Thank you, colleagues, for this opportunity. It's great to be here again, especially on the heels of our government's balanced budget, economic action plan 2015.
The balanced budget tabled on April 21 reflects our government's commitment to the fiscal discipline that supports job creation, economic growth, and long-term prosperity for Canadians. It also reflects our long-standing position that Canadian families should be able to decide how to spend their hard-earned money, and that's why we're returning more of it to the pockets of every family.
I mention this in the context of the matters related to natural resources because this approach is not shared by all. Obviously, our opposition has been vociferous in advocating for policies that would reverse these tax cuts and raise the price of everything through risky policies like a carbon tax. Let me be clear. This unilateral scheme will require, by necessity, a carbon tax, impose higher prices on everything that Canadians buy, and hurt the Canadian economy and competitiveness. This would be no more obvious than in its impact on the energy sector. That is why you will notice that absent from our economic plan is any mention of a carbon tax.
In terms of a budget overview, let me spend some time talking about what is in economic action plan 2015. As the said, our balanced budget is prudent, it's practical, and it sticks to our successful plan for creating and protecting jobs and opportunities for Canadians. This includes important new measures to help families and communities prosper, while ensuring the security of all Canadians, and it delivers timely investments for the natural resource sector that has helped to build this great country.
[Translation]
Members have often heard me talk about Canada's natural resources as key drivers of our economy. There's good reason for that.
Our resource sectors—directly and indirectly—account for almost one fifth of our nominal GDP and more than 1.8 million jobs across the entire country. They generate an average of $30 billion annually in government revenues—revenues that support important public programs and services, including health care, education and infrastructure.
That is why responsibly developing our natural resources continues to be a central element in our economic action plan for 2015. And that is why our government is proud to continue supporting sustainable growth through targeted measures in the forest, mining, nuclear and oil and gas sectors. We have also made significant investments to strengthen public consultation and environmental protection.
[English]
Let me highlight some specific details of the economic action plan 2015.
For forestry, we will continue to support the transformation of the forest sector by extending the forest innovation program and the expanding market opportunities program.
In mining, we are sustaining Canada's global leadership by renewing the targeted geoscience initiative to develop new and innovative ways of exploring for deeper minerals, unlocking rare earth elements and chromite production, extending the mineral exploration tax credit, and expanding the definition of Canadian exploration expenses to include the costs associated with environmental studies and community consultations.
On the nuclear side, Atomic Energy of Canada Limited will receive the investments it needs to maintain safe and reliable operations at the Chalk River Laboratories.
There is also continued support for LNG, from the accelerated capital cost allowance to a commitment to extend natural gas export licences from 25 to 40 years.
If you're in the business of natural resource development, then you are in the business of environmental performance and aboriginal engagement. That's why budget 2015 includes substantial investments and initiatives to maintain public engagement and improve environmental performance safety. There is funding to enhance the safety of marine transportation in the Arctic and further strengthen marine incident prevention, preparedness, and response in waters south of the 60th parallel. This is consistent with our approach to rail and pipelines.
As well there are some new investments to support effective project approval through the major projects management office initiative, to continue consultations with Canadians on projects assessed under the Canadian Environmental Assessment Act, and to support greater engagement with all Canadians, including aboriginal communities, with a focus on enhanced safety and environmental performance through the National Energy Board.
[Translation]
I will now discuss responsible resource development.
All of these measures build on our government's plan for responsible resource development, which is making the review process for major projects more predictable and timely while improving the safety of our offshore, rail, pipelines and nuclear facilities. Our government's message is clear: we are supporting the responsible development of our resources, but no project will proceed unless it is safe. Safe for Canadians and safe for the environment.
Let me now turn to the issue of lower oil prices. Clearly, this has had an impact on the economy in all regions of Canada, on government bottom lines, and on the oil and gas industry's investment plans, at least in the short term. While conditions are challenging today, Canadian crude oil production is expected to keep growing in 2015 and beyond. Canada's oil and gas industry has a long-term perspective and most projects already under construction are expected to move forward. And remember: the long-term outlook for energy is strong.
The International Energy Agency projects that by 2040 the world will need at least a third more energy than is being consumed today. With our extensive oil and gas reserves and our unparalleled expertise, Canada is well positioned to help meet that demand. However, we must build the infrastructure needed to get Canadian energy to global markets to ensure Canada gets the best return for its resources, whatever the market conditions.
[English]
This brings me to my department's main estimates. First, it's important to note that the main estimates are a snapshot in time of planned expenditures. Here are the details.
As you will see there are a number of substantial new investments and they include $22.8 million to renew the investments in the forest industry transformation program, an additional $19.7 million to define the outer limits of Canada's continental shelf in the Arctic, and an $18.4 million increase to manage low-level historical waste through the Port Hope area initiative.
These main estimates also include funding for the seven agencies under my portfolio, which are key partners in supporting our government's natural resources priorities. To ensure the National Energy Board can continue its important work we're providing an additional $5.6 million to carry out public hearings on major projects such as Energy East.
As announced in budget 2015, $80 million over five years will be invested beginning this fiscal year for safety and environmental protection as well as greater engagement with Canadians.
In conclusion, Mr. Chair, our balanced budget main estimates demonstrate our government's responsible and targeted approach to realizing the full benefits that our natural wealth provides. As I said when last here, we're committed to developing Canada's resources in a way that's safe and environmentally responsible, and engage all communities, in particular aboriginal communities, in every aspect of development. These are not negotiable, frankly, and we will continue to take action to ensure these goals are met.
Thank you again for this opportunity. I'm happy to take your questions.
:
Thank you for that question, Mr. Chair.
Obviously this is of particular interest to me, not just as the Minister of Natural Resources but as a member from one of the larger ridings in Canada and across northwestern Ontario, I would submit, with a calibre of timber that can compete with the best around the world.
In the wake of the last recession, in which the forest sector was the first in, and frankly, one of the last out, it's certainly showing signals—“strong” may too strong a word for it—and signs of life. There are parts of it that are doing better than others. If that's the case—and I believe it is—it's because of investments, the acceleration of commercialization, and highly innovative first-in-kind technologies in Canadian forestry industry facilities.
There are two important objectives in IFIT. In terms of technological innovation, there has been a focus on supporting the industry and specific mills in improving and increasing the efficiency of their production and of course the diversification of their product offering. I can say that in northwestern Ontario, particularly in the great Kenora riding, we are seeing one new mill open, two reopened ones, one set to reopen, and one at or near full capacity. In at least a third of these cases, they are coming back with value-added products. The support they're looking for—for example, from FedNor or Industry Canada—is focused on how to produce products more efficiently and with technologies that enable them to do so more effectively.
Current spending by proponents and contributions from other sources indicate that for every dollar the federal government invests from the program, another $2.60 is leveraged from other sources. We think that's good. We'd like to see it improve. The program has successfully funded more than 14 projects involving nine world-first technologies, with 75% of the projects creating new products or diversifying recipients' product offerings.
I'm a big fan of the success that this program has had. It's a credit to my officials for its implementation, and obviously, based on what I have just said, we have every confidence that it was a smart reinvestment moving forward.
:
Thank you for that question.
To go back to your first question, there are two structural challenges for the sector and in that sense two opportunities. I talked earlier about investments in innovation. The other important component is the transformation of the markets for forestry.
We've seen significant—I may understate it by saying significant—growth in the Pacific basin's demand for Canadian forest products. It's my view that while that's very encouraging, there remain parts of Canada.... Again I go back to northwestern Ontario, where we, being somewhat landlocked, are continuing to develop and strengthen our position in markets in the Midwest of the United States and looking at opportunities from the east coast, as our friends in New Brunswick are seeing strong signals that the forest sector is rebounding. In their aggregate, they all point to the pursuit of market diversification for Canada's sustainably produced and high-quality forest products.
This program spending, to the tune of $1.8 billion since 2007, has significantly improved product demand for the Canadian forest sector overall. I'm pleased to highlight to the committee that budget 2015 confirmed $30 million over two years to the expanding market opportunities program. I believe strongly this will help Canadian forestry companies develop new markets and market segments for Canada's wood products.
I would say in closing, Mr. Chair, that my efforts in the Pacific basin in particular have been focused on, in the case of South Korea, looking at the free trade agreements and dealing with any residual issues like marking, translation, and capacity around Canada forest products, This is to ensure there are no technical barriers to the robust exercise Canada has made overall in terms of signing on to more than 38 free trade agreements. For the forest sector this has to mean increased demand. We've seen that in significant ways for China and we're very hopeful in Korea. As other agreements become ripe for discussion and advancement, we believe that the forest sector has probably not been for some time in a better overall position in terms of technology and expanding market opportunities to take full advantage of what that presents.
:
Thank you very much, Mr. Chair.
Welcome, Minister.
I'd like to get back to the National Energy Board 2015-2016 report on plans and priorities. On page 20, in the section that discusses energy regulations and subprograms, the implementation of various projects, including Bill, is mentioned. The report discusses various strategic outcomes, programs, the continuous improvement of regulations, transparency and available information. The National Energy Board is going to be given greater responsibility. However, when we look at the evolution of planned expenditures between 2015 and 2018, we see that almost all of the subprograms will see a marked decline in financial and human resources of approximately 15%.
On page 17, where energy regulation is discussed, we see that planned expenditures will drop from $49.5 to $39.2 million over three years. The same thing is true of jobs. The number of full-time equivalent positions will go from 335 to 283. The same thing applies to the implementation and monitoring of energy regulations and their application, as well as to energy information programs and internal services.
Almost all of the National Energy Board sectors will see their human and financial resources diminish by approximately 15%, despite the fact that they will be given increased responsibility.
I would like to know how the National Energy Board is going to be able to attain its objectives, given these circumstances.
Thank you very much, Mr. Minister, and thanks for being here today.
I want to say that I particularly appreciated your championship of a balanced budget in 2015. That is something that will help the entire resource sector and Canadians by keeping their taxes low and something that's the number one priority for my constituents in Calgary Centre. I wanted to mention that.
I have to say that maybe “elated” is too much of a strong word, but they are certainly relieved that we have a balanced budget, given that oil prices are now about $60 a barrel. They also are appreciative of your incisive leadership on both energy and the environment. One of the examples that I had cited to me was the $80 million that we have announced over five years for environmental protection.
I want to ask you, in light of the $60 a barrel WTI right now, my constituents are really interested in our being able to take advantage of export opportunities, particularly in the clean LNG sector.
You started to answer the question, but I believe you were cut off across the way, so I would like to hear from you exactly what that tax break looks like, how it could be used, and why, please.
:
Thank you for that question.
First of all, I don't profess to be an expert on oil prices. For the federal government's purposes, we're more interested in the prudent approach to any potential revenue, in particular from oil over the course of 25 to 40 years, and its average cost, as opposed to the highs and lows. Obviously the current volatility reminds us of a much broader situation of a fragile economic environment the world over, but when it comes to oil prices, the responsible thing is to take an average cost over a longer period of time.
With respect to production, as I said in my opening remarks this continues to increase, both for the United States and for Canada. I would add that Canada in particular is increasing its production and export to Europe. The fuel quality directive obviously took us a step closer to that. Oil sands crude now sits with the light and sweet crudes that Europe currently permits. We're marching towards 5% of the crude oil supply to Italy.
Our transportation of crude oil is obviously going by pipeline, rail, and marine transportation. I think the most important thing we can do right now is to ensure as a matter of public confidence that when it comes to these three important transportation pieces of infrastructure, as they relate to reaching the markets that your constituents are thinking about and want, that safety, prevention, preparedness, response, and world-class liability based on the polluter pays principle are the bedrock of moving forward on any options for export of Canadian crude.
:
Thank you for that question. It builds on the previous responses that I've given in identifying what would be the most responsible and strategic investments for the mining sector at this critical juncture. Obviously, exploration is a key part of this. I mentioned the mineral exploration tax credit and the expanded definition of “exploration”, but the conversation around exploration is incomplete without talking about geo-mapping.
I know your background and I've appreciated your insights and counsel in this regard. It's designed to set the stage for long-term investment in what I often call legacy resource development, particularly in Canada's north, to guide the research activities. The geo-mapping program engages extensively with provincial and territorial partners.
There are 14 research activities launched last year alone that were shaped by important consultations, stimulating investment in exploration. The geoscience knowledge produced by geo-mapping for energy and minerals, or GEM, gives northern communities and investors valuable information to make informed decisions about the viability of a site. Frankly, it indicates the best locations to advance the extractive activity, obviously, for the benefit of the market and the speculation that goes on around commodities, particularly in mining, to give investors confidence of the scope, if you will, of a particular resource deposit, and obviously the justification for its mapping, for exploring it further, and in certain instances moving on to the extractive exercise.
:
Thank you, Chair, and thank you, Mr. Hamilton, and Minister Rickford, for being here today.
My first question is in regard to mentions of the Ring of Fire in the estimates. Back in 2013, Minister Clement, likened this project to the Alberta oil sands and estimated there could be up to $130 billion of wealth tied up in this mining project. Mr. Clement also said that he didn't believe this was an opportunity we could afford to pass by.
It's worth noting that budget 2013 made some very small, almost token if I may say, commitments to the Ring of Fire. Last fall, Lourenco Goncalves, the CEO of Cliffs Natural Resources, commented on the progress of this project. He said, “I don't believe under my watch, and I plan to stay [alive] for the next 50 years...that the Ring of Fire will be developed". He also said, “The Ring of Fire is a remote land with no railroad, no road, nothing”, and he added, “Without the infrastructure, there’s nothing we can do.”
Since then his company, as you know, has abandoned the project and taken a $264 million writedown as a result.
The Ontario government has put a billion dollars on the table in an effort to get the project going with the proviso of course that the federal government also comes to the table. This mining project is in your riding, Minister, so I'm sure you can highlight exactly what new support there is for the Ring of Fire in these estimates and explain how this new support will help kick-start this $130-billion project.
:
Thank you very much, Mr. Chair.
Minister, Deputy Minister, thank you very much for joining us today to speak to the mains. I do want to take this opportunity to thank you both, for your very excellent leadership of this important portfolio, as well as acknowledge the very capable officials in the department who support your work.
I want to talk a little bit about the major projects management office. Last year our committee was briefed on this initiative and learned that it is a horizontal partnership of 12 federal departments and agencies and that it was established in 2007 to improve the regulatory system for major resource projects. Also, we understood that it has resulted in significant improvements in the efficiency of the regulatory review process for major resource projects.
The main estimates show the funding for MPMO of $81 million over three years sunsetting. In your opening remarks, however, you noted that budget 2015 supports new investment in the MPMO. Is ensuring an effective, accountable, transparent, and timely review process still a priority for the Government of Canada, and can you expand on how this funding would contribute to that?
:
Sure. Thank you for that question.
Obviously, in answering I have to contain my enthusiasm for the major projects management office and the terrific results, frankly, that it has had. There are myriad examples, but on to the more pointed question around the efforts to improve the regulatory system and the aboriginal consultation associated specifically with it, we are providing $135 million over five years, starting in this fiscal year, to continue to improve the efficiency and effectiveness of project approvals through the MPMO initiative, our plan for responsible resource development.
MPMO has transformed the approval process for major natural resource projects by shortening the timelines, streamlining reviews, and improving accountability by monitoring and reporting on the performance of federal regulatory departments. More than 35 major mining, hydro, nuclear, and oil and gas projects worth more than $105 billion have completed the review process since the initiative was established. I think, objectively, that's a terrific result, and this has helped ensure that Canada remains an attractive and competitive place to invest in resource projects.
:
Thank you very much, Chair.
Thank you very much, Minister and Deputy Minister, for being here today. We really appreciate the opportunity to ask a couple of questions.
In the ministry's planning and priorities document, there are repeated references to renewable energy technologies and energy efficiency programs, all of which are geared, or at least in part geared, to decreasing Canada's greenhouse gas emissions. As you can imagine, I fully agree with that goal and, as wouldn't surprise you, would love to see much more on that in the budget.
But when I look at the estimates, the government is cutting the very programs that we need to even begin to take steps to fighting climate change. I'm looking specifically at cuts of $9.4 million from the clean energy fund, $5.4 million taken from the wind power production incentive program, and $7.2 million taken from the eco-energy innovation initiative.
Minister, when I look at that, I guess I want to know what I should take away from those numbers. Are you at a point where you're saying we're done, we don't need to fight climate change anymore, or are you saying that you've actually just given up?
Thank you to the witnesses for attending here today.
In my riding is the municipality of Port Hope, and of course this government has committed significant funds over the years to the cleanup of low-level radioactive waste, which was not necessary for health reasons because Health Canada did multiple studies and found that there were no diseases caused by this. What did occur in this community was a lightning rod for the anti-nuclears from all around the world to come here and tell us how to do our job. The good thing is that Natural Resources Canada, under the ministerial leadership since we've taken office....
I wonder if you could give, for the benefit of Canadians and my constituents.... I believe in 2001 a previous government allocated funding for the low-level radioactive cleanup. I forget the exact amount, but it was between $250 million and $300 million. My complaint upon election, and several years later, was that all of that money was used for meetings and licensing requirements, and not one teaspoon of soil was moved.
I went and lobbied a previous natural resources minister that we needed additional funding because of the problems that were caused to this community unnecessarily, which caused a very negative economic hardship to the community, so much so that some local businesses were closing down and people were...from the cities because of the negative press, primarily through the Toronto Star—which I refer to as the red star—which said some very uncomplimentary things about the community that were not substantiated by scientific fact.
I wonder if you could let the community know about the $1.2 billion investment that this government is making to finally, in a world-class way, clean up the low-level radioactive waste.
:
Thank you very much, Mr. Chair. I also thank Mr. Hamilton and Ms. Ramcharan.
I would like to go back to the report on plans and priorities of the National Energy Board. I put the question to the minister, but I would like to hear your comments on this. I do not think I got an answer from the minister to the direct question I put to him.
In the various components of the National Energy Board plans and priorities, i.e. energy regulation, information on energy, internal services and others, we see a constant drop between the current expenditures budget and the planned expenditures between now and 2017-2018. That decline varies between 15% and 20%, in general, whether we look at financial resources or human resources.
As of 2012, the National Energy Board has been given increasing responsibilities. That year, there was a major reform in how projects are evaluated. Bill gives the National Energy Board additional responsibilities, whereas the resources allocated to it seem to be on the decline.
How can we believe that the board will be able to meet its obligations? The minister spoke about an additional $80 million, but I received no reply to the question regarding whether part of that sum is going to offset the cuts in the report on plans and priorities.
I'll follow up with a very similar question, basically the same question I asked the minister. His answer was a good answer but I'm looking for an answer in a slightly different sense.
I asked before about the targeted geoscience initiative and I've asked before about the GEM program, $22 million over five years etc., the spending. Since I've worked in the field I do understand how difficult this is to evaluate. What I'm trying to figure out is this. How do we figure out our bang for our buck when we do programs like this, the targeted geoscience initiative, thematic programming, when we do mapping? I realize the length of time, believe me. Better than anyone else on this committee, I realize how long it takes to do. I realize why you have to do it as far as infrastructure goes, but when we look at the number and it's $22 million, we're supposed to consider whether that number should go up, go down, or stay where it is. How does the department figure out that we are getting this much return on investment x number of years in the future? How do they do that?
I mean, the minister quite accurately listed the papers, the geophysical surveys, all the research. I know the industry. PDAC loves the program, etc., but in the end it's not only about what you get out for papers, it's how much exploration money is invested in the country by the private sector, and really long-term down the line, how many mines are produced in the country.
It's very complex. I get that. But is there some way that the department tries to evaluate that from a really long-term perspective and say these $5 million a year really pay off in multiples because of x, y, and z?
:
The one thing I would say—and it goes to the earlier point we raised—is that when you look at the programs in the clean-tech area—and we talked about energy efficiency and innovation—two things are happening. Those programs have a natural cycle to them. You see them being at one level for a number of years, and then toward the end they typically tail off a bit as they're going to sunset. So we're seeing that, actually, in a couple of those programs.
The second thing is that they're coming to the end of their sunsetting period. We're going to have to go through an evaluation, and the government will have to decide whether it wants to renew them. We don't know if it's going to be at a higher rate or a lower rate or the same rate.
What you're seeing right now, in this snapshot we have this year, are programs that are in place. They might be reducing spending, but that's the way they were designed so you see a little bit of that.
You also see that in out-years, and this goes to the question that was raised earlier. The funding can just drop off, if you look at the reports on plans and priorities. In fact, it might; they might be totally eliminated. But the more likely scenario is that they are renewed, perhaps in a modified form, at some level—either a bit lower, a bit higher, or the same.
Anyway, I just want to clarify that when we talk about the funding for clean energy programs and what the estimates are telling us, we just have to keep those two things in mind.
On the biofuels, yes, the money was returned to the consolidated revenue fund, and it finds its way into...wherever. It might go into research in one area; it might end up finding its way into the renewal of some of these clean energy programs. We don't have those decisions yet.
:
Thank you very much, Mr. Chair.
Thank you again for being here to speak to us about the main estimates. I mean this most respectfully. I think one only has to spend a couple of years on the government operations and estimates committee to understand the relationship between the main estimates, the budget, and all of the supplementary estimates, and how they provide us with a full picture of our government spending.
I also want to refer back to a comment that the minister made in his opening remarks when he said that these main estimates also include funding for the seven agencies under his portfolio.
Just building upon the questions that my colleague across the way had, I can well imagine there are budgets that are produced and presented that give a full explanation on how these agencies are spending the funding they receive, and of course, if there are any additional funds required, they would have to make those presentations to the minister. I want to build on that as well with a question about the Eyford report and the major projects management office. We know the government has a legal duty to consult aboriginal groups whenever its decisions or actions could have an impact on aboriginal communities or treaty rights.
Building on what the minister shared about the major projects management office, can you expand a little bit more on how the funds that are in this budget build on the recommendations from the Eyford report?
:
Sure. I think I'll separate it into two things.
One—and it probably is a bit confusing—there's the major projects management office itself, which is really charged with looking at all of the major projects and making sure all the regulators are coordinated, taking a whole-of-government approach. That's the MPMO.
There's also the major projects management office-west, whose mandate is a little bit different and it's a lot more geared towards consultation with first nations. It's focused on resource projects in the west. That has been set up really in response to the Eyford report, to try to see if we could do a better job with engaging with first nations across all of government. It has that coordination aspect. We work with Transport, Environment Canada, and others, but it's more focused on the west coast and on those projects.
So the money that was provided in the budget was really for the first of those. It's for the broad activity that really is coordinating all of the projects across the country that the minister referred to—the $135 million over five years.
The major projects management office-west actually received its money two years ago, I think. They've already set up their office out west and they're actively engaging not only with other government departments, but also with first nations. I think they're becoming, as was intended, a go-to place for people who want to find out what's happening with projects, what does the government think, what are some of the programs that might be available for first nations to access. That's the single window that people have on the west coast to do that.
As you know, there's a lot of activity on the west coast. It's a busy place at the moment, but they have their money already and they're really just focused on getting the operation up and running, which they've done, and making sure that they effectively engage with first nations. I think we're already seeing some of the successes of that.
Thank you very much, Mr. Hamilton, deputy minister for the Department of Natural Resources, and Kami Ramcharan, assistant deputy minister and chief financial officer, corporate management and services sector.
Members, we'll go through the voting procedure here for the main estimates. We're dealing with the main estimates for the fiscal year ending March 31, 2016, to the Standing Committee on Natural Resources. That's 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.
The committee has the option to either carry, reject, or reduce, but not to increase spending.
ATOMIC ENERGY OF CANADA LIMITED
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Vote 1—Payments to Atomic Energy of Canada Limited for operating and capital expenditures..........$102,143,000
(Vote 1 agreed to on division)
CANADIAN NUCLEAR SAFETY COMMISSION
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Vote 1—Program expenditures, the grants listed in the Estimates and contributions..........$ 38,921,080
(Vote 1 agreed to on division)
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Vote 1—Program expenditures and contributions..........$68,636,080
(Vote 1 agreed to on division)
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Vote 1—Operating expenditures..........$654,814,321
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Vote 5—Capital expenditures..........$14,700,394
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Vote 10—The grants listed in the Estimates and contributions..........$306,608,750
(Votes 1, 5, and 10 agreed to on division)
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Vote 1—Program expenditures and contributions..........$701,215
(Vote 1 agreed to on division)
The Chair: Shall the chair report the main estimates for 2015-16, less the amounts voted in interim supply, to the House?
Some hon. members: Agreed.
An hon. member: On division.
The Chair: Okay, thank you all very much for your cooperation. I'll see you at the meeting at the same time on Thursday.
The meeting is adjourned.