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Standing Committee on Environment and Sustainable Development



Thursday, February 26, 2009

[Recorded by Electronic Apparatus]



     Welcome, everyone, to this meeting today of the environment committee.
    Welcome, Mr. Hamilton.


    As you know, today we are considering the Order-in-Council appointment of Bob Hamilton to the office of Associate Deputy Minister of the Environment, during pleasure. Mr. Hamilton will begin with a brief presentation of two or three minutes, and then we will have two rounds of questions. At the end of the meeting, I would like to discuss two or three routine matters with you.
    Welcome, Mr. Hamilton
    I would like to remind the committee members that during questioning they must limit their questions to the witness's qualifications and competence to perform the duties of the office in question. They must not go beyond those limits
    Mr. Hamilton, you have the floor.


    Thank you everyone.
    Let me start by saying what a pleasure it is to be here in front of the committee. It's my first time in front of this committee in this capacity, although I have been here before in my capacity as senior assistant deputy minister in tax policy.
    I thought I'd spend two or three minutes at the beginning to give you a couple of highlights on how I got to be here and then leave time for you to probe whatever areas you'd like.
    I should start by saying that I graduated from the University of Western Ontario with a masters in economics, so I'm an economist.


    I began working in the federal government in 1985, in tax policy. I was a member of the team that developed the GST.


    I came here primarily as an economist looking at tax issues, and I started in the tax policy branch.
    I worked in tax policy until 1995 when I started in the financial sector policy group, again at the Department of Finance, looking primarily at the regulation of financial institutions, managing the government's debt, money laundering issues, and I was involved in the start-up of the Canada Pension Plan Investment Board, etc. I was there through the time of the Enron and WorldCom regulatory issues as well. I then went back to tax policy.


    That was in 2003. I have worked on a number of interesting issues in that area.


    I was responsible for that branch of the Department of Finance and was there when we introduced things like the tax-free savings account, the worker's income tax benefit, and then through the income trust issues.
    In August of last year I moved from the Department of Finance to the Treasury Board, where I got involved in management issues across the government and learned a little bit about how government operates from the central agency perspective of the Treasury Board. I was only there for four months before accepting the position at the Ministry of the Environment seven weeks ago when I was appointed associate deputy minister.
    I should say at the beginning that I believe I bring a lot of background and experience to the Ministry of the Environment, particularly in economic matters. I think it's an extremely interesting time to be at the department. It's a challenge that I relish as I learn. I'm certainly by no means an environmental expert, but hopefully I can bring to the department some of the policy and implementation skills and economic analytic skills that I've learned to help face the challenges that are there.
     As I say, I find it an extremely interesting time to be at the Department of the Environment with the myriad of issues we're facing, which I'm just learning about, and I hope I can contribute to them as I make my way up the learning curve.
    With that, I would leave it there and open it up to areas you would like to probe.
    Thank you very much for inviting me here today.
    Thank you, Mr. Hamilton. It's good to have you here.
    We'll proceed to the first round of questioning with Mr. Trudeau.
    I'd be interested in hearing your take on combining economy and environment. There's a dichotomy there that tends to get separated. All too often the economy is separate from the environment, and we either have to be good for the economy or we have to be good for the environment. I think the view people are taking more and more these days is that one obviously can't be strong without the other also being strong, particularly when it starts to take a long-term perspective. I'd be interested in your reflection on that.
    Perhaps, since your taxation expertise is significant, you could give a little overview of your feelings on consumption taxes versus carbon taxes versus income taxes as tools to deal with environmental issues.


     Let me take a stab at that. I guess I should say at the beginning that I think primarily I won't be delving into issues of government policy or policy questions. I'll definitely be trying to stay on the correct side of that line, and hopefully we'll take it from there.
    But just in terms of the first part of your question, on the economy and the environment, and indeed the economy, the environment, and energy, I believe you're right that people need to think about those as integrated issues. Indeed, I think that's hopefully one of the things I can bring to the Department of the Environment with my background from the Department of Finance and as an economist, because it's going to be difficult in this day and age to move forward without simultaneously considering what the actions we take are doing for the environment but also for the economy.
    We do need to think about how we can grow both. How can we have an economy that's strong by virtue of creating clean energy, sustainable energy products, in a way that respects the environment? I don't necessarily see them as trade-offs, that one has to go all for the environment or all for the economy. Indeed, there are balances that need to be struck as one moves forward. But I think it would be inappropriate to think that Canada, for example, would be able to find its way forward without a strong economy and without a strong environment, and energy being such an important part of that equation, I think you need to think about the three of them together.
     I think one of the things that comes to mind when you try to assess what the impacts are of what you're doing on the economy and the environment is that you have to understand that we're not a closed economy that's operating in isolation. We're operating, very intensively and in an integrated way, with the United States and our other major partners. So we need to think about the global pressures that are out there and the global interactions that are affecting our economic policies and our environmental policies.
    In addition, within Canada, we have to think about not only the federal government's role but the role of the provinces going forward, because they have a significant role to play on environmental matters as well. All of that is to say that the things one brings to economic analysis and thinking about the impacts of policies, one does need to bring through on the environmental side as well.
    On the issue of taxation and the environment, I'm really not going to comment on policies, other than to say that when one comes forward with any kind of a policy, whatever it might be, one thing I always look for is whether the objective is clear—what we're trying to achieve—and then whether the instrument we're trying to use is the best instrument to try to achieve that objective, because from time to time people can try to use an instrument that may not be the most appropriate one for a particular policy issue.
     I guess my final point on the economy is that obviously one has to be conscious of the economic environment that's out there. What we're witnessing right now is a different economic environment than we might have had a couple of years ago or even several months ago. So I think we do need to think about that, about how policies play out in an economic environment like we're in now--though I agree with your assessment that these are integrated issues.
    You mentioned some of the international...the globalized world we live in and the impacts of that. Are there particular best practices or management practices--not policies specifically but processes--from various jurisdictions that you feel might be of interest for the management of the Ministry of the Environment to look at?
    I think to be fair, probably seven weeks in I won't pass judgment just yet on what other countries are doing, other than to say that I think it is important that we look around. I don't think anybody particularly has the right answer on all of these. These are complex issues, the integrations we just spoke about. I think, in a sense, countries and jurisdictions are trying different things. Some will be successful and some will be unsuccessful. But I couldn't look at a particular country and say, gosh, it looks like they've really got it right, in terms of trying to strike that right balance about doing the right thing in the long term—and I think you emphasized that, the long term—for the environment and for the economy.
    What you do see is different countries taking different approaches. Some delve into the tax domain, some countries are looking at implementing cap and trade systems for emissions, fuel standards, all the myriad ways—as I'm only just learning—we touch upon the environment. There's a bevy of instruments one can use, and I think you have to be open to the idea that different instruments can best attack different problems in better ways than others.
    So, no, I couldn't say I've seen a best practice emerge, mostly because I just don't feel qualified to judge that. But it's interesting to see the different approaches people are taking and try to make sure they fully understand the implications of what they're doing, because when you introduce a policy measure, it can sometimes have both intended and unintended effects. I think everybody's trying to sort through this complex area, making sure we understand that as well.
    You can even see the different approaches in Canada. The provinces are trying different things, and it's too early for anyone to judge how successful they are. It's certainly too early for me.


     That was my follow-up question, not so much on what provinces are doing but within various Canadian federal ministries, be it Natural Resources or Fisheries and Oceans. How are you seeing the coordination among the various ministries from your perspective? What are you interested in looking at in the coming years?
    It's a good question. Hopefully one of the things I bring is that having worked in central agencies, the Department of Finance and Treasury Board, I have been able to watch government operate from that perspective, and I've seen examples of good cooperation, bad cooperation, etc. I think in this area it's very important that we as a federal government work together.
    I've talked about this being an issue globally, where countries have to, in some sense, cooperate as much as they possibly can. Certainly within the federation, Canada and the provinces have to try to coordinate as best they can.
    The easiest of those challenges should be within the federal government, making sure we're working together closely with our colleagues at NRCan, with our colleagues at the Department of Finance on the economic issues, with Fisheries. A few key departments, but many departments, are touched by the Department of the Environment.
    It's certainly very early days, but I've experienced nothing but cooperation on the things I've been involved in or that I've seen. I think there's a general recognition that's important. There will always be bumps along the road, I'm sure. One thing I do know is it's extremely important, and to the extent that we see those bumps along the road, we have to be reminding ourselves that we can't get where we want to go if we're not working in a coordinated manner and all rowing in the same direction.
    As I say, in my time at Finance and Treasury Board, and in my short time here, I see very encouraging signs of that.
    Monsieur Bigras.


    Good morning, Mr. Hamilton, and I wish you good luck in your new position.
    I did a quick Internet search to try to understand what it means to be a public servant who holds office during pleasure. I found the following definition: may be moved, reassigned, revoked. Essentially, you are acting, as I understand it.
    I know that you have a long track record in the federal public service, where you have been working since 1982. That says a good deal. You have worked mainly in tax policy, the Income Tax Act and economic affairs. I am trying to understand your appointment and the mandate assigned to you. That is more or less our job today.
    Can you explain the mandate you have been given by the government, in your new acting position? Is your job to reorganize certain branches of the Department of the Environment? Is it to introduce new policies, whether tax or otherwise? What mandate have you been given, exactly, by your superiors?


    Thank you. I do not think of this position as an acting position. I will give you a brief explanation of the role of an associate deputy minister. In fact, it involves more than one particular project or one issue.
    I am going to explain it in English, if I may.


     This question has been asked of me, actually, so I've had time to reflect on it. The role of the associate deputy minister in the federal government, which is what I've been appointed to, just as I was at Treasury Board, is really to be a right-hand person, if you like, for the deputy minister, and to assist the deputy minister in running the department.
     For example, in my case, I was not brought in for a particular file, issue, challenge, or task, but rather to do what the deputy minister felt was the best way to contribute to the smooth functioning of the department. Since I've come in, I have worked quite a bit on climate change issues, just because they are among the issues preoccupying the department.
     But I've also worked on a number of other issues, including management issues within the department as we prepare for our report on plans and priorities and the various other files that go along with that. Going forward, I obviously will be doing what the deputy minister thinks I can best do, including acting on his behalf in instances where he's away or what have you.
    So it's not a particular role. Indeed, you can contrast it with an assistant deputy minister role, and maybe only somebody in Ottawa could understand the difference between an assistant deputy minister and an associate. Just to draw that contrast, in my position at Finance as senior assistant deputy minister on tax policy, I was responsible for the tax policy branch and had a group of people who worked directly for me in that capacity.
     If I contrast that with an associate deputy role, I don't have a particular branch or area of responsibility, except for the department overall. It can be a very fluid position, if you like, in that as an issue emerges that needs some extra attention, I can be placed on that issue for whatever the deputy minister thinks I can best do.
     I'm really part of the deputy minister's office and will have different areas of emphasis as time goes by, depending on the challenges the department faces. Although I'm not there yet, because I've only been at the department for seven weeks, over time I would be expected to be involved to some extent in pretty much all of the issues that face the department.


    It is a long explanation, but I hope that it is a relatively good description of the particular role of an associate deputy minister.
    Have you been given a mandate to reorganize the Department?
    No, nothing like that. There may be a reorganization in future, but that is still speculation. For the moment, neither the Department nor I have that mandate.
    As I said, over the last seven weeks, I have worked on climate change, but in particular on other policy issues. I have only done a little work on management of the Department.


    Monsieur Ouellet.


    Thank you, Mr. Chair.
    Good morning, Mr. Hamilton. I would like to say, if I may, that it is somewhat odd, in view of your experience, that the Conservatives have hired you to do what the Liberals want to do, which is to levy a carbon tax. In fact, you seem like the best person they could have chosen.
    Have you done any studies or reading that would have led you to the environment department? Could you tell us how you have prepared for taking up this position at the environment department?
    Yes, certainly. Over the last seven weeks, I have read a lot of articles and documents from the Department about a number of subjects relating to the environment, a large portion of which dealt with climate change, but also other subjects. I am engaged in a learning process, about environmental issues. I am learning to incorporate my experience in economics and finance into environmental projects and new areas. It is a learning period for me, but I have certainly...
    Do you think...


    Mr. Ouellet, unfortunately we have to move on to the NDP. You may have an opportunity to come back to this on the second round.
    I should welcome Bruce Hyer to the committee. If I understood correctly, Mr. Hyer would like to ask a question in place of Ms. Duncan. Is that the case?


     That's not correct, Mr. Chair.
    With your deference, I will be the first questioner until the second round and then—
    I see, okay. Yes, thank you.
    Go ahead, Ms. Duncan.
    Welcome, both to our committee and to the department. You may not be aware, but back in 1988 I was also in Environment Canada as the first chief of enforcement. It's a great department.
    I am wondering, sir, given your incredible background as an economist and investigating proper expenditures and so forth in alternative instruments, is your appointment also partly in response to the recent report of the commissioner for sustainable development, where there are various concerns raised about the capacity or the commitment to effective enforcement and compliance in the department? Is that part of the role that you'll be looking at, alternative approaches to enforcement and compliance?
    Thank you.
    One of the pieces of research I did do is to know that you were at the Department of Environment, so that's one thing I've learned since I've come here.
    I'm not sure how much I can speak to the reasons why I was put in this position. Ultimately the clerk and others decide how best to deploy the senior resources, but nothing was said to me about working specifically in the area of enforcement. Having said that, since I've come to the department I've heard some of the issues about enforcement and I know it's going to be an area that the department continues to do work on. As I mentioned earlier, depending on how things unfold and the issues facing the department, it's potentially something I could get involved in if the deputy minister thought I would be particularly helpful on that file. Again, I'd preface the whole thing by saying that I'm not sure how much I can really add or comment on exactly why I was put here. Somebody asked me to go—
    I guess I'm not asking why you were appointed; I'm wondering if that's one of the areas you've been asked to look into since you've come on board.
    Not in particular. It's been there, and I know it's an issue for the department, but after seven weeks...I think I've seen it, and it may be something I'm asked to do going forward, but that's all.


    Thank you.
    You mentioned at the outset that the department is interested in looking at approaches taken by other jurisdictions and so forth. I'm wondering if you will possibly be involved in the department's role in the Commission for Environmental Cooperation or in the department's role with the CCME? Are you foreseeing that the department might be examining the use of these other mechanisms, particularly when it's seeking a dialogue in an energy environment with the United States?
    I don't know what my particular role will be on those. I do know that even in my short time here I've seen that in moving forward and making progress on the environmental files one very quickly finds out that you have to have a very intensive dialogue with not only stakeholders, whether it's businesses, NGOs, whoever, but also with other jurisdictions. By that, I would include those outside of Canada and within Canada.
    So nothing has been specifically identified, as far as I'm aware of, that I'll be involved in with CEC or CCME, other than the fact that since I've been here we have actually had a CCME meeting, and I was involved in the preparation for that, not in a direct and central way. It was interesting to see the range of issues that federal and provincial ministers can discuss as they try to tackle the environmental challenges.
    Going forward, as I said, I don't think we'll be able to make as much progress as we need to on the environmental front if we don't find effective ways to work together with the provinces. Whether that's through the CCME...I'm not really commenting on the forum because I really don't know enough about it, but I know we need to work together with them. Similarly, if we're going to work together internationally and with the United States, could the CEC be a forum? I don't know in particular. But I think we're going to have to find ways to have very good dialogues about the policies we're contemplating, the implications they may have for the environment and for the economy, and those fora can prove to be very useful.
    Just drawing on my other experiences, it is much like the tax area, where you have similar types of fora, both domestically and internationally, that can be very effective in trying to make sure we are understanding the issues we face. When you go across different countries, one of the things I have found is that we are actually grappling with many of the same issues, and there's a lot of commonality in thinking and analysis that's gone into it. It's a useful opportunity to share and maybe try to find some of the best practices that were discussed earlier. What my particular role will be, it's early days, but obviously there'll be a lot of dialogue on both those fronts.
     Do I have time for one more question?
    When I was the chief of enforcement back in 1988, I had the privilege of being part of a very interesting initiative between the Department of Justice and the Treasury Board and the line departments. As chief of enforcement, I became very engaged in this initiative, which involved looking at alternative approaches to compliance. Part of that initiative included a dialogue with the United States and taking a look at their alternative approaches. Have you run across that? Do you think you'll become engaged in that at all? One of the things we looked at was the use of economic instruments.
    No, I haven't come across that particular issue in my short time there. I can imagine that it would be a fruitful area where we could work together with the United States, or whoever it might be, because I can imagine that such a dialogue would actually be very beneficial for all jurisdictions involved.
    In my short time there it hasn't been one of the preoccupations. But it is there and I could imagine it becoming an issue for us very quickly on a number of fronts.
    Can you share with us what particular activities you have been asked to assist on?
    As I say, if I talk about going forward, I'm not sure exactly how things are going to unfold and what the deputy will think I'm most beneficial to work on.
    Up until now it has primarily been on the climate change file. I've been trying to understand what the issues are out there and what other jurisdictions are doing, and how what is being proposed by us and others translates itself into effects on the environment and on the economy as well. I'm just trying to piece this together in my mind, and I haven't concluded anything yet, obviously. I will probably keep those conclusions to myself for the moment. But I'm trying to understand the linkages, and in particular, at this point in time, what are some of the particular things that are happening out there in the economy in financial markets and credit markets that are maybe having an impact on what would be the most desirable environment policy.
    So those have been some of the things, and obviously there's been a lot of discussion about climate change issues recently. We have a new administration in the United States, and that maybe opens up a different way of analyzing the issue.
    One of the things that I do see--and you could say this globally--is that the impact of what we do here in Canada is going to be different depending on what other jurisdictions do, whether that's the United States, obviously one of our most closely aligned economic partners, or globally. With the new administration in the United States, and understanding as they find their way into what they want to do from an environmental and economic perspective, I'm thinking about how that translates into some of the things that we might or might not want to do.
    Thank you very much.
    Mr. Warawa.
    Thank you, Chair.
    Thank you, Mr. Hamilton, for being here, and congratulations on your appointment. I want to focus on what you bring to this position. You've just touched on the importance of partnership economically and environmentally. I want to know what you'd bring to this position in terms of your experience with relationships that have been built since 1985, when I believe you started with the federal government. You have relationships that have been built over those years with our partners in the U.S. and other levels of government. To be economically and environmentally successful, there's that balance.
    So what kinds of partnerships have you built over the years that you'll bring to this position?


     Thank you.
    There are a couple of things that I hope I bring to the position. The first, as you've alluded to, is that I've spent all of my career really analyzing policy issues and sorting out what the implications are of particular options or choices for the economy on a whole range of issues. So I bring to it an ability to look at policy issues that are complex. I try to break them down, understand them, and provide the best advice I can to the minister of the day. So that's one issue, and it runs through the tax policy that I've been involved in, the financial sector policy, and a range of issues, and I look forward to applying some of those to the environmental file.
    On the other issue that you raised as well, partnerships, in all of the areas I've worked, as I mentioned earlier, it has been important not only to think about what we are doing as a federal government, but also what is happening either at the provincial level here in Canada or in other countries, whether it be the United States or globally. And I think I've shown a capacity to work effectively in those domains.
    For example, I chaired a federal-provincial committee on taxation when I was the ADM of tax policy. I was the chairman of a working party at the OECD, for two years, I believe. I was Canada's representative on the Financial Action Task Force on Money Laundering, and I have participated in a number of other ways with colleagues in other countries or provinces.
    As well, I mentioned earlier my involvement in setting up and implementing the Canada Pension Plan Investment Board. That was obviously a very intensive federal-provincial exercise, where I was the federal representative on the committee.
    So I believe I bring a cooperative approach, and people have told me that. Now, maybe they're just being nice to me, I don't know. But I hope I bring that. And on the environmental issues that I'm working on, I hope I can bring that as well, in addition to providing, hopefully, the policy analysis that I've shown on the policy issues, and finally, an ability to translate those policies into actions. If I use the tax policy analogy, it's a matter of trying to think through what the options are for a tax policy issue, presenting them, deciding what to do, but then also making sure that the legislation is drafted and the regulations are there, the administration is proper, and that we get the initiative out the door, implemented, and people start complying with it.
    So I think I bring a very cooperative, constructive approach to these multi-party exercises, and I expect, over the coming weeks, months, and years at Environment to be involved in a number of them, including, as was mentioned, within the federal government and making sure we're taking a cooperative, constructive approach with each other.
    I believe, Mr. Warawa, that you want to split your time with Mr. Calkins.
    Yes. How much time do we have left?
    You have about three and a half minutes.
    Okay, Mr. Calkins.
    Thank you, Mr. Warawa.
    It's certainly nice to have you here, Mr. Hamilton, and I certainly congratulate you on your recent designation as associate deputy minister at the Department of Environment. I look forward to your long stay there, which I know will give you opportunities to get back before this committee.
    My question for you is bit of a philosophical question about you as a person and as a thinker and a professional. You certainly have a large repertoire under your belt, so I'm going to get right to it.
    What is your philosophical approach to your role in relation to the accountability you have through the department to the Auditor General and the environment commissioner? And how do you rationalize that with the seeming need today to get things moving a little bit more quickly to streamline processes, to reduce red tape, and to eliminate some of the barriers that sometimes come up? I like to refer to them as rules just for the sake of rules. How do you balance that and make sure at the same time that we can find those efficiencies while still standing the test of public scrutiny?
     Thank you.
    That's an interesting question to pose to me after the time I've just spent at the Treasury Board, so let me elaborate a little bit.
    First off, I think I've demonstrated throughout my career that I'm very respectful of both the relationships we have with ministers and the accountabilities we have to Parliament. I think I've demonstrated that my approach is to try to analyze an issue, find the right thing to do, implement it, and be as transparent as I can be about the pros, the cons, the warts, everything. I try to bring a more thorough understanding to an issue so that a proper decision can be made and implemented, and so that everybody can feel proud about themselves afterwards that they've exhibited complete professionalism in preparing that advice and carrying it out.
    I feel that's been my personal contribution to not only the files I've worked on but also the people I have worked with to try to instill that spirit. Where something is awkward or difficult, we face it, we analyze it, and we do the best job we can as public servants. And I feel quite proud about that.
    Secondly, you raised how one balances the trade-off of making sure we do our due diligence and are accountable and have processes in place to demonstrate that, being as efficient as we can and not getting in the way of things that need to get done. When I was at Treasury Board--a very short time--I was quite involved in an exercise that we called the “web of rules”, which is really, as you put it, rules for rules' sake.
     Over time you can see these rules compound each other as people become more and more risk-averse. They say they don't want to take a decision that has an element of risk to it, so either Treasury Board is going to put a rule on them or the department is, or in some way they're going to stifle their ability to be innovative and to take the actions that are necessary, all the while respecting the reporting requirements we have and the due diligence.
    The key to that going forward is taking an intelligent risk-management approach to those issues. If we're going to provide proper service to Canadians, we really do need to analyze the issue. We need to understand the risks. I'm not in favour at all of risk-ignorance. l think we need to understand the risks and find the best way to manage them. Sometimes that's going to mean devoting our resources to those highest-risk cases and making sure we're doing a good job, and sometimes it's going to mean, in very low-risk cases, that we might do things a little bit more efficiently or not put as many resources on it, and understand that mistakes may be made there--but hopefully not. Hopefully, there won't be any. If there are, we'd do our best to manage, contain, and recover from them.
    I think there's scope, without losing any accountability or transparency, to actually just be a little bit smarter about the rules we have in place and the mechanisms. For example, as part of the web of rules exercise, we looked across the government at all the different reporting requirements we had, and we were able to eliminate quite a number of them without losing any information, just really recognizing that the same piece of information is collected in different spots.
    I don't think you need at all sacrifice the integrity of the system by trying to do things in a more efficient, intelligent way.


    We now move to our second round.
    We have Mr. McGuinty, Mr. Calkins....


    The order is as follows: Liberal Party, Conservative Party, Bloc Québécois, Conservative Party. We take it in turns.
    Ordinarily, there would not be questions from the NDP on the second round. However, the NDP has asked whether Mr. Hyer, who is here this morning with Ms. Duncan, could ask some questions. That requires the consent of the committee, given the routine motion we have adopted in that regard.


    Does that mean someone on the other side does not get a turn? How does that work?
    We could put it at the end.
    Rather than wasting time, Mr. Chair, why don't we just proceed and hope for the best?
    Okay, the suggestion is taken.
    Mr. McGuinty.
     Thank you, Mr. Chair.
    Mr. Hamilton, welcome to the committee. I've looked at your CV and I've looked at what this process entails. We're restricted to examining your qualifications and your competence to perform the duties of the post to which you've been appointed. I take it you're not a trained physical or natural scientist.


    I'm an economist.
    You're an economist, so you're a social scientist. The environment department is one of the key science-based departments in the federal government. This is not to suggest in any way that you're not going to bring a whole series of strengths to this position. I'm very impressed by your 25 years with the Department of Finance, because, in my experience, one of the major stumbling blocks to making progress in the federal government is the Department of Finance.
     I want to ask you a bit about that. How do you see the central agencies, like Treasury Board, PCO, and Finance? How do you intend to meaningfully engage them, for example, on overcoming their resistance to re-examine neo-conservative economic practice?
    I have a point of order, Chair.
    No, this is not about the Conservative Party; this is about social--
    I have a point of order, Chair.
    Mr. McGuinty began recognizing that he's here to ask the witness about his qualifications, so I encourage him to stay on topic.
    Mr. McGuinty, perhaps we could avoid reference to policy.
    This is not about policy; this is about how Mr. Hamilton intends to pursue his functions of the position.
    Okay, if it's a philosophical question, go ahead.
    It's exactly what it is. I don't understand the point of order at all.
    How do you intend, Mr. Hamilton, to pursue new thinking around environmental economics, natural capitalism, monetizing equal services? How is it you see getting these central agencies, which have been for decades, under every government, extremely resistant to rethinking, for example, how we measure and report on wealth in this country?
    Let me give you one example that you can draw on. When I was in a previous life at the national round table, we gave to the Department of Finance five or six key indicators that could be used alongside classical economic reports, like GDP up, GDP down, unemployment up, inflation is X or Y. We actually developed a couple of natural capital indicators to start reporting to Canadians on wealth, which heretofore remains outside the traditional economic thinking in terms of how we measure our wealth as a nation state. Can you give me some idea, after 25 years in Finance--which I think is your greatest asset to bring to this job, in my estimation--of how you see that going forward?
    It's difficult to know exactly how it's going to go forward. I certainly should state at the outset that I don't necessarily agree that the Department of Finance has been a significant blockage to creative thinking in previous years.
    My approach to it is that I look at this area and the interaction of the economy and the environment, and it does seem like an area that is evolving. People are taking new approaches to thinking about exactly how we analyze the implications of our actions and how we measure those, because some of the issues you raised are difficult issues to measure. For example, even if one could agree that you wanted to measure them, they're difficult to bring into some of the standard practices that we have of how we measure wealth, accounting practices, etc. So it's new, it's novel, it's certainly not easy. But I think what I've seen in some of the work that's been done is both doing work within the existing boundaries, obviously, because that's the way we understand it and best explain it to others, and some willingness to think that we really don't know all the answers yet in terms of how we best analyze some of these issues, how we measure and report them, and how we factor them into our policy thinking, which at the end of the day is the important factor. Whether we can measure it or not, if we can accept that this is a way of thinking about the implications of actions, then that can help drive our frameworks for assessing them.
    So I guess if you ask what my approach would be, I think I've shown--despite the fact that I've been from the Department of Finance--an ability to try to think of issues in a creative way and in an all-encompassing way, to try to think of all the different angles. Yes, we often use the structures and frameworks that are most common to us. And I would apply this to the Department of Finance more generally. It has really shown an ability to take these complex issues and think about them in different ways. I think this is an area--and there are others--where I look and say the state of economic thinking is actually starting to move and people are trying to integrate different ideas into their analyses and outputs.
    I'm open to those, and I will certainly try to encourage at the Department of the Environment that we are open to them in our thinking.


    Mr. McGuinty, your time is up. Sorry.
    That's it? That's too bad.
    I shouldn't have been interrupted. Did you take off the time for that?
    Yes, I did, in fact.
    All right. Thank you.
    Thank you, Mr. Chair.
    Mr. Hamilton, congratulations on your recent appointment. Welcome to the committee this morning, and thank you very much for your time.
    Having worked in the federal public service myself for a number of years, unlike some of my friends from across the way, it's not a revelation to me that senior leaders move from department to department within the federal government.
    It's clear that you have very strong skills from Finance and the Treasury Board Secretariat. I'm certain that those will be very well applied at the Department of the Environment.
    I'm just curious to know, and perhaps this is a bit of a philosophical question as well, could you speak a little bit about what you would like to achieve or hope to achieve personally from either a leadership or a policy perspective in your new role?
    That's an interesting question. I guess that's the other side of the coin of what can I bring to the department, which we've talked about, but also, what do I hope to gain by being part of it?
    I have demonstrated skills in the policy area of leadership, and so on, through my past work at Finance and Treasury Board. I'd certainly still hope to improve those. In terms of my ability to lead people, I am now not just responsible for our branch, but I'm helping, through the deputy, to manager a department—and a diverse department.
    To be honest, I've spent the bulk of my career, almost all of it, in central agencies, in Finance. Finance does not have regional offices across the country, so it was more difficult—although I did it—to try to get out and get regional perspectives. But Environment Canada is a more diverse department that way, spread out across the country. It's a bigger department. It's not just a policy shop; it has a science dimension, as we've talked about, and enforcement. It has a different scope from the Department of Finance or Treasury Board. Obviously the Department of Finance has a country-wide scope as well.
    So I hope to learn a little bit about what it's like to manage—or help manage, in my case—a diverse department like that. I think that will help me as I progress forward to build the central agency policy skills that I've developed with some of those real practical realities of what it's like to manage a department like this.
    Frankly, the other thing is that, as a public servant, I've always enjoyed being involved in interesting files. They're challenging, and that's what I like, whether it was introducing the GST or some of the other tax issues that I've been involved in. I see this as a really interesting time in the environment and in terms of the opportunity to try to help as we think through environmental policy and what that means for energy policy and the economy at a time that is perhaps unprecedented, at least for a number of years, in terms of what's happening out there in the economy. It's a real personal challenge to meet that and try to grow from it. Plus, it gives me a great opportunity to work with terrific people, because they tend to gravitate towards these files.
    Those are the kinds of things that I would hope to take out of my time at Environment, and obviously contribute in the many ways that I've talked about earlier.
    Thank you very much.
    Mr. Ouellet.


    Mr. Hamilton, you told us just now that you do not have a clearly defined mandate, in fact no mandate other than being the Minister's right-hand person. So you have considerable latitude.
    As an economist, do you think you have the competence needed to really advise the Minister on climate change or to listen to the people around you? You have to be able to understand not only the economic aspect, but also the environmental aspect of issues.
    At present, the economy is still the big predator. It is constantly preying on the environment. You are an economist, and only an economist, and I have to admit that scares me a little. To be an economist and an environmentalist, one has to achieve a certain balance, but that does not seem to be your case.
    What competence do you think you have to develop immediately in order to be able to understand, when people talk to you about climate change, more than just the economic aspect?


    That is certainly a challenge for a senior official in the public service. It is necessary to understand one's own area of expertise, but also other people's. It is important to listen to them and to understand and incorporate their arguments in relation to the economy and the environment, for example. I am a member of a good team made up of people with diverse expertise.
    I am not an expert, or a lawyer, or an accountant in the tax policy field. So it is necessary for me to work with people who have competence in the issue, who will provide certain details and point out other perspectives.
    I am not a scientist with a lot of technical knowledge about the environment, but I think I am capable of recognizing the experience of the other members of the team, be they economists, lawyers, physicians or others, and incorporating their advice into mine. That is necessary for a senior public servant. It is impossible to be an expert in all fields.
    I have to acknowledge that this will certainly be a challenge. But I am certain that I am capable of assisting the other team members. I am not the only one who will be advising the Minister. Rather, there will be advice coming from a team with a range of experience.
    Because I have only five minutes, I would like to give you an example and then you can comment on it.
    About 25 years ago, we tried to get windmills going. Nobody wanted the government to get involved in windmills, because the economists—and only the economists—said that it wasn't viable. The arguments were based solely on economic non-viability. The fact that it would reduce greenhouse gas emissions was hushed up.
    What might cause you to adopt a different approach? You have talked about listening. Other than listening, are you going to adopt a different approach to a new technology you are not familiar with, but that open-minded people are advising you to move toward, even if it is not economically viable at the moment?
    I think I am fully capable of understanding both an economic argument and a non-economic argument, and understanding that it is certainly necessary to take action that will have a non-economic benefit. Are there any guarantees? I can offer no guarantees at this point, but I think I am very open and I listen carefully to advice and opinions from other people in another field, for example from a lawyer or a physician.
    I have to give good advice, and to do that it is necessary to assemble all the expert advice in certain fields and strike a balance between the economic arguments and the other arguments. I am entirely capable of doing that. Certainly I am an economist, so I am more comfortable with economic arguments and analyses. I know that economic arguments represent an important perspective in any given field, but I understand that there are others. We have to listen to the advice coming from other experts. I think I am fully capable of doing that in performing the duties of my position.
    We will move on to Mr. Watson.


     Thank you.
    I'd like you to elaborate a little bit on your management style, and on how that fits with the current responsibilities you've been assigned.


     In terms of management style, I mentioned earlier a couple of matters.
     One is that I think I'm definitely a conscientious manager who tries to attract good people around to work on files and to keep them there, making an environment that is attractive for those people to work in. I think I'm a relatively easy person to work with. I may be demanding at times, in terms of the analysis that I demand from people, but they understand where I'm coming from.
     I think I've always been able to build a good team around me. I've been fortunate to have good issues to work on, but I feel that as a good manager of people, I can get things done, I can stay focused. I'm an organized person, and I think that contributes to a good workplace.
    I think I'm a leader of people as well. I can demonstrate through my actions a commitment to providing solid public policy advice for which we can all hold our heads high and feel that we've done the right thing, being proud of what we do and of having acted with integrity. I try to lead in that way and make sure that I demonstrate to the people who work for me that we need to carry ourselves in a totally professional manner; we need to show respect to the people we work with and the people we interact with, whether in consultation with outside groups or what have you.
     Those are the key things.
    And I think I'm a good listener. We talked earlier about listening to other people from other disciplines. I like to think I'm a very good team manager, in a sense: I'll listen to what everybody has to say. At the end of the day we have to make decisions, and not everybody can agree, but I like to hear all the perspectives on an issue before I think about what my advice would be going forward.
    It's very important not to be a know-it-all.
    I'm far from that.
    I appreciate your perspective on learning.
    So I've heard what your management style is. Can you illustrate from past experience how you've actually fulfilled it? I'd be interested in whether you can give us some examples of where you have led with that kind of style or what type of project you have tackled in which you've done something with a team. Can you illustrate, so that we know this isn't just aspirational? I want to be assured that you've actually done this before in some other capacity.
    Yes, there are probably a number of examples. The one I have talked briefly about is the Canada Pension Plan Investment Board. That would be an example where I had.... It was a very big change in the structure of it, to set up a separate board that would invest in equities, bonds—a diversified portfolio—rather than government bonds.
    It was a management style where there was a lot of pressure to deliver and a lot of complex issues needing to be sorted through. We developed a team within the federal government, and through all of the difficult negotiations we had with provinces and the public consultations we had, we were exposed many times to difficult issues that we had to sort through to decide how to present our advice and what advice to present. Through it all I tried to demonstrate to the team that we needed to do the proper analysis, we needed to do our due diligence, we needed to be open to all the views that were coming to us; then, at the end of the day, we needed to be clear when we made a decision what our advice was, going forward. And we needed to manage all of that in an environment where we were not only consulting with the public and their diverse views, but also with our provincial colleagues, who had a very direct stake in what we were doing.
    Being able to manage those relationships both internally and externally with the various people and have a successful conclusion—not only developing the policy, but implementing it and seeing it years later be rewarded—I feel is probably one of the better examples of how I managed an effective file for the government.
    You mentioned that there was pressure to deliver. There no doubt will be pressure to deliver as well within Environment Canada and within the ministry to meet the challenges ahead of us. I wish you good luck.
    Thank you, Mr. Chair.
    We would normally go to Mr. Jean, but it looks as though Mr. Jean is passing.
    We'll go to Mr. Woodworth.


    Thank you, Mr. Chair.
    Welcome to the committee, and congratulations.
    I think the term used is simply an expression associated with a person who is not employed, in the legal sense, who has no fixed term. So I think that this expression...


It has no particular reference to you or to your job duties. It's one that's common throughout the civil service.
    I want to state at the outset that I have absolutely no doubt that someone of your experience and background will be what might be called a “lifelong learner”, and be quite capable of adapting to new information and a new department.
    I am also going to say at the outset that I'm quite happy you have an economic background. When I looked at your résumé, at first I wondered about it, but the more I thought about it, the more I realized that all of the important questions I have on the environmental file involve economics. The only way we can proceed with environmental initiatives is by tailoring them to our economic circumstances. So I think you are, quite frankly, the right man for this job at this time.
    My area of interest has to do less with some of the policy issues that we've heard here today and more with the management side of things. It's been nibbled at around the edges by a few of the questions.
    Can you tell me whether or not the job description for the position you're filling now, as assistant to the deputy minister, will require you to interface with the whole environment department team, as it were, and to act in a managerial capacity with that team?
    Also, how does it compare with the managerial side of what you had done previously as associate secretary for the Treasury Board? For example, I don't know how many people you might have been responsible to manage, or, as the assistant deputy minister in charge of the tax policy branch, how large a team you had, or how many sections.
    Can you give me some sense of how your current managerial responsibilities grow out of or expand upon your previous managerial experience in those positions?
    Merci beaucoup.


    Maybe I'll start with the current position, that of associate deputy minister. You're right, there is nothing particular about my appointment relative to other associate deputy ministers. It's very similar to what I was at Treasury Board. You're really helping the deputy minister manage the department.
    That can be done in a number of different ways. It differs for people. For example, you can be involved in every file that the department is involved in but without any particular people reporting to you; you're sort of jointly managing it with the deputy. At the other point on the spectrum, for particular files, you, the associate, will basically be the deputy, will stand in for them. They will delegate that responsibility to you and you'll manage that group of people and that file. Obviously you'll keep the deputy informed, but really you'll run with it.
    From my experience, typically it's a mixture of the two. The associate does get involved to some degree with all of the files, but some of them can be very minimal. There are a few particular areas--these can change over time--where the associate would be involved. There you really are interacting directly on the file, much as you would as a deputy. You have a team of people who are working on it. You are having meetings, getting things done, and basically managing that file.
    I would expect that, going forward, I'll have a mixture of those activities. Part of it is for me to learn a little bit about all the interesting things that Environment does, the science, etc., and part of it is really to help deliver on particular projects.
    That would be similar to what I was doing at Treasury Board. The only other thing I'd add about Treasury Board as a central agency is that I was involved in management issues more broadly--how it applies across the government, how we're managing things in different departments. It was looking at it from a government-wide perspective rather than just Treasury Board.
    Again, there I was involved in a mixture of particular files, but I was also standing ready to be involved in any file that the Treasury Board was involved in.
    As a final comment to answer your question, if you contrast that with, for example, when I was an assistant deputy minister for the tax policy branch, or the financial sector policy branch, there it was very much a defined responsibility. You're responsible for providing advice up through the system in the area of tax or in the area of financial sector. You have a team. In tax policy, my team was made up of about 170 people. It's the largest Department of Finance branch, but small compared with the Canada Revenue Agency, at 40,000 people, or even Environment Canada, at 6,000 people. But it was a large branch, with 160 people that you were basically responsible for.
    So that's the difference, as I see it, between an assistant deputy minister and an associate. It very much does depend on the issues of the day and, frankly, the desires of the deputy minister in terms of how he or she thinks it's best to manage the issues of the department.


     Thank you.
    I was a bit intrigued by your comment regarding your experience--
    I believe your time is up, Mr. Woodworth.
    Before we go to Mr. Calkins, I've been informed that there's a vote. They're asking that all members head back to the chamber. There'll be a 15-minute bell.
    Mr. Calkins is up, and I believe he wants to give his time to Mr. Warawa. The idea was to hear from Mr. Warawa and then to start a third round of maybe three minutes each, in which case, if the committee agrees, Mr. Hyer could ask the question instead of Ms. Duncan. I don't know if we'll have time for a third round.
     Does Mr. Warawa want to give his time to Mr. Hyer? Then we end it there and go back to the House to vote.


    Can the clerk look into this? Ordinarily, the rule is that we find out, to know whether there is a vote.


    We have nothing from our party.
    Okay, we can go to Mr. Warawa and then see if there's time for a third round and take it from there.
    Mr. Chair, before I start my time, if there is a vote, and we all leave, then Mr. Hyer is not going to get a chance to ask a question. If I can have a gentleman's agreement that if we have a third round he would give me that time, I could pass that on to him right now.
    It looks like there's a consensus.
    Let's go, Mr. Hyer.
    Thank you, Mr. Warawa.
    I will be coming to future meetings, given that I'm Ms. Duncan's deputy critic for water, climate change, and national parks and that I'm very interested in the process.
     I'm a rookie member from Thunder Bay. I am a biologist, a forester, and a business person.
     I'm concerned about what I'm hearing here this morning. There are many economists out there, some of whom I'm quite aware of, who have a lot of expertise on the environment and who have been studying the ecological implications of the environment and the environmental implications of the economy for decades. I'm concerned that while we have a very intelligent man here, who is capable of learning, this is a very expensive training program.
    My question to you, sir, is a philosophical one.
     Is it the mandate of Environment Canada to seek and find compromise between the economy and the environment internally, or is it the job of Environment Canada to be the effective advocate for the environment and to allow other ministries, such as Natural Resources, Industry, and Finance, to provide that alleged balance with the economy?
    I'm concerned that with your experience and focus on the economic aspects you will see your role, and be good at your role, as making those compromises internally rather than as sticking up for the environment effectively.
    I would just interject that this could be seen as a policy question. I'll give Mr. Hamilton latitude to answer the way he thinks he should.
    I'll take a stab at it without trying to cross an inappropriate line.
    I think Environment Canada has many experts in the domains in which we need to carry out effective environmental policy. I bring a particular skill set. I think it's a relatively broader skill set than perhaps you're thinking when characterizing me as an economist. Through my work career in the civil service I've been exposed to a vast number of policy files. And I think I'm capable of bringing a broad perspective to issues put in front of me, listening to the views of others, and consolidating advice. That's my perspective on it. Maybe I'm biased, but that's what I think.
    In terms of setting up a department as an advocate or as an internalizer of issues, obviously the Minister of the Environment and Environment Canada have roles to play in terms of setting environmental policy for Canada. Clearly, as I mentioned earlier, in setting those policies we need to take into account the perspectives of other departments, whether it's our colleagues at Natural Resources, the Department of Finance, Fisheries and Oceans Canada, or what have you.


     I'm having a hard time hearing you, Mr. Hamilton, because there's a lot of buzz around the room. If I could have just a bit more silence, we can hear what you're saying.
    So yes, I understand that in assessing these issues and providing our advice, we need to take into account all of those different perspectives. I just think we're better off if my role in the Department of Environment is not only to bring that broader perspective, but also to contribute from an economic and policy analysis perspective. For me, that's good to have within the Department of Environment. It contributes to more collaborative discussions with our colleagues and with other departments with other perspectives.
     The more we can understand about each other's perspectives, I think the more common ground we can find and the more effective we can be in designing proper policies. I think I'm going to be able to contribute on that front, and I wouldn't characterize my approach to these issues as overly narrow at all.
    You have about 30 seconds, Mr. Hyer.
     I'll pass. Thank you.
    Why don't we go to a third round of three minutes, starting with Mr. McGuinty?
    Mr. Hamilton, I want to go back to something--
    Excuse me. We have a problem here.
    It's Mr. Warawa next, isn't it?
    Well, there was a gentleman's agreement if we were going to have--
    Go ahead, Mr. Warawa. My apologies.
    Also, if the bells are about to ring, what if we just made it very short and distinct, with maybe a one-minute round?
    An hon. member: Go for it.
    Mr. Mark Warawa: Okay. So--
    The Vice-Chair (Mr. Francis Scarpaleggia): Excuse me. Mr. Bigras has a point.


    Did you not say at the beginning of the meeting that there were some routine matters to resolve? There may be more important matters to be resolved.
    These are questions that we could discuss at the steering committee. I would have liked to address them, but if we want to do a third round, we can save time. If we have a few minutes left, I am going to raise a question, but it can wait.
    What is it?
    I wanted to know whether, to start the study of the oil sands and water, you would object to inviting, for Thursday, the three ministers involved: Natural Resources Canada, Environment Canada and Fisheries and Oceans Canada. It would be a sort of technical briefing. Otherwise, we risk having nothing to discuss on Thursday and having to cancel the meeting. However, if we want to offer those people time to prepare, I propose that we invite them.


    On a point of order, Mr. Chair, I guess you're now moving into those other questions. I would rather not do that. I'd rather finish our existing agenda--
    Yes. Why don't we do that and just leave it to the steering committee on Monday?
     Mr. Warawa, for two minutes.
    Two minutes? Thank you.
    Mr. Hamilton, could you just share with us the people or industries that you have experience with? You have the economic experience, and now, going into the environment department, it's very important to have that balance so that we're not too onerous in our requirements. We want to clean up the environment, but we don't want to put people out of work. What kind of experience do you have with industry?
    Maybe I'll just broaden it slightly to talk about the experiences I've had in consulting with people outside of government in general.
     Certainly in my experiences in the tax area I've touched on a number of issues that needed consultation. It could be actual environmental issues, where I was involved in looking at environmental tax initiatives. We do have tax incentives for assets used in co-generation, for example. There is a variety of places in the tax system where there is an environmental angle, so I am familiar with consultations with non-government organizations and with industry, with the oil and gas sector, and with the electricity sector, or whoever it might be.
    Finally, in the tax area, I would say there were also discussions with social groups, whether we were developing the working income tax benefit or tax measures for the disabled. I have quite a bit of experience in dealing with a broad range of groups out there that have particular interests they bring with them.
     I think that gives me a broad experience in terms of being able to consult with people outside government on policy issues. From a business perspective in particular, I was, for a period of time, the director of corporate taxation, so I certainly have a lot of experience in discussing all sectors of the economy, including the financial sector, as to how to analyze and understand the impacts of the policy issues.


    I think the committee would like to adjourn and do our duty as legislators.
     I would like to thank you for appearing, Mr. Hamilton. Your answers were informative, and we look forward to seeing you often in front of this committee.
    Thank you.
    Thank you very much, Mr. Chair.
    This meeting stands adjourned.
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