[Recorded by Electronic Apparatus]
Tuesday, May 2, 1995
.1110 
[English]
The Chairman: Colleagues, I'd like to call this meeting to order. Pursuant to our order of the day, which is the main estimates for 1995-96, we'll be looking at votes 20, 25, and 30 under the forestry program. This morning we have with us from the Department of Natural Resources Yvan Hardy, the ADM for the Canadian Forest Service.
I want to welcome Yvan Hardy and his colleagues to the committee. We're going to giveMr. Hardy and his colleagues an opportunity to make a presentation. Then we'll go right into questions and answers. - Yvan.
Mr. Yvan Hardy (Assistant Deputy Minister, Department of Natural Resources): Thank you, Mr. Chairman.
First of all, maybe I should introduce my colleagues. This is Doug Ketcheson, who is the director general for policy, economics, and international affairs; Jacques Carette, director general of industry, trade and technology; and Fred Pollett, director general, science and sustainable development.
[Translation]
These three people are director generals here in Ottawa.
[English]
Among the four of us, we should have the answer to most of the questions.
About numbers, because I suppose you're interested in numbers, I have also a number of persons here who can assist. There are Ginette Bergeron and Réjean Langlais particularly, from the corporate section, and they can also assist.
First, Mr. Chairman, I want to thank you for the opportunity to be here today to present the CFS outlook for the coming year. Again, you and your colleagues can address it in the question phase, and we'll do our best to answer.
As you know, the present year, 1995-96, will certainly prove to be quite a challenge for the CFS. There are many reasons for that. From the technical side, so to speak, there are many issues that are leading the federal government to have a greater and greater presence in the field of forestry. I'm thinking mostly about the national coordination and national side. But I'll come back to that later. The challenge will come not only from that side, but also from the fact that we have to operate in a new context, with reduced expenditures, program review, and a hard look at the ways we've been operating in the past and the expectations of both government and clients. As you will see, this year will be marked by very significant changes.
I'll look first at the context of the forestry issues that will be challenging the federal government, first the UN profile of national and international trade and environmental forest issues. All of you here are quite familiar with the forestry scene, and I don't want to go into detail, but allow me to name a few things, such as the very recent UNCSD - the Commission on Sustainable Development - meetings that have been taking place in the last few weeks in New York, at which forestry has been at the centre of the deliberations. Along with colleagues from other departments - Foreign Affairs, Environment, and so on - we had to play a very major role there in terms of setting the grounds for a future forest convention.
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The same thing applies to the Rome declaration, which came out of an FAO meeting, a ministerial-level meeting that took place in Rome about a month ago, and which you might have read about or become aware of. Again, it dealt with the future of global forest conventions and the effect of these conventions or proposed conventions on trade issues that are very important to Canada, like trade and environmental issues, and quality of forests.
I can name a few non-tariff trade barriers, such as the pinewood nematode; the problem or issue of having criteria and indicators defining nationally, internationally and globally what constitutes good, adequate sustainable development management of forests, which still remains to be defined on a global scale; certification of forest products to go around some of the efforts made by some countries to corner some of our markets for commercial reasons; and the global debate on sustainable forests.
There are also issues not directly in our target but that exist just the same. We have to live with these things, such as biodiversity, climate change, and so on. They are very much present with us.
Secondly, we have increased requirements for national coordination. In a sense, the less government there is, the more coordination we need to put our efforts together with our provincial colleagues. I'm thinking also of issues like implementing the national forest strategy, and some of the data like the report to Parliament on forest inventory and so on - all issues that need some federal presence for coordination.
There is a greater need - and I should underline this - for strategic R and D in support of sustainable development. It's one thing for the forest community, for the forest sector, and for government to make the turn to sustainable development. It's another thing to be able to deliver it with adequate knowledge, techniques and technologies. Our research effort has to be, in some cases, redirected. In other cases it has to be enhanced with emphasis on the linkage with sustainable development.
On the other hand, I mentioned program review. As you know, some of the objectives of the program review are twofold. One ``fold'' was to reduce the deficit in each department, including mine. Each sector within the department had to meet some targets - very demanding targets as a matter of fact.
At the same time, we were asked to examine and evaluate each of our programs and activities against six criteria that you are probably very much aware of. Just quickly, though, we were to answer these questions. Is it in the interest of the public? Is it an appropriate role for government? Is it an appropriate role for the federal government? Would it be better done by organizations other than government organizations, or in partnerships with others? Can it be done more efficiently? Can we afford it?
During the past six to nine months, starting at about this time least year and culminating with the budget at the end of February, each one of our programs has gone through this grid. I can tell you the results, coupled of course with the financial targets we had.
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There was then a consultation with the provinces, our major partners. With these major changes we needed to make sure that our usual partners, the provinces, who have always been the prime clients, were at least informed. But it went beyond just informing them to having them onside with us and supportive of our new orientation.
In terms of our new direction, the outcome has been a smaller and more targeted federal forestry presence. In a sense, ``smaller'' is very easy to describe. It includes the forest agreement and regional development agreement, plus program review. It will become 57% smaller over a period of three years, which of course is a big number. It remains a big number whatever way we look at it, but we have to consider that, under the non-renewal of the FRDA, a fair amount of that money was contribution money that was in a sense just passing through.
The real impact was with program review itself. It amounted to something between 20% to 25% of our basic A-base resources, which is still a lot, as you will see. The net result is that we will be cutting 410 jobs over the next three years, which in terms of practical application is, I should say, two years. That's about a third of our human resources across the country.
On top of that, another seventy persons will be relocated to new centres. Out of a current network of seventeen places of work, including headquarters, eleven will be shut down over the next couple of years. As a matter of fact, two minor ones have already been shut down, one in Val-d'Or and the other one in P.E.I. For the most part, those were offices delivering the FRDA. Other offices will be closed as the FRDA folds down. Only two are fully active this year, as you know, while offices such as Winnipeg, Prince Albert and Truro are in the so-called pay-out year.
The major impact is on two of our major research centres. One is St. John's, Newfoundland, which was about an eighty-person operation. It will be closed down in the next eighteen months, or somewhere thereabouts. The target is April of next year, but let's say that in all practicality it might stretch out to be a little bit more, although not by very much.
The second one is PNFI, or Petawawa National Forestry Institute, which is more like a 130- to 150-person operation. Another is in Sault Ste. Marie, where we had two different administrations with two different vocations under one roof. One was the regional lab and the other was one of two institutes, the one on pest management. These two will be merged and will come under one administration. At the same time, the new entity will be less than the sum of the two ex-organizations.
In terms of size, this is the impact of program review on the termination of FRDA. And I suppose you will agree that with less people, less facilities, less money and less everything else, we have to focus in terms of research. Using the six criteria I talked about, we have definitely refocused our research effort. We're in the midst of doing it right now. It's going to be a fairly long operation that will last probably over a period of two years before everything is in place.
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But the decision was made to focus on what we do best and what nobody else, no other organization, can do; that is, strategic research, research whose results eventually will change the way forestry is practised in this country. We need a strong, national network to accomplish that.
A good example of that is the use of viruses to combat forest insects. We're the only organization in the country doing that. When you have a breakthrough in research like that, then you definitely walk away from the old ways of controlling insects to a new, modern, substantially acceptable way of doing business. So that kind of research is an illustration of what we'll be doing.
The second thing is we will have a brand-new management framework. As you know, in the past we've been operating from six regional centres, whose attention was devoted mostly to serve a given region, like the Maritimes, Quebec, Ontario, and so on. Doing so was a bit of an inefficiency, because the same topic was repeated in a number of places to adapt to local conditions.
We're getting away from that mode because we cannot afford to do it any more and we've become much more horizontal in our approach. The centres will now be serving the country as a whole and will specify and identify a number of disciplines. I have an example of that, which I'll show you with slides at the end.
Our Pacific installation will do the remote sensing research for the whole of Canada. The people there will be responsible for meeting the need of the country as a whole. It's the same thing with most or all of our research activity. So that's another major change and turnaround.
Again, in terms of the third point with regard to research, not only will we be open to, but we'll be very actively seeking, new partnerships. With some of the research that's left behind, if we strike the adequate partner, we might very well...not reconsider, but with them find a new way of delivering that using some more flexibility that we can have as a government operation.
A good example of that is that in one given place we announced we were closing down. I don't know what's going to happen, but industry had a meeting not long ago saying maybe we should band together and try to maintain that operation. So immediately we indicated, sure, if you do it, we're open to talk business here and set a more, what I would call, businesslike way of doing business, where you have a board and you're paying, you're allowed to be part of the decision-making process, and so on. So we'll be very open in that direction.
In terms of policy and national coordination functions, some of the issues that will definitely retain our attention are issues like timber certification, criteria and indicators, national implementation, national forest strategy.
Already we've made some.... Along with my colleague from External, I'm now co-chairing an ADM committee, a Canadian committee with ADMs from all provinces, looking at some national and some international issues. When Canada goes somewhere and defends a position, we know the first interested party - that is, the provinces - is part of shaping up the position. We also shaped up, especially with international issues, some consultative mechanisms with Industry and NGOs for the same reason.
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Internationally, again, market protection will always be first on the list; very high on the list. Global forest conventions, international liaison, and so on will be at the centre of our preoccupations.
About forestry on federal lands, we will maintain a core resource for the federal government to have a place to go to for management of forest lands. But it's going to be on a cost-recovery basis.
With aboriginal forestry we're very active right now, talking with other interested federal departments and trying to maintain what we have at this point and at the same time getting the natives to be more involved in contributing. So it's a kind of phase-in of more, because they have been contributing to that program on their own, especially in kind. Maybe they can go out a little further. But the direction is that we're trying to stay in and make it a federal act rather than a CFS act only.
As you can see, along with the expiration of the federal-provincial agreements...as you know, that decision was confirmed in the current budget. The decision confirmed and made previously was the non-renewal of sectoral agreements. It did not mean regional agencies are not to be investing in forestry any more. There might be some cases in some areas and for some particular reasons. We've indicated we're more than willing to assist in that with our expertise. But sectoral agreements as we've known them in the past won't be renewed as they expire.
Also, some of the programs we were underwriting under these agreements might be now supported partly or entirely by some of the provinces. I'm thinking of private woodlot programs where there's some action in that direction. Nothing has happened yet, but we can see some interest.
So as you can see, the challenges for the coming year are numerous. We have them at every level.
At the human resource level, with our employees, we will be severing ties over the next two years with a large number of employees very loyal to CFS and our Government of Canada. We would like to do that in the best possible way our means, our tools, will allow us to do it.
We will have to restructure our science program in such a way as to respond to that. We will have to maintain and rebuild in certain areas the climate of excellence, especially motivation in the downsizing mode we are in right now. My indication is that we will be able to do it and in cooperation with our partners meet the forest sector's need in R and D, because the forest industry is and will remain in the short future, and maybe in the longer term too, the major industry in this country, and this industry has to remain competitive, has to be on the very edge of the new technologies, environmentally and technologically speaking, and maintain good client relationships.
These are the challenges for the year.
If you allow me, Mr. Chairman, I have four slides that would summarize these remarks.
The first one.... I guess you know everything that's there, but what may be of more interest to you is the bar graph in two colours. The pale green at the top is what's left of the forest agreements, the FRDAs we used as a reference last year. We still had a number of active agreements. This year only two are selected. You can see that in the following year and in the last year of the program review there's almost nothing left.
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The solid black in this slide illustrates the A base as we know it. You can see the blow is a little softer, but nonetheless very significant. We're going from more or less $125 million in the A base to $95 million, and since most of our money was tied up in salaries, that's one reason the blow is so hard on our employees.
So that slide is a summary of where we are going to focus after program review on the federal issues, such as.... One thing we have to do is consult with our colleagues from other departments in Environment and External Affairs to make sure they have adequate input in terms of forestry on some of these issues. Nationally, we will consult through CCFM, through coordination, ADM committees, and so on. I told you about the major international issues.
Strategic S and T remains very important, but there will be a shift away from the operational underground research we think can be handled more adequately or can be led by industry or by provinces. Direct financial support through agreements and short-term applied research will be left to other institutions.
It is a change from a focus on applied research to a focus on strategic research. There is a change in the management framework of research. We're going from regional institutes to a network of five establishments. There is a significant reduction in many research activities such as silviculture, regeneration, stand tending, growth and yield, tree breeding through conventional means, chemical pesticides - we're looking to the future - fire equipment testing and more.
The last slide shows you two things. It shows the geographic location of the centres. They are in Victoria, Moncton, Sault-Ste. Marie, Quebec City and Edmonton.
Also shown are the specialties for which these centres will assume national responsibility. The specialties for Victoria are remote sensing, biodiversity, succession/restoration, and national inventory. This doesn't mean these specialties will be exclusive to each centre all the time, because in some cases, due to the ecological and geographic variation across the nation, you might find people.... But in terms of management framework the responsibility will be there.
So, Mr. Chairman, I probably stretched my time a little bit, as usual. We are ready for questions.
The Chairman: Thank you, Mr. Hardy.
I'll go right to the Bloc and start with Mr. Canuel, please.
[Translation]
Mr. Canuel (Matapédia - Matane): As I was listening to Mr. Hardy, I was thinking that if we can cut 57% over three years, we could probably cut more. Why maintain a department if that department, at one point, has little power left, if any?
You also mentioned the closing of 11 regional offices, including that of Val-d'Or. I did not even know that it had been closed. The one in my area of Rimouski must be in a very precarious position. I would like you to elaborate on that, if possible.
I thought that last year, around this table, we had agreed on at least one thing: that investment in forestry was neither a loan nor a grant.
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You know as well as I do that forestry - and I am talking particularly about my region, the Gaspé region - is the future of these communities, because it creates jobs. Even the slightest decrease in forestry investment means that tomorrow, hundreds or even thousands of people will have to live off welfare.
You are going to tell me that it is obvious that provinces can take over. I have nothing against that, but only if the provinces have the means to do so. Listening to you, I had the impression that no one believed anymore in forestry in Canada.
I would have thought that you would have doubled the monies for research and development in your regional offices. In comparison with other countries, Canada has made great progress in forestry, but you have to admit that there is still much to do.
It takes one generation for a tree to grow. Surely something can be done to help trees grow a little faster. You will not convince me that there is no way that one could scientifically help a tree to grow faster.
We have made enormous progress in animal genetics. It is well known that a dairy cow produces three times more today than it used to do 30 years ago. I am extremely disappointed to note that you are cutting here and there in the research and development budgets.
Correct me if I am wrong, but you also said that you would do some centralization since there was duplication in some offices. I have some difficulty believing that. Given that I come from a region as large as four or five small countries, and that we have to drive long distances, I think that regional needs differ from one area to another.
The answer to my question is probably in the document, but I would like you to explain further. Given that you will be closing offices within one or two years, how will you be distributing your research and development budgets by province? I would like you to explain. Moreoever, what are the federal investments globally province by province?
As a politician, I cannot accept this 57% reduction within three years. It seems to me that it will be impossible to live with this reduction. It's completely nonsensical.
Do you honestly believe that it will be possible to achieve the same results notwithstanding the cuts? Will our forests improve within five or ten years? Will there be an interesting future for Canada within the research and development sector? I would hope that you could answer yes to my questions as honestly as possible. However, I reserve my judgement on the results that could be achieved within three or four years.
The forestry and energy budget of the Department of Natural Resources has been very limited for many years, and further cuts could have been made in other departments rather than this one. I even think that your budget should have been increased.
Mr. Hardy: Mr. Canuel, you have asked many questions. I will start by answering a few myself and then ask my colleagues to complete.
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I took notes as you were speaking, but I might have missed some things. First, I want to assure you that we will be answering all of your questions honestly and to the best of our knowledge.
You had a specific question on the office in Rimouski. The office in Rimouski will apparently close at the end of the federal government's present involvement in the Eastern Plan. This is our working hypothesis. As for the office in Val-d'Or, there had been only one person working there for a long while and that person has been relocated in Hull.
As for your general question, I can only give you my opinion. You said that if we reduced the budget by 57%, we might as well close shop since there wouldn't be enough left. In my presentation, I indicated that 57%... That is why I showed you the graph on which you could see the two sources of funding. The grey part represented the agreements on investments in forestry resources via...
You also wanted to know if it would improve the forest. During its program review, the federal government has stated clearly that forestry improvement, maintenance and investments were not a federal jurisdiction and that the federal role was limited to supply the necessary knowledge for those three activities.
That is what my answer will deal with. Given the reorganization that we are experiencing, I am totally confident that, either directly or indirectly, we will be able with our partners to generate the knowledge necessary to develop our forests in the appropriate fashion.
This could be done in different ways. One obvious way would be for some of our partners, including some industrial partners that in certain cases appeared spontaneously, to increase their contribution. We are not getting out completely of this area, but we are reducing our contribution. On the other hand, industry reacted immediately and increased its contribution. Things might not be very easy, but I'm convinced that we have the talent and the resources to work it out and that within two or three years, the Canadian Forest Service in its new form will be in full activity.
[English]
Mr. Pollett, many of the questions were addressed to your side. Maybe you would care to comment.
Mr. Fred Pollett (Director General, Science and Sustainable Development, Department of Natural Resources): Yes, there were quite a few references there to research and development.
With the cuts that are being imposed, there's no way we could carry on the program that we had. That's obvious. So we've had to make choices.
We've selected areas of program that we are actually moving out of. These are areas such as plantation research, more in the operational sense.
You mentioned genetics. We're moving away from what we would call traditional forest genetics. We're moving away from things such as certain silvicultural practices, such as thinning and fertilization, and from basic studies in growth and yields.
You might ask, why those areas? Those areas being more operational, and because we have a good base of knowledge, we're saying that this is the best chance in terms of provinces and industry. If there's an area they would move into, these are probably the areas that make the most sense.
.1150
With regard to the remaining areas, we want to focus on things that cross boundaries, such as provincial boundaries when we're dealing with problems that you are certainly aware of, such as spruce budworm, for example, which crosses many boundaries. We're developing new ways of dealing with those particular pests to benefit a large part of Canada. We're putting a lot of emphasis on the development of new techniques for combating pests.
We're still going to maintain our national fire network. We are going very heavily into ecosystem management, which will generically benefit all of the forest sector.
So we've had to make some hard choices. But it wouldn't be true to say that we would do as much with those cuts. But I think that with concentration and by networking we will have a very viable program, so when we come out of the other end of this in two years, I am convinced that with the new partnerships and the new way of doing business, what we have mandated in the organization will be done well.
In terms of your dairy cow - growing a better tree and a better cow - a lot of the work that was pioneered at Petawawa was indeed to develop that better tree.
Techniques have been developed. When I said that we're moving away from traditional genetics, that was looking at forest improvement in the way we did that some years ago. Those practices are now in place. But we have now developed what we call artificial seeds or somatic embryos in which we could take that Einstein tree or that fast-growing tree and develop artificial seeds from that one tree. We can make as many of those seeds as we want. In Canada we have pioneered that, and we're well ahead in the world in developing that type of technology.
In genetics now, with our geneticists who are left, we're looking at what genetic gains we can make rapidly from that new type of seedling. However, it's not called a seedling any longer, but an embling from artificial seeds. So if you see ``embling'' at some time in literature, you'll know they are talking about a type of seedling. So we are developing that better cow or that better tree.
We're not losing that research by closing down Petawawa, because we're going to concentrate that biotech research in Quebec in our lab at Sainte-Foy. We will combine that with the other elements of insect biotechnology so we will build a very strong base. But that base will then have to serve the needs of the country in a way that Petawawa did in the past.
I use that as an example.
[Translation]
Mr. Canuel: Could you tell me province by province what amounts will be invested in research and development?
Since agreements are not renewed, will there be compensation for the provinces? The Eastern Plan is very fine, but it will no longer be in existence in 1996. Will provinces be compensated even though there will be no direct agreement?
[English]
Mr. Pollett: Let me handle the first one. I'll give the tougher one to Yvan.
With regard to the dollars and people for research, what we're working on now is a framework that looks at the reduced number of resources and redeploys a certain number of individuals to the five centres we have at this particular time.
The centres will be reduced to some degree in terms of the number of individuals. I don't have those numbers with me, but certainly we could give you the existing resources and then the projected resources for those five centres in Quebec, Fredericton, and so on. We can provide that information.
[Translation]
Mr. Canuel: Could you provide this information a bit later?
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Mr. Hardy: On your question concerning spending, we don't have the numbers here but we can certainly give them to you after the meeting.
As far as compensation is concerned, it will not be part of the plan because we do not want to replace one expense by another.
[English]
Mr. Stinson (Okanagan - Shuswap): I have a number of questions. I would like to know if we are coming back with these questions, so if I put only one or two forward now, I'll have a chance for more later.
The Chairman: Time allowing, the intention is to go around, yes. We will try to keep it to 10 minutes for the opening round for each party.
Mr. Stinson: You've partly answered my first question in regard to expenditures, but I'll try to make sure. We have to vote on votes 25 and 30 as stated on page 5. By breaking the total spending into different activities - this is the research and the technical services sector - the problem is that, for the MPs to do their jobs effectively by scrutinizing how the government spends the taxpayers' money, we have to have additional information, which is not provided in the estimates. For example, there is no breakdown of how much is spent on each activity and operating expenses and capital expenses.
Can you provide us with these details?
Mr. Rejean Langlais (Corporate Services Sector, Sector Financial Office, Canadian Forest Service, Natural Resources Canada): What you want to find out is the breakdown of what we have shown in terms of research support. What kind of breakdown would you like? That's the level of detail that is required by the estimates process.
Mr. Stinson: Is there any way we can find out more information on the breakdown of each activity?
Mr. Langlais: What kind of breakdown? For instance, was research done in certain areas, and you would like to know what is this and that?
Mr. Stinson: If we could. Is any record kept of that?
Mr. Langlais: Yes, there is, but that would have to be provided - not today, as we will have to do the research.
Mr. Stinson: I'm looking to the future anyway.
Mr. Langlais: Would you like to have the 1995-96 forecast, the main estimates figure only?
Mr. Stinson: Yes, if I could. Sure.
Mr. Langlais: It is possible.
Mr. Stinson: Also, on page 18-8, part II of the 1995-96 main estimates, as well as 43, part III, there is mention of the forest development and liaison subactivity providing funding and technical services for the forest management on federal and aboriginal lands. During the past year, logging on the Stoney Reserve in Alberta allegedly removed massive amounts of timber, equivalent to about 25 years of harvesting at sustainable levels. When my office investigated the incident, we were told that the lack of adequate forestry personnel was a major problem here. We were told that DIAND temporarily had to borrow registered foresters from the Alberta government to try to gain control of that situation.
Can you tell me what amount you intend to spend on supplying registered foresters and technical support for forest management on Indian lands?
Also, I understand the forest management plans for many reserves were completed using FRDA funding. I would also like to know if this activity is completed, and what percentage of Indian reserves do not now have forest management plans in place, and what plans you have to complete those that are missing.
Mr. Hardy: We will need help to be able to answer all your questions, but I'll start on the more general aspect of it.
With regard to Stoney Reserve and any other reserve, the first thing to take into consideration is the responsibility of CFS versus that of the Department of Indian Affairs and Northern Development.
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What CFS has had in the past and still has is the forest management on native land program, in which we supply...and work with them. The first step was to get an inventory and then a management plan for a given property, and to assist in implementing the plan. But we have to keep in mind that we had absolutely no jurisdiction over that. So once the plan is made it's up to that particular band or nation to implement it according to the state of the art.
On issuing permits for logging, it's not our responsibility, it is INAC's responsibility. I guess your statement is quite right, INAC doesn't have that many resources in forestry, so if there's a crisis like that it might not be easy to handle.
That's a statement of fact. About the future, we definitely have been talking very closely with our colleagues to try to find solutions to that. CFS doesn't have that many registered foresters around, but we have a few, and how to make them available and make best use of them...I would like Mr. Pollett to make further comments on that; on how we're trying to put our energy and efforts together to find a solution to that kind of problem.
Mr. Pollett: I think it is the roles of departments that are very important here. However, the one thing that is for sure is we do have a lot of expertise that can help in leading to sustainable development. We're in dialogue right now with our colleagues in Indian and Northern Affairs to try to come up with some way we can use our expertise to help them in this particular area in the future.
Through the FRDAs...I can't tell you...I can certainly find out the amount of land in which management plans have been developed. We will find that out for you and provide that.
Mr. Hardy: We have that information.
Mr. Pollett: Yes, we have that information, and that will be provided. But I think it goes further than that. If you look back at the FRDAs and the history of the federal-provincial agreements, our objective has been to try to build a capacity towards sustainable development, first in partnership with the large landowners, the provinces. I think to a large degree that's pretty well done, in the sense that the provinces have come a long way. Then it's the work on the private land forests, and we have to work with aboriginal lands as well. If we're going to attain sustainable development, we have to look at the total picture.
Mr. Stinson: The only thing pertaining to that is are we in total agreement on all sides on what sustainable development is?
Mr. Pollett: I think so in the sense that...and I say that because we've had to develop some way of putting a measure on sustainable development, because ``sustainable development'' is too nice a catch-all phrase. But again, Canada has led in the development of international criteria and indicators; criteria in which we have to find some way to define what sustainable development's all about in forestry, not only in Canada but internationally, and indicators of areas we then have to measure to indicate whether we're moving towards sustainable development.
In Canada we have a process to develop those criteria and indicators and it involves all participants in forestry. We have come to an agreement with the provinces on the basis of the criteria and indicators that would be used to define and measure sustainable development in this country.
We've gone further than that through a process we call the ``Montreal process''. We're working with a number of countries; in fact ten key forestry countries have come together to work out criteria and indicators we have to bring some closure on internationally.
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So I think when you say ``agreement'', as much as possible...I can bring in a colleague here who might have a different opinion, but I think we do have the base now for defining and measuring what we mean by ``sustainable development''.
Mr. Stinson: You do have the base?
Mr. Pollett: I think we have that base; that understanding.
I had better defer to my boss here, to make sure he agrees with that.
The Chairman: Mr. Arseneault, please.
Mr. Arseneault (Restigouche - Chaleur): There are two areas I want to focus on. The first one is on pest control in the forest. I would like to have an indication of how much is being spent, or planned to be spent, this coming fiscal year on research, more specifically on the spruce budworm.
I note on page 48 of the estimates for 1995-96, in part III, there is an indication a possible new product could be on the market. Fenitrothion is going to be taken off the list within four years, I believe, and there is some major concern in New Brunswick about spruce budworm. I would like you to indicate whether this product has been proven successful, how successful it is, and in what establishment the research was done?
Mr. Hardy: I will give you a general answer and maybe Mr. Pollett can make some quick calculations about how much money we're spending on that.
The quick answer is we're spending a lot on forest insect protection. In The Soo we will keep and maintain a very strong core of researchers, mainly looking at new avenues, new strategies, and new products for combating spruce budworm and other major pests. I mentioned viruses during my exposé. Mimic is the product you're probably referring to in your remarks. We're also spending a fair amount of money improving existing Bacillus thuringiensis to become an even more effective tool.
About Mimic, it's going to be field-tested this summer. To give you a specific answer to your question, at this point that product has proven very successful through the usual lab tests and small-scale tests and now it is going to be used up in the air in operational fashion on a trial basis. That is usually the make it or break it of a new product.
But all the signs are very favourable so far that we'll had an adequate substitute with fenitrothion.
On top of that, we will maintain another line of core research, the behaviour...what we call the population dynamics and epidemiology of these principal insects, out of our Quebec and maritime facilities. That part of it is to understand the pests better in order to come up with proper strategies to counteract the pests. The strategy might be silvicultural, a matter of modifying the forest cover, for instance, or it could be using a particular product, or it could be preventive and so on.
Again, we'll be maintaining a very active program.
I know Fred is now finished with his calculations.
Mr. Pollett: I've realized the integrated pest management work is the largest single program we have in research. When we did an evaluation of research priorities right across the board, this work came out very close to the top, if not the top program in terms of a priority for this country.
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In 1994-95 we had approximately $8.4 million and 96 individuals involved in integrated pest management. In 1997-98, because this was rated very high, it would take a very low hit in terms of reduction but would probably be in the vicinity of, I would say, 8% and 14%; something of that nature.
We intend to continue with a very high focus. One thing the committee should be aware of is that we have two years to go through to get to 1997-98. There's going to be a high cost to the program and disruption over the next year or two, and that has to be accepted as a factor of change.
However, during that change we will try to continue to focus on the development of new products for budworm. Budworm is such a key concern of ours. It's not going to go away because it's quite natural in the type of forests we work in. However, once you move away from fenitrothion, which is a chemical that is being phased out over the next four years, we only have one tool and that's BT, Bacillus thuringiensis, which you've heard about before and which was research pioneered in Canada. That's all we have.
We're still undertaking a lot of BT work because we're trying to make it a lot more effective as an agent than it has been in the past. One of the concerns in New Brunswick is that a lot of people feel that BT can't do the job fenitrothion can do. That's an area we are continuing to focus on.
The other area of promise is one where our researchers in Quebec have discovered a budworm virus that looks very promising. It's early days, but trying to develop that is an area we're going to focus on in the future. When you say virus, people today get concerned. What we're dealing with there is a natural virus to that particular species; not an import from another species but using its own virus on itself. We do have some promise in that area.
Mr. Arseneault: Thank you.
The other area, Mr. Chairman, is the forest resource development agreements. As you know, for the last six or seven years I've been involved in reviewing the estimates with regard to forest resources. I suppose I could have brought in all the estimate books and placed them here, but I'm sure the officials know their content. Every year, including this one, we see how great these forest resource agreements are. They're doing such a great job. They're providing long-term employment. They're improving wood supply. They're reassuring us of the viability of our forestry sector. They're helping in research and development. They're assisting the economy. In fact, if we hadn't had those resource agreements in place years ago, I would say maybe we wouldn't have come out of the downturn so quickly in the forest resources sector. As you know, that's what's building up our numbers right now, export-wise and in the economy.
I'm sad to say that although again in 1995-96 I can point out different areas in the document about how great these resources are, after hearing your presentation today, Mr. Hardy, in which you talk about your six criteria - and I went through those six criteria - I don't understand why the forest resource development agreements are being eliminated based on those criteria. I just don't understand it. You have a citation here on page 52:
- The completion of silviculture treatments on 946,000 hectares, the planting of 465 million
seedlings, and the annual creation of 4,680 equivalent jobs -
- I can go on and on. Then you sit here and present to us these six criteria.
I would like to know why they were cut. I would like to know who made the decision. In other words, was it a political decision or was it officials? Was it a proper evaluation? I would like to know whether evaluations were made of these programs for efficiencies. If there were evaluations, I'd like to see them.
Mr. Hardy: That's a tough one. That would keep us here for the afternoon.
Mr. Arseneault: Just a straight yes or no; a straight answer. Who made the decision and why, for a start?
Mr. Hardy: First of all, to answer your question with regard to the criteria, the determination of FRDA wasn't part of the program review per se. The budget confirmed a previous government decision dating back to 1993, I believe, to terminate the agreements and not to review them at their termination. In a sense, they were already dead. The FRDA per se were never tested against the six criteria we are talking about. The result you come to when you test them might have been different, I agree with that.
No matter what level of decision it was, it was a government decision; it wasn't an official's decision. When you said how great these things were and so on, I can tell you that our people in CFS, especially those who were active delivering these agreements, were deriving lots of professional satisfaction in doing it, and they shared your views on that.
This being said, we were dealing with a political decision that was made in April 1993, if my memory serves me well, and this decision was confirmed in the current budget of this past February.
I don't know if I have answered your question.
Mr. Arseneault: Would it be based on a financial reason more than on evaluations?
Mr. Hardy: Sure, it's a financial basis.
Mr. Arseneault: Thank you.
The Chairman: Thank you, Mr. Arseneault.
Before we go to Mr. Reed, Mr. Arseneault asked if there were any analyses done over the last 25 years of the economic impact and effect of the FRDA agreements. Do you have those analyses available as to what the economic impact was of those particular agreements? If so, can we get a copy of those analyses in order for us to properly assess whether in fact, for example, the provinces are now in a position to fill the gap the federal government has left?
Mr. Hardy: Mr. Pollett is responsible for that file and can give competent information. There have been some yearly evaluations of these agreements that have been done in a systematic manner since the very beginning.
There might be some more specific analyses, Mr. Pollett.
Mr. Pollett: Yes, there have been quite a series of analyses, audits, and so on. What I can try to do is pick out the most germane that would give you an overall assessment impact. Also, we're looking now at the fact the agreements are winding up. We're trying not to walk away from it and say, that was nice, we did that. We are trying to look at a wind-up type of assessment ourselves of just what the history and what impact these agreements have had over time. We will provide you with the necessary documents. There are some assessments done of subcomponents of programs, but I think I'll be a little more discriminatory.
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The Chairman: If we can, Mr. Pollett, I'd like to get them all, because one of the problems we're having is we're now starting to get documents like this one, which is the Canada-British Columbia Partnership Agreement on Forest Resource Development. It's a report on the mid-term evaluation of FRDA too, which suggests the significance and importance of the FRDAs to British Columbia.
One of the problems we're going to encounter as a government, I'm sure, and as a committee, is if we don't have proper assessments and evaluations of our role as a federal government in these agreements, it's going to be pretty hard to have a debate when it's one-sided. The province has a particular analysis done and I'm quite confident we're going to see others from the other provinces come forward, in particular some of the smaller provinces that can't afford to take up the slack, as is being suggested by some of the government cancellations of these.
As you know in Ontario, which I can speak to very frankly, the Minister of Natural Resources has made a lot of hay out of this, about the fact the federal government gets significant revenue tax-wise but is walking away from its obligation as it relates to the forestry sector itself. They obviously must be doing an evaluation and are prepared to lay it on to the consumers, and, of course, Canadian and Ontario taxpayers.
I'd like to get the federal government's analysis of all of it, not just bits and pieces so we can't make sense of it. Of course, we know it was a political decision made in 1993 and confirmed in 1995. We're not going to dispute nor argue that. What we'd like to know is have you as a department done an evaluation of the importance of these agreements, and who will be filling in the gap to make sure that 10 years from now we don't have to revisit this and say, what a terrible mistake we made, and our forestry industry is in big trouble because we didn't keep it on the edge as far as technology, research and reforestation are concerned? Mr. Hardy was talking about this in his presentation.
That's why we're doing the estimates for you as part of our job as politicians, to make sure we recommend either this is acceptable or not acceptable. I would like to make sure you get the message from me, and on behalf of the committee, that we want those evaluations in front of us so we can do a proper assessment as to what these agreements were all about, if I can be so frank.
Mr. Hardy: Mr. Chairman, that's no problem. I just want to point out the document you are holding in your hands is a federal-provincial document. That's our document; it's not provincial on one side and federal on the other side. These agreements are managed by joint committees within the mandate, the terms of reference. There's usually a mid-term evaluation and always an end-of-term evaluation. We'll make them available to you.
The Chairman: What you're saying then is you have one for every province and every region?
Mr. Hardy: Agreements are by provinces, so they come by province.
The Chairman: Okay, so we'll expect to get a copy of them.
We'll go to Mr. Reed, please.
Mr. Reed (Halton - Peel): Thank you, Mr. Chairman. I'm quite interested in the R and D cuts that have taken place. I suppose I would be right to say that the R and D programs will be delineated in the public accounts records and the expenditures for those.
Would I be right to assume that if I took the current public accounts record when it's published and the previous years public accounts and compared the two, I could find out what programs were dropped and what were kept on? What I'm asking you is whether there is enough detail in the public accounts records to do that, or should I be asking you if you have a list of the programs that were in place, with the ones that have been dropped marked?
Mr. Pollett: Yes, I think it's the latter, that if you wanted to get an assessment of change, with resources attached to it, it would be better if we provided that to you.
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We've had to drop areas, but in some cases we've pulled out components and put them into some other areas to try to rebuild the program as best we can. It would be better for us to try to document that for your needs.
Mr. Reed: Is that very complicated?
Mr. Pollett: No.
Mr. Reed: I would very much appreciate having that information.
Mr. Pollett: Yes, we can do that.
Mr. Reed: I have one other general question. This has to do with the interaction among the various departments of your ministry. The words ``sustainable development'' have come up two or three times. It's quite obvious that, to achieve some sorts of targets on something like sustainable development, it's necessary that the various branches of a ministry should interact with each other in a complementary way, so when policy is set it's a complementary policy with this ``sustainable'' word as a flag, if you like. This perhaps has more to do with process than anything else. I realize that the assistant deputies talk with one another, but I was just wondering if you inject that theme into that interaction.
Mr. Hardy: There are many levels of answers to your question. The first one probably starts with the minister. Minister McLellan has indicated in a very clear fashion that what she intends the department to have as an orientation is sustainable development of the various portfolios for which we're responsible. She gave us very strong signals to that effect.
In day-to-day life some mechanisms had to be put in place, because not all sectors start from the same baseline on that.
Also, applications of sustainable development concepts to mining and forestry are two different things. In one case, with a renewable resource, it's easier than with mining activity, where you extract.
But we put a number of mechanisms in place; for example, at the level of directors general, policy people are sitting together. We have a committee where we compare notes and we come forward with strategy.
I'm the one responsible for the department to represent our interests at the government level when NRCan is asked for an opinion. Among ADMs, we share responsibility on a number of issues like that.
The deputy asked CFS to do it, and again we have a mechanism to make sure that whenever I go to represent an NRCan position, I'm talking on behalf of my colleagues. We have a feedback mechanism in order for my colleagues from other sectors to know where we are, and so on.
Yes, on all counts, we're dealing with that.
Mr. Reed: What I'm getting at is that a number of endeavours are taken on by government through ministries that at this point in history are leading into a broader picture. When you talk about NRCan, I think about research and development on the utilization of wood waste and its transformation into energy, and the question of how conscious the forest service is about that thrust, and how you make the two come together.
It's the same in agriculture. I sit on the agriculture committee. Agriculture is more than food and fibre now. So is your department.
Mr. Hardy: It took a bit of time to get to know each other. We have to be honest about that. You've got two departments; you pull them together. There is not instant knowledge of each other's activities and so on.
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Mr. Pollett will comment on some specifics, especially with wood products. Mr. Carette can talk to us about some joint work we're doing with Forintek and CANMET, with earthquakes and so on.
Jacques, would you maybe care to say a few words on that, and then Mr. Pollett?
Mr. Pollett: Maybe I can start.
Mr. Hardy: As you like.
Mr. Pollett: Your question is very perceptive because a lot of departments use the label ``sustainable development'' and want to move towards that goal. Dr. Hardy mentioned the fact that we do have committees in place, but during the program review it became clear that four departments really have to work very closely together in developing a common approach towards sustainable development. Those were Agriculture, Fisheries, Natural Resources, and Environment.
So we've been tasked - this came out of the program review and discussions and what not - with trying to bring together the activities towards sustainable development and our approaches in terms of looking at the broader resources.
The other thing is that I would like to send you the document on criterion indicators for sustainable development. I really think a committee that is going to be involved in sustainable development would be interested in the way we've approached this in defining and measuring sustainable development, because it's given us a tremendous step up internationally through the United Nations CSD, the Commission on Sustainable Development. Also, our own minister has promoted this internationally.
I think it's a really good ground to see where we're going with sustainable development in the future. I'm hoping other resource areas will pick up on this particular approach. We're not too shy to say we're leaders in this area.
Mr. Jacques Carette (Director General, Industry, Trade and Technology, Department of Natural Resources): I have just a few words on your utilization aspect, especially since I'm always the guy within the little group here who keeps reminding people that sustainable development also means wise utilization, and not only conservation.
Most of our utilization of the wood process is carried through a contribution agreement we have with Forintek Canada, with laboratories in Vancouver and Quebec City now, and also through the Forest Engineering Research Institute of Canada, which does the harvesting side, with laboratories, again, located in Vancouver and Montreal. We also have a close association with the Pulp and Paper Research Institute.
You've linked wood waste with energy and that's why we have some friendly debates with our energy friends there. From a wood side perspective, we think energy is a last option to use wood fibres for, because there are so many valuable products you can make with the fibre before you burn it.
Also, if you look at the various species we have, Canada was the first country to develop a technology to use aspen, which was considered a nuisance. Now we have excellent industry waferboard and an oriented strand board industry based on that so-called weak species. There's a lot of technology potential, and now we're trying, through Forintek and FERIC, to get a much higher level of utilization there.
The energy aspect of it has been dealt with and is worked jointly with our friends at CANMET. Also, Fred didn't mention this, but there have been a lot of attempts using biotechnology to manufacture ethanol and methanol and various things. But popular rumour has it now that since he sits on the agriculture committee, it's cheaper to use grain than to use wood. So that's a another debate.
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Mr. Reed: Don't trust rumours.
Mr. Carette: Yvan also alluded to some other work we do in promoting the use of wood in various markets, but also in protecting our markets. For example, to talk from a wood perspective, it was nice to see that after the earthquake in Japan the wood houses that were built there using Canadian technology withstood the tremors of the earthquake much better than any of the traditional wood frame Japanese buildings, and even the famous concrete buildings that are supposed to withstand everything. Unfortunately for competing materials, wood stood up much better.
We also have worked jointly with CANMET, the steel industry, and the concrete industry so we can demonstrate that wood is a much better sustainable material than any of the competing materials. That's one thing we're pushing with our various partners worldwide, where we try to develop wood, as I said, as a more sustainable material because it's based on a renewable resource. I'm sure you know all the key features of wood. We have that research now. It's been a massive undertaking.
I'll just finish on the same conclusion I made recently with a small speech I was giving. If we take into account the environment at the moment, wood is the best material, as long as you don't cut any trees.
Mr. Stinson: I'm glad to hear this about sustainable development. When I was in Kananaskis last fall at the Canadian Council of Forest Ministers conference, that was one of the main questions: where are we on sustainable development and what exactly is it? I'd appreciate having anything specific you have in that area forwarded to my office, please.
One of the main recommendations of this committee's report, Canada: A Model Forest Nation in the Making, was your department should cooperate with Industry Canada and the Canadian Standards Association to draw up an international certification system, which some people call a ``green stamp'', basically to provide customers or consumers with greater certainty on where the wood products are coming from. Can you tell me if this has progressed anywhere, or how we're going with that... basically to counteract what's going on in Europe with the negative response?
Mr. Carette: You mentioned Industry Canada. We do work with them. But I think more importantly, about a year and a half ago the industry itself formed a coalition, what we call now the forest industry coalition for timber certification. This is led by the Canadian pulp and paper association. They initiated the development of standards to deal with timber certification.
In Canada, as in many other places in the world, we have long-standing national standards organizations, such as the Canadian Standards Association, which has a good reputation at the consumer level, because they're experts in process and putting together people who will develop standards based on consensus. It's science based. They try to get the emotion out of it. So we were pleased when the industry picked the Canadian Standards Association to develop the standard.
At this moment, CSA is developing the standard. They have various technical committees working together. But it's like any consensus system. You can't please everybody all the time. At the moment they are at, I think, draft 8 or 9 of a consensus document. It is expected that they will have some kind of closure at the technical committee level by late summer, and then the CSA process calls for full public consultation over a 30-day period.
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All the provinces participated in the process, plus the industry and various non-government groups who have a direct interest and expertise.
There's also an international component to it, if you want, and the organization is the ISO, the International Standards Organization. They have a meeting coming up in June where Canada will be formally asking to have a new work item under ISO and then develop an international standard that hopefully will build on the Canadian initiative and create what I think is a level playing field for our industry to compete and also will have indicators and measurement elements that will permit the advancement of forest management.
It's boring at Forestry because we keep linking everything together. So the certification initiative is very dependent on the criterion indicator initiative that Fred was talking about before. It's also very dependent on what we do at the international level and and UNCSD, what Yvan was talking about earlier.
We try to link all of those things so they end up being complementary. Repeating what Yvan said, in the end we're trying to establish a good trade base for industry, but to improve forest management at the same time.
Mr. Rideout (Moncton): With the Green Plan being terminated effective in 1996-97, maybe you could give us some idea of the possible consequences as these relate to the model forest and to Tree Plant Canada, the community tree-planting operation.
Mr. Hardy: Your assumption might be right or might not be right; we do not quite know.
For program review purposes, we've been instructed to consider the Green Plan program as being part of the A base. The only problem is that we don't know, when we come to the last year of the known voted funding for the Green Plan, if that funding will be renewed. If it were not to be renewed, then it would be a hard blow to CFS, because, with everything shrinking, the importance of Green Plan funding is going up all the time. At the end of the three years, something like 20% of our funding is going to be out of the Green Plan.
For the immediate decisions that were made with regard to the Green Plan, as you can imagine, it is very high on our list of priorities, just as a matter of being consistent. We talk about sustainable development, and Green Plan programs are all tools leading towards sustainable development. The model forest is a demonstration or a field trial applying sustainable development principles to forest management. All the research behind it was to provide, and still is to provide, adequate tools to do it.
So we've decided to protect model forests, and the program called Partnership in Sustainable Development has been totally protected. There have been almost no cuts there.
The one we didn't support as much is Tree Plant. We made a kind of trade, saying that's a nice program and it would be nice if we had more resources to expend, but, since we have to make a choice, we protect the raison d'être of the department, so to speak, accomplishment of implementation and finding the tools to implement sustainable development.
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The Chairman: Thank you, Mr. Rideout.
Colleagues, that draws the interesting questions to a close. On behalf of the committee, I thank Mr. Hardy and his colleagues for coming to the committee. Keep in mind, Mr. Hardy, that we did make some requests this morning and we would certainly like to get those analyses as quickly as we can to the committees so we can distribute them.
You might want to keep in mind that we've been making the same request as related to the mining agreements and the analyses that were done as they relate to that area as well. You might want to transfer that to your colleagues in the department.
Mr. Hardy: I'll do that.
The Chairman: Colleagues, the meeting is adjourned to Thursday at 9 a.m., in room 308, for a continuation of the estimates.