:
Thank you very much, Mr. Chairman.
I have to tell you that it is a great pleasure to be before the committee. This is actually my first appearance before a committee of the House of Commons since becoming a minister. I have to admit I'm used to sitting in Mr. Cullen's seat, and not used to this end of the table, but I'm sure he'll be equally friendly to me as we were to him not that long ago.
But it is great to be here, and I'd like to start off by saying that since becoming the Minister of Natural Resources, I've had the opportunity to meet some of the 4,500 employees who are conducting some very innovative and groundbreaking research at Natural Resources—officials and dedicated employees working to ensure that effective programs are efficiently delivered to all Canadians.
Mr. Chairman, before inviting the committee's questions, I would like to say a few words about our overall approach to natural resources policy. Our approach is to step back and allow market forces to build the prosperity of the natural resources sector as much as possible. However, for this government, a key goal is to ensure that the regulatory framework will create a climate of certainty. Industry can manage risk under a stable regulatory environment; an unstable regulatory environment adds to that risk. We need clear rules and clear regulations, and we will enforce them consistently and fairly. These rules will help the industry get the clear answers they need to make the investment decisions they have to.
Through this mix of market forces and a stable regulatory environment, we need to balance three objectives: economic prosperity; resource-based employment; and most importantly, environmental protection. When handled in the right way, these objectives enhance the successes of one another.
This committee is well aware of the importance of the natural resources sector to economic prosperity. Every single region of this country benefits. The economy of my own province is driven by mining and forestry. At the other end of the country, Newfoundland's offshore resources are now in production and are bringing great prosperity to that province. The Northwest Territories is entering a new era of prosperity, with the development of the diamond mines; and of course, Alberta has it oil sands; Quebec has its hydro resources; and Ontario is rich in many resources, both in the mining and forestry sectors. In fact, across the country, over 900,000 Canadians work directly in the natural resource industries, and many more Canadians work indirectly in the sectors that support natural resources.
Mr. Chairman, the natural resources sector accounted for a $93.4 billion trade surplus last year alone—a record. If you took our energy exports alone, they would account for Canada's entire trade surplus in 2005 and 37% of Canada's business investment. Look at the financial pages of the newspapers and you can see ample evidence that Canada certainly has the first three objectives firmly established. We have built economic prosperity.
The government is confident that the development of natural resources or economic prosperity can co-exist with the other two objectives—support for the development of skilled workers and protection of the environment.
Resource-based employment includes the viability of hundreds of communities across the country, especially in northern regions that rely on the natural resources sector as their sole economic base. Consider the challenges faced by many communities during the softwood lumber crisis. Not only did the Canadian economy as a whole suffer, but there also was a cost to communities, as mills closed and people were laid off. The settlement of the softwood lumber dispute, under the leadership of the Prime Minister and the Minister of International Trade, will help restore certainty to the industry here at home for the first time in many, many years.
Another aspect of resource-based employment involves the challenges that this workforce faces. In Canada right now, we have a shortage of skilled workers. This is a topic that comes up in many of my discussions with my provincial colleagues. All sectors face skills shortages. For some, like oil and gas, it's a case of not being able to find enough skilled people to keep up with the burgeoning demand. For other sectors, it's a case of many of the best people leaving to seek higher-paying jobs in the oil and gas sector.
There are as many as 20,000 skilled trade positions that cannot be filled today, and that number is expected to rise to 50,000 by 2010. Despite this, only 17,000 people complete apprenticeships each year. As a result, our employment gap is going to grow. I'll be working with my colleague the Minister of Human Resources and Social Development to find ways to promote skills development for the resource sectors, and I'm proud that the new government is already moving to encourage growth and development of the skilled trades.
As most of you know, in the 2006 federal budget, the federal government included a number of key measures that encouraged employees to hire apprentices and help apprentices starting out with the much-needed tax incentives. Mr. Chairman, the federal budget also met the challenge of accommodating older workers whose skill levels have been overtaken by the demands of new technologies. Budget 2006 invested $60 million in a worker adjustment program for the forestry sector and the creation of a sector council to address the development of workplace skills and longer-term human resource issues.
In the same way as this government is committed to looking after workers and their families, we are committed to developing our energy and resource sectors in ways that are more environmentally sustainable and energy efficient. Mr. Chairman, the committee is well aware that the government has made a commitment to pursue a clean air, clean water, clean land, and clean energy policy. Such a policy takes into account environmental, economic, and social realities. We will replace vague policy goals with concrete action for clean energy to reduce emissions and pollution.
I am very encouraged that the Minister of Finance allocated $2 billion to the environment and energy efficiency fund in the recent budget. All initiatives are being re-examined to ensure they achieve real results for Canadians.
Mr. Chairman, there is one challenge that links each of these objectives—the economic prosperity, support for skilled and non-skilled workforce, environmental protection—and that challenge is the need to promote innovation, science, and technology throughout all natural resource sectors—innovation that helps produce resources more competitively and with less impact on the environment, innovation that raises the demand for continuous upgrading of skills in every community in Canada that relies upon the resource industry.
Over the past months, I've also had the opportunity to meet with my provincial colleagues. Let me say at the outset that this government respects the provincial jurisdiction over natural resources. These resources drive the economy in every single region. We will take an active part in areas of federal jurisdiction, such as nuclear energy, international trade, and environmental impacts that cross provincial and national boundaries.
I've had a very busy and productive time since the new government was sworn in. Last month, for example, I had the opportunity to meet in Washington with my colleagues the U.S. Secretary of Energy, Samuel Bodman, and the Mexican Secretary of Energy, Fernando Canales. As you know, the North American Energy Working Group continues to look at ways to encourage cooperation on energy issues, including electricity, oil sands, natural gas, science and technology, nuclear energy and efficiency, regulatory cooperation, and hydrocarbons.
Our competitiveness in the global economy will depend not just on the availability of the resource but on how smart we are in the stewardship of the resource, how efficient we are in the use of that resource, and how forward-thinking we are at identifying future market opportunities. The government will continue to invest in research and development and innovation. Canada remains at the forefront of research and development in mining, metallurgy innovation, and energy technology.
Across the country, we can point to examples where Canada is at the forefront of innovation. Canada is recognized as a world leader in the technology of enhancing oil and gas production by injecting carbon dioxide below the ground in order to help recover additional oil and gas. The Department of Natural Resources has been a key partner in this project, which involves other international partners.
As an example, in Weyburn, Saskatchewan, we are in the forefront of storage technology to capture carbon dioxide gas and put it permanently back in the ground. Working in a partnership with Sterling Homes and the town of Okotoks, Alberta, and other partners, Natural Resources Canada is supporting the installation of North America's first large-scale seasonal storage project. Solar energy will provide over 90% of space-heating requirements for 52 homes. Part of this unique system stores heat underground.
I know members of the committee will be interested to learn the Canadian GeoExchange Coalition, established with the help of Natural Resources Canada, has noted a substantial increase in inquiries with respect to the installation of ground-source heat pumps. A training program sponsored by the Canadian GeoExchange Coalition will provide the needed infrastructure for quality installations. The provincial governments of British Columbia, Manitoba, and Quebec have recently started activities supporting the deployment of this technology.
We will continue to support renewable energy in future, including solar and wind. Again, we are working as partners with leading-edge companies to create innovate solutions to meet our energy needs and environmental and social goals.
Innovation comes in many ways. Sometimes it involves making sure the technologies that have provided our competitive edge for generations remain at the cutting edge. This year, Natural Resources Canada is proud to celebrate the 100th anniversary of the Atlas of Canada. Today, the atlas is easily accessible to anyone with a computer and Internet connection. Every month it gets some 700,000 hits.
Mr. Chairman, when I look to the future of Canada's resource economy, I am very optimistic. In today's global economy, Canada's resource sectors compete fiercely with producers from around the world. We need to ensure our regulatory framework is competitive in that environment and still capable of ensuring we protect the environment.
Mr. Chairman, Canada is on the cusp of becoming an energy superpower, and we must make sure we do it correctly. I'm very optimistic because I believe strongly in Canada's ability to promote innovation, science, and technology. Canada became rich on the strength of our resource economy. We will continue to lead the world in finding better ways to use these resources to drive our economy, create jobs, and protect the environment.
With that, Mr. Chairman, I look forward to the committee's questions. Thank you.
:
Thank you very much. I'm pleased you raised this, because it's something I've lived through, as a member of Parliament. I've seen the dramatic impacts of what's happened with this dispute in my home province of British Columbia and the negative impacts it's had on that sector.
Resolving this dispute has been an enormous priority for this government, starting with the Prime Minister and right through our entire government. I have been involved in direct conversations with the Prime Minister. As you are very much aware, Mr. Cullen, this is the Minister of International Trade's file, but I will say this. As you are aware, there is a framework agreement, and final negotiations are concluding this. The anti-circumvention clause is a necessary part of any agreement. That clause protects our Canadian sovereignty and our forest policies. It's a two-way clause; in other words, the United States can't change their policies, and we can't be forced to change, nor can we change, ours.
The issue here is with the stumpage within British Columbia. As you know, this is an issue that's been looked at by the British Columbia government. It's an issue they've been working on for a number of years now and are getting very close to bringing into play. I'm confident they will be able to bring these policy changes with respect to stumpage in the interior. These changes were brought in to strengthen our position with respect to the entire reason why some of the countervail duties were put in place in the beginning. I can say this is only strengthening it. With respect to some of the specific issues surrounding that—specifically the stumpage in British Columbia—I genuinely believe that we will get around this.
This is good for Canada; this is good for the industry. As you know, when the price of lumber is above $355 per thousand, we get unrestricted access to U.S. markets in every single province. This is the kind of certainty that the industry needs and has been looking for for a long time. There's flexibility within this agreement, where they can go to a quota-based system or an export tax when the price of lumber falls. Again, regarding the export tax, it's important to note that the money is staying in Canada. There are exemptions for the Atlantic provinces; there are exemptions for the mills in Quebec.
Finally, because you raised the issue of the $5 billion, which has often been criticized, I want you to note that the Canadian industry will get $4 billion. Eighty percent of that $5 billion goes directly back to the industry. What did the United States get? They got $500,000—only 10%—as a legal fund for the U.S. industry to recover its legal costs. The other $500,000, or 10%, is a joint fund to cover humanitarian projects or promote the industry on both sides of the border.
This is a great deal for Canada, and something we're very proud of.
:
Thank you very much, Mr. Bigras. I do really appreciate your question and the work you've done on this. I know you want to see meaningful change. To answer in reverse--because you asked me specifically on wind--wind is something that I believe is very important to Canada's energy mix and I'm very supportive of moving forward on it. Announcements will come in due course. But I do believe wind is an important part of our energy mix. That's what I'm saying.
As far as the program cuts are concerned, there was an independent review done. It was initiated by the previous government, and there were various ratings on the programs, from good, to not so good, to failing grades. The programs weren't working, and there were over 100 programs. If some of these programs, from an independent review, were shown not to be getting the results they were intended to, we have to make a decision: should we continue with those programs? No, we didn't believe we should. Some of the programs had reached the end of what they were intended to do. They were actually completed; they weren't cut.
So it shouldn't surprise you that things are going to be done differently. You and I both know the record of the previous government. I want to give you straight answers, but even in their own government, probably some of the members had frustrations in their 13 years in office.
There were a number of programs. Of those 100 programs, there are still over 85 programs left in place. Will some of those change in the months and years ahead? I can't tell you which ones, but it won't surprise me, and I look forward to your input on which ones. Where can we redeploy money? Where can we get greater value for the taxpayer? When we're reviewing all of these programs, will we get it perfect the first time around? No. Will we be prepared to look at areas and take pieces of things that were working very well and say, this part of a program was working and maybe we can implement it in another program?
These are all the things that we're developing. We want to work with you to hear your ideas. I've said before in speeches that the largest source of untapped energy in Canada we have today, that we have not tapped into in any significant way, is the energy we waste. There's an enormous source of energy there, the energy waste. We want to do what we can as the government to invest the resources.
On energy efficiency, absolutely, we're looking at various programs. Will they be different from the previous government's? Without question. Will some of them remain the same? By all means, if they're working. But overall, yes, there will be changes. We are in a transition. I want to emphasize, talking about these program cuts, that 10% of the programs were either ended or cut, and they were not working. So we are looking forward to your input, and we're going to develop programs that we think are in the taxpayers' interest.
:
All I can tell you, Mr. Bigras...and you're fully aware, you're talking about the Liberal plan. I want to emphasize that this was a plan of the old LIberal government. Greenhouse gas emissions, as you're fully aware, are 35% above the target set when they signed on to Kyoto--29% above, plus the minus 6.
Greenhouse gas emissions went up each and every single year under the old administration. So no, we are not going to accept every single part of its plan, and when we are ready to give you our details, we will. We already have announced areas where we're moving forward on reducing greenhouse gases, and I can tell you, yes, we are very much looking at large final emitters. When we're prepared to give you what we believe is in the best interests of Canadians, where we can create that balance to clean up the air and we can ensure the sustainability of where we want to go, as I've talked about in our strategic energy plan, we will let you know.
I do want to emphasize you can pull out bits and pieces of the old Liberal plan you think you might like, and I'm more than willing to sit down with you and listen to you as we evolve and develop our programs. But you shouldn't be surprised that everything the LIberals did we're not just going to pick up and say, that's great, that's what we're going to do--we're not. We're not going to.
We are going to make changes, and we want to ensure that at the end of the day we're getting results, the taxpayers are getting value for their money, and we're getting the greatest impact out of those investments. That is something where, as you can appreciate, after a government has been in power for 13 years and we take office, and we've been there for six months, we are moving forward.
As you know, we've made our announcement on renewable fuels, we've made our transit pass. We think it's important to get people out of their automobiles in some of the most polluted air basins, and yes, we're looking at other parts of the file. We're very committed with the large final emitters on carbon dioxide capture and storage. This is something where we think there's great opportunity.
So yes, we will be working with them, but you should not be surprised that every single thing the previous government did is not going to be adopted by this government, because we're not going to.
Thank you.
:
Let me respond. First of all, these decisions, as you're aware, are not made by individuals; they are made by government collectively. So the decision to not continue with the current version of EnerGuide that was crafted by the previous Liberal government was a decision of the Government of Canada. It was made collectively, and there's nothing more I can say than that. My deputy said it was a cabinet confidence, but it was a decision by the government. Every decision that's made is a collective decision of the government. We can just leave it at that.
Let me just say that energy efficiency is very important to me personally. I believe there will be enormous opportunities for energy efficiency in homes in the years and the decades to come. Let me tell you my vision of where we are going.
There are some great opportunities in things like the heating and cooling of homes right across Canada. Ground-source heat pumps are an enormously efficient way of heating and cooling homes. The technology is there. It's been there for years. It's economical. I think we need to move the entire construction industry and the renovation industry to getting into these forms of energy efficiency.
Solar is still relatively expensive, but when I speak to people in the industry, I can see a day coming--whether it's 20 years from now--in which, when you will build a new home and put in a hot water tank, or you put in a heating or cooling system, you're going to put in a solar system, and we will have homes that are net zero users of energy. We will actually be able to put energy back on the grid. That technology exists today, and we want to support those technologies so we can move forward. Yes, we will come forward with energy efficiency programs.
There were parts of the EnerGuide program that were working, and there were other parts that were not. We're looking at those areas, as we develop our programs, which we think are in the interests of every single Canadian taxpayer. We're going to work with our provincial counterparts in the months ahead and partner with them again to ensure that we get the greatest value.
I want to say very strongly that I believe energy efficiency in the industrial sector, in our transportation sector, and in our housing sector plays a very significant role on this file, and it's something I'm very committed to. I look forward to your suggestions and to working with you.
:
The higher the administration, one could argue, the less impact it's having on the actual environment. Right now there's a program for wind. They support wind by 1¢ per kilowatt hour, I believe, over a 10-year period. This is a very simple one to administer, very easy to monitor, very easy to figure out the amount and move forward.
I don't want to get into numbers. Some areas will have more overhead than others, but they'll have greater efficiency.
I also think it's important when we talk about efficiency to realize that efficiency cannot come just from making buildings more efficient, making cars more efficient. That's a very important part of the mix, as we see hybrids and very fuel-efficient cars, and I think we should be providing everything we can to move those forward. The Canadian people are moving in that direction--SUV sales are dropping and the sales of hybrids are increasing.
But also part of the energy efficiency side is changing how people operate, changing their mindset, making them think about energy. We waste energy in a lot of ways that we could change right now. It would be interesting to know how many members at the table leave their computers on in their offices all night. It uses a fair amount of energy. If you think about every single computer in the federal government that's left on, if they were shut down at night, how much energy would that save?
There are technologies available on our appliances; they go into a sleep mode. This is something I'm very keen on, the one-watt challenge by the G-8. Right now, your televisions are in sleep mode when you turn them off, and they're drawing 30 to 40, sometimes as much as 50 to 60 watts of electricity. There's technology available now so that when you turn those appliances off they'll draw only one watt of energy.
There are lots of ways we can promote energy efficiency, and we're going to be there to support that, to do that, to ensure it happens.
Coming back to your question, sometimes we'll have to spend more at the front end to get the big benefits at the back end, and we'll evaluate all those programs. But at the end of the day we want to ensure that the Canadian taxpayer is getting the best value for their tax dollars that we're entrusted to look after for them.
:
I think it has a great future and it is something this government is very committed to. As you know, in our 2006 budget we committed $400 million over the next two years to the forest sector alone--$200 million specifically allocated to the pine beetle and $200 million specifically to the restructuring of the industry and helping it meet some of its challenges.
I've met with the officials of the Forest Products Association of Canada. I'm looking forward to working with them. They've been very receptive in looking at how we can best provide services to them to ensure that this industry goes forward.
As we talked about earlier--and I won't get into this in any length--the Softwood Lumber Agreement has been an enormous weight around the neck of the forest industry, something that has caused it significant pain in recent years, and we now have an opportunity to move beyond that to give the industry the certainty it needs.
I think it's a very exciting opportunity. We have challenges in British Columbia with the pine beetle--no question about it. Natural Resources Canada is working collectively with the Province of British Columbia to support that industry, to do the research and put the investments in that are required.
I know the head of the Canadian Forest Service, Brian Emmett, at Natural Resources Canada is meeting with his counterparts in the province, and they're sitting down saying, it's not about B.C., it's not about Canada; it's about how we can best ensure that every dollar we spend complements the other, moving it forward to best help the industry.
The fact that we're making these investments, that there are people working on it, and that we're working with the provinces makes me very optimistic about where the forest industry can go in the next 10 years. This softwood lumber agreement is for seven years, with an option for two more years; it creates nine years of certainty. Throughout that period we can continue to ensure even longer certainty beyond that.
I think we have made absolute significant gains through this sector in the recent months, again, starting with leadership right from the Prime Minister and the Minister of International Trade to the Minister of Finance's committing $400 million to one industry. This is a significant amount of money to commit in a budget, and it shows our commitment to that sector.
Thank you.
:
I'll ask Mr. Fadden my question, or maybe my question or my comment will go to....
[Translation]
I would've liked to question the Minister himself. However, I will make a few observations that I would like for you to relay to him.
I agree with him that to reduce greenhouse gases, we have to turn to softer energies. Nonetheless, I would remind him that there is only one energy that is absolutely pollution free, and that's solar energy. All others pollute, including nuclear energy and its waste. Where will that waste end up in 100 or 1,000 years? Even if lobbyists would like us to believe that all will be well in 30 years, we are not there yet.
If solar energy is the only non polluting energy, we would have to invest a lot of money into it. Contrary to what the minister said, solar energy is inexpensive. It all depends on what kind of solar energy were talking about. You know as well as I do that some solar panels are very affordable. Passive solar energy costs absolutely nothing. All it requires is a bit of will. Passive solar energy used to heat water is also very affordable, but it just hasn't been developed.
I would also like to remind the minister that we spend $5 million a year on R&D for solar and renewable energy, whereas we spend $500 million on nuclear energy and $2 billion on oil. There's an imbalance. When we are told that solar energy is more expensive, it's because we haven't managed to make other energies efficient yet.
I agree with him that the cheapest energy is the one we don't waste. That's very true. I was glad to hear that in his statement because we rarely do. People who come to lobby us here, such as those we met on Tuesday, don't agree with that at all. I also agree with him when he says that energy efficiency is an endless source of energy. Then why are programs like EnerGuide specifically targeted by the cuts?
There are electric engines also. A program entitled OSMCan was put in place towards the end of 2003. This program is not completed and is efficient. It was dedicated to engines running on one to 200 horses. It's a very efficient program that contributed to the reduction of GHGs because it significantly reduced the quantity of energy required to make engines run. Engines lasted a lot longer and there were much cheaper to run. This industry was largely based out of Montréal. Is it because these engines were made in Montréal that this program is targeted by the cuts? I wouldn't know.
I would've liked to remind the minister, and I'm counting on you to do so, that when he says that he will have 52 solar houses built this year, that's nothing next to what Mr. Mulroney was doing. I'm not talking about the Liberals, whom he dislikes, but of the Mulroney government. At the time, approximately 200 of those homes were built every year. I know because I was the president of SESCI back then.
So when he talks about 52 homes, it's a joke, a monumental farce. Had he tagged on two zeros at the end of that statement, had he talked about 5,200 houses a year, I would've thought he meant business. But 52 homes is a joke!
He said ground source heat is the way of the future, I agree with him, because that's the widest spread energy in Canada. But he didn't tell us what quantity he wanted to produce. In Sweden, a small country, the government announced two years ago that it would build 50,000 of those homes over three years. They weren't only talking about new homes and retrofitting like our minister. They're talking about existing houses that could be converted to ground source energy. I think this action is timid at best. Ground heating is an excellent way of reducing greenhouse gases across the country.
I would also like to point out that the Minister reminded us that a one cent per kilowatt hour of the wind energy is an efficient program. That's a one cent out of the 10.4¢ it costs to produce a kilowatt every hour of wind energy.
So why was the EnerGuide program scrapped if its overhead was only 12% of the budget? It's the same ratio, one cent over 10. He should be reminded Mr. Deputy Minister. It's important that he make the right comparisons.
Before I start with a question I want to make a little statement. Committees being committees, we often wander off topic. I hope you'll forgive me for this, but there's got to be a forum to say the odd thing now and then.
One of the things Natural Resources and Environment...and we generally get way too many questions here at committee on Kyoto, climate change, and all that. But one of the things that I think should be noted is that not everyone in this world is quite as enthused about the whole spending on climate change, or is quite as convinced that it is actually a man-made thing that's happening.
To back my opinion, I'll cite things like the Heidelberg Appeal, which had 4,000 signatory scientists, including 72 Nobel Prize winners; and the Oregon Petition with 8,000, etc. They're basically calling for a debate on whether or not the questions that are presumed to be answered are actually being answered.
I have seen surveys. One was commissioned by the American Meteorological Society and the American Geophysical Union. They hired the Gallup polling firm to poll climatologists on whether or not man-made or human warming was actually occurring. These being North American scientists, 49% said no, approximately 17% said yes, and a percentage in between said maybe.
So I guess I'm saying that when you have discussions with your environment colleagues, or give advice to the minister or something, be cognizant of that opinion out there. I'm not really asking for a response on this statement; I'm just saying there are members of Parliament who sit in support of the government who don't totally agree with everything, in all the spending and so forth. We're a little concerned about $2 billion over five years. We're not quite as convinced with the entirety of the rhetoric.
So I'm not really asking for a response. It's just that in committees you sometimes need to say things that are out there. At least there should be a debate. I know that Natural Resources is open to scientific opinion, debate, and so forth. I commend the department for that. As I've pointed out, I don't think Nobel Prize winners are generally viewed as flat-earth scientists, nor are members of the American Meteorological Society or the American Geophysical Union. So that's just a comment I want to start off with.
Now, to get to something that's probably more relevant to your responsibilities and to this committee, the Office of the Auditor General came out with a report, and part of it mentioned Natural Resources Canada and the management there. One of the statements she made was:
Natural Resources Canada has been working on a number of significant issues. However, the Department does not have a corporate strategic plan that addresses its legislative mandate and government priorities, is communicated to staff...
It goes on from there, and I'm sure you're all well aware of it.
I'm very curious. I understand you have been taking steps in responding to the Auditor General. I wonder if you might elaborate on what you've been doing to correct some of the questions that the Auditor General raised.