Speech – C-17 – Second Reading

Yukon Environmental and Socio-economic Assessment Act

On the Order:

Resuming debate on the motion of the Honourable Senator Campbell, seconded by the Honourable Senator Omidvar, for the second reading of Bill C-17, An Act to amend the Yukon Environmental and Socio-economic Assessment Act and to make a consequential amendment to another Act.

Hon. Dennis Glen Patterson: I rise today to speak to Bill C-17, An Act to amend the Yukon Environmental and Socio-economic Assessment Act, also known as YESAA.

Last week, Senator Campbell eloquently explained the history behind this bill. While I agree that Canada must move forward in good faith with First Nations, I do hold some reservations about his statement that it would:

. . . restore legal certainty for responsible resource management, paving the way for increased investment, development and jobs.

In fact, I would argue that the removal of legislative timelines and the exemption of projects with minor changes from reassessment proposed in this bill would bring a chill to investment in the region until replacement language can be drafted and approved.

Honourable senators, it was mining that gave birth to the creation of the Yukon Territory with the discovery of gold in 1896, and mining is still the life blood of the Yukon economy. It is critical to employment and the generation of revenues which support important government programs.

Yukon First Nations, with their settled land claims and their access to benefits and business opportunities, also have a significant stake in the orderly development of Yukon’s abundant natural resources.

All this, of course, must be done with great respect to protect and preserve the natural environment from adverse impacts of development.

Investment capital for mining is not easy to attract to remote regions where transportation and other infrastructure are often still undeveloped. The primary object of any changes to the regulatory regime as proposed in this bill should be to ensure that, when all is said and done, Yukon remains a stable and attractive investment opportunity for investment capital, remembering that mining investors have many opportunities all over the world, and many jurisdictions are offering efficient regulatory processes and welcoming tax regimes.

So how does this bill impact the investment climate in Yukon? Well, let’s recognize two major thrusts of this bill: It removes timelines for regulatory approval, and it removes a provision in the existing law which says that once a project is approved, minor changes in the project may be exempted from full environmental review.

In his speech, Senator Campbell quoted a March 13, 2017, letter from the Council of Yukon First Nations, the Yukon government and the Yukon Chamber of Mines to the Government of Canada urging parliamentarians to pass Bill C-17 “without change, as soon as possible.”

However, when Yukon Chamber of Mines President Michael Burke appeared before the committee studying this bill in the other place, he clarified that this support was:

. . . predicated on addressing industry concerns, namely reassessments and timelines, through a collaborative framework with Yukon first nations, the Yukon government and the Government of Canada . . . .

Senator Campbell also told this chamber that:

The Government of Canada has been in ongoing discussions with the Yukon Chamber of Mines, and the chamber stands by their support for passing this bill on an expedited basis with the understanding that these issues will be dealt with through other policy mechanisms shortly thereafter.

Yet Chamber of Mines president Mr. Burke closed his remarks in the other place by stating that:

We support the passage of Bill C-17 in order to reconcile with Yukon first nations. We urge the federal government to immediately engage with first nations governments and the Yukon government to find short-term administrative or long-term legislative solutions to the impact of the removal of the reassessments and timelines contained in Bill C-17. . . . The Yukon Chamber of Mines urges that this work be undertaken to implement solutions to these issues in advance of the passage of Bill C-17 to ensure continuity for all parties involved.

I agree with Mr. Burke. I believe 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 are negotiated and put in place.

Colleagues, with regard to timelines, I think it is significant to note that since the passage of Bill S-6 — the predecessor to Bill C-17 —in 2015, over100 projects have gone through the YESAA process. This brings to mind the old colloquialism, “if it ain’t broke, why fix it?”

Now, on the other main issue of reassessing projects for minor changes, the Yukon Minerals Advisory Board’s 2016 annual report, tabled in the Yukon Legislative Assembly on June 7, 2017, says that:

. . . speaks volumes for the critical need of a practical regulatory tool that can manage determinations of non-significance when appropriate.

I translate that language to mean that a practical approach is needed to deal with minor changes to ongoing projects.

I think it’s a great story that 100 approvals have been dealt with since the current legislation was passed in 2015, seemingly without any hiccups. Many of these projects involved minor changes — just the situation that the current bill addressed.

Once there has been full and rigorous environmental review of all aspects of a major development project, the same process should not have to be undertaken when the project is changed in non-significant ways.

Mr. Jonas Smith, who represents the Yukon Producers Group and is a member of Prosperity Yukon and the Klondike Placer Miners’ Association, told the committee in the other place that 60 per cent of companies who submitted a proposal for minor changes to an existing project were granted an exemption from reassessment.

In its 2015 annual report, referring to the period prior to the passage of Bill S-6, YMAB stated:

(1450)

Mining projects that have triggered a reassessment under YESAA require the entire project be reassessed rather than only the new or altered project component(s), which triggered the reassessment in the first place.

This can be a real nightmare for a mining company that is trying to invest money and create jobs in the local economy, yet faces hurdle after regulatory hurdle. Once they have gone through a very rigorous environmental review process, which is costly and time consuming, companies put a lot of effort into developing the so-called EIS, the environmental impact statement. Then to threaten them with the possibility of having to go through the entire process again due to making a minor change in their project will be a cause for concern for shareholders, company directors and stock market analysts.

To understand the significance of this reassessment issue, I’d like to share a story that was told to the other place by Mr. Brad Thrall, President of ALEXCO Resource Corporation, a silver-mining company, which currently employs 80 people and up to 200 people in full production, with an annual payroll of $35 million. His company has gone through the YESAA process 11 times in the past 10 years, and he has the benefit of being able to contrast his experience before and after Bill S-6 provisions were enacted. In his recounting, Mr. Thrall explains:

While in production between 2011 and 2013 under the former legislation, Alexco proposed to add to our mine production stream two new deposits adjacent to our existing operations. No significant changes were contemplated. Regardless, permitting required a new project-wide reassessment, which occupied 221 days of YESAB’s time and jeopardized the sustainability of our district. Under the existing legislation, small changes to operations could be dealt with as simple licence amendments and could subsequently help ensure sustainable jobs and a sustainable business.

Similarly, in 2014, Alexco was again fully reassessed for production from a third new deposit, and this reassessment included a duplicative assessment of our already licensed and operating mill which took another 298 days of YESAB’s time and resources. . . .

Over the eight years before YESAA was amended and over the course of 10 assessments, some of which were duplicative, the time period required to deem our project proposals adequate has increased more than fivefold. In contrast, our 11th assessment in 2017, under the amended legislation, took less than 20 days for adequacy. . . .

In my view, the reassessment provision has served exactly the purpose for which it was designed. It has increased efficiency at all levels of government. It has substantially reduced or eliminated duplicative assessments. It has reduced cost to the taxpayer while placing Yukon on a competitive footing with other provinces and territories — and globally, I might add.

I say again, honourable senators, if it ain’t broke, why fix it?

This is an important issue we must examine carefully while the bill is before our Standing Senate Committee on Energy, the Environment and Natural Resources. This bill is in response to litigation from Yukon First Nations, and I say again that it is in the interests of Yukon First Nations to have a welcoming, stable investment climate and an efficient regulatory process because they, too, have many opportunities to benefit from orderly, balanced development of Yukon’s rich natural resources.

Honourable senators, coming from Nunavut, I understand the importance of having these types of regulatory approvals in place far in advance in order to plan for the following season. Delays in assessments or unnecessary reassessments can be devastating to a company’s development plan, and a missed season in the North means no work for community members, making for a difficult winter.

Bill S-6 and the Nunavut Project Planning and Assessment Act, NuPPAA, were both introduced in 2015 in order to have regulatory consistency across the three territories, which occupy 40 per cent of Canada’s land mass. I believe that it is not good government policy to have inconsistent and competing rules in Northern Canada. Here is what the NuPPAA legislation says about project reassessment, and I’m going to read section 145, with your forbearance:

If the carrying out of a work or activity is a project within the meaning of subsection 2(1) and modifies a project that has been approved under this Part, that work or activity is, despite paragraphs 74(a)and (b), not subject to an assessment under this Part unless that work or activity is a significant modification to the original project.

A similar provision exists in Yukon’s neighbouring territory, the Northwest Territories, under the Mackenzie Valley Resource Management Act.

So both N.W.T. and Nunavut have provisions that exempt projects from reassessment for minor changes, and both N.W.T. and Nunavut have clear legislative timelines. That’s why the timely development of replacement language for Yukon through regulations is crucial. History tells us that the five-year review of YESAA took eight years to complete, which resulted in Bill S-6. There is currently no set timeline for the development of these new regulations, and that is something mining companies are very worried about.

I would like to make it clear, again, that I support reconciliation with First Nations. I believe the First Nations of Yukon should be full and active partners in the assessment process and management of lands and resources. Co-management and indigenous involvement at every level of project planning and assessment are already a reality in Nunavut, and we have a good history of making co-management work in Nunavut.

However, I would urge caution in not having important replacement language in place prior to the coming-into-force of this bill. Continuity and regulatory certainty are important for continued investment and growth in any jurisdiction, and I’ll be looking very closely at these issues during study at committee. At committee, I will ask Minister Bennett, who I expect will appear, to confirm her commitment to involve all stakeholders in developing the all-important regulatory regime, which will determine the answers to the major issues underlying this bill, including whether minor project changes will require full, costly and time-consuming reassessment. I will want to see a commitment that industry will be one of the stakeholders that is fully consulted in the development of the regulations, and I will advocate for the expeditious development of replacement language so as to restore regulatory certainty in Yukon.

Hon. Serge Joyal: Will the honourable senator accept a question?

Senator Patterson: Gladly.

Senator Joyal: Is the honourable senator aware of whether the Inuit were consulted prior to the drafting or tabling of this bill in the chamber?

Senator Patterson: Thank you for the question. The bill is for Yukon, where there are mostly First Nations residents, and I do know that the First Nations have been fully consulted. I do understand that the Yukon First Nations have been fully consulted in the development of the bill. But I think the honourable senator asked an important questions because, as I said in my speech, this regime in Yukon, if we pass the bill, will lead to a checkerboard of inconsistent provisions across the three territories, and I fear that it could lead to competition between jurisdictions, which I don’t think is good public policy in Canada. There should be a consistent regulatory regime across Canada, which was the purpose of the amendments introduced by the previous government in Bill S-6 and in the NuPPAA. So it’s a good question because I do believe that the changes in this bill do impact the neighbouring territories. But the short answer to the question is I don’t believe the Inuit have been consulted, but I’m not sure of that fact.

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

Is it your pleasure, honourable senators, to adopt the motion?

Hon. Senators: Agreed.

(Motion agreed to and bill read second time.)