Environment Committee on May 13th, 2010

[The Chair, Conservative, James Bezan]

We'll call this meeting to order. I'm sorry for the late start. I was held up in the House.

Before we get going with our presentations and our witnesses, there are a couple of housekeeping matters to take care of that we have to do publicly.

The first is that I received an e-mail from Dean Holman, who appeared on our SARA study. It's regarding the budget of the National Aboriginal Council on Species at Risk, and he has to correct the record. He says:

The current budget is approximately $350,000, which has decreased over time. My apologies in providing a misinformed figure. Thank you.

So that impacts the blues in four different places, in questions from Mr. McGuinty, Ms. Duncan, and Mr. Armstrong, who quoted the number he had given us.

So the numbers are actually.... Mr. McGuinty's statement changes to: “I support your caution, but it's a $350,000 organization...”.

Ms. Linda Duncan's record changes and says “$350,000” in her first statement and questions.

Mr. Scott Armstrong's changes are that the last full-time coordinator for NACOSAR was in “July 2007”--that was the other information that had to be changed--as well as “$350,000” in his comments.

The other thing on the agenda is that we have received a letter from the Minister of Environment saying that he is not available to appear on the main estimates on either May 25 or May 27. I believe that at our last meeting when we talked about the schedule we figured that if we couldn't get the minister we'd do our work on the oil sands and SARA, unless there is a desire to have officials.

Mr. Warawa.

[Mark Warawa, Conservative, Langley, BC]

Chair, speaking to the first item you brought up, I didn't catch it all. As you started talking, I wasn't quite sure what the--

[The Chair, Conservative, James Bezan]

It was the correction of the testimony that was provided by Mr. Dean Holman when he appeared on SARA from NACOSAR. He had given us a wrong number and a wrong date. In order to change the blues, we have to deal with it in a public setting.

[Mark Warawa, Conservative, Langley, BC]

So he has then provided clarification--

[The Chair, Conservative, James Bezan]

Yes.

[Mark Warawa, Conservative, Langley, BC]

--and we're just receiving that....

[The Chair, Conservative, James Bezan]

Yes.

[Mark Warawa, Conservative, Langley, BC]

Thank you.

[The Chair, Conservative, James Bezan]

Okay.

Seeing no other comments or questions, when we come back from break week, we'll continue with SARA and the oil sands.

With that, I want to welcome to the table the Office of the Auditor General. Of course, she is no stranger to all of us as parliamentarians. We have the Auditor General herself, Sheila Fraser, along with the Commissioner of the Environment and Sustainable Development, Scott Vaughan.

On behalf of the Department of Indian Affairs and Northern Development, we have Patrick Borbey, who is the assistant deputy minister.

From the Department of the Environment, we have Sue Milburn-Hopwood, who is the director general of environmental protection operations.

They're here pursuant to Standing Order 108(2), to study the spring 2010 report of the Auditor General, chapter 4.

With that, Madam Fraser, you can give us your opening comments.

[Sheila Fraser, Auditor General of Canada, Office of the Auditor General of Canada]

Thank you, Mr. Chair.

We are very pleased to have this opportunity to discuss our office's work related to chapter 4 of our spring 2010 report, entitled “Sustaining Development in the Northwest Territories”. As you mentioned, I'm accompanied today by my colleague Scott Vaughan, Commissioner of the Environment and Sustainable Development.

The federal government has a mandate to promote political and economic development in the Northwest Territories and to protect the environment. Our audit looked at whether responsible federal departments have implemented key measures to prepare for sustainable and balanced development in the Northwest Territories.

These measures included: settling comprehensive land claim agreements and self-government agreements; establishing and implementing a regulatory system that protects the environment; and supporting appropriate economic development and skills training programs for aboriginal peoples in the Northwest Territories.

These three measures are very closely linked. Agreements with aboriginal peoples that set out the governance rights and rights related to the ownership of land and resources are important for environmental protection and economic development. They help to provide a level of certainty and predictability for business, industry, communities, and government.

Similarly, protecting the environment is important since aboriginal communities in the Northwest Territories depend on wildlife, water, and land for subsistence and for economic development opportunities.

For the purposes of today’s discussion, I will focus my opening comments on the first two measures.

Almost all of the Northwest Territories either lies within settled land claim areas or is the subject of ongoing negotiations. At the time of our audit, four land claim agreements had been finalized. One of them, the Tlicho agreement, was also a self-government agreement.

Four other land claim agreements and ten self-government agreements were under negotiation. While much remains to be done, it is our view that the efforts to settle land claim and self-government agreements represent a significant achievement and an important step toward sustainable and balanced development in the Northwest Territories.

Mr. Chair, let me now turn to our examination of the environmental regulatory system. Protecting the environment is critical, both for Aboriginal communities, as I have mentioned, and because of northern ecosystems are often more fragile than in the south. There are also profound changes taking place in the North as a result of climate change and because of the long-range transport of air pollutants, which brings toxic and other substances to northern communities and to the environment of the Northwest Territories.

We examined whether Indian and Northern affairs Canada, or INAC, and Environment Canada had established and implemented an adequate regulatory system in the Northwest Territories. We found that, in regions with settled land claims agreements, there are systems and structures that support land-use plans and provide a means of adequate consultation with communities.

In regions without comprehensive then claim agreements in place, however--which represent close to 30% of the Territories--there is uncertainty about Aboriginal title to the land, how it may be used, and who should be consulted to make development decisions. Community leaders from these areas have also indicated that the existing process does not provide their communities with adequate representation for considering development proposals that affect their lands under negotiation.

Moreover, in regions without settled land claims, we noted a lack of specific mechanisms for developing land-use plans. Land-use plans are important for developing effective, predictable and consistent regulatory systems. They define where and under what conditions resource development activities may take place. Without a formal land-use plan, development decisions must be made on a case-by-case basis and decisions related to project approvals may therefore take longer.

INAC also has specific responsibilities for monitoring the cumulative impact of development. Community impact refers to changes an activity causes to the environment, added to changes caused by other past, present and future activities. Monitoring community impact on the environment is important because it provides co-management boards with environmental information to make informed decisions on development proposals.

We examined whether INAC had established the needs and priorities for monitoring community impact and had implemented a plan to do so. We also examined whether Environment Canada had supported INAC in these responsibilities.

We found that 11 years after receiving a mandate to do so, INAC had not yet put in place a program to monitor cumulative impact. Similarly, funding for Environment Canada's program that would support cumulative impact monitoring ended in 2007. As a result, neither department had implemented this program.

We note that the Minister of Indian Affairs and Northern Development Canada has recently announced a proposal for regulatory reform in the north. This proposal includes the appointment of a chief federal negotiator to lead consultations on changes to the land and water boards and $8 million to support cumulative impact monitoring in the north. Also of note, the proposal reiterates the importance of respecting comprehensive land claim agreements. If these initiatives are fully implemented, they will have an impact on some of the issues that we raise in our audit.

Overall, we concluded that Indian and Northern Affairs Canada and Environment Canada had not adequately implemented key measures designed to prepare for sustainable and balanced development in the Northwest Territories.

Mr. Chair, this concludes our opening statement. We would be pleased to answer any questions the committee members might have. Thank you.

[The Chair, Conservative, James Bezan]

Thank you, Madam Fraser.

Commissioner Vaughan, do you have any comments?

[Scott Vaughan, Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada]

No. Thank you.

[The Chair, Conservative, James Bezan]

Mr. Borbey, it's your turn.

[Patrick Borbey, Assistant Deputy Minister, Northern Affairs, Department of Indian Affairs and Northern Development]

Merci, monsieur le président.

I will deliver a slightly shorter version of my notes to stay within the time.

Mr. Chairman, Indian and Northern Affairs Canada believes this is a very helpful report and appreciates the constructive nature of the review. The department is given credit for a lot of good work and that is very appreciated.

The chapter and the recommendations have been beneficial as we continue to pursue our mandate of supporting and promoting the political and economic development of the north.

Canada's Economic Action Plan included a number of investments in economic development, skills training and infrastructure in support of the Government's Northern Strategy. Budget 2010 builds on these investments by focusing on measures that will improve environmental protection and the business climate, provide opportunities for Northerners and ultimately help unlock the region's vast potential.

On May 3, 2010, Minister Strahl announced his action plan to improve northern regulatory regimes. The action plan will allow us to respond directly to a number of the recommendations in the Auditor General's report. It will complete and strengthen current regulatory regimes in the north and will focus on three elements.

First, it will provide more efficient and effective processes through the creation and amendment of legislation. Second, it will enhance environmental stewardship by making investments in community-based impact monitoring programs. Third, it will reflect a strong aboriginal voice by building on partnerships that are already established in the north.

The action plan builds on the government's efforts to create a strong and prosperous north that realizes its resource potential while safeguarding environmental health and heritage. It is a key step towards the implementation of the northern strategy.

Budget 2010 announced funding to improve the North's regulatory processes and invest in environmental monitoring both in the Northwest Territories and in Nunavut. Through this year's Jobs and Growth Budget, the Government has committed $11 million over two years to streamline the regulatory regimes in the North and $8 million over two years to support community-based environmental monitoring, reporting and baseline data collection.

Recognition of the importance of these issues in the budget represents a strong signal from Canada on the importance of resource development and environmental protection in Canada's north.

Proposed legislative changes include the creation and amendment of various pieces of legislation. A restructuring strategy for the Northwest Territories is included in the amendments to the Mackenzie Valley Resource Management Act.

Canada's long-term goal is an amalgamated single board with jurisdiction over the entire territory. The immediate goal, however, is to have one land and water board for the Mackenzie Valley, similar to the situation that exists in the Yukon and in Nunavut. The minister has appointed Mr. John Pollard as chief federal negotiator to pursue this restructuring.

Land and water board restructuring will not undermine the co-management regime approach to resource management decision-making that is rooted in the land claim agreements in the north. There will be no loss of representation.

As set out in the land claim agreements and current legislation, any changes to the resource management structure will respect representation for aboriginal organizations and the territorial and federal governments. We intend to continue to work with our partners in the north to collectively improve the investment climate for the future of northern communities.

The environmental management component of the Action Plan includes the $8 million commitment I mentioned earlier in the Cumulative Impact Monitoring Program in the Northwest Territories and the Nunavut General Monitoring Plan. These investments will provide critical information to support an land-use planning, environmental assessment and regulatory decision-making.

By investing in the current regulatory regimes, and working together to implement this Action Plan, we will ensure strong and capable northern regimes that will reassure Northerners, Canadians and international partners that development can take place in a responsible fashion.

Mr. Chair, I would also like to take an opportunity to speak briefly about some of the other measures being taken to address the observations and recommendations in the Auditor General's report.

INAC will continue to work with willing partners to settle land claims. As the report indicates, we have made important progress with respect to comprehensive land claim and self-government agreements in the north.

While work remains to be done, the four completed agreements in the NWT represent a significant achievement and an important step towards sustainable and balanced development, because they introduce greater clarity and certainty.

Meeting the needs of all parties is extremely complicated and challenging, and this is why conclusion of land claims is such a lengthy process. As a rule, Canada has not worked with Aboriginal groups to develop land-use plans until claims are settled. It is far easier to negotiate land-use plans when key questions over rights and ownership have been confirmed by a land claim agreement.

In the meantime, Canada provides effective representation on bodies that make resource management decisions, and members of unsettled land claims regions may participate on resource management boards. Mackenzie Valley boards are in place to deal with environmental assessments and regulatory issues throughout the valley. Resource management boards apply the same inclusive approaches and processes in unsettled claims areas as they do in settled claims areas. Projects in these regions are being assessed and regulated.

I would like to clarify some of the work Canada has already done with respect to cumulative impact monitoring. Although the program is clearly not completely implemented, an NWT cumulative impact monitoring program has been developed. Further work and investment, such as the development of a comprehensive database, are required, but INAC and other federal departments have taken action and have made investments in cumulative impact monitoring in the NWT.

For example, INAC has been investing almost $1 million in yearly incremental funding dedicated to this programming, starting in 2008-09. Over the last 10 years, CIMP has funded over 175 community-based programs and related capacity-building initiatives. The program has a secretariat and an established governance structure that includes representatives of land claimant groups, the territorial government, and several observers.

As I mentioned earlier, commitments in budget 2010 will allow us to continue to address the concerns regarding the NWT cumulative impact monitoring program. The government, with its partners, will determine needs and priorities for environmental monitoring so as to meet obligations of the program.

With respect to the recommendations regarding inspections, the department has developed a database tool called the integrated risk assessment, a rating assessment that determines the level of inspections required for specific types of land- or water-use activities. This database will allow us to carry out inspections based on the specific risks the activity represents to the environment.

INAC is addressing issues related to benefit plans and will intensify its efforts, working with parties to meet guidelines. We have initiated the development of a benefits plan reporting database. Once complete, the database will store and track the training, hiring and contracting for Aboriginal, Northern and other Canadian participants.

We believe that the creation of the Canadian Northern Economic Development Agency, or CanNor, represents a significant commitment by Canada to promoting economic development in the north. The creation of a separate agency to support sustainable development in the territories will help Canada respond to the concerns raised by the Auditor General's report.

Mr. Chairperson, INAC accepts the Auditor General's findings and will continue to work together with its partners to address all the recommendations in her report.

Indian and Northern Affairs Canada is committed to helping the Northwest Territories realize its true potential as an economically healthy, prosperous, and secure region.

Merci beaucoup.

[The Chair, Conservative, James Bezan]

Thank you.

Madam Milburn-Hopwood, it's your turn.

[Sue Milburn-Hopwood, Director General, Environmental Protection Operations, Department of the Environment]

Mr. Chairman, members of the committee, my remarks will be very short.

As the land management authority in the north, the Department of Indian and Northern Affairs is the lead department responsible for monitoring cumulative impacts in the Northwest Territories.

Recommendation 4.62 from the Auditor General's report states that Environment Canada should support INAC “in identifying the information requirements for cumulative impact monitoring, and for planning and implementing programs to monitor cumulative impact in the Northwest Territories...”.

Environment Canada has accepted this recommendation and looks forward to working with the Department of Indian and Northern Affairs in implementing this recommendation.

Thank you, Mr. Chairman.

[The Chair, Conservative, James Bezan]

Thank you, Ms. Milburn-Hopwood.

We're on to our seven-minute round.

To kick us off, Mr. McGuinty, go ahead, please.

[David McGuinty, Liberal, Ottawa South, ON]

Thank you, Chair.

Thank you very much, ladies and gentlemen, for being here.

Ms. Fraser, one of the central thrusts of this was to look at the environmental regulatory system in play at large in the NWT. Did that embrace the Beaufort Sea?

[Sheila Fraser]

It would indirectly in looking at the regulatory regime that would cover the Northwest Territories.

I believe Mr. Vaughan might be able to give more precision about that.

[Scott Vaughan]

Thank you.

Yes, it was to look at the overall regime, but within the scope of this audit we did not look specifically at the Beaufort Sea.

[David McGuinty, Liberal, Ottawa South, ON]

So when you looked at the question of cumulative impact assessment, you did not take into account the prospective drilling and mining and oil and gas leases that have been let, for example, in the Beaufort...?

[Scott Vaughan]

It's obviously an important issue for many reasons, but for the specific focus of this audit, we looked at the environmental regulatory regime primarily within the scope of land, land use, and land-use planning within the Northwest Territories per se, so therefore not the offshore-related jurisdictions. No.

[David McGuinty, Liberal, Ottawa South, ON]

But presumably offshore activities being contemplated in the Beaufort would link to a pipeline through the Mackenzie Valley, through the NWT, and would have a bearing on cumulative environmental impact. Yes?

[Scott Vaughan]

I think that's absolutely right, sir. I think one importance of cumulative environmental effects is to look not at stand-alone specific projects but at the overall cumulative effects of various projects in their entirety from a regional perspective.

[David McGuinty, Liberal, Ottawa South, ON]

On May 16, two years ago almost to the day, I asked questions in the House of Commons of the government on the Beaufort issue, linked to overall carrying capacity in the region. I want to raise this because I think that if it's something you haven't examined, it is something that we had better examine quickly.

I know that the National Energy Board contradicted the Prime Minister this week by announcing that Canada really does need a serious re-examination of the offshore regulatory standards. I commend the chair of the NEB for doing so.

I want to turn to Mr. Borbey from DFO. I need to follow up on this line of questioning, because it really is linked not just to impacts monitoring but to environmental assessment.

Two years ago, I asked the government if it had an integrated management plan around the fast-tracking of the leases that were going forward for the Beaufort exploration for, at the time, BP, ConocoPhillips, and Imperial Oil, I believe. It's my understanding that an integrated management plan is mandatory under the oceans action plan.

At this stage, I've checked with the three companies involved. They don't have an integrated management plan, and we have never seen one. Do you know if the Government of Canada...? Has your department produced an integrated management plan?