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]

Thursday, February 18, 1999

• 1108

[English]

The Chairman (Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)): Good morning, everyone. I'm pleased to call to order this Thursday, February 18, 1999 meeting of the Standing Committee on Natural Resources and Government Operations.

Today we are continuing our study on the issue of global climate change. We have back with us again David Oulton, who heads the Climate Change Secretariat, and along with him is Ian McGregor, who is the deputy head.

We have had a number of sessions on climate change in the past. It was prompted by a suggestion from Dave Chatters that maybe we could get an update from you, Mr. Oulton, particularly on the tables and how they are doing. When the meeting with Mr. Oulton is over we'll adjourn, then have a short business meeting, colleagues, at that time.

I invite you, Mr. Oulton, to speak to us for a little time, and then we'll open the floor to questions.

Mr. David Oulton (Head, Climate Change Secretariat): Thank you very much, Mr. Chairman. I also have with me Mark Ziegler, who is a senior policy analyst with the secretariat, in the event that there are some other details he could add.

I brought a deck with me, the usual bureaucrat slide deck, to take you through some of the updating of where we're at. I would move quickly, because I know we're time-pressed this morning, to the slide that's called A-1, which is about three slides in. I just want to make sure everybody has a chance to focus on that. That's one called Kyoto Challenge—Addressing the Gap.

• 1110

I won't belabour that, because I think perhaps you've seen something like this before from others, but it's just to remind you of what we're focusing on in terms of the problem we're trying to address. This is indeed a measure of our greenhouse gas emissions in our base year, 1990—the 599 megatons. It shows you that the most recently measured year is 1996, where we had increased to 671 megatons. That's the solid point in the first third of the chart. If you look into the forecast period, which goes out to 2010, which is the Kyoto commitment period or the midpoint in it, you can see we've done a projection, working with Natural Resources Canada, to look at what we would emit under a business-as-usual scenario. You can see we've created a range that says we think it's something in the order of 703 to 748 megatons of carbon that we would be emitting in 2010.

If you asked how that compares to our Kyoto target, our target is 563 megatons, and that would give us a gap—which, if you will, we would need policy measures to address, working with industry, provinces, and others—of something in the order of 140 to 185 megatons, or about 20% to 25% reduction from our business as usual.

On page A-2, this is a way of trying to characterize the challenge we're facing in managing this issue. The left-hand side of this chart shows how much greenhouse gas emission you have in order to produce $1,000 of GDP. In other words, roughly, it's the efficiency with which we use carbon in our economy. You can see, if you look at the solid line, it generally improves about 1% per year, historically, simply because of technology change that happens in the economy. If you look beyond that to our projection period in 2010, you can see our estimate is that you'd need to increase that improvement to about 4% per year between now and 2010 if you are to get to your target point.

In essence, what does that mean? It means that we need to enhance the technology we're using in our economy, primarily in the energy area but not exclusively so. You have to increase the rate at which that technology is absorbed into the economy, whether it's transportation sectors and new cars, or whether you're talking about process equipment in industry. We also need to ensure there's demand for it, and demand bespeaks of changing people's behaviour, There has to be a demand for those goods if there are more fuel-efficient cars or demand on the part of industry for more fuel-efficient processes. There are two aspects to this that we're working on: technology, and behaviour that demands the new technology in the marketplace.

Turning to slide 3, you will recall that

[Translation]

the First Ministers provided direction on the National Climate Change Process in December 1997. The directives given to the ministers of energy and the environment were as follows: climate change is an important global issue and Canada must do its part to address it; no region of the country should be asked to bear un unreasonable burden of action; understanding the impact of Kyoto and the costs benefits of implementation options is key; a process to examine consequences of Kyoto would be established in advance of ratification; the provinces and territories will be able to participate fully with the federal government in the management and implementation of the Kyoto protocol; and finally, the Energy and Environment Ministers would consider jointly appropriate courses of action.

[English]

If you change to slide A-4, this takes you to what was set up in April of last year. When energy and environment ministers met they said they wanted to put in place a process for developing a national strategy. The boxes at the top, obviously—first ministers, energy and environment ministers, and the national air issues steering committee, etc.—were already there. The new boxes that were created, the structure, if you will, that was created to deliver this, is on the right-hand side, the national secretariat. And there's a federal part of it that is putting together federal perspectives on national climate change policy. Then, perhaps more importantly, there's a federal-provincial part of it, a joint enterprise with the provinces, to develop a national policy, and that's part of the national secretariat as well.

• 1115

Second, the issue tables that had been mentioned earlier were put in place and are a key element in doing the analysis that's going to prepare the policy work. I'll mention those in a little more detail later. There are about 16 of them, which were set up in the course of last summer. There's an integrative group, made up of the co-chairs of those 16 issue tables, which meets roughly once every four to six weeks to help manage the process and ensure that it's on track and ensure that the groups from one table to the other are indeed integrating their information, that we're not dealing with silos in terms of the issue tables.

Then finally you'll see on the far left-hand side other federal-provincial councils. It's not only energy and environment ministers that ultimately will be implicated in these solutions. There are also ministers in other areas, such as agriculture, transportation, and forestry. They have federal-provincial ministerial councils, and some of their councils will come into play in looking at solutions. That's background.

If I could move to section B, it talks about progress to date, which is really the point of being here and talking about where we're at. We've given you something we've called the score card since June, when we last met. We've broken it into four parts. The first part was the establishment of the climate change process, and I've mentioned some of these elements. The issue tables haven't been created. We've got about 450 individuals drawn from both governments, industry, environmental groups, and other non-governmental organizations participating. The federal and national secretariats were set up and running by last fall. The integrative group, as I mentioned, is meeting regularly every four to six weeks.

Indeed, the first product of the issue tables is completed. You'll recall when we last met we said really what their first effort was going to be after they organized themselves and developed budgets and a work program, was to produce what we called a foundation paper. That foundation paper was meant to look at the sectors they're responsible for and then developing an analysis of what the key issues are that face them in dealing with the mitigating climate change in that area. So it was really baseline information they would need to put in place before they would go on and develop options.

These foundation papers were completed in the November-December period and we're just now in the process of ensuring they're all available publicly. We're getting them translated and putting them up on our public web site so they'll all be available. Seven are up now. There are about another 14 that we hope will be up within the next four weeks. So all of that product from each of those issue tables should be available publicly.

Now the tables have moved on to the most important part of their process, which is doing the options analysis work. That is the work they'll be engaged in from now through to June.

The second area we wanted to talk about was initiating action on the part of the federal government. The key tool here, you'll recall, was the climate change action fund that was set up in the budget of 1998—$150 million over three years. That fund was set up; it was announced in terms of our ability to actually spend money out of it in October of last fall, so it really came into play as of last fall.

Since that time we've had 31 projects that have been announced that are receiving CCAF funding for $9.5 million over that October to February period. We've got another 100 projects, ranging from technology to public outreach to science and adaptation, that are currently under consideration by various elements of the climate change action fund.

As I've mentioned before, there are four key parts to this. One is technology, a second one is public education and outreach, a third one is science and adaptation, and the fourth is the foundation one, which is really the resources that are being used for the national process in the secretariats.

We've provided more background information, which you've got in the deck under the appendices. I wasn't going to take you through that, but it's there so you can use it. As well, I recall when I was looking at Minister Goodale's meeting with you last February 11, he indicated that we would be providing more details on that. Frankly, what we'll be doing is giving you a project-by-project review of those that have been announced. What we've given you in the back of this document is a summary, but we'll be giving the department and Minister Goodale a more detailed review that he can table with the committee as well. So this is a summary, but it's not all of the details that you'll be receiving.

• 1120

The next element in terms of the score card on B.3 is advancing the international agenda. You recall that two of the tables we've created are for what are called the Kyoto mechanisms. This is international emissions trading and the clean development mechanism, primarily. As well, they are for sinks, which is the ability for Canada and other countries to benefit if their forests or if their agricultural lands are going to be absorbing carbon rather than net-emitting carbon. Those are details to be worked out in the protocol. They're very important for Canada. It's one of the reasons we've set up a table in this regard.

Indeed, Minister Stewart hosted a workshop last fall on the clean development mechanism, which is referred to as CDM here, with the developing countries. It's a key tool simply because one of the key elements in the protocol is actually getting developing countries to participate in this endeavour so that it's not just Canada and other developed countries that are going to be engaged in reductions. It's bringing developing countries under it. This is one mechanism to help further their engagement.

Finally, you'll recall there was a meeting of the conference of the parties of the international negotiations in Buenos Aires last November. The achievement of that meeting was really to set a track for negotiating the key elements such as sinks and those Kyoto mechanisms over the period from now through to the sixth conference of the parties, which will be at the end of the year 2000.

Finally, in terms of objectives, one of the key issues that ministers of energy and environment had noted right at the beginning of this process in April was that industry had been asking for governments to set up a system whereby they could get credit for early action for measures they were taking that were going to help in terms of providing reductions. So this has been on a fast track in the sense that ministers said they didn't want to wait until the year 2000 to start getting something in place. They wanted to try to get something in place in 1999, and indeed we've had work done on a series of issue tables, as well as federal-provincial work, and our hope is we'll be able to take the first element of that to ministers to look at this spring when they meet.

Section C talks about the nature of the product we hope we're going to come up with. It's not the detail of it, and you'll notice I put a caveat on the front. This is a draft, this is what we're talking about with the provinces. It's also what we're going to be talking to ministers about at the end of spring, so they haven't seen this yet. They may decide they want something different, but this is roughly what we're talking to them about in terms of what it is we think we can bring to you in December of this year.

We really are looking at a strategy that would in a sense have two key components. One would be describing the various paths you could take. Paths are, if you will, descriptions of options that you have and that you use over a period from now through to 2010 and beyond, that you would use to take you to your Kyoto target. Our hope is to be able to describe two or three paths so ministers have an element of option and can weigh the cost and benefits of those different paths.

In addition to that, what we want to say is we're not only giving you a strategy you can look at and play out over a 10-year period, we're also going to give you a sense of what the actions are that you should be taking and looking at in year one, two, and three of this strategy. Those are what we refer to as immediate measures, which would be common to all of the paths we might describe for them.

A lot of the focus is of course on mitigation, reducing emissions, but the strategy is also going to cover adaptation or impacts and climate science. It's not exclusively mitigation. I wanted to underline that public education and outreach, as well as technology and other measures, are going to be important components of that strategy.

If you look at C.2 it talks a little bit more about the nature of the strategy. I guess the reason we put that down is because it's fairly clear that in December of 1999 you don't know all you need to know about the nature of the climate change issue to be able to make final decisions on it. You don't know how those international mechanisms are going to work out. You probably won't know what most of your major partners are doing, such as the U.S. They, like us, are in the process of developing approaches to how they're going to follow through on Kyoto. You don't know how your international economic environment is going to evolve. So what we're trying to work to is something that sets up a strategy that is in a sense like a business plan. It sets out a track you work to, but you don't make all of your commitments in year one to all of the things you're going to do in year one to ten.

What you're going to do is decide what you need to do in your first three years and then every year, as ministers look at it, go out and see what's going on. What's the U.S. doing? What's being done in other countries? Are the international mechanisms on track? What is happening in Canada? So every year you're doing a scan and deciding whether we are on track or off track, and what other options we should be looking at. To use a bit of a cliché, it's a living strategy and a living document rather than being something you set in concrete at one period of time.

• 1125

If you flip over the last section, section D, I don't like to bog people down with process and I won't dwell on this, but this shows you the steps we're taking from now through to year end in order to try to deliver what ministers have asked for.

We hope we will take them a description, in a little bit more detail, of what I gave you about the nature of the strategy, and that they will look at that sometime in the second quarter of this year and say yes, we agree, that's roughly the kind of product we want you to bring to us at the year's end.

The issue tables reports should be out; that was targeted for May 1999. There is no doubt some of the bigger tables are finding that they really have an awful lot on which to chew—electricity, industry, transportation. There will be some slippage; we acknowledge that. We've said to them that we can deal with slippage into June, but you start falling off your critical path if you get much beyond that.

There are time challenges we'll have to manage there, and there is a trade-off between time and quality, on which it is going to be important for us to make some judgments.

The key element in the summer of this year through to the fall is how you put all of that stuff together and make sense out of it. That's what we call modelling an analysis, how you add all of these things together so you have something coherent. You know how many megatons it's going to give you, you know what the benefits and costs are going to be, and you can give ministers a sense of what the puts and takes of the various options are. That's what we hope to do in the summer and in the fall, and that is actually going to be the most time-challenging. A lot of that is new modelling, new work, innovation on our part. So again, it's an element that's very much on the critical path.

We're not going to leave the drafting of the strategy until the end of the year. If you do that, you'll never get it written. We'll start working on the front end, the descriptive elements, actually now, and work on it through the year so that we have a reasonable chance of bringing a document in, even though some of the analysis and some of the input will come in in the summer and the fall.

Finally, we hope in December we'll have something we can take to ministers and get what we've called “approval in principle”.

If you turn to page D.2, it gives you a sense of some of the things I've just said we are going to be dealing with. There are risk factors on this, and we're not hiding this from ministers or anyone else.

As I mentioned earlier, the tables are going to be pressed. The modelling and analysis group is doing innovative work, and to have all of that come together in the right way is going to be challenging.

On the federal-provincial-territorial cooperation, you'll recall we hit a bit of a low in the Kyoto time period. We've used the last year to rebuild confidence and a working relationship. I believe things are working very well in our relationship with the provinces, but the hard work actually starts now. We've been setting up processes and getting things going, doing preliminary work. The tough stuff is actually when you build the strategy, and it's that part of it that will test the fund of goodwill that has been built up over the last year.

As to getting adequate consultation, we have a process that has a lot of input. The tables finish in May or June. With all the investment we have in them, we're not actually going to close them down completely. We're going to say we need somebody we can bounce this strategy off as we're developing it over the summer; we need a reality check. So we're going to try to keep those tables open for business for the last half of the year anyway, so that we have somebody we can bang our ideas off and get a sense of whether we are on the right track or not, that we're not bringing a hothouse flower to ministers in December.

Finally, page D.3 says if we're successful and we manage all those risks, then what we hope we'll get out of a December 1999 energy and environment ministers meeting is ministers approving in principle the nature of the strategy; approving in principle the measures for immediate implementation over the first to third years; a sense of guidance on the alternative paths, whether there is one on which we should be focusing and some that we should simply be leaving by the side; an approach for refinement of the strategy, because they may say there should be broader public input to this than just your issue tables, and there may need to be further work done on some elements of the analysis; an approval in principle of how you would implement this when ministers approve it; and an agreement that if governments need to do further internal consultation—bearing in mind that there are ministers of agriculture and transportation, other ministers implicated in this than just energy and environment ministers—we set up up a timetable to accomplish that. We're hoping that will allow year 2000 to be used for ministers then to come back and confirm what they've agreed to in principle.

Thank you, Mr. Chairman.

The Chairman: Thank you, Mr. Oulton, for that succinct update.

We'll start with John Duncan, and then Roy.

Mr. John Duncan (Vancouver Island North, Ref.): Thank you for your presentation. There's a lot of information in there in short order.

• 1130

I guess my first question is sort of a generic one. The bureaucracy is operating under the assumption that Canada has ratified our Kyoto position. Would that be a fair statement?

Mr. David Oulton: No. Both the ministers I report to would probably be upset if we had said that was the case. Canada has yet to make a ratification decision. We've signed the protocol. By signing, we have said we will work in good faith to see what we need to do in order to be able to take a decision on ratification. To the best of my knowledge, no other of the OECD countries like Canada has ratified and taken that decision yet.

What we are working toward, though, is allowing ministers to make a cogent decision on ratification. In other words, when you have a strategy or strategies and you know what the benefits or costs are of those strategies, you can decide if you have enough information and know what the implications are to take a ratification decision. We hope our work will put ministers in a position down the road where they can make a ratification decision that not only looks at our strategy but also at what's going on in the rest of the world—what other countries are doing. A variety of factors will probably come into that decision.

So we haven't been told to assume that; we've been told to do work that would allow that decision.

Mr. John Duncan: It seems fairly clear that strong forces are at work within our major trading partners, such as the U.S., that would indicate they're not going to ratify the Kyoto positions they have.

On the plans you've developed or are developing for the ministers, some of them probably make sense to carry forward whether there's a ratification or not, and others would lead us to a competitive disadvantage, assuming our major trading partner is not going to be so oriented. Are you clearly trying to designate and delineate which items we should probably proceed with anyway and which ones we shouldn't because they would lead us to a major competitive disadvantage?

Mr. David Oulton: The concept of the strategy is meant to address the ability to make decisions that are both timely and made in the proper context, so if you're making a decision on a major instrument that would have economic and other competitive impacts, you would be doing so at the right time, when you know how that fits with what other countries are doing. So the concept of a strategy is meant to give you the flexibility, so you're not doing all of your decision-making at one time upfront, but you are doing it at the right time, when it's appropriate.

The concept we've put in here of immediate measures in years one, two, and three is meant to try to ask whether there are measures the federal government, provinces, and municipalities can take and should be taking that are common to all paths—which means common to all strategies—that will go a long way to try to address those measures you can take that make sense in their own right, because you probably are getting multiple benefits and not just climate change, but benefit in other areas, such as other environmental issues and other health issues, and have a favourable cost-benefit analysis to you, and hold you harmless relative to what's happening in other areas.

We hope that concept of measures you can take in year one, two, and three will embody those measures that make sense, regardless.

Mr. John Duncan: Okay.

We have some industries in Canada that have done a lot of early action to reduce carbon emissions. They did that for cost efficiency and other reasons, but a lot of those actions actually predate the Kyoto conference. Is that the start date for early action recognition, or will there be some provision for industries that have really done a lot in the previous three or four years, for example?

Mr. David Oulton: We are looking at how you should treat actions that were taken before Kyoto and that indeed will be taken before the ministers take a decision on credit for early action, perhaps this spring or later this year. That is an issue, and it's been raised both by the issue table as well as in the federal-provincial discussion. It's not one ministers have yet taken a decision on.

• 1135

I think the balance of opinion and advice that's come in is that for equity reasons you need to recognize actions that were taken earlier, and you should be prepared probably to go back to the period, perhaps the early 1990s. Some would use the base year of 1990 as a benchmark point, because at that time governments became active in terms of encouraging industry voluntary action. That hasn't yet been decided. That is one of the issues that will be going to ministers when we take our credit for early action proposals to them. But I think it's fair to say the balance of opinion is there needs to be some recognition for what you might call historical actions.

Mr. John Duncan: What is the prediction on what will happen to industries that, just by virtue of what they are, get caught in the crossfire?

Mr. David Oulton: There isn't one, and I can't honestly say we've done the work yet that will tell you what to do. If you're moving to a less carbon-based economy, it probably doesn't mean a whole bunch in years one, two, and three, and it may not even mean a whole bunch in year ten. But if you are really on that track and you're projecting out to years 20, 30, and so on, it does start to have some impacts. That's one of the reasons for saying you should go at this gradually in a way that looks at what the regional impacts are.

When first ministers gave us the six conditions they set down, they were very clear and said we should be looking at a strategy that does not have any unfair, unequal implications for any particular regions. They were thinking about different regions having different carbon-based sources for their industries and other things.

I don't have a precise answer because we haven't gone that far in our work, but I can tell you it's an element of the considerations we've been asked to weigh when we take our advice to ministers.

Mr. John Duncan: The targets we've agreed to contradict any thought that gradualism will work, simply because we're well above 1990 levels now and we're talking about a reduction. We're up against some countries like Australia that have very similar geographies and infrastructures and basically are not talking about a reduction.

I know this is not your bailiwick, but I do have some real concerns. That's my comment.

The Chairman: Thank you, John. We can always come back.

Roy, then Peter.

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you, Mr. Chairman.

Thank you, Mr. Oulton. I hope this is the start of an ongoing dialogue with this initiative, because Kyoto, greenhouse gases, and climate change are big public policy issues now and as we move forward.

In a number of the issues tabled that you have here, I think there are some that would be of interest to this committee. Hopefully we'll be able to invite the various chairs in when their reports are in some form.

On the issues table, you alluded to the fact that you have some timetable pressures. When you're trying to consider so many different stakeholder groups and the issues are complex, are you going to meet those deadlines? You alluded to the fact that you have to trade off some quality for timeliness, which I would support. Maybe you could comment on that. What will have to happen to meet those deadlines?

I'm wondering if you have any thoughts on building into the budgetary process for 2000. It looks like your timetable doesn't necessarily allow for that. Out of the issues table, will some tax policy ideas emerge, and will they be timely enough to fit into the 2000 federal budget cycle, or are you're looking to the next budgetary cycle? Maybe we can start with that.

• 1140

Mr. David Oulton: I kind of wear two hats here, and one is as the chair of the national process on the federal side. But putting on the federal hat, in terms of our approach to the policy for this, I guess my aspiration is to see if we've got enough input from the tables. Whether we get it all in May, or whether it's going to be June or July for some of it, obviously that's going to affect the process.

In terms of the federal government trying to look at the things it needs to do to be able to follow through sensibly on it, I'm hoping we can develop enough, in terms of policy input, that by the time you get to the fall, when you're starting to work on whether we've got any input that the two ministers would look at with regard to the budget, not only for 2001, but also 2000, we'd have a decent crack at trying to look at both of them.

You can't predict that, but I think we will have pretty good input, and I think the federal policy process should try to aim to see that it doesn't have to wait until 2001 to start being able to set up next actions.

Mr. Roy Cullen: Yes. I'm just wondering, though, for the year 2000 budget, there may be some ideas germinating over the summer, as early as that even, and I don't know whether you'd be ready. But in regard to the issues tables, I've had feedback that some people are finding it's very...the word “cumbersome” might not be appropriate, but there are so many stakeholder groups, the issues are complex. It is very slow-going, very arduous. I'm wondering if you could react to that, in terms of the deadlines in particular.

Mr. David Oulton: Yes, to be fair, the tables are all quite different. Some of them are fairly tightly focused on a particular area, like sinks for example, or public education outreach, a broad subject, but still a fairly tight focus on one particular aspect. Some of them are very broad—the industry table, for example, which covers everything that's not in electricity, agriculture, and transportation. So there are different challenges for different tables.

Your comments certainly are true. Some of the ones that have the broadest stand and some of the toughest challenges, like industry... Transportation is another one where it's covering a wide variety. They've had to, in essence, try to deal with that issue of being too cumbersome and too big by creating subgroups and saying we need to find a way of focusing. So in each of the industry and transportation tables, for example, they've gone ahead and created subgroups to allow a less cumbersome process and a more focused way of dealing with specific aspects of it.

What we've tried to do is where we've had problems like that, first of all we listen to make sure we're aware of them, and secondly we try to allow the co-chairs the ability to innovate and change their process to accommodate it and make it less cumbersome and more reactive and responsive.

A large part of it is simply recognizing that, indeed, you're going to need to accommodate the different tables in terms of how they do their work. In terms of the timetables, frankly, if you have no timeline you know you'll never get there, so you do have to have a sense of a schedule and a sense of what you want to do. So I've been maintaining that it's very important that we have a December 1999 meeting and that it allow ministers to look at a strategy. It may be that there are some analyses and other pieces you're going to need to do some further work on, but I think it's important that you have a benchmark point.

I think it's also pretty critical that we allow ourselves about the last half of the year to do the integration work, the write-up work, and the policy discussion work. For that reason, I have been trying to keep pressure on the tables to report on time. Where I've gone so far in terms of flexibility is recognizing that maybe their reports won't be completed until June, or the end of June even, but if we can find a way we can get some of the hard information on their options pulled out by our modelling and analysis people earlier in that May-to-June period, then maybe when they actually dot the i's and cross the t's on the report is not critical.

So maybe we can find a way of trying to maintain the quality of the report and their advice but at the same time ensure that our ability to do integration work isn't too slowed down. I won't say we've solved those problems, but we're going to work with them, and there are always different ways to skin a cat.

Mr. Roy Cullen: Thank you. Maybe I'll ask one final question.

In their tables, I don't see any table on economic instruments, and I see something on tradable permits, which is clearly an economic instrument. I'm not out to prejudge the process, but my own view is that we may have to look at some economic instruments—tax incentives, tax policies, and market signals other than tradable permits—to meet these targets, if we're serious about the targets.

• 1145

That comes back to weaving that into the budgetary process provincially and federally, and the timelines, etc. Are the economic instruments that may come out of this woven into the different sectoral or horizontal tables? How do you see them emerging?

Mr. David Oulton: That really was the concept, but there are all sorts of opinions on whether it makes any sense. I'll give you an example of what I mean. In the transportation table, one of the issues is that you have to answer the question as to whether it makes any sense to further raise gasoline taxes, diesel taxes, or whatever it is. Is that going to have any beneficial impact in terms of incenting people to drive less? Are the economic puts and takes of a measure like that good sense or bad sense? Somebody has to do the work on that. The transportation table would indeed do that basic work.

Each of the tables empowered something. We specifically said to them that we weren't limiting them in terms of what instruments or policy measures they could look at and what sorts of analyses they could do. We're working on the assumption—and we're trying to test this with the table—that they're looking at the full range of measures, including economic instruments.

Mr. Roy Cullen: I have a final question to cap that one off.

In terms of what you expect to see in the table reports, would it be a series of recommendations not limited presumably to policy decisions of governments, but also applying to industrial-level action plans and other stakeholder action plans in order to move us all forward to meet these targets? Is that correct?

Mr. David Oulton: No. That's an important point. I try to encourage the industry table, for example, to recognize that it's actually not governments that are going to get us there if we're ever going to do this sensibly. It's actually going to be the players in the economy that are going to get us there. You often look at what government instruments you could use that would take out bottlenecks, that would undo things that are in the way of people when they're trying to take sensible action. Where there are things that industry can do on its own, things that would further enhance voluntary action, or things they do in their own sense, they should be identifying what is in the way of having them doing their own sensible measures. There are things that do impede industry—and sometimes it's not just industry, it's other players in the economy.

So it's not just limited to what it is that government can do; it's what all of the players can do, both in the context of government policy and in their own right.

The Chairman: Thank you.

I have Pierre, then Carmen and Werner.

[Translation]

Mr. Pierre de Savoye (Portneuf, BQ): It is always a pleasure to see you, Mr. Oulton. Your presentation was both complex and comprehensive. The question is whether this process will work. Let's hope so. Will you be able to meet your deadlines? You said that there were ways of doing some things at the same time. In short, I'm impressed by what I have here. Since I cannot really discuss all the issues, I would like to focus on one in which I am particularly interested, because it concerns an industry that has a factory in my riding. I'm referring to Portland Cement.

We were talking about transportation earlier, and Roy made some of the comments I was planning to make. We have to cover long distances in Canada, and to do that, we need vehicles that use gas. We have no choice but to consume gas. If we increase taxes, will the distances people have to cover be shorter? No, not really. Perhaps some people who use their cars for pleasure will use them less, but that is far from certain. Consequently, we have to find some way of reducing gas consumption. We know that automobile manufacturers have improved engine performance, but they also got some incentives from government.

The Canadian Portland Cement Association made representations to members of Parliament with factories in their ridings, including myself. The association says that there would be significant fuel savings if we had concrete highways. I would like to know whether this association has been invited to take part in one of the tables. Do you know whether these concerns are being considered? In short, could you provide us with some information on the subject?

[English]

Mr. David Oulton: Yes, and I have had the opportunity to meet some of the Portland Cement people, as well as other members of the secretariat. They are a player in at least the industry table, I think, but I'm not sure about the transportation table.

• 1150

I am aware of their ideas and their proposals. It is something that is an element of the discussions in the transportation table, I believe, but with your caution I'll make sure that it is part of the discussions and we can verify that indeed their representations have had a chance to get into that discussion. I'm pretty sure they have been, but I haven't followed the individual meetings, so I couldn't give you an absolute hundred percent assurance. But it is an interesting proposal they're making, and it is certainly one that I think needs to be considered along with other options.

[Translation]

Mr. Pierre de Savoye: That leads me to my second question. I'm sure it would be interesting to find out who the members of the various tables are, who are the industry and other representatives. That wold give us some idea of who is in a position to say what. We all get representations from various lobby groups. If we knew which table they were on, I think it would be easier for us to tell them that they already have a spokesperson and how they should channel their concerns. That is my first question.

I come now to my second. These tables will certainly be producing some summaries, rather than thick reports that we do not have time to read. There may even be some interim documentation available. Would it be possible to supply us with some information that we would have time to digest so that we might have a better understanding of what is going on and be better informed about the situation next time you appear before us?

[English]

Mr. David Oulton: Certainly we will provide the committee with the list of members of the tables and their associations so that you know what companies they're from, both the table members and the subgroups that I mentioned, because there's quite an active set of subgroups. Those actually are publicly available; we'll make sure the committee has them so that you have them handy.

With regard to the second question, the best piece that we have so far, and they're just becoming available now, are the documents I referred to as the foundation documents. All of them I think will be available in both languages, because we're in the process of translating them. Some of them are technical, but we should have them, I'm hoping, within the next month or so. We could provide the committee with those foundation papers. They are going to be publicly available as well, but again it's so that this committee has them.

The papers themselves, and I've read most of them now, are very good reviews of the issues that are facing each sector. You may be interested in specific sectors and this is a way of diving into it. They don't all have executive summaries, but there are 21 of them, so you can look at the one you are actually interested in and then use that to get into the particular industry element you might want to focus on.

Certainly we would be prepared when we have them all translated to make them available to the committee, and I hope that will be within the next month or so.

Mr. Pierre de Savoye: Finally, is there anything available through the Internet on this?

Mr. David Oulton: Yes. As they're translated we're putting them up on our public site. So seven of them are now up on the public web site. We can give you our card so that you can get it on the Internet.

Mr. Pierre de Savoye: I'm sure everyone will be interested. Thank you.

The Chairman: Carmen, please.

Mr. Carmen Provenzano (Sault Ste. Marie, Lib.): First, Mr. Chairman, I thank my colleague, Roy Cullen, for his excellent questions. It only leaves me with one question with a couple of branches to it, which relates to the timeline.

The presentation actually gives a pretty good explanation of the timelines, but it's my understanding that federal ministers will take a decision by the end of December this year. Then the provincial ministers will be presented with the national strategy for approval in principle and confirmation. That will be in 2000. So the three-year timeline runs from 2000, 2001 and 2002.

My question is that in terms of the development of the national strategy, if they're confirming it in 2000, that seems to me to mean that they are plugged into the process now. So if they're plugged into the process now, I'm wondering in what way they're plugged in. Secondly, it relates to who's plugged in. If industry's plugged in, are they plugged in by both levels of government? And is that being done in a proactive way, or are we waiting for industry to come to us?

• 1155

Mr. David Oulton: First of all, what we would do in terms of that federal and provincial, actually we'll do it together so that both federal ministers and provincial and territorial ministers are receiving the strategy at the same time and having an opportunity to discuss it together. So it's a joint meeting of energy and environment ministers, federal and provincial, in December, and we do it all as a collectivity.

Our aspiration has been to try to keep that group of federal and provincial energy and environment ministers plugged into the process as we go along. The last time they met was toward the end of October. We're currently planning to see that we would have a meeting sometime in the spring period between now and the summer, which would bring them up to date on where we're at in the process. We will actually discuss with them some of the elements we've raised with you about here's what we think the product is going to look like and see that they're comfortable with what it is we're going to deliver to them, as well to talk about what I mentioned earlier on credit for early action as a proposal.

So we try to keep them plugged in periodically so that what we're bringing them in December is not a surprise and is not something that comes out of the blue so they're prepared to discuss it.

The concept that we might need an ongoing approach in the year 2000 was the thought that if you are taking ministers a strategy that is on something as complex as this and they're going to have one meeting in December to be able to try to come to grips with it, we're not presumptuous enough to say that we think we have it all right, that ministers won't come back to us and say there are things that need more work, there are things that may need further public consultation. So the reason we built in that concept of approval in principle and then reconfirmation was on the assumption that ministers, when they got together, would actually provide feedback and say we want you to look more at this, we need you to do public consultation on that, and we want to see some more analysis in this area.

So the thought that we would get an approval in principle to say we're on the right track but we need a sense of guidance from ministers, and then perhaps a reconfirmation, was built on that assumption.

The last point is it alludes to the fact that there are other ministers, as I mentioned earlier, who are potentially engaged in this. Indeed, agriculture ministers—I use that because it's the parish I used to come from before I came to this job—have discussed climate change. It's on their federal-provincial ministerial agenda. And they will want to see what's being brought forward by the work by the table and by the working groups on agriculture so that they have an opportunity to look at the agricultural component of the national strategy as it's being developed.

So it's more than one group of ministers who are ultimately going to be engaged in this, and probably on more than one occasion.

Mr. Carmen Provenzano: Mr. Chairman, I have a final question.

I'm still not too clear to me, in terms of getting the input from the various sectors, who's going to take the proactive role. Is that going to be the provinces, the federal government? I'm not clear yet how we're going to do that.

Mr. David Oulton: We're really doing it in probably two or three ways. The first way directly is through the issue tables, which have industry representation on them. So we're getting direct industry input through the table, and the advice of the table is giving May or June. We hope then that we can use those tables as we're working on their input over the course of the summer and the fall to get some further input from them.

Then ultimately, when we go to ministers, one of the questions they will need to reflect on is you've had issue tables, yes, you've had 450 people, but there are others who are interested who were not directly engaged in your process. Is there a need for broader public engagement on this? This is something we need to consider. It's not an unimportant issue, and there may be a need for a broader filtering and a broader discussion process beyond the issue tables, which would include other elements of industry that have only been indirectly participating to date.

Mr. Carmen Provenzano: What we want to avoid, and it happens time and again, and I'm hoping you're trying to avoid this, is that no matter how well thought out an implementation strategy might be at both levels of government, if the political pressure can justly be applied that industry hasn't had the opportunity for the kind of input that's necessary, then the strategy falls apart at a point when it shouldn't be falling apart, and that will set it back. Do you agree?

• 1200

Mr. David Oulton: I agree with you.

Mr. Ian McGregor (Deputy Head, Climate Change Secretariat): Mr. Chairman, I want to make sure that we've been clear. The 16 issue tables that have been set up are very much a joint enterprise with the provinces, and there are provincial people on every one of these issue tables. It doesn't mean every province is on every table. Their participation was determined by them so that when these issues tables are looking at an area it truly is people from the federal government, provincial government, industry groups that are particularly focused in that area. And it's not narrowly defined in any way; it's quite broadly defined—other community groups, municipalities, for example, environmental groups, academics. We've tried to be extremely broad on this and at the same time put some limits on the numbers so the work that is being done is being integrated and brought to the fore in all levels.

The Chairman: The last one on my list is Werner.

Mr. Werner Schmidt (Kelowna, Ref.): Thank you very much, Mr. Chairman.

Thank you, gentlemen, for appearing. It's an exciting subject you're dealing with, an extremely complex one. I'm amazed you're as optimistic as you are. I think it's really an encouragement to see that you are that optimistic. I think it's great.

I'd like really to expand on Carmen's series of questions. You used two words in your presentation that absolutely intrigued me. The first word was “technology” and the other one was “attitudes”. When I look at those two words, I think to myself... I look at your sectoral issue tables, for example, and I look at the productivity component that's not in any of those issue tables.

It seems to me that if we're going to get serious about a national implementation strategy—and we either are going to get serious about it or we aren't, and I'm assuming you are getting serious and you're getting all kinds of people coming in—unless there is an awareness that this will not negatively impact productivity for the economy generally, there's going to be resistance. That speaks directly to the attitude issue.

You can have all the education you want and you can have all the technological development, but if there isn't a pay-off in terms of increased productivity or at least not a decrease in productivity, the exercise is doomed to failure. How would you respond to that?

Mr. David Oulton: Certainly the consideration you have is an important one, I think, whether it's voiced as productivity, which is a particular economic angle, or competitiveness, which is another angle. We've been fairly clear in trying to guide the issue tables in terms of their look at options. When they're doing the analysis, we should be getting a good view on what the implications are of a particular option for those particular aspects of the analysis. We're trying to ensure that the work we do will bring that out.

So when we have it and we've got the options, then ministers can look at the menu of options they've got before them, which will range from technology through to public education and outreach and cover a fairly wide ambit, and look at those that have positive benefits in costs, because that's one component you would look at. You may also say, remembering what our national agenda is and other things, that we want to put in place those options that minimize any negative economic benefits and regional disembalances, to speak to an earlier issue, and that actually enhance productivity, enhance other health and environmental impacts. So our hope is that the analysis will allow for that choice.

Now, my optimism is because there are actually options that will do that, and this will be part of the menu. I may be proved Pollyannish in that, but we'll find out.

Mr. Werner Schmidt: I hope you're right. I sincerely do.

On the other hand, I have this uneasy feeling that what we're dealing with is a reduction of carbon dioxide and other greenhouse gases, which are present given the current state of the way we do things, the way we manufacture things and the way we transport ourselves around. It seems to me that an exercise like this ought to concern itself with doing things in a different way and in providing for major innovation types of things.

• 1205

That may have very little, if anything, to do with regional issues at the present time, because in the way you've outlined them here, the current sectors are regionally based. It's one thing to talk about getting a regional balance. The fact is that the way these things are done now is not regionally fair and regionally balanced. They are not. Therefore, if you're really going to bring in a balanced position, what kind of new thinking is this group going to have in order to bring about a development in these sectors that is in fact a balanced one?

Mr. David Oulton: Indeed, one of the purposes of the exercise was to stimulate new thinking. To say that I have it now would not be the case.

Mr. Werner Schmidt: What's the strategy to stimulate that kind of thinking?

Mr. David Oulton: Remember, each table is working to a quite demanding criterion. The criterion they're all working to is put together options in your sector that will allow us to get to our Kyoto objective of minus six. In order to get there you have to innovate.

Mr. Werner Schmidt: Mr. Chairman, that's right. There's no question about that.

The final question has to do with the coordination of the research, the innovation that develops in our country, and this has to do with the National Research Council, NSERC, SSHRC, and the various other research granting groups, even the Canadian Medical Research Foundation. All of these are involved in this thing. When I look at the table on early action measures, I see that three areas are detailed here. As part of this national implementation strategy, is concerted attention being given to the coordination of NSERC, SSHRC, and all those other groups so that in fact the best thinking can be done?

Mr. David Oulton: It was fairly clear early on that one of the key elements was going to be technology and how you develop technology, and not just technology as a short-term solution, because it's long-term when it will come into play. What we did was create not just the team, which is really short-term action by the federal government, but rather a technology table whose purpose is to do that integrative function, to look at what is the technology solution—

Mr. Werner Schmidt: So this isn't complete here.

Mr. David Oulton: That's exactly it. Our hope was that would help pull it together and that we would have a technology element that would be integrated into the strategy. That's the aspiration.

Mr. Werner Schmidt: Then there's the human element. How will you deal with the professional territorial jealousies of these researchers in their particular areas and get them to work together?

Mr. David Oulton: I don't know. I can't honestly say I have an answer to that question, except to say that in this area I view climate change as a real opportunity for innovation on all of their parts.

Mr. Werner Schmidt: I do too.

Mr. David Oulton: Our hope is that by seeing there's an opportunity there for all of the various technology elements, which don't always work hand in glove, they will come together to seize that opportunity. I'm sounding Pollyannaish again, but that's my job. Somebody has to be an optimist.

Mr. Werner Schmidt: The counterpart of that is that the same kind of jealousy exists in certain industrial sectors, as you well know. Are you going to use the same approach there?

Mr. David Oulton: You were talking about electricity and the regional implications. Electricity is an area where we have people who are involved with hydrocarbon-based generators, water-based generators, and nuclear-based generators. They see the world somewhat differently, but they are coming together in a table. It isn't always easy, but they are working as a group to say what is a sensible future climate-change-based electricity policy. Some of the time they're more together than at other times, but they have been working concertedly on it. I've been impressed with the ability of people to come together when you're trying to develop innovative ideas on how to deal with an issue.

Mr. Werner Schmidt: Take the fuel cell. It's going to revolutionize the whole electricity industry.

Mr. David Oulton: That's another example. That's right.

The Chairman: Thank you, Werner.

Just before I thank our witnesses, I want to remind members that we will have a short business meeting as soon as we adjourn this part of the meeting, so please don't go away. We won't have a long meeting, I'm sure.

• 1210

Mr. Oulton and Mr. McGregor, I thank you on behalf of all of us. At the same time, I thank committee members for the very excellent questions that were put on record today. This is a very important subject. We therefore reserve the right to invite the witnesses back again someday, presumably maybe when the tables are getting ready to report later this spring.

Mr. John Duncan: Mr. Chairman, I'd like to make a point.

We had a backgrounder, a briefing note prepared by our researcher. He very rarely gets any mention, but I thought it was a very good backgrounder.

Mr. Werner Schmidt: I did too. It was great.

Mr. John Duncan: I wanted to thank Jean-Luc for that.

The Chairman: Yes, on the record, Jean-Luc Bourdages did an excellent job preparing that. John, thank you for raising it.

Mr. John Duncan: He does it routinely, but I just thought I would mention it.

The Chairman: It's a thankless job, eh, Jean-Luc?

The remainder of the meeting is in camera. Except for translators, members, and their staff, we need to have some privacy.

Thank you all. We'll adjourn this part of the meeting and take a thirty-second break while the room is being vacated.

[Proceedings continue in camera]