Minerals Industry Support for Bill C-47 Presentation to: The Standing Committee on Aboriginal Affairs and Northern Development February 5, 2013.

Minerals Industry Support for Bill C-47

Presentation to:The Standing Committee on Aboriginal Affairs and Northern Development

February 5, 2013

2

Introductions

• Industry Association Representatives– Nadim Kara, Prospectors & Developers Association of

Canada– Tom Hoefer, Executive Director, NWT & Nunavut Chamber

of Mines• We are here to support Bill C-47, with:

– Cover letter for NUPPAA and NWTSRBA – More detailed written brief for NUPPAA – Deck with some industry background

3

Mining’s importance to the North

• Mining is the largest private sector contributor in the North

• Its direct contribution exceeds all other private sectors

• It also contributes to other sectors, eg, real estate, transportation and construction.

• Nunavut’s one mine is already contributing ~ 15% of GDP

NWT GDP (2009)

Oil & Gas 4%

Transportation7%

Construction9%

Real Estate12%

Public Admin12%

Other27%

Mining29%

4

Mines create huge value

• World class diamond mines are a huge contributor to the NWT• Nunavut’s industry has the potential to match or exceed NWT

NWT, Nunavut and Yukon Mining Production

$653 $682$779

$874

$1,667

$2,112

$1,790

$1,638

$1,831

$2,123

$1,507

$2,045$2,144

$349 $385$321

$272

$35 $35 $4 $32 $35 $13 $0

$317$414

$0

$500

$1,000

$1,500

$2,000

$2,500

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011(p)

$C

Mill

ion

s

NWT

Nunavut

Yukon

Natural Resources Canada – March 2012

5

Value translates to huge community benefits

• From 1998 – 2010, diamond mines contributed:– More than 17,000 person years northern employment

• Nearly 9,000 (more than 50%) Aboriginal – Over $8.5 billion in northern business

• Nearly $4 billion is Aboriginal • Nunavut’s gold mine also making high contributions • Mining is the largest employer of Aboriginal people

6

Huge Aboriginal business success

• Ekati Services • I&D Management Services Ltd. • Tli Cho Logistics • Tli Cho Landtran • Tli Cho Cement • Tli Cho Air • Denesoline Western Explosives • Metcon • Tli Cho Explosives• Kete Whii Ltd.• Kete Whii Procon • Sodexho Alliance • Exploration Medical Services • Kitikmeot Cementation• Lac De Gras Constructors• Nishi Khon SNC Lavalin Inc.• North Slave Logistics• Nuna Logistics• SecureCheck• Lac De Gras Constructors• Nishi Khon / SNC Lavalin Inc.• A.T.B. Construction • Bouwa Whee Catering

• Det'on Cho DNX• Det'on Cho Earth Energy• Det'on Cho Foraco• Det'on Cho Hazco• Det'on Cho Nahanni

Construction• Det'on Cho New North• Det'on Cho NUNA• Det'on Cho Pure Earth Elements

Environmental Solutions• Det'on Cho Scarlet Security• Det'on Cho Stantec• Det'on Cho Training and

Conference Centre• Det’on Cho Logistics• Det’on Cho Medic North• Det’on Cho Mining Supplies• DICAN / ADG• Kete Whii / Ledcor• Kete Whii / Procon• Trinity Helicopters

• Diamonds helped create many new Aboriginal companies

• Akaitcho Helicopters• Dene-Emco Ltd.• Denesoline/Aboriginal

Engineering Ltd.• Denesoline/Air Tindi Joint

Venture• Denesoline/Arcan Constructio• Denesoline/De Beers Labour

Contract• Denesoline/Discovery Mining

Services – Logistics Expediting• Denesoline/Deton Cho/Procon• Denesoline/Deton Cho/Ledcor• Denesoline/Dyno Nobel• Denesoline/ESS Compass• Denesoline/McCaw Drilling and

Blasting• Denesoline/Nuna Logistics• Denesoline/Tlicho Logistics• Lutsel K’e Air Services

7

Corporate and Mining Taxes

Diamond Mining Taxes

$0

$100

$200

$300

$400

$500

$600

$700

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

$C m

illio

ns

Mining royalties

NWT Corporate Taxes

Federal Corporate Taxes

Source: GNWT – ITI Economic Model

8

Various additional mining benefits

Tax Already paid Still to pay Total

Fuel Taxes $ 77 million $ 68 million $145 million

Property Taxes $123 million $260 million $383 million

Total $200 million $328 million $528 million

• Fuel & Property taxes paid to GNWT

• $34 million in Resource Royalty sharing with settled Aboriginal claimants since 2001 (devolution promises more)

Claimant Group Diamond Royalty share

Gwich’in $ 11 million

Sahtu $ 10.8 million

Tlicho $12.8 million

9

Unfortunately mines don’t last forever

• Current NWT and Nunavut mine lives

Mining Operations 1997 2000 2003 2006 2009 2012 2015 2018 2021 2024 2027 2030

Ekati

Diavik

Snap Lake

Cantung

Meadowbank

10

Advanced projects could become new mines

Mary River(iron)

Hope Bay(gold)

High Lake(base metals)

Meliadine(gold)

Roche Bay(iron)

Hackett River (base metals)

Kiggavik(uranium)

Ulu(gold)

Selwyn(base metals)

Prairie Creek (base metals, silver)

Gahcho Kue(diamonds)

Nechalacho(rare earths)

YK Gold (gold)

NICO(gold,cobalt, bismuth)

Pine Point (base metals)

Courageous(gold)

Back River(gold)

Izok (base metals)

Lupin(gold)

Jericho(diamonds)

Committee Bay(gold)

Chidliak(diamonds)

11

Not slam dunks, but good potential for new mines

2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039

Jericho Izok & High LakeLupin & Ulu Gold

Hope BayBack River

Hackett Kiggavik

MeliadineMary RiverRoche Bay

Gahcho KueNICO

Pine PointNechalacho

Yellowknife Gold Prairie Creek

Nunavut Projects

NW

T Projects

12

NWT exploration is not what it could be

NWT, Nunavut and Yukon Mineral Exploration

$0

$100

$200

$300

$400

$500

$600

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

$C M

illio

ns

NWTNunavutYukon

NRCan – November 2012

• NWT languishing – should have similar investment levels as NU and Yukon. • In the face of strong global “boom”, our actions created a “bust” in the NWT.

13

Canadian Share of Exploration

NWT & NU as % of Total Canadian Mineral Exploration

0

2

4

6

8

10

12

14

16

18

20

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

% o

f Tot

al C

anad

ian

Spen

ding

Nunavut

NWT

• Legislative uncertainty in the NWT has created Investment decline. We need to take actions to create a real turnaround.

NRCan – November 2012

14

Industry support for Bill C-47

• We support the enactment of the NWTSRBA– Provides a “court of last resort” to help deal with land use

conflicts – Important to fulfil land claim obligations – Readies legislative framework for devolution

• We support the enactment of NUPPAA with six amendments

15

Amending NUPPAA will add balance

Environmental

Economic

Social

The Sustainable Development Triangle

16

NUPPAA: Timelines

• Timelines and Timeframes: – We strongly support establishing an environmental and

socio-economic review & assessment process of 24 months – Good for investment, and supports Nunavut’s unique

logistical challenges with seasonal “windows of opportunity” for construction

– Further refinements can be made to various open ended timelines, eg, clauses 92(4), 110, 112(9), 120(8) & 131.

• Recommend: further review of timelines in order to verify that they will consistently achieve the federal government’s objective of not more than 24 months to complete reviews

17

NUPPAA: Schedule 3 Exemptions Incomplete

• Schedule 3 – Classes of Works and Undertakings Exempt from Screening – Schedule 12-1 of the Nunavut Land Claims Agreement authorizes NIRB

and the Minister to agree on additional classes of activities and projects that are exempt from screening

– If the Minister and NIRB have made any agreements of this kind, Schedule 3 should list the exempted works and activities

– It is important for Schedule 3 to be “populated” in the final version of the Act so that potential exemptions are clearly set out

• Recommend: Schedule 3 be completed and included in the final version of NUPPAA ultimately proclaimed into law.

18

NUPPAA: Minor Variances

• Minor Variances: – Minor variances provide a flexible and adaptive approach

to projects that, strictly speaking, may not entirely conform – GOOD

– HOWEVER, process for dealing with minor variances is quite complex

– Recommend Commission be authorized to grant or deny minor variances.

• Recommend: NUPPAA be amended by deleting subsections 81(3), 81(4) & 81(5) and renumbering subsection 81(6) as subsection 81(3).

19

NUPPAA: Offences

• Offences under Land Use Plans: – Inappropriate, unnecessary and unorthodox to create

offences under land use plans – Offences also not contemplated by the Nunavut Land

Claims Agreement. – Offences are more appropriate under the permits issued

by regulators, permits that require compliance

• Recommend: NUPPAA be amended by deleting subsection 48(4) along with the references to that provision in subsection 69(1) and paragraph 74(f).

20

NUPPAA: “Grandfathering”

• Retroactive Application of New or Amended Land Use Plans: – Billion dollar mine investments are captive to their mineral

deposits, and cannot move if rules are changed – Current NUPPAA has complex, ambiguous & potentially

contradictory wording on grandfathering

• Recommend: NUPPAA clearly provide that new or amended land use plans do not apply to licences, permits or other authorizations required for projects after their original submission or approval; or where projects have been suspended or works will be rebuilt within a period of less than five years after their original approval.

21

NUPPAA: 5-Year Review

• Recommend 5-year Review– While we strive for perfection, it is virtually inevitable that

further refinements and adjustments will be necessary. – 5-Year Review currently underway under the Yukon

Environmental and Socio-economic Assessment Act– Could have resolved MVRMA challenges sooner

• Recommend: NUPPAA be amended to provide that the legislation must undergo a comprehensive review initiated 5 years after proclaimed into force.

22

Conclusion

• Mining is the North’s economic advantage • Mining is creating significant community benefits • We must sustain and grow these benefits • NUPPAA and NWTSRBA can add to a stronger, more

certain, and beneficial minerals industry for northerners and Canada

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Why it matters

Courtesy Diavik Diamond Mines Inc.