Environment Committee on May 13th, 2009

[The Vice-Chair, Liberal, Francis Scarpaleggia]

Your time is basically up. If you have a quick question, go ahead.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

I have a really good one.

How do you define sustainable development or environmental sustainability?

[The Vice-Chair, Liberal, Francis Scarpaleggia]

Make it a concise definition, please.

[Matt Fox]

It's a balance of the economic, social, and environmental aspects of project development.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you.

Thank you, Mr. Chair.

[The Vice-Chair, Liberal, Francis Scarpaleggia]

Thank you, Mr. Braid.

Thanks as well to the witnesses for being with us. Your evidence has greatly enriched our knowledge of the oil sands operation.

We'll now go to the second part of our program. We're going to hear from the NGOs, including the Pembina Institute, the World Wildlife Fund Canada, Ecojustice Canada and the Canadian Boreal Initiative.

Thank you very much for being with us. It was very interesting, and it will add a lot to our report, I'm sure.

We'll take a short break.

[The Vice-Chair, Liberal, Francis Scarpaleggia]

I would ask members to take their seats. We'll start with our segment on ENGOs.

Which witness will start? I believe you are prepared for 10-minute presentations.

[Simon Dyer, Director, Oil Sands Program, Pembina Institute]

Yes, five to ten minutes.

[The Vice-Chair, Liberal, Francis Scarpaleggia]

Okay.

Mr. Dyer, go ahead.

[Simon Dyer]

Thank you for providing us the opportunity to present here. We're very happy that the committee has come to Alberta.

My name is Simon Dyer. I'm the oil sands program director at the Pembina Institute, where I manage Pembina's research on oil sands development.

The Pembina Institute is a national sustainable energy think tank that works on sustainable energy solutions. We were founded in Drayton Valley, Alberta, in 1985.

We have researched the environmental impacts of oil sands development for over a decade and we are committed to responsible oil sands development. Unfortunately, Canada’s current approach to oil sands development is a case study in unsustainable development.

The manner in which the oil sands have developed includes many areas of federal jurisdiction beyond impacts on water. Unfortunately, the federal government has been very weakly involved in oil sands environmental management to date, despite these significant areas of jurisdiction.

I have a presentation that I've circulated in hard copy. I hope you will follow along with that.

Given the limited time available, I'll focus my comments on three main areas--the lack of protection of the flows of the Athabasca River, the unsustainable management of tailings, and the lack of adequacy and transparency in monitoring.

The federal-provincial management framework for the Athabasca River gives priority to oil sands production over protection of water and fisheries. Under the water management framework for the Athabasca River, there is no legal requirement for water withdrawals to be halted in order to protect fish habitat. The water management framework has a traffic-light system, identifying green, yellow, and red zones. During the red zone, fish and fish habitat are being damaged. Unfortunately, in this instance, red does not mean stop, and water withdrawals are allowed to continue, even when fish habitat damage is occurring.

Slide five looks at the current and future risks posed to water by unsustainable tailings management practices. It's estimated that there is a total of 720 million cubic metres of impounded liquid tailings on the landscape north of Fort McMurray. This amounts to 288,000 Olympic swimming pools of toxic waste. Tailings lakes now cover 130 square kilometres of land. That's an area the size of the city of Vancouver. On average, one and a half barrels of liquid tailings accumulate for every barrel of bitumen that is produced.

In over 40 years of oil sands development, no areas containing tailings have ever been certified as reclaimed, and industry has never demonstrated that they are able to deal with the toxic liquid waste in tailings lakes.

When you hear evidence from industry saying the first tailings ponds will be reclaimed in the next few years, this is misleading. The mature, fine liquid tailings will simply be piped to another location while those tailings lakes are filled in. Tailings lakes are toxic and contain hydrocarbons and naphthenic acids at concentrations of up to 100 times those found in bitumen.

Another risk is the risk of the catastrophic discharge, of course, which would be unthinkable.

In addition to the risks associated with current tailings production and the current risks in terms of seepage, which I'll talk about shortly, a bigger risk, I think, is the long-term fate of these tailings. Most Canadians would likely be astonished to learn that the accepted way to deal with this liquid waste in the long term is with an unproven concept called the “end pit lake”.

Other industries have end pit lakes. It's a place where you put water in a gravel pit at the end of the gravel pit's mine life, for instance. The oil sands are unique in that their tailings lakes or their end pit lakes will include toxic liquid waste at the bottom. The approved plan is simply to cap the liquid tailings waste with fresh water and hope that through a process called meromixis, in perpetuity, the upper water layers do not mix with the lower layers.

In slide eight, I show a cartoon from CEMA, the Cumulative Environmental Management Association, that shows exactly how these toxic liquid waste dumps are going to be a permanent feature on the landscape.

It's not possible to overemphasize what a risky and unproven concept this is. Concerns about the fact that this concept of an end pit lake has never been demonstrated are continually raised by federal and provincial regulators and by CEMA, yet all oil sands mines have been approved so far with this method. There are 25 end pit lakes approved and proposed so far on the landscape. There's a quote in my presentation that shows how, really, this is a complete experiment. We've never demonstrated that this is a sustainable solution.

I now want to talk about tailings seepage. Tailings lakes are leaking. I know you've heard mixed opinions on this during your stay. It's not surprising that there are mixed opinions, because there is a real absence of publicly available data to get to the root of this problem.

Last year, the Pembina Institute was commissioned to conduct a review of potential seepage from tailings ponds. We contacted the Government of Alberta on at least three occasions, asking for information on seepage data from groundwater wells. No data was provided on any occasion. It is unclear whether cumulative summaries of the data exist, whether the governments of Alberta or Canada have the capacity to analyze that data, or whether the Government of Canada has seen that data.

Despite some of the testimony you may have heard, assessments project that all tailings lakes leak, even after mitigation measures are accounted for. So even after the pumping you've heard about to move that material back to tailings lakes, there is still residual leaking into the environment--into the groundwater and the Athabasca River and its tributaries.

We did a very conservative assessment of environmental impact assessment data and found that tailings lakes could be currently leaking into the ground water at a rate of 11 million litres per day. This rate of leakage could more than double if current proposed projects proceed.

Occasionally, actual validated information on seepage is available. For instance, if you look at some recent approvals for Suncor, it was reported that their pond 1 was leaking into the Athabasca River at a rate of 1,600 cubic metres per day.

Finally, I want to comment on the availability and adequacy of publicly accessible data on oil sands environmental performance.

One of the unfortunate defining features of oil sands development is the lack of transparency and the absence of publicly available data for many elements of environmental concern, such as tailings seepage, tailings reclamation performance, and access to RAMP data. A clear and cumulative picture of the potential scale of tailings lake leakage has never been presented by the Alberta or federal government. It's been up to environmental organizations to try to project what those impacts may be.

There are many stakeholder concerns about inadequate monitoring of the Athabasca River. The regional aquatic monitoring program, RAMP, has been criticized as lacking provincial and federal government leadership. Federal reviewers of RAMP have raised significant concerns about the program itself, and we are not aware that these shortcomings have been addressed.

I'll also make it clear that the Pembina Institute has not been a member or participant in RAMP over the past six years. We simply have concerns about the credibility of the program and lack capacity to participate in all these different processes.

In conclusion, we urge the federal government to play a much more active role in oils sands environmental management. I would like to draw your attention to three specific recommendations.

First, we recommend that the federal government ensure no new approvals for oil sands mines until a scientifically based ecosystem base flow for the Athabasca River is established, beyond which withdrawals by all oil sands operations during the red zone or low-flow periods would be prohibited. The tragedy is that using off-stream water storage is an economically viable approach for the industry, but there's no regulatory requirement to store water and halt withdrawals, so we continue to see withdrawals during these low-flow periods.

Second, the federal government should ensure that no more oil sands mine approvals should be granted that include mature fine tailings or that propose unproven end pit lakes as a reclamation strategy.You've heard a lot of talk about the technological silver bullets that are going to improve the oil sands industry, but technology in the absence of regulation isn't going to drive the sort of change we need to see. Industry has been researching tailings ponds for 40 years, and it hasn't demonstrated they're able to deal with the solution. We need the regulatory levers that prohibit this unsustainable practice.

Finally, independent and transparent monitoring that has a strong, peer-reviewed, scientific basis is needed. Federal leadership is required to ensure that the data is publicly available and greatly enhanced. It should include comprehensive water quality, tailings reclamation, and tailings seepage information.

Thank you very much.

[The Vice-Chair, Liberal, Francis Scarpaleggia]

Thank you, Mr. Dyer.

Mr. Maas, you're next to present.

[Tony Maas, Senior Policy Advisor, Fresh Water, World Wildlife Fund Canada]

Thanks for the opportunity to speak to you today on what I see as one of the most important freshwater issues in Canada today.

My name is Tony Maas. I'm senior freshwater policy adviser with WWF Canada.

As some of you may know, and as others may not, WWF Canada prides itself on being a science-based and a solutions-based organization. What that means is that we tend to focus our efforts on working across sectors--public, private, not-for-profit--to look for and implement solutions to today's increasingly complex environmental problems, as long as we understand, as well as possible, the underlying science. When we don't understand that science, or when it is incomplete or in question, we advocate precaution.

With that as an early background, not unlike my colleague from the Pembina Institute, I'm here recommending that no further approvals for oil sands projects that require water withdrawals be granted in the near term. I make that recommendation because we believe decisions are being made in the absence of best possible science and with little or no precaution.

I should also note here that WWF is an active member of the phase two management framework committee, the P2FC. This is the group of industry, first nations and Métis, and other environmental organizations, as well as federal and provincial government representatives, that is working to develop a recommendation for what we hope will be an improved water management plan for the lower Athabasca River. As part of that, we have agreed with our colleagues on that committee not to discuss publicly the internal workings of the committee, as it's ongoing.

I'm going to frame my discussion around the concept of environmental flow, or what in Alberta is often referred to as instream flows.

Aquatic ecologists widely recognize that a river's natural flow regime--the peaks and troughs, the high and low flows--is critical to sustaining the integrity and productivity of freshwater ecosystems. The Athabasca River is unique when it comes to environmental flows. It is unimpeded by dams, so flows are largely natural. It is in fact the third-largest free-flowing river in North America.

Because the Athabasca is not impeded by dams and other infrastructure, there is significant interannual and intra-annual variability. It is this variability that sustains not only the integrity of the river but also the downstream Peace-Athabasca delta. That delta, as you might know, is 80% protected by Wood Buffalo National Park, which is a UNESCO world heritage site.

Also worth pointing out in connection with this interannual and intra-annual variability is that winter low-flows are the most critical period of time for the health, productivity, and survivorship of species in the Athabasca River, simply because flows are lowest at that point.

When we talk about environmental flows, it's important to recognize that there are sustainable limits to the degree to which we can disrupt flow regimes. When we think about this in the context of oil sands development, it appears very much that we put the cart before the horse.

Alberta Environment has licensed oil sands operators to extract significant volumes of water from the Athabasca River before setting sustainable limits on those withdrawals and before appropriate protections were put in place. This has been acknowledged, in fact, through the phase one management framework approach; however, we believe the phase one management framework for the lower Athabasca, the existing management framework that is in place, is inadequate, for at least three reasons.

First of all, as has been mentioned, there is no ecosystem base flow. An ecosystem base flow is essentially a threshold or limit below which, in order to protect the ecosystem, no further withdrawals from the river should be allowed. However, under the phase one approach, industry is allowed to take at least 5.2% of the median flow at any time, regardless of the severity of low flow.

It's important to recognize that some of the statistics that were put out this morning around the percentage of annual average flow that oil sands operators take from the river can be very misleading. The important timeframe to be considering is the period of these very low flows. At these times, the proportion of flow being taken by oil sands operators is much more than the annual average numbers would lead you to believe.

Second, there are no provisions for peak flows, those high flows that are very important to replenishing the Peace-Athabasca delta. The phase two framework simply assumes, without significant scientific support, that withdrawals will not affect ecosystem health, and it will therefore allow operators to withdraw the maximum amount of water they can during that period of time.

Finally, and I think incredibly importantly--it's come up a number of times--the phase one framework failed to acknowledge the impacts of climate change on future flows in the Athabasca River. Science tells us that flow is in fact declining in the Athabasca River, and that the decline is largely due to human-induced climate forces.

Over the past couple of years, WWF has commissioned reports by Dr. Jim Bruce, who some of you may know. He's the chair of the groundwater report that has been mentioned a number of times. He's also a member of the Intergovernmental Panel on Climate Change and a world-renowned, Canadian-renowned, climate scientist.

In a report commissioned by WWF, Dr. Bruce predicted that by 2050 the mean annual flow of the Athabasca could decline by 25%, and low flows could decline by 10%. We recently asked Dr. Bruce to update his report. What came out of that was a warning that his early predictions might be wrong for a couple of reasons, and that flows might decline quicker.

Those reasons include the fact that greenhouse gas emissions are increasing more rapidly than the IPCC assessments suggest, and headwater glaciers that provide some of the base flow to rivers like the Athabasca have passed the tipping point. They were providing more flow to rivers because of melting, and are now providing less base flow.

Finally, when we think about environmental flow we can't forget the quality dimension. It is important to recognize that when we're looking at the flow of a river, it carries pollution from upstream activities to downstream communities and ecosystems. I think an important way of looking at this is as an issue of watershed equity. When we are putting downstream communities at risk, we are putting ourselves increasingly in a position of conflict.

At the heart of this issue is the tailings ponds that have been discussed at length today, the seepage from those tailings ponds and its impact on the health of downstream communities such as Fort Chipewyan. But when you think about the potential--regardless of how low it might be--for a catastrophic breach of a tailings pond, the watershed equity issue stretches well downstream into the Mackenzie River basin, including the Northwest Territories.

Here again there's significant uncertainty related to the human and ecosystem impacts associated with tailings seepage, but there's also significant uncertainty related to how pollutants would disperse in the event of a catastrophic tailings breach.

To conclude, I think it's safe to say that for too long oil sands development has progressed without the appropriate oversight and leadership of the federal government. There are clear indications that the federal government has an incredibly important role to play and responsibilities in the realms of fish and fish habitat protection, transboundary water issues, and protection of aboriginal rights. What has been called a complex and confusing allocation of water management powers between federal and provincial governments is often used as an excuse for inaction.

We have a couple of specific recommendations for the federal government to demonstrate and take leadership on freshwater issues related to oil sands. Federal leaders, including the Minister of Fisheries and Oceans, should be encouraged to support the recommendations that come out of the phase two water management framework committee, and ensure that the framework has full political support so it moves toward an implementable water management framework and is resourced so that it can be implemented and enforced.

As you may be aware, under the original phase one management framework, a DFO biologist proposed a more stringent approach that was much more protective of the ecosystem. It included an ecosystem-based flow; however, it is unclear to us why that approach did not end up as part of the phase one management framework.

Finally, there is an opportunity here for the federal government to show leadership in an area where there is potential for growing conflict around transboundary water issues within this country. Alberta and the Northwest Territories are in the midst of negotiating a bilateral agreement under the Mackenzie River basin transboundary agreement. The federal government is a party to that agreement, and we recommend that the federal government participate in those negotiations to ensure that what emerges out of that is a robust water management plan that ensures watershed equity and reduces conflict.

Thank you.

[The Vice-Chair, Liberal, Francis Scarpaleggia]

Thank you, Mr. Maas.

Can you tell us the name of that DFO biologist, in case we might want to invite him sometime?

[Tony Maas]

I can't tell you at the moment. I'll have to figure out if I can find that out.

[The Vice-Chair, Liberal, Francis Scarpaleggia]

Sure.

You say that the federal government should endorse the phase two framework, but my understanding is that it's not published yet.

[Tony Maas]

Exactly.

[The Vice-Chair, Liberal, Francis Scarpaleggia]

So it might not be something that you would want the government to endorse. I mean, you probably didn't want the government to endorse phase one.

[Tony Maas]

What I didn't say was what is in parentheses, because it was challenging to fit into my talk.

[The Vice-Chair, Liberal, Francis Scarpaleggia]

Okay, so it's qualified.

[Tony Maas]

It presumes that the phase two recommendation reflects an appropriate management approach to protect the ecosystem.

[The Vice-Chair, Liberal, Francis Scarpaleggia]

Thank you.

Who's next?

Mr. Robinson, go ahead, please.

[Barry Robinson, Staff Lawyer, Ecojustice Canada]

Thank you, Mr. Chair and committee members, for the opportunity to present to you today.

My name is Barry Robinson. I am the staff lawyer at Ecojustice Canada, formerly the Sierra Legal Defence Fund.

Karin Buss was scheduled to present to you today, but unfortunately she fell ill this morning. She sends her apologies.

The focus of our written presentation and my comments today is the role that the federal government should and must play in the management of our water resources in the Athabasca oil sands region. It is our submission that the federal government has been somewhat missing in action in an area where it has clear responsibilities.

In our written brief, we have provided evidence that the federal government has not been fulfilling its responsibilities to protect water resources in the oil sands regions. Today I would like to focus your attention on the fact that the federal government actually has significant powers and responsibilities that it could and should use, and I urge the committee to recommend that those powers be used.

In the Constitution Act, 1867, the federal government has clear responsibility and defined powers in certain areas, such as fisheries. In other areas, the federal heads of power overlap with the provincial powers, and thus some coordination is required with Alberta. This does not mean, however, in legal terms, abandonment of these federal powers or acquiescence to the province's regulatory regime. Practically, what it requires is leadership, advocacy, and diligent work on the part of the federal authorities.

We must keep in mind that where there is a clear conflict between federal and provincial powers, the federal powers are paramount. Therefore, it is our recommendation that the federal government should begin exercising those powers that are clearly within its jurisdiction. I'd like to run quickly over some of those areas.

First, under the natural resources transfer agreement of 1930, under which Canada transferred ownership of natural resources to Alberta, the federal government reserved to itself the right to determine and secure sufficient flows within the rivers and streams that feed into Wood Buffalo National Park, to protect its “scenic beauties”, to quote the agreement.

In modern terms, I would submit that protection of the ecosystem would fall within that broad category of protecting scenic beauties. This gives the federal government an overriding and preeminent power to determine what flows must flow into Wood Buffalo National Park.

As Tony has mentioned, the Department of Fisheries and Oceans determined in 2006 what the inflow stream needs are in the Athabasca River, so what remains to be done is for the federal government to give Alberta formal notice of what flows it would require into Wood Buffalo National Park.

Second, Canada clearly has primary responsibilities to protect fish habitat under the Fisheries Act, and low flow levels, as has been pointed out by my colleagues, can destroy fish habitat.

To date, DFO has issued HADD permits—that is, harmful alteration, disruption or destruction of fish habitat permits—only for, as far as I'm aware, the actual process of digging out streams and water courses in order to mine underneath them, to reroute streams. I am not aware of DFO issuing any permits that deal with the impacts of lower flows in the Athabasca that result from diversions of water for these industrial schemes.

In fact, I'm only aware of one permit, which is the Albian Sands permit, for their Muskeg project, that did set a restriction. This was the permit for the actual physical structures to withdraw water from the Athabasca. That did set a minimum water flow below which no water was to be withdrawn.

I would suggest that the federal government, and DFO, in its power, should be doing that on all the HADD permits they issue and on other permits they issue with respect to oil sands.

Third, Environment Canada has administrative responsibility for those provisions in the Fisheries Act that deal with depositing deleterious substances into waters frequented by fish. The courts have been clear that this includes prohibiting the seepage of deleterious materials into water that does not contain fish but which eventually discharge into water containing fish. So the discharge does not have to be directly into fish-bearing streams to be prohibited.

I am fascinated by the discussions that I heard this morning and things I've read that tailings ponds are not seeping. We did have evidence this morning that Suncor's pond 1 did leak, for a number of years, and I understand it continues to leak into the Athabasca.

The Syncrude groundwater report for 2007 indicates water seeping from their Muskeg River tailings pond into Beaver Creek. This is not theoretical, but is measured in their groundwater report, which shows that the water is seeping into Beaver Creek. It's beyond their containment system. So it's not something theoretical in an environmental impact assessment, but is actual seepage happening beyond the containment systems.

I also understand that you may have heard from Dr. Schindler yesterday that there are deleterious substances entering surface waters through air emissions. Therefore, we would ask that Environment Canada step up and enforce the deleterious materials provisions of the Fisheries Act.

Fourth, the Canadian Environmental Assessment Act requires the federal assessment of proposed oil sands projects, which I'm sure you've heard of a number of times. This not only gives the federal government the power to assess these projects before they begin, but there are also monitoring provisions in there, on which they could require follow-up after these projects are approved.

This is the area where we see some weakness, in that commitments are made during the joint review panel hearings, and then, at times, the commitments made there are not followed through on by the companies. So the basis on which the approval is granted, that certain mitigation steps will be effective, turns out to be.... Either the steps are not implemented or they're not effective, yet no one is following up on these steps.

There are other pieces of legislation and powers that are set out in our written submission, such as the peace, order, and good government provisions, which give the federal government residual jurisdiction over environmental matters of national concern, including transboundary waters.

Finally, we wish to highlight that Canada does have a water policy. It was made in 1987, and has laudable goals and strategies to protect Canada's water resources and to promote efficient water management and use. The strategies that are set out in that water policy include Canada's fiscal and regulatory powers to penalize polluters and to encourage water efficiency. The 1987 water policy also identified water pricing as a key to conservation. This policy has not been implemented, but it is a tool that could be used.

In conclusion, we would recommend that the federal government use its available powers, including spending and other fiscal powers, to improve environmental performance in the oil sands. We are asking the federal government to step up and address the water issues in the oil sands area.

I thank you for your attention.

[The Vice-Chair, Liberal, Francis Scarpaleggia]

Thank you, Mr. Robinson.

Mr. Chapman.

[Ken Chapman, Advisor, Canadian Boreal Initiative]

Thank you, sir.

My name is Ken Chapman. I'm standing in for Mary Granskou, who is in Vancouver today with the Canadian Boreal Leadership Council. I'm from Cambridge Strategies in Edmonton, and I'm pleased to present to you on behalf of the Canadian Boreal Initiative.

As we understand, the committee has particular interest in water quality and water quantity.

Let me tell you a little bit about the CBI. It's a national organization guided by the boreal forest conservation framework. It's a vision to support the protection of at least half of Canada's boreal forests with world-class sustainable development in the remainder of the landscape and in a manner that respects aboriginal rights. This vision is supported by leading resource companies, first nations, and conservation groups, many of them located right here in Alberta.

We get behind real solutions. Our forestry company partners actually have over 50 million acres under Forest Stewardship Council certification, and they actually lead the world in this. Our oil and gas company partners are committed to demonstrating environmental, social, and technological performance improvements. Our first nation partners are shaping land use plans and balancing protection with sustainable resource development. And we work with environmental groups to raise standards for environmental performance. We have memoranda of understanding with governments, and we cover the whole range and spectrum of the boreal forest in our partnerships.

We believe that conservation-based planning and the establishment of large, interconnected protected areas is required to ensure that development, where it occurs, will not impair ecological and cultural values. We believe that planning for sustainability of the boreal forest is the key to economic prosperity, cultural vitality, and ecological integrity.

However, we'd like to note at the outset that these approaches also require immediate action to meet the challenges presented by climate change. We recognize that without a robust global and national response to reducing greenhouse gas emissions, including substantial performance improvements in the energy sector, all bets are off. Although we will focus in this presentation on the management of terrestrial and aquatic impacts, it is in that context and with that caveat I make these comments.

Today three countries on earth are home to the world's remaining large tracts of intact forest: Brazil, Russia, and Canada. Of those, Canada's boreal forest houses one-quarter of the world's remaining original forest, and is one of the largest intact ecosystems on the planet. Protecting this global resource is a responsibility Canada has to the world. There are 1.4 billion acres spanning 58% of our gross land mass, stretching from Newfoundland to the Yukon.

Scientists are telling us that large-scale protected areas to maintain wildlife and other ecological values are important to protect this landscape. There are some areas of the boreal forest, such as in Alberta, where the need for such protection is absolutely critical. For example, woodland caribou are very sensitive to disturbance, and the boreal population is declining in this province. Unless critical habitat is protected, this already threatened species may be extirpated over its former range.

Now, regarding the oil sands' impact on the broader boreal region, in Alberta, the boreal forest covers 60% of our land mass and most of the province's forested lands. The boreal forest is an economic engine for Alberta and indeed for the country as a whole, but development in this region is having specific impacts and is presenting tremendous challenges to the climate, boreal ecosystems, local communities, and wildlife populations.

Many of these pressures result from the unprecedented pace and scale of development in Alberta's oil sands. The substantial expansion of oil sands development, combined with industrial forestry and conventional oil and gas development, is straining a range of ecological services in northern Alberta.

After 41 years of oil sands mining in Alberta, the pace of reclamation to date has not matched the rate of disturbance. The level of impact on water quality and quantity is of great concern as a result.

What is urgently needed is a solution to set new and significant land and wetland conservation commitments within an overall regulatory system that gives first priority to proactive planning to protect air, water, and other ecosystem values in the broader region around the oil sands. The second priority is to ensure the health and sustainability of local communities, and particularly aboriginal communities. And the third priority is reducing the footprint and mitigating the impacts of development in a way that can be demonstrated as compatible with the first two priorities.

We have four recommendations for you. First, we recommend that the committee support and advance a cross-jurisdictional water strategy involving all governments in the Mackenzie River basin, with demonstrated leadership by the federal government.

The Mackenzie River is Canada's longest river, and its 1.8 million square kilometres watershed drains one-fifth of the country. It is truly the heart of much of Canada's north. The oil sands are located in the Peace and Athabasca watersheds, which are critical headwaters for the broader Mackenzie basin. Our recommendations focus on remedies within this larger watershed context as the impacts of oil sands development are and will be felt through this entire region, particularly in the many aboriginal communities downstream.

There is a need for effective integrated water resources management that has given rise in the past to the Mackenzie River Basin Board and the Mackenzie River Basin Transboundary Waters Master Agreement that guides that operation. Members of the MRBB include the NWT, Yukon, British Columbia, Alberta, and Saskatchewan. In 2008 the governments of the NWT and Alberta signed a memorandum of understanding on economic development that identified water and wildlife management as two priorities.

The Government of the Northwest Territories has been engaging with first nations and the broader community to develop transboundary water strategies for the Mackenzie basin. Environment Canada has been supporting this financially.

The federal government has to become a leader in this process. As you know, Canada has specific constitutional responsibilities for fisheries, navigable waters, migratory birds, and aboriginal communities, but it is also the senior government with responsibilities for interjurisdictional environmental impact. Canada must be at this table and must be prepared to ensure that our national interests in ensuring clean water, environmental quality, and healthy, sustainable aboriginal communities are advanced through this process.

Our second recommendation is that the committee support implementation of conservation offsets through providing federal resources, particularly to advance first nations-led offsets proposals.

Status quo land management and reclamation approaches in the oil sands have demonstrably failed to keep pace with public expectations, while environmental liabilities are accumulating rapidly. There is a pressing need to put new tools and approaches into practice to address decades of delay in initiating reclamation while proactively meeting the challenges of new development.

Since early 2008, CBI has been working with first nations, industry, and other interested parties to advance conservation offset as a regulatory tool to address the impacts of industrial development in the oil sands region. Through a report and subsequent workshops, it was concluded that conservation offsets should be considered to address the gap between Alberta's growing development footprint and unrealized reclamation and conservation needs in the boreal forest. Conservation offsets are compensatory actions and can be used to offset industrial footprints by securing areas of equal or greater biological value.

As part of a complementary strategy that will require significant new conservation and protected areas; world-leading mitigation and monitoring practices to protect land, air and water; enacting and enforcing higher standards for reclamation and limits on the extent of development footprints; and dealing equitably with impacted communities, conservation offsets are one tool that can be effectively used to limit industrial footprints in order to protect biodiversity within Alberta's boreal forest. It's in this context that conservation offsets can be cost-effective and operationally efficient methods to secure important conservation outcomes, help companies strengthen their social licence to operate, and help manage reputational risk.

In fact, in Alberta, the land use framework, the Alberta Land Stewardship Act, and oil sands plans identify conservation offsets as a land management tool that would contribute to achieving desired conservation outcomes within regional planning processes.

Through financing support, the federal government has a role to play in advancing conservation program offsets. As a good parallel for this, look at British Columbia's Great Bear Rainforest agreement, in which Ottawa matched B.C.'s $30 million contribution towards a $120 million fund to implement a plan for conservation and environmentally sensitive development.

Our third recommendation is that the committee support the advancement of protected areas in the region around the oil sands and the broader Mackenzie River basin.

Due to the size and intensity of oil sands extraction, the success of actions to mitigate the impact of development will have to be a large influence on the integrity of the Mackenzie River basin itself. The ability of Canada to fulfill this international agreement and the perception of Canada internationally are at stake here.

A key component of necessary conservation offset measures is protected areas. Protected areas are needed to sustain regional ecological processes, to protect representative examples of native ecological communities, and to maintain native biodiversity. If properly selected, protected areas can act as benchmarks for sustainable management strategies for the region while maintaining ecological integrity. They can also provide an opportunity for diversification of local and regional economies, where many of the benefits have the potential to stay within those local communities.

[The Vice-Chair, Liberal, Francis Scarpaleggia]

Mr. Chapman, will you be wrapping up shortly?