Subcommittee of the Standing Committee on Finance on Bill C-38 Committee on May 17th, 2012

[The Chair, Conservative, Blaine Calkins]

Okay, let's resume.

Colleagues, I don't believe we need to have any opening testimony from anybody here. That's my understanding, anyway. We've just heard from the ministers.

This committee is slated to end in 30 minutes. If we're going to have any opportunities for members to ask questions, and we're going to leave 10 or 15 minutes at the end for discussing committee business, I would suggest that we go into our first round, which would allow each political party one seven-minute question. Are we okay with that? Is that fine?

Mr. Khosla, you look like you have a question for me.

[Jay Khosla, Assistant Deputy Minister, Major Projects Management Office, Department of Natural Resources]

That sounds perfectly fine, Chair. I just wanted to point out that we came prepared with a presentation, but I understand if you don't want to hear it.

[The Chair, Conservative, Blaine Calkins]

I allowed the ministers to go on a little bit longer. You may wish to submit your presentations. I think we can accept those presentations, if you have them in print, as part of our deliberations. Committee members will have an opportunity to review them.

Given the fact that we have limited time, I'm just looking for some guidance from the committee. Is this an okay way to proceed? That will give us an adequate amount of time, I think, to discuss future business at the end.

We have with us, from the Department of Natural Resources, Jay Khosla, ADM, major projects management office, and Adam Hendriks, director of operations, western Canada, major projects management office.

From the Department of Fisheries and Oceans, we have Kevin Stringer, ADM for program policy. From the Department of the Environment, we have Coleen Volk, who is the ADM for the environmental stewardship branch. From the Canadian Environmental Assessment Agency, we have Steve Mongrain, senior policy advisor, and Helen Cutts, vice-president, policy development sector.

From Aboriginal Affairs and Northern Development, we have Jean-François Tremblay, senior assistant deputy minister, and from the Department of Transport, we have Helena Borges, assistant deputy minister of programs.

Thank you all for being here. I appreciate your patience. I think we're just going to proceed with seven-minute rounds of questioning.

We'll start with Mr. Allen for seven minutes, please.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you very much, Mr. Chair.

Thank you to our officials for being here.

I want to go on a few lines here. One is with respect to the federal-provincial overlap. Second would be public participation. And third, if we get the time, would be with respect to a focus on large projects.

Now, I know that we've heard a lot of noise and a lot of speculation out there that some major problem will happen because provinces might end up doing some of these environmental assessments. I know that in New Brunswick, at least, the entry point for the environmental assessment process is always the province. They're then supported by the federal government, from that standpoint, and agencies such as DFO.

I just want to understand what safeguards are in place to ensure that any review undertaken by a province follows the federal standards. And how do you anticipate this bill affecting federal-provincial cooperation?

[Jay Khosla]

I'll start, and then I'll turn it over to my colleague from the Canadian Environmental Assessment Agency to follow up.

You've touched upon a main aspect of the proposal we've provided today. I think the committee would be aware that provinces have been asking for some of the tools we're talking about today for quite some time.

What we're talking about are elements known as substitution and equivalency for us to harmonize practices better with the provinces. Of course, there are protection measures in the bill to ensure there are safeguards, that we're not going at this in sort of a holus-bolus way, but really it's to work better with the provinces.

Helen, I will turn it over to you to follow up on how substitution would work in particular.

[Helen Cutts, Vice-President, Policy Development Sector, Canadian Environmental Assessment Agency]

At the request of a province we would look at the conditions laid out in the act. The act is designed to ensure that the substantive elements of environmental assessment are carried out by a province. For example, we need to ensure the core elements, such as looking at the significance of cumulative effects, are addressed. We need to ensure there is an opportunity for public participation. Finally, with substitution, or with equivalency, we would require that the province prepare a report. On top of that, if we have the province carry out the project of assessing and making the final decision, we require that they carry out the enforcement.

The difference between substitution and equivalency is that in both cases we're trying to reduce federal-provincial overlap. With substitution, we have them carry out the process. They are the ones who are figuring out what the effects are, but at the end of the day both jurisdictions make a decision on the basis of that report. This allows the Minister of the Environment to determine the significance of effects.

With equivalency, we go one step further and allow the province to make that final determination.

Basically, the safeguards built into the act are to ensure that if the federal government is making a decision at the end, it has all the information it needs to make a sound decision. If the federal government is not making a decision at the end and is ensuring the province is going to make that decision, the safeguard is that they are carrying out the enforcement measures.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

There's always the idea of downloading. Is it fair to say that if a province doesn't have the capacity, the federal government is not going to leave the stage on this?

I mean, are you going to pick up to make sure there's no overlap—I guess that speaks to my point of federal-provincial cooperation—or are there going to be some negotiations to ensure there is no gap in that process?

[Helen Cutts]

I want to emphasize that these new tools of federal-provincial cooperation were put in at the request of the provinces. In 2009, the Canadian committee of ministers of the environment endorsed a report in which it recommended that jurisdictions add additional tools for cooperation.

We will never be in a situation where the federal government will say to a province, “We want you to do this.” We are not dictating it. The way it will work is that it will always be up to the province to say, “Look, we think we could do this. We're already doing a process, so we're not asking to do something different.”

They're already engaged in looking at that line, so they could come forward and say, “Rather than both of us being there and trying to work together, why don't we just do it?”

[Jay Khosla]

Could I supplement, if you don't mind?

The bill clearly lays out that the province has to meet the federal standard. The point on no gaps is that if they have to meet the federal standard and carry forward the review in that regard, there would be no gaps. So it's upon a request of a province, and then they must meet the federal standards.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Okay. When the ministers were here, Minister Ashfield talked about a lot of small projects, especially with fisheries.

We see that a lot in rural areas. There are farmers installing pipes and wanting to change pipes for drainage and things like that, and it's a pretty burdensome system.

I just want to know when we're reviewing the projects how we're going to make sure there's a differentiation of minimal to no risk and how we'll make sure we focus on the projects that are causing the major risk.

[Jay Khosla]

That's the fundamental point behind the package. We're consolidating responsibility for these reviews under the three main agencies. To this point, there have been more than 40 departments and agencies involved in environmental assessment. We're now putting it into the hands of the agencies that are best placed to do that. As a result, through the focus of our resources, we feel the reviews can be managed better and in a more timely way, but also more thoroughly. At the end of the day, we aim to do both by focusing on the significant adverse environmental effects of major resource projects that move forward through the Canadian Environmental Assessment Agency.

Also, there's a whole host of other environmental regulatory framework initiatives out there that will sort of cascade through the process as well. The idea here, though, is to target our resources through consolidation, do reviews in a more timely way, and also, at the end of the day, put safeguards in for environmental protection. The ministers mentioned the issue of a certificate, so we'll be looking at these projects through a life-cycle process.

To this point, a lot of the focus has been on the front end of the project. Now we'll be looking at beginning to end, to make sure these projects are developed in a sound and thorough way, protecting both the environmental and economic interests of the project.

[The Chair, Conservative, Blaine Calkins]

Thank you, Mr. Allen. Your time has expired.

Mr. Julian, you have seven minutes, please.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you, Mr. Chair.

And I thank the departmental officials for being here. As my colleagues have expressed, though, we are very concerned that we had three ministers here for 35 minutes beyond their own statements. In each of the cases, there were obviously many, many more questions to ask the ministers. We certainly hope that as a committee we'll have that consensus to bring the ministers back the week after next when we start our hearings.

As you are here, I'll follow up on a question I asked Mr. Oliver, with our colleagues from the Department of Natural Resources. I asked him to define how “directly affected” is being interpreted within Natural Resources. He seemed to indicate that people or organizations that are concerned about climate change might be excluded from the public hearings around this process. I'm not sure if he was expressing a personal opinion or whether he was expressing a departmental evaluation. So I'll ask you the same question I asked Mr. Oliver, which he didn't seem able to respond to.

Is it persons living two, five, or ten kilometres away from a project who are excluded? Is it people who are expressing certain opinions, such as tying in these new projects to climate change, who are excluded? Are they excluded on the opinions they're voicing? Are they excluded because they're not directly affected because they live 100 metres beyond the exclusion zone? What are the criteria the department is using to evaluate whether somebody can actually attend and give voice to their opinion in the public hearing process?

[Jay Khosla]

Thank you for the question.

I'll follow on what the minister said. Really, the policy rationale behind this links into one of the main pillars of the package, which is more timely and effective reviews. What we're talking about here in terms of “directly affected” will vary on a case-by-case basis, on a project-by-project basis. These are tools we're putting into the tool kit for managers of these projects—panel managers in particular—to be able to manage the process effectively and efficiently.

In the past, “directly affected” has kind of referred to three main areas. We're looking at really focusing our reviews to ensure we're hearing from the right scientific and technical folks. Aboriginal people certainly have big interests in these projects—we know that—so we want to make sure they're included. Also, we want to include people who live close to these projects or within proximity. Those are some of the criteria that have been taken into account in the past, and we'll likely rely on those in the future.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

You can understand the concern when you just said, “live close to these projects”. We have a very controversial project in northern British Columbia, the Northern Gateway, which threatens thousands of jobs and provides for a few dozen permanent on-site jobs. There is massive, significant concern right through the region. When you say “live close”, are we talking a hundred metres, one kilometre, ten kilometres? What is the department using to evaluate how to exclude individuals, citizens, who are concerned?

[Jay Khosla]

Thank you for the question.

I'll just make two points on this. First and foremost, when I said scientific and technical expertise, that's one criteria; living close is another. These are criteria that are general in nature. They're not necessarily mutually exclusive, if you will. At the end of the day, this will be defined by the panels and they way in which they run it. These are types of criteria that will be incorporated. It's much the same, if you will, as—

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Sorry to interrupt. I am limited in time. Has the department done an evaluation? Is there a department document that you can share with us that shows the type of criteria, how you define living close or not, and how you define what issues should be brought forward or not? Is there anything you can share with us?

[Jay Khosla]

We don't have—as I said, it will be done on a case-by-case basis and a project-by-project basis. Those will be developed over time, as these projects move forward.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

But as part of the production of this bill there must have been some evaluation of how this would be defined. We have this massive bill brought forward that has—many people are concerned about stripping away the environmental protections, which, in northern British Columbia and I can tell you on the B.C. coast, we feel very strongly about. There must have been something, at some point, within the Department of Natural Resources, some evaluation of who was going to be excluded by this.

You're saying there's no document and no discussion. This was just thrown out here to Parliament, but there was never any evaluation done by the minister or by the department? Is that true? There's nothing you can share with us?

[Jay Khosla]

No. I'm saying the projects vary in size and scope, so we're building in the flexibilities. These are tools that are being put in the tool kit to allow panel managers to have the flexibility, not necessarily to exclude folks but to maybe focus the reviews.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

But you have no documents—there were no internal discussions around how to define this?

[Jay Khosla]

It's defined in the legislation, as the words in the legislation.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Okay.

Ms. Volk, on the Northern Gateway, I asked this of the minister early Wednesday morning. He wasn't able to come up with a response, but hopefully he would now. That is whether the Department of the Environment has calculated the probable increase in environmental incidents requiring response from the environmental emergency program if the Northern Gateway pipeline project is actually brought to bear. Has there been any evaluation done by the Department of the Environment?

[Coleen Volk, Assistant Deputy Minister, Environmental Stewardship Branch, Department of the Environment]

Thanks for the question.

That's a difficult question because I think what you're asking for is a statistical probability of an accident or a spill. It's a highly improbable event, with very significant consequences if it did happen. In terms of the statistical probability, the likelihood of its happening is very low.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

My question was, has the department done an evaluation of this? The oil spill response centre was closed in British Columbia. We have now lost any access west of the Ottawa River. The environmental emergencies program—the minister did admit on Wednesday morning that every few days staff from the environmental emergencies programs are called on site to spills. Was there any sort of evaluation done before that program was shut down in British Columbia, so there is no oil spill response from the federal government?