Report January 2013 The Future of Mining in Canada’s North ECONOMIC PERFORMANCE AND TRENDS The Future of Mining in Canada’s North by Gilles Rhéaume and Margaret Caron-Vuotari About The Conference Preface Board of Canada Mining and its supporting industries will continue to be important economic drivers in many of Canada’s We are: Northern regions over the course of the next decade. The foremost independent, not-for-profit, applied While great potential for mining development exists, research organization in Canada. this potential must be approached in a balanced way. Objective and non-partisan. We do not lobby This report discusses a number of important factors— for specific interests. and their interrelationship with one another—that must Funded exclusively through the fees we charge be considered to ensure that both the positive and nega- for services to the private and public sectors. tive impacts of mining projects are fully understood. Experts in running conferences but also at con- The findings from this report provide policy-makers, ducting, publishing, and disseminating research; industry leaders, and communities with insight on steps helping people network; developing individual that can be taken to support the future of sustainable leadership skills; and building organizational mining in Canada’s North. capacity. Specialists in economic trends, as well as organizational performance and public policy issues. Not a government department or agency, although we are often hired to provide services for all levels of government. Independent from, but affiliated with, The Conference Board, Inc. of New York, which serves nearly 2,000 companies in 60 nations and has offices in Brussels and Hong Kong. ©2013 The Conference Board of Canada* Published in Canada • All rights reserved Agreement No. 40063028 *Incorporated as AERIC Inc. Forecasts and research often involve numerous assumptions and data sources, and are subject to inherent risks and uncertainties. This information is not intended as specific investment, accounting, legal, or tax advice. CONTENTS Executive Summary ................................................................ i Chapter 1—Introduction ...................................................................... 1 Methodology ............................................................................... 2 Chapter 2—Canada’s Northern Mining Potential to the Year 2020....................................... 4 Global Markets and Long-Term Trends .......................................................... 4 A Global Overview of the Mining Industry ....................................................... 5 Mining in Canada ........................................................................... 7 Chapter 3—Business Factors Related to Mining Development . 18 Corporate Fiscal Environment................................................................. 18 Regulatory Regimes......................................................................... 21 Aboriginal Rights........................................................................... 27 Infrastructure, Supply Chains, and Market Access ................................................. 31 Attracting, Developing, and Retaining Skilled Workers ............................................. 36 Chapter 4—Impacts and Benefits of Mining for Northern Communities ................................. 43 Mining and Northern Communities: Times Have Changed .......................................... 44 Relationship Building: Creating Partnerships and Trust With Northern Communities ..................... 44 Adverse Effects of Mining on Northern Communities .............................................. 52 Future Steps Toward Improved Northern Community Net Benefits.................................... 53 Chapter 5—Addressing Environmental Stewardship and the Impacts of Mining........................... 55 Mining and the Environment: A Historical Perspective ............................................. 56 Mining’s Potential Environmental Impacts ....................................................... 57 Approaches Toward Environmental Sustainability ................................................. 58 Chapter 6—Creating a Sustainable Future: What Happens After a Mine Closes?............................ 63 Minimizing the Environmental Impacts of Mine Closure............................................ 63 Understanding the Impacts of Mine Closure on Northern Communities ................................ 65 Identifying Community Business Opportunities and Challenges After Closure........................... 67 The Roles of Mining Companies and Governments in Mine Transition ................................ 69 Assisting Mining Workers With Closure......................................................... 70 A Sustainable Future for Mining in Canada’s North?............................................... 71 Chapter 7—Conclusion and Recommendations.................................................... 72 Recommendations .......................................................................... 73 Appendix A—Bibliography .................................................................... 76 Acknowledgements The authors of this report would like to thank Anja Jeffrey, Director, Centre for the North, and Siomonn Pulla, Senior Research Associate, Centre for the North, for their helpful revisions, expertise, and insights. The authors would also like to extend a very special thank you to the advisory board for this project, whose insights and contributions helped the project take shape, and to the anonymous interviewees for sharing their experiences with us. Finally, the authors wish to thank the Centre for the North’s roundtable members for their comments and their continued investment in the Centre’s work. ABOUT THE CENTRE FOR THE NORTH The Centre for the North is a major research initiative of The Conference Board of Canada. The Centre brings Aboriginal leaders, businesses, governments, and community advocates together to identify challenges and opportunities, and to decide how those challenges can be met. Working with Northern stakeholders and some 50 roundtable members, the Centre delivers cutting-edge research and provides a vibrant forum for discussion on issues facing Canada’s North. Vision: Toward a shared vision of sustainable prosperity in Canada’s North. Sustainable Prosperity Mission: Through research and dialogue, develop new insights that strengthen the foundation for informed decision-making. Governance and Policy-Making The Centre examines issues from a Northern perspective, Transportation and Infrastructure seeks to maximize Northern engagement, and prioritizes Northern interests. The Centre looks at issues and Human Capital oppor tunities across the North—a vast region that includes the three Northern territories, as well as the Healthy Populations northern portions of seven provinces. Cross-Cutting Themes Environmental Sustainability To date, the Centre has published a number of founda - Thriving Mapping Security and tional and issue-specific reports related to the underlying Communities Economic Sovereignty themes of thriving communities, economic development, Potential and security and sovereignty. The Centre’s research agenda Foundational Themes is based on a strategic interdisciplinary framework, as illustrated in the exhibit “Sustainable Prosperity.” CENTRE FOR THE NORTH MEMBERS The Conference Board of Canada is grateful to the investors and roundtable members of the Centre for the North that, through their membership, support the Centre’s research program. Aboriginal Affairs and Northern Development Canada Government of Saskatchewan Agnico-Eagle Mines Limited Saskatchewan Ministry of the Economy Arctic Co-operatives Limited Government of the Northwest Territories Bell Canada Aboriginal Affairs and Intergovernmental Relations BHP Billiton Canada Inc. Government of Yukon BMO Financial Group Yukon Economic Development Canada Mortgage and Housing Corporation Health Canada Canadian Institutes of Health Research Human Resources and Skills Development Canada Canadian Northern Economic Development Agency Hydro-Québec Cisco Systems Canada Co. IGLOO De Beers Canada International Institute for Sustainable Development Enbridge Inc. Inuit Tapiriit Kanatami First Air Makivik Corporation GE Canada Métis National Council Government of Alberta Métis Nation—Saskatchewan Northern Alberta Development Council MTS Allstream Inc. Government of British Columbia Nishnawbe Aski Nation Office of the Premier Northwestel Inc. Government of Manitoba Norton Rose Canada LLP Legislative Assembly of Manitoba Prince Albert Grand Council Manitoba Aboriginal and Northern Affairs Privy Council Office Government of Newfoundland and Labrador Public Health Agency of Canada Labrador and Aboriginal Affairs RBC Government of Nunavut RTL–Westcan Group of Companies Nunavut Department of Economic SaskPower Development and Transportation SaskTel Government of Ontario Scotiabank Ontario Ministry of Municipal Affairs and Housing TD Bank Financial Group Ontario Ministry of Northern Development and Mines TD Securities Inc. Government of Quebec The North West Company Secrétariat au développement nordique Transport Canada U15—Canada’s Fifteen Leading Research Universities (Note: The findings and conclusions of this report are entirely those of The Conference Board of Canada, not of the Centre investors and roundtable members.) EXECUTIVE SUMMARY The Future of Mining in Canada’s North anada’s Northern regions