Mining Economies, Mining Families: Extractive Industries and Human Development in the Eastern Subarctic OCTOBER 28 TH 2016

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1 Mining Economies, Mining Families: Extractive Industries and Human Development in the Eastern Subarctic STEPHAN SCHOT T (CARLETON UNIVERSITY) THIERRY RODON (UNIVERSITÉ LAVAL) BEN BRADSHAW (UNIVERSITY OF GUELPH) ANTENEH BELAYNEH (CARLETON UNIVERSITY) OCTOBER 28 TH 2016

2 Acknowledgments Arctic Net MAKIVIK Corporation NUNATSIAVUT GOVERNMENT

3 Motivation of Project Determine the role of extractive industries for local economic and business development Investigate the impact of extractive industries on local communities in the context of the Canadian Sub-Arctic Evidence regarding impacts of mining are based on regional or national studies mostly in the developing south A comparative study of experiences with the mining industry in two different Sub-Arctic jurisdictions with different governance structures

4 Context of Our Study NUNAVIK Raglan Mine and Canadian Royalties Nickel and copper First IBA signed in Canada in 1995 Glencore NUNATSIAVUT Voisey s Bay Mine Nickel was discovered in 1993 Agreement signed between stakeholders ( ) Vale

5 Regional Comparison NUNAVIK Kativik Regional government, Makivik, Landholding Corporations, Coop % Inuit employment at Raglan 10 % Inuit employment at Canadian Royalties NUNATSIAVUT Regionally elected government Nunatsiavut Group of Companies Around 42% Inuit employment at Voisey s Bay

6 Motivation of the Project To assess the role of mining activities at different stages of development for small scale local business development To understand the revenue flow cycles and regional leakage To understand labour movement, skill development and training To assess the importance and realization of IBAs and draw lessons for future negotiations As an input for the development of a Mining Policy for Nunatsiavut and potential advancement of the Nunavik Inuit Mining Policy

7 Progress so far Literature review Focus group with businesses from Nunavik and Nunatsiavut in Kuujjuaq (October 2015) Design of a business survey (April 2016) Initial piloting in Kuujjuaq at Mining Workshop (April 2016) Piloted surveys in Nain and Goose Bay on sit with about a dozen companies (May 2016) Survey currently being administered in both Nunatsiavut and Nunavik

8 Focus Groups COMMUNITIES CLOSE TO MINE Nain Hopedale Rigolet Makkovik Salluit Kangisujjuaq MAJOR CENTRES Kuujjuaq Goose Bay Separated participants based on region and proximity to mine Local communities vs Regional Hubs

9 Focus Groups Piloted surveys in Nain and Goose Bay (May 2016) Surveys being undertaken in Nunatsiavut and Nunavik currently

10 General Findings from Focus Groups 3 Major themes have emerged from focus groups 1. Benefits from mining and impacts on businesses depend on the stage of mining development 2. The IBA and the definition of Inuit ownership affects business development, partnerships and specialization 3. There are unforeseen impacts on migration and the distribution of benefits between local communities and regional hubs

11 Stages of Mine Development Phase of Mine Direct Benefits Indirect Benefits Induced Benefits Exploration X X XX Construction XXX XX X Operation XX X X (only at hub) Reclamation??? Direct benefits consist of business and employment opportunities generated at the mine, while indirect benefits incorporate business and employment opportunities that are generated in directly supplying the mine (Ejdemo, 2013). Induced benefits are derived from the consumption of good and services that are triggered by mining development (e.g. local hotels, restaurants, food supply, vehicle purchases, etc. outside of mining operations) Consumption and thus induced benefits in local communities is limited in all phases except exploration because mines operate on the basis of fly-in, fly out schedules

12 Business development, partnerships and specialization 1. What constitutes an Inuit-owned business? Strictly about legal ownership or active involvement in business operation? 2. How are contracts allocated? In Nunavik discussion on how a business gets on the official registry Nunatsiavut allows less controlled business development In both regions discussion on how to partner up with Southern companies and what is acceptable

13 Business development, partnerships and specialization 3. To what extent can and should local businesses specialize? Specialized local companies appear to be vulnerable exposure to Inuit owned partnerships and joint ventures with more experienced and capital rich Southern companies To what extent can business supply other sectors? Too dependent on mining contracts? At operation phase companies seem to increasingly compete for all required goods and services of the mine: competition at all levels with increasing partnering of experienced businesses from the South

14 Local vs. Regional Development Concerns that benefits leak out of local communities A significant proportion of employees reside outside of Nunatsiavut in Happy-Valley Goose Bay Participants highlighted the access to housing and training facilities that are available in Happy-Valley Goose Bay EMPLOYMENT BY RESIDENCE, VOISEY'S BAY (2014) Nain 6% Hopedale 3% Makkovik 3% Postville 1% Rigolet 2% Local mining project might actually result in outmigration Non-Inuit 57% Happy Valley- Goose Bay 21% Other 7%

15 number of employees Local vs. Regional Development 4,000 Employment by location (Voisey's Bay) 3,500 3,000 2,500 2,000 1,500 1, Newfoundland ,343 2,666 Labrador Other Total 1,507 1,579 2,354 3,560 Data includes employment figures from Voisey s Bay and Long Harbour Processing plant on which construction began in 2009

16 Some unanswered questions we try to address 1. Are businesses dependent on a particular stage of mining development? 2. Are businesses too specialized and dependent on procuring contracts from mining? 3. Who do businesses mostly compete with for contracts? 4. Do companies compete with the mine for qualified labor? 5. Does the mining industry drive a migration of people from local communities to regional hubs? 6. How are benefits distributed in the region and province? 7. Can local governments and mining companies do more to help local businesses successfully bid on and procure mining contracts? 8. How has the IBA affected businesses? How well have IBA commitments to businesses been met? What are problems or potential areas of improvement for Impacts and Benefits Agreement in terms of business development? 9. Are there barriers to securing contracts with a mine? If so, what are they?