AANR Committee Meeting

STANDING COMMITTEE ON ABORIGINAL AFFAIRS, NORTHERN DEVELOPMENT AND NATURAL RESOURCES

COMITÉ PERMANENT DES AFFAIRES AUTOCHTONES, DU DÉVELOPPEMENT DU GRAND NORD ET DES RESSOURCES NATURELLES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, March 13, 2001

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[English]

The Chair (Ms. Nancy Karetak-Lindell (Nunavut, Lib.): I guess we can start the meeting this morning. I have a cold, so if you can't hear me, just let me know.

I'm very pleased to have the Minister of Natural Resources here this morning. He's also the minister responsible for the Canadian Wheat Board and federal interlocutor for Métis and non-status Indians.

We've got Bill C-4 before us this morning, an act to establish a foundation to fund sustainable development technology.

Without further ado, I'd like to turn the floor over to the minister and have him introduce the officials he has with him. Minister.

Hon. Ralph Goodale (Minister of Natural Resources): Thank you very much, Madam Chair.

It is a pleasure to be with you today to talk about Bill C-4, an act to establish a foundation to fund sustainable development technology.

With me are three of my senior officials from the Department of Natural Resources, Sue Kirby, Anne-Marie Fortin, and Graham Campbell. I hope that among the four of us we'll be able to respond to any of the questions members of this committee may have.

If I may, Madam Chair, I'll begin with just a few brief remarks, and I hope we can spend most of our time this morning in a dialogue around the table about Bill C-4.

Accountable to Parliament through its annual report, the arm's-length foundation that is proposed through this legislation will administer the $100-million sustainable development technology fund that was specifically announced in the federal budget 2000 in February of last year.

Sustainable development is obviously an important challenge Canada must face head-on. It is a challenge we will face with new ideas, new knowledge, and new technologies.

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Essentially, sustainable development depends on our capacity to innovate, and that is what Bill C-4 is all about: innovation, quality of life, climate change, and clean air.

By establishing the Canada Foundation for Sustainable Development Technology and by endowing that foundation with $100 million, we are fostering and encouraging collaboration among diverse players to accelerate the development and demonstration of new sustainable development technologies—that is, Madam Chair, to accelerate technological innovation.

By supporting collaborative arrangements rather than just single entities and by ensuring that funds from the private sector are leveraged, the proposed foundation will support measures to get new technologies into the economy quickly and efficiently, so all Canadians may benefit at the earliest possible date.

Bill C-4 ensures that the proposed foundation will apply the principles of good governance. The foundation will operate with a 15-person board of directors, and 15 people will form the members of the foundation. The members of the foundation will represent the potential stakeholders. They would be analogous, Madam Chair, to the shareholders of a corporation, and as such they will scrutinize the overall activities of the foundation.

The board of directors and the members of the foundation will be drawn from all regions of Canada. A minority number of each body will be selected by the Governor in Council. The individuals will have experience in developing and demonstrating sustainable development technologies. They will represent the business, academic, and not-for-profit communities, and they will all be from outside government.

The foundation will be required to establish sound financial and management controls, and it must appoint an auditor to verify the effectiveness of these controls. The foundation will have to produce an annual report to the members of the foundation and to the public, and that report will be tabled in Parliament. The report will include an evaluation of the results achieved from the funded projects so we can measure the utility of the money that is being put toward this purpose.

The detailed terms and conditions associated with the management of the fund will be contained in a specific funding agreement between the Government of Canada and the foundation, and the Auditor General of Canada will scrutinize the funding agreement.

With the $100-million endowment, the foundation will fund technology projects proposed by collaborative arrangements among private-sector commercial corporations, universities, not-for-profit organizations, industrial associations, and research institutes.

The foundation will provide funding for projects that help reduce greenhouse gas emissions; reduce the carbon intensity of the energy system; increase energy efficiency; capture, use, and store carbon dioxide; lower levels of volatile organic compounds, nitrogen oxide, and particulate matter in the air; and so on.

Activities of the proposed Canada Foundation for Sustainable Development Technology will complement, leverage, and create synergies with ongoing federal and provincial programs related to climate change and clean air. This would include the federal program for energy research and development, the Natural Sciences and Engineering Research Council, the Canada Foundation for Innovation, the Industrial Research Assistance Program, the Technology Early Action Measures program, and Technology Partnerships Canada.

In addition, the foundation's activities will help Canada take a step closer to meeting international commitments on climate change and clean air.

Finally, Madam Chair, I would point out that toward the end Bill C-4 contains certain conditional clauses that allow, if so designated by the Governor in Council, a private sector foundation to continue the functions of the foundation, in accordance with the legislation. All the assets and liabilities of the foundation would be transferred to the private sector foundation, and the board of directors and the membership of the corporation would be dissolved so the legislated process could be triggered.

The conditional clauses help ensure that the government can fulfil its promise to establish the sustainable development technology fund and ensure that the new technologies that are necessary to address issues such as climate change and clean air are developed and put to use on behalf of Canadians as rapidly as is possible.

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Madam Chair, since Bill C-4 was introduced we have had the opportunity to engage in further discussions with various directors of private sector foundations. We were in agreement with them that there were a couple of issues that perhaps could be clarified before this committee. As a result, my parliamentary secretary, Mr. Serré, will be proposing some small administrative amendments, so that we will be able to ensure the foundation does in fact operate with the greatest efficiency. This is based upon advice that we will obtain from certain private sector representatives.

In the new millennium, Madam Chair, Canada, in my view, must lead the world as a living model of sustainable development if we wish to enjoy all of the benefits, economic, environmental, and social, that flow from our natural heritage. We must, in fact, be the world's smartest natural resources developer, user, and steward for the future. This legislation now before us will help us reach that goal on behalf of all Canadians. I hope members of this committee will be able to deal with this legislation and send it back to the House of Commons at the earliest opportunity.

Thank you, Madam Chair.

The Chair: Thank you, Minister.

I guess we'll go on to the—

Mr. Maurice Vellacott (Saskatoon—Wanuskewin, CA): On a point of order, is there a copy of his speech provided to us?

The Chair: We had not received it. So we'll distribute that as soon—

Mr. Maurice Vellacott: Is it your understanding that we would each in future be getting a copy?

The Chair: Yes, we're going to distribute it as soon as we get it. I asked—

Mr. Maurice Vellacott: I'm asking for future reference. I thought our understanding was that when witnesses appear before the committee, we have the material in both official languages in advance.

The Chair: Yes.

Mr. Maurice Vellacott: If that could be on the record, I'd appreciate it.

The Chair: So we'll get a copy of your brief.

As agreed, we will do the questioning with seven minutes from the first questioner of each party, and then three minutes on our side.

Mr. Chatters, I believe you have the floor.

Mr. David Chatters (Athabasca, CA): Thank you. And thank you for appearing before the committee, Minister. We appreciate your taking the time to come and talk to us about the bill.

I support the objective of the bill. I think it's an honourable and important objective that the government join with the private sector and with the public in support of the development of sustainable technologies and move towards meeting our Kyoto commitment.

My only concerns are with what I would see as a lack of transparency and accountability in the bill. And my question simply would be, why is it necessary to move the funding of these partnered projects away from the government and away from scrutiny by the Auditor General? The department is now funding a number of projects involving partnerships with the private sector on these types of programs. Why is it necessary now to move that away from the government, to arm's length from the government, and why can it not continue to be done the way your department is doing it now?

Mr. Ralph Goodale: Mr. Chatters, first of all, let me thank you for your support of the objectives we're trying to achieve here.

In respect of the methodology, there are a range of funding instruments that the Government of Canada utilizes to support technology, to support the development of future innovation. Some of those tools are directly within government departments. I think, for example, of the Climate Change Action Fund, which includes the TEAM initiative by which we have supported technology in the past.

Incidentally, the Climate Change Action Fund and the TEAM component of it are continuing. This initiative is not instead of the technology early action measures, it is in addition to the TEAM initiative.

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As well as those in-house funding mechanisms, we also have arm's-length agencies. For example, NSERC has a peer-review process for assessing the merits of projects that come forward for funding.

What we're hoping to achieve here is synergy among private sector players and other players outside government. We want to get them more and more into the game.

Many private sector players are already very proactive—a great many in your province. I could reel off a long list of ones you and I both know. I think those players deserve a lot of praise for what they've done so far, but we do need a range of tools to further engage them, to continue moving the yardsticks forward.

Our view was that having this funding instrument at arm's length from government is a good way to build that synergy and further engage the private sector. The people who assess the merits of projects would be bona fide representatives of the stakeholders—and therefore would make funding recommendations based on their external professional expertise.

Now we recognize, of course, the accountability point you refer to. That's why the activities of the foundation will need to be fully audited. That's why there needs to be an annual report, and that's why the report will be tabled in Parliament so MPs will have access to it.

The key instrument between the government and the foundation will be the funding agreement by which money is actually transferred to the foundation. That funding agreement will be subject to scrutiny by the Auditor General.

What we've tried to achieve here are two parallel processes for getting the best and most credible private sector engagement. I think the arm's-length arrangement is the best way. But we've tried very hard to build in accountability mechanisms, to make sure that members of Parliament and the general public can be satisfied that this money is well invested.

In order to be accountable, we're going to ask the foundation not just to report on what projects have succeeded in getting funding, but also to measure the results—to be able to tell us, as the fund evolves over the years, how much has actually been achieved as a result of the research.

We've tried to achieve a balance here—on the one side maintaining the fundamental principles of good governance and accountability, with a role for the Auditor General; and on the other side, developing synergy and outreach to the private sector, which is also critically important.

Mr. David Chatters: So the Auditor General would simply have access to the funding agreement. He wouldn't be able to go further than that, to scrutinize whether or not a particular private sector company met the criteria of the funding agreement. I'm thinking back to some of the problems with HRDC, and the failure of some of those projects to meet the program criteria. Perhaps accountability could somehow be built in through the Auditor General, to ensure that people receiving funds do in fact meet the criteria of the program in every measure.

Mr. Ralph Goodale: Mr. Chatters, I think we achieved that objective by requiring that the foundation select an auditor to audit its ongoing operations. There are actually two levels of audit here. One is the fundamental analysis of the funding agreement, the relationship between the government and the foundation. That's the role we've identified here for the Auditor General. The daily operations of the foundation are of course subject to whatever auditing procedure the legislation requires it to set up.

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Quite frankly, what I hope we get here is the best of both worlds: the official perspective and analysis of the Auditor General on the funding agreement and on the relationship between the government and the foundation; and then the ongoing audit of the foundation's activity, performed by a private sector auditor selected for that purpose.

Mr. David Chatters: I have no confidence, Mr. Minister, that an auditor chosen and appointed by the board and responsible to it would provide adequate transparency on the funding between the clients and the board. That doesn't provide the public transparency I think the Auditor General could, and should, provide. There's certainly transparency between the foundation's own hired auditor and the board he reports to, but I'm not sure that's enough to provide public transparency.

Mr. Ralph Goodale: I would just point out that any auditor called upon to perform this function would have to be duly accredited according to the standards of the auditing profession and would conduct himself or herself according to those professional standards. Obviously, I have no idea who the foundation directors would select—that would be up to them. But the individual or firm would need to satisfy all the requirements of the Institute of Chartered Accountants, which is a very high standard.

The Chair: Thank you, Mr. Chatters. I'm going to turn now to Mr. Cardin.

[Translation]

Mr. Serge Cardin (Sherbrooke, BQ): Thank you, Madam Chair. Good day, Mr. Minister.

You cannot oppose a motherhood issue. It is good to get rid of greenhouse gases. But let us look at what that projet really involves, namely creating a foundation. Earlier in your presentation you mentioned the discussions you had with representatives of the private sector to see how the project would work. Did you also hold discussions with the various organizations or foundations that could be set up or have already been set up in various provinces? There is currently a foundation in Quebec, the Fonds d'action québécois pour le développement durable. Did you speak with the provinces or with various foundations to see, even if you have your own sustainable development objectives, if there is not some way to share these responsibilities or even to leave them to the provinces, like Quebec? Have you tried to foster the development of technology in various provinces and where there are already foundations, to simply transfer the funds to the foundations already existing in provinces like Quebec?

Mr. Guy St-Julien (Abitibi—Baie James—Nunavik, Lib.): Madam Chair, I have a point of order. The Liberal Party of Canada should have the floor before the Bloc Québécois. I do not want our work to be harmful or useless.

Mr. Serge Cardin: —

[Editor's note: Inaudible]

[English]

The Chair: We understood from the agreement that we had seven minutes for the first questioner of each party, and then three minutes afterwards alternating between the government and the opposition. This is what I'm going by. Unless I misunderstood, there should have been a government member—and then back to this side for seven minutes.

[Translation]

Mr. Guy St-Julien: I think, Madam Chair, that we should have used the first seven-minute period and continued from there on.

[English]

The Chair: He did his seven minutes, and we're now into the second seven minutes.

[Translation]

Mr. Guy St-Julien: And what about us?

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[English]

The Chair: We understood that this was what we had agreed to at our last committee meeting, unless Jim and I misunderstood it. We're just following the agreement that we...

Mr. Chatters.

Mr. David Chatters: Madam Chair, traditionally the rotation goes first to the official opposition, then back to the government, then back to the other opposition parties.

The Chair: Okay.

Mr. David Chatters: That would seem to be the way that—

Mr. Gerald Keddy (South Shore, PC): It's sort of back and forth for the first round, and after...

[Translation]

Mr. Serge Cardin: Madam Chair, I began putting my question, but, as you could see, I was surprised when you called me because I thought we were going to alternate. I was surprised, but I obeyed you and I took the floor.

[English]

The Chair: Okay, I'm sorry. Let me start at the beginning. This is my first one, so I misunderstood that.

I'll give the floor over to Mr. St-Julien, then we'll go back to you. Thank you.

[Translation]

Mr. Guy St-Julien: Thank you, Madam Chair. I appreciate your respect for the rules.

Mr. Minister, I would like to know whether this foundation will have the same number of members in each province.

[English]

Mr. Ralph Goodale: Mr. St-Julien, to the extent possible, my answer to that is yes. Remember, there are two bodies to be chosen here. There are directors and there are members, fifteen in each case. The Governor in Council will essentially identify half in each case. We will obviously have in mind the need for them to be balanced—balanced in terms of the expertise they represent, and balanced in terms of the various regions of the country that they come from.

Now, fifteen may sound like a lot to some people, but there are obviously some limitations when you're trying to get all of this balanced. But to the maximum extent possible, yes, we will be seeking professional balance and we will be seeking geographical balance.

[Translation]

Mr. Guy St-Julien: If I understand, when we mention provinces, we also include territories like Nunavut which will be involved in this foundation.

[English]

Mr. Ralph Goodale: That would certainly be an objective of mine, yes.

[Translation]

Mr. Guy St-Julien: Mr. Minister, you mentioned the budget. There will be a budget of $100 million per year. Will it be divided into one third and two thirds, or into three thirds? I want to know whether this sum of $100 million will be fairly shared across Canada.

[English]

Mr. Ralph Goodale: Mr. St-Julien, the $100 million figure is the size of the total endowment. It's not an annual figure, it is a one-time contribution by the Government of Canada to the foundation. Now, assuming the foundation is as successful in the future as we expect it to be, the government may well make future endowments down the road. For the time being, however, $100 million is the total amount available to the foundation. What we will be seeking to achieve with that $100 million is a very substantial amount of leveraging from other participants and players, particularly in the private sector.

I've been asked the question about whether or not a significant degree of leveraging is possible, or whether this $100 million coming from the Government of Canada will in effect be all that will be forthcoming for these important sustainable development projects. I think we will be successful in leveraging.

For example, I think of the Technology Early Action Measures program that I referred to in my answer to Mr. Chatters. It has been up and running now for three years, and our experience there was that with every dollar we invested from the TEAM fund, the Technology Early Action Measures fund, we were leveraging between six and ten dollars from other players. So this was really quite an impressive performance, in that the TEAM money was used to such great advantage to bring other people into the tent to make contributions too.

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So my answer to you is twofold, really. The $100 million is the full amount of the initial endowment, but there may be subsequent endowments coming from the Government of Canada, depending upon how well the foundation performs and how much it succeeds in meeting the public objectives. And we do anticipate a very large amount of private sector and other forms of leveraging to make that $100 million grow into what is likely to be a much larger overall amount at the end of the day.

The Chair: Mr. St-Julien, you have three minutes.

[Translation]

Mr. Guy St-Julien: I have two questions. I have heard about one third, two thirds, private enterprises... Can other countries, either the United States or European countries, join foundation projects with a third? You mentioned foreign countries. I want to know who the government consulted to define the guiding principles of this foundation. Whom did you consult in Canada? That is what I want to know. I think it is excellent to set up a foundation, but did you consult people in our country?

[English]

Mr. Ralph Goodale: Mr. St-Julien, the foundation could well consider applications for projects involving international participants. The fundamental point about problems like climate change and clean air, of course, is that they do not respect anybody's national borders. They are a global atmospheric problem and challenge. Therefore, if there are projects that come forward involving international participation, and if the foundation is of the view that those projects materially advance the Canadian position, then they're perfectly at liberty to consider worthy international undertakings. That would be clearly a judgment call to be made by the foundation.

Now, in terms of the consultations, they were very broad. Specifically, in relation to climate change, we went through a two-year process of consulting with provincial governments, with municipalities, with the private sector, with environmental organizations and with the scientific community. Virtually every dimension of Canadian life was involved in that process. It began immediately after the Kyoto protocol was signed, and it concluded in the early part of 2000. The Sustainable Development Technology Fund was born out of all of that very thorough consultation.

What we identified was a gap in the innovation chain. There are a number of public and private federal and provincial funding processes that deal with the primary research end of the equation, and there are a number of funding initiatives that deal with the commercialization end of the innovation chain, but there has tended to be a bit of a gap in the middle. That's where this fund is aimed, and we've been very careful to make sure we're not overlapping with other initiatives or duplicating what somebody else is doing. We're trying to fill a gap to make that chain continuous, and we're trying to facilitate innovation all the way along the chain.

[Translation]

Mr. Guy St-Julien: Thank you.

[English]

The Chair: Thank you, Minister.

Mr. Ralph Goodale: The chairman is looking at me very sternly.

The Chair: I'll let Mr. Cardin start his seven minutes again. I'm being a little generous, but I'm going to start cutting it so that everyone can have a chance to bring some questions forward.

Mr. Cardin.

[Translation]

Mr. Serge Cardin: Thank you, Madam Chair.

So, this will be added to the time I took earlier. I did not get an answer yet. I do not know, Mr. Minister, if you recall any of the background I described at the beginning. Do you?

Thus, my question is about consultation with the various foundations that exist in different provinces and in Quebec. What kind of consultations were there, and what kind of priority did you give to the discussions that you had with various foundations?

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[English]

Mr. Ralph Goodale: Mr. Cardin, as I explained in my response to Mr. St-Julien, we did consult very broadly about this and other initiatives related to climate change and clean air. Those consultations included, I believe, virtually every potential stakeholder in those very important issues. It certainly included all of the provinces.

We examined the possibility of utilizing some existing foundation instead of creating a specific foundation for this purpose. We found in each case those various foundations that exist today in academic institutions or in the private sector are doing work in relation to sustainable development, are doing in fact very good and very important work, but in many cases are not directly on target with the objectives we are attempting to achieve here.

You have mentioned the foundation in Quebec. There is also a foundation in Manitoba. I believe there's another one in British Columbia. There are several across the country. Their purposes are generally in the same direction, but what we wanted here is to have a very specific focus on technology development related to climate change and clean air. In order to get that precise focus—first of all, one that is connected to the development of technology, and secondly, with technologies related to climate change and clean air—we thought the most prudent way to proceed was to establish this specific vehicle for this specific purpose.

Now, it may well be those other foundations that already exist will become involved in partnership projects of one kind or another and may apply to this new foundation for financial support. In order to be very crisp and sharp about the focus, rather than sort of borrowing a foundation that already exists somewhere, we felt it was more efficient to establish this new vehicle within which the others may, depending on their project applications, participate.

[Translation]

Mr. Serge Cardin: The first of the three main parts of the Quebec foundation deals with air pollution. Thus, the objectives are the same and the foundation deals of course with the organizations it funds. Isn't there an eventual risk of duplication, where the federal foundation might fund organizations that have the same objectives as other existing organizations funded by the Quebec foundation? Isn't there a risk of duplication, of competition in research, and of double expenditures in cases like those?

[English]

Mr. Ralph Goodale: Mr. Cardin, there are two comments in response.

Our experience over the period since 1997, when all of our activities in relation to climate change very substantially accelerated, shows there is a technology and innovation shortfall. When you add together everything that is being done by the Government of Canada, by the provinces, by private sector research organizations, by individual companies in the private sector, and by environmental organizations, there is still a shortfall in the development of the new technologies we will require. Therefore, the money that will be provided through this new foundation is aimed at filling the gap that already exists.

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My second observation would be that all of these various funding agencies work very hard with each other to mutually reinforce the benefits of their results, rather than overlap and duplication. Their work has been very good, recognizing that scarce dollars are available. We can't afford, and we don't want to have, overlap and duplication. I think there has been a high degree of responsibility on the part of all of the players not to reinvent the wheel in duplicating work that somebody else is already doing somewhere else.

We will require, as a part of the application process, that other funding sources be disclosed so it can be fully on the table as a matter that the foundation would take into account when they're considering the merit of any particular application. That helps us achieve the leverage we want to achieve. It also helps us to avoid overlap and duplication.

But at the end of the day, I think this foundation will be a useful addition to the amount of money that's available for sustainable development technology. It will not end up duplicating what somebody else is already doing.

The Chair: That's the end of your seven minutes. Thank you.

Mr. Serge Cardin: Madame Chair, I would just add one sentence. Some of that technology development work being undertaken in Quebec by Quebeckers is excellent work. Certainly I anticipate a significant number of applications from Quebec to this new foundation to help move that very good program further ahead still.

The Chair: Thank you, Mr. Minister.

Seven minutes to the NDP party, Mr. Comartin.

Mr. Joe Comartin (Windsor—St. Clair, NDP): Mr. Minister, I'm a bit concerned about the ongoing relationship between the foundation and the government. Do I understand correctly that if the foundation desires or requires additional funding, they would return to your department to carry on those negotiations for additional funding?

Mr. Ralph Goodale: I presume that is the source to whom they would go to make their point if they believed the foundation is not sufficiently well endowed. This $100 million will carry us some distance, particularly once it's leveraged, to be some multiple of $100 million. But they would no doubt, if they felt more money was required, approach the government and make their case for additional funding.

Mr. Joe Comartin: It would be your department they would approach at that point?

Mr. Ralph Goodale: It doesn't have to be. The legislation indicates I have the reporting responsibility to Parliament. Obviously, the Minister of the Environment has a role here. The Minister of Industry has a role with his general responsibility for research. They could approach my ministry. They may decide to approach somebody else. That's not a particular issue, unless there's a supplementary here.

Mr. Joe Comartin: There is.

Mr. Ralph Goodale: Okay, let's get on to it.

Mr. Joe Comartin: I know in the consultation process you consulted with a number of groups. In that process, and I suppose up to this time, is there any concern about the obvious conflict between a department such as yours being responsible for other sources of energy that may be in direct conflict with the types of energy we would be expecting this foundation to develop? Following that up, would it not be logical for the foundation to be actually designated to deal with the Minister of the Environment and his department, as opposed to either the trade department or your department?

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Mr. Ralph Goodale: The expertise within the Government of Canada for all forms of energy is not exclusively but largely vested within the professional talent in the Department of Natural Resources. We obviously have a mandate with respect to oil and gas and coal, and other forms of fossil fuels. But we also have, written right into the legislative mandate of the department, a responsibility for sustainable development. That carries the energy equation into renewable fuels, alternative sources of supply, new technologies like fuel cells.

If you examine the Action Plan 2000 that we published in relation to climate change, you'll find, for example, a very substantial emphasis on the diversification of our energy sources within Canada. That is one of the great blessings of this country: we are not dependent upon one single source of supply; we are very well endowed with respect to fossil fuels, but we also have enormous potential in biomass, in solar, in wind power, in nuclear power, and in the fuel cell technology, where Canada is a global leader.

I believe if we're going to address effectively issues like climate change and clean air, we will very definitely have to take advantage of that enormous diversity among our energy sources. I think you will find within my department a very fair-minded and even-handed approach to this, to make sure that all our potential energy producers are treated in a balanced way.

Mr. Joe Comartin: Mr. Minister, in terms of the structure of the foundation—I suppose we're into profit motive here—can this foundation enter into contracts with other groups as they're developing these technologies, where they actually would profit from it so that they can fund themselves from that methodology?

Mr. Ralph Goodale: If there were a prospect of profit, Mr. Comartin, the application would really move to another part of the innovation chain and most likely a vehicle like Technology Partnerships Canada. As you know, TPC typically involves a repayable contribution. Where there is the anticipation of profit eventually made, then the TPC program anticipates a payback.

Where this fund would come into play is at a level in the innovation process where it's pre-commercial, where you're not yet to the point of anticipating a profit. That obviously is research activity that is more difficult to fund. When there is an anticipation of profit, the funding sources are somewhat easier to find. But this fund would intervene at a stage that is a littler earlier in the innovation process, where the anticipation of immediate profit is not yet there.

Hopefully the new technology will help move the whole nature of our energy sector toward profitable sustainable development, but in the early stages it will be necessary for the research to be done on a not-for-profit basis.

Mr. Joe Comartin: So in your conception, this foundation will always remain as a granting agency as opposed to a self-funding agency.

Mr. Ralph Goodale: That's the anticipation at this stage. If that were to change at some future date, we would probably need to return to Parliament for a change in the authority. The standard vehicle for funding projects that anticipate a profit is a vehicle like TPC.

Mr. Joe Comartin: That's all, Madam Chair. Thank you.

The Chair: Thank you.

Mr. Keddy.

Mr. Gerald Keddy: Thank you, Madam Chair. I would also like to thank the minister for appearing before the committee.

Several questions come up about Bill C-4. A number of them have been asked, but certainly duplication seems to be a serious issue, and certainly one that I think most of us are a little bit troubled by.

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Part of the process also deals with funding, and as it states, its initial funding is $100 million, which is intended to be leveraged and hopefully will turn into $400 million or $500 million. But it will certainly turn into $400 million.

The example that has been used is the Canada Foundation for Innovation, which was set up originally with an initial allotment in 1997 of $800 million, another $200 million added in 1999, $900 million added in 2000, and $500 million added in the budget update of 2000. Now we're looking at a further injection of $700 million, for a total of $3.1 billion since its creation in 1997.

There are several other innovation funds out there. This isn't the only one, just one example.

We should know at this stage in the process... Is the intent to inject more funds into sustainable technologies? We're starting with $100 million. We've already seen what happens when we start with $800 million, how it turns into some $3.1 billion. Is the intent to come back in a year's time and look at a further injection of funds, if required?

Mr. Ralph Goodale: Mr. Keddy, there are two points. In order to achieve the technologies that are needed in relation to climate change and clean air, clearly more funding than this $100 million will be required. In terms of whether that additional funding would be conveyed through this particular mechanism or through some other mechanism I think depends largely upon the success of this foundation. If it's working, if it is substantially advancing Canada toward a more sustainable array of technologies that we can not only use ourselves but export around the world, then there may be future opportunities where we can convince the Minister of Finance to increase the endowment. But there may be other funding choices made in the future, as well.

The only thing that's committed at this stage is that $100 million. Whether there's something more will depend on how well that $100 million is used.

Mr. Gerald Keddy: I would assume that the board will take that into consideration when they're granting funding, whether it's to a university, a hospital, or whatever, or private industry. However, it begs the issue that there are several programs out there, all of which do similar things for literally tens of billions of dollars.

The reason and the object behind the Canada Foundation for Sustainable Development Technology is a wonderful thing, and it's one that most of us here would like to support; however, we're still getting into the duplication factor. Maybe some of your staff or deputies could assist in the number of dollars that are out there under similar projects now that are available for like-minded projects. That's one question.

My last question would be on the not-for-profit part. There has been a lot of discussion about not-for-profit, yet the board itself will have some power over patenting, and obviously if you're going to have some power over patenting, that deals in the for-profit end.

I'd like a little further explanation on those two points.

Mr. Ralph Goodale: Mr. Keddy, when we devised this vehicle we were very cognizant of the fact that there were other players in the field—

Mr. Gerald Keddy: Absolutely.

Mr. Ralph Goodale: —some of them private sector, some of them public sector at the federal level or at the provincial level. As I said in response to an earlier question, we were trying to target a part of the innovation chain where there appeared to be significant gaps.

• 1210

There is an array of funding vehicles available at the very primary end of the innovation chain. As I said to Mr. Comartin, when you get more to the commercial end you have vehicles like TPC. In the middle there are limited tools that can be used. This vechicle is aimed at that part of the innovation chain, and it is not company-specific. It is focusing on consortia of various players coming together.

We are very anxious here to leverage but not to duplicate. That obviously will be one of the factors the foundation itself will have to bear in mind when it is considering applications that come before it, and that, again, is the reason why we will require disclosure from applicants of what their other funding sources are. And while leverage is a good thing, getting more and more players to come together with their own dollars, I'm sure the foundation from a professional point of view will take into account whether they see stacking of program upon program would perhaps lead you to the conclusion that this is a duplication of effort.

That is a professional judgment that the foundation will have to make, and they will have to be prudent in the judgments they're called upon to make.

In the applications on the issue of patents, which you referred to, there is a question here of intellectual property and it will be obviously of benefit to Canada and of benefit to the proper dealing with the issues if we increase our intellectual property in relation to sustainable development. And there will need to be an intellectual property diffusion plan identified as a part of the application process. So, again, that is an area where the professional judgment of the foundation will need to come to bear to make sure that intellectual property is in fact being handled in an acceptable manner.

The Chair: Thank you, Mr. Minister.

I shall have to give the prize to the NDP for sticking to their seven minutes in this first round.

Mr. Ralph Goodale: What's the prize?

The Chair: We're ready for the second round. I would appreciate people putting their hands up so we can get them on the speaking list and we'll just alternate between the opposition and the government side. So if you have questions, I'll get your names on there. And I would appreciate you putting your questions and answers through the chair, please.

I'll go to Mr. Vellacott for his three minutes.

Mr. Maurice Vellacott: Thank you, Madam Chair.

I appreciate Mr. Goodale being here today and I thank the minister for his responses thus far.

I have a question referring back to what was raised by my colleague before—that is, is the funding agreement in the bill anywhere? I haven't read it word for word, but I don't see it per se in the bill, so I'd like a yes or no on that question.

Mr. Ralph Goodale: It's not in the bill per se. The bill provides that a funding agreement will have to be entered into between the Government of Canada and the foundation and the detail of the funding agreement would be scrutinized by the Auditor General.

Mr. Maurice Vellacott: Could that funding agreement at least be included as an appendix to this particular bill? Is that a possibility, or would you consider such a thing? Would there be reasons why it couldn't?

Mr. Ralph Goodale: I don't think, Mr. Vellacott, it would be appropriate for it to be a part of the legislation. What the legislation does is to identify what will need to be covered by a funding agreement.

Perhaps I could ask my officials to provide a list of the things that would be covered off in the funding agreement, just so you know the subject heads that the funding agreement would need to cover.

• 1215

Mr. Maurice Vellacott: Exactly. I have another question they might respond to also, which is where in the bill does it say that the Auditor General even has access? You've referred to that several times, and I don't see in the bill, at least in the appropriate sections 26, 27, 28, where it even mentions that the Auditor General has access to the funding agreement. We don't see it. There's in fact no mention of the Auditor General anywhere in the bill.

Mr. Ralph Goodale: Mr. Vellacott, on that point, in the estimates that provide for the transfer of the $100 million to the foundation, $50 million of that comes through the Energy Efficiency Act. The other 50% comes through the Department of the Environment Act, and it's those pieces of legislation plus the estimates process itself that allows the scrutiny of the Auditor General.

This is the natural process. So our estimates—meaning Natural Resources Canada's and Environment Canada's—taken together will provide the financial resources to move to the foundation. That transaction, if you will, is subject to the purview of the Auditor General.

Mr. Maurice Vellacott: Right. Would it not be appropriate then to have a specific or explicit mention in this bill—and I understand about the estimates there—that the Auditor General has specific access to the funding agreement? That's not mentioned here.

Mr. Ralph Goodale: The legal counsel advised me that this legal authority already exists by virtue of the other two pieces of legislation, the estimates process itself, and the Auditor General Act.

The legal authority already exists, and the legal advice I constantly receive, Mr. Vellacott, on these matters... When something like this arises and I'm advised the legal authority exists elsewhere, my question usually is, why don't we make it explicit right here? The lawyers constantly tell me that it raises complications in the duplication of statutes, and it's better to have the single authority rather than repeating the authority over and over again.

So the authority exists, and I would be happy to have the Auditor General look at the funding agreement, as he inevitably will do, because he already has that right.

Mr. Maurice Vellacott: You also said, Mr. Goodale—

The Chair: Excuse me, your three minutes is up, so I'll give you another chance.

Mr. John Finlay, please.

Mr. John Finlay (Oxford, Lib.): Thank you, Madam Chair.

Mr. Minister, I have three quick questions if I can get them in.

You've mentioned other government programs related to sustainable development, environmental priorities and technology innovation. I wonder whether we could ask you or your officials to prepare a list of those other programs, and might the members of this committee have such a list?

Mr. Ralph Goodale: Mr. Finlay, absolutely.

Between my department and Environment Canada, we have published a long list of the various initiatives that we've undertaken with respect to climate change. I would be happy to file all of that with the committee. In fact, I think it could be very useful to see the full scope of activity we're undertaking, particularly what has been announced in the last year, between budget 2000 and the climate change action plan last fall. I'll ask my officials to assemble that material and to provide it in both languages to the clerk of the committee.

Mr. John Finlay: Thank you, Mr. Minister.

I'm going to skip the second question in case you cut me off, and go to the third one.

Dealing with clause 11, it sets off factors that would have to be taken into consideration in appointing the directors of the foundation, and then the next sentence in my briefing notes says “appointment of the foundation members”.

I don't have a copy of the act. I'm sorry, Mr. Minister, but could you give me some brief explanation of how the members relate to the directors?

Mr. Ralph Goodale: To put it in the simplest terms, Mr. Finlay, the members would be analogous to the shareholders of the corporation. If this were a private sector corporation, the members would be the shareholders. This is obviously not a private sector corporation, it's a not-for-profit foundation. The members would be selected to represent the broad sustainable development technology community in Canada.

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As I said before, we will work very hard to get the various disciplines and professions represented, as well as geographical distribution. The board of directors, of course, performs the typical function of the board of directors of a foundation. The members represent the stakeholder community.

Mr. John Finlay: Thank you very much.

The Chair: You have 20 seconds.

Mr. John Finlay: Twenty seconds?

Mr. Ralph Goodale: All right, the other had 15.

Mr. John Finlay: Mr. Minister, this act is modelled on the Budget Implementation Act, but one of the differences is in the definition of an eligible recipient. The one act says who they are; it means a hospital, university, post-secondary education. This act says “means an entity that is established in Canada and carries on or, in the opinion of the board, is capable of carrying on eligible projects.” I don't wish to curtail the work of the board of directors in any way, but that seems very wide open. I wonder whether you could comment on that.

Mr. Ralph Goodale: It is—

The Chair: We need time for an answer, so I'm going to wait till our government side, so Mr. Cardin can get his three minutes—you can answer it in the next round.

[Translation]

Mr. Serge Cardin: Thank you, Madam Chair.

My first question will be about the definitions of some terms, such as eligible work. It is stated that this kind of work would mainly but not exclusively include new techniques meant for solving problems brought about by climate change and air pollution.

Eligible work would then allow for funding nuclear technology as a good way to reduce greenhouse gases, but this, on the other hand, would be contrary to the commitments made by the federal government in Kyoto.

Thus, would you go so far as to fund nuclear projects because they would decrease greenhouse gases?

[English]

Mr. Ralph Goodale: It's not intended, Monsieur Cardin, that this would apply to nuclear. There are other funding sources, as you know, with respect to nuclear research and nuclear technology. Generally speaking, those are directed toward a commercial end, leading ultimately to the sale of nuclear technology or the sale of CANDU's, but the intention here is that this would deal with technologies other than nuclear.

[Translation]

The Chair: Mr. Cardin.

Mr. Serge Cardin: Transparency was mentioned several times. There was also mention of an auditor for the foundation and of the Auditor General. Nonetheless, there seems to be some concentration of power.

We know that the Governor in Council appoints the first seven members who, in turn, appoint the other eight. The Governor in Council may revoke an appointment, and we know that he is mandated to enter into agreements with a foundation in order to develop eligibility criteria for the beneficiaries.

Thus, it seems that this leaves the organization little independence with regard to the federal government. Have you anything to say about this lack of independence that seems to exist at first sight?

[English]

Mr. Ralph Goodale: Actually, Monsieur Cardin, I think what we're doing here, rather than concentrating power, is diffusing and distributing it on a broader base. This goes, I think, to the issue Mr. Chatters raised in his first question. If we wanted to concentrate all power and authority here, we would keep all the cash simply within the A base of a government department, and therefore all the decisions would be made in-house. And that's one approach. But our view was that it would be better to broaden the net, to have a larger tent, if you will, to put this decision-making at arm's length from government, where independent professional judgments could come to bear. So we've tried to make the base here broader, not more narrow.

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That raises, as Mr. Chatters has indicated, the issue of accountability, and that's why we've worked in these various requirements, to have an auditor, to have an annual report, to have the funding agreement, by virtue of the Auditor General Act, subject to review by the Auditor General, and so forth. When you try to broaden the tent, you raise those accountability issues, but we thought it worthwhile here to try to involve and engage more people, rather than fewer people. So the effort is to be more inclusive.

I would point out that in the appointment process, the Governor in Council names the initial members and the initial directors, but it is then up to them to reach out and select others. So it is not a case where the government names them all. We get the process started by naming the initial minority, and then it's up to them to broaden the net.

I think we've tried to strike the right balance here between being open, being inclusive and, at the same time, making sure the principles of accountability are satisfied.

The Chair: Thank you, Mr. Minister.

I'm sorry, we're at five minutes now. So I'm going to give you an opportunity to answer the last question that came out, because I don't have anybody else.

Mr. Ralph Goodale: I think the answer to Mr. Finlay's question is this. He was referring to, I think, the CFI, where the definition of potential recipients is quite specific compared to the language in the STDF, which is a bit more general. I think the difference, Mr. Finlay, flows from the different purposes for which the funding under the CFI will be used.

Essentially, the Canadian Foundation for Innovation is funding the construction of facilities and the acquisition of equipment—bricks and mortar and hardware, the building of laboratories, and that sort of thing. In relation to that you can have a very precise definition—it's universities, it's teaching hospitals, those very specific identifiable institutions and organizations.

In the case of the STDF, the objective is not to build facilities, it's to do the research in the various facilities that already exist. So I suppose that's the same as the distinction between capital funding and operational funding. This is operational funding—get the research done, and at the same time bring together collaborative groups of players in a very broad network. And we have not wanted to limit the scope of who may participate in those networks.

We may see consortia coming together that involve two or three universities, half a dozen private sector companies, a couple of provincial government departments, maybe another federal government department. We'd like them all to be players here, so we've tried to have a more generous definition of who can apply.

Mr. John Finlay: I would hope, Mr. Minister, that might include something I think my colleague Mr. St-Julien was getting at in his first question, that all knowledge of climate change and of sustainable development—particularly sustainable development—is not contained in the nuclear scientists and so on. There is a lot of knowledge in some of our people who live in the far-flung north, etc.

Mr. Ralph Goodale: Absolutely.

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Mr. John Finlay: They survive. They've learned how to. Sometimes we forget that, I think. There's knowledge there that we should... So I hope there will be someone either on the board of directors or among the members who has that kind of background and knowledge.

Mr. Ralph Goodale: Mr. Finlay, I would certainly welcome it. I think that's a very strong point. The wider we can cast the net here, the more likely we are to get the most innovative ideas.

The Chair: Thank you.

I'm not sure if you had your hand up, Mr. Vellacott, but...

Mr. Maurice Vellacott: I have another question if there's time, or are we moving into another round now?

The Chair: We'll go to Mr. Keddy for three minutes, and then I'm not sure if anybody here has anything, so we'll go back to...

Mr. Gerald Keddy: Thank you, Madam Chair.

I'd like to go back to the funding issue for another point.

In subclause 22(3) of the bill, it states:

Except for the investment of its funds, the Foundation shall not carry on any business for gain or profit and shall not hold or acquire any interest in any corporation or enterprise.

If you go from there to subclause 19(1), which talks about funding for eligible recipients, it says:

...in accordance with any terms and conditions specified by the Foundation in respect of the funding, including terms and conditions as to the repayment of the funding...

If they're talking about terms and conditions, is it possible that part of those conditions... is interest being discussed here? That's a bit vague. I would assume it's not when you look at subclause 22(3), which says there's absolutely no profit to be made, but I think we're going to have to state that more clearly in the legislation.

Mr. Ralph Goodale: Could you repeat your point here again? I'm just not quite following you.

Mr. Gerald Keddy: Well, we're stating very clearly in the legislation that—

Mr. Ralph Goodale: It's not for profit—

Mr. Gerald Keddy: —except for the investment of its funds.

Mr. Ralph Goodale: That's right.

Mr. Gerald Keddy: I assume that's in keeping the funds in a bank account somewhere, and that's a long-term investment.

Mr. Ralph Goodale: Yes, it's earning interest on the money, so the $100 million will come to be a bit more than that.

Mr. Gerald Keddy: It's not for gain or profit.

Mr. Ralph Goodale: That's right.

Mr. Gerald Keddy: So I still have a problem with incursion—if you want to use that term—by the fund in the area of intellectual property rights. I would ask why that's there. Why are we discussing intellectual property rights?

There's also the issue of including terms and conditions as to the repayment of funding. I assume that in some circumstances there will be interest-free loans, but it doesn't state here that those will be interest-free loans. It's talking about repayment of funding. I'd like some further explanation as to what exactly that means.

Mr. Ralph Goodale: Mr. Keddy, while you hope every application will be successful—

Mr. Gerald Keddy: Some won't. Absolutely.

Mr. Ralph Goodale: —there will be some that won't be. For example, they may undertake to do things in the application and find out it's impossible to do them, or for other reasons they may default. You then obviously have to have a mechanism to have the funds repaid. These are the sorts of things that would be specified in the terms and conditions upon which the foundation advances money to successful applicants.

The terms and conditions would include such things as what amounts to a default, under what conditions an applicant would have to give the money back, how it's going to deal with intellectual property rights, and so forth. These would be the terms and conditions that bear upon whether an applicant is successful or not. If they are successful, they adhere to those terms and conditions. That's fine. If they don't, if there's a problem in the way they're handling their project and they default, then obviously the money needs to be collected back as a matter of responsible use of public money.

The Chair: That's your time limit there.

Mr. Gerald Keddy: I understand the minister's answer, but I'm not certain that's exactly what's said there. But we'll look at that further.

Mr. Ralph Goodale: Mr. Keddy and Madam Chair, on this point, if there are technical questions about the legal interpretation of any given section, members around the table can of course raise them. But if you would like a technical legal explanation about why a clause is worded in a certain way, my officials, including legal counsel from Natural Resources Canada, would be happy to sit down with any member of the committee to go through that exact wording and to explain the legal reason why a particular turn of phrase is used.

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The Chair: Okay, thank you.

Mr. Bagnell.

Mr. Larry Bagnell (Yukon, Lib.): Thank you.

Before I get to my question, I would just comment that I was a bit surprised at Mr. Chatters' first intervention. Maybe I misinterpreted Alliance philosophy, but I thought they would generally like to have less government in most cases, not more, and have either private sector or individual foundations delivering things. Maybe he can get back to me later, because maybe I'm wrong on that.

You can take this as a question or a suggestion, either way.

In the development of new technologies, one of the biggest benefits for Canada and the world will be the dissemination of that information and the commercialization of it. Sometimes scientists are great at developing things, but it's the next step that hopefully the new foundation will take into account in terms of working on marketing plans, etc. I know, for instance, of a case in point. A lot of the programs of the Alaska Science and Technology Foundation were just business programs.

You don't have to worry. The scientists will be great at inventing things and getting the job done there, but then they're terrible at disseminating or commercializing the information. But the faster we get this information disseminated, the better it will be for Canada, of course, and for the clean air of the world and the climate change in the world, and also for the export of our products.

As I said, you can take that as a question or a suggestion on the new foundation.

Mr. Ralph Goodale: Mr. Bagnell, I think your point is very well taken. This applies to technology and innovation right across the board. It's not just related to climate change or clean air.

A brilliant idea is only of the most esoteric, academic value if it sits on the shelf in a library somewhere and is not put to use in the field, where it can really make a difference. That is another part of the innovation process that Parliament, the private sector and others in our society, have to pay greater and greater attention to.

For example, we have made very significant strides in the field of ethanol. One of our objectives under Action Plan 2000 with respect to climate change over the next five years is to triple the Canadian productive capacity for ethanol, but there are still impediments that stand in the way of getting ethanol more broadly distributed through our motor fuel system.

There are the design issues in relation to ethanol vehicles. You can use E-10 or E-15 pretty regularly in a conventional vehicle, but if you want to up the percentage to E-85, for example, that involves significant modifications to the fuel system in a vehicle. That's one of the roadblocks standing in the way: the actual use of the technology that exists on a broader basis.

I drive an E-85 Ford Taurus, but they're hard to get in the marketplace. I would like all of you to drive ethanol vehicles of E-85 or better, or electric vehicles, the hybrids or one of the various range of greener vehicles. The technology exists to have E-85 vehicles. The issue is how to get it diffused into the marketplace so it's there on a basis that is just as economical from a consumer's point of view, just as convenient from a refuelling point of view, just as safe, and otherwise. That's a very practical example of where the technology exists right now, but where the diffusion has not yet taken place.

So your point is very well taken, and we will have to work very hard on that end of the equation too.

The Chair: Thank you, Mr. Minister.

Mr. Vellacott.

• 1240

Mr. Maurice Vellacott: This is in reference to Larry's question. Larry, I would say the short answer is generally less government is our position. If it's public money, it's clear and has thorough accountability. The public scrutiny comes by way of it being in a government department where there's greater access by the Auditor General. That's the nature of the questions here.

I appreciate the comments being made about synergy. I need to better understand that, Minister Goodale. Before I get to that, I have another question.

You made the comment about greater synergy when it's at this arm's-length foundation. I refer to the collaboration that went on with the Ballard fuel cell and the dollars that came in from Chrysler, Ford, and so on. You have a fair bit already by way of it being directly in the department. You talked about a leverage of six dollars for every dollar from the government. Are you assuming to do better than six dollars to one dollar with the arm's-length Canadian foundation?

Mr. Ralph Goodale: I hesitate to project such a high benchmark, Mr. Vellacott, because we quite frankly exceeded our expectations with the TEAM program.

Our basic requirement with the SDTF is a three-to-one leverage. That's the minimum threshold we want to achieve. I hope, in fact, the foundation can do better than that. What we're seeking here is a broader professional judgment being brought to bear on the funding application process than you would have exclusively within government if this were entirely in a department's A-base allocation. Hopefully by that means we can stretch the nature of the innovation we're pursuing.

It's our view that if we get more people involved in this process, more professional disciplines, we're looking at it not exclusively through the lens of an internal government department but a broader network, which would necessarily be the case through this foundation. We'll be able to be even more creative than we have been under existing programs.

Mr. Maurice Vellacott: I say that's setting up a hard act to follow early on, in the sense that you've exceeded expectations under the present regime and within the department by making it arm's length. I'm open to see what happens on that, but the synergy you're anticipating is going to be much better.

Mr. Ralph Goodale: When I first meet with the directors of the foundation once they come into existence, I will certainly remind them of the high standards that have already been set and challenge them to meet or beat those standards.

Mr. Maurice Vellacott: But you won't predict the six-to-one leverage?

Mr. Ralph Goodale: Not at this stage, no. But I have the feeling they're going to do pretty well. It has been demonstrated by other means and techniques that the level of performance is achievable—at least it was under the TEAM. I would encourage the members of the foundation to meet or beat that challenge.

The Chair: Thank you.

I have three people on the list: Mr. Cardin, Mr. Comartin, and Mr. Keddy. I understand the minister has to go shortly, so we'll try to make them very short and the answers just as short.

[Translation]

Mr. Serge Cardin: Thank you, Madam Chair. I have three very brief questions.

Some members mentioned transparency, concentration of power, etc. You mentioned the Auditor General, and the auditor for the foundation. Here is my first question. Will the foundation be subject to the Access to Information Act?

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[English]

Mr. Ralph Goodale: Mr. Cardin, my department is subject to the Access to Information Act. The foundation would not be. In these various applications, to a very large degree it would be dealing with the private information of a whole range of stakeholders beyond government. It would not be subject to the Access to Information Act, but of course the Department of Natural Resources is.

[Translation]

Mr. Guy St-Julien: They are in the same situation as the Quebec foundations. They have no access to information.

Mr. Serge Cardin: I was talking about those.

Mr. Guy St-Julien: I am also talking about Quebec. Shadow foundations...

Mr. Serge Cardin: I have another brief question. You seem to be very interested in sustainable development. On the other hand, if we consider the allocated sums, we know very well that Anderson's strategy in 1998 provided for investments in the range of 1.3 billion dollars, over five years, I believe, for the advancement of sustainable development. Regarding the 110 million dollars, could we say that the government really has the political will to act, especially if we consider the great difference between the actual investment and what should be invested, namely 1.3 billion dollars?

[English]

Mr. Ralph Goodale: Monsieur Cardin, the total amount that was invested or committed to by the Government of Canada during the year 2000 to climate-change-related objectives was in excess of $1.1 billion. Part of that was identified in Budget 2000 in February, the other part was identified in our Action Plan 2000, and then the mini-budget in October.

There are many components that go into this. The Sustainable Development Technology Fund is one of those components, with $100 million as its first endowment. There's also funding for green municipal infrastructure, which is a total of $125 million. There's $60 million for the science of climate change through collaboration with various universities. There's the extension of the climate change action fund. There's the renewal of programs that relate to energy efficiency, energy conservation, renewable energy, and alternative sources of energy. There's a commitment made to the diffusion of climate change action on an international basis around the world. Then there are the specific industrial elements that are in Action Plan 2000.

You add that all together and it's a total of $1.1 billion. The $100 million for the SDTF is part of that, but there's a very broad matrix of other initiatives that need to come together.

As I indicated in reply to an earlier question, I will ask my officials to assemble for the committee the details on how all of the $1.1 billion that was identified last year will be invested and how it all comes together in a cohesive whole. We have that information and I think it would be useful to members of the committee. I'd be happy to file it with the clerk, Madam Chair, for everybody's information.

The Chair: Okay. Thank you.

Mr. Comartin, please, very briefly.

Mr. Joe Comartin: Thank you, Madam Chair.

There was an announcement yesterday in Windsor by Minister Tobin with regard to the centres of excellence. One of the areas that was announced was automotive research, specifically around emissions, reducing noxious emissions, and increasing efficiencies. Would they be eligible to apply for funding under the foundation?

Mr. Ralph Goodale: That is an area, Mr. Comartin, that does relate to clean air and climate change. I would not obviously comment on any hypothetical applicant or group of applicants, but that sort of activity is the kind of thing that could have a bearing on the air quality issues or the climate change issues. It would obviously be up to the foundation to determine whether or not an application was appropriate. Again, as a fundamental principle of this legislation, there would need to be collaborative arrangements. This is not individual private sector funding; this is pulling together networks of people that can bring their own synergy to bear.

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Mr. Joe Comartin: I'm sorry, Madam Chair, if I didn't make it clear. If I can, I'll just say this quickly. The point I was really getting at and didn't make clear was that they're not precluded from applying if they're getting funding from another government source.

Mr. Ralph Goodale: No, but they would have to disclose that source and then it would be up to the foundation, exercising its professional judgment, to determine whether or not there was an overlap or a duplication here that was inappropriate.

Mr. Joe Comartin: Thank you, Madam Chair.

The Chair: Mr. Keddy.

Mr. Gerald Keddy: Thank you, Madam Chair.

There's been a lot of discussion about leverage and just how much will be leveraged, but the legislation itself doesn't set a maximum investment.

Mr. Ralph Goodale: Mr. Keddy, my goal would be to maximize the leveraging. If we can put one dollar in and get $10, $15, or $20 from somebody else, so much the better. Our operating goal here is three to one, minimum.

Mr. Gerald Keddy: Okay.

Mr. Ralph Goodale: If we can get better than that, so much the better. But if we can put in one dollar and get a total of three—

Mr. Gerald Keddy: Is that stated in the legislation?

Mr. Ralph Goodale: It's not in the legislation per se, Mr. Keddy, because that really is an operating objective, rather than a fiscal requirement.

To get back to an earlier point that you raised about whether or not in future we would put in more money as subsequent endowments, the performance of the institution will determine whether or not it merits future allocations. An issue like leveraging will be one of the factors we will take into account.

Mr. Gerald Keddy: I just have two other quick issues, if I could, Mr. Minister.

Mr. Ralph Goodale: Go ahead.

The Chair: We've had our three minutes; we're actually over.

Mr. Gerald Keddy: It will take one minute.

The Chair: Okay, half.

Mr. John Finlay: You got an award. You're going to blow it.

Mr. Gerald Keddy: Perhaps we should set a limit of 25% to one-third if it's not stated clearly in the bill. Somewhere in the legislation there has to be a maximum. How much are we going to benefit any single institution? Is it going to be a dollar for a dollar? Is it going to be 30¢ on the dollar or 25¢ on the dollar? What is the maximum? Are we looking at the possibility of the foundation coming back to the government and saying, listen, we've supported this particular effort 90% or 100%? It doesn't prevent that, to my knowledge.

Mr. Ralph Goodale: The legislation would not, Mr. Keddy, but it's my understanding that the maximum 33% requirement would be covered in the funding agreement. I accept your point that these sorts of benchmarks have to be established.

Now, I can think of circumstances where you're undertaking a very worthwhile project but you might not have as high an expectation of leveraging as you would in some other project. I don't think you'd want to say that with every project you've got to have a three-to-one, four-to-one, or five-to-one ratio. I think you need targets to aim for, but I don't think you would necessarily want to lock yourself into an absolute straitjacket by saying that no matter how good a project is, the foundation can't approve it because the leveraging isn't high enough. I think you need a little flexibility on that.

Mr. Gerald Keddy: We've already got other programs out there, very similar programs, that offer additional funding in these other areas, and they offer more funding. If we're talking of leveraging, then we need to have this, I would think, in the legislation, that there's a maximum amount that the foundation can approve. If that's 50% or two-thirds, then somehow or other private industry, not-for-profit corporations, universities, and hospitals will have to accept some obligation to put some of their dollars into these projects as well.

Mr. Ralph Goodale: I do not envisage a case, Mr. Keddy, where it would entirely be the foundation's nickel.

Mr. Gerald Keddy: I appreciate that.

• 1255

Mr. Ralph Goodale: If there's no leveraging, it's just not on.

But the issue of leveraging would be addressed in the funding agreement to make sure that we're accomplishing here what we're attempting to do: getting more people involved, getting them to bring their money to the table, and thereby creating a larger pot overall to direct toward sustainable development technology.

Again, I would say it's useful to have some flexibility because organizers of some meritorious projects may not be able to do as well on leveraging as others. But the general principles about leveraging and the minimum expectations would be laid out in the funding agreement. As I said, that of course is automatically subject to scrutiny by the Auditor General.

The Chair: Thank you so much, Mr. Minister.

I know that you're still brimming with questions, but I think this has gone quite well for now. Thank you for coming in this morning. We have a few housekeeping issues to deal with also, particularly future business. I would like to deal with those before we leave the committee room.

Thank you.

Mr. Ralph Goodale: Thank you very much, Madam Chair. Thank you, members of the committee. I look forward to other occasions to appear before you on other important matters affecting the Department of Natural Resources Canada.

Madam Chair, if I may, I'll just close by congratulating you upon your selection as chair, and I wish you a very successful tenure.

The Chair: Thank you.

I know this room is committed for one o'clock. I would just like to get clarification from the committee as to whether we should do a clause-by-clause study of Bill C-4 on Thursday.

Some hon. members: Agreed.

Mr. Dave Chatters: I had requested another witness, Madam Chair. I wrote a letter to the clerk requesting the appearance of another witness on this bill. I would just like the reaction of the committee to that request and an explanation of why that cannot be.

The Chair: Okay.

I think all of you have a copy of a letter from Mr. Chatters asking for another witness. Do any members have any comments? Mr. Serré.

Mr. Benoît Serré (Timiskaming—Cochrane, Lib.): I discussed this with the vice-chair of the committee before he left, and he was in agreement that we go clause-by-clause on Thursday.

I cannot comment on your request for having the Auditor General appear before the committee. I don't know if he has been asked or what his reasons might be for not appearing. I did consult the committee vice-chair from the opposition party on his way out, and he agreed to have the clause-by-clause discussion on Thursday. That's so you know.

The Chair: So we'll put that on the agenda for Thursday, that we'll be doing the clause-by-clause on Bill C-4.

Mr. Keddy.

Mr. Gerald Keddy: The comment from Mr. Chatters was that he had another witness to appear. I'm not quite sure of the reason. I realize Thursday is short notice, but if the witness is able to appear before Thursday, why not hear the witness?

The Chair: Mr. Finlay.

Mr. John Finlay: Madam Chair, I would simply like to express my opinion.

The Auditor General hasn't anything to audit yet. We've heard the minister say that the funding arrangements will be under both his and the Auditor General's purview, but the Auditor General's job is to audit, not to make laws, to define policy, and so on.

Mr. Gerald Keddy: He can make recommendations, though.

The Chair: We'll hear Mr. St-Julien first, please.

[Translation]

Mr. Guy St-Julien: Did the member speak to Canada's Auditor General? Is he ready to come and testify?

[English]

The Chair: Mr. Chatters?

Mr. David Chatters: Yes, I did, and he agreed to do that. He was unable to do that today simply because he was out of country. My intention was not to have the auditor come and make an audit report. I asked the Auditor General if he would consider simply coming before us and advising us how, as a committee, we could make recommendations to the minister as to how this board could become more accountable and more transparent.

I can think of no better person to advise us on how to make that happen than the Auditor General of Canada. I'm sorry that the committee doesn't seem to have followed up on my request and hasn't approached the Auditor General about appearing before the committee before we go to clause-by-clause.

• 1300

The Chair: Mr. St-Julien.

[Translation]

Mr. Guy St-Julien: Thank you. As far as I am concerned, I have no problem with calling in Canada's Auditor General. I know the other auditors, at least the Quebec auditor, who made comments about Quebec's shadow foundations before the budget. I have no problem with his coming. I am quite comfortable.

A voice: That's not relevant.

Mr. Guy St-Julien: Yes, it is. It is harmful and useless.

[English]

The Chair: Mr. Keddy.

Mr. Gerald Keddy: You know, I just want to make the comment again that if Mr. Chatters had spoken to the Auditor General and he's able to come Thursday prior to the meeting, then I see no reason not to hear him. There are a number of questions asked here today that, really, we didn't get completely clear answers on. I would, for one, appreciate the opportunity to ask some of those questions to the Auditor General.

The Chair: Mr. Serré.

Mr. Benoît Serré: I have no objections per se, but I wouldn't like to drag this on forever and ever. I think that the Auditor General's contribution would be specific to his role in terms of the agreement between the foundation and the government. So the point I want to make is that we could probably do both on Thursday if the opposition agreed that we could have Mr. Desautels appear for let's say 45 minutes and then move on to clause-by-clause. I would certainly agree to that.

The Chair: There seems to be a consensus that we'll request the Auditor General for a 45-minute session with the committee. We'll have the clerk check to make sure that he's able to come. We'll send a confirmation to your offices upon putting that request before him.

Would you agree, if the Auditor General himself couldn't be here, his representative would be an acceptable witness before the committee?

Mr. David Chatters: Yes.

Mr. Gerald Keddy: Not our first choice, but better than nothing.

The Chair: Okay, we'll put that request in for 45 minutes. Because we had two hours and not many people were putting their hands up, I was letting the time go a bit more. I'd like to remind everyone—questions and answers through the chair, please, so that we can keep the meeting orderly.

The other question we had is that we have to set up a meeting with the subcommittee on agenda and procedure so that we can do future business and can give you an idea of what to expect in the next couple of weeks. I know we told you we had Bill C-3 also, but we also want to make sure we have an idea of what kind of work will be before the committee during the next two or three weeks. So if the steering committee members can let me know when would be a good time for us to meet—sometime this week.

Mr. Serré.

Mr. Benoît Serré: Have the committee members received copies of the amendments we will be proposing?

The Chair: Yes, those are distributed to the members also. But if we can get the steering committee meeting either Wednesday afternoon or Thursday afternoon, we'd appreciate your letting the clerk know when would be a good time for you. All right?

Mr. Gerald Keddy: Afternoon.

The Chair: I know everybody's leaving, but I'm getting some notes here. If the Auditor General and his staff are unable to come, our understanding is we'll go straight to clause-by-clause. But we'll make sure that we give that opportunity to the Auditor General's office, just so I'll know exactly how we'll proceed on Thursday. Thank you.

The meeting is adjourned.