AANR Committee Meeting

Notices of Meeting include information about the subject matter to be examined by the committee and date, time and place of the meeting, as well as a list of any witnesses scheduled to appear. The Evidence is the edited and revised transcript of what is said before a committee. The Minutes of Proceedings are the official record of the business conducted by the committee at a sitting.

For an advanced search, use Publication Search tool.

If you have any questions or comments regarding the accessibility of this publication, please contact us at accessible@parl.gc.ca.

Previous day publication Next day publication

37th PARLIAMENT, 2nd SESSION

Standing Committee on Aboriginal Affairs, Northern Development and Natural Resources

EVIDENCE

CONTENTS

Monday, October 20, 2003

0905

The Chair (Mr. Raymond Bonin (Nickel Belt, Lib.))

Mr. George R. M. Anderson (Deputy Minister, Department of Natural Resources)

0910

0915

Mr. David Anderson

The Chair

Mr. David Chatters (Athabasca, Canadian Alliance)

Mr. George Anderson

0920

Mr. David Chatters

Mr. George Anderson

Mr. David Chatters

The Chair

Mr. George Anderson

0925

The Chair

Mr. Serge Cardin (Sherbrooke, BQ)

Mr. George Anderson

0930

Mr. Serge Cardin

Mr. George Anderson

Mr. Serge Cardin

The Chair

Mr. Rick Borotsik (Brandon—Souris, PC)

The Chair

Mr. Rick Borotsik

The Chair

Mr. Rick Borotsik

Mr. George Anderson

0935

Mr. Rick Borotsik

Mr. George Anderson

Mr. Rick Borotsik

Mr. George Anderson

Mr. Rick Borotsik

Mr. George Anderson

Mr. Rick Borotsik

Mr. George Anderson

Mr. Rick Borotsik

Mr. George Anderson

Mr. Rick Borotsik

Mr. George Anderson

0940

The Chair

Mr. Guy St-Julien (Abitibi—Baie-James—Nunavik, Lib.)

Mr. George Anderson

Mr. Guy St-Julien

The Chair

Mr. Bruce Holden (Assistant Deputy Minister, Corporate Services Sector, Department of Natural Resources)

Mr. Guy St-Julien

Mr. Bruce Holden

Mr. Guy St-Julien

Mr. Bruce Holden

Mr. Guy St-Julien

The Chair

Mr. George Anderson

Mr. Guy St-Julien

The Chair

Mr. Guy St-Julien

Mr. Bruce Holden

Mr. Guy St-Julien

The Chair

Mr. Guy St-Julien

The Chair

Mr. Guy St-Julien

The Chair

Mr. Stan Dromisky (Thunder Bay—Atikokan, Lib.)

0945

Mr. Stan Dromisky

Mr. George Anderson

The Chair

Mr. Graham Campbell (Director General, Office of Energy Research and Development, Department of Natural Resources)

Mr. Stan Dromisky

The Chair

Mr. David Chatters

Mr. George Anderson

Mr. David Chatters

The Chair

Mr. Serge Cardin

Mr. George Anderson

0950

Mr. Serge Cardin

Mr. George Anderson

Mr. Serge Cardin

Mr. George Anderson

Mr. Serge Cardin

The Chair

Mr. Serge Cardin

Mr. George Anderson

The Chair

Mr. George Anderson

The Chair

Mr. Rick Borotsik

Mr. Graham Campbell

Mr. Rick Borotsik

Mr. George Anderson

Mr. Rick Borotsik

Mr. George Anderson

Mr. Neil MacLeod (Director General, Office of Energy Efficiency, Energy Sector, Department of Natural Resources)

Mr. Rick Borotsik

Mr. George Anderson

0955

Mr. Rick Borotsik

Mr. George Anderson

Mr. Rick Borotsik

Mr. George Anderson

The Chair

Mr. John Godfrey (Don Valley West, Lib.)

Mr. George Anderson

The Chair

Mr. George Anderson

The Chair

Mr. Charles Hubbard (Miramichi, Lib.)

1000

Mr. George Anderson

The Chair

Mr. Guy St-Julien

The Chair

Mr. Guy St-Julien

The Chair

Hon. Robert Nault (Minister of Indian Affairs and Northern Development)

1010

1015

The Chair

Mr. John Duncan (Vancouver Island North, Canadian Alliance)

Mr. Robert Nault

1020

The Chair

Mr. Rick Borotsik

Mr. Robert Nault

Mr. Rick Borotsik

Mr. Robert Nault

Mr. Rick Borotsik

Mr. Robert Nault

Mr. Rick Borotsik

Mr. Robert Nault

Mr. Rick Borotsik

Mr. Robert Nault

1025

Mr. Rick Borotsik

Mr. Robert Nault

Mr. Rick Borotsik

Mr. Robert Nault

Mr. Rick Borotsik

Mr. Robert Nault

Mr. Rick Borotsik

Mr. Robert Nault

Mr. Rick Borotsik

The Chair

Mr. Guy St-Julien

Mr. Robert Nault

Mr. Guy St-Julien

Mr. Robert Nault

1030

Mr. Guy St-Julien

The Chair

Mr. Stan Dromisky

Mr. Robert Nault

Mr. Stan Dromisky

Mr. Robert Nault

Mr. Stan Dromisky

The Chair

Mr. Robert Nault

The Chair

Mr. John Duncan

1035

Mr. Robert Nault

Mr. John Duncan

Mr. Robert Nault

Mr. John Duncan

Mr. Robert Nault

Mr. John Duncan

Mr. Robert Nault

Mr. John Duncan

Mr. Robert Nault

Mr. John Duncan

Mr. Robert Nault

1040

Mr. John Duncan

The Chair

Mr. John Duncan

Mr. Robert Nault

The Chair

Mr. Serge Cardin

Mr. Robert Nault

The Chair

Mr. Serge Cardin

1045

Mr. Robert Nault

The Chair

Mr. John Godfrey

Mr. Robert Nault

Mr. John Godfrey

Mr. Robert Nault

Mr. John Godfrey

Mr. Robert Nault

Mr. John Godfrey

Mr. Robert Nault

1050

Mr. John Godfrey

The Chair

Mr. Maurice Vellacott (Saskatoon—Wanuskewin, Canadian Alliance)

The Chair

Mr. Guy St-Julien

The Chair

Mr. Robert Nault

1055

The Chair

1100

The Chair

Mr. John Duncan

The Chair

Mr. John Duncan

The Chair

Mr. Guy St-Julien

The Chair

Mr. Guy St-Julien

The Chair

Mr. Guy St-Julien

The Chair

Mr. Guy St-Julien

The Chair

Mr. John Godfrey

The Chair

Mr. Serge Cardin

The Chair

Mr. Serge Cardin

The Chair

Mr. Serge Cardin

The Chair

Mr. John Duncan

Mr. John Godfrey

Mr. John Duncan

Mr. John Godfrey

Mr. John Duncan

The Chair

1105

Mr. John Godfrey

The Chair

Mr. Guy St-Julien

The Chair

Mr. Guy St-Julien

The Chair

CANADA

Standing Committee on Aboriginal Affairs, Northern Development and Natural Resources

NUMBER 089

2nd SESSION

37th PARLIAMENT

EVIDENCE

Monday, October 20, 2003

[Recorded by Electronic Apparatus]

¿ (0905)

[English]

The Chair (Mr. Raymond Bonin (Nickel Belt, Lib.)): Good morning, everyone. I call the meeting to order.

Pursuant to Standing Order 81(5), we are considering supplementary estimates 2003-04, votes 1a, 5a, 15a, L20a, 30a, and 40a under Indian Affairs and Northern Development; votes 1a, 10a, 15a, and 20a under Natural Resources; and vote 25a under Public Works and Government Services, referred to the committee on Tuesday, September 23, 2003.

Appearing today is Deputy Minister George Anderson. Mr. Anderson, I invite you to explain to the committee why the minister is not here and to introduce your colleagues, then to make a short presentation. We have one hour.

To my colleagues, when we get to the point where you ask questions, I ask you to make them short and clean, and the answers should be short and clean. Although I have a reputation of cutting people off, I don't enjoy doing it.

[Translation]

Mr. George R. M. Anderson (Deputy Minister, Department of Natural Resources): Thank you, Mr. Chairman.

¿ (0910)

[English]

My apologies on behalf of Mr. Dhaliwal. He had every intention of being here this morning, but was with his wife all night in the hospital and is still there with her. I bring you his apologies, but I think you will understand the circumstances.

I am pleased to introduce my three colleagues who are at the table with me. I'll introduce other colleagues if it's necessary when we get to particular questions.

With me is Howard Brown, the assistant deputy minister for dealing with the large final emitters group, the work we are doing within the Kyoto Protocol, undertaking to reduce emissions from large emitters. Mr. Bruce Holden is the assistant deputy minister for corporate services in the department, and Mr. Neil MacLeod is the director general of the office of energy efficiency.

With your indulgence, Mr. Chairman, I will read from the statement that was prepared for Mr. Dhaliwal, and we can make copies of this available to members if that suits.

I'll speak first to climate change. The items in the supplementary estimates arise from Canada's measures to address climate change. As you know, we've come a long way in a short time on this. In the past 12 months alone, the government has released a climate change plan for Canada to ratify the Kyoto Protocol and announced substantial investments and new measures to help Canada reduce its greenhouse gas emissions.

On August 12, the Prime Minister outlined $1 billion in new strategic investments as part of $2 billion committed to climate change in budget 2003, and that builds on $1.7 billion that has already been allocated to climate change. The plan is flexible so that we can learn from our efforts and adapt to new possibilities and technologies. In the meantime, we've introduced a number of new initiatives.

[Translation]

I want to start by talking about ethanol. Later today, Minister Vanclief and Mr. Dhaliwal will launch the Ethanol Expansion Program by inviting industry to submit proposals for contributions toward new ethanol plants. A total of $60 million will be available in this first round of funding from the three-year, $100 million program. This first round is expected to lead to the construction of new fuel ethanol plants. These new plants will help us meet our target of at least 35% of gasoline containing 10% ethanol by 2010.

[English]

The second item I will speak to is the houses retrofit incentive. A central element of the announcement made by the Prime Minister in August was the Energuide for Houses retrofit incentive. This program, which will be officially launched tomorrow, will help Canadians find out how they can reduce energy use in their houses. We expect the average incentive to be about $1,000, which is $300 for the actual audits, pre and post, and about $700, on average, for the cost of doing the work. But that average will depend very much upon the level of improvement to a home's energy efficiency rating. In fact, the minister had his home evaluated and has indicated that he intends to make the recommendations in his report even though an MP does not qualify. I'm sorry, gentlemen and madam, that you do not qualify for these grants personally.

An hon. member: It's the story of our lives.

¿ (0915)

Mr. David Anderson: We know that.

The $73 million addition was part of our one-tonne challenge, which is directed at the emissions associated with those things that Canadians have directly under their control in terms of their activities and so on.

The third item I'll mention is hydrogen. We had an announcement made by Mr. Rock and Mr. Dhaliwal two weeks ago of a $250-million investment in this area. Over the past two decades Natural Resources Canada has contributed more than $60 million to advance hydrogen and fuel cell technologies in Canada, and we were among the very early supporters of companies such as Ballard Power Systems, Dynetek, and Stuart Energy Systems Corporation, the companies that now put Canada in the forefront of the hydrogen economy. For a country our size, we truly are extremely well placed in this area. We will be contributing $20 million over five years to help ensure that Canada takes advantage of the potential of hydrogen-based technologies. There is a great deal of interest internationally, as you know, in hydrogen, and this significant announcement is a great help on that.

The fourth item I will mention is Forest 2020. The supplementary estimates include $8.6 million for Forest 2020. This is a two-year, $20-million program, which is designed to fulfill the potential contribution that fast-growing, high-yield hardwood plantations could make toward our climate change objectives. Demonstrations of these plantations will be coordinated by the Canadian Forest Service across the country and will showcase plantation capacity on a large scale and provide options for meeting our protocol commitments. We're also doing a lot of work on trying to make this an attractive type of investment for private investors who may be looking to have carbon credits.

Another item that you'll see in the supplementary estimates is the better buildings partnership. These are some of the major initiatives over the next few months.

Before I respond to the committee's questions, let me tell the committee that NRCan and Mr. Dhaliwal have been particularly active over the past three months in bringing stakeholders together to build partnerships for the long-term prosperity of Canada's resource sectors. In the period since Mr. Dhaliwal last met with the committee, Canada has been negotiating MOUs on climate change with the provinces and territories. We've completed some agreements and others are close to completion. We hope to make announcements shortly.

Through our various energy efficiency and renewable energy programs, we're also developing bilateral agreements to develop initiatives with the provinces and territories. In Edmonton in May, Mr. Dhaliwal hosted a national diamond round table on Canada's diamond industry, which, as you know, is growing very quickly. Some 140 participants examined such issues as a skilled labour force, ways to increase aboriginal business capacity, changes to the tax structure, and so on. Canada is now the fourth largest diamond producing nation in the world and we are very hopeful to see that ranking even improve. It holds enormous promise for development in the north and in some of our provinces, although it is the north that is the furthest advanced.

Mr. Chairman, we also expect that the recent $10-million extension of the funding for the targeted geoscience initiative will help stimulate exploration and development for Canada's northern energy and mineral resources.

Last month Canada hosted the World Forestry Congress in Quebec City, which was a tremendous event. Mr. Dhaliwal chaired a gathering of over 4,000 people who came together from 144 countries, and the congress confirmed Canada as a major player in international forest issues and a leader on sustainable forest management.

[Translation]

I also want to mention CANDU reactors. The notes to the Supplementary Estimates (A) 2003-2004 contain something for CANDU. As the committee is aware, the government supports a diversified energy mix that includes state-of-the-art nuclear technology to help meet future energy needs. That is why, for more than half a century, Canada has supported the development of CANDU reactor technology. In these Supplementary Estimates you will find $46 million in support of R&D and pre-licensing of the Advanced CANDU Reactor or ACR. Our commitment demonstrates the importance this government places on science and technology in general, and on nuclear R&D in particular.

The ACR is a made-in-Canada solution for economical clean-air electricity supply. Not only does the new CANDU reactor cost much less than any other nuclear reactor to date, but it is clean energy. Moreover, there will be less waste produced by this new technology.

[English]

Finally, Mr. Chairman, last week Mr. Dhaliwal met with his colleague, the Secretary of Energy, Spencer Abraham--here in this building, in fact--to discuss the ongoing work of the Canada-U.S. task force that was established to investigate the cause of the recent power outage that affected North America. They had a very productive discussion, and thanks to the hard work and cooperation of all our partners in Canada and the United States, we are well on our way to finalizing the information we need, and we're expecting an interim report in the next two or three weeks. We share many areas of mutual interest with the United States, and the committee can be assured that Mr. Dhaliwal will continue to represent Canada's position on the broad range of energy issues.

Mr. Chairman, that completes the remarks that were prepared for Mr. Dhaliwal.

[Translation]

I will be pleased to answer your questions and comments.

The Chair: Thank you very much.

[English]

We will start with a first round of seven minutes, sept minutes.

Mr. Chatters.

Mr. David Chatters (Athabasca, Canadian Alliance): Thank you, Mr. Chairman. I apologize for being late this morning.

Having studied the estimates prior to arriving, I think it's safe to say that the bulk of the commitment in the natural resources portfolio, at least, continues to be towards the climate change challenge. I would ask the deputy minister if, and when, the minister is prepared to present to Canadians a plan that will show Canadians how the government intends to achieve the 240-megatonne target that they are committed to under Kyoto.

Mr. George Anderson: Thank you.

You will be familiar with the document that came out, the Climate Change Plan for Canada. On page 13 of that document, you'll see an overview of the proposed measures and what they're expected to contribute to the objective we have. Our current estimate is that Canada would need to reduce its estimated emissions by 240 megatonnes by the first Kyoto period. The actions under way under Action Plan 2000 and budget 2001, as well as our accounting for what are called sinks, would provide us with 80 megatonnes towards that target. The new actions that are in the Climate Change Plan for Canada would take us to another 100, so that makes 180, so there are 60 as yet not provided for. But there is still a considerable period between now and the first emission period. The intent is to learn from what we are doing and to come forward with measures to deal with the remainder in due course.

¿ (0920)

Mr. David Chatters: With Russia's decision not to sign on to the accord, there doesn't exist in the world a system to buy and sell credits, so the plan under the document that you refer to really is irrelevant, because part of that plan was to use an emissions trading system to achieve what we weren't able to achieve domestically. Really, that plan, as vague as it was and as incomplete as it was in the beginning, is even less relevant now. I think Canadians deserve to know what the government's plan is in some detail, specifically in dealing with heavy industrial emitters and transportation. There is nothing in that document that would indicate to anybody how the government plans to achieve targets in those areas.

So I reject that document as a plan to achieve the targets. I think the government has to come up with something a little more specific than that.

Mr. George Anderson: What you have before you today, in terms of the supplementary estimates, gives more detail compared to what was in this document on a number of program areas. If you like, we could speak further on the issues of where we are with the large emitters.

It's not our understanding that Russia has made any firm decision on whether it will or will not sign Kyoto. Mr. Anderson was in Moscow for the meeting where Mr. Putin spoke, and there was a good deal of conversation with the Russian delegations on this. We do not know what the Russian decision will be at this stage. Mr. Anderson expressed optimism that they will sign. We are proceeding with this in a progressive manner and we will make adjustments as we go.

Mr. David Chatters: It is pretty clear that the government has no more plan now than it had six months or a year ago, so I guess we'll switch gears and leave that topic, because we're not going anywhere with that one.

The Prime Minister has recently been in China in an attempt to sell the new CANDU technology,and officials from AECL are travelling in the United States promoting the same thing. Why are these individuals out in the world selling a technology that isn't available yet, and when will we, as Canadians, see the details of this new CANDU technology that is already being sold out there around the world?

The Chair: Before you answer the question, I think it is a fair question, but we have to clarify it. I wouldn't ask our witnesses to respond on behalf of the Prime Minister, but I think the question is fair if we ask whether there is a plan with the department and with the minister, and from there you can answer the question.

Mr. George Anderson: Thank you, Mr. Chairman. I'd be glad to respond.

As you'll see in the supplementary estimates, what we're talking about is funding two things. One is the engineering for what's called the advanced CANDU reactor. The second contains some of the pre-licensing costs associated with that.

You should understand that this is not a new generation of reactor. It's a new model within what's called the third generation of the nuclear reactor. The expectation is that it will be about 40% less capital intensive. There is a sort of shrinking of the central elements of the reactor, and everything else gets scaled down. There will about 40% less fuel required and 40% less waste, so it is very attractive. It looks as though it will have a competitive price with gas, at something like $3.50 or $3.75, which at today's gas prices makes it a potentially very valuable element of a diversified energy strategy.

There is no particular interest at the moment in selling this technology in China. The two markets on which the current focus is strongest are Ontario and the United States. There is currently a discussion in Congress with the energy bill, and we'll be following very carefully the measures there to facilitate the introduction of a next generation of nuclear new build in the United States.

There is a great deal of interest in Ontario. I can't speak for the new government, obviously, but I can speak for the utilities. There is a great deal of interest on the part of the utilities in this technology and its possible role in Ontario.

¿ (0925)

The Chair: Thank you, and thank you, Mr. Chatters.

Monsieur Cardin.

[Translation]

Mr. Serge Cardin (Sherbrooke, BQ): Thank you, Mr. Chairman. Good morning, gentlemen.

Of course, when we talk about natural resources, we talk increasingly about energy, and the government asks for supplementary estimates for that. But there are a number of other issues which can be raised in this whole debate on energy and additional investments in this area. I want to come back to the CANDU reactor.

This morning's newspapers indicate that China might be willing to make further investments in CANDU reactors. They have two of our reactors right now, and we are told that the ceremony that Mr. Chrétien will be attending is to mark completion of the reactor construction. So, this has been underway for a number of years. Now we are investing in the Advanced CANDU Reactor, but it would seem that there are not necessarily a lot of takers at this point for CANDU technology.

I also want to talk about the ITER, because we often hear about it in the papers and you may be able to confirm this. What is the status of the ITER project and potential investments in that area? I am talking about fusion rather than fission. I would like to hear from you about both CANDU, which no one seems to want to buy, and ITER, which can also be very expensive.

Mr. George Anderson: First, regarding the CANDU reactor, it is true that there are no takers and that no one has decided to buy it yet. However, if you look at the international market for nuclear plants over the past 10 years, the CANDU reactor has performed well in terms of its success and in terms of the number of buyers. In China, the current model was delivered early and at a lower cost than expected. Apparently, to date the Chinese have been very pleased with the performance of both plants.

In terms of Ontario, the United States and elsewhere, one of the important factors for the future of the nuclear industry is that many reactors are reaching the end of their life expectancy. There could therefore be a need for replacement and it is thought that there is a good chance that there will be a market for new plants. The new CANDU generation, the ACR, or Advanced CANDU Reactor, appears to be very profitable and, as I said in my opening comments, there is significant interest in Ontario. There also appear to be certain plants in the USA that are also very interested. It would be premature to say anything at this point, but we are currently reviewing the future of AECL, its structure, as well as its business potential. To date, indications are that this is justified.

In terms of the ITER, we have a mandate from the government and we have made an offer to the project participants. As you know, this is much more long term than nuclear plants. We will see how the international negotiations unfold. There are other offers that have benefited from very significant subsidies so, this is something that must be taken into account.

¿ (0930)

Mr. Serge Cardin: You said earlier yourself, when you were talking about nuclear plants and reactors, that Ontario and the United States are the ones mainly concerned, because other countries, for example in Europe, are trying to move away from nuclear energy. How can you explain Canada's position and Ontario's in particular, when for all practical purposes, 90% of the plants are in Ontario? How can you explain the United States' position when the rest of the world is beginning to move away, or thinking of moving away, from nuclear energy?

Mr. George Anderson: It is not true that the rest of the world is doing nothing with respect to nuclear energy. I don't know if you're aware of this but Finland has just decided to build a new nuclear plant, France is still committed to this industry, Great Britain has not made a decision, China is committed to doing more on the nuclear side, as are Korea and Japan. From what I can see, and given the challenges posed by climate change, the energy ministries of the OECD countries are giving this option considerably more attention. If we're going to meet carbon emission goals, then nuclear energy is a clean alternative.

Mr. Serge Cardin: Nuclear energy is often described as being clean but the issue of nuclear waste is often not mentioned. You say that the new reactor will involve less waste but there is always waste. If you look at all the investments that have been made in nuclear energy over the past several years, the billions of dollars that have been invested in this sector, do you not think that, instead of taking a gradual approach and saying that we will stay with nuclear energy while making every effort to cut down on pollution, we should invest much more in research and development for renewable energy?

[English]

The Chair: Thank you, Mr. Cardin.

Mr. Borotsik.

Mr. Rick Borotsik (Brandon—Souris, PC): Thank you, Mr. Chairman, for having me at your committee. It's my first time.

The Chair: It's addictive.

Mr. Rick Borotsik: I am very pleased to be here. I know the chairman is seen as someone who is fair and honourable, so I know I can get away with some things.

The Chair: Mr. Borotsik, you have seven minutes. I don't care what anybody does.

Mr. Rick Borotsik: Thank you.

We talked about forests. I believe it was 80 megatonnes with respect to reduction of CO₂ with the carbon sinks. That comes from agriculture as well as forests; we recognize that.

Natural Resources' mandate obviously pertains to the forests we have in this country. We have two major problems. Number one is that the forest fires we recently had exacerbate the problem, not only because of the emissions but because of the reduction of the forests themselves. Also, we have a little beetle that, I understand, is ravaging British Columbia at the present time.

When you asked about the reduction of CO₂, you talked about carbon sinks. Have you rethought the estimates in that book? What we see now happening in our forests, particularly if nothing is done, is going to make for a requirement to rethink the amounts of carbon sinks we're going to have in that area. Has your department looked at, first of all, trying to save the natural resource of the forest? I haven't heard of any programs in place right now that are going to assist in that. Second, have you rethought the amount of CO₂ carbon sink in the forest?

Mr. George Anderson: If I may, Mr. Chairman, I'll answer.

On the question of what's being done, there was a program announced in relation to the pine beetle last summer, a significant research program by the government. I don't have the number off the top of my head, but it's something in the order of $40 million to better understand the pine beetle and understand ways of controlling it, etc. That's been the major initiative in that area.

We also do quite a bit on issues associated with fire management, and this is becoming much more of an issue with forest services generally.

In terms of our actual estimates of what the business-as-usual sinks might be--this is the term that's used, the assumption being that over time we've been adding to the stock of carbon in our forests with existing practices--yes, we've had some extremely bad forest fires in British Columbia this year, but if you take the level of the whole country, I don't think the forest fire situation was that different from normal. It was actually slightly down from other years for the country as a whole.

We have a technical working group with the provinces that is trying to get a handle on this. It's very data intensive and so on. We have an estimate in the climate change plan of 30 megatonnes as what Canada would be able to claim for its business-as-usual practices in relation to our forest management. That's still the number we're carrying, but we've always recognized that it could be different from that. It could be better or it could be worse. We'll have a better sense from the work of this committee in about a year. We won't change--

¿ (0935)

Mr. Rick Borotsik: Then we can make some comparisons of where you were with the 30 megatonnes with what the plus or minus is a year from now.

Mr. George Anderson: Yes, but there are always things happening with the forest. It's been very bad in B.C. in the last year with these two things you mentioned, but if you take it at the national level, it probably isn't out of line with some of the things we've seen in other years.

Mr. Rick Borotsik: But the way things are going, it could well happen that a similar circumstance could have existed the previous year and could exist next year, the next year, and the next year, not only with fires but also with the pine beetle. That's not stopping. Even though you spent $40 million, that is expanding quite dramatically.

Mr. George Anderson: Oh, we're very concerned about it.

Mr. Rick Borotsik: I'm sure. That's part of Natural Resources as well; you should be very concerned about it.

You talked about some of the other areas you're investing in too, and you talked about the nuclear reactor. That's laudable. There are others I haven't seen too much on, and they're certainly not reflected in these supplementary estimates. I come from Manitoba, and there is no doubt hydroelectricity should be at the very top of that list. Can you tell me how much money you're spending on hydroelectricity possibilities?

There are two others. You mentioned your involvement in fuel cells, and again that is laudable, but I'd like to hear a little about what kind of investment you have in wind currently as well as--and this is one that's there and, I believe, has real potential--geothermal energy. There's a lot of geothermal development going on right now. Is your department involved in that at all, or are you simply putting all your eggs in the nuclear reactor basket?

Mr. George Anderson: What was the first question?

Mr. Rick Borotsik: It was on hydroelectricity. What do you mean, what was the first one? That's the most important. That should be the top priority.

Mr. George Anderson: We are actually paying a lot of attention to hydro. Most large hydro is economic. We've done a survey of potential large hydro in Canada. There remains a significant amount of large hydro potential, and a good deal of it, as you know, is in Manitoba. There is a good deal in Quebec, and obviously there is Churchill Falls and so on in Labrador.

For the most part we have not been asked by either the utilities or the provinces to get too far into this. The exception was with Manitoba's interest in the possibility of developing Conawapa and bringing that power into Ontario. We offered some money for a joint study that would update an earlier study on some of those issues. In the end the three utilities--OPG, Hydro 1, and Manitoba Hydro--chose to go without the federal government, but we did make an offer of some funds there.

In Halifax I spoke with Mr. Sale, the Manitoba minister, and they are close to having some material to bring to us in terms of what the possibilities might be there.

Mr. Rick Borotsik: I find it very strange that the federal government hasn't done more than simply ask with respect to their position on hydroelectric generation. Could this not be a major component of your Kyoto? Hydroelectric is quite clean. Could it not be a major part of your overall strategy?

Mr. George Anderson: We would like to think we will see some new hydro coming on. The question is whether it requires any sort of direct subsidy. It certainly could benefit from some of the rules we're developing for large emitters, and that's one of the issues we're discussing.

Mr. Rick Borotsik: Have you looked at geothermal at all?

Mr. George Anderson: Graham Campbell, who is the director general of our R and D offices here, could speak more to the precise numbers on geothermal. He could also speak, if you'd like, to what we spend on small hydro. On wind, as you know, the government announced a major initiative, which is the $350 million WPPI.

¿ (0940)

The Chair: The time is up, but we'll try for a second round.

[Translation]

It is the Liberals' turn.

Mr. St-Julien, you have three and a half minutes. It will then be Mr. Dromisky's turn.

[English]

I have four from the Liberal side who wish to speak, and we'll split the time.

[Translation]

You have three and a half minutes.

Mr. Guy St-Julien (Abitibi—Baie-James—Nunavik, Lib.): Thank you, Mr. Chairman.

Mr. Anderson, I'm looking at your supplementary estimates and I notice that with respect to the total budget, there's a gap of $114 million. I'll explain why. You say that you have $524 million for operating expenditures and $173 million for grants and contributions, for a total of $697 million, and you say that you need new appropriations of $42 million and $83 million, that is a total of $126 million. If the addition is made, that approximately makes a total of 824 million dollars.

Where is the $114 million amount which is missing? If we total up your budget, that makes $812 million already.

Mr. George Anderson: Quite frankly I am lost in your numbers. I don't know if Mr. Holden could answer your question. As far as I know there is no gap; the matter simply has to be explained.

Mr. Guy St-Julien: Mr. Chairman, I see a gap here, because we have the figures. We're waiting.

[English]

The Chair: Mr. Holden.

[Translation]

Mr. Bruce Holden (Assistant Deputy Minister, Corporate Services Sector, Department of Natural Resources): To my knowledge, we requested supplementary estimates of $126.5 million, of which $42.5 million will be operating expenditures and $83.9 million will be for transfer payments. That is the total of what we are requesting in Supplementary Estimates (A) 2003-2004.

Mr. Guy St-Julien: According to your figures, that makes a total, for the estimates to date, of $824 million, I have it here before me.

Mr. Bruce Holden: We have budgets...

Mr. Guy St-Julien: You had already expected $812 million before. What is the difference?

Mr. Bruce Holden: There is no difference. Those two numbers are in addition. I do not have the documents...

Mr. Guy St-Julien: Mr. Chairman, could they provide us in writing with all the other factors explaining that difference of $114 million?

The Chair: Would you do that?

Mr. George Anderson: Yes. If that will solve the problem, we will do that.

Mr. Guy St-Julien: Good.

The Chair: You can send it to us and it will be distributed.

Mr. Guy St-Julien: Second, we know that in northern regions, whether it be northern Ontario, northern Quebec, Nunavut or Nunavik, you are not particularly present in the resource regions, that is, natural resources. I'm talking about the department.

If we take the amount of $812 million—or the $938 million that the department seems to have reached, I think—how much, out of that $938 million, have you allocated to the mining sector in Canada?

Mr. Bruce Holden: Those numbers do not change the amount invested in this sector. I believe we have provided...

Mr. Guy St-Julien: Mr. Chairman, could the witness provide us in writing with the breakdown per region for the mining industry, that is, mines, forestry and other sectors, including energy, for each of the department's activities? How much money is being spent on operations, fringe benefits, grants and contributions, employees, in each location?

The Chair: Just one minute, Mr. St-Julien. That is a question you can put directly to the department because that is not part of...

Mr. Guy St-Julien: Fine.

I'm raising something else now, Mr. Chairman.

The Chair: Your time is up.

Mr. Guy St-Julien: Could you come back to me on the second round?

The Chair: If the other two have had a chance to speak.

[English]

Mr. Dromisky, three and a half minutes for the question and the answer.

Mr. Stan Dromisky (Thunder Bay—Atikokan, Lib.): One of the major contributors to the pollution in our environment, of course, is the coal-burning stations that we have. In northwestern Ontario there is a huge swath of lakes, hundreds and hundreds of lakes, that 30 years ago used to be very cloudy. Today, they are crystal clear, and people say they are beautiful, but they're dead. We haven't heard a frog in my area of the country, in northwestern Ontario and in northern Minnesota, for many years. They used to sing songs to us every night, but now they've all croaked.

Voices: Oh, oh!

¿ (0945)

Mr. Stan Dromisky: I would like to know whether the ministry has devoted any thought to joint research projects with private industry, or by themselves, to become leaders in the kind of research that is required to cleanse the air from industry and in energy-producing plants where they burn coal. We know we have enough coal on the North American continent to provide energy for us for many hundreds of years.

Mr. George Anderson: I'll ask Graham Campbell to come to the table to speak to this in a bit more detail, but we recognize the potential importance of coal.

As you know, the United States produces 50% of its electricity from coal, and a lot of the emissions coming into Canada actually come from south of the border. The new government in Ontario has indicated that it wants to accelerate the phase-out of coal-fired plants in Ontario, but there is not much doubt that, whether it's in North America or globally, there will continue to be a lot of interest in coal as a source of electricity. Then the issue gets to how to make it cleaner, and there are two aspects to that. One is cleaning up things like NO_x and SO_x, the conventional pollutants, which go to your issue of acid rain. There is also now the issue of carbon dioxide emissions and whether one could have clean coal plants that actually are contained and don't have the carbon dioxide emissions. We're engaged on both of these fronts, and Graham Campbell can speak to them.

I wish to say that there is now an international consortium looking at two things: one is carbon dioxide sequestration, which relates to this, and also clean coal, including the possibility of enclosed coal plants.

The Chair: Mr. Campbell, one minute.

Mr. Graham Campbell (Director General, Office of Energy Research and Development, Department of Natural Resources): Thank you very much.

I would simply add briefly to what our deputy has said with respect to the partnerships that we're working on with industry. There is work afoot in western Canada, called the Canadian Clean Power Coalition, or CCPC. This group has started to look at alternative means of generating electricity from coal. They've completed their feasibility study. It shows promise. They're looking at gasification rather than conventional combustion technologies, and they are very cognizant of the air quality issues that you've raised in your question this morning.

We also have industry closely involved with us as we do our research on carbon dioxide capture and storage, as the deputy has indicated. We are doing work there with industry to look at roadmapping, or ways to bring ideas of R and D to bear on issues of carbon dioxide capture and storage, GHG emissions, and air quality as well, so I believe we're quite well engaged in that issue you have raised this morning.

Mr. Stan Dromisky: Thank you very much.

The Chair: We now have time for a three-minute round. The fair thing to do would be to allow a one-minute question with a two-minute answer. Who will go?

Mr. Chatters.

Mr. David Chatters: Thank you, Mr. Chairman. I'll try to get it in one minute.

You made a very fleeting reference to the ITER project, and it raised my curiosity. It is pretty clear that the Government of Canada's commitment to the ITER project now is not competitive with the other bids for citing the project. We've heard for some time that some kind of an announcement is imminent from the minister on the federal government's commitment to this project.

When can we expect a decision to be publicly announced to Canadians on the federal government's commitment to that project?

Mr. George Anderson: Mr. Chair, the government's position is the position it has taken for some time in terms of an offer. The offer remains on the table, and I can't advise you as to when there might be any further news on that.

Mr. David Chatters: That's a pretty general question.

[Translation]

The Chair: Mr. Cardin, you have three minutes.

Mr. Serge Cardin: Thank you, Mr. Chairman.

If it were just up to me, the use of oil, coal, etc. would be truly minor. In Quebec, as you know, in terms of electricity, wind power is quite highly developed, but the fact remains that oil is used minimally.

Applications have been made to the federal government for an exploration permit in the St. Lawrence River, and I like to know at what stage the department is in its consideration of that application.

Mr. George Anderson: We have had discussions about that with the previous Quebec government, and we are opened to the possibility of entering into an agreement with Quebec, as we have done with the other eastern provinces for coastal resource management. As you know, there is a specific problem with the settlement of the boundary issue in the coastal area between Newfoundland and Quebec. It's an issue that both provinces will have to discuss in order to reach a settlement, but we are basically prepared to go ahead with an agreement.

¿ (0950)

Mr. Serge Cardin: Is that currently active? Is that being done, or is it in a holding pattern?

Mr. George Anderson: I don't know whether discussions have been held in recent weeks, but there's a new government in Quebec City. So, we're waiting a little for that government to clarify things, but Mr. Dhaliwal has had conversations with Mr. Hamad about the fact that Quebec is interested in proceeding with those discussions, and that will be done.

Mr. Serge Cardin: Quickly?

Mr. George Anderson: Rather quickly, yes.

Mr. Serge Cardin: Do I have any time left?

The Chair: You have one minute.

Mr. Serge Cardin: Let's talk about the Nuclear Waste Management Organization. The Nuclear Waste Management Organization must of course recommend a plan to the federal government by November 15, 2005, and a site to be chosen for long-term management of nuclear fuel. The organization, through nuclear owners, made a commitment, at some point, to consult, because obviously when it comes to nuclear power, the public's views, the consent of Canadians is quite important.

At what point in the process is the public to be consulted?

Mr. George Anderson: I think there may be someone more knowledgeable than myself on this topic, perhaps Mr. Wallace, but as you know, there is a fund to cover the costs of an underground waste storage facility, and consultations are anticipated. I think they will go ahead, but I'm not quite sure when. I'm under the impression that the consultations should start in three or four years. Finding a solution is a long, drawn- out process. I'm not sure of the precise date. There's a sort of critical path, and I'm not sure exactly when the consultations will begin.

[English]

The Chair: Merci, monsieur Cardin. You have three minutes.

[Translation]

Mr. George Anderson: Three years.

[English]

My understanding is for three years--

The Chair: I'm sorry, the time is up.

Mr. Borotsik.

Mr. Rick Borotsik: Thank you, Mr. Chairman.

Mr. Campbell, one of my comments was on hydroelectric. We've dealt with that, I think. The other was geothermal. Is there anything in the department concerning research and development? Are any dollars going to geothermal at the present time?

Mr. Graham Campbell: At the present time it's not receiving an investment. We have worked in that area in the past and decided that the area of application would be fairly limited. We are following developments in geothermal in the international community, though, and as that technology moves ahead, in areas where it is more amenable to practical application, we keep an eye on it, if you like. But at the present time we're not investing directly in geothermal.

Mr. Rick Borotsik: But you are investing, Mr. Deputy Minister, in ethanol. In the supplementary estimates, $60 million is identified. You talk about E-10, 10% ethanol and gasoline. You also talked about working with the provinces. This is very important because, as you're aware, a lot of provinces not only have legislation in place but are considering mandatory levels of ethanol.

However, I'd like to hear your department's position as to where you stand on that. Do you foresee some form of subsidy for the use of ethanol to industry itself? Do you foresee mandatory legislation in the not-too-distant future with respect to either E-10, E-15, E-20, or E-25?

Mr. George Anderson: On the subsidy issue, we already have a very significant subsidy, which is the fuel tax forgiveness.

Mr. Rick Borotsik: Is that going to continue? Is that part of the plan? It's good to make the stuff, but you have to use it.

Mr. George Anderson: When that was brought in, the industry sought some assurances because of the uncertainty, and they were given those assurances.

Mr. Neil MacLeod (Director General, Office of Energy Efficiency, Energy Sector, Department of Natural Resources): They were. Clearly, the Minister of Finance is the only person who can talk about when a tax is going to be levied or how long it will stay on. That's why in the previous budgetary announcement for climate change there was a reimplementation of the national biomass ethanol program. If that tax were reimposed for whatever reason, this program would kick in to provide financial assistance to companies affected. But there are no plans now for such an action. So the excise tax is off.

Mr. Rick Borotsik: What about mandatory legislation?

Mr. George Anderson: It's not clear that the federal government has the jurisdiction to legislate in this area. We've been operating under the assumption that we should be proceeding with the provinces. Some provinces, as you know, are interested in mandating, so that is the basis on which the discussions have been held so far.

¿ (0955)

Mr. Rick Borotsik: You're investing millions of dollars in the industry without any real conclusiveness that you're going to be able to maintain an E-10 or E-15 level. Are you saying that you're going to leave that responsibility up to the provinces? Does the federal government not have any input at all? You have financial input.

Mr. George Anderson: As the market grows, the federal government's financial cost rises in direct proportion because of the way the tax forgiveness works. Even in Ontario, for example, which does not have mandated ethanol, some companies are using ethanol as an additive. They find that it's a marketing advantage and so on. We'll see how that plays out over time.

Mr. Rick Borotsik: Are you leaving it totally to the industry?

Mr. George Anderson: No. What's in the plan is that the federal government was prepared to have discussions with the provinces about mandating E-10. It's our understanding that in our federation it would be difficult. We are not the government responsible for fuel standards. So we really have to work with the provinces on this.

The Chair: Thank you, Mr. Borotsik.

Next is Mr. Godfrey for two minutes, followed by Mr. Hubbard for two minutes, and then that will be it.

Mr. John Godfrey (Don Valley West, Lib.): Thank you.

My question has to do with the energy climate change file. As I go through the various components, it seems to me that if one were to think about this subjectively, there are five variables. The first is the true economic cost of production per unit of energy once you strip out tax incentives and subsidies, whether it's for oil and gas, CANDU, or ethanol. The second is the actual CO₂ emissions and other greenhouse gas emissions. The third is the depletion rate of the resource over time, particularly things such as natural gas and other hydrocarbons. The fourth variable would be scale. That is, even if you had all the wind generators in the world going and all of the ethanol, would it ever scale up to replace nuclear or hydro? The final item is the interrelationship between some of these things. In other words, does hydrogen actually make sense over the whole life cycle if you don't have a source, which might be, say, nuclear?

Given those variables and given the political nature of those variables--that is to say, the huge constituency there would be for ethanol amongst rural folks, for example--where in your department, or indeed in the federal government, is there a true environmental cost-benefit analysis? It seems to me that without that, all the choices are political.

Mr. George Anderson: There are different aspects to this. We do modeling, saying, if we were to come up with incentives or different measures and so on, what would be the reaction within the energy economy? That modeling, classically, in an econometric sense would be static in terms of technology. We try to project what we think will happen to technology over five or ten years, and some of what underlies our climate change plan includes that, including new technologies. When you get into the longer-term issues, such as hydrogen versus wind versus new generations of nuclear and so on, it gets a fair bit more speculative.

The Chair: Your time is up, Mr. Godfrey.

Mr. George Anderson: I don't think there is a strict answer to the question. It's a matter of judgment and following developments.

The Chair: Mr. Hubbard.

Mr. Charles Hubbard (Miramichi, Lib.): Thanks, Mr. Chair.

In a little different vein, this morning I read the headline in the Globe and Mail. I didn't read the article, but when I look at the supplementary estimates here, about 15% of your budget is apparently for activities and so on that weren't planned with the original budget. With it I see at least $30 million apparently for personnel and professional services.

Are all of those activities that weren't planned for last January and February? Is this a new program? What has caused this big increase in people?

À (1000)

Mr. George Anderson: Generally, what you're seeing here was indicated in the last budget. Mr. Manley, when he brought forward the budget, indicated where we were going on climate change and said there would be money available for this. He gave the amount of $2 billion over five years.

What had not been established at that point was the actual allocation of the money. So what you're seeing in the supplementary estimates, for the most part, is the allocation of the money this year for those things that were provided for in Mr. Manley's budget. The exception to that is the money for AECL, which was not referred to directly in the budget, and that's a normal supplementary estimate.

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

Colleagues and guests, I know I was rushing through. We had only one hour. We usually have more time than that, but with the House calendar and the break last week, this is the last day we could do this. I have to report it, tabled, this afternoon; otherwise, it would be considered tabled automatically and we wouldn't have dealt with it. We're probably one of the few committees, if not the only one, that will have gone through this exercise, so we have that comfort. But I do realize that I rushed you through. I'm sorry.

[Translation]

Mr. Guy St-Julien: On a point of order, Mr. Chairman. Can the officials come back later?

The Chair: That isn't a point of order.

Mr. Guy St-Julien: Right, Mr. Chairman.

[English]

The Chair: Okay, now we will proceed with the votes.

NATURAL RESOURCES

^ç	Vote 1a—Natural Resources—Operating expenditures...........$42,554,668

^ç	Vote 10a—Natural Resources—The grants listed in the estimates and contributions..........$83,964,100

^ç	Vote 15a—Payments to Atomic Energy of Canada Limited for operating and capital expenditures..........$46,000,000

^ç	Vote 20a—Canadian Nuclear Safety Commission—Program expenditures..........$6,743,500

(Votes 1a, 10a, 15a, and 20a agreed to)

The Chair: Shall votes 1a, 10a, 15a, and 20a under Natural Resources be reported to the House?

Some hon. members: Agreed.

The Chair: Thank you very much.

À (1002)

À (1007)

The Chair: We will resume proceedings on Standing Order 81(5), which I read at the beginning of the other meeting.

I'm pleased to welcome Mr. Robert Nault, and his assistant deputy minister, Caroline Davis.

I explained at the last meeting that I am really rushing the committee. I'm very strict on time. We have one hour, but that's because of the House calendar. This is the last day we can do the estimates. I have to report them today, otherwise they're considered reported without having been perused.

On your agenda you will see there is a section for Public Works. We will not be dealing with that. I was surprised to see it on my agenda. There's a reference to residential schools in the estimates. This is a responsibility of Minister Goodale; therefore, we will not deal with that portion.

We have one hour. The minister has a short presentation. I will be very strict on times, colleagues, so when I say five minutes, that's for both the question and the answer. I will have to cut it off so we will finish at 11:05 a.m.

Mr. Minister, please.

Hon. Robert Nault (Minister of Indian Affairs and Northern Development): Thank you very much, Mr. Chairman.

Good morning to my colleagues, whom I have been in front of many times before.

I'll make, as you have said, very short comments relating to the agenda of the department and the supplementary estimates themselves, and then I'll go right to questions.

I want to thank you, Mr. Chairman, for inviting me to appear before this committee. As always, I welcome this opportunity to bring members up to date on our department's recent achievements and the significant plans we have for undertaking continued fundamental change in aboriginal affairs in the coming years.

To say that too many aboriginal people continue to live in poverty without the tools they need to build a better future for themselves or their communities is an understatement. We have pledged to provide first nations with the tools and institutions to improve aboriginal quality of life in over 630 communities across the land, and we continue to deliver on this commitment. We've done this through embarking on an energetic, proactive agenda in consultation with first nations, through a program of proposed legislation, through settlement of some historic land claims agreements, and through vigorous economic development initiatives in communities right across Canada.

Mr. Chairman, our vision is simply a logical part of a progressive, enlightened, and productive agenda that has been developed with aboriginal people for aboriginal people. Across the country we're beginning to see genuine progress, serving as proof that the train to aboriginal prosperity has indeed left the station. Though no one would disagree that more work is needed, we are definitely moving forward on some of the most basic and most vital priorities, such as housing, education, and community infrastructure. What's more, recent studies have shown that these priorities are shared by both aboriginal and non-aboriginal Canadians from coast to coast to coast.

This convergence of priorities comes at a time when the relationship between first nations and Canada is improving by leaps and bounds, progressing towards its natural destination, one that succeeds on a nation-to-nation basis and respects and affirms the inherent right to self-government.

I want to say, Mr. Chairman, that the contributions of this committee provide, and have enabled us to ensure, an agenda that encourages change to the status quo. Your investment in this agenda sends a clear signal to first nations citizens and their leaders acknowledging that much remains to be done before aboriginal people can enjoy the same standard of living as the rest of us take for granted.

Most of all, these resources affirm hope in the vision we can build upon together to bring about improved opportunities and prosperity for first nations people and their families. In real terms, this means committing further support to first nations housing on reserve, and it means ensuring that safe and clean drinking water in first nations communities remains a priority. A good home and clean water are essential building blocks for community and individual success across Canada.

Mr. Chairman, we've also made significant investment in schools—$1 billion in 2001-02—to help over 500 first nations elementary and secondary schools. It's encouraging to note that along with the challenges there is progress. Education is one area where we can see a number of bright spots—some 30,000 bright spots, in fact. That's the number of aboriginal college and university graduates, and more enroll and graduate all the time.

These graduates are returning to their communities to become community builders and leaders. They are also contributing to an emerging aboriginal business and professional class—people with the skills, resources, and ambition to seize opportunity. Opportunity enables progress through which communities break the cycle of poverty, creating hope and encouraging a focus upon building a better quality of life.

À (1010)

Mr. Chairman, I've said this many times, but I continue to repeat it just to assure people that there are improvements in first nations communities. There are over 25,000 aboriginal businesses in Canada today, and to create even more success stories this government is providing new tools and resources to attract investment to first nations communities and to help create jobs. In just two years, Indian and Northern Affairs Canada has increased economic development funding from $25 million to $125 million. This funding has leveraged more than $400 million in other forms of equity and debt financing.

Based on overwhelming demand, this government also recently opened up the first nations-led First Nations Land Management Act to other nations. This will provide first nations with more control over lands and resources, making it easier for them to attract investment. In fact, Mr. Chairman, we now have over 100 first nations that have requested involvement in the First Nations Land Management Act, which, as you know, means getting out of the Indian Act and into their own control over lands and resources.

Those of us who started our careers in municipal affairs will know that land use planning in the communities is one of the most important tools you need if you're going to build an economy. It's pretty obvious that you need to know where the commercial zone will be, where the industrial park will be, where residential lots will be built on. In fact, the First Nations Land Management Act goes a long way towards allowing first nations to develop those modern tools. It will provide first nations with more control, as I said, over lands and resources and, I want to repeat, will make it easier for them to attract investment.

Our government is also supporting the stronger fiscal capacity of first nations by proposing the creation of four new institutions under Bill C-19.

Mr. Chairman, when we consider the progress occurring across the aboriginal agenda, we see much cause for optimism. Our success to date shows that we can overcome obstacles. We are building trust and we will build a stronger, more productive partnership with first nations.

Yet we cannot take our progress for granted. The investment your contributions represent will reap dividends in social, economic, and human terms for years to come. They help us build the bridge that will lead all first nations in Canada, at their own pace and according to their own aspirations, toward full expression of the inherent right to self-government, realizing a third order of government in Canada in the process. First nations deserve no less.

Mr. Chairman, those are my short remarks, as I said I would be fairly brief. I am sure we could spend much time on where we are and on specifics, but with the short time you have given us, I thought I'd leave a lot of room for questions on many areas that relate to the supplementary estimates and, I'm sure, to the broader agenda we have as a department.

Thank you.

À (1015)

The Chair: Thank you very much, Mr. Minister. The committee knows you have never refused an invitation to appear.

Colleagues, we can get directly to the questions and a quick answer, and I know that if you wish to reinvite the minister at any time, his record shows he would accept.

Instead of doing a seven-minute and then a three-minute round, I'll do a six-minute round and will try to get in a four-minute round as the second one. Is that okay?

Who goes first? Mr. Duncan.

Mr. John Duncan (Vancouver Island North, Canadian Alliance): Thank you very much, Minister, for coming before us today, on this last possible day.

I want to go straight to the supplementary estimates, because there is $337 million in new appropriations for the department, approaching 7%, which, on the surface, since most of it is going to grants and operating expenditures, indicates a very sloppy level of fiscal financial discipline. Every signal the government is emitting would indicate that the government is continuing to throw money at the department.

I am wondering why, for example, when in the pre-budget submissions the Assembly of First Nations asked for $1.7 billion in new spending, the minister's response is not a financial response but rather a political response: “Not until you reform yourself”. In the meantime, the AFN offices are filling up with ex-departmental employees and, in the words of some, friends of the minister. Why is the signal that's being sent a political signal as opposed to one of financial discipline?

Mr. Robert Nault: Mr. Chairman, let me give Mr. Duncan some understanding of how the process works.

First of all, the submission that was made by the Assembly of First Nations was not made to the Minister of Indian Affairs but to the finance committee. It was the normal round of consultations that occurs between the finance committee and different interests or individual groups, including the first nations, who on a regular basis, if you recall, make submissions for pre-budget discussions.

So that $1.7 billion pre-budget submission was not made to the Minister of Indian Affairs, nor would it normally be. The only access I got to that particular submission was on the website, like everybody else, because it wasn't made to the Minister of Indian Affairs.

Secondly, what I had commented on was the increase in the AFN's budget itself. Of course, the criticism I've received in the past was on reducing the AFN's budget from some $19 million dollars, which comes from the Department of Indian Affairs, down to close to $9 million, and I commented that if there was going to be an increase in that budget, as I have said many times, I think it's important for the AFN to reform itself so that it has better tools and capabilities of working with the Government of Canada. I've said in front of you on many occasions, as I come here quite often, that the important aspect of the work between the AFN and the Government of Canada is not so much the studies we do, because we're all in favour of good research and good technical information, but the political discussion of being able to proceed to make a decision.

I'll give you an example--and I think I did the last time I was before you, Mr. Chairman--and I'll stop after this point.

In 1995 and onward, the AFN supported Bill C-19 and its development, including working together with the department on that legislation. For about five years or more, every resolution that came out of the AFN supported Bill C-19. Then in the last couple of years that changed dramatically, and there was a reversal of position by the assembly--which put us in a pretty difficult position, of course, because as you know, Mr. Chairman, the AFN and its representatives wrote Bill C-19, not the Minister of Indian Affairs or the bureaucrats.

Therefore, I have asked for a better way of working with the AFN so that there are clearer deliverables and a clearer understanding of the politics on the ground. I think we all agree--first nations, elected officials, members of Parliament, and of course, this minister--that the status quo isn't good enough, and if we are going to make change, we have to have a process that allows that.

I hope that clarifies for Mr. Duncan that the pre-budget submission was not to this minister but in fact to another committee.

À (1020)

The Chair: Thank you, Mr. Duncan.

Mr. Cardin? No.

Mr. Borotsik.

Mr. Rick Borotsik: Thank you, Mr. Chairman.

It's my first opportunity to sit at this committee, so thank you, Mr. Nault, for being here. I haven't had the opportunity of hearing you at this committee before. But I'm going to get into the financials more than the politics of it.

On the supplementary estimates, the total cost to date with the new estimates would be $5.359 billion. Do you have a comparable number for the last budget year, what the comparables would be, perhaps, Ms. Davis?

I should have had that. I apologize. Had I known I was going to be here for this part of it, I could have done the comparables. I

ask because there is a suggestion of a 7% increase. I don't know whether that is in fact the case or not, if you make comparables between this year and last year.

Mr. Robert Nault: We will get you the exact number, but let me put it to you in this frame. The increase in our general budget from last year to this year is 2%. So it's a 2% increase. Then there are other initiatives, for example, that you can classify as a budget increase, although we don't necessarily classify it that way at the Department of Indian Affairs, that is, the dollars that come from the fiscal framework for settlement of claims, which we don't consider as part of our general business as a department.

Mr. Rick Borotsik: That would be an extraordinary capital cost of sorts.

Mr. Robert Nault: Exactly. So if we spend a couple of hundred million dollars on specific claims resolution, that would drive up the increase overall to somewhere in the neighborhood of where Mr. Duncan was at, I think, around 7%. That's factually correct, because that is about what it was last year for those claims, but our budget increase has been, in fact, 2%.

Mr. Rick Borotsik: The year to date to last year's comparables would be about 2%.

Help me with this one. I notice vote 40a actually is the vote for payment to Canada Post. That agreement would be negotiated. It's $15 million for the supplementary estimates and $15.6 million for the previous estimates. This is something that just comes out of the air. Was this not an agreement that was negotiated with Canada Post? Would you not know what those dollar amounts would be, and why is it necessary to have a supplementary as opposed to just putting it into the total estimates initially?

Mr. Robert Nault: No, in fact we wouldn't know exactly, because it would depend on the volume and the costs that they project for the northern food mail initiative. This is a particular initiative that was undertaken a number of years ago to reduce the cost of living in the far north, and in northern Quebec and Labrador, and a very small piece of northern Ontario, I understand. We subsidize the food mail delivery. As I understand it, this budget and the supplementary is based on the fact that we now know what the numbers will be.

Mr. Rick Borotsik: Are you telling me you underestimated by 50% initially? Your initial estimate was $15.6 million. You have doubled that. Did you underestimate by 50% initially?

Mr. Robert Nault: Also, through the supplementary estimates, we have been able to access the funding to pay for this, which, of course, then comes from different sections of our funding envelope because it's not our regular, normal order of business. In fact, if I can be blunt with all of you, which I am quite used to being, we don't see it as necessarily our department's responsibility, but we've been given the mandate to deliver on it, so we do our best to find the resources to pay for it.

Mr. Rick Borotsik: Do you have comparables?

Mr. Robert Nault: Maybe we'll get Caroline to give us the exact numbers for you and how it fits into the total framework for the northern food.

À (1025)

Mr. Rick Borotsik: Actually, I was looking for the overall cost. I was looking for the total comparables, this budget year to last budget year, the $5.359 billion to date compared to what it was last budget year.

Mr. Robert Nault: We don't have the number yet because it hasn't come out yet.

Mr. Rick Borotsik: Because the fiscal year is March 31.

Mr. Robert Nault: Right.

Mr. Rick Borotsik: This is my last question. This is more political. You talked about the municipal backgrounds initially with respect to the First Nations Land Management Act. It's not just planning, as you're well aware, Mr. Minister. There's more to the municipal side of it.

Can you just touch on individual ownership? Is that an extension of this, the First Nations Land Management Act, and is that where you see this thing going, to more of an individual ownership opportunity with respect to first nations and land ownership?

Mr. Robert Nault: No, the First Nations Land Management Act specifically exempts the issue of...and protects the reserve-based lands held in trust for first nations. Obviously, one of the things we were not prepared to do, nor was first nations leadership prepared to do, is to have land potentially up for sale. It could end up in other people's hands.

What this basically does is allow first nations with protected land to develop the kinds of policy that will allow, for example, for private home ownership on reserve but not the land base itself, and those kinds of initiatives. Also, it allows for set-asides for business purposes through referendum, through designation of, say, an industrial park, so that there is a better relationship with the private sector in a much more humane manner.

I put “humane” in there because our department and the Indian Act were never structured to allow for the building of a first nations economy. I'll give you an example. Our average timeframe for land redesignation, for land to be put into a different designation for industrial purposes, takes at least three years. Some take as long as seven years, and if you're trying to develop an economy or to entice business, you have to be able to do that in fairly quick order. The First Nations Land Management Act is intended to allow first nations to have control over those kinds of decisions under certain principles and parameters, and they can do that.

Mr. Rick Borotsik: But that is not for private ownership.

Mr. Robert Nault: It is not private ownership.

Mr. Rick Borotsik: Thank you.

The Chair: Thank you very much.

Thank you, Mr. Borotsik.

[Translation]

Mr. St-Julien, you have three minutes.

Mr. Guy St-Julien: Thank you, Mr. Chairman.

Minister, your work at the Department of Indian Affairs and Northern Development is greatly appreciated, but at times there's a lot of opposition. It's hard, but you are playing an active role.

My first question is the following. Are the provinces participating in the local airlift of perishable food in the North?

[English]

Mr. Robert Nault: I'm not sure I understand, Mr. Chairman, what Mr. St-Julien is speaking of. The omnibus bill?

[Translation]

Mr. Guy St-Julien: Do the provinces participate in the food-mail program for the North under Canada Post?

[English]

Mr. Robert Nault: No, they don't. Certainly, we have attempted over the last number of years to convince both the provinces and the territories that they should partner with us on the costs of delivery of foodstuffs to the north and the subsidy that we put forward as a department. But so far other levels of government have refused to participate in the cost of reducing the costs of those goods.

Of course, you know the importance of this program, and on a number of occasions ministers, myself and those before me, have criticized the structure of the program--not the program itself, which we are very supportive of--in terms of how it works. It's very difficult for a minister like me, who understands the north, to ever visualize that we could cancel the program. It would mean that children would no longer get fresh vegetables, fresh fruit, foodstuffs that are good for their health, when the price is too high. We very much see this as a health issue and as a quality of life issue, so we have continued to fund the subsidy with that interest in mind.

À (1030)

[Translation]

Mr. Guy St-Julien: You mentioned housing twice in your remarks. Coming from a northern riding representing Cree, Inuit, and Algonquin people, I find it hard to support Bill C-7 and the other pieces of legislation. Housing is currently the national priority for first nations people, for the Inuit and the Cree. Winter is coming and there will be five or six children sleeping in one small bedroom all winter. Things are not so bad in the summer because people go fishing, but winter will be difficult again this year. We do not have enough funding to build housing for our Aboriginal friends and the Inuit of Canada, but we are investing $300 million for reconstruction in Iraq, which was destroyed by the Americans. I find it hard to understand why there are no supplementary estimates to build housing on Aboriginal and Inuit reserves in Canada.

The Chair: Thank you, Mr. St-Julien.

Mr. Dromisky.

[English]

Mr. Stan Dromisky: Thank you very much, Mr. Chairman. I'll be quick.

Under the northern affairs program “assessment, management and remediation of contaminated sites”, I know there was an advance of $10.7 million given. What I want to know is, is that money part of the First Nations Land Management Act financial file, or is it a separate, distinct amount?

Mr. Robert Nault: It is separate, Mr. Chairman.

Mr. Stan Dromisky: I see.

Many times I've read in the paper, because I live in northwestern Ontario, about grants and moneys being given for the assessment of contaminated sites. Mr. Minister, I don't expect you to know everything that is going on in such a complex portfolio as you have; however, I would like to know if we have any information pertaining to the management and remediation of contaminated sites, which is a very serious problem.

Mr. Robert Nault: Yes, Mr. Chairman.

We have a complete remediation plan of every major contaminated site in the country as a government, and we can break them down into north and south. For the northern parts of our country--and I'm the minister responsible for northern development and that particular file--we can give you, if the committee so wishes, a complete plan of the remedial management of every one of these sites.

As you know, Mr. Chairman, in the last budget, this government put some $600 million forward to start moving much more quickly on dealing with the remedial effects of, for example, orphan mining sites, which we have inherited from companies that went bankrupt, and we did not have in place, in those days past, the kinds of regulatory regimes that allowed for us to have money put aside for remediation and protection of the taxpayer. So we have inherited somewhere in the neighbourhood--it might be a little higher--of some $400 million of liabilities just in the north. We are moving to correct those issues as we speak, but the plan does exist.

Mr. Stan Dromisky: Could we ask the department to make copies for us of the report?

The Chair: Yes, would you provide that report, Mr. Minister, through the department, to the clerk?

Mr. Robert Nault: Yes, we will endeavour to get the report to the committee in quick order.

The Chair: Thank you.

We can do a five-minute round. Mr. Duncan.

Mr. John Duncan: Thank you very much.

I'm going to ask two specific questions. I'd like to ask them both first.

The first one relates to Davis Inlet. I understand the costs of the move are now approaching $300 million, which for 600 residents is a considerable sum of money. Reports from the community concerning vandalism, substance abuse, and other problems are not good. My question is why have we spent so much there and yet done so little in terms of policing and community leadership issues?

The second question I have relates to the minister's reference to 100-plus first nations that are interested in the financial and statistical institutions. Many of those same first nations are also very interested in pursuing land ownership not dissimilar to that of the Sechelt. The Sechelt have had fee simple ownership since 1986, and they've made that a very successful change. My question is why is the department's response, whenever any other first nation asks for what the Sechelt have, always that “We will have no more Sechelts”.

À (1035)

Mr. Robert Nault: Mr. Chairman, I'm a little surprised to hear from Mr. Duncan that the department has said it is not in favour of a Sechelt model of governance, because in fact it is—

Mr. John Duncan: If I could just comment there—

Mr. Robert Nault: Okay, you're allowed.

Mr. John Duncan: The Skeena Native Development Society has produced a book called Masters In Our Own House: The Path to Prosperity. That is where I got that information. I'm quoting first nations themselves. It's not something I made up myself, so I don't need a lecture on it from the minister.

Mr. Robert Nault: Can you tell me where you got this from again, just so I know?

Mr. John Duncan: It's from Masters In Our Own House: The Path to Prosperity, produced by the Skeena Native Development Society, which is a group of first nations who are promoting entrepreneurship, capital formation, and other pro-business activities. It includes the Sechelt Band; it includes many of the 55 or so bands in British Columbia that are very progressive and very supportive of Bill C-19 and the land management act.

Mr. Robert Nault: I apologize if Mr. Duncan thought I was lecturing him. I just wanted to know where he got the information. In fact, what he has just confirmed for me, Mr. Chairman, is that it didn't come from Indian Affairs; it came from another organization.

My point to you is—

Mr. John Duncan: They are quoting their dealings with Indian—

Mr. Robert Nault: My point to you, Mr. Chairman, is that is not the position of the department; we are prepared to consider that model of governance. The reality of it is, though, that virtually no first nation is prepared to go to the same model Sechelt has. As you know, it's not constitutionally protected. It's a form of governance that is very similar to the municipal style of governance; one that's been advocated by others, and by many; one we're prepared to look at. But it's not the one the first nations people in British Columbia, in particular, seem all that interested in pursuing.

Mr. John Duncan: If I could clarify, I'm not talking about the governance aspects of the agreement; I'm talking about the land ownership aspects of the Sechelt agreement—fee simple ownership, Mr. Minister. As I already indicated to you, that transfer occurred in 1986—quite a long time ago. Others have asked for the same treatment.

Mr. Robert Nault: I'm not quite sure I have the answer to that question. I think what is being suggested is that somehow the department is not in favour of that. I don't want to go too far with this until I get the information and can give you a more thorough answer to the question, because I want to be fair. Mr. Duncan has put me in a spot where I don't think I know the exact way this is being formed.

If he's suggesting that the department is opposed to first nations having lands considered to be fee simple, not all, but a large number of first nation communities own fee simple lands now. They own large pieces of land in many parts of this country, including fee simple lands in major urban centres as part of business opportunities. So I don't think the Government of Canada is opposed to that.

I want to follow this up a little bit more, Mr. Duncan. I don't want to get into a debate if I'm not exactly sure how you're asking the question.

À (1040)

Mr. John Duncan: I don't want an answer; I just want it clarified.

The Chair: We'll give you few seconds for that.

Mr. John Duncan: I'm talking about the transfer of current reserved lands to fee simple status. I'm not talking about the lands they may have acquired since that time.

Mr. Robert Nault: If that's the way the question is being asked, as a minister who's been in this portfolio for over four years, I have never received a letter from a first nation wanting to move their land out of reserve status into fee simple. That I can assure you.

The Chair: Thank you.

Thank you, Mr. Duncan.

Monsieur Cardin.

[Translation]

Mr. Serge Cardin: Thank you, Mr. Chairman.

Good morning, Minister. Mr. St-Julien had an opportunity earlier to ask a question, but he did not have the opportunity to get an answer. Although social housing is a Canada-wide problem, it seems to be a major problem for Aboriginal people.

What is the department doing right now and what does it intend to do to address the urgent need pointed out by Mr. St-Julien?

[English]

Mr. Robert Nault: I think the question has been asked by both my colleagues from Quebec. It's the one I get asked most often, and it has been the most difficult to respond to. I have said on many occasions that the government is not of the view, and our policy does not suggest, that we will supply the financial resources for every first nation family to have a house built for them. On the other hand, our policy is such that every fiscal year our department subsidizes significantly, to the tune of close to $300 million. That doesn't include CMHC and their program, which is separate. The flexibility of the new policy we've put in place allows first nations to develop a strategy around housing and the development of private housing and home ownership on reserve.

My only answer--the one I've been giving for many years--is that you need a housing market on reserve if you're going to have good housing stock. That means the equity put into a house and the ownership have to be private, and the individual has to feel that the house can be sold or bought in a marketplace of some kind, in order for us to develop a housing strategy that improves housing and builds more houses. It's been our objective to try to put policy in place that moves in that direction. But the long-term interest of the department is to create a first nation economy so there are jobs and people have employment that then allows them to be in the housing market.

I want to make it very clear that this government is still firmly in the business of social housing on reserve. We will continue to be in social housing as long as people are living in poverty, meaning they're unemployed and on social assistance. We don't expect a first nation person to be able to afford a house if they're on social assistance, just as we don't expect that of a non-native Canadian in the same situation.

Finally, we have entertained a number of pilots across the country in the last few years. We are looking at creative ways for the financial institutions to be involved with first nations collectively in larger groupings, to try to develop the strategies to build more houses much more quickly in the community, because of the large population growth. That's the way we're proceeding at this point.

[Translation]

The Chair: Mr. Cardin, you have time left.

Mr. Serge Cardin: I am not necessarily the Bloc Québécois critic for Aboriginal Affairs, so I am not very familiar with all the concerns. Mr. Borotsik asked questions earlier about last year's budget. He was wondering about that.

Let us talk about the new estimates. Canada Post Corporation, for example, does not seem to have properly evaluated its needs for the current year. Do the new monies being sought include some that are basically for recurring expenditures, or are these mostly for ad hoc needs? If they are for recurring expenditures, can we expect substantial budget increases?

À (1045)

[English]

Mr. Robert Nault: Mr. Chairman, in the four years that I've been the minister, this particular food mail program has never gone down; it's always gone up. I expect it will continue to do so.

The estimate, I admit to my colleagues, was a little low, but I expect it'll continue to rise as the population grows and as more and more aboriginal people and northerners take advantage of shipping their goods through the mail and being subsidized by the Government of Canada or my department.

I see this as a continuous program over a number of years until we find a different process, a different way of developing the indicators that either first nations people or northerners are starting to see their cost of living go down--because that's what this is really all about: the cost of delivering goods in an environment that's isolated. It costs a lot more for a loaf of bread, a litre of milk, vegetables, or anything of that nature.

So I expect these costs will continue to rise, and I'm very supportive of continuing to expend the resources of the Government of Canada to see that people's standard of living is similar to ours even if they do live in isolated parts of our country.

The Chair: Merci, Monsieur Cardin.

Mr. Godfrey.

Mr. John Godfrey: Minister, thank you for coming.

I'm just looking at the little cheat sheet we have on the supplementary estimates. I'm just curious. On page 58 there's an item on out-of-court settlements for $81 billion, and then I assume, in some associated way, additional funding for litigation management for $15 million. I'm puzzled about the out-of-court settlements.

Mr. Robert Nault: Mr. Chairman, for the sake of information, I can give the committee every single out-of-court settlement--it's a matter of public record. I don't have them at my fingertips.

Mr. John Godfrey: I guess they're categories. I'm just curious about what kinds of things are covered by that phrase.

Mr. Robert Nault: Most of them would be considered to be specific claims. We'd be in court, then we would put the court case in abeyance, and then we would end up resolving it in negotiation. We would consider that to be an out-of-court settlement.

Mr. John Godfrey: These aren't land claims?

Mr. Robert Nault: Not always. For example, we had some out-of-court settlements with the Hobbema bands in Alberta on issues dealing with protection of their money. We settled out of court with those communities this fiscal year. That, I assume, would be part of our supplementary estimates here.

For the sake of argument, I didn't bring the list, Mr. Chairman. I could easily supply those. There are a variety of out-of-court settlements. As I have said to colleagues before, besides Revenue Canada, I'm the second biggest customer for Justice, because we are in court all over the place. Obviously, part of our litigation strategy, which I have supported, is to get out of court and find out-of-court settlements and ways to get agreement so we can improve our relationship and then move forward with the business of the future versus the business of the past.

We have a fairly extensive litigation management structure. The costs, as you can tell, are being reflected in these supplementary estimates.

Mr. John Godfrey: My only other question would be, is there something about the nature of out-of-court settlements that is less predictable than your other expenses? Does this sum of money represent 7% of what you normally budget for out-of-court settlements, or is it a higher figure of the total simply because it's less knowable?

Mr. Robert Nault: I would say it's less knowable. There is no way to predict whether we will in fact have willing partners in out-of-court settlements from year to year, so what we normally try to do is to build in enough flexibility and, obviously through the supplementary estimates, come forward to request from Parliament the abilities to finance them.

I want to go to a discussion we've had on a number of occasions, Mr. Chairman, just to make it clear to all members. On a few occasions, we've had this discussion about specific claims and out-of-court settlements and the costs of specific claims versus going to court. As you know, historically we've spent about some $75 million through our allocated budget. But in the years I've been the minister, we have never spent $75 million; it's always been closer to $200 million. So we get that money through the fiscal framework, through supplementary estimates and the like, because obviously the objective of the exercise is to resolve those claims. But we can't predict.

À (1050)

Mr. John Godfrey: Thank you.

The Chair: Thank you.

I may have time for one minute for questions, and the minister may choose to respond to them in his closing remarks. So we'll give members one minute for a question.

You can include it, if you wish, in your closing remarks.

Mr. Vellacott.

Mr. Maurice Vellacott (Saskatoon—Wanuskewin, Canadian Alliance): There are representatives from the Hobbema First Nation here, from the Six Nations Reserve in southern Ontario. I'm sure, Mr. Minister, they would be pleased to get a response on the status of the governance bill and on what your intent is in respect of that. It's in limbo—or your department is obviously not pushing it in the House.

Secondly, I notice we have an increase of $96 million in terms of contributions, most of the money going for education, capital, and maintenance. It seems like an area in which forecasts should not be erratic. Can you explain why it's so difficult to get the number right the first time around in the main estimates?

Lastly, as well, you had a $15-million increase in loans to native claimants for the purpose of defraying costs related to research, development, and negotiations of claims. Why is there an increase there?

So I have three quick questions.

The Chair: Thank you, Mr. Vellacott.

[Translation]

Mr. St-Julien, you have one minute.

Mr. Guy St-Julien: Thank you, Mr. Chairman.

Minister, with respect to housing, we know that the federal government has a fiduciary responsibility when it comes to the Innu, Cree and Naskapi people and the James Bay and Northern Quebec Agreement. There are houses right now and I do not see any supplementary amounts. There's a lot of housing on those reserves that is in poor condition. Four, five or six children will have to sleep in one bedroom all winter. The houses are falling apart and these people are waiting for extra money for renovations.

The Chair: Thank you, Mr. St-Julien.

[English]

Mr. Minister, we invite you to make closing remarks of about five minutes, which would allow us two minutes to deal with our two motions.

Mr. Robert Nault: Thank you very much, Mr. Chairman.

I'll start, if I can, by answering Mr. Duncan's question about Davis Inlet, because I didn't get a chance to respond to it, and I think it's extremely important that we do.

Davis Inlet, as you know, was part of a program through which the department agreed with that first nation—because of where they were situated and their isolation—to move the community to a location to its liking and build a new community. The costs of that community are not $300 million, as has been suggested, but are closer to $200 million. I suppose, to some extent, though, it's irrelevant to the conversation. It was a large expenditure of taxpayers' money with the intent of giving this community, which has had a lot of social issues and historical problems, a fresh start. That opportunity, of course, is now at hand, with the individuals moving into their new housing, their new school, their new clinic, their new administrative building, and the infrastructure available to them. Very soon, through donations from the private sector, some new recreational facilities will be built with the help of a number of prominent Canadians who have been working financially to get donations to build them.

Mr. Chairman, one of the things we have said many times and that I want to repeat in this room is that we did not suggest, nor should we, that the building of a new community and new infrastructure would deal with the social issues. There is still what we call a healing program going on between the community leaders and our department and Health Canada. Yes, there is a need to move to reserve status, which gives more powers to the first nation leadership versus fee simple, which has been their request. We're working on that as quickly as we can.

Thirdly, Mr. Chairman, we're working with the Solicitor General's office to build a new police station, so there will be a police force there that is more culturally sensitive to the Innu and that will deal with some of the issues of vandalism occurring not just in that community, but also in all Canadian communities across the country. Vandalism is not unique to native people; it's the same everywhere in our society. The Solicitor General is working on that.

Mr. Vellacott asked me about the governance bill, Mr. Chairman, as you know. I have said publicly that it's not my view that the governance bill will proceed before there's a transition of leadership, but I am very confident and supportive of the continuation of the discussion and of seeing a governance bill eventually pass under the new leadership. That's the position of our department and this minister. I am firmly convinced that without the fundamentals and good institutional structures of governance, it makes it that much more complicated and difficult to eradicate poverty and to move to building an economic base.

Mr. Chairman, I've never been to a committee where Mr. St-Julien hasn't asked me about housing, which of course is his most important initiative. We are working with the new national chief on a proposal between the AFN and the Government of Canada to look at housing, with the objective of trying to deal with some of the issues that Mr. St-Julien has suggested. One of the recommendations is to create a housing institute that will allow first nations control over the housing envelope we now have, working closer with CMHC, provincial governments, and the private sector to find ways to deal with housing. That's just one example of the things we're doing.

Mr. Chairman, I want to reiterate what I've said to you and to members: this government has a very activist agenda, with one objective in mind—to improve the quality of life, the life expectancy, and the opportunities for first nation people in our society. Part of that is the increase in financial resources. It is true that since our government has been in power, there has never been a cut to the budget of the Department of Indian Affairs—and rightfully so. It is the fastest growing population in Canada; it is the youngest population with the greatest needs, both infrastructure-wise and, obviously, regarding the social issues confronting it. So it has been our need to come before you on many occasions to confirm for you, through supplementary estimates or estimates, the costs we're incurring, in partnership with first nations, to develop those kinds of better tomorrows we speak of.

À (1055)

So on behalf of our department, I want to thank you for inviting me. I'm always available, as you know, to come before your committee. If there are any questions that weren't asked today, if you want to put them in writing, I will certainly make our answers available to you in depth on any particular area within the supplementary estimates you might want to hear about, because I know that in a short hour's timeframe it's never possible to answer everyone's questions.

Thank you very much, Mr. Chairman.

The Chair: Mr. Minister, thank you very much. Again, as I said, one hour is not a long time. We did what we could. I'm sure the committee will want to invite you again, and it's always a pleasure receiving you. Thank you very much.

Colleagues, we'll go directly to the vote.

INDIAN AFFAIRS AND NORTHERN DEVELOPMENT

Department

^ç	Vote 1a--Indian Affairs and Northern Development--Administration--Program expenditures....................$19,598,846

^ç	Vote 5a--Indian and Inuit Affairs--Operating expenditures....................$110,661,348

^ç	Vote 15a--Indian and Inuit Affairs--The grants listed in the Estimates and contributions....................$138,915,000

^ç	Vote L20a--Indian and Inuit Affairs--Loans to native claimants....................$15,100,000

^ç	Vote 30a--Northern Affairs--Operating expenditures....................$37,739,000

^ç	Vote 40a--Northern Affairs--Payments to Canada Post Corporation....................$15,000,000

(Votes 1a, 5a, 15a, L20a, 30a, and 40a inclusive agreed to on division)

The Chair: Shall votes 1a, 5a, 15a, L20a, 30a, and 40a under Indian Affairs and Northern Development be reported to the House?

(Motion agreed to on division)

Á (1100)

The Chair: Thank you very much.

Mr. John Duncan: Can we have another meeting scheduled?

The Chair: Do you want a steering committee meeting for future business? We have two notices of motion to deal with.

Mr. John Duncan: What if we said no?

The Chair: I'm easy. Any time you say no to a meeting you make me happy. This is not a vocation.

The rumours in the newspapers tell us we're leaving on November 7. It makes sense to me, but we have no assurance. Do we want to have meetings to plan a whole pile of work when we have three weeks to do it? God knows, all of you members went beyond the call of duty in the spring. Do you want us to take it easy until November 7, or do you want to pile on some work?

Before I give the floor to Monsieur St-Julien...he's always keen to give us extra work.

[Translation]

He is always ready to give us extra work, but we will insist that he be here to do it.

Mr. St-Julien.

Mr. Guy St-Julien: Mr. Chairman, I had tabled a motion to devote one day to Aboriginal issues and another day to natural resources. Given the crisis in the mining industry and resource regions, could we spend two or three hours with officials from the Natural Resources department on the problems in the mining sector?

The Chair: We could discuss that. There are eight mines in my riding, but I do not know what problems you are talking about.

Mr. Guy St-Julien: Here is the problem. Currently, there is not enough exploration. Several mines—and it is not only because of the price of metals or the rising dollar— in the northern Quebec resource areas, are having problems; a crisis is looming. Three mines were just shut down and four others may be shut down within six months. We would like to find out, from the Department of Natural Resources... The department has a budget of $43 million within the 918 million-dollar budget. Now, about $500 million are shared by all of Canada, whereas the rest, amounting to $37 million, goes to run the Ottawa offices.

The Chair: We already debated this. Mr. St-Julien, can you convince your colleagues that we need a special meeting to debate this issue.

Mr. Guy St-Julien: We need a meeting to discuss the resource sector.

The Chair: Then you can go and lobby other members of Parliament.

Mr. Guy St-Julien: Certainly.

[English]

The Chair: Mr. Godfrey.

Mr. John Godfrey: Mr. Chair, I sent a letter to you suggesting...partly because, I think, we've neglected the natural resources side of the committee, for reasons that are understandable. It's also partly because I think it's a matter of some interest not only for us but for the larger Canadian public to have a better understanding of the blackout and of the report the Minister of Natural Resources is working on with his American counterpart. I would have thought there would be sufficient public interest for us to have something of a discussion and a better understanding concerning the lessons we have drawn to date from that experience. So I would put that out, as I have in a letter to you already, as a possible briefing matter for a session.

The Chair: Colleagues, this is something we could do in maybe one meeting or two, so there's an opportunity there. We do have time to do that.

Monsieur Cardin.

[Translation]

Mr. Serge Cardin: Mr. Chairman, on the agenda, something may have gone by too quickly, because under the heading “Public Works and Government Services”, on page 2 of 2, it was...

The Chair: I was surprised to see that on our agenda. I think that someone believed that residential schools were the responsibility of the Department of Indian Affairs, but they come under Minister Ralph Goodale. So we do not have to study this.

Mr. Serge Cardin: Secondly, you just mentioned that this could take place on November 7th.

The Chair: That is what the newspapers say.

Mr. Serge Cardin: If we must finish on November 7, it is all right with me, but we need to know when we are coming back; this is much more important.

The Chair: September 8 would suit me.

Mr. Duncan.

[English]

Mr. John Duncan: I just wanted to clarify with John Godfrey whether the intent of his suggestion was to have the minister appear before the committee.

Mr. John Godfrey: Ideally, but if not, let's at least have somebody who can speak to the findings to date so we can actually have a better understanding of.... I've seen the press reports, but we might want to explore that as a committee, and I think it's appropriate that Parliament should take time to look at such a matter.

Mr. John Duncan: My point is that we can't get the minister here for the estimates. It would seem rather strange to me that he could come for something else but not for the estimates.

Mr. John Godfrey: But we were stuck today. We had an absolute drop-dead--

Mr. John Duncan: But he can't come before November 6; that's what he said.

The Chair: Would you like me to set up that meeting for next Tuesday as an information session?

Á (1105)

Mr. John Godfrey: Yes, I think it would be nice to have the minister, but I almost think it's even more important to have the discussion just with people who are advising the minister. They could give us an update on where they're going with their work and on what some of the preliminary lessons drawn are. So I'm not insisting on the minister.

The Chair: Well, I will be upfront with the committee. The Minister of Natural Resources hasn't been the most cooperative with this committee--we know that--but he was not here this morning for very legitimate reasons. He was at the hospital with his wife all night, so that I accept. But I will agree that the record in the past has not been the best. We have been turned down, I think, three out of four times. I'm not pleased about that and I was ready for battle today, but we have to have compassion when there is a family member that close who is ill.

Would you like me to set up an information meeting for next Tuesday on the blackouts and the binational committee for whatever information we can get?

Some hon. members: Agreed.

The Chair: Monsieur St-Julien.

[Translation]

Mr. Guy St-Julien: I understand that the power outage in Ontario and Quebec is over; the power is back, but the thing that matters to us, in the remote regions, both to the Inuit...

The Chair: We'll hold the meeting on Tuesday.

Mr. Guy St-Julien: Tuesday.

The Chair: That is what we will do.

Anyone else? Is there anything else?

Thank you very much.

The meeting is adjourned.