Natural Resources Committee on May 6th, 2008

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

No question. Listen, it's not just the United Kingdom, it's also countries like China; they are putting 1,000 megawatts of new electricity on the grid every 10 to 14 days, primarily coal.

So there are enormous opportunities for coal. We're seeing this growth in different parts of the globe. An enormous amount of global energy is coming from coal. Canada has an opportunity to be a world leader in the development of this technology. Our department does a significant amount of research right here in the labs at Bells Corners. With their oxy-fuel process, they can take virtually all of the pollutants out of the stack.

I said earlier in my speech that we have committed $240 million for a Saskatchewan project, the world's first fully integrated clean coal with CCS. There are clean coal plants, and a few of them are operating. I don't have the details, but there are a few. We are doing carbon capture and storage. Weyburn, Saskatchewan, is an example; it has one of the largest ones in the world. There are other CCS projects around the globe.

This is bringing the two technologies together for the first time. You're seeing a lot of growth. I've had discussions with my counterpart, the Secretary of Energy, in Washington. The United States has significant interest in this as well. These discussions also come up with my colleagues at the International Energy Agency.

I personally believe there absolutely is an opportunity for Canada in the development of this technology, but I actually think we need to get this technology into countries like India and China. We need to do everything in our power if we're going to make an impact on the environment on a global scale. And that's where the great benefit is.

Absolutely, this is one of the reasons we're investing in this technology. There is an economic gap. This is very expensive technology. As with any new technology, there's always an economic gap, but as we get started, that economic gap will narrow. We've seen it in Hibernia, we've seen it in the oil sands. That's why we're quite excited to get this project off the ground.

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

How much time do I have left?

[The Chair, Conservative, Leon Benoit]

You have two minutes, Mr. Allen.

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

Thank you.

My next question is with respect to the National Energy Board. In the estimates there's been just a small increase for the National Energy Board, by roughly $1 million to $1.5 million. Given their desire to be a major energy player and given some of the challenges faced by the National Energy Board, on interprovincial pipelines and exports to other countries, do you see that as an issue with respect to staffing and being able to hire and retain the proper resources at National Energy Board to do those reviews? We are living in a challenging environment right now with respect to getting talented resources.

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

Yes, finding talented resources and keeping them is always a challenge. There is no question about that.

The National Energy Board, like the CNSC, though, uses a cost-recovery model in which the proponents of the applications are bringing them forward and in fact are ending up paying for the work the National Energy Board does.

We're confident that they have the resources to do the jobs they need to do. They have some great people at the NEB, about whom we get very positive feedback from environmental organizations, as well as industry. We can be quite proud of the work the NEB is doing on behalf of all of us. It is a very highly regarded regulator across all sectors in Canada.

[The Chair, Conservative, Leon Benoit]

A short question, Mr. Allen.

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

In the ecoENERGY initiative, one of the programs, as I understand it, was supposed to support 800 to 900 homes for hot-water heating. That was in the last budget. Can you tell me how successful that program has been? It would seem to me that going to solar power and other opportunities for hot-water heating and storage is a tremendous opportunity. Do you have any comment about that program and the possible expansion of it?

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

According to what I have in front of me, Mike, about 200 contribution agreements have been signed, for a total incentive value of about $6 million for deployment under this initiative. We are seeing some significant uptake of that. I believe the funding we announced for this program was $36 million over four years. I'm not positive about the four years, but I'm pretty sure it was that.

We expect the program to be fully deployed. In its first year, as I said, we had $6 million in contribution agreements signed, and we expect that figure will likely grow as the program becomes better known.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Allen.

We now go back to the official opposition for the second round, to Mr. Boshcoff, for up to five minutes. Go ahead, please.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Thank you very much, Mr. Chair.

I have two troubling questions, Minister. The first is why would you, knowing full well that the committee had passed a frank and clearly worded motion expressing its direction that the Prime Minister convene a full national summit on forestry, still go ahead with a three-hour session, knowing it would be inadequate for what this committee had set as a direction?

We've called your office for a list of invitees, and we've been told that it cannot be revealed to the public. So one can't help but feel there is some hidden agenda here, Minister.

Our report, which we've been labouring on for many, many weeks, won't be ready, but you would think it would be the focus of why you would bring people together, so they could start working on what we have proposed to the government as a direction, rather than going through all of the sludge work we've gone through. It really will set a national and international agenda for us, not a provincial or territorial one.

So I would question first of all why you would undermine this committee while knowing what our wishes were.

I guess the second question I would have is that this committee passed a resolution for $1 billion for forestry, but the amount provided was $330 million a year, and it was given carte blanche to the provinces. My question is that when we have a chance to have some influence with $330 million a year, why wouldn't we say at that time that these are some of the ambitions, directions, and goals of the federal government, as opposed to just transferring the money?

Thank you, Mr. Minister.

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

Thank you very much, Ken.

First of all, with respect to the forestry round table, for one thing the timing of it is because it's forestry week. We thought that's a great opportunity. There will be a lot of the folks who are going to be in town for forestry. In fact, the next day is forestry day on the Hill. So logistically it's a lot easier for some of the invitees.

I'll be honest; I wasn't aware that someone had said you couldn't see the list of invitees, but let me tell you about some of the people who have been invited. Not to mention all of you around the table, there is FPInnovations, which is a leading public–private research institution; the Forest Products Association of Canada....

By the way, we've consulted with both of those agencies, who vastly represent a large section of the industry, and have said: we've done some work and we think an afternoon is what we should need; bring some people together, as well as union leaders—some of the stakeholders such as those. We're looking for a good discussion around this event.

You say you wanted the Prime Minister to lead it. No one should challenge this Prime Minister's commitment on forestry, nobody. He's the one—and we'll get to that in your second question—who put $1 billion into the community development trust. He's the one who, in our first budget out of the gate, had $400 million for forestry. We hadn't seen those kinds of commitments by the previous government, in all fairness, to forestry.

So we have put in significant funds. We worked with the industry to ensure that this money was flowing through to agencies to look at innovation, at new market opportunities, and there was our commitment on the pine beetle.

We work as a government. In all fairness, Mr. Boshcoff, your party is standing up in the House of Commons saying the Prime Minister is a one-man show. Now you're coming here and saying, “How come you're involved? You're just the minister responsible for forests. Why don't we get the Prime Minister?”

We work as a team. We really do work as a team, our entire cabinet, just as I work as a team with my deputy minister. We talk daily. We are all focusing our eye on the ball, on getting the job done, and you can rest assured that the Prime Minister will pay very close attention to this forestry round table.

Your second question was why give it to the provinces? We recognize that some of the most difficult part involves the communities that are being affected by the downturn of the forest sector. Some of the challenges are unprecedented. The forest industry was never geared to being competitive at a par dollar. U.S. housing starts are off by 25%; that's where 80% to 85% of our market goes.

So how do we help those communities? Who's best to deliver initiatives to help the workers themselves?

Just let me finish, Ken. I'm giving you a straight answer.

It's the provinces. Why would we in Ottawa want to deliver programs to these communities? We gave that money to the provinces with a focus to help these communities in the downturn of these sectors in the economy, and in fact we think they're in a far better position to deliver these programs than we are here from Ottawa.

[The Chair, Conservative, Leon Benoit]

Thank you, Minister.

Your time is up, Mr. Boshcoff.

Mr. Ouellet, you have up to five minutes, please.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Thank you, Mr. Chairman.

Good afternoon, Mr. Lunn.

I don't want us to get bogged down in the figures, but roughly speaking, if you factor in contributions from other departments, the government has invested somewhere around a billion dollars this year in atomic energy, for security, etc.

On the other hand, when you consider the amount of money invested in renewable energy—and let's not talk about biofuels for the moment because that's another issue and I'd like to come back to it later—you decided to allocate $111 million to it. This is completely out of wack in my opinion because that envelope includes wind energy, passive solar with water, active solar with air, biomass for heating, wave energy, run-of-the-river hydro electricity—that's on the horizon—gasification of garbage. There's also geothermal energy and included in that, and I want to stress this, there's deep geothermal energy and low-level heating geothermal energy to produce electricity. According to a report published in the United States—and this is valid for Canada—by 2050, if we were to invest in deep geothermal energy alone, we'd produce all the electricity we need, and that's from the heat that's found in the ground.

So given this—and I'm sure you're aware of these projects—you have decided to invest $111 million and almost 10 times that amount in nuclear energy. Don't tell me where you're investing the money, Mr. Lunn; I know where it's going. Tell me why you're not investing more in renewable energy. You said earlier, and rightly so, that there is major economic development, and that half of our exports come from natural resources and that you are very sensitive to the environment and health and that because of all that we don't need any reassurance. We need reassurance when it comes to nuclear energy, but not for that. Tell me why you're not investing more money in these forms of renewable energy.

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

Thank you very much.

On the $111 million, with all respect, I believe you're mistaken. The $111 million is purely on biofuels. That money is not in renewable energy. It's about $111 million or $112 million. I believe it's $112 million. I'm going by memory, but that number you're talking about is for the biofuel program, not the renewable energy.

We put $3.5 billion into clean energy. We announced $1.5 billion for 4,000 megawatts of clean, renewable energy, everything from wind, tidal, solar, biomass, as a production incentive. So that money doesn't flow until they start producing the electricity. Some of that's flowing now, but once they start producing that electricity the amount of clean electricity we're going to put on the grid is 4,000 megawatts. That's the equivalent of 12--

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Just a moment.

That's on the investment side. I am asking you about the contribution for research. Clearly, the contribution to research amounts to $111 million. Indeed, $112 million were set aside for biofuels. But the amount for research and development is $111 million, while the other amount goes to fund research, development and part of the safety component, which is obviously a must in the area of nuclear energy, but which isn't a concern with the other forms of energy. So, one billion dollars is being invested in nuclear energy.

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

I can assure we're doing a lot more research. To give you an example, what we're doing on our clean coal project in Saskatchewan, $240 million, that's a commercial scale, but think of it as a research project for clean energy that's emission-free, no pollutants, no carbon dioxide. So we are making significant investments in clean energy, both in the production and in the research as well.

I would invite the committee members to take a field trip and go out to Bells Corners. Go out to the labs at NRCan and see what our own scientists are doing there. You'll be very impressed at the work they are doing. But we're also partnering with industry. We're putting money into this.

The other thing we've done is we've put in Sustainable Development Technology Canada.... Again, this is an agency that reports to me. I believe we put in an additional $500 million just in the development of next-generation biofuels, cellulosic ethanol. As well, they have hundreds of millions of dollars they go out to the private sector with. People put in applications—and all this is done arm's length from the government, but we fund it 100%—and they select projects. Some are relatively simple.

I'll give you some examples. North America's first tidal turbine, off the coast of Victoria, had significant funding from Sustainable Development Technology Canada. But there are projects in clean energy--

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

That's an investment; it's not research.

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

That research is being done, and that's exactly where this is coming from. So I would submit that we're spending a lot more than your one-line item in the budget, but it is being flowed through other agencies.

[The Chair, Conservative, Leon Benoit]

Monsieur Ouellet, your time is up.

We go now to the final questioner to the minister, to Mr. Harris, for up to five minutes. Go ahead, please.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Thank you, Mr. Chair.

Perhaps in all fairness, Minister, we should clarify something. A proposed motion came to the committee regarding a round table of sorts, but it was never passed at this committee. And now that I've said that, I want to thank you for taking the initiative to put together a round table on the future of forestry in our country.

I know it's going to attract leaders in forestry from all across the country, and I think it will be a very appropriate partner to the report that's going to come out of this committee as we wind up our studies on the future of the forest industry, the challenges and opportunities we face in Canada. So I think it's a good one-two move for the government to have some clarity on where the forest industry is going in the country, both in the manufactured lumber and the pulp and paper industries, as well as the additional value-added products we expect out of it.

Thank you for that, Minister.

I want to talk just briefly about some of the spending that's mentioned in the budget. Of course you knew I was going to bring up mountain pine beetle, and I see there's $30.8 million allotted in this fiscal year. Can you just give us a brief outline on how those funds are going to be spent?

Then you might want to comment on the forest communities program, because this is really important to our forest industry. I think there's about $1 billion for that.

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

First of all, on the mountain pine beetle, it's actually almost $100 million we're spending on the mountain pine beetle this year. I think it's just shy of $100 million.

The reason only $30.8 million shows up in the estimates is because some of this money is flowed through the western diversification program for community economic development and some of the money is actually flowed through Transport Canada for larger infrastructural projects in a number of airports, bridges, and infrastructure that we know promotes economic growth.

In fact there will be almost $100 million coming directly out of the pine beetle money this fiscal year. It's simply not coming through our department. So that's why you're seeing that.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

I appreciate that. It was my mistake. I think there's a total of about $98 million coming. I forgot the departments momentarily.

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

Yes, it's $98-point-something million. Again, I don't have the exact amount. It's a little over $98 million. The deputy can probably get you an exact number, and if you need it we can get you that later on.

With the community development trust, is that what you're referring to?

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Yes. The forest communities trust.

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

Again, this was money that was given to the provinces to help workers in the downturn within specific sectors. One province may have other priorities over another province, but the goal is for the provinces to administer initiatives to help these communities and to help the workers. Really, that's where to put the focus.

We will be working with the provinces. I know in my home province of British Columbia, I have a great level of cooperation with the provincial ministers involved. I don't have the details of how each province is structured and what those initiatives are looking at, and it's still relatively early. The money has flowed to the provinces, but they take time to develop how they'll get that money out to the communities.

We really did believe that it was in the best interests, that the provinces were best suited to know what the needs of their provinces were and how best to have that money flow. That money was distributed on equitable formulas to ensure that every province gets its fair share, as well as the territories, and that's how that was done.