Environment Committee on May 26th, 2009

[The Chair, Conservative, James Bezan]

We'll call this meeting to order. It is meeting number 22 on the spring 2009 report of the Commissioner of the Environment and Sustainable Development.

I'd like to welcome Scott Vaughan, the commissioner. Today he has with him Neil Maxwell, assistant auditor general; Kevin Potter, principal; Eric Hellsten, principal; and Richard Arseneault, principal. Welcome to the table.

First I'd like to thank Mr. Scarpaleggia for covering for me for the last few weeks in my absence. I really appreciate that you took control of the committee, and I understand you guys had a great trip out to Alberta. I want to thank all committee members for their thoughts and support during that time.

Mr. Commissioner, the floor is yours.

[Scott Vaughan, Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada]

Mr. Chair, thank you for inviting us this morning. I'm pleased to be here to present my 2009 spring report, which was tabled in the House of Commons on May 12. The May report comprises two chapters, “Protecting Fish Habitat” and the “Kyoto Protocol Implementation Act”.

Let me begin with Protecting Fish Habitat. We examined the role played by two federal departments—Fisheries and Oceans Canada and Environment Canada—in the protection of fish habitat.

Fish habitat is a national asset. It provides food and shelter for aquatic wildlife as well as water for human consumption. The fish habitat protection and pollution prevention provisions of the Fisheries Act are important pieces of environmental legislation relating to aquatic ecosystems. In this audit we looked at ways Fisheries and Oceans Canada and Environment Canada carry out their respective responsibilities for fish habitat protection and for pollution prevention.

We found that efforts to protect fish habitat have been inadequate. In the 23 years since the habitat policy was adopted, many parts of the policy have been implemented only partially by Fisheries and Oceans Canada or not at all. This could be putting fish habitat in jeopardy. The department does not know whether there has been an overall habitat loss or gain. For example, it has limited information on fish stocks, the quality of fish habitat, contaminants in fish and water quality nationwide.

There has been little progress since 2001, when we last reported that Fisheries and Oceans Canada could not determine the extent to which it is progressing toward the policy's long-term objective of a net gain in fish habitat. Fisheries and Oceans has made progress in implementing its environmental process modernization plan so that it can better manage risk that projects pose to fish habitat. However, the department has little documentation to show that it has monitored the impact on habitat that actually occurs, whether habitat was protected by mitigation measures the department required as a condition for improving certain projects, or the extent to which project proponents actually compensated for any habitat loss.

In addition, the department reduced enforcement activity by half and, at the time of our audit, had not yet hired habitat monitors to offset this reduction. We note that Environment Canada has not yet identified what it has to do to fulfil its responsibilities under the Fisheries Act related to prohibiting the deposit of harmful substances like pollutants into fresh water and coastal waters that contain fish. It has not established clear priorities or results. It does not have a systematic approach to addressing risks of non-compliance with the act that allows it to focus its resources where significant harm to fish habitat is most likely to occur.

Environment Canada does not know whether the results of its own administration of the Fisheries Act are sufficient to satisfy the strict prohibition against pollution that the Fisheries Act imposes.

Finally, Mr. Chair, we found little formal coordination between the two departments to set priorities or to develop common criteria for habitat protection.

The two departments have accepted all of our recommendations for this chapter.

Turning now to the Kyoto Protocol Implementation Act, the act was passed by Parliament in 2007. It requires the government to produce a plan each year showing how Canada will meet its obligations under the Kyoto Protocol by 2012. It also requires me to issue reports to Parliament on Canada's progress. This is my first report in accordance with these obligations.

The government has completed two climate change plans, which include targets for reductions in emissions of greenhouse gas within the Kyoto Protocol period, 2008 to 2012. We found that the plans do not include all of the information required under the act.

We found that the government will be unable to determine actual emission reductions achieved for each of the measures in its plans as the act requires. Without a system to count real emission reductions resulting from its measures, the government will be unable to inform Parliament whether the measures are working.

We also found that Environment Canada has overstated the expected reductions in greenhouse gas emissions for the 2008 to 2012 Kyoto Protocol period.

Lastly, the audit also found that the plans lacked transparency. For example, they did not disclose how reductions in greenhouse gas emissions could be affected by various uncertainties, including economic fluctuations.

Environment Canada has accepted most of our recommendations and has committed to follow through on them in the next climate change plan.

Mr. Chair, that concludes my opening statement. We will be pleased to answer questions.

Thank you.

[The Chair, Conservative, James Bezan]

Thank you very much, Mr. Commissioner.

We'll kick it off with our seven-minute round. Mr. McGuinty, if you could lead us off, please do so.

[David McGuinty, Liberal, Ottawa South, ON]

I have a series, Mr. Vaughan, of specific questions. On protecting fish habitat specifically, are the expenditures of Fisheries and Oceans Canada up or down with respect to enforcement and protection of fish habitat?

[Scott Vaughan]

Overall, we noted in the chapter that $70 million was allocated for the entire program. We also noted that there was a reduction in the number of fisheries officers in certain regions in Canada.

Let me turn it over to Mr. Hellsten to give you a more precise answer.

[Eric Hellsten, Principal, Office of the Auditor General of Canada]

Thanks, Mr. Chair.

The expenditures that DFO is spending on fish habitat have remained about the same for the last five years that we looked at.

[David McGuinty, Liberal, Ottawa South, ON]

Mr. Vaughan, I want to go to navigable waters and environmental assessment changes. I don't think your report speaks directly to this issue. You do talk about the essential nature of protecting fish habitat. Have you examined the changes in the NWPA and the massive changes to environmental assessment that have not seen the light of day through this committee or through Parliament?

[Scott Vaughan]

Thanks for the question.

No, the scope of this audit was to look at the application of the habitat policy. We've noted that among the triggers in that is CEAA, and we've looked at a sample of ministerial authorizations for which there was a CEAA trigger, but we haven't looked at the specific changes you've alluded to.

It may be of interest to the committee that we will be tabling a report in November of this year on the CEAA and its application.

[David McGuinty, Liberal, Ottawa South, ON]

Can I go to some of your comments from just moments ago on the government's statements with respect to reductions it expects to achieve in greenhouse gases? How badly overstated are these numbers, or can you qualitatively help Canadians understand how deliberately overstated these numbers are?

[Scott Vaughan]

Well, there are two questions there. Going to the latter first, we wouldn't comment on intent. What I will say is that doing these estimations is complicated. Just to leave it at that, it's complicated to actually come up with accurate estimations.

On the first part, on how much of an overestimation, we probably have a ballpark of at least half, or perhaps a little more.

[David McGuinty, Liberal, Ottawa South, ON]

Over half of the anticipated greenhouse gas reductions will not occur?

[Scott Vaughan]

We didn't want to get into specific numbers, but that would be a general estimate, yes.

[David McGuinty, Liberal, Ottawa South, ON]

I'm not sure if you were appointed commissioner, Mr. Vaughan, when the former minister, now the Minister of Transport, went to a Senate committee and put up a very interesting slide show—he had a penchant for slide shows—when the Kyoto Protocol Implementation Act was being debated at the Senate. He showed up with a 20- or 25-page deck, which was projected, in which he had, in his estimation, completely costed the implementation of the Kyoto Protocol Implementation Act. That has since disappeared. We can't find that deck or that overture or statement anywhere. It's not public. It's not on websites.

If a previous minister was in a position to tell the Canadian people, with what we believe now were fictitious numbers, that he knew the cost of implementing the Kyoto Protocol Implementation Act, have you found any evidence anywhere to suggest that the government has costed the implementation of this act?

What number can we rely on here if over 50% of the anticipated reductions are overstated?

[Scott Vaughan]

Let me turn to my colleague Monsieur Arseneault on whether we've examined that.

In the chapter we looked at what was required within the act itself. We noted, for example, that some parts were missing, such as estimates on equitable distribution of reductions, as well as just transition of workers, which would get at some cost issues.

Perhaps Monsieur Arseneault can look at the more general question.

[Richard Arseneault, Principal, Office of the Auditor General of Canada]

The government itself, in its plans under the Kyoto Protocol Implementation Act, has said that it's not going to meet Kyoto. That's not news to anyone. I think it's been made public. The government instead is coming up with another plan, called “Turning the Corner”, which is reflected in big part in the plans the government has produced under the Kyoto Protocol Implementation Act.

We looked at what they're proposing. It's a different baseline. It's no longer 1990, it's 2006. It's no longer the Kyoto Protocol objective of minus 6% based on 1990; it's 20% in 2020 and 50% or whatever in 2050.

So we looked at, for the Kyoto period--that's what the act requires--what they will be producing in terms of greenhouse gas emissions reductions. We saw that they will be accounting for credits given to industry for a technology fund, which won't represent real reductions during the Kyoto period. That's a significant part of the reductions, and those reductions are not, therefore, real during the Kyoto Protocol. They may happen later. That's not even certain, but they may happen later.

There are also other things the government is proposing, such as regulated codes of practice for fugitive emissions. They're assuming a compliance rate of 100%, which, based on previous audits that we've done on compliance....

You know, compliance is a difficult thing. You need to promote compliance and then you need to enforce compliance. It takes time. Therefore, it's unlikely that they would achieve 100% compliance right away.

[David McGuinty, Liberal, Ottawa South, ON]

Let me ask one last question, if I could.

Commissioner, during the briefings I think you told us there were at least three plans--three plans tabled by the government, three years, three ministers. In any of the work they've done, any of the analyses you've performed, have you come up with any numbers, or has the government produced any numbers, on how high the prices for energy will increase under their plans, which will lead, of course, to an increase in the price of everything?

[The Chair, Conservative, James Bezan]

Mr. Commissioner, I'll just let you know that Mr. McGuinty's time has expired. I would just ask you to make a very quick response.

[Scott Vaughan]

Yes. Thank you.

Under this we looked at two plans, the 2007 plan and the 2008 plan. One of the observations we made in relation to the transparency issue was that it wasn't clear what the assumptions were, within the business-as-usual scenario, on what the energy prices would be, including volatility and some price range.

[The Chair, Conservative, James Bezan]

Thank you.

Monsieur Bigras, sept minutes, s'il vous plaît.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

Thank you, Mr. Chair.

First of all, I would like to thank you for your report. It is too bad that it was submitted when the committee was away on business in Alberta.

[The Chair, Conservative, James Bezan]

Just one minute, please.

We have a technical difficulty. Our interpreter is actually by herself back there. She will have to make a phone call.

We're going to suspend the meeting briefly to allow interpretation to get set up properly.

[The Chair, Conservative, James Bezan]

I'll call the meeting back to order.

Monsieur Bigras, s'il vous plaît.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

Thank you very much, Mr. Chair.

I want to thank the Commissioner for his report, which was unfortunately submitted while the committee was away on business in Alberta. It provides us with an update on the Canadian government's progress with respect to climate change policies, programs and plans.

When the government was elected in 2006, it undertook a program review. Treasury Board examined all of Environment Canada's and Natural Resources Canada's programs. It evaluated those programs using three categories: the first involved programs that it recommended be renewed; the second, programs that it recommended be cancelled; and the third, those that it recommended be reviewed. I believe that the review was done in 2006. The goal was to see whether the previous government's programs had met their greenhouse gas reduction targets. I remember that certain programs ended up being cancelled.

If I understand correctly, the government introduced a program audit procedure. How is it that the government is now having difficulty making the connection between the performance of these programs and reductions in greenhouse gas emissions, when Treasury Board established a program specifically for that purpose?

Are you saying that the government does not have a system in place? Commissioner, in your speaking notes, you said that without a system to measure the reduction in greenhouse gas emissions resulting from these measures, the government cannot tell Parliament whether the measures are productive or not.

How is it that, in 2006, the government was able to put in place a procedure to audit the previous government's programs, when it is unable to put in place a system to evaluate its own programs?

[Scott Vaughan]

Thank you for your question.

In terms of the Kyoto Protocol, as you said, we found that there was no appropriate system to measure the reductions resulting from various measures. There is a national system that evaluates all greenhouse gas emissions. However, there is no system to evaluate the reductions resulting from each measure.

We also found that this system was very complicated. There are one or two examples in other countries.

I think that Mr. Arseneault could elaborate on this.

[Richard Arseneault]

I believe you are talking about a government evaluation program. It is indeed in place. Every five or seven years, requests are made, and the government has to re-evaluate its programs. The government has not been in power long enough to have evaluated all of its programs, but it plans to do so. It will be done in the future.

In this chapter, we indicated that the government is able to forecast the reductions that it will achieve through various measures in its action plan. But how is it that the government is not able to evaluate them after the fact? That is the question we asked. We made a recommendation, and the government has responded.