We're here today, as everyone knows, to deal with the main estimates of Natural Resources. Pursuant to Standing Order 81(4), for the main estimates 2014-15, we are dealing with vote 1 under Atomic Energy of Canada Limited, vote 1 under the Canadian Nuclear Safety Commission, vote 1 under the National Energy Board, votes 1, 5 and 10 under Natural Resources, and vote 1 under the Northern Pipeline Agency, as referred to the committee on Thursday, February 27, 2014.
Just before we get to today's meeting with the minister, I want to ask members if it would be acceptable if we took a few minutes after the meeting to discuss how we proceed next week. There have been some discussions before this meeting regarding this.
Is that agreed?
An hon. member: Regarding the votes?
The Chair: Yes, on the votes, depending on all of that.
Some hon. members: Agreed.
The Chair: Thank you very much. We will do that then.
I want to start today by welcoming the minister to our committee, the very first appearance by Minister Rickford—and with him, of course, his deputy minister.
Minister, thank you again very much for making yourself available this early in your mandate. I know it takes a lot of preparation when it is a new area, but I also know that you're very well versed in the area and looking forward to this committee meeting. We'll start with your opening comments and then go to questions and comments by members.
Thank you so much for being here. Go ahead.
Thank you to all of my colleagues for the opportunity to be here. I was looking forward to having a discussion. You've been doing some important work, but I was really looking forward to having some of this committee's famous coffee. There's nothing like it in the city, so that's the first thing I did.
Mr. Chair, as I said, it's a pleasure for me to meet with the committee for the first time. As the member of Parliament for the great Kenora riding which covers more than 290,000 square kilometres of land, water, trees, and minerals, I have a sound understanding of the importance of natural resources. They are, in no uncertain terms, the lifeblood of my riding in northwestern Ontario.
Obviously, I'm pleased to be here today in my capacity and to explain the important work of our government in the natural resources portfolio.
[Translation]
In my 10 weeks as Minister of Natural Resources, I have had the privilege of witnessing the opportunity that our vast natural resources present to all Canadians.
Mr. Chair, there is no questioning the role natural resources play in maintaining the strength of our economy.
[English]
Together, the direct and indirect impacts of the forest, energy, metals, and minerals industries account for close to 20% of Canada's nominal GDP and some 1.8 million jobs for Canadians.
Over the past five years, the resource sector has added $32 billion a year to government revenues. These are revenues, of course, that go to support important programming, including health care and education.
I will talk about opportunities for growth.
[Translation]
As we look to the future, market diversification will play a crucial role in unleashing our natural resource potential, particularly for energy resources like oil and gas.
[English]
As you know, right now Canada has one customer for its energy, the United States. In 2012 alone Canadian producers lost over $13 billion in revenue, more than $35 million a day, because of our narrow customer base. Mr. Chair, that is significant.
That's why the private sector is pursuing potential new pipeline proposals east, west, and south to expand access into new markets as well as the U.S., and open new markets in Asia, Europe, and elsewhere. I know that this committee has grappled with that to a certain extent.
[Translation]
All of these projects underscore a need and an opportunity to diversify our energy markets. This is a time-limited proposition, and the pressure on Canada to respond quickly is high.
[English]
I would like to speak about responsible resource development.
[Translation]
As a government, we are very mindful of the importance of the resource sectors to our economy—and equally mindful of the importance of developing our natural resources in a responsible manner.
[English]
This is the overarching principle behind our government's plan for responsible resource development. With this plan in place, Canada now has one of the most competitive and one of the most effective regulatory regimes in the world.
[Translation]
Time-consuming and costly duplication between federal and provincial project reviews is being eliminated. There are firm, beginning-to-end timelines for reviews. A more efficient and predictable regime, one that is more effective.
[English]
We have been clear: projects will not proceed unless and until they have been proven safe for our workers, for our communities, and for the environment. Responsible resource development is an ongoing top priority of our government, and certainly of Natural Resources.
I'd like to talk a bit about tanker and pipeline safety.
[Translation]
We are committed to taking the steps to improve our already robust tanker and pipeline safety systems that will result in stronger prevention, enhanced preparedness and response, and improved liability and compensation in the very unlikely event of an incident.
[English]
Earlier this month, and I announced future measures to enhance these energy transportation systems. The new world tanker safety measures respond to the tanker safety expert panel report and continue our work towards preventing spills in the first place, cleaning them up quickly should they occur, and making sure that polluters pay.
As part of this enhanced system, we are modernizing Canada's marine navigation system, establishing new area response planning partnerships, and, importantly, supporting aboriginal communities participation in marine and pipeline preparedness in response planning.
[Translation]
In addition to the steps already taken in recent years for our pipeline safety system, we are expanding the power of National Energy Board to enforce compliance. We will also ask the National Energy Board to provide guidance on the use of the best available technologies in federally regulated pipeline projects.
New measures will ensure that companies are fully liable and provide compensation for damage to the environment and property in the event of a spill. The polluter-pays principle will now be enshrined in law so that it is clear that Canadian taxpayers are not expected to foot the bill in the event of a major oil spill.
[English]
We are also increasing the involvement of aboriginal communities in planning and operations to ensure their local expertise is incorporated into our world-class safety systems.
As well, our government intends to develop a strategy, in full consultation and collaboration with aboriginal communities, to better integrate aboriginal people and their communities into energy infrastructure development. This was a key recommendation of the recent report by special representative Douglas Eyford.
I was pleased to be in Prince Rupert earlier this week to announce two important measures for enhanced aboriginal engagement. This includes the creation of a major project management office in the west, and a tripartite agreement with the province of British Columbia and first nation leaders.
[Translation]
Indeed, our government understands the benefit of the full participation of aboriginal Canadians in all aspects of resource development.
[English]
Finally, with respect to main estimates, Mr. Chair, with this context let me discuss my department's main estimates for 2014-15.
The estimates show planned budgetary spending of $2.53 billion, which is a decrease of about $232 million from the previous fiscal year.
[Translation]
The decrease from year to year is the net result of a number of changes in levels of spending across different items, against the backdrop of diligent management of resources, as our government works towards realizing a balanced budget by 2015.
[English]
The economic action plan's 2014 main estimates do not include all of the decisions that our government has taken in support of Canada's natural resource industries. For example, Canada's economic action plan 2014 will deliver on priorities, such as $90.4 million, over four years, for investments in the forest sector, specifically IFIT, an initiative to foster job creation, and, importantly, innovation in communities' forestry operations across Canada. IFIT provides support for the adoption of advanced technologies and the commercialization of new products in the forest sector.
[Translation]
$11.4 million over five years to invest in state-of-the-art earthquake monitoring systems, supporting the safety of families and communities, the Government of Canada is providing emergency planners and responders real-time information about earthquakes in Canada.
[English]
There is $117 million for AECL to maintain safe and reliable operations at Chalk River Laboratories while we take steps to restructure the labs and prepare for transition to a government-owned contractor-operated model; and $28 million over two years to assist the National Energy Board as it undertakes an unprecedented number of reviews of major projects.
I should note, colleagues, that approximately 90% of the funding received by the NEB is cost-recovered from the energy industry.
In conclusion, Mr. Chair, NRCan's 2014-15 main estimates clearly demonstrate how this government is committed to delivering on policy, program, and service delivery priorities for Canadians, and doing so in a fiscally responsible manner.
[Translation]
We are working with industry, aboriginal leaders and communities, provinces and other key stakeholders to ensure Canada's natural resources continue to be a cornerstone of our prosperity and the heart of an innovative, competitive Canadian economy.
[English]
Thank you again for the opportunity to appear before the committee. I look forward to taking your questions.
[Translation]
Thank you.
:
There may be several questions packed in there.
Obviously, I think the best way to start, Mr. Chair, is to give a specific example of how, perhaps, this is being done differently. It fits with an energy strategy, at least in terms of approach. Pipeline safety, as you may or may not know, has been one of the topics over the past couple of weeks in my 10-week tenure as the Minister of Natural Resources where we hope we're sending a clear signal of the importance of a strategy that looks at prevention, preparedness and readiness and, obviously, at the liability and compensation regime that's in place.
It has been consistent with our approach to nuclear energy. It has been consistent with our approach in other government departments, where the approach to energy overall is substantially and substantively implicated, and I'm talking about marine safety.
My exercises, in the past few weeks in particular, have been focused on community engagement, policies and tools, for example for the National Energy Board, to focus on enforcement, and for communities to be involved in the safety aspects of, for example, pipeline safety.
This has been very well received by stakeholders, by community leaders, and I think it is a really good example of where our government, moving forward, understands the context of energy development, energy infrastructure, energy transportation. When it's well understood in the context of community level participation, and subsequent to that, in community level activities that focus on safety, specifically prevention, preparedness, and readiness--I'm speaking primarily of land-based, because that's what fits within Natural Resources--and, of course, a liability regime.... Those kind of exercises and investments, if you will, go a long way to creating more confidence and more education and understanding about a national energy strategy.
:
This is a really important question, Mr. Chair, and it was one we were seized of in Rome at the G-7. Obviously, there are a couple of important issues and, therefore, things that I am sure we would benefit as a government from getting participation from the standing committee on.
First of all, in the context of the Ukraine, there's a very obvious over-reliance on supply from Russia. I would submit that this goes to at least ten eastern European countries that are in what I would frame as the 100% club: they're exclusively reliant on them. There are varying degrees of dependency on energy supply from other European countries, certainly western European countries. What the issues raise are energy supply, energy sources, and their implications on issues of national, and I would submit, global security, as we're currently finding out.
The exercise that we went through at that conference was very important. In the first instance, it was to denounce Russia's using energy as a means of coercion and to denounce, obviously, their violation of Ukraine's sovereignty and territorial integrity, and that energy would be used, as I said, as a means of coercion to that end. Beyond that, our discussions focused on an alignment of a number of other key exercises, obviously, energy collaboration; hydrocarbon science-based, non-discriminatory regulation; innovation and responsible energy use; and particularly, renewable energy and the need for alignment on GHGs. I had a bilateral meeting with Secretary Moniz on that, and we identified some key opportunities in these regards.
For us here at home, in the context of the main estimates and the policy platforms that support it, Mr. Chair, we need to understand how responsible resource development can move forward for energy products to get to our tide waters safely for distribution to other markets.
I met with my counterpart from Japan. I'll be attending a conference there later this year, and the number one topic is how far out are we from being able to bring product to their market. The good news is, there's still time, and we would benefit from any work that the committee could give us on these matters.
I think what were satisfied with, with respect to Ukraine, was that there were some short term measures that we could take to help them out, and I've offered the expertise of NRCan for some of those assessment processes. In the context of our other partners, 2017-20 have been identified as medium-term timelines where we could quite possibly get our product to those markets. That's consistent with the goals of, say, British Columbia, for example in LNG, so I'm satisfied that, while there are some pressing things we need to do, we can fit those timelines and focus on, obviously, a dynamic energy supply from Canada to meet new customers' demands.
:
Every time forestry comes up I'm always at the risk of digressing, so jump in any time if my answer reflects that.
Let me say this, Mr. Chair, obviously there is considerable forestry potential in the great Kenora riding, for example, as there is in many regions of Canada. In particular, in Kenora one of the challenges that we face is that even though our markets, the traditional ones that we've served, are showing signs of life—there is a pulse there—the forestry sector was in fact decimated.
The question on its return is how is that going to happen? We cannot have our machines dusted off to cut board-foot or just continue with primary pulp. In Kenora's case we make world-class pulp that's being tested in a number of ways. In nanocellulose technology, for example, testing confirms the quality of our pulp. But that's all we're making with it, right in our riding.
The residual questions and the ones that the main estimates have to address, in my view, have got to focus on innovation. We have to make the forest sector in the regions where our trees come from more competitive for sustainable jobs that are not subject to things like we had just experienced with the recession of 2009. In the end, for example, in Kenora all we were left with was 160 direct jobs at a value-added facility in Kenora and a couple hundred direct jobs making pulp. Everything else had been eliminated, Mr. Chair.
The main estimates have to, and I'm pleased to report do, focus on investing in industry transformation. The IFIT program itself offers $90.4 million over four years. It's focused on Canada-first technologies that foster innovation in the forestry sector. It's projected to support more than 12 and possibly up to 15 innovation projects over the next four years.
The main estimates also provide $93 million over three years for the forest innovation program. This will generate advanced high-value products and processes in the industry. It's helping to make Canada a world leader in several key technology areas.
I should add as well that the main estimates provide support for expanding market opportunity programs to increase offshore exports in the use of wood in non-residential and mid-rise construction in North America.
Certainly, as well, in my capacity as the minister responsible for FedNor, our targeted manufacturing initiatives are focused obviously on mining and some forestry activities that go to support—since the regional economic agencies and/or programs can be a little bit more nimble to respond to the scale of manufacturing that could occur, particularly with respect to forestry—efforts to become manufacturers instead of just raw producers. That involves participation with colleges potentially to bring innovation centres to key areas across northern Ontario.
I see potential in northern Saskatchewan as well and I know some of that's being done, so that people who come from those regions, who go to college in those regions, can come to better understand what the products that are naturally occurring in their regions actually do.
I'm stealing a page from my time as the Minister of Science and Technology, where over at NRC we do a myriad of things with residual pulp product and by-product, but I don't think it's as well understood as it could be by people in regions where trees are cut for the purposes of materials manufacturing and pulp and the like.
:
This is a great question, not just for Canada in general but obviously for the province of Quebec also.
We supported the decision by the National Energy Board, in particular, to approve the reversal of line 9B. It is a safe way to transport energy products. It's environmentally responsible and will create jobs and long-term prosperity.
I spoke at a forum in Montreal. Since we're using metaphors, as a former nurse, maybe I should say mine. We've had drilling, and energy and drive. There was a palpable enthusiasm. If I were to take the pulse of our industry stakeholders in Montreal to ensure that Quebec was participating in the opportunities related to your question, line 9 will transport western Canadian oil east to refineries in Montreal and Lévis. This pleases the industry. They'd like to get back into that business more substantially.
Of course, it goes without saying that every barrel of oil from western Canada displaces a barrel of oil coming from a foreign source, which will assist Quebec obviously in ending its dependence on, as you particularly pointed out, Algerian oil.
Line 9 is a made in Canada solution. It's the reversal here.
We'll have the benefit of protecting jobs in Quebec and across Canada. I believe this will create an opportunity to further develop the confidence and understanding that Canadians in communities across this great country will have in our efforts to ensure that we have world-class, world-leading pipeline safety.
It's designed not just to address international markets but, as your particular question points out, to address demand and capacity, particularly in Quebec, for our energy products. To that extent, it's a win-win for us all.
:
Thank you, Mr. Chair, for the question.
Well, as I said before, we believe that, like western Canadian refineries, refineries in eastern Canada should have the opportunity to source competitively priced Canadian oil. I think it would be counterintuitive to think about it any other way. So we welcome, in principle, the prospect of shipping western Canadian oil to eastern Canada, and to new markets abroad, and as I alluded to in my previous answer, for domestic demand, because we understand the importance of diversifying our markets in order to benefit from the incredible opportunity of energy development provided within natural resources.
This particular project will have to undergo a scientific environmental review by the National Energy Board, and we'll wait for the science and the facts before we conduct our own review and determinations. What I can tell you, for my part, in my capacity as the Minister of Natural Resources, is that what we're focused on here is ensuring that the foundational pieces like pipeline safety and the measures we will take will lead to greater confidence and understanding for communities from coast to coast to coast—that they are in fact world-class, and that elements of it are world-leading. We've already gone through this exercise in meeting the five stringent conditions from British Columbia, or at least four of them, since one of the conditions was between Alberta and British Columbia.
We want to ensure that our prevention, our preparedness in response, and, in particular, our liability regime give Canadians the confidence. To that extent, we have an absolute liability regime in place. It's the only one of its kind in the world, of up to a billion dollars, in the remote case that there is a spill. It doesn't matter whose fault it is; the pipeline companies have to start their activities immediately. The “fault and negligent” regime remains in place and it's unlimited.
Obviously, what we've proposed in a recent announcement I made—and I hope it will garner the support of our colleagues from across the floor—is new powers for the National Energy Board to enforce activities, and not make taxpayers pay, but rather focus on polluters paying, in the event that, as rare as it might be, a spill should occur.
So these are the important pieces that I think help build confidence through engagement and consultation with our communities across the country—that what is being proposed here and what is already in place is working. We're proud of our 99.999% safety record for the more than 73,000 kilometres of pipeline we already have in Canada; and we want to build on that success, as statistically impressive as that might seem.
:
Thank you, Mr. Regan, your time is up.
Before we go to the votes, I'd just like to thank very much our departmental officials for being here today, deputy minister Dupont for being here for the whole meeting and Kami Ramcharan, assistant deputy minister and chief financial officer, corporate management and services sector, for being here for the second hour. Thank you both very much.
Before we go in camera for future business, I want to go through the votes so we can report the main estimates to the House. There are seven votes, the choices of the committee are either to carry, to defeat the motions, or to reduce the amounts in the votes.
So we'll start with the first vote.
ATOMIC ENERGY OF CANADA LIMITED
ç
Vote 1—Operating and capital expenditures..........$102,143,000
(Vote 1 agreed to on division)
CANADIAN NUCLEAR SAFETY COMMISSION
ç
Vote 1—Program expenditures..........$36,578,266
(Vote 1 agreed to on division)
ç
Vote 1—Program expenditures..........$64,555,107
(Vote 1 agreed to on division)
ç
Vote 1—Operating expenditures.........$649,823,365
ç
Vote 5—Capital expenditures.........$12,777,080
ç
Vote 10—Grants and contributions.........$444,039,000
(Votes 1, 5, and 10 agreed to on division)
ç
Vote 1—Program expenditures..........$701,325
(Vote 1 agreed to on division)
The Chair: Finally, shall the chair report the main estimates for 2014, less the amount voted in interim supply, to the House?
Some hon. members: Agreed.
Some hon. members: On division.
The Chair: Thank you all very much for your cooperation. We'll now suspend very briefly and go in camera for a very short meeting on future business.
[Proceedings continue in camera]