ENVI Committee Meeting

37th PARLIAMENT, 2nd SESSION

Standing Committee on Environment and Sustainable Development

EVIDENCE

CONTENTS

Tuesday, April 1, 2003

Á

1100

The Acting Chair (Mr. Paul Szabo (Mississauga South, Lib.))

Mr. Gary Lunn (Saanich—Gulf Islands, Canadian Alliance)

The Acting Chair (Mr. Paul Szabo)

Mr. Alan Nymark (Deputy Minister, Department of the Environment)

Á

1105

Á

1110

Á

1115

The Acting Chair (Mr. Paul Szabo)

Mr. George Anderson (Deputy Minister, Department of Natural Resources)

Á

1120

Á

1125

The Acting Chair (Mr. Paul Szabo)

Mr. Jim Judd (Secretary of the Treasury Board and Comptroller General of Canada, Treasury Board of Canada Secretariat)

The Acting Chair (Mr. Paul Szabo)

Mr. Bob Mills (Red Deer, Canadian Alliance)

Á

1130

The Acting Chair (Mr. Paul Szabo)

Mr. Bob Mills

The Acting Chair (Mr. Paul Szabo)

Mr. Bob Mills

Mr. Alan Nymark

Á

1135

Mr. Bob Mills

Mr. Alan Nymark

Mr. George Anderson

Á

1140

Mr. Alan Nymark

Mr. Bob Mills

The Acting Chair (Mr. Paul Szabo)

Mr. Bernard Bigras (Rosemont—Petite-Patrie, BQ)

Mr. Alan Nymark

Á

1145

Mr. Bernard Bigras

Mr. George Anderson

Á

1150

Mr. Bernard Bigras

Mr. George Anderson

The Acting Chair (Mr. Paul Szabo)

Mr. John Herron (Fundy—Royal)

Mr. Alan Nymark

Á

1155

Mr. John Herron

Mr. Alan Nymark

Mr. John Herron

Mr. Alan Nymark

Mr. John Herron

Â

1200

Mr. Alan Nymark

Mr. John Herron

Mr. Alan Nymark

Mr. John Herron

Mr. Alan Nymark

Mr. John Herron

Mr. Alan Nymark

The Acting Chair (Mr. Paul Szabo)

Â

1205

Mr. Alan Nymark

The Acting Chair (Mr. Paul Szabo)

Ms. Hélène Scherrer (Louis-Hébert, Lib.)

Mr. George Anderson

Ms. Hélène Scherrer

Â

1210

Mr. Alan Nymark

Ms. Hélène Scherrer

Mr. Jim Judd

Ms. Hélène Scherrer

Mr. George Anderson

The Acting Chair (Mr. Paul Szabo)

Mr. Julian Reed (Halton, Lib.)

Â

1215

Mr. Alan Nymark

Â

1220

Mr. George Anderson

Â

1225

Mr. Julian Reed

The Acting Chair (Mr. Paul Szabo)

Mr. Andy Savoy (Tobique—Mactaquac, Lib.)

Mr. George Anderson

Mr. Andy Savoy

Mr. Alan Nymark

Â

1230

Mr. Andy Savoy

Mr. George Anderson

Mr. Andy Savoy

The Acting Chair (Mr. Paul Szabo)

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

Mr. Alan Nymark

Â

1235

The Acting Chair (Mr. Paul Szabo)

Mr. Bob Mills

Mr. Alan Nymark

Â

1240

Mr. Bernard Bigras

Mr. George Anderson

Mr. Bernard Bigras

M. George Anderson

Mr. Bernard Bigras

Mr. George Anderson

Â

1245

Mr. Bernard Bigras

Mr. George Anderson

Mr. Bernard Bigras

The Acting Chair (Mr. Paul Szabo)

Mr. John Herron

Â

1250

Mr. Alan Nymark

Mr. John Herron

Mr. Alan Nymark

Mr. John Herron

Mr. Alan Nymark

The Acting Chair (Mr. Paul Szabo)

Mr. Julian Reed

Mr. George Anderson

Mr. Julian Reed

Â

1255

Mr. George Anderson

Mr. Julian Reed

Mr. George Anderson

Mr. Julian Reed

Mr. George Anderson

Mr. Julian Reed

Mr. George Anderson

Mr. Julian Reed

Mr. George Anderson

Mr. Julian Reed

Mr. George Anderson

Mr. Julian Reed

The Acting Chair (Mr. Paul Szabo)

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CANADA

Standing Committee on Environment and Sustainable Development

---

NUMBER 021

l

2nd SESSION

l

37th PARLIAMENT

---

EVIDENCE

Tuesday, April 1, 2003

[Recorded by Electronic Apparatus]

Á  (1100)  

[English]

    The Acting Chair (Mr. Paul Szabo (Mississauga South, Lib.)): Good morning, everyone. The Standing Committee on Environment and Sustainable Development is meeting this morning, pursuant to Standing Order 108(2), on the federal government's approach to sustainable development.

    We have witnesses: from the Department of the Environment, Mr. Alan Nymark, deputy minister; and from the Treasury Board of Canada Secretariat, Mr. Jim Judd, Secretary of the Treasury Board and Comptroller General of Canada.

    Welcome, gentlemen. We are pleased that you're able to be with us, and we would certainly entertain any opening remarks you have right now, followed by questions by the members.

    Mr. Gary Lunn (Saanich—Gulf Islands, Canadian Alliance): On a point of order, Mr. Chair, I'm almost embarrassed that we have three people here for two witnesses. The time of these men is very valuable. Are we expecting more members of the committee?

    The Acting Chair (Mr. Paul Szabo): Yes, we are. There is apparently difficulty in one of our other committees on a filibuster, and they have taken members away to try to stabilize that situation.

    We certainly apologize to the witnesses, but your comments and your submissions are part the official record. As well, I know with the representation of the parliamentary secretary and the official opposition--and another member has just arrived--we will certainly have a number of questions for you.

    But the member's point is well taken. We are embarrassed. Notwithstanding, we have a job to do, and we will proceed. We have two other members coming in, so I think we're going to be just fine now.

    With that, gentlemen, would you please proceed with your opening remarks.

    Mr. Alan Nymark (Deputy Minister, Department of the Environment): Thank you very much, Mr. Chair.

    Good morning, ladies and gentlemen. I would like to thank you for the opportunity to appear this morning. Our third witness, George Anderson, I'm sure will be along momentarily.

    I appreciate the opportunity to discuss the issue of the federal government's approach to sustainable development, which is one of the key issues of our time. I will be circulating my notes in both languages to you, and I'll try to bring out the highlights of those notes in my remarks.

    I'd like to begin with an emphasis on both the international context and the domestic context for sustainable development. I believe that George Anderson will focus his remarks more directly on the process we have available in the federal government at the deputy minister level, which will be really the locus of discussion at that level in the Government of Canada. We'll then turn to Jim Judd, who will discuss the Treasury Board Secretariat's role, particularly from the point of view of policies and their reporting responsibilities.

    In many ways, 2002-03 marked a watershed year for the environment and sustainable development in Canada and internationally. It was a year in which a decade of hard work on many files came to fruition, a year during which the government took significant actions that support the environment and sustainable development.

    If I can turn to the international context, you're all quite familiar with the world summit on sustainable development that took place in Johannesburg last September. In my opinion, it significantly advanced the pursuit of sustainable development on a global basis. While these summits are far from perfect, the WSSD outcomes did have many strengths, and I'd like to touch on a few.

    First, we are all cognizant that we are living in a difficult time for multilateral institutions. Despite this, the world summit in Johannesburg emerged with not only a political declaration, but a plan of implementation with the full support of all countries in the United Nations.

    Second, WSSD represented the first real sustainable development agenda where developing countries and development were a fundamental part of the discussion and the outcomes at Johannesburg.

    Third, the private sector was widely recognized at WSSD as an essential and fundamental player in the success of sustainable development and the clear links with innovation.

    Finally, the plan of implementation that came out of the summit is just that--a concrete plan of implementation. It has some 37 targets and timetables attached, and in that way it is qualitatively different from the summit in Rio ten years earlier.

    Canada is very much committed to following up on the world summit outcomes at both the national and international levels.

Á  (1105)  

[Translation]

    At the UNEP Governing Council meeting,

[English]

which is the United Nations environmental program,

[Translation]

    in February, we saw that like many other UN agencies, UNEP is performing a thorough analysis of what the Johannesburg commitments mean for them and how to best take action. This means that UNEP's work will broaden out into sustainable development issues such as poverty alleviation, from an environment point of view. Canada, as a member of the Governing Council, is active in these debates and wants to make sure that the environmental component of UNEP's work remains paramount. At the same time, we support its efforts to help ensure an integrated approach to meeting WSSD commitments.

    One of the key international challenges at this point is to ensure that states have an effective means for encouraging and tracking efforts to implement WSSD commitments.

    This function is likely to fall to the United Nations Commission on Sustainable Development, or CSD. In the meantime, however, the CSD is undergoing a reorganization so they are currently faced with additional challenges.

    You may be familiar with the Canadian discussion paper on the future of the CSD. We are currently following a course of public consultations on the Canadian position that will be taken to the next meeting of the CSD in late April. Issues that are important for the workings of the CSD include: a manageable agenda that focuses on cross-cutting sustainable development issues, such as water, energy or sustainable production and consumption; maximum participation by all who bear responsibility for advancing sustainable development, namely governments, NGOs and business; an environment that facilitates the sharing of best practices and lessons learned; and opportunities for the partnership model to be advanced and enhanced.

Á  (1110)  

[English]

    So how do we go about linking these global efforts with our own efforts here at home? Leading up to the WSSD in Johannesburg, Canada engaged in a thorough round of consultations. As a result, Canada went to the summit with a number of priority areas, including health and environment, global sustainable development with an emphasis on Africa, partnerships to achieve sustainable development, and governance. In each of these priority areas, we will continue to make progress over the coming years.

    At WSSD a document outlining the progress we have made in Canada toward a sustainable development strategy was tabled. We are working on overarching themes such as health and environment, and we are linking Canadian actions we may take with the WSSD outcomes. This analytical work, which is being done by the secretariat established for the lead-up to Johannesburg, will be considered by government officials in the near term.

    The federal government is also in the process of building upon the conceptual framework. Mr. Anderson has discussed his new architecture initiative with this committee on at least two occasions. This allows us to review issues within a common framework and emphasizes knowledge, innovation, and partnerships.

    Integral to this view is that environmental prudence today is a firm foundation for building future economic growth. The environment and the economy cannot be seen as competing or even as complementary priorities; rather, they are part of an integrated whole. While more remains to be done to make this a reality, over the past several years the federal government has taken significant actions that support sustainable development in Canada. Again, Mr. Anderson appeared before you recently to report on the actions taken in budget 2003, which invested some $4 billion over five years that will enable significant progress on the key priorities of climate change, clean air, water quality, species at risk, toxics management, contaminated sites, and national parks.

    Lastly, as I mentioned in my introduction, and which George will speak to in a moment, a key mechanism for linking the international to the national is in the form of a renewed committee at the deputy minister level, the environment and sustainable development coordinating committee. The Clerk of the Privy Council, who I understand tabled a letter before you yesterday, has indicated that he has given Mr. Anderson and me the responsibility of co-chairing this committee, and George will be speaking about that in a moment.

    Finally, I'd like to conclude by saying that in the international context, in international discussions, it is quite clear that Canada is in the leadership group of countries that have made significant progress on sustainable development in many ways, both domestically and internationally.

    Johannesburg was very different from Rio. The global community is now well positioned to take concrete actions in support of sustainable development. The federal government's investment in sustainable development has been significant and widespread, if evidenced only through the climate change file.

    However, significant challenges remain ahead of us. We must get the right timeframe for actions. We received some guidance on this from the world summit, where timeframes span from five to fifteen years and even longer.

    Second, we must become more adept at truly integrating the three pillars of sustainable development--the environment, the economy, and society.

    Third, we must choose our priority areas for action carefully and ensure integration.

    Fourth, we must move sustainable development from the theoretical to the practical. That means changing behaviours on the ground at the level of consumers, producers, other levels of government, and society as a whole.

    And last, accountability, which Commissioner Gélinas has stressed in her remarks to this committee recently, must be improved.

    Thank you once again for this opportunity to appear before you. We'll certainly be glad to take your questions.

    If you wish, Mr. Chair, I'll turn it over directly to George Anderson.

Á  (1115)  

    The Acting Chair (Mr. Paul Szabo): Thank you, Mr. Nymark.

    We welcome Mr. George Anderson, who is the Deputy Minister of Natural Resources.

    Do you want to speak first, before Mr. Judd?

    Mr. George Anderson (Deputy Minister, Department of Natural Resources): It's at your pleasure. I'm happy to go first.

[Translation]

    Thank you very much, Mr. Chairman, members of the committee.

[English]

    Before I begin to describe the path forward, or what Alan called the renewed environment and sustainable development coordinating committee, I'd like to say how pleased and honoured I am to have been asked to co-chair the committee. While the task is daunting, it's comforting to know that I can always draw on the great knowledge and experience of my co-chair, Mr. Nymark. In addition, the other members of the committee have shown a strong commitment to making a real contribution, so that the committee can successfully carry out its mandate.

    In addition, the participation of the Treasury Board Secretariat, the Privy Council Office, and the Department of Finance gives our committee an important central agency focus.

    That the committee co-chairs should be asked to appear before your committee so early in our mandate reinforces our shared view of the importance of sustainable development. Certainly this deputies committee must be the strategic forum within the government for addressing critical sustainable development issues facing Canada.

    The reconstituted committee is only now beginning its work. You will understand that the tremendous effort that went into both the summit in Johannesburg and the development of a plan around climate change last year dominated the efforts of the interdepartmental community on these questions.

    As it happens, that timing was fortuitous because it provides the context in which departments will now be asked to prepare the sustainable development plans for the next three years. One of the first tasks of the committee will be to further develop the government's long-term vision of sustainable development. This is something that the commissioner has asked the government to do, and I agree with her recommendation.

    Through such a vision, departments and agencies will be encouraged to link their individual sustainable development strategies in a more strategic and integrated manner. This in turn will lead to significant and essential outcomes on a federal level.

    If I may, I would like to speak for a minute from my perspective as Deputy Minister of Natural Resources. I worked in this department in the 1980s and then returned to it only last May. What has struck me both within the department and in the resource sector more broadly has been the immense progress that has been made in that time period in integrating concepts of sustainable development into the way business is done and how issues are viewed. This reflects a bit of what Mr. Nymark just said about the difference between Johannesburg and Rio.

    Natural Resources Canada has been recognized by the commissioner of sustainable development for being far ahead of other departments in its commitment to sustainable development. The department was congratulated for its multi-stakeholder approach, its vision of a sustainable future, and its well-functioning management systems, including review procedures designed to ensure corrective actions.

    The commissioner observed that the integration of sustainable development has permeated to the ministerial level in Natural Resources Canada. I can take no personal credit for this progress. As I just mentioned, it took place before I got there. But in my view, the leadership the department has shown within government on such issues reflects the immense challenges that the resource sectors face in adapting to the requirements of sustainable development. If we are ahead on such practices, it is because our challenges demanded the biggest response. This is true of all the resource sectors, both renewable and non-renewable. The renewable sectors—forestry and hydro traditionally, but now also wind, biomass, and solar—must demonstrate that their practices are not just sustainable, but also respectful of wider environmental values such as biodiversity. For example, there has been a virtual revolution in the approach to forestry in Canada.

    The non-renewable sectors are also undergoing deep change. New mines and oil developments are now planned on a very different basis from those in the past, with community and environmental impacts and the ultimate restoration of the site being integral to upfront planning.

Á  (1120)  

[Translation]

    Finally, we are concerned in NRCan not only with the production side of the resource sector, but also with consumption, namely energy use, metals recycling, the use of waste and biproducts in the forests.

    Often it is in these areas of consuming less or consuming better where the most important progress can be made.

    If you are interested, I have copies of Natural Resources Canada's Sustainable Development Strategy available for distribution.

    Of course, the biggest challenge we face is climate change. Upwards of 85 per cent of our greenhouse gas emissions come from the production and use of energy. Any serious plan to address climate change must go to the heart of energy policy. The truth is that the world is still a long way from a sustainable energy path.

    The Kyoto agreement is an important first step, but it is only the beginning of a very long process. Canada can and should contribute to this process, but we cannot solve it alone. Thus on this issue, and on some others, our approach to sustainable development will be more in terms of direction than ultimate solution.

    The new deputies' committee on environment and sustainable development will need to build on the progress that has already been made or that is being made in other places. The Prime Minister has created an ad hoc committee of ministers on climate change which will have the responsibility for overseeing work on this issue. The work of officials as it relates to this Cabinet committee will be coordinated by the Privy Council Office.

[English]

    For this reason, the members of the deputies committee on environment and sustainable development decided not to focus on climate change. Instead, the committee will try to help move forward the larger horizontal files that need additional attention.

    First, the committee will provide guidance to departments about their sustainable development strategies. Clearly there has been great variation in these in the past—more variation than there should have been. We should try to ensure that the next round of these strategies reflects much greater shared vision, as well as a more consistency in format, management philosophy, and expectations.

    Secondly, the committee will address some substantive files. One that we have identified for early attention is water, which touches on the mandates of so many departments. Water is perhaps the best example of how effective interdepartmental coordination can pay dividends. It has significant implications in terms of quality and quantity for the broad issues of infrastructure and urbanization. In my own department, for example, water cuts across every sector, from the purification role provided by our forests to the energy supplied through hydro and the oil sands. Water is also key to minimizing the impact of mine tailings, which is the core of the work we are conducting in the area of groundwater research. Although it's specific applications will obviously differ, there's no doubt that water plays an equally important role in other federal departments.

    The committee has agreed that it will be most effective if it is able to focus its efforts on a few key priorities to advance the government's sustainable development agenda. In fact, with the exception of climate change, which has its own track, our committee will be prepared to take on critical sustainable development issues that we feel will benefit from a cohesive and coordinated approach.

[Translation]

    In closing, Mr. Chairman, let me say that the new committee is committed to addressing critical sustainable development issues. Working with public and private sector partners, we can advance the sustainable development yardstick and enhance the quality of life of Canadians. At this time, I would welcome any questions the committee might have. Thank you.

Á  (1125)  

[English]

    The Acting Chair (Mr. Paul Szabo): Thank you, Mr. Anderson.

    We'll now hear from Mr. Jim Judd, Secretary of the Treasury Board and Comptroller General of Canada.

    Mr. Judd.

[Translation]

    Mr. Jim Judd (Secretary of the Treasury Board and Comptroller General of Canada, Treasury Board of Canada Secretariat): Thank you, Mr. Chairman. With your permission, I'd like to briefly highlight the role of the Treasury Board Secretariat in the area of sustainable development.

    First of all, the TBS sits on the deputies' committee on sustainable development chaired by my two colleagues, Mr. Nymark and Mr. Anderson; colleagues from other central agencies, including the Privy Council Office and the Department of Finance, also serve on the committee. This committee plays an important role in that it has responsibility for setting federal policy in this area.

[English]

    Secondly, the Treasury Board Secretariat is responsible for setting guidelines for departmental and agency reporting on sustainable development issues through the annual reports on plans and priorities and departmental performance reports. I should note in this regard that the 2003 budget committed the Treasury Board Secretariat to reviewing the adequacy of these reports with parliamentarians and the Auditor General and other stakeholders to determine what improvements could or should be made in the quality of reporting that is provided by departments and agencies.

[Translation]

    The TBS is also responsible for developing federal government administrative policies with respect to federal property and assets.

[English]

    Fourthly, the Treasury Board Secretariat has been responsible for setting policies with respect to contaminated sites on federal property. We have invested over the last two years somewhere in the order of $30 million in an effort to assist departments and agencies in the development of the inventory of contaminated sites on federal properties, an amount of money over and above the $100 million that is already being spent annually by departments and agencies on remediation. You will also have noted in the last budget that the government committed $175 million over two years for remediation of high-priority contaminated sites on federal properties. The work to identify the highest-priority sites is currently underway between ourselves and Environment Canada with a view to making recommendations soon to Treasury Board ministers on both priorities and funding levels.

    My final comment, Mr. Chairman, would be that the budget of this year also mandated the Treasury Board to undertake a five-year cycle of reviews of non-statutory programs in the federal government, some of which will result in some examinations of issues related to sustainable development such as the one George has already mentioned on how the federal government deals horizontally with issues like water. We have some others in mind as well, including what the federal government is doing across the board on issues like research. There may well be others that are added to that menu.

    That gives you a very brief overview of our role. We'd be happy to take questions.

    The Acting Chair (Mr. Paul Szabo): Thank you very kindly.

    Gentlemen, colleagues, with your indulgence, we do have quorum and there is a small item of business for which I believe the member for Red Deer has a motion.

    Mr. Bob Mills (Red Deer, Canadian Alliance): Thank you, Mr. Chair.

    You can see the motion to authorize the purchase of gifts for the trip for the environment committee to England, March 24 to 27. I move that we authorize the chair to purchase those gifts.

    (Motion agreed to)

Á  (1130)  

    The Acting Chair (Mr. Paul Szabo): Thank you.

    Mr. Bob Mills: March 27 has happened already. This is just typical government.... Oh, sorry, I didn't mean that.

    The Acting Chair (Mr. Paul Szabo): Thank you.

    I'm sure there are a number of questions, so we will follow our usual pattern. I will ask Mr. Mills to begin.

    Mr. Bob Mills: First of all, I'd like to thank the gentlemen for appearing.

    I have several questions that relate to what you've said. I'd like to know the timeline for the action plan on implementation of Johannesburg. When are we going to see the specifics that will affect people down on the farm, so to speak, and when will we see those priorities and that timeline?

    Secondly, I would ask about the 240 megatons that we've agreed to under Kyoto. In talking to industry this past weekend, they are quite happy now with Kyoto, since government has reduced their commitment by 100 megatons, they feel. As a result, they are still doing that, because they're using clean energy credits with the U.S, of course, which has been turned down by the European Union and by the other signatories to Kyoto, but we're still using those credits and also some other credits to reduce our commitment by at least 100 megatons below what we have already committed to. I'd like to know your comments on that. Some of the costs of Kyoto didn't seem to be part of the budget.

    The other item is when we were in Britain this past week talking to British parliamentarians, most of them who were up on the subject seemed to agree that a round figure of $35 per tonne would be reasonable for carbon. Of course, because the Canadian government has a $15 cap on that, which industry is very happy with, who's paying the $20 and why doesn't that show up as it leaves the side item in the budget?

    Thirdly, I wonder when the secretariat is going to look at water. How are you going to handle the provincial-federal relationship to that subject? How are the provincial governments going to be involved in dealing with that most important subject of water? Most of them will tell you it's a provincial issue, and of course there's a real conflict between the two.

    Fourthly, Mr. Nymark mentioned priorities and how important they were. That goes back to my first question where we list the priorities and let people know what our priorities are in the short term and in the long term. You mentioned they could be both. When will we see that list?

    Mr. Alan Nymark: Perhaps I'll start on the issue of Johannesburg and timelines. There has been agreement that the follow-up to Johannesburg will be centralized in the CSD, the Commission for Sustainable Development, in the United Nations. They will be meeting for the first time later in April. The UN recognizes that the plan of implementation is some 600 paragraphs of commitments, and that somehow the international community has to move to the next stage to determine the priorities and look at accountability. That will be the focus of the discussions at CSD later in April.

    We're looking for where the international community will be setting its priorities and we will at the same time be developing our priorities on sustainable development, primarily through this deputy minister committee. Then we link to and we will have a plan of action coming out of that. Those should be reflected in the individual departmental sustainable development strategies, which will be tabled in Parliament by the end of this year.

    As to your question on climate change, I am not clear on where you have found the 100 megaton reduction. It is quite clear that the plan that was tabled by the government last fall had its objective and committed to achieving 240 megatons. It had a detailed layout of how it would do that, up to, as I recall, 180 megatons, with the last 60 megatons being left according to a menu of possibilities that would need to be discussed with stakeholders, provinces, and territories in the future.

    Of the 180 megatons, it is true on the so-called large emitters--and perhaps George would like to follow up on this--that they have been capped at 55 megatons, so there is in fact a limited liability both in quantity and in price for the large emitters.

    Access to the international market for credits is to be worked out and has few limits on it. The need for Canadian companies to gain access for international credits will depend partly on the economic opportunities they had in Canada to reduce their emissions and what world price for carbon eventually emerges. Presumably they will want to seek possibilities of meeting their commitments through the cheapest course, either reductions or purchases of credits.

Á  (1135)  

    Mr. Bob Mills: Are we counting clean energy credits?

    Mr. Alan Nymark: Clean energy credits are an issue that is continuing to be discussed at the international level. As indicated in the plan of action that the government tabled, of the remaining 60 megatons, which is not clearly defined, it is one of about ten items that the government mentioned were possibilities for the future.

    On the issue of water, I might just say that water is a good example of where you have to get horizontal cooperation across departments within Ottawa, because I think there are 12 departments in Ottawa with legislative responsibilities in water. Then you have to get cooperation across provincial and territorial governments because clearly they have prime responsibility in a lot of areas, particularly drinking water.

    Then we have international obligations, particularly the obligations in the millennium development goals and in the Johannesburg summit, where Canada committed as part of a global effort to reduce by half those who do not have access to clean drinkable water by the year 2015. So there is a huge coordination and integration role in order to come up with a coherent policy on the issue of water.

    Mr. George Anderson: If I may just speak a bit further to the issue of industry and Kyoto, Alan Nymark just mentioned the 55 megatons, and as you've said, we put on a cap of $15 in terms of the cost of carbon. We've also moved from a strict quantity-based approach, where there would be an absolute cap, to an emissions intensity approach, where we would try to design emissions intensity factors. So it gave us the result we were looking for, but at the end of the day, they were getting their credits in relation to their emissions intensity, not some absolute cap.

    On the issue of $35 a tonne, I heard that number in a U.K. context. What you should understand, and I'm sure you do because of your visit there, is that the U.K. has decided to move into carbon trading before they get into the European system, which they will be doing shortly, and before they get into the Kyoto system, which happens only in 2008.

    So what you have in the U.K. is just the beginning of a carbon trading system. It's a very thin market, and my understanding is that prices were running a good deal below $35 a tonne, but I have heard of that number being one possibility--within that narrow market.

    When you move into the broader international market, prices come down dramatically. You can see that already. The Dutch have a policy where they're doing half of their Kyoto credits through the clean development mechanisms of the United Nations, and the joint development mechanism, I believe. They're putting a lot of emphasis, for example, on projects that recapture methane from landfill in developing countries. In these projects they are finding they can buy the carbon credits in the range of $4 to $6 U.S., and they've been doing a number of contracts.

    The World Bank now has three funds that are also engaged in these types of investments, but they've just now created a new one. The first two had to do with dealing with energy, capturing emissions. The third one they've created is a bio fund, which has to do with investing in sinks, where people grow trees and the trees hold the carbon, or the soil holds the carbon. For these funds as well they're finding their prices are in the $5 to $6 range.

    One of the great unknowns as we go forward will be the price of the excess credits some of the countries might have--the eastern European countries, for example. That doesn't come into anything like this calculation of $35.

    So we're pretty optimistic that the price of carbon is not going to be above $15. That is why we had some comfort in giving the protection.

Á  (1140)  

    Mr. Alan Nymark: Mr. Chairman, if I could make one last comment on that, the larger international market, as George has mentioned, will be where Canadians buy credits if they choose to buy credits, and the market will be heavily determined by who the suppliers of credits are. The largest supplier of credits is likely to be Russia. Russia has not yet signed the protocol, but should they sign this year, it would have a significant impact on the price of carbon.

    Mr. Bob Mills: But they're talking $50 a tonne, the Russians.

    The Acting Chair (Mr. Paul Szabo): Hold that thought.

[Translation]

    Thank you, Mr. Mills.

    Go ahead, Mr. Bigras.

    Mr. Bernard Bigras (Rosemont—Petite-Patrie, BQ): Thank you very much.

    I'd like to thank the three witnesses for appearing before the committee. I have two questions, the first of which is as follows.

    Regarding the Sustainable Development Strategy, you indicated to us -- and you are partly right -- that some 37 targets were identified in the wake of the Johannesburg Summit. Along with these 37 targets came 37 timetables. I more or less agree that there should be 37 timetables, because even though targets have been identified, the general consensus is that the timetables are a long way from being clear.

    I won't deny my disappointment, but this morning, you advised us that we needed to chose carefully our areas for priority action and to take an integrated approach. In my opinion, the failure of the policy regarding a sustainable development strategy can be directly attributed to departments' failure to take an integrated approach. As I see it, such an approach is key to implementing a sustainable development policy in Canada.

    Several weeks ago, the committee heard from the Commissioner of the Environment who had this to say about the Sustainable Development Strategy, and I quote:

In my view, departments are floundering. There is no overall direction or support from the centre—the guidance to departments that does exist is discretionary or outdated. There is no overall federal perspective or set of priorities, although I understand that an overall federal strategy of some sort is being developed. And leadership and accountability are unclear. Everyone is in charge, so effectively no one is in charge. That's the bad news.

    While an integrated approach is key to implementing a successful sustainable development policy, as you pointed out to us this morning, what steps have you taken, or are you planning to take, to achieve greater integration? By all accounts, this process has failed thus far.

[English]

    Mr. Alan Nymark: Perhaps I could start on that.

    As I mentioned, at the global level, Johannesburg was quite different from Rio, in that Rio had largely been an environmental conference, and Johannesburg attempted, really for the first time, to integrate the development side of the sustainable development agenda as well as significant aspects of the social side, including issues such as human rights, the ethical basis of action, and some more traditional social issues such as health and the environment. So there has been progress over the decade in integrating the thinking among the three pillars.

    It is true that the result of Johannesburg was very broadly based. In essence, governments committed to a very wide range of actions. They understood they couldn't achieve everything in an early timeframe, because particularly when you're talking about the environment, you can't affect the environment on a sustainable basis sometimes for decades. So the targets and timetables are spread out over the next couple of decades.

    At the global level, in order to come to grips with the issue of priorities, there is a range of views among countries now as to how to set priorities, and once those priorities are set, how to dig deeper into certain issues rather than deal with all issues over the course of every meeting.

    That same debate is being reflected, as Mr. Anderson said, in our own preparations. Our deputy ministers community cannot deal with all the issues at one time. We will have to set priorities. The clerk, in his letter to the committee, has asked us to set priorities, and we will be advising the government on how best to do that.

Á  (1145)  

[Translation]

    Mr. Bernard Bigras: I have one last question for you about your priorities. I was disappointed once again this morning to hear Mr. Anderson say that the role of the deputies' committee would be to advise on sustainable development strategy matters and that water would be a priority issue. You indicated that research would be conducted into climate change, but you also conceded that this area was not one of your committee's key priorities.

    Given the impact of climate change on our ecosystems and our biodiversity, I'd like to know how you can dismiss in such an off-handed manner a critical issue like this. I just don't understand your reaction. I can understand that water might be a priority, but when the day comes that objectives are set to reduce energy production through the use of green energy sources, then we'll be on the right track.

    Why not substitute as a priority energy production using green energy? Why not advocate in favour of the European recommendation put forward in Johannesburg, which called for 15 per cent of all the energy to be produced to be green energy by the year 2010? Do you not think that in addition to providing better protection for our ecosystem and our biodiversity, this global objective would prove to be the vital link in the sustainable development policy?

    Mr. George Anderson: As far as renewable energy is concerned, I know that in Canada, 18 per cent of all energy comes from renewable sources, given the importance of hydroelectric power in this country. I did not in any way mean to imply that climate change was to be put on the back burner. On the contrary, this issue is very much in the forefront of our work every day.

    I mentioned that we had a departmental committee as well as a deputies' committee working with the Privy Council on climate change issues. Therefore, to avoid any duplication, we have not assigned any responsibility for this area to the committee on sustainable development. Basically, the same people sit on the two committees. However, the focus of the sustainable development committee is on the following: developing additional guidelines to enable departments to finalize their sustainable development plans--as you know, the deadline is this fall--along with vision components, best practices, and so forth. Departments will be increasingly obligated to adopt exemplary practices.

    We decided to focus our attention on an issue that seemed to require more work. We can't focus on everything all of the time and that's why we decided to make water a priority. However, there was never any question of putting climate change on the back burner. No question whatsoever.

Á  (1150)  

    Mr. Bernard Bigras: Can you give us your assurances that the provinces will be in attendance at these meetings? I wouldn't want to find ourselves in a situation where we have sectoral tables and the provinces do not even enjoy observer status at these meetings, as is the case with the current negotiations on climate change, whereas the federal government proceeds to negotiate directly with the industry, even though, technically speaking, resources are a provincial responsibility.

    Can you give us your assurances that the provinces will have a seat on this committee and a say in the decision-making process, given that, as Mr. Mills noted earlier, we're dealing with a provincial area of responsibility?

    Mr. George Anderson: We're talking here about a federal government committee, a departmental coordination committee. We meet with the provinces and coordinate our actions with theirs in various ways.

    On the industry question, we have already held meetings with the provinces. We discussed the system for monitoring the emission levels of major industries. We have had at least two meetings to date, and more are scheduled. We have let the provinces know that we are very interested in getting their perspective on this issue.

    In the final analysis, if a federal regulatory structure is put in place within the framework of our constitutional powers and responsibilities, certain decisions will likely be the sole responsibility of the federal government. However, we will take steps to ensure that the provinces are consulted and their views taken into consideration. Provinces have their own procedures in place and do not systematically consult with the federal government.

[English]

    The Acting Chair (Mr. Paul Szabo): Mr. Herron.

    Mr. John Herron (Fundy—Royal): Thank you, Mr. Chair.

    I'd like to refer to the centre part of page 3 of Mr. Nymark's presentation. I must say that I was a bit struck by the bravado in the statement. You say: “For example, Budget 2003 invested $4 billion over 5 years that will enable significant progress on the key priorities...”.

    It's six years since Kyoto, and we really don't have a climate change strategy where we're actually working toward reductions of output. We're still growing in terms of carbon dioxide.

    On water quality, we're one of the few industrialized nations in the world that doesn't have national drinking water standards and a public right to know when there is a contaminant in the water that could have a significant effect on human health.

    On toxics management and contaminated sites, the fact that we don't even have an inventory of the contaminated sites that exist and are within the purview of the federal government, which are even harmful to human health, and the fact that in national parks.... That has been changed to some degree with Minister Copps' announcement of the additional funding to complete the national park network. I think that has been helpful.

    We don't even have the regulations in place with regard to implementing the Species at Risk Act, which Parliament just passed after three efforts.

    Try to raise some confidence in me that these funds will actually cause some progress to be made in those particular areas.

    Mr. Alan Nymark: My comments are particularly couched in the international context in the first instance. If you look at our climate change plan, which is quite specific down to the level of estimated megatonnage reductions by sector and subject matter, and if you look at the financial commitment that has been put behind that plan and the degree of intensive discussions ongoing with stakeholders and provincial and territorial governments, I think that in the year 2003 we will have a difficult time meeting our commitments, as all countries will. But I think we have the basic foundation blocks in place to do so.

    I'll take another one of your issues, and that's toxics. It's an extraordinarily difficult issue for all countries. CEPA is a piece of legislation that has been passed by Parliament to deal with this issue. It is a very challenging task, given 50 to 75 years of the legacy of using chemicals in our society without having used a pollution preventive approach. So we are now taking a cleanup approach to society's use of chemicals over most of the last century.

    The United States and the European Union are in exactly the same position. They do not have equivalent legislation as we do in Canada, nor do they have a plan of action to address the legacy of the use of chemicals as we do in Canada. We have a specific timetable, as you know, set out in federal legislation. We did get in the recent budget additional moneys to address the issues of both risk assessment and risk management in the area of toxics. None of us are comfortable that we currently have the knowledge base or indeed all the resources to do the full job, but we feel as though again Canada, if not in a leadership position, is at the forefront among the leading countries in dealing with the toxics issue.

    I could go through the others one by one, but I think you were using them as examples.

Á  (1155)  

    Mr. John Herron: I'll try a different track. Is Health Canada part of your steering group?

    Mr. Alan Nymark: Yes, they are.

    Mr. John Herron: The reason I ask that question is that the majority of the items you list as priority areas have a direct connection to environmental policy, which is connected to human health.

    When we're talking about risk assessment, is the ultimate driver of public policy human health? When we're establishing priorities with respect to areas pertaining to clear air, drinking water standards, toxic management, when do we ask Health Canada to engage in these particular issues?

    Mr. Alan Nymark: We don't need to ask Health Canada. They, as you know, are co-responsible for CEPA, for example, so there is no risk assessment done or no risk management put in place without the sign-off of the Minister of Health.

    The two departments collaborate on risk assessment and risk management, and it is quite true that the health and security of humans is an absolute priority in approaching the management of that legislation.

    Mr. John Herron: I have a last question if I could. Who's the lead minister domestically on climate change?

  (1200)  

    Mr. Alan Nymark: There are two lead ministers. The Minister of Environment and the Minister of Natural Resources report to an ad hoc committee of cabinet, which has just been established, and of course in the normal course of events final decisions are the collective responsibility of cabinet.

    Mr. John Herron: Can you tell me when that policy changed? After 1997, when we were in Kyoto, there was a joint press conference held with the then Minister of Natural Resources, Minister Goodale, and the then Minister of Environment, Christine Stewart. It was said at the time--my question was pertaining to domestically--that international issues pertaining to the climate change file would be managed by the Minister of Environment, and the domestic lead would be the Minister of Natural Resources. Can you provide me the date when that policy changed?

    Mr. Alan Nymark: Neither Mr. Anderson nor I were the deputies of those departments, so I don't have it readily at hand, but it is quite true that two ministers have always been leads within the Government of Canada, and at any particular time one minister would have more of a lead in one area than another.

    When the negotiations were international, Mr. Anderson had the primary responsibility for the international negotiations, although many aspects of the international negotiations, for example, such as on sinks, were a primary responsibility of the department that had the greatest expertise, which was Natural Resources Canada.

    So over the course of the policy development and implementation the two ministers are a partnership on a team and they bring issues forward to cabinet committee.

    Mr. John Herron: The reason I ask the question is that Brian Emmett, when he served as commissioner for the environment, mentioned a litany of items where Canada has a dismal record at fulfilling commitments that it makes on an international basis, on international agreements.

    Mr. Emmett really pointed to the issue of an immense amount of lack of accountability at the ministerial level on this particular issue. The fact that it took six years to even get any kind of a framework document on a plan to address a potential Kyoto commitment in 1997 I think evolves from the fact that there was a clear direction from the government that said the natural resources minister was the lead domestically, and internationally it was the environment minister, and now there's a new hybrid approach. It might be better, but it does explain why this file stayed in some kind of purgatory for six years before we had any action on it.

    Mr. Alan Nymark: If that was a question, maybe I could try to answer it.

    I think that on multilateral environmental agreements, Canada has an exemplary record in living up to whatever commitments it makes when it ratifies and implements in this country.

    Mr. John Herron: Mr. Emmet didn't think so.

    Mr. Alan Nymark: Mr. Emmet was in a particular position that led him to be particularly questioning of the level of commitments and action. But I think if you would like to investigate any particular multilateral environmental agreement we could look into the detail of it and make our own judgments.

    On the issue of taking a long time for development of an action plan, I would say, first of all, the reason why it took six years was that the international community did not finalize the rules on which you would implement climate change goals agreed in Kyoto until about a year ago. Therefore, you could not implement an international agreement that was neither ratified nor had the rules by which you could implement it. That is why implementation has taken that long.

    The second reason was that Canada does it in its own interesting way, which is trying to build consensus across the country.

    The Acting Chair (Mr. Paul Szabo): Thank you, Mr. Herron.

    Mr. Nymark, you mentioned that the Minister of the Environment and the Minister of Natural Resources now report on this file to an ad hoc cabinet committee. Are you aware who the chair of that committee is?

  (1205)  

    Mr. Alan Nymark: Yes, I believe that Mr. Vanclief has been appointed as chair of that committee.

    The Acting Chair (Mr. Paul Szabo): Thank you.

    Madame Scherrer, s'il vous plaît.

[Translation]

    Ms. Hélène Scherrer (Louis-Hébert, Lib.): Thank you very much, Mr. Chairman.

    Thank you, gentlemen, for coming today. I'd like to ask you several more pointed questions about the makeup of the committee. From an operations standpoint, you three seem to be the key players on the committee.

    First of all, as Ms. Gélinas has often mentioned, the 28 departments and agencies called upon to develop strategies each devised one hundred or so strategies, which means that today, we're dealing with a total of 2,500 strategies. It would seem that there is no one strategy that has been adopted by everyone. She also likens the process to a jigsaw puzzle that isn't yet completed, because people lack vision.

    When the question arises as to who will identify priorities and which agency will step in, the deputies' and Privy Council committee has been identified as the authority that will help move the overall process forward.

    My questions are very simple. I'd like to know who among you is driving the bus, so to speak. Who is the boss, the person who ultimately decides what should be the biggest priority or where investments should be made? As a committee, what kind of power do you actually wield and what responsibilities do you have? If a department drags its heels and fails to implement some strategies, what authority do you have as a committee to take steps to get this department to act in this area? Do you have such powers?

    Lastly, of all the strategies put forward, which ones have you identified as priorities, not for the coming year, but for the next ten years?

    Mr. George Anderson: Thank you, Madam, for your questions.

    One must remember that this is a deputies' committee and that we do not have final decision-making authority within the system. That power rests with the ministers, who have overall responsibility for their respective departments. Much of the work is cooperative in nature. The focus is on persuasion, on sound practices and on professionalism, not on issuing orders.

    Having said this, the clerk sent a clear message, not just to our committee, but to all deputy ministers as well, to the effect that the Prime Minister is counting on us as a committee to enhance and move the process forward. If we were to encounter problems with a deputy minister who was unwilling to cooperate and who was impeding our efforts, the clerk could step in to help us persuade the deputy minister to see things differently. If we were to encounter some opposition from a minister -- and that's always a possibility even with ministers who are known to us -- we would have to ask ourselves whether the matter should be raised with our minister, with Cabinet, our with Treasury Board, depending on the circumstances.

    Ms. Hélène Scherrer: Ms. Gélinas often talks about the tendency of government departments to operate in a vacuum as one of the major impediments to sustainable development. Each department adopts its own policies and strategies and rarely does there appear to be any linkages. As I understand it, your committee was struck and given the task of getting the departments to break out of this mould and to establish linkages, a horizontal perspective and a long-term vision. Putting it another way, I thought your committee comprised of deputy ministers of major departments involved in sustainable development would be responsible for reviewing the overall strategies developed, given the social, political and geographical context, for setting priorities and for informing the various departments of the 100 or 150 strategies that they should be implementing. Is this not in fact your committee's responsibility?

  (1210)  

[English]

    Mr. Alan Nymark: I wouldn't disagree with your description at all. And that is, I would say, not unique to this particular issue of sustainable development. Increasingly, whether it's in the business community or other areas of government such as social policy, for example, issues of public policy have to be managed on a horizontal basis. We have the institutions that we have. At the level of the bureaucracy increasingly you're finding co-chairs or partners in the leadership. At the level of ministers you're increasingly seeing, as you saw, for example, in the Species at Risk Act, where there are three ministers responsible for a single piece of legislation.... For CEPA there are two ministers.

    So officials are attempting to work horizontally. Ministers are attempting to work horizontally, where they have individual responsibilities after the discussion of the collective guidances given to that ministry but the individual minister takes their responsibility. If it's a collective decision, that's an issue for cabinet to decide upon and decide how best to integrate the various perspectives. I don't disagree with you. I think George was just saying that we are public servants, we're not decision-makers. We will help the collective of ministries through setting priorities, and at the end of the day we will go to the government and ask them and give them advice on whether those priorities are appropriate.

[Translation]

    Ms. Hélène Scherrer: Each time that you identify some priorities, you also ascribe a dollar value to them. Does the committee in fact take time to cost the priorities identified? Do you, the committee members, actually request money from the Department of Finance? Is the government receptive to your requests for funding?

    Mr. Jim Judd: This is all part of the process of drawing up our annual budgets. We all line up to submit our requests for budget funds for consideration by Cabinet, the Finance Minister and the Prime Minister.

    Ms. Hélène Scherrer: How often does your committee meet? Are you required to draw up an annual report or to produce something concrete?

    Mr. George Anderson: That has yet to be decided. However, the committee will likely meet every two or three months. The deputies' committee will be seconded by working groups of ADMs and other officials who will assemble the material required by the deputies' committee.

    The Acting Chair (Mr. Paul Szabo): Thank you, Madam.

    Mr. Reed.

[English]

    Mr. Julian Reed (Halton, Lib.): Thank you, Mr. Chairman.

    I would like, if I may, to take this conversation to a place where I get my knees dirty. There's a statement in Mr. Nymark's intervention that “we must move sustainable development from the theoretical to the practical”, something I welcome very much. So I want to talk about a couple of specific areas where the rubber hits the road and just get your thinking on it.

    Dealing with the introduction of new technologies, or even the reconstituting of old green technologies, seems to me will have impacts above and beyond what you would normally say is this something that addresses Kyoto directly. In other words, there's a much broader picture than just carbon dioxide offsets if we go to support some of these new technologies that are ready and willing to come on line.

    But so far I'm not getting the message that the thinking is outside the box. The thinking and the consideration of support for some of these technologies is still in a tunnel. I should ask both of you, are you prepared to look at the broader picture, the co-benefits, if you like, of these technologies? Because it seems to me that when they come in in a macro form, and they ultimately will, we hope, they will have a very broad-based impact.

    We've seen some small indication of that--for instance, the stabilization of corn prices in the Chatham area, just with being able to observe what happened to corn prices when the plant in Chatham was shut down for a while for cleaning and so on and what happened after it went on.

    It seems to me that this is only one small example, but we have a situation where we have our American friends subsidizing farmers hither and yon in any shape or form you can imagine, and we can't do it to that extent, and then you have in Europe a subsidy situation that's even worse. We have a situation in the United States now where an ethanol producer buys two bushels of corn and the federal government gives him the third bushel free and so on.

    It seems to me that if these technologies are going to take their rightful place and we end up being able to stop importing them from the United States, which is what we're doing to a large extent at the present time, there has to be something outside the box. There has to be some addressing of co-benefits and so on. I would like to hear both of you comment on that.

  (1215)  

    Mr. Alan Nymark: I know George will definitely want to comment on this, particularly given your examples.

    From a broader point of view, let me take the announcements in the budget on climate change, for example. I think it did a number of things. One, it recognized the difference between technologies that could have an impact in what I would call the medium term, which would be in the first commitment period, 2008-2012, and technologies it would be useful for us to be encouraging now but that may not have a particularly deep impact in terms of greenhouse gases in that first commitment period, though they might have a major impact down the road--longer-term technologies. I think the budget statement tried to point out that it's important to work on both tracks at the same time.

    That has certainly been an issue with provincial governments, for example. How much of our technology should be geared towards meeting certain targets in one subject versus longer-term commitments that might have a benefit to society down the road?

    As to the second issue, in terms of thinking outside the box, we sometimes do divide our issues up, such as between clean air and climate change, and even within clean air, between various pollutants that effect clean air or produce smog. I think there is a movement towards a multi-pollutant approach to these issues so you are signalling to the business community in a longer-term framework what the outcomes expected are. Then they can bring on technologies in an orderly way over time and understand the overlap of technologies between a public objective of climate change and a public objective of clean air. So co-benefits in terms of design of assistance on technologies is a critical factor.

    Otherwise, you're encouraging what's called “stranded capital”. You're trying to solve a problem, but over here you have another problem that makes it more complicated. Capital equipment can't be turned over all that quickly, so when you make those investments, you try to make them in a way that will serve multiple objectives at the same time.

    Your third point is that it's difficult living next to the United States because their treasury is larger than ours, and that is true in almost any subject matter. In the technology field it really requires us, number one, to collaborate to the degree possible with the United States in their efforts in the technology area. Second, it requires us to have as clear priorities as possible because the demands for assistance on technology do outstrip the supply.

    Those are the comments I'd make.

    George.

  (1220)  

    Mr. George Anderson: I agree. Obviously, one tries to look at co-benefits. You have different programs that are oriented to different priority issues and obviously there's money for climate change. To the extent that money's been invested on getting climate gas reductions or greenhouse gas reductions, you have to be pretty clear about that. But then having done that, you can say what are the associated benefits. Let me give you an example.

    We're doing work now as an international group with Weybourne, Saskatchewan, with carbon dioxide injection and trying to learn more about how that's done. Well, when that's used with oil fields, you cannot only get the carbon dioxide out of the atmosphere, but you can actually enhance oil production. In the forestry business, there's been a lot of work done on using bio-waste for a variety of purposes to make new products or to provide fuel for their needs at the sites of these large mills and so on. The subject you were talking about--ethanol--yes, we'll certainly look at that issue. You have to work your way through the numbers when you think about ethanol. You mention corn, but there's also a lot of interest in cellulosic ethanol. What would be the relative benefits of the two approaches to doing something like that?

  (1225)  

    Mr. Julian Reed: I'd like to suggest to you, with respect, that in 1979 the Ontario Minister of Energy funded the establishment of four ethanol stills in Ontario. That was the beginning of the journey. I attended my first ethanol conference in 1976, actually. I'm giving away my age. But the fact is, if the journey had not been begun, we wouldn't be where we are today.

    The second thing I want to make clear is that some of the corporations on cellulosic ethanol that we are funding with the government have now said they will not invest in Canada unless there's an ethanol infrastructure. The only way an ethanol infrastructure is going to come into existence is if we go with the girl we came with, and that's carbohydrate ethanol at this stage. We're all anxious to wait for cellulosic ethanol. It's been two years away for the last eight or nine years. We'll be two years away two years from now, and so on, until it finally makes its mark. It will, and we welcome it very much. It seems to me that if we interrupt this journey of a thousand miles now and say we're going to wait till that happens, we're dead in the water.

    The Acting Chair (Mr. Paul Szabo): Mr. Savoy.

    Mr. Andy Savoy (Tobique—Mactaquac, Lib.): Thank you very much, Mr. Chair.

    Thank you very much, gentlemen, for attending.

    In picking up on the previous issue, ethanol, we know that in trying to achieve our goals of 35% of gas containing 10% ethanol by I think 2010 or 2012, roughly, our demand would be one billion litres. Presently, we produce at the Chatham, Ontario, plant about 238 million litres, so we'll face a deficiency of three quarters of a billion litres of ethanol. We all understand ethanol and the benefit it has for the environment to reduce greenhouse gas emissions. I don't think the question is on the impact of it. The question is how do we get there from here, as Mr. Reed said, when the rubber hits the road? How do we implement this?

    The concern I have along similar lines to Mr. Reed's is that in dealing with ethanol, you're looking at a technology that is proven in the U.S. They're looking at constructing a plant a month in the U.S. for ethanol to meet their domestic plans primarily, with some export--about 100 million litres to Canada right now to offset our deficit. They're constructing about a plant a month, and it's primarily grain, because cellulose is unproven.

    In looking at the movement of cellulose, as Mr. Reed said, it has been nine years in the making. We are unsure about the timeline. I understand now it's at the bench scale still. There are some prototype plants running, but there are still some bugs to work out.

    I support both forms of ethanol--cellulose ethanol and grain ethanol--but I think in meeting our demands we have to look at in the near term grain ethanol to do so. We can't let the U.S.... From an economic perspective, it's a very opportune time to look at ethanol and grain ethanol for rural areas. I, as chair of rural caucus, have strong feelings in that regard. In terms of the co-benefits, I really feel strongly, and I think we've received a commitment today, that co-benefits will be examined when looking at the ethanol industry.

    Could you, Mr. Anderson, give us your timeline on the implementation of ethanol and the arguments from your department's side on how these timelines should be impacted and how they should take effect and what issues may be of concern in implementing this ethanol strategy?

    Mr. George Anderson: You're familiar with what was in the plan that came out before Christmas in terms of the 35% ethanol target for the country. The way that was envisaged was we would be working with the provinces that have responsibility for fuel specifications whether or not they were prepared to mandate that. We're now in the process. Alan and I in fact are going across the country, having our preliminary meetings with the provinces about how we're going to engage bilaterally on the climate change agenda. This is high on the agenda of some provinces, so we'll be getting into it.

    The actual progress will be something we will report back on as we go. We know that Manitoba and Saskatchewan are keen to proceed. There are measures in other provinces, which you're familiar with. We're engaging the provinces. That's our first attempt.

    As you know, we have a fiscal incentive for ethanol through the tax regime, but what we're looking for now is incentives we would work out with the provinces to complement that.

    Mr. Andy Savoy: Mr. Nymark, did you want to add anything?

    Mr. Alan Nymark: Not really, except to say that the commitment in the plan was across a broad number of areas called targeted measures. I think the government is now in the process of determining which of those are ready now versus which of those require engagement either with partners in the private sector or particularly engagement with provincial and territorial governments before action can be taken. Part of the reason why we are now out talking to provincial governments individually, for example, is to make sure that we really do understand their priorities and how they would like to move forward in certain areas.

    The timetable for implementation on any one of those targeted measures is a matter of significant discussion right now, and it's a little difficult for George and me to forecast precisely how it will come out.

  (1230)  

    Mr. Andy Savoy: The U.S. has been criticized for its lack of movement towards GHG reduction, but in the area of ethanol they've been leaders, in fact. We are at a deficit in terms of ethanol. And moving in that direction, do you feel that we need to immediately look at ethanol initiatives to bring us more in line with the penetration, if you will, of the U.S. ethanol business and their GHG-reducing impact that penetration has in the U.S.?

    Mr. George Anderson: You should understand that most ethanol in the United States is produced using electricity that comes from coal-fired generation. When you do a full-cycle analysis of what their ethanol does for greenhouse gas reductions, it's about 20% compared to gasoline. If it came from gas-fired facilities, which is typically the case in Canada and in some places in the United States, you get down to a number more like 65%--going from 80% down to 65%.

    So the American ethanol program, particularly because of their heavy base in these things, has not had a huge impact on their greenhouse gas emissions.

    Mr. Andy Savoy: Another question, Mr. Chair?

    The Acting Chair (Mr. Paul Szabo): We will move to Mr. Tonks.

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

    Mr. Chairman, we have so much expertise in the three deputants. The committee has been looking at state-of-the-environment reporting. To put it simply, given the action plan to reduce greenhouse gases, is it possible to develop a reporting mechanism that would periodically look at the action plan and cross-reference progress and either report that progress out separately to the public or integrate it into the state-of-the-environment reporting? And what would be the preference? That's my general question, Mr. Chairman.

    Mr. Alan Nymark: Thank you for the question. You have had quite lengthy discussions on state-of-the-environment reporting, so I'll try to make my comments short.

    In the area of climate change we have international obligations to report annually in a format the United Nations accepts and that is auditable by the United Nations. Our reporting internationally has to be extremely rigorous and is on an annual basis.

    There are complexities in doing that. Measurement of greenhouse gases is more difficult in some areas than in others. We are investing heavily now in looking at the measurement issues, for example, in sinks. We'll have to make an interim report to the United Nations on an overall basis by 2005 to give an indication as to progress towards the starting line, which is 2008.

    The domestic system that will feed into that international system is a matter of importance. It will require federal-provincial cooperation because much of the emission measurement takes place at a local level, sometimes by municipalities, for example. Therefore, that's an issue that is being discussed with the provinces. It's also an issue that is being discussed with, for example, the large emitters in terms of how they will be reporting theirs.

    We will need a national system on reporting and we will have to report internationally and in conformity with the UN requirements.

  (1235)  

    The Acting Chair (Mr. Paul Szabo): Thank you.

    Mr. Mills, I think we have time for a quickie second round.

    Mr. Bob Mills: The first thing is that we Canadians are being asked to reduce our emissions by 20%. As far as I can see, the plan consists of a $23 million advertising campaign to convince us of that.

    It must be a fairly hard sell, in the sense that three Great Lakes have frozen over for the first time in a hundred years. We've had more snow than we've ever had, at least the second most in history. We have colder than normal temperatures, etc., etc. I wonder what the next stage of the approach to the Canadian public will be to convince them that in fact they need to do these reductions. And as the price of energy goes up, will there be a connection to this 20%, which will be a reverse incentive?

    The second question regards weather stations. I was half an hour after the tornado at Pine Lake and was told very clearly that the reason no one had been warned was because of a lack of Environment Canada people on the ground. We now of course have closed or they're planning to close a whole bunch of stations to have fewer people on the ground and count more on technology. Where I live, coming over the mountains, half an hour is when it all changes. I just can't understand those criteria.

    Mr. Alan Nymark: On the first question, you're quite right that awareness and public education is only one part of an action plan. It is an important part, and members of Parliament and this committee play a significant role in that respect. So I wouldn't want to underplay awareness and education, giving people the information and tools to take action when they choose to do so, providing choice, really, to individual consumers.

    It is true that price and incentives matter. Many of the targeted measures in the plan relate directly to actions that might be taken by individual consumers. The plan for the one tonne challenge or the 20% reduction in the emission of GHGs is not divorced from the targeted measures, for example, on fuel efficiency, on residential housing, in a commercial workplace, for public transit, and for intermodal systems. The government has indicated that it wishes to take action in those areas and will be looking at the most effective instruments to do that, whether it's incentives, regulation, or just public awareness. So I agree with you, action and awareness are required in order for us to meet our commitments.

    On your second question, on weather stations, firstly, we will not be reducing the number of meteorologists on the ground. We will in fact be increasing the number of meteorologists on the ground. Secondly, we will be increasing our specialization so that we have critical masses on important issues such as severe weather, marine meteorology, or mountain meteorology and so that we get the expertise that is instantaneously shareable on a national basis. The number of meteorologists on the ground will be increased. Yes, their location is being changed to some degree, and it has been explained as to why that would take place. But we will increase our service to Canadians through the measures that have been announced.

  (1240)  

[Translation]

    Mr. Bernard Bigras: Thank you, Mr. Chairman. My questions are for Mr. Anderson.

    In order for Canada to meet its Kyoto commitments, it's clear the federal government is advocating a sectoral approach, whereas Quebec favours a bilateral agreement. I have several questions about this matter.

    At a meeting on or about February 14, your Deputy Minister, Mr. Brown, apparently expressed little enthusiasm about the prospect of a bilateral agreement with Quebec. Is that true? Therefore, I'd like to know if you still agree with the principle of a bilateral agreement with Quebec.

    Secondly, has your negotiator been formally appointed?

    Thirdly, has any progress been made on this front? Are you confident that you can reach an agreement in the not-too-distant future?

    There's one more thing. No agreement has been reached with Quebec and I'd like you to confirm the following for me. Apparently, after working out an agreement on phase one with certain industry sectors, you're already in the process of negotiating with certain industry sectors specific targets and objectives for phase two. Is that correct? Isn't it rather odd that while an agreement has been reached on phase one with some industry sectors and while the situation as far as Quebec is concerned is still unresolved, the government has already moved on to begin negotiating with certain industry sectors, particularly in Western Canada, specific objectives and targets for phase two?

    Mr. George Anderson: To clarify the second point raised, I would just like to point out that we are not in the process of negotiating targets for phase two. Certain questions were raised about the circumstances. Some large investors, primarily investors from Western Canada, were reviewing proposals involving several billion dollars and they asked us a number of questions. It's not obvious that we can give these individuals the assurances they are seeking, but it's not...

    Mr. Bernard Bigras: Then you admit that you have held some talks.

    M. George Anderson: Discussions have taken place, but these are quite different from the talks we have had for the period from 2008 to 2012.

    I have met in person with two Quebec deputy ministers to discuss a bilateral agreement covering the range of climate change issues. We will be appointing a federal negotiator shortly to conduct negotiations with all of the provinces. We are working on a model agreement. Obviously, some difficult issues will be broached during the course of these negotiations.

    Mr. Bernard Bigras: But how do explain the fact that you have initiated talks on phase two and made some commitments with certain industry sectors when you haven't even appointed someone to conduct the negotiations with Quebec? Partnerships are all well and good, but let's be realistic here.

    Mr. George Anderson: We haven't cut any corners when it comes to Quebec. Let me remind you that we have adopted a general approach. We worked closely early on in the process, using macroeconomic models and the like, on an approach that would be equitable for all provinces.

    Secondly, we want to adopt measures that will have reasonable economic repercussions. We have no wish to undermine our industry's competitive position. One of the issues that we have broached with the industry is the likely impact of the system's implementation on competitiveness. We are also looking at how to deal with companies and industries that were among the first to take action on this front.

    These matters are all open to discussion with the industry and with the provinces. As I said, we have had three meetings with the provinces. Some would like their approval to be mandatory before a system can be put in place. As I see it, that would be difficult because, as is true of other regulatory fields in which the federal government enjoys power under the Constitution, we need to maintain our ability to act.

    This being said, we want to take the steps that are warranted, while remaining as sensitive as possible to the views of the provinces and of the industries involved. Therefore, we continue to hold consultations.

  (1245)  

    Mr. Bernard Bigras: What is the status of the negotiations with the manufacturing sector? We know an agreement is in place with the West, whose economic base is the oil industry. Exemptions have been provided for the automobile industry, which fuels Ontario's economy. As you know, the manufacturing sector is the driving force behind Quebec's economy. In light of your sectoral approach to this issue, when do you plan to initiate talks with the manufacturing sector? Perhaps you're going to tell me that these negotiations are already under way.

    Mr. George Anderson: Before finalizing the letter written in December by Mr. Dhaliwal, which provided some indications about planned measures, I met on several occasions with manufacturing sector and energy industry officials. We ultimately agreed that it was not the appropriate time to try and resolve their problems. However, they were made aware of the situation before the letter went out.

    Mr. Bernard Bigras: Thank you.

[English]

    The Acting Chair (Mr. Paul Szabo): Mr. Herron.

    Mr. John Herron: Thank you, Mr. Chair.

    I was extremely concerned by the comment that we needed to wait six years before we developed an implementation plan. I found that type of approach is an approach to have almost a deception to delay.

    What I mean by this is that I think Mr. Nymark was absolutely right in his comment he made to Mr. Mills that there's a public awareness campaign aspect about changing behaviour. I think this is a very valuable contribution, but it's a valuable contribution that could have been made perhaps not six years ago, but five years and six months ago. There was nothing that took away the government's capacity to hit the ground running on that regard.

    I think all members, all the witnesses, would recognize the fact that there are immense opportunities in the marketplace for Canada in developing technologies to fulfill our climate change commitments, immense opportunities, things that can be described as “no regrets” in terms of providing incentives so our industries can be that much more cost-competitive because they're more energy efficient.

    There would have been nothing that would have precluded this government from being able to develop that part of that regime domestically, on the ground, in tangible ways, to fulfill a mark that the ministers once used in February and March of 1998 of rewarding industry for early action. Six years later isn't exactly early action; it's late action.

    So where I'm trying to challenge the witnesses here, Mr. Chair, is on the issue that these “no regrets” issues, things we're starting to do now, could have been done six years ago. That's water under the bridge now.

    So we have such a very finite window now between our 2008 and 2012 commitments. Any of these initiatives that are now in that document, the plan, have to be extracted out of that plan and put on the ground with incredible dispatch, otherwise we ris not following our climate change objective, which we want to do to pull our weight in the world, and secondly, we could potentially sully Canada's reputation as being a country that made a disingenuous ratification of the accord if we don't really intend on carrying it through.

    In order for that to be real, many of the good ideas in the plan have to hit the ground. So my comment is we have a mandatory report we have to make in 2005 to provide demonstrative evidence that we're on track to fulfilling our climate change evidence. I think that report in 2005 really will be the watermark or the milestone of whether we're ever going to be able to fulfill our climate change commitment.

    So can you tell me what we'll see from the plan that will be on the ground by the time we report in 2005?

  (1250)  

    Mr. Alan Nymark: Regarding the water-under-the-bridge comment, since 1997, of course, there was $1.7 billion allocated to climate change, including on-the-ground measures through the Climate Change Action Fund. Secondly, there was extensive consultation with the private sector, in particular through the sixteen tables, and there was publication of two national action plans by the joint ministerial meeting of environment and energy ministers.

    On your point--

    Mr. John Herron: On-the-ground measures.

    Mr. Alan Nymark: Indeed, and there were on-the-ground measures taken over that period of time; particularly, since budget 2000 there was an additional $500 million allocated to this subject matter.

    On your point that time is getting short, I agree with you. Time is getting short. We need to take action and we need to take action this year, clearly, not across the board, on the plan, but in those areas where it makes sense to take action. Some of those areas require further consultation with provincial governments to make sure that we have it right and we are hitting their priorities, and it does require further consultation with the private sector to make sure that we not only have it right, but we are actually doing it in partnership with on-the-ground people who will do the projects. Government isn't going to do many of these projects, it will be the private sector, so we have to get these partnerships and get the leverage out of joint action. Nevertheless, we do have to take action and we have to take action this year. Otherwise, we will be jeopardizing our ability to meet those targets. It is fully the intention of the government to take action this year.

    On the report in 2005, it is a stock-taking report. It is...I think you used words like “demonstrable”, and progress has to be clear by that time--

    Mr. John Herron: I think those exact words are in the document, or in that section.

    Mr. Alan Nymark: We have to report, but there are no, as it were, if I can put it this way, sanctions related to the report.

    I might point out that over the last number of years, the greenhouse gas intensity of our GDP has been at least levelling off and reducing in most years. So there is room for optimism. There is a plan in place, there is a budget in place, and I think you're correct, it is now time to accelerate action.

    The Acting Chair (Mr. Paul Szabo): For the final intervention, the honourable member for Halton.

    Mr. Julian Reed: Thank you very much, Mr. Chairman.

    I was interested in your remarks, Mr. Anderson, about the fact that there wasn't much gained in the American plants because some of them were gas-fired and some were coal-fired.

    Mr. George Anderson: Particularly the coal-fired ones.

    Mr. Julian Reed: Coal-fired, sure. Let's take a step back and look at the forest a little bit.

    Here, in 1979, when the first ethanol plants were put up in Ontario, they were energy negative, totally energy negative. Now, because of progress that's been made in technology and agricultural practices, and so on, they're 34% energy positive. Now we have the fuelling that you talked about. They don't have to be fuelled by those kinds of sources in the future. They can be fueled by green energy.

    We're on a journey. We're passing through time. My plea is that we not stop the process just because certain things have not yet happened. If we had done that in 1979, nothing would have happened. This is where my concern enters in. We're now developing green technologies, and we have emission trading on the horizon, hopefully domestic emission trading, which might have a bearing on what energy choices are used at that ethanol plant, and so on.

    So I throw those out for your thoughts.

  (1255)  

    Mr. George Anderson: We've shown a great deal of interest, as you know, in this area. The government has taken measures on ethanol, in terms of the ten cents a litre. It extended some of that in the last budget to some of the other fuels that have a biological base. We have been of the view for a very long time--it goes back to the 1980s--that there is a lot of interest in developing cellulosic technology. There was some reference made to it earlier, but that is now at the stage where they have a large plant where they're trying to demonstrate it. The next step will be to have a commercial plant.

    You should understand that there is a twofold interest in a cellulosic base. One is it creates a new market for farm products that don't have a market at the moment. It creates a market for straw, corn stover, and what have you. That's potentially quite attractive in what you would call the peripheral benefits.

    In greenhouse gas terms, it's potentially a closed system, because the actual energy for the processes comes from the lignin that's taken out of these feedstocks. You could actually produce something where you could say this fuel source doesn't produce any net greenhouse gases. That's a huge improvement on the current sources of ethanol.

    Mr. Julian Reed: Sir, I'm very much aware of that. I just don't want to be buying my cellulosic ethanol from the United States

    Mr. George Anderson: One of the things you'll see in the climate change document that came out just before Christmas, “Climate Change Plan for Canada”, is a preparedness by the government to work with industry on a commercial-scale ethanol plant of this type. So we're having those discussions.

    Mr. Julian Reed: But if you ignore grain now you'll create a gap in the process and lose--

    Mr. George Anderson: Part of what we're discussing with the provinces is what they are prepared to do to create further incentives.

    Mr. Julian Reed: Pardon me for being skeptical.

    There's another very brief one I should bring up that's specific. The federal government is now committed to buying 20% of its electricity from green sources and paying a premium for that--capping it at three cents and so on. However, the other side of the coin is it wants to claim the green credits. So the generator forfeits the green credits in exchange for getting the green premium.

    I'm in the midst of correspondence with the ministry on this right now. It was in your ministry, and now it's moving into Public Works. How odd, because if the federal government thinks the Lord giveth and the Lord taketh away, and blessed be the name of the federal government.... In a situation like that, why should the government try to claim something back that it doesn't have already? And it will probably never get it, because there won't be any investment, even though there's a green premium.

    Mr. George Anderson: I'm just not familiar with this; I don't whether you are.

    Mr. Julian Reed: You're not familiar with it. Well, I'm sorry.

    Mr. George Anderson: It's fair to ask the question. I just have to report that I'm not familiar with it.

    Mr. Julian Reed: It was in your ministry, and I think it's been moved to Public Works now.

    Mr. George Anderson: I can chase it.

    Mr. Julian Reed: Thank you very much, Mr. Chairman.

    The Acting Chair (Mr. Paul Szabo): Thank you.

    On behalf of the committee, I'd like to thank Mr. Judd, Mr. Nymark, and Mr. Anderson for appearing today and for doing an excellent job in answering the members' questions.

    From my own standpoint, colleagues, it's always a good meeting when all of the members have had an opportunity to ask all of their questions. I certainly hope we'll continue in that pattern.

    I would simply advise the members that our next meeting is next Thursday at 11 a.m. to consider the draft EPA report beyond Bill C-9. Since we need quorum, I would encourage you to be here, or if there is a conflict to arrange for a substitute.

    Thank you all.

    The meeting is adjourned.