ENVI Committee Meeting

37th PARLIAMENT, 2nd SESSION

Standing Committee on Environment and Sustainable Development

EVIDENCE

CONTENTS

Tuesday, September 30, 2003

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1535

The Clerk of the Committee

Mr. Paul Szabo (Mississauga South, Lib.)

The Clerk

The Clerk

Mr. Roy Bailey (Souris—Moose Mountain, Canadian Alliance)

The Clerk

Mr. Julian Reed (Halton, Lib.)

The Clerk

Mr. Julian Reed

The Clerk

Mr. Joe Jordan (Leeds—Grenville, Lib.)

The Clerk

The Clerk

Mr. Bob Mills (Red Deer, Canadian Alliance)

The Clerk

The Clerk

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1540

The Vice-Chair (Mr. Paul Szabo)

The Vice-Chair (Mr. Paul Szabo)

Mr. David Runnalls (President, International Institute for Sustainable Development)

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1550

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1555

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1600

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1605

The Vice-Chair (Mr. Paul Szabo)

Mr. Bob Mills

Mr. David Runnalls

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1610

Mr. Bob Mills

Mr. David Runnalls

The Vice-Chair (Mr. Paul Szabo)

Mr. John Herron (Fundy—Royal, PC)

Mr. David Runnalls

Mr. John Herron

Mr. David Runnalls

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1615

The Vice-Chair (Mr. Paul Szabo)

Mr. Julian Reed

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1620

Mr. David Runnalls

Mr. Julian Reed

Mr. David Runnalls

Mr. Julian Reed

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1625

Mr. David Runnalls

Mr. Julian Reed

Mr. David Runnalls

Mr. Julian Reed

The Vice-Chair (Mr. Paul Szabo)

Mr. Alan Tonks (York South—Weston, Lib.)

Mr. David Runnalls

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1630

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1635

Mr. Alan Tonks

Mr. David Runnalls

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1640

Mr. Alan Tonks

The Vice-Chair (Mr. Paul Szabo)

Mr. Bob Mills

Mr. David Runnalls

The Vice-Chair (Mr. Paul Szabo)

Mr. Julian Reed

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1645

Mr. Bob Mills

Mr. Julian Reed

The Vice-Chair (Mr. Paul Szabo)

Mr. Bob Mills

The Vice-Chair (Mr. Paul Szabo)

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CANADA

Standing Committee on Environment and Sustainable Development

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NUMBER 029

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2nd SESSION

l

37th PARLIAMENT

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EVIDENCE

Tuesday, September 30, 2003

[Recorded by Electronic Apparatus]

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[English]

    The Clerk of the Committee: I see a quorum.

    Our first order of business, pursuant to Standing Order 106, is the election of the chair. I'm prepared to take motions to that effect.

    Mr. Szabo.

    Mr. Paul Szabo (Mississauga South, Lib.): I nominate Mr. Charles Caccia for chair.

    The Clerk: Mr. Szabo nominates Mr. Charles Caccia. Seconded by Mr. Mills.

    (Motion agreed to)

    The Clerk: Mr. Caccia is not here, so he's elected in absentia.

    I can now proceed to the elections of the vice-chairs.

    Mr. Bailey.

    Mr. Roy Bailey (Souris—Moose Mountain, Canadian Alliance): I'd like to nominate my colleague, Bob Mills.

    The Clerk: Mr. Bailey nominates Mr. Bob Mills as vice-chair.

    Mr. Reed.

    Mr. Julian Reed (Halton, Lib.): I nominate Mr. Szabo.

    The Clerk: We're on the opposition vice-chair now.

    Mr. Julian Reed: Okay. We have to do it one at a time. All right.

    The Clerk: So I have one nomination for Mr. Mills.

    Mr. Jordan.

    Mr. Joe Jordan (Leeds—Grenville, Lib.): I nominate John Herron.

    The Clerk: Mr. Jordan nominates John Herron.

    By standing order, we should proceed to secret ballot. I'll ask my assistant to pass the ballots around. All you have to do is put the name you prefer on the ballot and we'll tabulate them after.

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    The Clerk: Honourable members, the votes have been counted and there has been a majority winner. It's Mr. Mills. I would congratulate Mr. Mills, elected as vice-chair.

    Mr. Bob Mills (Red Deer, Canadian Alliance): I would like to nominate Mr. Szabo as vice-chair.

    The Clerk: Mr. Mills has nominated Mr. Szabo as vice-chair from the government side.

    (Motion agreed to)

    The Clerk: Now, we do, as you know, have a witness waiting. We would need consent to hear that witness. We would need somebody to sit as the chair, if the members would agree to nominate somebody as acting chair.

    Mr. Szabo, you would take the chair.

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    The Vice-Chair (Mr. Paul Szabo): I'd like to suspend.

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    The Vice-Chair (Mr. Paul Szabo): We are resuming the 29th meeting of the Standing Committee on Environment and Sustainable Development.

    Colleagues, there is one item on the agenda, which we've now dealt with. To pursue a second item, I would require the unanimous consent of the committee to proceed with this item. Is there consent?

    Some hon. members: Agreed.

    The Vice-Chair (Mr. Paul Szabo): Okay. It is so ordered.

    The second item, pursuant to Standing Order 108(2), is a study on the implementation of the commitments of the world summit on sustainable development.

    We have today before us Mr. David Runnalls, president of the International Institute for Sustainable Development. Welcome, Mr. Runnalls. We would welcome your comments for approximately ten minutes. I'm sure the members will have some questions or comments for you to consider at the end of your remarks.

    Could you please proceed?

    Mr. David Runnalls (President, International Institute for Sustainable Development): Thanks very much, Mr. Chairman. Thank you for having me.

    I've appeared before the committee before, but perhaps I ought to say a little bit about what we do, for those of you who aren't familiar with our work.

    I'm the president of the International Institute for Sustainable Development. We're based in Winnipeg. We have a small office in Ottawa, one in Geneva, and one in New York. Our job is to do policy research on international sustainable development issues. We are a bit of an Internet company. For those of you interested in this as a subject, we have the most active sustainable development website on the web; it's iisd.org.

    I think your newly elected chair was rather keen on having us at this initial session so that you have some base of departure to deal with this world summit on sustainable development and what the Government of Canada has done about implementing its recommendations.

    It's about a year since the summit was held in Johannesburg in South Africa. It attracted over a hundred heads of state and heads of government, including the Prime Minister and all of the G-7 heads of state or government, with the exception of President Bush. It met for two weeks. It was an enormous gathering of something like 25,000 people, when you include government delegates, NGOs, and the like.

    I think there's a general consensus that it was not exactly a roaring great success, Mr. Chairman. Some called it a dismal failure. I think it was neither a success nor a failure. Perhaps I could spend a couple of minutes explaining that to you as background, I think, for your own work on what the government has done to try to implement the recommendations.

    Johannesburg produced a plan of action, or a plan of inaction, as some people called it. That's not fair; it does actually have some concrete commitments in it. You may want to focus on some of them.

    The text contains over 30 targets and timetables on various issues of importance to sustainable development. Some of these are a repeat of what's called the millennium development goals that have been adopted by the UN, particularly at the Monterrey summit in Mexico earlier last year, on things like reducing the number of people without access to clean water and sanitation by 2015. Others are contained or implied in existing treaties and commitments, such as the determination to restore depleted fisheries by 2015, phasing out toxic chemicals by 2020, or reversing biodiversity loss. These are targets, but there were no resources committed to achieving them, or very few, and no real specificity on who was supposed to do it.

    A few of the targets do represent new commitments. There's a commitment to establish a network of marine protected areas around the world by 2012. But without new money, as you will know from being members of Parliament, not much happens.

    A serious effort was made to reach numerical targets for the increased use of renewable energy, but the combined efforts of the United States and the OPEC countries proved too much to overcome and no target was adopted. Canada was not helpful in this effort, I should say to you, siding largely with the United States on this.

    There was also a very bitter debate on the age-old issue of the universality of human rights, particularly reproductive rights. The debate, led by Canada, was successful in ensuring that health care should be universally accessible to all. This was really a code word for a hidden debate on the whole question of genital mutilation and the sorts of practices that go on in many countries. Canada fought this one quite well. I think it was an interesting effort. I think it was one that was worth fighting, and it eventually was carried in the Canadian direction.

    Speaking of movement in the wrong direction, I think that Johannesburg pioneered a new interpretation of success. Success no longer needs to be defined as moving towards a given goal, in this case, of sustainable development. Success is to avoid slipping back to a position farther away from the goal.

    We heard lots of comments by officials saying that at least we didn't go backwards. The debate on trade was an interesting example of that. Remember, this was a conference on sustainable development, not only on the environment.

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    There was a very heated debate about the relationship between the WTO and international trade negotiations and the environmental treaties on climate change and biodiversity and endangered species. I was in Cancún recently at the WTO ministerial conference, and that one resurfaced. That might be something you might want to explore as a committee when you're talking to some of the government witnesses. In the end that debate was resolved, I think, quite amicably.

    If we want, Mr. Chairman, to look for the silver lining on the otherwise dark cloud of WSSD, we have to look beyond the formal text adopted in Johannesburg in at least two directions. The first is the political significance of the process and the slow evolution in policy thinking that was evident in Johannesburg.

    One of the problems with its predecessor, the Rio Conference in 1992, was that Rio was really a conference on the environment. The social dimension was largely missing, both from the debates and the conclusions.

    Johannesburg demonstrated that the integration agenda, essential to sustainable development, has advanced considerably. Poverty is accepted now as the underlying theme, linked to sustainable development through the economic, environmental, and social dimensions. All of the heads of state from the wealthy countries made that connection. Prime Minister Chrétien, particularly, made the connection and he followed it up with a very strong speech in the United Nations itself about three weeks later.

    One began to understand that there really was a connection between a clean global environment and doing something about the status of the two billion people who really were miserably poor in the world. That was something that came to be accepted during this conference.

    Similarly, globalization has emerged as an issue in its own right, separate from the immediate rights and responsibilities of states. It's now accepted that globalization presents its own set of issues that needs to be addressed through multilateral action.

    WSSD provided a platform for a number of dramatic acts that may or may not have occurred on their own. Here, perhaps, the most notable was the announcement by the Prime Minister of Canada's intention to ratify the Kyoto Protocol, followed by the announcement from his Russian colleague that Russia was going to ratify the Kyoto Protocol. That one seems to be in some doubt after the recent conference in Moscow and President Putin's remarks.

    Ironically, one other factor may, in the end, prove to be the most significant of any of the above. I think one of the clearest conclusions we all had from this glorious summit of 20,000 people is that the age of this mega-summitry should be finally coming to a close. It doesn't make sense to send a hundred heads of state all the way around the world for one day in order to produce a declaration of the insignificance of the Johannesburg plan of action. I think even the Secretary General of the UN admitted by the end of this conference that this particular model of negotiation was broken and needed a replacement.

    I noted earlier, however, that there was a positive spirit and a great deal of optimism in the activities that took place around the conference. Johannesburg was really about six conferences. It was the government delegates and the heads of state in one big congress centre arguing about moving square brackets here and putting commas in there. There was a huge host of activities organized by non-governmental organizations and, most importantly, by the business community in other locations in Johannesburg.

    I want to tell you a little about the business meeting, because it seems to me to be very revealing. There is an organization called the World Business Council for Sustainable Development, which is composed of the CEOs of 250 of the world's largest companies. There are a number of Canadian CEOs who are members of this. One thinks of companies like TransAlta, Suncor, Ontario Power Generation, DuPont, and a number of others.

    This particular group of CEOs believes that sustainable development is now an integral part of the cost of doing business and an integral part of a business plan of any large company. They spent an entire day going through their own experiences of building sustainable development into the business plans of their companies.

    One of the most powerful speeches was one given by Philip Watts, who's the chairman of Shell, in which he said:

This is now part of the way we do business at Shell. We think that by building sustainable development into our business plan, we will have a competitive advantage over our competitors in the next 50 or 60 years.

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    This is one that has really been built right into the corporate culture of a number of these companies.

    I think that was a real revelation to a lot of the delegates. They'd viewed sustainable development as the purview of the greenies and perhaps of government bureaucrats, but not as something that a respectable company would ever pay attention to.

    Mr. Chairman, there are a couple of areas where Johannesburg really failed, as opposed to areas where it simply glossed over some of the issues. One of them is this whole question of how we deal with the environment and sustainable development at the international level.

    After the conference at Rio in 1992, the grand-daddy of the summits, the UN set up something called the Commission on Sustainable Development, part of an arcane part of the United Nations known as the Economic and Social Council. This CSD was supposed to integrate environment and economics into its discussions in a way that was recommended by the report of the World Commission on Environment and Development. It never succeeded in doing that. It never succeeded in attracting finance ministers to its deliberations. It became a talk-shop for environment departments.

    We've lived through 10 years of the most stunning non-performance on the part of CSD, culminating in a thing called Rio plus five--five years after Rio in 1997--surely one of the worst meetings in the history of intergovernmental cooperation.

    And the preparatory process for the summit in Johannesburg was characterized by a really nasty period of low-level political backstabbing between the UN secretariat of this Commission on Sustainable Development and the UN environment program.

    The recommendation for the institutional follow-up to Johannesburg went, surprisingly, to the Commission on Sustainable Development.

    Your chair, Mr. Caccia, has written to the Secretary General of the UN twice, signifying both his unhappiness with this situation and his severe skepticism about the ability of the Commission on Sustainable Development to do anything.

    I share that skepticism. I think when you are following up with the government's follow-up on WSSD, you might ask some questions about what's going to happen with the international institutional follow-up.

    Mr. Chairman, where do we go now that WSSD is behind us? My suggestion is that we build on what's good, on what works, and on the openings that were achieved, but we stop investing in what has proven to be beyond repair.

    I would suggest there are three areas in which we want to make some progress. The first is the emerging framework of rights and goals for development for the poorer countries in the world.

    We saw, Mr. Chairman, at Cancún that international progress on trade negotiations or environmental negotiations is now highly dependent on our ability to bring developing countries into the discussion. And if we don't do that, we won't make international progress in these discussions.

    Secondly, we need to use the full panoply of economic incentives to redirect the market into sustainable channels. It is quite clear to me that the corporate sector is ready for this and there will be a debate over the next 10 years on just how one gets market signals to point in the same direction as environmental signals.

    I would suggest to you on the basis of my experience in Cancún at the WTO ministerial conference that a very good place to start is with the removal of environmentally perverse subsidies. That could literally free up $800 billion in the OECD countries if we stopped subsidizing agriculture and subsidizing other resource-consuming industries, something that people in my part of the world are very interested in.

    Finally, we really do need to think seriously about how we reform these international institutions for environmental governance. Many of the institutions in the current set have failed us badly, and efforts over the past decade have suggested that it's going to be difficult, if not impossible, to reform them. Here I speak again of the Commission on Sustainable Development.

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    What's happening instead is that there's a whole series of networks with targeted cooperation between governments, non-governmental organizations, and the private sector, which Wolfgang Reinicke, who is a German academic, calls “global public policy networks”. In other words, there are a bunch of formal and informal public-private discussions on issues like delivering clean water to the poor or on how to pursue targets for renewable energy. The landmines treaty is another perfect example of that.

    Now, what about Canada's follow-up, Mr. Chairman? I would ask questions about international environmental governance, which I just spoke about, and the integration of sustainability concerns into Canada's trade policy, because these issues are now beginning to come together. We're beginning to get lots of references to international trade policy in environmental meetings, and we're getting more and more references in the WTO to the relationship between trade and the environment.

    Sanitation and water goals: Canada argued quite strongly that the goal of reducing by half the number of people in the world without access to proper sanitation should be built into the plan of action. It would be interesting to see what plans we have for actually carrying out that goal.

    Marine protected areas: Marine protected areas, again, are in the Johannesburg plan of action. We have some marine national parks in Canada, but that's probably the part of the Canadian parks system that has been the least developed.

    Renewable energy commitments in Canada: We have now some very interesting discussions in Alberta, Saskatchewan, and Manitoba on renewable energy. I also note that in the election platform of the Ontario Liberals there is a commitment to move to 10% reliance on renewables in Ontario by the year 2010. That is a very bold and ambitious goal.

    Then finally, Mr. Chairman, there is something that sounds esoteric but isn't, which is called “the framework for access to genetic resources”. This is really about prospecting for interesting plants and animals in developing countries and how one begins to involve those countries in some of the benefits of these discoveries. Up until now the tradition has been for scientists to go from wealthy countries to places like Costa Rica or Brazil. If you find a particular plant that then becomes a major ingredient in a heart medicine, for example, the benefit flows to the discoverer and the pharmaceutical company, not to the country itself. There is a feeling that this provides too few incentives to developing countries to actually preserve these biological resources in place.

    I think that's it, Mr. Chairman. There are 78 pages in the Johannesburg plan of action. We could spend the rest of today, tomorrow, and the next day going through every one of them. I think I've touched on those that are likely to be the most significant, many of which were promoted actively by Canada as part of its position in Johannesburg.

    Thank you.

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    The Vice-Chair (Mr. Paul Szabo): Thank you, Mr. Runnalls.

    I understand there are members who would like to ask some questions, and we'll start with Mr. Mills.

    Mr. Bob Mills: Thank you.

    Thank you for joining us.

    I have to agree with an awful lot of what you've said relating to Johannesburg, the size of it, the cost of it, and so on. The other thing that's obvious, which you didn't really reference, is the fact that when you get 185 countries, the differences are so massive between the developed world and the.... Here it's very difficult to sit around a table and have a discussion when their interests are so absolutely different from what, in a developed country like Canada, we would have.

    That being said, instead of our going into this international thing, would you see this breaking up into, for instance, a North American or a North and South American plan of action and an EU plan of action, possibly including Africa? Instead of this move toward full globalization, do you see the world splitting up into those kinds of segments on these international agreements?

    Mr. David Runnalls: I think that's a real possibility. I also think it's a real danger. You can see this in the trade talks as well. There's a tendency, now that Cancun has ground to a halt, to think that since we're not going to get anywhere there, we'd better go to bilateral or regional discussions. It partly depends on the issue. There are some issues that are genuinely global, where we do need a genuinely global solution, and we need a better way to reach it than with 150 heads of state. There are other things that are better dealt with on a regional basis.

    The plan of action actually does have sections on sustainable development in Latin America and Africa. When you're talking about things like shared rivers, that is a real problem. River basin management in tropical countries is a serious problem, and deforestation is to an extent a regional problem; they probably demand regional solutions. But there are still a series of global problems where we're going to have to get the global mechanism right or they're going to consume us. They're going to get on top of us and we're not going to be able to deal with them.

    The core problem with Johannesburg was that because sustainable development is everything connected to everything else, they tried to deal with everything. We had discussions on the role of cities, for example, which I'm sure Mr. Tonks would be interested in. We had discussions on agriculture, on genetic resources, on water pollution, and on weapons of mass destruction. So it basically became a discussion about everything and you couldn't get any agreement. What we may get is fewer mega-conferences and more conferences at lower levels so you don't have your prime minister going, and I think we will get more regional agreements, regional agreements on regional problems.

    What really worries me, however, is that what you're suggesting is the next logical step. If that happens in economic relations, if we start getting back to the free trade agreement of the Americas at the expense of the multilateral trading system, for example, we'll run ourselves into the real danger of creating these blocs that then negotiate en bloc. I don't like the sound of that as a citizen of a middle-sized country, which Canada is.

    I think Canada has a really special role here in both preserving the multilateral system and making it work more sensibly. Johannesburg wasn't a sensible exercise of the multilateral system, nor, I suspect, was Cancun.

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    Mr. Bob Mills: Can you demonstrate--because I believe it's true--that a rise in the economic well-being of a country makes the environment better for that country? I can come up with the logic for that, but is there quantitative material to really back that up?

    Mr. David Runnalls: There's a big debate about it. I think in general it's right. The poorer you are, the worse your environment is going to be. The poor are the most impacted by environmental problems.

    There's a difference between those countries that have consciously tried to improve their environment as they've developed and those countries that have assumed that just because they're getting better off, their environment is going to be better. As you get better off, you have more resources. You do spend more money, you get a middle class, and the middle class starts putting pressure on the government to improve environmental conditions.

    Where the government has said okay, we need a conscious environmental policy as we're beginning to grow, those countries have done much better than those countries that have simply said this will be an automatic part of their economic growth. You can see that in Asia.

    The Vice-Chair (Mr. Paul Szabo): Mr. Herron, please.

    Mr. John Herron (Fundy—Royal, PC): I just have a couple of questions.

    First off, can you tell me why countries were as reluctant as they were to agree to at least establishing targets, not specific targets but targets on what percentage of the energy would be produced from renewables? What was so problematic about that? The Americans, I think, in particular really wanted to send a bit of a signal that they still believed in the concept of multilateral relations, and that was the kind of message Powell wanted to send. But that aspect of it really went the wrong way, and that was going to be one of the most comprehensive issues at the table.

    This is my second question, and you can take your time with it. I agree that the summit-of-all-summits approach really is incredibly problematic if we're to do anything that's really tangible, just because it is too big and too awkward. Now, I have to tell you that one of the reasons I'm a big supporter of being in the Francophonie and the Commonwealth is that there are very few institutions that naturally foster a relationship between northern nations and southern nations. I always think it is very dangerous if we have the rich folks' club and the not-so-rich folks' club. How do we ensure we have north-south relations to the degree we need to have them if we don't have these types of summits, which I really do agree are dysfunctional?

    So those are my two questions: one, specifically on renewable energies, and two, how do you see that we should pursue north-south issues?

    Mr. David Runnalls: On the renewable energy side, the U.S. resisted targets on anything. The U.S. resisted the sanitation target. They resisted targets and timetables all the way through. That was basically a negotiating strategy. The U.S. particularly didn't want to give in on the renewable energy one, because it feels that energy is left to the private sector and government should stay out of it. Here they were assisted by the OPEC countries, which have opposed anything that would appear to lessen the world's dependence on oil. They reckon they're drying up their own markets. The Europeans were pushing this quite hard. So I think there was partly an anti-European movement at one point in the negotiations. There was partly a movement by the U.S. to avoid having any targets and timetables on energy of any kind.

    Mr. John Herron: All the NGOs said that Canada was not exactly helpful in that regard. How is it that on the one hand we have the Prime Minister saying we're going to have a vote on ratification and on the other hand saying we don't really know what percentage we're going to do on renewables?

    Mr. David Runnalls: I found that very curious. The explanation offered by the delegation was that energy was a provincial responsibility, they didn't have any instructions as part of a delegation going to Johannesburg, and therefore they couldn't commit Canada to any renewable energy targets. Then, as you say, the Prime Minister turned around and announced that we were going to ratify Kyoto. That was remarked upon by lots and lots of folks in Johannesburg. The official explanation given by the government was that this is an area of provincial responsibility, we don't have any instructions on this, so therefore we can't agree to any kind of quota for Canadian energy production.

    Your second question is a terrific one. I don't think I really know the answer. But I do think you've hit on something with both the Commonwealth and the Francophonie. We're going to be in desperate need of bodies of various kinds that bring north and south together, whether it's on a formal or informal basis. I think one of the more interesting ones--and I suspect that Mr. Martin when he becomes prime minister will want to revive this--was the G-20, which he was the chair of when he was finance minister. The G-20 was a real attempt to say we're never going to expand the Security Council beyond the permanent members for political reasons. It's just too difficult. But we have to have a way of bringing Brazil, India, Germany, and Japan, some of the big players that aren't now at the table, into discussions that are smaller than 156 but larger than 13.

    My guess is that we will now find more and more of these structures, whether they're formal or informal, like the Commonwealth, the Francophonie, or the G-20, that bring together north and south decision-makers to begin to talk about these issues. There is still a place for the group of 150 countries, but it can't negotiate everything. It probably can only deal with things that have been pre-negotiated by a smaller group.

    I think this is a very interesting role for Canada, because all those clichés about Canadian foreign policy actually come true here. We are members of the Francophonie, the Commonwealth, the G-7, and NATO, and we have been the chair of the G-20. So I think there's an interesting intermediate set of institutions here that Canada could very much involve itself in. This would not only help international discussions on sustainable development, but it would also help international economic discussions and so on.

    At the end of the Cancun meeting, Pascal Lamy, who is the European trade commissioner, stormed out, saying under his breath in French, “This is a truly medieval institution”. What he meant by that was that the WTO now has 145 members and it proceeds entirely by consensus. That worked when it had 58, but you can't do that with an organization that has 150 or 160 members. How are we going to adjust the way that system works so that developing countries still have a say but we're not basically trying to get 160 people all to say yes, I can agree with that? That's what I mean by these intermediate institutions. I think that's a very interesting potential role for Canada.

    I hope that helps. That was a very difficult question.

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    The Vice-Chair (Mr. Paul Szabo): Yes, it was.

    Mr. Reed, please.

    Mr. Julian Reed: Thank you, Mr. Chair.

    Welcome, Mr. Runnalls, to this committee. You mentioned in your opening remarks that you expected there would be interim industrial debate over the next ten years about the introduction of renewables, and so on.

    I met with the gas industry this morning, and according to them we don't have ten years. Some of the major oil companies have already gone on record as saying that some time after the next ten years our ability to meet demand will outstrip our ability to increase supply.

    It seems to me if there's a driver there to bring on renewables, that is somehow going to have to be recognized sooner rather than later. That's why I'm quite shocked that Canada just hid behind the fact that they didn't have any instructions to move ahead. I'm not sure who we should bring to the committee to justify that statement.

    The question that comes to my mind is are there not a lot of economic competitive moves that Canada can make on its own that do not depend on international targets?

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    Mr. David Runnalls: Absolutely, Mr. Reed. I entirely agree with that. I think there is much greater potential for renewable energy in Canada than we've realized up to now.

    I think the economics are still slightly iffy, unless you consider the full environmental costs of generating electricity the way we are now. We've just done a study at my institute that actually looks at the overall cost of generating power from burning coal--not just the cost of the coal and the cost of the capital investment, but the other costs, the extras, the health cost, the smog damage in southwestern Ontario and the greater Toronto region, and so on.

    Our guess is that even using very conservative estimates it would probably cost almost twice as much as it does now, if people paid a price for certain kinds of electricity that took some of those costs into account. This has nothing to do with carbon dioxide emissions; this is particulate matter, nitrous oxide, sulphur dioxide, and the like, with quite hard figures from Health Canada, the Canadian Medical Association, and others. If we paid a price for electricity that included those externalities, that would make a fair number of renewables a lot more economical. They're beginning to discover now in windier parts of the west, for example southern Alberta, southern Manitoba, and southern Saskatchewan, that wind power is getting very close to being comparable to gas-fired electricity.

    I think it's arguable that if we move to a stage in which we're paying much more of the real cost, and the cost to us.... I mean, we're the people who miss hours and days of work. We're the people who have 2,000 relatives in Ontario who die from air pollution every year, according to the Ontario Medical Association. These are real costs that we pay. We don't pay them in our hydro bills, and Ontario Power Generation doesn't pay them, but the citizens of Ontario do.

    I think a very solid economic argument can be made--and your voters will hate this--that coal-fired electricity, in Ontario at least, is underpriced and should be more highly priced to reflect these other costs. If it were more highly priced to reflect these other costs, certain kinds of renewables would become much more economical: wind, small-scale hydro, and more electricity from Niagara Falls, for example.

    I worked for Ontario Hydro for a couple of months, and one of the things we discovered was that nobody had invested in the hydroelectric generation facilities in Niagara Falls since the 1950s. You can get an enormous bang for your buck by simply upgrading some of those facilities; it has just never been done.

    I think there is real potential for renewables. I think the Kyoto ratification will drive some of that, but we're also finding that private companies like TransAlta and Suncor are investing in renewables because they think it's a good way to earn return on their capital over the longer term. You may lose money in the first ten years, but you gain operating experience; you get more familiar with the technology and you get on the learning curve, and when this stuff becomes more economical, you gain a competitive advantage.

    I think you'll see that whatever government is elected in Ontario, they will need to have a major push for renewables as well.

    Mr. Julian Reed: The problem with the electric power system in Ontario really goes back 25 years. The former Ontario Hydro never did have to use accepted accounting principles when it was calculating the price of electric power.

    Mr. David Runnalls: No.

    Mr. Julian Reed: Consequently, there are some things yet to be found out, I think, in the system as to what the real cost is, not counting even the environmental cost--if you throw in environmental, it's even more--but simply in the way the capital is written down. As the present chairman of OPG now has said, nuclear power is the cheapest power to produce as long as you don't count the capital cost, the cost of refurbishing--and, he might well have added, the cost of the long-term storage of high-level waste. Hence, a stranded debt has been built up, as you know.

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    Mr. David Runnalls: Absolutely.

    Mr. Julian Reed: An incredible stranded debt.

    I was asked, at a meeting last February with some senior people in Ontario, what I thought was the right thing to do to start to restore capacity in the system, and so on. I said that the first thing you have to do is tell the truth to the citizens of Ontario, so that they know where their starting point is, and then, of course, proceed to empower the consumer with the business of demand management and things like that.

    Do you have any concept of whether this kind of perverse subsidy applies itself in other provinces in Canada?

    Mr. David Runnalls: My guess is yes, but we haven't looked at it in enough detail to be able to confirm that.

    I think that Ontario is a unique case, partly because of this massive investment in the nuclear business. The chairman is right: nuclear power is the cheapest way to produce electricity if you don't count the capital cost. But if you don't count the capital cost of hydroelectricity, it's virtually free. I mean, the capital costs are the biggest costs in the nuclear business, particularly when they get out of control.

    As you probably know, Darlington, which is the reactor down the road at the eastern end of Lake Ontario, was scheduled originally to cost $3 billion and it cost $13 billion. The Pickering A units that are still not in service, which were taken out of service in 1997, I believe, were supposed to take three years to refurbish. It was going to cost $700 million. We're now in 2003. They've spent close to $3 billion, and they still don't work.

    This is a technology where it is very difficult to estimate the cost, and the cost can run away with you. I mean, these are big overruns. You can't overrun that much when building a hydroelectric dam or a coal-fired power station. There are lots of unknowns and unknowables about nuclear power. That's what finished off Ontario Hydro. That's why we have the stranded debt of $38 billion or $39 billion.

    These are very tricky investments. To say that this is economic, when you don't count the capital costs and the thing costs $13 billion, is slightly peculiar economics.

    I might add that only a publicly owned company could get away with economic assumptions like that one.

    Mr. Julian Reed: Thank you very much.

    The Vice-Chair (Mr. Paul Szabo): Mr. Tonks, please.

    Mr. Alan Tonks (York South—Weston, Lib.): Thank you.

    Again, thank you for being here.

    Could you outline for the committee the relationship the international institute has with the round table on the economy and sustainable development?

    In terms of achieving the objectives that you outlined in the relationship with the Auditor General in the reporting or accounting, if you will, of our record on sustainable development, I think that the committee would benefit from understanding how the institute integrates into our accountability how we are performing in terms of achieving the rather nebulous, as you've indicated, objectives of Johannesburg.

    Mr. David Runnalls: Sure. That's a very fair question as well.

    The National Round Table on the Environment and the Economy, as you know, is technically an advisory body to the Prime Minister. Its job is actually to prepare written advice to the Prime Minister himself, but I think they have also pioneered, more than almost anybody else, this technique of multi-stakeholder consultations. It's a body appointed by the Prime Minister. I think it has about 20 members. It's sort of geographically distributed across the country. They have done a great deal through public hearings and public discussions of some of the trickier issues.

    For example, when Mr. Martin was the finance minister, he became very interested in this whole question of how do you get Canada's national accounts to reflect the value of our natural resources so that you're not just valuing capital equipment, factories, cars, office buildings, and so on, but you're beginning to try to value other things, like forest resources and soils, and so on?

    The round table has been working quite hard with a multi-stakeholder group to come up with some new definitions of how you actually measure the value of Canada's national capital. They've also become very much involved, as you probably know, in this debate about how to revive brownfield sites in Canada's cities. So they've taken a number of issues, brought together public hearings and public discussions of this, and then formulated it either as reports or as advice to the Prime Minister.

    The Commissioner of the Environment and Sustainable Development is part of the Auditor General's office, originally basically developed by this committee. I can remember the hearings, in fact, when you or your predecessors were discussing the bill to set it up, and that's really government accountability.

    I suspect you'll call the commissioner. I know she's very interested and her predecessor was very interested in Canada's accepting all these international commitments on the environment, whether it's ozone depletion, biological diversity, or climate change, and how we actually measure up. Each of the departments of the federal government on a list--and it's most of the departments--has to prepare a sustainable development strategy every three years. The commissioner then audits the performance of those departments against those targets.

    So I suspect or would hope, for example, that in Environment Canada's new sustainable development strategy, which I think is due to be presented to Parliament in November--they're in that three-year cycle--you would expect to see some statement of what Canada was doing to follow up its commitments to WSSD, because Environment Canada was certainly the lead in Johannesburg and I presume it's now the lead in terms of follow-up.

    So if I were a member of the committee, I would be rather disappointed if I didn't see some reference to what Canada's commitments were at Johannesburg. There is, as I recall, $15 million in the budget for carrying out these commitments, and I would expect, and I'm sure the commissioner would expect, some sort of statement from the department of how Canada was going to carry out those commitments.

    Where do we fit? We're a non-profit organization. We're not a crown corporation. We now get about 65% of our revenue from outside of Canada, mostly from governments--from European governments, from the U.S., from Japan, and from Australia and New Zealand. So we are a genuinely international organization.

    In that sense, we were interested in Johannesburg because it was a summit on our issue, on sustainable development. But we're also a Canadian organization, so we have a real interest in how Canada performs on these issues. We are willing and able to provide services to the government and this committee and anybody else on how Canada might proceed to get to a higher level of sustainability, how Canada might proceed to be able to fulfill its international commitments.

    We were very active at Johannesburg. For a number of years we have been the sort of unofficial chronicler of these meetings. For example, we sent a group of 19 people to Johannesburg, most of them young people, most of them PhD candidates, and we produced something called the Earth Negotiations Bulletin. So if you were looking at our website during Johannesburg, you would have seen, at the end of every day, a 3,000-word summary of what went on, some photographs, some audio, and some video feeds produced by these kids.

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Our people go around with UN Secretariat badges, which means they have access to all of the meetings, including the closed meeting. So we do our best to try to make these discussions more transparent to the world.

    If you can't afford to fly all the way to Johannesburg and pay for a hotel room for two weeks, you can visit our website—or you could when it was on—every day and get what we hope is an unbiased and objective summary of what went on that day, what were the most important events. We also covered perhaps ten or twelve of the so-called side events, which ranged from a debate with Nelson Mandela about sustainable development in South Africa all the way through to Hazel McCallion, who I'm sure is an old friend of yours—well, certainly a former colleague of yours—actually discussing on behalf of the Federation of Canadian Municipalities the role of cities.

    We try to keep people who aren't going to these conferences au fait with what's going on, so that they do become more transparent. We will get several million hits on our website during a conference like that. People will come to us as an authoritative, unbiased source of reporting on those events.

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    Mr. Alan Tonks: May I follow up—it may not be short—and on behalf of the committee ask this question on Cancun?

    You have been very circumspect with respect to your second point, that there is much more that can be done with tax shifts or removal of subsidies. You actually quantified that to the tune of $800 billion if we could satisfy the domestic policies and have a global policy that would be working towards that end. What happened in Cancun? What was the role the international institute played? Locking into your critique of the UN Commission on Sustainable Development, where do we go from there? What role does the institute play in terms of now moving that agenda past where it was sandbagged, so to speak?

    Mr. David Runnalls: In Cancun we did a number of things. One thing one needs to remember about trade negotiations is they don't last very long. Johannesburg was two weeks. It was an exhausting two weeks, but it was two weeks. Cancun was four and a half days. It's a kind of huge kaleidoscope: there are several hundred delegates; it's a non-meeting, so to speak. In UN meetings there are signs on the door and there's a meeting to discuss whatever it is—trade and environment, or water supply, or whatever. In the trade negotiations, you basically have these shifting groups of countries meeting behind closed doors to try to negotiate their way through an issue.

    Our view of the issue has been quite clear from the beginning. We actually think trade liberalization is an important component of sustainable development, particularly in developing countries. We're not anti-free-traders. We're not with the group that believes that destroying the WTO is the best way to proceed. We are very much with the group that believes the WTO as an institution needs some fundamental reforms, not least because you can't have 150 countries agreeing on absolutely everything. We have maintained from the beginning that the WTO will have to build the environment more into its agenda than it has, because if it doesn't it comes in anyway. It comes in through the back door as part of trade disputes.

    One of the things we are trying to do at the moment as a result of Cancun is establish a group of distinguished world citizens—largely economists, people who are recognizable to trade negotiators—to actually begin to turn the public spotlight on what happens with these subsidies, which are quite often environmentally perverse, certainly trade-distorting, and basically bad for the poor.

    The fundamental reason Cancun broke down is that the United States and western Europe couldn't really agree on doing anything serious about agricultural subsidies. They produced a so-called “deal” about three weeks before the meeting, but the deal was very carefully crafted to make sure it had almost no effect on the major subsidies in President Bush's farm bill or on the major parts of the common agricultural policy.

    The developing countries essentially said, “We've seen this one before, and we're not buying it this time. You guys say you're going to do something about trade-distorting subsidies in agriculture. You don't do it, and we're the victims. And we now, because China is in the WTO, have the clout to be able to put a stop to this.”

    I think we're in a very dangerous time, because we have about four or five months to get the dialogue started again, or what will happen is that the big powers—the EU and the United States—will proceed to do bilateral deals and regional deals, and that's probably not a good thing for Canada. We benefit much more by a multilateral rules-based system.

    I just don't know how much give there is in the system. The U.S. was very angry at the end of this; the Europeans were very angry at the end of this meeting. We're now in a very difficult period in which each side is going to sound the other one out, like a boxer, and if something doesn't happen within six months we could be in some trouble.

    I certainly didn't come away from Cancun applauding that the whole thing had broken down. I think there are lessons to be learned, and I hope we learn them.

    On your second question, about what our institute would do about Johannesburg follow-up, some of it I mentioned: this whole question of these intermediate institutions and these public-private partnerships. I really do believe there are major people in the private sector who think sustainable development is a critical ingredient in business planning and business execution. They are impatient with governments in the same way that many of us on the non-governmental side are, and I think there are many discussions to be had there. There are alliances to be formed, and there are ways, I think, of beginning to create these smaller bodies to begin to discuss some of these tricky issues, north and south. I'd be happy to talk with you individually a bit more about that, if you're interested.

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    Mr. Alan Tonks: Thank you, Mr. Chairman.

    The Vice-Chair (Mr. Paul Szabo): I believe Mr. Mills has a further brief intervention.

    Mr. Bob Mills: Yes, just briefly. It arises from what was just said.

    Why did the poor countries, the developing countries, come away from Cancun saying they had great victories? Many of the leaders said this was a great victory. I'd like you to briefly answer that.

    The other thing is, we have quite a few bureaucrats who are working on our commitments to Johannesburg. We've had them before this committee, and they sound as if they're involved in something. From what I read between the lines of what you said, you seem to question what they are really doing. I think it is good if our committee asks them again, specifically: “Here are the targets. What are you doing?”

    Third, I have to comment on your public consultation. While I think quite often it is legitimate and does work, in the area of Kyoto I would beg to differ from the view that it was very open or very effective, in that there was a selected, invited list. As the environment critic for the official opposition I was not allowed to attend. A number of other people I know in industry who wanted to attend were not allowed to attend, and the media were not allowed to attend. I couldn't help but respond to your comment about how open and flexible and transparent it was. I'd question whether it was any of those things.

    Mr. David Runnalls: Let me start with that one, and I'll go backwards with your questions.

    I was really referring to the role of the national round table, which I don't think played any role in Kyoto at all. We can talk about Kyoto some other time, but I think this has probably been one of the most badly handled files I've ever seen in Ottawa, from many points of view.

    Coming back to your initial question about why developing countries were celebrating, I think they were celebrating because they thought they'd won. They had won in a sense—in the sense that I think they made the United States and western Europe realize that the old way of running the WTO doesn't work any more. You can't just have the U.S. trade representative and the head of trade for the European Union sit in a room and make a deal and give it to everybody else.

    What's dangerous about it is that I don't think the developing countries have won. I think they've made their point; I hope they're now capable of coming back to the table and saying let's have the next step of the dialogue and the debate. I hope the Europeans and the Americans are flexible enough that they'll actually make some concessions on agricultural subsidies, because if they don't, I think the developing countries aren't going to move. The developing countries perceive that they don't get much out of this system and that their stalling it wouldn't make any difference. I think that's wrong. I also think it's dangerous.

    On your question of Canada's follow-up, I'm just not familiar enough with the individual items of it. I tried quite hard to get a consolidated document out of somebody on Canada's overall follow-up to WSSD, and I didn't find anything. I may be ignorant; it may well be there's more going on than I know about.

    The Vice-Chair (Mr. Paul Szabo): I see no further questioners.

    Mr. Runnalls, I'd like to thank you kindly for your intervention today and for your responses to the members' questions. I suspect this is not the end of this, but a continuation.

    Colleagues, our next meeting is Thursday, October 2. We will have the Honourable David Collenette, Minister of Transport, on the subject matter relating to the implementation of Kyoto. It will be in this room from 3:30 to 5:30.

    Mr. Reed.

    Mr. Julian Reed: Mr. Chair, I'd like to go on the record as expressing concern. I realize this meeting was arranged months ago, but there is a provincial election in Ontario on Thursday. If we're going to do our duty to this committee, we'll have to be here and will not be able to be with our counterparts. Historically, what has happened is we've always tried to defer if any party was having something unusual, whether it was a convention or whatever it was. We would try to rearrange the meeting so that it wouldn't conflict. I know it's probably too late to change it now; we're probably there.

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    Mr. Bob Mills: He's here in Ottawa. We should be able to change that.

    Mr. Julian Reed: I phoned the chairman's office and some of our Toronto colleagues who would be affected--

    The Vice-Chair (Mr. Paul Szabo): As you know, the House parties have agreed on meeting schedules, and they are rotating. We were a morning meeting, then the eleven to one, and now our authorized slot is 3:30 to 5:30 on Tuesdays and Thursdays. That's the reason for the time.

    But your point is well taken. We have not posted that meeting yet, since we were just constituted at this meeting. So it's coming. But inquiries will be made to see if we can move it to another slot.

    I understand the Standing Committee on Government Operations and Estimates have authorized slots on Tuesdays and Thursdays, but they don't use them because they prefer to meet on Mondays and Wednesdays. So we possibly could accommodate that. But it does raise the question about whether, if a change is not possible, the suggestion is to try to reschedule this for another day.

    Mr. Bob Mills: I would move that we ask Eugene if he can schedule it for another day next week or the week after. That sure seems reasonable.

    The Vice-Chair (Mr. Paul Szabo): Would that be preferable, colleagues?

    Some hon. members: Agreed.

    The Vice-Chair (Mr. Paul Szabo): We'll take the necessary steps to make sure we deal with this matter as the members have indicated.

    Thank you kindly.

    The meeting is adjourned to the call of the chair.