EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, April 16, 1995

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[English]

The Chairman: I would like to call this meeting to order. Thank you very much.

We have a continuation today of our study of the environmental regulations in the mining sector. We are pleased to have witnesses from two groups today - from the Canadian Institute for Environmental Law and Policy, and also from the Canadian Environmental Law Society.

We have three witnesses. The witnesses are Paul Muldoon, Mark Winfield, and Cathy Wilkinson. I understand the two groups are going to give their testimony first and that testimony will be divided among the three of them. We'll then go into questions.

Welcome, ladies and gentlemen. I believe Mr. Winfield is going to begin. The floor is yours.

Mr. Mark Winfield (Director of Research, Canadian Institute for Environmental Law and Policy): Thank you, Mr. Chairman. On behalf of my colleagues, I would like to thank the members of the committee for the opportunity to appear here today.

My name is Mark Winfield. I am director of research with the Canadian Institute for Environmental Law and Policy. With me today are Mr. Paul Muldoon, who is counsel with the Canadian Environmental Law Association, and Ms Cathy Wilkinson, who is coordinator of the mining caucus with the Canadian Environmental Network.

As we're the first environmental non-governmental organization to appear before the committee on this subject, I thought we would ask Ms Wilkinson to provide a brief overview of the work of the mining caucus of the Canadian Environmental Network before we get intoMr. Muldoon's testimony and my own.

[Translation]

Ms Cathy Wilkinson (Coordinator of Caucuses and Consultations, Canadian Environmental Network): Good morning, my name is Cathy Wilkinson and I am the Coordinator of Caucuses and Consultations with the Canadian Environmental Network.

The Network represents some 1,400 environmentalist groups in Canada. At the national level, the CEN consists of 16 caucuses that work on environmental issues such as toxic substances, environmental assessment and mining.

The mining caucus has been in existence since 1993 and consists of 75 environmentalist groups from each province and territory of Canada.

Caucus members work at the local, regional, national and international levels on each stage of mining production, including site exploration and mining operation. The caucus has been very active in the Whitehorse Initiative.

The caucus continues to work toward the implementation of the agreement with other Initiative partners.

In November, caucus members met with representatives of the Department of Natural Resources Canada to examine their working papers on sustainable development as well as minerals and metals.

The caucus is currently taking part in the multipartite process for assessing the aquatic effects of mining and/or revising the metal mining liquid effluents regulations.

In addition, other Network caucuses are working on questions relating to the committee's work, including environmental assessment and the Fisheries Act.

There is currently a very strong wish on the caucus's part to continue working with the committee, the Department and the Minister on important issues. Thank you.

[English]

Mr. Winfield: Thank you.

Mr. Muldoon and I are going to address a number of points in our presentation today, beginning with a brief discussion of the environmental impacts of the mining industry in Canada. That will be followed by a discussion of federal and provincial roles in the environmental regulation of mining in Canada, with particular reference to the reference in the throne speech regarding the federal government's withdrawal from its function in this area, and with respect to the CCME environmental harmonization initiative.

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We would then like to address some of the specific issues raised in the committee's December 1995 report, particularly with respect to the fish habitat protection provisions of the Fisheries Act, the pollution prevention provisions in the Fisheries Act and the metal mining liquid effluent regulations in particular, and also the committee's discussions and recommendations regarding the role of voluntary measures in the environmental regulation of mining and other industries.

I must begin by expressing some disappointment that the committee's interim report did not acknowledge as strongly as we might have hoped the extent of the environmental impacts on the mining industry in Canada, which are quite significant.

In terms of waste generation, the industry generates approximately one million tonnes of waste rock per day and approximately 950,000 tonnes per day of tailings, making for a total of about 650 million tonnes per year of waste. That's approximately 20 times the amount of municipal solid waste generated by every household, institution, business, industry and commercial establishment in Canada combined.

In addition, the mining industry and the primary metals industry, smelting and refining, are Canada's leading sources of a number of major air pollutants including lead, mercury, cadmium, arsenic, copper, nickel, antimony and sulphur dioxide, the precursor to acid rain.

The industry is also a significant source of water pollution. Major pollutants include cyanide, sulphates, chloride, ammonia, nitrates, a range of heavy metals, large quantities of dissolved and suspended solids, and significant chemical oxygen demand.

In our brief we've included a table that outlines the water discharges from the Ontario mining industry. These records were kept for the purposes of the municipal industrial strategy for abatement program in Ontario.

One of the most significant problems with respect to mining and the environment in Canada at the moment is the issue of abandoned mines and abandoned tailings. On the basis of figures generated by the Ontario Ministry of Northern Development and Mines we estimate that there are about 10,000 abandoned mines in Canada, or at least 10,000. And Environment Canada estimates that there are approximately 6,000 abandoned tailing sites.

Tailings areas in need of remediation in Canada include 185 million tonnes of uranium mine tailings, which are considered to be low level radioactive waste, in northern Saskatchewan, northern Ontario and the Northwest Territories, and an estimated 875 million tonnes of rock and tailings waste capable of causing acid mine drainage.

Acid mine drainage is one of the most serious problems associated with mining operations. It is the process by which contact of exposed rock with the atmosphere produces a series of chemical and biological reactions which produces sulphuric acid. That has the effect of producing a highly acidic run-off and also dissolves heavy metals and other materials out of the rocks, which also appear in the run-off.

The Mining Association of Canada itself has estimated the clean-up cost for abandoned mines in Canada to be in the range of $6 billion and other people say that is a low estimate. Under the present circumstances, it seems the bulk of that cost will have to be borne by federal and provincial taxpayers.

One of the most important points we would like to make today is that it's important to recognize that these environmental problems aren't simply a question of the bad old days that have passed, or of bad actors. We recognize that the industry has made very significant strides in the past five or ten years in terms of environmental problems, but we also note that within the past five years there have been some very serious incidents which we can't ignore. The most obvious and most serious was the Westray mine disaster in May 1992, in which 26 miners died.

We also noted that just in November of last year there was a very significant release of sulphur trioxide in Sudbury by Inco. It's been estimated that it affected 10,000 people. What was particularly disappointing was that Inco was quoted in the press describing those who had gone to hospital as a result of this leak as cry-babies.

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In other places in North America we also have to recognize that there continue to be very significant problems. One would draw the committee's attention in particular to the Summitville situation in Colorado, a heap-leach gold mine operation, which was closed in December 1992 and which has been identified as the largest Superfund site in the United States. Today the United States government has spent $110 million on remediation efforts at that site.

We also have to be conscious of the incidents that have occurred involving Canadian mining companies overseas in the last few months. I would point again particularly to the Omai mine incident in Guyana in August of 1995, with the failing of the tailings dam there, and to the recent problems with the Placer Dome mine in the Philippines at Marcopper last month.

With respect to the role of the federal government in the environmental regulation of the mining industry, we noted with interest the statement in the throne speech of February 27 that the federal government intends to withdraw from its functions with respect to the mining sector. We have written to the Prime Minister requesting a clarification of the practical implications of this statement. It is our understanding the reply to our questions is under development, although we have not received it yet.

In the meantime, there has been a very significant initiative going on through the Canadian Council of Ministers of the Environment, something called ``the environmental harmonization initiative''. This is focused on the development of something called an ``environmental management framework agreement for Canada''. This would in effect be an intergovernmental agreement between the federal government and the ten provinces and the territories.

We have expressed concerns about the direction of the harmonization initiative from the outset. We have included a copy of an analysis of the draft agreement prepared by the Canadian Institute for Environmental Law and Policy with our full brief. We are concerned about the rationale presented for the agreement, in particular the allegation that there is significant duplication and overlap in federal and provincial environmental protection efforts.

A number of recent studies, including the regulatory review document completed by Environment Canada in November 1993 and a study for the harmonization initiative itself completed by KPMG Management Consulting in August of 1995, indicated that in fact the actual incidence of duplication and overlap in federal and provincial efforts is very small. The KPMG study actually concluded that most incidents of overlap have already been addressed.

We are also concerned by the agreement's proposals regarding the devolution of the enforcement of federal environmental law to the provinces and territories.

We are also concerned that the agreement would effectively establish a decision-making process which would make it virtually impossible for the federal government to take any significant action on an environmental issue without the consent of the provinces. This includes action in the area of international affairs and even in the production of educational materials.

We're also concerned that the agreement really fails to address the issue of the role of aboriginal peoples in national environmental decision-making. For something that purports to be national in scope, we're very surprised it hasn't addressed this issue. We're also very concerned because in our view it didn't really address the real issues before us, which in the minds of our organizations and of many others are in fact the emerging gaps and underlap in federal and provincial environmental protection requirements as resources at both the federal and provincial levels shrink.

We do believe there is a strong rationale for a significant federal role in the protection of Canada's environment. This relates to Canada's international environmental obligations. Canada is a party to a wide range of international treaties and under international law the federal government is responsible to the other parties to these treaties for Canada's fulfilment of its obligation under these treaties.

We also believe that a strong federal role is necessary in order to ensure regional equity and in particular to ensure that pollution problems in one province don't overflow into other provinces or that some provinces don't engage in efforts to create pollution havens to attract investment, which can precipitate races to the bottom among provinces.

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We're also concerned that in some areas it is difficult to see how the provinces, either acting individually or collectively, could provide efforts as effective or efficient as the federal government. One of the areas that strikes us as being particularly evident in this case is with respect to devaluation of new substances in Canada. It simply would make a lot of sense for each province and territory to have a process for evaluating new chemicals or new pesticides or those kinds of things. It would seem an enormous duplication of effort. There's sort of a rationale there for the federal government to play a role.

I think I'll leave off there and let my colleague, Mr. Muldoon, take over.

Mr. Paul Muldoon (Counsel, Canadian Environmental Law Association): Thank you. I am Paul Muldoon, staff lawyer at the Canadian Environmental Law Association. My task today is to outline some of our specific comments on the recommendations in the document ``Streamlining Environmental Regulation for Mining: an Interim Report''.

What I'd like to do before I provide specific comment is provide four contextual issues or points that flavour or colour our comments. Our overall response to the document is that we see this as a move to deregulate at worst and at least minimize or relax at best the requirements of the mining sector with regard to environment protection. This is particularly disappointing for the four contextual reasons I'd like to outline.

The first reason is that the number of federal regulations that apply to the mining sector is remarkably small. No new discharge or emissions regulations have been introduced since promulgation of the metal mining liquid effluent regulations under the Fisheries Act in 1977. Furthermore, these regulations do not apply either to mines open before 1977 or to gold mines.

Secondly, three recent polls in Canada suggest the trend towards deregulation, at least with respect to the environmental field, is in fact contrary to expectations of the public. The public clearly expects stronger, not weaker, government action to protect the environment.

In June 1995 a survey by Ekos Research, for example, suggested that members of the general population sampled place a clean environment second only to freedom in the hierarchy of values of the federal government.

The Canadian Council of Ministers of the Environment has commissioned polls in order to determine public attitudes semi-annually since 1988. In the latest poll, the majority of respondents surveyed believed Canada has gone only 30% of the way towards achieving a safe environment; 78% of respondents stated that environmental regulations should be strictly enforced, even in times of recession. When asked the best way to reduce industry pollution, 48% cited strict laws and heavy fines to punish companies. The voluntary measures were at the bottom of the list.

Recent surveys of business leaders have confirmed the importance of strong laws and regulations in achieving environmental protection. In 1994 and again in 1996, KPMG Management Consulting conducted surveys of over 300 businesses, school boards, and municipalities questioning them about their environmental management programs. In both surveys, over 90% stated that the primary motivation for establishing environmental management systems was compliance with regulations.

The third reason we're disappointed in terms of the move towards either deregulation of or diminishing environmental requirements is that the level of concern currently being expressed over the federal environmental regulation of the Canadian mining industry is in fact surprising when you look at other regulatory regimes, particularly in the United States. Our thesis is that the Canadian regulatory regime is weaker than our southern counterpart, and the precise analysis of that is done in our submission. I'll just refer you to that, and we can certainly discuss it later on.

The fourth reason we are disappointed relates to environmental regulation in competitiveness. Natural Resources Canada's document ``State of Development in Mines and Minerals'' contains a brief discussion of the relationship between environmental protection requirements in innovation and competitiveness. This paper reflects the traditional view of the relationship between environmental protection and economic performance as a zero-sum game. Within such a framework, additional environment protection requirements are seen to impose non-productive costs on regulatees and to act as deterrents and barriers to innovation, investment and job creation.

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This position, we submit, reflects an economic perspective rooted in the past, and it ignores the growing consensus about the potential convergence between pollution prevention and economic efficiencies. We point you to a recent paper published in the Harvard Business Review that outlines, we think, the new, more tenable vision of the relationship:

Properly designed environmental standards can trigger innovations that lower total cost of a product or improve its value. ...Ultimately, this enhanced resource productivity makes companies more competitive, not less.

These conclusions regarding potential linkages between well-designed environmental protection requirements, innovation and improved efficiency have been reflected in numerous other studies completed by the Organization for Economic Cooperation Development, the U.S. Congress Office of Technology Assessment, and the U.S. Environmental Protection Agency, among others.

So that is the context upon which we'd like to base our submissions. In looking at the specific recommendations, we noticed the standing committee made a number of recommendations regarding the federal environmental assessment regime in its December 1995 report. We will not address these comments in this presentation in detail, but will highlight some of the issues we see as being of concern.

First of all, both our organizations regard comprehensive environmental assessment of mining undertakings to be essential to form an integrated environmental, economic and social decision-making with respect to such projects. In this context, we are particularly concerned about the committee's recommendation that a single-window assessment system for environmental assessment processes at the federal and provincial levels be established.

Most importantly, it should be a fundamental principle that the process, procedures and standards for environmental assessment not be lowered in a move to a single-window assessment. Rather the governing principle should be that the single window includes the most stringent requirements of both the federal and provincial environmental assessment regimes. It should be noted that the Canadian Environmental Assessment Act already makes provision for both federal and provincial environmental assessments.

The Standing Committee on Natural Resources made two recommendations regarding the administration of fish protection provisions of the Fisheries Act. The standing committee's second recommendation, recommendation 9, proposes the formal delegation of freshwater fish habitat management to the provinces, which already manage their own fisheries under federal legislation or local co-management boards. This proposal raises serious concerns for a number of reasons.

Firstly, the track record of most provinces with informal delegation of this authority since the enactment of the current habitat protection provisions of the Fisheries Act in 1977 is not strong. This has been carefully documented in a report recently presented to the Minister of Fisheries and Oceans by the Centre québécois du droit de l'environnement on behalf of the Fisheries Act working group at the Canadian Environment Network.

Secondly, due the wording of the Canadian Environmental Assessment Act, the delegation of the decision-making authority under section 35 of the Fisheries Act to the provinces would eliminate subsection 35(2) authorizations as a trigger for federal environmental assessment under the law list regulation. This would introduce a significant change to the federal environmental assessment regime. The decision to make subsection 35(2) authorizations a trigger under that act was the result of extensive multi-stakeholder consultations and negotiations. Its effective repeal through the amendment of the Fisheries Act to delegate habitat alternation decision-making authority to the provinces would damage the integrity of consultation under the Canadian Environmental Assessment Act, in which the mining industry was a full participant.

Third, the requirements for the protection of fish habitat comparable to those provided under subsection 35(2) of the Fisheries Act exist only in some provinces. Indeed, in most provinces and territories the Fisheries Act habitat protection provisions and the requirement for federal approvals of habitat alterations are the only legal protection for a maintaining of the integrity of wetlands, streams, shorelines and other ecologically sensitive areas.

I'd like to move on to recommendation number 12. In this instance, the standing committee recommended that the mining meadow effluent regulations under the Fisheries Act be harmonized with provincial effluent regulations. In our view, this recommendation should not be supported.

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First, one of the principles relating to the development and administration of laws within the federal system should be the development of a clear, predictable, and consistent set of laws and regulations. In our view this principle would not be achieved through harmonization. At present, only the Province of Ontario has effluent limits that by and large parallel the federal regulations. Most provinces simply do not have comprehensive effluent limits for mining. Instead, they rely on the federal effluent limits under the Fisheries Act. I might add that the provincial regulations continue to be under review.

Second, over the past few years the process of AquaMin, which is the acronym for the assessment of the aquatic effects of mining in Canada, has been ongoing. This multi-stakeholder process was initiated in response to an Environment Canada commitment to update and strengthen the mining effluent regulations. During these consultations it was our understanding that there was a general consensus among the stakeholders of the need for federal regulation to promote the principles of consistency and predictability that I mentioned earlier.

Finally, there is the issue of enforcement. With some exceptions, the provincial record of enforcement is not strong. Indeed, in his 1990 Report to Parliament, the Auditor General of Canada documented the collapse of industry compliance rates. Their mining regulations dropped from 85% in 1982 to 48% in 1988, following the delegation of responsibility for enforcement to the provinces.

Federal standards that can be enforced by federal officials provide an incentive for the maintenance of provincial enforcement capacity. In addition, the federal presence acts as a backstop or safety net against provincial inaction and helps prevent the emergence of pollution havens in Canada.

In light of the time, I'd like to move on to recommendation 15, dealing with voluntary measures. The standing committee has recommended that the federal government consider alternative approaches to traditional regulation, including voluntary measures, to attain a more efficient regulatory system. In our view, while there is a role for promotion of voluntary initiatives, such initiatives should not seek to undermine or replace the current regulatory system. Our overall view is that instead of considering alternative approaches to traditional regulation, efforts should be made to improve the regulatory system.

One of the key constants that must be maintained in the move to update the regulatory framework is the respect for the rule of law. The rule of law recognizes that the rights and duties of government and citizens and the interpretation of those rights and duties is the responsibility of the judiciary through the due process of law. The fundamental importance of the due process of law is that it invokes a number of key principles.

Without any attempt to be exhaustive, the key principles for the purpose of this discussion include fair and consistent decision-making, public accountability, and due process itself. In our view, the trend towards voluntary measures undermines these very fundamental principles of not only our legal system, but of democracy itself. So we urge you to consider very carefully any move towards voluntary measures that either replace or supplant the regulatory system.

In our view, proponents of self-regulation and voluntary regulation often suggest that the regulatory system is not working. However, there is little analysis of the nature of the problem. A report prepared for the Standing Joint Committee for the Scrutiny of Regulations put the issue in this way, and I quote because of its relevance:

Those critical of the use of regulations as a policy instrument typically characterize regulations as inflexible, difficult to amend, and therefore as being inefficient.

Although it seems trite, it must be pointed out in response to such criticisms that none of these attributes are capable of being possessed by regulations themselves. In fact, such criticisms relate not to regulations per se, but rather to the process by which regulations are made and amended.

There is no inherent reason that the regulatory process cannot be more responsive to changing circumstances. In the end any process, including the regulation process, can only be as effective as those who are in charge of it. Making the regulatory system work better in the end serves the broader public interest, rather than devising alternative systems with potentially equal or more pitfalls than the current approach.

In conclusion, the mining industry and its supporters tell Canadians that Canada is competing with other jurisdictions that have lower environmental standards and more favourable tax treatment for mining investment. Effectively they are inviting Canada to engage in a race to the bottom with countries in Latin America and Asia in terms of who will permit the industry the greatest externalization of its cost and the minimum return of revenues to citizens of the host country. Given the enormous environmental costs associated with the industry and with it the jobs, by definition, Canadians must ask themselves if this is a race they wish to be part of.

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In many provinces the federal environmental regulations and requirements that apply to the mining sector are the only legal protection in place. These standards and requirements need to be strengthened and updated rather than being streamlined or harmonized out of existence.

Canadians clearly place a high priority on the environmental role of the federal government. It is now incumbent on the federal government to respond to this expression of confidence and trust.

Thank you very much.

The Chairman: Thank you very much, Mr. Muldoon.

We'll begin the questioning with Mr. Canuel.

[Translation]

Mr. Canuel (Matapédia - Matane): There seem to be an enormous number of regulations. I wonder whether it is the regulations that are deficient or rather the application of those regulations. Listening to certain companies and persons, I am inclined to believe that there is a problem in the application.

There is very frequent talk of overlapping. As there are federal and provincial standards, shouldn't this be handed over to the provinces, somewhat as the government stated in the Throne Speech with respect to the logging and mining industries?

As to standards and regulations, shouldn't that all be handed over to the provinces? What purpose do these standards serve if we have trouble enforcing them because of overlapping between the federal and provincial governments? I would like to hear your comments on this point.

[English]

Mr. Winfield: With respect to the issue of the number of regulations, in fact only three federal discharge-type regulations apply to the mining industry. The metal mining liquid effluent regulations came into force in 1977, a set of regulations for secondary lead smelters came into force in 1976, and a set of regulations applied to the asbestos industry came into force in 1977.

There is a sort of a vacuum there. There has been concern over the enforcement level or level of effort in enforcement at both the federal and provincial levels over the years. The federal government's efforts in this area are not exemplary by any stretch of the imagination. We would point in particular to the Auditor General's 1990 report and his comments on the federal government's efforts in the far north, in the Arctic.

The problem is at the provincial level the enforcement track record is not much better. In British Columbia and Ontario over the past few years there has been some improvement, but in many other provinces there are essentially de facto non-prosecution policies in place, and prosecutions under any environmental law are extraordinarily rare.

In theory it may seem apparent that there are some efficiencies to be gained by delegating enforcement responsibilities to the provinces. The problem is when we connect that theory to empirical reality and the track record of most of the provinces, it does not inspire confidence by any stretch of the imagination.

In our view, the presence of the federal regulations and their active enforcement has the effect of providing some kind of cross-country floor, hopefully - if they're administered and enforced effectively - below which no one is allowed to sink. The provinces are allowed to set standards above that federal floor, but it's at some kind of minimum standard for all Canadians and it helps to prevent the possibility of some provinces trying to attract investments by in effect saying ``Come and do whatever you like''.

I have to look at my own province of Ontario right now, where that's essentially precisely what the provincial government's proposing to do.

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Mr. Muldoon: Let me respond to the second part of the question, which is whether or not the provinces should be delegated the authority over mining. I have four basic responses.

One is that there is a presumption that there is undue duplication and overlap. Quite frankly, the evidence of that is scant. During the harmonization initiative by the CCME, the non-governmental groups asked continually across the board for evidence of the alleged overlap and duplication such that it required this whole reworking of federalism with respect to environment protection. Those studies never did materialize.

Our view is that if there is overlap and duplication, let's deal with it on a specific provision by provision approach, rather than just trying to use delegation as the saviour. It's not. There are lots of reasons, which I'll get into, as to why the dynamic federalism we have with respect to environmental protection is an appropriate way to go.

So, at the end of that point, I think we do not subscribe to the view that duplication is a given. Duplication overlap must be established. We have to look at the nature of the duplication overlap. Then we have to deal with it on an issue-specific basis.

Second, the view that the devolvement of authority of mining to the provinces will be good for the mining industry is also at risk. What you'll have over time are a dozen different mining regimes in Canada, because there is no need to suggest that each province would deal with it differently.

So that inconsistency and lack of predictability of how to deal with mining law will be exasperated now in Canada with all these different regimes. So the goal toward consistency and predictability and some sort of level playing field will certainly be lost without federal presence.

Third, one has to look at the capacity of the provinces these days and ask: can they actually deal with another sector devolvement? It should be recalled that devolvement is not accompanied by a resource transfer agreement or additional resources. Look at the provinces that are dramatically reviewing the regulations with the hope of shedding themselves of more regulatory burden.

So the question is: first of all, is there a capacity at the provincial level? Is there a political willingness at the provincial level to enact and maintain environmental standards, especially the mining industry, that's in the public interest? Third, at the end of the day, is there a capacity to enforce, maintain and update those? In the light of that, I think you'll see that in most provinces the answer is no.

Finally, I think that one has to look at the history of environmental law in Canada. History demonstrates that there's always been an interplay between provincial and federal regulation. It has not always been interplay without problems. But the interplay means that each level of government looks at what each other is doing, and as it evolves, this dynamic federalism does work into some level playing field or some sort of minimum protection for Canadians.

I think to remove that dynamism by removing the federal presence will not only hurt the mining industry in the long run, but it will also hurt the environment protection regime in Canada.

[Translation]

Mr. Canuel: If some provinces are able to assume their responsibilities fully, do you agree that those responsibilities should be given to them? If another province were not prepared to accept this responsibility, it would not be given it.

[English]

Mr. Winfield: In some aspects, I think if one did undertake that kind of delegation, one would have to put in place a very strong review mechanism to make sure it's appropriate. With the province, if it has the capacity and the will to do something at the time of delegation, that situation may change over time. So there will need to be a mechanism to review these things for it to be done in an administrative manner, rather than by a permanent legal one.

In terms of other aspects of this, I think there are certain dimensions of the present federal role that would make sense from a number of different perspectives to retain at the federal level for reasons of efficiency and cost-effectiveness. In addition, in terms of maintaining some degree of regional equity, it is important that those things stay with the federal government.

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The Chair: Mr. Strahl.

Mr. Strahl (Fraser Valley East): Just to play the devil's advocate a little bit here, I wonder if one of the reasons why we have not had good compliance in Canada is that sometimes mining companies are able to play both ends against the middle. They just say that's federal and, yes, we're working on it. And the province comes along and says no, this is provincial and that is federal. And they end up with a mishmash, which, instead of being the dynamic tension you're talking about, really allows people to slip through the cracks. It's a case of everybody is responsible and therefore nobody is responsible. And people are sometimes able to use this to their advantage.

I wonder, in that sense, if it isn't like the chicken-and-egg thing. The provinces don't enforce because they just say it is not our job so we'll let the feds do it. And the feds don't do it because constitutionally mining is a provincial jurisdiction. Everybody just runs around and it's everybody's job but it's nobody's job. As a consequence, we end up with some tough regulations all over the place and lousy compliance.

What if we said to Ontario, or whomever, that it's your baby, it's your pollution, and you're going to answer to your electorate? You're going to have to do it because it concerns your rivers and if you don't, you're going to face the wrath of the electorate and create a screwed-up environment. You're going to pay the price politically, internationally, and so on. What if we said this? Right now, it's as if it's everybody's fault but nobody's fault so let's just open another mine.

Mr. Winfield: A colleague of mine at the University of British Columbia has actually written a paper about federal-provincial blame avoidance in environmental management.

Yes. I think from time to time there has been finger-pointing both ways - saying it is their problem. I think the problem with full devolution to the provincial level is that the consequences of a province's failure to act can have impacts outside of the province in a number of different ways. The most obvious is transboundary pollution where pollution from one province affects another, where damage to a river system or something inside of one province overflows into another province.

The other problem - and this comes back to part of the federal role in terms of providing some sort of national floor - is the danger that if one province starts lowering its standards and weakening its standards, potential investors may try to whipsaw among provinces too. They might say one province is going to let us have a much messier operation. This is going to cost us a whole lot less money. So we're going to go there rather than to your province. This kind of downward dynamic among pollution havens is a major concern.

I think this is one of the core reasons why it's helpful to have the federal presence there. Again, one province lowering its standards has a double effect. Not only does it potentially mean pollution inside that province can affect other provinces, but it also means other provinces can start to feel pressure to lower their standards to compete for investment.

In fact, I've heard off the record from provincial ministers who have experienced this kind of dynamic in relation to other provinces. They felt they certainly couldn't raise standards and were in fact under pressure to lower them because another province had done that for this sector.

Mr. Strahl: Okay, I hear you. Actually, I should talk to you later and see if I can get a copy of that paper. I think this is going on a lot right now. When the mining companies are here before us they claim on a stack of mining regulations that they're not interested in lowering standards. They say they don't want to lower standards, and they're happy with the standards, whatever the standards are, and all they want is to just deal with one jurisdiction so that whatever the standards are they can go to this person and ask for an answer on a specific procedure. They say is it yes or no - just give us the yes or no and we'll move on. So I think there's a lot of that going on.

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I'm wondering if there's any concern from your institute on the potential trade-offs you're talking about between what is happening in British Columbia specifically, which is where I'm from, with a third level of government and the aboriginal land claims issue....

Under the Nisga'a agreement, the first of probably sixty land claims agreements in British Columbia, there is a transfer of the control of mining and natural resource management in its entirety, as near as I can figure it, to the Nisga'a people. Of course you assume things will go well and so on.

Have you looked at that agreement? You talk in here about three levels of government. Are we going to end up with three or four, or fifty or sixty? What role should federal or provincial governments maintain in the environment when we're devolving? There is a massive devolution of powers in the Nisga'a agreement.

Mr. Muldoon: I have not studied that agreement. You highlight an important issue that should be looked at, but I certainly can't comment on it.

I'd like to get back to the finger-pointing issue. The mining industry may want a simple yes or no answer to a complex question, but if you look at the Constitution, the reality is that provincial and federal governments have different responsibilities.

It is a federal government responsibility to look after fish and fish habitat. It's a clear head of federal power. And a threat to the fishery and to fish habitat is mining. So in my view there is no way you can devolve certain areas of responsibility and still undertake your core federal role under the Constitution.

The goal should not be simply clear answers; it should be clear rules. If we can try to work for a regulatory system that is more predictable and more certain and maintains a high level of standards, then I think there's a win-win situation available.

What's needed - and this is what we've been urging for - is a more clear understanding of what the problem is. Is the problem really that there's confusion out there in terms of how the rules ought to be administered or enforced? Then we ought to study that and clarify that. Or is it in fact the agenda to deregulate?

If we could clarify and have a discussion on that point, it would serve the broader public interest. Our view of course is we support clear, more predictable rules as long as they maintain the core principle that environment protection is a public interest priority.

Mr. Strahl: Many of us in British Columbia feel - and I think it's being proven right now, certainly in our air emissions standards and so on - that we have probably the highest standards in the country, and higher than the federal standards in some areas. I don't know about all the mining stuff for sure, but certainly in B.C. any government that approved standards lower than the national average would be nuked, to use a non-environmental term.

To use the Huckleberry mine example in British Columbia, even Moe Sihota, who is probably the superest of the super environment ministers in the country, signed off on it and said ``Let's go; I approve''. He felt he was held up by the feds for absolutely no reason at all. He said ``We have the toughest standards in the country, we've done the whole works and we approve''. Certainly B.C. does have the resources to do that kind of study. And they were waiting on the feds. What do you tell a mining company there?

I don't think B.C. standards are lower. They're tough. The company has made an honest effort to address any concerns, and then they have to wait six months or a year while the feds get their buns in gear. What do you say to a company then?

Mr. Winfield: I'm not intimately familiar with the Huckleberry case. I've had it put to me in different terms, saying that in fact things moved relatively smoothly through the federal system and there were no undue delays. I've heard that version from other people who are knowledgeable too.

Mr. Strahl: Well, that's certainly not what's been said in the papers, but -

Mr. Winfield: Yes.

What we're saying is yes, there may well be opportunities for a smoother interface between the federal and provincial requirements to make sure some kind of floor is maintained in that process, and there's a capacity, if the provincial will shifts, for some sort of floor to still be maintained. That's the core principle we're looking for.

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I want to go back to your earlier comment about the mining industry and its goals. I would like to believe that all they're looking for is streamlining and greater efficiency, but I have to look at what's been going on in Ontario in the last six months with respect to environmental law and mining.

Clearly, the provincial government is being driven by the mining association. The Ontario Mining Association was so confident that it was going to get what it wanted out of Bill 26, the omnibus bill, that it was the only major industrial or non-governmental association that didn't make an appearance before the legislative committee studying the bill. That bill essentially gutted the mine closure and remediation requirements in the province.

On Friday we got a copy of the mining association's brief to the provincial red tape commission for the environmental regulations. They're asking that every environmental regulation in the province applying to the mining sector either be repealed or gutted.

Mr. Strahl: And no replacement is offered?

Mr. Winfield: No.

Mr. Muldoon: If you combine that approach provincially - clearly it's a deregulation agenda - with issues like closure plans, financial assurances, liability regimes, and couple that with the devolution of federal authority over mining to the provinces, we feel that has serious consequences for the regulations governing mining. So we're very concerned when we hear and read about the federal moves toward devolvement. And if you look at what's going on in provinces that do have mining regulations, there's devolvement or deregulation going on even there. When you put the two together, it's a scary picture.

The Chairman: Mr. Wood.

Mr. Wood (Nipissing): I have a question for Mr. Winfield on what he just mentioned about Ontario.

Since you're from Toronto, I'm sure you are aware that Premier Harris recently announced deep cuts to the provincial Ministry of Natural Resources. In our efforts to end overlap and duplication in environmental regulations we have recommended that much of the assessment and monitoring be done by the provinces, with the federal government setting and enforcing national standards. In terms of Ontario, do you think there'll be adequate resources at the provincial level to perform these tasks? Second, are there similar situations in other provinces that we may not be familiar with?

Mr. Winfield: The answer to your question is yes. My institute is preparing a fairly detailed review of the affect of the ``common sense revolution'' on the environmental management of Ontario. Some patterns are becoming clearer in the cuts being made both to MNR and the Ministry of Environment and Energy.

One of the areas clearly being targeted is the capacity of provincial agencies in the area of assessment monitoring scientific research. As we go through the line items in the various financial statements coming from Mr. Eves and Mr. Johnson, it's clear that's being targeted. It is pretty clear in Ontario that the capacity is not going to be there.

We also have some familiarity with the situation in Alberta. The Alberta Department of Environmental Protection lost something approaching 50% of its budget, and one of the major themes in its efforts to cope with this shift has been the move to various self-monitoring and self-reporting regimes. So instead of the province doing the reporting and the assessment, they asked the companies to do it.

Mr. Wood: Does that work in Alberta?

Mr. Winfield: No, we're seeing a fair amount of evidence that there are serious problems with that, ranging from the quality of the data.... I understand from our colleagues at the environmental law centre in Alberta that during prosecutions, issues have arisen as to whether or not the use of self-monitoring data is in fact self-incrimination and therefore not admissible as evidence under the charter. So there seem to be serious problems emerging there, and we're hearing from various sources that even some industry people are disturbed at the direction of some of this and the complete lack of rules and where that's heading. So I think there are clearly some quite serious problems.

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Mr. Wood: So you're afraid that's going to happen in Ontario?

Mr. Winfield: As we look at the estimates that are coming out and where the cuts are falling on environment and MNR, it's clear that's what's going to happen.

Mr. Muldoon: Can I just add something? If we can understand the magnitude, it's 752 positions out of 2,000 for the Ministry of Environment and Energy and 2,180 for the Ministry of Natural Resources. So you're talking in the range of one-third of these ministries being reduced within one year, and this is only the first round. That, coupled with other reductions and lack of capacity plus the review of not only the regulatory base for Ontario.... There's right now an 80-regulation review for the Ministry of the Environment, plus a province-wide red tape commission review, plus a review of selected statutes such as the Environmental Assessment Act.

In other words, while there may be a move towards federal devolvement on the assumption that there's a strong environmental assessment regime in provinces like Ontario, that assumption is in fact being challenged, because the minister said that in the near future she'll be announcing her agenda dealing with environmental assessment.

So again it goes back to the question that you're devolving some federal authority, but to what? It may well be, at least in one of the provinces that traditionally had a strong regulatory framework, that it's not going to be existent or that it will in a much weakened state.

Mr. Wood: There's been some recent progress in signing bilateral agreements between the federal government and the provinces to coordinate environmental assessments. The most recent of course is with British Columbia. I guess I'm curious as to whether you support the bilateral process, whether you think it can be successful nation-wide, or whether there are political or jurisdictional barriers to prevent this.

Mr. Winfield: Given a choice between the sort of framework agreements across the board, such as the CCME environmental management framework agreement, which attempted to address everything all at once among all 13 provinces and territories and the federal government, and a series of bilateral agreements, I think the bilateral approach makes more sense for a number of reasons.

The first reason is that if you're trying to deal with specific problems in which there may be some overlap in administrative requirements or in which reporting requirements can be consolidated, that will basically have to be done on a case-by-case basis. So it makes sense to do it bilaterally. You can't do it on a ``one size fits all'' basis.

Secondly, the bilaterals have the advantage of allowing the federal government to tailor its role in each province to something that is appropriate in that province. There are enormous differences in capacity and political will among the provinces. In some provinces the federal government may need to do more, and in other provinces it may be able to get away with doing less. One would expect that the environmental role that the federal government's going to need to play in Prince Edward Island is going to be very different from the role it may need to play in British Columbia.

The third advantage to bilateral agreements is that they avoid the kind of twelve against one dynamic that was inherent in the CCME harmonization agreement, whereby you had the federal government on one side and it was always going to be arguing with twelve provinces and territories on the other. This is a much more equal negotiation that occurs, and the requirements of whatever agreement can be entered into can be tailored to what's appropriate for that province.

That said, we have in our response to the government's proposals on the CEPA review put a number of qualifications on the way in which bilateral agreements should be approached to make sure there are appropriate public accountability mechanisms built in, that there are mechanisms to ensure there are regular reviews of those agreements, that the parties are fulfilling their obligations, and that if there's a need for the federal government's role to change, there's a mechanism for that to happen.

There have been a number of these bilaterals on environmental assessment - also what are called equivalency or administrative agreements under the Canadian Environmental Protection Act - entered into as well.

There are some concerns starting to emerge about those agreements and about their effectiveness. There was a report done by a group in British Columbia a few months ago about the Canada-B.C. bilateral on the pulp and paper regulations under CEPA, and there are some questions as to whether or not the two governments are fulfilling all of their obligations. So while in principle we prefer the bilateral approach, I think we also need to do some serious evaluation of the agreements that are in place, and think about how well they're working.

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Mr. Muldoon: We will submit a copy of our response to the government response to the proposed amendments to the Canadian Environment Protection Act. They outline a menu of issues that ought to be considered in negotiating bilateral agreements and reforms to the process, for a better way of going about it than the omnibus way proposed by CCME.

Mr. Wood: Are you saying that there are political or jurisdictional barriers here?

Mr. Winfield: The only formal jurisdictional barrier that one ultimately comes up against is the issue of illegal delegation. The federal government cannot give the province authority to legislate over fisheries, and vice versa. That's the only real jurisdictional limitation.

The political consideration that must be taken into consideration, particularly from the federal government viewpoint when entering into such agreements, is whether the capacity and political will exists at the provincial level to fulfil the obligations. That is the critical question.

The Chairman: Mr. Reed.

Mr. Reed (Halton - Peel): Regulation was not one of the big concerns expressed to us by the mining industry. As Mr. Strahl indicated earlier, the mining industry made it clear that they have no objection to the rules of the game. Their concern is that the rules of the game may be changed in mid-stream. In other words, what often happens after a proposal has been assembled and delivered is that a regulatory change comes into play. This means the proponent has to turn around and resubmit.

If we are looking at this business of a one-stop office and so on, one of the objectives is to grandfather the rules so that when someone starts a project they know what the rules are, because they are all spelled out at the beginning. They need to know the goal posts won't be moved during the process. Have you had this experience?

Mr. Muldoon: Not only the mining industry but most industrial sectors voiced that complaint. We hear it over and over again. I don't want to diminish their concern, but I think the evidence of that problem is a bit overstated. In virtually every sector trying to get approvals, whether for a doughnut shop or in the mining sector, these problems occur and are inevitable.

Having said that, we support the notion of clear and predictable rules, of a regulatory system upon which proponents can rely. However, we believe that in that process there is a difference between procedural reform, which makes the process more predictable and easier, and the substantive reform of lowering standards. One of the themes you're hearing from us is that in the effort to clarify the process, standards are being lowered.

If we want to get on with one-stop shopping and those kinds of things, we should talk about procedural reforms that assist the process. But if you look at the proposals on the table, that is something different. You're talking about lowering and deregulating the standards for the mining industry, and that's our major concern. So I'm afraid that the problem offered and the solution offered are different.

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Mr. Reed: To suggest that the moving goal post phenomenon is being overstated.... I can only talk from personal experience. I'm not a miner and I'm not involved in the mining business, but I am involved in business that interfaces with the approvals process, with government and with environmental law as it applies in the province of Ontario. I can tell you - and I'll put it on the public record here - that the experience is horrific in terms of the moving of goalposts as a project proceeds.

The cost to the proponent is so onerous that many would not even have begun the process in the first place had they known they were going to run up against this constant changing of regulation. What has made matters worse in Ontario is that the policies have been decentralized from the minister's office out to the regions, as you know, so that subjective interpretation becomes the order of the day and then it is well nigh impossible to do anything.

I think those of us who are involved in industries that have environmental impacts and so on understand and accept the rules, but what we have to know is that the rules are going to be constants. Otherwise how can anyone risk the money that's risked and make any kind of a decision?

Mr. Winfield: I agree that the ideal - and I think we should aim for it - is a structure that says ``Business, here are the rules. Here are some things that are non-starters, so don't bother with them.''

I've no objection to that. There will be times when the rules have to change because of new information, new science and those kinds of things. We need to have processes for dealing with that.

It seems to me this is more of a problem at the provincial level than at the federal level. The federal regulations on mining haven't really changed for the better part of twenty years at this stage.

One of the concerns we've been raising with what's happening in the Province of Ontario right now is about these wholesale regulatory reviews, such as the entire land use planning system having just been thrown out the window.

Companies were already making investments to deal with regulations which had come into force but which are now under review so the whole thing has been thrown into turmoil. There was a very important recognition of this when the Ontario Environmental Bill of Rights was passed because there was actually a provision in the bill that said you could request a review of an existing law or policy or regulation. There was a clause put in the bill that said you could request this only if something was already been in place for five years, precisely because we don't want to be opening things up constantly. We have to have closure and then move on.

One of the problems we are encountering in Ontario right now is that everything has been thrown into complete turmoil. Some companies are being caught after having started to make investments, for example, to comply with MISA regulations. Others haven't. It's just a mess. In fact, we're even hearing that in other provinces like Alberta there's concern that one of the regulatory reform things that keeps coming up in a number of provinces is to keep putting sunset clauses in regulations to say they expire after five years.

We're hearing from people who are saying ``Well, that doesn't really help us. In fact it makes the problem worse because we don't know if the rule is going to be there or not.''

I think we agree there needs to be some stability. I think the EBR rule about the arrangements for requesting reviews and having a five-year rule unless there's some overwhelming reason for changing things is a good one. It's a way of trying to bring some stability to that situation. I think we recognize the problem.

The Chairman: Thank you, Mr. Reed. Mr. Bélair.

[Translation]

Mr. Bélair (Cochrane - Superior): I listened to your presentation very carefully and I generally subscribe to the views you stated. I believe that the distance your organization has taken is fully justified.

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My colleagues on the committee know that I am enormously concerned about the future of the mining industry in Canada in light of foreign investment, and all the statistics today confirm this concern.

When you look at the other side of the coin, the mining industry is clearly investing much more outside Canada than within Canada, first of all because of overlapping with the provinces with regard to environmental assessments and, second, because of regulations that are too strict.

The statistics on mining exploration in Canada are highly alarming. In 1995, we invested only 12 % of what we invested in 1987 and 1988. That statistic speaks volumes because, after exploration, there is discovery and then development of new mines. We are talking about economic growth in Canada and, in particular, about the number of jobs that will be created.

Ladies and gentlemen, we of the committee are still trying to reconcile these two positions and we will have recommendations to make to the Minister. I would like to hear a comment from you, in particular on the effects of the regulations, which are perhaps too strict.

[English]

Mr. Winfield: I think there is a need for some.... I'm not certain how much evidence there is that the issue of environmental regulations is actually the cause of where the mining industry decides to invest. The costs are quite marginal, or can be quite marginal in relation to the overall cost of an operation and the nature of the investment. Labour costs and other factors are also present.

With respect to the specific issue of the comparison of the Canadian regulatory regime with that of other jurisdictions, when compared to the United States what is remarkable about the Canadian federal regime in particular is actually how minimal it is.

We've included in our brief a copy of the paper by one of our colleagues from the Environmental Law Institute in Washington, D.C. It's an excellent paper and it outlines the U.S. regulatory regime, which is clearly much more extensive and much more rigorous than the existing rules in Canada.

With respect to comparisons with other countries, particularly in Asia and Latin America, I think one has to approach this with great care. I don't think we want to get into some kind of a competition with countries which have neither the legal nor the institutional infrastructure to deal with the potential environmental, social, and other impacts of the industry.

Mr. Bélair: But isn't that exactly the reason why our bigger mining companies invest in foreign countries instead of investing in Canada? Isn't it because of less bureaucracy, fewer guidelines, less of everything and better tax breaks?

Mr. Winfield: To look at it the other way they're saying they want to go where they can externalize their environmental and other costs the most and where they have to share the least amount of the royalties of their activities with the host country. They're effectively asking for a subsidy. I think that given the extent of the environmental costs we've identified and the extent of other costs as well we need to ask ourselves if this is a race we want to be part of.

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I'm told there are other factors involved in the exploration activity as well with respect to the availability of good, high-grade concentration sites in Canada. Part of the reason that Voisey Bay causes so much excitement is that it's one of the few sites where we have really good ore available.

So that's a factor in this mix as well. But my really fundamental concern is for us to not get into a race with Latin American or Asian countries in terms of mining investment, because I think it's one we're going to lose, or at least one that will cost us dearly.

With respect to the specific issue of environmental assessment, I think it's really essential for us to do environmental assessments so that when we're making decisions about mining projects, we have a really solid handle on the economic, social and environmental dimensions of what's proposed and can be certain that what is proposed is in fact of net benefit to Canada and to the communities involved. I think it's just essential to good decision-making. That's sort of where I'll have to leave it.

I think there's a multiplicity of factors here. On top of that, as we've said before, the regulatory regime hasn't really changed very much in twenty years, except for the environmental assessment side, from the federal perspective. It's not clear how that suddenly is such an enormous factor. I think that there are other factors at work here. So I think we need to approach this very carefully.

Mr. Muldoon: Let me just add that we have come here to argue about the need to protect the environment and conserve natural resources. But another perspective we always give is that environmental protection is not only for environmental protection; there is also an economic dimension.

There are two economic dimensions here. The more obvious one is that the cost of poor mining development is put back the tax if something goes wrong. There was a quote in our presentation that the estimated clean-up cost now for mining operations is $6 billion. I ask you: if we had had adequate environmental laws from the beginning, what would be the price tag? My proposition to you is that it would not be $6 billion; it would be very much lower than that.

Mr. Bélair: The reclamation fund should be of great interest to you.

Mr. Muldoon: That's right.

Mr. Bélair: It is. That's a great step forward for us.

Mr. Muldoon: Right. But the key is that we want to prevent problems before they occur. Strong environmental regulation has that advantage.

So we're here to say that there's an environmental perpective, but also an economic one, because, by and large, at the end of the day, it's the Canadian taxpayer that has to foot that bill. That is a subsidy that's not usually taken into account. The subsidy that one has to look at is $6 billion. That's a lot of money for cleaning up. We're saying there's technology and methods and means, by and large, to ensure that will not happen in the future. That's what we're arguing for.

The second thing is the whole move toward what they call cleaner technologies. I quoted, for instance, Professor Porter in his Harvard Business Review article. He talks about the economic benefits of good, strong environmental regulation.

This is not some sort of abstract thinking. This is sort of a whole movement of thinking, of looking at the benefits, the economic benefits in environmental regulation. It's being documented in Europe, it's being documented in the United States. Our plea, both before this committee and the other committees, is let's look at that as a nation, about the economic benefits of environmental regulation, so we're not behind, we're ahead of the game. Our view, and it's documented in the paper, is that internationally Canada seems to be behind, arguing against initiatives that not only yield an environmental benefit but an economic benefit. We're not sure why some European countries are running so hard and fast with this movement and we're standing behind.

I thought Canada was always out in the lead in terms of the green movement. That's not the case. So we're asking you to take a good hard look at these arguments - the scholarly literature and the studies that back them. Look at those connections. Our view is that at the end of the day you're going to see in fact there's a very strong economic argument for what we're arguing for.

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Mrs. Cowling (Dauphin - Swan River): You have clearly stated in your presentation this morning that you support clear rules. This leads me to the environmental assessment. I'm wondering if you could be more specific, because I think it would help this committee.

How would you think the environmental assessment should proceed? Should there be a provincial assessment? Should there be a federal assessment? Should it be done at the same time? Should one be done before the other? Should we work together? Could you expand on that? I think that would help us a lot.

Mr. Winfield: Clearly, except under some extraordinary circumstance, one would not want to see separate assessments or two different assessments proceeding in parallel. To our knowledge that's never actually happened simultaneously. There have been a couple of things on which there have been two separate assessments and they occurred at widely different points in time.

I think what one would envision would be an integration of the provincial and federal processes into one process. The federal environmental assessment act makes provision for joint processes. What is critical, though, is that the joint process reflect the minimum requirements of the federal process so that it's providing some kind of a floor in terms of what's looked at in terms of the assessment, the full range of environmental effects, and in terms of provisions around public participation in decision-making and intervener funding and those kinds of things.

In addition, although we would hope it would never occur, provision does have to be left for the federal government to be able to do its own assessment if, for whatever reason, the provincial assessment is inadequate or there cannot be agreement reached on how this will work. That has to be an option. It's one that one would hope would never have to be exercised, but I think it needs to be there as a safeguard to make sure that some sort of minimum standard is maintained in these processes. I think that's the way we would envision things.

Mr. Muldoon: So what we're looking for is a very coordinated system whereby both provincial and federal requirements are met but in a process that is efficient and effective.

Let me just give you an example provincially. It's probably not the only example, nor is it without some problems, but it's an example. In Ontario, when a proponent has approvals on the Environmental Assessment Act and is proving land use issues, the hearings are consolidated. There was an act passed in 1981 called the Consolidated Hearings Act. Basically you go to one hearing and all the approvals necessary are in that one hearing, and the boards physically combine themselves. You have members from each board coming together, and it is truly one-stop shopping in that context.

So there are examples of it, and by and large it has worked. There are always complaints on both sides about the process, but by and large it's an example of where there was the fear of duplication of process. They combined them and consolidated. The word is interesting; it's consolidate rather than delegate or harmonize, which means you get the best of both systems. That's the thrust of our submission.

Mrs. Cowling: Thank you.

The Chairman: Mr. Thalheimer.

Mr. Thalheimer (Timmins - Chapleau): We're talking about environmental regulations and we are all obviously in agreement that there have to be regulations in industry. As I understand the problem, the industry is saying fine, environmental regulations. We have three governments regulating the same subject matter. We have the federal government, the provincial government, and in a lot of cases the municipal governments. Many times the regulations are adverse to each other, they're not uniform, and so on.

As I understand your evidence here today, you wouldn't want the federal government to get out of mining and forestry. My suggestion to you is that we should have one body, one government, whether it's the provincial or the federal government, to regulate that field. Then we'd get away from this finger-pointing, right? The problem as I see it today is that we have three governments involved in regulating the same subject matter over mining and forestry. To follow the example that you just gave us a moment ago, it seems to me that we can get them all together to agree, but it's very costly and there is duplication. Doesn't it make more sense that one government should take control over this situation and say it will regulate mining and forestry? This is what our present government is proposing to do. It is proposing to say to the provinces that they should regulate and we'll get out of it. What's wrong with that?

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Mr. Winfield: There are a number of points there. The first is that the actual incidence where the federal and provincial requirements overlap are actually quite limited. They may both have regulations that affect the mining industry, but the federal regulations and the provincial regulations affect different aspects of the operation. So in some cases there is in fact actually a filling of gaps going on between the efforts of the two levels.

As I say, both the Environment Canada regulatory review that went on from 1992 to 1993 and also the KPMG study that was completed for the CCME indicated that the actual incidence where there is overlap and duplication of requirements is actually extremely limited. In fact, they could only identify five of the 36 regulations administered by Environment Canada as actually suffering from that phenomenon. In threee of the five cases the overlap was only partial and dealt largely with what were virtually archaic regulations. So the actual incidence of that is very small.

There are benefits to both levels having a role in the senses both of this process of filling of gaps, and in making sure that between the efforts of the two, all the essential bases are covered. There are advantages in terms of backstopping and oversight: if one level doesn't do its job, the other one might. That's very important, as we've said, in terms of the concern around the possibility that if it's left entirely to the provinces and a province doesn't do its job properly, there's a potential for direct impacts on other provinces in terms of overflow of pollution. There is also a danger of the possibility of the emergence of these kinds downward dynamics racing to the bottom as jurisdictions compete for investment - they try to see who can have the lowest standard. So there are advantages in terms of that.

There are advantages in terms of creativity. It's one of the dynamics of federalism that having both levels of government acting in any field can produce innovation. In fact, there's a great deal of literature around environmental policy in Canada and public policy in general about the advantages that occur there.

This is not to say that the interface of the federal and provincial requirements can't be made more efficient and tidier and cannot be done more effectively. We're not here simply to advocate more paperwork. There are places where you could conceivably integrate federal and provincial reporting requirements, and if you do it properly you can do it without loss of accountability or enforceability while reducing the paper burden in that kind of way. But that probably has to be done on a case-by-case basis.

In each province, you're looking at the way in which the particular legal rules in the province and the federal rules interface. What you hopefully end up with is a structure in which the federal government provides some sort of minimum floor that becomes incorporated into the provincial standards, and then the provinces have the freedom, if they want it, to establish additional requirements on top of that if they feel that's appropriate to deal with their particular circumstance and conditions.

Mr. Muldoon: Let me just add something by saying that we recognize the fact that that federalism sometimes creates a more complex situation in terms of environmental regulation and approval. In our view, though, the delegation or devolvement solely to one level of government is not the answer.

The issue is not about what is the easiest thing to do, but what is necessary to make the system work. The federal government does have responsibility under the Constitution for certain areas, such as the protection of fish habitats. Delegation of mining without any understanding of the implications of that would, I think, impede the ability of the federal government to look after its constitutional areas.

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Second, the process of devolvement - and you should be aware of this, in our view - will mean that you will be devolving to jurisdictions that either do not have the capacity to deal with the mining sector in terms of regulation or will not have the political will to deal with it.

Yes, at a certain level it is a solution just to hand off and say ``Okay, provinces; you look after this''. Our submission to you is that in doing that, you must look at your constitutional responsibility and at who you're handing it off to. Not all provinces, again, will want to or will have the capacity to regulate that sector. In other words, there is an area of federal responsibility here we're urging you to exercise, and it's for those reasons.

The Chairman: Mr. Deshaies has a question.

[Translation]

Mr. Deshaies (Abitibi): You said there was not that much overlap between the provinces and the federal government, whereas in certain cases it takes two years to file applications to open mines. In fact, about 30 applications for various permits must be made. While there may be no overlapping, there definitely are operational problems.

The committee does not want to lower the quality of the environment, but rather to study the number of regulations. I believe that the environmental movement has said it took part in the Whitehorse Initiative. Perhaps you have seen that the mining industry has made major efforts in recent years to improve, though perhaps not enough to achieve "zero pollution". Agriculture must pollute as well so that we can eat. An attempt must be made to improve all industries, including the mining industry.

There are jobs on the one hand and quality of life on the other. Shouldn't the environmental movement promote a reduction in regulations, not a lowering of their quality, but a reduction in number, which would be offset by an increase in the quality of the environment? The industry is asking for a trade-off. Could it obtain a permit in six months if it set higher environmental objectives? The industry is saying: ``Since we have made concessions with respect to time, paperwork, etc., we are going to set higher objectives with regard to quality of the environment." That is what we need to aim at.

Some of you around the table are wondering whether the various levels of government are looking into this. Is it necessary for the federal government to be a safety latch in case...? Perhaps, but we know that the fewer people are involved in paperwork, the faster things will get done, though without neglecting the environmental aspect.

The environmental movement should promote this. Perhaps concessions could be made on time, paperwork and the number of minor regulations, but this regulatory reduction must result in enhanced environmental quality.

The second phase of the Whitehorse Initiative should be to attack this economic issue. Can Canada produce more mines? Possibly. The answer should be ``yes", but how? A mining operation is not a more polluting operation than certain others, but it could improve its ecological effectiveness if it were granted concessions that made for greater administrative efficiency.

Do you think we can secure a better future for the industry by putting pressure on the various levels of government to increase efficiency in the area of paperwork, but also from an ecological point of view?

[English]

Mr. Winfield: There's a bunch of stuff in there, and I'll try to deal with it all.

With respect to the issue on approvals of mining projects, one of the important things to keep in mind in terms of time lines is the fact that certain mining projects can have absolutely enormous impacts on the environment.

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It's important that we take the time to make sure that before we approve something, we have a complete handle on what those consequences are going to be and on our ability to deal with them and remedy them. We should also take the time to ask, on a full-cost-accounting basis, whether in fact an operation is going to make sense. If something can only work by being enormously subsidized by the taxpayer through the externalization of an enormous environmental cost, then one has to ask, is it really a very good idea?

With respect to the issue of administration and paperwork, on the one hand I agree that if there are places where reporting requirements can be consolidated and those kinds of things can be done, that's very helpful. But at the same time I'm extremely conscious of the submission the Ontario Mining Association has made to the Ontario Ministry of Environment and Energy on the regulatory review. What they are actually going after is precisely the so-called paperwork components, which are the monitoring reporting requirements under the various regulations that apply to the industry in Ontario.

Essentially if you take out those monitoring reporting requirements or weaken them, you're repealing the regulation as effectively as if you had removed it completely. It's a de facto repeal, because at best the regulation becomes unenforceable. You no longer have the data and the monitoring data you need to enforce it.

So I think the other opportunities where this can be done - and that's not such a bad thing - have to be approached with a great deal of care. We have to be very careful not to throw things out that are essential in our effort to make things more cost-effective.

The Chairman: Just before we close, I'm going to indulge upon my colleagues to ask a couple of my own questions.

Mr. Muldoon, I have a couple of philosophical questions; I want to make sure I understand your position clearly.

You addressed the issue of voluntary compliance. Without seeing the record - I might not be quoting it exactly - I think you characterized it as undemocratic. So I would suspect that from a philosophical standpoint you would be opposed to any regime that involved voluntary compliance.

Mr. Muldoon: No. The paper outlines the different self-regulation and voluntary types of initiatives, and each one has both strengths and pitfalls.

We urge you to look at that, because it's very hard to say volunteerism, here it is. They are manifested by different types of instrumentalities, and each one has aspects that are of concern to us.

For instance, in other realms there are pollution prevention voluntary agreements where various industrial sectors have negotiated agreements with the province and the federal government over different sectors. Our concern in that context is that many public interest groups have worked for 20 years to have a say in the development of regulations, laws and approvals, so that the concerns of the public that endure the detriment of some of these approvals and regulations are at the table, or at least the public has a fair say. Many of these pollution prevention agreements, however, are done behind closed doors. In other words, there is now a sort of parallelism in the structure.

So for many of the voluntary initiatives, access of the public to the information, to the actual development of the agreements and the initiatives themselves is lacking. To us that's unfair.

The Chairman: So it's not the fact that you would come up with the voluntary regime. You have no opposition to voluntary adherence as long as it's developed in what you would consider to be a transparent manner.

Mr. Muldoon: That's one point. Again, I do not endorse voluntary measures to the extent to which they either intend to supplant or replace regulatory initiatives. If the industrial sector wants to undertake voluntary measures on its own, we support that. The question - and it's documented in our paper - is that most of the time they are at the cost of present or future regulations. That's our concern.

Volunteerism as a policy instrument to get industry to do the right thing over time is supported. Voluntary instruments to replace, supplant or prevent regulatory initiatives is a problem, and we do not support those.

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The Chairman: I have a second philosophical question. I think I heard you say it is not an appropriate activity for the federal government to delegate administrative authority to a provincial body to carry out our constitutional responsibilities. Did I hear that correctly?

Mr. Muldoon: I think a fair way to put it is that there have been delegations over time. Some of those delegations have worked well, some have not. Certainly there are limits to what you can do from a constitutional legal point of view.

The Chairman: Leaving that aside, just to -

Mr. Muldoon: There are areas where delegation is appropriate - for instance, in a bilateral agreement. Again, philosophically we are not speaking against bilateral agreements, for instance, for specific areas of devolvement or delegation.

The Chairman: I have one last question, and then I'm going to let Mr. Reed get in one last question.

Am I correct in summarizing your testimony by saying it is your position that there is not now duplication or overlap in the regulatory regimes that cover mining? Is that your position?

Mr. Muldoon: Our position is that there is not a clear study on the record outlining the specific nature of duplication and overlap. Our presumption is that it's overstated in terms of what you've probably heard here during the committee hearings.

The Chairman: So you're not saying it doesn't exist; you're just saying it hasn't been demonstrated to exist.

Mr. Winfield: It hasn't been demonstrated that it exists. The evidence we have, on the basis of our expertise and studies by the Government of Canada itself, by consultants retained by the CCME, by independent academic researchers, is that the actual incidence of duplication and overlap is greatly exaggerated.

The Chairman: Thank you.

Mr. Muldoon: I would just like to add that for the duplication that does exist, the answer is not to rewrite regulations and wholesale devolvement, but to address specifically those areas of concern.

The Chairman: Okay. Mr. Reed, you have the last question.

Mr. Reed: Thank you very much, Mr. Chairman; I really appreciate it.

I don't want to end this on a provocative note, but I would like to challenge your organization to do some self-examination.

You know, over the years I've heard from the green movement in one way or another. I consider myself and what I do outside of my role as a parliamentarian as being part of the green movement, but it's not recognized as such.

What I hear from the green movement is everything that is negative. When I have challenged organizations in the past to ferret out and to search out those elements of our enterprise that are green, it has been refused. I won't go into detail with names on the record, but I'll talk to you about this off the record.

The fact is that if in fact many of these green enterprises came into existence, some elements of the green movement would disappear, because there would no longer be any support for them. Your job would be finished.

I heard the statement that Canada should be a leader in the green movement. I couldn't agree more. But being green does not always mean opposing. Being green also means supporting and searching out those areas of enterprise where profit is not a dirty word, where the activities of humankind can be seen as being good and beneficial.

So I leave you with that challenge. By not searching out the positive aspect of the environment and what's happening, are you not part of the problem?

The Chairman: That is a good point to wrap up on.

Mr. Winfield: For the record, my own organization in fact has published extensively on a wide range of issues related to environment and the economy, including environmental industries and the kinds of changes that need to occur within our economy to make it more environmentally sustainable in pointing out both economic opportunities and costs associated with that.

Frankly, I think it's a characterization that we're simply negative, and that we don't have any perspective on the economy or economic issues. I disagree profoundly. I think it's reflected in some elements of the paper we presented today.

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I think there are different perspectives on what constitutes an environmentally sustainable economy. There are probably very different perspectives on where the mining industry fits in that economy - in fact I'm sure of that. But we are very conscious of the efforts some firms have made. We would be fools to criticize them, and we don't; we applaud them.

We've done work on the economic opportunities that exist in the process of the transition to sustainability, and we have highlighted that.

In general the environmental movement has become much more sophisticated in the last few years about its perspective on the relationship between the environment and the economy. There have also been movements in broader academic and governmental literatures about that.

In particular, I would commend the references we make in our paper to work by people like those in the Worldwatch Institute in the United States, the Wuppertal Institute in Germany, the work that's been done by the OECD environment unit, the work that's been done by the U.S. Office of Technology Assessment, the work done by the EPA recently, and some of the recent academic work we cite on these issues.

There's a much more complex and sophisticated perspective emerging on these things. People need to be conscious of that and consider it, particularly in the considerations of this committee at its next steps.

Mr. Muldoon: Let me just add that I'd like to pick up on your challenge. I think it's one we actually do accept. We want to be positive. We want to say good things. We want to say that industries are moving toward sustainable development. In some areas I think they are. In the mining area, unfortunately, we think there's a lot of room to improve.

If you look at the history of the development of policy reform and environmental reform, both provincially and federally, I'm afraid you're going to find a lot of hard work in non-governmental organizations. That was the genesis of many of the ideas and initiatives that eventually were translated into those laws and policies. A lot of time they themselves are not recognized across the country.

I also would like to give a plug to those groups that work hard on trying to be positive, not only identifying the problem but also pointing to some solutions.

We hope today in our paper not only that we have identified some of the areas of concern, but that there are some positive things your committee can review and hopefully consider seriously as a positive contribution to the debate.

The Chairman: Thank you, Ms Wilkinson, Mr. Muldoon and Mr. Winfield. I would like to thank you for taking the time today. You've provided a perspective to the committee that's important for our deliberations. On behalf of the committee, I express my thanks and appreciation.

The meeting stands adjourned to the call of the chair.

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