Environment Committee on Feb. 26th, 2009

[The Vice-Chair, Liberal, Francis Scarpaleggia]

Welcome, everyone, to this meeting today of the environment committee.

Welcome, Mr. Hamilton.

As you know, today we are considering the Order-in-Council appointment of Bob Hamilton to the office of Associate Deputy Minister of the Environment, during pleasure. Mr. Hamilton will begin with a brief presentation of two or three minutes, and then we will have two rounds of questions. At the end of the meeting, I would like to discuss two or three routine matters with you.

Welcome, Mr. Hamilton

I would like to remind the committee members that during questioning they must limit their questions to the witness's qualifications and competence to perform the duties of the office in question. They must not go beyond those limits

Mr. Hamilton, you have the floor.

[Bob Hamilton, Associate Deputy Minister, Department of the Environment]

Merci, monsieur le président.

Thank you everyone.

Let me start by saying what a pleasure it is to be here in front of the committee. It's my first time in front of this committee in this capacity, although I have been here before in my capacity as senior assistant deputy minister in tax policy.

I thought I'd spend two or three minutes at the beginning to give you a couple of highlights on how I got to be here and then leave time for you to probe whatever areas you'd like.

I should start by saying that I graduated from the University of Western Ontario with a masters in economics, so I'm an economist.

I began working in the federal government in 1985, in tax policy. I was a member of the team that developed the GST.

I came here primarily as an economist looking at tax issues, and I started in the tax policy branch.

I worked in tax policy until 1995 when I started in the financial sector policy group, again at the Department of Finance, looking primarily at the regulation of financial institutions, managing the government's debt, money laundering issues, and I was involved in the start-up of the Canada Pension Plan Investment Board, etc. I was there through the time of the Enron and WorldCom regulatory issues as well. I then went back to tax policy.

That was in 2003. I have worked on a number of interesting issues in that area.

I was responsible for that branch of the Department of Finance and was there when we introduced things like the tax-free savings account, the worker's income tax benefit, and then through the income trust issues.

In August of last year I moved from the Department of Finance to the Treasury Board, where I got involved in management issues across the government and learned a little bit about how government operates from the central agency perspective of the Treasury Board. I was only there for four months before accepting the position at the Ministry of the Environment seven weeks ago when I was appointed associate deputy minister.

I should say at the beginning that I believe I bring a lot of background and experience to the Ministry of the Environment, particularly in economic matters. I think it's an extremely interesting time to be at the department. It's a challenge that I relish as I learn. I'm certainly by no means an environmental expert, but hopefully I can bring to the department some of the policy and implementation skills and economic analytic skills that I've learned to help face the challenges that are there.

As I say, I find it an extremely interesting time to be at the Department of the Environment with the myriad of issues we're facing, which I'm just learning about, and I hope I can contribute to them as I make my way up the learning curve.

With that, I would leave it there and open it up to areas you would like to probe.

Thank you very much for inviting me here today.

[The Vice-Chair, Liberal, Francis Scarpaleggia]

Thank you, Mr. Hamilton. It's good to have you here.

We'll proceed to the first round of questioning with Mr. Trudeau.

[Justin Trudeau, Liberal, Papineau, QC]

I'd be interested in hearing your take on combining economy and environment. There's a dichotomy there that tends to get separated. All too often the economy is separate from the environment, and we either have to be good for the economy or we have to be good for the environment. I think the view people are taking more and more these days is that one obviously can't be strong without the other also being strong, particularly when it starts to take a long-term perspective. I'd be interested in your reflection on that.

Perhaps, since your taxation expertise is significant, you could give a little overview of your feelings on consumption taxes versus carbon taxes versus income taxes as tools to deal with environmental issues.

[Bob Hamilton]

Let me take a stab at that. I guess I should say at the beginning that I think primarily I won't be delving into issues of government policy or policy questions. I'll definitely be trying to stay on the correct side of that line, and hopefully we'll take it from there.

But just in terms of the first part of your question, on the economy and the environment, and indeed the economy, the environment, and energy, I believe you're right that people need to think about those as integrated issues. Indeed, I think that's hopefully one of the things I can bring to the Department of the Environment with my background from the Department of Finance and as an economist, because it's going to be difficult in this day and age to move forward without simultaneously considering what the actions we take are doing for the environment but also for the economy.

We do need to think about how we can grow both. How can we have an economy that's strong by virtue of creating clean energy, sustainable energy products, in a way that respects the environment? I don't necessarily see them as trade-offs, that one has to go all for the environment or all for the economy. Indeed, there are balances that need to be struck as one moves forward. But I think it would be inappropriate to think that Canada, for example, would be able to find its way forward without a strong economy and without a strong environment, and energy being such an important part of that equation, I think you need to think about the three of them together.

I think one of the things that comes to mind when you try to assess what the impacts are of what you're doing on the economy and the environment is that you have to understand that we're not a closed economy that's operating in isolation. We're operating, very intensively and in an integrated way, with the United States and our other major partners. So we need to think about the global pressures that are out there and the global interactions that are affecting our economic policies and our environmental policies.

In addition, within Canada, we have to think about not only the federal government's role but the role of the provinces going forward, because they have a significant role to play on environmental matters as well. All of that is to say that the things one brings to economic analysis and thinking about the impacts of policies, one does need to bring through on the environmental side as well.

On the issue of taxation and the environment, I'm really not going to comment on policies, other than to say that when one comes forward with any kind of a policy, whatever it might be, one thing I always look for is whether the objective is clear—what we're trying to achieve—and then whether the instrument we're trying to use is the best instrument to try to achieve that objective, because from time to time people can try to use an instrument that may not be the most appropriate one for a particular policy issue.

I guess my final point on the economy is that obviously one has to be conscious of the economic environment that's out there. What we're witnessing right now is a different economic environment than we might have had a couple of years ago or even several months ago. So I think we do need to think about that, about how policies play out in an economic environment like we're in now--though I agree with your assessment that these are integrated issues.

[Justin Trudeau, Liberal, Papineau, QC]

You mentioned some of the international...the globalized world we live in and the impacts of that. Are there particular best practices or management practices--not policies specifically but processes--from various jurisdictions that you feel might be of interest for the management of the Ministry of the Environment to look at?

[Bob Hamilton]

I think to be fair, probably seven weeks in I won't pass judgment just yet on what other countries are doing, other than to say that I think it is important that we look around. I don't think anybody particularly has the right answer on all of these. These are complex issues, the integrations we just spoke about. I think, in a sense, countries and jurisdictions are trying different things. Some will be successful and some will be unsuccessful. But I couldn't look at a particular country and say, gosh, it looks like they've really got it right, in terms of trying to strike that right balance about doing the right thing in the long term—and I think you emphasized that, the long term—for the environment and for the economy.

What you do see is different countries taking different approaches. Some delve into the tax domain, some countries are looking at implementing cap and trade systems for emissions, fuel standards, all the myriad ways—as I'm only just learning—we touch upon the environment. There's a bevy of instruments one can use, and I think you have to be open to the idea that different instruments can best attack different problems in better ways than others.

So, no, I couldn't say I've seen a best practice emerge, mostly because I just don't feel qualified to judge that. But it's interesting to see the different approaches people are taking and try to make sure they fully understand the implications of what they're doing, because when you introduce a policy measure, it can sometimes have both intended and unintended effects. I think everybody's trying to sort through this complex area, making sure we understand that as well.

You can even see the different approaches in Canada. The provinces are trying different things, and it's too early for anyone to judge how successful they are. It's certainly too early for me.

[Justin Trudeau, Liberal, Papineau, QC]

That was my follow-up question, not so much on what provinces are doing but within various Canadian federal ministries, be it Natural Resources or Fisheries and Oceans. How are you seeing the coordination among the various ministries from your perspective? What are you interested in looking at in the coming years?

[Bob Hamilton]

It's a good question. Hopefully one of the things I bring is that having worked in central agencies, the Department of Finance and Treasury Board, I have been able to watch government operate from that perspective, and I've seen examples of good cooperation, bad cooperation, etc. I think in this area it's very important that we as a federal government work together.

I've talked about this being an issue globally, where countries have to, in some sense, cooperate as much as they possibly can. Certainly within the federation, Canada and the provinces have to try to coordinate as best they can.

The easiest of those challenges should be within the federal government, making sure we're working together closely with our colleagues at NRCan, with our colleagues at the Department of Finance on the economic issues, with Fisheries. A few key departments, but many departments, are touched by the Department of the Environment.

It's certainly very early days, but I've experienced nothing but cooperation on the things I've been involved in or that I've seen. I think there's a general recognition that's important. There will always be bumps along the road, I'm sure. One thing I do know is it's extremely important, and to the extent that we see those bumps along the road, we have to be reminding ourselves that we can't get where we want to go if we're not working in a coordinated manner and all rowing in the same direction.

As I say, in my time at Finance and Treasury Board, and in my short time here, I see very encouraging signs of that.

[The Vice-Chair, Liberal, Francis Scarpaleggia]

Thank you.

Monsieur Bigras.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

Thank you, Mr. Chair.

Good morning, Mr. Hamilton, and I wish you good luck in your new position.

I did a quick Internet search to try to understand what it means to be a public servant who holds office during pleasure. I found the following definition: may be moved, reassigned, revoked. Essentially, you are acting, as I understand it.

I know that you have a long track record in the federal public service, where you have been working since 1982. That says a good deal. You have worked mainly in tax policy, the Income Tax Act and economic affairs. I am trying to understand your appointment and the mandate assigned to you. That is more or less our job today.

Can you explain the mandate you have been given by the government, in your new acting position? Is your job to reorganize certain branches of the Department of the Environment? Is it to introduce new policies, whether tax or otherwise? What mandate have you been given, exactly, by your superiors?

[Bob Hamilton]

Thank you. I do not think of this position as an acting position. I will give you a brief explanation of the role of an associate deputy minister. In fact, it involves more than one particular project or one issue.

I am going to explain it in English, if I may.

This question has been asked of me, actually, so I've had time to reflect on it. The role of the associate deputy minister in the federal government, which is what I've been appointed to, just as I was at Treasury Board, is really to be a right-hand person, if you like, for the deputy minister, and to assist the deputy minister in running the department.

For example, in my case, I was not brought in for a particular file, issue, challenge, or task, but rather to do what the deputy minister felt was the best way to contribute to the smooth functioning of the department. Since I've come in, I have worked quite a bit on climate change issues, just because they are among the issues preoccupying the department.

But I've also worked on a number of other issues, including management issues within the department as we prepare for our report on plans and priorities and the various other files that go along with that. Going forward, I obviously will be doing what the deputy minister thinks I can best do, including acting on his behalf in instances where he's away or what have you.

So it's not a particular role. Indeed, you can contrast it with an assistant deputy minister role, and maybe only somebody in Ottawa could understand the difference between an assistant deputy minister and an associate. Just to draw that contrast, in my position at Finance as senior assistant deputy minister on tax policy, I was responsible for the tax policy branch and had a group of people who worked directly for me in that capacity.

If I contrast that with an associate deputy role, I don't have a particular branch or area of responsibility, except for the department overall. It can be a very fluid position, if you like, in that as an issue emerges that needs some extra attention, I can be placed on that issue for whatever the deputy minister thinks I can best do.

I'm really part of the deputy minister's office and will have different areas of emphasis as time goes by, depending on the challenges the department faces. Although I'm not there yet, because I've only been at the department for seven weeks, over time I would be expected to be involved to some extent in pretty much all of the issues that face the department.

It is a long explanation, but I hope that it is a relatively good description of the particular role of an associate deputy minister.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

Have you been given a mandate to reorganize the Department?

[Bob Hamilton]

No, nothing like that. There may be a reorganization in future, but that is still speculation. For the moment, neither the Department nor I have that mandate.

As I said, over the last seven weeks, I have worked on climate change, but in particular on other policy issues. I have only done a little work on management of the Department.

[The Vice-Chair, Liberal, Francis Scarpaleggia]

Monsieur Ouellet.

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

Thank you, Mr. Chair.

Good morning, Mr. Hamilton. I would like to say, if I may, that it is somewhat odd, in view of your experience, that the Conservatives have hired you to do what the Liberals want to do, which is to levy a carbon tax. In fact, you seem like the best person they could have chosen.

Have you done any studies or reading that would have led you to the environment department? Could you tell us how you have prepared for taking up this position at the environment department?

[Bob Hamilton]

Yes, certainly. Over the last seven weeks, I have read a lot of articles and documents from the Department about a number of subjects relating to the environment, a large portion of which dealt with climate change, but also other subjects. I am engaged in a learning process, about environmental issues. I am learning to incorporate my experience in economics and finance into environmental projects and new areas. It is a learning period for me, but I have certainly...

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

Do you think...

[The Vice-Chair, Liberal, Francis Scarpaleggia]

Mr. Ouellet, unfortunately we have to move on to the NDP. You may have an opportunity to come back to this on the second round.

I should welcome Bruce Hyer to the committee. If I understood correctly, Mr. Hyer would like to ask a question in place of Ms. Duncan. Is that the case?

[Linda Duncan, NDP, Edmonton Strathcona, AB]

That's not correct, Mr. Chair.

With your deference, I will be the first questioner until the second round and then—

[The Vice-Chair, Liberal, Francis Scarpaleggia]

I see, okay. Yes, thank you.

Go ahead, Ms. Duncan.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Welcome, both to our committee and to the department. You may not be aware, but back in 1988 I was also in Environment Canada as the first chief of enforcement. It's a great department.

I am wondering, sir, given your incredible background as an economist and investigating proper expenditures and so forth in alternative instruments, is your appointment also partly in response to the recent report of the commissioner for sustainable development, where there are various concerns raised about the capacity or the commitment to effective enforcement and compliance in the department? Is that part of the role that you'll be looking at, alternative approaches to enforcement and compliance?

[Bob Hamilton]

Thank you.

One of the pieces of research I did do is to know that you were at the Department of Environment, so that's one thing I've learned since I've come here.

I'm not sure how much I can speak to the reasons why I was put in this position. Ultimately the clerk and others decide how best to deploy the senior resources, but nothing was said to me about working specifically in the area of enforcement. Having said that, since I've come to the department I've heard some of the issues about enforcement and I know it's going to be an area that the department continues to do work on. As I mentioned earlier, depending on how things unfold and the issues facing the department, it's potentially something I could get involved in if the deputy minister thought I would be particularly helpful on that file. Again, I'd preface the whole thing by saying that I'm not sure how much I can really add or comment on exactly why I was put here. Somebody asked me to go—

[Linda Duncan, NDP, Edmonton Strathcona, AB]

I guess I'm not asking why you were appointed; I'm wondering if that's one of the areas you've been asked to look into since you've come on board.

[Bob Hamilton]

Not in particular. It's been there, and I know it's an issue for the department, but after seven weeks...I think I've seen it, and it may be something I'm asked to do going forward, but that's all.