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ENVI Committee Meeting

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[Recorded by Electronic Apparatus]

Thursday, June 8, 2000

• 0906


The Chair (The Hon. Charles Caccia (Davenport, Lib.)): Good morning. We have quorum, so we can begin.


We'll start deliberations very soon in listening to the witnesses from the Department of Natural Resources, but before doing that let me deal for a moment with Bill C-33, and that is the endangered species legislation. As you know, this bill is likely to be before the House on Monday and it may find its way to committee next week. The plan for the treatment of that bill is determined by the fact that there are over 40 witnesses who have indicated an interest to appear. Some of them have indicated that they would prefer to appear in the fall to have time to prepare their briefs. Some are ready to appear, including the minister and his staff.

What I propose to do is that in the week following next week, which is still a parliamentary week in our calendars, at least even if we adjourn a week tomorrow, we hold hearings Tuesday, Wednesday, and Thursday to hear those witnesses who are ready to come forward so as to reduce the load in the fall.

For those who are interested in having a good and stronger piece of legislation, I have this observation to offer: the sooner we can get the bill in committee, the better, because it will take time to strengthen that bill, and of course it will take time to gather the necessary information to draft desirable amendments.

So by holding hearings before the summer, we would be reducing the load in the fall. We have to hear from those who are ready to come forward, as I mentioned, which could absorb at best one-half, or at worst one-third, of the witnesses who wish to appear before the committee. The balance would have to be heard in the fall, beginning in the last week of September. That means that at the very best the committee would be able to start going over the 120 clauses of the bill—as you know, it is a fairly extensive one—beginning in mid-October and finish its work maybe in four weeks, by mid-November, which would maybe offer a chance to have this bill passed in the new year. If it is done at a slower pace than that, we would not likely have a bill of any kind, neither a weak nor a strong bill.

So I'm raising this item because members of the committee have expressed an interest in knowing what the plans might be. They all hinge of course on whether or not the bill will be given second reading that week, and I'm seeking the cooperation of members to arrange their schedules so as to be here in the week following next week.

• 0910

The quorum required is very low; therefore there can be rotation amongst members to be in Ottawa, perhaps not necessarily at all meetings. But to reduce the load, it can be shared among interested members. I thought I would raise this at the beginning of the meeting today so as to facilitate communications.

Madame Kraft Sloan.

Mrs. Karen Kraft Sloan (York North, Lib.): Thank you, Mr. Chair.

Given the fact that there are only two members, other than yourself, who are members of this committee present this morning, I believe this issue should be raised when more of the permanent members of this committee are present. My schedule would not allow any meeting that week because I'm already booked into a conference out east for most of those days.

I think, as I have suggested many times over and over again, it's really important that the members of the committee are involved in planning and developing the work plan for this committee, particularly when it comes to this bill, because it's a very important bill. We have had absolutely no input into this decision, and I think it's important that we do have input into this decision.

The Chair: Thank you.

Are there any other comments? The input on this decision was made by the committee members two weeks ago.

Mrs. Karen Kraft Sloan: Mr. Chair—

The Chair: Excuse me, I have the floor now.

There was a good discussion. The input was incorporated in a plan, which the clerk circulated to members of the committee, who were invited to provide additional input. That preliminary work can always be improved and expanded, of course. The opportunity is always available. In that respect, I think as much as could be done has been done, in the knowledge we have of interested parties wishing to appear before the committee.

A brief intervention, Madame Kraft Sloan.

Mrs. Karen Kraft Sloan: Mr. Chair, in the meeting we had, which was a future business meeting of the committee, we discussed a number of items. We did not get onto endangered species until the last bit of the meeting. During that discussion I asked you several times when the committee would meet to make final decisions with regard to the work plan, which was not just putting names of witnesses forward; it was also talking about the scheduling of the meeting. I didn't get any kind of an answer from you. So I do not believe the committee has received fair input on this particular question, and I think it's important....

Madame Girard-Bujold, I know you've just joined us. The chair thought we should have meetings on endangered species a week after Parliament has finished sitting. I think a lot of members have made plans, so they're not necessarily available during that time period. I think the members of the committee, the members who come to this committee on a more permanent basis, should be involved in these particular decisions.

Perhaps through you, Mr. Chair, to Madame Girard-Bujold, she may like to comment on this.

Ms. Jocelyne Girard-Bujold (Jonquière, BQ): Oui.

The Chair: Excuse me, Madame Girard-Bujold. The memory of Madame Kraft Sloan is very selective. We have gone into this discussion quite at length.

The plan, as I said, is as comprehensive as it can be, and the hearings will take place in the week following next week, provided of course that the bill is given second reading. The members will have to decide whether they can rearrange their schedule for the week following, the week of the 19th—sorry, the week following, the next week—and it could very well be that we may even have to sit in July and August, because it is the wish of interested parties to make as much progress as possible.

I think I'm trying to alleviate the schedule of members in July and August by trying to hold meetings in June, so as to reduce the load in the fall, so as to provide as much time as possible in committee for interested members who are really concerned and wish to improve the quality of the bill, because if we do not realize that we need the time in committee, then we will not have much time in committee to make the improvements that are required.

• 0915

I hope members will understand the link between having hearings of witnesses so as to increase the time available in committee. This is what I'm trying to get across to interested members who, like me, would like to see the bill improved.

Evidently I'm having some difficulty in penetrating the minds of some members of the committee, but I will continue in this valiant effort because it seems to me essential that members of the committee understand that with 120 clauses and the desire, quite understandable, of committee members to improve the quality of the bill, we have a load of hearings that have to be digested first in order to enter the phase of the committee hearings vis-à-vis these 120 clauses.

There are some witnesses who are ready to appear before the committee and some who are not. We will arrange the workload so as to hear those who are ready and wait for those who are not ready until the fall, which seems to me quite a reasonable arrangement that allows for some reduction in the workload. I'm therefore putting this matter before the committee this morning in order to make people understand the practicality and the efficiency that is required in order to have a good bill at the end of the process.

Madame Girard-Bujold.


Ms. Jocelyne Girard-Bujold: I'd like to discuss what you're proposing this morning, Mr. Chair. First of all, I don't understand your proposal.

Secondly, the...

The Chair: If you want me to, I'm prepared to explain it a third time.

Ms. Jocelyne Girard-Bujold: Just a moment, Mr. Chair. It's my turn to speak. I think I respected you when you were speaking. I would like you to listen to me now.

Mr. Chair, the bill is currently at second reading in the House of Commons. It has not yet been passed at second reading. If you really want this bill to be very good, Mr. Chair, it is not your way of doing things that will allow parliamentarians who sit on the environment committee to make sure that the bill is acceptable.

Mr. Chair, it's the first time I see this. I've always had great respect for you in the past, but I think that you're overstepping your powers with this way of tabling a motion so that we will examine the bill before it is examined in second reading in the House. I do not agree with what you've suggested. I think that we, the opposition parties, do not agree with your proposal.

I also want to spend my summer holidays in my riding and I don't think it is up to you to decide what I have to put on my agenda for the summer that I will be spending at home. Therefore, Mr. Chair, I totally disagree with your proposal here this morning.

The Chair: Ms. Girard-Bujold, you've admitted you haven't yet heard the proposal; you've spoken to a proposal that you haven't heard already. As I said, there is no motion. I informed members of the committee of the need to have sittings before the summer if we want to avoid having them during the summer. I also explained why it would be better to have two sittings to hear witnesses who are prepared to speak to us, given the fact that there are over 40 witnesses. We can do some work before the summer break; with regard to the witnesses who are not yet ready to be heard, we can hear them in September and October. Thus, we could begin consideration of the 120 clauses in the second half of October and probably—this is not certain—finish around mid-November and thus give Parliament an opportunity to proceed with third reading...

Ms. Jocelyne Girard-Bujold: Are we going to sit during the election campaign, Mr. Chair?


The Chair: All right, bon.

Madame Kraft Sloan.

Mrs. Karen Kraft Sloan: Mr. Chair, if you were to review the committee meeting minutes the morning we discussed future business of the committee, you would see that I do not have selective hearing. Perhaps the chair misunderstood me when I asked him five or six times when the committee was going to be meeting to make a decision about the future work plan of the committee.

• 0920

This happens time and time again. I don't think it's very fair for members to have a schedule that is laid down with absolutely no input from those members. That's why I asked you several times—and you can consult the committee minutes from that particular meeting—when the committee would be meeting to agree on a work plan.

Committee members make plans. They're very busy people. They cannot have a schedule laid down upon them.

Madame Girard-Bujold doesn't accept this, and I'm sure Mr. Herron will not want to meet the last week of June to hear witnesses on—

The Chair: Hold it.

Mr. Herron, you'd better agree; otherwise you will lose your status.

Mrs. Karen Kraft Sloan: Mr. Herron is quite capable of making up his own mind on this particular—

The Chair: Exactly. So there's no need to ask him to take a position in that manner.

Mrs. Karen Kraft Sloan: Mr. Chair, I believe I have the floor. Do I not have the floor?

The Chair: Madame Kraft Sloan, I would now ask you to allow me to answer your objection.

On the future work plan that you requested, I replied to your request very clearly at that meeting and I said it would be circulated, as it has been. I said the clerk would seek input, as he has. So the future work plan has been dealt with as well as it can be at this stage. That's all we can do at the present time.

Mrs. Karen Kraft Sloan: My question was, when will the committee meet—

The Chair: Excuse me. There are members—

Mrs. Karen Kraft Sloan: —to make the decision, and I did not get an answer from you. It's important that all the members of the committee, like any other committee—

The Chair: They have been consulted.

Mrs. Karen Kraft Sloan: —come together in committee meetings and meet together to discuss the work plan to make a decision. This is a whole new set of information.

The Chair: There are different ways of doing it. We have done it on a one-to-one basis, which I think is as good as the committee meeting.

Mrs. Karen Kraft Sloan: Well, it's not acceptable.

The Chair: Madame Girard-Bujold.


Ms. Jocelyne Girard-Bujold: Mr. Chair, I'd like to remind you that we don't have quorum this morning.

The Chair: But we do have quorum.

Ms. Jocelyne Girard-Bujold: No.

The Chair: We have quorum. It's not necessary to make a decision this morning. I wanted to inform you. That's all.

Ms. Jocelyne Girard-Bujold: Mr. Chair, you have informed us, but it's not up to you to make decisions. It's always up to the committee to make decisions.

The Chair: Ms. Girard-Bujold, I was asked to make a statement regarding the status of Bill C-33. That's all I've done. Before you arrived...

Ms. Jocelyne Girard-Bujold: Mr. Chair, I don't understand why you arrived here with this this morning. Last week, Ms. Catterall warned the opposition by saying: tell your whips to make sure we hurry up and pass the bill at second reading in the House of Commons.

Mr. Chair, I told Ms. Catterall and I'm telling you again this morning that it's not up to you, the government, to tell the opposition parties what they should do. We have the right to use the methods we want to to allow voters that we represent to have a voice in the House of Commons.

We also read the papers and we're capable of finding out information. The government wants to impose an accelerated process for Bill C-33 and nothing good can come of that.

I always cooperated with the Standing Committee on the Environment and I'm not about to let the government start pushing me around.

The Chair: There are misunderstandings here, Ms. Girard- Bujold, and I must repeat what I said for the third or fourth time.


I will say it in English for the purpose of absolute clarity.

According to members of this committee, the bill needs strengthening, and I agree with them. The load of witnesses is very large, over 40. Time will be required, therefore, to hear witnesses and to do the committee work on 120 clauses. So it stands to reason that we reduce the workload of hearing witnesses with those witnesses who can appear before the summer and leave those who are not ready for after the summer. So in the fall this committee has the necessary time to do the committee work on the clauses and their amendments. That's all.

If the committee feels this is not a reasonable approach, fine. I'm in the hands of the committee. I'm not putting forward a motion. I'm just informing people of the reality of life and time limitations. But then don't complain if we do not have a bill that corresponds to your wishes.

• 0925

That's the end of this discussion.

I welcome now the presence of Ms. Kirby, Mr. MacLeod, Mr. Frank Campbell, and Mr. Jim Campbell, who are at the table, as well as some resource people, Mr. Ian McGregor and Mr. Dave Burpee. We welcome you here today.

We would like you to know that this committee is extremely interested in the issue of climate change.

As you know, we had a meeting with your colleagues in Foreign Affairs. We are in the megaton business, and we are very interested in knowing how we, as a nation, will move from some 764 megatons to 565, as the Kyoto agreement seems to expect from us.

We are aware, as a committee, of the fact that we have had a fairly lengthy process in the past. We had a consultation process, part one, so to say, which began in 1993 and resulted in a number of measures proposed in 1993-94, to be only partially implemented for a number of reasons, but it was mainly a voluntary round. We then had the commitment in last year's throne speech and a round of consultations, consultation process part two, if you like, which began with another 18 months of national consultation processes and with meetings with the work of the issue tables, 16 of them, and then a meeting of ministers in March of this year in Vancouver.

To make a long story short, the members of this committee would like to know, really, the very essence of progress being made so far in relation to the reduction of CO2 emissions.

So we welcome you, and I'm sure there will be a good round of questions by members of this committee. We hope you will be focusing on this very central question, namely the reduction of greenhouse gases according to the megaton numbers that have been identified by your department.

Who wishes to go first?

Ms. Sue Kirby (Acting Associate Assistant Deputy Minister, Energy Sector, Department of Natural Resources): Thank you, Mr. Chair.

I'm Sue Kirby, the acting associate ADM of energy at Natural Resources Canada.

Before I begin, I'd like to introduce my colleagues, if I may. Since there appears to be plenty of room at the table, I wonder if I could bring a few more up, just in case there are technical questions in their area.

Mr. Ian McGregor is the deputy head of the climate change secretariat. He has appeared before you on previous occasions. I think he's known to the committee.

Mr. Neil MacLeod is the director general of the office of energy efficiency at Natural Resources Canada.

Mr. Jim Campbell is a director in the energy policy Branch at Natural Resources Canada, specializing in economic analysis.

I would like to ask Mr. Frank Campbell and Mr. David Burpee to move up to the table, if that's all right.

Mr. Frank Campbell is a director in our energy technology branch and specializes in technology, and Mr. David Burpee is a director in our energy resources branch and specializes in renewable energy.

If it suits the committee, I have a very brief opening statement. I will keep those remarks quite brief, and then I would like to ask Mr. Ian McGregor to add also on some of the national issues, if that's all right.

The Chair: Are you concentrating on the megatons?

Ms. Sue Kirby: My understanding was that at your hearing last week, when you had witnesses appearing before you on preparations for COP-6, one of the major questions was, what is being done in terms of action on reducing emissions.

• 0930

As you know, for more than a decade various governments in Canada have been addressing the challenge of climate change through a wide variety of actions. Federally, the bulk of our initiatives to reduce emissions is based on technology development and deployment to improve energy efficiency and to encourage renewable and alternative forms of energy.

Within Natural Resources Canada we currently spend roughly $100 million per year on climate change. The main focus is on energy research and development delivered through the Energy Technology Branch and the interdepartmental program for energy research and development, which is a partnership of 11 federal departments. In both of those technology areas resources have been significantly reallocated in recent years, and climate change R and D now accounts for two-thirds of Natural Resources Canada's energy R and D spending.

In the deployment area, the focus of activity for the federal government is Natural Resources Canada's Office of Energy Efficiency. That office was established in 1998 to renew, strengthen, and expand our commitment to energy efficiency. In that office we have over 19 programs in the residential, commercial, industrial, and transportation sectors, and the Office of Energy Efficiency provides these programs to reduce emissions at home, at work, and on the road.

In 1996 Canada announced a renewable energy strategy, and we have been particularly active in supporting renewable energy through the renewable energy deployment incentive, known as REDI, which was announced in the 1997 budget, and through increasing federal government purchases of green power. Also, two income tax measures were introduced in the 1996 and 1997 budgets to encourage investment in renewable energy and energy efficiency programs. Those incentives accelerated the write-off for certain equipment producing energy more efficiently or from renewable energy sources.

These initiatives and activities will not be sufficient to meet our Kyoto commitments. These are the activities that are currently underway. But it is our view that they provide an exceptionally strong base of expertise, experience, and partnerships from which we can build in the future.

In 1998, as you know, we established the Climate Change Action Fund to support the national process that has been underway. You have already referred to the consultations. As you are aware, there has been a federal-provincial consultation process as well, both of which were established immediately in the wake of Kyoto. The Climate Change Action Fund supports federal coordination and support for federal analysis and policy development and augments the resources available through individual departments, such as Natural Resources Canada.

The Climate Change Action Fund has four elements. The technology early action measures component accounts for roughly 40% of the Climate Change Action Fund. It is co-managed by Natural Resources Canada, Industry Canada, and Environment Canada and has provided support for on-the-ground projects to develop and deploy technology and reduce emissions in Canada and abroad.

To date, announced team projects total $31 million, and those have levered over $150 million in additional investment from private and public partners. Other projects are about to be announced, and we expect those to have an even stronger leverage component to them.

The public education outreach component of the Climate Change Action Fund has promoted climate change awareness among Canadians and has supported community-based educational projects across the country.

The third element of the action fund, the foundation building element, has supported the 16 issue tables, to which you've already referred, which, as you know, have involved 450 experts. Those issue tables and their experts have developed options papers, all of which are now complete, which are rich with suggestions for reducing emissions. The foundation component has also supported data development and analysis, modelling, and policy analysis to examine the options that have been generated. This element of the action fund has also generated and increased engagement and ownership of the file among jurisdictions, economic sectors, and individuals. It is our belief that this will lay the foundation needed to support new actions and policy options.

• 0935

The final element of the Climate Change Action Fund, the science, impacts, and adaptation element, has supported capacity building, climate change modelling, and improved understanding both of how our climate will change and of its vulnerabilities and how we can best adapt to them. This is a relatively new area for us. Speaking from Natural Resources Canada's perspective, we do believe that adaptation has been a neglected area and that it is one that we must focus on more extensively in the future, as well as reducing emissions.

In addition to those areas of activity, the most recent federal budget in February 2000 announced over $600 million in new funding in several areas. These included the newly announced $100 million Sustainable Development Technology Fund, the $60 million Canadian Foundation for Climate and Atmospheric Sciences, $125 million in two funds to help municipalities take action, an additional $15 million to expand government green power purchases, $150 million to extend the Climate Change Action Fund for an additional three years, and $60 million to renew various energy efficiency and renewable energy programs. As well the recent budget announced over $100 million over four years to encourage partnerships with developing countries and $15 million to participate in the World Bank's recently announced Prototype Carbon Fund.

You have already referred to the March meeting in Vancouver of ministers of energy and the environment. The meeting is known as the joint ministers' meeting. That did take place in March, and one of the key outcomes of that meeting from our perspective was the agreement amongst all of those ministers that they would commit to having a first business plan ready for their next meeting, which is on October 16 and 17 of this year in Quebec city, and that they will be examining that business plan at that time.

From the federal government's perspective, our key challenge for the fall will be to have a credible federal contribution that builds significantly on the investments we have made in federal programs and with outside partners. The first business plan will need to further reduce emissions, to invest in the future, to show federal leadership, to continue with public education and outreach activities, and to include newer areas, such as the one I mentioned previously on adaptation.

As I said, at their March meeting ministers agreed to this first business plan. In that business plan they will be looking at sector strategies. Sector strategies will include objectives on a sector-by-sector basis to deal with the megaton reductions you mentioned and the specific actions for the first business plan that ministers would be examining to achieve those reductions. It will also outline crosscutting areas, such as technology development.

I thank you for your attention.

I would like to ask my colleague Mr. McGregor to add some remarks on the national process, and then we'd be ready to take your questions, if that's acceptable.

The Chair: Thank you, Ms. Kirby, and we'll certainly proceed with Mr. McGregor.

It's interesting to note that in your presentation the figures are all in dollars and not in megatons. I suppose that will follow in due course. But it's essential that all these dollar amounts be linked to megaton reduction in order to see what is the result flowing from those initiatives.

Mr. McGregor, would you do it fairly quickly, please.

Mr. Ian McGregor (Deputy Head, Climate Change Secretariat, Department of Natural Resources): Yes. Thank you very much, Mr. Chairman.

I think the last time the secretariat appeared before this committee was in the fall of 1998. At that time the national process had just been established. At that time I think we explained the 15 issue tables that were created jointly with the federal, provincial, and territorial governments and the intent of those.

I think we laid out some of the challenges in front of the issue tables and ourselves. We had asked the issue tables to prepare a foundation report. Those have all been completed. They are all publicly available. We also asked the issue tables to assess options to reduce greenhouse gas emissions. We asked them to address all options and give us their best advice. With the exception of the tradable permits working group, all of those reports are now publicly available. The one for the tradable emissions working group is expected to be available within a week or two. It is being held up just a little bit because of its technical nature and some difficulties in preparing both official languages.

• 0940

That's by way of background. In terms of what I'd like to cover today, if I may, I'd like to go through fairly quickly the nature of what was considered by the joint energy and environment ministers at the JMM meeting in March and cover off the path forward. I've attached annexes. I do not intend to go through those. I'm more than pleased to answer questions should the committee wish.


This slide shows the starting point for the involvement of the national secretariat. The first ministers met immediately after the Kyoto Conference. These are the points on which the federal and provincial governments agreed: we cannot take Kyoto into consideration; Canada must take this issue seriously; and we must establish a common strategy that will have more or less the same effect throughout the country rather than a strategy whose impact would be unequal in various regions.

This slide proposes certain milestones, as well as how federal-provincial co-operation will be shaped in this area.


The March JMM meeting was very much a working meeting. The reports out of the issue tables were generally available. Some were still in draft form, but ministers had in front of them an outline of a national implementation strategy. They discussed the idea of a framework agreement. They discussed a first business plan. They covered the themes for the first business plan and credit for early action. I will come back to each of those in terms of the outcomes.

In addition, the ministers very much wanted to lay the foundation for the fall JMM. That will be an important meeting because it will help inform Canada's position for COP-6 negotiations. We expect that it will confirm the strategy for the national implementation strategy and deal with the first business plan, as Ms. Kirby just mentioned. There will also be consideration of credit for early action pilots, which officials are currently working on, and a decision on when and how to report back to first ministers.

The first of the JMM decisions was very much ministers wanting to express their sincere appreciation for the work of the issue table members. They agreed to meet again in October 2000, as has been mentioned. Importantly, I think, they agreed on the key elements of the national implementation strategy.


The ministers agreed that the national strategy should be implemented through continuous three-year plans. Since the nature of the strategy requires a reaction through a policy... [Editor's Note: Inaudible], the action plans will be continually monitored, examined and, if necessary, updated in order to reflect any new knowledge, question or outcome. The activity plan will be presented to the ministers on an annual basis.


In addition, ministers asked that the analysis of the results out of the issue tables continue, and they asked officials to undertake consultations. Those consultations are in midstream as we speak. Western Canada has been done. Most of the north has been done. There were meetings in Toronto yesterday and there are meetings in Iqaluit tomorrow. Maritime or Atlantic provinces will be done shortly, culminating in Montreal and Ottawa at the end of this month.

• 0945


The ministers also agreed that, given the permanent nature of the climate change issue, we must have an on-going federal- provincial territorial framework that will serve to co-ordinate the activity plans throughout the sectors and regions of the country, to monitor and report on progress of the implementation of the strategy. It would also serve as a permanent mechanism to obtain advice from the stakeholders.


As I mentioned, ministers also asked that pilots be developed to test the concept of credit for verifiable early actions.

The final slide of the presentation sets forward our work plan for the coming months. Based on the decisions from ministers, we have a very challenging work plan ahead of us. We need to finalize the national strategy document so that it is ready for approval by ministers in October. We need to complete the development of a proposed first business plan for ministers' consideration. As I mentioned, we are in the process of consultations on that first business plan.

If I may stop for a second there, if the committee will bear with me, I believe a document called “Distillation of Phase I Measures” has been made available to the committee. This is an extract of the work of all the issue tables. This is the document that's being used as a basis for consultation across the country and it is in some respects a very rough cut at that first business plan. So I believe we are making significant progress in that regard.

Officials are continuing to work on an agreement on how to move forward, and further analysis is continuing on a number of areas.

I'll stop there, but as I've said, I'm more than pleased to answer questions on other areas.

The Chair: Thank you very much, Mr. McGregor.

I was just asking myself which of these charts could not have been produced five years ago, and I'm having difficulty in answering my own question.

We have a good round ahead of us. We have Mr. Chatters, Madame Girard-Bujold, Mr. Herron, Madame Kraft Sloan, and Mr. Reed.

Mr. Chatters, would you like to start?

Mr. David Chatters (Athabasca, Canadian Alliance): Thank you, Mr. Chairman. I couldn't agree with you more in your analysis of the material we've seen.

I've been following this process very closely, and I've certainly studied the 15 issue table reports, at least the ones that have been available. Of course, one of the greatest concerns is with the international tradable emissions proposals. The thing that comes through loud and clear in those recommendations is that any of the recommendations that produce substantive results in terms of reduction of carbon emissions would appear, at least to me, to carry huge costs to someone, whoever that someone might be, whether it be industry, whether it be the consumers of end products of those industries, etc.

I have some concerns, because following the consensus the federal government reached with the provinces in Winnipeg prior to Kyoto, the federal government went to Kyoto and in fact went far outside the consensus they had with the provinces in their commitment in Kyoto. I have concerns that this will be repeated at COP-6.

I think it's absolutely imperative that the federal government produce an implementation strategy, including a cost-benefit analysis and who the government is proposing to meet those costs. Then Canadians and provinces and everybody involved will know what the government's position going into COP-6 will be, rather than going there, having nobody in Canada knowing what the government plans to present, and then coming back from the conference to try to sell the position the government presented at COP-6. Quite frankly, the government is sending some very mixed messages out there.

We have environmental groups in the country today extolling the virtues of the exploding gasoline prices and saying how they're going to help conserve fossil fuel energy and help us meet the Kyoto commitment. We have the federal government leaving the impression that they're studying gasoline pricing in Canada with the intention of doing something about lowering gasoline prices. We have the consuming public screaming bloody murder out there about gasoline prices. So clearly the public is not prepared, at least not without a lot of convincing, to do their part in meeting the costs of the Kyoto commitment.

• 0950

I would like to know if the intention of your department is in fact to present to Canadians and to the provinces, prior to going to COP-6, an implementation strategy, including a cost-benefit analysis.

The Chair: Thank you, Mr. Chatters.

Ms. Kirby, please.

Ms. Sue Kirby: Your question is a good one in that it raises some of the other things for the joint ministers' meeting in October that I think we neglected to include in our opening remarks.

At the joint ministers' meeting, which is deliberately scheduled to happen before COP-6—it will be in the middle of October, whereas COP-6, as you know, is in November—there are two other important elements that will be included.

One of those is the results of the so-called analysis and modelling group in this national process. Part of what they are looking at is how you integrate the options from the various issue tables and come up with an estimate of impacts and implications. The individual options reports do not give you that sense of distribution of COPs and that's part of why we're doing this so-called roll-up analysis.

The other thing to be included in their analysis is some of the environmental and health impacts, because when we look at the options reports, although there was guidance to the tables to deal with that issue, many of them felt unable to do so, and to do so in a partial way did not necessarily help. So one of the things we will have for the October joint ministers' meeting is that set of results on a national basis in terms of the roll-up analysis, including costs.

The other area we had not mentioned is that on the agenda for October there will also be a discussion of the position at COP-6. It is important, as I expect my colleagues pointed out at the last discussion, to recognize that the nature of COP-6 is not one that's about target setting. It is really one that's about the other elements of the Kyoto protocol and making sure we have the rules in place to have a full protocol and to deal with cost-effective reductions.

Do you want to add anything, Ian?

Mr. Ian McGregor: The only thing I would like to add is that a document somewhat similar to this will go to ministers in the fall. This document is a federal-provincial-territorial document. It's a joint document. Obviously the federal government is doing its homework and each of the provinces and territories is doing its homework, but we're trying to reach a national approach to a business plan.

Mr. David Chatters: Mr. Chairman, I still haven't heard a commitment from the department on behalf of the government that the plan is to present to the public of Canada an implementation strategy, including a cost-benefit analysis, going into COP-6, and even more important than that, for the Canadian public to have that information laid before them going into a federal election that could happen as early as this fall.

The costs involved in who is going to pay those costs have huge political implications for this country. I'd surely love to hear if it is in fact your intention to make that plan available to the Canadian public—not just to the first ministers but to the public—before you go to COP-6 with that plan.

Ms. Sue Kirby: Starting—

The Chair: It seems to me that is a political decision that will have to be made by the ministers in October, but, Ms. Kirby, go ahead.

Ms. Sue Kirby: Before we get to October, there will be some workshops again, which will be held around the modelling results.

That's not the same as the political question you have asked, on which I fully agree with Mr. Caccia. It is for the ministers to decide. That is what I would have said around the public availability of the plan.

But there are workshops being held around the modelling results so that people, experts in particular, will have an opportunity to comment and reflect on the quality of that analysis.

The Chair: Thank you, Mr. Chatters.


Ms. Girard-Bujold, you have the floor.

Ms. Jocelyne Girard-Bujold: Madam, sir, you alluded to the meeting that took place in Vancouver in March 2000. You stated that the federal government and the provinces had met to discuss climate change and that Canada was to submit its plans to Canadians and to the international community.

• 0955

Since these negotiations took place, have you been able to determine whether the strategy for the elimination of greenhouse gases was to be implemented by sector or by province? Have you already prepared an agreement that you could table at the next meeting? This is very important for Quebec which, as you know, has already fulfilled the commitments it had made and has attained a 90% rate. If this strategy is based on sectors, this will be to the detriment of Quebec which has already done its share. When he left the meeting, Minister Bégin had put his forecast on the table.

Last week, at the meeting of ministers of the Environment in Quebec, the federal Minister of the Environment stated that all the provinces had to meet at the same table if we wanted Canada to formulate its global plan for the elimination of greenhouse gases and respect commitments made in Kyoto.

We know that Quebec has already done its share. Are the government and the Department of Natural Resources recommending that we proceed by province or by sector? I would like to know what philosophy you will be putting forward at the meeting that will take place next October.

Ms. Sue Kirby: At the October meeting, the first stages of the plan will be discussed, both from a sectoral and regional standpoint. At the last meeting, we discussed the possibility of establishing sectoral objectives. These were not necessarily targets, but objectives by sector and measurements that we could take. All the provinces and the federal government expressed their ideas regarding the initiatives that could be taken in the regions and provinces in order to reduce greenhouse gas emissions.

Ms. Jocelyne Girard-Bujold: If you decided to proceed on a sectoral basis, this would really have a negative impact on Quebec, which has already done its part. You know that they say that all the emissions come from Ontario. If the other provinces don't do their share, Quebec will be penalized.

In your talks with the provinces, including Quebec, which is still taking part in these talks, I don't know whether you take that into account and if you plan to evaluate what Quebec has submitted to you. Quebec told you what it has managed to do. You are saying that you are tending toward a sectoral approach. I would like to be very clear on what your sectoral philosophy is.

The Chair: I will ask you to give a brief answer, please.

Ms. Sue Kirby: Last March, the ministers discussed the possibility of a sector-based strategy. As I was saying to you, that does not mean that all stakeholders have to deploy the same efforts. For example, we could establish a strategy for transportation.

During that same meeting, Quebec talked about the importance of establishing targets province by province, but the other provinces did not necessarily agree. I am almost certain that the ministers, especially the one from Quebec, will want to discuss this issue again at the October meeting.

Ms. Jocelyne Girard-Bujold: I don't know whether you include the CANDU reactors that are in Ontario in the sectoral strategy. Are they part of a sector? I don't understand your definition of the word "sectoral". You talked about transportation, pulp and paper mills, aluminum smelters and CANDU reactors. In Ontario and the other provinces, what corresponds to this concept of a sector that is being considered by the federal government?

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Ms. Sue Kirby: The idea of sectoral strategies resulted from round tables and focus groups that we held with decision-makers. There were round tables and focus groups on all sorts of subjects: transportation, electricity, industry, forests. Some of them dealt with the sectors. In March, the ministers discussed the possibility of establishing sector-based strategies in order to disseminate the best ideas raised during the round tables and focus groups.

The Chair: Thank you, Ms. Girard-Bujold.

Mr. Herron.


Mr. John Herron (Fundy—Royal, PC): I have a couple of questions. Has this group met before the natural resources committee yet?

Ms. Sue Kirby: Have these witnesses been called there?

Mr. John Herron: Yes.

Ms. Sue Kirby: No.

Mr. John Herron: The minister responsible for the domestic regime is who?

Ms. Sue Kirby: Minister Goodale.

Mr. John Herron: There's been a fair amount of confusion amongst some of our provincial partners, and very much in the media and even amongst the opposition, because it seems that the current Minister of Environment has been making most of the pronouncements with respect to climate change and on domestic perspectives. Is there a change in leadership between the two?

Ms. Sue Kirby: There is a shared responsibility, with the Minister of the Environment obviously having a key role in climate change as an environmental issue, as a scientific issue, and in terms of the international negotiations, and with Minister Goodale sharing the file with him and having the lead responsibility in terms of domestic implementation, energy efficiency, renewable alternative energy, forests, etc., which fall within his department. It is a shared responsibility.

Mr. John Herron: If that is the case, I trust that your group has the intention of going before the natural resources committee as well?

Ms. Sue Kirby: That's up to the committee.

Mr. John Herron: The terminology has been used quite often about further reductions, to build on further reductions to what we have right now. I think the reality is that this terminology is somewhat disingenuous from the standpoint that we're not reducing our output of carbon dioxide from year to year currently. We've slowed the acceleration of production, but the word “reduction” probably would not be as appropriate.

Ms. Sue Kirby: We believe there have been reductions on a project-by-project basis compared to what otherwise would have happened, but the member is exactly correct that on an aggregate basis emissions at the current time are continuing to increase.

Mr. John Herron: I think Mr. Chatters' line of questioning was fundamentally dead-on, that Kyoto not only.... What happened in Regina on November 13, 1997, and Mr. Goodale's comments the very next day in the Globe and Mail, saying it may not necessarily be our position, after reaching a consensus amongst his provincial partners, had a very negative effect on interprovincial and federal relations a few months after the Kyoto conference.

Something I don't quite get is that you are going to meet in October, with the provinces bringing back their first business plan, and then about six weeks later, or two months later, you'll be in The Hague for COP-6. To say that business plan cannot be ratified by the respective cabinets in each one of the provinces by that time, in that kind of short timeframe—would that seem a reasonable assumption?

Ms. Sue Kirby: Several jurisdictions have indicated their intention to present business plans ad referendum, and in some cases that will be after the meeting.

Mr. John Herron: I know in this federation you really can't implement anything unless you have your provinces fundamentally onside. I think it's fundamental in your meeting in October that you give a clear indication to every one of those provincial partners that what's agreed to in that room will be the position that will be taken to The Hague, especially when we look at what happened in Regina back in 1997.

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I'll save my next question for the second round.

The Chair: Thank you.

Madam Kraft Sloan.

Mrs. Karen Kraft Sloan: First of all, I'd really like to compliment Environment Canada and the others who worked on the Canada Country Study on Biodiversity. I certainly talked about the wonderful work that was done in putting that particular study together. I think it gives us a bit of an insight as to some of the impacts and the effects of climate change and some of the things we're seeing starting to happen in our own country.

We often hear, who's going to pay the cost of implementing the Kyoto agreement? I'd like to know who's going to pay the cost of not implementing the Kyoto agreement.

When we hear about some of the devastating effects to this country with problems around shipping and transportation, the changes that will affect agriculture in this country because of changing growing seasons, the boreal forests possibly moving further north.... And then there's the problem that the climate might be better for the trees to grow but the soil isn't there for the trees to grow. So it's not that we're going to extend boreal forests; we're going to diminish the boreal forests.

Also, there is the concern raised by northern peoples as to the effects of climate change in their communities, which are immense. There are the effects on the fisheries and things like this.

I'm wondering if anyone would like to comment as to who's going to pay those costs. We always talk about the costs of Kyoto, but what about the cost of inaction?

Ms. Sue Kirby: I think in terms of the question of who's going to pay, it's the same one in both cases.

Voices: Oh, oh!

Mrs. Karen Kraft Sloan: Let's get it on the record then.

Mr. Ian McGregor: You're absolutely correct that climate change will have a significant impact on the economy. I'm not talking about addressing climate change; I'm talking about the impacts of climate change. I think you've touched on much of our best information of what the impacts are.

I think as it stands now in this country those costs would be, unfortunately, directly paid by the people who are impacted. To my knowledge, we've never had essentially an adjustment plan that would run across the country of the scale that would be required for climate change.

Mrs. Karen Kraft Sloan: So there would be incredible dislocation for communities, individuals, and the private sector and certainly government. A lot of people would come to government to ask them to bail them out.

While the water levels in the Great Lakes may not be a cause of climate change, it's certainly something we'll have to live with as the effects of climate change take hold. I know people in my community are wondering when the government is going to pay for dredging and things like that. I know other of my colleagues throughout the Great Lakes area are putting pressure on the federal government to come forward with moneys. The public purse is only so big.

The other question I have is—and I was unable to get an answer when we had the other witnesses speaking about the COP-6 negotiations—with regard to Canada's position with regard to nuclear. Will Canada be putting a position forward to get credits on nuclear power in foreign countries?

Ms. Sue Kirby: If I could start with your first point about changing water levels in the Great Lakes and so on, it's partly because of those impacts that we've been emphasizing the importance of adaptation. One of the other points that is important to note is that at their meeting in March the ministers talked about these sector strategies coming back. One of the things they asked that they address is adaptation as well as mitigation, and that's a change from previous approaches. So I think that's worth flagging for the committee.

In terms of your second question about nuclear power, the position Canada has been taking, as I understand it—and you did have the negotiators here last time, so they're more expert in it than I am—is that all forms of energy that reduce greenhouse gas emissions ought to be included in ways of addressing the challenge of climate change.

Mrs. Karen Kraft Sloan: Does that mean that Canada will be specifically pushing nuclear then?

Ms. Sue Kirby: What we have been specifically putting forward so far is no individual sources of energy be excluded from those kinds of discussions.

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Mrs. Karen Kraft Sloan: But it's part of the Canadian position to put nuclear forward as an option then.

Ms. Sue Kirby: Nuclear power does reduce greenhouse gas emissions.

Mrs. Karen Kraft Sloan: Fine. Thank you.

The Chair: Thank you, Madam Kraft Sloan.

Mr. Reed.

Mr. Julian Reed (Halton, Lib.): Thank you, Mr. Chairman.

I'm going to take a point of view that is probably opposite to that of my friend, Mr. Chatters, because I don't look at meeting the Kyoto targets as a cost. I see it as a profit opportunity, provided it is addressed from that perspective, from that point of view.

I'm going to zero in on one subject because of the shortness of time. I wish we could have a lot longer.

Hydro power is the first renewable. Hydro power is the most highly developed in terms of technology. Hydro power was mature at the turn of the century. But I see it, in these publications, being relatively dismissed. Hydro power is discriminated against across Canada. It's discriminated against through taxation and through price, and it's discriminated against through the approvals process, where people who are supposed to be approving projects, particularly small hydro projects, take their own prejudices into the decision-making process.

I see in this working plan that consideration be given to some of these things that have been obvious for 20 years. Where have we been? If I put a cubic metre of air through a gas blower at Pearson Airport, I'd strip the oxygen out of it, replace it with carbon dioxide, and whatever impurities were left after the burn-off in Alberta...and I pay nothing for it. If I put a cubic metre of water through my turbine, I pay water rental. I pay a tax.

Now, small hydro in Ontario alone has the capacity to displace 16 million tonnes of greenhouse gases annually, and it is still being continuously discriminated against—not encouraged, not supported. Why? What is the agenda underneath the opposition to small hydro? We have to somehow try to get there.

I read the tables, the reports, and I read a statement that astounded me in one report: that small hydro produces massive amounts of methane. I've heard all the speeches and arguments about this stuff over the last 15 years: it's mercury, it's methane, it's water-warming, and it's fish being ground up in turbines. They're all totally specious arguments, and it's taken an awful lot of years for me to research it in order to be able to point that out.

I am not a conspiracy theorist, but I guess I'm getting paranoid about that. What is the second agenda behind the discrimination against small hydro development?

Ms. Sue Kirby: I think you've put your finger on why we need this to be a national process: because we do need federal and provincial governments at the table. It's also one of the reasons why electricity is one of the sectors that will be examined in the sector strategies I've mentioned.

David, I'm going to ask you to talk to some of the changes we have made specifically in the area of small hydro, if you would.

Mr. Dave Burpee (Director, Renewable and Electrical Energy Division, Energy Sector, Department of Natural Resources): I guess some of the measures you mentioned are provincial, like water royalty and siting process. Part of the electricity table recommendations were to streamline those processes. In the case of larger hydro, that would involve perhaps the Environmental Assessment Act at the federal level, which is undergoing its five-year review now, so there's an opportunity there to do that.

Environment Canada has been supporting the idea of setting criteria for green power or low-impact electricity and setting guidelines for those, which I think are presently being reviewed, and small hydro is certainly part of that process.

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In terms of the tax measures, of course there's the availability of class 43.1 for small hydro. So there are some things there that are in progress, but the table does recommend further action on a hydro strategy.

Mr. Julian Reed: If a plant's not making any money, class 43 doesn't work. It doesn't exist. Many of these plants can't function with a false cost or a false revenue. In Ontario, the revenue for electric power has been phony for 25 years, hence the stranded debt that the utility carries.

The true cost of electric power is not here at all. It's phony and has been. What happens is that while there's lip service being paid to independent generators, it's not happening. There probably will not be many more nickels invested in small hydro in Ontario unless there's a seat change.

Thanks, Mr. Chair.

The Chair: Are there any comments?

Ms. Sue Kirby: I think we all agree that's why this work is underway.

The Chair: All right. We could start a good second round. Allow me first to ask a couple of questions.

The first one boils down to this. What are you doing about taxation? The commissioner of development informed this committee and the world at large last week.... In one of his chapters, he pointed out that many renewable energy projects do not yet provide an adequate rate of return on investment, and he pointed to the desirability of improving the tax system in order to achieve better results.

Secondly, two years ago, if not three, this committee pointed very strongly in one of its reports to the desirability of removing perverse incentives in the tax system that increase greenhouse gas emissions. We particularly pointed to the tax incentives provided to the oil sand sector. This matter was also pursued in the House of Commons. There may be other taxation items that need attention in order to make the renewable sector more attractive than it is now. What are you doing in the tax field?

Ms. Sue Kirby: In our reading of the report of the commissioner, one of the main conclusions that comes out of that is that at the current time, energy investments do not necessarily favour the non-renewable sector through the tax system, with the exception of investment in oil sands. I believe that's one of the statements in the report of the commissioner.

In the area of oil sands, the Department of Finance is cooperating with Natural Resources Canada to prepare a scenario of tax expenditures related to oil sands to the year 2030. We expect that to be publicly available for release probably sometime around July.

The Chair: When asked, the Department of Finance said that it is your department that wishes to retain that incentive, that they would have no objection to removing it. Is that correct?

Ms. Sue Kirby: I don't think it's up to departments to have particular views on retaining incentives.

The Chair: You're underestimating the power of your department then.

Could you tell us what is being done in the field of taxation in general in order to facilitate the reduction of greenhouse gases? What are you proposing?

Ms. Sue Kirby: I think it would be more appropriate for you to ask those questions to the Department of Finance in terms of what's being examined on taxation in general.

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But again, David, perhaps I could ask you to talk on the—

The Chair: When asked, the Department of Finance tells us it is your department that initiates requests and makes proposals one way or the other. So we are getting the runaround, as they call it.

Ms. Sue Kirby: There are many places that initiate requests.

David, particularly in the renewables area, there might be some additional information.

Mr. Dave Burpee: Yes. Sue Kirby mentioned briefly in her statement that there are tax measures currently available for renewable energy. Again, that's class 43.1, which—

The Chair: For the sake of time limitations and the second round, Mr. Burpee, could you provide the members of this committee with a memo in which you will inform us as to what are the taxation measures initiated by your department in order to facilitate the reduction of greenhouse gases in Canada? Would that be a reasonable request?

Mr. Dave Burpee: Yes. In fact we have a little booklet or report on those tax measures that were implemented in the budget, and we can provide that.

The Chair: Please do.

The second question I have has to do with sequestration. The sequestration issue is crucial. Can you give us a brief outline or write us a memo as to which areas will be included under the heading of sequestration, and to what extent?

Mr. Ian McGregor: I'm certainly no expert in that, Mr. Chairman, but it is my understanding that three areas are covered under sequestration. One is obviously forests, which are specifically covered in the Kyoto protocol. Two is soils, agricultural sequestration, which is not excluded under the Kyoto protocol. Forgive me; I may not have the words entirely correct, but it's one of the areas where Canada is pushing to make sure that's included. And finally there's geological or physical sequestration, which is at least referenced.

We're certainly looking at all of those areas, trying to make sure we understand how they work. Forest knowledge is fairly good. I shouldn't be speaking; that's not my area of knowledge. In agricultural soils, a great deal of work needs to be done to understand the processes. And in physical sequestration, some research is now being undertaken to see to what extent it's an option for Canada.

The Chair: Could you provide this committee an outline on the sequestration issue, and in particular on the issue of whether reforestation after harvesting is going to be claimed by Canada in The Hague, in view of the fact that that type of reforestation after harvesting is not in the Kyoto agreement?

Ms. Sue Kirby: We can provide a specific response on forestry. Is that the nature of the question?

The Chair: Well, I would like you to expand it, because Madame Kraft Sloan already raised—

Ms. Sue Kirby: To deal with all three areas.

The Chair: —the question of nuclear. So there are several factors, several components, so to say.

Might I say that in the field of transport—and time does not permit me to go into that—transport represents over 25% of greenhouse gas emissions. Having read the tabled paper, which is a great disappointment, I wonder what on earth is happening in that field, because if transport doesn't come through, buildings don't come through, which is where there is a tremendous opportunity, and then our position will be extremely weak. Therefore anything you can tell us about those two particular sectors would be very helpful.

Might I say also that in another federal system that is as complex as ours, in Germany, they produced a plan sector by sector already in 1994. So it shouldn't be that difficult to provide in the Canadian federal system a sector-by-sector reduction plan along the lines suggested by Madame Girard-Bujold. Surely it is desirable to see what amount of tonnage each sector is expected to reduce eight years after the protocol was signed and then three years after the Kyoto agreement.

• 1025

Anyway, we'll leave it to the end for the second round.

We'll start with Mr. Chatters, followed by the other members in the same order as before.

Mr. Chatters.

Mr. David Chatters: Thank you, Mr. Chairman.

Certainly I too would be most interested in Canada's strategy to deal with the position of the United Nations Climate Change Secretariat on forest seques.... Forget it; whatever.

Voices: Oh, oh!

Mr. David Chatters: Clearly the Climate Change Secretariat has said that wouldn't be accepted, and Canada has said publicly that must be accepted, so I'd be interested in where we're at on that issue.

Other than that, the debate around the table certainly has been interesting, and it's exactly a microcosm of the debate that's going on out there in the public. As to Madam Kraft Sloan's comments about who pays for not meeting the Kyoto commitment, I think it's inevitable that the same people pay, either side of the argument. That's why it's imperative that those people who are going to pay get in on this discussion soon. And they can't get in on the discussion until this government produces an implementation plan, including the cost-benefit analysis.

Julian says this is going to be a profitable operation. Well, we'll never know that until we see how the government's going to deal with it. It's not acceptable that the federal government and the provincial governments come to some kind of arrangement and impose it upon the Canadian public. The Canadian public clearly is not anywhere near buying into this initiative, even with the kinds of threats we've heard about what's going to happen to our climate.

If my last question was too political, then I'll bring it down to the departmental level. Will your department have produced or be able to produce, prior to the COP-6 meeting, an implementation plan with a cost-benefit analysis?

Ms. Sue Kirby: I think I've already answered the question. The plan will not be produced by any one department. It will be produced by several federal departments and in the federal-provincial process. But that work is underway, including the costing.

Mr. David Chatters: But again, will the plan be ready prior to the COP-6 meeting?

Ms. Sue Kirby: A plan will be ready for the October meeting of joint ministers, which is prior to COP-6.

Mr. David Chatters: Okay. That's good.

Thank you, Mr. Chair.

The Chair: Thank you, Mr. Chatters.


Ms. Girard-Bujold.

Ms. Jocelyne Girard-Bujold: Madam, you stated earlier that nuclear energy was very good for greenhouse gases.

We know that Canada is currently considering importing MOX from Russia and the United States to carry out experiments using samples. However, the Seaborn Commission had stated that if Canada wanted to go that route, it had to hold hearings, notify the public and carry out consultations. The two ministers, the Environment Minister and the Natural Resource Minister, had even made a commitment to do so.

Right now, in Chalk River, you are analyzing MOX fuel core samples that come from the United States and you will obtain results. You are supposed to import some from Russia as well. We know that these will arrive soon. Will the results of these analyses be known quickly? In light of these results, if they are positive, are you going to hold hearings before starting the general importation of the astronomical quantities that the federal government is considering? Will you be consulting the public in a clear and transparent manner?

In addition, do you know that right now, when MOX fuel is burnt within powerplants, there always remains radioactive waste that has a life expectancy of 24,000 years and that we currently have enormous quantities that are being warehoused on the site of nuclear powerplants?

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I would like to know what the Department of Natural Resources is planning to do and I'd also like to know if it is considering responding to what the Seaborn Commission had to say about the process the government should undertake if it decides to go that route.


Ms. Sue Kirby: I don't think we have the appropriate people to answer all the details of your questions. We can follow up on those if you wish.

The earlier question, as I understood it, was really, would Canada be supporting nuclear power as one of the options that does reduce greenhouse gas emissions? That is our position.

The Chair: [Inaudible—Editor]...has one of the highest per capita emissions in the world. It's very hard to understand that approach.


Ms. Girard-Bujold, are you finished?

Ms. Jocelyne Girard-Bujold: Yes.

The Chair: I'm sorry. Mr. Herron, please.

Ms. Jocelyne Girard-Bujold: Will she answer in writing?

The Chair: Yes.

Ms. Jocelyne Girard-Bujold: Thank you, Madam.


Mr. John Herron: My question is going to follow a little on the chair's questioning as well.

Prior to that really positive agreement in 1988, known as the free trade agreement, we traded $90 billion each and every year with the Americans. Today we trade about $260 billion each and every year with the Americans. We're an export-driven country, really reliant on being able to manufacture and export and be competitive with the States.

If the Americans are following up on the money that Clinton announced right after Kyoto, in 1997, in terms of the investments they will be making with respect to energy efficiency, if we don't engage at the same levels with the same aggressive tax regime for investments in energy efficiency, that's going to have not only negative implications on our export-driven economy, but on the Canadian economy as a whole.

I know when I speak to industry, whether it's in the hydrocarbon production industry or whether it's any kind of industrial sector, they have no clue about what rewarding early action really means. They have no signal from the federal government in any way, shape, or form.

So if I move the yardsticks right now, if I invest in this technology at this point in time, am I going to get a little pat on the back at some point down the road that I made this initiative now? If I'm willing to engage early, and if almost three years after Kyoto industry has no clue in terms of what early action actually means.... The point that illustrates that the most is that just last week, that fine Liberal initiative that was done with the Commissioner for the Environment pointed out that when it comes to reducing climate change, we have not even begun to tap the tax incentive component on energy efficiency.

I would think, three years after Kyoto, you should be able to chime off the amount of what we should be able to do on energy efficiency initiatives and what kind of menu you'd like to put before the Minister of Finance.

Entertain me a little bit. There must be a few in there somewhere.

Mr. Neil MacLeod (Director General, Office of Energy Efficiency, Energy Sector, Department of Natural Resources): I think it's worth noting that there are a number of ways to promote energy efficiency that are underway now other than through the tax system. There are in fact 19 different programs aimed at improving energy efficiency and alternative transportation fuels in Canada. They cover all sectors of the economy—the residential sector, the industrial sector, the commercial institutional sector, the transportation sector.

I can rhyme off a few examples. A number of these are very recent initiatives, begun only two years ago.

In the residential sector, for example, in order to encourage Canadian homeowners to have more energy efficient homes, there is a program whereby an auditor will go into the home, do a thorough audit of the energy consumption in that home, and provide the homeowner with a prioritized list, in terms of starting off with the biggest bang for the buck, of improvements they could make. The person then gets a full report in that regard. Should they then go ahead and make those improvements, the auditor comes back, re-audits the home, and gives them the final grade. They can then, should they choose to do so, put it on their own personalized EnerGuide label.

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The Department of Natural Resources pays for that information in order that the federal government can enrich its database on what's going on. By paying roughly $150 for that $300 audit, we are subsidizing the cost of that audit.

Mr. John Herron: The point I'm making here is that that's not a tax incentive. I mean, from that perspective the tax incentives are really rewarding early action. I guess my very short question is, will industry—when this is one of the primary sectors, in the transportation sector and the automobile manufacturers sector as well—have a clue what early action means when that's utilized in the House of Commons?

I saw Mr. Goodale stand up in response to my questions as well and say we're going to reward early action. I look at every automobile manufacturer and every industrial sector I've spoken to on climate change, and they clip their head and say, “What?”

Are they going to know what early action means before you go to The Hague?

The Chair: Briefly, please, Madam Kirby.

Ms. Sue Kirby: I think there's a pretty good understanding of what early action means. It means we want action now. The mechanisms and incentives for rewarding it, as you've suggested, are still under development. Clearly, those are going to be amongst the things that will be included in the first business plan. As I said, that will be ready before The Hague.

The Chair: Thank you.

Madam Kraft Sloan, Mr. Reed, the chair, and Madame Girard-Bujold on the third round. We are asked to leave the room at 10:50 a.m. today.

Madam Kraft Sloan, please.

Mrs. Karen Kraft Sloan: Thank you.

When you say that nuclear reduces greenhouse gases or is a better form of energy with regard to the creation of greenhouse gases, I'm wondering if you've done a full life-cycle analysis of using energy. That would include the extraction of uranium from the ground, because certainly that creates greenhouse gases. If you have done this study, could I have a copy of the material, or could the committee have a copy of the material, if you've done a full life-cycle but you've still reduced greenhouse gases?

Ms. Sue Kirby: I don't think I suggested that nuclear was a better form of energy. I did suggest that it is a form of energy that does reduce emissions and in that context should not be excluded. But no, we do not have the specific study available. It has not been done.

Mrs. Karen Kraft Sloan: You don't have a full life-cycle analysis then of extraction of the uranium, because obviously you need uranium.

You don't have a full life-cycle analysis then? Is that what I'm hearing?

Ms. Sue Kirby: That's what I believe I said. Do you want to add anything, David?

Mr. Dave Burpee: No.

Mrs. Karen Kraft Sloan: Secondly, with regard to the issue that Mr. Herron raised on early action, and I realize this is something you're still developing in terms of a mechanism, how do you verify the reductions in greenhouse gases? I'm having trouble with the concept. If you're acting before action is required, how do you know what greenhouse gas has been reduced, how much, and how the individual company or sector is going to be provided with credit for that?

Ms. Sue Kirby: There are a number of different proposals that have been put forward. The majority of them call for third-party verification. They call for a party outside of the industry to do the verification, whose pay varies from proposal to proposal. That is, I would say, the most common form of proposal we got.

Do you want to add anything, Ian?

Mr. Ian McGregor: Just that if a company is undertaking a project, they probably have a pretty good idea of the greenhouse gas emissions in advance. There are some technical problems, obviously, with measurement, but they can certainly get an order of magnitude, and through these third parties, an assessment can be done.

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One of the steps that has been taken with provinces is the creation of a baseline initiative that allows companies to register the reductions they have made to make sure they are not in any way lost in any future developments.

Mrs. Karen Kraft Sloan: So you'd have to establish a baseline and then this would have to be verified by an outside third party.

Mr. Ian McGregor: Yes.

Mrs. Karen Kraft Sloan: Someone couldn't come to you later and say they had reduced greenhouse gas emissions by such-and-such an amount, could they? They would have to register what they were producing at time zero, undertake their project for early action, and then get a credit for it. You have to have a baseline and it has to be registered in a verifiable way. They can't simply say this is what they've done.

Ms. Sue Kirby: That's correct. For baseline protection, they have to register in a verifiable way.

Mrs. Karen Kraft Sloan: But you haven't established the mechanism for that, have you?

Ms. Sue Kirby: The registry will be the Climate Change Voluntary Challenge Registry. They will be doing the registration of the baselines. The individual companies will be doing the calculations, but to get baseline protection they must do it in a verifiable way. The rules for those are in the consultation phase right now.

Mrs. Karen Kraft Sloan: If someone wanted to take credit for early action for the year 1999 and on, they really couldn't do that then.

Mr. Ian McGregor: The rules that are being worked on provide a one-time opportunity to go back to 1990, which is the base year. I must admit I can't tell you precisely how that would be done, but they are working with companies. Where they have taken action since 1990, which is the base year, they will be able to register those.

Mrs. Karen Kraft Sloan: But you would only be able to—

The Chair: Thank you.

Mr. Reed, please.

Mr. Julian Reed: There have been federal-provincial memoranda of understanding regarding the purchase of green power. It seems to me that one in Ontario went back to 1996, yet Alberta is the only province so far who has ratified and adopted it. Does anyone here know the status of those memoranda now and whether...?

Mr. Dave Burpee: I guess what we have is really not a memorandum of understanding. We were authorized to purchase green power for NRCan facilities, and we discussed this opportunity with most provincial energy ministries and with the utilities in those provinces. The first project we went ahead with was in Alberta, where we did a request for proposal from all the Alberta utilities for the supply of green power for the NRCan facilities, and Environment Canada did the same thing.

So we do have an agreement in there that has been in place for a couple of years with ENMAX, which is the City of Calgary project. They built on that to have a broader program—what they call a Greenmax program—in which they're adding residential customers. I think that's been quite a successful exercise.

Mr. Julian Reed: Is there any reason why Ontario hasn't taken this on?

Mr. Dave Burpee: We did have fairly extensive discussions with Ontario Hydro. At one time they had a renewable energy technology program. But as we were discussing that, the program came into question because of the restructuring of the Ontario market, and some of those decisions were put on hold. So we proceeded with the arrangement in Alberta.

In the 2000 budget plan, there was another $15 million provided over a 10-year period for additional purchases of green power for federal facilities in Prince Edward Island and Saskatchewan, and those are both proceeding.

Mr. Julian Reed: Who would coordinate that, now that Ontario Hydro is being dismantled, or has been dismantled? OPG is only one generator now, and under legislation they have to reduce to 35% of their current capacity. It's everybody for himself on an electricity exchange. So how would that mechanism work now, out of Ontario?

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Mr. Dave Burpee: That hasn't been discussed yet, but there are, of course, recommendations in the electricity table report for governments—federal, provincial, and municipal—to consider additional green power purchases.

I presume that in Ontario, when the market's open right to the retail level, it would be done through a competitive process. There'd be an RFP process, which would get you the least-cost power from those eligible sources, those that were certified as low-emission sources.

Mr. Julian Reed: There's one other thing. I just want to throw in a caution here. When nuclear power is being considered as green power, if you like, or as eligible—I'm not anti-nuclear, particularly—there are some cautions that should be considered. One is that nuclear power is only 29% thermally efficient. It means that for every 2,000 megawatts that's being generated at Pickering—if Pickering is running, and I don't think it is right now—5,000 megawatts is being discharged into Lake Ontario in the form of waste heat. I hope that realization is considered.

The other caution is that there still has been nothing done with high-level waste. It was 20 years ago that I was taken out to Whiteshell and shown the answer to the problem of long-term storage; yet it is still not addressed. What we are doing to our grandchildren is leaving a clean-up problem that.... You talk about cost. We're leaving clean-up problems in the billions.

When Robert Kennedy, Jr. was here from the United States a couple of weeks ago, he estimated that the nuclear waste clean-up cost in the United States, so far, is $1 trillion. I only say that as a statement. You don't need to comment on it if you don't want to, but it's a caution that I throw out.

The Chair: Thank you very much. It's very timely and we certainly appreciate that cautionary signal.

Because of limited time, I will invite Madame Girard-Bujold to ask her question, instead of mine.


Ms. Jocelyne Girard-Bujold: I have here the report of the Environmental Assessment Panel on nuclear fuel waste regarding the concept of management and stockpiling of nuclear fuel waste. Two visions were presented to the panel. Some said that nuclear energy was an affordable and environmentally friendly source of energy, whereas others said that this form of energy should be progressively replaced by renewable energy sources.

Is there currently a sectoral panel that is examining this problem in anticipation of the reports that you will be submitting to the Minister of the Environment next October?

Ms. Sue Kirby: There is one on electricity. That is the closest.

Ms. Jocelyne Girard-Bujold: Does it establish a link between nuclear energy and renewable energy sources in order to facilitate comparison and determine which is better from the standpoint of the environment, cost and renewable energy?

Ms. Sue Kirby: All forms of electricity production were taken into account by the table or focus group: nuclear energy, fossil fuels, renewable energy.

Ms. Jocelyne Girard-Bujold: Will there be a report on that and will it be made available?

Ms. Sue Kirby: One of the sectors that will be taken into consideration in October will be electricity.

Ms. Jocelyne Girard-Bujold: Thank you.

The Chair: Thank you, Madam.


We will conclude this most interesting exchange. We could go on much longer, because every round brings out more interesting observations.

All I can say on behalf of my colleagues—unanimously, I think—is that we wish you luck. You're terribly behind schedule. In addition, your measures will not bring us to the desired reduction to 565 megatons, unless a miracle happens.

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The measures you seem to be outlining for us on taxes are badly inadequate. The interventions made on early-action recognition are very legitimate, and it's disturbing to learn the process is so slow. The net cost of sequestration is far too wide.

Mr. Chatters has quite rightly urged you to engage in cost-benefit analysis. May I warn you though that cost-benefit analysis can be very tricky. If you use the short term, you arrive at a completely different or diametrically opposite conclusion than for the long term, as Mr. Reed outlined with his intervention a few minutes ago. And nuclear is a classic example.

So you have a terribly difficult task ahead. As far as I can conclude, we are not yet on the right path, but I hope you will be able to make the necessary changes. To do that you will require a lot of muscle within the system, particularly with your colleagues in the taxation department.

I thank members of the committee, and on their behalf I thank you as well.

The meeting is adjourned.