Natural Resources Committee on May 29th, 2014

[The Chair, Conservative, Leon Benoit]

Good morning everyone.

We're here today, as everyone knows, to deal with the main estimates of Natural Resources. Pursuant to Standing Order 81(4), for the main estimates 2014-15, we are dealing with vote 1 under Atomic Energy of Canada Limited, vote 1 under the Canadian Nuclear Safety Commission, vote 1 under the National Energy Board, votes 1, 5 and 10 under Natural Resources, and vote 1 under the Northern Pipeline Agency, as referred to the committee on Thursday, February 27, 2014.

Just before we get to today's meeting with the minister, I want to ask members if it would be acceptable if we took a few minutes after the meeting to discuss how we proceed next week. There have been some discussions before this meeting regarding this.

Is that agreed?

[An hon. member]

Regarding the votes?

[The Chair, Conservative, Leon Benoit]

Yes, on the votes, depending on all of that.

[Some hon. members]

Agreed.

[The Chair, Conservative, Leon Benoit]

Thank you very much. We will do that then.

I want to start today by welcoming the minister to our committee, the very first appearance by Minister Rickford—and with him, of course, his deputy minister.

Minister, thank you again very much for making yourself available this early in your mandate. I know it takes a lot of preparation when it is a new area, but I also know that you're very well versed in the area and looking forward to this committee meeting. We'll start with your opening comments and then go to questions and comments by members.

Thank you so much for being here. Go ahead.

[Greg Rickford, Conservative, Minister of Natural Resources]

Thank you, Mr. Chair.

Thank you to all of my colleagues for the opportunity to be here. I was looking forward to having a discussion. You've been doing some important work, but I was really looking forward to having some of this committee's famous coffee. There's nothing like it in the city, so that's the first thing I did.

Mr. Chair, as I said, it's a pleasure for me to meet with the committee for the first time. As the member of Parliament for the great Kenora riding which covers more than 290,000 square kilometres of land, water, trees, and minerals, I have a sound understanding of the importance of natural resources. They are, in no uncertain terms, the lifeblood of my riding in northwestern Ontario.

Obviously, I'm pleased to be here today in my capacity and to explain the important work of our government in the natural resources portfolio.

In my 10 weeks as Minister of Natural Resources, I have had the privilege of witnessing the opportunity that our vast natural resources present to all Canadians.

Mr. Chair, there is no questioning the role natural resources play in maintaining the strength of our economy.

Together, the direct and indirect impacts of the forest, energy, metals, and minerals industries account for close to 20% of Canada's nominal GDP and some 1.8 million jobs for Canadians.

Over the past five years, the resource sector has added $32 billion a year to government revenues. These are revenues, of course, that go to support important programming, including health care and education.

I will talk about opportunities for growth.

As we look to the future, market diversification will play a crucial role in unleashing our natural resource potential, particularly for energy resources like oil and gas.

As you know, right now Canada has one customer for its energy, the United States. In 2012 alone Canadian producers lost over $13 billion in revenue, more than $35 million a day, because of our narrow customer base. Mr. Chair, that is significant.

That's why the private sector is pursuing potential new pipeline proposals east, west, and south to expand access into new markets as well as the U.S., and open new markets in Asia, Europe, and elsewhere. I know that this committee has grappled with that to a certain extent.

All of these projects underscore a need and an opportunity to diversify our energy markets. This is a time-limited proposition, and the pressure on Canada to respond quickly is high.

I would like to speak about responsible resource development.

As a government, we are very mindful of the importance of the resource sectors to our economy—and equally mindful of the importance of developing our natural resources in a responsible manner.

This is the overarching principle behind our government's plan for responsible resource development. With this plan in place, Canada now has one of the most competitive and one of the most effective regulatory regimes in the world.

Time-consuming and costly duplication between federal and provincial project reviews is being eliminated. There are firm, beginning-to-end timelines for reviews. A more efficient and predictable regime, one that is more effective.

We have been clear: projects will not proceed unless and until they have been proven safe for our workers, for our communities, and for the environment. Responsible resource development is an ongoing top priority of our government, and certainly of Natural Resources.

I'd like to talk a bit about tanker and pipeline safety.

We are committed to taking the steps to improve our already robust tanker and pipeline safety systems that will result in stronger prevention, enhanced preparedness and response, and improved liability and compensation in the very unlikely event of an incident.

Earlier this month, Minister Raitt and I announced future measures to enhance these energy transportation systems. The new world tanker safety measures respond to the tanker safety expert panel report and continue our work towards preventing spills in the first place, cleaning them up quickly should they occur, and making sure that polluters pay.

As part of this enhanced system, we are modernizing Canada's marine navigation system, establishing new area response planning partnerships, and, importantly, supporting aboriginal communities participation in marine and pipeline preparedness in response planning.

In addition to the steps already taken in recent years for our pipeline safety system, we are expanding the power of National Energy Board to enforce compliance. We will also ask the National Energy Board to provide guidance on the use of the best available technologies in federally regulated pipeline projects.

New measures will ensure that companies are fully liable and provide compensation for damage to the environment and property in the event of a spill. The polluter-pays principle will now be enshrined in law so that it is clear that Canadian taxpayers are not expected to foot the bill in the event of a major oil spill.

We are also increasing the involvement of aboriginal communities in planning and operations to ensure their local expertise is incorporated into our world-class safety systems.

As well, our government intends to develop a strategy, in full consultation and collaboration with aboriginal communities, to better integrate aboriginal people and their communities into energy infrastructure development. This was a key recommendation of the recent report by special representative Douglas Eyford.

I was pleased to be in Prince Rupert earlier this week to announce two important measures for enhanced aboriginal engagement. This includes the creation of a major project management office in the west, and a tripartite agreement with the province of British Columbia and first nation leaders.

Indeed, our government understands the benefit of the full participation of aboriginal Canadians in all aspects of resource development.

Finally, with respect to main estimates, Mr. Chair, with this context let me discuss my department's main estimates for 2014-15.

The estimates show planned budgetary spending of $2.53 billion, which is a decrease of about $232 million from the previous fiscal year.

The decrease from year to year is the net result of a number of changes in levels of spending across different items, against the backdrop of diligent management of resources, as our government works towards realizing a balanced budget by 2015.

The economic action plan's 2014 main estimates do not include all of the decisions that our government has taken in support of Canada's natural resource industries. For example, Canada's economic action plan 2014 will deliver on priorities, such as $90.4 million, over four years, for investments in the forest sector, specifically IFIT, an initiative to foster job creation, and, importantly, innovation in communities' forestry operations across Canada. IFIT provides support for the adoption of advanced technologies and the commercialization of new products in the forest sector.

$11.4 million over five years to invest in state-of-the-art earthquake monitoring systems, supporting the safety of families and communities, the Government of Canada is providing emergency planners and responders real-time information about earthquakes in Canada.

There is $117 million for AECL to maintain safe and reliable operations at Chalk River Laboratories while we take steps to restructure the labs and prepare for transition to a government-owned contractor-operated model; and $28 million over two years to assist the National Energy Board as it undertakes an unprecedented number of reviews of major projects.

I should note, colleagues, that approximately 90% of the funding received by the NEB is cost-recovered from the energy industry.

In conclusion, Mr. Chair, NRCan's 2014-15 main estimates clearly demonstrate how this government is committed to delivering on policy, program, and service delivery priorities for Canadians, and doing so in a fiscally responsible manner.

We are working with industry, aboriginal leaders and communities, provinces and other key stakeholders to ensure Canada's natural resources continue to be a cornerstone of our prosperity and the heart of an innovative, competitive Canadian economy.

Thank you again for the opportunity to appear before the committee. I look forward to taking your questions.

Thank you.

[The Chair, Conservative, Leon Benoit]

Thank you very much, minister, once again, for your opening comments.

We go now to questions and comments. We'll start with the seven-minute round, which allows one round to each of the three recognized political parties in the House and after that, we carry on with the five-minute round as allowed.

I want to remind members the minister is here for only an hour and his schedule requires that he leave on time at about 9:45.

We'll start the first seven-minute round with Mr. Leef.

Go ahead, please, Mr. Leef.

[Ryan Leef, Conservative, Yukon, YT]

Thank you, Mr. Chair.

Minister, welcome to the committee. As you can see, I don't share your same affinity for the committee coffee, so I brought my own.

Minister, you've been to my riding in the Yukon Territory in a former capacity and, obviously, you haven't missed that mining is an important part of the Yukon sector. In fact, just last week I was back in the Yukon for the annual gold show and hundreds of people gathered in Dawson City to talk about the investment climate and the mining prospects coming up for the next year. We see how many jobs are provided for first nation and non-first nation people in the mining sector in our territory and, of course, the direct and indirect and induced benefits from the mining sector.

I'm wondering if you can elaborate on what the main estimates are going to provide for mining sector support across the country.

[Greg Rickford, Conservative, Kenora, ON]

Thank you for your question.

Through you, Mr. Chair, we obviously recognize the importance of the mining industry. We share a passion for its profile in our respective regions. In my short tenure as minister we've been very proactive, especially during Mining Week, sitting down and having some round tables. I can say what we've heard are in the main estimates.

Obviously, the 15% mineral exploration tax credit for an additional year has been appreciated. I can respect and understand the desire for that to be ongoing and for it to reflect the extractive activities that exploration companies set up. This credit has helped junior mineral exploration companies raise capital by providing an incentive for investors to finance mineral exploration. I can say that the tax credit has helped junior mining companies and, in that specific regard, raised more than $5 billion for exploration activities.

We are also taking action to streamline review processes for major projects, which is helping to attract investments and providing greater certainty and clarity in the regulatory process. I might add, Mr. Chair, through you to my colleague, that some of these processes have begun to involve substantially more and more first nation community members, which I'm very pleased to see. That's obviously occurring within the context of the Ring of Fire in my region.

Finally, we've announced investment in phase two of the geomapping for energy and minerals program. This is a key objective. It supports increased exploration for new mineral resources, particularly in the north. Of course, when we say the north, we probably have two categories, my north and north of 60⁰. So it's been done officially in that regard.

[Ryan Leef, Conservative, Yukon, YT]

Thank you, minister.

There is definitely that north and north. You know what north is—

[Greg Rickford, Conservative, Kenora, ON]

I have got some of your north.

[Ryan Leef, Conservative, Yukon, YT]

That's right, and then there's the Arctic.

I just wonder if you can explain to the committee what NRCan is doing in establishing mandatory reporting standards for the Canadian extractive companies.

[Greg Rickford, Conservative, Kenora, ON]

As I said, in the early stage of my tenure as Minister of Natural Resources this has been a file on which we have been very busy meeting with my provincial counterparts, first nation leaders, and obviously the private sector.

Look, Canada is recognized as a world leader in promoting transparency and accountability in the extractive sector—that would obviously include mining and energy—right here at home and around the world.

In 2013 we announced plans to develop mandatory reporting standards. This exercise was to work in concert with the United States and Europe on some alignment around mandatory reporting standards. We're in the process of seeking relevant feedback from the provinces, territories, and aboriginal groups, as well as the private sector.

It will mean a level playing field for companies operating domestically and abroad, enhanced investment, and certainty in reinforcing the integrity of Canadian extractive companies. It will mean, most importantly, that citizens in resource-rich countries around the world will be better informed overall and understand the benefits from responsible resource development in their own countries, and to the extent that countries like ours are operating there, have a full appreciation for what is involved in those activities.

[Ryan Leef, Conservative, Yukon, YT]

Great, thank you.

How much time, Mr. Chair—two minutes?

Minister, in your opening address you touched on the topic of responsible resource development. Of course, in the north, in both your great Kenora riding and in the Yukon, we have people who have a great affinity for the work and the prosperity that mining brings, but also for the natural environment around them.

I think in the past there has been this tendency to discuss mining and natural resource extraction in an either/or discussion. It's either that you have care and concern for the environment, or you're involved in the extractive sector.

I think our government has done a tremendous amount of work in making sure that it isn't an either/or discussion, that it's not mutually exclusive, that we can very much have care and concern for the natural environment and at the same time utilize the tremendous resources that we have in our country. It's been well said that riches under the ground don't necessarily equate to wealth above ground. We have to be able to access those, but as you've indicated, in a responsible manner.

I just wonder if you can talk a bit about what the main estimates do to ensure that we maintain a solid path toward responsible resource development, and what that means to you and your department.

[The Chair, Conservative, Leon Benoit]

Minister, you have about a half-minute for your response.

[Greg Rickford, Conservative, Kenora, ON]

In short, Mr. Chair, the way I see this, certainly in my current capacity, is that it's not an either/or proposition. I think the main estimates and the policy platform from which they derive—from the observations that I've had both in the private sector and now in a political capacity—have created opportunities for communities, in particular for first nation communities, to be involved in all aspects of resource development.

This has played a critical role for things like the Ring of Fire, where we see small, very isolated first nation communities participating in the environmental assessment process. Their participation in things like traditional land use planning, customary practices, and the like are essential parts of the environmental assessment process designed to be protected and respected when and if extraction activities actually occur.

That's the way I see the policy evolving, and actually working, God help us all.

[The Chair, Conservative, Leon Benoit]

Thank you very much.

We go now to the official opposition, to Ms. Duncan, for up to seven minutes. Go ahead, please.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thank you very much.

It's nice to have you here, Mr. Minister. Congratulations on your new portfolio. You used to sit across this way, and we appreciate your giving us an hour. We have lots to cover. We look forward to having you back many more times, and I hope you'll be open to our invitation.

The first question I'd like to ask right off the bat comes out of the remarks you've just made. Under your administration of this department, I'm curious about what is happening to the Canadian energy strategy. You have stated that you're pursuing what you call responsible energy development, and you've also stated it is going to proceed only when it's proven safe to workers, to communities, and to the environment.

I don't know if you're aware, but you might want to get your staff to pass on to you a report done by the Canada West Foundation, a well-known economic foundation in Alberta, and they've raised serious concerns about the direction the federal government is taking. They're saying there is too much time spent on advertising and branding and not enough on actually engaging the people who are potentially impacted. They come right out and state that Canada is not a superpower and that Canada should therefore be acting in a different kind of direction, making sure that in Canada people buy in, whether they be aboriginal Canadians, or whether they're small communities.

I wonder if you could tell us—we haven't heard anything on this since the fiasco with the Bruce Carson initiative with the Canadian energy strategy, which was then a closed door between industry and government—whether you are intending to pursue a Canadian energy strategy and, if so, in what direction. Or are you simply going to continue to spend hundreds of millions of dollars on advertising?

[The Chair, Conservative, Leon Benoit]

Minister, go ahead, please.

[Greg Rickford, Conservative, Kenora, ON]

There may be several questions packed in there.

Obviously, I think the best way to start, Mr. Chair, is to give a specific example of how, perhaps, this is being done differently. It fits with an energy strategy, at least in terms of approach. Pipeline safety, as you may or may not know, has been one of the topics over the past couple of weeks in my 10-week tenure as the Minister of Natural Resources where we hope we're sending a clear signal of the importance of a strategy that looks at prevention, preparedness and readiness and, obviously, at the liability and compensation regime that's in place.

It has been consistent with our approach to nuclear energy. It has been consistent with our approach in other government departments, where the approach to energy overall is substantially and substantively implicated, and I'm talking about marine safety.

My exercises, in the past few weeks in particular, have been focused on community engagement, policies and tools, for example for the National Energy Board, to focus on enforcement, and for communities to be involved in the safety aspects of, for example, pipeline safety.

This has been very well received by stakeholders, by community leaders, and I think it is a really good example of where our government, moving forward, understands the context of energy development, energy infrastructure, energy transportation. When it's well understood in the context of community level participation, and subsequent to that, in community level activities that focus on safety, specifically prevention, preparedness, and readiness--I'm speaking primarily of land-based, because that's what fits within Natural Resources--and, of course, a liability regime.... Those kind of exercises and investments, if you will, go a long way to creating more confidence and more education and understanding about a national energy strategy.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thank you.

To quote you back, Mr. Minister, you've said “We have been clear: projects will not proceed unless and until they have been proven safe for our workers, for our communities, and for the environment.” Your counterpart in Environment, I believe, was one who initiated the study on fracking, and that report has been very clear that there has not been enough work on monitoring and assessing whether or not fracking is safe. So there we have one sector that is continuing to proceed where it has not been proven to be safe.

We have other sectors, for example in the oil sands, where recent studies, including by the federal government, have shown that there may be significant impacts on the environment, and yet the government is continuing to allow those projects to proceed.

I'm wondering what measures you are anticipating taking to actually start delivering on that. The most important is the report on the gateway that, of course, has countless recommendations for work that needs to be done before they can determine how they can proceed safely. So can we anticipate then that there will be no approval for the gateway project until it is absolutely proven safe for tanker traffic, for recovery of oil spills and so forth?

I have personal experience with the failed federal-provincial response to major spills with bunker C, of which 200,000 cubic litres still lie in my lake after a derailment. I'm hoping you can give assurance that we're not going to be giving more and more approvals until, in fact, these dangerous projects are proven safe.

[The Chair, Conservative, Leon Benoit]

Minister, you have about a minute-and-a-half.

I would like to just remind members this meeting is about the main estimates. I also acknowledge that any question for the minister and his portfolio is allowed at these meetings.

Go ahead, please, Minister.

[Greg Rickford, Conservative, Kenora, ON]

Thank you for that. There's a certain polyvalence to that question. I'll try to address a number of them.

First of all, obviously I can't speak to Northern Gateway right now because it is under review and we're carefully examining the report and its 209 conditions.

Through the chair to the member, I can tell you that I can't share your view fully and completely. I think this government quite recently has demonstrated an ability to draw bright lines around specific projects. Obviously, the New Prosperity mine is a really good example of that. I was in the House of Commons when some of your colleagues with glee crossed the floor and spoke openly about the government's ability to make tough decisions around resource development, major legacy files that had significant economic benefit.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

That was a first.

[Greg Rickford, Conservative, Kenora, ON]

Finally, with respect to shale gas development, which we support, responsible resource development includes shale gas. The provinces and territories obviously have their own natural resources and they have primary responsibility for this. We're seeing in British Columbia robust activity, sensitivities to all of the environmental components, and the need to have first nation communities fully integrated and involved in any and all activities that are implicated. The health and safety and protection of Canadians and our communities are paramount in this, of course, but we have seen no indication, obviously, of contamination to drinking water from things like shale gas activities. I think as long as they are subject to rigorous independent review, I'm comfortable that provinces will make responsible decisions around the development of shale gas, and to the extent the federal government is implicated, for example, in certain exercises around for pipeline safety, we'll be there to support these activities.