Good afternoon, everyone.
We're here today pursuant to Standing Order 81(5) to examine the supplementary estimates (A) for 2015-16, vote 1a under Atomic Energy of Canada Limited, and votes 1a and 5a under Natural Resources. They were referred to the committee on Thursday, May 14, 2015.
We have one witness with us today, and others who, if need be, can be counted on, I'm sure. We have with us from the Department of Natural Resources, Kami Ramcharan, assistant deputy minister and chief financial officer, corporate management and services sector.
Welcome to you. Thank you very much for being here on such short notice. You do have a presentation, so go ahead with your presentation, please, then we'll get right to the questions and comments from members.
Thank you, Mr. Chair. It's a pleasure to meet with the committee to discuss Natural Resources Canada's 2015-16 supplementary estimates (A).
Let me take a moment to briefly discuss my department's supplementary estimates. These estimates reflect the first change to planned budgetary spending since the main estimates. The supplementary estimates show current planned budgetary spending at $2.49 billion, which is an increase of $277.8 million from the originally approved 2015-16 budget of $2.21 billion, as outlined in our 2015-16 main estimates.
This increase is due to a number of factors across our operating vote, capital vote and our statutory authorities.
Within our operating and capital vote, there is a $231.3 million commitment to extend the nuclear legacy liabilities program for 2015-16. Launched in 2006, this program is implementing a multi-decade strategy to address long-standing Government of Canada liabilities, including radioactive waste, retired research facilities and related infrastructure, and contaminated lands at the Atomic Energy of Canada Limited research sites.
Significant progress has been made to date, and the 2015-16 funding will provide the necessary bridge to continue to control and reduce risks and liabilities at the sites until the restructuring of the nuclear laboratories is complete.
There's also a commitment of $5.3 million in operating funding and $38.6 million in capital funding for the federal infrastructure initiative to support the rehabilitation, repair, and modernization of many of Natural Resources Canada research facilities across Canada. From Dartmouth to Victoria to Alert, Natural Resources Canada's infrastructure projects will be carried out in 15 locations across Canada. Upgrades include things such as roofs, energy-efficient lighting, distribution panels, security systems, and energy-management control systems that will help our department move toward its goal of reducing greenhouse gas emissions and improving energy savings.
Additionally, the money will be used to make significant upgrades to laboratories that conduct critical research on our forests, geohazards, including earthquakes, and geosciences in both marine and land-based environments.
We will also be relocating a specialized geomagnetic calibration building from Ottawa to Fredericton. This specialized geomagnetic calibration building is used to calibrate equipment used in the national geomagnetic observatory network. This network provides measurements of the earth's magnetic field for navigation and to protect critical infrastructure such as power distribution and pipelines from the impacts of space weather.
These investments will not only help support Natural Resources Canada to continue to conduct leading-edge research, but they will also encourage job creation, economic growth, and long-term prosperity across the country.
Finally, there's $1.3 million in operating funds and $1 million in capital funds for the targeted geoscience initiative, a collaborative federal geoscience program to provide industry with the next generation of geoscience knowledge and innovative techniques to better detect deeply buried mineral deposits.
This initiative will continue to promote and support exploration and investment in Canada's mining sector, and to ensure that the sector continues to benefit from outstanding scientific research.
This is a collaborative federal initiative delivered in partnership with provincial and territorial geological surveyors and collaborators from industry and academia.
First funded in 2000 and renewed in 2003, 2005, 2010, and now in 2015, each renewal of the targeted geoscience initiative has been used as an opportunity to strategically refocus the program on the most pressing needs of mineral exploration and each phase has made significant progress in stimulating investment by and innovation in the Canadian mineral exploration industry.
The current phase of the TGI, phase 5, focuses on understanding the processes by which metals accumulate to form an economic mineral deposit. This new knowledge will allow exploration companies to expand their reach in targeted regions for exploration in order to discover a new buried mineral deposit at much greater depths and distances from known deposits. This initiative will support mining industries by developing knowledge and expertise to increase their competitiveness. It contributes to increased private sector exploration and successful discovery rates for base, precious, and other metals, grows the pool of highly qualified people available to industry, and extends the lives of existing mines and communities.
New geoscientific knowledge and methods provide industry with cutting-edge tools to stimulate private sector innovation and exploration for deeper mineral deposits and new emerging mining caps. More effective targeting of buried mineral deposits increases the likelihood of discovery and ensures the mining industry's long-term prosperity.
Exploration industry spending increased over $240 million in mining regions across Canada following the conclusion of phase 3 of the targeted geoscience initiative in 2010. The just-completed phase 4 has already outlined new regions of interest for mineral exploration, for example, a region that stretches from southeast Manitoba to northeast Quebec that is highly prospective for new nickel-chrome deposits.
Phase 4 of the targeted geoscience initiative released over 730 publicly available geoscience publications and delivered over 500 scientific presentations at conferences, workshops and events, helping industry in the development and planning of their exploration activities.
To date, the exploration industry across Canada has integrated over 50 new geoscience results that were developed during the fourth phase of the program. These have been used by industry to adapt their exploration approaches, for example, in Ontario's Ring of Fire region, in Saskatchewan's Athabasca Basin, and the Bathurst region of New Brunswick. TGI played a key role in training the next generation of highly qualified personnel with a fourth phase supporting over 133 students in their graduate-level research studies, equipping them with skills suitable for future employment in the mineral exploration sector.
In terms of statutory authorities there is also an increase of about $300,000, which is related to the statutory payments for the employee benefits plan. This includes costs to the government for the employer's matching contributions.
Mr. Chair, Natural Resources' 2015-16 supplementary estimates (A) clearly demonstrates how this department is committed to delivering on the Government of Canada's policy, program, and service delivery priorities and is doing so in a fiscally responsible manner.
Thank you, again, for the opportunity to appear before the committee.
Basically, we have been able to reduce the liabilities and risk associated with this program. This program has been around since 2006 and has provided over $1.1 million, so basically $1 million, in funding over nine years to implement to the program up to March 2015. In February 2013, the Minister of Natural Resources announced that Canada would undertake a competitive procurement process to seek a contractor that will continue to manage the operations associated with managing our nuclear waste, and we're in the midst of doing that right now.
The program was extended $231.3 million for this current year's worth of funding. It hasn't been extended into the future at this point, because with the introduction of that new contractor model, it is expected to move from the department over to the contractor to deliver that.
The funds will also be used to make further progress on highly enriched uranium reparation initiatives, continue decommissioning activities at AECL's Chalk River and Whiteshell Laboratories, and implement initiatives and activities to prepare for the transition to the government-owned, contractor-operated management model, including upgrading the software system for the waste inventory database and advancing strategies and planning for future work.
This liability program is also recognized as part of the overall help to support the reduction of the $6.3 billion that are recognized in the public accounts of Canada as an environmental liability.
My name is Jean-Frédéric Lafaille, and I am the Director General of the sector called the Atomic Energy of Canada Limited Restructuring.
Thank you for the question. I think the question was about how this funding would relate to the implementation of the government-owned, contractor-operated model.
I will make a distinction from the nuclear legacy liabilities program that's been implemented for a number of years, and this will carry on going forward as there is a long-term plan to remediate any nuclear waste that's been accumulated over the past decades. That will carry on, but going forward it will be delivered under a different model. That model has it that a private sector company will be selected to actually manage the operations of the nuclear laboratories going forward, including the management of the waste that is currently being managed by the nuclear laboratories at Chalk River Laboratories, in particular, but also Whiteshell Laboratories.
The funding is being provided on a one-year basis to carry on the activities and will be renewed going forward to make sure that these nuclear wastes are being remediated over the long term. Does that answer the question?
Yes, and I want to make sure I give you the right answer. AECL has their own chief financial officer; we're just here representing the department.
I do have a response for you. With regard to how the 2015 budget funds requested by the National Energy Board will be used, the main responsibilities include the construction, operation, and abandonment of pipelines that cross international borders or provincial-territorial borders. The $80 million requested by the National Energy Board is dedicated over five years, starting in 2015-16. The funds support responsible resource development by contributing to the safety of energy transportation and infrastructure.
A portion of the estimates requested support the NEB's responsibility related to the safety of Canadians and protection of the environment during the construction, operation, and abandonment of pipelines. These activities include audit and compliance follow-ups, incident investigations, emergency management, post-decisions process management, and program support. The specific number of audits, inspections, emergency exercises, site visits and compliance meetings, and other compliance activities will be optimized to deliver the highest level of safety oversight. The remainder would support greater engagement with Canadians on NEB's role and mandate in the regulation and oversight of Canada's energy infrastructure.
Activities supporting this initiative include the communication officer duties, regulatory data collection and analysis, general public engagement, energy information collection and analysis, and program support.
Engagement with Canadians and public participation is also an important element of NEB's open and balanced regulatory process. The NEB plans to increase the number of opportunities for board members and staff to engage directly with Canadians. These activities strengthen the quality and credibility of decisions and recommendations. They also serve to inform the public of its role in our processes. The public is an important source of local and traditional knowledge about a project's physical site and potential impacts. Through public participation activities, project proponents can obtain information and better understanding to respond to public concerns and inform the public about decisions.
The NEB does not generate or participate in advertising campaigns. Notifications like the hearing order can be viewed on the NEB website and a public notice with the hearing order information is usually published in local newspapers.
That gives you a sense of what the money is for. It's pretty well for their regular operations.
I can't speak specifically to the results that they're using, but maybe what I can talk a little bit about is what the targeted geoscience initiative tries to do on behalf of industries with regard to some of the exploration. Really what it's doing is focusing on new and innovative ways to look for deeper mineral deposits, reducing some of the risks for mineral exploration and helping improve the industry's global competitiveness while creating opportunities at home.
In budget 2015 we did have an allocation identified of about $23 million or $24 million over the next five years to stimulate the technological innovation needed to separate and develop chromite and other important minerals. According to the Province of Ontario, the Ring of Fire region is estimated to hold over $60 billion of in situ metal deposits of chromite, base metals, and platinum-group metals. So our estimate of the value of the seven most-advanced projects is between $31 billion and $54 billion, related to those types of minerals.
In the past four years $40 million of federal funds have been invested to support aboriginal capacity-building, as well as business and skills development in northern Ontario to support the initiative. Over three years, starting in 2013, $4.4 million has been invested from FedNor to support aboriginal communities.
Another $5.9 million was invested from the ESDC's—Employment and Social Development Canada's—skills and partnership fund to support skills training for aboriginal peoples in 2013, and $5.2 million was invested toward training and work experience for aboriginal participants in 2014.
So in addition—
Thank you very much for your question.
Maybe what I can do is to sort of come back a bit.... Although we're only showing roughly about $40 million this year, the infrastructure initiative is actually $89 million over two years. What we see in our estimates for this year is the funding for this year, and then we'll have a subsequent amount in next year. The $89 million over two years will include funding in a number of different projects. I will go through them and give you some examples.
In Alert, Nunavut, we are going to be airlifting a new prefab structure to upgrade our research space in that environment. In Calgary, we have a variety of laboratory renovations to meet life-cycle renewal of heating and induction terminal units, air handling systems, laboratory fume hoods and exhaust fans, pneumatic control systems, and electrical distribution panels. In Dartmouth, Nova Scotia, a refit of our palynology laboratory will be implemented, and repurposing three dated labs to modern-day standards will be conducted.
In Devon, Alberta, we have pilot plant building upgrades, including electrical and ventilation system improvements to hazardous areas through the shipping and receiving centres. In Edmonton, we have the installation of a new fire suppression system in some building areas, electrical and ventilation system upgrades to meet life-cycle requirements, and the replacement of a water distillation system. In Fredericton, New Brunswick, we have roof and exhaust fan replacements and a chiller upgrade. As well, the specialized geomagnetic calibration building will be relocated from Ottawa and rebuilt at a site in Fredericton, far from magnetic interference.
In Inuvik, Northwest Territories, we will replace, upgrade, and extend roads to ensure access by scientific staff. In the national capital region, we'll do system upgrades and base building repairs to include fire alarm control panel replacements and switchgear updates. In Resolute, Nunavut, we will do investments to replace air quality handling units, furnaces, and fuel oil systems. We'll install cooling units for communication rooms and replace electrical controls and exhaust fans.
In Sault Ste. Marie, we'll have various upgrades to improve energy efficiencies from terminal heating units as well as replacements. In Sidney, British Columbia, we will do investments that focus on modification and repairs to our core sample facilities. In Sainte-Foy, Quebec, laboratory upgrades will include replacement of ventilation fans, and other recapitalization and repair.
In Val-d'Or, Quebec, replacements include window replacements and electrical upgrades. In Varennes, Quebec, there are investments in the replacement of HVAC pumps and various repairs. In Victoria, B.C., we'll have repairs, including distribution panels and security system upgrades.
All of these will help to support our science going forward, as well as helping to reduce our GHG emissions so that we can continue to be energy efficient in our buildings where we conduct our research.
Good afternoon. I'm Daniel Lebel. I'm director general for the Geological Survey of Canada and one of the leads for the geoscience programs we have.
The principles behind the targeted geoscience initiatives are that these are time-limited and cyclical. We have programs that, for the last few cycles, generally last about five years. In this case, because the government always has the chance to decide whether or not to renew, these programs are arranged so that the funding is ramping up and ramping down. In every cycle, we have a full suite of projects that start and finish. It's not an ongoing program where these activities never end. We actually start with a very solid program.
In anticipation of the start of this program, we've been in the planning for about a year and interacting with industry. This first year will really be about planning solid activities. There are some staff who are supported by these activities and are coming on board, but not very many, because the program is highly dependent on the expertise that resides in-house in the Geological Survey of Canada, and then we leverage expertise that resides in universities.
Really, the first year is about starting this and having the best suite of activities. Moving forward, the funding will really ramp up—
I'm happy to take this question, Mr. Chair.
The government announced in 2010 that the NRU reactor would cease to produce the medical isotopes called molybdenum-99 in October 2016. That policy stands. If you look at the projections from the OECD on this, supply is projected to meet demand after 2016, even though the NRU reactor would cease to produce medical isotopes.
Just to put this in perspective, there was a prolonged shutdown of the NRU in 2009-10. At that time the NRU was producing between 40% and 50% of the world's molybdenum-99. Currently, the NRU on average is producing 15%. It's been decreasing because of the policy that was announced to the world in 2010 that the NRU will cease to produce medical isotopes and will promote the entry into the market of alternative ways to produce medical isotopes. The problem with the market as it was in 2009 was its reliance on aging reactors, which were, each of them, single points of failure in the system. At the time the plan was to fix that problem by encouraging the promotion of other sources of supply to enter the market.
With regard to the specific question about the announcement in 2015 on the future of the NRU, the government decided to prolong the life of the NRU to March 2018, so the NRU would continue to carry out the activities that it does now, which includes research and development, the support of industry for testing, as well as medical isotopes. Medical isotopes will only be done in a backup capacity. Should there be an emergency situation internationally, let's say a shortage that could not be compensated for by any other means in the system, the NRU would keep the capacity to fill the gap in the market, so there would be a contingency or insurance policy, if you will.
First, the government has committed to ensuring that NRU can produce until October 2016. That's part of the funding going to AECL, to make sure that this will continue until 2016.
Then there are programs in our department, Natural Resources Canada, that have supported the development of alternative technologies, based not on reactors but on cyclotrons or linear accelerators, and bringing them to commercialization in a 2016 timeframe. Those would be Canadian technologies that would be able to compete in the market to try to sell medical isotopes after 2016.
Now, we have to understand that this is a global market, so the fact that NRU has decreased its market share over time has been compensated by other sources. Really, the isotopes are traded globally. We haven't seen the shortage in the magnitude we saw in 2009-10, which means the market has really adapted to the situation. When we look at the projections from third parties, from the OECD, the projections tell us that there will be enough capacity in the system and enough supply to meet demand.
Going back to the targeted geoscience initiative, you note on page 11 of your speaking points that there are 730 publicly available documents and that there were over 500 scientific presentations at conferences, workshops, and events. You note specifically that it is helping industry in the development and planning of their exploration activities. Perhaps I'll give you an opportunity to expand on that a little bit.
I'm also curious; when you're doing 500 scientific presentations and producing 730 documents, I would assume that within those presentations, within those documents, there is community uptake in this as well. We spend a lot of time talking about community consultation when we discuss responsible resource development plans. That includes our aboriginal communities' participation.
How broadly were those presentations available? Were they centralized in a particular part of Canada, or were they vastly used across Canada? What level, that you know of, did engage community uptake and not just industry uptake on these presentations?
These publication presentations are largely technical, aimed at the geoscientist or explorationist community members who are very savvy about that sort of documentation, looking for breakthroughs in knowledge and science and new models, so that they can look out for the haystacks that are out there in nature and find the needles in them.
We have an array of meetings that we attend every year. We restrain ourselves in terms of attendance so that it's within reason, but at the same time we go so that connections are made. For instance, one scientist might present for several others when we attend these meetings.
Canada is a vibrant place for mineral exploration, so we have yearly open houses, as they call them, in each of the provinces and territories of Canada. Usually they happen in the fall just after the field season, so we have the mineral industry and provincial organizations that do some work in this field. People get together and it's part of networking and knowledge transfer face to face. Generally there are technical presentations that are made. It could also be through a poster presentation, because some of these things are really crowded—if you think about PDAC, for example, which gets into the multi-thousands.
We look for the best opportunity to do this knowledge transfer. Sometimes it is through workshops also with universities that are operating in this field.
With regard to bridging this knowledge to communities, we have examples through geoscience for mapping in the north where we're really reaching over to the communities of the north and letting them know that the first element of development is sometimes a mineral exploration company arriving in their territory. We try to bridge the knowledge with them so that they can build capacity in their own community to interact with developers that are coming there and know what this is about. It could take five or 10 years sometimes before the actual development, and there is a lot of chance it will not go the way people hope. There's a lot of chance that they don't quite find what they are looking for in that industry. It is high risk.
Thank you very much to all of you from the Department of Natural Resources for being here today, Ms. Ramcharan, Mr. Lafaille, Mr. Lebel, and all the others at the back.
Members, let's quickly go through the votes here for the supplementary estimates (A).
ATOMIC ENERGY OF CANADA LIMITED
Vote 1a—Operating and capital expenditures..........$164,900,000
(Vote 1a agreed to on division)
Vote 1a—Operating expenditures..........$237,888,974
Vote 5a—Capital expenditures..........$39,586,996
(Votes 1a and 5a agreed to on division)
The Chair: Shall the chair report vote 1a under Atomic Energy of Canada Limited and votes 1a and 5a under Natural Resources to the House?
Some hon. members: Agreed.