Copyright © 2019 Senator Dennis Patterson.

Speech – C-17 – Third Reading

Yukon Environmental and Socio-economic Assessment Act

Bill to Amend—Third Reading

December 14, 2017

Hon. Dennis Patterson: Honourable senators, as the critic for Bill C-17, I rise to speak to it.

The context is this: The mining industry is cyclical and volatile. The key to success is knowing when to invest, when to lay low, and where to go to maximize your profit. When assessing these options, I understand that mining companies look at a variety of factors that include the quality of the deposit and also, most important in this discussion, the governance structure of the jurisdiction, the regulatory regime in the jurisdiction. I believe that this legislation, without transition measures or replacement language, will negatively impact the latter in the eyes of potential investors.

Bill C-17 seeks to repeal four provisions that were introduced in the previous government’s Bill S-6 following a comprehensive five-year review of that legislation that amazingly took eight years to complete.

When I spoke during second reading in this chamber, I discussed the need for regulatory consistency across all jurisdictions but more specifically throughout the North. The removal in Bill C-17 of mandated timelines and the removal of the provision that exempts previously assessed portions of a project to be reassessed due to a minor change are non-issues in the N.W.T. and Nunavut where corresponding legislation and regulations are in place. The same is true of every other jurisdiction in Canada today. I said that without replacement language, the removal of timelines and reassessments for minor changes will bring uncertainty to the mining industry in Yukon, negatively impacting investment, jobs, benefits and opportunities for all Yukoners until new regulations and policies are negotiated and put in place.

So I take no pleasure in reporting back to this chamber today that my fears have been heightened rather than allayed after study of this bill at committee.

Three issues arose during your committee’s study: the lack of a timeline for mutually agreed upon replacement language; the lack of transition language; and a new issue — thank you for mentioning it, Senator Campbell — the lack of capacity for First Nation involvement.

Firstly, the removal of timelines by the provisions of this bill. Not one of the witnesses who appeared before the committee could provide an answer as to when we can expect the conclusion of the collaborative process to develop replacement language, which involves the Government of Yukon, the Government of Canada, First Nations and industry.

Minister Bennett told the committee in her remarks that, with regard to the collaborative process, the outstanding issues of timelines and reassessment:

. . . will be dealt with through other policy mechanisms shortly after the passage of this bill.

Senator Neufeld quite rightly asked Minister Bennett and her officials to define what “shortly” meant, but the answer we received was evasive, with a senior official stating that:

We work at the pace of our other partners also. They’re at the table with us and it’s a collaborative process.

That answer, for me, did not instill much confidence that the process would proceed quickly and efficiently. After all, as I noted earlier, the same parties — Canada, the Yukon territorial government and the Council of Yukon First Nations — took eight years to undertake the mandated five-year review of this legislation, and Council of Yukon First Nations even said at committee yesterday that the review process still was not complete in their view.

What Mr. Mike McDougall, President of the Klondike Placer Miners’ Association, told the committee is that:

Should Bill C-17 pass as it stands, there will absolutely be a period of uncertainty in the interim, and it’s our view that the investment climate and opportunities for Yukon citizens will suffer as a result.

He continued, stating that:

The rescinding of the timeline and reassessment provisions without having replacement language in place beforehand will be a step backwards in public policy.

He asked for a “mechanism to hold all parties accountable” to the conclusion of the collaborative process.

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Mr. Brad Thrall, President of Alexco Resource Corporation, also echoed that sentiment, stating to the committee that:

If set back to the previous legislation, uncertainty will prevail, and investment, jobs and benefits and opportunities for residents and communities will be compromised.

Ranj Pillai, Yukon’s Minister of Energy and Mines and Resources and the Minister of Economic Development, when asked about the timeline for concluding the process, put the ball back in the federal government’s court, saying:

. . . we want to work with our stakeholders here right away to ensure that we can look at our regulation in the Yukon and how we can improve . . . .

. . . at the federal level that would be a different conversation altogether.

It is due to these statements of uncertainty about how long the process of developing replacement language would take that I recommended that the committee make an observation in its report to the Senate, urging the government to work with its partners to complete this process as expeditiously as possible.

I was pleased by all members of the committee supporting and participating in the fine-tuning of that observation; I thank them for that and for their support in asking the minister to return to the committee and report on the progress of the collaborative effort after 10 months.

The next issue is the lack of transition language in this bill. The government was clear that once Bill C-17 is proclaimed, sections 49.1 and 56(1), which had allowed for exemptions for reassessment due to minor project changes and established timelines, will automatically cease to apply to projects currently going through the process, regardless of what stage they are at.

I understand there are some major projects that are now enmeshed in the process. They do not have to restart the process, we were advised by federal officials, but they will also be subject to any policies in place governing these issues prior to Bill S-6.

Colleagues, that leads me to seriously consider what the implications would be for a proponent that has budgeted and planned their submissions based on these rules the government is now seeking to repeal. How does that make those proponents’ investors feel? How will that make prospective investors feel?

When I raised this issue at committee, Mr. Gilles Binda, the Acting Director of INAC’s Natural Resources and Environment Branch, told us that:

. . . the board will assess that portion of the project that has changed since the last environmental assessment.

Yet that differs greatly from today’s testimony from Mr. Brendan Marshall, Vice President of Economic and Northern Affairs at the Mining Association of Canada. Mr. Marshall described the regime prior to these provisions we are looking at repealing by providing us with an example that I would like to share with my fellow senators. Mr. Marshall told us:

MAC is aware of one mine, a YESAA permitted mine, where the following areas that had already been assessed required reassessment under the former law when that company sought an expansion under the former YESAA process. These include socio-economic impacts, hydrogeology, geochemical characteristics of current tailings and waste rock, current operational water management and an entire access road that had been in place for over 20 years.

The consequences were significant. The surface mining operation was interrupted for more than six months, resulting in layoffs. The company in question experienced reputational damage in local communities and significant economic damages due to lost time and start-up costs, which were magnified by market losses due to the persistent drop in copper prices during the period when the mine was inactive. Most significantly, however, it resulted in reputational damage to Yukon and Canada as a destination for mineral investment, a memory the industry acutely recalls and which serves as a basis for our concern with the proposed legislative package and the prospect of a return to this regime.

Honourable senators, the repeal of these provisions does create a gap that needs to be addressed immediately.

Chief Richard Sidney of Teslin Tlingit Council stated that:

. . . Canada, Yukon and the First Nations have agreed that YESAA regulations would define which projects are subject to assessment. Therefore, discussions about the regulations are an appropriate forum for addressing exemptions and inclusions of projects from assessment.

This only underscores the importance of having replacement language developed and implemented as expeditiously as possible.

The final issue that was raised during the committee’s study pertained to First Nation capacity funding. Peter Johnston, Council of Yukon First Nations Grand Chief, told me that:

. . . screenings by the executive committee —15 months and panel reviews at 18 months — do not provide adequate time to complete assessments of complex projects that will be subject of these assessments.

We heard today from the Yukon Government Minister Pillai, when I expressed my concerns about timelines, that in his view, in order for First Nations to participate in this next stage of regulation and policy development and to build capacity to do the assessments, First Nations would need appropriate resources.

Since this has been identified as a potential barrier to the efficiency of the collaborative process to develop replacement language and the ability to fully engage in the regulatory process, your committee also recommended in our observation that the federal government address the capacity funding issue as a priority.

Honourable senators, Minister Pillai told our committee that Yukon wants to become one of the most competitive jurisdictions in this country, and I understand they are currently developing a mineral development strategy to help them achieve that goal in the next 10 years.

However, this period of uncertainty, with a lack of mandated timelines and the removal of the exemption from reassessment for minor changes, threatens to slow down the recent surge of interest in Yukon as a viable mining jurisdiction.

Senator MacDonald asked some interesting questions and found that Yukon has received a 2.3 per cent increase in territorial formula financing transfers from the federal government while, at the same time, it has seen an 18.4 per cent decrease in own-source revenue from the mineral, oil and gas and forestry sector.

Should we not be enacting legislation and policies that encourage Yukon to generate more own-source revenue and ultimately become less dependent on federal transfers that make up anywhere from 85 to 90 per cent of their annual budget?

In conclusion, honourable senators, I would like to be clear and leave you with this: I will certainly not be so bold as to recommend that we amend or delay a bill that the Government of Canada, the Government of Yukon and the Council of First Nations have asked us to pass quickly and without amendment. I agree with Senator Campbell that the bill should be passed without amendment.

However, I will ask you to accept the observations that our committee has adopted and to help us ensure that the collaborative process for developing replacement language is concluded promptly. Thank you.

The Hon. the Speaker: Are honourable senators ready for the question?

Hon. Senators: Question.

The Hon. the Speaker: Is it your pleasure, honourable senators, to adopt the motion?

Some Hon. Senators: Agreed.

Senator Neufeld: On division.

(Motion agreed to and bill read third time and passed, on division.)