Natural Resources Committee on May 6th, 2008

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

Yes.

Minister, I think you appreciate that when it comes to the challenges and the opportunities in the forest industry, as you have indicated, there is no such thing as a cookie-cutter approach to it, and every area in the country is unique in their challenges and opportunities.

I want to applaud you for your approach and also encourage you to stay true to that vision, because we cannot for a moment fail to recognize that we have unique forest industry challenges and opportunities and differences as between one area and another.

We have seen previous governments, going back two to three decades, where they have tended to look at the forest industry in Canada as a single entity without respect to the differing features of different parts of the country. So I want to really stress my hope that you continue with this vision.

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

Thank you very much, I appreciate that.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Harris.

Thank you, Minister, for coming today. We appreciate that very much. I appreciate you answering the questions on the budget of your department and the spending in your department. I wish you the very best in the future. I know we'll have you back at this committee soon. You have made yourself readily available.

I'll suspend the meeting for one minute, then we'll come back with the deputy minister and associate deputy minister for further questions.

Mr. Minister, do you have a closing comment?

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

I only wanted to thank the committee for the work you do. This is one of the better committees on Parliament Hill, and I hear you work in a bipartisan way in all your studies.

Again, I appreciate the support that I get from the committee, the work that you do, and hopefully you'll be able to join us at the forestry round table. I look forward to working with all my colleagues from all parties in the coming months to ensure that we really show how important this sector is to our economy, and to work on solving some of the challenges in the forest sector.

Thank you very much for having me.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Minister.

[The Chair, Conservative, Leon Benoit]

We will resume the meeting. For the second hour we have as witnesses Deputy Minister Cassie Doyle and Assistant Deputy Minister Richard Tobin.

Mr. St. Amand.

[Lloyd St. Amand, Liberal, Brant, ON]

Thank you, Mr. Chair.

Nice to see you again, Ms. Doyle and Mr. Tobin. Thank you for coming.

Ms. Doyle, during his presentation the minister talked quite effusively about nuclear and to some extent about coal. I want to know what the department is doing, as a matter of leadership, however incrementally, to wean us off our dependence on oil and gas and aggressively endeavour to develop a wind industry and a solar industry in Canada.

I believe that we are laggards internationally with respect to both wind and solar, that we have done not very much to develop these sectors. We have abundant wind—particularly in Ottawa, many say. We have abundant sun across Canada. There is no reason that we can't develop a strong wind and solar industry sector, so I'd like to know what the government is doing as a demonstration of leadership.

[Cassie Doyle, Deputy Minister, Department of Natural Resources]

This is a very good question. It relates to the overall strategy of our ecoENERGY initiative, which has been the focus of our energy work over the last year. It is aimed at supporting a diverse approach to energy production.

Renewables and solar are both priorities under that ecoENERGY Initiative. We have put $1.5 billion into ecoENERGY for renewable power. It is focused on wind but also includes other forms of renewable energy, like biomass. That's a key platform of the ecoENERGY initiative. We also have an ecoENERGY for renewable heat program that's aimed at the deployment of solar-powered air and water heating systems in the commercial, industrial, and institutional sectors.

It's fair to say that our approach under ecoENERGY has been to support not only renewables and a diversification of our energy supply, but also energy efficiency. That's a key second objective. A third is energy research and development. In those key areas of renewables, we have research that is undertaken in our own laboratories. Bells Corners is an energy research institute, and I would certainly echo the minister's invitation to the committee to come for a tour of this facility. It's impressive what our own scientists are doing in these areas.

[Lloyd St. Amand, Liberal, Brant, ON]

I wasn't trying to suggest in my question that we're doing nothing. Some funds are being contributed. Some funds are being earmarked for renewables, for wind and solar, etc. The funding is more than tokenism, but in my view it's not nearly as bountiful as it could be. There seems to be a mindset that nuclear and coal are the way to go, that it's nice to have little boutique wind and solar industries, but that we're not really keen about promoting them.

Can you disagree with that, or better yet agree with it?

[Cassie Doyle]

I'm sure the honourable member would recognize that I wouldn't be of the same mind on that front. Over the course of the last half a decade at NRCan, the largest investment that we have made in supporting energy production has been in wind. This is continued with ecoENERGY for renewables. That's a $1.5-billion initiative, and it builds on early initiatives under the wind power production incentive. It represents the largest amount of funding that we're dedicating to a particular energy production incentive—far larger on an annual basis than support for nuclear energy.

I'd be happy to provide you with an overview of our investments. But I also want to reiterate that we are not only funding programs. We also undertake a significant amount of research, R and D, within the department itself. There has been a strong focus on renewables, biomass, and other forms of alternative energy.

You have to look at it as a package in relation to our departmental priorities.

[Lloyd St. Amand, Liberal, Brant, ON]

How is that translated on the ground, so to speak? What are the benchmarks? Five years ago nobody was developing solar energy products, and now there are 18 companies. What is the on-the-ground data with respect to the payoff, so to speak, in terms of developing the industry?

[Cassie Doyle]

I'm just wondering if my ADM from energy technology might want to add something. We can certainly provide some of that information. I just don't have those specifics with me.

[The Chair, Conservative, Leon Benoit]

We'll just take a few seconds here.

[Cassie Doyle]

Sure. This is Margaret McCuaig-Johnston, our assistant deputy minister for energy technology programs.

[The Chair, Conservative, Leon Benoit]

Thank you.

Go ahead.

[Margaret McCuaig-Johnston, Assistant Deputy Minister, Energy Technology and Programs Sector, Department of Natural Resources]

Thank you very much.

I would just mention briefly that the department is investing in the future of Canada's capacity for wind technology through the technology road map we've just initiated with the industry and the environmental organizations involved in wind. In fact, the first meeting of the steering committee of that initiative was last week, in Alberta. It's being chaired by Dawn Farrell, president of TransAlta Wind. It involves the whole cross-section of the wind industry in Canada: the delivery agents and technology producers and the hydros that have to integrate their grids with the wind capacity.

What we're endeavouring to do with this initiative is identify where Canada has its strengths, where there may be technology gaps, and where there's economic development potential for Canadian companies to contribute. We also want to learn where there's international potential to collaborate with wind leaders in other countries and to build on their research and development. This is a very focused technology road map that will be completed early next year. It will lead to an identification of all the technology development that can be done in the wind area as well as to potential policy and regulatory barriers that will need to be addressed.

It follows quite a bit the model for carbon dioxide capture and storage, the subject of one of our technology road maps a year and a half ago. It led to a CCS task force that identified policy and regulatory measures that needed to be developed. That, in turn, led to the investment in CCS in the last budget.

On the solar front....

[The Chair, Conservative, Leon Benoit]

Okay, be very brief on solar.

[Margaret McCuaig-Johnston]

At our lab at Varennes, initiated for academic research on solar technology, a solar research network, which is now being sponsored by the Natural Sciences and Engineering Research Council, pulls together all the researchers in solar from across the country who are doing research in technology. Even more important, they are trying to get the costs of solar down, because the real barrier to putting more solar out in the community is the very high cost of it.

So on those two fronts, we're taking technology development very seriously.

[The Chair, Conservative, Leon Benoit]

Thank you.

Thank you, Mr. St. Amand.

We go now back to the government side, to Mr. Trost, for up to five minutes. Go ahead, please.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Thank you, Mr. Chair.

One of the not highly publicized issues but more important issues that has been around since I was elected to Parliament about four years ago has to do with issues concerning regulation and regulatory reform. I remember that when this committee was part of the industry committee, the smart regulation report was coming out. I'm going to let you take quite a bit of leeway, when you answer this question, to give general answers and also specifics.

I know that the department has been taking some leadership on smart regulation. There's the major projects office and various other things. Could you give us an update as far as what's being done, what sorts of benchmarks are being used to quantify or evaluate the progress you're making on smart regulation, and what sorts of problems you're finding? And can you offer some solutions for us as parliamentarians to help speed along the process of smart regulation?

[Cassie Doyle]

That question really relates well to one of the department's priorities over the last year and a half. That was how to take the overall smart regulation approach and apply it to major natural resource projects. The reason we had been drawn into this priority was the fact that we have, for one thing, a significant increase in the demand on our regulatory agencies in review and assessment of large natural resource projects. There's about $300 billion worth of projects that are pending review—either are in review or pending review now—at the federal level.

One thing we had heard loud and clear from a number of different stakeholders was that our overall systems within the federal government lacked a coordinating or management function. In the development of the major projects management office, which the minister referred to and which was funded in budget 2007, the aim was to improve significantly the performance of the federal government overall when it came to the review of major natural resource projects. So it's not only the environment assessment, which is coordinated by the Canadian Environmental Assessment Agency, but the regulatory review by departments like DFO, Transport Canada, and Environment Canada. NRCan itself is a regulator when it comes to the area of explosives on large NR projects.

The idea was to pull together an office that would be able to establish an overall management regime for these projects. We secured a cabinet directive that provided a direction to all regulatory agencies to work together and sign large agreements for these large projects. The office itself was funded out of budget 2007. It provided not only the funding for that office but also support for capacity in the other major regulatory agencies. It was launched in February of this year, so it's now up and operational. We are just finalizing project agreements and templates for these agreements that will contain timelines and distinct accountabilities for each regulatory agency.

I think this will improve significantly the performance of our regulatory system. We certainly will rely on committees like your own to be reviewing progress on that front as we proceed, because just the volume of natural resource activity under way is so vital for the economy and the environment of the country.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

I realize that with the limited time it's been up and running it may be difficult to state benchmarks, success, etc., so I'll be fair.

When might you be able to start reporting back and be able to say what has been a success and what hasn't been a success as far as the construction of the office and the integration of resources are concerned? When do you anticipate first being able to report back and say yes, this has worked, or this needs some modification? When might we as a committee look for that sort of response?

[Cassie Doyle]

It's a good question. I would think that realistically—

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

I know it may not be a totally fair question, but we're talking ballparks, and I'm not holding you to anything specific.

[Cassie Doyle]

I think that after one year of operation we would be in a position to report back on the progress made through that office.

I also wanted to add that one of the objectives of this initiative was to increase the transparency of how the overall regulatory system works. So there will be a website that will post the key milestones for each project. That will be made available publicly to stakeholders and of course to committee members. This will be an opportunity to actually track and monitor how the office is actually progressing in terms of meeting its objectives under each project agreement. Realistically, in terms of reporting on progress, it will be about a year.