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Evidence of meeting #3 for Subcommittee of the Standing Committee on Finance on Bill C-38 in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was environmental.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Chief Shawn A-in-chut Atleo  National Chief, Assembly of First Nations
Fred Denning  President, The British Columbia Coast Pilots Ltd.
David Schindler  Professor of Ecology, Department of Biological Sciences, University of Alberta, As an Individual
Terry Quinney  Provincial Manager, Fish and Wildlife Services, Ontario Federation of Anglers and Hunters
William Amos  Director, University of Ottawa - Ecojustice Environmental Law Clinic, Ecojustice Canada
Ron Bonnett  President, Canadian Federation of Agriculture
Kevin Obermeyer  President and CEO, Pacific Pilotage Authority
Scott Vaughan  Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada
Clarence T. Jules  Chief Commissioner and Chief Executive Officer, First Nations Tax Commission

9:10 p.m.

Professor William Amos Director, University of Ottawa - Ecojustice Environmental Law Clinic, Ecojustice Canada

Thank you, Chair, and thank you, members. I appreciate the opportunity.

My name is Will Amos. I'm a lawyer and professor. I work with a charitable organization called Ecojustice. We have offices in Calgary, Vancouver, Ottawa, and Toronto.

We consider ourselves to be Canada's leading non-profit public interest environmental law organization. We use the law to protect and restore the environment. For 20 years our lawyers and scientists have represented, on a pro bono basis, community groups, citizens, first nations, municipalities—in effect any group that has as its goal to protect the environment. We hold governments and corporations accountable for the implementation of environmental laws in this country, both provincial and federal.

I'm here not only wearing my Ecojustice hat but also as the director of the Ecojustice environmental law clinic, which is a partnership between the University of Ottawa's faculty of law and Ecojustice. The faculty of law at U of O deemed a partnership with Ecojustice to be a strategic one because it wanted its law students to learn what it is that Ecojustice does. Students have been working with us in the preparation of these materials.

Although the timelines were short, and that's why we weren't able to get our materials translated in time, I do have four legal backgrounders that we would like to provide this committee. If it would be possible to have them translated so that the francophone committee members could read them, that would be great.

I will be very happy to answer questions in French. I apologize that I will not be making my presentation in French, but I am always very happy to communicate in that language.

It's difficult in the six minutes I now have left to communicate—

9:10 p.m.

Conservative

The Chair Conservative Blaine Calkins

Eight.

9:10 p.m.

William Amos

Oh, eight. That's fabulous. Thank you, Mr. Calkins.

It's difficult to know where to start with this bill. I'm going to do my best to provide what Ecojustice believes is a broad-brush stroke critique of Bill C-38 and of the contents of part 3.

Effectively, what we're looking at are weakened federal protections for fish and fish habitat, an entirely new and entirely less comprehensive federal environmental assessment regime, and greater discretionary powers vested in ministers and in cabinet. We believe there will be less accountability and fewer opportunities for the Canadian public to participate in processes that ultimately lead to sustainable development.

It's our opinion that this is the most significant and devolutionary set of environmental law reforms that have ever been presented to Parliament. There is no law that we can recall that has ever, in such a broad and structural manner, changed the federal environmental governance regime. Thus, our main message here is that Canadians are not ready for this. Parliament is not ready for this. There has been inadequate process to consider the transformative changes that are being proposed.

We would urge this committee to recommend to the finance committee that part 3 of Bill C-38 be excised and be separated and retabled, if the government deems appropriate, in a stand-alone bill.

Now, I understand it is less than likely that this government is going to move in that direction. However, both for the sake of environmental protection and also with a view to social licence going forward for Canadian industries...it's not good for Canadian businesses when environmental laws federally are eviscerated without sufficient buy-in from a number of communities. That isn't to say that the environmental community couldn't appreciate the need for amendments to the environmental assessment process and that, if necessary, we couldn't proceed with changes to the Fisheries Act. Indeed, there are changes that are needed, but the scope and the depth of the changes that are being proposed are simply unacceptable.

To go specifically to the Fisheries Act, this is at the core of Canadian environmental protection. Habitat protection through the Fisheries Act is really where environmental protection started federally, back in the mid-19th century, when the river immediately to our north was being polluted by the sawmills, the industry of the day, with all of its sawdust causing impressive losses of fish, destruction of fish habitat, and actual property damage as well. This history is well documented.

One of the key raisons d'être for the enactment of the Fisheries Act one year after the enactment of the British North America Act was to protect the environment. As a matter of historical process, the protections to the environment have only increased over the years. In particular, in 1977 the Honourable Roméo LeBlanc proposed changes that were adopted to ensure habitat protection and to ensure that deleterious substances wouldn't impact fisheries as well. So this was a progress towards greater protection.

What we're seeing with the amendments proposed in Bill C-38 is a reversal of direction, and we don't think that is in the Canadian public interest. I'd like to quote Roméo LeBlanc, then the Minister of Fisheries and the Environment, who said:

Protecting fish means protecting their habitats. Protecting the aquatic habitat involves controlling the use of wetlands. The banks of streams, the foreshores of estuaries, provide nutrients to the larger eco-system of lakes and oceans in amounts far out of proportion to their size.

The main effect of the changes would be this: for landfill, dredging, excavation, or other such projects in these sensitive areas, we would be able to examine the plans first, and to require modification or, if necessary, prohibition. Instead of accusing someone, after the fact, of destroying fish habitats, we would be part of the planning to save them.

The point of this comment is that three years after I was born, the then Minister of Fisheries made amendments to allow for habitat protection of fish, with a view to establishing a planning and environmental protection regime that would ensure we weren't trying to solve environmental problems after the fact. We are reminded of this when it seems that every month there is some other disaster that happens in this world, whether it's the Exxon Valdez spill, the BP disaster, or nuclear incidents in Japan. We're reminded constantly that better decision-making up front saves us money and ultimately is better for the economy.

What I see and what Ecojustice sees with this legislation is a return to an era when this kind of planning in advance is going to be lost, in large measure, whether it be for protection of fish habitat or environmental assessment processes that are no longer going to be done, and we're very concerned about that.

Ecojustice is extremely concerned by the provisions in Bill C-38 that would provide for ministerial regulations exempting certain water bodies and certain classes of works from the application of the fish habitat protection provisions. This has been done before. We've seen it done back in 2009 in the context of the Navigable Waters Protection Act with amendments that were also smuggled into the budget bill.

Also, we know from the ministerial order issued pursuant to the NWPA that certain types of works, such as pipeline crossings, and certain types of waters—the famous drainage ditches, but there are others as well—have been exempted from the authorization process required under the NWPA. In relation to the Fisheries Act, we're expecting that there will be regulations passed exempting these kinds of waters and these projects—like pipeline crossings—from fish habitat protection.

That's clearly not going to ensure that habitats are protected, and we have serious concerns in that regard.

I'll conclude by suggesting—and maybe for the purpose of this comment I will wear my University of Ottawa hat, as a professor there—that this government really does not have any mandate to make the fundamental amendments it's proposing in Bill C-38. The Conservative Party 2011 platform, prior to their majority election, mentioned nothing in the way of environmental law reform. We don't believe there is a mandate to make any amendments, let alone far-reaching amendments. We don't know right now whether risky activities such as offshore drilling in the Arctic or offshore drilling in the Gulf of St. Lawrence—

9:20 p.m.

Conservative

The Chair Conservative Blaine Calkins

Mr. Amos, you've already exceeded your ten minutes. Would you conclude, please?

9:20 p.m.

Prof. William Amos

Sure.

We don't know whether there are going to be environmental assessments now for such projects as offshore drilling in the Arctic and the Gulf of St. Lawrence. This is a matter of great concern. It's not about process for process's sake; it's not about consultation just to consult. We know there need to be amendments, but there needs to be an appropriate process to evaluate them.

Thank you for your time.

9:20 p.m.

Conservative

The Chair Conservative Blaine Calkins

Thank you, Mr. Amos.

We'll get to the crux of some of your questions, I'm sure, in the questioning rounds.

Mr. Bonnett, you have up to ten minutes, please.

9:20 p.m.

Ron Bonnett President, Canadian Federation of Agriculture

Thank you, and thank you for the opportunity to present to the committee. I think I've met a number of you.

Just so you're aware, the Canadian Federation of Agriculture represents farmers right across the country, representing all provinces and a number of commodity groups.

We were supportive of some of the changes that had been proposed with respect to Bill C-38 in part 3. I'm going to try to keep my comments focused on why some of these have such an impact on agriculture.

There are several acts that are changed or amended: the Canadian Environmental Assessment Act, the National Energy Board Act, the Canadian Environmental Protection Act, the Fisheries Act, and the Species at Risk Act. I will likely be concentrating most of my comments around the Fisheries Act, although the Canadian Environmental Assessment Act will also have implications for agriculture.

With respect to proposed changes in the Species at Risk Act, we don't see a major impact on agriculture from the proposed Species at Risk Act contained here. However, we understand that changes are being contemplated to the Species at Risk Act later this year and that there will be some changes that we will be commenting on at that time.

We fall under the act because agricultural activities are identified in the context of physical works. It's mainly in the case of drainage ditches and irrigation canals that we fall under it. For a long time there has been a lot of frustration in the agricultural community about the complicated, costly, and convoluted process that is in place to get approvals. We have multiple levels of authority: we have municipal governments, provincial governments, different departments, and the Department of Fisheries and Oceans, all with a role to play in not only constructing drainage ditches, but also in doing ongoing maintenance, which is necessary.

I think it's key to understand that the whole issue of drainage is so important to agriculture that it was among the first kinds of legislation put in place by provinces when they started putting agriculture into the country, recognizing that they had to get rid of excess water. Maybe, to give a better understanding, I should describe the drainage ditch life cycle. These drains in many cases are put together with a very structured process, including some environmental assessments for the initial construction.

They try to describe how the drains are going to be constructed—the standards for construction, mitigation of environmental impacts—but along with that they also have to make provision for maintenance. When most drains are constructed, they have about a 15-year life cycle before they start to fill in again and have to be maintained.

You have to get your mind around the fact that before the dirt ditches were dug there was no fish habitat there. It was basically wet, soggy land with no fish habitat in place. As soon as the drainage ditches were done, naturally the fish swam up those streams. But in order to keep the drainage working and in order to make sure that ongoing fish habitat is maintained, you also have to have maintenance take place from time to time. At any one time, as I said, one in maybe fifteen drains is subject to maintenance.

But the existing description of destruction of habitat under the Fisheries Act basically leaves an opening, at the discretion of offices at the local level, to stall projects that can have a real impact upon farm operations in making sure those drains are properly maintained.

The Fisheries Act provides for protection of the fish and fish habitat. Under section 35, the act talks about “undertaking that results in the harmful alteration, disruption or destruction of fish habitat”. Then in subsection 35(2) it allows the minister or Department of Fisheries and Oceans officials to allow for permitting of clean-outs. This is where the problem is, because the description of “harmful alteration” or “disruption” gets married with this need for permits, and that puts a whole complex situation in place whereby there are extra costs built into the system with no added value.

I think the changes they're proposing actually do give some indication of the types of things that need to be protected. They talk about the new factors, the contribution of relevant fish to ongoing productivity of commercial, recreational, or aboriginal fisheries. It talks about fisheries management objectives. It talks about whether there are measures and standards to avoid or mitigate and offset serious harm to fish. Then it talks about the public interest.

I think that will give more clarity to the minister in making decisions. I think the next step, though, is looking at the regulations that are developed. I think in some of the discussions we've had with others, the development of the regulations is something that's going to have to be looked at to make sure the intent of the changes to the act actually meet the objectives.

The changes to section 35 prohibitions are going to come in two steps. I think the first step is when the act is implemented. They look very similar to the description in place now, but one of the things that has changed is that it's not going to only prohibit works and undertakings, but it will also prohibit activities. That is the first step, when the act is put in place. The second step will occur at some point in the future, through an order of cabinet, when the existing prohibition against harmful alteration, disruption, or destruction would be changed to read “serious harm to fish that are part of a commercial, recreational or Aboriginal fishery, or to fish that support such a fishery”; “serious harm to fish” is a new concept defined as “death of fish or any permanent alteration to, or destruction of, fish habitat”. I think the key issue here is that they're removing the strict interpretation of “harmful alteration or disruption”.

If I go back to the drain maintenance issue, we know that in order to maintain one drain, you're likely going to disrupt that fish habitat during that maintenance period. However, you're actually creating habitat for the future years. But the way the act is worded right now, it leaves a situation where you have to go through a whole complicated process to get the approvals in place.

On final comment. I think Bill C-38 puts in place a process to bring improvements about how the Fisheries Act is implemented on minor works so that you don't get hung up with frustration, costs, and overlap of jurisdiction. I think there's clearly scope to improve the efficiency and effectiveness of the Fisheries Act. It has been something that has been going on for years. There is still uncertainty in how the changes will be implemented and the final impact of the regulations.

I think that's something there will have to be engagement on as the regulations are developed. I think, ideally, on drainage ditches, we should be looking at management through a stewardship approach, with clear guidelines on the best practices for maintenance in instances where they do support a fish population. Then not all drainage ditches should be treated equally, but the maintenance needs to be the main priority.

Thank you. That summarizes my comments.

9:30 p.m.

Conservative

The Chair Conservative Blaine Calkins

Thank you very much, Mr. Bonnett.

Mr. Obermeyer, for up to 10 minutes, please.

9:30 p.m.

Captain Kevin Obermeyer President and CEO, Pacific Pilotage Authority

Thank you, Mr. Chairman and members of the subcommittee.

I'm going to confine my comments today to who we are and what we do on the west coast with respect to the marine environment. We are the Pacific Pilotage Authority, one of four pilotage authorities across Canada and a federal crown corporation operating under the Pilotage Act of 1972.

Our mandate is to provide a safe and efficient pilotage service on the west coast of Canada on a basis of financial self-sufficiency. We do this by working in partnership with the pilots and the shipping industry to protect the interests of Canada.

Our area of operation extends from the Washington State border in the south to the Alaskan border in the north. As a rule of thumb, if you extend each major point around that coast by two miles and join them all together, that will be the area of operations we have as our compulsory pilotage area. Within this area, all vessels over 350 gross tonnes, about 150 metres, will require a licensed pilot. In every instance, any new projects and terminals will require consultation with the pilots and the authority to ensure that navigational safety is not compromised.

We have developed guidelines and standards for many of the more difficult passages on the coast. The marine pilots on the coast of B.C. are all masters in their own right, with many years of experience in local waters. We provide marine pilots to all vessels over 350 gross tonnes. They're a resource for the master and the bridge team, providing them with expert local assistance. They are responsible to the master for the safe navigation of the vessel while it is in compulsory pilotage waters. The exceptions to the 350-tonne rule are government vessels such as those manned by DND and the coast guard.

On the west coast there are two groups of pilots, the BC Coast Pilots Ltd. and the Fraser River Pilots' Association. The BC Coast Pilots Ltd., about 100 FTEs, are a private company—and you heard from the president earlier—that contracts its services to us through a service agreement. They cover all the coastal assignments from Stewart in the north to Victoria in the south and all ports in between. The Fraser River Pilots, of which there are seven, are employees of the authority and operate as specialists in fast-water conditions on the Fraser River from Sand Heads to Mission.

We're extremely proud of our safety record, which regularly exceeds a 99.9% success rate. In 2011 we handled 12,144 assignments and had four minor issues, for a 99.97% success rate. This success is not accidental. The exam process is one of the most stringent the candidate will face, and an enormous amount of time and money is spent on training to maintain our level of safety. In order to become a pilot, you need to pass two written exams and an oral exam with a minimum of 70% in each. The emphasis is on local knowledge. Once passed, you are placed on a waiting list until you start your career as an apprentice pilot. The apprenticeship can last from six and a half months to two years, and it involves hands-on training with a senior pilot as well as—

9:35 p.m.

Conservative

The Chair Conservative Blaine Calkins

Can you just hold for a second?

Ms. Duncan, do you have your hand up to raise a point of order?

9:35 p.m.

Liberal

Kirsty Duncan Liberal Etobicoke North, ON

I do, Mr. Chair.

I apologize for interrupting. It was brought to our attention that they want the committee to stay very strictly to part 3. The parliamentary secretary has said that the tanker traffic provision is 19(1) of the new CEAA, and that provision reads:

(1)The environmental assessment of a designated project must take into account the following factors:

(a) the environmental effects of the designated project, including the environmental effects of malfunctions or accidents that may occur in connection with the...project and any cumulative environmental effects that are likely to result from the designated project in combination with other physical activities that have been or will be carried out;

I think this is a stretch. I think this is relevant to page 98 of the budget, and it's not the budget implementation bill.

9:35 p.m.

Conservative

The Chair Conservative Blaine Calkins

We'll hear from Mr. Anderson and then Ms. Rempel on the same point of order.

9:35 p.m.

Conservative

David Anderson Conservative Cypress Hills—Grasslands, SK

Thank you, Mr. Chair.

Mr. McGuinty clearly wasn't prepared when he came tonight. Maybe Ms. Duncan should have checked a little bit deeper.

I'd like to go through the half dozen acts that impact shipping, and perhaps she can look these up as well. Part of the Environmental Violations Administrative Monetary Penalties Act, speaks specifically of ships complying with provisions and orders that are given to them. The Fisheries Act speaks of vessels regularly throughout it, including ships. It speaks of marine inspectors and their authority, and the expectation that vessel operators cooperate with them. The Canadian Environmental Protection Act, which is being amended, talks directly about the operation of ships. This may not have something directly to do with it, but also the Antarctic Environmental Protection Act talks about shipping as well. I don't think we have to deal directly with that today. The Canada Oil and Gas Operations Act, which is being amended, also addresses the issue of safety in navigable waters. Fisheries protection and pollution prevention also address issues of shipping.

I think we've got a number of places that we can talk about shipping and vessels. If you'd like me to go on, I could get into quite a bit more detail on each of those acts, and we could have that discussion as well, but perhaps we should just let the witness go ahead with his presentation.

9:35 p.m.

Conservative

The Chair Conservative Blaine Calkins

Thank you.

Ms. Rempel.

9:35 p.m.

Conservative

Michelle Rempel Conservative Calgary Centre-North, AB

My colleague stole the words right out of my mouth.

9:35 p.m.

Conservative

The Chair Conservative Blaine Calkins

Now we have theft.

Thank you, Ms. Duncan. I appreciate your point of order. I understand what motivated you to make that point of order.

It's my understanding that the environmental approval process for something like a pipeline that is going to transport oil from an origin source all the way through would involve various aspects. My understanding is that part of that approval process would be that nobody would build a pipeline to a coast if shipping wasn't part of the entire approval process. I would imagine there would be some salient points of this. The question is whether or not it's in the scope of part 3 of the particular legislation, which is what our mandate is.

Mr. Anderson has cited several passages in part 3 of the bill that do pertain, in a broader context, to shipping. I think out of interest and respect for the witness who is already here, I'm going to allow his presentation to continue. However, I will be very focused. I would ask that we focus on those relevant and salient points pertaining to the mandate the subcommittee has.

Thank you very much, colleagues, for your points of order. It was much appreciated and very helpful to the chair.

Please continue, Mr. Obermeyer.

9:35 p.m.

Capt Kevin Obermeyer

Thank you, Mr. Chair.

In the interest of time, I'm going to jump ahead slightly.

I think the question comes down to why have pilots at all. In short, it's a country's insurance against a marine disaster. By placing a pilot on the vessel, you're ensuring that at least one member of the bridge team has an in-depth knowledge of the local dangers, is not fatigued, and is a knowledgeable resource in the event that something does occur. Last, the pilot adds an additional level of safety on the vessel.

There are usually three levels of safety on every vessel. The first level of safety is the ship itself. A well-maintained, well-run ship will provide this first level. By tankers coming in as vetted, that is a certain level. The second level of safety is the bridge team, the master and the officers. A well-trained and engaged crew will provide that second level of safety. The third level of safety is the pilot himself. The bridge crew is more wary if there's a stranger in their midst, and the pilot not knowing the bridge team is just as wary. This is a positive situation, as everybody will remain on their toes.

For most vessels, that's where it stops, but where tankers are concerned, there's a fourth level of safety when an escort tug is utilized, as the escort has the ability to assist the vessel should there be a failure.

In closing, I've been with the pilotage authority for 13 years, and during this time there has only been one oil pollution incident with a pilot on board. This was a freighter that happened to be pushed back onto the dock during a squall and a piece of metal punched the ship's side. There has never been an incident involving a tanker, and we've never had an oil spill from a tanker on this coast.

Thank you.

9:40 p.m.

Conservative

The Chair Conservative Blaine Calkins

Thank you, Mr. Obermeyer.

Now we will hear from Mr. Vaughan, who has much experience in testifying before the committee, for up to 10 minutes, sir.

9:40 p.m.

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

Thank you, Chair. I hope it will be under 10 minutes.

I also hope it will be useful for the committee to refer to three past audits of relevance to the current deliberations. As you can understand, I cannot comment on any policy matters related to this discussion, so I hope it is relevant.

In 2009 we examined how the government's fish habitat policy was being implemented. We noted that protecting fish habitat was critical to safeguard places where fish spawn, feed, grow, and live, as well as to support aquatic and terrestrial wildlife and to protect the quality of fresh water for Canada's lakes and rivers.

We found that Fisheries and Oceans Canada and Environment Canada could not demonstrate that the fish habitat was being adequately protected. For instance, Fisheries and Oceans Canada did not measure habitat loss or gain. It also had limited information on the state of fish habitat—that is, on fish stocks, the amount and quality of fish habitat, contaminants in fish, and overall water quality.

We reported that past streamlining efforts to focus limited resources on projects that pose a higher risk to habitat showed little signs of success. For example, monitoring of mitigation measures by DFO was rarely done. We also reported that Environment Canada actively enforced only two of the six pollution regulations under the Fisheries Act.

Turning to our past work presented to Parliament related to the Canadian Environmental Assessment Act, in 2009 we examined the overall implementation of the act. Our findings were both positive and negative. For comprehensive studies and panel reviews we observed compliance with the act's requirements. However, various problems hindered the most common category of assessment: screenings.

Screenings are currently used to assess environmental effects for a wide range of projects. These are often small projects; however, screenings are also currently conducted for more significant undertakings such as mines, dams, and some offshore energy development projects under a certain production threshold. Although mitigation of negative environmental effects were required in over 75% of the screenings we reviewed, there was little evidence that mitigation measures were actually completed.

In the fall of 2011, we examined how cumulative environmental effects as referenced in the Canadian Environmental Assessment Act were being considered. Specifically, we examined projects in the oil sands region of northern Alberta.

The audit found information gaps over the past decade—gaps in scientific data that is needed to determine the combined environmental effects on multiple projects in the same region. These include impacts on water quantity and quality, air quality, on fish and fish habitat, as well as more general effects on land and terrestrial and aquatic ecosystems.

We noted the significant progress the government has made in announcing in 2011 a new environmental monitoring system for the region. This system would be capable of establishing baseline environmental data critical to understanding the cumulative impact of projects.

In conclusion, let me suggest some questions the subcommittee members may wish to explore in relation to the changes to CEAA and the Fisheries Act.

First, the subcommittee may wish to consider reviewing what types of projects will be included and excluded under the proposed changes to the Canadian Environmental Assessment Act, including the threshold or criteria used to establish the project list. The subcommittee may wish to explore whether certain projects now requiring a screening-level environmental assessment will be excluded from the list of designated projects to be finalized with the regulations. Examples that come to mind include offshore oil and gas projects and activities, certain mining developments, and aquaculture.

The subcommittee may also wish to identify how assessment of cumulative effects will be carried out, in light of substitution and equivalency to be handled by the provinces.

Finally, on the proposed changes to fish habitat, a general question is how the proposed focus on commercial, recreational, and aboriginal fisheries will align with assessing aquatic biodiversity and ecosystems more broadly.

Mr. Chair, that concludes my statement.

Thank you.

9:45 p.m.

Conservative

The Chair Conservative Blaine Calkins

Thank you very much, Mr. Vaughan. You came in at half time.

Mr. Jules is next for up to 10 minutes, please.

May 29th, 2012 / 9:45 p.m.

Clarence T. Jules Chief Commissioner and Chief Executive Officer, First Nations Tax Commission

Thank you, Mr. Chair.

My name is Clarence Manny Jules. I'm a former chief of the Kamloops Indian Band, and currently I'm chair of the First Nations Tax Commission. I want to thank all of you for this opportunity to make this presentation.

As you are undoubtedly aware, one of the areas that I am promoting is the first nations property ownership initiative, which this committee had supported and which was in the last budget announcement in March.

As a chief, obviously I'm very familiar with a lot of the issues that have been discussed here this evening, but what I want to focus on is the fact that first nations have to be an integral part of the economy. The sustainability of Canada's living standards, pensions, and social programs depends upon improving the productivity of first nations.

The failure of our investment market means that first nations do not share in the full benefits of resource development. Generally, about 10% of the total economic and fiscal benefit of resource development is provided through royalties. The remainder is paid out as salaries, wages, and profits, and corporate taxes paid by resource companies and their suppliers.

The inability of first nations to share in investment makes it more difficult to reach agreement on many issues and projects. First nations simply do not receive the benefit, only the costs.

We proposed solutions to this committee to address these issues: develop and pass the first nations property ownership act and develop and implement the first nations fiscal relationship.

Supporters of the first nations property ownership initiative mostly believe that the federal government's proposal to streamline the environmental assessment process will help address market failure on reserves. Parallel systems make it difficult to hire professionals, and they create the need to duplicate many procedures. They lack single points of accountability. Consequently, they often add to the administrative and compliance costs, and they may actually result in reduced standards of environmental protection and oversight.

An improved first nations fiscal relationship would amplify the benefits of FNPO. In a typical government setting, investment creates jobs, business opportunity, and government revenues. This creates capacity for improving local services and infrastructure. Improved local services and infrastructure support further improvements in the investment.

The current fiscal relationship for first nations cuts short this cycle. We can fix this short-circuit by creating clear and exclusive revenue authorities and expenditure responsibilities for all governments towards first nations. First nations need more revenue authorities that are tied to local investment successes, such as my proposal for a property transfer tax. These need to be linked to service responsibilities. Transfers need a transparent formula linked to a national standard.

I believe very strongly that if first nations are not involved in the Canadian, and therefore global, economy, you will see in the future many more “conflicts”, I guess, over resource development and expansion in the country. First nations, in order to be part and parcel of the economy, need to be part of the solution.

Thank you very much.

9:50 p.m.

Conservative

The Chair Conservative Blaine Calkins

Thank you very much, Mr. Jules.

That concludes our opening comments. We will now proceed to the rounds of questions.

From the Conservative side, we will start with Ms. Rempel, for seven minutes.

9:50 p.m.

Conservative

Michelle Rempel Conservative Calgary Centre-North, AB

Thank you, Mr. Chair.

Thank you to all the witnesses for being part of this process and being with us at such a late hour tonight. It's much appreciated, the time you've taken away from your families to be here today.

I'll start with you, Mr. Vaughan. Thank you for coming today and for your testimony, refreshing us on some of the work you've already done.

I want to speak to the oil sands monitoring project that you brought up. It's my understanding that the review you completed in the fall of 2011 did not include the oil sands monitoring framework that was announced in February of this year. Is that correct?

9:50 p.m.

Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada

Scott Vaughan

It was included in the sense that we had referenced it as a subsequent event to the period of the audit. We also included it in the perspective at the beginning of that report, where I said what I've just said now: significant progress on behalf of the government.

9:50 p.m.

Conservative

Michelle Rempel Conservative Calgary Centre-North, AB

Were you aware that since we've announced this, over the next five years it will add up to 22 new water sites, 11 new air sites, and over 7 new biodiversity sites?

In your research of the monitoring requirements related to the oil sands, would you say that it's good progress?