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37th PARLIAMENT, 3rd SESSION

Standing Committee on Aboriginal Affairs, Northern Development and Natural Resources

EVIDENCE

CONTENTS

Thursday, April 22, 2004

0905

The Vice-Chair (Ms. Nancy Karetak-Lindell (Nunavut, Lib.))

Mr. Roderick Forbes (Acting Director, Horizontal Policy, Department of Fisheries and Oceans)

The Vice-Chair (Ms. Nancy Karetak-Lindell)

Mr. Roderick Forbes

Mr. Denis Hains (Acting Director General, Canadian Hydrographic Service, Department of Fisheries and Oceans)

0910

The Vice-Chair (Ms. Nancy Karetak-Lindell)

Mr. Roderick Forbes

0915

The Vice-Chair (Ms. Nancy Karetak-Lindell)

Mr. David Chatters (Athabasca, CPC)

0920

Mr. Roderick Forbes

Mr. David Chatters

Mr. Roderick Forbes

Mr. David Chatters

Mr. Roderick Forbes

Mr. David Chatters

Mr. Roderick Forbes

Mr. David Chatters

Mr. Roderick Forbes

Mr. David Chatters

Mr. Roderick Forbes

Mr. Denis Hains

0925

Mr. David Chatters

Mr. Denis Hains

Mr. David Monahan (Director, Ocean Mapping, Canadian Hydrographic Service, Department of Fisheries and Oceans)

Mr. David Chatters

Mr. David Monahan

Mr. David Chatters

The Vice-Chair (Ms. Nancy Karetak-Lindell)

Mr. Serge Cardin (Sherbrooke, BQ)

Mr. Denis Hains

0930

Mr. Serge Cardin

Mr. Denis Hains

Mr. Serge Cardin

Mr. Denis Hains

Mr. Serge Cardin

M. Denis Hains

0935

Mr. Serge Cardin

The Vice-Chair (Ms. Nancy Karetak-Lindell)

Hon. Larry Bagnell (Yukon, Lib.)

Mr. Roderick Forbes

Mr. David Monahan

Mr. Roderick Forbes

Hon. Larry Bagnell

0940

Mr. Roderick Forbes

Hon. Larry Bagnell

Mr. Roderick Forbes

Mr. David Monahan

Hon. Larry Bagnell

Mr. Roderick Forbes

Hon. Larry Bagnell

The Vice-Chair (Ms. Nancy Karetak-Lindell)

Mr. David Chatters

Mr. Roderick Forbes

Mr. David Monahan

Mr. David Chatters

Mr. David Monahan

0945

Mr. David Chatters

Mr. Roderick Forbes

Mr. David Chatters

Mr. Roderick Forbes

Mr. David Chatters

Mr. Roderick Forbes

Mr. David Chatters

Mr. Roderick Forbes

Mr. David Chatters

Mr. Roderick Forbes

The Vice-Chair (Ms. Nancy Karetak-Lindell)

Hon. Andrew Telegdi (Kitchener—Waterloo, Lib.)

Mr. David Monahan

0950

Hon. Andrew Telegdi

Mr. David Monahan

Hon. Andrew Telegdi

Mr. Roderick Forbes

Hon. Andrew Telegdi

Mr. David Monahan

Hon. Andrew Telegdi

The Vice-Chair (Ms. Nancy Karetak-Lindell)

Mr. Serge Cardin

Mr. David Monahan

Mr. Serge Cardin

0955

Mr. Roderick Forbes

The Vice-Chair (Ms. Nancy Karetak-Lindell)

Hon. André Harvey (Chicoutimi—Le Fjord, Lib.)

Mr. Roderick Forbes

Mr. Denis Hains

Hon. André Harvey

The Vice-Chair (Ms. Nancy Karetak-Lindell)

Mr. Roderick Forbes

1000

The Vice-Chair (Ms. Nancy Karetak-Lindell)

Mr. Roderick Forbes

Mr. David Monahan

The Vice-Chair (Ms. Nancy Karetak-Lindell)

Ms. Liseanne Forand (Assistant Deputy Minister, Northern Affairs, Department of Indian Affairs and Northern Development)

1010

1015

1020

The Vice-Chair (Ms. Nancy Karetak-Lindell)

Mr. David Chatters

Ms. Liseanne Forand

1025

Mr. David Chatters

Ms. Liseanne Forand

Mr. David Chatters

Ms. Liseanne Forand

Mr. David Chatters

Ms. Liseanne Forand

1030

Mr. Serge Cardin

Ms. Liseanne Forand

Mr. Serge Cardin

Ms. Liseanne Forand

1035

The Vice-Chair (Ms. Nancy Karetak-Lindell)

Hon. André Harvey

Ms. Liseanne Forand

Hon. André Harvey

Mme Liseanne Forand

1040

Hon. André Harvey

Ms. Liseanne Forand

Hon. André Harvey

The Vice-Chair (Ms. Nancy Karetak-Lindell)

Mr. Chuck Strahl (Fraser Valley, CPC)

Ms. Liseanne Forand

Mr. Chuck Strahl

1045

Ms. Liseanne Forand

The Vice-Chair (Ms. Nancy Karetak-Lindell)

Hon. Andrew Telegdi

Ms. Mimi Fortier (Director, Northern Oil and Gas, Department of Indian Affairs and Northern Development)

Hon. Andrew Telegdi

Ms. Mimi Fortier

Hon. Andrew Telegdi

The Vice-Chair (Ms. Nancy Karetak-Lindell)

Mr. Serge Cardin

Mme Liseanne Forand

1050

Mr. Serge Cardin

Ms. Liseanne Forand

Mr. Serge Cardin

The Vice-Chair (Ms. Nancy Karetak-Lindell)

Mr. David Chatters

Ms. Liseanne Forand

1055

Mr. David Chatters

Ms. Liseanne Forand

The Vice-Chair (Ms. Nancy Karetak-Lindell)

CANADA

Standing Committee on Aboriginal Affairs, Northern Development and Natural Resources

NUMBER 010

3rd SESSION

37th PARLIAMENT

EVIDENCE

Thursday, April 22, 2004

[Recorded by Electronic Apparatus]

¿ (0905)

[English]

The Vice-Chair (Ms. Nancy Karetak-Lindell (Nunavut, Lib.)): I guess we can get the meeting underway. According to our agenda today, pursuant to Standing Order 108(2), we will do a study on seabed mapping.

We will start with our first witnesses this morning from the Department of Fisheries and Oceans.

I understand that Mr. Roderick Forbes will be the first speaker. Go ahead and do your presentation, and we'll have questions right after that.

Mr. Roderick Forbes (Acting Director, Horizontal Policy, Department of Fisheries and Oceans): Thank you very much for inviting us. We're pleased to be here.

My name is Roderick Forbes. I'm the acting director of horizontal policy in the policy sector. With me is Mr. Denis Hains, who is the acting director general of the Canadian Hydrographic Service, and David Monahan, who is the director of ocean mapping within the Canadian Hydrographic Service.

The Vice-Chair (Ms. Nancy Karetak-Lindell): Welcome.

Mr. Roderick Forbes: We were not sure of what specifically you were interested in hearing from us with regard to seabed mapping. Because of that, we've prepared two presentations, which have been handed to the clerk for distribution.

The first is a presentation by Denis Hains on hydrography in the Arctic, on what we're doing and what progress we've made in overall seabed mapping in the north.

The second is a presentation that I'll go through very quickly. It's on UNCLOS, the United Nations Convention on the Law of the Sea, ratified by Canada in November of last year. It places certain obligations on Canada with respect to mapping of the extended continental shelf. So I'll talk about that.

I'll pass this first to Denis Hains to talk about hydrography.

[Translation]

Mr. Denis Hains (Acting Director General, Canadian Hydrographic Service, Department of Fisheries and Oceans): Thank you very much.

Firstly, I want to mention that I am the acting director general of the Canadian Hydrographic Service.

Hydrography, as you can see on the first page of this presentation, is both the art and science of compiling in-depth data to produce charts or maps of seabeds or water-covered areas of the earth's surface, to contribute to navigation safety and sustainable development.

The Canadian Hydrographic Service has been a part of the Department of Fisheries and Oceans for more than 100 years. It strives to provide information which will contribute to security navigation, storm search hazard mitigation and other such phenomena in storm zones, non renewable resource management, environmental stewardship and sovereignty, by providing an infrastructure or, in other words, a basic map.

[English]

At the bottom of the page, you have my name and my coordinates, in case you want to have additional information later on.

¿ (0910)

I will not go through all the slides or each page, because I understand we have limited time and you probably want to ask specific questions. I will jump to page 3, where you have a map of Canada. The chairperson received a colour copy of this map. It just shows that in the Arctic specifically we don't have a lot of data. Mainly what is covered is what we call corridor surveys that ships use to navigate. So there's a lot to be done in the Arctic and the north. A lot of surveys are old. Surveying waters is very expensive and time-consuming, so we have limited ourselves, over this period of more than 100 years, to surveying areas that are necessary for safe navigation, commerce, and safety.

There is other information there, but I will jump to the second-last page of this presentation to give you an idea of what was done in the last years in terms of surveys. When we're talking about surveying the waters to produce maps, you have to understand that we have to go by ship, of course, because it's a body of water. In the past it was very minimal information. We had to position the ship and take a measurement with a lead line at the beginning and after that with sounders that would give only lines. Nowadays we have technology that is comparable to what you could see in terms of satellite imagery. So we have full bottom coverage, but it is still very time-consuming and very expensive, especially in remote areas in the Arctic where the conditions are very difficult and sometimes unpredictable and the navigation and survey season is limited.

You can see on the second-last page of this presentation that multi-beam--this is the new technology--which allows full bottom coverage, is again very limited in the Arctic and in the north because of the severe meteorological constraints, the cost, and the funding available to go into the north.

I will conclude my presentation with the last slide. I could go into more detail with questions, if you have any. I'll just say that only a small portion of the Arctic waterways has been surveyed and charted. Some of them have not been charted with let's call it the state-of-the-art technology we have today. The funding for hydrography to do that type of survey of the bodies of water in the Arctic is limited, and we use a risk-based approach to decide where to survey and where we are going to focus our energy resources in the future.

Of course, the Arctic and the north is an area with a lot of possibility; however, the navigation or the traffic right now is still quite limited. So we are doing what we can with the resources we have and are working in collaboration with the Department of Indian Affairs and Northern Development in the north, with the territories, and with private companies to share the cost of those expensive surveys.

Of course, the difficulty of working in the ice-covered area makes Canadian hydrography more difficult but also pretty unique in terms of developing new techniques and new technology that can be eventually exported.

I limited this to only a few minutes because I know we're limited in time. Mr. Forbes will talk about UNCLOS, and we've provided a map as an illustration.

Merci beaucoup.

The Vice-Chair (Ms. Nancy Karetak-Lindell): Mr. Forbes.

Mr. Roderick Forbes: Thank you.

As I indicated, Canada ratified the United Nations Convention on the Law of the Sea in November of last year.

Again, I will not speak to all of the slides in this presentation. I'll speak mostly to those that refer to mapping issues. I'll go first to slide 3, which outlines the provisions under UNCLOS.

The key provisions address the limits of national jurisdiction over ocean space; access to the seas; navigation, protection, and preservation of the marine environment; exploitation and conservation of living resources; seabed mining and other exploitation of non-living resources; scientific research; and settlement of disputes.

In terms of the benefits to Canada, they include allowing Canada to strengthen its ocean governance and participate in the international community on international oceans governance. It also allows, with the geography of Canada, a significant extension and clarification of Canada's jurisdiction over the continental shelf, which would strengthen Canada's security and sovereignty and the potential development of new offshore resources.

As you see on the map on slide 5, Canada's continental shelf extends beyond the 200-mile exclusive economic zone. Under UNCLOS we are permitted to claim jurisdiction of the seabed on that extended continental shelf, but in order to claim that jurisdiction, Canada is required to do detailed mapping and provide other information on that area to be submitted to the United Nations for its consideration. That has to be done within 10 years of Canada's ratification if we wish to claim that extended jurisdiction.

If you look at slide 5, there are two areas where Canada has that opportunity. On the left-hand side there is a map of the east coast that shows potential extended jurisdiction, which would be the white line, off the east coast of Canada, and the second part would be in the north, in the Arctic, on the right-hand side. The yellow area that's on slide 5 is the area that Canada potentially has an opportunity to claim extended jurisdiction over.

I'll talk briefly about slide 7. This talks about the opportunity for extended jurisdiction beyond the 200-mile limit. After acceptance of a formal claim to the United Nations Commission on the Limits of the Continental Shelf, the challenges for us include potentially overlapping claims with other countries in the Arctic and the feasibility and difficulty, as Mr. Hains indicated, of undertaking that mapping in the Arctic under ice-covered waters.

I'm going to move to slide 11, which talks about some of the other issues around clarification and affirmation of Canadian sovereignty and the strengthened maritime security, safety of marine navigation, and control that's permitted under UNCLOS. Again there are challenges. Not only do we have potentially overlapping jurisdictional issues in the extended continental shelf, we still have four ongoing disputes with the United States on border issues with respect to that.

In the budget this year, $70 million was identified over 10 years for mapping of Canada's Arctic and continental shelves under the UNCLOS mapping requirements, and the budget notes that the seabed mapping on the continental shelf is a first step in the pursuit of Canada's new oceans action plan to maximize the potential of coastal and offshore areas. The budget specifically indicated that $51 million of the total will be spent on mapping of the Arctic as part of the government's commitment to supporting northern communities.

That concludes our presentation. As I indicated, we weren't sure specifically what you were interested in with respect to mapping. We'd certainly be happy to answer questions as best we can.

¿ (0915)

The Vice-Chair (Ms. Nancy Karetak-Lindell): We'll go to our first round of questions.

Nine minutes to the official opposition, Mr. Chatters.

Mr. David Chatters (Athabasca, CPC): Thank you, Madam Chairman.

I guess the obvious question that comes to mind when we listen to the presentation is why the east coast and the Arctic and not the west coast?

That's the first question. Maybe we could deal with that one first.

¿ (0920)

Mr. Roderick Forbes: Certainly.

On the east coast Canada's continental shelf extends well beyond 200 miles offshore. On the west coast the continental shelf is actually quite narrow, so by the time you get out to 200 miles, there isn't a continental shelf. The continental shelf is basically the continent's extension, continental rock before you get to the deep ocean waters. Then there's what's referred to as continental slope, which is a steeper angle that goes down to ocean depths beyond the edge of the shelf. There is a potential, although we think it's very weak, for some extended jurisdiction on the west coast. The United States have indicated that they may be putting in a claim at some point under some special provisions of UNCLOS, but we feel it's unlikely. In the Arctic as well we have an extended continental shelf.

Mr. David Chatters: So really this expenditure and initiative are all about providing the data to make the claim for that extended jurisdiction.

Mr. Roderick Forbes: The funding that was indicated under the budget of this year is specifically for that. We're required to undertake hydrographic surveys, which are water depth surveys, detailed mapping of the water depths, as well as providing underlying geophysical data that back up our claim that this area is in fact continental rock and part of the continent of North America, not separate geologically. Those data are compiled and sent to the United Nations Commission on the Limits of the Continental Shelf, which rules on whether it's a valid claim.

Mr. David Chatters: Okay. That adds some understanding.

I think we also need perhaps some clarification on how this new oceans action plan, if you will, relates to Canada's ocean strategy coming out of the 1997 Oceans Act. Is there a relationship there? How do those fit together?

Mr. Roderick Forbes: Actually, there is a relationship. The oceans action plan is putting into place and into action the strategic elements that were part of the Canada ocean strategy. It's identifying the specific steps that need to be taken to bring more life to that strategy.

Mr. David Chatters: So it's an extension of that particular strategy. This flows out of the oceans strategy.

Mr. Roderick Forbes: Yes, it does. There are four parts under the strategy. I don't know if you want details.

Mr. David Chatters: No, that's fine.

If that's the objective, why do we spread it over so many years? A lot of things change in ten years, particularly in politics and government. That seems like a long period. Why so long? Maybe that's more of a political question.

Mr. Roderick Forbes: With the technical aspects, it will take us that long to do the work required, particularly again in the Arctic, where the area in which we have to do mapping is probably the most difficult part of the Arctic to work in; it has the most ice-covered waters, the thickest ice cover. So there are challenges related to the technology. There are also challenges related to getting the ships in place, icebreakers. You need some lead time to book icebreakers and other research ships to do that work. So it will take that long.

Mr. David Chatters: I have to assume that Canada doesn't actually own ships with this multi-beam technology, so you will have to contract for this work. Who has them? Where are they available? When can you start?

Mr. Roderick Forbes: We do have some, but I'll let Mr. Hains talk about that.

Mr. Denis Hains: Maybe Mr. Monahan will be able to complete my answer, but we do have some Canadian ships in the coast guard fleet that are equipped to do some surveys. However, if you look at the distance from the shore, we don't have ships to work there. So we plan to charter ships. There are ships that are used for offshore exploration on which we will consider installing the technology to do the surveys for the east coast of Canada. For the north, of course, we will need icebreakers, a very limited number of which are available for charter from outside, but there are possibilities. This one is going to be coordinated with the Canadian Coast Guard, but also with neighbouring countries in the Arctic--Russia, Denmark, and the United States--in order to share the cost and the resources to acquire the data.

¿ (0925)

Mr. David Chatters: Is it a competitive thing, or is there not much choice out there when you're looking for ships that are capable of doing this?

Mr. Denis Hains: There is some choice, so it's not something that is going to be sole-sourced. I don't know, Mr. Monahan, if you could provide more information. I know you have been involved more in this.

Mr. David Monahan (Director, Ocean Mapping, Canadian Hydrographic Service, Department of Fisheries and Oceans): In the Atlantic it is a very competitive business. We'll use standard equipment used in the oil industry, so companies will be competing. In the high Arctic we're going to be doing things nobody has done, so we'll have to explore and feel our way and learn, but this is a chance for Canadian industry and Canadian researchers to develop techniques we can export. There are a few ships that can work there, that have worked in ice almost that bad.

Mr. David Chatters: So we would actually develop Canadian technology on Canadian Coast Guard vessels that we would be able to do this with, and we then could export that technology.

Mr. David Monahan: We hope so.

Mr. David Chatters: That's interesting.

Thank you, Madam Chairman.

The Vice-Chair (Ms. Nancy Karetak-Lindell): You actually had some time left.

Mr. Cardin.

[Translation]

Mr. Serge Cardin (Sherbrooke, BQ): Thank you, Madam Chair.

Good morning, gentlemen. Earlier, you were wondering what was expected of you. Let's just say that I was really surprised to see that you were appearing today, but the fact remains that this is a very interesting subject.

In addition to staking potential territory to establish Canadian sovereignty, do your cartographic techniques provide specific information on resources, since this falls under Fisheries and Oceans? I presume that you also have information on resources.

Yesterday, I happened to speak with a colleague, and we were wondering if the techniques you use also provide information on the state of the environment, and allow you to discover that in certain areas, the seabed might have been used in the past as a major dump site. Do your techniques allow you to find that out? How is it done? Is information on the environment provided, etc.?

Mr. Denis Hains: Indeed, in the past, cartography was used mainly to measure the depth of water. This is what was traced on marine maps which were used primarily for navigation purposes. The technology we use currently allows us to detect the composition of the bed. As well, as I was explaining earlier, with satellite images and different returning tones and signals, we can decipher changes in the seabed and take measures to establish a relation accordingly. Technically and scientifically, there have been a lot of changes. This now allows us to not only measure the depths available for navigation, but to also understand the geological composition of the seabed.

This type of cartography uses geological measures developed by our colleagues at Natural Resources Canada; these are seismic measures which allow us to know how thick is the layer of sediments at the bottom.

With respect to the environment, to answer specifically your question on potential dump sites, I will say that this technology is very interesting because we discover different things on the images, similar to what we find with a radar or ultrasound. With measurements, we can detect things with increasing precision. We're talking about precision in the order of one cubic metre. With regard to possibly discovering important deposits or ship wrecks, yes, we are able to detect certain things in relation to chemical, or other environmental deposits from the past. Along with our colleagues from Natural Resources Canada, National Defence, our federal and territorial counterparts, this will allow us to check on events which occurred in the past, particularly in the Arctic. Before taking these measures, we can determine any risks because of things which have been lost over time. By using a special lens, we can see what is at the bottom. As you know, navigating is not like driving on the road; we cannot see the potholes because they are under water. It is very interesting in that sense.

So we should be able to discover very interesting things. We will have to cooperate with territorial, local and federal authorities to ensure, in case we discover things which have been lost over time, that it is safe.

¿ (0930)

Mr. Serge Cardin: As far as you know, have you discovered anything so far?

Mr. Denis Hains: We discovered some wrecks in lesser-known areas, particularly on the east coast. We were able to do so through this technology. I don't know if you are familiar the Lower St. Lawrence. We knew that the Empress of Ireland was off the coast of Pointe-au-Père, but we did not know its exact location and we had never seen this ship at the bottom of the river. Through these technologies, we came upon this ship and discovered how it broke, fell apart and how it was laid out. We were able to find out certain things, specifically, ammunition deposits or ships which carried certain things on board. Currently, we mainly get the information provided to us by National Defence. When we discover such things, we must check with them if there's any connection to information they may already have. We have already discovered things, but no treasures yet!

Mr. Serge Cardin: That's not why I asked the question. I was not trying to get secret information.

Mr. Denis Hains: To answer your last question, I will say that this information is public and will be made available.

Mr. Serge Cardin: Earlier on, you seemed to attach some importance to the establishment of sovereignty, in other words to the delineation of Canada's seabed territory. Of course, it's interesting, but I presume that the technology you are developing and that you are probably going to continue to develop is mainly for resources, for fisheries. You focused on the delineation of territory. In the future, will the rest be just as important? Will you put as much emphasis on resources namely the fisheries? By drawing maps, what are you doing to determine the potential of resources?

M. Denis Hains: Funding announced in the last federal budget is mainly for determining Canada's new boundary that goes beyond the exclusive economic zone set out in the United Nations Convention of the Law of the Sea. In ratifying this agreement last November, Canada committed to making a land claim that extends past the white line you see on the map, within a period of 10 years. What you see within the red line is what belongs to us already. We hope to lay claim to the area between the red line and the white line, but we must first determine where the continental shelf ends. The focus is on establishing this line through funding we currently have at our disposal. Obviously, by using this technology and by focusing on the area that we want to claim, we will discover other things and that will provide indicators with respect to geology, resources, what lies below, and what we still don't know, even though we have a vague idea.

In this case, the bulk of the $70 million spread over 10 years will be used to prepare technical files that will support the claim we will make to the United Nations to draw Canada's new border. With respect to resources, we are trying to encourage other initiatives within the framework of the strategy for Canada's oceans and the action plan on oceans, once we know better what lies in our zone currently. As you know, little is known about the seabed, particularly in the Arctic, where we are only familiar with small corridors. Without this information, nothing can be done. There are other aspects of the action plan on oceans which would allow us to simultaneously carry out other surveys. Currently, we are focusing on the land claim.

¿ (0935)

Mr. Serge Cardin: Do I still have some time, Madam Chair?

[English]

The Vice-Chair (Ms. Nancy Karetak-Lindell): Unfortunately, no, but I think we'll have time for a second round.

Mr. Bagnell.

Hon. Larry Bagnell (Yukon, Lib.): Thank you.

Thank you for coming, although as I'm as surprised as Mr. Cardin that you're here. I have no idea how you got on our agenda.

But I have fought a lonely battle on northern sovereignty for the last few years, so I was delighted when the new Prime Minister came in and handed in his first speech, and then a month ago we put in this vast military plan, a five-year action plan, and in the budget, when we had been lobbying for this money for the mapping. So this is fantastic.

I do notice the irony in the very last page of your deck, where you spoke about partnerships with foreign governments, and you picked Denmark first. Seeing that we're at sovereignty blows with them right now, it's great that we're going to be partners.

Now to get down to the hard facts, if you had to make just a rough estimate, roughly when do you think we're going to start? I know you can't predict because of ice and all that, but when might we start and finish that part, the Arctic mapping? I know Russia has already done it, and our sovereignty is at risk, so the sooner the better.

Mr. Roderick Forbes: Briefly, yes, Russia has submitted a claim. The claim was sent back from the commission as having insufficient data to support their claim, but they certainly have drawn their lines as to what they believe would be their area of jurisdiction.

Within our area, I'll leave it to Mr. Monahan to answer specifically, but it will take several years of lead time for us to arrange for the vessels particularly. That's the principal issue, as well as some of the technology issues, but I'll leave that to Mr. Monahan.

Mr. David Monahan: What you see on the map is based on all the data that has been collected to date, which is not very much at all, and it shows our best estimate of the area we have to go to, inside the white line.

We plan in year two to run along seismic lines from the northern end of Ellesmere Island--from Alert, actually--out into the white area. I have to say that's in partnership with the Danes simply because it's so hard to work there and so expensive, and we have as much to gain as they do in doing that. That's in year two. We don't plan on getting a ship in there until year five, and then in years five, six, seven, and eight, we should do the ship operations.

Mr. Roderick Forbes: Again, as Mr. Monahan has indicated, we have to work in partnership with others because of the expense and the difficulty of getting sufficient vessel time.

As he indicated, we are in a jurisdictional dispute with the Danes. We also have four areas around the coast of Canada, including the Beaufort Sea boundary between Canada and Alaska, with respect to bilateral borders with the U.S., and we would, as best as possible, work with them as well, as well as with Russia, given the opportunity.

Hon. Larry Bagnell: It's rather astonishing that we don't have a military ship that could go there, but if we were to buy one, would there be dual purpose, that you could actually use it for some of this work before we used it solely as a military ship?

¿ (0940)

Mr. Roderick Forbes: I would expect so. The technology we're talking about is transferable from ship to ship to some extent. We would have to design in some specific aspects or specific parts of the ship to allow it to employ that technology, but if it's accessible, if it has access, yes.

Hon. Larry Bagnell: That's good.

What's the ridge dilemma?

Mr. Roderick Forbes: I will again leave that to Mr. Monahan, but it relates to interpretations under UNCLOS with respect to what constitutes part of the continent and what doesn't. In the Arctic, there are several ridges that extend well into the Arctic Ocean and that have lower water depth.

But again, I'll leave it to Mr. Monahan to respond.

Mr. David Monahan: Thank you.

The juridical continental shelf, the area in white, is defined very carefully in the convention, in UNCLOS, article 76, and that was written at great labour. Trying to describe geography in words is difficult, and that's one reason there's a 10-year allowance to get the work done.

There are exceptions in there, but what the drafters of the convention were trying to do was to separate continental rocks from oceanic rocks. That's basic geology, but it is very hard to do. They made exceptions on ridges, about whether ridges were part of a continent or not. There are three ridges in the Arctic. One is very clearly oceanic, and nobody disputes that one. In one of them, north of Ellesmere Island, the rock is continental, but we don't know whether it joins to Canada or not, so we have to go and prove that it joins to Canada before we can claim in. The third one, which we call Alpha Ridge and the Russians call Mendeleev Ridge, we think is probably continental, the Russians think it is continental, and the Americans leap up and down and say it is oceanic and nobody can claim it.

So we have to sort out the nature of those ridges, and it can really affect the area we get beyond 200 miles up there.

Hon. Larry Bagnell: I just have one last question. Does the east shore cover the nose and tail, so that if we got that as part of our sovereignty, a lot of people in Fisheries would be happy?

Mr. Roderick Forbes: It does cover the nose and tail. What needs to be clear is that UNCLOS gives us jurisdiction over the seabed and sedentary resources in the area beyond 200 miles that we claim. It does not necessarily give us the jurisdiction that we're looking for, for the water column and the fisheries resources.

We are actually working with other government departments at this point to identify if there are potential changes that we might want to seek under UNCLOS, to provide a greater ability to coastal nations to address those issues, specifically in terms of fisheries resources, under UNCLOS.

Hon. Larry Bagnell: Thank you.

The Vice-Chair (Ms. Nancy Karetak-Lindell): Mr. Chatters.

Mr. David Chatters: Thank you again, Madam Chair.

I go back to my first question, as I see this area with a question mark on the west coast. What is the significance of that question mark? This doesn't seem to be a program that is allocated to the west coast. Are you going to be able to answer the question mark?

Mr. Roderick Forbes: Mr. Monahan.

Mr. David Monahan: In the treaty, there is an exceptional clause added some years later that refers to the Bay of Bengal. We don't think it applies to Canada. However, in a study that the United States released a couple of years ago, they looked at this exclusive Bay of Bengal clause and said that they thought it applied to the Gulf of Alaska.

So we have to take another look at that from the legal viewpoint—not the data viewpoint. The first-off reactions from some law professors we've asked are that, no, it does not apply. But we would be remiss if we didn't mention the fact that it has to be investigated.

Mr. David Chatters: Will this technology in this process identify the location and existence of gas hydrates?

Mr. David Monahan: It can contribute significantly to that. Gas hydrates are not the easiest things to find, but it will help draw areas in which there are gas hydrates. It won't give you exact boundaries to them.

¿ (0945)

Mr. David Chatters: Okay.

You're from Fisheries and Oceans and are obviously heading this initiative, but what's the role of Natural Resources Canada and Geomatics Canada, who I think would certainly have an interest in this as well? What's their role?

Mr. Roderick Forbes: We are working directly with Natural Resources Canada on this. There are two aspects of information required to submit a claim. One is the hydrographic data, the water depth in detail, and the second is the geological and geophysical data that's needed to demonstrate that the area is, in fact, continental rock and is part of Canada. So they will be undertaking those surveys in conjunction with us, but not necessarily at the same time on the same vessels, because hydrography can be done a little bit faster than the seismic and other work that's needed for the geological work. But we're working directly with them on this.

Mr. David Chatters: Given the scope of this work and what needs to be done, it also strikes me that this $70 million is woefully inadequate to achieve what you want to achieve. Is that a fair comment?

Mr. Roderick Forbes: It will be a challenge, particularly in the Arctic, because we're really uncertain about doing the work there. So I would say that it's fair to say that we're concerned in dealing with areas where we haven't done this kind of work before. On the east coast it is much easier to determine what the costs are and to undertake the surveys.

Mr. David Chatters: What I think Larry raised is interesting as well, the issue of the Russian claim in the Arctic. You also suggested that you're partnering in this work with Russia. Clearly, we've got conflicting claims.

Mr. Roderick Forbes: The area that Russia considers it would have the ability to claim does overlap with part of the area shown by the white line. In fact, on slide 5 of the coloured copy you'll see a black line, and that's the area of overlap. However, the Russians would interpret the ridge articles, which we talked about earlier, in the same manner as we would, so they would be potential allies in discussions with the United States, which would prefer that we claim as little as possible, if anything at all. So there certainly are some international political issues around that, overlaid with our ability to actually undertake the technical work that needs to be done.

Mr. David Chatters: This funding package is for 10 years. But in terms of making these claims and gaining jurisdiction over these areas at the same time as Russia, Denmark, and others are looking at sovereign claims, is there a timeline we have to meet to have a reasonable chance of achieving success in these claims?

Mr. Roderick Forbes: We have to submit a claim to the commission within 10 years of ratification. That is a firm timeline. In a sense, it's a one-time opportunity for Canada to extend its borders.

Mr. David Chatters: You have to have this data before you make the claim.

Mr. Roderick Forbes: Yes. What we're not certain about is the quality of data. Only one claim has been submitted so far, that of Russia, and it was sent back as being inadequate. At this point they're still in the running in that they have submitted data. They have said that they want to claim. Canada also has to submit that within 10 years.

The Vice-Chair (Ms. Nancy Karetak-Lindell): This is a three-minute round. I failed to clarify that at the beginning.

Because you didn't use up all of your time in the first round, I let you go over a little.

Next is Mr. Telegdi, followed by Mr. Cardin and Mr. Harvey.

Hon. Andrew Telegdi (Kitchener—Waterloo, Lib.): I'm wondering about the mapping and sonar technology. It relates to my ice fishing experience. Can you do that through ice?

Mr. David Monahan: We do in fact do a lot through the ice. The diagram that is in colour shows you the extensive areas in which we have taken the soundings through ice. One of the problems is that you don't get coverage of an area. You get the depth directly below where you are on the ice, and you have to move and move and move. Unfortunately, you don't get the data that the UN has specified in their guidelines we have to provide them. But you're right, we can fire transducers through ice.

¿ (0950)

Hon. Andrew Telegdi: It's a lot cheaper, I take it. But you don't get the same coverage.

Mr. David Monahan: It's not cheaper if you consider the area we have to cover. We fly helicopters and land every six kilometres and take a depth. The helicopter time is quite expensive.

Hon. Andrew Telegdi: On this whole issue of working with some of the people with whom we have claims in conflict, I would imagine that it's good to try to develop relations while working in a particular area. It certainly is better to do it in that fashion than in any other fashion.

Mr. Roderick Forbes: The scientific community is an international community, and this is very much a science-based activity. Certainly, it provides us an opportunity to build better relationships with those countries and to share knowledge. Nobody disputes that it's the commission that will decide on the validity of the claim. But at the moment, the practical nature of doing the work, given that we don't have the total capacity to do it within Canada, really does require that we work with others, and it provides that opportunity to build better relationships.

Hon. Andrew Telegdi: With regard to the mapping, would submarines also be able to do it?

Mr. David Monahan: We have experience with United States submarines. There's a program that ran for five years, starting in 1992, in the deep Arctic, beyond 200 miles, in which most of the data we would like were collected from the submarines and shared with the international scientific community. So we have that. Unfortunately, none of it's where we really need it for the Canadian claim. That program has been discontinued in the U.S. as well. But the submarine is a very nice platform for scientific instruments in ice-covered waters, because it gets down below the ice into quite still and calm water.

Hon. Andrew Telegdi: Thank you.

The Vice-Chair (Ms. Nancy Karetak-Lindell): Mr. Cardin.

[Translation]

Mr. Serge Cardin: Thank you, Madam Chair.

Indeed I want to ask a question with respect to submarines. You say that it's the best technique, particularly in the Great North, I presume. In the Great North, during which periods of the year are you able to work with boats? You can't work with them all year around, I presume. Can you work for a few months?

[English]

Mr. David Monahan: The season for surface vessels is very limited, as you suggest. A lot of it depends on whether you're going to gain access from the Pacific or the Atlantic. There's only about a six-week window, really, to come in from the west. There's perhaps a four-month window from the east into the islands. In the high north, out there in that wide area, it's always ice-covered, and there's not really a season. There may be years in which we cannot get there. The submarines are pretty well immune from this, but they have to be nuclear submarines. A conventional submarine can't stay under the ice that long, it has to surface. It's only the U.S. that can do it right now.

[Translation]

Mr. Serge Cardin: Therefore, as it is relatively pressing or urgent to establish sovereignty of Canadian territory, the best tool would be the submarine. Mr. Harvey is here. It's about time to place an order for supplementary estimates. Mr. Harvey is quite efficient!

Obviously, we're talking about 10 years to draw a map of the North, but in fact we do not have 10 years; we have a few years. If we only have four weeks or one month, this is not equivalent to one year of full-time work. So there is a sense of urgency. How much does it cost to use one submarine for marine cartography?

¿ (0955)

[English]

Mr. Roderick Forbes: I don't know the answer to that question either. With surface ships, as Dave indicated, access from the west coast is particularly difficult and limited. We would hope to have several months per year that would be workable with surface vessels. Canada does have a class one icebreaker, as do other countries. There's also a limited season, actually, for working on the east coast. In doing this hydrographic surveying, there are limits on your season created by waves and storm action. You can't be doing this work in January in the north Atlantic either, but it's certainly much more limited in the Arctic.

The Vice-Chair (Ms. Nancy Karetak-Lindell): I'm sorry, your time is up. This is our short round.

Mr. Harvey.

[Translation]

Hon. André Harvey (Chicoutimi—Le Fjord, Lib.): Thank you very much, Madam Chair.

Fisheries and Oceans Canada plays an important role in the coordination and management of federal programs for seabeds. What kind of relationship do you have with other departments, specifically Human Resources Canada, and provincial governments? Do you assume full leadership in the protection of sea beds?

[English]

Mr. Roderick Forbes: Under Canada's ocean strategy, and now under the oceans action plan, there's a coordination of work in the oceans of Canada. The Minister of Fisheries and Oceans has responsibility for coordinating that work. It doesn't mean we do it all; in fact, numerous government agencies have various responsibilities related to the ocean. Natural Resources Canada specifically works on issues concerning the seabed. They do physical and geological mapping and research on the seabed. They work in coastal areas on coastal action and erosion of coastal areas. They're responsible for the work in the government that relates to the geology of the ocean bottom. It's really a collaborative effort, as with other government departments. Under the oceans action plan, and certainly under Canada's Oceans Act, the Minister of Fisheries and Oceans is responsible for ensuring that this coordination takes place.

[Translation]

Mr. Denis Hains: I would like to add that we did not touch upon that in our presentation. However, as you can see, in the appendix on pages 15 and 16, specifically on page 15, the Canadian Hydrographic Service is a part of Fisheries and Oceans Canada and the GSC, the Geological Survey of Canada is a part of Natural Resources Canada. If we look at the funds that have been set aside over the next 10 years for the Canadian offshore land claim project, the geological portion, a responsibility of Natural Resources Canada, is more expensive than the work of Fisheries and Oceans Canada, given the complexity and difficulty in collecting this information, in comparison with the measure at depth. That gives you an idea of each one's role. These are two key departments for the Canadian initiative for offshore land claim.

However, as I was saying earlier, there's a lot of coordination and cooperation with the northern territories, certain provinces and other departments, such as the Department of Indian and Northern Affairs Canada.

Hon. André Harvey: Your projects affect a resource which is very fragile right now : the seabeds. This is a very fragile resource. What is your instinctive reaction to the issue of oil and gas exploration on the two coasts? Does this concern you a lot?

[English]

The Vice-Chair (Ms. Nancy Karetak-Lindell): Could we have a very short answer?

Mr. Roderick Forbes: Our responsibility in Fisheries and Oceans and the responsibility of other government departments is to manage those resources in a sustainable way for Canadians and for the benefit of Canadians. We are undertaking under the oceans action plan integrated ocean planning. One area that is likely to be focused on first will be the Beaufort Sea area, which is an area of development of and exploration for mineral resources, hydrocarbon resources, but also an area that people are concerned about in regard to living resources as well.

À (1000)

The Vice-Chair (Ms. Nancy Karetak-Lindell): Thank you, Mr. Harvey.

I just have one very short question. You talked a lot about working with other departments on this. What about universities and research? We have an Arctic caucus within our party, and we've been trying very hard to promote research in the Arctic. Is there any coordination with universities on other types of research? We find that in the north, because of the high costs of doing research, you try to pool together different operations, for example, with university students studying arctic pollution and all these other things. What are the coordination efforts?

And how does this technology you're talking about, which I know is new, rate internationally, say against Russia or Denmark?

Mr. Roderick Forbes: On your comments about working with universities, particularly in the north, we're in the process of developing a northern strategy to look at how we do our work in the north and who we work with and to develop more effective partnerships with institutions in the north in doing the work. That would certainly include universities and colleges in the north, as well as other groups and institutions.

I'll leave it to Mr. Monahan to speak more specifically about this technology.

Mr. David Monahan: The map you see there in those areas was defined in close cooperation with the University of New Brunswick and Dalhousie. The University of New Brunswick is recognized in our profession as being the world leader in multi-beam technology. Its courses are given around the world. It's very prominent. I'm sure it would welcome the chance to work in the north and with the universities with other programs in the north.

The Vice-Chair (Ms. Nancy Karetak-Lindell): I would also put on your radar screens the land claims groups that are doing research on their own.

This brings us to the close of this round of presentations. Thank you very much for your very interesting information. We will suspend for a moment to give time for the other group to come in. Thank you again.

À (1003)

À (1006)

The Vice-Chair (Ms. Nancy Karetak-Lindell): I would like to call the meeting back to order, please.

We are now on our second item of the morning, our study on the northern gas pipeline, and we have witnesses with us from the Department of Indian Affairs and Northern Development.

I understand that Liseanne Forand, assistant deputy minister, northern affairs, will be giving the presentation. Welcome.

Ms. Liseanne Forand (Assistant Deputy Minister, Northern Affairs, Department of Indian Affairs and Northern Development): Thank you, Madam Chair. My name is Liseanne Forand. I am the assistant deputy minister responsible for northern affairs at Indian and Northern Affairs Canada.

I am accompanied by Mimi Fortier, the director of northern oil and gas in the northern affairs program.

[Translation]

I'm very pleased to speak to the Standing Committee on Energy Development of the North. The presentation will deal with the Mackenzie Valley gas pipeline, the current pace of oil and gas exploration activity in the North, factors which have led to a recent increase in these activities, the regulatory framework, and lastly I will give you a summary of the interests that the Canadian government is seeking to protect and promote as these activities progress.

[English]

With increasing demand for natural gas as a clean source of energy in North America, there's clearly an interest in developing northern natural gas resources and connecting the supply regions in the Mackenzie Delta, the Beaufort Sea, and Alaska North Slope to southern markets. Concerns over energy security are also driving this demand.

Canada has rich reserves of natural gas, and over 30% of our remaining conventional natural gas resource potential lies in the north. The Canadian north therefore has the potential to become a strategically important component of Canada's response to climate change, while also contributing to continental energy security.

With the filing of a preliminary information package for the Mackenzie gas project, it has become widely known that major oil and gas producers, along with the Northwest Territories Aboriginal Pipeline Group, are planning a $5-billion project to develop three major gas fields in the Mackenzie Delta, approximately 6 trillion cubic feet, and to construct a 1,300-kilometre pipeline to Alberta.

Past exploration, dating as far back as the 1960s, has shown the Mackenzie Delta-Beaufort Sea basin to be a potentially prolific producer of oil and gas. The region has approximately 9 tcf--that's trillion cubic feet--of discovered volumes of natural gas, and potential resources are estimated to be in the order of 60 tcf. In total, including resources outside the delta region, 82 tcf fall within an area that could be tapped by a Mackenzie Valley pipeline.

To put this in perspective, Canada's total production of natural gas is currently running at about 6 tcf a year. Of this amount, Canada exports 60% of its gas production to and supplies 16% of the U.S. market. With conventional gas supply declining, northern gas will be needed to meet domestic demand and to sustain Canada's annual $26 billion in petroleum exports to the U.S.

The Mackenzie gas project is a strong signal that major petroleum companies consider the Canadian north to be economic and attractive for investment. Already this new perception has induced a resurgence of market-driven exploration in the Beaufort Sea and Mackenzie Delta, and south along the length of the Mackenzie Valley.

Approximately $875 million has been spent on exploration in the last five years, and a further $500 million to $750 million is anticipated on the basis of current projections over the next five to seven years. As a result of this activity, new gas fields are being found that can augment throughput on the pipeline, reduce unit costs, and pave the way for expanding infrastructure development in the territories.

[Translation]

I want to give you information on some of the results from recent exploration activities. Over the last two years in particular, new investments in the exploration of the North were focused on four main areas which produced considerable and positive results. I draw your attention to the map which has been provided and on which you will find the places I will be talking about.

À (1010)

[English]

We provided a map for your use this morning. You can refer to it to see the locations I'll be mentioning. We're going to start in the southern portion and work our way north.

There's been much recent success in the southern Northwest Territories in two separate areas: Cameron Hills in the east and Fort Liard in the west. Fields that have already been developed in this area have been connected by north-south pipelines to the pipeline grid in northern B.C. and Alberta.

In the central Mackenzie Valley, Apache and Paramount are actively exploring on private Sahtu lands in the Colville Hills. Two wells drilled last year have been announced as successful gas wells, and the companies are drilling follow-up wells this year.

The new discoveries add to three existing fields in the Colville Hills, which together could pool sufficient gas to warrant a connector line to the main Mackenzie Valley trunk line, with throughputs roughly estimated at 100 million to 200 million cubic feet per day. Alternatively, should tariffs on the Mackenzie Valley trunk line be too high, developers might even consider a stand-alone gas line from Colville Hills to Norman Wells, the beginning of the existing Enbridge pipeline to Alberta.

Moving out of the valley and into the Mackenzie Delta, Devon and Petro-Canada have confirmed gas reserves at Tuk field on Inuvialuit private lands. This field lies some 30 kilometres northeast of Parsons Lake field. Last year Chevron announced a discovery at its North Langley well on the outer Mackenzie Delta, some 10 kilometres west of the Niglintgak field. The proximity of these discoveries makes them prime candidates for development and early add-on projects.

Finally, we move into the Beaufort Sea, which is the most prospective of all and was the focus of intense exploration 20 years ago. During this period, several large discoveries were made offshore, among these Amauligak, a major oil and gas field held by ConocoPhillips, with an estimated 1.4 tcf of natural gas. Clustered development of this and other discoveries, which is expected as a result of exploration underway in the offshore led by Devon Canada, could add large gas volumes to a Mackenzie Valley line. Devon's portfolio of prospects in shallow water around the fringes of the Mackenzie Delta lie in areas of very high potential, and additional gas discoveries are likely once offshore drilling recommences as planned after 2005.

Just in terms of some recent information, Devon—in fact, just last Thursday—submitted a draft comprehensive study report for their proposed Beaufort Sea exploration drilling program to the NEB. That is already now in train.

[Translation]

Beyond the Northwest Territories and the Beaufort Sea, there are other regions which have great potential, such as the northern part of the Yukon as well as the Arctic islands. To this day, exploration results in the Yukon have led to discoveries in the Eagle Plain Basin, which indicate potential, although to a lesser degree than that of the Mackenzie delta. Promoters are working to improve the economic situation and to include this basin in the infrastructure before moving ahead with development.

Even though we do not anticipate the development of resources found in the High Arctic islands through traditional methods, because these islands are too far, their potential in natural gas reserves is similar to that which can be found in the Beaufort Sea area as well as the Mackenzie delta. The most promising discoveries are in the Sverdrup basin, where exploration results point to considerable natural gas fields in the neighbouring regions of Drake Point and Hekla. Resources total 6.5 billion cubic feet.

[English]

That the north contains large reserves of oil and natural gas has been known for many decades. This recent and dramatic increase in industry activity, therefore, leads to the question: what has created this new attraction for investment? The answer lies in a combination of government policy and market forces as well as in the evolution of jurisdictional and governance issues in the north.

Canada's energy policies are based on a deregulated, market-driven economy and have contributed to the lowering of development costs in the sector. Technological innovations have also contributed to significant reductions of the costs of major pipeline construction.

More importantly, over the past 25 years the federal government has invested in the settlement of aboriginal land claims. Most of the aboriginal groups with traditional lands along the Mackenzie Valley gas pipeline route—the Inuvialuit, the Gwich'in, and the Sahtu—now have settled claims. As a result, they have a direct say in resource management issues, a share of royalty revenues, ownership of subsurface mineral rights, and the capital needed to be active players in major economic projects, and they are recognized partners in the political evolution of the territory.

Aboriginal people are anxious for development to proceed in a manner that is aligned with their priorities and interests. Some 40% of the proposed Mackenzie Valley pipeline would cross lands claimed by the Deh Cho First Nations, who are in discussions with Canada but do not yet have a final agreement. Through an interim resource development agreement and an interim measures agreement, every effort is being made to provide opportunities for the Deh Cho First Nations to advance their interests in the context of a pipeline proposal and potential exploration and development activity.

In this overall context, the aboriginal groups of the Northwest Territories attempted very early to coordinate the articulation of their interests in obtaining partnership status in the pipeline project. They created the Aboriginal Pipeline Group, usually called APG, and signed a memorandum of understanding with the producers in October 2001 that grants the APG up to a one-third ownership of the natural gas pipeline.

The ownership shares of the parties to the MOU are based on the volumes of gas the parties can contribute to the throughput on the pipeline; thus the MOU requires the APG to bring incremental gas volumes to the project. As noted by the APG when the MOU was signed, it establishes “the framework for an unprecedented partnership between the aboriginal populations and industry”.

Many of the same factors that have improved the investment climate are also contributing to the critical issues that industry must address as it moves back into the north. Aboriginal support is contingent on sustained economic benefits. Modern aboriginal claims settlements have created uneven fiscal and access provisions. In addition, recognition of land ownership and jurisdiction in the context of claims settlements has resulted in the establishment of new shared institutions of public government to regulate land and water use in the Northwest Territories. This has created a new and complex operating environment that requires new approaches and expectations.

[Translation]

As I have already indicated, the recognition of ownership and the drafting of agreements to reach common decisions have made possible oil and gas exploration and the development of hydrocarbon resources in the North.

In practice, it resulted in the establishment of public agencies under federal legislation, such as the Northwest Territories Water Board, and the Mackenzie Valley Land and Water Board, whose members are not only appointed by the federal government, but by territorial interests and aboriginals as well.

Because the federal government still plays an important role in the management of territory Crown lands, federal regulatory agencies must fulfill the responsibilities set out for them in the act. Therefore, for a project such as the Mackenzie valley gas pipeline, some 14 regulatory agencies have decisions to make and permits to issue before the project can be carried out.

[English]

Given the scale and the importance of the Mackenzie gas project, these regulators and their partners work to develop—and I'll cite the full title—the Cooperation Plan for the Environmental Impact Assessment and Regulatory Review of a Natural Gas Pipeline Project through the Northwest Territories , which is commonly known as the cooperation plan.

The plan sets out a coordinated, predictable, and efficient process that respects areas of ownership, responsibility, and jurisdiction while supporting mechanisms for information-sharing and coordination that will help regulators, proponents, and intervenors participate in the process. The cooperation plan represents a model that could be usefully studied for oil and gas exploration activity as well as for other sectors such as the mining sector.

This brief presentation represents only an overview of energy development in the north and has not included any detailed descriptions of the efforts INAC and the Government of Canada as a whole are making to ensure the development proceeds in a manner that is respectful of the need for strong and healthy communities, that protects the northern environment—for example, through the establishment of protected areas and the necessary research into cumulative and other effects—and that results in sustainable benefits at the community, territorial, and pan-northern levels.

À (1015)

Budget 2004 announced an investment of $75 million over three years to demonstrate the government's commitment to responsible energy development in the north. This funding will be used to enable not just INAC but several departments and agencies of the Government of Canada to increase their capacity to respond to the requirements that the pipeline project and induced exploration will put on them and to undertake research in the public interest to support rigorous and effective environmental impact and regulatory review processes.

À (1020)

[Translation]

I would like to thank you once again for inviting us this morning. We are ready to take your questions.

[English]

The Vice-Chair (Ms. Nancy Karetak-Lindell): Thank you very much.

We'll start our first round of nine minutes for Mr. Chatters and seven minutes for Mr. Cardin and Mr. Harvey.

Mr. David Chatters: Thank you, Madam Chair.

I think we need a more specific overview of where the Mackenzie Valley pipeline project is at and the timelines around it. We've been talking about this forever. It seems to be always out there, but nobody seems to have any firm timelines on it. Perhaps you could give us an overview of that.

Ms. Liseanne Forand: I'm sure the sense that this has been going on for a long time is due in part to the feasibility studies and the various discussions that went on before the producers were in a position to make even a preliminary commitment to the project. They made that preliminary commitment in June 2003 with the filing of a preliminary information package, which is quite an extensive volume of information that describes their intentions with regard to the project, such as where the pipeline route would go, these sorts of things. It's not an application yet; it's just information that's being provided to assist in the preliminary review processes.

Since then, the regulatory authorities with responsibility for environmental impact assessment have taken a first look at this PIP, as it's called, in order to screen the project with regard to environmental assessment rules. All of that was provided for in the cooperation plan. The Environmental Impact Screening Committee in the Inuvialuit Settlement Region screened the project. Then it was referred to the Mackenzie Valley Land and Water Board, with a trigger application so that they could refer it to the Mackenzie Valley Environmental Impact Review Board, which two days ago completed its mid-level screening of the project to see whether sufficient public concern existed to warrant the referral of the project to a joint review panel. That is provided for in the cooperation plan. The chair of the board has written to the Minister of INAC to say there is sufficient public concern to warrant a referral to the joint review panel. The Minister of INAC will consider that recommendation, will consult with his colleagues, and will make the determination to that effect.

Should it be referred to a joint review panel, that panel will be established in the next two months, by June. The expectation is that formal applications will be filed by the producers in July 2004. There is no formal application on the table yet. There is the preliminary information package. The expectation is that application will be filed in July. That will trigger the joint review panel process--that's the environmental assessment review stage--which is expected to take 18 months, including public hearings and other requirements.

Following that process, the final stage of preparation is about a six-month period for the issuance of regulatory approvals. All of the regulatory authorities will use the results of the joint review panel environmental impact assessment to guide their decisions in the issuance of permits. There is an estimate that some 3,400 permits will be required from 14 permit regulators in order to move the project ahead. It's possible that some of these requests will be bundled and considered in a variety of ways to promote efficiency. But in terms of the complexity and size of this project, that's the number of permits we're looking at.

So it's an 18-month process, which would start, say, in July. That is in the court of the producers as to when they table their application. So that's 18 months, followed by six months of regulatory permits being issued, and then construction would start.

À (1025)

Mr. David Chatters: That's not a very pretty picture that you paint. With 3,400 permits from 14 boards, this thing could certainly be bogged down in bureaucracy.

Of course, the other issue that we need you to address for us is the Deh Cho participation in the project, considering 40% of the pipeline goes through their territory and we do not yet have a land settlement agreement with them. Can the project move ahead in any significant way before that agreement is reached, or is that really the bottleneck in the project moving ahead?

Ms. Liseanne Forand: I'd like to provide two perspectives on that question.

First of all, notwithstanding the interests at stake and whatever interests the Deh Cho First Nations might want to put forward, it is possible to build a pipeline in an area where there is no settled land claim. The Enbridge pipeline from Norman Wells to the Alberta system was constructed in advance of the settlement of land claims. So it is possible for that to happen.

That being said, of course, the situation is that the Deh Cho First Nations do not have a land claim agreement, but as I mentioned in my presentation, through the signature of an interim measures agreement and an interim resource development agreement every effort is being made to ensure they can protect their interests in the context of this project.

Specifically, as a result of the interim measures agreement they have been able to nominate a member to the Mackenzie Valley Land and Water Board and to the Mackenzie Valley Environmental Impact Review Board, which of course the Sahtu and the Gwich'in, with their settled land claims, are able to do. So that enables them to participate on the same footing as those other first nations in the regulatory process.

Of course, the MVEIRB, the impact review board, is the one that will be participating in the joint review panel on behalf of the Mackenzie Valley boards, and the Mackenzie Valley Land and Water Board is the board that will be issuing land and water permits once the environmental impact assessment is completed. So in terms of regulatory participation, through the IMA they've been given the opportunity to participate despite the fact that they don't have a settled land claim.

The next challenge is going to be, as it is up and down the valley--not just in the Deh Cho, but probably more so there--the question of access and benefits for the arrangements between the producers and the first nation to compensate and recognize their access to the land that is being claimed. In the case of the Deh Cho, it's not as straightforward as it is elsewhere, because elsewhere it's been settled as to who is the owner. As we've mentioned in the presentation, there are private lands, and these arrangements can be made.

However, we're confident that the producers will be taking a positive approach to this and we'll be able to reach agreement with the Deh Cho First Nations. As a government we are trying to work with them as best we can to ensure they are in a position to protect their interest so they're not disadvantaged by the fact that this pipeline is being constructed in advance of their final agreement.

Mr. David Chatters: They are part of the Aboriginal Pipeline Group, the Deh Cho?

Ms. Liseanne Forand: Yes. I would have to check--it's a moving environment--but they were part of the formation of it.

Mr. David Chatters: The interesting comment in your presentation was that the ownership shares under this memorandum of agreement are based on the volumes of gas that each party can contribute. Of course, much of this gas is yet to be discovered and developed--it's speculation that the gas is there. What happens if the Aboriginal Pipeline Group, for example, can't deliver the volume of gas that the memorandum of agreement allows them to? What happens to the ownership share in that pipeline?

Ms. Liseanne Forand: That's a very hypothetical situation that I am probably not the best situated to answer, in terms of their interests.

I would expect the memorandum of agreement was drafted and signed as it is because of the very strong level of confidence that such gas exists, that it is commercially developable, and that it will be possible for the APG to secure it. As well, as you may know, the producers' plan for the pipeline allows for an expansion of the pipeline to take in the extra gas that the APG could provide. So there's a high level of confidence in the availability of that gas.

À (1030)

[Translation]

Mr. Serge Cardin: Thank you, Madam Chair.

Madam Forand, madam Fortier, good morning and welcome to the committee.

Because of environmental issues as well as aboriginal issues, I don't think I will be attending the ribbon cutting ceremony, to celebrate the opening of the pipeline. Aside from these potential problems, even though you seem to be saying that everything will be sorted out at the appropriate time, what other hurdles, in your opinion, must be overcome so that the project is carried out within the desired timeframe? Is there any risk that it may be further delayed?

Ms. Liseanne Forand: As you indicated through your question, this is an extremely complex project, which brings together all sorts of interests, and these different interests will influence the industry's ability to move this project ahead. It is obvious that all throughout the project, there will always be difficult issues to resolve and interests to accommodate when finding solutions.

Let's talk about hurdles. It's obvious that the regulatory process is complex. In fact, we have a plan of cooperation which provides the procedure. It is not simple, but it's coordinated. We have set up an infrastructure based on the plan of cooperation to better share information and to better coordinate everything.

In addition, investment set out in the budget for the federal government will allow federal agencies to be better able to meet the demand, whether it be in the area of regulation, scientific capacity, environmental capacity, etc. We are trying to get organized in order to be ready and to avoid any difficulties which may arise.

These obstacles do not arise in the government alone. Obviously, in the end, what matters is the project profitability. It is up to the industry to determine that, and to move ahead. Up until now, the industry considers the project very profitable and will go ahead with it. Right now, the industry is committed to applying for the necessary permits in July, as agreed upon. Right now, there aren't any hurdles, but it's obvious that all the industrial partners in the project will make sure that costs do not exceed profits.

Mr. Serge Cardin: The agreements concluded with Aboriginal groups of course include economic considerations. However, we know that Aboriginal people are very environmentally aware. Do these agreements with Aboriginal people include environmental criteria, or have any environmental considerations been dealt with in their case? Do they go through the usual process?

Ms. Liseanne Forand: You are quite right in pointing out that Aboriginal groups are extremely concerned about environmental protection. They consider it extremely important. The territorial agreements we have with them establish decision-making institutions or mechanisms, rather than set standards or guidelines. At the end of the day, it is through their regulatory and approval institutions that they can ensure compliance with environmental standards, which are very important to them. This will therefore be incorporated into the process. They set standards not in advance but along the way, through the regulatory process.

Moreover, with the Government of Canada and the government of the Northwest Territories, they are involved in developing a system of protected areas, areas within their own territories that are protected. They will also want to continue working on these plans to ensure that sensitive areas, important areas—be they important from a cultural or environmental standpoint—are protected. This is a process that runs parallel to the pipeline development process. A five-year action plan has been formulated in consultation with groups to parallel the pipeline project and ensure that environmental protection is ensured, even beyond project boundaries.

À (1035)

[English]

The Vice-Chair (Ms. Nancy Karetak-Lindell): Mr. Harvey.

[Translation]

Hon. André Harvey: Ms. Forand and Ms. Fortier, good morning.

What is the status of negotiations with the U.S. with respect to pipeline construction? Where do they stand? What are their main concerns? Are they focusing solely on economic concerns? Is there an urgent resources supply issue? In what spirit are negotiations moving forward?

Ms. Liseanne Forand: You must be alluding to the potential pipeline project that would link Alaska, which is known as the Alaska Highway Pipeline Project. At present, discussions are taking place entirely within the United States, within U.S. jurisdiction. There are some tax conditions that the U.S. industry would like to establish to make the project profitable. This is what they have revealed on the basis of work and feasibility studies conducted so far. These tax provisions were included in several versions of a federal energy bill introduced in the U.S. The bill has not yet been adopted, and has been amended several times. At present, there is no real project to build a pipeline linking Prudhoe Bay to a pipeline system further south.

As you know, we have an agreement and treaty with the U.S. to build a pipeline like this. It is the Northern Pipeline Act and the Northern Pipeline Agreement, which is still in force. One of the industrial, commercial or other parties involved in the projectis closely involved with the treaty and the provisions established at the time of its conclusion.

However, other interests in the U.S. would prefer an approach different from that in the act, the agreement and in the treaty. However, this is still hypothetical because there is no project in existence as such.

Two bids were presented to the government of Alaska to initiate discussions with Alaska on potential tax considerations in order to prepare a licence application to build a pipeline. This is still at the very preliminary stage.

So, the Government of Canada is doing the studies needed to compare the profits we would receive under the treaty and the existing arrangements, and the potential profits if another arrangement were concluded, in order to equip the Government of Canada and other...

Hon. André Harvey: Is a new energy policy being defined in the United States?

Mme Liseanne Forand: In the United States? Yes. The pipeline provisions are included in a massive energy policy, which might become too controversial to be accepted.

À (1040)

Hon. André Harvey: Are you working together with the National Energy Board for the whole approval process? It's supposed to be a complex process. Are you working with the NEB to try to rationalize the approval procedure?

Ms. Liseanne Forand: The National Energy Board was one of the regulatory agencies to sign the cooperation plan. It is therefore part of the cooperation plan and the whole federal process to align, fit and harmonize all project requirements, while still respecting the Board's jurisdiction, needs and authority.

There is division on one point. You might be thinking of the fact that, according to some people, it would be preferable to have a single process for environmental assessment, regulation and regulatory review. When the cooperation plan was developed, it was decided to establish an environmental assessment process which would satisfy everyone, both the National Energy Board and the other regulatory agencies, and then a regulatory review process. This decision was made after extensive discussion in keeping with the interests of all regulatory agencies at the table, and according to the cooperation plan, this procedure can be very effective.

Hon. André Harvey: Thank you, Ms. Forand.

[English]

The Vice-Chair (Ms. Nancy Karetak-Lindell): Okay, we'll start our second round of three minutes with Mr. Chatters.

Yes, Mr. Strahl.

Mr. Chuck Strahl (Fraser Valley, CPC): I have just a couple of questions. On the Deh Cho First Nations, it does seem to me, just potentially, that this timeline of 18 months to review the process and six months later to begin construction seems pretty optimistic if there's no agreement in principle in place with the Deh Cho at this time.

Of course, I have no idea what the interim resource development agreement binds either party to. Is there a commitment in there from the government or the Deh Cho that the project can go ahead? What's in the agreement to give you the confidence to say that those kinds of timelines could be met? Normally, without at least an AIP in place, people are pretty reluctant to see things go ahead.

Ms. Liseanne Forand: There's no question that the absence of a land claims agreement with the Deh Cho injects additional uncertainty into the project. Both agreements are important, really. The interim measures agreement, as I mentioned earlier, is the one that gives the Deh Cho the opportunity to participate in the regulatory process--and that's really critical because that's where the decisions will be made.

The interim resource development agreement is slightly different in that what it does is pave the way for oil and gas exploration and development to take place on Deh Cho lands in the absence of a land claims agreement. We are currently working with the Deh Cho to reach agreement on the conditions under which that exploration and development would take place.

As you're aware from looking at the map and from my presentation, there are areas of very rich potential in the Deh Cho lands, and the uncertainty surrounding the jurisdiction with respect to these lands has made it impossible for industry to be as active in those areas as it might otherwise have been. Through the IRDA, the interim resource development agreement, we're seeking to work with the Deh Cho to put in place some conditions in advance of a land claims agreement having to do with benefits, with their involvement, with public consultations, these sorts of things.

What needs to be done on the pipeline for it to be able to proceed well is for those sorts of agreements to be possible--agreements between the Deh Cho First Nations and the producers on access and benefits--as well as having the Deh Cho participate fully in the environmental impact assessment process and the regulatory process.

Mr. Chuck Strahl: But my question, though, is, what stage is this all at? If the resource companies are reluctant to do their drilling, that means they're not convinced it's going to happen, at least not yet, yet both for the amount of natural gas that might be found there and for the viability of the whole project--the location of pipelines and stuff--all of this is pretty critical.

You use words like “pave the way” and “it's looking good”, but if the industries are not in there, it means they're not confident yet that the deal is going to be done; they're not poking holes in the ground and waiting.

What stage are we at? I'm not sure. This 18 months and then six months to construction sounds like the next election campaign is going to feature another northern pipeline deal, but I don't think so, unless there's more to this than meets the eye. It seems to me that this is the bottleneck, perhaps.

À (1045)

Ms. Liseanne Forand: We are currently in discussions with the Deh Cho First Nations. When the Minister was in Yellowknife about a month ago, he met with the grand chief and with their negotiator. There was very positive momentum in that discussion on both the cooperation plan and the resource development fronts. There was momentum with respect to sitting down and talking to all of the participants in the cooperation plan on the pipeline project to identify any issues and concerns that the DCFN have with that project, and to find ways of addressing them that would be acceptable to both the cooperation plan signatories and the DCFN.

There was momentum to look at the concerns they might have with respect to resource development as well. We have a working group that will be meeting to review those concerns with them with a view to moving forward. The grand chief said to the minister that they were anxious to move ahead on both fronts.

Now, obviously, extensive discussions have to take place for the right conditions to be in place for that to happen. We're confident we can reach agreement with them on both of those fronts, but there's no question that discussions will be complex and difficult.

The Vice-Chair (Ms. Nancy Karetak-Lindell): I know we all want to ask that question.

Mr. Telegdi.

Hon. Andrew Telegdi: Thank you.

I'm just trying to put this in perspective. The area you said has approximately 70 trillion cubic feet of natural gas. Usage in the U.S. and Canada is something like 25 trillion, so we're looking at a little over a two-year supply if you use that framework. I think Mr. Chatters asked this. Do you have any idea what kind of resources we have of gas hydrates up the west coast of Vancouver Island?

Ms. Mimi Fortier (Director, Northern Oil and Gas, Department of Indian Affairs and Northern Development): You'd probably have to refer that to Natural Resources, if they have an estimate. It's a relatively new area, resource assessment.

Hon. Andrew Telegdi: The demand on natural gas is increasing all the time, and I just wanted to put in perspective what it represents.

Ms. Mimi Fortier: I don't have a perspective, but I know that in the north it is something that the Geological Survey of Canada is very interested in expanding their ability to assess. I think in the region we're looking at it is a huge potential that hasn't been measured yet.

Hon. Andrew Telegdi: Thank you.

The Vice-Chair (Ms. Nancy Karetak-Lindell): Thank you.

Mr. Cardin.

[Translation]

Mr. Serge Cardin: I would like to follow up on the comments made by my distinguished colleague, Mr. Harvey, about the discussions with the United States. Maybe I did not understand all the nuances and technicalities of what you said about the United States.

Are we not doing at the same time the work of the United States as far as this pipeline project is concerned? When the United States want to go south, there will already be some type of highway. There will already be a link. After building one lane and two lanes they can build a third one.

In other words, can we consider that this process could be used to meet a future request by the United States if they were to say that we have already accepted this link?

Mme Liseanne Forand: I would like to say two things about that. First, Alaska has implemented a policy and a statute saying that construction of a pipeline from Prudhoe Bay to the Beaufort Sea, what is called the over-the-top route, would not be allowed through licensing or otherwise. This has been forbidden. It would have been a submarine pipeline. The State of Alaska has prohibited the construction of such a pipeline. It cannot be built if one of the partners does not agree. That is now a factor, but it could always change later on.

The pipeline that would be built in the Mackenzie Valley is not as big as that mentioned by the business interests for Alaska. It is about half that size. The Mackenzie Valley pipeline would never be able to meet the requirements, the demand and the potential of the Prudhoe Bay deposits.

À (1050)

Mr. Serge Cardin: Earlier, I compared the pipeline to a one-lane, a two-lane or a three-lane highway. After the land has been acquired and the environmental analysis, studies and process will have been made and when all the land is set aside for the pipeline, if the pipeline is too small, it would be very easy to build another one twice as big next to it. Would the process change a lot at that point? No. The licences will already have been granted.

Ms. Liseanne Forand: Enlarging the existing pipeline or building a bigger one next to it would probably raise important issues for the native groups and the benefits they would want from such a pipeline. As for the environmental aspects, the cumulative effects study is quite important. It would make a big difference whether there were one, two or three pipelines. Other mines will be built in the meantime which might have affected the natural environment. It is impossible to predict what would happen in such a case.

Mr. Serge Cardin: Thank you.

[English]

The Vice-Chair (Ms. Nancy Karetak-Lindell): Do you have another question?

We have time for a next round. Mr. Chatters.

Mr. David Chatters: The government has allotted the $75 million you mentioned in your presentation—I believe the reference was “to help streamline the regulatory process”. Perhaps you could break that down and be a little more specific on what that $75 million will go towards.

Of course, before this project moves forward there is a huge requirement in the Northwest Territories for infrastructure to support this kind of project. Who is going to build that infrastructure, who is going to pay for it, and where is the money coming from for that side of it?

Ms. Liseanne Forand: The $75 million is over three years. That's roughly $25 million a year, although it is not going to be disbursed exactly that way. It is divided one-third and two-thirds, with one-third going to science-type work. That is science that federal departments and agencies will do in the public interest, so that for the environmental impact assessment process and the regulatory process the federal government and the governments all together and the boards have access to independent scientific research that is not done by the producers or other interested parties.

There is environmental science, fisheries science, etc., that will be done. It will also prepare for induced oil and gas exploration, which will require further regulation. It's not just the pipeline. If the pipeline is built, it will induce, as I think I have mentioned, a tremendous expansion of exploration. We have to be ready for that as well.

One-third of the funding would be used for science and the other two-thirds for capacity support. It includes seven federal agencies: the Canadian Environmental Assessment Agency, the NEB, Fisheries and Oceans, Indian and Northern Affairs, Natural Resources Canada, Transport Canada, and one other that I'm sure is very important. This is to ensure that all the federal regulatory responsibilities can be discharged in a timely way.

As I've mentioned, the volume of the 3,400 permits involved here will put pressure on the federal system that it has not had to withstand and is not equipped to deal with. That's what the $75 million is for. There will be announcements, as spending details are approved by the Treasury Board, about exactly what these resources are going for.

Let me give a couple of details on infrastructure. There is community-level infrastructure, and there is larger infrastructure. Part of the funding Indian and Northern Affairs is receiving for its capacity is going to be used to support the communities to put in place a program that will provide resources and funding to individual communities up and down the valley so that they can prepare for negotiations with the producers, can prepare for the environmental impact review process, and can fully participate in those processes. That is something that has been drawn to our attention: that if they are really to participate in the decision-making, they need to have the ability to do so. Part of the funding will be used for that.

With respect to larger-scale infrastructure, over the next five years some $190 million is going across northern Canada through Infrastructure Canada programs. Some of those programs are going to help with the pipeline in the Northwest Territories. They have put forward a proposal called Roads to Resources, which will help particularly the transportation infrastructure to support the pipeline project.

À (1055)

Mr. David Chatters: For $190 million, you don't build much road now in that kind of territory.

Ms. Liseanne Forand: As well, Indian and Northern Affairs has just approved a contribution, for example, to the construction of a bridge over the Mackenzie River. There are a number of initiatives. We also facilitated some additional improvements to the winter roads system. So there is a variety of projects; it's quite active these days in the Northwest Territories.

The Vice-Chair (Ms. Nancy Karetak-Lindell): I think that wraps up this morning.

I want to thank you for your very informative presentation and also for your answers, which were very straightforward.

I just want to inform the members here what our agenda will be like for next week. On Tuesday, April 27, we have a meeting on the main estimates for 2004-05 for Natural Resources. The notice of the meeting will be sent out very soon. On Thursday, April 29, we will have a discussion on Bill C-31.

The committee is working on the representatives right now for the first nations. Bill C-31 is an act to give effect to the land claims and self-government agreement among the Tlicho, in the Northwest Territories, and to make related amendments to the Mackenzie Valley Resource Management Act, which I think is relevant to what we discussed this morning. A notice of that meeting will also be sent out soon.

Thank you all. That brings an end to this meeting.