Natural Resources Committee on May 6th, 2008

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Allen.

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

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

Thank you very much.

Is there any direct hope from the federal government for unemployed forestry workers who've lost their jobs, such as extensions of EI benefits and those types of things? When you were here before, you advised that the $300 million for the competitiveness fund would be going directly to the provinces and territories. So that's $300 million divided by 13. I'm trying to determine how we can really get involved with workers and have a federal stamp on it--some kind of statement showing that the federal government is there helping, as opposed to just transferring money.

I don't know if you are aware that the honourable member for Thunder Bay—Superior North said in the finance committee that he had seven or eight projects on the go on this. I haven't received any details of this funding myself, so I'm wondering how we can apply for this, because our communities are certainly asking for it.

Specifically, how many trees have been saved from the infestation over the past number of years, and how many beetles have been stopped? I don't want to say that the minister is mathematically challenged when he says that $38 million is more than $1.5 billion, but....

Why don't you answer those three questions first.

Thank you.

[Cassie Doyle]

Thank you, Mr. Chair.

I'll start with the question on the government's response to unemployed forest workers, and then perhaps ask my ADM for the forestry sector to get into more details around the number of beetles.

We had some discussion when I was last here on the question of the community development trust. That program is not run from my department, but it's certainly aimed at providing resources to the provinces to work with forest-level communities.

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

I meant the community development trust.

[Cassie Doyle]

Yes. As the minister mentioned, a decision was taken by the government to provide resources to provincial governments to address readjustment programs, or support for individual unemployed forest workers at the community level.

The perspective we have at National Resources Canada is to focus on the competitiveness of the forestry industry. So some of the initiatives that have been discussed here today are really aimed at supporting innovation and overall markets for our forest sector in Canada to increase or provide support on that side. So I think it's the community development trust as well. It has been well publicized. It was a decision that provinces would be in the best position to work at the community level in areas of readjustment.

I'll ask my ADM--I'm not sure it's fair or not--to answer the questions around the numbers.

[The Chair, Conservative, Leon Benoit]

Mr. Farrell, are you ADM for the Canadian Forest Service?

[Jim Farrell]

Yes.

[The Chair, Conservative, Leon Benoit]

Have you done a head count on those beetles?

[Jim Farrell]

I'll maybe defer to Mr. Harris on that, as he lives closer to the beetles than I do. But when we speak about beetles we're talking about billions of them. The numbers are actually quite staggering, and the extent of the infestation in terms of the numbers of trees goes into the millions as well.

If the question is on what sort of success we have had in slowing it down, we have scientists working in the field this month. They are doing assessments on what sort of combined impact the weather last fall and winter has had on beetle survival and spread, as well as what sort of success we've had in Alberta and British Columbia with the control efforts we made over the winter.

In the labs, as well as with the models we've used, the indication is that there has been an impact. There has been a reduction in the numbers of beetles that can actually prosper in the next growing season, but I can't give you a specific answer on that until the field studies are completed in May. It does look quite hopeful, and for that reason we increased our investment over the winter in northeastern British and northwestern Alberta in that band where the beetles have moved into Alberta and are possibly threatening the boreal forest.

I certainly can give you more information as the analysis is completed toward the end of May.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Boshcoff.

Now we'll go to the Bloc Québécois and Monsieur Bigras. You have up to five minutes.

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

Thank you, Mr. Chairman.

I would like to welcome the deputy minister. On December 3, 2007, your government announced the eligibility requirements for $1.5 billion in biofuel production incentives available through the ecoENERGY initiative. That policy is intended to increase corn ethanol production from 212 million litres in 2003 to over 3 billion litres in the coming years; quite an ambitious plan.

Have you analyzed how much energy is spent through corn ethanol combustion compared with how much energy is needed to produce corn ethanol? Has your department done such an assessment? If so, could you table it with us?

I was also surprised by a number of studies that show that 1,700 litres of fresh water are needed to produce a singe litre of ethanol, and that 12 litres of noxious waste are released into the environment, including pesticides and fertilizers.

Earlier, you spoke about a guideline from the Prime Minister's Office concerning regulations. I would like to remind you that another guideline dating back 25 years calls on all departments to conduct a strategic environmental review of policies, plans and programs put forward by the federal government and departments.

Have you carried out a strategic environmental review of your biofuel production incentives policy, particularly with regard to corn ethanol production? Is there such a strategic environmental review? If so, could you table it with the committee?

[The Chair, Conservative, Leon Benoit]

Please go ahead, Deputy Minister.

[Cassie Doyle]

Thank you, Mr. Chair.

Thank you for those questions. They are certainly very pertinent.

In terms of the first question, which is about the studies done around the net energy used in the production of ethanol, a fair amount of research has been undertaken on that front. I can't name a particular study that has been undertaken by NRCan, but I do believe there is some research we have used in the development of our ethanol program. I'll ask my ADM of energy technology to follow up on this one.

With regard to a strategic review in relation to the production incentive, I'm quite sure we did that, because it's a requirement, as you know, on each one of our new program developments. I'd be happy to provide that to the committee.

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

So you will commit to tabling that strategic review with the committee?

[Cassie Doyle]

Yes, you have that commitment.

I wanted to mention that the development of a production incentive for biofuels replaces an exemption on the excise tax for biofuels. There was this switchover from an exemption on the excise tax to an actual dedicated and focused production incentive. That program just came into effect April 1. We're starting that program as of April 1, 2008.

[The Chair, Conservative, Leon Benoit]

Ms. McCuaig-Johnston, you are ADM for energy and technology. Please go ahead and answer the other part of the question, if you would.

[Margaret McCuaig-Johnston]

Thank you very much, Mr. Chair.

I would add that in terms of the benefits of corn ethanol specifically, the statistics we have are that there's a 40% improvement over the traditional gasoline used in vehicles. With respect to the next-generation ethanol, the statistics are closer to 60% to 100%, depending on what the ethanol or biodiesel is made from--cellulosic, of course, being much more green than other forms.

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

Mr. Chairman, may I continue?

[The Chair, Conservative, Leon Benoit]

Mr. Bigras, if you're finished, we'll go to Monsieur Ouellet for 30 seconds.

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

I challenge your assertion, but that is not what I wanted to address, because biodiesel has an effectiveness rate of at least 25%.

I would like to talk about biodiesel. The minister indicated earlier that $142 million was spent—and that is a fact—on biofuels, as part of the contribution to the ecoENERGY program. If you add that to the contributions from other departments, I suppose that the amount could easily be close to $200 million.

Could you tell us, given that there are three types of ethanol—ethanol made from corn or sugar cane; biomass ethanol; and ethanol produced using industrial and domestic waste—how much money is allocated to each of these three types of ethanol?

[The Chair, Conservative, Leon Benoit]

Can we have a very short answer, please?

[Cassie Doyle]

Mr. Chair, I think we'll have to get back to the committee with those figures. I don't have them in front of me.

[The Chair, Conservative, Leon Benoit]

Okay, we'll look for that. Thank you.

Merci, Monsieur Ouellet. Your time is more than up.

We go now to Ms. Bell, for up to five minutes.

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

Thank you, Mr. Chair.

I'm going to change topics and talk about the National Energy Board. Recently the NEB approved two more pipelines--Alberta Clipper and Southern Lights--that will transport, it's proposed, raw bitumen to refineries in the U.S.A. Some arguments have been made that this will impact jobs in our refineries in Canada.

I understand that we don't have the capacity at this point, but at some point, if we were to build that capacity, we would not be able to turn off the pipeline and supply our own refining jobs here in Canada, because there's a clause in NAFTA that says we can't do that.

The other thing is that this would increase production of the oil sands by significant amounts and add to our greenhouse gas emissions. We already know that most of our GHGs are coming from oil sands.

It also speaks to the security of our energy--again, based on the clause in NAFTA that says we can't turn off the tap and also our commitment to supply U.S. markets by a percentage. The more we ship, the percentage stays the same but the more they're entitled to.

Given the minister's statement previously on the objectives of NRCan about environmental responsibility, safety and security—I'm talking energy security in this instance—and economic competitiveness, I'm just wondering, how does the pipeline project fit in with those objectives? Does the National Energy Board have different objectives from those of NRCan, and that override our environmental sustainability objectives?

[Cassie Doyle]

Thank you, Mr. Chair.

That's a fairly wide-ranging question. I'll do my best to make some comments on it.

The National Energy Board, as you know, has the specific mandate to review projects, infrastructure projects particularly that cross interprovincial or international boundaries, and so is very much involved with the Clipper and Southern Lights. It doesn't set trade policy per se. As you mentioned, we are subject to larger trade agreements such as the North American FTA.

It is the case right now that the capacity for refining and upgrading is below the amount that's actually being produced out of the oil sands. I just want to mention that the reality of the oil sands is that it's growing in terms of its production. In fact, in relationship to GHGs, it's not at all the highest or largest proportion of GHG emissions in Canada--in fact, that honour goes to the electricity sector in this country--but it is the fastest-growing area of GHG emissions. Those were addressed recently in “Turning the Corner”, the regulatory framework announced by the Minister of the Environment. It will make a big difference in terms of the amount of emissions from the oil sands.

Just going back to what the minister was mentioning, our strategic objectives at NRCan are very much around economic competitiveness, environmental leadership, and the safety and security of Canadians and our natural resources. We do work on that in conjunction, very closely, with the provinces. As you will understand, a lot of the determinations on the pace of development rest with the provinces in terms of their ownership of the resources.

But we have a particular role to play, and we do that through our own department and through the portfolio agencies like the National Energy Board, who are prescribed by their own act in terms of how they make their decisions. As I mentioned, they make them within the context of existing trade agreements and our trade obligations.