NRGO Committee Meeting

STANDING COMMITTEE ON NATURAL RESOURCES AND GOVERNMENT OPERATIONS

COMITÉ PERMANENT DES RESSOURCES NATURELLES ET DES OPÉRATIONS GOUVERNEMENTALES

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, May 6, 1999

• 0833

[English]

The Chairman (Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)): Good morning, colleagues. Good morning, Mr. Minister, and all others. I'd like to call to order this May 6 meeting of the Standing Committee on Natural Resources and Government Operations.

We are meeting and have the minister as our principal witness for a number of reasons, partly to have a look at the main estimates for 1999-2000, and also to get his advice and comments on our study of Canadian forest management practices as an international trade issue.

Mr. Minister, I know you're under some time pressure, and I think you have a target of about 9.30, so we'll invite you to start with a few remarks and we'll get right into questions.

The Honourable Ralph E. Goodale (Minister of Natural Resources and Minister responsible for the Canadian Wheat Board): Thank you very much, Mr. Chairman, and good morning to members of the committee.

This is one of those mornings when I need to be in about three different places at once, so I appreciate your cooperation in allowing me to leave the committee meeting at about 9.30. If there are further questions that members have, my departmental representatives would be able to stay for a little bit longer to try to deal with those.

I'll introduce the people I have with me. I'm sure you're all familiar with Deputy Minister Jean McCloskey. Assistant Deputy Minister Yvan Hardy is in charge of the Canadian Forest Service. Joanne Toews is assistant deputy minister for corporate services. And there is a variety of other senior departmental personnel in the room, depending on the subject matter committee members would like to deal with.

In the interest of time, I will very much abbreviate the remarks that I might otherwise have made this morning.

• 0835

I'm sure you are all very interested in the health and the condition of the natural resources sector in Canada. One of the things that I think we have to keep reminding ourselves and other Canadians about is the huge value of the resources sector in Canada. In 1997, for example, close to $90 billion, or 12% of Canada's GDP, came from the forestry, energy, and mining sectors in this country. The share of our balance of trade is enormous; the share of new capital investment every year is enormous; and the number of jobs directly or indirectly in the natural resources sectors is very significant.

The forestry sector alone contributed $31.6 billion to our balance of trade last year and employed more than 365,000 Canadians. Some 337 communities across this country rely on forestry for their livelihood. So obviously this committee's particular interest in forestry issues, as you mentioned in your opening comments, Mr. Chairman, is very important.

The overall strategy for my department as we head into the new millennium is something that we call the “win strategy,” winning in the knowledge-based economy of the new millennium. Quite simply, that means that Canada must become and must remain the world's smartest resources steward, developer, user, and exporter. And by “smartest,” I mean the most high-tech and value-added, the most environmentally friendly and socially responsible, and the most competitive and productive.

The key to achieving all of that, in broad terms, for the forestry sector and for all others is innovation, science and technology, being the best in the world in terms of our intellectual capital and our brain power. I'm very pleased in that connection that the last federal budget, as reflected in the estimates you have before you, shows a significant increase in the government's ongoing commitment to all forms of science and technology. In fact, if you add them all together, the science and technology initiatives in the budget of 1999 add up to $1.8 billion over a period of five years.

Specifically with respect to natural resources, I would draw to your attention the $60 million that has been committed to geo-connections; that is, building the Canadian geospatial data infrastructure, which is the geography lane on the information highway of the future. That will be extremely important to Canada. It's in a field of geoscience where we are already one of the world leaders, and this additional investment will make sure that we remain there.

The budget also included $55 million for ongoing biotechnology research. That is a pan-government figure. With respect to Natural Resources Canada, it involves $5 million over three years that will be put to work by the Canadian Forest Service with respect to the very valuable biotechnology work they are engaged in and in which they are, quite frankly, a pioneer and a world leader.

We've also provided an additional $1 million to the polar continental shelf project in the north. I know a number of members of Parliament were very interested in that program, anxious to see it not only continue, but expand. I'm pleased that my department has been able to find that additional allocation to provide further support to the polar continental shelf project for the year to come.

With respect to climate change, the major new funding commitment, as you know, was made in the budget of 1998 when we created the climate change action fund. But looking forward, I suspect that in many budgets to come there will be new initiatives that relate to climate change.

I would note two items that were in budget 1999 in relation to climate change. One was funding to the Federation of Canadian Municipalities to help them identify ways to reduce greenhouse gases. There is also the extension of a tax credit to oil producers who find new and innovative ways to use waste gas, gas that would otherwise be flared into the atmosphere. I would also note the specific reference to the wind power development project in Prince Edward Island.

• 0840

As one more word about climate change, having to do with the commitments we are now moving forward with in relation to the funding that was provided in Budget 1998, and in reference to the climate change action fund, the biggest single component of that fund is aimed at technology. We call it the “technology early action measures”, or TEAM. It very much involves teamwork among all levels of government, the private sector, and others.

Three projects that have now moved forward under that initiative are very encouraging. One is a project with Iogen Corporation of Ottawa in partnership with Petro-Canada to use biotech enzymes to produce fuel ethanol from farm and other wood waste, including potentially forestry waste. That project is moving from the laboratory to the commercialization stage of its development. If it's successful, and we believe it will be, it has the potential to develop a fuel mix that will be from 70% to 90% less CO₂-intensive than ordinary gasoline. So obviously that's a major initiative.

We're also supporting a project in Montreal in cooperation with Hydro-Québec to test 40 different electric vehicles under Canadian driving conditions.

We've entered into a venture with Stuart Energy Systems of Toronto to help commercialize a system for refuelling vehicles that are powered by hydrogen fuel cells. This is obviously part of that brand-new field of science that is so exciting.

I really can't leave the topic of the fuel cell without one further sentence with specific reference to my department and the vision in that department 20 years ago. It was NRCan that came to the table in the first place, in 1979, I believe it was, with a little bit of seed money to help get this idea of fuel cell development started. Recently, as we all know, it has sort of become the flavour of the month. It's fashionable and obviously very exciting in terms of our energy future and technology.

Major investments have been made by Technology Partnerships Canada through the Department of Industry, plus the Ford Motor Corporation and the Daimler-Chrysler Corporation and others, literally hundreds of millions of dollars now coming in those more commercial investments. But I think it's important to remember that if NRCan and our partners in DND had not made those initial investments in this venture 20 years ago, there wouldn't be anything commercialized today. That's the kind of forward-looking anticipatory science that we need to continue to have in the resources sector, specifically with respect to forestry. I know your committee has been very active on this topic, and I commend you for that.

I know within a week or so some of you will be travelling through British Columbia to look at the particular difficulties in that province. Shortly thereafter, some other members of this committee will be travelling to Europe to attend a meeting of the Council of Europe, which will be having some discussions about forestry practices, particularly forestry practices in Canada.

I want to congratulate the committee for taking those initiatives. I think it's exceedingly important that all of us, whether we be in cabinet or in Parliament, whether we be on the government side or the opposition side, be well versed about the facts that pertain to Canadian forestry and be very proactive in explaining those facts to other Canadians who perhaps don't know the whole story, and to others around the world who may have a partial or biased or distorted view of what forestry practices are in Canada and the fact that we are moving very progressively toward more and more sustainable forestry management.

• 0845

Of course, the nitty-gritty of sustainable forestry management rests in the hands of the industry and the provinces. The federal role is in relation to science and technology, value-added, dealing on the international front, working on environmental issues, assisting with aboriginal issues, and so forth. The practical day-to-day management rests with the provinces and with industry.

So we have to have a fully coordinated Team Canada effort here. I think the story that we do have to tell on behalf of Canada is a good one and a positive one. I am engaged now in very intensive discussions with a variety of organizations, including the Forest Sector Advisory Council of Canada, about the specific steps we can take that are reasonable and effective to make sure that if there is misinformation abroad about Canadian facts and circumstances, we're in a position to correct those.

I would mention two things in particular that have been recommended to me by the Forest Sector Advisory Council of Canada and that I intend to pursue very vigorously. One of those is an enhancement of the forestry partnership program that we have with the provinces. Under that program, the Government of Canada, with provincial cooperation and industry cooperation, is working through the good offices of the Department of Foreign Affairs and International Trade in 100 different locations around the world. We make a very large effort to communicate effectively with consumer groups, buyer groups, public interest groups, and other governments that may be operating on some incorrect information about what Canadian forestry practices are all about.

For example, we have found under that program that when we invite some of our critics from abroad to come to Canada to tour our forests, to stand there and look at what is actually happening, in the vast majority of cases they go away with a much different impression and a much corrected impression from the one they had when they originally came in.

We also reversed the process and sent Canadian missions abroad in a proactive way to meet with some of those critics in other locations around the world. I think we have to enhance and expand that effort to be more vigorous and more aggressive with it, and we intend to do that.

The corollary, though, is that we need to make sure in our own backyard that we do continue to have a very good story to tell and that it's constantly getting better. That's where we need to work with the provinces and with the industry to make sure that where there are problems, where there are points of valid critique, we're addressing them.

One of those areas is the issue of certification. That is very much in the hands of the private sector. I think it's important from the federal government's point of view that we make sure that issues like certification don't become trade distortions, because they're not intended to be, and we have to be vigilant about that.

On the other hand, it is very important that our forest companies move more rapidly to get more and more certified Canadian product into the marketplace so that buyers at the other end of the chain can see, in fact, that the output of the process comes from very well-managed Canadian sources.

The other activity we're pursuing—and I'll conclude with this—is a constant series of Team Canada-like trade and investment missions specifically focused on the natural resources sector. We had one of those in the fall of 1998, to Latin America, involving certain segments of the forestry sector as well as others in the natural resources sector. There were 35 or 40 Canadian companies involved in that trade mission.

Our next one is scheduled for January 2000. It will specifically focus on Asia, and we anticipate a very significant forestry component in that because that is a market area in which our forest industry is very much interested. That will be more on the side of market access and market promotion, but in all of those missions we will certainly be carrying the message about sustainable forestry practices in Canada.

I have one final sentence. That is, that 1999 is the 100th anniversary of the founding of the Canadian Forest Service. It has served this country with distinction over a century, and I think that's something well worth celebrating in our country.

Thank you.

• 0850

The Chairman: Thank you, Minister, for that.

With the cooperation of all members and the minister, we'll try to get our questions and answers moving along so that everybody can get on.

We'll start with you, John, please.

Mr. John Duncan (Vancouver Island North, Ref.): Thank you, Mr. Minister, for appearing before us this morning. I know it's a busy time for all of us.

I have about five questions, just to give you warning here. The first one is on rougher-headed lumber. I know it's not, strictly speaking, your file, but can you confirm that the U.S. has announced or given us a 30-day extension on their decision-making on that reclassification?

Mr. Ralph Goodale: Mr. Duncan, to be honest with you, I would have to double-check that with Mr. Marchi. That is obviously within his portfolio responsibilities. As you know, Canada takes strong exception to this tendency on the part of our American trading partners to rejig definitions after the fact that have a detrimental impact upon what was originally intended in the agreement. But in terms of timing and the exact procedure, I would have to check that with the Minister of International Trade.

Mr. John Duncan: I understand that it has occurred.

My second question relates to a follow-up to your last visit. I understand there's been some progress in terms of levelling the playing field for woodlot owners in terms of the federal taxation scheme so that they have a more level playing field with the agricultural sector and so on. Can you give us a very quick sketch of what progress has been made on that front?

Mr. Ralph Goodale: Very briefly, Mr. Duncan, the Canadian Council of Forest Ministers' private woodlot taxation task force has examined this issue and it has obviously been raised by members of Parliament as well. The task force concluded, based on information that the task force received from Revenue Canada and from the Department of Finance, that an anticipated revised interpretation bulletin on woodlots will in fact meet the demands of the private sector woodlot owners for revisions to the taxation system.

It would not appear at this stage that the legislative change is actually necessary. It appears that the matter can be dealt with through the interpretation bulletins issued by Revenue Canada. We'll obviously have to look very closely when it's officially published to determine the precise effect, but from the analysis done by the task force and by officials in my department, based on what we anticipate will be in that reinterpretation bulletin, it does appear to address the concern.

Mr. John Duncan: Thank you for that, because some of the Revenue Canada decisions were becoming increasingly bizarre in terms of the landowner.

Thirdly, the Minister of Environment has indicated that the transportation group of the climate change group has recommended a fuel tax at the pump, and I would like to ask you if that falls within the government's definition of a carbon tax or not. In other words, is the government saying that it's not a carbon tax unless it's at the wellhead?

Mr. Ralph Goodale: There are various academics who debate the precise nature of various forms of taxation, Mr. Duncan. I think in conventional layman's language, a carbon tax is one that is directly related to the carbon content of a particular product, which is probably more measured at the wellhead than anywhere else, whereas a fuel tax tends to be one that's more consumer-oriented. I think what's important to note here is that taxation measures of that kind are not part of the government's planning or thinking.

• 0855

How this discussion with respect to taxes came up really flows from the mandate that was given by first ministers when they originally considered the Kyoto protocol back in December 1997. At that time, the prime minister and all of the premiers agreed we needed a very open, transparent, inclusive process involving all levels of government and many others from the private sector to examine everything that had anything to do with climate change. Therefore, we established this series of issue tables—16 of them now altogether, including one on transportation. The issue tables have been plowing through every conceivable issue that might relate to the topic matter. In due course they will report.

I think it's interesting to note, though, that this is not a federal issue table on transportation. It is a joint federal, provincial, and private sector initiative. When it reports, it does not report to the Government of Canada; it reports to the Government of Canada, to all of the provinces, and to the private sector stakeholders. It is thereafter that all of us collectively, particularly within the federal government and the provinces, will assemble the national implementation strategy.

So in considering tax matters, the issue table is simply doing its job in examining anything that could in any way relate to the climate change issue and the matter of transportation. But with respect to taxation, as a matter of broad principle for the government, our focus, I'm sure with your enthusiastic urging, is toward tax reductions, not tax increases.

Mr. John Duncan: Thank you for that.

There are $20 million in the budgets allocated for out-of-court settlement. Is that the MMT settlement?

Mr. Ralph Goodale: Could I ask Deputy Minister McCloskey to respond to that?

Ms. Jean C. McCloskey (Deputy Minister of Natural Resources): MMT is the responsibility of the Department of the Environment.

Mr. John Duncan: I'm pleased to hear that.

Ms. Jean McCloskey: It could be related to Nordion or other issues that we have ahead of us. But we can confirm that for you.

Mr. John Duncan: Okay.

Mr. Ralph Goodale: Mr. Duncan, could you just pinpoint what you're referring to in the estimates so we can respond to the exact point you're raising?

Mr. John Duncan: It's on Treasury Board contingency vote items included in the supplementary estimates—National Energy Board out-of-court settlements, $20 million.

Ms. Jean McCloskey: With respect to the National Energy Board, there are always pipeline issues. Landowners and others put forward grievances and there are appeals and so on. So we have to provide some funds in advance of the judgments that are rendered.

Mr. John Duncan: Okay.

The Chairman: You have one last short one, Mr. Duncan.

Mr. John Duncan: Well, the last short one is a long one. I'll just give you notice that I wanted to talk about the international interests, the forest market-access issues. It's obvious from the estimates that there are some more resources going into that area. My prime interest is in knowing what actions or initiatives are being done in terms of trying to get aboriginal and rural community workers involved in that whole initiative. I'll just leave it there.

The Chairman: Thank you, John.

Tony.

• 0900

Mr. Tony Ianno (Trinity—Spadina, Lib.): I'm curious about some of the new technologies and alternative fuels you mentioned, a couple of them being the fuel cell and the other one you alluded to. I wonder if you could expand on that and tell us where you see the industry going and how the government can be proactive in ensuring their success.

Mr. Ralph Goodale: Mr. Ianno, this is a field where Canada has a leg up on the rest of the world in terms of dealing with climate change. In many ways we see our climate change position as being a problem or a challenge, in relation to the rest of the world, and in some ways it is. But on the issue you refer to, I think we have a clear advantage.

Unlike a lot of other countries, we have a diversified mix of existing and potential energy sources. We are not constrained to what is just conventional. We have a broad range of options to develop and choose from. Other countries, like Japan, for example, simply don't have that flexibility. We do.

So in addressing climate change, we have to take maximum advantage of this Canadian advantage. That means pursuing a more diversified mix of sources, beyond conventional sources of energy. With respect to alternative and renewable fuels, for example, we have long had within the department specific developmental programs to support research and technology diffusion, and commercialization of those new types of fuels and fuel products.

In dealing with fuels like the new blends of ethanol, the potential for wind sources of power, solar sources of power, the fuel cell and so forth, it's not sufficient to just help do the basic science and the basic research. We have to go beyond that and work in partnership with the private sector to help these newer sources of fuel get a practical foothold in the marketplace, to overcome marketing impediments that may exist.

I referred in my opening remarks to an investment we're making through the climate change action fund with a company called Stuart Energy Systems, dealing with a hydrogen refueler. One of the things that constrains the use of fuel cells is the delivery mechanism and the delivery infrastructure for the fuel itself. So you not only have to overcome the technological problems or challenges of developing the fuel cell, getting it to the right size and the right cost, making sure it works, and having it installed in appropriate vehicles, but you need the infrastructure to deliver the fuel in the first place—the hydrogen source and so forth.

This investment we're making with the Stuart company will help develop that refuelling infrastructure, in this case in the Greater Vancouver area, specifically related to the Ballard buses that are beginning to be test-run there. That is one practical example.

What we're doing in partnership with Iogen is another practical example. An industrial enzyme has been developed by Iogen that can convert agricultural and forestry waste into a form of ethanol that is substantially less intensive in CO₂ than conventional gasoline. It has been developed and tested in the lab. The issue now is whether you can do it commercially.

• 0905

We've come to the table in partnership with Technology Partnerships Canada and Petro-Canada in a $20 million project that will take Iogen's ethanol production out of the lab and into a pilot plant. If that works—and they have every confidence it will—then Iogen and Petro-Canada will be looking for between 12 and 17 different locations across this country where they might consider making investments in the construction of these brand-new ethanol production facilities. So it has very exciting economic potential as well as climate change and CO₂ potential.

We also have programs that deal with the promotion of solar power, wind power, small hydro projects, and power alternatives in rural and remote communities that are a long way from being connected to any main power grid and need those alternative sources.

My department has been very forward-thinking on this front for a long time. Before people were really turning their minds to this issue, in the context of climate change, we had alternative and renewable fuel scientific activities under way. The climate change challenge tells us we have to redouble that effort—accelerate it. We're basically doing the job correctly, but we have to do a lot more of it in the future.

Mr. Tony Ianno: As an advocate of alternative fuels, I've been pursuing them for 20 years. Ethanol was one of the items the Liberal caucus pushed hard with the government on, especially with several of the plants that have been opened and are successful.

I'm curious about solar energy, especially for the urban centres. I wonder if you can expand on how it can become commercialized and if the government is in any way participating, so eventually urban centres will be able to utilize that technology in a cost-effective manner that will reduce some of the need for CO₂ in other sources that exist today.

Mr. Ralph Goodale: It can have an important impact, and in fact my department has been working on issues related to solar power in a variety of ways. In the spring of last year, I had the opportunity to attend a major conference of the renewable energy companies in this country in Montreal and to announce an expansion of our support systems and investments, in relation to renewable fuels, including particularly some aspects of solar power.

What I would offer to do for the committee is file a detailed description of that program, which was made public about a year ago, and indicate within that report the kind of uptake we've had over the course of the last year.

It is a very exciting field and one in which some of the major companies internationally are taking an increasingly favourable interest. I believe, for example, British Petroleum has made the development of solar power in rural and remote communities internationally one of its major diversification initiatives. That may sound a bit odd, pertaining to a company that's basically in the oil and gas business, but BP has taken a very progressive view of this.

I agree with you, it's not just related to rural and remote communities; it can have a very important impact on urban communities. In Toronto we have a great Canadian success story in relation to solar technology. A company called Conserval Engineering Inc. has perfected something it calls the solar wall. This is a new technology and a new technique for building design and construction that uses west-facing and south-facing walls—at least in North America—specially designed to trap and heat fresh air and use it for the entire internal air cycling system for the whole building. It provides a ventilation system for very large buildings at very low cost, and in the process saves significantly on CO₂.

• 0910

Conserval Engineering has made major investments in the technology in Canada. I can think of a case a few months ago, for example, Tapis Coronet, a major carpet manufacturer in Quebec, which constructed a big, brand-new building. They constructed the south-facing wall as a solar wall, and they're now saving significantly on their energy costs for running that humongous building because they have that technology.

But Conserval is not only selling the technology in Canada; they're selling it across the United States and in Latin America and Asia. In some parts of Asia they're using that technology to generate an air flow system for drying tea and herbs in the agrifood sector.

It's a great success story. It's based on solar technology. It's Canadian. It will be demonstrated in Paris at the next meeting of the International Energy Agency.

The Chairman: Thank you.

Mr. Tony Ianno: Mr. Chair, I wonder if it would be possible to get some further information, if the minister will allow it, at some other hearings.

The Chairman: Absolutely. Will you allow that, sir?

Mr. Ralph Goodale: We'd be delighted, Mr. Chair.

The Chairman: We'll note that for discussion at a future business meeting.

René, please.

[Translation]

Mr. René Canuel (Matapédia—Matane, BQ): Richard Desjardins has made his film, L'erreur boréale, and you are telling us that our forests are in good shape, and that we can invite foreigners to come and see them, and so on. A few years ago, a group of Europeans came to Western Canada... according to some forest engineers, some industrialists in the eastern part of the country as well are logging our forests in a rather grotesque manner. They cut down much more than the forests can produce. So we have to ask ourselves some questions.

Could the government not ask industrialists to use different forestry techniques, and also require them to invest 2% of their net profits in a third conversion? While some may say that Desjardins is a poet, he nevertheless knows part of the truth. Can you assure me that our forests are not being logged unduly and that in 50 and 100 years our grandchildren will not have to suffer the consequences of that?

[English]

Mr. Ralph Goodale: Mr. Canuel, that's a very important question.

I think all forestry ministers in Canada, whether at the federal level or the provincial level, take this issue of stewardship and proper sustainable forest management very seriously. We treat it seriously, not only because of the important public pressures that are mounting in that direction, particularly in the last number of years, but also because sustainable forest management is the right thing to do.

Many of the things you've referred to in your question are actions or initiatives that fall outside of federal jurisdiction. They are within the purview and control of either the private sector or provincial governments who regulate the private sector in relation to forest management practices.

Our role federally is to work with all the provinces and with the private sector to try to improve understanding, to try to improve our science and technology, to try to reach national consensus on things like criteria and indicators that can be used, both domestically and nationally, to demonstrate that we are in fact managing our forests in a sustainable manner.

• 0915

The film you referred to has obviously had a powerful impact in Quebec. I suspect as that film gets broader and broader distribution, the impact will spread beyond Quebec. It's a very emotive documentary. In fairness, some of the approaches and commentaries that are contained in the film can be validly and intellectually critiqued, because there are other arguments, points of view, and lines of reasoning that were not adequately reflected in the film, in terms of having a fully balanced presentation.

Nonetheless, it is important to learn the lessons of that film and be able to demonstrate in the future that if there have been deficiencies in forestry management practices in the past, we are addressing those and moving forward, so future generations can indeed enjoy the economic, cultural, social, and aesthetic values that are historically characteristic of Canadian forests.

[Translation]

Mr. René Canuel: I would like to come back to the Canada-U.S. agreement. Some people in the industry, in Quebec in particular, have told me that they were penalized, and are wondering what Canada can do to achieve a better agreement, or even to have none at all, in light of free trade. Is there any way of getting rid of this agreement when it expires or to come forth with something different? What do you think about the agreement and what can people in the industry expect in the future?

[English]

Mr. Ralph Goodale: Monsieur Canvel, quite frankly, I would prefer to see our Canadian commodities and products, including forest products, moving back and forth across the Canada-U.S. border in a free and dynamic way, according to the principles of the NAFTA and the other trading agreements we have between our two countries.

The softwood lumber agreement came into place a number of years ago, as you know, to respond to a particular set of border concerns. The technique that was embodied in that agreement was largely driven on the basis of a consensus arrived at within the forest industry itself. Obviously that agreement has a couple of years yet to run.

The issue we need to turn our minds to now is what outcome will we want to pursue when that agreement expires. To that end, Minister Marchi and I are working on a consultative process right now across the country to engage the forest industry in an examination of the present facts and how they are the same or how they may be different from what we were facing four and five years ago. What has been our experience under the current agreement? Has it been a good experience or a bad experience? What will the circumstances be two years from now, when this current agreement expires? And what is the best technique, with all of us working constructively together, to go forward from there?

• 0920

I think, as you know, opinion is a bit divided within the forest industry at the moment about the right technique for the future. There are some who would argue to keep what we've got right now. There are others who would say the basic principle there is probably okay, but we have to modify it a little bit. There are some who would say, throw it out altogether. It's better to have nothing than to have that. And there are others who would say there are other ways to accomplish the objective more creatively.

Mr. Marchi and I are going to be using this next 18 months or so to work with the forest industry and the provinces to try to develop the broadest possible consensus we can on the Canadian strategy for going forward. That consultative process will be very inclusive of all elements of the forest sector to make sure that at the end of the day, we get the strongest Team Canada approach to this that we can.

The Chairman: Gerry Byrne.

Mr. Gerry Byrne (Humber—St. Barbe—Baie Verte, Lib.): First off, I want to thank you very much, Mr. Minister, for taking the time to appear before our committee. I'm sure we have a number of questions still, so I'll try to be brief.

I just want to turn the conversation to climate change and Canada's actions. Of course, we've agreed in principle to the Kyoto process. We've agreed that a domestic implementation plan is needed. We've established the Climate Change Secretariat, and we've established an action plan. Why is it that the Government of Canada and NRCan, in terms of domestic implementation of the requirements of meeting our Kyoto commitments, aren't articulating a policy themselves as to how the Government of Canada and how the nation of Canada can accomplish those objectives? Why don't we just put out a blanket...this is what we will do, and this is the way the problem will be solved? Could you explain to the committee exactly how Canada is approaching the problem, and in large respect, how Canada is approaching the opportunity?

Mr. Ralph Goodale: Mr. Byrne, this is not a field in which any single actor or player, either domestically or internationally, can solve the problem all by themselves. When greenhouse gases get into the atmosphere, they obviously don't respect anybody's national or provincial boundaries. Once they're in the atmosphere, they're in the atmosphere. And that's a problem not just for us, but for the whole world. So we need a lot of partnerships and a lot of team work globally and domestically.

If we were to take a purely unilateral approach, you know, working toward a solution that was made in Ottawa or working toward a solution that was made in government, we would have a result that would be very expensive and not very effective. So in order to be effective and to make sure we get to where we need to be in the least-cost fashion, we have taken very much a partnership approach. The provinces, the municipalities, and the private sector are fully engaged, as are environmental organizations, the scientific community, and a whole manner of non-governmental organizations. As I said earlier, we have, in fact, in analysing all the dimensions of climate change, 16 issue tables that are looking at every aspect of this challenge. I think I've said to the committee before that in dealing with climate change, it's like looking at a watermelon and deciding where you're going to take the first bite. It's kind of tough to get started.

The approach we've taken with the issues tables is to have a process that is very open, very inclusive, and very transparent. There are 450 different individual Canadians representing every aspect of Canadian life involved in this. They are slicing that climate change watermelon vertically by economic sector, and horizontally by cross-cutting themes. We expect to get all of their reports during the course of this summer.

• 0925

Then the challenge for federal and provincial energy and environment ministers will be to synthesize all of that into a plan that makes sense and works. My instructions for the prime minister in my role as the federal minister with lead responsibility for domestic implementation of our climate change commitments are many, but particularly on this one, the first is to work in partnership, in collaboration, and as a team with other levels of government and with the private sector to make sure we are fully collaborating. And secondly, to work toward those solutions that are the most compatible with sustained Canadian economic growth and increased Canadian competitiveness. That obviously implies a major emphasis on science and technology, and I described earlier some of the dimensions of what we're doing. It's an approach that is incremental—step by step by step—trying to get to where we need to be. And I think we're going to get there.

Mr. Gerry Byrne: So, Mr. Minister, what does this say about timing of the issue, in terms of exactly...? There's been a lot of criticism that we haven't been moving fast enough or thoughtfully enough in some sectors, that we haven't had an action plan. What exactly does this do in terms of the timing of the issue, given the fact that there are so many tables and so many groups to be consulted? We obviously agree this cannot be a unilateral, top-down decision from Ottawa, but I think the process is good and it will lead to a solution. What do you see as the timing?

Mr. Ralph Goodale: We're pretty well on track in terms of timing with what we anticipated. And when I say “we”, I mean not just the federal government, but also the provinces, who are very much a part of this process. The issue tables will be reporting to all of us, federally and provincially, during the course of the summer. In the last half of this year, the challenge for federal and provincial governments will be one of synthesizing all of that advice into a coordinated approach that makes sense. And then we'll get on with the specifics of implementation as we move through the year 2000 and beyond.

In Kyoto, the obligation that we undertook was to reach the level of 6% below 1990 levels of CO₂ and equivalent emissions by the period between 2008 and 2012. So essentially we have the coming decade to work at this issue. It's important, I think, that we work at it in a meticulous and determined way, but also in a collaborative and step-by-step way. Because as the old proverb goes, the journey of a thousand miles begins with those singles steps. And it's important those single steps be taken properly. That's why time and effort need to be invested at the front end, to make sure we've got the analysis right, we've got the partnerships right, we're building the team, and we're building the collaboration. I think all of that is effort very well invested.

In the meantime, we have the climate change action fund that has started the technology measures, for example. We have the programs on renewable energy and alternative energy sources, energy diversification, which I mentioned earlier, that are moving us forward on that front. We're making all the quick starts wherever it's possible, while laying a foundation for the long term that will be a solid foundation and will stand the test of time. I think we will get to where we need to be on time.

The Chairman: Thank you, Gerry.

Well, clearly we could have used more time, but we certainly appreciate the dilemma you have, Mr. Minister. You've been very cooperative in coming to our committee, and no doubt we will have opportunity to have you back again. I understand your officials are able to stay. We have a few more questions, and I'm sure they can capably take your place while we allow you to excuse yourself.

Mr. Ralph Goodale: Thank you very much, Mr. Chairman.

I have two small bits of information for the committee. At my last appearance in February, I had promised to provide the committee with further specifics with respect particularly to our R and D spending in the mining sector. I'm pleased to tell you that a letter will be coming to you very shortly, Mr. Chairman, within the next day or so, with the details the committee requested.

• 0930

Further, Mr. Duncan has a question on the order paper pertaining to the breakdown of expenditures for the promotion of Canada's international interests. I'm pleased to confirm for Mr. Duncan that the answer will be filed in the House, if not today, then tomorrow.

Mr. John Duncan: Thank you.

The Chairman: Thank you, Mr. Minister.

Gerald, we're going to go to you, and I presume you could address your questions to the officials.

Mr. Gerald Keddy (South Shore, PC): I'd be happy to do that.

The Chairman: Okay, Gerald, the floor is yours.

Mr. Gerald Keddy: Just as a point, Mr. Chairman, with all due respect I would hope that the next time the minister appears, all opposition parties present would have an opportunity to question the minister before he leaves.

The Chairman: So noted.

Mr. Gerald Keddy: There are several questions for the deputy minister and others who are here. I think I'll just list them all off and you can answer them as you wish.

Certainly there's a lot of discussion this morning about sustainability. My first question on sustainability is the difficulty of convincing our trading partners that we're committed to sustainability without a federal silviculture program in Canada. We've cancelled and no longer are involved in the old silviculture program.

I'm disappointed the minister is leaving. I understand he has to leave.

There's a lot of discussion about cross-border trade, especially with the U.S., which is a major issue with all Canadian forestry producers, and certainly our major trading partner. In western Canada there's been a movement from a lot of the companies I've talked to to look again at the exportation of round logs into the U.S. Certainly they can do that and avoid some countervail. So there's a real economic gain for them, although there's an economic loss for Canadians. I'd like to know the department's position on that.

Mr. Duncan has mentioned forestry taxation. I'd like to be a little more specific on forestry taxation. Is it the intent to move to a $500,000 capital gains exemption for private woodlot managers, the same as in agriculture? There's been a lot of discussion about it. It was supposed to be in the 1998 budget, and it didn't appear there. There was a kiss and a promise for 1999. I'd like something a little more specific than that.

Are we going to look at the amortization of forestry maintenance practices within that whole issue? What happens, as you're well aware, is that forestry managers managing the woodlots properly are constantly doing forestry maintenance practices on their land. There's no avenue available for them now to amortize that over time against future harvest. I think that's as important an issue as the capital gains exemption.

The other issue I think we need to look at, and look at specifically—and I realize it gets into Mr. Marchi's domain, as the Minister of International Trade—is compliance checks at the border. We don't have a lot of compliance checks on round logs or on lumber. However, we do have compliance checks on Christmas trees. Christmas trees are a forestry product in eastern Canada. It's a fairly valuable industry, worth $50 million.

Have we—and I'm talking through the Minister of Natural Resources to the Minister of International Trade—really evolved and pursued this issue? Because it's a major issue, with narrow windows and narrow deadlines for delivery. In the U.S., lots of times you may only have two hours; you know they want them noon on Saturday. It's a serious hindrance to a very lucrative trade.

I have other questions, but I'll wait for another round.

The Chairman: Thank you, Gerald.

Ms. Jean McCloskey: Thank you, Mr. Keddy. That's quite an array of questions. I'm going to ask Dr. Hardy to deal with the taxation issues. I'll just make a couple of general comments on taxation.

• 0935

Starting from the top, with respect to a federal silviculture program, the federal government is not in the business of forest resource management, as you know. That is the jurisdiction of the provinces. In the past, through cost-sharing arrangements, the FERDAs, we worked with the provinces, who then in some instances selected silviculture as the area where they wished to do some intensive work.

I would say, though, given our science and technology vocation, we do look at silviculture from the innovative perspective. As the minister mentioned earlier, there are funds now being put aside for biotech across government, and $5 million over three years for the Canadian Forest Service, and we're looking at genetically enhanced trees. Their properties would be better for timber values. They would be more pest-resistant, more disease-resistant. So this is an area where we would see ourselves continuing to work.

We've looked at various methods, from a technology point of view, of harvesting. We've looked at variable retention harvesting, for instance, which is what MacMillan Bloedel seems to be going into now in the west. So from our perspective it's the technology end, and we're always ready, through our five regional laboratories and our ten research networks, to assist provinces and companies with respect to silviculture.

With respect to Canada-U.S. cross-border trade, as you know, the United States is our very best market for forest products across the board. It has been extremely lucrative and it has been more reliable, if I might say, than other markets. I have in mind particularly the downturn in the Asian market over this last little while.

That said, the Americans are fairly aggressive about what they view to be their self-interest, and I think in the forestry sector we've probably seen the most systematic approach on the part of the Americans in this regard. So you'll recollect that notwithstanding several successful defences on the Canadian part of U.S. challenges under the NAFTA, we did end up with this softwood lumber agreement. As the minister says, it was entered into with the full agreement and through consultation with the industry and the provinces across Canada.

What we've observed of late, of course, is that using the U.S. Customs Act in administration, the Americans are trying to find ways to broaden the scope of items covered under the agreement, because there are caps with respect to volumes. So there are three items now that are in contention—drilled studs, rougher-headed lumber, and notches. There is an additional list of some 20 items that might come up for scrutiny and review. It's not easy; in fact it's a very tough relationship in the lumber business, and we will be in an intensive period of negotiation with Canadian industry over the months ahead.

On the subject of round logs, I think there is a bias in public policy terms, whether at the federal level or the provincial level, to try to add as much value as possible in Canada to products that are exported. So there are usually rules about when you can export round logs. There's always a little tension there, because from the point of view of the company, it's sort of quick cash and it's under the barrier, if you like, of the softwood lumber agreement.

From the point of view, though, of the community and the workers and so on, you really don't wish to make that a significant part of your export picture. So it's something we're concerned about, we work with the provinces on, but essentially it relates to forest management practices.

You then went into the question of taxation. For at least the last three years, we've been talking to the provinces and to the private woodlot owners about taxation issues. That's why we set up the task force. We've had excellent cooperation in terms of the work of the task force, including with the Department of National Revenue. You know, it takes a while to get on their agenda, if I can put it that way, but we're on their agenda. We're having sensible—

Mr. Gerald Keddy: We've been ten years at it.

• 0940

Ms. Jean McCloskey: However, we're there now. We think we're making progress. One of the things we did find out is that many of the private woodlot owners are available for programs that are originally intended for farmers. So it's not a black and white picture.

Having said that, with your agreement, Mr. Chairman, I'd like to turn the microphone over to Dr. Hardy, who will comment further on taxation.

Mr. Yvan Hardy (Assistant Deputy Minister, Canadian Forest Service, Natural Resources Canada): There's not that much to add between what the minister and the deputy minister have said, except maybe that originally it was the Canadian Council of Forest Ministers who took the lead on the issue, advising of course the federal minister on the issue. A task force was put together, working closely of course with the provinces and the woodlot owners.

The consensus at this point will be in a bulletin that is going to come out very soon that will have the opinion of the provincial officials and government and the woodlot owners. The opinion of the woodlot owners seems to be meeting most of the outstanding issues with taxation on private woodlots, including the one of investment capitalization for further benefits that will come ten or twenty years later, like road-building, bridges, and infrastructure in general.

So the general consensus at this point is to wait for that, evaluate it, use it for a year or two and see from that point if there's a need to go further or if it meets most of the expectations, and have some kind of a level playing field with counterparts in agriculture.

The Chairman: Thank you very much.

Gerald.

Mr. Gerald Keddy: I have one question that didn't get answered. It was about the compliance checks at the border and cooperation with the Minister of International Trade through the Minister of Natural Resources. Are we actively involved in trying to work closer with that department, in particular for forest products crossing the border? You'd mentioned all the rest, but the compliance checks on Christmas trees in particular.

Mr. Yvan Hardy: Within NRCan CFS has a branch that is industry and economics, whose task, among others, is to support the Department of Foreign Affairs and all other federal departments in every matter relating to trade and industry in general, cross-border. So that's the case where we are giving support to DFAIT on the lumber issue with the U.S. It's the same thing with the compliance.

It also involves some technical advice whenever quarantine issues are involved, like the risk of bringing Canadian insects to the U.S., or vice-versa. We're involving our local people in the centres. In that particular case, it could be Fredericton. Also, our science branch is always there to support agriculture and the new quarantine agency.

The Chairman: Thank you.

Roy, please.

[Translation]

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you very much, Mr. Chairman, Ms. McCloskey, Ms. Toews and Mr. Hardy. I apologize for missing your presentation.

[English]

As you know, the committee is doing some work in this area. We're calling it forest management practices and going out to B.C. to look at the rain forest or the old growth forest.

Mr. Hardy, I presume that you're putting together some briefing material for the committee. I'm wondering if you could help me and the committee. When we talk about Canada's forest management practices generally, in terms of silviculture, logging practices, integrative forest management, etc., I think we have a good story to tell. We can always do better and we can always communicate better, of course.

We have companies like MacMillan Bloedel moving to eliminate clear-cutting. I know there are some skeptics out there. But when we look at old growth or ancient rain forests—ancient rain forest now on the coast, old growth in northern Ontario and Quebec later—how do we deal with this? It seems to me the environmentalist movement is now targeting this. From my discussions with them, there seems to be little room for compromise because of the ecoystems, etc., and you just shouldn't log in these old forests.

• 0945

Could you tell us and prepare the committee perhaps for the story we should be telling in Europe when we go there for the Council of Europe environmental committee meetings? For example—and I'll just touch on a couple of things and then turn it over to you—when I was in B.C. in the early 1980s we were told that the old growth forests were being logged to avoid this fall-down effect, and that eventually we could get out of the old growth forests. Can we? That's the question. Can we get out of logging in old growth forests?

Secondly, one of the arguments—maybe you could expand on this for the benefit of the committee—is there are huge, massive areas of land that have been set aside for wilderness areas. Is that good enough? What's the story there?

Thirdly, what are we doing with respect to logging practices in old growth forests or ancient forests? Is there a story to tell there? Maybe you could expand or elaborate on those points. If we look at logging practices in old growth forests, if you accept the notion, which is a major hurdle from the point of view of some groups, that you can log in these forests, what are we doing now? What could we be doing better?

Mr. Yvan Hardy: It's almost a lecture on forestry that you want there.

Mr. Roy Cullen: I didn't mean to do it that way, but....

Mr. Yvan Hardy: Thank you for the question. You're aware, Mr. Cullen, that the officials will be coming back to this committee next week to testify—

Mr. Roy Cullen: Okay.

Mr. Yvan Hardy: —before you go on your trip to B.C. I can go through your questions very quickly, and then maybe take advantage of this coming session for more details.

Old growth and fall-down effect and so on was the theory that was not only in B.C., Mr. Cullen, but was universally accepted in North America in the seventies up to now, actually. It was the brainchild of a very famous forest economist in New York State University, Mr. Duerr, who was saying in effect that if you have that wood out there that is mature or approaching maturity, society has two choices: either you look at it rot away or burn or so on, or you put it to good useful industrial use and it creates economic activity, understanding that there will be a fall-down effect at one point in time when you're finished with that. And if you log, like they do out west, a tree that's 600 years old, I don't believe any society will be patient enough to wait another 600 years to get a tree of a similar size. So that fall-down effect was there.

Dr. Duerr's theory has been taken over, so to speak, by an evolution of society that is saying it's a crime to cut such a nice tree, and if we take it away then I won't have anything to look at, or for all kinds of other values. So that's where the debate is right now, and you know the rest of the story.

On how much land to put aside, again, there's a technical matter there in terms of making sure that a country like Canada, with multiple different kinds of ecosystems, has put aside a sample of each one of these ecosystems so that biodiversity is being preserved and so on. In Canada we're almost there. Then again, you're complying with what society wants. And again I would go back in history. This country's demography has changed dramatically in the past 50 years, where we evolved from a majority rural society to a majority urban society, and the way people are looking at their forests is no longer the same. Urban people tend to look at the forest as a place for recreation, a place to get peace, harmony, and all kinds of other values. The people living in the country have very different ways of looking at that same forest; they see a place to earn a living and so on.

• 0950

On logging old growth, I go back to a question that was addressed by Mr. Canuel, the film by Mr. Desjardins in Quebec, which is a very popular one. The images shown in that film illustrate your question, because from a biological point of view what Mr. Desjardins has shown from 2,000 feet altitude from an airplane—which looked like hell, let's be honest—is a piece of land that had been logged and then scarified to be planted. It had been planted, actually, at that moment, but from 2,000 feet you don't see a seedling that's only that big. You see brown all over the place. Biologically, this thing was correct.

Again, how do we make these decisions? Do we make these decisions from an emotional point of view of what is nice or ugly for a while? Whenever you harvest, whether it's a small patch of forest or a bigger patch of forest, there's nothing nice there. You have slash, you have browning leaves or needles, and so on.

What I can tell you is that most of the time what is being done in the country is sound from the biological point of view. What I can say is that in this country we do have nationally sustainable practices. We do not harvest more wood than is growing. There are some regional problems, very often brought about by the first point I was making about the fall-down effect—once you have an industrial infrastructure somewhere, good-paying jobs and so on, do you put an X on that mill? B.C. is a good controversial place to look at that kind of problem, like the Skeena mill that has been closed about three times, always for the same problem—overcapacity, old mill, and so on.

That's enough for the time being. I'll be at your disposal next week.

Mr. Roy Cullen: That's a good primary, thank you.

The Chairman: Thank you, Dr. Hardy.

We'll have officials on Monday, so we can pursue that, Roy.

Werner, you're next. I think you said you would split your time with John.

Mr. Werner Schmidt (Kelowna, Ref.): Yes, that's right.

The Chairman: Then we'll try to squeeze one question in for Gerald before the officials have to leave. Are you okay for another 10 or 15 minutes?

Ms. Jean McCloskey: Thank you, Mr. Chairman. I'm supposed to join the minister about ten o'clock, so yes.

Mr. Werner Schmidt: I'm sure we can get the answers in that time.

We've done a lot with lumber, and I think we need to broaden this out a little bit. I have further questions on the lumber, but you answered a number of the questions I had.

I'd like to move into the mining sector, and ask you in general terms exactly what is being done. I notice you've changed your accounting and reporting system quite a bit, so it's hard to find out exactly what the proportion is that is being devoted to the mining and metal sector. What is the development that you project taking place in the next while in the mining sector? What is being done to help the development of the mining sector in Canada and to find new deposits and make it a little easier for the mining companies to operate and have a profitable operation in Canada? This is a very real concern, I think, not only in British Columbia, but right across Canada. I wonder if you could address those questions, either one of you.

Ms. Jean McCloskey: Thank you, I'd be happy to do that.

You're right about the numbers. Treasury Board has our department and four others looking at improving the way we report to Parliament, so we're in a kind of transition period now and we're moving from reporting on the basis of business lines, such as minerals and metals, to reporting on the basis of goals. There's a lot of emphasis now on performance measurement and we're in a transition year. The numbers are here, however, and we'd be happy to make them available to you.

With respect to the minerals and metals sector, the budget is just under $40 million and there are over 500 people involved in this particular sector. It is, however, not only that sector that's concerned with the mining industry. The earth sciences sector, which includes the Geological Survey of Canada, does a lot of work in the mining sector. The budget there is about $140 million, with about 1,300 people. When I say it starts with the—

Mr. Werner Schmidt: Could I ask specifically, then, what is the proportion of earth sciences that would be in the mining sector?

• 0955

Ms. Jean McCloskey: I would have to get you that proportion. I don't have it off the top of my head.

Mr. Werner Schmidt: The reason it intrigued me was that the proportion of moneys to the mining and metal sector, you know, is not even a quarter of what's in the earth sciences or even in other natural resources. So I'm just wondering why the difference.

Ms. Jean McCloskey: It's certainly fair to say that in terms of resources it has the smallest allocation, other than the corporate services function. It is, however, misleading, because we have not broken out that portion of earth sciences that's related to the mining sector. We would be happy to do some work and give you a clearer picture of that.

Mr. Werner Schmidt: I think it would be very helpful if you did that, Deputy Minister, and I thank you for volunteering to do that. I think that's good, because it is a major portion of our economy in Canada, as you know. So I would really appreciate that.

As for the rest of the question, I would like to refer to John. He has a very specific question.

The Chairman: I've got to ask John and Gerald, are they forestry-related questions?

Mr. John Duncan: Well, I can ask my forestry-related question.

The Chairman: Okay. I was just thinking that Ms. McCloskey has to go for ten o'clock.

Dr. Hardy, can you stay for a few more minutes?

Mr. Yvan Hardy: Oh yes, I can.

The Chairman: Would that be acceptable?

Mr. John Duncan: Mine's a short snapper. What's the effective date of the woodlot taxation changes? Is it the 1999-2000 taxation year?

Ms. Jean McCloskey: Do you know the effective date of that?

Mr. John Duncan: The upcoming bulletin will obviously not apply to the—

Mr. Yvan Hardy: That's something that will have to be checked, Mr. Duncan. My guess would be that it will be for the 1999 taxation year, but that's only a guess, since the bulletin is supposed to be out within weeks from now. It should be out for the next taxation year, but let me check that and we'll come back with the specific answer.

Mr. John Duncan: Can you give us that answer next week before committee?

Mr. Yvan Hardy: I'll try very hard.

Mr. John Duncan: My other two questions are mining-related.

On the DEVCO miners, we have this unhappy circumstance where we have this bulge of people in the difficult age group. They're not old enough to fully retire but they've been there a long time, and there are quite a few of them who do not qualify. It seems to me that everything the federal government has done on this file hasn't really addressed the bulk of that lump of people, and it seems to me to be a very inappropriate response from the federal government.

We've had other circumstances earlier. I know I had a mine shut down in my riding, a major employer, the BHP mine in Port Hardy, and at that time in the last Parliament there was a program from HRD that looked after those people pretty reasonably. It seems to me the federal government's responsibility on the DEVCO file is more than it was with the copper mine in Port Hardy. Yet I view the federal government's response as being inappropriate to date. There has been some movement, but I still believe, from what I can understand, that the bulk of those people are in that crucial age group where most of them are not being addressed properly. Are there further changes to come that will do that?

The second question is just a short snapper. Is the department putting any pressure on the finance department to get rid of the counterproductive luxury tax on jewellery now that we have real diamond mining processing, etc., in Canada? It's a very counterproductive tax. It's the last luxury tax left.

• 1000

Ms. Jean McCloskey: If I were to take the last one first, we need more women in the Department of Finance to effect the change you've suggested, removing jewellery from the luxury tax item.

We are working with DIAND on the whole subject of the regime with respect to the diamond industry, but I wouldn't say the removal of tax is something that happens very quickly. You really have to build the case. So we are discussing it with them.

Mr. John Duncan: Just to add to that, every other luxury tax has been got rid of very easily.

Ms. Jean McCloskey: Yes. Well, the sin and luxury taxes have been around for a long time. There is, I think, a move to try to make this a more rational process, based on the interests of Canadians: sin and luxury, life and enjoyment. So we will continue to talk to them, but thank you for that comment.

With respect to DEVCO, it has been a very difficult process. It was difficult to arrive at the decision that was announced on January 28. It has been decades that the federal government, working with the people on Cape Breton, has kept the mine going at considerable cost, not only to the federal treasury, but to the community down there.

The agreement we've put in place with respect to the workers respects their collective agreement. That is the approach we take in regard to crown corporations that are undergoing downsizing or commercialization or privatization. So the announcement on April 28 was in line with the collective agreement.

There is a group of about 100 miners who don't meet the age 50 specified in the collective agreement but who have significant years of service. That group has been the subject of a good bit of study and analysis and discussion. There are a variety of ways we could look at making the transition easier for this particular group. We have spoken both to the province and to the company, but at this time I'm not able to say that we've arrived at a solution, if you like.

With regard to HRDC, yes, they will be very active. They're part of a task group that we have looking at Devco. Their programs, when it comes to adjustment, have proven to be effective right across the country, so I'm expecting they will be effective here as well. There is, of course, an HRDC office right on the island, so they have a very detailed knowledge of the situation and the individuals.

Mr. John Duncan: The specific program that HRD utilized for the Port Hardy mine actually ended. I think they were virtually the last recipient of that program.

Ms. Jean McCloskey: Was it POWA, the older workers?

Mr. John Duncan: Something like that.

Ms. Jean McCloskey: Yes, POWA has ended, that's correct.

Mr. John Duncan: Thank you.

The Chairman: I do know that Ms. McCloskey has to go for a meeting. We'll certainly have her back, Gerald.

Mr. Gerald Keddy: In any event, it will be on the record. I can ask it later.

The Chairman: Okay.

Dr. Hardy, do you have a couple of minutes if there are a couple of forestry questions?

Mr. Yvan Hardy: Yes.

The Chairman: Jean, thank you for being here. I know you have to go.

Ms. Jean McCloskey: Thank you very much, Mr. Chairman. And thanks to all the members too. I really enjoyed the questions. I hope you've enjoyed the answers.

The Chairman: We'll just keep Dr. Hardy for a couple more minutes, if that's okay.

Mr. Yvan Hardy: No problem.

The Chairman: John, did you have a forestry question for Dr. Hardy? Are you okay?

Mr. John Duncan: Yes, I'm okay. He'll be back next week anyway.

The Chairman: Yes.

Gerald, did you want to wait till next week?

Mr. Gerald Keddy: I have just a couple of quick questions. I'd like this information for Monday, if we could have it.

We're back to the sustainability issue again, Dr. Hardy, and the whole thought process involved in the European Union and the great selling job they've done, that somehow their forestry practices are superior to ours, when in reality they don't have any forests left; all they have are plantations—for much of Europe.

I'd like to see a comparison of the amount of timber that's blown down, that's destroyed by insect infestations and by fire, by territory and province, versus what we cut out of that province every year. Now, I realize those numbers can be misleading, because people will put that on your sustainable allowable cut and say that should come off of your sustainable allowable cut. But in reality, what we should be doing is specifically....

• 1005

For instance, in the Yukon—I don't have the numbers off the top of my head—there's more timber being burnt and destroyed by the bark beetle than we allow for the sustainable allowable cut in that forest. We certainly could target specific areas with insect infestations and areas that are more susceptible to fire for our logging opportunities in the Yukon. Even though there is a sustainable allowable cut there, it is fairly incrementally small. But if we could see that.... I think there's an argument to be made that timber does not last forever. Trees may live to be 600 years old, but they can burn in an afternoon, and they can be destroyed by insects probably in a 10- or 15-year period, and dramatically destroyed.

I want to put this on the record. I always remember a quote—and I don't know if you're familiar with Fernow, who was hired in Nova Scotia in 1901 to criss-cross the province. He walked throughout Nova Scotia in 1901. At that time he wrote that the timber resources in Nova Scotia were gone. And I would dare say that in 1901 we had some significant timber in the province. However, most of it had been destroyed by fire. Now, since then much of that old Acadia forest in places has grown back.

I don't think we put enough emphasis on those two dynamics in comparison to what should be available to cut. Nova Scotia may not be a great example, because we've exceeded our sustainable allowable cut there for the last three or four years. But I think the information would be interesting.

Mr. Yvan Hardy: I'll get you the information.

The Chairman: Thank you, Gerald.

Mr. Yvan Hardy: But just for the interest of the committee at this point, the rough answer to your question, nationally speaking, is that about the same amount of wood is being cut, harvested, as is being lost to insects, diseases, wind, and fire yearly.

The Chairman: Are you finished, Gerald?

Mr. Gerald Keddy: Yes, sir.

The Chairman: Dr. Hardy, thank you very much, and Ms. Toews. We'll see some of you next Monday afternoon for further briefings on our B.C. trip.

We're adjourned for this morning. Thank you all.