line, and invited people to come and call free of charge - he picked up the tab - to make their voices heard in Ottawa.
I'm going to skip the part of my presentation where I describe plans for this year, because you all have a copy of my speech. I will conclude by thanking you very much for putting Keep Mining in Canada on your agenda. Like you, we know mining has the potential to make a tremendous contribution to the Canadian economy in the future. We urge you to recommend the changes necessary to realize this potential.
We certainly welcome your questions, but I will turn to Mayor Power, who speaks for the 47,000 people in the city of Timmins and by analogy for mining communities across the country.
Mr. Victor Power (Mayor of Timmins): Mr. Chairman, it's a pleasure to join you this morning to speak about the city of Timmins, my very favourite topic, and to let you know how important mining is to Timmins and the many mining communities that dot Canada's mostly northern landscape.
Eileen really paints an accurate picture of what effect Keep Mining in Canada has had in communities right across Canada, including the city of Timmins. The campaign has generated a new sense of pride within the mining community for the contribution mining makes to the economy and to our way of life. It has made ambassadors out of the tens of thousands of people who depend on mining.
People have rallied around Keep Mining in Canada because they see it as an opportunity to tell Ottawa how concerned they are about their future, wherever they live, in Newcastle, New Brunswick; Val d'Or, Quebec; Flin Flon, Manitoba; Tumbler Ridge, British Columbia; or Timmins, Ontario. I know; I hear it all the time. I'm sure my friend Peter Thalheimer, member of Parliament for Timmins - Chapleau and vice-chairman of this committee, hears it.
Tens of thousands of hard-working Canadians count on mining. Even those who don't depend directly on mining depend on it indirectly for the standard of living they have come to enjoy.
.1140
Prime Minister Chrétien and Finance Minister Paul Martin may not realize how important mining is to small communities, but I'd like to take a few minutes to tell you what mining means to the city of Timmins. Perhaps you'll leave today with a deeper understanding of how important mining is to people not only in my community but also in communities like Timmins from coast to coast.
Timmins is not the biggest mining town in Canada, but we are, as I like to say, sitting on a jewellery box. There are 47,430 people in Timmins, and every one of them has a stake in mining.
There are currently six mines in operation in the Timmins area, huge, world-class operations like Falconbridge's Kidd Creek Mines, Kinross Gold's Hoyle Pond Mine, Placer Dome Canada's Detour Lake and Dome Mines, as well as Luzenac Mine and Royal Oak Mines. Several projects are ongoing, including Hemlo Gold's Holloway project near Matheson, Blackhawk Mining's Redstone project, and Echo Bay Mines' Aquarius project.
These mining companies employ 3,400 people and pay approximately $244 million in annual wages. These people have families, too. Add another 6,000 people who rely on mining. Say there are four people in every family. That means there are 24,000 people who owe their standard of living directly to mining.
The combined annual tax contributions of local mines to the City of Timmins last year were approximately $9 million.
Then there are supplier industries. They employ about 6,000 people in and around Timmins. They include companies like Acculab Engineering and Testing; CTR Tire Service; Cambrian Welding Supplies; Canox; Canadian Oxygen; Crane Supply; Dominik Drilling; For-Min Industrial Supplies; Gorf Manufacturing; and many others.
Then there are spin-off businesses that exist because of mining: hotels, restaurants, convenience stores, grocery stores, clothing stores - the list goes on and on.
There isn't one person in Timmins who doesn't count on the mining industry to some degree for their quality of life. Apart from its economic benefits, mining also contributes very significantly to the social and cultural life we enjoy in Timmins, as it does to communities across Canada.
It's easy to see that mining is truly the economic backbone of Timmins, and the contribution the industry makes not only is felt by our city but chips in more than its share to federal coffers as well.
Timmins is not alone. I did a bit of research before coming here and found a number of interesting statistics I'd like to share with you.
We all get snowed under in statistics, on an almost daily basis, but think about these in terms of what they mean to people, how these numbers translate into the human equation: jobs, income, certainty for the future, stability, and community.
Mining in Ontario contributed more than $1 billion to government revenues in 1993 and provided more than 25,000 jobs in Ontario in 1993. Mining is the best paying of the resource industries, with an average wage of around $1,000 per week. In 1993, $63 million was spent on exploration and development in Ontario. The value of production was around $3.5 billion. These numbers sound impressive, and they are, but they are also on the decline.
The key to keeping mining a vital contributor and employer in places like Timmins is to make sure that exploration and development will continue. It takes years to open a mine, and unless the process is ongoing, the future can look quite bleak for a lot of communities out there.
The stark reality is that Canada is not encouraging exploration in the mineral industry at this time. That $63 million used for exploration in 1993 is small compared to the $440 million invested in 1988. It's not a coincidence that the value of production has also dropped, from $5.5 billion in 1988 to $3.5 billion in 1993.
The changes in flow-through share arrangements announced in the budget earlier this month are certainly a step in the right direction, but more needs to be done.
If Canada is not able to attract investment as successfully as other equally resource-rich countries, mining will not be able to contribute to our economy as it has in the past. We are concerned about the future of our mining communities.
There is no reason why the mining industry in Timmins should not support thousands of families and contribute billions of dollars to the Canadian government for decades to come. If the federal government removes the impediments to investment, then that's exactly what we will do.
.1145
We urge you to stand behind the recommendations tabled in the committee's interim report, published last December. We urge you to reward the patience of an industry that has seen recommendations come and go with no apparent inclination to act on them. We urge you to demonstrate the will to act. People in Timmins and 149 other communities across Canada are counting on you.
Thank you for listening. I welcome your questions, not just today but any time. Thank you, Mr. Chairman.
The Chairman: Thank you very much.
Mr. Dennis Prince (Director, International Exploration, Falconbridge Limited): Mr. Chairman, I understand in the interests of time that perhaps you'd like to move on to the question session, so I won't read my speech. In fact, it would be difficult for me to do that anyway, because I really like speaking off the cuff. I'd just like to make a couple of comments about my perspective on all this and then maybe we can move on.
As you probably heard, I'm director of international exploration for Falconbridge, and I'm also an ambassador for Keep Mining in Canada. So I get some really hard questions when I go around to different communities in Canada, questions like: Are you a traitor? Are you taking the wealth of Canada and taking it outside the country and creating wealth for other Canadians? It's a difficult one for me to address, because I'm a Canadian, and I feel that Canada's place in the world, in terms of mining, has been downgraded, I guess, by the competition that's coming about.
So really, I bring a perspective from my job that maybe we can discuss in terms of your questions. I'll just leave my speech for you to read. Maybe we can go on from here.
The Chairman: Mr. Asselin.
[Translation]
Mr. Asselin (Charlevoix): First of all, I'd like to ask if it's possible for the clerk to send the Official Opposition, the Bloc Québécois, three French copies of the text that was tabled as well as the mayor's presentation.
We're very interested, because the mayor of a municipality is the representative of government who is closest to ordinary citizens. We also know that mayors are often the spokespersons for those citizens, who don't always find it possible to come before our committees.
I'd like our clerk to note that he should send a copy to Messrs René Canuel and Bernard Deshaies as well as to me as deputy spokesperson on the environment.
First, I'd like to thank you for having come here this morning to meet us and show us how important Canada's mining industry is. As the film showed, this industry creates employment and ensures economic security for many regions in Canada.
However, I didn't fully understand the comments accompanying the film. I'd like to know if you have any clients, mainly in Quebec, in the mining industry. How many mining companies does that represent? What kind of mining companies do you represent, mainly in Quebec?
You'll also allow me to put several questions of a rather environmental nature in view of my position as deputy and critic for the environment.
Is your organization first and foremost concerned with the quality of life and working conditions in the mining industry? We know that the working conditions of those engaged in working the mines, extracting or processing the minerals can seriously affect their health.
The mayor mentioned, in a report, the percentage of people in his municipality working in and depending on mining. These people need someone to be concerned about their quality of life.
So I'd like to know if your first and foremost concern is quality of life and working conditions.
Next, are the companies you represent monitored, for environmental standards, by the different levels of government, municipal, provincial and federal?
.1150
I'll put all my questions one after the other and you can answer after.
What are the main problems you have to settle with the unions directly representing workers on the site either in mining or processing the product?
In the companies you represent, are there a lot of workers who are now unfortunately dead or afflicted with some chronic disease because of the poor working conditions in their industry?
Finally, the lady mentioned overlap and duplication between the federal and provincial governments. In your opinion, where does this overlapping occur? Do you have any estimate of how much it costs? In your opinion, does the federal government tend to legislate in a jurisdiction that should belong exclusively to provincial governments? For example, municipalities manage their own zoning and building by-laws and, within their jurisdiction, they're the only masters on board.
So, as you brought up overlap and duplication, I'd like to know if you know of any between the federal and provincial levels and, if so, I'd like you to identify them. In Quebec, we denounce the fact that the federal government meddles in fields of provincial jurisdiction.
[English]
Ms Wykes: Dennis, would you like to answer the working conditions issues and I will speak to the overlap and duplication.
Mr. Prince: I think one of your questions was are there legislated environmental standards that the companies in Canada have to work to. Certainly, there are literally hundreds of standards we have to work to, all legislated. There are our own internal codes as well that we have to work to. As a member of the Mining Association of Canada, we have our own environmental policy, for example, that we have to meet to maintain membership in that organization.
It's not only in Canada that Canadian companies meet those standards, we also bring those with us when we go overseas. When we go to other countries you can see that standards there are not as strong as in other countries. In some places they are stronger than Canada, in fact, but there we try to bring Canadian standards forward because we realize the world is an inter-connected place and to sell our products around the world, we know those standards are going to be more broadly developed around the world.
We try to as much maintain Canadian standards as possible, occasionally it has to be higher than Canadian standards, depending on where we are. But, certainly, there are lots of legislated standards that we have to meet. Does that answer your question?
Mr. Asselin: Oui.
Ms Wykes: With respect to the question of overlap and duplication, as I mentioned in my speech, I cannot discuss the intricacies of The Fisheries Act or specific technical areas. In general terms, it's my understanding there is a tremendous agree of overlap and conflict between the regulations of one federal department and another. For example, if Industry Canada, Fisheries and Oceans and Natural Resources all have to sign off on a certain project, there is no guarantee that their respective regulations are in harmony.
Then there is the level of the provincial regulations which, in many cases, are different from those of a federal department. That, in very general terms, is the problem.
George Miller spoke to some of the specifics of how the overlap and duplication manifests itself. I don't have a dollar figure to attach to that. I am going on the assumption that by reducing the amount of time, the number of people and the number of processes involved in those regulations, the cost would be reduced as well.
.1155
The Chairman: Mr. Stinson.
Mr. Stinson (Okanagan - Shuswap): I have a few questions, but first of all let me thank you for coming here today.
The subject of overlap was brought up and well-recognized a long time ago at this committee, and yet, again, nothing has been done. We talk about committee work here. Justifiably, you are upset about what is going on here. You have good reason to be. We sit around here and all look at our positions with a sense of responsibility. We work very hard, and have worked very hard, in this committee to see that some of these concerns you've brought forward here today are addressed. We can come to a conclusion here at this committee, and when it reaches the government that's out there today, something is lost. I'm not sure whether or not it's because we have people who are not bringing it forward strongly enough to the government.
One, I would like to congratulate you on your video. I think it's long overdue. I appreciate seeing things like that out here. So I just want you to understand that if you think you feel frustration, I wish you could sit here for a minute and listen to what I've been hearing for the last two years, sitting on the same committee with nothing being done.
I understand there was a letter put out from Mr. Donald Campbell, ambassador to Japan for the federal government here. He has concerns about the investment level the Japanese will now regard putting into Canadian mining. I would like to know if you've heard anything on that. It's of concern to me, and I'm sure it's of concern to you - if you've heard this.
I have a number of concerns. You say we're down to number four. I have to question this, too. I think we're down a lot further than that. It's only a personal opinion, but when I talk to the mining industry they say when geologists and engineers get together now it is more of a Spanish class than a mining class. I have to have concerns when I hear that, especially when I see what is going on here, and then I see the depletion of money that is normally invested in the country for jobs not taking shape. When I read rhetoric from the government saying they are concerned about jobs, jobs, jobs in this country and I see it disappearing into other countries, when we should be having it here and putting our youth to work, I have to question this, too.
So I'd like to know what you have heard - or whether you have heard anything - on Mr. Campbell's letter with regard to the Japanese investment.
Ms Wykes: I'm aware of that situation. I think in general terms it conveys to the public the sense of frustration of companies that are ready, willing and able to invest in Canada but discouraged by the fact that the decision-making process seems to be totally open-ended with respect to time. Since time is money, that is a huge concern to investors.
I would defer to Princeton Mining for any particular comment on that situation, but I think it does attract attention, because there is so much at stake with this issue. With the prospect of diamonds in the Northwest Territories, with the vast potential for Voisey's Bay in Labrador, I think people look to the Huckleberry project in B.C. as a foretaste of what could potentially go wrong, given this climate.
I hve just one other comment on the exploration statistics you mentioned. Natural Resources Canada points to an upturn in spending in exploration. In fact, it's moved from an all-time low of approximately 400,000, inching up to 600,000, 625,000. But what Natural Resources does not quote is how those expenditures stack up relative to other countries'. That's where we are losing ground. This is now a global marketplace, and if Canada is not competing on the world stage we will lose our industry.
.1200
Mr. Strahl (Fraser Valley East): Just so you'll know what we're up against, I'll mention that we received a letter from the chairman of the Standing Committee on Environment and Sustainable Development, here in Ottawa, critiquing our interim report in December. He said things like a single-window approach is not plausible because the federal government has to hold the hammer. So, in his opinion, that's just not in the works. He goes on to say that he'll fight against relegating inland fisheries or freshwater fish management to the provinces. He'll fight against voluntary compliance. It's no wonder we're stymied. We're up against a very powerful group.
There are new members here again, but this committee are going to come out and agree that Canada's future prosperity is going to be largely dependent on the development of its natural resources. But you must know - I guess you do know - that we're up against the other side. I hate to say it like that, but when we talk about a single-window framework or approach, none of us is talking about reduced environmental standards, I don't think, I hope - yet even the thought of a single-window approach is rejected.
Have you seen this letter from Mr. Caccia to the previous chair of our standing committee, which basically says that our whole interim report is nonsense and he figures that it's going to have to be thrashed over and fixed?
Ms Wykes: I haven't seen that letter.
Mr. Strahl: If not, I'll get you a copy. I don't know if you have the resources or if you could, but I would like you to answer the questions that are raised in here. Basically, he says that the answer is a stronger federal presence.
From what I've heard in talking to the mining industry, they don't care whose presence it is as long as there is a decision-making body.
What is your approach on this? First, are you looking for a single-window approach, specifically on environmental assessments and approvals? Second, what is your preference? Would you like to see it devolved to the provinces - not a lowering of standards, but a devolution of responsibilities - or would you just as soon see the feds hold the hammer and have the last word on it?
Ms Wykes: I understand that environmentalists have concerns that the idea of duplication and eliminating overlap might threaten environmental standards. In fact, nothing could be further from the truth. The industry is not fighting for any dilution in environmental standards or any less rigorous enforcement.
We would love to see environmentalists as allies. Through the Whitehorse Mining Initiative, the industry demonstrated its total commitment to a consultative process, to working cooperatively to solve problems together. This has not changed. The industry focuses on the need for scientifically based decisions where the emotional quotient is brought down and the scientific quotient is upped. I think that is always very important.
As to whether the federal government or the provincial government will take the lead, as you say, I think it's the industry's position that, whoever takes the lead, there should be a commonly understood timeframe within which decisions are made and that the process should have clearly defined rules - not fewer rules, but more clearly defined ones, and within a specific timeframe.
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I will develop a response to that letter.
Mr. Strahl: I'll get you a copy of this, if I can, because I think it would be interesting. This is the alternative argument you're going to get: voluntary compliance does not work, and you people are just not willing to do your job and so on. This has to be answered, because this is going to be the attack on whatever final report we come out with. This is going to be the other side, so to speak.
So I would like to have your evaluation of it, if I could.
Ms Wykes: There's one other addition I might make to that question as proof that the industry is committed to making improvements that are not legislated. You've probably heard of the ARET program, whereby 13 mining companies, representing approximately 85% of the value of production in Canada, voluntarily developed a framework for themselves within which emissions would be reduced by a phenomenal degree between the baseline year, which is generally 1988, and the year 2000. This is a very significant commitment of time and dollars to solve a problem on its own.
Dennis, do you want to add something?
Mr. Prince: Yes. Maybe I could bring a bit of perspective to the competition we're dealing with in terms of the one-window approach.
Let me use as an example what happened two weeks ago at the Prospectors and Developers Association convention in Toronto, which is held every year. This year was the largest ever. I think there were nearly 5,000 registrants at the convention. Every year there's been an increasingly international component to this. This year over 60 different countries came to Canada to try to entice Canadian companies to go overseas and explore in their countries.
For the first time, one of the countries that attended was Fiji. Fiji actually has a mining industry, believe it or not. We met with the members of that delegation. Three ministers from the government came in. Before we could even ask them what was going on in Fiji, they made a comment to us about how surprised they were at the Canadian industry's perspective about investing in Canada. They said they couldn't believe how we had this fight going on between our different levels of government. They were just appalled at this and kept saying to us that they had one set of rules there, and we didn't have to worry about those things. If there was something that wasn't right, they'd fix it. That was the kind of attitude they were taking.
There are a lot of countries around the world that only have that one level of government to deal with. They don't have this duplication problem we have in Canada, the United States, Australia and a few other countries. It's not unique to Canada, but it's particularly bad here. India is another place where it's bad. You can't generalize this as a problem unique to Canada, but it's one we certainly have to tackle. A whole lot of countries out there are aggressively trying to get our business because of what they perceive to be our weakness. I think this is a real challenge for all of us to deal with here. We have to make sure we deal with this in a really constructive manner.
The Acting Chairman (Mr. Bélair): Mr. Reed for ten minutes.
Mr. Reed (Halton - Peel): I'd like to welcome back to this committee Keep Mining in Canada. I had the pleasure of your presence here last year. The only thing I can say is that I wish my brother Laurie were here, because he could make a better contribution to this exchange today than I can.
I just want to correct a couple of things. Mr. Strahl, my friend, read into the record a letter from the chair of the environment committee. It should go on the record that such a letter is an opinion but not government policy. It simply expresses a reaction. I don't even know whether that letter was voted on by the committee - probably not. The fact is, the movement really has been in the other direction in terms of where the government wants to go on mining.
In terms of overlap, a lot of background work has been done among ministers. We talk about the Fisheries Act, and I couldn't agree more. It's one of the most vexatious things you could imagine.
.1210
The government is trying to get the cooperation of the provinces to assume responsibility within their borders for the whole thing on a one-stop-shopping basis, or however else you want to describe it. My information is that those negotiations haven't always met with total cooperation from the provinces. What happens is that it then makes the province fully accountable, so when a sticky wicket arises, no longer will they be able to say that they are going to throw it over on the feds' lap and let them look after it. A lot of that is ongoing.
Perhaps this committee would now be well served to get an update from the ministry, just to spell out exactly where we are and where we've come from and where we're going. Of course the budget had the flow-through shares, for which we're all quite grateful and so on, but other things are happening. We would be well apprised to know exactly what they are and where the goals have been set.
I don't think it's as black a picture as my friend Darrel Stinson would paint.
The one big concern we had when we were producing our last report was the regulatory process and the fact that goalposts often changed during the development process. I think we're now in a position in which we can get a statement from the ministry about what is being done to address that very serious problem. Speaking from personal experience, I know that it's one of the most vexing and costly things one can imagine.
You gave us a statistic indicating that the percentage of investment on a world basis had dropped from 35% to 14%. Can you enlighten us as to what the overall investment has done during that period on a world basis?
Mr. Prince: I can answer that. The latest study by the Metals Economics Group shows that in the number of companies they survey it's increased from $2 billion worldwide to about $2.6 billion the year before, and I think the latest number is $3.6 billion. Generally it's increasing, but Canada's proportion has been falling as a result. If you look at our absolute number, it's quite flat.
Mr. Reed: It's flat. I wanted to get that on the record. In other words, we're not -
Mr. Prince: We're not holding our own.
Mr. Reed: All we're doing is holding our own.
Those are really the primary questions I had, Mr. Chairman. I don't think any of us on this committee disagree on where we need to go and what we need to do, but the time has come at which we need to know where the minister has taken us to this point.
Ms Wykes: May I comment on your first point, about the federal-provincial cooperation?
To strike a somewhat more negative note, we were very discouraged to learn that the work of the Canadian Council of Ministers of the Environment, who were dealing specifically with this issue, has virtually bogged down. So no encouragement was to be taken from that process.
Mr. Stinson: On the 14% we're down to now, I also heard 12%.
Ms Wykes: Yes.
Mr. Stinson: So we're not holding our own at all. In my understanding, we've slid another 2% in a matter of a few days. I just want to clear that up. Is it 12% or 14%?
Ms Wykes: May I show you some charts?
Mr. Stinson: Please do.
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Ms Wykes: Just to clarify any misunderstanding with respect to the statistics that I've been quoting, these are the statistics of Natural Resources Canada, which show exploration spending in Canada. You can see that it fell in 1992 to its lowest level in many years. However, Natural Resources Canada says to look what's happened since. They've suggested that figures for 1994 and 1995 show there are significant increases.
The fact remains that when you look at where we stand in the international arena, the largest chunk of the pie in terms of exploration spending worldwide used to be Canada. Now it's led by Latin American countries, the United States, and Australia. We come well behind that.
Look at the trends. I quoted that in 1988 Canada accounted for 35% of exploration spending worldwide. This, as you know, is the predictor for future development. By 1994 it had fallen to the 14% I mentioned. If this chart were continued to 1995, it would be 12%.
Mr. Stinson: That's scary.
Ms Wykes: It's very discouraging.
Mr. Stinson: One more thing. You're familiar with the Kemess Mine decision. We're into federal and provincial overlap here. There was the decision on the Kemess Mine by the federal government after it had been signed off by provincial government, which said to go ahead on it. The federal government stepped in and shut it down. Do you have any figure you can use as to what impact that decision alone created on the mining industry?
Mr. Prince: It's hard to put a dollar number on those kinds of decisions, but it translates into perception, and perception eventually translates back into reality in terms of future investment. What that lost investment might forgo is anybody's guess. But that number is probably what you saw.
Mr. Stinson: That's what I wanted to get to. Thank you very much.
The Acting Chairman (Mr. Bélair): Mrs. Cowling.
Mrs. Cowling (Dauphin - Swan River): I would like to thank you for your presentation. I have two very brief questions.
What evidence do you have that Canada's current environmental regulatory regime is having a negative impact on decisions to invest in mineral development in Canada?
My second question: What did the participants of the Keep Mining in Canada campaign identify as the most important reforms that need to be made in order to provide a proper investment climate for the industry? What would that priority be for you?
Ms Wykes: I think the evidence that overlapping federal and provincial regulations are hurting mining is seen in the investment decisions that companies are taking, which is not to invest here.
Maureen Jensen is the president of Noble Peak Resources, a junior mining company, and an ambassador of Keep Mining in Canada. When she speaks with us, she points out that her shareholders tell her that they are right behind her, wherever she wants to go, as long as she doesn't invest in Canada. The reason she's not here on the podium today is because she is signing a deal today with South Africa.
So I think the evidence for the impact of the overlapping federal and provincial regulations is seen in the investment decisions that companies are making.
With respect to the most important issue, I believe that it is streamlining federal and provincial regulations. As I mentioned, the people who are supporting Keep Mining in Canada, whether they're miners, restaurateurs, mayors, or members of the chamber of commerce, don't know the intricacies of those decisions. They do know, just from a common sense standpoint however, that having two levels of government following different sets of guidelines and making rulings on potential investments is not productive.
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Add to that the fact that the time lines are not defined - in fact, they are open-ended - then you have a climate that makes investors very nervous. In those broad terms, I think our constituents understand the issues and are committed to seeing them resolved.
Mrs. Cowling: Thank you.
The Acting Chairman (Mr. Bélair): Any more questions? Mr. Strahl?
Mr. Strahl: This single-window thing and so on, as you say, whether it's Mr. Manley orMs McLellan, they all seem very supportive in word, if not in deed.
I'm trying to think of how we can - In our report, we suggested specific time lines with a kind of default, whereby if something is not approved in a year and nobody can come forward with an argument, if they've got no argument within that certain timeframe, just that phase of it is approved.
Are there any other examples? Maybe I'll direct this to our international guy here. I heard of an example - I think it's Australia - in which the major mine initiative goes to the prime minister's office, and he kicks butt until it happens. Is something like that required in Canada?
We all agree; this is the sickening part. Everybody here agrees, the last committee members agreed, and the future committee members will agree, and so what? What do we need to make it happen? Do we need an office in the PMO for major mining initiatives?
As for Voisey Bay, as exciting as it is - and it is - do we need somebody to say that we've got a guy with a great big brain that's doing nothing but working full time to make this happen? Do we need that? What do we need to cut through all this?
Mr. Prince: That's a good example of a possible solution.
In fact, it sort of works that way in Indonesia, for example. They have a contractive work system. You actually go and sit down with a special representative of the government. You negotiate the terms of your exploration and exploitation licence. Once that's negotiated, that's actually passed through their equivalent of the legislature. It has the power of law. It happens in several different countries. That's one approach.
In other countries, they do have a special - I don't know what you call it - mining ambassador or a person to push it through the system. Other countries do have those deadlines that you talked about in which, by default, something will happen automatically.
If you look at the levels of regulation or the complexity of regulation, ours generally compares pretty well, I guess, with that of some of the developed countries. But when you go to the developing countries, they have an advantage because they can do it a lot faster. If you go to Chile, for example, look at the technical regulations for the environmental side of things. Those are copied from ours, but their process allows it to happen a lot faster. They're very accommodating. They'll work with you to try to make sure there is a technical solution. So you'll find that it's a matter of months, rather than years - this is the way it it is in Canada - for them to approve it.
I think it's an attitudinal problem that we have here, as well as an internal aggression against each other somehow. There's probably a cultural difference here, in a sense.
Mr. Strahl: Personally, I'm reluctant to think that the Prime Minister's Office should have control over it. My fear is that you would have a regular war with the provinces, because constitutionally it's largely a provincial domain.
It just seems like we're going to agree here again today, pat one another on the back, right on, let's go do it, then it's going to be 10% next year. That's starting to make us pretty worried, frankly. I'm sorry you're more worried than I, although money knows no international boundaries and you can go where you have to. The mayor will not be happy to know that, and I'm not thrilled either.
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I guess I'm just looking for the specific thing that needs to happen. We've suggested in our interim report that NR can take the lead as the agency to shepherd it through. But I'm sure interested to hear suggestions as to what it needs to be, whether it be an office in the PMO or whether it be a negotiator. We need to do something in a hurry and not just have another deadline come and go and another government come and go and just talk about this. This is serious stuff now.
A voice: That's one reason our unemployment is so high.
The Acting Chairman (Mr. Bélair): Any comment on Mr. Strahl's statement? There are no questions, so does anyone wish to comment very briefly?
Colleagues, I had a question prepared while I was sitting over there. Allow me to ask it now.
Mrs. Wykes, in your exposé you quoted a 1994 report. I was a member of the natural resources committee then, and I took part in those recommendations. The Mining Association of Canada was a witness then in preparation for this report, and it was very quick to chastise the federal government for its non-involvement or lack of action towards the mining industry in Canada. I was not aware of the numbers you have presented here this morning - that the 35% in 1988 has gone down to 12% today. I was unaware of those numbers, but even then I asked him whether it would be proper for the federal government to institute a foreign investment tax on Canadian companies investing abroad. I was somewhat surprised by his reaction, because I thought he would have said that maybe it's something that could be looked at. But he said ``No, absolutely not.'' I was shocked then, because what it meant was that indeed the Mining Association of Canada was condoning such a practice - to invest in other countries instead of our country.
Can I have a comment from you? Even today, looking at the numbers without becoming alarmists, is there something in this line of thought that could be done by the government?
Mr. Prince: The mining industry in Canada has always been an international industry. We've had operations around the world, and we've been a leader because of that, because of our experience in Canada, which is the largest base, of course. But we've been competitive in other countries as well. We can take our technology, our know-how, and our people and apply them to deposits in other countries.
The Acting Chairman (Mr. Bélair): I have no problem with that. I'm talking about the dollars.
Mr. Prince: I know. Exactly.
So I would imagine the response you got back was that people wanted to preserve that ability to go outside and not become an instrument of our country. If you try to put limits on the way money flows like that, I think we're going to end up like the Soviet Union.
Mr. Strahl: Oh yes.
Mr. Prince: If you visit there and see what that mining industry was like, you don't want to have any part of that. The environmental regulations and the practices that develop there - Cuba's the same thing - are no comparison to what we have here in Canada. Part of the reason we've been able to preserve or to do such a good job, I think, is that we have the ability to see it from all perspectives, to bring technologies from other countries here, and to bring profits back to Canada. I don't think anybody wants to see Canada go down. I think we'd like to see Canada compete, that's all. We want to bring ourselves back to a level playing field. We're kind of like a teeter-totter, whereby on one side the other countries are pulling us down, but we're pushing it up on the other side too.
The Acting Chairman (Mr. Bélair): Sorry to interrupt, but we are not competing.
Mr. Prince: That's right; we're not.
The Acting Chairman (Mr. Bélair): All the stats indicate that. That's a fact; we're not competing.
Mr. Prince: That's right; we're not.
The Acting Chairman (Mr. Bélair): At the same time this gentleman was chastising us because the flow-through shares were not as generous any more and the incentives to mine in Canada were not as good any more, he would not commit himself or his association to do more in Canada.
Does this mean to say that our environmental guidelines are much too stringent, our salaries and training are much too high, their profits are much lower in Canada than they would be in Latin America, and the bottom line is profits only?
Mr. Prince: No. I think that's probably incorrect. In reality, if you start to measure opportunities that you can see in Canada versus those in some developing countries, first of all, the technical expertise Canadians have means that one person might be equal to ten people in those other countries. So your costs, even though they may appear to be small per person, in fact are quite high. Certainly on a technical level, there's a competition that develops there.
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The trouble is that expertise is also exportable. People can learn and bring themselves up, and we have to compete in that sense. We can compete on a scientific level, too, in Canada. They haven't had the same background that we've developed in Canada in terms of supporting the industry with science. That's something we've kind of let slip as well, but we can bring ourselves back up and compete in that regard.
With respect to financial understanding, Canada has got a wealth of that. Toronto is probably the largest centre for raising money in mining around the world. It's displaced London. London used to be the centre for financial investment for South Africa, Australia, and Canada, but it's no longer. Toronto is the place now.
The Acting Chairman (Mr. Bélair): Well, how do you explain that we're at 12% of world explorations and development?
Mr. Prince: We're at 12% of the amount being spent in Canada, but there's a lot of money being raised for the world here. So there's financial expertise here as well as technical expertise and scientific expertise. There's a lot of expertise we have that we can bring to bear around the world, but our problem is our own internal competition, which creates a problem when we compete outside with other countries.
I think that's the issue we have to deal with here. I don't think putting artificial barriers around that is going to fix the real problem. And investment taxes - It hasn't worked in other countries, and it won't work here.
Mr. Power: Chairman, as a follow-up to what Mr. Prince is saying, right now from the city of Timmins we have mining exploration people working in Australia, South America, Russia, and Mongolia, to name a few. So they're all over the world. I'm sure these people would prefer to work in Canada and of course in Timmins.
The Acting Chairman (Mr. Bélair): They would prefer that - There' are a lot of meanings of the word ``prefer''. Why are they not working here?
Mr. Power: Well, the opportunities are elsewhere.
The Acting Chairman (Mr. Bélair): That's the point I'm making. Why are we not creating the opportunities in Canada?
Mr. Power: That's why we're here. That's why we're here this morning.
The Acting Chairman (Mr. Bélair): Very briefly, Mr. Strahl.
Mr. Strahl: I have just a comment. It's not really a debate, but I would just say that the way to create incentives in Canada is not to prevent exploration around the world.
If you want to know why we don't have jobs in Canada, it's because of what's happened at Windy Craggy, at Huckleberry Mines, the Kemess Mines, and so on and so forth, and a million others or thousand others that have never even made it to the drawing board because people threw their hands up in despair.
But for sure the way I would argue is that the way to encourage investment in Canadian mines is not to prevent international exploration. The only people I have in my community who are working in mines right now are working overseas. They're bringing their money home. I get their taxes, and they're spending it in my community. But there's not an active mine left. They've all been nuked.
All the expertise, thankfully, is still transportable around the world, so we still have a taxation benefit to Canada. But we can't prevent that. If we tried, I would have even more unemployment in my area.
I just encourage us not to even consider an export tax or a disincentive like that. What we have to do is get our own ducks in a row in Canada rather than try to blame it on Chile or somebody else. We've got to get our own act together, and I think that's what we're trying to do in the committee here.
The Acting Chairman (Mr. Bélair): Time for a brief comment from the witnesses. If not - Yes, Mayor Power?
Mr. Power: No. I'm just going to say that we certainly appreciate your taking the time to listen to us. There's always been a good rapport with you and your committee, and we'll continue that.
The Acting Chairman (Mr. Bélair): We thank you all for being here.
We are adjourned at the call of the chair.