Environment Committee on Feb. 10th, 2009

[Mark Warawa, Conservative, Langley, BC]

Is my time up? Oh, my goodness.

[The Chair, Conservative, James Bezan]

Mr. McGuinty, you'll kick us off on the five-minute round, please.

[David McGuinty, Liberal, Ottawa South, ON]

Thanks, Mr. Chair.

Thanks very much, gentlemen, for joining us this morning. I'd like to zero in, if I could, on two issues. One is the ecoTrust, and of course the other is the tax deductible transit pass.

Fifteen months ago at committee, I asked a series of questions of the former minister, Mr. Baird, about the $1.5 billion trust. We asked serious questions about where the money was going and who the trustee of the fund was. I couldn't get an answer from the minister or his deputy minister, in terms of who the trustee of the fund was. Maybe you could help us, Mr. Vaughan.

It's interesting. I think I heard you just say in response to Mr. Warawa—who rhymed off how all the money has been spent—that you weren't aware of those numbers. You are the environmental auditor for Canada, and yet you can't track where that money has gone. We don't know whether the Province of Ontario has used all of that money to Canadian national standards, in terms of value for money propositions. The government has said now repeatedly for almost four years that it is the accountability government, and the previous minister was the accountability guy. He ran in the last election with that kind of language in his own materials.

Mr. Vaughan, can you help us understand how it's possible that $1.5 billion has gone into a trust fund and you cannot report to Canadians, number one, how the money was disbursed; number two, who the trustee of the fund is; and number three, whether it had any effect at all, in terms of the minister's language of 15 months ago—which I pulled up—of reducing greenhouse gases and eliminating smog?

Can you help us understand how this is possible?

[Scott Vaughan]

As I mentioned earlier, the Auditor General did a study on the overall nature of trusts between the federal government and provinces. The general trend or general rule of thumb is that there are no conditions attached in those transfers, so that there are trusts for strengthening police forces and trusts for other objectives.

Because of that, I think the discretion on how that is spent when it is transferred lies, then, with the provinces. As to whether that goes into the provinces' general revenue or into other areas, this is, I think, as the previous member suggested. They're called “trusts” because partly it's a matter of trust in terms of the partnerships between the federal and provincial governments.

On this one, the reason we don't know is that we don't have the mandate to look at how the provinces intend to actually spend it. We don't have the oversight on what the provincial programs of spending will be. I've seen what the numbers are in the press, but we haven't officially, in the scope of our audit, looked at how the funds were actually disbursed.

[David McGuinty, Liberal, Ottawa South, ON]

So who's the trustee?

[Scott Vaughan]

I don't know, sir. We'll get back to you on this.

[David McGuinty, Liberal, Ottawa South, ON]

Do we know who's in charge of the $1.5 billion? Is it the Department of Finance? Is it the Department of the Environment? Is it the Department of Natural Resources? Is it Treasury Board? Is it a third party? Is it an independent foundation? Is it a not-for-profit? Who's in charge of the money?

[Scott Vaughan]

I don't want to give you the wrong answer to this, so I'll double-check. My guess is that it probably follows the pattern of the other trust funds and it's with Finance as the lead department, but I'd like to double-check on that, if I may.

[David McGuinty, Liberal, Ottawa South, ON]

Mr. Vaughan, about eight or nine months ago we had the Minister of Finance in the committee of the whole. I asked him specifically, in about five or six questions, about this tax deductible transit pass.

We had heard from Pembina at the time that the cost per tonne of reductions in greenhouse gases would probably be over $7,000. Your numbers are somewhat more modest at $3,000, $4,000, or maybe $5,000, but we're not sure exactly what it is.

Can you tell us from your audit and your work if the Minister of Finance and the Government of Canada were forewarned by Finance officials, NRCan officials, or Environment officials that the use of this tax deductible transit pass would not be good value for money?

[Scott Vaughan]

In our report, on what we did find, the department actually provided us with an internal analysis from Finance Canada. What they said was that any program over $800 a tonne would not be an effective use of taxpayers' money in order to get at a target. I don't know whether you can characterize this as a forewarning; it was an analysis.

Our analysis, as you say, was between the range of $2,000 and $3,000 per tonne, and probably more.

[The Chair, Conservative, James Bezan]

Thank you very much.

Mr. Calkins.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thank you, Mr. Chair.

I want to thank our guests for being here today.

I'll be coming at this from the perspective and the context that my riding is a rural riding in Alberta, so I'll be asking questions pertaining to the agricultural portion, just so you can prepare yourself.

One of the questions I have deals with the comments made here that it didn't appear you were able to sense whether or not there was value for money from programs such as the environmental farm plans and so on. Your report did highlight, however, that in order for farmers to qualify to receive farm stewardship program money or Greencover Canada money, they had to fill out an environmental farm plan first. So that did put the onus on the program to actually deliver a tangible result.

I'm just wondering about this from your perspective in dealing with accountability. Does the fact that in order to qualify for programs to receive money to help with farm stewardship they had to fill out the plan first not in itself create some accountability mechanism for the environmental farm plan program?

[Scott Vaughan]

I'll ask my colleague, Mr. Maxwell.

[Neil Maxwell]

I have two comments. The first is that our comments were about the fact that the department is responsible for ensuring it can demonstrate, so we really weren't commenting on whether the programs were good or bad. That's consistent with our mandate.

On the second question, yes, the whole design of that program, as I'd mentioned earlier, is to start with environmental farm plans. That's a very important mechanism by which producers determine what the biggest environmental risks are. That then becomes the gate to moneys under the other programs you've mentioned: stewardship, Greencover, etc.

We raised two issues with respect to that. First, one of the great obstacles for the department in terms of being able to demonstrate what impacts those programs are having is the fact that the farm plans remain confidential. We recommended that much of Statistics Canada's and other organizations.... There are ways in which one can protect the confidentiality of those farm plans, yet still be able to demonstrate results.

The other concern we raised is that from an operational point of view, because of the confidentiality of the farm plans, when someone comes forward and is looking for money under Greencover or stewardship, the department isn't in a position to know if in fact the things being sought are the biggest risks on that farm. Again, we made recommendations where we believed that the confidentiality of the farm plans could be maintained, yet provide some mechanisms for the department to manage this better.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

I spent a number of years as a conservation officer in a prior life before coming down this road. I not only protected ecosystems under my mandate as a conservation officer, but I worked in partnership with farmers and rural producers. You see the fencing off of rivers to keep cattle out of them, and so on, and the environmental changes. These are anecdotal things that I can track in my own personal life, but they are difficult to measure.

Farmers are not welders, carpenters, or environmental scientists by trade, but they have an ability to weld when they need to fix their own machinery. They also understand that their environment is their backbone, and if they keep their farms clean and their access and sources of water available, that's vital to their industry. So just to reinforce the point, the issue isn't whether or not farmers are doing a good job, or whether or not the environmental farm plan is working; the issue is the accountability mechanism within the department.

So at what point in the department is this breakdown happening? Is it a leadership issue in the senior ranks within the Department of Agriculture and Agri-food? Is it a mid-management issue? Is it at low-level management, just before we get out into the operational field? Where is that breakdown occurring?

[Neil Maxwell]

Thank you, Chair.

I have two points on that question as well.

First, it's very important to emphasize the importance of improving how well that department can demonstrate results. It's important for all the obvious reasons—taxpayers' money, etc.—but it's equally important for the producers. As you say, the problem now is that much of the benefit of these programs is anecdotal. The department is not in a good position to be able to say in any systematic way what kind of return taxpayers are getting and the kinds of improvements that are happening on the farm. So for a lot of reasons, it's important that the department improve its measurement.

On the causes, it's probably a better question to put directly to the department. There were a number of areas in this audit where we identified problems, but we also noted that in many instances corrective action wasn't under way. We were fairly impressed by the kinds of steps still not complete that were being taken by the department to address issues such as measurement and several of the other things we were concerned about.

[The Chair, Conservative, James Bezan]

Mr. Ouellet, you have five minutes.

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

Thank you, Mr. Chair.

Mr. Vaughan, in your introduction, you said that pollution caused by the agricultural sector is a substantial environmental burden that worries an increasing number of people. I entirely agree with you on that.

Knowing that the agricultural sector is responsible for 40% of the greenhouse gas emissions in Canada, are you evaluating the programs based on that 40% figure, that is, the total greenhouse gas emissions caused by the agriculture and agri-food sector, or do you evaluate them based only on the programs?

[Neil Maxwell]

Thank you, Mr. Chair.

The level of greenhouse gas emission is the main reason we conducted this audit. It highlights the importance of improving the situation and the department's ability to get results.

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

He did not answer my question at all.

[Scott Vaughan]

The indicators used regarding the agricultural and agri-food environment do include a target. It is a 21% reduction in agricultural greenhouse gas emissions. In the national inventory, there is a breakdown of emissions by sector, such as industry, housing, transportation and agriculture. As you said, there is one very significant source of emissions. Does Chapter 1, which we have looked at, mention a breakdown of emission reductions by sector? We did not do that in the two climate change programs we audited.

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

You only audited two programs, then?

[Scott Vaughan]

That's right.

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

And not what the government could be doing that it is not doing. Is that it?

[Scott Vaughan]

Yes, that's it. We examined two programs, the tax credit and the Trust Fund. We looked at those two programs in terms of climate change, and in terms of the two existing targets for the reduction of greenhouse gas emissions. We did not examine the impact of each sector, or the levels in each sector, on this aspect. We are preparing a chapter, to be submitted in May, on the application of the Kyoto protocol. This would be a broader evaluation that would provide a wider-ranging overview of the various programs offered by the federal government.