Natural Resources Committee on Dec. 4th, 2012

[Mark Eyking, Liberal, Sydney—Victoria, NS]

That brings me to my point. If that money were available, you would think the manufacturer of windows in my riding would keep selling windows. There's something happening with the new program that is not doing what the old program did.

[Serge Dupont]

There are issues around ensuring that there's information available to households, to businesses, to industry, and various other ways—through research and technology and so forth—to try to grow the potential for this industry over time.

Other things are happening in the economy that are trying to develop and foster the market for this. Some utilities and some provinces are contemplating advancing some of the moneys which homeowners can repay through their utility bills or through their tax bills or whatnot. Those are sensible investments for households to make. They typically generate good payback, in three or five years. There would be an expectation at some point that after considerable government support, the market would take over and pursue those opportunities through other means.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Okay, so it's a market-driven thing.

I don't know if you have in your estimates the new spending the Department of Natural Resources is doing on—I don't know what you call it, promotion or propaganda, but all those commercials.

Are they in your estimates? What's the difference between how much you're spending on all this so-called promotion now from what might have been spent in previous years? Has it gone up? What are the numbers?

[Serge Dupont]

In these estimates there is an amount of $4 million that is funding for additional television and Internet advertising that will take place in 2013. There was also $5 million set out in supplementary estimates (A). In total there's $9 million. These funds are provided to inform Canadians about the responsible resource development initiative capacity of Canada, the potential, and directs Canadians to the actionplan.gc.ca website in order to learn more about resources and what those industries mean for Canada.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

I'm well aware of it.

I am just wondering why there is such a big increase in spending. Is it a self-promotion tool for the government?

[Serge Dupont]

It is all part of the government's overall advertising envelope that is allocated annually, based on the priorities of the government. Certainly the resource sector, representing 20% of the GDP in this country, is considered a priority for Canadians to become aware of.

[The Chair, Conservative, Leon Benoit]

You have half a minute.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

I have no more questions.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Eyking.

We go now to Mr. Calkins, for up to five minutes.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thank you, Chair.

I want to start off by welcoming Mr. Eyking to the committee today. I'm just going to warn him that I'll be talking about the oil and gas sector as it pertains to pipelines, and I don't want anybody to get their feathers ruffled too much and go down the wrong road here.

My question pertains to the supplementary estimates. We see with respect to the National Energy Board an adjustment of roughly $5.9 million. That brings the total from roughly $55.8 million to $61.7 million insofar as dollars go. I just want to find out what that funding is for.

Also, I'd like to know if you could remind the committee about the total length, capacity, and distance of pipelines that the National Energy Board is a responsible regulator for.

As well, if we can talk a little bit, I'd like to find out the volume that those lines will take into account on an annual basis.

Could you tell me what this funding is for? This is about a 10% increase. I'm not aware of any massive increase. Obviously, new pipelines are being built and pipelines are being decommissioned, but I just wonder why we have this 10% adjustment in the budget.

[Serge Dupont]

Thank you for the question.

Mr. Chair, the NEB, National Energy Board, regulates in Canada more than 70,000 kilometres of oil and gas pipelines. Basically the amounts—I don't have the volume—but the value of the oil and gas shipped through those pipelines in 2010 was $85.5 billion. It is obviously a very important component of the infrastructure for this country and the economy.

Through these supplementary estimates, the National Energy Board is receiving authority to spend an additional $5.89 million. This is in line with the commitments in budget 2012 to enhance the safety capacity of the National Energy Board, essentially to hire additional safety staff. This will allow the National Energy Board to increase the number of annual inspections it conducts from 100 to 150. There will be a 50% increase in inspections. It would also allow it to double the number of comprehensive audits of pipeline companies that it conducts, from three to six annually. These amounts will be cost recovered from the industry.

The way it works, estimates still have to be voted to give the National Energy Board the authority to spend the moneys. The National Energy Board then charges the companies back for those amounts. In fact, these are not net draws on the fiscal framework, but rather are going to be cost recovered, but you still need the estimates.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Okay. Thank you very much.

Is it because of the cost recovery aspect of it that we don't see.... That expenditure appears in the program expenditures line. There is nothing in the contributions to employee benefit plans and so on. When you talk about increasing the capacity to do so, we're not talking about it from that perspective insofar as ongoing costs go, but these are simply....

Can you explain the cost recovery and how that works a little bit better for me?

[Serge Dupont]

I'd rather get back to you on that part of it, but fundamentally it is cost recovered.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

That's fine.

Let's talk about it, then, from a broader perspective. If we're going to increase the audits and increase the inspection capacity, I'm assuming this is in response to some issues and some public concerns that are there. What's the safety record with these pipelines from the National Energy Board insofar as it is a regulatory body?

I believe over 99.9% of the product is safely transported to its end destination. The enhanced audits and enhanced inspection have to do with what—increasing the net record?

[Serge Dupont]

Fundamentally, yes. The actual safety record, as the minister likes to mention, is 99.99996%. I may have one nine too many or too few there. Obviously, it is a very solid safety record that stands well in terms of international or other comparisons.

That being said, it is always important to keep a focus on safety. Obviously, some of the pipelines are growing older. There has to be continued diligence in ensuring the best safety standards are met and respected. That's why you need to conduct the inspections and the audits to meet the expectations of Canadians in regard to safety.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thank you very much.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Calkins.

We go now to Mr. Trost for up to five minutes.

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

Thank you, Mr. Chair.

In a similar vein to my colleague who was talking about the National Energy Board, I see here the CNSC, the Canadian Nuclear Safety Commission, is being allocated $8.6 million in new funding for the fee-exempt licensees: hospitals, universities, etc. Could you break down for me first of all the why? Why are we seeing a greater demand in that sector? Is McMaster University doing more programs? Are hospitals more involved? What is going on there to increase the demand? Then, could you break down the how? Is the agency hiring more personnel? Where specifically are the expenditures going to go? First the why, then the how.

[Serge Dupont]

What really is happening here, Mr. Chair, is that this funding had traditionally, historically, been provided through the CNSC, but it was sunsetting as of March 31, 2012. There may be a small increase, but those moneys were basically paid to the CNSC before. It was a sunset, and the government had to make a decision. Do we change this pattern and start cost recovering from those currently exempt licensees, or do we make this permanent and continue on with roughly the same funding structure we have had in the past? The government has decided on the latter choice, to make it permanent so that schools, universities, hospitals, and others would not have to pay. This had to be recorded. First it had to be enunciated through the budget, and then confirmed through the supplementary estimates. It was not in the mains because the mains would have reflected the sunset of those funds for the CNSC.

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

Okay. Effectively, there's no increase; there's nothing. It's just business as usual; it's just accounting. Okay, it's good to know that.

There's another thing, and I'm sure I'm not the only one who's eye it caught. I'm a bit curious how this works out. There is some work Natural Resources Canada is doing with and for National Defence. There's a $1 million transfer from National Defence for Resolute Bay, and then a second transfer of $170,000 for the Canadian safety and security program. That's a little unique and not standard from my history on this committee. It's not normal from what I remember being on committee over the last few years. Could you elaborate on what those programs involve?

[Serge Dupont]

In fact, I'm not sure I would dispute the word “unique”, because it's actually a very productive kind of partnership with National Defence, particularly with regard to the $1 million in the north. We at Natural Resources Canada basically run the polar continental shelf facility in Resolute Bay in the north. That is a base basically for our researchers, other researchers from the Government of Canada, and others who go in the north. Obviously, that station is used mostly in summer months when it's reasonable for researchers to go up there.

National Defence wanted to train its workforce in the harshest conditions, more in the winter. We have established a partnership whereby they are contributing to growing the facility for us and expanding it. It allows them to have a base for training in the harshest conditions in the north in the wintertime. It also provides additional capacity for us to actually host researchers in the summertime. It's a good agreement between two departments that have common cause here to have an infrastructure in the north, and to share it on an optimal basis. DND in this context here in this year is contributing $1 million to building that expanded facility.

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

With reference to my point about it being unique, are there other opportunities, or is this fairly rare, that departments can support each other and more effectively utilize their infrastructure?

[Serge Dupont]

We are constantly looking for those kinds of opportunities.

The two arms of the Geological Survey of Canada, for example, in both east and west are co-located with the Department of Fisheries and Oceans, in terms of those research facilities. We have other research facilities co-located with universities. We have another Geological Survey of Canada office in Quebec City co-located with l'Institut national de la recherche scientifique. McMaster, as you know, is where we now have our new laboratory for materials, on the McMaster research park, in close collaboration with the university and other universities, and so forth.

That has to be the way we do things going forward. Basically you try to leverage every dollar with other partners, whether internally in the Government of Canada or externally, to try to get the most mileage from the tax dollar.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Trost.

We go now to Mr. Nicholls, for up to five minutes.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Mr. Chair, I hope I will not be interrupted with points of order. Everything I am going to say has to do with the Supplementary Estimates (B).

With respect to the National Energy Board, we see on page 107 that the program expenses are in the order of $55.8 million, with adjustments of $5.89 million. My colleague, Mr. Calkins, spoke a bit about it.

The section on voted appropriations on page 110 lists an amount of $5.89 million. Is that the same amount?