Views and Speeches

Yellowknife Rotary Club
Address by
Mike Vaydik
General Manager
NWT Chamber of Mines
March 16, 2000

Good afternoon. Thank you for giving me the opportunity to address you today. We share common interests and a common vision. We at the Chamber of Mines see a north which is self sustaining and free to chart its own political course. The NWT Chamber of Mines believes that the mineral industry, and our sister industry, oil & gas, have a key role to play in realizing that vision. Unfortunately, the place of the resource sector in the future of our territory is being overlooked by the general public and the policy makers. I am not here to place the blame for this state of affairs, the fault rests with all of us: the industry, government, policy makers and opinion shapers, and yes, even our schools.

Ask your kids tonight what they think of the mining industry. If their parents or sibling don't work in the mining business, I'll tell you mostly what you'll hear:

"It's a dirty business. It tears up the land and leaves a mess behind."
"Mines are always in conflict over the land claimed by aboriginal people."

I know, I've heard most of this around my own breakfast table.

What kids and adults aren't hearing today is that mining has played a key role in the development of the north, and in fact, most of Canada. Minerals are why most of the non aboriginal residents of the Northwest Territories came here. We hope to continue the tradition of providing opportunities and jobs for northerners.

The radium and uranium mines on Great Bear Lake started the influx of southerners in the 1930s. The discovery of gold in the Yellowknife area in the 1940s began the formation of the city. Pine Point, south of Great Slave Lake, in the 1960s, Nanisivik in the 1970s, Polaris and Lupin in the 1980s have all played a key role in the north's development.

The mines on Great Bear Lake and the oil wells at Norman Wells led to the development of the barge system on the Mackenzie River. The highway system, what there is of it, was developed to assist mineral or oil and gas projects. The NWT's only railway was built to allow Pine Point to ship its lead and zinc concentrates south. The Talston hydro project was undertaken to power Pine Point. Special ice breaking cargo ships were developed to service Nanisivik and later, Polaris.. The port at Nanisivik is used as a transfer point for community resupply in the high arctic.

All of this infrastructure remains, even after some of the mines have closed, to serve the communities of the north. Communities as far away as Aklavik and Gjoa Haven still benefit from a combination of the rail and barge routes. The Mackenzie River stands ready to serve as a major new route for exports should markets ever be developed in Russia. The Talston dam continues to provide power to the communities south of Great Slave Lake.

Later silver mines at Great Bear Lake and the gold mine at Lupin provided the impetus to develop the network of winter ice roads which continue to serve our mines. The techniques learned have been also been applied to roads which provide all important re supply to isolated northern communities.

These are some of the unsung and unseen benefits of mining. Our communities, if they were here at all, would look quite different without the mineral industry.

Unfortunately, what we are more likely to hear or read today is that our industry is in some land conflict with an aboriginal group. Something I want to say very clearly is that our industry and the NWT Chamber of Mines fully supports and encourages the early and fair settlement of land claims. We have been on record as supporting claims for many years. Unfortunately, this doesn't get reported very accurately, particularly in the southern press.

In fact, the Chamber has been proactive in initiating efforts to involve northern aboriginal peoples more fully in our industry. The Chamber has played a key role in the Mine Training Committee. This is a partnership of aboriginal groups, mining and exploration companies and educators that advises the Minister of Education on the design and delivery of training programs to allow aboriginal northerners to get ready to take advantage of job opportunities in mining. We believe that we have been very successful in targeting training to real job opportunities.

The Chamber, along with aboriginal business partners, have been working for some time on a proposal to encourage more participation in the industry by aboriginal development corporations. Our partners include aboriginal development corporations from both the NWT and Nunavut.

We are proud to say that our Board of Directors has included Darrel Beaulieu for the past two years. Darrell is a former Chief of the Yellowknives Dene and is now the President of the Band's development arm, the Deton 'Cho Corporation. We see this as a signal of where we are and where we are going. Our business is everyone's business. Many non aboriginal and a few aboriginal northerners grew up in the mining business. We are actively encouraging more aboriginal northerners to become part of our industry.

Another bit of information you don't hear much is that mining companies have played a key role in funding the West Kitikmeot/Slave Study Society. This partnership of governments, aboriginal groups and the mining industry has been engaged in gathering basic baseline environmental data on the Slave Province. Mining companies have provided millions of dollars towards this initiative. This is in addition to the millions already spent by companies to do environmental and archaeological studies on their projects. Some of you might be surprised to learn that one company has a full time archaeologist on staff.

We believe that our industry has changed and continues to change with the times. We are concerned about the environment and want our environmental regulations to be the best in the world. Unfortunately what we hear in the media is that our industry cannot be trusted because of the Giant Mine legacy. Giant was built over 50 years ago, in accordance with the regulations, or lack of them, of the day. All through its history Giant operated in compliance with government permits. Surely, regulators and society as a whole must shoulder some of the blame for past mistakes. We in industry are tired of being blamed for all the ills of the past.

We must remember that another part of Giant's legacy is two or three generations of Yellowknifers who were gainfully employed at full time, well paid jobs. Yellowknife would not be here without Giant, it's that simple. In addition to the jobs and business opportunities provided by Giant, this mine and its employees paid corporate and income taxes, property taxes and royalties for over fifty years. We believe that the balance sheet is in favour of the mine even if it looks like we are now faced with a large bill for clean up.

Yellowknife as we know it won't be here for our next generations if we do not speak out for an industry which has an image problem. Various policy makers and legislators know what my letter will say as soon as they read my letterhead, so I'm asking for your help as community leaders today:

You need to tell our schools to teach a balanced curriculum about development vs. conservation. Our kids have to grow up with a realistic view of the world and man's place in it. They need to know where the things they use every day come from: If you can't grow it or hunt it, you, have to mine it.

You need to tell our educators that there are real, lifetime opportunities to be had in the mineral industry. Kids need to know that trades and technical jobs are honourable and rewarding ways to earn a living.

You need to tell our territorial government to provide a business friendly atmosphere which encourages investment. Mining, the north's number one industry, must no longer be used as a whipping boy by the territorial government in its quest for devolution of mineral responsibility from the federal government. The GNWT needs to provide a policy framework and tax regime which allows industry to pay its fair share of taxes but which clearly identifies the government's responsibility to deliver social programs. It simply does not make sense for each mining project to have to reinvent the wheel and individually negotiate terms for training, job and business opportunities. Tell us what the rules are, write them down and stick to them.

You need to speak out about the Department of Indian Affairs and Northern Development's mishandling of the northern development portion of its mandate. We had some hope that the new minister, Bob Nault, would take the Northern development part of his mandate seriously. He told us he would. Unfortunately, he has fallen into the same trap as many of his predecessors. He has taken the word of his southern based bureaucrats and delayed a critical northern project. DIAND does not have a balanced budget or bureaucracy. There is a preponderance of environmentalists and regulators and few development specialists. We do not believe that the minister gets balanced advice from this southern headquartered agency and that is to the detriment of the northern mining industry.

The Northwest Territories stands on the threshold of exciting developments: The diamond industry continues to look favourable. Oil and gas offer exciting opportunities. We are just beginning to see an increase in interest in gold and base metals after three awful years of market jitters and low prices. We should be doing cartwheels down Franklin Avenue in celebration of our mineral wealth. But mineral potential must be managed by humans if we are to benefit. Voisey's Bay looms large as a good project which has been politically mishandled. Three other world class nickel mines have opened in other counties since Voisey's Bay was discovered. Will this ore body ever be allowed to produce benefits for Canadians? We need to understand that we operate in a global economy. We need also to understand that technological advances of tomorrow may mean either boom or bust for any particular mined commodity. On my desk today is an article detailing recent successes in manufacturing artificial diamonds. They are getting better every year, the only drawback is that they still cost more than mined diamonds. How long before some bright young man or woman discovers the secret of manufacturing them cheaply?

My point is that we have to seize opportunities as they present themselves. It's fine to say " Well the diamonds will always be there". But will they be economically feasible to mine and provide the jobs, business opportunities and tax revenues we northerners need to become self sufficient?

You need to tell DIAND and Natural Resources Canada to re establish the budget for northern geoscience programs. After the cutbacks over the past years, expenditures North of 60 are less that ten per cent of that in the provinces. It's $1.00 per square kilometer in the north vs. $11.00 average in the provinces. Geoscience spending by government is a key component of encouraging mineral exploration. Recent efforts by Quebec and Manitoba in this area have paid huge dividends in increased exploration and some very positive discoveries. I have recently read a very positive paper in Mining Journal, the international bible of the industry on the benefits of investing in mining projects in Botswana. I don't think I have to tell the Yellowknife business community about the importance of exploration to our economy. From expediters, aviation companies, grocery stores, hotels and restaurants, every business in this town makes part of its living from the fact that we have a long history as a centre for northern exploration. It was once a $200 million a year industry and can be again if it is encouraged rather than being held to ransom.

Most critical of all, you need to call for a review of the regulatory environment in the north. Over the past months we have seen a mining company's project stalled by the minister of DIAND. This project has undergone the most stringent environmental review ever done on a Canadian mining project and gained approval from the federal minister of the environment. Yet what has happened?

It has been subject to the worst kind of extortion, blackmail and coercion (I hope I haven't left any synonyms out) by Mr. Nault and his department. None of the recent demands placed on the project proponents are laid out in legislation or regulation. They are all add ons after the fact. The company was forced to negotiate with a gun to its head, in private, alone, and with the winter road closure looming on the horizon. Is this a fair way to set northern mineral policy or negotiate anything? I've said before that we in the industry want the best environmental legislation in the world. A regulatory regime that allows this to happen is not it. Again, we want DIAND to write the rules down, tell us what they are, and stick to them.

My organization is not celebrating the recent announcement that Diavik was granted a land use permit. It will only be able carry out a small portion of the work that it planned for this year. The delays have been and will be critical to many northern businesses. The irony of this situation is that it is small northern companies that Diavik has purposefully included in its project who will suffer most along with the Canadian junior joint venture partner in Diavik. Here we have a northern based company bending over backwards to encourage northern participation in its project and it is stalled by the federal government. We are also concerned about the effect the delay may have on the ability of the junior partner in the mine, Aber Resources to raise capital on the stock market.

Just last week I attended the Mining Millennium Conference in Toronto. This was a combination of the Prospectors and Developers and the Canadian Institute of Mining and Metallurgy annual conventions. There were about 15, 000 people in attendance from all over the world. Every continent and many countries were there to show there wares: their mineral potential, their government sponsored geoscience programs, their business acumen, their tax regimes and generally, their support systems for mineral development. The international flavour of this conference cannot be overemphasized. These countries and their projects are the competition for our investment dollar. Every year less mining exploration money raised on Canadian stock exchanges is spent in Canada. The Canadian expertise in mining and exploration is being used to develop other countries' economies.

The short form of my message to you today is, if we don't speak out in support of the northern mineral industry now, we will have to teach our kids Spanish. That's where they'll have to go to find a future.

Thank you.

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