Environment Committee on June 7th, 2007

[The Chair, Conservative, Bob Mills]

Okay.

Now I will call our officials to the table, please.

I'd like to welcome the officials who have come before us. It is certainly an opportunity for members to ask questions. We are of course largely talking about the expenditures and the spending on the climate change plan. I would ask members to try to keep within a certain range of questioning as much as possible.

I believe you have a brief statement that you'd like to make, just to open. We'd like to hear that now, please.

[Michael Martin, Assistant Deputy Minister, Strategic Policy Branch, Department of the Environment]

Thank you very much, Mr. Chairman. It's a pleasure for me and my colleagues to be here with you today.

My name is Michael Martin. I'm the assistant deputy minister of strategic policy at Environment Canada. With me at the table today are Basia Ruta, who is assistant deputy minister of finance and corporate services and the chief financial officer of Environment Canada; and as well, Alex Manson, who is special adviser on climate change policy at Environment Canada.

Mr. Chairman, following Mr. Baird's appearance on May 29, I believe the committee received a table that outlines planned spending on the government's new environmental initiatives. Those initiatives total $4.7 billion announced prior to budget 2007 and $4.5 billion announced in budget 2007. Let me briefly summarize the climate change and clean air component of that funding before I go through the details.

The government committed $367 million in 2006-07 and $88 million in 2007-08 to fund the interim extension of existing climate change programs that were in place prior to 2006-07. Then subsequently, prior to budget 2007 and through budget 2007, the government committed $8.127 billion for new initiatives to address clean air and climate change. That's just the summation.

In spring 2006, while it was developing its approach to address climate change and clean air, the government made a decision to extend on an interim basis 53 programs in the area of greenhouse gas emissions, international reporting, and engagement in domestic policy development for one year. As well, they made the decision to extend 40 programs in the areas of technology innovation, science impacts, and adaptation for two years. With those decisions, as I said at the outset, the government committed $367 million for 2006-07 and $88 million in 2007-08. Those figures, Mr. Chairman, are additional to those that were included in the table that was circulated on the government's new environmental initiatives.

Prior to budget 2007 the government announced a number of new initiatives. As you know, the foundation of the government's approach to addressing climate change and clean air is a robust regulatory regime to reduce GHGs and air pollution, complemented by targeted program initiatives aimed primarily at promoting the deployment and use of energy-efficient technologies.

The regulatory framework for air emissions that was announced at the end of April, which will regulate greenhouse gas and air pollutant emissions from major industrial sources as well as emissions from the transportation sector and take action on consumer and commercial products, has been funded with a commitment of $339 million, with planned spending in 2007-08 of $68 million.

The government has taken a series of decisions and announced initiatives in the area of clean energy. The government has committed $2.061 billion to this set of ecoENERGY technology initiatives, of which planned spending in 2007 and 2008 is $145 million.

I will briefly summarize the ecoENERGY initiatives, Mr. Chairman: there's the ecoENERGY technology initiative, which funds research, development, and demonstration of clean energy technologies; the ecoENERGY for industry program, which helps industry improve energy use; the ecoENERGY for buildings and houses program, which encourages the construction and operation of more energy-efficient buildings and houses; the ecoENERGY retrofit initiative, which provides financial support and information to encourage the retrofit of homes and small and medium-sized enterprises; the ecoENERGY for renewable power program, which provides incentives to boost Canada's supply of clean electricity from renewable sources such as wind, biomass, small hydro and ocean energy; and, the ecoENERGY for renewable heat initiative, which provides incentives and industry support to increase the adoption of clean, renewable thermal technologies. Those are the ecoENERGY and the clean energy initiatives.

The government has made a series of commitments in the area of clean transportation. Prior to the budget of 2007, the government committed $2.012 billion to achieve emission reductions in the transportation sector, including an investment of $1.3 billion, announced in 2006, to support capital investments in public transit infrastructure, and the transit pass tax credit, with spending of $150 million in 2006-07 and $220 million in 2007-08, to increase the use of public transit by Canadians.

The government also announced a set of new ecoTRANSPORT initiatives, with anticipated spending of $20 million in 2007 and 2008. Just briefly, that set of initiatives includes the ecoMOBILITY program to work with municipalities to encourage commuters to choose public transit or other sustainable transportation options, the ecoTECHNOLOGY for vehicles program to test and promote environmentally friendly vehicle technologies, and the ecoENERGY for personal vehicles initiative to provide fuel consumption information and decision-making tools to Canadians.

As well, there are six initiatives in the area of freight, including the national harmonization initiative for the trucking industry to help remove regulatory barriers to the adoption of emission-reducing technologies for the trucking industry, the ecoENERGY for fleets initiative to reduce emissions from commercial and institutional road vehicle fleets, the freight technology demonstration fund to support new and under-used freight transportation technologies in real-world conditions, freight technology incentives to mitigate financial barriers to the adoption of new and under-utilized technologies, the partnerships on freight initiative to enhance domestic and international partnerships to reduce emissions from freight transportation, and the marine shore power program to support the installation and use of shore-based power for marine vessels in Canadian ports. All of those initiatives, Mr. Chairman, were announced prior to budget 2007.

Turning now to budget 2007, in that budget the government announced a further set of new initiatives, totalling $3.715 billion, to address clean air and climate change.

First, the government committed $1.519 billion of funds from 2006-07 to the trust fund for clean air and climate change. This will provide support to major provincial and territorial projects to lead to real reductions in greenhouse gas emissions and air pollution.

In addition, the government extended and expanded the accelerated capital cost allowance rate for renewable generation equipment, which has an anticipated cost in 2007 and 2008 of $10 million.

Finally, the budget included $2.176 billion in new initiatives to promote clean transportation, with planned spending this year of $293 million. To summarize, that includes the ecoAUTO rebate program to provide performance-based rebates for the purchase of new fuel-efficient vehicles, as well as a green levy that has been placed on fuel-inefficient vehicles; the personal vehicle fuel efficiency incentive program to provide incentives to encourage the retirement of older, more polluting vehicles from Canadian roads; a new operating incentive in support of renewable fuel production in Canada, which will help meet the regulated requirement of 5% renewable fuel content in gasoline by 2010, and 2% renewable content in diesel fuel and heating oil by 2012; and a commitment to provide funding for Sustainable Development Technology Canada to establish large-scale facilities for the production of next-generation renewable fuels in partnership with the private sector.

Therefore, to summarize, Mr. Chairman, the government's commitments prior to budget 2007, and through budget 2007, for initiatives on climate change and clean air total $8.127 billion. In addition to that, as I stated at the outset, the government did commit $367 million in 2006-07 and $88 million in 2007-08 for the interim extension of the previous government's climate change programming.

That concludes my statement. My colleagues and I would be delighted to answer any questions you may have.

[The Chair, Conservative, Bob Mills]

Mr. Martin, I wonder if you could provide us with that in writing. It's very difficult, I'm sure, for me and the members to really keep track of everything we just heard. It would be very helpful if we, certainly after the fact, could get a copy of that sent to the clerk, and he will distribute it so we can all see that.

We'll begin with Mr. McGuinty.

[David McGuinty, Liberal, Ottawa South, ON]

Thanks, Mr. Chair.

It would be very helpful, Mr. Martin, indeed, if we could get this written down and in writing.

Mr. Martin, Mr. Manson, and Ms. Ruta, we were given a document two days ago called “Environmental Initiatives since 2006”. It's a page and a half long. Have you seen this document?

[Michael Martin]

Mr. Chair, that document was provided by our department to the committee.

[David McGuinty, Liberal, Ottawa South, ON]

So your department prepared these numbers?

[Michael Martin]

Yes, Mr. Chairman, the Department of the Environment prepared that document.

[David McGuinty, Liberal, Ottawa South, ON]

So can I ask why it didn't come in on the departmental letterhead or with the authorization, for example? Was this authorized by the deputy minister?

[Michael Martin]

Mr. Chairman, I'm not sure why we prepared it in this format, but it certainly was authorized by the department and reflects the department's view.

[David McGuinty, Liberal, Ottawa South, ON]

So it was signed off by the deputy minister and the minister?

[Michael Martin]

Yes, Mr. Chairman. It was reviewed by me and reflects the Department of the Environment's view of the figures.

[David McGuinty, Liberal, Ottawa South, ON]

Thank you very much.

Let me ask the guests who are here with us. When we talk about this one-and-a-half page document, it says “Initiatives announced prior to budget 2007”. That's very vague. What does that mean, “Initiatives announced prior to budget 2007”? It's at the top of the page.

[Michael Martin]

That includes initiatives that were announced prior to budget 2007, Mr. Chairman, including budget 2006.

[David McGuinty, Liberal, Ottawa South, ON]

Okay. It talks about ecoENERGY measures in support of the clean air agenda, under clean energy. It lists a little over $2 billion, for example. This is money for initiatives like wind power and small hydro, tidal power, correct?

[Michael Martin]

Mr. Chairman, one of those initiatives, in particular the ecoENERGY initiative for renewable power, is intended to support initiatives in that area.

[David McGuinty, Liberal, Ottawa South, ON]

So is this basically a repackaging and re-gifting of the WPPI and RPPI programs that were in existence a year and a half ago?

[Michael Martin]

As I stated at the outset, this represents initiatives announced by the government, and I think they were announced publicly. I think they're self-explanatory and I can't really comment beyond--

[David McGuinty, Liberal, Ottawa South, ON]

Fair enough. Did any of this money flow last fiscal year?

[Michael Martin]

Yes, certainly there was spending.

Actually, Mr. Chair, if I could take a moment, I'd just like to confirm that point.

[David McGuinty, Liberal, Ottawa South, ON]

Can we stop the clock?

[Basia Ruta, Assistant Deputy Minister and Chief Financial Officer, Department of the Environment]

In terms of the opening comments, the amounts that were planned spending for 2006-07 related to the initiatives that were indicated--a total, I guess, under the clean energy and clean transportation areas--up to $1.45 billion.

The reason it has flowed or it has not flowed is this. As you know, some of these expenditures are contained in the budget implementation bill, and we still need to have approval for that, so the definition of what is spent or not spent we would be using as expenditures in the public accounts. So once we get the approval from Parliament, then the finalization of the books will have the actual amount spent.

So this is why we're using planned spending until the books are closed, and then when the public accounts are tabled, we would be able to give a good definition of what that is.

[David McGuinty, Liberal, Ottawa South, ON]

I'm most confused. You're saying some of this money flowed last fiscal year. I'm confused, because Minister Lunn has publicly stated several times that these funds were frozen. Is he wrong or is he right?

[Michael Martin]

As I stated, Mr. Chairman, the government did commit funds for the extension in 2006-07 and 2007-08 of some existing programming. They subsequently made commitments for new programming. In terms of this program that has been mentioned--the ecoENERGY for renewable power programming--my understanding is that those funds have been profiled beginning in the current fiscal year and extending forward.

[David McGuinty, Liberal, Ottawa South, ON]

Can I go back to a question I put to the minister the last time he was here? I asked him how much money flowed in 2006-07 explicitly and specifically for climate change programming--a global, single number--and after some time, he said $3.336 billion was dispersed in 2006-07 exclusively for climate change programming.

Now, is that right?

[Basia Ruta]

Yes, that is correct. When he spoke, the minister included in that the interim strategy of $367 million. The clean transportation, as I was just mentioning, the $1.45 billion—