NRGO Committee Meeting

STANDING COMMITTEE ON NATURAL RESOURCES AND GOVERNMENT OPERATIONS

COMITÉ PERMANENT DES RESSOURCES NATURELLES ET DES OPÉRATIONS GOUVERNEMENTALES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, April 21, 1998

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[English]

[Editor's Note: Technical difficulty]...

Hon. Ralph Goodale (Minister of Natural Resources Canada): Thank you, Mr, Chairman and honourable members of the Committee, for the opportunity to meet with you to discuss the current plans and priorities of Natural Resources Canada.

I believe that Canada must be the world's smartest natural resources developer:the most high tech, the most environmentally friendly, the most socially responsible, the most productive. This is my vision.

Mr. Chairman, as you yourself remarked when this Committee met with several senior officials from Natural Resources in March, a large part of this country's economic strength and potential still lies in the “hewing of wood and the drawing of water”. Natural resources is one of the largest contributors to Canada's GDP, earning about $95 billion dollars in 1996, or 14% of the total. Natural resources contribute about $65 billion to our balance of trade.

But we've come a long way from men in plaid shirts swinging a double-bladed axe. Natural resources today is in fact a high technology, high opportunity, knowledge-based industry. And an incresing share of its future growth will come from development of new technologies and new, value-added industries. That's a necessity in the competitive global economy.

[Editor's Note: Technical difficulty]—we have, Mr. Chairman, is a generator of economic growth and upscale, well-paid jobs, including and especially jobs in rural areas, that no other sector of the economy is in the position to provide.

Our strategy for becoming the world's smartest natural resources developer is embodied in an approach that we call “winning in the knowledge-based economy”. Our goal is sustainable resource development for the 21st century.

In December, as you know, we tabled in Parliament the sustainable development strategy of Natural Resources Canada, a strategy that, by the way, received the most favourable assessment of all the 28 reports that were reviewed by the Commissioner of the Environment and Sustainable Development. The strategy ensures the alignment of our sustainable development principles with the ongoing business of the department.

The first challenge we always face is one of consensus, getting people to pull together on mutually defined goals. There are always differing perceptions and views about how or even whether we should develop our natural resources. The challenge is how we reconcile objectives that sometimes seem somewhat incompatible.

For example, on the one hand we have the goal of developing our resources for the benefit of the present generation and our own immediate needs, while on the other hand we are committed to preserving our natural environment and development opportunities for future generations. In its simplest terms, that is what we mean by sustainable development: a judicious and integrated balancing of economic, environmental, and social considerations for the present and for the future.

Our priority will be to promote Canadian and international consensus and cooperation on natural resource and sustainable development issues and actions. In fact, consensus-building underpins our whole strategy for winning in the knowledge-based economy.

I have long maintained that in dealing with the vast majority of our issues and challenges, we cannot have made-in-Ottawa or government-only approaches to these issues. We must be open and inclusive. We must find better ways of consulting, discussing with, debating with, and involving all the relevant stakeholders.

An obvious area where we have to work very hard on building consensus, both nationally and internationally, is the ongoing challenge of climate change. On this issue, our country and indeed the whole world face an enormous challenge.

At the end of this week my colleague, the Honourable Christine Stewart, and I will be meeting with our provincial and territorial counterparts in Toronto. We will be discussing a process for the national implementation of the Kyoto Protocol.

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Climate change is certainly not a simple issue. It cannot be resolved by a single set of decisions taken at a given point in time. We must have a balanced approach—reasoned, measured and determined—and one that is international at the same time. Canadian knowledge and expertise can be brought to bear in solving the range of problems—economic, social and environmental—that are related to this issue of climate change. We need flexibility, but we also urgently need solid, workable solutions.

I know this committee is keenly concerned about issues surrounding climate change. The government will be responding to your committee report and recommendations later this month, but at this juncture I would simply like to commend the committee for the depth of its research and the obvious thought that is evidenced in the report that it filed. I look forward to responding to that report in detail through the formal process in the days immediately ahead.

This committee can continue to make an important contribution to the Canadian strategy on climate change. As I told the Prospectors and Developers Association of Canada a few weeks ago, the more creative and the more proactive we are in dealing with these issues, the more we will be able to position ourselves as global leaders, the people to whom the world will look for the best ideas and practices and solutions.

Mr. Chairman, the national and international emphasis on issues like climate change and sustainable resource development is both a challenge and an opportunity. Very often, we only see the challenge side of the equation and overlook some of the most important opportunities. New value-added industries are in fact developing, making use of new technologies to advance environmental and sustainable development goals while reaping economic benefits.

I think, for example, of firms like Ballard in Vancouver. It started out as an interesting idea ten or fifteen years ago. With a little bit of research support from my department and subsequently from other departments of government, it is now a very exciting and innovative company that is developing a new technology that may well be very useful to all of us in dealing with an issue like climate change. It's to the point where Ford, Daimler-Benz and Mazda are now coming to the plate to make very significant multimillion-dollar investments.

I think also of the Iogen Corporation here in Ottawa, which that has been doing work with respect to ethanol. Again, that was an interesting idea a few years ago, and it has now taken off to the point where Petro-Canada is making a $20 million investment in a pilot project to commercialize the lab work that was done by Iogen.

I think of the initiatives undertaken by private sector firms like PanCanadian in my own province of Saskatchewan, for example. It's developing new technology for the sequestration of carbon dioxide in its oil patch in southeastern Saskatchewan. That's a process that will in fact enhance oil recovery from that oil patch, while at the same time putting into the ground the equivalent of the emissions of about 100,000 automobiles.

I think of Suncor, which has recently made some significant investments in wind power and is piloting a contract for emissions trading with an American firm.

I think of the power utility in my own province of Saskatchewan. Saskatchewan Power is now making significant investments in technology to reduce emissions from its coal-fired power plants. SaskPower is also taking a very active interest in the concept of co-generation facilities, particularly surrounding the bi-provincial upgrader at Lloydminster.

I also think of firms like Rose Technology, which is in the business of building retrofitting. The Rose company started out a few years ago as a very small enterprise. It now has very significant employment and is engaged in advanced retrofitting work in public and commercial buildings in many places here in Ontario.

Mr. Chairman, in Canada, such industries as these can prove to be of immense economic value. I think this is especially interesting for rural communities—and I know this committee has taken a very special interest in the future of rural Canada, where resource-based employment in industries like mining and forestry is shifting more and more towards small and medium-sized value-added enterprises.

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We have seen the growth in our environmental technology industries. I believe similar gains are possible in other sectors, such as geomatics, mining technologies, energy technologies, and the science of forest fires. Such firms as the ones I've mentioned, and many others, have the knowledge and the potential to become world-class suppliers not just of resources products but of knowledge products related to those resources.

In this regard, Mr. Chairman, I will be leading a series of Canadian trade missions to areas of the world where our knowledge and expertise with respect to natural resources, and the technologies associated with natural resources, will find ready and willing markets. The first of those missions is likely to be this fall, and the area of the world where we will be concentrating initially will be in Latin America.

These Team Canada-style missions will have full industry participation, with a special focus on smaller and medium-sized enterprises. My goal is to showcase Canadian capabilities, technology and know-how. We want to open doors and strengthen existing relationships with our trading partners and do good business for Canada.

I would welcome this committee's input on future trade missions. Your perspectives on market development for our natural resources industries would be invaluable in shaping further efforts to promote international opportunities for those firms and industries.

Natural Resources is a science-based department. The department produces invaluable data and conducts research that helps position Canada as a world leader in fields like earth sciences, remote sensing, minerals and metals, forestry, and energy efficiency. We are committed to building a national knowledge infrastructure that will provide Canadians with ready access to economic, environmental and scientific information that can shape informed debate and decision making on many fronts.

For example, we are constructing the Canadian geospatial data infrastructure, in partnership with the provinces and territories, along with a number of other federal agencies. The CGDI is the geographic lane, if you will, on the information highway. It means applying new, leading-edge technologies that will provide national access to vital geographic information. This information is important to the targeted and sustainable development of key natural resources. It will support commercial interests and community-based decision making. CGDI will also foster the growth of knowledge jobs in the geomatics industry across Canada.

Mr. Chairman, I have mentioned consensus building, knowledge—both the collection of knowledge and the diffusion of knowledge—the importance of trade and investment, the importance of employment and employment growth, the importance of the value-added sector in relation to our natural resources, and I've mentioned important national and international challenges like climate change. These are the key components that are preoccupying me and my department at the present time.

We aim to position Canada as a leader in the sustainable development of our land, our energy, our forests, our mineral resources. We work in partnership with other levels of government, with industry, with the research community, and with the broader community of Canadians to whom the natural resources sector is obviously vital. We are committed to promoting and advancing the mutually reinforcing goals of economic growth, value-added employment opportunities, and the effective stewardship of our natural resources bounty.

With that, Mr. Chairman, I will look forward to your questions. In an ongoing way, I also look forward to a very positive relationship with this committee, and will always welcome your advice, your suggestions and ideas.

Thank you.

The Chairman (Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)): Thank you, Mr. Minister.

Just a brief comment before I pass the floor to Dave, on behalf of the committee, I particularly appreciate your comments about the knowledge-based sectors that have evolved in the natural resource sector. We've had numerous meetings in the last few weeks, and have been impressed very much by the developments we see in that sector. So we look forward to that and other areas under your purview.

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With that, Mr. Chatters, please.

Mr. David Chatters (Athabasca, Ref.): Thank you, Mr. Chairman.

I, too, thank you, Mr. Minister, for coming here to answer our questions. I'd like to concentrate my questions on the climate change issue, maybe because I just came from a breakfast where I was listening to one of Canada's most respected scientists on the subject.

I was kind of confused after going through the estimates and the dollar figures. We appear to have some $70 million previously committed to the initiative. I see here that another $20 million has been budgeted to this Climate Change Secretariat and a further $50 million is coming from the interdepartmental committee of deputy ministers.

I'd like to know a little more about the Climate Change Secretariat, what its mandate is, what you're trying to achieve, what the secretariat's actual budget is and what amount of those dollars is going over and above the costs of the secretariat itself to various initiatives.

I'm also concerned about buzzwords that seem to pop out throughout the estimates. When we talk about initiatives to increase the energy efficiency and conservation of “industrial processes, vehicles, commercial buildings and homes”, we talk about a combination of regulations and incentives. I'd like to know what those regulations and incentives might be.

Further down that page we talk about the voluntary measures program, how effective it is and the commitment by the government to “strengthening, broadening and deepening” these self-initiated actions. Again, what do you mean by those statements?

Again, further down that page we talk about ensuring that no company engaging in an effort to reduce emissions and no company engaging in these new technologies is at a disadvantage because of their participation, and you talk about ensuring “a level playing field”. What are you talking about there? Are you talking about subsidies or tax write-offs? What are you talking about?

You talk about engaging the public in the discussion and getting the public's support for the initiatives. We saw your department in Calgary purchase a block of wind power at triple the Alberta grid price of electrical energy today. Is that an example of what the electrical consumer in Canada can expect as a result of some of these greenhouse gas initiatives?

That's probably enough for now. It will probably keep you going for a while.

Mr. Ralph Goodale: Mr. Chatters, first of all, I appreciate your questions and your focus on this issue, and I will try to do justice to all of those points, but I suspect we may come back to them several times this morning.

In terms of the broad numbers, for a number of years Natural Resources Canada has been investing in the order of $70 million out of its A-base in a range of activities related to climate change, most of those in the field of energy efficiency and science and technology.

In the budget of 1997, the government increased its financial commitment to deal with these issues by adding $20 million per year for each of three years, beginning in fiscal 1998-99. The $20 million increment that you referred to was that which was identified in the 1997 budget, so the roughly $70 million becomes $90 million over the course of the next three years. That money is going toward a series of initiatives to encourage greater energy efficiency, particularly in relation to commercial buildings. Some of it is focused on residential construction, but the most of it is related to commercial buildings and also the further deployment of renewable energy in our society and economy.

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I'll just pause there to go to the point you referred to later in your remarks about the cost of wind power. There's no question at the present time that some renewable sources of energy, such as wind power, come at a higher cost than the more conventional types of energy, but obviously, if we are to develop those other energy resources, the renewables and the alternative energy sources, we also have to take some steps to foster the development of a marketplace for those forms of energy.

With that kind of activity—it's not just that one illustration, but many others—over time, we believe the technology and the economics will emerge that will allow the cost of sourcing those other kinds of energy so as to become more economic.

But back to the numbers. I mentioned the base budget, which is ongoing, of approximately $70 million. There was $20 million added in budget 1997. In budget 1998, a further $50 million was added. There's $50 million per year for each of the next three years, beginning in fiscal 1998.

That additional $50 million is, in part, the focus of what we will be discussing with the provinces and stakeholders in terms of the more rapid evolution of Canada's response to the climate change challenge. The two essential purposes, in broad terms, to which we see that $50 million being dedicated is, first, for building the short-term foundation now for the more profound and longer-term climate change solutions that will be required in the future.

There is a tremendous amount of intergovernmental and intersectoral consultation that needs to be undertaken. There's a large amount of information, hard data, and facts and figures, that needs to be provided to Canadians and to various players in the economy. There's a good deal of analytical work that needs to be advanced.

I'll just give you one example. I referred to it briefly in my remarks. This is the issue of emissions trading and how that can work in a way that is environmentally and economically sound at the same time. That's an area of analysis that Canada must advance for itself, but we also have to advance on that front in concert with the rest of the world, because obviously emissions trading is an international concept.

It will be discussed in greater detail at the next international Conference of the Parties on climate change, which will be held in the fall of this year in Argentina. We will need to have our homework done in advance, so that as we engage in that further international discussion about an issue like emissions trading, we will have in our own minds the right vision of emissions trading that will serve not only our environmental purposes but also our economic purposes. We want to make sure that the Canadian perspective on emissions trading is well prepared.

So part of the $50 million per year will be dedicated to these sorts of things that build the foundation. The other part will be focused on areas where we believe it's possible to see quick action and early starts in moving the process of climate change solutions forward—for example, areas in which there is a new technology that has been developed that may need a little bit of push in terms of incentive to get it commercialized in the marketplace.

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It's all very well and good to have a bright idea and a technology developed, but if it's not deployed in the marketplace and actually put to work reducing greenhouse gasses, it doesn't do you much good sitting on the shelf. We will be inviting not only the provinces but most particularly business and industry to give us their suggestions for those areas of activity in relation to science and technology and perhaps a number of other fields, where quick starts are possible if there is the right kind of incentive, encouragement, or seed money to get a particular idea, program or activity over the hump and actually into action.

You mentioned a number of activities that are very likely to be part of our overall strategy. Broadening, deepening and strengthening the voluntary challenge and registry is one of those. This is an effort that began three or four years ago. Many private firms, business organizations and industrial groups in the private sector are coming forward on their own initiative to take action with respect to reducing emissions. Clearly their activity has had a positive impact, but I believe and they believe there is more that can be accomplished through the VCR type of technique.

I have already challenged the VCR and the component parts of the VCR to develop their own plans for broadening, deepening and strengthening the VCR so we can achieve the maximum results in terms of the reduction of greenhouse gasses through that particular technique. They are working at that, and I will expect to hear from them steadily over the weeks and months ahead in terms of how that particular component of our approach is likely to be improved and enhanced.

Energy efficiency is another part of the equation. You made the specific reference there to a combination of regulations and incentives. In terms of the appropriate regulations, there are already a number of illustrations of where we've taken action on this front in terms of the energy efficiency standards that apply to appliances, motors, electric engines, some kinds of industrial equipment, and some of the products that are used in the construction of buildings and homes.

Let me just give you one illustration of how significant some of these regulations can be in terms of the results they achieve. In 1995 we developed new regulations pertaining to the installation of fluorescent lighting in commercial buildings, and particularly the proper standards that apply to the ballast in fluorescent tubes. When that regulation was first implemented, the better fluorescent tubes were not readily available in the marketplace and their cost was somewhat higher that the conventional old-fashioned tube.

Now, about three years later, I'm told the new style fluorescent tube is readily available and in fact its cost is competitive or even less than the old-fashioned conventional fluorescent tube. We estimate that as that new style of lighting is generally deployed through commercial construction, by the year 2010 that one little regulation will have saved something in the order of 5 million tonnes of CO₂ per year. It's being done on an economical and common sense basis.

Beyond energy efficiency and the voluntary initiatives I've mentioned, other components in our approach will include the encouragement of alternative energy sources, renewable energy sources, and co-generation facilities. As I mentioned, recently SaskPower and its counterpart on the Alberta side, TransAlta Utilities, have worked on the development of co-generation facilities around the bi-provincial upgrader at Lloydminster, and I commend both of those utilities for that very proactive approach. But developing those alternatives, renewables, and co-generation ideas will also be a part of our equation.

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Science and technology is a big part of the equation—not just the conduct of additional research and development, although that is part of it, but the commercialization of that technology and putting it into the marketplace.

Finally, a further component will be our development and use of the international flexibility tools we were able to achieve in the context of the Kyoto Protocol. These include emissions trading, which I've made reference to already, the joint limitation projects with credit among developed countries, and the concept of the clean development mechanism in relation to the developing world.

Let me refer to just one other item that was included in your question—and I'm sure I've left a number of loose ends here that you or others may want to pursue—on the point about companies not being put at a disadvantage in terms of the early actions they might take in relation to addressing the climate change challenge. Those in the private sector have said, and I think quite reasonably so, they are willing to come to the plate and participate, but they want to know whether, in doing that, they will receive appropriate recognition and credit for the actions they take, and by taking action now they will not put themselves at some kind of subsequent disadvantage if there's a new or different benchmark established at a later time. I think that's a reasonable position for people in the private sector to take.

That is specifically one of the items Minister Stewart and I will want to discuss with our provincial counterparts on Friday of this week in Toronto: how do we ensure that proper credit for early action is provided and that there's sufficient certainty about how this whole file will evolve over coming months and years, so a company taking action now does not find itself inadvertently putting itself in a disadvantageous position as the whole file evolves into the future? I'm sure that is a subject federal and provincial ministers will want to address, not only on Friday but in an ongoing way.

Mr. David Chatters: I have just a short one

The Chairman: Okay, Dave.

Mr. David Chatters: Those are very good answers, and I appreciate that. I think industry has a very substantial understanding of the whole issue and how it will deal with it, but the general public, the average Canadians in their everyday lives, still don't understand how this whole thing will impact on their lives and whether their cost of living will skyrocket or their lives will be impacted in a major sort of way. Somehow your government has to communicate to everyday Canadians so they can make informed decisions to support or whatever.

On my other point, this morning I listened to one of Canada's most prestigious scientists on the issue, and he admits the science is far from certain. Yet, with this whole government initiative and the dollars going with it, you haven't mentioned any effort to prove the science, to work on substantiating the evidence there. I'd like to hear some comment about that.

Mr. Ralph Goodale: Mr. Chatters, on your first point about more information to Canadians and engaging individual citizens and consumers in this dialogue in an informed, solid and substantive way, I agree with that point completely. So does Minister Stewart, and so does the Government of Canada.

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Part of that whole process of building the foundation I talked about earlier must include, by definition, a whole range of techniques that will provide Canadians with all of the hard facts and figures and full data they will need to have so that they can become engaged in this discussion in a fulsome way.

You've put your finger on one key component there, because a solution to this issue, nationally or internationally, cannot be found unless and until consumers are fully plugged in to the whole process. So we most definitely will be moving on that front, as you have suggested.

In terms of the ongoing scientific activity within my department, within Environment Canada, and within other departments and agencies of the government of Canada, we have very much an ongoing effort in terms of the science of climate change. That issue was referred to, at least in part, in the communiqué issued following the first ministers meeting held in December, endorsed by the Prime Minister and the premiers. The ongoing effort required with respect to the science of climate change was also specifically articulated within the Kyoto Protocol itself.

So there is the recognition that this work must be ongoing. We must constantly strive to upgrade our knowledge and our understanding of all of the factors and forces that go into this very complex equation. That work is under way now and it will be continuing in the future.

Mr. David Chatters: Thank you.

The Chairman: Thank you, Mr. Chatters. If there's time, we can come back to you.

Mr. Serré, please.

Mr. Benoît Serré (Timiskaming—Cochrane, Lib.): Thank you very much, Mr. Chairman.

Mr. Minister, good morning, and welcome to the committee.

I've heard enough about climate change in the last six to eight months, so I'll do my line of questioning on another issue that's very important for me and my riding. I'll try to put my question into context.

As you've stated yourself, and it's well known, rural economic development as it relates to natural resources is tied to the new knowledge-based economy. We have to export not only the product itself, the trees or whatever, but also the technology that comes with it.

The reality is that in the riding of Timiskaming—Cochrane—and I'm sure it's true for many parts of Canada—80% of the land mass is not provided access to a private telephone. That's the reality. How can a small tool and die company from Temagami sell its mining equipment or its technology to Latin America when it does not even have a private telephone line? In the riding of Timiskaming—Cochrane, I believe this is the biggest impediment to rural economic development.

I've tried to work with the private enterprise to try to come to a solution. The reality again is that the cost of servicing the rural areas is so high, those companies could not have a return on their investment for twenty years. By that time, all the technology will be gone and changed and there will be no more lines. It will all be by air.

I've developed in Timiskaming—Cochrane a committee, called the Rural Telecommunications Infrastructure Improvement Committee, made up of private enterprise industry experts in the field of telecommunications and consumers, both commercial and private. We've secured $200,000 in funding from the province and the federal government to develop a plan for the area.

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Within the next two to three months, I will submit to you and your colleagues in cabinet a proposal for a pilot project, which I would like to call the rural telecommunications infrastructure program. I'm looking at something like what we did with the national infrastructure program, but limiting it to rural areas, areas with a population of less than 5,000 or less than 10,000, in a partnership with the federal government. We could go in at maybe 20%, the province at maybe 20%, and private enterprise at 60%, something like that.

If federal governments and provincial governments don't get involved and try to service rural Canada and bring rural Canada into the 21st century in telecommunications, I believe it will be impossible. It won't happen, and we'll be left behind. Right now Kirkland Lake, in my riding, has an unemployment rate of 40%. We talk about Newfoundland and we talk about Atlantic Canada, but there are parts of northern Ontario that are just as bad, and maybe worse.

My question is quite simple, Mr. Minister. I would like to know if you and your department—and I know you are also normally in charge of natural resources and rural economic development—would be prepared to look seriously at a proposal such as this. We know what the problems are, but I would like to hear your comments on the solutions and on what role your department is prepared to play in that field.

The Chairman: Thank you, Ben.

Mr. Ralph Goodale: Mr. Serré, I certainly understand very clearly the point you are making, and I certainly commend you for the initiative you're taking on behalf of your own constituents to try to address some pretty big gaps in the telecommunications infrastructure.

In terms of the government's potential response to that, I should perhaps point out that my colleague, Mr. Vanclief, now carries the overall responsibility with respect to rural development issues. I used to have the honour of carrying that responsibility when I was Minister of Agriculture and Agri-Food and the Rural Secretariat was a part of my department. That is now devolved to Mr. Vanclief.

But certainly, I would think Mr. Vanclief and I, because of my interest in natural resources and the impact of natural resources in rural Canada, along with other cabinet colleagues, would be very interested in seeing the kind of proposition that you and your committee may come forward with.

Clearly, gaps in infrastructure, whether they be in relation to telecommunications or perhaps in a variety of other fields that we could think of, can be constraining factors in terms of developmental opportunities in rural areas. Some parts of this country are better positioned than others in terms of how they have historically dealt with those infrastructure challenges.

Some provinces, for example, in relation to their own telecommunications sectors, have full fibre optics networks that blanket virtually the whole province. My own province of Saskatchewan is one example and I understand New Brunswick is another. But there are other provinces that perhaps haven't been quite so proactive, at least in relation to the broad rural parts of those provinces.

I acknowledge the issue you have raised. I'm advised—unless the situation has changed dramatically in the last several months since I left the agriculture portfolio—that you could perhaps be within 50 miles of Toronto in a rural area and run into exactly the same problem you've referred to in relation to Kirkland Lake. Not only the more remote areas suffer from the difficulty you have referred to.

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I think you've touched on an important issue. Obviously, without seeing the proposition I'm not in a position to respond in a detailed way other than to say I would certainly welcome seeing the proposition that may come forward from your committee.

I might refer you to the rural partnerships initiative Mr. Vanclief has announced. He is looking for pilot project types of initiatives that can address the community and economic development needs and priorities of rural areas. It may well be an area that holds some potential to address the problem you've referred to.

When the government responds formally to the very creative work of this committee, in this Parliament and the last, in terms of your Think Rural! report, I would expect that some further information about this rural partnerships initiative will be forthcoming as part of that response, which may be helpful information in the work of the committee you've put together in your own riding.

Mr. Benoît Serré: Thank you.

On another issue totally, we haven't heard about the Whitehorse Mining Initiative for quite some time. In terms of the conference of ministers, I know you were working with your provincial counterparts to try to reduce the duplication in your regulatory system. Can you briefly bring us up to date on that?

Mr. Ralph Goodale: As Minister of Natural Resources, the first meeting I attended of my federal, provincial, and territorial counterparts was last summer, quite literally a few days after I became minister. The overriding discussion at that meeting had to do with this whole challenge of regulatory simplification.

We agreed at that meeting that we would charge our officials federally and provincially to work on the first ever federal, provincial, and territorial cross-cutting review of mining regulations and to identify areas where there was overlap and duplication and to work on streamlining. The first step in that was to get the inventory and the analysis done.

I'm advised by officials who have been working on this steadily since last summer that they believe they're enjoying considerable success. In some provinces there's a greater willingness to collaborate and move forward than in others, but generally speaking, progress is being made. I hope at the next mines ministers meeting, which will be in the summer of 1998, we will be in a position to report to the mining industry some considerable progress.

That is also being aided and assisted on some other fronts by the work, for example, of the Canadian Council of Ministers of the Environment. The harmonization accord entered into in January of this year will also contribute to this effort of trying to remove those areas of unnecessary overlap and duplication to have an approach to regulatory matters that is sound and secure from the point of view of protecting public health and safety and the public interest and that is at the same time predictable and transparent and easy to work with from the point of view of the private sector entities that have to live within that regulatory framework.

Have we solved all the problems yet? No. But in the last year I think we have made progress, and we will continue to move in that direction.

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Mr. Benoît Serré: We're going backwards right now. The provinces used to take care of, let's say, Fisheries and Oceans licensing or permitting for mining. Now the provinces won't do it. People have to go to Fisheries and Oceans, and it takes about two months more than it used to take. So we're not making very much progress in Ontario.

Mr. Ralph Goodale: On the issues with respect to the Fisheries and Oceans jurisdiction, I know Minister Anderson is concerned about that. He is working with his counterparts both within the Government of Canada and at the provincial level to try to resolve that issue, which I know is of particular concern in Ontario.

The Chairman: Thank you very much, Ben. Mr. Godin, please.

[Translation]

Mr. Yvon Godin (Acadie—Bathurst, NDP): First of all, I am very happy to see you here this morning. I know that time flies. This gives us an opportunity to discuss certain matters with you that are a major concern for us in the regions and mostly in the rural areas.

I will try to be brief, but I have three really important questions. Since I have no control over how long it takes for you to answer, I will ask them all at the same time, one after the other. This way, I will let you use up all the time left to answer. Personally, I can take all day. But I hope I get an answer.

I will start with a question on natural gas. You were talking about Kyoto earlier and about the problems with greenhouse gasses and global warming. We are in the Atlantic region and a natural gas pipeline is supposed to come from Nova Scotia, from Sable Island, through Moncton and Saint John, and then on to Boston.

You must have heard about the controversy: will the line be going up to northern New Brunswick or not? I mean, unemployment is a problem in the northern area of New Brunswick.

They are conducting studies to see whether it could be viable. Mr. Minister, if we wait for the project to become viable, it will never happen. That is how we see it: either we get a gas pipeline or we don't. It should be an investment. Once the investment has been made, we will be able to attract companies that will invest in the infrastructure.

Your party is always saying, not before the election but afterwards, of course, that government is not in the business of creating jobs. I think, however, that it is a responsibility of the government to establish the infrastructure that will attract industries in the regions.

In a document published in 1996-97, it says at page 83 that there was a planned expenditure of $2 millions for Pipe Line Inc. to cover the deficit incurred to build a pipeline all the way to Montréal.

Was it the first time that the government was budgeting some money to extend the pipeline? For us in northeastern New Brunswick, it would be important. If not, why is the government not ready to invest in the infrastructure in New Brunswick and to support the building of a lateral line towards the northern area of the province? If we don't get that lateral line, if we don't get a pipeline— As I say, we can't wait until it is viable.

Pretend that this here is New Brunswick. You are flying over it in a helicopter. You are a big company and you are looking at New Brunswick, thinking "I want to invest in New Brunswick." The first thing you will ask is "Where is the pipeline?" If it is in the South, that is where you will decide to set up your plant. I have nothing against the southern area personally and I don't want to take anything away from it. I am not asking you to take from the South and give to the North. I'm simply asking you to give the same thing to both areas so that there will be more jobs in northern New Brunswick. Otherwise, people out west will have to stop saying that people in Atlantic Canada don't want to work, that they are lazy bums. That's not true. We have to give the area the infrastructure it needs to attract industries. This is my first question.

Secondly, in the same report, on page 22, it says that government has invested in aerial surveys. That was in my own riding of Bathurst where you were able to find an ore deposit with the new technology. We all know the Brunswick mine will be closing in 12 to 15 years. After all, it has been open for 30 years. The ore deposit is thinning and people are concerned. It is one of the biggest industry in the northeast area. There are now 850 jobs at that mine in Bathurst. At the smelter right beside, there are 400 more jobs. We are already worrying about what will happen 12 years from now. Will we lose all of this?

• 0935

Is government ready to increase exploration? We feel that government is withdrawing from exploration and withholding the money that goes with it. We find that companies are beginning to invest in Africa or in other countries and we are left behind.

My third question is about this same document. I was not an M.P. when it was published and I know that these figures might be a bit stale, but it is addressing the future. I would like you to look at page 55 of the French text and at page 53 of the English.

On page 53 of the English version, something very important is mentioned, Mr. Minister. I have even asked questions about it myself in the House. It says at the bottom of page 53:

[English]

“—administer the federal mandate for the Cape Breton Development Corporation”. You're still there, and that shows me you're doing your best to have it succeed, that you don't want Cape Breton on welfare. And up there in Cape Breton, most of the people speak English.

Now we're going to go to the French one:

[Translation]

S'acquitter des responsabilités du gouvernement fédéral en ce qui concerne la Société de développement du Cap-Breton.

This means that you are trying to get rid of it. It is in the middle of page 55.

I am not interested in knowing who made a mistake, whether it is the French or the English text that is wrong. I won't take up this fight; there are already quite enough as it is in Canada. Mr. Minister, why don't you establish a commission or some group that will go to Cape Breton to listen to the people there, to make a decision and tell them the truth about your intentions concerning the Cape Breton Development Corporation?

Try and put yourself in the shoes of these people. Sydney Steel is half closed and there is not much work. The people are concerned. They are wondering whether they will still be working tomorrow. I am not trying to insult you in the House. I am simply asking you to do something for Cape Breton. Tell us what your intentions are.

Enough is enough. There are human beings over there that get up every morning. Kids get up and go to school not knowing whether their father will go to work or not.

[English]

The Chairman: Yvon, leave time for some answers.

Mr. Yvon Godin: Well, let's go to 11 a.m. I'm open to that. We're not going to see this guy again for a long time.

Anyway, those are my three questions, and I would appreciate answers, please.

Mr. Ralph Goodale: Mr. Godin, I'll ask my deputy to provide some information on your second item referring to the Bathurst projects.

On the issue of natural gas lateral pipelines, this is an issue that is principally the purview of the private sector. What is important for any gas pipeline to succeed, or for any lateral that is built off the gas pipeline to succeed, is for there to be a sufficient gas market into which the lateral runs.

• 0940

I have received a number of representations from a variety of people in New Brunswick about the concept of a northern lateral that would move, at some future date, some of the Sable product north off the main line that would be moving south. The critical ingredient for that to be able to happen would be for the company involved to see, along the northern parts of New Brunswick, a market of sufficient size to be able to justify the construction of a pipeline into that area.

I know there are some conflicting opinions on whether or not the market is there to justify the construction of the infrastructure, but I presume this is an issue that a variety of people in New Brunswick will be pursuing with the proponents of the pipeline. They will try to make the case to them that there is in fact a market to be serviced and that there is an economic return to be gained from the servicing of that market.

You've brought another dimension to the discussion and it is a fair and valid dimension: that there is something to be gained here, not just in terms of the commercial aspects of the pipeline and the notion of building a lateral, but also in terms of savings on greenhouse gasses by the conversion of facilities to gas. Quite frankly, that is a question I think all of us are going to be asking about almost every kind of development in the future. Can we achieve something in terms of greenhouse gases by switching to a lower-carbon-content type of fuel? I know that's an issue that the Government of New Brunswick is presently examining and pursuing, and I would expect to hear more from them as well about the potential for a greenhouse gas saving if there were some lateral construction.

In the past, there have been some types of incentive programs or government contribution programs to projects of this kind. For example, there was a period in time when an effort was being made to encourage the more rapid deployment of Alberta gas into some new and different markets, and there was a period of time historically when there was an incentive for that purpose. I also know that in some provinces and in relation to the Canada infrastructure works program, there were some projects undertaken using money from that source for the development of gas distribution systems.

I guess the nub of my answer to you is that I hear your point. I think it's an issue that obviously needs and will get a lot more study and examination in terms of cost-effectiveness and in terms of real impacts in the battle against greenhouse gasses. As I sit here today, there aren't any programs that I am immediately aware of that would have direct application to the situation you have described, but there have been some historical precedents.

In any event, you have registered your point, as have a number of other New Brunswickers, including the Government of New Brunswick. I would imagine this discussion will be ongoing.

On your point about Cape Breton, obviously DEVCO is dealing with a very difficult situation. The rock falls and the other geological difficulties that have emerged in the last number of months have been a particular challenge for the corporation.

Thus far—and I'm very pleased about this—DEVCO has performed within the terms of the mandate the government gave it a few years ago, the mandate to establish its commercial viability to live squarely between certain financial parameters and to focus upon reinforcing and building its commercial viability for the future.

• 0945

Because of the difficulties that have occurred this past winter with the geological problems, the slowdown in production and the lay-offs that were a necessary part of that, DEVCO's preparation of its five-year business plan has been delayed. When I met with the Senate, which was examining DEVCO-related issues towards the end of last year, I indicated to the senators that I expected to receive from DEVCO not just their operating budget for the next following fiscal year but also their five-year plan for moving forward.

Because of the physical difficulties they have experienced this past winter, the five-year plan has been delayed. The one-year operating and capital budget has been forthcoming, as you know, but I expect DEVCO to obtain all of the information it needs pertaining to the analysis of its current situation in the days and weeks immediately ahead, and I am expecting to receive from the management and the board of DEVCO their five-year, go-forward plan during the course of the summer.

Obviously they have some serious challenges to deal with. I have enormous regard for the management, the board, and in particular the employees of DEVCO, who have been struggling with a very difficult situation. The establishment of commercial viability is the critical first priority. That is the mandate we have given to the corporation and that is the mandate they are working on now, and I will very anxiously await their five-year plan in terms of how they see that unfolding over the course of the next several years.

Mr. Yvon Godin: Could I get an answer about the dispute?

Mr. Ralph Goodale: Could I ask my deputy minister to make reference to Bathurst?

Ms. Jean C. McCloskey (Deputy Minister, Department of Natural Resources): Thank you, Minister.

Yesterday was the 200th anniversary of the birth of Sir William Logan. Sir William Logan founded the Geological Survey of Canada, which was the precursor of the Department of Natural Resources. And since we have been surveying this country for 200 years, when I joined the department four years ago I had the view that we probably had done it all because we had been at it so long. But in fact, what's happened is that the technology has advanced considerably, and most recently with respect to aerial surveys and various other forms of assessing what's beneath the earth's surface.

So we have these enhanced surveying techniques based on new technology, and “ex tech”, or exploration technology, is one of these programs that we put together. What we have been doing on a limited basis is going into areas where there are mines that are coming near the end of their useful life and seeing if there are other prospects, given the geographical formations in those areas. Bathurst was one of the first areas that we went into and it proved to be remarkably successful.

So we're looking at other prospects. It's a very intensive kind of work and we attempt to work cooperatively with the province, the local industry and the community to determine where we will have this renewed and more advanced look at the geology.

We have been in discussions with the Province of New Brunswick on additional work. I am hopeful that we'll come to some kind of an agreement. But I am pleased that you mentioned it. It's an example of a success and gives us an enormous amount of encouragement.

So even though we've been at it for 200 years, hopefully we'll be at it for another 200 years, always pushing the frontier of knowledge with respect to the resources we have.

The Chairman: Mr. Godin.

Mr. Yvon Godin: Thank you. With respect to the translation of both books, which one is right on Cape Breton, the French one or the English one?

Mr. Ralph Goodale: Mr. Godin, we will check on the discrepancy between the English and French versions. There's not supposed to be any, but if there's a clear difference in meaning, if a technical correction is needed, we will report back to the committee.

• 0950

The Chairman: Yes, that's fine. Thank you, Mr. Minister.

Mr. Jackson, please.

Mr. Ovid L. Jackson (Bruce—Grey, Lib.): Thank you, Mr. Chairman.

Mr. Minister, welcome to you and your group. You have a fascinating department. When I got onto the Treasury Board and it amalgamated this committee, I didn't foresee that it would be such a fascinating department.

I was born in a third world country, trained in England, and then went back home. When I went to teacher's college in 1967, Alvin Toffler was talking about Future Shock and what computers would do, and it's interesting to see how they have evolved.

I don't know if you know it, but I am a licensed mechanic and I'm also a licensed diesel mechanic. I have watched the car evolve from what it used to be in the past. I had a 1975 Lincoln Continental with a 460 cubic inch engine, and when I brought it into the shop, if I ran it for five minutes it would probably have killed everybody in the room if I hadn't put on the exhaust pipes. Now you could probably take a vehicle and run it for long periods of time without having the same impact because of the technology.

There are lots of rumours that come about. One guy actually used acetone in cars. They ran for quite a distance, but the engines became ruined. There was talk that, for instance, the potential energy contained in a gallon of gasoline should take a car about 416 miles. Now, we're moving toward that kind of stuff. As technology changes, it changes a lot of our concepts.

We think we should take a lot of gas out of the ground and the price of gas is going up, but when we put the technology to the engine, the engines run better, are less polluting, run for longer periods of time and you get better mileage, so you use less gas.

So it's interesting how we have these paradigm shifts. I know that in Canada, because we're a northern climate, we have the challenge of not blinking so other people get the economic advantage over us.

The emissions trading is also very fascinating to me. It's sort of like a game of basketball where they give credits for a pass, or in hockey when they give credit for a pass, because a pass is the most dangerous thing in the game. The guy scores much better with a pass. In basketball the pass is the most dangerous thing, and then the dribble—going toward the basket, you have to stop them—and then there's the shot. Kids think the shot is the most important.

We talk about emissions trading. You're making up the rules of the game here, so to speak, and it's going to be interesting. At teacher's college in 1967 I read Barry Commoner's the Closing Circle, and we know everything is related to everything else—our limits to growth—and these things are not total answers. We get little glimpses of these things.

So, Mr. Minister, you have an opportunity and a challenge. I'll stop reminiscing and maybe ask you an appropriate question.

The Chairman: It just fascinates me. Do you still have the Lincoln?

Mr. Ovid Jackson: No, my wife made me get rid of it. I was trying to hang onto it. It was quite a thing of beauty. It was a big monster but it was a lovely car. It really floated. I also worked for Rolls-Royce, by the way, so I know about the different kinds of vehicles. It was my kind of pet car. We moved into a condo and my wife made me get rid of it, but it was a sad day.

You talked a lot about your plans and priorities and I'm very much interested in your research department. I'd like you to tell me about your plans, but before you do that, some things are on my mind.

For instance, there are lots of places where they're not getting rain. I don't know what your technology is in terms of making rain clouds or being a rain maker. It certainly would help in a lot of places.

We have a lot of technology in firefighting. We have aircraft and we're well versed in that. Our climate has given us these economic advantages, and I wonder how we're doing in helping with that.

The reintroduction of species, for instance, is becoming more and more of a problem. You talked about the fuel cell at Iogen Corporation and some of those things.

Could you tell us what's coming up? Maybe some of them are trade secrets, but we'd like to get an idea about that plan. I think that's a very important part of Canadian society, because we need high-tech, high-skilled jobs. Notwithstanding that we may export them to countries that are poor and maybe can't pay us back in dollars, we get it back in the exchange of the atmosphere—the oxygenation, carbon dioxide production and things like that—so we can't always look for the dollar, but we could be very helpful.

• 0955

Mr. Ralph Goodale: Mr. Jackson, I believe the science and technology dimension is one of the most exciting activities in which my department is presently engaged, and has been for many years. Climate change and the science and technology related to climate change are very important components in that whole effort.

Mr. Chairman, I don't think it's possible to do justice to Mr. Jackson's point in the time we have left available today. This committee might want to do some further intensive work in relation to the science and technology opportunities that pertain to an issue like climate change, for example. It really is intriguing when you have the opportunity to delve in detail into the activities that are being undertaken by various government departments and agencies and, even more so, into the S and T work many in the private sector are undertaking.

I referred in my opening remarks to the work being done by PanCanadian Petroleum Limited on the sequestration of CO₂. It's a technology it has acquired. It allows it to extend the life of older existing oil patches by 10 to 20 years. It manages to get more oil out of the ground by pumping and retaining CO₂ underground, so it's a double win. In effect, it reduces CO₂ in the atmosphere and manages to generate more oil production in the process.

Examining that kind of technology advanced by the private sector and examining the technological initiatives my department has undertaken under the PERD, or the program for energy research and development, there are some truly terrific success stories that I think would be of interest to the committee.

When I meet with my provincial and territorial counterparts on Friday of this week, I will be providing them with an overview of some, by no means all, of these technological activities that will be part of the solution.

Mr. Jackson, you referred to the technological changes related to the automobile. I mentioned in my earlier remarks the work that's being undertaken by the Ballard Power Systems Inc. in Vancouver. It's interesting how that story has evolved. It was, in fact, under the PERD program that the Government of Canada offered its first encouragement to that Ballard science, going back probably 15 years.

More recently, the Technology Partnerships Canada program of Industry Canada has made an investment in the work Ballard has undertaken. So along the way, the original idea and the sustenance and maintenance of that idea had a good deal of encouragement and support from the public sector, my department of Industry Canada, and others. But the real excitement now is that it's moved far beyond any kind of government incubation. Ford is in there in a big way with a major investment and so are Daimler-Benz and Mazda. That indicates this kind of technology has attracted the attention and excitement of major global investors.

If that technology on the fuel cell is completed, perfected and commercialized by Ballard, it will be a double win for Canada.

• 1000

First of all, we will benefit in terms of the environmental impact this new technology will have. That will be a good thing for the environment and a very good thing in our battle against climate change, recognizing that about 27% of emissions come from transportation. So the introduction of this kind of new technology could have a tremendously beneficial impact.

But even more than that, if we're the first ones to perfect that technology, then the world is going to be beating a path to Canada's door to get that technology. Others may develop the second or the third or the fifth generation of the technology—fair enough; that's the way the process works—but we can get an enormous leg up, economically, in terms of scientific sophistication, and in terms of the battle against greenhouse gases, if we win this race.

What is interesting is that there is an international race. It really indicates the kind of seriousness, the kind of brain power, nationally and internationally, that's being invested in these kinds of solutions. And that's what gives me encouragement and real confidence, the intractability of the climate change problem notwithstanding, that we—and I mean “we” as humankind—are going to solve this problem. We're going to win this battle. We're going to do the right thing for the environment and we're going to make good, solid economic sense at the same time, doing it in a practical, rational, and cost-effective way.

Mr. Chairman, I wish I could explore this subject further, but I know our time has expired. It may be that on another occasion your committee will want to devote a specific, special study to the work that's been undertaken, is now being undertaken, and will be undertaken in the future in relation to the science and technology related to natural resources generally and related to the climate change file in particular.

Mr. Ovid Jackson: Mr. Chairman, the minister has said he's going to be meeting with the provinces, and I don't want to pre-empt them, but maybe you can share that information with them later on. If you want to extend it to them personally and send us a copy, that would be kind of nice.

Mr. Ralph Goodale: Mr. Jackson, I meant to say that as the other part of my sentence. Yes ,indeed, that type of information should be shared with members of the committee, and I'll make sure that happens.

The Chairman: Mr. Minister, on behalf of all members, I'd like to thank you and your officials for attending this meeting. You've opened up a number of interesting areas for us. We certainly reserve the right to invite you back sometime to indeed talk about climate change and the technology surrounding that problem.

With that, we'll adjourn the meeting. Colleagues, we'll see you Thursday at 11 o'clock for a future business meeting.

Thank you, Mr. Minister.

We're adjourned for the day.