Subcommittee of the Standing Committee on Finance on Bill C-38 Committee on May 28th, 2012

[The Chair, Conservative, Blaine Calkins]

Good evening, ladies and gentlemen.

To our witnesses, I want to say thank you very much for your patience. I know we were scheduled to start at 6:30, but Parliament being what it is, we had some votes we had to deal with.

We have a full agenda here this evening.

From the Canadian Manufacturers and Exporters, we have Jayson Myers, president and CEO; from the Building and Construction Trades Department of the AFL-CIO, we have Christopher Smillie, senior advisor; from the Canadian Association of Petroleum Producers, we have David Collyer, president; from the Canadian Nuclear Association, we have Denise Carpenter, president and chief executive officer; from the Federation of Ontario Cottagers' Associations, we have Terry Rees, executive director; and from the Ontario Commercial Fisheries' Association, we have Mr. Peter Meisenheimer, executive director.

To our witnesses, our orders are those of the natural resources committee. For the first two hours we'll have presentations of up to 10 minutes from each of you, and then we'll have rounds of questioning from colleagues at the table.

I didn't solicit who would go first, so I'm just going to go based on the order you appear on the list.

We'll start with Mr. Myers, please, for up to 10 minutes.

[Jayson Myers, President and CEO, Canadian Manufacturers and Exporters - Ontario Division]

Thank you very much, Mr. Chair.

Good evening, ladies and gentlemen.

Thank you for the invitation to comment on Bill C-38.

Thanks very much for inviting me to appear at this subcommittee and to discuss the implications of Bill C-38 on responsible resource development in Canada. I represent Canadian Manufacturers and Exporters, as well as the Canadian Manufacturing Coalition, a group of about 50 associations that represent all sectors of manufacturing and industrial development in the country. The members of our associations jointly employ over 2.5 million Canadians.

I believe we're at a critical juncture in our economy. The global economy is presenting Canada with many challenges, but also with a historic opportunity to take full advantage of the immense potential of our natural resource wealth. Across Canada, over 500 major projects are under way or are being planned for over the next 10 years, representing half a trillion dollars of new investments in our energy and mining industries and related infrastructure.

These private sector investments will give a very badly needed short-term boost to our economy and to jobs. In the long run, they represent a significant part of our industrial infrastructure, offering long-term employment and export growth. However, they also offer something that is much more significant. Canada's real long-term opportunity is to develop a world-class manufacturing technology and services supply chain for these natural resource projects that will create high-paying, value-adding jobs on the basis of expertise that can be exported globally.

There's been a lot said recently about the impacts of resource development on Canadian manufacturers, and particularly about Dutch disease, the negative impact that a strong dollar has had on Canadian manufacturing—a strong dollar presumably driven as a result of resource development. There's no doubt that over the past decade Canadian manufacturers have faced significant challenges to their profitability and therefore to maintaining employment, to investing in new products and new processes, and to staying ahead in global competition. They face those problems as a result of the challenges of a rapidly appreciating Canadian dollar, the recession, increased competition from low-cost producing countries, uncompetitive regulatory regimes, the decline in the U.S. market, rising protectionism in key export markets, and continued escalation of labour shortages.

Canadian manufacturers are suffering from some of the symptoms of the Dutch disease, but I think this diagnosis is wrong, and I'm afraid that policy treatment based on faulty diagnosis will have damaging impacts on manufacturing and on the economy as a whole.

First of all, the strength of the dollar is a reflection of the weakness of the U.S. economy, which has had a far more damaging impact on Canadian manufacturers than currency appreciation. You can always improve productivity to offset a higher dollar. It's hard to replace 30% of your customer demand, which disappeared in a matter of six months at the end of 2008.

Despite the challenges faced by manufacturers over the past decade, I want to say that manufacturing is far from disappearing. Today, it's an innovative industry, it's flexible, it's driven by customer demand, and it's global, in terms of markets but also in terms of investment. Manufacturing represents about 10% of our total employment, about 14% of our GDP, and about 60% of all of the private sector research done in the country. In fact, today, manufacturers are creating more jobs in the services sector of the economy than ever before, in high-paying services jobs in logistics, in research and development, in technology, in engineering, in design, in financial services, and in business services, for example.

Today, Canada's manufacturers are developing new products for new markets, and many have found new customers as suppliers of the new energy, mining, and infrastructure projects across the country. These projects offer Canadian manufacturers, companies like Berg Chilling, Promation, and Aberfoyle heat treating, run by Harry Hall out in Aberfoyle, new business opportunities in new sectors of the domestic market. They've led to the development of new products and processes. They've provided them with new opportunities to sell, not only within Canada but in new markets around the world.

Rather than seeing natural resource development as a curse, we should recognize the opportunities these projects present to Canadians, do our best to facilitate their development, and ensure that we can leverage them to build new industrial, technology, and services capacity.

We support Bill C-38 because we believe that Canada needs to maximize our economic opportunities while maintaining the right balance between environmental protection and economic growth. We believe the approach proposed in this bill will continue to support responsible environmental protection and oversight, while greatly speeding up approval processes.

The development of our natural resources is a capital-intensive enterprise requiring high levels of investment years before a project begins its commercial activity phase. Today's approach to environmental reviews has created an uncoordinated, duplicative, cumbersome, and uncertain process for both domestic and foreign companies. This process is acting as a direct barrier to foreign investment in natural resources, and it's limiting our members' ability to capitalize on new supply chain opportunities. We believe a better approach is a “one project, one review” process with a clearly defined time period.

Our members have provided some current examples of the problems of duplication and unnecessary delays in the environmental process, whether it's Areva Resources Canada, which has had a 19-month delay in starting new environmental assessments for operating and constructing a uranium mine and mining facilities in northern Saskatchewan, with investments of over $400 million and up to 200 construction jobs; or the Rabaska partnership, for instance, that's proposing to construct and operate a liquefied natural gas terminal near Beaumont and Lévis, in Quebec.

These projects all create significant on-site construction jobs, as well as directly sustaining and creating hundreds of jobs in the manufacturing services and technology sector, and jobs in metal fabricating, jobs in concrete, jobs in environmental technologies, jobs in processing technologies, and in services, finance, engineering, and design. They support job creation across the economy.

While our oil and mines will be here for decades, the investment opportunities in this sector always prove to be very cyclical and sometimes unstable. We have to remind ourselves that Canada is not the only player in the global resource market and that many countries are competing for investment capital. This capital will flow where the environment for investment is the most beneficial. With a potential of over $500 billion in major projects being developed in Canada over the next decade, we need to ensure that Canada welcomes this much needed capital in order for us to develop these resources to allow our businesses to take advantage of this tremendous unprecedented economic opportunity.

While we all agree that the protection of the environment must be addressed through reliable environmental assessments, we believe that efficient regulatory processes can go hand in hand with high-quality environmental reviews and effective regulatory enforcement.

The approach for environmental approvals proposed in Bill C-38 represents, in our view, a responsible and modern approach to regulatory management and oversight.

Thank you very much.

[The Chair, Conservative, Blaine Calkins]

Thank you very much, Mr. Myers.

We now go to the building and construction trades.

Mr. Christopher Smillie, please, for up to 10 minutes.

[Christopher Smillie, Senior Advisor, Government Relations and Public Affairs, Building and Construction Trades Department, AFL-CIO, Canadian Office]

Thanks very much, Chair.

I guess depending on where you sit tonight, where I am on the political spectrum is sort of up to you guys. I'm either on the left of you folks or on the right of these guys.

Thank you for the invitation, and good evening, Chair, members of the committee, fellow witnesses, and guests. We're the Canadian building trades and we represent more than 550,000 skilled trades folks in every province and territory. It's my pleasure to come to you today and give you what I call a tip of the spear view of what natural resource extraction writ large means to regular people in Canada.

From here on in, if the committee will indulge me, I'm going to refer to the natural resources extraction and economic benefit title as “energy projects”, and that's where I'll focus my remarks today. I'm going to talk a little bit about what energy projects mean to job prospects, short- and long-term employment, and how energy projects make a difference right now in the skilled trades in Canada.

I've compiled information from some of our construction employers, companies small and large, who do energy project construction and maintenance work in every part of the country, and from the trades themselves, which actually do the work. Hopefully, when I'm finished you'll have an understanding of the importance of these energy assets to the Canadian economy.

I hope you'll see that energy projects or natural resource extraction, the economic benefits, should be considered as important to the national economy and to the communities you all represent around this table. They deserve serious consideration and rational debate on the future of Canada's place in the world. They deserve more than partisan attacks. They deserve more than blind obstructionism and sound bites by opponents. These endeavours have real world impacts for working people, their pay cheques, their jobs, and the food on their table.

We need a Canadian vision on this file. I usually have a quote in my presentations. I won't do that, but I think Alison Redford has it right in this case. If I were her advisor, I'd submit that an energy strategy, which she's pitching, should be coupled with a workforce strategy. This way, when the workforce is needed, when these projects move ahead, we'll have a rational undertaking in terms of workforce planning with some sort of energy plan.

Every energy project in this country, from North America's first commercial crude oil well, which in fact was opened in Ontario in 1858, just outside of Chatham, to the Suncors of the world, the Syncrudes of the world, the Imperial Oils of the world—these modern-day projects, and also the old ones, create an enormous amount of economic activity for every region of Canada.

Last week I visited a new $7 million training facility in Calgary, which is fully funded by building trades members and contractors, by the way. The Boilermakers Local 146 in Calgary has about 3,500 welders on their roster, and I took a look at their job lists. Contractors call us and provide us with jobs they're hiring for. Every call for a welder out of this local in Calgary was for an energy project, be it the new Enmax plant in Calgary, Shell's Albian Sands, or the small metal fab shop in Calgary South, which by the way is fabricating pressure vessels for oil sands facilities 16 hours a day, seven days a week. So every single call that this local union hall had was for an energy-related project. All this economic activity is derived from Alberta's energy project envelope.

The operations manager at this facility told me they had workers from across Canada, places like Newfoundland, Nova Scotia, Ontario, and even the United States on travel cards through their local unions and their communities, to meet the demands of our contractors and some of the owner-partners at the table today.

At this office in Calgary they had 500 apprentices. These are people who are working their way through an apprenticeship program. It's a four-year program to be a welder in Alberta. This means young people are learning a skill and building a life on these projects.

This is a snapshot of what happens all across Canada. It's not unique to Calgary. Unions train and manage the mobile workforce through a hiring hall at no cost to Dave's members or Jayson's members.

That's a real life example. Let's talk overall numbers. We estimate that at any given time, out of our national membership, about 45% of our people are actively engaged in oil and gas in some way, be it the oil sands in Alberta, refineries in Sarnia, the Lower Churchill project in Newfoundland, building potash mines in Saskatchewan, or New Brunswick, or even a natural gas co-gen facility in any number of large cities across Canada.

You may have seen those massive electrical towers along the sides of highways. Construction workers install and maintain that infrastructure. These lines carry electricity, which in Ontario comes from nuclear power.

Uranium being another natural resource, I thought it was applicable to this committee. At Point Lepreau, in New Brunswick, more than 10,000 construction workers are on the job at AECL, upgrading the facility to pump power around the east coast so that the lights stay on. It's another example of natural resource extraction, or uranium.

The connections here are obvious in the energy industry. The energy economy means jobs, no matter how you slice it. For those of you who are on the natural resources committee, you would have heard this pitch before, but I want to talk pipelines for a minute. It seems a topic of heated debate in Canada and the U.S., and rightly so. These are pieces of infrastructure that mean 50 or 60 years on the production side of the resource extraction.

Before I talk a little bit about what that means, what exactly is a pipeline? To me, a pipeline just connects jobs. You put a product in, but at each end of the pipeline there are jobs being created. The uninformed think a pipeline is just a few short-term jobs, but they're wrong. In the oil sands, for example, petroleum—however we define petroleum—is extracted. It can't be stockpiled for very long, except in expensive tankage, and it has to move to the next stage in the process. The extraction jobs and initial processing at that end of the pipeline are 50-year jobs that last for as long as the line is being used. It then moves to an upgrader, where it's turned into synthetic crude. A huge number of high-paying, skilled jobs are found here. They are also 50-year jobs. And there are more maintenance and operation jobs created over the lifetime of the plant than there ever were constructing it.

By the way—and, Dave, correct me if I'm wrong—currently Alberta upgrades about two-thirds of its own bitumen. The Keystone Pipeline will not send this stuff from Alberta. It's new production, and Keystone will continue to upgrade most of the extracted material in Alberta.

Then the synthetic crude moves to a refinery, where it becomes products. The same equation is present in terms of refinery jobs: sustaining construction, operations, maintenance—those are 50-year jobs.

The pipeline links those jobs together—both ends of the pipeline. If there's no pipeline, those other high-paying, high-skilled, and challenging jobs don't exist. The pipeline moves both the oil and the jobs down the line to the end user. Some of the finished product, after you refine it, then moves in other pipelines back to market.

There are really four major construction activities and four major skilled trades involved in pipelines: heavy equipment, sideboom operators, backhoe operators, pressure welders, etc. I think you guys get the point that these are complex projects.

I ran some numbers for the Northern Gateway pipeline. I know we've been talking about that one in the public domain. There are probably about 2,700 direct jobs for three construction seasons with just the installation of the pipe. Total jobs for a $6 billion project are in the 12,000 mark right off the bat.

I wanted to mention to the committee that of the four pipeline jobs that are currently being worked in northern Alberta today—we call them pipeline spreads in the industry—there were a total of 2,633 employees at the end of March working on these things, and 811 of them were from outside Alberta. This gives you a really good idea of the national scope of some of these projects. It's roughly the same percentage found inside the extraction, the upgrading, and the refining plants. At the end of the day, the energy jobs are not merely Alberta jobs; they're Canadian jobs.

The payroll—I pulled some numbers just for interest, and don't tell anyone I got these—for the four spreads for a week was about six million bucks. So you can see the link.

I'm getting the hook here.

I just want to talk quickly about apprentices. We represent about 25,000 apprentices in Alberta. Every year about 40,000 construction apprentices move through the training system in some way across the country.

If it's not welding pipes at an oil sands plant, or doing concrete, or excavation at Kearl Lake, it's about office towers in Calgary, and everything else, if it's associated with those kinds of builds.

The last thing I want to talk about is the diversification of markets. I think if Canada is serious about moving down the continuum of a developed country, we need to seriously consider diversifying our market beyond the United States. Gateway would give Canada another market for our oil and would not have us beholden to oil politics south of the border. Our natural resource pricing isn't dependent on one customer. Maybe we reverse the pipe from Alberta to Sarnia. It could be good for jobs.

There's been some discussion in the media on the regulatory system surrounding these types of projects, and that's what we're here talking about today. The position of our organization is that we support changes to the system to facilitate large projects, though not at the expense of safety or an environmental review, I think we would all agree.

[The Chair, Conservative, Blaine Calkins]

Mr. Smillie, I'm sorry, your time is up. Thank you very much for your presentation. I apologize. We have to stick to the rules of the committee.

Next on my list is Mr. David Collyer, president of the Canadian Association of Petroleum Producers, for up to 10 minutes, please, sir.

[David Collyer, President, Canadian Association of Petroleum Producers]

Good evening, Mr. Chairman and members of the subcommittee. My name is Dave Collyer. I'm president of the Canadian Association of Petroleum Producers. We represent Canada's upstream oil and gas sector, and our members produce more than 90% of Canada's petroleum resources.

I certainly welcome the opportunity to provide our perspective on Bill C-38, part 3, responsible resource development.

This bill is extremely important to our industry. It's going to help attract the investment required by the oil and gas sector to create Canadian jobs, economic growth, and energy security in an increasingly competitive global market. I want to really emphasize the global competitive environment in which we operate. LNG is perhaps a good example—a tremendous opportunity, we believe, to export natural gas from Canada's west coast. But our competitors in Australia and other countries are not standing still, nor are markets necessarily waiting for us to supply those particular markets. We need to be competitive, and a key part of that is the regulatory regime under which we operate.

In our view, the bill sets out a framework for legislative change that will significantly improve the regulatory review process for natural resource development projects without compromising Canada's strong record of responsible environmental performance and environmental outcomes.

Our industry is the largest single private sector investor in Canada. We invest over $50 billion each year, and we employ well over half a million Canadians. We foresee opportunities to maintain or in fact increase that level of investment going forward. In fact, there are over $120 billion in oil sands development projects in the queue. However, we will only attract that investment and the investment capital required to grow our industry if we're internationally competitive.

As we all know, capital is mobile. I think it's rather sobering that a variety of domestic and international authorities, including the International Energy Agency and the World Economic Forum, have characterized our current regulatory system as being overly complex, redundant and open-ended, and a significant threat to Canada's ability to attract the capital necessary to develop our abundant natural resources.

The current regulatory process has often led to project delays and cost escalation, which both defer and reduce the employment and revenue benefits accruing to Canadians from these investments. In some cases, projects have unfortunately been cancelled or deferred for many years without any discernible improvement in environmental performance or outcomes. In our view, that is clearly not in the public interest. CAPP is very encouraged by the measures within Bill C-38, which, if properly implemented, will address many of those issues.

We strongly disagree with those who allege that Bill C-38 will result in lower environmental standards or turn back the clock on environmental regulation. The existing regulatory processes, to review and approve, or not, industrial activity in Canada have developed incrementally over many years, resulting in a patchwork of requirements that are confusing, overlapping, often conflicting, and ultimately uncertain. The existing process undermines competitiveness, negatively impacts project economics, and does not contribute to better environmental outcomes. More regulation is not necessarily better regulation; in fact, it's often quite the opposite.

From our perspective, the key elements of Bill C-38 are the following.

First is one project, one review, with review by the best-placed regulator by enabling equivalency and substitution. In our view, that will remove unnecessary overlap and duplication, and it certainly does not mean a lower standard of environmental review.

Second is significant consolidation of regulatory review bodies for those projects that are under federal oversight, which, from our perspective, is a sound, common sense reform—a risk-based regulatory review process that focuses resources and effort on higher potential impact projects and in fact reallocates resources in a manner that should improve environmental outcomes for those projects that have the potential to have a higher environmental impact.

The final key element is greater clarity and predictability in the regulatory review process, specifically in regard to timelines, which is going to provide much greater certainty to project proponents in terms of the costs and resources they need to devote to the regulatory review process and should shorten the timeline between the identification of a project opportunity and the point at which a proponent can make a final investment decision, thereby reducing uncertainty and complexity in the overall decision-making process.

I have just a couple of thoughts on implementation. I'd like to emphasize that the benefits that arise from this legislation outlined in Bill C-38 will only be realized if this legislation and supporting regulations are effectively and efficiently implemented in a manner that delivers the intended outcomes. It will be important to ensure that adequate federal resources are dedicated to fully implement the intended regulatory changes on an aligned, whole-of-government basis, and additionally, that collaboration and alignment among federal, territorial, and provincial government departments and agencies will be critical to delivering the intended outcomes, particularly as they relate to equivalency and substitution.

To conclude, in our view, we must continue to grow Canada's resource sector for the benefit of all Canadians, to provide jobs, economic growth, and substantial revenue to Canadian governments. As an industry, we will continue to do this responsibly and with a commitment to continue performance improvement under environmental policy and regulation that will deliver the outcomes Canadians expect and that compare very favourably with those of other countries with whom we're competing for investment capital.

We look forward to less but better process that will deliver more jobs, a stronger economy, and responsible environmental performance. In our view, Bill C-38 represents a practical, efficient, and effective framework for change that is long overdue, and from our perspective, it is time to act on this legislation.

Thank you, and I look forward to your questions.

[The Chair, Conservative, Blaine Calkins]

Thank you, Mr. Collyer.

We now move to the Canadian Nuclear Association, Ms. Denise Carpenter, president and chief executive officer.

[Denise Carpenter, President and Chief Executive Officer, Canadian Nuclear Association]

Good evening, Mr. Chairman, committee members, and members of the public. I'm here today to speak on behalf of Canada's nuclear industry.

The Canadian Nuclear Association has some 100 member companies, representing 71,000 people employed in the production and advancement of nuclear medicine, uranium mining and exploration, fuel processing, and electricity generation.

Our members will be affected by the amendments in the budget bill, in particular the amendments to the Canadian Environmental Assessment Act, the Fisheries Act, the Species at Risk Act, and the Nuclear Safety and Control Act.

Our members are highly familiar with this legislation, as we've complied with it for over 50 years. As a matter of fact, June 4 is the 50th anniversary of nuclear power generation in Canada. It will also mark our 50 years of safe operations and strong environmental stewardship by our industry.

Given our experience, we welcome the efforts to modernize Canada's regulatory system. In the World Economic Forum's 2011-12 global competitiveness report, bureaucratic inefficiency is the largest barrier to doing business in Canada. The report ranks Canada's regulatory burden the 48th highest out of 142 countries.

CNA members are optimistic that the proposed amendments will increase not only the efficiency but also the effectiveness of Canada's regulatory system. We expect the amendments to enhance job creation and economic growth and to protect the environment. This is good for Canada.

Upon reviewing the budget bill amendments, we found the following. Number one, the bill has taken great strides towards achieving the goal of one project, one review in a clearly defined time period. Number two, its reduced overlap and duplication will not only limit the one project to one review, but it will strengthen the environmental protection. And number three, the effectiveness of the amendments will be demonstrated through compliance with the newly established timelines and regulations.

Allow me to elaborate. With respect to achieving the goal of one project, one review in a clearly defined period, several of the amendments are aimed at reducing overlap and duplication through delegation, substitution, equivalency, and fixed timelines. We see all of these as useful options that should be available to all industries.

Amendments to the Canadian Environmental Assessment Act will allow the delegation or substitution of one environmental assessment process for another. This has the potential to reduce multiple layers of overlapping environmental assessment processes to a single, effective process.

We were extremely disappointed to discover that under this new act federal and provincial equivalency will not be made available to our industry. So our uranium mine members, which may be better served by a provincial environmental assessment process, will not have the same opportunities as other metal mines will have.

There's nothing to be lost in making federal-provincial equivalency available to all industries. The goal is not to reduce the environmental scrutiny that our industry is subject to, but to improve the overall regulatory system so that it fosters environmentally responsible economic activity.

We believe the reduced overlap and duplication will strengthen the environmental protection. Limiting one project to one review is not only more efficient, it's more cost-effective, allowing resources to be applied where they can achieve the greatest environmental benefit.

It's not difficult to imagine how some 40 different agencies, each with their own regulatory processes, could draw resources—valuable human resources—away from what matters to the environment. Resources, such as time and budget, could be and will be dedicated to improving oversight and therefore compliance. For example, the conduct of some 37 environmental assessments at Chalk River Laboratories has consumed considerable resources. These resources could have been spent on environmental redemption or other beneficial environmental initiatives, rather than on the regulatory process.

We appreciate the renewed focus the budget bill brings to what matters to the environment. That being said, we believe the true blue test of the budget bill's effectiveness will be the federal government's ability to comply with the legislated timelines it has introduced.

The bill promises legislated timelines for a number of permits and authorizations. These timelines can take anywhere from two to five years to develop. The development of these supporting regulations is particularly pressing right now, today, given the proposed increases to penalties under the Fisheries Act and the establishment of an administrative monetary penalty system under the Nuclear Safety and Control Act.

There needs to be a clearly defined path to compliance. This will be provided in part through the newly developed regulations. As an industry, we are committed to working with the federal government to implement the budget bill amendments and to develop these supporting regulations.

In summary, our members are very supportive of a regulatory system that reduces duplication, establishes clear timelines, and focuses on what matters to the environment. We are optimistic that the budget bill amendments will increase the efficiency and effectiveness of Canada's regulatory system while protecting the environment. We see the modernization of Canada's regulatory system as a positive initiative for Canadians. It will allow Canada's nuclear industry to continue to provide highly skilled jobs, strong economies, and, above all, safe, clean, reliable, and affordable power in the energy-hungry world we live in today.

Thank you very much.

[The Chair, Conservative, Blaine Calkins]

Thank you very much, Ms. Carpenter.

We now move to Mr. Terry Rees, executive director, from the Federation of Ontario Cottagers' Associations. You have up to 10 minutes, please, sir.

[Terry Rees, Executive Director, Federation of Ontario Cottagers' Associations]

Thank you, Mr. Chair, members of the committee, and members of the public.

I'm disappointed I'm not addressing these comments and concerns, frankly, to the fisheries committee, and instead that these important matters are being considered as part of an unrealistically complicated, unprecedented omnibus finance bill. The timing and design of this approach short-circuits the democratic process, and it certainly doesn't allow for the type and amount of reasoned discussion that fundamental important public policy deserves.

The considerations in Bill C-38 related to Fisheries and Ocean's activities, mandate, and resources could have significant long-term impacts on the essential underpinnings of our communities and our economy. Despite the significant displeasure with this approach, I'm here to speak on behalf of the tens of thousands of waterfront property owners who help to form the backbone of our rural economies.

First some background. My specific interest here relates to my role with the Federation of Ontario Cottagers' Association. Our organization is a not-for-profit established 50 years ago to represent the interests of rural waterfront owners in the province of Ontario on all facets of community life. We currently count amongst our supporters 500 community groups that represent 50,000 families. In total, the residential waterfront community numbers approximately 250,000 families across Ontario. We also work collegially with waterfront organizations in a number of other provinces, and with industry, other not-for-profits, and government as part of numerous committees related to water, biodiversity, mining, land use planning, and resource management.

Our interests include fire and crime safety, safe boating, risk management for volunteers, sound land use planning and rural practices, and, most centrally, the promotion of sustainable and healthy rural waterfront communities. We are vested parties. We have member associations in over 380 of Ontario's 444 municipalities and many in Ontario's northern unorganized territories. All told, there are about 15,000 kilometres and 50,000 hectares of privately held waterfront lands in Ontario, which are some of our most ecologically sensitive lands. The residential waterfront property community owns over $75 billion of residential real estate and contributes over $600 million annually in municipal and school property taxes.

For over 50 years our primary interest has been on supporting thriving and sustainable communities and specifically the health of our precious aquatic resources. In addition to supporting private land stewardship, we rely on the rule of law to ensure our natural resources are managed and cared for. Our community inherently knows, and it has had it confirmed by at least two U.S. university studies, that cleaner water is positively correlated to higher residential property values and directly impacts the use and enjoyment of our homes and the health of our families.

Today I wanted to relay our specific concerns related to the proposed changes to the Fisheries Act and the significant negative implications that may result. The habitat provisions in section 35 of the Fisheries Act prohibit the harmful alteration, disruption, and destruction of fish habitat. That's been the basis for ensuring aquatic resources are not impacted by shoreline or in-water projects and that our fisheries are allowed to thrive.

Clause 142 of the proposed budget implementation act diminishes the existing law and as a result is bad for Canadians. It does this first by limiting prohibitions to only commercially important fish. Complex natural systems require healthy food webs made up of a variety of species, and I note that the large majority of at risk fish species aren't commercially fished. Secondly, clause 142 establishes a prohibition based on serious harm that's permanent. We feel this new definition is both unclear and ill defined, and thus is subject to interpretation and will be challenged. Defining a serious harm that's permanent is problematic and will not simplify things.

Most provinces don't have laws making it an offence to harm fish habitat, and for those that do, these laws can be weak and discretionary. For many provinces, like Ontario, they rely on the Fisheries Act and their own regulations to protect habitat, and use it to ensure environmental assessment of major projects like mines, which are excluded from provincial environment assessment laws.

While an important piece of Canadian law, section 35 of the existing Fisheries Act is still overly discretionary and should be strengthened, not weakened. The act should be revised to require that industrial undertakings are economically and environmentally sustainable, they take a precautionary approach, and repair or avoid harm to aquatic habitats and species.

The proposed changes to the Fisheries Act are regressive. Instead of embracing ecosystem-based management, the changes narrow the provisions to protect fish and fish habitat to focus only on identified fisheries. Instead of limiting discretion or guiding decision-making under the act, they create a framework for suspending the application of conservation provisions altogether.

The national laws on our fisheries should provide a clear national standard for protecting fish and fish habitat. Yet clause 134 of the budget implementation act allows for certain provisions of the act or regulations to be completely relegated to provincial discretion, in which case the federal fisheries law is suspended and provincial law applies in its place.

Whatever its shortcomings, the existing law has breadth and consequences for offenders that are significant, including fines and jail terms. This is a deterrent that is potent and powerful.

I would like to conclude my remarks with some commentary about the investment our government is making in natural resources research.

Our water resources and the life they sustain are our most valuable resource. Our freshwater resources, our lakes and rivers, sustain our industry, are fundamental to agriculture, and are the foundation for all life on earth. Yet overall, we have a limited understanding of the dynamics of freshwater and their long-term health.

For almost 50 years, Canada's Experimental Lakes Area has been an incredibly valuable aquatic research facility, unlike any research facility like it in the world. This dedicated area of 58 small lakes in northwestern Ontario and their watersheds are an important natural outdoor laboratory to study the physical, chemical, and biological processes in actual lake ecosystems. The ELA has one of the longest, most complete, and unique sets of information on water quality in the world. This data is crucial for monitoring and developing sound environmental and industrial policy. Research at ELA makes, and has made, important contributions to decision-making on many issues, and these include: restricting phosphorus inputs to lakes, which combats undesirable algal blooms; it contributed to the Canada-U.S. Air Quality Agreement, which is a policy that limits air pollution from sulphur and nitrogen oxides and reduces acid rain; they've studied greenhouse gas production in hydroelectric reservoirs, the effectiveness of proposed legislation to restrict mercury air pollution, and the effects of releasing endocrine disrupting chemicals into our waters. These issues can dramatically impact our economy and Canadian society.

Investing in this important facility and its researchers will provide benefits through better understanding of our freshwaters for years to come.

The notion that private industry or universities will be able to dedicate themselves and maintain this research over the long term is simply false and unrealistic. The government must reconsider the decision to close this facility and reinstate our commitment to the knowledge it provides our industry, our governments, and civil society.

Canada's federal government needs to provide the conditions for rational and sustainable growth. This means providing clarity and accountability to everyone who has a stake in Canada. It also means a commitment to the scientific underpinnings that will drive innovation, strong and informed public policy, and a healthy and prosperous population.

Thank you.

[The Chair, Conservative, Blaine Calkins]

Thank you very much, Mr. Rees.

Last but not least, we have Mr. Peter Meisenheimer, executive director, from the Ontario Commercial Fisheries Association, for up to 10 minutes, please, sir.

[Peter Meisenheimer, Executive Director, Ontario Commercial Fisheries' Association]

Thanks for the invitation to be here.

I'm going to begin with a digression. Earlier in May I received a call to come to Ottawa to speak about Asian carp before the Standing Committee on Fisheries and Oceans, on a date that fell in the middle of a week that my wife and I had booked for holidays. She was very understanding and I came to Ottawa. It went very well. We decided we would take our holidays later in the month, and that would be fine. We were in the middle of them last week when I got a phone call from your clerk telling me that I was hopefully going to be able to come here on Monday evening to testify for Bill C-38's hearings. So somebody here owes my wife flowers.

Nonetheless, my invitation didn't arrive in time for me to put together a brief, and if my remarks have the feel of a stream of consciousness address, I apologize in advance, and I apologize to the translation services also for not having notes. I will be speaking exclusively in English.

I'm the executive director for the Ontario Commercial Fisheries' Association. I represent fisheries in Ontario, on the Great Lakes and its connecting waterways on Lake Nipigon and a number of inland waters in the province. We've been an industry that's been well-established in Ontario in its current European fishery form since the 18th century, and there is abundant evidence in the historical archeological record of a commercial fishery in Ontario for centuries before European contact.

We're nationally small but locally very important, and in some cases very important to the history, the culture, and the economy of the communities where we are engaged in business. I will say at the outset that I think the fishery in Ontario is unique and instructive. We prosecute the fishery alongside an extraordinary mix of other economic activities, large and small. We do it in water bodies that are much smaller in scale than some of the other fisheries that are prosecuted on the coasts and elsewhere in the country, where the impacts of other activities can become magnified by the scale of the habitat in which our fisheries exist.

As such, the full range of bad things that can happen when you get it wrong have happened to us over the years. It's perhaps for that reason that at least as it relates to the Fisheries Act provisions of Bill C-38, there was a great deal of consternation about the uncertainty that was being introduced into the mix by this legislation.

Let me give you a bit of history. Fish and fisheries have not done well in the interaction between our industry and other industries, whether they be other resource extraction industries or manufacturing or any of the other ways that people make money, big and small, in Ontario. That's true especially as it relates to habitat destruction and degradation.

Here's an example. There was an enormously productive spawning reef in the lower reaches of the Detroit River that produced vast quantities of cisco, white fish, and any number of other fish that were an important part of the Lake Erie fishery. That was dynamited for navigational purposes early in the 20th century, which would have been bad enough, except that instead of removing the blasting spoils in trucks, they just spread it over the remaining reefs in the river, which would have been available otherwise to the fish as spawning habitat had they removed it from the water and taken it away. They completely obliterated all possible spawning habitat from the lower reaches of that river.

The reason they did that was not that they were bad people; the reason they did that was that it was convenient. I suspect that for the most part, people in responsible positions in that project understood full well that they were eliminating spawning habitat at the time. They didn't have to, so they didn't. It was cheaper to do it the way they did, so that's how it got done.

We may think that we do things differently now, but I submit to you that when money is tight and budgets are close and circumstances are straitened and the competition is biting at your heels, people don't tend to do inconvenient things unless they have to. If there's a fudge factor that's involved, well, it gets invoked if it can be.

There are more examples. There were spawning reefs all over the Great Lakes that were removed for gravel and cobble to build roads, to build buildings, to do all manner of good things. Many of the buildings of a historical nature in Ontario that we admire were built with materials that were extracted in that manner. They're gone forever. Those habitats cannot be reclaimed except at enormous expense.

The number of wetlands in Ontario that have been demolished in one form or another, whether by filling them in to build on, by digging drainage channels through them to drain them dry for agriculture or other land use purposes, by any number of very ingenious techniques that have been devised—each and every one of those was a fisheries habitat, either directly or indirectly.

The point is that these things don't happen so much anymore. The reason they don't happen so much anymore is the result of a number of pieces of legislation or regulation, but overwhelmingly, the most important piece of regulatory paper that we have to stop that kind of thing from happening, and the reason that it is so rare, is section 35 of the Fisheries Act. That is a lynchpin of fisheries management in this country, and certainly in Ontario.

I have just recently been through an extremely worrisome exercise in Lake Erie again, which has over 80% of the commercial fishery in Ontario, where there were a number of proposals to put hundreds of wind turbines on the western basin of Lake Erie, which is the nursery of the lake. It was being pushed very aggressively by a provincial government that fancies itself to be environmentally sound, and they seem sincere in seeing themselves that way. They believe that renewable energy is an environmentally good thing. The hammer we had was the Fisheries Act, section 35 specifically, and boy, did we wield it.

When I look at the sorts of things that are being proposed now, my first reaction is that it's not very clear. It's not at all clear where this is going to land. I have to tell you, there is an awful lot of accumulated wisdom out there that could help you come up with a system for revising the Fisheries Act, and particularly the habitat regulations, because we think they could stand to be improved as well. There is a lot of wisdom in the industry. There is a lot of wisdom in academia. There is a lot of wisdom within the staff you employ within the public service and in other levels of government.

But it requires a proper process. It requires full stakeholder engagement from all sides. It requires detailed agendas to be drawn up and worked through in a way that does not put us in a position where the law of unintended consequences comes home with a vengeance.

I am somewhat mollified by some of what I have heard about some of what I was worried about in the bill, but when I read the remarks of the minister with regard to what constitutes habitat, what constitutes a fishery, my worries are brought back with force.

I would say that we feel strongly that the Fisheries Act is due for a revisit, but a new Fisheries Act should incorporate strong safeguards for fisheries, potential fisheries, and fisheries rehab through science-based management, and I would echo Mr. Rees's comments about science and programs like the Experimental Lakes Area, which was instrumental in saving the fishery in Lake Erie. We wouldn't have saved it if we hadn't had the Experimental Lakes Area project, and full stakeholder engagement.

Do I have any time left at all?

[The Chair, Conservative, Blaine Calkins]

You have 10 seconds, Mr. Meisenheimer.

[Peter Meisenheimer]

Can I tell a short story?

Years ago when acid rain was still on the front pages, a friend of mine was working in Sudbury, at the regional office of the Ministry of Natural Resources, and he went door to door talking to stakeholders about plans to reintroduce fish to dead lakes. He went to a meeting with some people and got yelled at; they were really mad that their nice swimming pool of about 150 acres, which was as sterile as you could ever want a pool to be, was going to have fish in it. The excuse they gave was that fish pee in a lake. It turns out over time that the real reason they didn't want it was that fish meant a fishery and it meant having to share the lake. I would ask you, was that fish habitat?

[The Chair, Conservative, Blaine Calkins]

Thank you very much, Mr. Meisenheimer.

We'll now proceed to our rounds of questioning. The standard procedure that we follow at the natural resources committee applies here, and we have a seven-minute round, starting with Ms. Rempel.

[Michelle Rempel, Conservative, Calgary Centre-North, AB]

First of all, I'd like to send my regards to Mrs. Meisenheimer on behalf of Mr. Rempel, who is watching these proceedings on CPAC with a pizza box in front of him—so duly commiserated.

I want to start this evening with Mr. Collyer and talk a little bit about the process by which major projects are put forward in industry, certainly the planning process. It's my understanding that many of the projects in your industry contribute a great deal to the economy—I believe current forecasts show $2.1 trillion to the Canadian economy over the next 25 years. Many of the planning processes related to these projects include evaluating windows to market, evaluating opportunity costs for the projects based on defined timelines for the products that will be produced.

Could you perhaps speak a little bit to the importance of ensuring a timely and predictable regulatory process in that planning process?

[David Collyer]

Yes, I certainly can, and thanks for the question.

Let me start by reiterating the point I made in my remarks about global competitiveness. I think it's really important to think about this in the context that we in Canada are competing all the time for markets, for suppliers, and for other dimensions of these projects against other countries and other corporations. We always need to be mindful that we're not doing this in a silo or on an island. We're very much part of an integrated and very competitive system.

In terms of how these projects get advanced, from my standpoint, this is all about integrating—from the point of identifying an opportunity to the point of an investment decision—a whole lot of complex factors that go into whether a decision is made to proceed or not at the end of the day. Largely, that process is about reducing and, where you can, eliminating uncertainty and risk.

The factors that go into these kinds of investment decisions are financing, cost structure, market windows, supplier opportunities, labour availability—a myriad of factors, all of which have bands of uncertainty around them.

The regulatory process is on the critical path in that decision process. So that's one factor that can have a significant bearing on the ability to move these projects forward and to hit market windows or to keep cost structure where it needs to be for the project to be successful.

I think the key point I would make is to say that clarity and predictability in the process—how it's going to work, what it's going to cost to enter into it, when might the party that's proposing the project expect a decision and, importantly, at that point, bring together all of those complex factors that enter into the decision to proceed or not—is extremely important.

So this is a risk management process, and the regulatory process is a key element in that overall process leading to an investment decision.

[Michelle Rempel, Conservative, Calgary Centre-North, AB]

Certainly, and it's interesting that you use the terminology “risk management process” and you talk about reducing uncertainty and risk, because as legislators looking at a regulatory system that should reduce risk and uncertainty when it comes to environmental protection.... I'm wondering if your member companies, after seeing some of the regulatory reforms roll out, would characterize the reforms such that they would have to have a lower standard of environmental scrutiny on their projects or that they felt they would be changing their processes to adjust for a lower standard of environmental scrutiny.

[David Collyer]

No. I think the answer is definitively not. We look at this entirely in the context of the process by which we get to regulatory decisions.

We don't see this in any way impacting or degrading environmental performance. In fact, I think there are a number of elements of what's being proposed that would bring more resources to bear on those projects that have potential for greater environmental impact. Therefore, I would argue to at least maintain, and I think reasonably it could be expected to enhance, environmental outcomes.

[Michelle Rempel, Conservative, Calgary Centre-North, AB]

We have established that the regulatory process ensuring transparency, predictability, and timeliness is important for rigour, but also to ensure that projects can go forward sensitive to investment.

Perhaps you could talk a little bit about the impact of your industry on the economy in Canada, in specific terms with jobs across the country. We've heard a lot over the last few months about how the energy sector perhaps is a detriment to the Canadian economy, and I'd just like to get your thoughts on that, with specific regard as well to aboriginal employment.

[David Collyer]

There are a lot of questions.

[Michelle Rempel, Conservative, Calgary Centre-North, AB]

Sorry.

[David Collyer]

I'll try to talk about all of them.

We're a major employer. We're the largest private sector investor across the country. We have a supply chain that extends into Quebec and Ontario, and there are many people in Atlantic Canada who work in the oil sands.

Some of you may have seen a recent ad we started running on the Prevost bus line in Quebec. They build the coaches that move workers back and forth between Fort McMurray and the oil sands projects. That's just an example of the kind of investment that's being made across the supply chain—it affects the whole country. So it's revenue to governments, it's jobs, and it's opportunities.

Aboriginal employment is extremely important to us. There are many examples of great successes in engaging aboriginal communities in employment and business opportunities. I would argue that it's an area where we need to get better. The Fort McKay Group of Companies, which works in the oil sands, is a fabulous example. But there aren't enough of those, so I think we need to work with governments and across industry to do better.

[Michelle Rempel, Conservative, Calgary Centre-North, AB]

It's my understanding, and we've heard this from some witnesses tonight, that we need to diversify our markets within the country to ensure that we have stability and other trading partners. Perhaps you could talk a little bit about why it's so important for us to diversify our markets, and how some of the regulatory reform changes included in this bill will help to see that goal through. Perhaps you could mention some of the challenges your member companies are facing right now in achieving those goals.

[David Collyer]

It's extremely important. Any supplier of anything wants more than one market. There is an opportunity to ensure that we have access to global prices, and there is an opportunity to ensure we have outlets for the products we sell. So it's extremely important.

I come back to international competitiveness and the perspective of buyers. We hear from markets that they want certainty about when these projects will get off the ground. So we look internally at how this works for us. I think we need to look more globally and ask how this is perceived by the people buying the products we sell. A certain clarity and predictability in process is important, and we're competing with Australia and others that have a better process than we do.