Canada’s Minister of Natural Resources Seamus O’Regan made his first appearance at the Prospectors and Developers Association of Canada (PDAC) convention in Toronto last week, knowing he would be under the spotlight as the new man in town from Ottawa. Since taking on the ministerial portfolio last November, O’Regan has faced a series of issues that affect the resources industries in Canada, most notably the recent decision by Teck Resources (TSX: TECK.B; NYSE: TCK) to cancel its proposed Frontier oilsands mine, the nationwide protests relating to the Coastal GasLink pipeline and the growing economic impact of the coronavirus outbreak.
Over the course of several busy days, O’Regan was front and centre at a variety of PDAC events. These included appearing with Prime Minister Justin Trudeau as the federal government announced it would extend tax write-offs for electric vehicles to include off-road vehicles. As Trudeau pointed out, this means mining companies using EVs in their operations will now be able to write down their costs.
As O’Regan made the rounds at the convention, he was particularly vocal about touting the government’s commitment to the mining community, with its Canadian Minerals and Metals Plan, which recognizes that the mining sector is vital as countries shift to low carbon economies and eventually net-zero emission targets.
He also sought to promote the competitive advantage the government believes comes with being on the “right side” of the environment. At several events he said Canadian miners set the world standard when it comes to extracting natural resources safely and with consideration for the environment.
O’Regan also said he has a strong personal affinity for the sector, gleaned while growing up in Goose Bay, Labrador. O’Regan spoke to The Northern Miner as the convention was wrapping up in early March.
The Northern Miner: What are the most important issues you and the government wish to address in the year ahead when it comes to the mining sector?
Seamus O’Regan: Positioning the industry to attract new investments, that’s our big thing. The prime minister made the announcement at PDAC about the new tax measure for electric mining vehicles under the accelerated capital cost allowance, and last year we extended the mineral exploration tax credit for five years. So those are tangible things.
What I’ve spelled out very clearly, and what the prime minister spelled out as well, is that we are determined to get to net zero by 2050, [and] there is no way we can do that without the mining industry. Net zero is not just a climate plan, it’s also an economic competitiveness plan.
TNM: On Jan. 9, Canada and the United States finalized a Joint Action Plan on Critical Minerals Collaboration. What are the key takeaways from this for the Canadian mining industry?
SO: We want to position ourselves as the supplier of choice for critical minerals. And that’s ensuring you’ve got domestic value chains that include processing and manufacturing, working with the partners to ensure that you’ve got secure, sustainable global supplies of critical minerals, and that includes rare earth mineral elements.
This is a moment for Canada. We have an important strategic role to play as an energy power that has these minerals. But the only way we’re going to make this happen is with partners, and the only way we’re going to make that happen is talking to the United States. It’s early days and there’s a great deal of enthusiasm about positioning ourselves well again.
TNM: What is the federal government’s reaction to small modular reactors (SMRs) and the memorandum of understanding signed by Ontario, Saskatchewan and New Brunswick?
SO: We welcome it. I just gave a speech to the Nuclear Association of Canada and said straight out that nuclear is front and centre, and this government is putting nuclear front and centre. Because we cannot achieve net zero without nuclear. I’ve yet to see a plan that can do that. And I think that when Canadians reflect on nuclear in a different context — that context being, we have to cut back on our emissions, we have an economy that still needs to grow, and people need to prosper — how do you do all that? Nuclear has got to be part of that plan. I don’t think that there is any one thing. Every scenario that we’re looking at right now as a government has a mix of several things. An essential part of that mix is going to be nuclear.
We are extraordinarily well-positioned to re-invigorate the nuclear energy market, and small modular reactors will be a big part of that. And another huge competitive advantage for us is our regulatory environment. I mean, people trust us — we’re very good at this. We put in the right regulations on things where people need to feel reassured. And nuclear energy would be one of those.
TNM: The Ontario government and two First Nations (Marten Falls and Webiquie) recently announced their intention to revive plans for a year-round road towards Indigenous communities in the Ring of Fire. What do you think of that development?
SO: ECCC (Environment and Climate Change Canada) recently launched a regional assessment under the Impact Assessment Agency, and that will provide baseline scientific data for the Ring of Fire. And that will help inform future development.
We want to make sure that all the First Nations in the region benefit from the Ring of Fire development. But I said this to Minister Rickford [Ontario Minister of Energy, Mines, Northern Development and Indigenous Affairs Greg Rickford], in my experience as somebody who’s worked very hard on offshore oil and gas off the shores of my home province, these regional environmental assessments can kind of give industry a bit on an edge.
TNM: Does the government have any specific plans to address the economic impact of the coronavirus situation as it affects the mining sector?
SO: We’re seeing that it is having impacts on global economic activity and it will affect global supply chains, commodity prices, tourism, travel. This has potential impacts for our economy. At the same time, I would want to say that we are in a strong fiscal position, and that gives us the necessary leverage I think to respond to potential challenges, like coronavirus. G7 finance ministers reaffirmed their readiness to take action if they feel necessary to aid in the response.
I remember SARS. This is a transient world. It’s a globalized world, [and] that has brought significant economic benefit to much of the world. At the time of SARS, I think that China was responsible for something like 7% of global trade and now it’s responsible for 25%. So, it just shines a light on the fact that we are so interconnected. It just means we have to be extremely vigilant.
TNM: How does the government feel about ESG (environmental, social and governance) progress being made in the resource industries?
SO: It’s extremely important. What you’re seeing is that consumers are demanding it. And many Canadian mining companies are leaders. They’re developing some really groundbreaking new techniques to reduce GHGs [greenhouse gasses]. Miners are responding.
And now, it’s not just how you’re treating Indigenous partners, it is also now what are you doing with climate change. And consumers are demanding that. They’re demanding that at investment houses, whether it be in Toronto or whether in New York or London or Zurich. People follow the money.
I’m surprised that the market is moving as quickly as it is on ESG and particularly on climate change. When you get an investment firm, a leader like BlackRock, coming out and saying that this is what they are looking for, they are looking for jurisdictions that take net zero and GHGs seriously, these are game-changers. The market will respond. And I’m part of a government that wants to lead in that response, and we are the country that can lead — that I am convinced of.
But I know one thing: change can be tough. This is the change that will affect thousands of Canadians, and a lot of energy workers and their families. And we are determined to make sure that no one is left behind. It’s too good an opportunity.
TNM: Finally, what are your personal thoughts about taking on the Natural Resources portfolio at this challenging time for the mining sector?
SO: I’m excited. You know my background before I got into journalism was Indigenous relations and economic development in resource development specifically. I helped negotiate two impact benefits agreements with the government of Newfoundland and Labrador around the Voisey’s Bay project twenty years ago, negotiating with the Innu and Inuit, so this is all pretty close to home for me.
While a lot has changed since twenty years ago, my passion for this has not changed at all. I feel fortunate. I think it’s also a really exciting time for our natural resources [sector]. It is a challenging one at the same time because climate change is changing everything. It’s giving us great opportunities, but obviously it’s also providing significant challenges.
I feel very strongly in our proud history as a natural resources country, a country built on them, and about a country with the smarts and the ambition to get it right in the changing world.