Natural Resources Committee on May 6th, 2008

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

I didn't say you said that. I'm asking, is privatization on the table?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

I've said this before. All the options are on the table. None have been excluded. But I wouldn't be focusing on one—

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

When can we expect to hear from you about that?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

I'm not going to give you a timeframe, but it's something that we're very much engaged—

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Approximately.

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

It will be this year. We're very much focused on that.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

I want you to share some of the lessons learned from the last fiasco at Chalk River. What corrective actions have we put in place to ensure that it doesn't happen again?

[The Chair, Conservative, Leon Benoit]

Minister, you'll have to give a very general answer, because you only have 15 seconds.

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

I've worked with my colleague, the Minster of Health. We've put plans in place to ensure that there's an adequate supply of medical isotopes. We have contingency plans to ensure that this will happen. The reactor at Chalk River, the NRU, is operating. It's a marvellous piece of technology, and it's producing. We can be very proud of what that technology is doing in providing 50% of the world's supply of isotopes.

[The Chair, Conservative, Leon Benoit]

Thank you, Minister. Thank you, Mr. Alghabra.

Madame DeBellefeuille.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry, QC]

Thank you, Mr. Chairman.

Thank you, Minister and Madam Deputy Minister. We'll continue our discussion on the AECL.

You stated, in November 2007, that a final amount of $37.5 million would be allocated to Atomic Energy Canada. We learned, in the last budget, that the government had given the AECL $300 million for fiscal year 2008-2009.

Minister, how much of this money will be used to make the Chalk River laboratory safe and what amount of the $300 million is earmarked for the advanced CANDU reactor? And can you tell me whether this will really be the last sum of money taxpayers will have to pay to develop the ACR-1000?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

You were correct: it was $300 million in this budget. When I made those statements last time, we were sitting down with AECL and trying to find out exactly the resources they need. We were in discussions at that time, preparing for the 2008 budget. There was some confusion, but we were looking for a final funding and a means of getting this completed. Of the $300 million, $100 million was for the completion of the ACR; $80 million was for the dedicated isotope facility; and $120 million was for the regulatory, health, safety, and security requirements at Chalk River laboratories.

We believe this will be the last installment required from the federal government to complete the ACR, but that does not mean it will be the end of the work. There's still ongoing work to do on the ACR, and it is going on as projected.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry, QC]

Minister, when will the ACR be on the market? Last year, you told us it would be the last investment. You've come back here this year and told us that this is really going to be the last time money will be invested, taxpayers' money, in the development of the ACR-1000.

Can you tell me when the ACR will be ready and if taxpayers have really finished contributing to the funding of the ACR-1000's development?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

Yes, absolutely. First of all, we believe the ACR-1000 under AECL will be competitive in the Ontario bid process. They are looking at starting construction of the ACR-1000 in Ontario, I believe, by 2012. Starting construction in 2012 is the objective of the Ontario government. So this research is very well along. I agree with you, it has to be commercially viable, and that's why we're going to the review right now with AECL. We look forward to coming back with more on that in the coming months.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry, QC]

Thank you. Now let's talk about the ecoENERGY program for home retrofitting. Last year, I said to you that the transition between the two programs was somewhat chaotic. I submitted files to you, at your request, about some people who had fallen between the cracks. Unfortunately, these people got the same response from your department, in the form of a letter, that they had already received. In other words, my discussions with you haven't change the situation these people are in. It is impossible for me to determine today based on the figures how many people have received assistance under the program since it was instituted. How many people have received assistance? That's what I'd like to know.

I'd also like to know if your very serious problem in terms of the availability of competent and accredited appraisers to carry out assessments in remote regions of Quebec has been solved. Your program was announced in January 2007; it took you a couple of months to get it up and running, in April. Only a couple of months ago, people from the far-flung corners of Abitibi and the Lac-Saint-Jean region still did not have access to appraisers, and as a result, there's now some level of inequality in terms of availability of resources and getting access to the program. Could you address this issue?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

First of all, I think we should focus on the successes of this program, and it is very successful. We started accepting applications on April 1 of 2007. And she got some specific numbers for you, which I was going to have to get back to you on. But, on average, the homeowners are receiving a cheque for about $1,000. A much greater percentage of public funds are going into home retrofits, so we're seeing a significant uptake in the program, which is saving energy, which is what the goal was all along.

Once people get their first audit done, they have up to 18 months to do the work, so a lot of people are—

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry, QC]

But—

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

Let me just finish. I want to answer a couple of your questions.

A lot of people in the program are still waiting for their cheques. In 2007-08, some 89,000 had retrofit evaluations, and 13,000 homeowners to date have received grants of an average of approximately $1,000, but a lot of those people are still doing the work. The data we have is that a far greater percentage of that money is going to doing the retrofits themselves.

You raised a question about the inspectors. I do acknowledge it was difficult to get inspectors in more rural parts of Canada. That's something we were aware of and we were looking at where there were shortages and were trying to fill them. I know the department's done some work by putting out a new call for inspectors, and we'll continue to do that. Obviously it's important for us to have the inspectors there, because the program cannot function, and we want Canadians right across Canada to have access.

If there are still areas--I'm not aware of any--where there are still problems, we're happy to hear about those. We'll try to work with you or other members to resolve problems with inspectors, but I'm not personally aware of any. There were some, and I know the department called for additional inspectors and tried to resolve those issues.

[The Chair, Conservative, Leon Benoit]

Madame DeBellefeuille, your time is up.

Ms. Bell, for up to seven minutes.

[Catherine Bell, NDP, Vancouver Island North, BC]

Thank you, Mr. Chair.

Thank you to the minister and deputy minister for appearing today and for answering our questions.

Thanks also for the invitation to the forestry round table on the day on the Hill. Unfortunately, I may not be here for the 14th. I'll be at home. One of our mills is closing, and there will be an event there on the 14th. That's the last large mill in my riding that will be shut down. We're hoping a buyer comes along between now and then, but it doesn't look promising.

On that topic, Mr. Lunn, when I first came to this committee, I think it was within the first few months of meetings, you came before us. I think it was the first time, and we talked about raw log exports. You said that you were very concerned about that. I'm wondering what steps you've taken or what you have done to curtail raw log exports from this country since that time. That's one of the largest reasons our mills are closing down. It's because they don't have any logs to mill. They are being exported.

My second question is with regard to the ecoENERGY program. You've answered some of this in your answers to the Bloc. I have people in the riding who have had inspections, and the inspections cost approximately $400. The amount of money they got back was $400. They felt that this didn't really give them much hope. They didn't see this as a big incentive for doing the work. Unfortunately, they had to spend around $11,000 to get their heat pump. I have been asked by them to ask a question about why it is so high and why there is not much of an incentive.

My last question is about the ecoAUTO program. That was discontinued, and I'm wondering why that was discontinued. I know a number of people who took advantage of it, and it was successful, in their minds. I wondered, from Natural Resources Canada's point of view, why it was scrapped.

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

Thank you.

Let me try to address your three questions. First of all, on the raw log exports, you're correct. This is Minister Emerson's responsibility, but I have had discussions with him, as well as with my other colleagues. James Lunney has raised this with me a number of times, with equal concern.

There are issues. We have to be careful we don't trigger any kind of trade action within the softwood lumber agreement. That is one of the mitigating factors.

We've had discussions with the province. I know on the softwood lumber agreement there were opportunities for discussions dealing with this issue, but again, Minister Emerson has the lead.

I should say that one of the things we're trying to do within the forest industry.... And you've talked about your mills closing. We recognize the difficulty this is placing, especially on some of these small-industry towns right across Canada, the one-industry towns. That's why the Prime Minister announced $1 billion in the Community Development Trust, so that there could be some money going out to help these communities, to help these families, and to help these workers, not to mention the money we're investing in forestry innovation and in looking for new markets.

We're committed to doing that. We're working with FPInnovations and the Forest Products Association of Canada to continue, and we absolutely believe that the forest sector is an important part of our economy and will continue to be for some time to come.

But I take note of your concerns on the raw logs. There are different people with different schools of thought. The province is engaged in this as well. So again, I know people are looking to see if there are things that can be done. There is no silver bullet, though. Just thinking that if you stopped the shipment of logs, those mills would come back tomorrow.... In fact, all of those mills on Vancouver Island have access to every single log first, before one log goes south of the border. Any Canadian mill is going to have access to those logs before they're exported. That's an important note to make.

On the ecoENERGY program, the reason we asked the homeowner to pay their audits was that we wanted their buy-in. What we found from the previous program was that the homeowner didn't have to pay for the audits, so a lot of people were just getting audits but then not doing any of the work. We felt that by having the homeowner at least pay for the audits we could actually increase the amount of the grant, which we've done. The average grant is just around $1,000 across Canada; there will be some that are less and some that are more. But we believe the program is working, and it has great participation.

I don't know the specifics with respect to the ecoAUTO program, only that we've put a significant amount of money in the budget looking at our auto sector for innovation, looking at how we can work with the industry. We have a great auto manufacturing sector in Canada. They've been world-class in building automobiles and manufacturing some of the best in the world. We know the auto sector is having a tougher time. For SUVs and pick-up trucks, the market has virtually collapsed in the United States, so the auto sector is definitely looking for other opportunities. They're all engaging in more efficient vehicles, which is great, and our government is trying to work with them to ensure that happens.

On the ecoAUTO program, though, we felt it was better to move money into doing that kind of work with the auto sector in the development of more fuel-efficient vehicles, and that's why we decided to make that change.

[The Chair, Conservative, Leon Benoit]

Ms. Bell, your time is up.

We'll go now to the government side: Mr. Allen, for up to seven minutes.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you, Mr. Chair.

Thank you, Minister, Deputy Minister, and Assistant Deputy Minister, for being here.

I have a number of questions. The first two I want to get out on the table, and then we'll see where we go from there.

You've already answered the question with respect to the funding for AECL on the ACR reactor, but one of the things that has been discussed quite a bit is the pre-licensing arrangement to be able to compete. That was one of the key success factors for competition for the ACR. I noticed that CNSC's budget has been reduced by roughly $5 million. Do you see any impact from CNSC's being able to do a proper pre-licensing for the reactor? What stage is that in?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

Thank you very much.

First of all, the decision to do pre-licensing is completely within the jurisdiction of the CNSC. They've made a decision to initiate the pre-licensing of the ACR with AECL.

One thing that's important to note is that the CNSC operates on a cost-recovery regime. In terms of their budget, I'm not sure, if something's not in the supplementary estimates, it's in the main estimates, and back and forth, but I will make this commitment: we are committed to ensuring an efficient regulatory process, and we will ensure that they have the resources they need to do the job. We're very much committed to that, and we are doing that.

The main estimates in 2008-09 include $152 million.... Oh, that's for AECL; I'm sorry, I don't have the specifics for the CNSC.

Again, it is on a cost-recovery basis. I actually thought we had increased the funding to CNSC marginally, but I might be mistaken.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

I'll go on to my next question. It's on carbon capture and storage.

Minister, you mentioned the $250 million for carbon capture and storage. I was reading an article just recently about the United Kingdom. With the number of coal plants they have, they are going to be facing a significant problem on energy supply between 2012 and 2015.

Being from eastern Canada, where we do use a lot of coal for generation, I'm wondering if we have done consultations with other countries in carbon capture and storage. Do we think we are positioned to benefit our economy from being in front of this technology so that other countries can use that and benefit from that?