Good afternoon, everybody. Welcome back after our brief hiatus from Ottawa. Today we have a full agenda.
We're going to be discussing, reviewing, and asking and getting some answers to questions on the main estimates for 2016-17 with respect to the areas that fall under the jurisdiction of this committee, those being Atomic Energy of Canada Limited, Canadian Nuclear Safety Commission, National Energy Board, Department of Natural Resources, and Northern Pipeline Agency.
In that respect, we are very fortunate to be joined by the minister for a second time. We're very grateful, Minister, for you taking time out again to be with us, given your very busy schedule, as well as deputy minister Bob Hamilton for the first hour. Gentlemen, thank you very much for being here today for the first hour.
In the second hour, I understand Mr. Hamilton will stay with us and be joined by another one of his colleagues and we can continue our discussion.
On that note, I am going to turn the floor over to you, Minister, and we can discuss the estimates.
Good afternoon, Mr. Chair, and members of the committee.
I'm glad to be back again, and so soon. We had a very good conversation the first time I had a chance to sit down with you. I think I said then, and I'd be pleased to say again, that I really believe this is at the very heart of Parliament; members from all sides having an open debate about issues that matter to Canadians.
We may disagree on some of the detail, but we certainly agree on one thing and that is that we all care about the best interests of our country. I am very pleased to spend the next hour with you talking about the Natural Resources Department. I'll talk about the main estimates for the current fiscal year, the supplementary estimates (C), and of course our government's first budget.
As I said when I was here in February, we share a big responsibility with this portfolio. Our task is to ensure Canada's natural resources are developed sustainably as part of a strong economy and a clean environment, and in ways that ensure local communities are the true beneficiaries. All of these things depend upon the choices we as parliamentarians make, the priorities we set, the principles we establish, and the investments we make. The main estimates are part of that. They provide the fiscal base for the coming year, but the main estimates are only part of the story. Budget 2016 fills in the details. It outlines our overarching vision that Canadians are ready and eager to embrace the low-carbon, clean growth economy of tomorrow. Economic growth and environmental protection are not competing interests, but vital components of the single engine of innovation. Canadian ingenuity can rise to the challenge of solving today's problems, bettering our lives, and bringing us the future; a future that will be better, brighter, and more prosperous than we can imagine.
In many ways, our first budget reflects the great opportunities we see in Canada's resource industries: to support research and development, to invest in clean technology and innovation, to promote clean energy and alternative fuels, to engage in more meaningful consultations with indigenous people and local communities, and to develop greener ways to extract and process our natural resources and get them to market.
All of these things are front and centre in budget 2016, with Natural Resources Canada figuring prominently in our government's investment plans.
Those highlights include $87.2 million over two years to update the facilities that support research in forestry, mining, and minerals, earth sciences and mapping, as well as innovation in energy technology; $82.5 million over the next two years for the research, development, and demonstration of clean energy technologies; $62.5 million over two years for recharging stations for electric cars and refuelling stations for vehicles powered by natural gas and hydrogen; $50 million to invest in technologies that will reduce greenhouse gas emissions from the oil and gas sector; and $2.5 million to support regional dialogues and studies that identify the most promising electricity infrastructure projects.
It's a lengthy list, but each of those investments is designed to speed Canada's transition to the low-carbon economy of the future.
There is more. We are also investing $128.8 million over five years to develop new energy efficiency programs and policies. We want to help Canadians save money as they reduce their environmental footprint.
We've committed $81.3 million over five years to support marine conservation activities. Budget 2016 also extends the 15% mineral exploration tax credit for another year. It permits certain costs associated with undertaking environmental studies and community consultations to continue to qualify as Canadian exploration expenses. That's good news for junior mining companies seeking the venture capital they need to finance exploration. It also serves as an incentive to individual investors attracted to the flow-through shares that finance grassroots mineral exploration.
Taken all together, it's a game-changing budget that delivers on our promises to Canadians.
I would be remiss, though, if I did not point out that budget 2016 also gives substance to the international commitments we've made over our first six months in office, including commitments made at the COP 21 climate change talks in Paris last November; at the North American energy ministerial I hosted in Winnipeg earlier this year; in the joint statement on climate, energy, and Arctic leadership that Prime Minister and President Obama agreed to in Washington last month; and with our pledge, as one of the 20 founding countries of Mission Innovation, to double government investments in clean energy research and development over the next five years, as well as spurring private sector investments in clean technology.
For example, budget 2016 provides for more than $1 billion over four years beginning in 2017-18 to support clean technology. That includes innovations in the forestry, mining, and energy sectors. We realize that the marketplace will ultimately decide how quickly the global economy goes green, but governments can point the way. We can provide the necessary nudges by pricing carbon, by ending subsidies for fossil fuels over the medium term, and by investing in and supporting the low-carbon, clean-growth economy of the future.
We can also show leadership by building consensus for major resource projects. That's what our interim approach does for assessing and reviewing major resource projects already in the queue.
How? It does so by restoring public confidence in the process; by renewing our nation-to-nation relationship with indigenous peoples through meaningful consultations; by ensuring direct and upstream greenhouse gas emissions linked to a project are considered; by basing regulatory decisions on science and evidence; and by ensuring this evidence includes traditional indigenous knowledge. Our government's approval of Woodfibre's proposed liquefied natural gas project near Squamish, British Columbia, is an example of doing things the right way.
I'm pleased that budget 2016 also includes $16.5 million to implement our interim approach over the next three years. It's a vote of confidence in our efforts to bring Canadians together, to find common ground, and to ensure Canada's resource industries remain a source of growth, employment, and new opportunities in a world that increasingly values sustainable practices. That's why I've also been hosting round tables across the country from Halifax, Saint John, and Toronto to Winnipeg, Calgary, and Vancouver. When you bring industry representatives, indigenous peoples, and environmental leaders into the same room, often for the first time, you quickly discover that there is much more that unites us than separates us.
As I've said before, I have great faith in Canadians and their ingenuity. We are a nation of hard-working, resilient, and visionary people who always seem to rise to the occasion, and I'm convinced that we will do so again.
Great things are within our grasp for Canada's resource industries, and budget 2016 will help us achieve that. Through innovative ideas and important investments, we will redefine our resource sectors and reset our economy for generations of prosperity.
I'm here today, Mr. Chair, to seek your support for our spending plans, to invite all of you to work with us, and to answer any questions you may have.
Thank you to both the minister and Mr. Hamilton for being here with us today.
I would like to focus my time on the National Energy Board.
Minister, as you know, the budget for the NEB increased this year compared to the 2015-16 main estimates. It was due to an increase of $18.3 million specifically for energy transportation and infrastructure from the previous government's 2015 budget. In fact, the previous Conservative government committed $80 million over five years to the NEB to contribute to safety and environmental protection and to enhance engagement with Canadians related to transportation infrastructure. The funding was intended to be fully cost recovered from industry.
Recently, as you noted in your opening comments, the Minister of the Environment and Climate Change announced new transitional pipeline review measures that are in addition to the existing NEB process. Of course, we know proponents of Canada's world-leading and sustainable natural resources projects have invested millions of dollars in what they believed was a predictable, responsible, and robust approval process. Now your government is changing the rules of them mid-project, which is perpetuating uncertainty and instability at what I think we can agree is the very worst time. Previous governments, through their significant investment in budget 2015, signalled to industry and to Canadians that safety, environmental protection, and enhanced engagement on energy and transportation infrastructure are important issues that demand appropriate investment from the federal government and they delivered on that.
I have some questions for you relating to the NEB and your government's intention. I'll ask them all at once.
One, does your government intend to continue the $80-million investment in the NEB announced last year by the former government? If not, what will your investment be and how will it assist the board in doing their work?
Two, given your government's insistence that an extra review process is necessary, in addition to the great work of the NEB, do the chair and the experts at the NEB have the confidence of your government, yes or no?
Three, do you plan on making any management changes to the NEB, given your government's ambiguity over confidence in their work and the need for an additional process?
The answer to the first question is yes, the funding that was announced will be maintained. The answer to the second question is the government has confidence in the chair of the National Energy Board.
We also understand that we have a mandate from Canadians to reform the National Energy Board. That's something we have started to do already in two phases. The transition phase will include those five principles that you know very well.
When it comes time for the energy east pipeline to be assessed by the National Energy Board, we have agreed we will appoint a number of temporary commissioners to help the board in its work to assess that very long and complicated project.
I must say, Mr. Chair, just before question period today the member from Grande Prairie—Mackenzie in his member statement asked the government to approve the energy east pipeline. This is before the application has been lodged with the regulator, and that is part of our problem. If there are members of Parliament who want the government to make decisions on major energy projects even before those projects have been assessed by the regulator, it's no wonder Canadians have lost confidence in the regulatory process.
Our ambition is the same as the ambition for the member from Portage—Lisgar and the same as the ambitions of members of her caucus, and that is to move our natural resources to tidewater and to market sustainably. This is what we all want, but to assume that decision can be made by government before the regulator has even looked at the application is part of the reason we're having to reform the regulatory process.
That is how we will reform the NEB in the short term. In the long term we have a mandate to reform the environmental assessment process in Canada. That will be a responsibility of the Minister of Environment and Climate Change and the Minister of Natural Resources. We will be working together; we will be consulting Canadians; and very importantly we will be consulting members of this committee.
We will be posing the question: if you had to create a Canadian regulator from scratch, what would it look like? What would the principles be that would determine the structure? What would the legislation we would ask Parliament to pass consist of? What would the values be? What is the relationship ultimately between the government and the regulator?
That is the longer-term reform of the NEB. The process we have introduced now seeks to establish a broader consensus across the country.
Thank you, Mr. Hamilton, for coming to the committee again today.
I hear my colleagues talking a lot about the impact that low oil pricing is having in Alberta and parts of the country. Northern Ontario and Canadian communities are also concerned about the drop in mineral pricing. According to Stats Canada, the job numbers last week showed Sudbury has the highest unemployment rate in Ontario, and the second highest in Canada.
The people in northern Ontario are also concerned about the missing opportunities we are having with the Ring of Fire, and the tremendous opportunity that this has as one of the most promising developments in the Canadian mining industry in the last hundred years. We've had companies like Noront Resources and KWG Resources that are really pleased with the budget in 2016. As you mentioned earlier, we've made significant investments with the municipalities in infrastructure and education capacity-building with first nations. The Ontario government is really pleased to finally have a partner at the table for resource-based initiatives like this.
My question to you is, when we look at the government's support for the Ring of Fire, for the mining industry...and it's also related to the investment of innovation and research for the forestry, mining, and all the resource-based...on the R and D.
I'm glad you asked that question because I can take a little bit more time to complete my answer from the previous question.
Forestry, as a part of a series of natural resource sectors, also qualifies for additional investment over time. For example, there is $1 billion over four years starting in 2017-18 to support clean technology in the forestry, fisheries, mining, energy, and agricultural sectors as part of the innovation agenda.
Also there is $87.2 million over two years for Natural Resources Canada projects across the country that support research in forestry, mining and minerals, earth sciences and mapping, and innovation in energy technology.
I also want to say that we know they impact families and individuals, and we try to make this a part of every answer we give to questions about low commodity prices. We know there is hardship when commodity prices are as low as they are, and we know that in Alberta times are tougher than they have been in a very long time. We're attentive to the statistics, but they're more than that, they have human consequences. That's why the government is responding, through transfers, through infrastructure investment, through changes to employment insurance, through these investments in new technologies that will ultimately rely on the innovative skill and, I would say, entrepreneurial genius of so many in Alberta who have built that economy, and will rebuild it again. Many of the investments are across the sectors of NRCan's responsibilities and the government, including forestry, mining, and oil and gas.
Thank you, Minister, for being here. I appreciate your time.
Looking through the mains, I'll quote the finance minister from his budget speech, “Wherever the sun shines and the wind blows, farmers and landowners can become energy producers. Particularly for rural regions hurt by falling commodity prices, the opportunities for economic diversification are enormous.”
Now, as much as that is not the greatest comment on what farmers, ranchers, and rural Canadians do, to me it sends a message that you are going to be looking at renewable energy as a way to diversify Canada's economy, which I think is something that all of us here would agree is worthwhile. However, when I look at the mains that you brought out, there is a decrease of $93 million in the clean air agenda program, a $70.6-million cut from the energy efficiency practices and lower carbon energy sources, a $21.8-million cut from the ecoENERGY for biofuels producer initiative, a $13.6-million cut in the wind power production incentive program, and an 85% cut in the responsible natural resource management program, a decrease of $163.5 million.
To me this sends a mixed message, if you are going to delay projects like energy east—I am not saying that we want to rubber-stamp it tomorrow, because it has to go through the program, but you have said you are going to delay it—and if you want us to look at other ways to make up the loss of these jobs, including 100,000 in Alberta alone. You have been saying that we are going to look at renewables as a way for these jobs to be found, and yet you are making substantial cuts to programs that help fund and innovate renewable energy.
That's a really good question. I remember going back to my days as a legislator in Manitoba, a very long time ago, 1988 to 1992, when I was in opposition. I always thought it made total sense to every year at budget time pose the question, is a program working? If it's not working, how can we make it work? And it we can't, then we should stop funding it. That's the prism through which I look at all public expenditures.
We must be able to convince the people who brought us here, and the people who fund these programs, that they are being run effectively. My several months' experience as minister tells me that our senior public servants believe that to be a value and an important one of prudent budgeting as well. The way you go about it is you assess the impact, the effectiveness, and whether or not it's a justified renewal.
In the case we've been talking about over the last 10 minutes or so, some funds have been sunset, so the department looked at the best way to renew them, learning from the experiences over the last five years, so new dollars could be spent more effectively and more efficiently, in part on the strength of what we've learned from what happened the five years previously.
So I'm with you. There really ought to be a way of examining, rationally, why we're spending any dollars that taxpayers—
This will be a cross-government initiative. We'll be working very closely with and across government to ensure the innovation investment is directed to where we think it can do the most good. If you look at the mandate letters that were sent to those ministers by the you will see there is a very important cross-government commitment to innovation, in general, and in particular to clean green growth. We will be working with the private sector. We will actually be asking for proposals from the private sector to work with us.
We don't assume government has all the right answers on how these investments should be made. We do assume those investments will be more impactful if we work in partnership with those people who are devising some of the innovation, and who are implementing some of the innovation. You will find, over the next number of months and years, this government reaching out to the innovators, to the entrepreneurs, so we can work together in both the public and private sectors to make a difference.
By the way, on that very point, 20 prime ministers and presidents from around the world signed a mission innovation in Paris—I think November 30 was the date—that commits those 20 governments to doubling their investment in clean technologies, but there's also a private sector component. International billionaires, such as Bill Gates and Mark Zuckerberg, have also committed themselves to put together a group of private investors who will join the public sector, globally, to ensure we can lever up these investments.
The same thing is implicit in the commitments we've made in this budget in the ways in which we will reach out across the sectors to entrepreneurs and innovators to ensure we're getting maximum leverage for the money we spend through the taxpayer.
The most important value for me, and the lesson learned, is that the relationship indigenous people have with the land and the water is a generational relationship. When we approach a discussion about what to do with our resources that run through indigenous land, we hear time and time again that generations of ancestors have delivered the land and the water to us, and that we have an obligation in our time to leave the land as we have found it, or better, to the generations who come after us.
This is a wisdom and a perspective of understanding the relationship between the human and the land that gives us water, that gives us food, and that gives us life itself, which is very special.
If proponents of major energy projects are imbued with that sensitivity, with that clarity, and can understand that trusting relationships don't begin the day before you seek approval of a project and don't end the day after the project has been approved, but are relationships that extend years and in some cases generations, it is that meaningful consultation about values and about the power of culture and the relationship with the land and the water that will have to be an essential part of any approval process moving forward, in Canada.
That, to me, is one of the principal values at stake as we move forward.
I also know, in my conversations with indigenous leaders across the country, that they want economic development opportunities for their children. They want their kids to have the same aspirations that mine have, the same educational opportunities that mine have had, the same apprenticeship chances, the same professional aspirations that we find in all of our young people wherever we go in Canada, and that natural resource projects are economic development drivers. They want to be partners as we drive our natural resource economy forward with the very special understanding that we can't do it without that relationship with the land and the water.
Thanks, Mr. Chair, and thank you all for being here.
I asked the minister about the NEB and I would like to follow up with you for clarity and specifics on that issue if it is possible.
Regarding the minister's claim about a perceived lack of confidence in the review process, what evidence is there that this is indeed the case? What facts were used to determine that these transitional review measures are needed and how will they actually change or improve the work of the NEB?
For example, we all know upstream greenhouse gas emissions are already assessed by the provinces. This is a standard that doesn't apply to any other infrastructure project in any other sector. There aren't any specifics around when the crown has recently failed its duty to consult first nations. I would like to understand how the government got to the position that these new transitional measures were needed. What will be the actual impact on the NEB work?
In the case of the temporary commissioners, why are they needed, what will be the process, the timeline, the cost, and the parameters around their selection? Will there be new temporary commissioners appointed for every new project application that goes through the NEB process?
In a couple of those questions, I think you're asking why the government decided to do this or that. Rather than respond to that since I'm part of the public service, I can explain to you some of the things that I understand people are saying and why the government might have chosen to do what it did.
Certainly, as we look at the pipelines and other projects that have been proposed in recent years, there has been a lot of debate and a lot of opposition. People have been questioning whether or not we have a good process in place, so the government said they going to review the environmental assessment process. They said that they were going to look at it to see if it's good as it should be and whether there are some things they should change to inspire greater confidence in the system as we go forward.
That review will start, but it's going to take some time. It's good to do that, but we actually have projects in front of us right now, so the government decided to put in place an interim strategy using the five principles. This is what we will do now while the review is under way. The principles, as you know, are things such as science-based evidence and greater consultation. I think that one of the issues we have seen in the reactions we get is that there's a need for greater involvement of communities, of indigenous communities as well as others enveloped in these major pipelines and projects.
We have put that in place, and that will apply until any new regime comes about.
Certainly, some of the key projects that are in front of us right now are the energy east pipeline, the Trans Mountain pipeline out west, the Pacific NorthWest project, and other LNG projects. We have a number there for which we have to decide what we will do. In its interim policy, the government decided to say that for two pipelines, Trans Mountain and energy east, we will extend the time to make the decision to allow greater consultation.
on the TMX process, the NEB part of it is almost over. We normally would give three months for the government to make its decision, based on the NEB report, and we've said that we'll give it another four months. That takes it out to probably the end of December of this year.
On energy east, it hasn't started yet, as the minister indicated, so there's more time to change the process and to do different things. One of the things that will be done is that for the period in which the NEB is reviewing it, the government will appoint three or four—I guess the number hasn't been determined—additional temporary members, which is allowed under the legislation, and then the chair of the NEB will decide what those people are to do. They could be involved in extra consultations along the route on the project itself, or on whatever the chair decides, but it's an opportunity to have more consultation and perhaps more balance in the makeup of the NEB people looking at this project. That will go on. Also, as part of the interim policy, that period was extended as well, so the government will take a bit more time for its decision.
That's how the interim policy will play out for those two pipelines.
I think your last question had to do with whether there will be new members appointed for every project. It's hard to say right now whether that will be the case. I would just say that this interim policy is in place while the government consults on what to do with the environmental assessment process more generally and on what to do about modernizing the NEB. These are measures that are in place until that's done, so I'm not clear on whether there will be other temporary members put in place for other projects.
As the minister indicated in his remarks, this year a number of programs sunsetted or ended at the end of 2015-16. They were in a basket called “clean air agenda” or something to that effect, and it was energy efficiency, clean technology. Those programs were set up over a five-year period, and they were scheduled to expire at the end of last month.
Every time a government has that kind of a situation, they have to make a decision about whether we continue those, we increase them, or we decrease them. What we saw in budget 2016 in the area of energy efficiency, which you have raised, was there has been a commitment to spend $129 million over five years in the area of energy efficiency. That's in a sense a renewal or a continuation of those energy efficiency programs.
In the area of clean technology there was some additional money in this budget. There was some green infrastructure money for charging stations for electric vehicles, for example. There were some things there. But as the minister indicated, there was also another $1 billion set aside without a specific program beside it to look at clean technology investments in the natural resource area as well as other sectors going forward.
Some of what's going to continue over the next five-year period is going to be decided based on consultations that we will be having over the course of the coming months and conceivably could be set out in, say, the next budget.
There were programs that were in place. Some of the funding has gone forward. Some is going to be subjected to further consultation to see how best to spend that money. Another example of things that were continued and renewed was money spent on adaptation. There were programs in place for that, and that's continued for our international climate change negotiations.
I haven't given you an exact comparison—you may have noticed—between what's going to be spent over the next five years versus what was spent in 2013-14. I can endeavour to try to get you that answer, but unless Kami has it right at her disposal, which she might because she's the CFO—
I do have a little bit of detail for you.
Just in terms of the overall difference between the 2015-16 main estimates and the 2016-17 main estimates, roughly $70.6 million, much of it is, as Deputy Minister Hamilton has mentioned, related to the clean air agenda. We'll be seeing roughly a $30 million coming back into that area of spending this current fiscal year.
There are other two areas where we have had a little bit of a decrease. It really is related to our funding profile for these programs. We don't have funding profiles that are always constant throughout the entire program. They ramp up, and then they ramp down. One of those programs that is ramping down is the ecoENERGY for biofuels program. Its funding profile is going to go down about $20 million, which was expected.
The other area that we see a decrease in is the wind power program initiative, which is also going down roughly $13.6 million.
All of those things combined explain the $70-million difference between the 2015-16 main estimates and the 2016-17 main estimates.
Would everyone take their seats, please?
We have to now vote on the estimates. There are five aspects to it, as I mentioned at the beginning, and what we're doing is voting on the estimates less the interim estimates that have already been passed by the House.
I propose to go through them individually, and I think we can get through this quickly. I went through them at the beginning, and the first one is dealing with the Atomic Energy of Canada Limited.
ATOMIC ENERGY OF CANADA LIMITED
Vote 1—Operating and capital expenditures..........$968,615,589
(Vote 1 agreed to on division)
The Chair: For the benefit of the rest of the people on the committee, does anybody need clarification what that means? “On division” means that the vote carries. It's not unanimous, but we're dispensing with the necessity of identifying who was voting in favour and who was voting against.
CANADIAN NUCLEAR SAFETY COMMISSION
Vote 1—Program expenditures..........$38,686,934
(Vote 1 agreed to on division)
Vote 1—Program expenditures..........$80,581,081
(Vote 1 agreed to on division)
Vote 1—Operating expenditures..........$450,234,684
Vote 5—Capital expenditures..........$53,318,447
Vote 10—Grants and contributions..........$292,249,050
(Votes 1, 5, and 10 agreed to on division)
Vote 1—Program expenditures..........$701,095
(Vote 1 agreed to on division)
The Chair: Shall I report the votes on the main estimates, less the amount voted in interim supply, to the House?
Some hon. members: Agreed.
The Chair: Perfect. That takes care of the business on the agenda.
There are a couple of other things that we need to deal with. We're coming back here on Wednesday and we are going to have two groups of witnesses—three with the first group and one with the second group—but they're going to come at the same time in the first hour. They're going to make consecutive presentations, and then we can ask questions so we will have some time at the end of that. I propose that we use the balance of that meeting as a committee as a whole to set our agenda going forward from now until the end of June.
In that vein, I would like people to take a look at the witness list again and turn your minds to it when you're ready to talk in terms of timing, who, when, and whatnot so that we can get that tightened up and get that finished.
The second thing is that there is a delegation of Indonesian parliamentarians in Ottawa. They've expressed an interest in meeting with the members of this committee and the members of the environment committee. There is an informal meeting over coffee on Thursday morning between 9:30 and 10:30. We'll circulate a note.
Last, Mr. Cannings, just to clarify, you proposed that Deputy Minister Hamilton may come back. Is that what you're proposing?