towards a more innovative future: insights from canada’s natural resources sector
DESCRIPTION
This report explores the opportunities for action in advancing innovation in Canada's natural resources sector are great. We have identified key challenges and action items in four essential areas of activity: Knowledge Development and Dissemination, emphasizing the need for greater collaboration and connectivity across the sector; Community Capacity, addressing the dual goals of community infrastructure and social license to operate and engage with local communities; Resiliency, Jobs and Growth, looking at the human capital needs of a growing sector; and Environmental Stewardship, highlighting the opportunity to position Canada as a leader in new products and processes in the green economy.TRANSCRIPT
ppforum.ca
Towards a More Innovative Future
Insights from Canada’s Natural Resources Sector
The Public Policy Forum is an independent, not-for-profit organization
dedicated to improving the quality of government in Canada through
enhanced dialogue among the public, private and voluntary
sectors. The Forum’s members, drawn from business, federal,
provincial and territorial governments, the voluntary sector and
organized labour, share a belief that an efficient and effective public
service is important in ensuring Canada’s competitiveness abroad and
quality of life at home.
Established in 1987, the Forum has earned a reputation as a trusted,
non-partisan facilitator, capable of bringing together a wide range of
stakeholders in productive dialogue. Its research program provides a
neutral base to inform collective decision making. By promoting
information-sharing and greater links between governments and other
sectors, the Forum helps ensure public policy in our country is
dynamic, coordinated and responsive to future challenges and
opportunities.
© 2012, Public Policy Forum
1405-130 Albert St.
Ottawa ON K1P 5G4
Tel: 613.238.7160
Fax: 613.238.7990
www.ppforum.ca
978-1-927009-29-1
March 2012
i
Table of Contents
Preface ....................................................................................................................................... ii
Challenge #1: Knowledge Development and Dissemination ..................................................... 4
Challenge #2: Community Capacity ........................................................................................... 6
Challenge #3: Resiliency, Growth and Jobs................................................................................ 8
Challenge #4: Environmental Stewardship .............................................................................. 11
Conclusion ................................................................................................................................ 13
Agenda for Action – Specific Roundtable Recommendations ................................................. 15
Appendix: Roundtable Participants ......................................................................................... 17
ii
Preface
On behalf of the Public Policy Forum and our partners, I wish to thank the individuals and organizations
across Canada who have participated in our dialogue on the future of innovation in Canada’s resources
sector. This report synthesizes the results of six roundtable discussions and a national conference with
leaders from the Canadian mining, forestry, energy, agriculture and fishery sectors along with senior
government officials, scientists, and academics involved in natural resources sector policy, regulation,
and research and development. The regional roundtables were held between June and November,
2011. They were organized as a follow-up to a one-day conference in Calgary in October, 2010 which
focused on uncovering the current state of innovation in Canada’s natural resources sector.
These sessions were convened to deepen the engagement of Canada’s resource industries in exploring
future issues of competitiveness and the role of innovation in improving sector performance. Using the
comments and observations from these discussions, our goal is to help frame a strategy for action to
more fully leverage innovation in a sector that is competitive, resilient and sustainable from all
standpoints: economic, environmental and social. We believe that Canada’s abundant natural resources
are and continue to be a significant advantage, one that can contribute to positioning Canada as an
innovation nation.
I would like to recognize the contributions of key leaders who have inspired us to advance this dialogue.
Stephen Lucas, Assistant Deputy Minister, Natural Resources Canada has been the catalyst for much of
this work; he and his team have provided us with support and encouragement along the way.
Our project partners, including Barrick Gold, the Canadian Association of Petroleum Producers, Suncor,
Teck, Vale and Xstrata Nickel, have provided us with the resources to advance this dialogue. They each
offer important examples of the innovative capacity found within the sector.
Finally, a special thanks to our team at the Public Policy Forum, including Vice-President, Julie Cafley for
leading this project, Mary-Rose Brown for her research assistance, Matt LeBlanc for his project
assistance, Garnet Garven for his counsel, and Sarah Hurman for drafting this report.
David Mitchell
President and CEO
Public Policy Forum
iii
Our Partners
Our Hosts
iv
Roundtable Locations
In order to obtain insights into best practices and barriers to innovation in Canada’s natural resources sector,
Canada’s Public Policy Forum convened leaders from all sectors at a national conference in Calgary October
2010, and in roundtable discussions in six communities between June and November 2011.
1
“It is important to consider, are
Canada’s natural resource
endowments a curse? Do these
assets prevent us from being
innovative and stand in the way
of long-term growth?”
Introduction
The Innovation Imperative
Canada’s resource sector is a vital aspect of
our national competitive advantage. The
sector contributed over 11% of Canada’s Gross
Domestic Product in 2010 and directly
employed about 755,000 workers. Resources
accounted for over half the value of all
Canadian goods exported in 2010, over three-
quarters of which were destined for U.S.
markets including 55% of mineral and metal
exports, 97% of energy exports, and 71% of
forest product exports. Capital investment in
the resources sector accounted for about one-
quarter of Canada’s total in
2010, or about $80 billion.
As of 2009, Canada was the
world’s leading exporter of
potash, the second largest
exporter of uranium,
newsprint, wood pulp and
softwood lumber, and the
third largest exporter of
nickel and natural gas. 1
There are more than a few Canadian resource
firms that rank among the world’s largest in
their respective industries. Still, the sector as a
whole attracts more foreign direct investment
than it invests abroad. In 2010, foreign direct
investment in Canada’s resources sector
exceeded $207 billion or nearly 37% of Canada’s
total, whereas direct investment abroad by
Canadian resource firms was just under $156
billion, accounting for about 25% of the national
total.2 While
1 Measuring Innovation Performance in Canada’s
Resource Sectors – An Overview, Natural Resources
Canada, May 2011 2 International investment position, Canadian direct
investment abroad and foreign direct investment in
While the stats are impressive, they are by no
means the limit of what can be achieved.
Demand is growing, driven by emerging
markets hungry for Canadian commodities. New
sites are being explored and becoming
operational. The private sector, public sector,
and academic institutions are engaging in
intensive research and development (R&D),
testing new ideas for the future of resource
production.
The sector has a key role to play in driving
future growth in the Canadian economy and in
maintaining or even furthering Canada’s
position as a world-leading, G8 nation. Realizing
this vast potential will
rest on the sector’s
ability to create new
value, meet changing
consumer and market
needs, and secure the
social license to operate.
In this sense, innovation
is imperative.
Re-setting the narrative For too long, a single
narrative has dominated perceptions of
Canada’s natural resources sector, epitomized
by the phrase “hewers of wood and drawers of
water.” This narrative maintains that the
extraction, processing and export of primary
resources (commodities) is “old economy”
activity of inherently low value with little
potential for innovation, whereas good jobs,
wealth creation and sustainable economic
development depends on knowledge
generation and innovation in the “new
economy.” i.e. higher value manufacturing and
services sectors. Relying on income and wealth
Canada, CANSIM Table 37-0038, available at:
http://www5.statcan.gc.ca/cansim/a05?lang=eng&i
d=3760038
2
“There is a need to collectively
change the image of the
resources sector.”
from resource industries, so this thinking goes,
is like feasting on empty calories.
This narrative is premised on a false
dichotomy. It ignores the reality that there are
always going to be better ways to hew wood
and draw water – that high-skilled, high-paying
jobs and advanced products, processes and
systems are fundamental to success in resource
industries. There is as much economic potential
for innovation in the natural resources sector as
in any other. Moreover, as leaders in Canada’s
natural resources sector know, there is an
imperative to innovate in this sector because
the stakes are higher – not just for sustainable
economic growth, but for solutions to the very
real challenges facing humanity and the planet
we all share.
Innovation has played a key role in the sector’s
success, some examples of which are
highlighted in this report. The flawed notion
that generating wealth from abundant natural
resources occurs at the expense of innovation is
not something Canadians can or should accept.
Left unchecked, it acts as a drag on investment,
discourages research, and fails to inspire the
next generation of innovators to lead the way
towards a sustainable and resilient future
economy.
Sector leaders recognize that changing this
narrative has to start within the sector itself. As
discussed in more detail in this report, there are
several key steps they agree must be taken.
First and foremost, more collaboration and
information sharing is needed across the
sector. Resource leaders need to work together
to embrace a broader view of innovation and to
step-up efforts to convey to Canadians the
importance of innovation to the sector, to
fundamentally change its image with the public.
More needs to be done with communities,
particularly in rural and remote areas of the
country. Maximizing the sector’s innovative
potential depends on strong community
infrastructure and approaches to development
that ensure communities reap lasting social,
environmental and economic benefits from
sector activity. The remote nature of much of
the sector’s activities means that basic
infrastructure, like roads and
telecommunications, often need to be
developed, and that education and social
services need to be made accessible to ensure
the full engagement of local populations.
The resiliency of the sector and its ability to
keep growing and creating more and better
jobs, demands that it accelerate the pace of
innovation. This depends on everything from
promoting entrepreneurship and risk-taking as
core values, beginning in the K-12 education
system, to attracting more highly skilled talent,
including from abroad, to developing more hubs
and centres for sector innovation across the
country. It also requires a stronger focus on
effective methods to support research and
development through partnerships and
collaborative ventures at regional and national
levels, within the sector and with other
industries.
Finally, the sector must excel in environmental
stewardship. This requires coherent regulatory
frameworks aligned across jurisdictions,
3
alongside strong outreach championing the role
of innovation in improving environmental
outcomes. An unequivocal commitment to
becoming recognized world leaders in
environmental sustainability will play a key role
attracting both the investment and the highly
skilled people the resource sector needs to
improve performance and secure
competitiveness well into the future.
4
Challenge #1: Knowledge Development and
Dissemination
Through a number of informal and formal arrangements, resource
industry leaders are collaborating. However, for the most part this is
happening within specific industries such as forestry and mining, and is
generally restricted to identifying and promoting best practices and
sharing some of the risk associated with research and development.
In all of our roundtable discussions, participants stressed the need for
greater collaboration across industries and regions. This was seen as a key
first step in generating ideas and strategies to fuel innovation across the
whole of the sector and build the capacity it requires. Effective
collaboration on a wide range of non-competitive areas offers significant
opportunities to address challenges all industries face, such as building
community capacity; advancing environmental protection, and working
with governments to modernize regulatory frameworks. Cross-sector
collaboration was also seen as a means to share best practices across
provincial jurisdictions—sector leaders cited the area of worker safety and
training as examples of areas where innovative practices can and should be
shared.
Leaders in regions of the country that have experienced strong growth in
recent years see an even greater need to step up knowledge sharing and
collaboration to accelerate innovation and capacity building in the sector.
They argue that during periods of increased productivity, innovation
should be a priority for both industry leaders and the Canadian public. The
fact that there is no apparent “burning platform” during periods of high
productivity and growth only means that the sector must work harder to
share knowledge and get information out to Canadians on the importance
of thinking about the future and investing in innovative capacity now.
The Canadian Boreal
Forest Agreement, 2010
This unique collaboration
between 21 major Canadian
forest products companies
and nine leading
environmental non-
governmental organizations,
applies to more than 76
million hectares of forest from
the provinces of British
Columbia to Newfoundland
and Labrador. It explicitly
recognizes that Aboriginal
peoples have constitutionally
protected treaty rights and
titles as well as legitimate
interest and aspirations.
The Agreement is a three-year
roadmap with mechanisms to
allow for its extension. It
facilitates collaboration in the
marketplace and on the
ground to support
governments in the
realization of a stronger,
more competitive forestry
industry and a better
protected, more sustainably
managed Boreal Forest. Some
of the objectives in the early
stage of the agreement
include identifying the areas
of climate and energy policy
that intersect with forest
management and
conservation, and creating a
work plan for developing joint
positions and producing
ecosystem-based
management guidelines for
integration into existing
practices by participating
companies.
5
Sector leaders stressed the importance of
telling the story of the resources sector – and
the advances that have been made – as
fundamental to its ability to enhance its
innovative capacity and engage Canadians.
Companies across the sector are reducing their
environmental footprint, reducing energy use
and water consumption, achieving process
efficiencies and realising substantial
shareholder returns through innovation. Sector
leaders feel strongly that
these stories need to be
shared more openly,
across the sector and
with the public.
Industries must come
together and find ways
to correct public
misperceptions and
update the sector’s image to more accurately
reflect reality. To attract the human and
financial capital needed to thrive in a tough
global economy, where competitive advantage
will be driven by innovation, the sector must
show Canadians that its industries have been
transformed with the use of advanced
technologies and processes and through
exercising social and environmental
responsibility.
It can take years to realize a return on
investments in innovation, making it all the
more important to engage Canadians on why
these investments matter. Sector leaders felt
much needed information must be provided to
Canadians about current and future activities in
the sector, especially those made possible by
innovation. Positioning potential trade-offs and
opportunities in a global context was also seen
as important, to enable an informed and
mature dialogue about
the challenges facing
sector industries and
Canada’s future
prosperity.
A single national voice
that spans public,
private and not-for-
profit interest must be identified to represent
the sector. In Montreal, participants asked the
basic question, who speaks for Canada’s
resources sector? They stressed that a single
national voice must be identified,
representative of all industries and
stakeholders, to channel multiple and diverse
perspectives into an effective, actionable
strategy.
“There is a public and social
imperative to both communicate
and collaborate – we need to put a
light on what is happening and what
could be happening.”
6
“We must build local capacity for
innovation with a long-term
outlook that moves beyond the
purely extractive dimension.”
Challenge #2: Community Capacity Innovation can improve all aspects of organizational performance,
including social performance. Canada’s energy, mining and forest
product industries operate in Canada’s most remote areas, in
topographically challenging locations with some of the harshest
climactic conditions on Earth. Exploring, developing and operating in
remote areas distant from modern infrastructure and transportation
corridors is highly challenging. Resource development is easier when
local communities have a stake in it, and realize direct and lasting
social as well as economic benefits from it.
High functioning education systems and flexible, locally based
education and training opportunities are needed to secure the
future of the sector. However in many of the areas where resource
industries operate, traditional post-secondary and academic
institutions have a limited presence. This challenge is particularly
acute in the North, home to many of Canada’s most significant
resource assets. In the Northwest Territories, for example, GDP is
projected to nearly double over the next 10 years, centred in the
expansion of activities in the resources sector. Gold and diamonds, as
well as oil, natural gas, and rare earth elements are the industries
expected to see the
greatest growth.
Innovation will be
essential to ensuring
the efficient and
sustainable
development of
these resources.
However, to fully
realize this potential, a culture that supports innovation must be built,
and the sector must be able to draw from a reliable and skilled
workforce. Meanwhile, Aboriginal Canadians, who make up the vast
majority of the Northern population, have education participation
and completion rates that fall well below the Canadian average.
Xstrata Nickel – The Raglan
Agreement (Northern Quebec).
Xstrata Nickel is the world’s fifth
largest nickel producer, and is
focused on sustainable, value-
creating growth. The company
pursues this goal within a
framework of corporate social
responsibility. The Raglan
Agreement was signed in 1995 by
the Raglan operation, the Makivik
Corporation and local Inuit
communities to support
harmonious relations and foster
opportunities between Xstrata
Nickel and local populations in
areas such as training, hiring of
local businesses and environmental
management. Yearly profit sharing
is also part of the agreement. To
date, more than $100 million in
profit-sharing payments have been
directed to an Inuit trust fund for
economic and community
development.
The Mine Training Society
This non-profit society comprised of
Aboriginal, industry, and
government partners has a dual
focus: to screen, select, train and
place northerners in diamond
mining jobs, and to build a legacy
of education and awareness about
the employee and skill needs of the
mining industry in cooperation with
the Northwest Territories’
education system and communities.
The Society works closely with
Aurora College and industry
partners to chart a learning course
tailored to the needs of each
applicant. That may mean
attending school, job shadowing, or
apprenticing at a mine site, or a
combination.
7
Sector leaders recognize that new ways must be found to address the
education and skills gap in Northern communities. New, more
innovative approaches to deliver basic education, skills development
and job training to local populations are urgently needed. This requires
strong community engagement, partnerships with public and academic
institutions, and the utilization of information and communications
technologies to deliver learning and training. Some companies have had
success working with communities to provide training opportunities,
and have developed on-site training programs. The mining industry has
taken a particularly strong leadership role in this area. However, a
systematic approach, in concert with governments and local
communities, is required to identify what works and to replicate it
across the whole of the natural resources sector.
While education plays a critical role in community capacity, other
infrastructure matters too, including transportation and
communications. In the North, communications technology lags well
behind the rest of the country. There is a pressing need to improve
communications linkages in the North, including reliable telephone
networks and wireless internet connections, to support business
activities and real-time data exchange. Roads and ports, and supporting
the fuel and transportation needs of rural and remote regions are also
challenges that leaders argue must be addressed to build the capacity
required to support expanding natural resource industry activity, and
strengthen rural and remote communities.
Innovative approaches to exercising corporate social responsibility in
the natural resources sector must be replicated to become the norm,
not the exception. There are compelling examples of resource
companies that have made effective community engagement core to
their business operations. When conducted with respect and flexibility,
these efforts not only develop the social license needed to operate
successfully in remote communities, but lead to lasting improvements in
social capital, community infrastructure and quality of life.
The Oil Sands Leadership
Initiative’s (OSLI) Janvier-
Chard Project - Sekweha
OSLI is a collaborative network
of resource companies operating
in the Canadian oil sands. It
launched this sustainable
community pilot project in the
hamlet of Janvier-Chard, 94km
southeast of Fort McMurray,
with the support and active
involvement of community
leaders, to arrive at a vision of
working together toward a
shared future. As a result of this
collaborative work, the
community formed a voluntary,
non-profit board called Sekweha,
which means “for the youth” in
Dene / Chipewyan. Its vision is to
create a healthy, safe and
sustainable community that
helps children and youth gain the
knowledge, confidence and skills
they need to make a positive
contribution to their own future
and that of their community.
Sekweha provides the structure
for developing youth-led projects
in the community, and has
developed a skilled group of
youth within the community who
are delivering activities and
programming, including youth-
operated summer culture camps;
youth-to-elder councils; the
development and operation of a
youth centre and programs; a
youth-to-industry program; and,
StartSmart, a school program
offered at Father R. Perin School.
8
Challenge #3: Resiliency, Growth and Jobs While Canada’s resource industries vary widely, they share a
number of common characteristics. Many operate in notoriously
capricious and volatile global markets – prices can soar one minute
and collapse the next. They are capital intensive. Resource
extraction and production involves large up-front investments in
technology and equipment that remains in service for many years
and is difficult to change. Production processes involve numerous
activities including exploration, licensing, resources management,
harvesting or extraction, processing and/or manufacturing,
transportation and shipping, and preventing or mitigating
environmental impacts. These activities all involve different
upstream suppliers of equipment and services, and many regulatory
actors. The scale and complexity of these operations, coupled with
price volatility, make them inherently high-risk.
Intense competition and production complexity has favoured
process innovations to improve efficiency and lower costs. This type
of innovation will continue strengthening the sector’s
competitiveness and addressing challenges including reducing its
environmental footprint. However, in the face of mercurial markets
and often “razor thin” margins, strengthening the resiliency of
Canada’s resource industries and creating more high paying jobs
means growing and diversifying markets, including by putting more
emphasis on developing
innovative value-added
products. Sector leaders
recognize the importance
of creating new value,
meeting consumer and
market needs. In
particular, meeting
growing demand for
sustainable products and clean technology offers a significant
opportunity for the sector to grow and lead the way for Canada in
the green economy.
Sector leaders want government to support and incent innovation,
but they recognize simply funding research and development is not
enough. More partnerships, joint initiatives, and knowledge-sharing
across jurisdictions are needed to support development and drive
innovation. They point to initiatives like the Geo-Mapping for Energy
Cornerbrook Pulp and Paper
This company operates the largest
newsprint mill in Newfoundland and
Labrador. Over the past decade, it
has improved its pulping and
papermaking systems; enhanced its
wood handling capability; introduced
recycling technology; and made
environmental improvements. These
investments totaling close to $400
million, have increased product
quality, productivity, and helped to
solidify market position for the
company. Its competitive
advantages include its use of modern
pulping technology and the latest in
pulping processes, quality fibre, and
its ability to generate about 70
percent of its own electricity. Quality
fibre together with input advantages
presented by efficient pulping allows
the mill to produce newsprint of
good opacity, meaning that print on
one side of the paper does not
interfere with print on the reverse
side.
Vale Ltd.’s Long Harbour
Processing Plant, Newfoundland
and Labrador
Construction of the $3.6 billion state-
of-the-art nickel processing plant is
expected to wrap up in 2013. It will
use hydrometallurgical technology
developed in Canada by Vale to
process nickel concentrate from its
mining operation at Voisey’s Bay,
Labrador. The processing operation
will employ 475 people. In addition
to the mine and the processing plant,
Vale made a $20 million gift to
Memorial University to establish and
operate a centre for research and
innovation. Vale’s support is
enabling enhanced research and
education in mineral exploration,
mining and mineral processing.
“Canada punches above its
weight globally, because
we are a natural resources
powerhouse. How can we
take these advantages to
the next level?”
9
and Minerals (GEM) Program, launched by the Government
of Canada in 2008. This program is developing the
geosciences knowledge needed to guide industry
investments and allow companies to advance their mineral
exploration and resource development activities. Sector
leaders pointed to the success of the Canadian Mining
Innovation Council, as an approach that could be replicated
in other resource industries.
Developing more hubs and centres for sector innovation
across industries and that span the continuum from
research to commercialization is critical to building a
culture of innovation that permeates the sector. Ideas
include developing more regional innovation clusters;
strengthening collaboration between business and
academia to enhance capacity for research and
development; re-evaluating arrangements for the
ownership of intellectual property flowing from joint
ventures; examining potential supply chain improvements;
emphasizing applied research, including by colleges;
incenting entrepreneurial initiatives by new graduates and
experienced professionals; and making strategic
investments in human capital, including by increasing co-
op placements and expanding and diversifying university
and college programs to accept more students in areas
relevant to the sector’s future.
Natural Resources Canada – Geo-
mapping for Energy and Minerals
This program provides public geosciences
knowledge to support investment and
land-use decisions. Focussing mainly on
mapping the Arctic, it provides geosciences
knowledge to guide investment decisions
by private sector exploration companies,
and land-use decisions by governments.
Co-funded by the Natural Sciences and
Engineering Research Council of Canada
and Natural Resources Canada’s Earth
Sciences Sector in collaboration with
industrial sponsors, the program also
emphasizes the training of the next
generation of Canadian geoscientists and
provides funding to Canadian academic
researchers.
The Centre for Excellence in Mining
Innovation
CEMI directs and coordinates step-change
innovation in the areas of exploration,
deep mining, integrated mine engineering,
environment and sustainability for the
metal mining industry. With a seasoned
team of program directors, CEMI identifies,
assesses and manages industry-focused
applied research & development projects
that extend from geology and engineering
to the natural sciences. We recognize
innovation is a three-phase process:
research, development and
implementation (R & D, I). With
implementation, we turn innovative ideas
into best practices.
10
Innovation is not easily defined. Participants agreed that it is
at least as much about culture, as it about science, technology
or process improvement. Innovation is the product of human
imagination and the willingness to take risks. Firing that
imagination and encouraging risk-taking is a function of culture,
and shaping culture is
function of public
education. There was
broad consensus that
the sector has a role to
play in helping to
promote science and innovation in the K-12 system, helping to
embed the values of entrepreneurship and risk-taking in the
next generation of innovators. Developing jointly-administered
programs that pair business, science and engineering
departments; offering grants and seed-funding to young
entrepreneurs; and coordinating mentorships and co-op
placements with successful entrepreneurs were cited as ways
the sector could encourage this. Leaders recognize that inspiring
younger Canadians means highlighting technological
developments related to water, energy and waste management,
positioning the resources sector as a place where young people
can have an impact addressing the environmental challenges
they care about.
Attracting people from diverse backgrounds who offer new
and fresh perspectives is also important in building the sector’s
innovative capacity. Immigration policy is another avenue to
help create a culture of innovation and expand the talent pool,
particularly in cases where immediate demand for skills cannot
be met domestically. Sector leaders mentioned the issue of
foreign credentials recognition to help maximize this avenue for
recruiting talent to the resources sector.
FPInnovations
FPInnovations brings together Forest
Operations, Wood Products, Pulp &
Paper, and the Canadian Wood Fibre
Centre of Natural Resources Canada, to
create the world’s largest private, not-for-
profit forest research institute. It aims to
strengthen the Canadian forest sector’s
global competitiveness through research,
knowledge transfer, and implementation.
For example, through its Performance /
Innovation / Transport Municipal
Program, FPInnovations is sharing the
expertise of its engineers and technicians
with municipal vehicle fleet managers to
help them implement high performance
energy efficiency measures and plans.
Suncor’s Zero Liquid Discharge
Process
At Suncor’s MacKay River in situ facility,
the company demonstrates the only fully
functional Zero Liquid Discharge (ZLD)
system in the oil sands industry. ZLD has a
number of benefits, such as recycling
approximately 96% of the facility’s water.
Like most in-situ operators, MacKay River
uses the steam-assisted gravity drainage
process. Using a pair of wells, steam is
injected underground to heat bitumen,
which flows to a second well (the
“producer”) and then to the surface. But
that’s not all that comes up. In addition to
bitumen, water with a high saline content
also enters the producer well. This water,
plus condensed steam from the injection
well, also flow to the surface. More than
90% of the injection steam required to run
MacKay River is recycled continuously in
this manner, and MacKay River needs to
draw very little water from underground
aquifers for its operation. Combining the
ZLD system with MacKay River’s low
“steam-to-oil ratio” (meaning less water
is required for steaming than at
competing projects), results in the use of
one sixth of a barrel of subsurface water
for every barrel of heavy oil produced.
“We need to capture the
attention and imagination
of innovators.”
11
Challenge #4: Environmental Stewardship There are a range of environmental challenges facing the sector for
which innovative solutions are required. These include the need to
continue reducing operating costs and minimizing environmental impacts
through better energy, water and waste management; adapting
technologies used in other sectors to enable the exploration of potential
mineral reserves with less environmental impact, and finding ways to
minimize the impacts of extractive activities.
In economic terms, the boom in resource industries makes the case for
continuing with a business-as-usual approach relatively compelling.
However, the increasing global focus on climate change and sustainability
provides an opportunity to get ahead of the curve, exploring green
technologies and methods now to make the sector more profitable and
productive in the long-term, positioning Canada as a global leader in
environmental products
and processes.
Governments need to play
the dual role of catalyst
and champion for
Canada’s resources sector.
At times, government
must be nimble and
responsive to the needs of
the sector, to maintain the
growing momentum behind cleantech and environmental innovation.
However, governments must also be sure to provide the push needed
through effective regulation and environmental standards.
ICO2N – Carbon Capture
and Storage (CCS)
ICO2N is a network of Canadian
companies committed to the
deployment of Carbon Capture
and Storage (CCS) in Canada to
help meet climate change
objectives while supporting
economic growth. For six years
the group has been working to
accelerate CCS deployment as a
means of reducing CO2
emissions, and fundamentally
transforming the way Canada
can develop and use its fossil
fuel energy resources in a
sustainable way.
Carbon Capture and Storage
(CCS) — is the process of
capturing carbon dioxide (CO2)
from large industrial sources
before it is released to the
atmosphere, and then safely
transporting the CO2 and
storing it in mature oil and gas
reservoirs or in other deep
geological formations. CCS is a
proven, technically viable and
environmentally safe means of
reducing greenhouse gases
(GHG). It is the country’s
largest potential CO2
mitigation option and is a
critical part of Canada’s GHG
reduction and energy
strategies.
“There is a misconception that the
sector is not ‘cool’ – this needs to
change. These industries are where
the action is happening – where the
future of sustainability lies.”
12
Governments must create policies that better favour and encourage
innovation activities to advance sustainability. It can do this by setting
the competitive conditions for innovation and success through sound
taxation and regulation, recognizing that the driver of innovation is the
private sector. Ideal
frameworks establish
outcomes, but allow
industry to follow its own
path to achieve them. They
create the conditions for
companies to flexibly and
proactively achieve desired
outcomes, while ensuring that the industry as a whole adheres to a
clear standard. Sector leaders identified a number of specific
improvements that could be made, including a redesign of the
Scientific Research and Experimental Development Tax Incentive
Program, and on an international scale, addressing regulatory
impediments including between Canada and the US in the energy
sector.
However, there was strong consensus that the most important
priority for government should be to develop a coherent, evidence-
based regulatory environment to help spur innovation. A clear
regulatory imperative must be set by government in a number of areas,
but most notably with respect to issues of sustainability and
environmental impact. To achieve this, governments need to align their
efforts and move beyond consultation to engagement, bringing
together communities, industries and other stakeholders to provide
meaningful opportunities to shape policy and regulation.
Smart Grid Canada
Canada’s power grid is aging.
Efforts are underway to replace
old elements with new Smart Grid
technology, which meets many of
Canada’s energy and
environment policy objectives by
enabling the capture of more of
Canada’s vast renewable resource
potential. A more intelligent grid
allows utilities to fully incorporate
clean energies such as wind and
solar power, and to distribute
conventional and renewable
power to consumers more
efficiently, reliably, safely and
economically. It integrates two-
way digital communication
technology that analyzes
monitors and streamlines the
system to maximize throughput,
while promoting and enabling a
reduction of overall energy
consumption.
To date, Ontario is the
frontrunner in Canada’s growing
adoption of Smart Grid
technology. Implementation of its
2010 Green Energy Act
encourages the development of
renewable generation by
establishing long-term power
purchase agreements with wind,
solar, biomass and other clean
energy providers.
“Laggards don’t move if there
isn’t a regulatory structure,
but the structure must allow
leaders to get out ahead.”
13
Conclusion
Shaping an Agenda for Action
The history of Canada’s natural resources sector has in no small way shaped Canada as we know it
today. Moving forward, the sector will be at least as instrumental to Canada’s future. In an increasingly
competitive and capricious global economy, one thing is certain: all the goods and services we produce,
or that are produced anywhere else for that matter, will rely on secure supplies of commodities made
possible by industrial activity in the natural resources sector.
In Canada, these primary industries are far more innovative than they’ve been given credit for.
Growth, job creation, and prosperity in all sectors of our economy, demands that we recognize the role
of innovation in the sector’s success, and its importance in making resource industries even more
sustainable and competitive going forward.
Key areas for action emerged from the roundtable discussions. (For a list of the participants, please see
the Appendix.)
• Communication and Engagement: Inform and engage Canadians in a dialogue about the
future of the sector. Lead an honest and open conversation about the impact of resources
on Canada’s economy, environment and position in the world. Tell the story about the
changing face of the sector.
• Collaboration and Institutional Development: Use forums to connect leaders across the
resources sector to promote greater collaboration and information sharing. Facilitate
knowledge transfer among governments, industry leaders, academic researchers, and key
stakeholder groups such as First Nations. This can be done by the creation of hubs and
partnerships. Success in promoting collaboration in specific industries through bodies like
FPInnovations and the Canadian Mining Innovation Council should be replicated at a sector-
wide level.
• Education: Reach out to innovators
early, by promoting science and
engineering in the K-12 education
system. Start building leaders at an early
age, highlighting the fun side of science
and the future opportunities it provides. Encapsulate the cultural values of innovation, such
as risk-taking and collaboration, in our education system and curriculum.
• Skills Training: Explore novel and innovative arrangements in the post-secondary
education system to offer skills training and education to all Canadians. Create
opportunities in post-secondary education to develop the skills and leaders needed for the
sector at all levels – from skilled workers, to researchers, to business leaders. Action items
include co-development of post-secondary programs; industry and academic partnerships
for delivering in-house skills development; and expanding access to education in remote
“We need to think as Canadians – the
sector can’t let regionalism
dominate.”
14
communities and for target populations, especially Canada’s aboriginal population.
• Community Capacity: Invest in the infrastructure needs of remote communities and
resource operations, especially transportation networks, and information and
telecommunications needs.
More work needs to be done and leadership provided in each these areas, especially by the resource
industries, governments, non-governmental organizations, and the research community. While these
roundtables were convened to look at best practices and barriers to innovation at the regional level in
Canada, participants agreed we need a better understanding of what works to support innovation on-
the-ground, in resource communities where sector activity actually occurs. We need to look more
closely at examples of sector innovation in corporate social responsibility and community engagement.
At the same time, the roundtable discussions suggested we should explore international best practices
for insights about how best to mobilize public consensus and modernize the regulatory environment.
To shape an agenda for action and get this work done, the sector as a whole requires “one voice”—
ideally, one that integrates the views and perspectives of all stakeholders: industries, communities,
unions, regulators and non-governmental organizations. An important next step will be for the project
partners to consider how best to convene stakeholders to help make it possible for such a voice to
emerge.
15
Agenda for Action – Specific Roundtable Recommendations
Knowledge Development and Dissemination
• Develop communications and information-sharing campaigns to present an
updated picture of what the resources sector looks like today.
Toronto
• Develop forums at local and national levels to share best practices. St. John’s
• Develop forums for greater collaboration and partnerships through knowledge
sharing and dissemination of best practices.
Yellowknife
• Find new ways to communicate and share successful innovations. St. John’s
• Encourage the resources sector to consider different ways to approach innovation.
Share information about new types of innovation, including product innovation;
process improvement; new marketing methods, and new organizational methods in
business practice, workplace organization, etc.
Montreal
• Initiate a dialogue on what motivates innovation. Encourage and incentivize
innovation in times of surplus or success.
Montreal
• Learn from other jurisdictions that have faced similar challenges (e.g., Australia) Vancouver
• Identify a champion for resources sector innovation with the mandate to facilitate
an ongoing exchange of ideas, and communicate successes and best practices to
the broader public.
Montreal
Community Capacity
• Promote local solutions to developing the skills and talent needed in the sector.
Develop frameworks for the education and engagement of youth, Aboriginals, and
remote and rural populations, exploiting opportunities at both the K-12 and post-
secondary levels.
Toronto
• Develop more training and education opportunities, sensitive to the challenges that
traditional education systems have had in the North.
Yellowknife
• Scale up demonstrated successes in education and youth engagement, as
exemplified by Xstrata and other private sector leaders.
Montreal
• Incent entrepreneurship among new grads and experienced professionals through
the promotion of start-ups.
St. John’s
• Invest in developing information and communications technology systems in the
North.
Yellowknife
• Establish a Northern Innovation Council or annual forum to share ideas and best
practices.
Yellowknife
Resiliency, Growth and Jobs
• Position entrepreneurship and risk-taking as core values in the education system,
through joint programs among business, science and engineering disciplines in
universities and colleges.
Montreal
• Expand and promote relevant academic programs to assist the development of the
regional talent pool.
St. John’s
• Evaluate mechanisms for government to support research and development in a
variety of settings, through a variety of means (financial and other).
Yellowknife
16
• Expand efforts to improve competition in the transportation sector to reduce costs. Vancouver
• Continue to develop partnerships and collaborative ventures, in existing institutions
or through the development of hubs or centres for innovation, similar to
FPInnovations.
Montreal
• Explore unique arrangements to share knowledge, expertise, and if possible,
technology, among industry partners and companies.
Toronto
• Work across jurisdictions – look for partners in other industries and sectors engaged
in research and operations with the potential to be adapted and improved upon.
Toronto
• Reach out to the next generation of workers, including immigrants, aboriginals and
youth, to attract the new talent the sector needs. (For example, develop the
equivalent of a “Top 40 Under 40” program for the resources sector.)
Vancouver
• Explore opportunities and programs for welcoming new Canadians looking to work
in the resources sector.
St. John’s
Environmental Stewardship
• Create a forum to share best practices and knowledge across the sector to address
common challenges faced by all resource companies, and to tap into other fields
(e.g., military, nano, medical and other non-sector specific technologies) as sources
of solutions to reduce environmental impacts.
Vancouver
• Reach out to creative and passionate individuals, highlighting the successes of the
industry and the excitement of solving its challenges, especially in the area of
sustainability.
Toronto
• Exploit more opportunities for innovation in energy, water and waste management
and in extraction with environmental technologies that reduce operating costs and
minimize overall impact
Vancouver
• Articulate a clearer role for the federal government in promoting resource
innovation and competitiveness.
Vancouver
• Address the need for innovation in government (to create policies that better
favour and encourage innovation in the private sector through sound taxation and
science-based regulation).
Saskatoon
• Create conducive regulatory frameworks for innovation, and then vacate the space:
governments set the stage, industry charges forward. Engage all stakeholders in
developing a clear, supportive and results-oriented regulatory environment.
Toronto
• Work towards better harmonizing international regulations for the resources
sector.
Saskatoon
17
Appendix: Roundtable Participants
Innovation in Canada’s Resources Sector
Roundtable Participants
Elyse Allan President and Chief Executive Officer General Electric Canada Colin Andersen Chief Executive Officer Ontario Power Authority Paul Austin Regional Director, Partnerships Sustainable Development Technology Canada Ernie Barber Acting Dean, College of Engineering University of Saskatchewan Allan Baydala Chief Financial Officer Port Metro Vancouver Darrell Beaulieu Chairman Northern Aboriginal Business Association Bob Bleaney Vice President, External Relations Canadian Association of Petroleum Producers Mitch Bloom Vice-President, Policy and Planning Canadian Northern Economic Development Agency Bohdan Bodnar Vice-President Human Resources Spectra Energy Transmission
Pierre A. Bossé Directeur de projets Division Industriel Genivar Anne-Marie Bourgeois Regional Director Sustainable Development Technology Canada Mary-Rose Brown Research Associate Public Policy Forum Murray Brown Development Manager Husky Energy Inc. David Burns Professor of Chemistry and former Associate Dean Research (Science) McGill University Julie Cafley Vice-President Public Policy Forum Kent Campbell Deputy Minister, Energy and Resources Government of Saskatchewan Denise Carpenter President and CEO Canadian Nuclear Association Karen Chad Vice-President, Research University of Saskatchewan Karen Chan Assistant Deputy Minister
18
Agriculture, Food and Rural Affairs Research and Corporate Services Division, Guelph Government of Ontario Ron Crotogino President and Chief Executive Officer ArboraNano Inc. Hervé Deschênes Vice President FPInnovations Michel J. Desrochers Director General NRC Biotechnology Research Institute National Research Council Canada Tom Diment President Potash Producers Association Gavin Dirom President and Chief Executive Officer Association for Mineral Exploration BC (AME BC) Robert Doherty President NWT & Nunavut Construction Association Mary Donlevy-Konkin Chief of Staff Minister of Advanced Education, Employment and Immigration Government of Saskatchewan Brian Doucette Director, Environmental Excellence Suncor Energy Inc. Cassie Doyle Consul General San Francisco/Silicon Valley Foreign Affairs and International Trade Canada D. Tim Doyle Executive Director Yellowknife Chamber of Commerce
Ian Dyck Vice-President Infrastructure and Environment WorleyParsons Canada Julian Edwards Director, Process Engineering & Strategic Studies Vale Base Metals Technology Development Vale Craig Ennis Vice-President Policy and Communications St. John’s Board of Trade Jock Finlayson Executive Vice-President Policy and Analysis Business Council of British Columbia Chaitanyamoy Ganguly President, India Cameco Corporation Garnet Garven Senior Fellow, Western Canadian Office Public Policy Forum Kevin Goldthorp Vice-President, External Relations University of Western Ontario Ida Goodreau Adjunct Professor Sauder School of Business University of British Columbia Ray Gosine Associate Vice-President Research Memorial University of Newfoundland Mark Haney Director, Investment and Economics Analysis Science Policy Evidence and Analysis Natural Resources Canada
19
Bryan Harvey Professor Emeritus, Plant Sciences University of Saskatchewan Lorne Hepworth President CropLife Canada Elise Herzig President and Chief Executive Officer Ontario Energy Association Dan Hewitt President Consulting Engineers of the Northwest Territories Dennis Hogan Assistant Deputy Minister, Innovation Department of Innovation, Trade & Rural Development Government of Newfoundland and Labrador Morag Howell Area Manager Yukon, Northwest Territories and Nunavut Region USC Sandvik Mining and Construction Canada Inc. Ray Hrkac President, Exploration GGL Resources Corp David Katz Acting Director Innovation Saskatchewan Government of Saskatchewan Kim Keating Suncor Energy Inc. Bob Kelly General Manager Duck Pond Operations Teck Resources Ltd
Doug Konkin Deputy Minister Ministry of Forests, Lands and Natural Resource Operations Government of British Columbia Paul Labbe Vice-President and General Manager Saskatoon WorleyParsons Canada Pierre Lapointe Président et chef de la direction FPInnovations Roger Larson President Canadian Fertilizer Institute Martin Lorrion Vice President, Operations, Region 1 Domtar Corporation Stephen Lucas Assistant Deputy Minister Science and Policy Integration Natural Resources Canada J. Hugh MacDiarmid President Killin Management Corporation Fiona Macfarlane Chief Inclusiveness Officer Managing Partner Western Canada Ernst & Young LLP Peter MacKinnon President and Vice Chancellor University of Saskatchewan David Malloy Associate Vice-President and Director Research Services University of Regina
20
Carmine Marcello Executive Vice President, Strategy Hydro One Inc. Tina Markovic Senior Project Manager Operational Readiness BHP Billiton Canada Inc. Katrina Marsh Policy Analyst Science Policy Integration Natural Resources Canada Alasdair Martin Acting President Diavik Diamond Mines Inc. Dan McGillivray Toronto Hydro Distinguished Fellow Centre for Urban Energy Ryerson University Brent Meade Deputy Minister Innovation, Trade and Rural Development Government of Newfoundland and Labrador Tony Mercer Senior Project Manager WorleyParsons Canada Trish Merrithew-Mercredi Regional Director General Northwest Territories Region Aboriginal Affairs and Northern Development Canada Suzann Méthot Directrice régionale - Québec Initiative boréale canadienne David Mitchell President and Chief Executive Officer Public Policy Forum Don Montalbetti Head of Projects, EKATI Diamond Mine
BHP Billiton Canada Inc. Phil Moon Son Executive Director NWT & Nunavut Construction Association Garth Moore President Potash Corporation of Saskatchewan Inc. Paul Morris Assistant Deputy Minister Department of Natural Resources Government of Newfoundland and Labrador Geoffrey Morrison General Manager of BC Global Public Affairs A.J. Nichols Director, Corporate Affairs Vale Hon. Rob Norris Minister of Advanced Education, Employment and Immigration Government of Saskatchewan Eden Oliver Partner Bennett Jones LLP David O’Toole Deputy Minister Northern Development, Mines and Forestry Government of Ontario Engin Özberk Vice-President Innovation and Technology Development Cameco Corporation Joel Page Manager, Sustainable Development Raglan Mine Xstrata Nickel
21
Chuck Parker President NWT Chamber of Commerce G.R. (Gay) Patrick Executive Director Saskatchewan Potash Producers Association Inc. Greg Payne Vice President, Portfolio Management Greenchip Financial Ian Pearce Chief Executive Officer Xstrata Nickel Gordon R. Peeling Independent Director/Consultant and past President of the Mining Association of Canada Bob Rappolt Vice-President, Mining Stantec Chris Ryder Vice-President, External Affairs BHP Billiton Canada Inc. Eric Sanscartier Director Science Policy Evidence and Analysis Branch Natural Resources Canada Bryan Schreiner Chief Geoscientist and Manager, Minerals Saskatchewan Research Council Pam Schwann Executive Director Saskatchewan Mining Association Kevin Scissons Strategic Advisor Directorate of Nuclear Cycle and Facilities Regulation Canadian Nuclear Safety Commission
Joy Senack Director, Strategic Policy Natural Resources Canada Colm Seviour Partner Stewart McKelvey Kent Smith-Windsor Executive Director Greater Saskatoon Chamber of Commerce Bruce Sprague Partner, Tax Ernst & Young LLP Barb Steele Director of Strategic Partnerships Network for Business Sustainability Bill Swett Research and Development Lead Coordinator Commercial and Joint Interest ExxonMobil Gray Taylor Partner and Co-Leader Climate Change and Emissions Trading Group Bennett Jones LLP Eira Thomas Chairman Stornoway Diamond Corp John Thompson Vice-President, Technology and Development Teck Resources Ltd Tom Tiedje Dean, Faculty of Engineering University of Victoria Kirsten Tisdale Partner, British Columbia Advisory Service Ernst & Young LLP Doug Trask Executive, Strategy and Program Development RDC Research and Development Corporation
22
André Tremblay Président-directeur général Conseil de l’industrie forestière du Québec Gordon Van Tighem Mayor City of Yellowknife Brian Veitch Associate Dean Research Engineering and Applied Science Memorial University of Newfoundland Peter Vician Deputy Minister Industry, Tourism and Investment Government of the Northwest Territories David Waldron Partner SECOR Consulting
John Walsh Director General Science Policy Evidence and Analysis Natural Resources Canada Allan Ward President and Chief Operating Officer Alberta-Pacific Forest Industries Joanne Wong Director, Village Project Canada Cisco Systems Canada Co Sarah Wright Cardinal President Aurora College Zoe Younger A/President and CEO Mining Association of British Columbia
ppforum.ca