NRGO Committee Meeting

STANDING COMMITTEE ON NATURAL RESOURCES AND GOVERNMENT OPERATIONS

COMITÉ PERMANENT DES RESSOURCES NATURELLES ET DES OPÉRATIONS GOUVERNEMENTALES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, March 10, 1998

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[English]

The Chairman (Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)): Colleagues, we'll bring to order this March 10 meeting of the Standing Committee on Natural Resources and Government Operations.

Before I introduce our principal witnesses, as an opening remark for the record, the knowledge-based sector, which has evolved from the natural resources sector, has a lot of wonderful stories, and in many ways Canada is a leader. I think it's also recognized that more can be done to promote the knowledge-based industries that have come out of mining, out of forestry, out of geomatics, out of the oil and gas sector. Maybe our committee can add something to that understanding and help with government policies that could encourage further job creation in these knowledge-based sectors out of natural resources.

As a country, we are still hewers of wood and drawers of water. We are still seen as that, but many more items of good news need to be shared with the public on what is happening with the knowledge-based sector.

It is also, colleagues, as you will appreciate, part of our better understanding of rural Canada and economic development in those areas that most of us represent back home.

We have with us today, from Natural Resources Canada, Dr. Marc Denis Everell, who is assistant deputy minister of the earth sciences sector; and Linda Keen, assistant deputy minister, minerals and metals sector. They have several colleagues with them, who they will introduce as required.

So we'll invite either Dr. Everell or Ms. Keen to begin the presentation, and then we'll have questions after. Thank you.

Ms. Linda Keen (Assistant Deputy Minister, Minerals and Metals Sector, Department of Natural Resources): Thank you very much, Mr. Chair. It's an honour to be with you today.

As an opening note, it was unfortunate that I was not able to meet with the committee earlier, as some of my colleagues did, to give you an overview of my sector, but perhaps we'll be able to do that at a later time.

First of all, I'd like to draw your attention to a deck we've provided to you, and I will be using this deck in my opening remarks. It is entitled “Knowledge and Technology-Based Industries: Natural Resources into the 21st Century”.

To start with, I'm going to use the deck to set the stage for the discussions we're going to have today and that you'll be having with my other colleagues from forestry on Thursday.

On page 2, in regard to the resource industry, as you've noted, Mr. Chairman, Canada's wealth in natural resources contributes immensely to the prosperity of our country, particularly to the development of rural communities.

Just how key are those resource industries? Natural resources is one of the largest contributors to our GDP: $95 billion in 1996 dollars, or 14% of the total GDP. Canada's natural resource sector is responsible for 38% of our exports and is the largest contributor to Canada's positive balance of trade: $65.3 billion in 1996.

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On page 3 we have shown a map that illustrates more clearly the role of the resource sector as the major engine of growth and jobs in every region of Canada. This map shows the forest-based companies operating mines, including fly-in mines, and oil and gas fields. This map was prepared by the GeoAccess Division of Natural Resources Canada.

On page 4, when we look at natural resources into the 21st century, as you've noted, Mr. Chairman, part of natural resources is the traditional view we're all familiar with. It's the commodities the world needs and we can supply them. But as you've noted, this is only part of the story. If people still think of natural resources as low tech, that is not the story today.

Natural resources industries are striving to be clean, environmentally friendly, high-tech, high-opportunity, knowledge-based operations and are committed to sustainable development. Here and elsewhere in the world they are growth industries. An increasingly large share of that growth will come from the application of new technologies and new value-added products.

Slide five—I'll just briefly go over Canada's position. Where does Canada fit in this global economy? As an exporter of forest products we lead the world. In minerals and metals we are a global force. We are also a major league supplier of oil and natural gas. Our biggest customer and nearest neighbour is the world's largest economy, the United States. We are a leader in the technology of oil sands development and we have barely scratched the surface of the potential in that field.

Canada is also a world leader in technologies and techniques of modern natural resource development. Geomatics, for example, which my colleague Dr. Everell will talk about, includes remote sensing, mapping, and surveying.

On slide six, in talking about how to compete successfully in the global knowledge economy, we must not just be the world's largest player in natural resources but we must be the smartest supplier. By “smartest” we mean a resource sector that is productive, solidly grounded in science and technology, equipped to expand into the new value-added products and new markets, environmentally responsible, and able to compete at every level with every other resource-wealthy country.

On slide seven we give you the outline of the presentations, Mr. Chairman, that you will receive today and Thursday. We hope we will provide you with some interesting and thought-provoking examples in the high-tech, high-opportunity, knowledge-based natural resource sector.

Today my colleague, as you have noted, Dr. Marc Denis Everell, who is ADM earth sciences but also the chief science adviser to the department, will be speaking to you on technology and techniques of modern natural resource development.

I will be speaking after, specifically on the minerals and metals sector. On Thursday, you've scheduled Mike Cleland on energy and Dr. Yvan Hardy, who will speak on the forest sector.

Mr. Chairman and members of the committee, those are my opening remarks.

The Chairman: Thank you.

Dr. Everell, I've taken a little extra liberty with the time for opening remarks because we're trying to cover off two major areas and we want to make sure we get a good clear picture from our senior officials.

Dr. Everell.

Dr. Marc Denis Everell (Assistant Deputy Minister, Earth Sciences Sector, Department of Natural Resources): First of all, it's a pleasure to be here this morning in front of you. I'd like to briefly introduce the people accompanying me. With me are Janet King, who is the director, continental geoscience division of the Geological Survey of Canada, and Ed Shaw, the director general of the Canada Centre for Remote Sensing of Geomatics Canada.

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This morning the presentation we want to make to you is entitled “Knowledge-based Industries in Natural Resources, Geoscience and Geomatics”. The presentation will most likely be about remote sensing elements.

Slide number 2 is a brief introduction to the sector of earth science in NRCan. I had the pleasure of a previous appearance in front of you a few months ago. At that time I described the work of the sector as Maps 'R Us, or Maps Canada. In simple terms, it's a way to look at the sector, which is composed of Geomatics Canada, the Geological Survey of Canada, and the Polar Continental Shelf Project. This is a very sizeable element of the science and technology of NRCan.

For the last 155 years, in one form or another, we've been doing mapping. The earth science sector is a centre of expertise. We see our role not only as one of pushing S and T boundaries with our knowledge and our skill; we're also making sure that what we learn is available to Canadians and obviously is shared and transferred to industry.

Resource industries are now knowledge industries, as we have often repeated, but it is really true. Going back to when mapping started in Canada, I guess the technologies were quite simple, like canoes and horses, and, we have to admit it, like hammers for geologists and theodolites for surveyors. That's the way it started. If you look back to the time the GSC started, in 1842, those were the instruments.

In the fifties we started to adapt helicopters to do much of the geoscience activity, and just to give you an example of the progress that resulted, I'm told that in five years with that approach we were able to do as much mapping as was done in the previous 100 years.

As you know, Canada is a very large country, and I must admit that after 150 years we still have not mapped Canada completely. In fact, we do need to re-map Canada from time to time, because the concepts around geology evolve and also, obviously, other changes occur. Obviously much of the mapping that we do is very important for the rural and remote communities of Canada.

The key to completing the mapping is certainly to use new technologies and partnerships. I'll talk today about some of these new technologies and some of the very interesting partnerships we are involved in with industry, with our provincial colleagues, and with universities.

On slide four, we talk again about how mining and energy companies depend on the ability to explore the ground. That's obvious. The challenges today are really about more effective tools and methodology and more sophisticated approaches, and this is where high technology comes in. If you want exploration in mapping, geology is no longer chipping at the surface with a hammer. In fact, if you look at the upper part of the slide you see a geologist there in the field with a computer. This is the normal way of operating today for a geologist. He is doing much of the feeding in of data right on the spot.

Also, for our geologists the challenge is often to see below the surface, again using very sophisticated technologies. I'll give you some examples of this in the next two slides.

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On slide 5 we have an example of a very impressive success story, in my view. It's a success story about a company, Phoenix Geophysics, from Toronto and the association between that company and GSC to develop very good instrumentation. GSC did supply some of the knowledge that was necessary for that company to develop new instrumentation. We did provide that company with some initial grants, but now it's very pleasant to see that company is a world leader in its field and has been able to produce much instrumentation. We have a figure there on the slide of something around $20 million. The technology is now being sold in 75 countries in the world.

If you look at the little diagram below, this is an example that shows how we can use electromagnetic and seismic sounding to basically produce an X-ray, if I can use the term, of the earth's crust. In this case it's an X-ray, if you look at the slide closely, that goes down to three kilometres. Obviously if you're able to do an X-ray of that nature, it's very helpful to geologists and exploration companies. Such a diagram or representation would not have been possible 10 years ago.

So again, to summarize on that one, it's an example of where a small company working with government, with a little financial help, evolved into a world leader exporting across the globe, doing interesting things for Canadian companies, but at the same time using the same technology to make money outside the country.

The next slide is also about an example, this time of PCI Enterprises of Richmond Hill, Ontario. In this case it's a company that's very strong in terms of producing very good software. The example we show here is that some of the software allows integration of remotely sensed data that is obtained through satellite. It's a mixture of that information coming from satellite and other geoscience information.

The illustration you see on the page shows the Sudbury Basin with some of the mine sites indicated. You will note that on the diagram, the mine sites are all in a similar position. In fact they're all in an area that obviously leads to finding the ore bodies. That type of picture, which is possible through the use of sophisticated software, is of course very useful for geologists to establish their drilling program and the exploration program. In this case a very close partnership between GSC and PCI has produced the software for local use, but also that software is very successfully sold internationally.

The next slide talks about the fact that data from satellites are certainly more and more available. Some of you may remember that the last time I came here, I said something about the fact that the sector, through the Canada Centre for Remote Sensing, is operating receiving stations that are receiving information from many satellites circulating around the globe. We operate these receiving stations at Gatineau, Quebec and at Prince Albert, Saskatchewan.

We work in this area in cooperation with the Canadian Space Agency and the industry. We benefit from the space plan budget to do the work we do in terms of expanding the possibility of using satellite data. We do that particularly to help the resource sector and also to help with respect to environmental monitoring.

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With some satellites it's now possible to detect lots of features that are useful for geologists. Certainly this will develop over the years, but already some very good use is being made of satellite information. You may be interested to know that, for instance, the RADARSAT satellite of Canada is now selling pictures, if you want, information, mostly for geological applications, things that are used in Canada but also throughout the world.

Another important aspect where we have scientists working is on a better understanding of the state of vegetation, the state of the environment, the state of groundwater issues, again using satellite information. I know this committee has been talking about climate change. You should perhaps understand that again, satellite information can be useful to help in modelling climate change. We do plan to be quite involved in the sector with the understanding of forests as a sink, again using information provided by satellite.

The next slide is again a slide about success stories. In the first case it's a success story about a company called MacDonald Dettwiler in Richmond, B.C., a very significant company in the area of remote sensing and the development of ground stations. Just a few weeks ago they won the contract to build RADARSAT II, which is going to be a continuation on the first satellite, which was launched by Canada a few years ago.

The story of that company is a very fantastic story. It's a story of partnership between government and industry. That company started as an SME in 1969. We worked with that company for many years through our group called the Canada Centre for Remote Sensing, providing them some contract money, getting them to do some work required for government use. The final result is we have a world-class company that is really providing lots of instrumentation, facilities, throughout the world now in the area of ground stations. They are also very important in the area of image resolution activities. Of late their involvement in radar satellites will certainly also involve a lot of future benefits in this area.

So I'm quite pleased with that example. In fact, because I was so pleased, we've included an example in your package of a pamphlet we've assembled that describes in some detail the story about MacDonald Dettwiler and what we have done with that company over the years. This company, from a small SME of 4 people in 1969, has become a company that has about 900 employees, and I believe it's going to have a few more with the RADARSAT II contract they won. I don't want to get overly excited, but I like that example, because it's really a success story.

The next one is the example of a real-time global positioning system. Obviously right now you can go to Canadian Tire and buy a GPS unit and that unit will provide you with some information about where you are. The problem is that for most very precise applications this is not good enough.

In the last few years the department has been involved in developing systems that will allow much more precision with these instruments. In fact, right now we're in the process of negotiating commercial agreements with various companies to transfer the technology that was developed in government to private sector users, who will, we hope, make a lot of money with this, and maybe government also will make a bit of money from the royalties we will collect.

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Slide 9 is a slide that I could spend a long time talking about, but I will be quite brief. It's basically a slide that gives you a bit of an overview about the market opportunities in the area of geomatics remote sensing. If you note the first few lines, they talk about an industry that's worth almost $2 billion per year right now—a growth of almost 50% in five years. It's an industry that is very important in the global market, at about 18% to 20%. Also, what's very important is that we have a number of companies that have important niches in this geomatics area: areas of remote sensing, GIS, land management, property title, and GPS technology.

If you look at my slide carefully—and maybe I should have reminded you about this before—you will also note that the geomatics companies of Canada are not located only in Toronto or Montreal; they're all over the country. In fact, they're quite well distributed across the country. Because these companies very often deal with information technology, they can in fact be situated in remote communities and operate quite successfully. I think it's important to realize this aspect about the geomatics industry of Canada, along with the fact that it's quite well spread out.

Moving on to slide 10, knowing that there are so many market opportunities, is Geomatics Canada doing anything special in that area? The answer is, yes, very much. About ten years ago, we received from the government the mandate to do things that were important for government in the geomatics area—for the government to use. We also received the mandate to support the development of the Canadian geomatics industry, and we've taken that mandate quite seriously.

We have many types of interactions in which we help Canadian companies sell abroad. We do that first of all with our government counterparts—basically, government departments in other countries where we want our companies to do business. We do a memorandum of understanding with them, and we exchange with them. This has been quite useful to the development of significant contracts for the Canadian private sector.

I've listed some of the very important contracts with which we have been associated. One was in Mexico, one was in Russia, there were a few in Saudi Arabia—and again you'll note the different company names and the size of the contract. They were sizeable contracts. Very often in these contracts, Geomatics Canada will do a small piece of the work as well.

We are working as well with CIDA, of course. I'll give you an example of a partnership that we now have between CIDA, geomatics companies, and ourselves. The purpose of that partnership is really to sell more use of the RADARSAT technology in many different countries of the world. In fact, yesterday I was briefed by some of my directors about the GlobeSAR program. The GlobeSAR program is really of interest to the Latin American countries in terms of the use of RADARSAT, and it's really a partnership between Geomatics Canada, very important geomatics companies of Canada, and CIDA. It will lead to a development of these markets.

Geomatics Canada has been involved in the last two Team Canada efforts with the Prime Minister. We haven't been pushing for ourselves to be included, but we've been asked to be there, because the Canadian geomatics industry finds that Geomatics Canada is a very important player, helping them to develop the business outside the country.

The summary of my presentation is on the last slide. Obviously, mapping and exploring our natural resources is key to the history of Canada, but it does remain essential to our economy today. More and more, innovation technology and expertise are needed to do this. In fact, this is one of the strengths of Canada. It's important to maintain and build on that strength and intellectual capacity, as it is key to our global competitiveness in natural resource management and development.

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As I said, many of the things we are developing with our geologists or our people in geomatics are useful for Canadian needs, but what's also fascinating is that we use the same information to sell abroad, so it's really about jobs and growth.

I'm certainly open to answering your questions, but I think we have a good story to tell in that area of knowledge-based industry associated with the resource industry.

The Chairman: Thank you, Dr. Everell. It has been very interesting. I know there will be questions, but I wonder if we should do the other presentation first, because the questions may relate to one or the other.

So, Ms. Keen, did you want to do your sector then?

Ms. Linda Keen: Thank you very much, Mr. Chairman. It's an honour for me to brief the committee today on the importance of knowledge and advanced technologies for the Canadian minerals and metals industry. As Marc Denis has outlined already, knowledge-based industries are exciting and important, and they are also exciting and important to minerals and metals.

I'm accompanied today by Dr. Jean-Claude St-Pierre, who is the director general of the mineral and technology branch; and Dr. Bob Hargreaves, who is the director of the mining and mineral science laboratory.

I have given you a turquoise booklet that I'll be using and following today for your information.

I'm going to be talking to you today about three aspects: first of all, an outline of the Canadian minerals and metals industry in the knowledge economy; some key innovation challenges that we see in minerals and metals; and drawing some conclusions today.

On page 3, I'll start by talking a little bit about the sector. As I mentioned earlier, we hadn't had a chance to talk to you about the sector earlier, and we have asked the clerk under a separate time to supply you with some information about the sector and what we do. But today, if I could, I'd like to mention first, that the sector is really the source of leading edge science and technology in minerals, metals, materials, and explosives; second, that we are responsible for minerals and metals policy and explosive regulations; and third, that we have a unit that specifically addresses economic and financial analysis for this sector.

On slide 4, we'll start to talk about the role of minerals and metals in the knowledge economy. First of all, the industry is high tech. As I mentioned in my opening remarks, there's often an impression of the industry as not being high tech, but I'm sure many of you have had a chance to meet with the industries that are in your ridings and they do pride themselves in terms of their high-tech ability.

Just to give you an illustration of that, the industry spends $100 million annually on research and development. This is clearly an industry that realizes that their future lies in science and technology.

Advanced technology is highly used in all mines, and this has made Canada a world leader in mining technology. But Canadian technologies are also used in areas such as mine safety, enhancing environmental systems, increasing productivity, and providing our industry with a competitive edge.

In slide number 5, we talk a little bit about the trends in productivity for the minerals industry and the total economy. Again, I think it's important that we address the myths that are often too present about the minerals industry. You can see that the mineral industry actually leads in terms of the total economy and looking at the areas of productivity. So I think this slide very much illustrates the role our industry plays in the world in this area.

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On slide 6 we're talking a little bit about the innovation challenges we face in this area, and I'll be going over each of these areas in further detail: automating our mines; protecting our environment; reducing, recycling, and reusing our resources; protecting our infrastructure investment; and adding value.

I'll turn to page 6, which is about automating our mines. One of the innovation challenges facing the mining industry as it extracts ore at greater depths is to maintain and improve productivity in what are frankly potentially hazardous conditions while enhancing health and safety conditions. One solution to this that has been pursued by industry is the use of automated mining equipment such as robotics. Another solution is for the companies to team up to accelerate progress and share technical and financial risks. In both these cases the minerals and metals sector plays a key role in these partnership projects.

For example, the CANMET laboratory, which Dr. St-Pierre heads, is an active participant in the mine automation program, what is called MAP. This is a joint research program that was initiated by Inco and is undergone through partnerships. Another example is CANMET's experimental mine at Val d'Or, Quebec, which provides a test bed for prototype testing in the real-life environment of a mine for many technologies. I at this time encourage you, if you have an opportunity, to visit this experimental mine, where you will have a firsthand opportunity to see some of the innovative projects under way.

Slide 8 just gives you some illustrations of how we are seeking to protect our environment. Again, the industry has been innovative in developing new technologies to predict, prevent, monitor, and control potentially harmful effluents related to mining and mineral processing. We are also working to increase our collective knowledge base, and this has been particularly useful in addressing this challenge. Again, all the stakeholders—provincial governments, industry, and regulatory authorities—have joined forces to address these issues.

I'd like to mention in particular our participation as a lead agency in three major national programs and some of the benefits that have arisen from these programs.

The first one is the mine environmental neutral drainage, or MEND, program and the post-MEND program, which we've just initiated. We will seek to reduce environmental liabilities by 10%, or about $500 million. This is a major issue for mining companies, and jointly with provinces and companies we have sought to make significant strides in this area.

The second program is the aquatic effects technology evaluation project, which will provide the necessary science base to make informed decisions in designing environmental effects monitoring programs.

The third program is called DEEP, the diesel exhaust emission program. CANMET participates in the North American consortium involving industry, federal and provincial agencies, and labour groups. The objective of this program is to reduce miners' exposure to diesel exhaust pollutants and oil mists, which is very important in the health and safety area.

We'd be pleased to provide details on any of these programs, either today or at a later date.

I will turn to slide 9, which is about reducing, recycling, and reusing our resources. In this case the key challenge is sustainable development. Sustainable development involves the economic, environmental, and social development that is aided by the industry. This is at the forefront of our agenda. Through advanced knowledge and innovation, the industry is making significant progress as the nation seeks to make the ultimate use of their resources.

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I'll give you some examples. First, the metals recycling industry. This is a $3 billion a year industry involving 1,000 companies employing an estimated 15,000 Canadians. Half of all the iron and steel produced in Canada is from recycled scrap metal. This involves companies such as Noranda up at the horn, companies such as IPSCO in Regina, and many companies in the Ontario area as well.

Our sector contributes to this challenge by enhancing the level of awareness and encouraging technology transfer. The benefit from these activities is enormous to Canada and Canadians.

We are very proud of one example, because it highlights the contribution we have made to the building of the Confederation Bridge. The Confederation Bridge construction used waste fly ash from coal plants. When this waste fly ash is used to supplement cement in concrete, it improves the durability of concrete and also substantially reduces CO₂ emissions from cement production. For each tonne of cement replaced by fly ash, one less tonne of CO₂ is emitted into the environment.

Slide 10 addresses the protecting of our infrastructure investment. In this area, the key challenge is the aging of the materials-based infrastructure, particularly the steel pipelines that move Canada's oil and gas across Canada and across North America, and the steel and concrete roads, bridges, and buildings that link our communities and provide the working environment. Just to give you an example, the replacement cost of our pipeline infrastructure alone represents about $100 billion worth of investment.

It is critical that we maximize our infrastructure investment while ensuring public safety and environmental protection. With our help, the steel and concrete industries of Canada, for example, are tackling this challenge by developing technologies to predict and prevent failures in these infrastructure components. We are contributing by leading research consortia to tackle stress corrosion cracking of pipelines, and to mitigate the effects of alkali aggregate reactivity, which causes concrete deterioration. We are also developing technologies such as engineering critical assessment and improved weld repairs, which reduce down time and allow optimal rescheduling of repairs.

In all of these cases, CANMET works directly with the industry involved. With all these projects, the benefit for the cost has been proven in independent surveys. We're very proud of CANMET's record in this area.

Slide 11 talks about the issue of adding value. The industries in Canada are facing increasing pressure globally to raise the performance standards of their products, to lower costs, to improve productivity, and to be productive both domestically and internationally now with their products. The minerals- and metals-based industries are tackling this issue by pursuing improvements in equipment and process technology and related services.

Again, we're adding value to the industry through CANMET's research programs, and I'll just give you a few examples. One is the promotion of efficient manufacturing processes such as the development of near net-shape technologies through metal powder injection moulding. I'm going to be inviting you to take a tour of the CANMET laboratories both here, in Sudbury, and in Val-d'Or at some time. You'll get to see these. It's quite fascinating to see how it's used in your daily lives.

Other examples are the development of high-performance steels, which we're hearing so much about now in terms of the development of autos; metal matrix composites advance casting techniques to reduce the number of rejects, improve efficiency and reduce energy use; and the development of advanced, high technology combination of lighter materials to reduce the weight of vehicles, for example—the lighter steel we hear so much about.

On slide 12, I wanted to talk to you a little bit about the associated industry for minerals and metals. As Canadian industry provides a diverse range of products and services, many of these involve advanced technologies and skills. Areas in which these firms have gained internationally recognized expertise include some of the areas that Marc Denis talked about earlier, in terms of geophysical surveying, but also pollution control, environmental monitoring, and laboratory services.

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One of the industry associations that's assisting the sector is called the Canadian Association of Mining Equipment and Services for Export, or CAMESE. This association has 200 Canadian members, and they're involved in every aspect of what we call the services area, such as legal or environmental services. Drilling companies developed because they, first of all, serve Inco, and then they develop drilling services that are sold throughout the world. There are financial and legal services. Marc Denis mentioned consulting companies. Some of these were on the Team Canada mission. They started out in Canada servicing Canadian mining companies, and they are now all over the world.

We're an important producer and exporter of these services as well in terms of exploration work. The capacity of host countries, especially in the developing world, to meet these needs is really limited, and that's where Canadian companies benefit.

When you visit the Chilean mine site of a Canadian company, you're likely to see Finning equipment and Canadian software used, as they travel with the Canadian company. This presents a significant opportunity for Canadian companies.

I'll conclude with slide 13. We think this industry is a well-hidden secret in terms of the fact that it plays a big role in the new knowledge economy. NRCan provides a significant role and continues to meet the challenges placed with us by our companies. We're very proud of the fact that we have this chance to appear before you today. We thank you for showing your attention to these challenges and opportunities.

Thank you very much, Mr. Chairman.

The Chairman: Thank you very much. That's very fascinating. Clearly, the opportunities are virtually endless.

We'll start with the opposition side. Pierre de Savoye is first, then Bob Wood is next.

[Translation]

Mr. Pierre de Savoye (Portneuf, BQ): To begin, I would like to thank our guests for the French documents they provided. They are excellent documents, with only one exception, a small error which does have some importance. In the first document that was used, the title, which should be les ressources naturelles, is "natural resources". This is the only glitch.

However, Mr. Chairman, I do have an observation to make, and I hope that the clerk will convey this to the next witnesses. It would be pleasant, to the extent that our guests are able to do so, to have a little bit of French in the presentation.

Mr. Serré and I represented a quarter of the members at the beginning of the presentation. Unfortunately, we had to rely upon the translation which, also, is excellent. Nevertheless, there is still a small problem: in the document, there are 13 slides in English and 17 in French. When you refer to slide number 12, it is not slide number 12 in French, and the interpretation does not help us to follow. This is merely a small opening comment.

The Chairman: Thank you, Pierre.

Mr. Pierre de Savoye: Now, I have some questions for you, Ms. Keen, since you raised a number of subjects. However, if the people accompanying you are more qualified to answer, you could ask them to do so.

I am interested in three things, forestry products, minerals and metals, and oil and natural gas. It's not that I am not interested in geomatics, but I think that things are going very well in that area.

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With respect to forestry products, there is a quota problem. In my riding, there is a small sawmill that would like to expand its operations; it has the wood supply to do so and has received a guarantee of a bank loan, but it does not have the necessary quota. The big players in the industry have appropriated the quota and this small company is therefore in a straightjacket, unable to grow. Yet it could create a number of jobs in my riding. Perhaps other members are in the same situation.

Mr. Roy Cullen (Etobicoke North, Lib.): Ask the Parti québécois.

Mr. Pierre de Savoye: No, the quotas were set by the Canadian government.

Mr. Roy Cullen: With the approval of the Province of Quebec.

Mr. Pierre de Savoye: Were you consulted on the quotas? What do you think will happen in the future?

My second question is about asbestos. This is an important mineral in Quebec. We know that as we are speaking, the European Parliament is considering a ban on the use of asbestos throughout Europe. We were just talking about knowledge. Canada has the necessary knowledge for a healthy, appropriate and safe use of asbestos. What is your position, and how can you help the asbestos ore industry to prosper?

Here is my third question. The Sable Island gas pipeline to the United States will have few spin-offs for Canada; however, Canadians invested billions of dollars in exploring the Sable Island deposit or deposits. Isn't there something wrong here? What recommendation could you make, and what future possibilities do you envisage in this regard? Thank you.

[English]

The Chairman: Just before our witnesses answer, some of those concerns may be outside the ambit of our witnesses, Pierre. Should that be the case, maybe they could simply allow us to follow up on a separate basis.

Witnesses?

[Translation]

Ms. Linda Keen: I would ask you to put the question on forests and the gas pipeline to my colleagues next Thursday. The question on chrysotile asbestos I will answer in English.

[English]

The defence of asbestos is of great concern to the Government of Canada. The fact that we've been committed to supporting the asbestos industry has been clear at many levels, including the Prime Minister and the Minister of Natural Resources. To that effect, and on behalf of the federal government, Natural Resources Canada signed a memorandum of understanding on the responsible use of chrysotile asbestos with the industry in March 1997. We also financed and co-sponsored an international conference on the safe and responsible use of crystal fibres in Montreal. I spoke at that conference, as did the Minister of Natural Resources. That conference attracted about 300 delegates, from 44 countries.

This is extremely important to us because chrysotile asbestos and the safe use of chrysotile asbestos are very important to Canada and to the companies in Quebec. It also has very broad implications for the use of all sorts of minerals and metals around the world. So I would call it a bit of a beachhead for us.

Safe use is very important to us; that when a product is used in the manner for which it is proposed and prescribed, it has safe uses. If it is used in other, inappropriate ways, of course that would be another matter. But we think the companies in Canada have shown a very clear and responsible view towards the use all over the world.

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As you know, we continue to talk to some countries, including France and the United Kingdom, about the use of chrysotile asbestos, and we continue to consult, particularly with the French and U.K. governments in this regard.

However, Natural Resources Canada, under the leadership of the minister, has clearly shown its support and will continue to support this industry in the safe use of its products around the world.

Mr. Pierre de Savoye: Do I have any time left?

The Chairman: We're going to come back to you, Pierre. There are some issues you've raised that may be more relevant to Thursday or may even be beyond the study we're looking at.

We'll go to Bob Wood and we can come back to you.

Mr. Bob Wood (Nipissing, Lib.): Thank you very much, Mr. Chairman.

As the witnesses will obviously know, one of the major concerns of this committee in recent years has been the economic development of the rural areas. Obviously the majority of mining and mining exploration occurs in rural areas. I think we would probably all be happier if more research and development into mining technology was developed in these particular areas.

I represent the city of North Bay, which borders, as you probably know, on the rich mining areas of northern Ontario. We do a lot of manufacturing of mining equipment and other products, like explosives and drill bits, in support of this industry, and I know that my community would benefit greatly from partnerships between local industry and natural resources, designed, obviously, to develop new technology.

My question, Ms. Keen, is this: what with budget cuts to your department and the fact that much of the natural resources department is now located in urban areas, are efforts still being made to do research and development in the more rural areas of Canada?

Ms. Linda Keen: Thank you very much for your question.

We have two laboratories, two experimental sites, still functioning very well, and in fact we've put in some additional resources by transferring some people into the Sudbury area. So we do have a laboratory in Sudbury and it plays an extremely important part in our programming.

Mr. Bob Wood: Is that the neutrino one?

Mr. Robert Hargreaves (Director, Mining and Mineral Science Laboratories, Department of Natural Resources): No, it's the CANMET laboratory in Sudbury. It's located close to the Copper Cliff complex and looks at issues around underground environment and air quality, and to a small extent at ground control issues as well.

Ms. Linda Keen: The second area we talked about in our presentation is the Val-d'Or, Quebec, experimental mine, which also allows us an in situ example of the activities we're doing.

Those are our important sites.

We also spend a great deal of time working with the industry outside of Ottawa, whether it's on Vancouver Island or in Newfoundland. We work with companies. The basis of CANMET is that the projects are cooperative projects.

Also, for example, some of the programs I talked to you about also had provincial moneys in them. So we work with the provinces as well, but clearly it's the federal government that's leading in science and technology in this area.

[Translation]

But Jean-Claude has a few comments.

[English]

Mr. Jean-Claude St-Pierre (Director General, Mineral Technology Branch, Department of Natural Resources): I think you've touched on one of the most important points. It's that in fact we work in partnership with industry, so wherever the industry is we are willing to go and work with them, on site if need be, and we have projects in rural areas as well as urban areas. We're not limited to the urban areas.

Mr. Bob Wood: Can you give me the names of the companies in the rural areas you're working with?

Mr. Jean-Claude St-Pierre: Bob can probably give you more. I can give you a few examples with Cambior, a gold company in northwestern Quebec, where we have at least three or four sites. Bob can add a few.

Mr. Robert Hargreaves: Yes. We work with the mining industry, first of all, as the primary client across Canada, whether that's Cominco or Westmin or Placer Dome in the west, whether it's the SOREDEM consortium of companies in Quebec, whether it's Inco or Falconbridge in Sudbury, whether it's Hudson Bay in Manitoba, or whether it's a host of others. Basically, you name them, we have some relationship with them.

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In addition to working with the mining companies, we're also involved in a number of these projects, such as supply companies. Linda Keen mentioned the experimental mine at Val d'Or. A lot of companies come to Val d'Or to test their equipment—companies like Noranda, like Instantel, and other small companies you may or may not have heard of, like El-Equip. A number of companies are members of CAMESE, members of MEMAC, or members of trade organizations for equipment manufacturers. They come to the experimental mine at Val d'Or to work with us to test their equipment, to optimize their equipment.

In a lot of our consortia—which again will mention the diesel emissions consortium and the mine environmental emissions drainage program—these are multi-stakeholder consortia looking at developing technology. They involve not only ourselves, not only the mining companies, but also many of these consulting or equipment supply companies that would be present as eventual suppliers of the technologies that are developed.

For example, in another area there is the aquatic effects consortium. It's looking at developing a toolbox of technologies that will enable the mining companies to better measure the environmental impact of their effluents. Eventually, not only will they benefit from this toolbox, the consultants that operate enough of the services to the mining company will also be able to avail themselves of these technologies.

Mr. Bob Wood: I have just one other question, Mr. Chairman, and perhaps Dr. Everell can answer it.

With the cuts to the departmental budgets that you've incurred, and with the inevitable lay-offs and the restructuring that occurs, in a lot of cases it's often the younger employees with less seniority who leave. In addition, obviously limited financial resources can mean that those who remain are sometimes paid less than what they might make in the private sector. Certain private industries, such as those involved in technologies like those you mentioned—remote sensing, the global positioning system, and others—are, as you said, sir, prospering and expanding at this time.

Is the earth sciences sector that you're involved in suffering a brain drain to the private sector because of this competitive job market? If it is, is there a solution to the problem, other than obviously giving people more money in order to make them want to stay?

Dr. Marc Denis Everell: I don't think I would say we are suffering from a brain drain. Obviously we do lose some individuals because of the fact that the salaries are certainly below competition at times, but I don't think it's to the level at which it creates major difficulties. Also, as a government science organization, I think we feel we have a mandate to train people to move to the private sector. If we were to lose a large proportion of our staff, obviously we would be disturbed. But to have people leaving our organization to go to a few of the major companies or to the small companies is seen as a good thing.

Mr. Bob Wood: How does that affect the continuity of the programs in the work you're doing?

Dr. Marc Denis Everell: I think that's an issue about management in the sense that we have to be careful, as much as possible, to replace people who are essential. It obviously makes the management of the program a little more delicate at times—I cannot deny that—but I don't think I would go so far as to call it a brain drain.

Obviously, we are losing people, but we believe it's often for a good cause. Obviously, we also try to recruit other people as we lose. Perhaps they're sometimes younger people, so it gives an opportunity to others.

We live within sort of our financial constraints in our business. You asked me if we could use more resources. Obviously I would say we could, because there is so much to be done in science and technology. But in the end, I think we have to accept that there are decisions made about budgets, and we live within these budgets.

Mr. Bob Wood: Thank you, Mr. Chairman.

The Chairman: Thank you, Mr. Wood.

We'll go to Mr. Cullen, and then to Pierre De Savoye.

Mr. Roy Cullen: Thank you, Mr. Chairman, ladies and gentlemen. I have three general questions that I should perhaps direct to Ms. Keen, and then one for Dr. Everell.

Firstly, I think you're justifiably proud of CANMET. I was there last year when I was involved in the caucus task force looking at commercializing government science. I think CANMET does a great job in that area. The committee should probably see the operations of CANMET, Mr. Chairman, to see how technology can be transferred to the private sector quite effectively.

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I have three questions, Ms. Keen. First, what is the department doing with respect to renewable energy sources? What kind of research, what kind of policy initiatives, if any, do you have in the area of renewable energy resources? I wonder if you could talk, just briefly, about the potential for renewable energy sources. We've heard a lot about how the scope is actually quite limited in the overall mix of energy sources in Canada.

Secondly, with respect to greenhouse gas emissions trading and economic instruments, what role has the department played in terms of putting some of these policy initiatives into play? For example, we just heard about Churchill Falls and emissions trading, some kind of deal they're looking for with the federal government to trade emissions. It may be the first time our government is really asked to put this into practice. How will we handle that? Will your department be involved in those kinds of questions or decisions?

I have a question on carbon sinks that I'll save for Dr. Hardy.

My final question is, what level of commitment or investment do you see in the private sector in terms of research and development in the natural resource sector? I know we have a very progressive tax regime in Canada for R and D. You often hear that we're lagging behind in terms of other countries. Are there any constraints, are there any opportunities, any public policy issues that as a committee we should be seized of to ensure that the private sector is investing significantly in R and D in the natural resources sector?

Shall I deal with those first and then come back?

The Chairman: You put the questions out and then—

Mr. Roy Cullen: Okay.

Dr. Everell, on the question of GIS—you may have dealt with it on page 10 of your presentation where you talk about foreign governments—I'm wondering if we've really explored selling turnkey GIS products and services to foreign governments. I'm talking about not only the technology and the software but the whole management regime that goes with effective land information systems.

I know the World Bank, for example, set some pretty tough criteria, saying they were not going to put money into these countries until they have a better idea of what their land mass is all about. In Canada we've dabbled with this in various provinces. Some are very good at cadastral; some are very good at geophysical.

Have we actually tried as a federal government to pull all this knowledge and expertise together and use it as a turnkey product? We would go to a developing country and say, you're trying to get money from the World Bank and you want to know more about your land mass; here's a total turnkey operation that we could put in that deals not only with the technology, not only with the science, but with the management of land information. As you know, it gets very political in terms of protocols and different land information systems speaking to each other. Have you ever tried to sell that as a turnkey product?

Ms. Linda Keen: Your questions about renewable resources and emissions trading I would ask you to address to Mike Cleland when he comes on Thursday. However, knowing what the questions are, I can let Mike know today and he'll certainly be able to provide you with those answers on Thursday.

Also, I'll raise the subject of the sinks with Dr. Hardy and ensure that he is aware of your interest in pursuing that subject, if I could, Mr. Chairman.

With regard to science and technology, as I mentioned at the beginning, Dr. Everell is the senior science adviser to the department. I'll ask Marc Denis to address it first, and on the specificities as we come down to minerals and metals, as time permits, I'll give more details on that. The best person to give the overall answer is Marc Denis.

Dr. Marc Denis Everell: Linda mentioned in her presentation that the mining industry is spending so much per year, and obviously Yvan Hardy from our forestry area could say the same thing and so on.

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If you look at the figures from our Canadian private sector, they're still in many cases lower than what other countries would spend. With similar resources, the U.S. or the countries of northern Europe, in general, would spend a little more. It's true for forestry and it's true for mining as well. In part it must be an issue about culture. Certainly, as you said, our tax advantages in Canada are very good; they're some of the best in the world in fact.

I used to manage CANMET and can remember my frustration to some extent in trying to convince the Canadian private sector to do more. I think what I saw through my experience of managing CANMET for about eight years was the fact that we were able to get it to invest a little more. To be honest with this group, I would have to say I'm still left with an appetite with respect to that.

We've tried to work in partnership, as my colleagues have explained. We tried to start working with companies where they are and build confidence that these investments can be useful. We've had some success in many areas. We also did a number of impact studies to try to understand the work we did in the past with industry or by ourselves, to show what the impact is of working, and we publicized this impact after. We've been proactive in getting the culture to change. Again, I think it's an endeavour we have to continue working on. There's no magic silver bullet for that. I wish it were different, but I think it's better than it was.

If I can use the document of my colleague, “CANMET Making an impact on Canada”, I think a lot of good work was done at CANMET in this area. I believe it's having some impact, but maybe not as much in terms of convincing the industry to invest a lot more. I think there is some success but not as much as we would like perhaps.

Ms. Linda Keen: Those booklets will be part of the kit of information on minerals and metals we will be supplying in a bilingual format, because it's very important to illustrate this.

We met yesterday with Noranda, which has made a significant investment in Pointe-Claire, Quebec, with its laboratory there. There are some Canadian companies—they lead the world in many areas—that have made significant investments. For example, its new magnesium technology is key to being able to propose a plant in Magnola which is Asbestos, Quebec, where it can use these technologies.

It's somewhat within the industry too that leadership has to happen. Frankly, federal laboratories can do very good things and can lever and help, for example, to form consortia where otherwise they wouldn't get together. They get together because we're providing that leadership.

The bottom line is I agree very much with Marc Denis that much more needs to be done. When you look at the level, it's not there comparatively. But Canada is one of the world's leaders in mineral and metal areas for research and technology as well as other developments.

The Chairman: Dr. Everell.

Dr. Marc Denis Everell: I will ask Ed Shaw of our Canadian Centre for Remote Sensing to answer the question, and I may comment after.

Dr. Edryd Shaw (Director General, Canada Centre for Remote Sensing, Department of Natural Resources): In our contract with Mexico in particular, we attempted to move into Mexico what we were doing in Sherbrooke in the whole management structure for how we were mapping in Canada. It was done with the support of some of our top people from the Sherbrooke office over a year or two. The Mexicans wanted to replicate what they saw in Sherbrooke. The contract was with SNC-Lavalin, but it had a subcontract with some of our people.

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One of the things we found is we had been trying to make that happen on a regular basis, and we now have a mechanism where we can transfer people easily as support contractors into a private sector consortium.

The other problem that has been occurring is that it has been hard for Canada to go as a single entity into these countries to get this contract. There have often been competing interests across the country, and I'm pleased to say that we've been working for many years now with the Geomatics Industry Association of Canada. They've recently formed a consortium called GEOCAN International, where the major players in the geomatics association have joined together, put shares into GEOCAN International, and are going to use this to address the very contracts you're talking about.

We have an agreement with GEOCAN International that we will backstop them. The kind of things we can offer are the management streak we're using in Canada; the quality control techniques; and our good name in terms of a government-to-government agreement.

So that is the way we're addressing it. There has been some success, as you can see from these examples, but I think with that new mechanism we will see further success in the future.

Mr. Roy Cullen: May I have just one quick supplementary? No?

The Chairman: I'll just go to Pierre. We're going to come back to you, Roy, okay?

Mr. Roy Cullen: Okay.

The Chairman: Pierre.

[Translation]

Mr. Pierre de Savoye: First I have a question for Ms. Keen and then another one for Mr. Shaw and Ms. King.

Ms. Keen, you said a little while ago that you were particularly concerned with issues related to asbestos. Could you tell the committee what you are presently doing, and what you intend to do in the near future to promote asbestos, particularly in Europe?

You could supply this information to the committee clerk, who would then distribute it to the members. Is that all right, Mr. Chairman?

I will now ask Mr. Shaw and Ms. King my question. I note that you are responsible for geology and remote sensing. At the present time, we assume that climate change is occurring, and I think that we are beginning to experience climate change.

In your various surveys, have you noticed that the coast line is changing? Have you noticed through remote sensing that the vegetation is changing? In the medium term, do you have any programs to monitor these various changes and to model them?

Mr. Edryd Shaw: I will begin. Yes, we do have a program that monitors vegetation in Canada. The program uses a satellite, in fact, a weather satellite. Each day, the satellite crosses Canada and gives us an image of vegetation growth.

This satellite has enabled us to see changes. It is not possible to stay outright that the climate has changed, because the vegetation has to be monitored for a number of years. We have noticed a change where the forest has started to grow a little earlier than normal, namely, five days earlier. This is a change, that represents only a finding over one year. We have to observe such things over a number of years.

As for the coast line, my colleague may wish to comment on this, but I think that we have not noticed a change in the coast line in recent years.

Ms. Janet King (Director, Continental Geology Division, Department of Natural Resources): The Geological Survey of Canada has a program that studies these matters.

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The program involves primarily measuring and monitoring the active processes on the Canadian coasts: the Maritimes, the Gulf of St. Lawrence and the Arctic coast. We use videos to note the changes and we also have researchers who try to understand what these changes mean and to establish parallels between them.

At the present time, they are trying to understand what is happening, the scientific processes involved and what the impacts will be on communities.

Mr. Pierre de Savoye: Do you regularly publish the results of your research?

Ms. Janet King: Yes, of course, the results are published in scientific publications and also elsewhere.

Mr. Pierre de Savoye: Do you publish anything internally?

Mr. Marc Denis Everell: We can send you some information on this. This field will probably develop because of the growing interest in climate change. Obviously, we are trying to get a better understanding of the various phenomena involved.

In the earth sciences field, we have experts in geology and in remote sensing to help us. Therefore, I would not be surprised to see even greater activity in this area in the future.

Mr. Pierre de Savoye: Thank you, Mr. Chairman.

[English]

The Chairman: Maybe I could ask a short question to follow up on a question Mr. Cullen had in the area of geomatics, on being able to supply turnkey geomatic systems to the world. Maybe the answer was in the geomatics association creating a company for the purpose of marketing together the best of what Canada has. Would that be where one would find such turnkey systems made available to other countries?

Dr. Marc Denis Everell: Yes, I think that's the approach we certainly accept, and we favour it as well. You could see an approach where the government would try to do that. It would try to rally people around and develop an approach that could be transferred. We, however, prefer the mode where the private sector comes together as a consortium, and, with the support of government, goes after these big contracts.

I guess time will tell if the approach will be successful. But certainly from a government perspective we favour what has been put in place, and we are certainly willing to do our best to make it successful.

The Chairman: With that I thank you, Dr. Everell, Ms. Keen, and all your colleagues.

I believe what we're pursuing is very important. Considering that we are already near the top, or at the top, in many of these knowledge-based fields, I believe it means high-tech jobs for Canadians. It makes sense to build on those successes.

So with that I'd like to thank you for your presentation today. We look forward to your colleagues in the forestry and energy sectors this Thursday.

So we'll call the meeting adjourned. Thank you.