Voisey's Bay Mine and Mill Environmental Assessment Panel Report

VBNC predicted that, over the life of the Project, it would generate approximately 80,000 person-years of employment in the province, with slightly less than half being located in Labrador. This total includes direct employment (workers employed by VBNC or VBNC's contractors), indirect employment (workers employed at businesses supplying goods or services to VBNC), and induced employment (workers employed by businesses benefiting from the re-spending of direct and indirect income). In Labrador, VBNC estimates that 63 percent of total Project-related employment would be direct, 25 percent indirect and 12 percent induced. VBNC's total expenditures would be $10.6 billion ($8.2 billion for operations and $2.4 billion for capital expenditures), of which $3.3 billion would be spent in Labrador.

For North Coast communities, VBNC predicts that the main source of economic benefits would be direct employment, with the potential for some induced employment. Nain is a possible exception because its proximity to Voisey's Bay could give an advantage to certain types of business development. In Happy Valley-Goose Bay and Labrador West, VBNC sees more potential for indirect employment.

Many presenters had questions, concerns and suggestions about access to employment and business opportunities.

15.1 Direct Employment Opportunities

In its guidelines, the Panel asked for specific information on educational, training and employment opportunities for local people, recognizing that employment opportunities at the Project would be directly linked to levels of education and training.

In the Environmental Impact Statement (EIS) and Additional Information, VBNC outlined the number and kinds of jobs expected to become available during each phase of the Project, the skills required for those jobs and the expected duration of each job category. During the hearings, VBNC gave general information on the years of experience an employee would need to qualify for various jobs. VBNC also outlined the current situation for employment, education, training and skills on the local, regional and provincial levels. Based on these factors, VBNC projected the number, duration and type of jobs that would be available to workers throughout the province.

The Panel heard many concerns and suggestions from communities, organizations and individuals, particularly with respect to barriers to employment for people on the North Coast. Concerns focused on access (the ability to find out what work would be available, suitable training and other types of preparation, qualification requirements, the effects of potential unionization and hiring practices) and retention (VBNC's policies with respect to language and culture, harassment, and employee and family support).

Project construction will require an experienced and highly skilled workforce. VBNC pointed out that these jobs would be short term and would most likely be filled mainly by people from outside the local area because potential workers in North Coast communities lack the necessary experience and skills. VBNC expects workers to come from the island of Newfoundland to meet the demand. It estimates that North Coast communities would benefit from 29 percent of total employment (156 person-years) and income expected for Labrador during this phase.

During the open pit phase, VBNC expects more jobs to become available to the North Coast population as the overall number of workers increases. However, North Coast inhabitants would make up a smaller proportion of workers overall during this production stage. The Project would need a skilled, experienced workforce, and the demand for high school education as a minimum requirement would increase. Labrador North Coast communities are projected to receive 21 percent of employment (242 person-years) and income benefits going to Labrador during the open pit phase.

During the underground phase, Labrador North Coast communities are projected to receive 20 percent of employment (325 person-years) and income benefits going to Labrador. VBNC anticipates that any workers who wished to qualify for underground jobs would be given the opportunity to train for this work during the open pit phase.

Though VBNC expressed confidence that the labour supply in Labrador would be adequate to fill its needs during the operations phases, it did not make predictions about the community breakdown of that supply. VBNC expressed caution about interpreting the employment numbers generated by economic modelling. It warned that these numbers are indicators or projections and not quotas. VBNC was confident that the fly-in/fly-out nature of the operations would give North Coast residents an advantage in access to employment, as people living in communities other than designated pick-up points would be responsible for paying the additional transportation costs.

As its main mitigative measure related to hiring, VBNC commits to applying the "adjacency principle." This principle gives first priority to residents "located in communities which are adjacent to the Company's mine/mill and smelter/refinery operations." During the hearings, VBNC said it would give preference first to qualified members of the Labrador Inuit Association (LIA) and the Innu Nation, then qualified residents of Labrador followed by qualified workers from the island portion of the province. VBNC says it is negotiating the details of the adjacency principle in the impact and benefit agreements (IBAs) and is committed to contracting only companies who would abide by the principle.

VBNC also committed itself during the hearings to considering people's life experience as a basis for employment eligibility. It acknowledged that workers could bring many transferable skills from experience without meeting formal educational requirements. The development of a personal inventory of skills is part of the search and recognition program being delivered under the Multi-Party Training Plan discussed in Section 15.1.1.

VBNC stated on a number of occasions that it would require contractors and subcontractors to adhere to its policies regarding employment but did not say how it would monitor contractors' compliance.

VBNC also indicated that it would monitor "the numbers and types of workers employed." In the public technical session on training and labour, it also pointed out that the Province would require quarterly reports on VBNC's employment and business procurement figures.

15.1.1 Training Opportunities

VBNC acknowledged the barriers that Aboriginal people and women would face in getting employment at the mine site. The company has worked with the federal and provincial governments, the College of the North Atlantic, LIA, and the Sheshatshiu and Mushuau Innu band councils to create a Multi-Party Training Plan (MPTP) to provide pre-employment education and training for interested individuals. The MPTP, based on what the Panel believes to be a successful program developed in Saskatchewan, is designed specifically to attract Aboriginal people interested in qualifying for work at the proposed mine. VBNC also presented details of a women's pilot workshop that has been conducted as part of the MPTP.

A number of presenters expressed concerns that training must meet the needs of Aboriginal workers and that, therefore, Aboriginal groups should be involved in delivering it. LIA in particular stated that training programs should not be the sole responsibility of government agencies and VBNC. From its experience in administering training programs using money from Post Pathways and the regional bilateral agreements between the federal government and Aboriginal groups, LIA believes that the greater the control it has over programming, the more successful such programming is.

LIA expressed frustration that MPTP money is not dedicated solely to training Aboriginal people. The initial $1.3 million dedicated to the program has come from the Labour Market Development Agreement, which co-manages federal employment benefits. LIA expressed concern that this training money is available to all residents of Labrador and that only unemployed workers eligible for Employment Insurance (EI) may apply. It believes that these two requirements combined, especially the EI requirement, could make many Inuit ineligible for this training. Similar concerns could presumably apply to residents of Innu communities also, although the current Sango Bay construction project may result in a different situation in Utshimassits.

The Panel recognizes that training opportunities should be open to all residents of Labrador, but concludes that current restrictions of the MPTP, combined with the high levels of chronic unemployment in North Coast communities, may mean that Aboriginal residents would be unable to benefit from the provisions of the adjacency principle.

Recommendation 74

The Panel recommends that, to improve access to appropriate training opportunities for as many North Coast residents as possible, the parties involved in the Multi-Party Training Program (the federal and provincial governments, the Innu Nation, LIA, the College of the North Atlantic and VBNC) collaborate to identify new or reallocate existing resources to ensure that Aboriginal participants who do not meet the Employment Insurance eligibility requirements could still qualify for training assistance.

The Province expressed concern that there is insufficient information about the specialized training that would be needed over and above the basic entry-level requirements. Though on-the-job training would be VBNC's responsibility, the Province believes that such information is needed to build a more unified approach to training. The Building, Construction and Trades Council recommended development of a comprehensive skills inventory to track the skills available in the workforce. The Council feared that, without such an inventory, an oversupply of tradespeople could be created, and individuals would waste time and money getting trained with little chance of eventual employment.

Recommendation 75

The Panel recommends that the Province, in cooperation with VBNC, LIA, the Innu Nation and the College of the North Atlantic, coordinate the development of a skills inventory to help parties develop both appropriate training programs and individual career planning.

Another training issue raised was how to help workers get the training and experience they need to work at the mine during the operations phases. In the public hearings, VBNC outlined plans to train LIA and Innu Nation members at other mine sites; these trainees could then become mentors at the Project. The Building, Construction and Trades Council recommended using the construction phase to help workers in training gain their journeyperson status. This practice, known as "featherbedding," requires a fully accredited employee to work with the trainee. Because of its financial implications, it needs to be built into Project planning right from the beginning. The Council also alerted the Panel to safety concerns that arise when employers use inexperienced workers on construction sites without adequate supervision. "Featherbedding" also helps to address this issue.

Some North Coast residents probably already have suitable skills and experience and VBNC should make every effort to recruit them during the construction phase. The Panel acknowledges, however, that the Project may not employ large numbers of Aboriginal workers during construction, because of the specialized skills required and the short duration of the work. The Panel concludes that it makes little sense to mount an extensive effort to train new construction workers, given the transient nature of the work. Instead, the Panel endorses VBNC's mentoring proposal and agrees with the Building, Construction and Trades Council that the construction phase should be used to give on-the-job experience to workers who will then be able to "graduate" to longer-term work in subsequent phases of the Project.

Recommendation 76

The Panel recommends that VBNC, in consultation with LIA and the Innu Nation and prior to Project approval, establish a quota for apprenticeships during the construction phase, with emphasis on skills that would be transferable to the operations phases. Through the tendering process, VBNC should require contractors to establish these apprenticeship positions.

As another barrier to training opportunities, both Inuit and Innu presenters described the alienation and loneliness North Coast residents often feel when they travel to larger centres to take a training or education program, especially if there are few or no other Aboriginal participants. Aboriginal women entering non-traditional occupations can face a double barrier. LIA's experience shows that locating training programs in participants' home communities results in higher retention and success rates.

From evidence presented, the Panel believes that retention of participants in training could become an issue. Therefore, every attempt must be made to group sufficient numbers of workers from similar backgrounds together in training programs. Locating training centres in North Coast communities, where possible, could help VBNC overcome this potential difficulty. However, the company would need to use other types of affirmative action, particularly in the case of women, so that participants would not feel isolated and therefore be more likely to drop out. The Panel recognizes the value of VBNC's search and recognition process, including the effort to train Aboriginal trainers. The Panel believes that involving LIA and the Innu Nation in developing and implementing this process would make the process more credible and culturally relevant, and thus more effective.

VBNC would need to put extra effort into the search and recognition process to attract women who may want to work at the Project, but who feel inexperienced or daunted by a variety of barriers.

Recommendation 77

The Panel recommends that, upon Project approval, the parties to the Multi-Party Training Plan develop a strategy for doing the following:

• locating some training programs, beyond adult basic education, in appropriate North Coast communities;
• developing formal and informal support programs, such as support groups, counselling or mentoring, for Aboriginal students who have to leave their home communities for training;
• providing extra supports, such as child care, to give women, especially single-parent women, equal access to training;
• developing a monitoring program to track training outcomes - including trainees' participation in, completion of or failure to complete the program, and their ability to obtain employment - to help the parties improve the program, as necessary.

Recommendation 78

The Panel recommends that VBNC, to build on the search and recognition process, work in partnership with LIA and the Innu Nation to further develop and implement the process. LIA and the Innu Nation should play the major role in workshop delivery. This partnership should involve the Tongamiut Inuit Annait and Innu women designated by the Innu Nation, to ensure that the search and recognition workshops for women respond effectively to the concerns and requirements of Aboriginal women.

15.1.2 Unionization

Some presenters expressed concerns that unionization of the Project workforce might limit local residents' access to employment. Because of the provincial labour regime, all recent major construction projects in the province have employed unionized workers and the Panel was told that this would likely to be the case for the construction of the Voisey's Bay Project.

The operations phases would not automatically fall under a legislated union regime. However, presenters feared that a union coming in during the operations phases could require VBNC to hire workers from outside the area and that such a situation could nullify the adjacency principle. During the hearings, the Province clarified this issue. If the workplace were to become unionized during operations, VBNC would have to negotiate a collective agreement with the bargaining agent that included all commitments made to LIA and the Innu Nation through the IBAs, which are also binding agreements. Evidence was presented, both in hearings and in written documentation, of similar situations where collective agreements have honoured commitments made by employers in IBAs.

The Panel therefore concludes that if the IBAs include the adjacency principle as an enforceable provision, unionization will not act as a barrier to local employment.

15.1.3 Employment Access for Communities South of Rigolet

The EIS gave brief attention to the communities on the South Coast and the Labrador Straits. It indicated that these areas jointly account for 17 percent of the population of Labrador, but predicted that they would obtain less than 3 percent of total Project employment and income. VBNC has not designated any community on the South Coast as a pick-up point but stated that it would monitor the numbers of employees coming from the area and consider designating a pick-up point there if numbers warranted.

The Panel heard from presenters in Cartwright, including the Labrador Métis Nation, that the absence of a designated pick-up point represented a significant barrier to employment. South Coast residents wanting work at the Project would have to pay the extra transportation costs to get to Goose Bay or move there. If VBNC provided transportation to even one South Coast community, it would increase residents' employment options. It is also possible that South Coast communities may soon be linked by road.

The Panel agrees that, to ensure that South Coast residents benefit from the provisions of the adjacency principle (after members of LIA and the Innu Nation, preference will be given to other Labrador residents), VBNC should locate a pick-up point in this area.

Recommendation 79

The Panel recommends that VBNC designate Cartwright as a pick-up point for Project employment, and consider the possibility of a pick-up point in an additional community south of Cartwright, if circumstances warrant.

15.1.4 Language and Cultural Concerns

To help Aboriginal people adjust to the workplace, and to help the workplace accommodate Aboriginal workers, VBNC proposed the following mitigative measures:

• hiring Aboriginal employment coordinators who would be involved with employee relations, which would begin with the hiring process and extend to interaction with the community;
• serving country food on site, when feasible;
• providing an employee assistance plan to cover the needs of workers and their families as they adjust to rotational work at the mine;
• having interpreters on site to assist workers who are not fluent in English;
• allowing for a two-week cultural leave without pay, which, together with vacation time, could permit two six-week breaks that workers could use for harvesting purposes; and
• providing cross-cultural training for both non-Aboriginal and Aboriginal workers.

LIA and the Innu Nation, as well as individual members, expressed many concerns about the ability of VBNC to accommodate Aboriginal culture at the mine and mill site. They were concerned about Aboriginal workers' ability to use their own languages at the work site, to get country food in the cafeteria and to have flexible schedules to accommodate their lifestyle.

VBNC stated that English would be the working language at the mine site, and presented statistics suggesting 97.5 percent of people in Inuit communities and 88 percent of people in Innu communities speak English. Based on their own research, both LIA and the Innu Nation questioned the validity of these numbers, as well as the definition of the ability to speak a language. Both Aboriginal groups expressed concerns about safety in the workplace if Aboriginal languages could not be used in some situations.

LIA recommended that, where possible, special situations be set up to accommodate language needs. As an example, LIA suggested that communication systems between dispatchers and haulage truck drivers could be set up to accommodate the use of Inuktitut or Innu-Eimun, if all the workers on a given shift spoke the same language.

The Panel believes that cultural issues would present a major challenge to VBNC and to workers, with language being only one issue. Individuals in coastal communities suggested that Aboriginal workers would encounter many difficulties in trying to fit into the mining workplace. The Panel heard stories of Aboriginal workers who had experienced sexual and racial harassment, or who felt their personal situations were not understood and had therefore left the workplace. The Panel also heard examples of expectations that VBNC would not be able to meet. For example, one man wondered why a worker could not just decide to stay for a longer shift if he or she had no reason to go home.

In several communities, presenters raised the issue of company policies relating to dismissal of employees for infractions of workplace rules, such as possession of drugs or alcohol. VBNC's right to enforce these rules was not challenged, but some participants encouraged VBNC to develop fair policies that would make such employees eligible for "second chance" re-hiring after an appropriate period of time.

The Panel believes that retaining Aboriginal workers would be an important challenge for VBNC, and for LIA and the Innu Nation, if the Project were to continue to deliver durable and equitable social benefits. Becoming qualified and obtaining work would be a significant hurdle for many Aboriginal employees, but adapting to the demands and constraints of a rotational schedule, long shifts and an industrial workplace could be a much larger hurdle over time, especially for individuals who would already be dealing with social problems such as substance abuse or who would face significant family or community pressures during their two weeks at home.

At the same time, the Panel is aware of other northern mining projects with large and stable Aboriginal workforces. VBNC presented literature to the Panel during the hearings that gave some examples of ways in which Aboriginal communities have worked with companies to create situations where workers can carry on their community and traditional lives while holding down paying jobs in the mining industry.

The Panel commends VBNC for its proposed mitigative measures to promote retention of Aboriginal employees, and suggests that VBNC should rigorously apply its policy of continuous improvement in this area by monitoring employee retention success and reasons that individuals leave. The Panel is concerned that, despite good intentions, it might seem easier to VBNC to replace an Aboriginal employee who leaves, voluntarily or otherwise, with a non-Aboriginal employee with ample mining experience, rather than to make further changes to working conditions or to give Aboriginal employees a second chance.

Recommendation 80

The Panel recommends that, before hiring Aboriginal employment coordinators, VBNC set up a joint committee with LIA and the Innu Nation to finalize job descriptions and requirements for these coordinators. This committee should also work with the coordinators to establish guidelines for the anti-racism and cross-cultural programs to be delivered on site.

Recommendation 81

The Panel recommends that VBNC develop a policy to establish the process and criteria to be used to determine if and when an employee who leaves voluntarily or is dismissed for just cause can re-apply for employment on the Project. Through its Aboriginal employment coordinators, VBNC should be prepared to work with prospective employees to discuss ways VBNC can personally support them in a second employment attempt, and ways in which VBNC can address specific workplace problems.

The policy should provide a reasonable second chance, with appropriate conditions, to employees who may have experienced difficulty in adapting to an industrial workplace and rotational schedule, but who wish to make a second attempt.

Recommendation 82

The Panel recommends that VBNC, through the Aboriginal employment coordinators, monitor Aboriginal employee satisfaction with language and cultural aspects of the workplace, including reasons why Aboriginal employees leave, and use this information to maintain and improve the Aboriginal employee retention rate.

15.1.5 Women's Employment

Women from Labrador talked about the barriers that women would face in getting access to potential jobs at the proposed mine site. A representative from the Labrador West Status of Women Council, speaking about the inequality of opportunity that exists for women, said that women want "equality of opportunity; equality of choice; equality of safety; equality of rights; equality of financial security and independence; equality of access to education and training; equality of being able to use that training and education in the job market; equality of access to the benefits of the resources of our land."

Many people pointed out that the mining industry continues to be a male-dominated workplace, with women's participation across the country remaining fairly steady at 10 to 11 percent of total employment. According to the figures presented by the Women's Resource Development Committee (WRDC), the percentage of women in Atlantic Canada employed in the joint category of mining and construction trades is 1.8 percent.

VBNC has said it is willing to try to change this ratio for the Voisey's Bay Project and has indicated a commitment to employment equity. VBNC informed the Panel that, as a subsidiary of Inco, it is covered by federal employment equity legislation. Some of VBNC's efforts have included a pilot workshop for women as part of the search and recognition process, and the development of a women's employment plan and a harassment policy, which covers both racial and sexual harassment. While these efforts were acknowledged, women's groups who appeared before the Panel believed that VBNC needed to go farther. In particular, WRDC expressed concern that the women's employment plan submitted by VBNC during the hearings process falls far short of a full employment equity process.

VBNC has developed a policy on sexual harassment addressing such issues as sexist jokes, display of material of a sexual nature and sexually degrading words. Several presenters, however, including the provincial Women's Policy Office, indicated that women will also experience more subtle behaviours that can contribute to a "poisoned" workplace for women. This is seen as being particularly true for workplaces where the most occupations are those in which women have been traditionally under-represented. There is also concern that Aboriginal women could be particularly vulnerable. Presenters therefore recommended that VBNC address the broader issue of gender harassment.

Both government and community groups suggested that VBNC would not show real commitment to employment equity unless it developed an affirmative action plan that set measurable goals. Similarly, VBNC should set measurable goals for its cross-cultural and gender sensitivity training. Some presenters stated that VBNC had not consulted women's groups sufficiently in developing existing programs, and had not incorporated advice from groups such as WRDC that have extensive experience in developing effective employment equity programs.

Presenters also said VBNC should carry out comprehensive gender-based analysis, defined in one submission on behalf of Inuit and Innu women and the Newfoundland and Labrador office of Women in Trades and Technology as "analysis that takes account of women, their reality, experiences, and the issues of importance to them." These presenters also advocated involving women in all aspects of program planning, from defining research topics to integrating women fully as sources of information.

The Panel believes that with women's issues, as with the concerns of Aboriginal people in general, VBNC needs to develop a fully consultative process in which concerned groups help develop programs that affect their lives.

Recommendation 83

The Panel recommends that VBNC, prior to Project authorization, revise existing VBNC employment assistance programs - including, but not limited to, the women's employment plan and the harassment policy - to address women's concerns. In developing the revised programs VBNC should

• hold consultations with Innu Women chosen by the Innu Nation and with representatives from Tongamiut Inuit Annait, Women's Resource Development Committee, the Provincial Advisory Council on the Status of Women and the Women's Policy Office of the provincial government;
• use gender-based analysis; and
• include measurable goals and procedures to monitor compliance with federal employment equity legislation and the provincial government's harassment policy.

A number of women told the Panel that another barrier to women's employment is their responsibility for providing child and elder care. In scoping sessions and the hearings, participants discussed ways child care might be provided during the Project. Tongamiut Inuit Annait (TIA) members strongly advocated on-site child care for mothers with preschoolers, because two weeks away from home is a long time for parents with younger children.

The Panel recognizes the legitimacy of women's concerns around child and elder care, as well as VBNC's position that child care at the work site is not practical, given the nature of the industrial workplace and accommodations and the reality that employees will be working 12-hour shifts, with little time left to give to family responsibilities on site. The Panel also believes that VBNC, LIA and the Innu Nation have a responsibility to remove barriers to women's participation in the Project workforce, to the extent possible.

The Panel believes that the best approach would be to develop or augment a reasonable program of child care in the individual communities. While 24-hour care is probably neither affordable nor even desirable, a service offering care during regular or extended working hours would assist extended family members who might be looking after the children of Project employees, and would also allow women and men to take advantage of Project-related employment in the community. Developing such a service should be the responsibility of LIA and the Innu Nation, with assistance from the Province. VBNC should contribute resources through IBA payments.

Recognizing that family emergencies could occur and be extremely stressful to employees, VBNC should also support employees with family responsibilities by providing emergency leave.

Recommendation 84

The Panel recommends that, during bilateral negotiations related to impact and benefit agreements, VBNC, LIA and the Innu Nation address resource requirements that would permit LIA and the Innu Nation to develop a comprehensive program of community child care for families with a parent or parents at the work site.

Recommendation 85

The Panel recommends that VBNC develop a policy to provide for family leave for employees with child care or elder care responsibilities who face an emergency situation.

The Panel notes that it heard from a significant number of Inuit women who were not convinced that the IBA negotiations were addressing women's concerns and issues, of which child care is one. The Panel is not privy to these negotiations and therefore cannot comment on the accuracy of these observations. However, LIA did indicate its intention to ensure that women are consulted and involved and that women's interests are fully addressed. The Panel would encourage LIA to review the comments and concerns of women who spoke at the hearings and to work with TIA and other Inuit organizations to address outstanding issues.

15.1.6 Employee Assistance Program and IBAs

VBNC acknowledged many of the employment barriers facing North Coast residents, and indicated that its main mitigative measures would be the employee assistance program (EAP) and specific provisions to be negotiated in IBAs.

VBNC would provide the EAP to employees and their immediate families. It will include initial counselling by the Aboriginal employment coordinator; referrals; additional services provided by other agencies or medical staff; counselling and awareness programs on subjects including financial management, stress, family violence and substance abuse; and workplace orientation sessions for new employees.

According to a joint presentation made by the Innu Nation and VBNC, the Innu Nation IBA will include the following provisions to help Aboriginal men and women obtain employment:

• an education and training program;
• an agreement in principle to set quantified employment objectives as part of VBNC's commitment to the adjacency principle;
• specific measures to ensure that formal educational requirements are not a barrier to Innu employment;
• the hiring of an Innu employment coordinator who would participate in the interview and selection process for all job candidates;
• measures to create a workplace that respects Innu culture and values and helps the Project function effectively and efficiently; and
• a workplace conditions program that would include measures such as an anti-discrimination policy, mandatory cross-cultural programs for all employees, a mentoring program run by and for Innu employees, access to country food, and provisions for cultural leave and job sharing.

While LIA and VBNC did not present this level of detail about their IBA negotiations, the Panel understands that LIA has similar concerns. LIA pointed out that it had not yet reached agreement with VBNC on employment preferences for Inuit, including ways to deal with the principle of adjacency. It also indicated that the parties had not reached agreement on gender equity issues, such as the training of Inuit women, the participation of Inuit women in the workforce, the development of gender sensitive workplace conditions, and the representation of women on the proposed IBA implementation committee.

15.2 Business Opportunities

VBNC provided a preliminary list of likely business contracts that the Project would require, and information on the distribution of business benefits during the exploration stage. It also indicated that it was carrying out a business supply capability study in Labrador and the rest of the Province, the results of which would have to remain confidential. This study will include a determination of national benchmarks. VBNC's estimates of indirect employment and income in the EIS were not based on this more detailed study.

VBNC indicated that Labrador businesses have a wide diversity of experience in delivering goods and services. Labrador West has considerable experience in serving the mining industry, and Happy Valley-Goose Bay has been a transportation hub and a centre of international military flying operations for many years. North Coast and other communities in Labrador have had little opportunity to develop large-scale business experience and are hindered by limited transportation infrastructure.

VBNC therefore predicts that Happy Valley-Goose Bay and Labrador West will draw the main business benefits from the Project, though Nain may be able to take advantage of its proximity to the site. VBNC noted, however, that both the Innu Nation and the Labrador Inuit Development Commission (LIDC) have been discussing possible joint ventures with other companies to enhance their capacity to bid on Project contracts.

15.2.1 Projected Economic Benefits and Effects

VBNC predicts that the Project would substantially diversify local economies in Labrador, although it does not provide much detail about how this would happen. As quantified by VBNC, the key economic benefits to local, regional and provincial businesses over the life of the Project would be as follows:

• Labrador and Newfoundland businesses and workers would capture 16 percent of the expenditures on goods and services;
• Labrador firms would supply nearly 43 percent of the purchases made within the province, amounting to $2 billion; and
• indirect employment would generate incomes totalling $1.48 billion across the whole province, with $436 million going to Labrador and $74 million to the Labrador North Coast.

VBNC suggests that, for the North Coast in particular, higher income levels associated with increased participation in the waged economy would induce employment growth, through increased retail trade and business growth associated with improved infrastructure and services. These projections are greater for Nain than for the rest of the coast because of predicted in-migration to Nain. In general, predictions of increased induced business are greater for larger centres.

During the hearings, VBNC updated the information from the Industrial Benefits Monitoring Program, which was described in the EIS. VBNC reported that to date $55 million out of an approximate total of $127 million allocated to the province has been spent in Labrador on goods and services for the Project. Both LIA and the Innu Nation expressed dissatisfaction with the benefits that have accrued to Aboriginal businesses to date. In a document submitted during the hearings, VBNC indicated that it expects to improve its record through the business opportunities chapter of the IBAs.

During the hearings, VBNC said that it wanted the IBAs to include measures to give Aboriginal people opportunities to participate in the Project. Two of the measures mentioned were business participation objectives and preferences for business opportunities. At the same time, VBNC pointed out opportunity was only one part of the equation, the other being supply capacity.

To increase Aboriginal business capacity, VBNC committed to supporting a revolving business loan fund and a business centre. It reported that it had met with working groups on several occasions to identify contracting opportunities that the Project would create. These working groups discussed measures that LIA and the Innu Nation could take to pursue contracts. VBNC pointed out, as well, that both LIA and the Innu Nation had established separate joint venture companies that had successfully bid on contracts for camp operation and maintenance (LIA), and camp catering and housekeeping (Innu Nation).

The EIS assesses the negative environmental effects on businesses and related employment during construction and operations as minor, indicating that they will be short term and highly reversible over time. The effects identified in the EIS include the following.

• some business disruption as businesses give priority to the mine rather than to regular customers;
• business closures due to increased competition;
• wage inflation because of the pressure on businesses to compete with wages at the mine; and
• labour force displacement, either to the mine or to businesses that offer better paying jobs because they serve the mine.

15.2.2 Mitigation Measures

As with direct employment, VBNC stated that it would try to enhance local business participation and reduce negative effects by applying the adjacency principle when buying goods and services, and through specific provisions in IBAs. VBNC did not provide details about the way the adjacency principle would work for businesses.

VBNC does say in the EIS that IBAs would ensure significant employment and business opportunities for members of LIA and the Innu Nation. As one example, VBNC indicated at the hearings that they are negotiating with the Innu Nation to form a Business Development Advisory Committee that will promote the involvement of Innu businesses and create more employment opportunities in Innu communities. Similar provisions are being negotiated in the LIA IBA. VBNC also believes that IBAs would enhance business organizations through increased funding and therefore increase the capacity of Innu and Inuit to shape their own economic future.

15.2.3 Public and Government Concerns

At the hearings, a number of presenters indicated that the Project would need to last at least 20 years to benefit Labrador businesses and spur economic diversification. Chapter 3, Project Need and Resource Stewardship, addresses this issue.

A second major concern related to the procurement of goods and services. Presenters speaking on behalf of businesses in the Happy Valley-Goose Bay area, Labrador West and the North Coast all stated that they did not have sufficient information about VBNC's requirements to plan for the future. For example, they did not know what types of goods VBNC would back-haul on the concentrate carriers and which goods the company could buy from Labrador businesses. Presenters also asked about contracting procedures and whether they would be given fair opportunity to bid on contracts. The Atlantic Canada Opportunities Agency (ACOA) indicated that VBNC should address these concerns by developing an explicit supplier development strategy to provide timely information and establish contracting procedures to help local businesses compete on an equal footing.

Business groups in Labrador City and Wabush were concerned that VBNC would accept bids for materials delivered to the concentrate discharge location or another port outside Labrador, and would incur the freight charges to Edward's Cove. This would disadvantage any local quotes for materials on which suppliers had already incurred transportation costs to Labrador.

Both LIA and the Innu Nation talked about the difficulties local businesses experienced when trying to get access to business opportunities during the Project's exploration stage. LIDC stated that Aboriginal enterprises would need special assistance to qualify for contracts, because they are not used to dealing with large-scale developments.

Both groups reiterated that the Project should not go ahead before IBAs are in place, since IBAs would include specific provisions to assist Aboriginal businesses and resources to help them branch out into other economic development ventures, thereby creating longer term durable benefits for their communities. As indicated in Recommendation 5, the Panel concurs with this conclusion.

Conclusions and Recommendations

The Panel believes it is important to ensure that existing and new Labrador businesses maximize their participation in the Project because

• according to VBNC's predictions, at least 25 percent of the Project's economic benefit to Labrador would come in the form of indirect employment and income; and
• local business growth would provide a wider range of opportunities for people to participate, especially since not everyone would either want or be able to work at a fly-in/fly-out mining operation.

The Panel agrees with many presenters that Labrador businesses need more information about VBNC's requirements for services and supplies to be able to plan. The company has not yet chosen the ultimate destination of the concentrate carriers. The Panel believes that destination would affect the company's decisions about where to obtain certain supplies, with implications both for suppliers and for transportation and handling businesses in Labrador.

The Panel observes that VBNC has not explained how it would apply the adjacency principle to the procurement of goods and services. Although, in the EIS, the company outlines the record of various commute mines in procuring goods and services from nearby businesses, it does not commit itself to a particular plan. The EIS presents a much more positive picture for the Upper Lake Melville region than it does for the North Coast. The most it offers the North Coast is "best efforts...to award contracts on the basis of price, quality and other relevant value factors." (EIS 21.2.5.1)

The Panel recognizes that factors relating to location, business experience in general and mining experience in particular will tend to favour the larger centres in Labrador. However, the Panel believes that the Project should also contribute significantly to Aboriginal business development in North Coast communities. This would require VBNC to make specific commitments, pursue specific actions and apply its policy of continuous improvement.

The Panel agrees with ACOA that VBNC would need to develop a strategy, with measurable goals and a monitoring process, to ensure that potential suppliers in Labrador had every opportunity to prepare and to compete, and that VBNC's communication, tendering and contracting procedures should help the company realize or better the economic benefits predicted in the EIS.

Recommendation 86

The Panel recommends that, as soon as possible and before construction, VBNC, in consultation with representatives of Aboriginal and other Labrador businesses and relevant federal and provincial agencies, establish an explicit supplier development strategy that includes contract procurement procedures and supplier development initiatives. The strategy should include objectives for Aboriginal and Labrador procurement that the company could monitor and evaluate. All provisions of this strategy should conform to commitments made in Impact Benefit Agreements.