Industry Roundtable
Overview
A number of mining and exploration companies operating in Northwestern Ontario “NWO” have identified that they are experiencing significant barriers in advancing projects. In an effort to promote NWO as a jurisdiction that supports and encourages responsible natural resource development, industry members facilitated a forum for discussion.
A roundtable discussion with executives and professionals from the mining industry was held on September 16th, 2013 in Thunder Bay, ON and was facilitated by the office of the Thunder Bay Economic Development Commission. The primary objective of the discussion was to identify barriers exploration and mining companies are experiencing in advancing projects in NWO, and to outline solutions for overcoming the same.
Although representatives from all stages of the mining cycle were invited to attend, the participants were primarily comprised of exploration companies with projects at an advanced stage of exploration. All projects discussed are subject to Ontario regulations, policies and standards.
The roundtable agenda items discussed:
1. Ontario Mining Act – Plan and Permits (Exploration) & Mineral Development
(Advanced Exploration and Closure Plan Process)
2. CEAA/MOE
3. Aboriginal Consultation
4. MOUs/IBAs
5. Energy Infrastructure
6. Transportation Infrastructure
7. Workforce
8. Supply chain
9. Other
Barriers for Advancing Projects in Northwestern Ontario
Ontario Mining Act – Plan and Permits (Exploration) / Mineral Development (Advanced Exploration and Closure Plan Process)
There were varying opinions on the recently implemented Ministry of Northern Development and Mines “MNDM” Plans and Permits regime. Some participants felt it was a smooth process if the proponent had an opportunity to plan for the 2 -3 month review and approval period. The majority felt there is no certainty in the timeline and that the approval is heavily contingent on how cooperative the aboriginal communities in the project area are, especially for permit applications.
Although the MNDM is not currently charging a Plan or Permit application fee, companies identified that they are experiencing additional expenses in coordinating these applications. There was consensus that exploration programs are largely results based and that the Plans and Permits regime is not sensitive in terms of scheduling. Furthermore, permits and approvals being issued by other Ontario ministries (MNR,MOE, MTO) do not align with approval timelines in connection with the MNDM Plans and Permits. Most were concerned about the reduction in flexibility for planning projects and meeting Flow-Through financing commitments.
The MNDM Plans and Permits regime is negatively impacting the ability to raise and spend Flow-Through capital, which has been a long time incentive for investors to support Ontario projects. Overall it was agreed that the process will slow down investment in Ontario.
Few saw any advantages to the modernization of the Mining Act. One positive outcome identified was that one (1) Mineral Development Consultant is assigned as a project lead to each project. It was noted that this process is being carried out well by the Thunder Bay MNDM staff however, the same level of service is not being met province wide.
Participants identified that the Plans and Permits process in its current form will result in less projects being carried out in the province, resulting in less opportunities for new discoveries.
It was viewed that the modernization of the Mining Act imposes additional regulatory burdens and levels of bureaucracy.
Participants also felt that there is a lack of government resources for reviewing Plans and Permits in a timely manner.
The modernization of the Mining Act has not clearly defined who proponents should consult with. Participants identified that the MNDM database for aboriginal communities and their Traditional Land Use Area is often grossly outdated or inaccurate. In some instances, proponents have been provided with incorrect contact information or advised by MNDM to communicate with the wrong communities.
Government has a reputation of scoping additional communities into the project as the scope of the project changes. This has resulted in ill feelings towards the proponent from the new communities being scoped in at a later period in the project schedule. It gives the communities the impression that the proponent failed to engage them earlier in the process.
Proponents are unclear about Traditional Territory boundaries and culturally sensitive areas. Having a map that outlines this information would be helpful for determining contentious areas. Furthermore, the modernization of the Mining Act has resulted in greater pressure being applied to proponents to fund aboriginal activities such as mapping and elder interviews etc.
Discussions surrounding whose role it should be to lead the mapping resulted in all participants agreeing that it is most appropriate for government to lead this initiative, as there are many issues related to outstanding land claims and confidentiality which industry has no authority over.
It was noted that funding is available to communities from the Ministry of Aboriginal Affairs “MAA” to facilitate consultation activities. The program funding is $50,000 annually and in essence funds one position. Some companies were not familiar with this funding however, most felt that $50,000/yr was an inadequate amount.
Further dialogue with respect to educational training performed by the MNDM with aboriginal communities brought to light that the curriculum being delivered does not appear to be consistent.
Furthermore, there does not seem to be a formal database that records which communities and specifically which members have received the training. Proponents also felt that there should a method of recording comments made at training sessions, as well as a system for allowing the comments to be made available to proponents.
Education was regarded as a major priority. There was a strong consensus that many of the issues impeding project advancement could be eliminated if there is a greater understanding of the industry by aboriginal communities and other crown agencies (MNR, MTO etc).
Furthermore, the lack of knowledge of the exploration and mining business by MNR and MOE district and regional personnel who deal with mining projects and mineral industry personnel, is a large concern.
Thoughts of Explorers
- “Early exploration phases must not be limited by bureaucracy (Plans & Permits) and/or the necessity for expensive agreements for work that may not proceed past the first drill program.”
- “There is a chance that grassroots exploration could be so stifled to become non-effective (i.e., no new discoveries if exploration cannot be dynamic – quick moving).”
Proposed Solutions
1. MNDM should have a staff member dedicated to updating and maintaining the aboriginal database.
2. Establish a formal reporting system to facilitate maintenance of Aboriginal community websites.
3. Establish a system for identifying appointed community contact/liaison to eliminate confusion for proponents (Presently, this varies from community to community and is a discretionary decision of Chief and Council).
4. MNDM should clearly define all communities that may have an interest in the project, and communicate this information with proponents at the inception of a project.
5. Allocate additional government resources to expedite the review and approval process of Early Exploration Plans and Permits.
6. It is recommended that MNDM revise threshold for permits (too low at present –i.e. up to 10,000 m of diamond drilling should not require a permit).
7. Community based Land Use Planning needs to be completed and funded by the government.
8. The government is urged to update databases and maps of Traditional Land Use Areas.
9. Allocate additional government funding to provide First Nation capacity for timely engagement with proponents and regulatory agencies – $50,000 from the MAA is inadequate.
10. All expenditures accrued in connection with facilitating aboriginal engagement (i.e., travel and meeting costs etc.) need to qualify, as an eligible Canadian Exploration Expense “CEE”, as these are costs related to the Crowns Duty to Consult. In an effort to encourage exploration, it is recommended that the Canada Revenue Agency revise the CEE criteria to include the aforementioned expenses. Currently some costs qualify for renunciation as CEE under Flow-Through share arrangements, but consistent with a PDAC request, a review of current CEE guidelines and expanded scope to allow companies to manage new costs associated with
government requirements, is recommended.
11. MNDM should implement a database that contains a detailed record of which communities and members have received training (MNDM Mining 101 etc.).
12. MNDM should adopt standardized educational curriculum and presentation content.
13. A record of comments and questions arising from MNDM training/workshops should be made available to proponents.
14. Government should render educating relevant crown agencies and aboriginal communities about mining and exploration as a high priority.
15. It is recommended that the curriculum/content developed and deployed by MNDM be considerate of the diverse audience needs (i.e. technical information synthesized for nontechnical audiences etc.).
Canadian Environmental Assessment Agency “CEAA” / Ministry of Environment “MOE”
The predominant barrier outlined in the discussion by participants was the lengthy timeframe and the perception of intentional delays. Proponents questioned the continuous requests for additional data from Crown agencies, specifically the MOE. On occasions, information that has already been forwarded to MOE by the proponent is requested multiple times.
The MOE Terms of Reference is viewed as a significant challenge as it lacks a defined process. Furthermore, there is a perception that MOEs actions are resulting out of concern of being subject to a Tribunal process. Participants felt that a substantial knowledge and capacity gap about mining exists in the MOE.
In comparison, the CEAA process is not viewed to be as large of a barrier, as this process is more clearly defined. However, the uncertainty with respect to a Panel Review and the extensive “clock stops” was deemed as a barrier for advancement. Additionally, there was a strong consensus with respect to the issue of overlapping mandates amoungst Crown agencies (i.e., MOE, MNR, DFO, NRC etc.), and that this issue continues to result in the significant waste of time and resources.
Industry emphasized a need for government to be more mindful of the boom and bust cycles associated with the industry, and the serious implications of delayed approvals – specifically in connection with a proponent’s ability to finance the construction of a project. In essence, the lengthy and uncertain regulatory regime is killing projects. The Ring of Fire was noted as a shining example.
Some participants noted that in their experience, they have witnessed a resistance against industrial development from some ministry staff, particularly the Ministry of Natural Resources “MNR”.
Proponents expressed a feeling of insecurity with respect to the ability to achieve permits to actually construct mines in the province. There was a sense of lack of clarity and guidance in connection withpermitting pathways available for projects. It was noted that no proponents present were using the Major Projects Office “MPO”, and that all participants had little knowledge about the agency’s mandate or resources.
Thoughts of Explorers
- “Challenge – Delays.”
- “Opportunity – One stop shop process needed.”
- “Uncertainty is killing our ability to finance.”
- “Greater capacity for government to address projects.”
- “Need one process – one lead agency to deal with.”
- “Lack of clarity on permitting pathway.”
Proposed Solutions
1. It is recommended that the government mandate one (1) lead agency, with an emphasis placed on eliminating overlapping mandates. The government is encouraged to review jurisdictions such as the USA and the province of B.C. where such models exist.
2. Refine one (1) window approval, simplify overall process. Establish one (1) process.
3. Provide greater funding to the MOE to increase capacity. A significant deficit of human resources exists in comparison to existing project demands.
4. Greater senior MOE support, accountability and direct involvement in projects.
5. Implement cross Ministry agency training. MOE and MNR require greater education about exploration and mining (i.e., Mining 101).
6. Although it is acknowledged that mining is part of the Ontario education curriculum, the Federal government is encouraged to provide funding for a major Mining Matters campaign.
7. The government should provide greater clarity and guidance in connection with permitting pathways available to proponents.
8. Greater promotion and outreach about the Major Projects Office to proponents is required.
Aboriginal Consultation / Agreements (MOUs, IBAs etc)
At present, the view is that the challenges encountered with aboriginal consultation by explorers are impeding early stage prospecting and exploration which threatens the opportunity for future discoveries.Furthermore, this challenge is also dominating advanced stage projects and is compromising the project pipeline and future economic state of many communities in Northwestern Ontario. Extensive time and resources are being allocated by proponents in an effort to negotiate good faith agreements.
The major barrier identified in these negotiations are the unreasonable and varying expectations of communities. Participants felt this is a direct result of a lack of knowledge and understanding about mining and exploration by aboriginal communities (i.e., exploration generates no revenues – all expenditures etc.). There was a strong consensus amoungst the group that agreements between proponents and aboriginal communities should not contain financial provisions, and that the overall process should be simplified.
Concerns were raised with respect to precedents that may be set through the Bob Rae – Justice Frank Iacobucci negotiations in connection with the Ring of Fire. Currently, there is no industry representation in these negotiations. The view was that these discussions are setting the stage for future expectations on mine development projects, and if a resource revenue sharing agreement is reached, how will this impact future and existing arrangements?
It was also discussed how the government does not formally recognize certain aboriginal groups however, industry is still required to consult with these parties, as per government directives. Participants questioned how Resource Revenue Sharing “RRS” will be addressed with these parties, and how the government will address existing agreements?
The consensus of the group is that government should lead negotiations for standardized RRS with aboriginal communities, and that it is the responsibility of government to directly administer the RRS arrangement. With that said, the negotiation process should also involve industry feedback, as all parties need to agree on the structure of the model. It was questioned if there is a comparative or foundation for a formula with the existing RRS model for gaming.
Industry representatives discussed the benefits of a fixed percentage for RRS, and felt this process would create greater certainty in planning budgets. Moreover, the implementation of a government administered RRS will alleviate the burden of agreement negotiations, create certainty with shareholders, and provide for clear government disclosure.
Participant’s felt strongly that RRS cannot take place on the back of industry and that funds must be generated from the existing tax base. Projects are marginal at the best of times, and an increase to the current tax rate will result in projects being deemed uneconomic.
Furthermore, proponents questioned their ability at present and in the future to access mineral claims, insinuating that there does not appear to be the political will to uphold the rights of explorers and miners.
The standardization and regulation of non-financial agreements with aboriginal communities was heavily debated. Some felt that mandated engagement policies and agreements failed in other jurisdictions however, others argued that it defines boundaries, provides for a code of conduct, and reduces risk.
Further comments surrounding the topic included that a one size fits all approach is not a solution because each community is individual and unique.
There appeared to be a general consensus amoungst the group that the following provisions would be appropriate for Company – First Nation/Métis MOUs & exploration agreements: Education, training,employment and business opportunities, provisions for the protection of the environment and cultural values. In cases of producing operations some felt there was a possibility to include a trust fund provision for future generations however, it was stated this would have to be further reviewed if the government formalizes and implements RRS.
It was also highlighted that Agreements (IBAs were specifically noted) are not required or even legal in other jurisdictions, particularly where there are financial provisions for no exchange of product or service.
Participants felt that the title of agreements should reflect more positively and be named more appropriately. Existing agreement language is awkward & confusing. The following suggestions were made: Economic Benefits Agreement / Collaboration Agreement / Opportunities & Benefits Agreement vs. Impact Benefits Agreement.
The Nunavut model was discussed however, it was determined that this model would be difficult to replicate because of the distinct variance in the government regime, whereas in Ontario proponents are required to deal with each individual First Nation.
It was questioned if a central agreement repository could be established by government however, some felt there may be resistance by some parties to disclose agreements due to the confidential nature of certain information.
Thoughts of Explorers
- “Lack of financial capacity. Who pays?”
- “Government fund to identify sensitive areas of concern within Traditional Lands. This will take time to identify possible problem areas.”
- “Ambiguity in Aboriginal consultation process.”
- “Lengthy and uncertain First Nation consultation process – simplify process, especially early stage.”
- “First Nation agreements – no transparency, all one offs.”
- “Solution – Tax/royalty to replace IBAs. Collection and distribution by the province.”
- “Thresholds for consultation level – less pass off of procedural aspects. Inclusive of guidance.”
- “Government to take full responsibility and negotiate with First Nations directly to agree on an appropriate tax regime under which benefits from projects are equally shared by all First Nation people.”
- “For junior explorers, make it a requirement that until such time that an actual measurable resource is defined, there will be no expectation of payments – payments staged on project”
- “Stop delegating negotiations to proponents.”
- “As a junior explorer with no defined resource, the expectation of taking exploration money and donating it to various groups is appalling.”
- “Ensure one company does not offer more (incentive) than another company.”
- “The Ontario government should introduce (i.e. in Mining Act) rules to demand full disclosure of all deals (one’s involving financial payments).This might actually discourage demands for financial payments.”
- “Need clarity on roles in general-process for permitting a viable project.”
- “Public companies need full disclosure to their shareholder (they have a right to know). Agreements or portions of them cannot always beconfidential.”
- “Agreement process – must remove the expectation of cash payments as part of all agreements, including early stage agreements.”
- “Inconsistency of regulatory regime between ministries.”
Proposed Solutions
1. It is recommended that government immediately undertake negotiations with aboriginalcommunities and industry to develop a regulated Resource Revenue Sharing system.
2. It is recommended that the RRS system be a fixed percentage to provide proponents and their shareholders with greater certainty.
3. It is strongly recommended that RRS funds be allocated from the existing tax base, in an effort to support and encourage future mine development.
4. It is recommended that government assume full responsibility for administering RRS with aboriginal communities, thereby fulfilling its fiduciary duty to accommodate.
5. Institute an education campaign to explain what RRS is.
6. Provide a forum to facilitate Industry in collectively establishing standardized terms for nonfinancial agreements with aboriginal groups, particularly for resource strapped early stage projects.
7. It is recommended that government regulate full disclosure of agreements in an effort to discourage outrageous financial precedents.
8. It is recommended that government adopt new legislation that prevents financial provisions in agreements with aboriginal groups and provides a mechanism to render existing agreements entered into null and void/illegal whereby agreements were entered into under duress.
9. Establish a system whereby one (1) body represents all groups in negotiations.
10. It is recommended that the government refrain from regulating non-financial agreements amoungst proponents and aboriginal communities in an effort to facilitate relationship building.
11. The government should make education for First Nations/ Métis and cross cultural training for companies, a high priority, and provide funding for the same. Specifically, greater education about the i) mining sequence, ii) odds of an actual discovery, iii) environmental safeguards, iv) modern day mining practices in comparison to historic methods. To ensure effectiveness, the development and delivery of such information should be considerate of respective audience needs.
12. It is recommended that the Federal and Provincial government undertake comprehensive measures to address education and employment barriers for Aboriginals. Specifically, conducting an evaluation of skills prior to commencing training.
13. It is recommended that the government provide greater financial assistance to support opportunities for job shadowing (i.e., Oshki good model).
14. The government is urged to update Traditional Land Use databases and maps, and undertake areas that have not completed this process.
Infrastructure
The main barriers discussed focused on the need for greater access and the length of time and costs associated with permitting infrastructure projects.
Participants discussed the overall long term benefits of infrastructure and the resulting long term cost savings to government, and economic benefits for Aboriginal communities. Furthermore, it was deemed that greater access will provide opportunities for increased exploration and development from mining and other natural resource sectors. Participants felt strongly that in order to advance projects such as the Ring of Fire, infrastructure and a firm investment commitment from government is critical.
Participants evaluated the province of Quebec’s proactive and supportive approach to building infrastructure to assist industry development.
With respect to access barriers, it was noted that the MNR is decommissioning former forestry roads. Participants see an opportunity to develop work agreements or a protocol with MNR or possibly between MNR and MNDM to maintain access routes for exploration projects. This discussion touched again on the lack of understanding or inadequate communication amoungst MNR and other provincial agencies and industry.
The topic of government commitment surfaced again on the discussion of energy. Proponents would like the government to lengthen the term of power agreements and programs for periods greater than the existing 2 – 3 year terms.
Thoughts of Explorers
- “Investment, growth, prosperity, work, capacity to deliver.”
Proposed Solutions
1. Firm commitment from government to invest in infrastructure projects and programs that encourage industry development.
2. Extend Terms for energy agreements and programs (greater than 3 years).
3. Provide Mining 101 education for various Ministries (MNR, MTO etc.).
4. A Government review of the rebranded Quebec Plan termed “Nord Pour Tous” to inspire planning investment commitments and infrastructure development.
5. Develop a process to facilitate improved communication amoungst industry and government Ministries prior to the decommissioning of Crown infrastructure (MNR roads etc.) to seek out opportunities for agreements or protocols.
6. It is recommended that the Ministry of Transportation work more closely with industry in highway planning – at present there is a disconnect.
Workforce
The requirement for fundamental education dominated the discussion. Participants emphasized that it is vital to address the need for basic skills training (life skills, financial, numeracy, literacy etc.) in order to facilitate success in speciality training programs. Proponents discussed the need for greater government assistance and incentives to help companies overcome the financial burden of training unskilled workers.
The participants examined the training partnership between Noront, Fednor, KKETS and Confederation College which led to dialogue on the importance of implementing strategies behind training, and the difficulty in timing training for when jobs actually come to fruition.
Participants expressed the need to sync training with actual demand. Some felt there are no jobs available to support the training programs currently being contemplated in the Ring of Fire.
Participants were in agreement that the mining industry requires its labour force to be mobile, and that in order to conduct meaningful and successful training programs, these expectations need to be discussed up front with individuals who are contemplating training and a career in the industry.
Dialogue about how to attract and diversify the workforce focused on the need to implement unique and flexible work schedules to attract and retain talent. The Goldcorp Red Lake Mine model was discussed as an example.
Proposed Solutions
1. It is recommended that the government distribute training dollars across projects evenly, and not just focus on the Ring of Fire.
2. Workers need to be prepared to be mobile.
3. The government should closely evaluate and debate policy that would require in province hiring practices.
4. In an effort to anticipate training and workforce needs, a system should be implemented whereby at a certain stage of exploration (feasibility stage) government would require a proponent to submit a formal labour plan.
5. The government is encouraged to closely review the results of the “Time Continuum” study currently being undertaken by the North Superior Workforce Planning Board, and the “Custom Labour Market Report” published by the Mining Industry Resources Council and consider these results in planning future training initiatives.
6. Emphasize and promote positive aboriginal role models to youth and communities.
7. Develop a communication strategy that generates knowledge and interest about career opportunities in the mining industry. As part of the messaging include information about the mobile nature of the industry.
8. Develop a systematic strategy of how to train and retain a mobile workforce in the Thunder Bay region.
9. It is acknowledged that the Prospectors and Developers Association of Canada, the Ontario Mineral Association, and the Mining Association of Canada are making continuous efforts to promote the industry. In an effort to create greater awareness amoungst the general public and stakeholder groups, it is recommended that additional funding and resources be expended to conduct high profile public education and awareness campaigns about mining.
10. Seize all opportunities to raise a positive profile on mining by highlighting good news stories.
11. Training dollars for Driller Helper training is required in slow exploration periods (now); these individuals, in time, become accredited Drillers (a highly specialized skill).
12. Need to match requirements with respect to workforce training and the opportunity in industry.
Thoughts of Explorers
- “Workforce multi-tier approach, educate general public, identify upcoming shortages and apply resources regionally by need.”
- “Up trades funding.”
- “Leverage potential of female workforce.”
- “Workforce – education at all levels about mineral exploration and mining.”
- “First Nations must encourage education to promote professionals (i.e., geologists & engineers).”
- “Barrier – availability of trained and safe workforce.”
- “Change the perception of the industry so that the present stigma is removed.”
- “More GED and training programs, basic skills such as 3R’s needed.”
Supply Chain
A brief discussion was held on the local and regional supply chain, which primarily focused on existing gaps.
Through these discussions, participants identified an absence of services and supplies in the following categories:
1) Heavy Equipment
2) Manufacturing
3) Mine Contractors
Participants regarded the Thunder Bay region as more of a shipping area that is competing for services and supplies with Sudbury.
Proposed Solutions
1. Encourage companies to become part of the local Chamber of Commerce (and ultimately the Northwestern Ontario Mine Service and Supply Association, when it develops).
2. It is recommended that CEDC in collaboration with NOACC, NADF and FWFN host a supply chain conference to promote local Northwestern Ontario purchasing opportunities.
3. CEDC lead an initiative to educate local companies about the mining industry, and provide support to define areas for business diversification of services and supplies.
Other
Participants discussed the need for greater collaboration amoungst Municipalities, the Province and proponents for identifying synergies, and for the development of Mutual Aid Agreements.
Safety concerns were raised with respect to the lack of training and equipment of local fire departments who are relied upon by area operations.
As well, participants expressed concerns about the inconsistent application by MOL inspectors of the MOL guidelines and the Ontario Occupational Health & Safety Act. The individual interpretation of the legislation is resulting in operational setbacks.
Additional concerns were raised about the manner in which the Workplace Safety & Insurance Board “WSIB” is applying rates. Proponents perceive the current system as a cash grab, noting that the rate of billing is often inaccurate, specifically when exploration activities are being charged a mining rate.
Participant’s questioned WSIBs knowledge about mining as they appear to not understand the significant differences between field operations vs. corporate operations, and exploration activities vs. mine development and production.
Proposed Solutions
1. Establish a formal process to promote greater communication between Municipalities, the Province and industry project proponents.
2. Greater government funding to support local fire department training (HAZMAT training etc.).
3. It is recommended that the Ministry of Labour provide clear directives and guidance to MOL inspectors with respect to correctly and consistently applying the Ontario Occupational Health & Safety Act and Guidelines.
4. It is recommended that the WSIB classification system be reviewed and revamped.
Closing Remarks
The Proposed Solutions contained herein have been put forth by mining executives and professionals who possess a deep understanding and extensive experience in the exploration and mining industry. The intent of drafting this report is to assist policy makers in facilitating positive change that will support the advancement of several mine development projects in Northwestern Ontario, and encourage continued exploration throughout.
It is critical that immediate steps be taken by government to support proponents attempting to advance projects in NWO. Economic prosperity and the health of many NWO communities is heavily dependent on keeping projects in the pipeline.
Our Message – The government must return certainty to Ontario. The government must commit to investing in projects. The government must commit to supporting and protecting the rights of Ontario Explorers and Miners.