NRGO Committee Meeting

STANDING COMMITTEE ON NATURAL RESOURCES AND GOVERNMENT OPERATIONS

COMITÉ PERMANENT DES RESSOURCES NATURELLES ET DES OPÉRATIONS GOUVERNEMENTALES

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, May 28, 1998

• 0835

[English]

The Chairman (Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)): Good morning, everyone. It's my pleasure to call to order this Thursday, May 28 meeting of the Standing Committee on Natural Resources and Government Operations.

We're pleased to have with us again today the Honourable Ralph Goodale, Minister of Natural Resources, who is appearing along with a number of his senior officials, including the deputy minister, Jean McCloskey, to discuss with us and talk to us about climate change. The committee did some work on this prior to the Kyoto conference, and we wish to go to phase two of that study, so the minister was quite willing to come to help us kick off this next stage.

With that, Mr. Goodale, we invite you to open with some remarks. I understand you need to leave about 9:50. I'm sure my colleagues will be more than happy to accommodate you in that way.

The Honourable Ralph E. Goodale (Minister of Natural Resources and Minister responsible for the Canadian Wheat Board, Lib.): Thank you very much, Mr. Chairman. It's a pleasure to appear before you again this time, especially on the topic of climate change.

For the record, I would like to introduce my deputy minister, Jean McCloskey; Mr. Marc Denis Everell, assistant deputy minister for the earth sciences sector of the department; Sue Kirby, acting assistant deputy minister for the energy sector; Mr. Yvan Hardy, assistant deputy minister, Canadian Forest Service; and Ms. Linda Keen, assistant deputy minister for the minerals and metals sector. Certainly, if it's appropriate, from time to time I would invite the officials to participate in our discussions this morning as well.

As you will know from the government's official response to this committee's recent report on climate change, our approach to tackling this hugely important and complex issue is largely consistent with the type of approach you yourselves have suggested. Climate change is truly a global issue. Greenhouse gas emissions do not respect any national boundaries, and their impact on the climate is gradual, creeping toward serious consequences almost imperceptibly over time. But now is the time to take the appropriate action to forestall those consequences. Like buying an insurance policy, you cannot get the protection you should have had after the fact.

For Canada, the arithmetic of climate change and our national circumstances are especially challenging. In global terms, it's estimated that we account for only 2% or 3% of the world's emissions. But on a per capita basis, we are among the highest emitters on earth. That should really be no surprise. We are a northern nation with sometimes brutal weather, and we use more energy for heating and cooling. We are a huge nation, the second-largest land mass in the world, and we use more energy to transport people and goods.

We have built a high standard of living on the strength of energy-intensive industries and natural resource exports. Our population, our economy, and our trade are all growing, as we of course would want them to. But hand in hand with that growth comes more demand, more energy consumption, and more greenhouse gases. So we have a difficult circle to square.

Last December in Kyoto, in concert with 160 other nations, Canada agreed to an international protocol on climate change, which should result in developed countries cutting their greenhouse gas emissions by more than 5% on average below 1990 levels by the period between 2008 and 2012. Canada is committed to a specific target of a 6% reduction and so is Japan. The United States is committed to 7%, and the Europeans to 8%.

From a competitive point of view, our relative positioning would suggest that our Canadian target is very much in the ballpark with other major industrialized nations, especially the United States. But still our task and theirs is large.

• 0840

Compared to where Canada's greenhouse gas emissions could be expected to climb over the next ten to twelve years, under any realistic, business-as-usual scenario, we will need to reduce our emissions by about 20% to 25% to meet our Kyoto obligations. It won't be easy, but we must not fail.

This week, as you know, the environment commissioner published a report in which he expressed concerns about Canada's ability to reach its targets. It should be noted that for the most part, the commissioner's analysis related to that period of time after the Rio Earth Summit in 1992, and before the Kyoto conference in 1997. Events have moved on. The targets and timeframes have changed, the available tools are changing, public attitudes are changing, and momentum is building toward concrete action.

Since Kyoto, here in Canada a number of important steps have been taken. Within 48 hours after the Kyoto meeting concluded, Canada's first ministers agreed that climate change is an important global issue and Canada must do its part to address it; no region of the country should be called upon to bear an unreasonable burden; and all governments should work together in a collaborative effort on implementation. Within one week after Kyoto, the Government of Canada announced the specific allocation of the $ 60 million in incremental funding that was earmarked in the 1997 federal budget for further climate change action.

Early in the new year, the Prime Minister established the structure within the federal government to provide the necessary post-Kyoto management of the file. It involves an all-encompassing approach under the coordinated direction of the Department of Natural Resources and the Department of the Environment, supported by a specifically dedicated federal climate change secretariat. Within that structure, as Minister of Natural Resources and chair of the cabinet committee for the economic union, I've been assigned to lead on the domestic implementation of Canada's Kyoto commitments.

In February, our 1998 federal budget committed a further $ 150 million to a climate change action fund, which will support federal and federal-provincial implementation initiatives; secure the short-term foundation for longer term action; encourage early action and quick starts on a broad variety of fronts; and launch a public outreach program to better inform and engage Canadians.

From last December through March, Minister Stewart and I were constantly involved with our provincial and territorial counterparts, and with an extensive range of private sector stakeholders and non-governmental organizations, to collect their post-Kyoto analyses and advice. In April, we met with all provincial and territorial ministers of the environment and energy to respond to the collaborative mandate, which was assigned to all of us collectively by the first ministers.

We have agreement on the process for developing a national implementation strategy, including the support of an inclusive national climate change secretariat. We are establishing a series of representative, focused and results-oriented issues tables, to zero in on key elements of our climate change challenge. Eight initial work areas for these issues tables have been identified. They include modelling and analysis, transportation, electricity, international emissions trading, technology, carbon sinks, credit for early action, and public information and outreach. At least four of these tables will be up and running in June, and the others will follow shortly thereafter.

On credit for early action, we have agreement that a system should be identified by early 1999 to properly and tangibly recognize and credit prompt action to reduce greenhouse gas emissions. The private sector wants and deserves a clear signal that there are advantages and no disadvantages in moving quickly. We're also looking at how appropriate credit might be given for measurable verifiable actions already taken by those who have been particularly proactive.

On public outreach, there is complete agreement that all Canadians need to understand clearly how climate change and the action necessary to address climate change will affect their lives. Individual citizens need to be plugged into the whole strategy, as consumers, homeowners, homemakers, drivers, workers, employees, taxpayers and voters. This file isn't the exclusive purview of scientists or politicians. All Canadians must buy into the solution.

• 0845

To this end, the National Round Table on the Economy and the Environment has done some important preparatory analysis and the first phase of a concerted public outreach campaign will begin likely within a couple of weeks.

I invite you to examine the views expressed by the environment commissioner, particularly in chapter 3 of his most recent report. I think you will find that what we have been doing in the six months since Kyoto is right on the mark with what he recommended. We moved in that direction before he published his report.

Let me also respond to some criticism from other quarters about the federal government being too consultative or collaborative in its approach.

First, these complaints directly contradict the advice of the environment commissioner, who explicitly calls upon the Government of Canada to pursue all means by which to engage other levels of government, the private sector, NGOs, and individual Canadians.

Second, it is commonly agreed that climate change is a shared responsibility. A strictly made-in-Ottawa approach or made-in-government approach is unlikely to be effective and would certainly be the most costly. We want to be as open, inclusive, and transparent as humanly possible. The broader the base of participation, the better will be the results.

But also consistent with the environment commissioner's advice, the Government of Canada will fully discharge its obligation to lead. We are determined to demonstrate that strong environmental policy and strong economic policy are not mutually exclusive. They are not the enemies of each other. We can, indeed we must, have both.

In the weeks and months ahead, I can see at least five areas of prime importance on the domestic implementation front that will receive heavy attention.

First, the Government of Canada itself is a big operation, and consequently, a big user of energy. A couple of years ago, we made the commitment to reduce our greenhouse gas emissions from federal operations to 20% below 1990 levels and to reach that goal by 2005. Thus far, we are in fact ahead of schedule. If we manage to maintain our current pace, by 2005, the federal government will get to about 27% below 1990 levels. We're making progress through energy retrofits of federal buildings, better boiler systems, green power procurements, and better vehicle fleet management. But we're not going to rest on any laurels, we intend to pick up our own pace notwithstanding being ahead of target.

Second, we need to broaden, deepen, and strengthen the voluntary initiatives that are being undertaken in the private sector. To date, these efforts have demonstrated some success, but not yet enough. I've already challenged business and industry leaders to accelerate their efforts to really show what they can accomplish, register ambitious commitments, implement effective action plans, and report their results in a clear and verifiable manner. A system of credits for early action, which I mentioned earlier, should help to provide some additional encouragement.

Third, in every aspect of our economy, we need to enhance energy conservation and efficiency. This will require an astute combination of better public information, promotion, incentives, regulations, and government leadership by example.

Fourth, we must diversify our Canadian sources of energy by increasing the availability and effective use of alternative fuels and renewable power from solar, wind, hydro, earth, and bio-energy, and promoting co-generation and district energy systems.

Fifth, we need a powerful focus upon science and technology to develop new Canadian solutions to climate change and deploy that new technology in the commercial marketplace quickly.

Internationally, we will be pursuing the effective implementation of the flexibility tools that we fought for and won in Kyoto: emissions trading, joint implementation projects with credit among developed countries, the clean development mechanism in relation to the developing world, and the proper inclusion and calculation of carbon sinks.

• 0850

We'll also be working hard, in concert with many other like-minded countries, to achieve the more effective engagement of developing nations in the global campaign against climate change.

I'm pleased to note that many of these topics are included in the order of reference, which is now before this committee. I sincerely look forward to what you will have to say by way of good, solid policy advice. I hope that advice will help chart a course toward converting the climate change challenge—this is often seen as a big problem to overcome—into more of an opportunity to be seized and to position Canada on the leading edge of the new global energy ethic. It will be an opportunity for new business development, new jobs, new technological sophistication, and new export potential.

Let me conclude with some early examples of determined innovative thinking and action that may help to show in a tangible way what we can seek to accomplish.

Suncor is investing in wind power procurement and is testing an emissions trading contract with an American firm.

Ontario Hydro is also engaged in emissions trading. The Government of Ontario and the Government of British Columbia are sponsoring emissions-trading pilot projects.

Petro-Canada is investing in ethanol with the Iogen corporation.

PanCanadian and Shell are investing in the sequestration of carbon dioxide.

Ford and Daimler-Benz are investing big time in the Ballard fuel cell.

The Government of Alberta is investing in new climate change research.

Saskatchewan is investing in cleaner coal processes and fostering new co-generation projects.

Canadian vehicle manufacturers are promoting a new energy conservation guide to enhance fuel efficiency.

Innovative companies like Rose Technologies and MCW Services are investing in building retrofits and are growing rapidly.

Conserval Engineering is exporting its solar wall heating technology to Japan.

The Bentall group is constructing new smart commercial buildings with 50% energy savings.

A Lethbridge entrepreneur has perfected a natural gas cargo motorcycle to go after a billion-dollar new market in Southeast Asia.

A district heating system at Oujé-Bougoumou in northern Quebec, fueled by biomass waste, is providing cheaper local energy and a whole range of new local economic development opportunities.

Weyerhaeuser is investing $ 315 million in its Prince Albert pulp and paper mill, 725 person years of employment, and an 80% reduction in its consumption of natural gas.

The list goes on, but I think that's enough for now. Some of these initiatives were aided by strategic federal investments or incentives, others were entirely privately generated, but all of them bear some common characteristics: vision and innovation, an ability to think outside the box and capture a sense of the future, an astute marriage between economic and environmental priorities, and the will to thrive in the new millennium.

These are the ingredients of a successful strategy to deal with climate change, honour our global obligations and in the end, win for Canada.

Thank you, Mr. Chair.

The Chairman: Thank you, Mr. Minister.

We appreciate your remarks and your charge to us to assist in whatever way we can in the development of Canada's response to this challenge.

We'll move to questions. Dave has allowed Yvon to start because Yvon's got a meeting to go to at nine o'clock.

You'll be back, Yvon, after your short meeting?

[Translation]

Mr. Yvon Godin (Acadie—Bathurst, NDP): Oui.

The Commissioner of the Environment and Sustainable Development says he is deeply concerned and worried about the environmental performance of the federal government. You have launched a new round of national consultations on the climate change issue. The NDP certainly supports those consultations, but shouldn't we act now?

• 0855

Why do we need further consultations after having had such consultations for several years? Other countries have their strategies already in place. When will you undertake some concrete steps? Can the minister give me precise deadlines?

[English]

Mr. Ralph Goodale: I think there are several dimensions to the answer, Monsieur Godin.

First of all, as I indicated in my remarks with a fairly extensive list of specific events over the course of the last short while, action is already being implemented; action is already taking shape.

In broad terms, if you look back to that period between 1992 and 1997, the initiatives launched by the Government of Canada in response to Rio, the initiatives taken by a number of the provinces in response to Rio, and the initiatives the private sector were encouraged to take in response to Rio have had, we estimate, the effect of saving approximately 66 million tonnes of emissions from being released into the atmosphere.

So there has been action and there has been progress—as I readily conceded in my remarks, not yet enough progress, but the situation would be some 66 million tonnes more severe today had those actions not been taken.

I provided some illustrations of the kinds of actions that were either taken before Kyoto or after Kyoto in terms of the specific conduct of various departments of government, various levels of government, various companies in the private sector. So the implementation process is very much under way and ongoing.

What is important for us to do is to make that implementation process far more comprehensive, far more innovative, and far more successful in terms of the magnitude of what it accomplishes. That was really the principal purpose behind the establishment of our climate change action fund in the last federal budget, a total of $ 150 million, $ 50 million a year for each of the next three fiscal years. That money will be used to support these necessary consultative and collaborative processes as between governments, and as between governments and the private sector. It will be used to put the solid foundation in place, in the short term, to support the longer-term action that will be required out into the future five to ten years.

The climate change action fund will also be used to identify and prompt early actions that don't need any further analysis, that can be launched almost immediately. I suspect many of those will be in the field of technology development and technology diffusion, and I expect that you will see some of those specific initiatives getting up and running during the course of this summer of 1998.

The climate change action fund will also help in the process of public outreach. As the environment commissioner recommended, that is a critical ingredient.

So the pieces are very much coming together, not only to facilitate consultation and inclusiveness, not only to build the strong analytical foundation that's needed for future action, but to accelerate the rate at which the ball is already rolling on a whole variety of fronts, where action is either already under way and we need to speed it up or where new action is potentially possible, where that's ready to go but just hasn't started yet.

• 0900

Just to put the dollars in context—and I'll conclude on this point—within my own department the ongoing A-base funding that we provide year over year in relation to climate change is in the order of $ 80 million annually. In the budget of 1997, that amount was increased to $ 100 million annually, and the climate change action fund is on top of that, so that's a further $ 50 million per year, although that's not exclusively within NRCan; that allocation is between Natural Resources Canada and Environment Canada.

If you go beyond that to add in the initiatives that are being taken by other departments, particularly by Environment Canada, there's a base funding commitment at the moment by the Government of Canada that would exceed $ 200 million. That has been focused on the voluntary initiatives, energy conservation, renewables, alternative fuel sources, co-generation, research, science and technology, all of those things I mentioned in my remarks, which are very tangible examples of action already under way.

The Chairman: Thank you.

Maybe when we come back to you, Yvon, you can try again.

Mr. Cullen, then Dave Chatters.

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you very much, Mr. Chairman.

Thank you, Minister. I guess congratulations are in order with respect to you taking on the Kyoto file. I'm sure it'll be a very challenging file, but I know we'll be up to it. I'd just like to echo the comments from the chairman: if is there anything we as a committee can do to help you in your mission, I'm sure we're willing and able to do that.

Minister, I'd like to talk briefly about two topics. One is the whole question of economic instruments and emissions trading, which we're going to be studying later on, I think, so I'm not expecting all the solutions here today. But could you perhaps just paint with a broad brush the role for economic instruments and emissions trading?

With respect to emissions trading, I talked to some executives in the natural resources sector and asked them how they see emissions trading working. They said they really didn't know because they don't have much experience with it domestically. And on an international level, when you talk about trading credits, etc., it's a bit of a puzzle for them, I guess.

Perhaps some companies are more adverse to this than others, but I'm pleased to see that there are a lot of pilot projects going on. How do you see it working at the domestic and international levels as part of the whole puzzle as you move forward to meeting these targets?

Mr. Ralph Goodale: In the broadest terms, Mr. Cullen, the Kyoto protocol says that countries are supposed to reach their targets primarily through concrete domestic measures and that international flexibility tools, like emissions trading, joint implementation and the clean development mechanism, can be used in a supplementary manner to assist countries to reach their goals and to do so in a way that is the most cost effective.

There's a tendency, I think, on the part of some, to dismiss these flexibility tools as loopholes or devices to get around honouring your obligations, and they are not that. They are devices that will allow investment dollars to flow to those areas of greenhouse gas emissions or those geographic areas around the world where you can get the biggest bang for your buck.

If you could invest a dollar in Canada and have a 0.1% impact on greenhouse gases or invest that same dollar in China or some other part of the world that has a bigger challenge to accomplish and make a 2% difference in greenhouse gas emissions, obviously you get more impact with respect to solving the global problem if you make the investment where it is most cost effective. That's what these tools are all about.

• 0905

There is some global experience with tools of this kind. A few years ago, the United States developed a system dealing with sulphur emissions. In fact, a very vigorous market developed on the Chicago commodity exchange in regard to trade in these sulphur permits.

There are obviously some differences between greenhouse gases and the situation with respect to sulphur, not the least of which is just the order of magnitude that's involved, but there is some experience.

There is the testing being done by British Columbia and by Ontario and in the private sector by Suncor and Ontario Hydro. All of that will provide very useful experience. The World Bank is working assiduously on a whole range of models, as are a number of other international financial institutions. We have already had a number of meetings with other like-minded countries who are very interested in these tools, most especially the United States, but others as well.

The broad framework for how we would like to see emissions trading work was hammered together in Kyoto in the context of the discussion amongst a number of countries, including Canada. Both Minister Stewart and I were involved in those discussions. Everybody agrees that a lot more international brainpower has to be brought to bear on this challenge so that we get it right, in a way that works for Canada and in a way that works for the international community, so that we get an economic instrument that is market-based and allows for the greatest cost efficiency to be achieved in the challenge of bringing down the gases.

In that regard, as you mentioned, the committee is going to be looking at issues relating to emissions trading. For expert technical testimony, you may wish to give an invitation to some of the international experts who are working up the various models. For example, the World Bank, based in Washington, might have some useful concepts to put before the committee.

And there are a number of very innovative and experienced NGOs based in Washington that have done a considerable amount of work and are in fact acting as the clearing house for transactions such as the one Suncor has entered into. We could certainly provide the committee with the information about the key contact people within those NGOs who may be useful to you.

At the next conference of the parties on climate change, which will take place this fall in Buenos Aires, we hope—and this is the plan—that the world will make considerable progress in nailing into place the rules that will facilitate emissions trading. Certainly, for a number of countries like Canada and the United States, the earlier we get on with this the better and the earlier we will begin to make faster and better progress in dealing with climate change.

The Chairman: Thank you, Mr. Cullen.

We'll come back to you if we have time, but we want to make sure everybody gets their questions in.

Dave, then Carmen, Jocelyne and Benoît.

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

Welcome to the committee, Mr. Minister. I have a couple of questions. First, I have a perhaps fairly straightforward question on the ratification of the Kyoto deal. I understand that we did sign some sort of ratification, but others say that the ratification we signed doesn't yet actually legally bind us to our commitment. The United States has yet to sign the ratification. What is the situation there? What is our position now?

Mr. Ralph Goodale: Mr. Chatters, there are several steps that each country must pursue in relation to these international agreements.

First of all, of course, there is the negotiating period and the formal arrival at agreement, and that is what took place in Kyoto. Then, following the achievement of an agreement, the formal text is open for signature for a certain specified period of time.

• 0910

In the case of the Kyoto protocol, that signature window was between March 1998 and March 1999. Canada has signed the document, which is simply the reconfirmation that this piece of paper truly and accurately reflects what was agreed upon in Kyoto and that Canada is committing itself to avoid conduct that would detract from that agreement.

As of the end of April or the early part of March, 34 countries had signed, and more are signing all the time during this signature window period.

The next stage in the process is formal ratification, and that's a different process in every country. In Canada, this is a responsibility of the Government of Canada. In the United States, it is a federal government responsibility, but requires, because it's an international treaty, the endorsement of the United States Senate. Other countries have other methodologies by which they accomplish the ratification of international treaties.

But that is now the next step in the process. And then, under the terms of the protocol, once 55 countries have signed and ratified, and if their cumulative emissions account for 55% of the total, Kyoto clicks into place as a legally binding instrument. But there's a threshold that has to be achieved before it becomes legally binding. Those are the technical steps.

Mr. David Chatters: Will your government ratify the agreement before the U.S. does?

Mr. Ralph Goodale: Ratification, as I said, is a responsibility of the Government of Canada, and we will assume and act upon that responsibility when we believe the time is appropriate to do so.

There are a variety of factors that would influence timing. One of them would be the progress made with respect to our implementation plan. Another would be to watch carefully what our international competitors and trading partners are doing. The key thing there is to watch closely what they're doing, not just what they're saying. There are examples in the past, for example, where the United States has never ratified a particular treaty but has in fact implemented its effect—and vice versa, where they've ratified but not implemented. It's the conduct here that matters.

And one of the things, Mr. Chatters, that I think will be very instructive is the budget process that the United States is now going through. President Clinton has before the Congress $ 10 billion U.S. in initiatives related to climate change. There is a variety of incentives. There are some heavy investments in research and development and some matters related to electricity restructuring and so forth. If only a fraction of those actually get—

Mr. David Chatters: There are some other areas that I want to explore before my time runs out and—

Mr. Ralph Goodale: Okay. I'd be happy to come back to the point, Mr. Chatters, but we'll leave it there.

Mr. David Chatters: It was a pretty straight question and obviously you're not going to answer it.

The other area that I wanted to pursue is in relation to the Alberta energy minister's remarks at the CERI conference in Calgary, wherein he expressed the opinion that the Alberta government wasn't about to support or to get involved in this process until such time as the federal government was able to produce a clear plan—a map, if you will—including the costs and the impacts of this process on the Canadian economy and on the Canadian people.

• 0915

Certainly I think even everyone in this room would like very much to know when this is all over how much more they're going to pay to heat their homes and drive their cars, and all of the things that you do in your everyday life. At this point I don't think anybody has any indication of what that's going to do except for a couple of small initiatives the government has taken, and they are quite frightening.

The purchase of the wind power in Alberta tripled the going rate, for example. You gave a substantial grant to an alternative energy power plant not two miles from my house that is proceeding to burn peat bogs in the production of power. I think everyone knows—certainly your deputy minister in earth sciences knows—that peat bogs are one of the greatest carbon sinks in the world, and here this government's giving a grant to burn it and to destroy it. So I have some concerns about that.

You talked about a public outreach campaign that's going to start in a couple of weeks and you talked about transparency. Yet at this point in time no one has a clue what the impact is going to be on their lives. I'd like to know when you will come up with such a plan, such a road map to achieve the goal you want to achieve so that Canadians know what they're going to pay for it.

Mr. Ralph Goodale: Mr. Chatters, there obviously is further work that needs to be done in regard to the issues you raise, but that's not to say no work has been done to date. In fact, in that period leading up to Kyoto a variety of analysts were put to work modelling what the impact would be on the environment and on the economy of a series of different projected Kyoto outcomes. There was a very useful analysis of all of that work put together by the Conference Board of Canada where they summarized what all of the various projections and forecasters were saying, took a look at their assumptions, and came up with an amalgam, if you will, of all of that private sector and public sector input. So that raw material is very much available and useful.

Part of the reason we have established a collaborative process with the provinces and part of the reason we have our climate change action fund is to help in the ongoing challenge of putting more precision and definition around all of these issues.

The issue, though, is one where the work will always be a work in progress, because the challenges involved here are so large and so complex and so interrelated. But it's our hope and determination that with the cooperation of provinces and others, and certainly the private sector, we can, together as Canadians, assemble a comprehensive implementation plan that will let us get to where we need to be in terms of our environmental commitments and do so in a manner that is equally successful from an economic point of view.

There are some people who would argue that you cannot square this circle. Our objective is to demonstrate that you can and that at the end of the day we can have sound environmental policy and sound economic policy that serves all Canadians well and positions us very competitively on the global basis.

Mr. David Chatters: When will that implementation plan be available to Canadians?

Mr. Ralph Goodale: The timeframe that was discussed and agreed to among federal and provincial ministers was a period between now and the end of 1999. And as I indicated in my remarks, a lot of the work that was in effect agreed to or commissioned by the federal or provincial ministers is already under way. Several of the issue tables are now just about to be launched and all of that will be input into the process.

• 0920

Mr. David Chatters: Thank you, Mr. Chairman. I'm not a lot wiser, but my time has run out.

The Chairman: Thank you very much, Dave.

We'll go to Carmen Provenzano and then Jocelyne.

Mr. Carmen Provenzano (Sault Ste. Marie, Lib.): I have two short questions, Mr. Chairman, for the minister.

I was interested to hear the list of companies and agencies that have taken the initiative. And you made the comment, Mr. Minister, that some of these were aided by federal strategic federal investment. I may not have heard, but it seems that absent from the list were the railways. The railways to me seem to be a very key component of the transportation sector, and I was wondering if there was a federal strategy that related to the national railways. The railways can play a key role in the reduction of greenhouse gas emissions. Do we have a strategy? Have the railways been involved? Have the railways started on an initiative of some kind?

Mr. Ralph Goodale: The list I mentioned in my remarks, Mr. Provenzano, was certainly not intended to be exhaustive or all-inclusive but purely illustrative. You're right, transportation overall is a big part of the issue here. Some of the statistics vary a bit, but generally speaking pretty close to 28% or 29% of overall emissions come from the consumption of energy in the transportation sector, so transport is a big part of the equation.

The Minister of Transport and his officials are very much involved in the issues table that were putting together on transportation. I would expect issues related to the railways, both in terms of their transcontinental operations and their more local urban commuter-types of operations, will figure very importantly in that analysis. At the appropriate time, Mr. Chairman, it might be useful to invite Mr. Collenette to meet with your committee on the initiatives specifically in relation to the transport sector. It's a big part of the equation.

Mr. Carmen Provenzano: Mr. Minister, did I hear you correctly to say that the Prime Minister has assumed direction for this file?

Mr. Ralph Goodale: Of course the Prime Minister is in charge of all directions of all files, because he's Prime Minister. What I said was after Kyoto, he established, as is his prerogative, the machinery of government to manage and lead on this file. There were several elements in the management structure that he put in place.

The Minister of the Environment and I have a joint responsibility. I am particularly responsible for domestic implementation. Mrs. Stewart is responsible for the establishment of overall environmental policy, for leading on our interventions in the international fora, such as that next COP-4 conference in Buenos Aires, and for crafting the public outreach initiatives.

Supporting us there is a coordinating committee of key deputy ministers, and that committee is co-chaired by my deputy, Mrs. McCloskey, and the Deputy Minister of Environment, Mr. Ian Glen. It involves key deputies right across the government, so the whole government is plugged into this process. There are working groups of assistant deputy ministers that support and work with the deputies providing the overall coordination among the departments, and the back-up support is the climate change secretariat.

• 0925

So the Prime Minister has put in place here a very substantial administrative and management structure—incidentally, virtually all of it within existing resources, meaning that we're not spending money out the door on unnecessary bureaucracy and overhead. We want to spend the dollars we have in the field, where they will do some good to bring down greenhouse gases. But the Prime Minister establishes the appropriate machinery of government as he sees fit, and this is the structure he has put together to manage this file to get us where we need to be by the year 2010.

Mr. Carmen Provenzano: The reason for my question, Mr. Minister, was whether that information you're giving the committee has been clearly communicated to the provinces and whether the provinces have followed suit that way, whether any of them have taken that kind of a step. It will eventually mean a lot to implementation, will it not?

Mr. Ralph Goodale: The mandate to federal, provincial, and territorial governments came from the first ministers when they met two days after the Kyoto conference concluded. The first ministers explicitly directed their ministers of energy and the environment to work together to lay out the game plan for how we're going to get to where we need to be in response to Kyoto.

Following that explicit mandate from the first ministers, we have within the federal government established our own way of organizing ourselves internally. I presume that provinces have done the same, but that really is their business. The mandate is clear from first ministers: how they organize themselves within themselves is really up to them. But what's most important from our point of view, federally, is to make sure there's good coordination.

That is why it was important at the meeting of energy and environment ministers in April in Toronto to get agreement on the national process, which we did, to get some specific timelines in place, and if I may for a moment, going back to Mr. Chatters' point, having an early system for crediting early action in place by the spring of 1999, having the full implementation plan in place before the end of 1999, making sure that early action is being encouraged and taken all the way along the road so we're not waiting until the end of 1999 before anything happens—obviously that is not the case, although that has sometimes been the interpretation in the media, and so forth—and to help bring all of that together.

We not only have our federal climate change secretariat within the Government of Canada; we have a national climate change secretariat that involves all of the players, federally, provincially and territorially. It's that coordination element, Mr. Provenzano, that is the most important from the federal point of view, and we have it.

The Chairman: Thank you very much, Carmen.

Madame Girard-Bujold and Jerry Pickard.

[Translation]

Ms. Jocelyne Girard-Bujold (Jonquière, BQ): Good morning, Mr. Minister. I want to ask you a few questions.

I'll start with the environment commissioner's report. In Chapter 3, paragraph 3.133 refers to our long-term commitment to address climate change. There is the U.S. framework-agreement on climate change, and you said earlier that the prime minister had taken all necessary steps. I'd like to know what measures have been taken to make sure that your strategy will meet the challenge of climate change as it relates to greenhouse effects and I'd also like to know whether this national strategy is designed to respond to the foreseen changes.

[English]

Mr. Ralph Goodale: Madame, I could take the time of the committee once again to run through the steps, but in my opening remarks I detailed, point by point, the steps that had been taken since Kyoto to move forward on the commitments we had made. There was the Kyoto conference itself in early December; immediately after that was the first ministers' meeting; after that was the earmarking of our initial $ 60 million in incremental funding; and following that was the Prime Minister's establishment of the necessary machinery of government, the management structure, the leadership structure I was referring to just now in answer to Mr. Provenzano.

• 0930

That was followed by the federal budget and the creation of the new climate change action fund for the specific purposes I detailed earlier. Throughout that whole period there were the meticulous consultations with the provinces, the territories, the non-governmental organizations and the private sector, to gain their collaboration as well as their input.

In April there was the federal-provincial-territorial meeting of ministers of the environment and energy, and all of the various agreements that came out of that meeting in Toronto on the collaborative process; the national implementation strategy; the national climate change secretariat; the issues tables; the action on credit for early action; the work that's being done on public outreach and the launching of the outreach program, and so forth. All of those things have transpired since Kyoto, and they are completely consistent with the recommendations of the environment commissioner.

Now that covers the first six months. There's obviously a way to go between now and the year 2010, and we will want to ensure that as we constantly move this file forward we have a way by which we can demonstrate to ourselves, Canadians, and the world that we are progressively moving forward and getting to where we need to be, on time.

[Translation]

Ms. Jocelyne Girard-Bujold: Mr. Minister, I'd like to know whether research and development are appropriate tools with regard to your commitment. We know that Canada currently is a world leader in R & D on microwave-generated energy. Could it be contemplated as a potential source for renewable energy? In terms of renewable energies, how does the worldwide concerted effort in the area of nuclear fusion fit in with Canada's strategy and how does the ITER Canada project currently stand?

[English]

Mr. Ralph Goodale: All forms of alternative fuels, renewable energy sources and areas like wind, solar, earth, biomass, and hydro will be important parts of the equation.

I had the opportunity two or three weeks ago to address the renewable energy technologies conference held in Montreal. I laid out in some detail the Canadian strategy post-Kyoto, with respect to alternative and renewable energy sources. Rather than taking the time of the committee now, I'd be happy to make a copy of those remarks and the supporting material available to the committee, which shows an exciting field of activity here. It's directly on the point, Madam, with your argument that this is a source of great export potential for Canada. It certainly can be that.

On the specific question about fusion, a number of years ago in the course of our program review we had to, as a government, prioritize our spending initiatives, and as a consequence of that take some difficult decisions. The decision was taken that while fusion is a very interesting and potentially very beneficial field of science, in relation to energy and other matters, its time line was so long, extending beyond 40 to 50 years as I understand the file, it would be more important in the short term, as our country struggled free of its deficit problems, to focus on other priorities that would have a payback and produce results in a shorter timeframe than 40 to 50 years into the future. So the decision was made at that time to withdraw from that particular field of study in relation to fusion.

• 0935

There may be a future time when it will be appropriate to return to that topic, but for the time being it was the government's judgment that other things, relatively speaking, were of greater priority in the fields of research, with a shorter payback period. Accordingly, we had to choose our priorities.

The Chairman: If we have time in the last few minutes, maybe we'll try to get short questions in from Dave, Roy, and Yvon.

Jerry Pickard.

Mr. Jerry Pickard (Kent—Essex, Lib.): Thank you very much, Mr. Chairman.

Mr. Minister, one of your major strengths is consultation with other colleagues in provincial governments, as well as consultations with people themselves. I've observed over the years that you take a great deal of effort in trying to get the viewpoints of others, and deal with them as well as can be done.

I'm wondering if you can give us a flavour of viewpoints you're getting from provincial governments, provincial ministers, with regard to the challenges they see they face, and possibly solutions they see may come about through those.

On industry, you gave us a really good list of industrial work that's moving in a positive direction, but I'm certain there are concerns industry has raised, and I'm also certain there are many positive challenges for industry that are coming about. I guess I would like to see, as a committee member, where you see the provinces fitting into this and the challenges they have, as well as industry and the challenges they have. I think that would be very important, in the role you're carrying on, to make sure our domestic policy goes ahead.

Mr. Ralph Goodale: Mr. Pickard, thank you very much for your remarks.

Mrs. Stewart and I have spent a lot of time, either in person or over the phone, with our provincial counterparts. The mood at the joint ministerial meeting in Toronto in April, where all the environment and energy ministers—federal, provincial, and territorial—were there around the same table was very positive and constructive. I sensed there was a real determination to work together, accomplish the results we need to achieve, and do so constructively and collaboratively.

That's not to say that every province has the same degree of enthusiasm for the issue. There are as many shades of opinion on that as there are provinces and territories.

One of the things Mrs. Stewart and I have asked the provinces and territories to do is give us, in written form, their assessment of the biggest challenges and obstacles they have to overcome, their assessment of their biggest potential opportunities, and their self-analysis of their own best practices, to see if many of those might be shared on an interprovincial kind of basis. When that information is fully submitted by the provinces, and assuming they don't have any objection, it might well be appropriate for us to share those details with your committee, because it is a very interesting collection of information.

• 0940

Not to betray any confidences, but clearly provinces like Quebec and Manitoba have great enthusiasm for the potential of hydro. Newfoundland shares that enthusiasm with considerable vigour. New Brunswick is interested in the potential that natural gas might have, as is Nova Scotia, of course.

Saskatchewan is interested in the potential of co-generation facilities. To give you one example, right on the border between Alberta and Saskatchewan at the City of Lloydminster is the bi-provincial heavy oil upgrader. There is now an agreement in place between the SaskPower Corporation on the Saskatchewan side and TransAlta Utilities on the Alberta side for a brand-new co-generation facility that will be efficient both in terms of cost and in terms of greenhouse gases and will have access to both of the provincial grids. This is a new innovation and will make a substantial contribution to solutions here.

Provinces like Ontario are very interested in and concerned about urban transit situations and congestion and air quality in major urban locations. They are also very interested in the commercial aspects of emissions trading and in the science and technology potential of the climate change file.

British Columbia shares many of those urban congestion concerns and is also very interested in issues related to sinks and forestry and carbide sequestration.

There is a broad variety of views among the provinces. Beyond that little flavour, Christine and I would try to assemble for you a compendium of what the provinces see as their biggest difficulties to overcome, the major opportunities they can seize to their advantage, and the best practices that they think have worked for them and could work for others if they were shared effectively interprovincially.

The Chairman: Thank you, Mr. Pickard.

With the minister's assistance, we'll try to get a couple of short questions in before he has to leave. Dave.

Mr. David Chatters: A quick question, Mr. Minister, on the proposed public outreach campaign that you say is ready to go in a couple of weeks. Is this campaign simply an effort to convince the public of the seriousness of the greenhouse gas, global warming, climate change problem, or is it in fact a campaign to outline to Canadians the depth of commitment they are expected to make to the effort to reduce greenhouse gases?

Mr. Ralph Goodale: Mr. Chatters, the content of ministerial responsibility for outreach, as I mentioned earlier, rests with Mrs. Stewart. I'm sure she would be happy to provide the committee with complete detail. But of necessity, as I think the environment commissioner would recommend, the effort has to be both of those things you referred to. It needs to provide information to Canadians about the seriousness of the issue, why it's an important issue, what it means to them in their daily lives, what steps can be taken to deal with it, and what are the implications of those steps.

A move has to be made to get Canadians totally engaged in this effort. Everybody I've heard from—all political parties, all levels of governments, NGOs, private sector, distinguished agencies like the National Round Table on Environment and the Economy, and so forth—have been unanimous in saying Canadians have to be plugged in to this whole process. They have to know what it's all about. They have to know the consequences, for them, of not taking action and the implications of taking action, and all of the various options as to what the action might be. It's intended to be fully open and informative and I hope Canadians will find it useful.

• 0945

The Chairman: Thank you, Mr. Chatters.

Mr. Cullen, a short one to you.

Mr. Roy Cullen: A short one. I'll try.

Mr. Ralph Goodale: The question or the answer has to be short?

The Chairman: I'm hoping you would interpret my comments to mean both.

Mr. Ralph Goodale: If the shoe fits.

Mr. Roy Cullen: I'll try to make it short, Minister, and I'm sure you'll be challenged to make your response short.

If we look at meeting domestic goals, it seems to me we talk sometimes in government of using the carrot and the stick. We have certain carrots in the sense of economic instruments. We touched on emissions trading. There are a whole host of others: market signals, tax policies, other public policies. We have voluntary measures—I know you're a supporter of that—and I'm pleased to see that you're talking about credits for work already done. I know a lot of companies in my riding will be pleased to see that, because they've been working very hard voluntarily to achieve certain performance improvements. Then we have enforcement for the laggards. Somewhere, you sit on top of all this and say the clock is ticking toward 2006.

How do we orchestrate this? How do we bring it together? What are the resources, what are the means to do that? Could you give us some perspectives on how you see all the pieces fitting and how they're going to be orchestrated into harmony?

Mr. Ralph Goodale: Mr. Cullen, it is a huge challenge, and it will take the dedicated attention of officials right across the Government of Canada in collaboration with officials at every other level of government in this country. That's why this working together theme is so very important. I'm sure that of all the departments within the Government of Canada it will be officials in Natural Resources Canada and in Environment Canada who will carry most of the freight in making sure that all of those elements in the puzzle you mentioned come together in the proper fashion.

Ultimately, at the political level it will be up to Mrs. Stewart and me to monitor this every step of the way. I can assure you that there isn't a day, or half a day, that goes by where there isn't climate change business to be transacted by the Minister of Natural Resources.

It will take a lot of personal time and effort, but it is a very worthwhile endeavour. And I can assure you that the work of this committee and other committees of Parliament can be very important as well, if you will, beyond the formal monitoring processes within the bureaucracy or within the Auditor General's office or whatever. I would think a periodic oversight by this committee and by your counterpart committee would be extremely useful to measure progress and to spur further action.

The Chairman: Yvon, you've got two minutes.

Mr. Yvon Godin: Thank you.

Next week in Bonn, what is Canada's position on the balance between the international and domestic reduction target? Is it 50-50, 60-40, 100%? Or do you agree with the Minister of the Environment, who said before the environment committee two weeks ago that Canada would probably be meeting 49% of all our reduction targets through the international effort?

Mr. Ralph Goodale: What Kyoto provides for is that the majority of effort—and I presume by that it means 50% plus one—must be accomplished through domestic measures and that the international flexibility tools are to be used in a supplementary fashion.

I think, Monsieur Godin, that it would be difficult at this moment in time to predict by the year 2010 whether we will have achieved our target by a combination of 75% domestic, 25% international, or 51-49, or 90-10. There's a lot of water yet to go under the bridge, but what Kyoto provides for is that the majority of the action needs to be of a domestic nature and the international flexibility tools are supplementary. I presume that is what is meant by the reference you made a moment ago to 49%.

• 0950

Hypothetically, that's permissible under the terms of Kyoto. Of course in Bonn and in Buenos Aires in the fall there will be further work done on fleshing out the rules for emissions trading.

The Chairman: Thank you, Mr. Goodale.

I know before the meeting began the minister asked if he could leave about ten minutes before the hour. I leave it in your hands, Mr. Minister, as you're the one who has the meeting. Mr. Bergeron was asking if he could ask a short question.

Mr. Ralph Goodale: One short one, but I do have to be on my way in the next three or four minutes.

The Chairman: A very short one, then.

[Translation]

Mr. Stéphane Bergeron (Verchères, BQ): Thank you, Mr. Minister. I know that you have already stated that you felt that the technology developed at the Tokamak facility was relevant, but that, since results could only be expected in the long term, i.e. 20 or 30 years from now, you would rather not carry on with your involvement.

We just received the report of the Commissioner of the Environment and Sustainable Development, which was critical of the federal government's strategy on climate change. Paragraph 3.46 states that "most greenhouse gases remain in the atmosphere for decades to centuries". Under such circumstances, isn't it appropriate to have a longer-term strategy for the development of renewable energies which will have an impact on climate change and on greenhouse gas emissions rather than a short-term strategy?

[English]

Mr. Ralph Goodale: We need, I believe, a combination of both immediate short-term measures and longer-term measures, and that's what our policy approach to this file is aimed toward. The challenge of dealing with greenhouse gases is indeed global and is indeed long term. We've made some progress over the last number of years. We have to make more and better progress faster, so we need a riveted attention on the next five to ten years. But as we put together those immediate action plans for the period just ahead, at the start of the next millennium, I think you're quite right to suggest we also need to have our eye on the ball fifteen and twenty years down the road—and perhaps further, to make sure that we're on a constantly downward projectory in terms of emissions and not setting ourselves up for some kind of a relapse a few years beyond 2010 or 2015.

The short answer is we need both. We need good, solid, effective short-term conduct that gets us where we need to be as per the terms of Kyoto, and we most definitely need to have that longer-term strategy for years further out in the new millennium.

[Translation]

Mr. Stéphane Bergeron: Mr. Minister, can we expect NRCan to reconsider its decision with regard to supporting a medium-term or a long-term fusion research program such as the Tokamak de Varennes?

[English]

Mr. Ralph Goodale: I certainly would not want to raise expectations in that regard. I understand how difficult that decision was. The Government of Canada over a period of time invested, if I remember correctly, $ 90 million in the Tokamak facility and a further $ 19 million to assist in the phase-down process after the difficult decision was made under program review to phase it down.

• 0955

Quite frankly, at this point on the planning horizon, as I see it at the moment, I don't see the potential for that decision in any way being altered. What I would be interested in pursuing, though, would be other alternatives by which the brain power and expertise of those very skilled people who have participated in that and other projects can be put to good and effective scientific advantage of Canada generally as we tackle this and a variety of other challenges.

The Chairman: Thank you. Thank you, Stéphane.

Mr. Minister, you've helped us greatly this morning. Thank you very much. Maybe this fall we could have you back as we pursue this matter.

Mr. Ralph Goodale: I'd be pleased to, Mr. Chairman.

The Chairman: On behalf of all colleagues, it was a good session, good questions.

The meeting is adjourned.