AANR Committee Meeting

37th PARLIAMENT, 1st SESSION

Standing Committee on Aboriginal Affairs, Northern Development and Natural Resources

EVIDENCE

CONTENTS

Tuesday, May 7, 2002

¹

1535

The Chair (Mr. Raymond Bonin (Nickel Belt, Lib.))

Mr. Dhaliwal

¹

1540

¹

1545

¹

1550

The Chair

Mr. David Chatters (Athabasca, Canadian Alliance)

Mr. Herb Dhaliwal

Mr. David Chatters

¹

1555

Mr. Herb Dhaliwal

Mr. David Chatters

Mr. Herb Dhaliwal

The Chair

Mr. Cardin

Mr. Herb Dhaliwal

º

1600

Mr. Peter Harrison (Deputy Minister, Department of Natural Resources)

Mr. Serge Cardin

Mr. Herb Dhaliwal

Mr. Serge Cardin

Mr. Herb Dhaliwal

Mr. Serge Cardin

Mr. Herb Dhaliwal

Mr. Dan Whelan (Director General, Energy Resources Branch, Energy Sector, Department of Natural Resources)

Mr. Serge Cardin

Mr. Dan Whelan

The Chair

Mr. Gerald Keddy (South Shore, PC)

º

1605

Mr. Herb Dhaliwal

Mr. Gerald Keddy

Mr. Herb Dhaliwal

Mr. Gerald Keddy

Mr. Herb Dhaliwal

Mr. Dan Whelan

º

1610

Mr. Gerald Keddy

Mr. Herb Dhaliwal

The Chair

Mr. Guy St-Julien (Abitibi—Baie-James—Nunavik, Lib.)

Mr. Herb Dhaliwal

Mr. Guy St-Julien

º

1615

The Chair

Mr. Guy St-Julien

Mr. Herb Dhaliwal

Mr. Guy St-Julien

Mr. Herb Dhaliwal

º

1620

The Chair

Mr. David Chatters

Mr. Herb Dhaliwal

Mr. David Chatters

Mr. Herb Dhaliwal

Mr. David Chatters

Mr. Herb Dhaliwal

º

1625

The Chair

Mr. Gérard Binet (Frontenac—Mégantic, Lib.)

Mr. Herb Dhaliwal

º

1630

The Chair

Mr. Serge Cardin

Mr. Herb Dhaliwal

Mr. David Oulton (Head, Climate Change Secretariat, Department of Natural Resources)

º

1635

Mr. Serge Cardin

Mr. Herb Dhaliwal

The Chair

Ms. Nancy Karetak-Lindell (Nunavut, Lib.)

Mr. Herb Dhaliwal

º

1640

Ms. Nancy Karetak-Lindell

Mr. Herb Dhaliwal

The Chair

Mr. Gerald Keddy

Mr. Herb Dhaliwal

º

1645

Mr. Larry Bagnell (Yukon, Lib.)

Mr. Herb Dhaliwal

º

1650

The Chair

Mr. Larry Bagnell

Mr. Herb Dhaliwal

The Chair

Mr. David Chatters

Mr. Herb Dhaliwal

Mr. Gérard Binet

º

1655

Mr. Herb Dhaliwal

Mr. Richard Haworth (Assistant Deputy Minister, Minerals and Metals Sector, Department of Natural Resources)

The Chair

Mr. Serge Cardin

»

1700

Mr. Herb Dhaliwal

The Chair

Mr. Larry Bagnell

Mr. Herb Dhaliwal

Mr. Larry Bagnell

The Chair

Mr. Gerald Keddy

»

1705

Mr. Herb Dhaliwal

The Chair

»

1710

Mr. Herb Dhaliwal

The Chair

Mr. David Chatters

The Chair

Mr. Herb Dhaliwal

The Chair

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CANADA

Standing Committee on Aboriginal Affairs, Northern Development and Natural Resources

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NUMBER 049

l

1st SESSION

l

37th PARLIAMENT

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EVIDENCE

Tuesday, May 7, 2002

[Recorded by Electronic Apparatus]

¹  (1535)  

[English]

    The Chair (Mr. Raymond Bonin (Nickel Belt, Lib.)): We will now call the meeting to order.

    Pursuant to the order of reference of the House dated February 27, 2001, we will deal with the main estimates for the fiscal year ending March 31, 2003, votes 1, 5, 10, 15, 20, 25, and 30 under Natural Resources.

    We are pleased to have with us today the Minister of Natural Resources, the Honourable Herb Dhaliwal, accompanied by the Deputy Minister, Dr. Peter Harrison; the Director General, Energy Resources Branch, Energy Sector, Mr. Dan Whelan; the Assistant Deputy Minister, Corporate Services Sector, Bruce Holden; the Assistant Deputy Minister, Minerals and Metals Sector, Richard Haworth; and a number of other members of the department staff.

    I encourage you, at need, to call in anyone you wish. The important thing is that we provide information to members.

    Mr. Minister, the few minutes of delay were due to your having to speak in the House, and we appreciate that. You shared that with me, and I did inform my colleagues on the committee.

    Please begin with your presentation, after which we will proceed to questions from members.

    Hon. Herb Dhaliwal (Minister of Natural Resources): Thank you very much, Mr. Chairman, it's a pleasure to be here. As usual, I'll be making a statement before taking questions. You've introduced the panel with me, so I won't introduce them again.

    I do want to say, however, that this is Peter Harrison's last week as Deputy Minister at Natural Resources. We wanted to make sure he had the full experience of coming to the committee as his last act. He will go on to become the Deputy Minister of Fisheries and Oceans, which will be another challenge. I want to recognize the good work the deputy minister has done in his time at Natural Resources. He's been a great leader, an inspiration for all of our staff and we're going to miss him very much.

    Peter, thank you very much for your good work.

    Voices: Hear, hear!

    Mr. Herb Dhaliwal: Mr. Chairman and members of the committee, it's a pleasure to be here. You've introduced the officials who are here. I'll call upon them from time to time to make sure you have all the information.

    When I was last here in March, I focused my comments on a couple of specific issues facing my department--namely, continental energy markets and climate change. Today I want to step back and focus on the bigger picture. In particular, I want to talk to you about my recent work to advance strategic interests of the Government and Canada on the international stage and my vision for the natural resources sector and how we're putting it into action.

    Since we last met, I've been actively working to ensure that the interests of Canada and the natural resource sector are well represented internationally. This is particularly important this year with the G-8 summit next month in Kananaskis and the World Summit on Sustainable Development in late summer in Johannesburg.

    I led the Canadian delegation to the sixth conference of the parties to the International Convention on Biodiversity in the Hague. I was pleased that a member of this committee, Gerald Keddy, could also join us, and I congratulate him on his good work at the convention.

    With over 180 countries participating, I worked hard to ensure that Canada's views on sustainable forest management were heard and were reflected in the final declaration.

    I've just returned from a G-8 energy ministers' meeting in Detroit that I co-chaired with Secretary Abrahams from the United States. This meeting allowed for an important and timely dialogue on key energy issues. In our joint statement as co-chairs, we noted how energy security, economic growth, environmental protection, and, therefore, sustainable development are supported by improved energy efficiency and diversification of energy sources and fields. We reaffirmed the importance of renewable energy for diversification of energy supplies. Finally, we discussed how to enhance access to energy and the use of more efficient and cleaner technologies for the developing world.

    I was pleased that David Chatters, a member of this committee, could also join me in Detroit to make sure that he supported our position. I congratulate him for his good work.

    As you know, a top priority of the government is the softwood lumber issue. I've listened to stakeholders from across Canada talk about the importance of the forest sector to their families and communities and about the impact that they are already feeling from the U.S. trade action. A week ago, Minister Pettigrew and I attended the summit on softwood lumber convened by the Premier of British Columbia. We heard strong messages from participants that reinforced our resolve to fight the U.S. with a Team Canada approach. We need to tell the American people how their government's actions are going to hurt them in their pocketbook.

    My colleagues and I are looking at ways in which we can assist workers and communities through the challenge ahead as well as focusing on the future through developing new markets and research.

    A key part of my job as Minister of Natural Resources is to work internationally with governments to open doors to new and expanded markets for industry and to make sure we can continue to access them.

    In March I announced a Canada-China wood products initiative. This cooperative project with industry and provinces is designed to build markets in the burgeoning Chinese housing and construction economy.

    Last month I was in the United Kingdom to launch a project in partnership with industry to promote what is referred to as “super-E”, or super-efficient, energy wood-frame homes that are now being sold in the U.K. I was happy that the contractor there had ordered another 30 model homes, where 75% of the products are Canadian, are built of wood-frame products.

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    I've also been working with my U.S. counterpart to enhance trade relations and further our sustainable development objectives in the energy sector. In a broader North American context, I've recently signed an MOU with counterparts in Mexico to enhance our bilateral energy relations, which will also contribute to promoting expanded business opportunities in Mexico.

    I'd now like to turn to my vision for the future--enhancing the quality of life of Canadians through sustainable resource development.

    As I see it, sustainable development is the key to the future, ensuring that we develop and use our resources wisely in ways that balance economic, environmental, and social considerations so that we can meet both our needs today and those of our children and grandchildren.

    To translate my vision to reality, we're taking action in four key areas: creating and sharing knowledge; boosting research on innovation; promoting resource stewardship in environmental responsibility; and helping to build sustainable communities. Knowledge is key to making balanced decisions about Canada's land mass and resources. Every sector of my department and every agency that is part of my portfolio in one way or another creates and disseminates knowledge.

    We're using the latest technologies to get the knowledge out and to interact with Canadians about it--for example, through NRCan online. NRCan's scientific knowledge helps the government, private sector, and other stakeholders make decisions. For example, new geoscience knowledge gained through the central foreland NATMAP project in northern Alberta and B.C. has improved exploration focus, giving rise to oil and gas industry commitments of at least $100 million in terms of exploration and drilling investment.

    Our project on central Baffin Island has yielded impressive results to date. New maps from the Geological Survey of Canada have sparked over $4.2 million in mineral industry exploration commitments within 15 months of publication, bringing new opportunities to eastern Nunavut.

    Through the targeted geoscience initiative, or TGI, announced in Budget 2000, the department is acquiring and sharing new geoscience knowledge for areas of high mineral potential across Canada in partnership with provinces and territories, industry, and academia. New results, released in March 2002, in diamond potential from a TGI project in northern Quebec resulted in more than 500 claims being staked and significant private sector investment plans for this summer.

    Innovation is the best way to improve the economic performance and international competitiveness of the natural resource sector. Canadian ingenuity and talent is driving innovation in knowledge and technology-based industries that enables smart sustainable resource development and use. Important growth areas include geomatics and remote sensing, ocean technologies, sustainable development technologies, and renewable and alternative energy.

    But our competitors aren't standing still. Just to match their efforts, we must accelerate the pace of innovation through private and public sector partnerships and investment. Wind power is a case in point. Wind is a particularly promising source of energy for Canada, and I'm convinced it can play an important role in our climate change strategy.

    To support increased market penetration of wind energy, my department will implement the wind power production initiative announced in the 2001 budget. The initiative will encourage the construction of 1,000 megawatts of wind energy capacity, with $260 million of funding from the government.

    We'll also strengthen and expand our energy efficiency in alternative energy programs, which are a core element of Canada's response to the climate change challenge. For example, we'll invest $13.5 million this year in R and D on cleaner and more fuel-efficient transportation. We're also enabling communities in Canada and around the world to make decisions about the potential for wind power and other renewable energy technology applications using RETScreen International software . This evaluates the energy production, life cycle costs, and greenhouse gas emission reductions for eight types of technology.

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    In the case of wind energy, we have wind data collected from 1,000 ground-monitored sites around the world, and we collaborate with NASA to provide wind data from satellites.

    Innovation is also critical in the forestry sector. Today Canada is a world leader in the development of value-added wood products thanks to industry-government partnerships in the development of such new engineered wood products. Achieving excellence in resource stewardship is key to ensuring that Canada is branded as a world leader in the sustainable development and use of natural resources.

    A great example of how we've taken action is MEND, the national acid mine drainage research program, pioneered more than 10 years ago. A broad group of stakeholders, provincial governments, other federal ministries, and NGOs in the mining industry work together to solve environmental challenges. It has produced an impressive return on investment. The liability on acidic drainage has been reduced by at least $350 million from an investment by partners of $17.5 million over nine years. We're now onto MEND 3, launched in 2001 with a strong research program on understanding acidic drainage and how to prevent it.

    As I noted above, a key point of my job is to ensure that Canada's interests are well represented internationally. I plan to lead resource sector trade missions to such key markets as India to facilitate investment opportunities for Canadian firms, improve market access, and improve our ability to sell value-added products, technologies, and services. With provincial and territorial colleagues in the Canadian Council of Forest Ministers, we're working to position our forest sector internationally by promoting Canada's approach to sustainable forest management.

    My final area of focus is sustainable communities. We're helping to improve the quality of life of Canadians where they live. For example, we're helping in Val-des-Monts, Quebec, to save money and use less energy in the operation of its hockey arena. We are projecting that the innovative new technology we've supported through the commercial building incentive program will use 39% less energy.

    Our sustainable communities initiative is helping aboriginal, rural, and northern communities in Canada use geographic information to make informed decisions. This initiative is only two years into its operational phase, and already 55 communities are involved, about half being aboriginal. In a similar vein, we reviewed the first nations forestry program to help first nations build a capacity to sustainably manage their forest resources and to participate in economic development.

    We're working to improve public safety and security in a number of areas where I have specific mandated responsibilities. This includes strengthening NRCan's role in regulating the acquisition, transportation, and export of explosives; protecting Canada's energy infrastructure, including nuclear plants and pipelines; and providing emergency mapping services.

    Mr. Chairman, I'd also appreciate your committee's consideration of issues that are relevant to NRCan's mandate. In this regard, I would be grateful if you would consider studying these suggestions: alternative fuels and vehicles; renewable energy; northern science and technology; and mining research.

    In closing, let me say that I'm committed to enhancing the quality of life of Canadians through sustainable resource development, working with public and private sector partners. I believe we can get there.

    I welcome any questions the committee might have of me. Thank you very much.

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    The Chair: Thank you very much, Minister.

    Now we'll proceed to questions, starting with opposition members. If my colleagues agree, we'll have seven-minute rounds.

    For the benefit of the minister, when we say seven minutes, it means both question and answer. For the minister to go way beyond seven minutes would be inviting problems from the next questioner.

    Mr. Chatters, please.

    Mr. David Chatters (Athabasca, Canadian Alliance): Thank you, Mr. Chairman, and thank you, Mr. Minister, for coming before the committee today.

    First, I want to express my reservation about the production of the estimates in the form they are in. As the chairman said when he opened the session, the purpose here is to produce information for the members that is useful to them. I really have some question about the usefulness of the form this report takes. It does go over the department's vision of where it wants to go in natural resources to some degree, but it produces little in the way of accountability for those programs. It produces little in an understandable form for us members as to where the money goes in the department and how it's used.

    I did manage to glean from the material that in spite of the fact that last year was a recession year and a year of cutbacks for the government, the estimates for your department for this year constitute or seem to constitute a substantial increase. This is not only in finances but in human resources, up to a 37% increase in the energy sector. To start off with, I'd like you to justify those increases, both in dollars and in human resources, for your department.

    Mr. Herb Dhaliwal: Thank you very much, Mr. Chairman.

    I presume the honourable member is referring to the year-over-year changes from last year. Let me outline why there's an increase from last year. It's not that I got a huge budget increase from the Minister of Finance; it's because there were some special programs in our budget.

    For example, $67 million was spent this year for the climate change action plan. This was under the climate change program we announced of $1.5 billion. The Port Hope cleanup was $15 million. These are additional funds that were allocated. As well, $12 million was spent for collective bargaining, $9 million for program integrity funds, and $7 million for the Nova Scotia revenue account.

    Now, there are some areas in which we did better than anticipated and we saved money. Investment in capital assets was $8 million less. There was $5 million less than anticipated for the Hibernia interest assistance, I presume because the interest rate was lower. For biotechnology, genomics research, there was $2 million less. For energy efficiency and alternative energy programs, there was $1 million less spent than was anticipated in the Geomatics Canada revolving fund.

    So the difference between areas where we have new money and areas where we didn't spend as much is $87 million, and that may be part of the difference between the year-over-year expenditures--we have additional programs.

    Mr. David Chatters: Well, again, it just goes to prove my first comments on the worth of the estimates. When you produce these documents and then require, I think last year it was $180 million, in supplementary estimates to meet your responsibilities as a department, you really have to question the worth of them. I'm not saying that all of those things weren't necessary and that there's not good work being done; it just makes it very difficult, particularly for us in the opposition, to evaluate those programs, because there's nothing in here that provides any substantive evaluation or cost-benefit analysis of those programs. I find that disappointing.

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    Mr. Herb Dhaliwal: I think you're saying we should provide more detail in our breakdown of these. I don't know whether these are consistent through department to department, or whether more detail can be provided. I'm certain more information could be provided, and we'll look into having more information available. I think it's important to committee members to have detailed information available to them, rather than just very large and general numbers.

    So I will look into that. I'll also see if we can get more information on it. I have breakdowns, in tremendous detail, of where the money is spent. I don't know whether these are public or not.

    Mr. David Chatters: It does precious little good to us if that information isn't in a form that the layman can understand. That's what I'm getting at.

    Leaving the monetary issue aside, certainly I thank you for including me in the trip to Detroit. But one of the overall impressions I got of the discussions that went on there, mainly around new energy technologies, was the fact that most of the G-8 countries that were there were all working on various projects of research and development in new technologies independently of each other. It seems to me there would be a real opportunity to make far greater and faster progress in those technologies if there were some agreement between the parties, the different countries, to concentrate their research on certain areas and then share the results with all the other countries, instead of everybody doing the same research over and over again. Yet I didn't hear that discussion going on at the meetings.

    Maybe you could comment on that.

    Mr. Herb Dhaliwal: You're absolutely right. In fact, that point was brought out by a number of ministers, and we actually agreed to get our officials together--if you read the final co-chair's statement--to share information, to look at technology, especially the big technology that no one country can afford, to bring our resources together and talk to each other regularly.

    The point you made actually came up in our meeting. We put it in our co-chair statement, and we're very much involved in seeing how we can look at the research of all the countries together so that we're not duplicating and overlapping things that are already done somewhere else, and are sharing that information. That was very much part of the discussion.

    So I think your point is well taken and it's something we're getting our officials to try to work on.

    The Chair: Thank you, Mr. Chatters.

    Monsieur Cardin.

[Translation]

    Mr. Serge Cardin (Sherbrooke, BQ): Thank you, Mr. Chairman. Good afternoon, Mr. Minister, and good afternoon to your officials.

    There are major discrepancies in the main estimates between the energy sector and the earth sciences sector. There is $73 million more in the energy sector, an increase of 33%. For earth sciences, there is $16 million more, an increase of about 10%.

    In what proportion is the government favouring renewable energy and traditional energy projects in this budget where the energy sector's budget has gone up by $73 million in a year?

    The Climate Change Secretariat has $7 million less this year. So it is the relationship between the renewable energy and traditional energy projects that, at some point, will lead to climate change. I have another question linked to that. If the government plans to step up its fight against climate change, why has it decreased the budget for the Climate Change Secretariat?

[English]

    Mr. Herb Dhaliwal: My understanding is that some of the climate change money is in energy efficiencies, where a lot of money is spent . There is money allocated, but it's under a different budget. That's where the largest expenditures are made on energy, and we have the Office of Energy Efficiency. A lot of that has to do with climate change. The money is allocated in areas such as buildings--how we can improve efficiencies in buildings--and alternative fuels--how we can make sure we play our role there. A lot of money is in the energy efficiency budget.

    Peter, did you want to add to that?

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[Translation]

    Mr. Peter Harrison (Deputy Minister, Department of Natural Resources): The minister is right. The funds allocated to the department go through the sectors. In terms of renewable energy and other forms of energy, the Office of Energy Efficiency delivers the programs.

    As for the secretariat, which is a joint secretariat with our department and the Department of the Environment, the level of effort is ongoing. What you see here is the capacity to earmark funding, in the estimates, for future years.

    Mr. Serge Cardin: So that goes back to what Mr. Chatters was saying earlier. When reading the estimates, it is not always easy to go from one budget to the next and see exactly what the government's objectives are and how the major sums of money are transferred or linked.

    I would like to ask another question about the Green Municipal Investment Fund. Out of a budget of $125 million earmarked for municipal funds, the government, to date, has only paid out $10 million for 152 projects.

    Is this because the fund has not generated much interest on the part of municipalities, in particular to fight climate change?

[English]

    Mr. Herb Dhaliwal: Are you talking about sustainable development funds? Which budget are you referring to?

[Translation]

    Mr. Serge Cardin: I am talking about the Green Municipal Investment Fund, the government's program for municipalities as regards climate change.

[English]

    Mr. Herb Dhaliwal: This is for energy efficiencies and all those areas?

[Translation]

    Mr. Serge Cardin: But how is it that, if we ask them...?

[English]

    Mr. Herb Dhaliwal: Okay. This is about the green municipal funds, which were allocated by the government to let municipalities look at ways in which they can develop green projects.

    Dan can speak on that in more detail.

    Mr. Dan Whelan (Director General, Energy Resources Branch, Energy Sector, Department of Natural Resources): Quite simply, in programs like this the first year is traditionally the lowest in terms of spending. It takes time for organizations and the municipalities themselves to gear up to be able to spend the money.

    We've had the same experience with, for example, our renewable energy development initiative, where the funding was low in the initial year as people became aware of the funding and put themselves in a position to take advantage of it. We would assume that spending would ramp up in subsequent years.

[Translation]

    Mr. Serge Cardin: So I imagine that we cannot assume that there is a lack of interest on the part of the municipalities. However, we know that for some time, municipalities have been tabling resolutions asking the government to ratify the Kyoto Protocol. So, if the municipalities seem interested, and they're asking the government to ratify the Kyoto Protocol, and yet you are telling us that they are not really in a hurry to sign on to your $125 million program, it is because interest in your program is embryonic.

[English]

    Mr. Dan Whelan: I wouldn't say it's a lack of interest at the very beginning; rather, it's just the capacity to be able to have information about the funds and spending. Certainly, the point you made about the positions they've tabled vis-à-vis Kyoto and the strong support we received from the municipalities on the announcement of this fund indicates a strong interest on the part of the municipalities. It's just that the actual dollars spent in the first year have been slower because of their ability to actually spend it.

    So it's not a reflection of their interest or a lack of interest.

[Translation]

    The Chair: Mr. Keddy.

[English]

    Mr. Gerald Keddy (South Shore, PC): Thank you, Mr. Chair, and welcome, of course, to the minister.

    Deputy, I'm sure you will look back with fondness at Natural Resources after you get to Fisheries and Oceans.

    I have a couple of questions. You mentioned the Convention on Biodiversity. Since the estimates are timed not only to get answers on the estimates but also to get other issues on the table.... In the closing hours of the council in the Hague and the Convention on Biodiversity, the Dutch president certainly took some, I would say, “prerogative” with the ministerial declaration on biodiversity. A number of countries--Canada, Australia, Colombia, Brazil, and China--were certainly against the position he took. Certainly I think it's in Canada's interest and also in your interest as a new minister here to make an official complaint on how that occurred and to deal with it immediately, rather than to wait.

    I'm wondering what your intentions are.

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    Mr. Herb Dhaliwal: One of the important things is that a number of countries wanted to put primary forest in the declaration. We objected at that time. It was sent back to the working groups to look at again. At that time, my position was that the working groups had been working to try to resolve this thing for the last couple of days and that we resolve it at the ministerial meeting.

    Now, my understanding is that for the final ministerial declaration, they could not get agreement on primary forest, which is something we wanted, and--

    Mr. Gerald Keddy: And alien species.

    Mr. Herb Dhaliwal: Yes. So they were not able to get those in there, the declaration did not include that. It's just something we worked for. It would create a problem because it was saying that only certain forestry should be harvested in a sustainable way. We're saying all forestry. No matter whether they're defined as primary forest or any forest, all forests should be developed.

    I understand the final statement reflected the views, but I don't know if there's something in particular that you thought we would have a concern about.

    Mr. Gerald Keddy: In particular would be the guidelines on alien species and the chair reinterpreting what consensus is, taking it as a broad-based agreement rather than the usual “no formally expressed opposition from any delegation”. That sets a precedent that I think we have to be aware of on the international scene.

    To get back to the estimates, my other question is specifically on protection of energy infrastructure. Certainly that's an issue that your predecessor dealt with in the House a number of times, assuring Canadians that there were steps being taken to protect energy infrastructure.

    What I guess I was looking for on page 32 of the estimates, and didn't find, was the number of dollars that have been set aside to actually do this. I don't see a budget for that particular item, although, as I understand it, we have the government saying that you are doing something to protect pipelines, nuclear facilities. What is the cost and where's the proposed budget?

    Mr. Herb Dhaliwal: First of all, there are a couple of ways to deal with the security infrastructure. One is through the NEB, National Energy Board, which determines the infrastructure and how to deal with pipelines, interprovincial and otherwise. The Canadian Nuclear Safety Commission is also responsible for public safety. Both of the agencies are responsible for dealing with it.

    I understand there was a budgetary approval for it. There was an overall expenditure of the government of $7-odd billion. I believe we received $12 million in that regard.

    Is that correct, Dan?

    Mr. Dan Whelan: Minister, you are correct in stating a lot of the activities we do on energy security are done through regulatory bodies, such as the National Energy Board and the Nuclear Safety Commission. In fact, part of the legislative package that has been going forward under the Public Safety Act is to give the National Energy Board the authority to actually carry out work on energy security. The Canadian Nuclear Safety Commission is also considering whether it needs any additional legislative support.

    On the question of dollars, there has been funding set aside. We have received funding for some of our mapping activities.

    In terms of energy security specifically, the role we have in our department isn't going to require a large expenditure in terms of either dollars or human resources. We've set up an energy protection division within my branch. Largely, its role will be one of coordination between the energy industry associations, the two regulators the minister mentioned, and the Office of Critical Infrastructure Protection and Emergency Preparedness, OCIPEP, which I am sure you are familiar with.

    The actual funding we will get for that division, which will carry out the coordination responsibilities, is something the departments are now discussing with OCIPEP. We're hopeful we will get a share of it. In the meantime, we've been carrying those extra staff simply through general departmental funds.

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    Mr. Gerald Keddy: Perhaps I could get just a little bit better breakdown on that. And if you don't have it here today, you could certainly supply it later. I understand the provisions in place now; that's not what I was talking about.

    When the former minister answered the questions in the House, he said there would be increased surveillance and greater protection for pipelines, energy infrastructure, hydroelectric lines, dam infrastructure, and the whole thing. It comes with a price tag. I don't think it can be covered with a $12 million price tag, so either it's there or it's not.

    Mr. Herb Dhaliwal: Part of it can come through regulations passed by the agencies, the Nuclear Safety Commission or the NEB. It will be paid by the individual who owns the infrastructure, not specifically by the government itself. When the Canadian Nuclear Safety Commission increases the security requirements, they'll be paid by the nuclear plant operators, not specifically by the government. It has provided new direction for the agencies to make sure they have a higher security level. We as a government would not be responsible.

    I understand that over five years we have additional money of $12 million for the Canadian Nuclear Safety Commission to make sure it can do more work in this area. This was given to one of our agencies. It is the $12 million I was referring to.

    The Chair: Thank you.

    Monsieur St-Julien.

[Translation]

    Mr. Guy St-Julien (Abitibi—Baie-James—Nunavik, Lib.): Thank you, Mr. Chairman.

    Mr. Minister, I appreciate the detailed answers you gave to the questions we asked you after your visit on March 12. You were quick. We've received them and we greatly appreciate that.

    Since last week, have there been any new deputy ministers and any new people who have joined your departmental team?

[English]

    Mr. Herb Dhaliwal: Since last week? If we have any new deputy ministers, I am not aware of any--unless you know something I don't.

[Translation]

    Mr. Guy St-Julien: Okay. Thank you very much.

    When you last appeared on March 12, we talked about the Targeted Geoscience Initiative announced in the 2000 budget . I am going to talk about that, because we know that mineral exploration is not easy in remote areas. At any rate, you know what is currently happening in our region in Quebec. I want to inform you immediately that Noranda has just announced that it is closing a mine that employs 260 people in Matagami/Bell Allard, because of the price of metals.

    I want to go back to mineral exploration. The Quebec Prospectors' Association is asking the federal government to contribute to financing the acquisition of new geoscience data in Abitibi by doing “megaten” surveys; this funding could lead to an increase in the budget for Canada Economic Development in Abitibi, and stimulate exploration in the mining camps. It could also lead to the acquisition of new geoscience data that would make it possible to identify new exploration sites. There is currently a project seeking financing that would make it possible to identify new targets in the mining camps in Rouyn/Noranda and Cadillac. It involves long-range “megaten” geophysical surveys each year by Exploration Noranda and the Université du Québec in Abitibi-Témiscamingue, in Northern Quebec. The funding required for this project is about one million dollars. An increase in the Canada Economic Development Budget... to provide funding for this project.

    In the English version of your statement, on page 3, you say that your department:

...is sharing new geoscience knowledge for areas of high mineral potential across Canada, in partnership with provinces, territories, industry and academia.

    The problem we currently have with the “megaten” project that was submitted to Canada Economic Development for Quebec Regions is that there is not a damn cent left. I want to point that out, because I am precise.

º  (1615)  

    The Chair: I must interrupt you and ask you to use parliamentary terminology.

    Mr. Guy St-Julien: Okay. I apologize.

    Mr. Minister, there's not a bloody cent left at Canada Economic Development; mineral exploration is in jeopardy, and the “megaten” project should come under Natural Resources Canada and not Canada Economic Development. Canada Economic Development has had the file for several months, but has no money. Your department has money for airport-related geoscience to help the remote areas in northern Quebec. I want to know if your officials can contact Canada Economic Development to find a solution. It will give northern regions a boost.

    Thank you.

[English]

    Mr. Herb Dhaliwal: My understanding is that this was a proposal to the development arm of Canada Economic Development, and they had looked at it. I'm not sure if our program would fit into that. It's something we can look at in more detail and see if our targeted geoscience initiative, which is not a huge amount of money.... It's $15 million over three years. Working with the province and the industry, we try to leverage about $27 million. So over three years, it's only $5 million a year for the whole country.

    I don't know what the detailed criteria are, or concerning the program you had applied for, for regional economic development, the reasons they didn't accept it or they didn't have the funds. But we can look at whether the criteria that we have fulfill...and we could look at the program that we have.

    The note I have says it doesn't fulfill our core program, but it's something that we can look at further.

[Translation]

    Mr. Guy St-Julien: If it does not correspond to your core program... That is why I am going back to the budget. If you look at the huge document tabled by the government of Canada, the mining sector is penalized in your department. I won't go over all the questions I have asked in the House of Commons on that. You are new, but I know that you are a man of action. We need exploration with advanced new technology to kickstart the mining sector in northern Ontario, and northern Quebec. You have the budget to do that. You even received a several million-dollar increase over last year. You are the new minister, but I know that you will come up with a solution for the remote areas of northern Ontario and the other northern regions in Canada. We're not just talking about northern Quebec. Mineral exploration is in jeopardy in the regions. The ball is in your court. I'm asking you to sit down with the other ministers to come up with some new solutions.

    Thank you very much.

[English]

    Mr. Herb Dhaliwal: Certainly our intention is to encourage mining and bring more investment into the mining area. This is one of the reasons I was recently at Indaba in South Africa, talking to major mining companies like DeBeers, and in fact they're investing up here. There was actually an increase last year in mining activity in Canada, and we hope we can continue to do that. The flow-through shares we put through helped a lot. The mining companies we've met have said, this has been very good; it's helping our mining industry. We want to continue to do that.

    One of the things I've realized as minister is that the mapping things we do are essential to business. If you look at DeBeers, it tied up 10 million hectares of land to look for diamonds on Baffin Island. A lot of those decisions are made because they look at the research and the mapping we have done that provides them with the base information to make decisions as to where they think the mining should go.

    I know DeBeers was saying a lot of our maps were very helpful. They've been here 10 or 15 years, but they haven't been looking in the right places. Some of our mapping has helped that, so providing that base information is extremely important. We're doing everything we can, and I've said to the mining industry, tell me how I can help to spark mining activity again in Canada, and we'll do what we can.

    Part of it is also based on commodity prices, as you know. Commodity prices have gone down, so therefore some of these areas are not economically viable. But we can look at streamlining, getting rid of some of that overlap and duplication, and working with the mining industry. I'm committed to doing that to see how we can encourage more investment in mining in Canada.

º  (1620)  

    The Chair: Thank you.

    Now for the second round, a five-minute round.

    Mr. Chatters.

    Mr. David Chatters: Thank you, Mr. Chairman.

    I'd like to discuss and hopefully get some clarification on a couple of issues around the northern gas pipeline. When you were last before the committee, you made the statement, and you were very emphatic, that your government wouldn't be investing in or building pipelines. You made that very clear. Yet some time later, your colleague, the minister for northern development, said he was willing to consider a proposal for the government to invest $1 billion in equity ownership of a Mackenzie Valley pipeline. That seems contradictory to me.

    The other issue is that your government has consistently held the position that economics should drive the building of the northern pipelines, that the market should dictate which should go first, and all the rest of it. Of course, as you know, the energy bill that's before the U.S. Congress is suggesting subsidization, loan guarantees, and a floor price, generally very much interfering in the marketplace.

    If our position is that the market should prevail, we are in a very strong position in Canada, because that pipe, that gas, has to pass through Canadian territory. Yet your government and you yourself have been absolutely silent on that issue, standing up for the marketplace.

    I'd like to hear your views on that. Answer the two of them, if you could.

    Mr. Herb Dhaliwal: First of all, I think we can send you lots of clippings to show I haven't been silent. There are lots of stories on this issue in papers we can give you where I certainly haven't clammed up.

    Let's look first at the question, what is the Canadian position on the northern pipeline? Our position has been articulated many times, and it's the same as the American administration's. Now, I want to separate the administration from the Senate and the House, because they have different views on this issue.

    Both the American administration and the Canadian government have said that we are route neutral and that it would be a market-driven decision. The market will decide which pipeline will be built. When I talked to Secretary Abraham last week, he reiterated the same thing. He said that they are route neutral, that the market will drive it, and that they don't agree with the Senate's position on the amendments to the energy bill.

    Mr. David Chatters: Will the president veto the bill?

    Mr. Herb Dhaliwal: I've asked them that question. Of course, they have a dilemma because they cannot veto line by line. They have either to veto the whole bill or accept it.

    I made it perfectly clear to Secretary Abraham and the government of the U.S. that if they move away from the route-neutral position or the market-driven solution with these subsidies, we will have to reconsider our position of route neutrality and a market-driven solution. We've put that squarely to them. They know our position. We're very clear. I have many newspaper clippings, which we can send to you, where I've said, well, it's nice that the Senate is passing all sorts of laws; two-thirds of their pipeline will go through Canada. I just wanted to remind them that the vast majority of the pipeline will pass through Canadian territory. We'll be watching the situation closely.

    What will happen now is the Senate and Congress will come together and reconcile their differences. There are many differences. ANWAR is one of them. One House said you could drill in ANWAR and the Senate voted against it. They'll need to come together before we will know what the final bill will look like. Then we'll see how the administration reacts to it.

    They've said they do not support the amendment nor subsidies, as the Senate has. They support a route-neutral and commercially driven decision on pipelines.

    Mr. David Chatters: You still have to answer the other question.

    Mr. Herb Dhaliwal: Our position is the same. We've never subsidized pipelines, and we won't be subsidizing pipelines. I don't know in what context he may have delivered that message, but I think our position is pretty clear. We're route neutral, and the market will drive the decision. That position has been consistent. We haven't subsidized any pipelines, as far as I know.

º  (1625)  

[Translation]

    The Chair: Mr. Binet.

    Mr. Gérard Binet (Frontenac—Mégantic, Lib.): Thank you, Mr. Minister. It is nice to meet you. I come from a beautiful region: Frontenac--Mégantic, where there are lots of natural resources, including asbestos, more specifically chrysotile asbestos, and forests.

    I would like to start by talking about chrysotile asbestos. We are currently going through very difficult times. Twenty-five years ago, 3,400 people worked in this sector, as a regional paper recently reported. To achieve its socialist dream, the Parti Québécois nationalized asbestos mines at a cost of $205 million. A few years later, losses reached $500 million, and the government liquidated the mines for $34 million.

    Today, about 900 people work in the sector about 6 months a year. These workers are currently locked out. The company says it no longer has the means to pay them. At any rate, they are negotiating cuts, and the employees are locked out. I just wanted to explain the situation I find myself in as a member of Parliament.

    As you pointed out in your presentation, you have travelled abroad. I think that is a good thing. I think it is very good, because the main client for our asbestos is India. You really need to be on site to see that asbestos fibre cement really is the building material that costs the least per square foot. We know that this material, fibre cement, is virtually problem-free. I must point out that fibre cement was largely used to rebuild Europe after the war.

    In another region of my riding wood is the main resource. I have been lucky in that regard, as people have diversified their activities, even if, of course, the softwood lumber problem is having a major impact on us. Today, some people are making wood doors, others melamine furniture. There is still some work to be done, but thanks to this diversification, life is perhaps a little bit less difficult for these people than it is for people in other regions.

    Recently, I went to the Council of Europe as part of the Canada-Europe delegation. We talked about forests, and I can tell you about the comments made by other countries and about the work that was done by the delegation in Europe. The experts who came to assess the forest here, in Canada, did a good job. They also wanted to congratulate us. So it is very important, in my opinion, to promote our wood abroad and above all to promote our chrysotile asbestos.

    What is your budget for prospecting markets in sales abroad? Do you intend or do you plan to send out a delegation, as was recently done?

[English]

    Mr. Herb Dhaliwal: First of all, let me say I agree very much that we have to get out and get new markets for softwood lumber. Let me deal with that one first.

    I think if we've learned anything from our current situation with the Americans, it's that we have to diversify our investment. That old cliché, that you don't want to put all your eggs in one basket, is very true. For industry, it's always easier just to load a truck and send it across the border. It's a lot harder to develop new markets and benefit from those markets.

    I know when we first started going after the Japanese market, a lot of our business people went and said, here's a 2x4; can we sell you this 2x4? The Japanese said, no, we don't use 2x4s. Someone said, hold it, why don't we ask them what dimension they use? So they went back and asked what dimension of lumber they wanted. And then we started producing those dimensions; we changed our mills. We had to change the size because they didn't want 2x4s; they wanted different dimensions.

    So we went back and developed that market, and it has been very successful. I think it was a $2 billion or $3 billion market for us. Because of the recession, recently it has gone down, so we've been hurt. But that's a good example of where we had very little market, but we went in and developed it.

    We need to do that in China and in India. We've already started in China-Canada wood products. We have a wood products showroom in Bombay, starting off in India. But in Korea, Taiwan, and even Europe, with the prefab homes that I talked about, where I opened up the super-E home, those types of things, we need to do that and we need to develop it.

    Government should be there, because industry can do only so much. Industry can't deal with some of the building code changes that are required, where you need government-to-government relationships, and we're doing that.

    On the asbestos part of it....

    I know I'm running out of time.

º  (1630)  

    The Chair: Sorry, you have run out of time, but you will have the last word with closing remarks.

    I feel compelled to interrupt, because the two of you are getting along too well, and I wouldn't want everyone to imagine that there are no problems. That's what we're here for today, to search for problems.

    Mr. Cardin.

[Translation]

    Mr. Serge Cardin: Thank you, Mr. Chairman.

    It says in the estimates that the government's Action Plan 2000 on Climate Change, once applied, could allow Canada to reach about one third of its objective in terms of emission reduction over the course of the period established in the Kyoto Protocol. The other two thirds will, of course, be covered by other plans.

    I would like you to refresh my memory and tell me what part of the current estimates is devoted directly to the issue of climate change.

[English]

    Mr. Herb Dhaliwal: It is my understanding that the total budget allocated by government in all the budgets, the cumulative amount, is $1.5 billion. Of course, this is not in just my department. This is in Environment Canada, Natural Resources Canada, possibly Industry Canada and other areas, and some arm's length organizations. So this is divided among a number of government departments, agencies, and other ministries. The total is $1.5 billion.

    Depending on what figures you use, and depending on whether you use the 240-megaton total, I think one-third is probably close. What we'll succeed in, when we include sinks and targeted measures, is anywhere between 74 megatons and 90 megatons, depending on what assumptions you make.

    But we have to keep in mind that these are the easier things, what they call the “low-hanging fruit”. They're more cost-effective. It becomes more expensive as you go further up the ladder and try to do other things. We're trying to get the lowest-cost opportunity as well.

    So the total amount is $1.5 billion.

    We have someone here, David Oulton, who can give you more details on that particular question, if you don't mind, Mr. Chairman.

    The Chair: Mr. Oulton.

    Mr. David Oulton (Head, Climate Change Secretariat, Department of Natural Resources): Thank you very much, Mr. Chairman.

    The main funds that are used, as the minister mentioned, are distributed through a number of departments, so it is not just Natural Resources Canada. Probably about two-thirds of the total government spending in Natural Resources Canada is through Action Plan 2000, which is what you alluded to, and is that $500-million initiative--that's over five years--and through the Climate Change Action Fund, which is a $150-million initiative that was renewed. It's now for three years and it's the first year of the three-year period.

    They're used for a variety of purposes. I'll just mention some of the main ones, to be quick about it. One of the primary purposes is, indeed, starting to get reduction in areas of energy efficiency and renewable energy. A large portion of that 65 megatons is located in transport and commerce and in residential areas in terms of improved energy efficiency and in broad industry sectors.

    There's also money that is going for climate system science and looking at the impacts of climate change as well as starting to do work on what we would need to do to adapt to climate change. That is also coming out of the Climate Change Action Fund.

    Finally, resources are going into both the area of public education, ensuring there's broader understanding of the issue, and the area of public policy work with the provinces and with industry on climate change policy.

    Thank you, Mr. Chair.

º  (1635)  

[Translation]

    Mr. Serge Cardin: Do I have a bit of time left?

    The Chair: You have 30 seconds.

    Mr. Serge Cardin: I will be quick.

    If, in the Action Plan, you can meet about one third of your objectives, that leaves another two thirds. What is the government's action plan? What steps does the government intend to take? Obviously, the majority of people are asking you to respond to the Kyoto Protocol and to meet the objectives.

    There is not much time left for you to answer my question.

[English]

    Mr. Herb Dhaliwal: This is what we'll be consulting on with the provinces and the industry, and that's why we have a meeting on May 21-22, where we'll put forward a document for input from the provinces and make sure that we have a Team Canada approach to see what methods we should use. I mean, there's a variety of things: domestic emissions trading; international credits; international mechanisms and joint mechanisms; and targeted measures.

    All those things are areas in which we can achieve the other two-thirds, but how we get the balance, how we do it, is something we want to work out with the provinces. We want to make sure they're part of the discussion in making those choices.

    The Chair: Thank you.

    Ms. Karetak-Lindell.

    Ms. Nancy Karetak-Lindell (Nunavut, Lib.): Thank you, and thank you, Minister, for coming before the committee today.

    I was very pleased to hear you mention some of the projects that are happening in the Arctic, especially in my riding. We had all the mayors of Nunavut down in Ottawa through the Nunavut Association of Municipalities, and we were very proud to have Iqaluit receive an award for the water restoration program under the green fund. We would certainly like to be able to promote that project in every community.

    We are still providing power through diesel-generated sources, and because we live above the tree line, we rely on southern lumber products. All the price increases that are being felt in the north are, of course, being carried over to anything that we're building in the north. I hear about all the work we're doing internationally, which I totally support, but we would certainly love to be the recipients of any other pilot projects that you want to share internationally and to do some in our own backyard.

    We're very interested in your rural and remote component in Natural Resources. You talk a lot about renewable and alternative energy sources. I think we should invest more money into these types of projects in the Arctic, because we're certainly feeling the effects of climate change in our part of the country. You talked about super-E homes, so I would certainly press upon all your staff here that, again, we would love to see pilot projects of any of these alternative energy projects up in the Arctic.

    Thank you.

    Mr. Herb Dhaliwal: Thank you very much, Mr. Speaker.

    We are actually working in the north on a couple of projects--on wind, in particular--to replace diesel and get communities off diesel. We're encouraging communities to come forward. We have $260 million in funds available to support the industry.

    If there are communities you want us to work with to support diesel, we would be very much interested in how we can accomplish it. I know there are some communities now working with us. We're willing to work more on those areas, as well.

    I've been up to the north. I understand that people in the north have a better understanding of the effects of the climate change they're facing. They see it all the time.

    I was up in Yukon, as well, with Larry Bagnell. When we went up to the Taku River, the pilots told us about the receding glaciers. They'd never seen them recede as quickly as they are now. The changes that are happening are very clear to them. I think people in the north have a much better idea because they're seeing the effects of it very quickly.

    We want to make sure we look at renewables and other forms of energy. We certainly will support you, if you have projects, to work with you to deal with it. It's part of the climate change project to look at renewables, such as wind energy, solar energy, and other forms of energy.

º  (1640)  

    Ms. Nancy Karetak-Lindell: Thank you.

    Going into the research part of it, I know my other northern colleagues, Larry and Ethel, have been pressing very hard for continued research. I've been very encouraged by the acknowledgment of traditional knowledge in a lot of the projects that have been done. I only want to put in a good word for them, again, to see some more increased research in the north.

    Mr. Herb Dhaliwal: Thank you.

    The Chair: Mr. Keddy.

    Mr. Gerald Keddy: Thank you, Mr. Chairman. I have two questions I want to try to get in within the five minutes allotted.

    I've a concern stemming from page 32 of the estimates and what appears to be a direction the government is taking vis-à-vis the discussion of the International Boundary Commission in the U.S. and Canada. It goes on further, referencing September 11 and then the Patriot Act that was recently enacted by the United States. It contains provisions for significantly increasing both personnel and technology along the Canada-United States border: “An unobstructed line of sight will be essential to ensure the effective deployment of new surveillance systems.”

    Certainly, I think we all realize security has become increasingly important since September 11, but I think it's a mistake. When I read it, as we have some Canadian technologies that are applicable, it almost sounds as if we're encouraging the U.S. to build a wall around the United States of America versus pursuing some other option, such as a perimeter around North America for security more similar to the Schengen agreement in Europe.

    I really have some difficulty with it. I would hope that's not what it means. If it is what it means, I have a problem.

    My second question is on forestry. Obviously, the softwood lumber agreement with the United States increased American protectionism, and was a failure by the government to deal with the duties that have been applied.

    Further to that, there's some discussion in the estimates on page 17. Natural Resources Canada is helping the Department of Foreign Affairs and International Trade with softwood lumber costs estimated to be between $100,000 and $150,000 in 2002-03.

    What is the Natural Resources Canada share of this? Is it the total amount or a portion of the amount? I don't understand exactly what it is.

    What was spent last year, in 2001-02, leading up to the fiasco we've gone through with tariffs being applied by Natural Resources Canada on the softwood lumber negotiations? Do we have the number?

    Mr. Herb Dhaliwal: First of all, maybe I can answer the first one on the International Boundary Commission. It doesn't really refer to your perception of it as building walls.

    Mr. Gerald Keddy: That's good.

    Mr. Herb Dhaliwal: On some occasions we have people who have homes right on the boundary line. They're supposed to have a site they can see for security purposes, but people build all sorts of other structures where they're not allowed to build them. We have some of that in certain parts of the country where we're trying to deal with people building their tool sheds or fences or whatever where they're not allowed to, because they're supposed to be able to see across for security purposes.

    We have a treaty with the Americans, both for ourselves and for them, so that it's easier for us to have surveillance and a clear view, and really to have some area between the two countries where there's clear visibility and people can see. So that's the main purpose of that. We have a treaty that clearly outlines that.

    On the second issue, the forestry, we have staff members who work with DFAIT in terms of providing information and details and supporting DFAIT with some of our staff and some of our resources. We have certain information, knowledge, and expertise that DFAIT doesn't have. So it's really to pay for manpower. That's my understanding. I think there's just one or two staff there to support them. They go to the negotiations and they're there providing advice for DFAIT on an ongoing basis.

    The Chair: Mr. Bagnell.

º  (1645)  

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

    I have just one question. It's very similar to Mr. Chatters' question, but I can add a bit more information.

    As you know, we want two pipelines through Canada. It would be a huge benefit for the north. The NWT route has already been set. The NWT government explains that it is feasible and it will go ahead. The Canadian route for Alaskan gas, of course, is down the Alaska Highway, as opposed to through Alaska, where Canada wouldn't get any benefit.

    A huge study has just come out this week, and I can add this to the preamble to my question because most Canadians don't know about this. It explains the benefits to Canada. There would be about 108,000 person-years--over 2,000 permanent jobs--for Canada, 107,000 just from my riding in the Yukon. There would be $1.2 billion in tariff revenues for Canada, which is just immense and wonderful. This is the hugest project in the history of northern North America, at least for Canada. It's $13 billion, of which half the expenditures will be in our country.

    I'm delighted that the Americans would offer up to $10 billion in loan guarantees and a repayable tax credit. Some people said in the press that it sounded like a subsidy. They're not subsidizing. It's a repayable tax credit that is paid back when gas is high.

    Considering these great benefits for Canada, for this Canadian route for Alaska gas.... It would also allow us not to strand Yukon gas. It helps jobs for Canadians all along that route and lowers energy prices and our greenhouse gases from dirty energy.

    I've been very happy that the Government of Canada's position to date has just been to act as the regulator. They've said that when these two pipelines put their applications in, they'll regulate it.

    My question is in two parts. Hopefully we will be ready so we can do this quickly. Secondly, I assume it is the Canadian position today that we're the regulator and that when each of those pipeline proponents decides to put their application in, we will deal with them efficiently. If we ever stalled, the Americans could go right through Alaska to Valdez and LNG, and we'd lose all those 108,000 person-years and $1.2 billion in annual revenue for Canada.

    Thank you.

    Mr. Herb Dhaliwal: We recognize that there are benefits for Canada in both the pipelines and in the long term. As you say, as the need for natural gas energy increases, most likely in the long term both will be built.

    We have benefits on the Alaska Highway, because the petrochemicals as well as some of the gas that come along that line go by northeastern British Columbia. Of course, whenever you have a pipeline, it creates more opportunity and greater investment and exploration in those areas. I mean, if that happens in the long term, that's fine.

    Our position is pretty clear. As I said to Mr. Chatters, it should be route neutral and it should be commercially driven. I think you heard some of the other companies saying that they put some of the existing companies at a disadvantage by getting protection by having a floor price. Other companies are saying, hold it now, this is going to distort the market, because some guys are getting a guarantee for a floor price--if the Americans do what they say they're going to do--and loan guarantees, so what's going to happen is the market may get distorted in certain areas and some may be less competitive.

    I think the companies want to make sure that there is a level playing field and that other decisions aren't distorted because of subsidies that may occur. But a lot of this is speculation. Until we have a final bill before us, we don't know. In the long term, if we get two pipelines built, I think it will be good for Canada. The NEB will look at all the applications that come in and evaluate them based on their normal regulations.

º  (1650)  

    The Chair: Thirty seconds, Mr. Bagnell.

    Mr. Larry Bagnell: In my last thirty seconds I'd like to note that the United States does give tax credits for Gulf of Mexico deep wells and Rocky Mountain methane. By 2010 there will be a 50-BCF requirement and the Mackenzie Valley will be only 1.2 BCF per day, and the Alaska Highway 5.6 BCF. That's not even one-fifth of what's needed, so there's great demand. There will be lots of benefits for Alberta and B.C. as Alberta takes off the liquids and B.C. gets millions of these dollars.

    Mr. Herb Dhaliwal: Yes, there are a lot of petrochemical benefits when natural gas is brought in through Edmonton.

    The Chair: For the benefit of everyone, BCF is billion cubic feet.

    Mr. Larry Bagnell: Per day.

    The Chair: I think it's important to clear that up. So BCF is billion cubic feet per day.

    We will do a three-minute round, and then we will conclude with the minister's comments.

    Mr. Chatters.

    Mr. David Chatters: On the last discussion, I would suggest that the issue isn't hypothetical. Based on the fear of that market interference, our own national oil company, Petro-Canada, has moved to procure drilling rights in Alaska, which they didn't have before and they wouldn't have done. That money would have gone to drill in the Mackenzie Delta, or somewhere else in Canada perhaps, if things weren't happening the way they were. So I don't think it's entirely hypothetical.

    But my question is in a different area. You were recently at the summit in British Columbia where, coming out of the summit, the premier expressed a desire to move forward quickly on offshore drilling in British Columbia. Of course, that resource belongs to the federal government and it will require federal government approval to do that. I would like to know what the government's position is and at least get an estimate of the timeframe involved before activity could perhaps begin offshore in British Columbia.

    Mr. Herb Dhaliwal: First of all, as to your first comment on Petro-Canada, it's very difficult to determine on what basis companies make their investment decisions. It would be tough for me to comment on that. It may be that they want to hedge their bets or some other reason, I don't know, but they may be into their long-term program.

    On the offshore oil situation, what's happened now is that, as you know, the B.C. government had a scientific panel. It has reported to them, and the report is now public. They have approached us, and they're interested in working together to make sure that we do the science and that we have all the information available to make a good decision. I've said clearly in the press that if we can have development and if we can do it in an environmentally sound way, then I'm open to doing that.

    Now, what we have to do is first of all make sure that we have a process. We have to make a decision as to whether we are either going alone on the moratorium, making it a totally federal process, or going together to do some joint work with the provinces and to try to take advantage of the synergies that exist with their resources and our resources.

    At this time we're doing a review in order to make that decision, and I think it will be made fairly soon, hopefully within the next three or four weeks. We'll make that decision, and then we'll have to move on to make sure that we have a plan to do the consultations and that we have the necessary science to make the decision.

    Once we have that, we will make a decision that involves the longer-term period. It depends on how long the consultation work takes, on how much new scientific work has to be done, and on how much existing scientific work is available. Then we will make that decision as to whether we lift the moratorium or not. It's currently being reviewed, and I'm open to it if we can do it in an environmentally sound way.

     The Chair: Colleagues, if you wish to have yet another round, I will accommodate you.

    Mr. Binet.

[Translation]

    Mr. Gérard Binet: Mr. Minister, I want to go back to my cause, asbestos. I know that you are a new Minister of Natural Resources. In our region, we have been mining asbestos for 125 years. Our people are very old, and we are not afraid of asbestos.

    As we know, the product is still sold widely throughout the world. In this industry, the bulk of our current problems are coming from the fact that Russia, which produces huge amounts of asbestos, is dumping it, especially in a country that was one of our major clients: Japan. Moreover, they use 60% of the asbestos they produce. We know that Russia, which was communist, is still a country that can impose certain things. It is different here in Canada.

    Currently, in Quebec, the Parti Québécois is developing a policy on the production and use of asbestos. They had nationalized the industry, and now they are developing this policy which, in principle, should be made available.

    Last fall, the region lobbied hard, because we needed a policy for the production and use of asbestos. To my mind, it is essential. Canada defends this natural resource throughout the world, but it does not have a policy for producing or using it. We know that asbestos has been used in places and ways that were not appropriate, which means that today, in some ways, we are forced to pay for that. But there are a lot of good market opportunities to develop with respect to chrysotile asbestos in fiber cement.

    Do you agree, Mr. Minister, that Canada needs a policy on the production and use of asbestos?

º  (1655)  

[English]

    Mr. Herb Dhaliwal: First of all, as a government we advocate the safe use principle with asbestos, and we have to ensure that there are risk assessment and risk management strategies with regard to asbestos. I'm sure you know the history of asbestos and the problems it's had. Obviously, that makes it a lot tougher when you have these asbestos problems.

    But we think there are areas where there's a safe use for it. We promote that, and there are areas we are looking at. I can get Richard to talk about market access and areas where there is safe use in other parts of the country and about what we've done to access those markets.

    Mr. Chairman, perhaps you will allow Richard Haworth to speak on that issue.

    The Chair: He has thirty seconds.

    Mr. Richard Haworth (Assistant Deputy Minister, Minerals and Metals Sector, Department of Natural Resources): Your last question also talked about the minister's travels. As part of the concern we had about asbestos last fall, we actually did pay a visit to Chile to discuss the safe use of chrysotile asbestos. We did involve people from the Institut de l'amiante and the Commission de la santé et de la sécurité au travail in those discussions to ensure that the safe-use principle for asbestos was being adhered to as the basis for the development of those markets.

    The Chair: Thank you very much. Well done. You're welcome to join this committee any time.

    Some hon. members: Oh, oh!

    The Chair: Mr. Cardin.

[Translation]

    Mr. Serge Cardin: Thank you, Mr. Chairman. I'm going to continue along the same lines with respect to the Kyoto Protocol. Earlier on, perhaps the minister did not have time to answer the question, but he touched on the answer saying that the consultation will determine to some extent what action will be taken, the action plan to come for the two thirds of the Kyoto Protocol that remain to be covered.

    During our last meeting with you, of course, I talked about natural gas. You explained that the natural gas that is exported to the United States contributes to reducing greenhouse gases, because the United States is using more and more natural gas, among other things, to produce electricity, to replace coal. Your department produced several items to back up your answer. You had a table, and it showed that in terms of total electricity production in the United States, hydroelectric power had dropped 148 kilowatts an hour, more or less.

    I asked myself the following question: has production in the United States decreased, or did that perhaps include the electricity it bought, namely from Quebec?

    You say that you are going to be holding consultations throughout Canada, but interests are not the same everywhere. Of course, there is hydroelectricity in Quebec, but there are also other forms of energy, namely in the west. There's also natural gas that the US could obtain. There's also natural gas in the east which, for the most part, is directed to the United States. The question I asked you at the time was to find out why we are not also favouring natural gas from New Brunswick and Quebec. So globally speaking, with respect to action to take as part of the Kyoto Protocol, these are questions that are relevant to all of the issues in the action plan to come as a result of your consultations, that may have a very different impact from one region to another. So it would be important to know in which direction you are moving.

    It looks like not everyone in the cabinet is on the same wavelength with respect to the Kyoto Protocol. Perhaps there are some divergences or some different opinions. Where are we today? Will we arrive on time with everyone else?

»  (1700)  

[English]

    Mr. Herb Dhaliwal: I think what you're referring to is a credit for cleaner energy exports. We're actually negotiating that at the UN meetings that are taking place this week not only for gas but also for hydroelectric and other renewables, wherever we're displacing dirtier fuel--coal, for example. They were burning coal to produce electricity, and now they're burning gas. Of course, there's a big reduction in greenhouse gas emissions. So our objective is to get credit for cleaner energy we export, including hydro, which is big in Quebec. They export a lot. In B.C. we export a lot of hydro, but we also export natural gas.

    So our objective is to make sure we get credit for those, and that's what we're working toward.

    The Chair: Thank you.

    Mr. Bagnell.

    Mr. Larry Bagnell: My question is the second part of my last question, on Canada's readiness to regulate.

    But before you answer, I want to say that I disagree with the position about distorting the market. Mr. Chatters said that maybe this pipeline would help other parts of Canada. What would happen is that these people would go to the Gulf of Mexico or the American Rockies and we would lose these 100,000 person-years and $1.2 billion in revenues. This just allows this pipeline to go ahead. It doesn't distort the market, because people don't have to understand the magnitude of the $13 billion. The Canadian infrastructure programs, which were so successful and created thousands of jobs in this country, were around $2 billion. This is a $13 billion project. It's absolutely massive. As I said, I want to make sure that Canada is ready to regulate such a project.

    I don't know if you want to elaborate on that. I didn't leave you much time before.

    Mr. Herb Dhaliwal: We're focusing on ensuring that we have efficient regulations through the NEB and that they are proactive in making sure that projects that do come over can go through the process.

    Of course, as you say, it's a very large project, it's very complicated, and we have to ensure that we have a process that doesn't create all sorts of jurisdictional problems. But we're committed to making sure that the process is streamlined and can move forward.

    So the NEB is very much in tune on these projects, that they may be getting applications. They have none to date, neither the Mackenzie nor the Alaska Highway. We don't know when industry has to make that decision, but the NEB is ready to look at any application that comes forward and process it in an efficient and proactive way.

    Mr. Larry Bagnell: I just want to add that people might think the only Canadian benefits are the ones I mentioned in B.C. and Alberta, but Petro Canada just offered--I think it's probably the biggest in history--$8.5 million for an oil and gas lease in Alaska. We have other companies in Alaska, too, so we also have all those benefits to gain in Alaska with Canadian companies.

    The Chair: Gerald Keddy.

    Mr. Gerald Keddy: Thank you, Mr. Chairman.

    I have a statement and a question. It was an interesting discussion on the possibilities of offshore gas and I listened attentively to what the minister's reply was to offshore gas in B.C., that if it could be done in a sustainable and environmentally friendly manner, would he support it?

    I want to make the comment that the technology has been there for a long time to have environmentally friendly gas and oil production in the offshore. It's nothing new. It's just a matter of applying it. It's called zero discharge. It's called timing your seismic testing. It's easily done. So there's absolutely no scientific argument against offshore oil and gas exploration.

    The issue and the question that I wanted to get in while we still have time here relates to a comment made earlier on cost-benefit analysis on much of the estimates that come out from the department. I think it's something we could see more of in the future, that the department spent this much money in this area and what was the return on that dollar. I realize that makes a much more convoluted and probably more expensive set of estimates, but on the other hand, those of us in the opposition could gain a lot more from them.

    Specifically, in your estimates you're saying the federal government and the provinces have allocated $3.4 million over five years to the international forestry partnerships program, to inform international forest product buyers that practices have changed in Canada and are now consistent with the concept of sustainable forest management. That's page 16. I guess the question then is, quite simply, how are Canadian forest practices currently perceived in the international marketplace? Has there been an improvement? We spent the money. What's the return we got on that investment? If this perception has improved, has it resulted in lifting of some of the non-tariff trade barriers that the Europeans are very favourable to putting in place, particularly phytosanitary regulations, which are always the excuse for a non-tariff trade barrier?

»  (1705)  

    Mr. Herb Dhaliwal: First of all, let me comment on the technology issue. Yes, if you look around the world, there's oil drilling in the North Sea, which is one of the toughest areas to do oil drilling, but we still have to do environmental and all those reviews because of certain unique characteristics within each area that are quite different. But the technology has changed, it has improved, so in a lot of hostile areas there's been oil and gas drilling. So I agree very much with your comment.

    In terms of cost-benefit analysis, we do that, and our evaluations, we understand, go on the Internet and on our website so that they can be available to the public. We'd be happy to provide you with any cost-benefit analysis that may be done throughout our department.

    It's important to make sure that Canadians get value for their dollar. It's something that I very much promote. I come from the business community, so it's important to make sure that all the dollars are spent properly and benefit Canadians. It's something that we do as well as the Auditor General.

    In terms of our view abroad, our understanding is that the perception has improved, but we've still got more work to do. We have to continue to go out there and talk about the fact that we do develop our forests in a sustainable way, and give examples. We have to continue to bring people in and show them what we're doing, but it will be an ongoing challenge for us.

    So, yes, my understanding is that it has improved, but we still have a lot more work to do.

    The Chair: Thank you very much, guests and colleagues.

    I will say to my colleagues, I commend you for the fine work you have done today. Speaking about natural resources is an exciting subject, but doing estimates is not the biggest game in Ottawa. It's not the most fun. So I thank my colleagues for asking 15 questions, with 15 good answers.

    The answers were so good, Mr. Minister, that you have heard for the last time that you are the “new” minister. I want to thank you very much for sharing the information with us, and our relationship will grow, because as a committee, our reason for being is to work with you for the betterment of Canada and for the Canadian people.

    If you have any closing remarks, we invite you to make them now.

»  (1710)  

    Mr. Herb Dhaliwal: Mr. Chairman, I want to congratulate the committee for their concise and clear questions. I hope that I, as well as my officials, have made every effort to answer those as precisely as we can. Any information that the committee is searching for, we'd be happy to provide for them.

    As well, I would encourage the committee to look at some very important issues such as renewable resources, and how we can do more. I think there's a lot more that Canada can do in renewable resources, and if the committee would choose to look into that, you'd get my full support in any way. If the committee feels that it needs to travel to get to know some of the technologies that are being used--in Europe they're doing a better job in some of the renewables, in wind energy and other areas--we would certainly support the committee's work in all these areas.

    We would also encourage you to come and tour some of our labs. There are more PhDs in the Department of Natural Resources than in any other department. So if you want to come out and look at our labs, I think that would be very informative.

    The other thing I've learned a lot about in the geosciences, the earth sciences, is that we have satellite stations, and they show us how to get this incredible information. For example, I would ask, if I want to set up a wind turbine, how would I know where to go? Well, there's a program that can show you, for the private sector to search in those areas, what parts, what the wind velocity is, and where would be a good place to put wind turbines.

    So I would invite you to visit some of our satellite locations and see how they get information, and how important it is for the business community to visit our geoscience, because I think that would be very informative and you would be able to be better informed. Anything we can do to facilitate any visits to some of our labs, we would be willing to do, and we'll wait for your response.

    Thank you very much. I look forward to working with all the committee members on this extremely important area for Canada. After all, natural resources are responsible for 12% of our GDP and one-third--$150 billion, I think--of our exports. It's a huge part of our economy and very important for Canadians.

    So thank you for inviting me.

    The Chair: Thank you very much, Mr. Minister. We'll take you up on your offer.

    Yes, Mr. Chatters.

    Mr. David Chatters: I have just a short comment.

    On the issue of changing the way estimates are done and providing some of that cost-benefit analysis, I would urge you to move forward with that. It's so important. I've been part of the natural resources committee for the nine years that I've been a member of Parliament, and in spite of my hard work and my staff's hard work, there's little evidence of some of the scandals that we've seen in other departments in this government. I commend the people in the different natural resources sections, because they are obviously doing good work in avoiding that. But I think that's another way we could have transparency and openness, if you would consider that.

    The Chair: Thank you.

    Mr. Herb Dhaliwal: We'll send you any reports we have on evaluation and try to give better information.

    Mr. David Chatters: Thank you very much.

    The Chair: To my colleagues, I have received no notice of motions to amend any parts of the estimates. I understand that doesn't mean my colleagues agree with everything in the estimates, but we will consider the estimates as having been dealt with and the report to the House will be made automatically.

    Thank you very much. The meeting is adjourned.