RNNR Committee Report

New Democratic Party’s Supplementary Report

to

The Standing Committee on Natural Resources report

FROM MINERAL EXPLORATION TO ADVANCED MANUFACTURING: DEVELOPING VALUE CHAINS FOR CRITICAL MINERALS IN CANADA

The New Democratic Party of Canada supports the development of Critical Minerals in Canada and agrees with the recommendations of this report. However, the report is incomplete as it fails to consider the closure, clean-up and rehabilitation of these mines and mineral processing facilities. This report recommends the expenditure of large amounts of public funds to support the development of this industry while not ensuring that the private sector benefactors of this expenditure take responsibility for any environmental liabilities created.

The issue of taxpayers being encumbered with the burden of cleaning-up abandoned/orphaned mine sites and mineral processing facilities is not new. In 1994 this committee reported to the House of Commons:

“The main issue raised by old mining sites, unlike current and future mines, is the issue of liability for funding site reclamation. The onus today is on the governments concerned and on the mining industry to assume joint or several liability for activities that were conducted at those sites, in some cases a long time ago.”[i]

The impact on Canadians of the negative environmental legacy of these operations goes beyond the monetary burden of financing the clean-up. The United Nations Environment Program notes the impacts of these abandoned/orphaned mines and mineral processing facilities include:

“... loss of productive land; loss or degradation of groundwater; pollution of surface water by sediment or salts; fish affected by contaminated sediments; changes in river regimes; air pollution from dust or toxic gases; risks of falls into shafts and pits; and landslides.”[ii]

In their 2002 report to Parliament the Commissioner of the Environment and Sustainable Development found:

“[h]undreds of thousands of tons of highly toxic chemicals such as arsenic and cyanide are found at northern abandoned mine sites. These chemicals, the result of past mining operations, have accumulated to hazardous levels. Indian and Northern Affairs Canada estimates that the cleanup and closure of these complex contaminated sites will cost Canadian taxpayers at least $555 million. In many cases, longterm site management will be needed because complete and definitive cleanup will not be  possible.”[iii]

Unfortunately, the commissioner’s figures were extremely low as the cost of cleaning-up Giant Mine in Yellowknife is approaching a $1 billion. Other examples of the Canadian public having to clean-up environmental liabilities from private sector operations include the more than $530 million (from all levels of government) spent cleaning Hamilton Harbour[iv] and the $1.7 billion to clean-up orphaned oil wells.[v]

Arguments have been made that any requirement by the federal government that the private sector be responsible for its environmental liabilities would be an invasion of provincial jurisdiction. However, history and jurisprudence show the opposite to be true.

As Joseph F. Castrilli in his paper Wanted: A Legal Regime to Clean Up Orphaned /Abandoned Mines in  Canada notes:

“federal legislative jurisdiction over mining and related activity derives from its constitutional powers over public property, taxation, seacoast and inland fisheries, Indian lands, and criminal law. Works situated wholly within a certain province that are declared by Parliament to be for the general advantage of Canada (the declaratory power), as well as peace, order, and good government, have been used to justify federal legislation relating to all aspects of the uranium industry.”[vi]

The Canadian Constitution allows Parliament to spend or lend funds to any government, institution, or individual it wishes, for the purposes of its choosing, and may attach any conditions to such grants or loans—including conditions on matters it could not legislate directly.[vii]

In its 1991 decision Re Canada Assistance Plan the Supreme Court of Canada found financial arrangements like the Canada Assistance Plan were constitutional as withholding federal monies to fund a matter within provincial jurisdiction does not result in regulation of that matter by the federal government. As such a federal department or agency could therefore act with respect to abandoned/orphaned mines and mineral processing operations through loans, grants, and other financial arrangements. In particular, it could impose conditions regarding cleanup standards for air, land, and water protection.[viii]

In his testimony Dr. Raphael J. Heffron said:

“…there's what's classed as an energy reserve financial obligation where companies have to put money into a bank account so that there are funds there for decommissioning. Irrespective of that company's sale to another company, let's say here in the U.K., the practice has sometimes been that the company would go bankrupt before, or nearly at the end of, the life cycle of the particular mine, and then the obligation to clean up was left with the government.

    More and more we see a financial reserve obligation where companies are forced to put in two hundred million three hundred million, or five hundred million—it depends on the size of the project—which should provide insulation from a company's disappearing in some type of bankruptcy and not fulfilling its decommissioning obligation.

    The issue of decommissioning comes if Canada wants to expand this industry. If so, the industry is going to need that public support in five, 10, 15, 20 years if the critical minerals industry is to grow and to be relied upon.”

The New Democratic Party of Canada recommends that:

Prior to any mining or mineral processing project receiving federal assistance the private sector proponents show there is sufficient financial resources in place to close, clean-up and rehabilitate there operations so that no liability falls upon the Canadian people.