[Recorded by Electronic Apparatus]
Wednesday, May 1, 1996
.1620 
[English]
The Chairman: I call this meeting to order.
Today I would like to welcome Hon. Anne McLellan, the Minister of Natural Resources. We are going to be studying the estimates and continuing our review. This is the second of two meetings; Deputy Minister McCloskey was here last week.
I apologize to the members. We are a little late because of a vote, and we are probably going to be squeezed at the other end because of another vote. So maybe we can get right to it. I would ask the minister to commence with an opening statement.
[Translation]
The Honourable Anne McLellan (Minister of Natural Resources): Thank you,Mr. Chairman, for this opportunity to discuss the Main Estimates of Natural Resources Canada.
I have with me today several officials of my departmental management team.
[English]
As I just mentioned, there are a number of people from my department here: my Deputy Minister, Jean McCloskey; Yvan Hardy, ADM, Canadian Forest Service; Mike Cleland, ADM, Energy Sector; Marc Denis Everell, ADM, Earth Sciences Sector; Simon Labrie, Acting Assistant Deputy Minister, Corporate Services Sector; Bill McCann, Acting Assistant Deputy Minister, Mining and Metals Sector; Hugh MacEachern, Financial Officer; and Monique Carpentier, Manager of Government Relations. They are all here today to help me answer your queries.
In earlier discussions about the main estimates, my officials have outlined the general strategic and budgetary plans for the department. Today I'd like to focus on my department's role in the natural resources sector and why that role is so important to Canada.
If you recall, the Speech from the Throne stated:
- ...the Government is prepared to withdraw from its functions in such areas as...forestry and
mining...that are more appropriately the responsibility of others, including provincial
governments, local authorities or the private sector.
I realize there has been dissatisfaction over the federal government's withdrawal from programs that historically provided funding to the natural resources sectors. Natural Resources Canada is no longer involved in FRDAs and MDAs. Those that remain, such as the mineral development agreement with the province of Quebec, will expire on their natural expiry dates in Quebec, the date being 1998. There will be no renewal of the agreements upon their expiry.
However, the work of Natural Resources Canada reflects the federal government's core responsibilities in those areas where national effort and coordination are necessary: international trade and investment, science and technology, aboriginal matters, management of federal crown lands, national statistics and environmental questions.
I want to say a few words about my department's activities in the area of science and technology. This area provides some of the best examples of our new way of doing business.
My department has initiated a program, first with the provinces and later with industry and provincial utilities, to share the costs of acquiring digital data for topographic mapping. The Canadian Oil Sands Network for Research and Development, CONRAD, brings together nine oil companies, two universities, three research organizations and a provincial agency to undertake research in environment, in situ recovery, upgrading, mining and extraction.
My department develops integrated forest pest management strategies, including the biological control of insect pests. NRCan also develops innovative tools such as decision support systems, which accelerate the shift to sustainable forest management.
.1625
We're involved in the information highway, transferring high-quality S and T data that can be organized and retrieved by geographical location. Our work on the Canadian Spatial Data Infrastructure and the National Atlas Information Service provides examples of our commitment to maintain knowledge about Canada's land mass.
As a department we're strengthening our international linkages in order to create and expand market opportunities, to improve our access to foreign technologies, and to participate in global progress that contributes to national priorities. For example, in forestry, Natural Resources Canada works with other countries to develop international standards, scientific criteria and indicators, and certification of sustainable forest management.
These are but a few illustrations of our new directions in science and technology that are making a positive contribution to Canada's social and economic well-being. Now I would like to mention a few specific examples of how NRCan will continue this effort over the next three years.
The federal buildings initiative, or FBI, is an innovative program that directly and indirectly will improve the quality of life for all Canadians. The goal of this program is to reduce energy consumption in government buildings across Canada by improving the energy efficiency of building operations and systems.
Besides contributing to financial savings in the future through reduced energy consumption, the federal government is making a positive contribution to our environmental goals, at no extra cost to the taxpayer. We're encouraging other orders of government to replicate this program. For example, the Canadian Federation of Mayors and Municipalities is working with my department to make municipal buildings and facilities more efficient. We even have a list, a long list, of private sector businesses that have teamed up with my department under a similar program, called the energy innovators initiative, to lead the way in an effort to reduce energy waste.
Climate change is a global environmental concern I know all of you are familiar with. Federal and provincial governments are working together to stabilize greenhouse gas emissions through the national action program on climate change.
In the coming year my department will work with provincial energy and environment agencies to review the progress we are making in a realistic fashion. For my part, I will continue to champion the voluntary challenge and registry program, as well as complementary initiatives. Currently over 500 companies are participating in the voluntary challenge program. Our goal obviously is to increase the number of corporate commitments to this initiative.
In addition to these and other initiatives in the coming year, I will issue a new federal minerals and metals policy that meets the goals of sustainable development. I will release a paper outlining my department's renewable energy strategy. I will also release a sustainable development discussion paper, which will provide the basis for consultation on an overall sustainable development strategy for the department.
The promotion of economic growth and job creation is obviously a top priority for this government. In the natural resources sector, the oil sands have tremendous potential for future growth. This is a project that is of particular interest to me as an Albertan. Estimates indicate these deposits contain more than 300 billion barrels of recoverable crude. The National Oil Sands Task Force has estimated that in the next 25 years new investments totalling $25 billion will help create 44,000 new permanent jobs in the oil sands industry, and studies have indicated procurement spending will flow to more than 50 industrial groups throughout Canada.
As you will recall, finance minister Martin announced important changes to the taxation framework that are expected to stimulate opportunities for jobs and growth in Alberta's oil sands industry. Through its research and development activities, NRCan will participate in securing a bright future for the oil sands industry not only for Alberta but for Canada.
The federal buildings initiative also offers excellent potential for jobs and growth for Canada. I referred to the outlines of this program a minute ago. Once the FBI has been implemented by federal, provincial and municipal governments, we expect a total of 80,000 person-years of employment will be created, again all over Canada.
We are all aware of extraordinary mineral discoveries in Canada during the past year. In fact, for the first time since 1989 I can proudly say there are more mine openings and reopenings than closings. This has created some 2,300 jobs and generated important economic spin-offs.
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The good news for resource exploration in this country is that mineral exploration spending is expected to total $945 million this year. That's an increase of 24% over last year, and almost two and a half times the level that existed in 1992. This demonstrates that the Government of Canada is living up to its commitment to create the right climate for job creation and economic growth.
My department is actively involved in assisting the mining sector in Canada. As you may have read in yesterday's Financial Post, the governments of Canada and Newfoundland have set up an intergovernmental working committee to identify and resolve regulatory pressure points to help speed up the development of Voisey Bay. We are determined to reduce the strain of regulatory overlap and duplication in federal-provincial environmental assessment.
Through the work of my department, the Government of Canada is playing an important role in ensuring that mining is a key contributor to Canada's economy. The Prospectors and Developers Association of Canada and the Quebec Prospectors Association told us that they wanted to changes in the flow-through share system. We responded, and my colleague the Minister of Finance responded, by extending the look-back period for claiming flow-through share deductions from sixty days to twelve months. I can assure you that the tax changes directed at mining and oil and gas activities will help stimulate both new discoveries and employment in existing and, in some cases, new resource communities.
Natural Resources Canada will continue participating in work to improve the competitiveness of the natural resources sector. By developing sound scientific criteria, by assisting companies in the acquisition of the expertise and advanced knowledge that they need, and by participating Team Canada trade missions, the department will help to maintain and enhance the sector's competitive edge in the global marketplace. As an example, this year our energy technologies area will complete the testing of small turbine units being developed for the Canadian, eastern European and southeast Asian markets.
My department continues to provide invaluable scientific and technological expertise to Canada's world-leading geomatics industry. This is one of the fastest growing economic sectors in Canada, with annual sales currently at the $1 billion level. As you can see, this work is critical because a more competitive natural resources sector will boost its contribution to Canada's positive balance of trade, and this will bring home to Canada and Canadians the benefits of increased economic growth and new high-quality jobs.
As you know, the Government of Canada continues to promote and develop partnerships. Partnerships are, of course, a key element of this government's national unity theme and plan. Natural Resources Canada has built, and will continue to build, close and cooperative relationships with all orders of government, our clients and our stakeholders. I would like to mention some of the partnership activities in which my department is involved.
In March 1996 I announced that a new intergovernmental geoscience accord was ready for signing. This accord is a milestone in federal-provincial relations with regard to geological surveying. It defines the respective roles and responsibilities of the federal government and its provincial and territorial counterparts. It also sets the stage for bilateral agreements with individual provinces. This new accord is a prime example of how the partnership approach can work.
In January 1995 the Canadian Council of Forest Ministers endorsed the framework for cooperation in forestry. Our priorities include science and technology, international affairs and trade, regional development, aboriginal forestry, and national coordination. Ten new science and technology networks in five national research establishments sponsored by NRCan are addressing national and international forestry issues.
In mining, my department will continue to implement Whitehorse Mining Initiative goals that fall within the federal government's responsibility. My department is committed to fostering the success of these partnerships. NRCan will continue to pursue other partnership opportunities with all orders of government, the private sector and other stakeholders.
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In conclusion, Natural Resources Canada will continue to make progress on sustainable development and jobs and economic growth in the areas of energy, mining, forestry and the earth sciences. My department will continue to promote international competitiveness and environmental stewardship in Canada's resources and related sectors.
My department will continue to build partnerships with clients and stakeholders, including the provinces, and enhance existing partnerships to improve program delivery and ensure good government. I believe NRCan's approach is an excellent model for efficient and effective federal activities that reflect and deliver upon the objectives set out in the Speech from the Throne.
Finally, Mr. Chair, I want to say a few words about AECL, Atomic Energy of Canada Limited. I know there are some here who probably have a particular interest in the challenges presently confronting AECL.
As I have mentioned in the House, the budget for AECL will be reduced from $174 million in this fiscal year, 1996-97, to $100 million in fiscal 1998-99. The company will reduce some of its activities and must focus on maintaining a viable and internationally competitive CANDU business.
I want members of this committee to know that while the federal government does support long-term and fundamental science, it must also support research and development that helps Canada be innovative and competitive in the nearer term. With limited funds, not all basic science can be supported any more. Difficult choices have to be made.
In nuclear energy, the government's priority is the CANDU reactor. Electricity from CANDUs is a commercial reality today, and the CANDU is a competitive product with good chances of success internationally.
Foreign sales of CANDU technology are bringing important benefits to Canada. For example, projects to build three CANDU reactors in South Korea are bringing in more than $1 billion worth of contracts to Canadian companies, resulting in high-quality jobs.
[Translation]
Mr. Chairman, this concludes my presentation about the Main Estimates and AECL.
[English]
Let me close by inviting members of this committee to participate in both National Forest and Mining Weeks. These are two very important events, and for the members of this committee who obviously have an interest and concern for the resource sectors, I would ask for your help in making your constituents and Canadians more generally aware of the importance of both the forestry and mining sectors during these two very key weeks. My department is planning events not only here on the Hill and in Ottawa, but across the country.
I think it's important for members of Parliament to become stakeholders in these weeks and to ensure that as many people as possible across this country understand the importance of these two sectors to the Canadian economy. I look forward to your cooperation and help in celebrating those two special weeks.
I think I will conclude with that and say merci. My officials and I are prepared to answer questions you might have.
The Chairman: Thank you very much, Madam Minister.
We'll begin with the Bloc. Mr. Canuel.
[Translation]
Mr. Canuel (Matapédia - Matane): As May 5th to May 11th is National Forestry Week, I will start with forests, but before doing so I have a general comment to make.
After having heard from the deputy ministers last week, and following the Budget, I am truly worried when I see that the department's budget is decreasing by almost 50%.
For me, that does not make sense, because a country's natural resources are what enables it to create numerous jobs at modest cost. As for jobs created in forestry, try to count them. You will note that the rate is minimal.
For me, it is a tragedy to see a department stripped of the money it needs for research and development and forced to cut jobs in this area. We'll come back to this later, and my colleague will undoubtedly have some questions on the Varennes Tokamak project. It is not acceptable and it should really be questioned.
.1640
Seeing the Minister of Finance chop the department's budget by 50% leads me to wonder if such a department still has a raison d'être.
Getting back to forestry more specifically, from 1983 to 1996, the federal government implemented the development plan for the Gaspé and lower St. Lawrence region, which is commonly called the Eastern Plan.
This program, which was directed at small private woodlot owners - there was something else in New Brunswick - was really quite good. It was set up to provide exceptional assistance to a region which was grappling with a very difficult economy. Seven out of the ten poorest RCMs are located there.
This program provided these owners with technical and financial assistance to do forestry work. It also made it possible to set up complementary regional initiatives such as the forestry extension service, in Causapscal, as well as the development of an applied geomatics capacity for forestry and another wonderful program known as Testing and Experimentation.
As you all know, the Eastern Plan ended last March 31st. The Quebec government was to take over, except in the area of the three services I just mentioned.
I have a few questions for the minister. She could take note of them, but if she prefers responding to each of them immediately, she may.
Can the minister tell me what concrete steps she plans to take to ensure the continuation of these activities after March 31st next, in the three areas I mentioned?
The people at home, throughout the Gaspé and the lower St. Lawrence region, primarily the producers's union and other people who you know very well, because they came here last year, are very worried. Would you be willing to meet with them again? They asked me to pass this request on to you. When could you meet with them?
Would you also be willing to set up a task force comprised of officials from your department, of course, and people from the region who would be responsible for finding solutions to our various problems?
I have one last question on forestry. In a letter that you wrote to the three union presidents of the Office des producteurs de bois de l'Est du Québec on December 28th last, you state, and I'm quoting you:
- These considerations do not exclude the development of new partnerships with governmental
and non-governmental organizations in light of the fact that the transfer of technologies will
represent more and more of a priority for the CFS.
I will come back to the Varennes project afterwards.
[English]
Ms McLellan: Let me say first, Monsieur Canuel, that I thank you for your support in relation to arguments as to why the department could do with a larger budget.
Having said that, let me also express that I find it somewhat ironic that you as a representative of the Bloc Québécois would argue for a larger and enhanced role for my department in an area where we have heard in particular from the provincial Government of Quebec that they see the primary jurisdiction in the areas of forestry and mining as lying with the provincial government. They have been one of the most vociferous, I suppose, in asking us to sort out our core federal responsibilities and leave to the provinces what is more appropriately done by the provinces. We have done that; and we have done that generally in cooperation with the provinces, although of course when one is withdrawing from programs such as the FRDAs and the MDAs it is not unusual to find provinces that want to assert their own primary jurisdiction but at the same time ask the federal government to keep paying.
.1645
So I think we have to put your questions in that context, that in the areas of forestry and mining primary jurisdiction rests with the provinces. In fact, that is one of the main reasons we withdrew from the FRDAs and the MDAs. The FRDAs and the Plan de l'Est, which is a FRDA by another name, delivered on the ground in local communities, in eastern Quebec, in the Gaspé, in other small communities across this country, many important services that assisted especially private woodlot owners.
But the reality, Mr. Canuel, is that the provincial Government of Quebec would argue that this is a matter of primary provincial jurisdiction. The management of the forests, be they owned by private woodlot owners or others, is a matter largely, if not exclusively, of provincial jurisdiction. The obligation we have as a federal government is to sort out our responsibilities and do those things we believe to be core federal functions.
Science and technology, Mr. Canuel, you know better than anyone... We have a major forestry research institute in your province. We have four others. They do science of national significance that will benefit all provinces and all people, be they private woodlot owners, be they the provinces in dealing with their provincial crown lands.
But the reality, Mr. Canuel, is that we cannot continue to do everything we have done in the past, because that has led us to a situation where we have a deficit and a debt that are, as the Minister of Finance has said, simply unsustainable. Therefore, in the name of good government and in the name of national unity, it is important for us to sort out our respective core federal and provincial responsibilities.
About the possibility of new partnerships with either government or non-governmental organizations as they relate to elements of the forestry industry, we are always willing to come to the table and talk about how activities within our core federal responsibilities can assist provincial governments, municipal governments, or non-governmental agencies. But the way of the world is simply that we do not have unlimited pools of money to enter into new partnerships and new arrangements.
So people have to understand they cannot come to us, my department or others, simply looking for new programs that involve the expenditure of huge amounts of federal dollars. But if you want to talk about how our science can complement the science of the province, complement the research needs of private woodlot owners, we're happy to do that. That forms the kinds of strategic partnerships I think serve this nation well, and will serve this nation well into the next century.
The Chairman: Thank you, Madam Minister. We'll return to the Bloc on the second round, but we'll go to the Reform Party -
[Translation]
Mr. Canuel: That was not ten minutes.
[English]
The Chairman: No, it's ten minutes, ten minutes, ten minutes, and then we'll go on five-minute rounds.
[Translation]
Mr. Canuel: That was only four minutes.
[English]
The Chairman: We started at 4:38 p.m. by my watch, and it's now 4:49 p.m.
[Translation]
Mr. Canuel: The minister used a lot of time with her response. I just have a short question.
[English]
The Chairman: It was also a long preamble by the questioner. We will come back to you, don't worry.
Mr. Strahl.
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Mr. Strahl (Fraser Valley East): Thank you, Mr. Chairman.
Welcome, Madam Minister. It's always a highlight to have the minister in front of the committee.
Earlier today I faxed a press release I'd put together to your office. You were thinking of where we could save money and I had details of a few examples of where I thought money may have been wasted.
Ms McLellan: I haven't seen it.
Mr. Strahl: I understand that. Unfortunately it did not get into your hands, although we phoned at 10 a.m. and everything was okay. I feel badly about that in a way, although I did try everything I could to get that to you. I have examples of... Oh, I don't know...as I said, I feel slightly bad in that I tried to give you the heads-up on this so I could get some answers.
Ms McLellan: My deputy hasn't seen it and my legislative assistant hasn't seen it.
Mr. Strahl: No, we just gave her a copy, but it was faxed to your office this morning.
There are some examples in it that we could bring up. Maybe I should just go ahead with it. The one example I would like to bring up is the example of the rental of office space on Seymour Street at Robson, in Vancouver. My understanding is that there was a good deal of office space there, rented since May of last year, that has been sitting empty for the last year. Is that true? That's a lot of...
Ms McLellan: I'm going to call upon Marc Denis.
Mr. Strahl: While he's coming, if I could just give you some details, I understand that the first, fourteenth and fifteenth floors of that building are vacant. All of the questions I have in this press release are...
There are two points I'm trying to make. One is that there are areas where I think you can save some money, but the other more important point is that I am disturbed by a trend in your department to deny me information. They are consistently and continuously telling me to use access to information requests.
So in example eight on that page, where I ask what is going on, they just say, ``I won't talk to you. Use access to information.'' I'm not happy with that and I would hope that you are not happy with that. If I have to go through access to information just to find out why that building has been vacant for a year, all it does is raise suspicions in my mind. I don't think that's a good use of my time or of the access to information department.
I'd be interested to hear about that particular example, if one of your officials can tell me what's going on there.
Ms McLellan: Okay. Let me introduce Marc Denis Everell from my department. Do you want to respond?
Dr. Marc Denis Everell (Assistant Deputy Minister, Earth Sciences Sector, Department of Natural Resources): Yes, of course, but perhaps I cannot respond with a complete answer, because this is a bit of a surprise to me too.
The building you refer to is the building that will of course be occupied in part by GSC, starting in September. It's rented by Public Works and we're their tenant, in a sense. I certainly don't know the financial arrangement that Public Works has made with the owners of the building.
I can tell you that we will be using part of that building to reduce some of our costs over a certain period of time by using less space and perhaps better space, space that is more accessible to Vancouver clients, in fact. So from our point of view it's for long-term savings, but I can't comment on the arrangement with Public Works and the owners.
Mr. Strahl: Okay. I assume that you'll get me the answers.
Ms McLellan: Yes. We will get you answers or responses to everything you have set out here.
Mr. Strahl: Okay. It's my understanding that it has been empty for a year now and if it's not going to be used until September, it'll be a fifteen-month lease on an empty building, which is quite a bit of lead time and probably costs you $1 million.
Ms McLellan: On that one, I guess we'll have to talk to Public Works, because they're the ones who contract on behalf of the Government of Canada.
Mr. Strahl: The other thing is - and I'm not sure how you ride herd on this - that from October to January of last year, while personnel reductions were in full swing and the program review was in full swing, NRCan spent over $1 million on temporary services. That amounts to...all the information is not complete, but it shows that about 48,000 hours were worked by temporaries during those months, at an average of $16.86 per hour. That's at a time when you let 100 clerical workers go. Now, it seems to me that is a lot of temporary service if you're in the process of downsizing. Rather than spend $1 million on temporary services, couldn't you have hired or kept some of your permanent employees?
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Ms McLellan: I'll ask the deputy to comment on this.
Ms Jean C. McCloskey (Deputy Minister, Department of Natural Resources): Thank you, Minister. We have a very active workforce adjustment program and committee in the department. We're enormously concerned with the impact on our employees of the program review decisions that were taken by ministers. I'm sure you're aware that something in the order of 1,600 positions will be eliminated over the three-year course of program review one - and two, of course, we now have in preview.
As a result, we've instituted a system that we have worked out in cooperation with the unions in the department, and of course in cooperation with the management across the department, whereby we look at each particular instance where we have a staffing action and assess whether or not at that time there are people available within the department who are either on affected or surplus status and who might perform those functions.
Sometimes we get a good match and sometimes we don't, either because of location or because of skills or other work demands, but it's an issue we're very much concerned with and I think we do have a good record with respect to how we treat our employees.
Mr. Strahl: Okay. Again, I'd be interested in the amount... That's a lot of money to spend on temporary services at a time when you are downsizing and laying off clerical staff. Temporary services are clerical workers, by and large, and that's a lot of money to spend when you're laying people off. That's my comment.
Ms McLellan: We can certainly provide you with more details of that expenditure.
Mr. Strahl: Again, I have to go through access to information for everything because they won't talk to me down there. I don't like that. I wish I didn't have to do that, but I have had to make -
Ms McLellan: As you know, Mr. Strahl, there is a formal process through which one can receive access to information within the federal government. I would think that in many cases that process should be used to ensure that the formalities of the access to information rules and procedures are observed.
However, I will speak to my department, because I think there are probably some kinds of requests - and I think it would be useful for the department to discuss with you what those might be - where the formality of an access to information request is not required. I will certainly talk to them and ask them to talk to you about how we define that category for which the formality of access to information isn't required. I will follow up on that.
Mr. Strahl: As I said, I can go through the whole list, but what happens is that I have to bring them up like this because no one will talk to me.
The other example in here is an all-decked-out Blazer for $34,000. I say, man, that's pretty nice; that's nicer than the vehicle you're allowed to buy as a minister. So what's it used for and who drives it? No one will talk to me. They tell me to use access to information.
Ms McLellan: I think the vehicle in question is a departmental vehicle and you clearly have the right to know who uses it and what it's used for. It was paid for by the taxpayers of Canada. I will make sure you get that information.
Mr. Strahl: Thank you. I would appreciate it. I always got along well with your ministerial staff, but I am having trouble getting anything out of your department. If you will do that I would appreciate it.
The Chairman: You have one minute left.
Mr. Strahl: I have just one last question. It has to do with the energy chapter on the interprovincial trade agreement. That's been left blank to date and it's been put off, as you know. It was going to come in June of last year and then it was September, and now it's still coming. Do we have a due date on that? Is this a long birthing process or is the due date near?
Ms McLellan: I think it is probably fair to describe it as a long birthing process, and as you are aware, federal-provincial relations and cooperation - let me say even cooperation between the provinces where in fact we are not involved - are very difficult to achieve. I think it's fair to say that my provincial colleagues have worked very hard to try to reach an agreement on an energy chapter.
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Much of the chapter has been agreed to; however, there are still some sticking points, especially as it surrounds electricity markets. And there are fundamental changes taking place in these markets south of the border. These changes are obviously going to take place in this country.
Those changes, for some, are promising. They open up a whole new future of competitive potential. For some others, obviously, that change is frightening. They are, perhaps not with the same alacrity, willing to proceed with the restructuring the electricity markets in this country. They have some legitimate concerns, like stranded assets and other things.
So, Mr. Manley, whose responsibility it is to deal with the internal trade agreement generally, and I are very keen on having this chapter completed. We think that maybe the first ministers conference in June is an opportunity for the Prime Minister and the first ministers to encourage their energy ministers to conclude this chapter.
But let me say that this is not from lack of trying and coordination on the part of my department and the federal government. It is not from lack of trying on the part of some of the provinces, which are as frustrated as I think you are in relation to the non-completion of this chapter.
It is one of my goals and one of Mr. Manley's goals to complete this chapter as soon as possible, but there are some difficult intraprovincial issues there that provinces or subsets of provinces have to work out. There is little that we at the federal level can do but provide them with whatever help we can in terms of help and support, and in this role as a facilitator.
The Chairman: Thank you, Madam Minister.
Mr. Wood.
Mr. Wood (Nipissing): Madam Minister, in the recent Speech from the Throne, the government announced its intention to devolve many of its powers in forestry and also in mining. We've been led to believe by previous witnesses that the federal withdrawal and transfer of responsibilities has already been ongoing and is even probably near completion. Is this devolution of powers a result of fiscal restraint that has been forced on you and your officials, or is it part of a more long-term plan and a new vision that you have for your ministry?
Ms McLellan: No, it's not forced upon us exclusively or even primarily by fiscal constraints. I think, actually, that the deficit situation in which the government has found itself has provided us with an opportunity to sort out core federal and provincial roles that ultimately will lead to the better functioning of the federation.
I think it's fair to say that too often in the past there were those who looked to the federal government to take on - perhaps the federal government was too quick to take this onto itself - a whole series of problems, programs and initiatives. It did so because it at least thought it had money to help deal with those problems or establish those programs or initiatives.
I think we all know the results and consequences of that way of doing business. So what the fiscal situation has presented us with is an opportunity to get a better sense of that which is the appropriate role of the federal government in the areas of forestry and mining, where we concede that the primary, but not exclusive, jurisdiction rests with the provinces.
In a nation like ours where the resource sectors are so important to the economic and environmental health of the country, obviously there is an important role for the federal government. Our colleagues in other federal states, such as Australia and the United States, to name but two, which are also important and resource-rich countries, have a federal presence in the resource sectors, although jurisdiction rests primarily with states or provinces.
So we have taken this opportunity through program review to define that which we appropriately can do in this area to build on the primary jurisdiction of the provinces, complement that primary jurisdiction, and complement the activities of the private sector, universities and other research facilities, to ensure that our resource sectors have the knowledge, the technologies, and the trade opportunities to remain competitive and productive in a global market.
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These industries are export-oriented. Look at forestry. We export $28 billion worth of forestry products every year. We import $4 billion worth. This is an amazing positive balance of trade in that sector.
These are export-driven industries. Therefore the federal government must be involved, not only on the technical trade side to ensure that the markets of the rest of the world are open to us on a fair basis, but also to ensure that our industries domestically are competitive, productive and sustainable.
Mr. Wood: Here's the other thing I was wondering about. When we're reducing overlap and duplication in mining and forestry, obviously that is a good thing. I think it's devolving our responsibilities to the province, and I'm all for this.
However, I remain concerned about national standards in both these sectors. To use an analogy, Health Canada, as you know, oversees national health care standards across the country, even though the provinces administer health care. The federal Minister of Health has clout to enforce these standards because the federal government provides funding for health care to the provinces.
In the case of your ministry, however, I wonder if your officials have the clout, let along the manpower, to enforce national standards in forestry and mining management.
Ms McLellan: First of all, let me go back and pick up on this use of your language: devolution of power. I don't want anyone to be under a false assumption here. What the Speech from the Throne talked about was the withdrawal from certain functions if those functions could be done more appropriately by another level of government or another agency.
We believe we have been sorting out our functions and those that can be more appropriately done by others, for the past number of years. I don't use the language of ``devolution'', I don't use the language of ``withdrawal'', because I don't want anybody to be under a false assumption here.
We are going to continue to be in the areas of forestry and mining, but as it relates to federal heads of jurisdiction, like international trade, environment and international environmental agreements. I just want to clarify any misunderstanding that may exist there.
There are, however, functions that we have been doing that are more appropriately done by, and are within, provincial jurisdiction. We have worked cooperatively with the provinces to sort those out and to enter into agreements. The geoscience accord is a perfect example of how we have sorted out that which a national geological survey should be doing and that which provincial surveys should be doing. That's the essence of a functioning federation. I wanted to clarify that.
In relation to national standards, in fact, Mr. Wood, as you're probably aware, because the provinces have primary jurisdiction over forestry and mining, there are very few national standards per se in these industries. The management of provincial crown lands lies with the provinces. They enter into management agreements with private sector companies in their respective provinces in relation to the management of those crown lands. They set the standards for private woodlot owners.
In the mining industry, the health and safety standards are largely provincial.
As it relates to the nuclear industry, they're federal, because the federal government has jurisdiction in large part over the nuclear industry, although even in that area, as it relates to occupational health and safety, we're sorting out our roles with the provinces.
So in terms of national standards, quite truthfully, it's not an area in which the federal government has a very large constitutional jurisdiction. We look to the provinces, as we should, to determine their provincial standards as that relates to most of that which goes on in the mining and forestry sectors.
We are, however, working with the provinces and with the private sector to develop criteria and indicators as they relate to the forestry sector. We want to be able to tell the rest of the world, because the rest of the world is interested, that lumber, value-added products of whatever kind that come from the forests, come from sustainably managed forests. We would like a set of national criteria and indicators to help us define whether forests are being sustainably managed, whether there's sustainable harvesting and so on. We are working cooperatively with the provinces and with industry.
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As that relates to our domestic situation, it will probably be a voluntary set of criteria and indicators developed through the CSA. Will there be national standards? Perhaps in one sense ultimately, but not to be enforced by the federal government.
The Chairman: Thank you, Mr. Wood.
I'm going to ask for some direction from the committee. The bells are going to go off in about five or six minutes.
Madam Minister, I understand you're available until 6 o'clock. If we can get the vote over by 5:40 p.m., since it's supposed to happen right at 5:30 p.m., we could have another twenty minutes at that time.
Would it be the desire of the committee to take advantage of those twenty minutes? I look for direction. Yes? All right.
Mr. Bergeron for five minutes.
[Translation]
Mr. Bergeron (Verchères): Mr. Canuel would perhaps like to make a comment before I begin.
Mr. Canuel: I would just like to say, Minister, that you are quite right in handing mines and forests over to the provinces. However, as long as the workers pay federal taxes, it will be almost insulting to say: ``Do what you can with that" without granting the necessary funds. Thank you.
Mr. Bergeron: Because we have very little time, I'm going to skip the preamble, since we already raised the issues in the House of Commons. I invite you to jot my questions down, because I'm going to go over them quickly.
The minister told us that her government had to make a certain number of choices, difficult choices, I agree, and that it asked AECL to make suggestions as to the choices the government should make. However, to some extent, AECL is judge and judged in this area, as it makes the choices, benefits from government funding and provides direction to the government regarding these choices. Moreover, we know that AECL is very closely linked with the development of the CANDU industry, in Ontario more specifically.
Minister, does this not, in your mind, appear to be a conflict of interest for AECL? We know that it plays a role in determining the government's choices. But you also talked about the spin-offs from CANDU development for Quebec. The minister will certainly be honest enough to share with us the full list and the potential spin-offs from CANDU development for Ontario. We would have a better idea of the comparative advantages for the two provinces, if we had the numbers for both provinces.
In the House, in response to a question from the Official Opposition, the minister mentioned that her department spent 25% of its budget on research and development in Quebec. This response infuriated researchers in Quebec, because the most generous figures indicate that Quebec's share of the internal and external research and development budgets at the Department of Natural Resources is 17%. Without Tokamak, it drops to 12%. This figure represents the share of internal research at the department, which represents 70% of the department's expenditures in terms of research and development.
If you include the AECL budget in the budget the minister has just mentioned, Quebec's share for research and development drops to 8%, and without Tokamak, it falls to 6%.
Could the minister indicate what figure she used to provide her answer? And could she also table the figures she has mentioned?
Minister, in your presentation you talked about partnerships and dialogue with the provinces. May I remind you that the Tokamak project is one of the rare projects in Canada conducted jointly by the province, the federal government, the private sector, the universities and a crown corporation.
Is the minister aware that she is presently sending out a message that this type of joint project does not work in Canada, because the federal government can make unilateral decisions without ever consulting its partners, as it is doing in this case. How, then, can we talk about partnerships and dialogue with the provinces?
Finally, perhaps the minister could explain how they managed to save the Sudbury Neutrino project, and why they are not in a position to do the same and save the Varennes Tokamak project?
Ms McLellan: Thank you.
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[English]
In relation to what I think was your first question regarding AECL and who makes the choices, let me assure you it was a decision of the Government of Canada that the priority for AECL would be in the CANDU reactor business, in particular the CANDU reactor business in the export market.
It's no secret that we do not expect to sell in the near future any additional CANDUs here in Canada. However, the export market, especially in southeast Asia, is really taking off, and we also anticipate a growing market in eastern Europe. The Prime Minister's recent visit to Romania obviously is evidence of increased interest in countries of eastern Europe in relation to nuclear power as a part of their energy diversification.
So the choice was made by the government that we, in a time of limited resources, would concentrate AECL's activities on the export CANDU market. That then led to certain difficult choices. As I have already told you in the House, nobody is questioning the quality of the scientists at Tokamak. No one is questioning the fact that in an ideal world where there are unlimited funds -
Mr. Bergeron: I know that. You already answered it.
Ms McLellan: That's right. So let's remember that it is with no pleasure that these choices are made, but the act of governance requires difficult choices. We determined our priority; it is the export sale of CANDU reactors. Therefore that determines the science, the R and D, we will do as it relates to the nuclear industry.
I just want to clarify a few things here.
In relation to the fusion research being done in Varennes, this is research. It is not basic science; it is not fundamental science. It is for commercial application, and people have to understand this distinction. This research is being done with the long-term objective, if the research proves to be successful at all, of commercial application.
Who will benefit from that? It will be Ontario Hydro and Hydro-Québec. Therefore it is more than appropriate, since this is being done not as fundamental research but as commercially applied research, that these two hydro utilities, two of the largest utilities in the world, which will derive the benefit... Their shareholders - the taxpayers in their respective provinces - will derive the benefit of this research.
We have started this. We have provided start-up money, and some significant amount. I think in the case of Quebec it was approximately $50 million over the past number of years. That is a huge amount of start-up funds for something that is being pursued for its commercial viability. You have utilities that are in the business of selling power, and this potentially will be another source of electricity.
Therefore, after some $40 million worth of contribution from the federal government to Quebec and some $40 million to Ontario, I would suggest it may be time to look to the utilities to pick up the shortfall and continue this research.
In relation to the research budget of my department, it was not 27%. I have never used that number. The number I used in the House was 25%, and that is 25% of our regional R and D budget. I am always very careful to indicate ``regional'', because of course if you include the national capital region it skews the numbers both in terms of Hull and in terms of Ottawa.
Therefore, when I talk of the 25%, I am saying 25% of our regional R and D budget is spent in the province of Quebec. It is spent on facilities such as the Quebec Geoscience Centre, the Val d'Or Laboratory, the Canadian Centre for Geomatics, the Laurentian Forestry Centre and the Energy Diversification Research Laboratory. Those are the kinds of things that money is spent on, and I think if you talked to the men and women who work there and the industries they support and work with, they would say they are all very valuable and significant contributions to the economy of Quebec and Canada.
To return briefly to the fusion issue, under the contracts entered into with this government and Ontario Hydro and Hydro-Québec, there is a provision to provide one year's notice to withdraw from the contributory agreements. We have provided that notice. Therefore funding will stop not this year but on March 31, 1997.
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We have exercised our right to provide notice. There is a one-year transition. In fact, we're going to be working very closely with Hydro-Québec, Ontario Hydro, and other interested parties in the hope that we can find and develop a transition plan that will provide the opportunity to continue the best of that science.
I realize this is a difficult choice, but it's not a heartless choice. We are exercising our legal right under the contract. We will do everything we can to ensure a smooth transition.
Mr. Bergeron: Will you give us the figures I've asked for?
Ms McLellan: In relation to our research budget, the regional R and D?
Mr. Bergeron: Yes. Can you release it with the CANDU benefits for Ontario and Quebec?
Ms McLellan: Yes. As a matter of fact, I can say something about that when we return, if you want.
The Chairman: The meeting is suspended. I would ask members to come back as quickly as possible after the vote.
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The Chairman: The meeting is reconvened for the purpose of adjournment. Unfortunately we have to vacate the room. I will, however, on behalf of the members, extend an invitation to the minister to come back and finish her testimony. We had but an hour because of the votes. I know in talking to her informally that she will be amenable to that as soon as we can find some time in her schedule.
We stand adjourned.