Party leaders, McLellan speak out on mining issues — Land claims, regulatory reform among most pressing concerns

At the beginning of the federal election campaign, The Northern Miner invited all five party leaders to participate in a brief interview about issues concerning the mining industry.

Three of the leaders complied: Jean Charest of the Progressive Conservative party; Preston Manning of the Reform party; and Alexa McDonough of the New Democratic Party (NDP). Liberal Minister of Natural Resources Anne McLellan participated on behalf of Prime Minister Jean Chrtien. Gilles Duceppe of the Bloc Qubcois declined our invitation to participate.

Each party representative was asked the same five questions, which were prepared jointly by The Northern Miner, the Mining Association of Canada, the Prospectors & Developers Association of Canada, and Watts, Griffis & McOuat.

The interviews were conducted by Lisa Murray of the investor and media relations department of Ventures Resource.

1. What role should the federal government play in disputes between mining interests and aboriginal groups over mineral development in Canada? * McLellan — First of all, I think it is fair to say that we recognize, both as a party and as a government, the uncertainty that prevails in the area of aboriginal rights and land claims. There is uncertainty as to who owns many of the areas that mining companies would like to explore. Industry needs certainty.

* Manning — We actually want to do away with the Department of Indian Affairs and devolve a lot of its functions, responsibilities and funding to local aboriginal government. This way, mining companies would be able to deal directly with the aboriginal interests without Indian Affairs being a third party behind the scene. Secondly, we believe the land claims settlement process should be made much more open, with all the affected interests being involved in it from the beginning. We think if those two changes were brought about, there would be fewer disputes such as those that have occurred either because of overinvolvement by Indian Affairs or because interested parties have not been as directly involved in the land claim process as they might have been.

* Charest — The best thing government can do to help business and industry is create a positive climate for investment and growth. However, this cannot take place in an environment of uncertainty, and this is where I believe the federal government must take a leadership role. Regarding aboriginal issues that affect mining, I believe land claim issues should be settled fairly and publicly, through non-Confrontational and balanced negotiations. Wherever possible in the negotiations, other affected groups would have input. I think this process will go a long way towards reducing the number of future disputes between the mining industry and aboriginal peoples.

* McDonough — We need to get serious about settling land claims. I think we can say, based on cases in the Yukon, that everybody benefits from removing the uncertainty that surrounds unsettled land claims. That’s probably the single most important thing the federal government can do. One of the problems is that the government seems to be in a very protracted process, and even where provincial governments have been willing to move ahead with land claims, such as in British Columbia, very often it is the federal government that is constantly introducing delays.

2. All parties have acknowledged that regulatory reform with respect to mining issues is needed. What action, if any, should be taken either to reduce overlapping or provide a single national regulatory system for securities?

* McLellan — Regulatory reform is a key initiative for this government.

Obviously, we have to maintain procedural fairness and achieve objectives in a cost-effective manner. Government cannot be oblivious to the potential cost of the process and of the substantive regulation of industry and other stakeholders; nor can we be oblivious to the cost in terms of the government itself and government policy-Making. At the convention of the Prospectors & Developers Association of Canada in March, I outlined more than 50 specific recommendations brought forward by the [Parliamentary] Standing Committee — recommendations that we, as a government, would implement. We are committed to moving on those recommendations as soon as possible. I also believe that multi-stakeholder initiatives, such as the Whitehorse Mining Initiative, are crucial in that they bring together all concerned parties.

* Manning — We’ve not done a lot of work on that, though we favor a sort of one-window regulatory authority in other areas. We’ve been particularly strong in establishing one-window regulatory authority in environmental matters. I do think the same principle should apply to the securities area.

There are some constitutional complications, given that the provinces have some jurisdiction, but I think that at least a co-ordinating role by the federal government is justified. The ultimate aim ought to be the one-window regulation of the securities industry.

* Charest — The problem with the securities issue, as I see it, is that each province has its own securities commission. This not only makes things very cumbersome; it increases the cost of raising capital, whether for mining or other enterprises. This issue falls squarely within the category of inter-provincial trade barriers, which we are convinced must come down in order to lower costs and create jobs. In the end, we need either one national system or uniform standards for provincial commissions. Each would accomplish the same effect, but it remains to be decided which of these roads we will take. A consultative process would be required before any change of this magnitude could be undertaken.

* McDonough — The NDP has advocated, and will continue to fight for, a Canadian securities system. I think it’s a priority, and certainly the Bre-X Minerals scandal has demonstrated why there is some urgency in this area.

Certainly this was a fraud without precedent in the history of mining, and nobody should think that this is an everyday occurrence, but I think it has demonstrated that we need to shore up the system. I think that means moving to a Canadian securities industry that will protect Canada’s international reputation among investors, because, as we know, there are victims when this kind of thing happens. It’s also important that we have laws and sanctions against corporate misconduct and white collar crime, which tends to be taken too lightly.

3. There are concerns that cutbacks to the Geological Survey of Canada (GSC) and federally sponsored co-operative programs with the provinces will erode Canada’s competitive edge in geoscience and weaken our geoscience database.

What steps, if any, would you take to reverse this?

* McLellan — As you know, my department, Natural Resources Canada, has been cut 50% since 1993, and the GSC is part of my department. But we have identified the geoscience knowledge base as a key component to a successful mining industry and to our long-Term competitiveness. The underlying principle in the long-Term strategic plan for the GSC is “partnership,” so that we will deliver geoscience knowledge and expertise in active collaboration with the provinces, industry, national organizations and international organizations. We must work with these partners because we simply don’t have the money to do it in the way we’ve done in the past. But through focusing on partnership, we will find out what sort of information mining companies need, both domestically and internationally, as it relates to geoscience.

* Manning — We argue in favor of maintaining and ever strengthening anything that qualifies as federally supported scientific research, which would include the GSC. On the broader question of transfers to the provinces, we want at least to stabilize those and, in some areas, increase them. We have a financial plan that calls for balancing the budget more quickly than [Liberal Finance Minister] Paul Martin, running surpluses, and putting about $4 billion a year back into transfer payments to the provinces. Those two approaches w
ould maintain and strengthen anything that qualifies as scientific research. But to do that, we first have to balance the budget and run surpluses.

* Charest — Canada has an international reputation for having some of the most experienced and knowledgeable people in geology and mining, and this tradition must continue. Our economy depends too much on mining for this reputation to be diminished. The continuation of the geoscience database is therefore crucial to future mineral development in this country. We need to enhance the level of research and development in Canada, and the GSC is certainly part of this effort. One of our proposals is to inject an additional $25 million into the Centres of Excellence program, which will assist the private sector and academic experts to develop high-level teaching and technological development. Individual funding to programs like the GSC should also be reviewed.

* McDonough — I’m not familiar with the specifics of that issue, but I will say that we’ve had a lot of concerns about the number of areas in which the federal government has really backed away from joint federal-provincial undertakings. It has an appalling record with respect to research and development. I guess the GSC would fall into a slightly different category, but what we do know is that corporations in Canada generally have a poor record in research and development under both the Liberal and the previous Conservative governments. There’s been very inadequate support for research and development, whether it’s encouraging value-Added production, or technology transfers or any number of other areas. We are absolutely committed to halting federal cuts to research undertakings because it’s all part of what we need to be doing to be competitive in a global economy.

4. There is currently no provision in the Charter of Rights and Freedoms giving Canadians the right to own property. This is of concern to the mining industry, especially with regard to the threat of expropriation, as in the case of the Windy Craggy deposit in British Columbia. What would you do to (a) strengthen mineral property rights and (b) provide for more strict provisions against expropriation without compensation?

* McLellan — I think the response is probably not to include property rights in the Charter, because the biggest opponents to that were the provinces, not the federal government. If you entrench the property right, it places the most significant limitations on provincial government power, not federal power. We obviously are involved north of 60, but south of 60 the areas companies want to explore and develop are virtually all within provincial jurisdiction. So really there is not a lot that the federal government can do directly. However, we believe we need clear rules. It’s another issue of certainty. But at the end of the day, the solutions to bringing certainty to those kinds of problems really lie with the provinces. I would encourage them to work with industry, aboriginals and other stakeholders to ensure that there is certainty, and that where land has to be expropriated by the province for another public purpose, there is clearly compensation.

* Manning — Right from the beginning, we have supported the inclusion of a property rights protection clause in the Constitution. We’ve actually developed the wording as well, which reads: “Nor shall private property be taken, except by due process of law and upon payment of just compensation.” The wording is focused exactly on the problem you are raising. Because it’s hard to amend the Charter, we’ve also proposed getting that into some ordinary legislation right away. But the ultimate aim would be to get it entrenched in the Constitution so it cannot be tampered with.

* Charest — I believe the right to own property should be a fundamental, individual right in this country. It is also the basis of any economic activity. The fact that neither property rights nor their scope is mentioned in our Constitution is a serious weakness of our Charter. As for expropriation, there may be times when this is justified, but it should be decided at the judicial level, not by government or bureaucracy. Certainly, if expropriation is deemed necessary, fair compensation should be paid to the prior property owner. Entrenchment certainly would have prevented the expropriation of Windy Craggy, and the millions of dollars that had been spent on exploration activities would have been repaid.

* McDonough — I think there have to be provisions for appropriate compensation, but I also think — and this has long been the NDP’s position — that we have to strive to achieve balance between individual property rights and the collective good for the community’s best interests. For that reason, we have had severe reservations about entrenching individual property rights as something that would prevail over the broad public interest.

5. Some have suggested that it might be beneficial to merge Natural Resources Canada with other government departments. Does your party have a policy proposal in this area, and, if so, how might you implement such a measure? Have you identified any areas of overlap?

* McLellan — There are no areas of overlap anymore. When you cut a department 50% and when you define your core functions and when you do that with the provinces and industry, there’s not much duplication. I am strongly opposed to the notion of the Progressive Conservatives about amalgamating resources, fisheries and agriculture. Obviously there are certain things that both areas might have in common in the sense that aspects of them are based in rural Canada. Having said that, the demands in the agricultural area are so different than the ones in fisheries, which are so different than the ones in mining and forestry. I think you might just end up with the lowest common denominator where you don’t have the kind of expertise at the national level that provides the policy focus on international trade and environmental issues. Industry and the provinces might not feel well-served by the federal government if focus were to be watered down.

* Manning — Natural resources, including mining, are primarily a provincial jurisdiction, and we favor respecting that jurisdiction. The two primary responsibilities of Ottawa should be international standards and the creation of a healthy trade environment for our primary industries. We want to strengthen the federal government in the area of national standards and trade, but the actual development generally falls under provincial jurisdiction. Also, the federal government can assist the resource sectors by reducing tax levels, thereby increasing competitiveness, and ensuring that we protect our position in international trade. A lot of those responsibilities fall under the Trade and Finance departments, not the resource departments.

* Charest — Overlap and duplication between different levels of government amount to a waste of resources and an increase in costs to Canadian businesses and industry. What we are proposing is to merge four existing federal departments — Environment, Natural Resources, Agriculture and Agri-Food, and Fisheries and Oceans — into a new Sustainable Development department. We feel that this would ensure that all these sectors address concerns in a comprehensive fashion and work towards common, rather than competing, objectives. Mining would still have its own autonomous section within the larger department, with the bonus that bureaucracy would be flattened out so that participants can assume a more direct role and have a stronger voice in the decision-Making process.

* McDonough — I don’t think the proposal of merging departments is necessarily the solution to the problem of red tape and overlap. I think sometimes the kind of red tape that occurs has more to do with the fact that governments’ objectives are not as clear as they need to be, so you often get departments that are working at cross purposes. But in answer to your specific question, no, we don’t have a proposal for the merging of those public policy aspects related to mining with other government depa
rtments.