Subcommittee of the Standing Committee on Finance on Bill C-38 Committee on May 31st, 2012

[Anne Minh-Thu Quach, NDP, Beauharnois—Salaberry, QC]

Thank you, Mr. Chair.

Thanks to the witnesses for being here.

I would like to ask Mr. Maas some questions. We are talking a lot about the impact of Bill C-38 on environmental assessment. Under this bill, responsibilities would be delegated to the provinces on the ground that there is duplication. However, the Canadian Environmental Assessment Agency has told us today, through an internal document, that there is in fact no duplication.

In that case, what risks would be incurred? The federal government is transferring these responsibilities to the provinces when there are no uniform standards. This causes a lot of predictability problems. What do you think about that?

[Tony Maas]

Well, my crystal ball is as good as anyone's, so I can only speculate, of course.

Specific to the Fisheries Act, it's important to recognize that there are many, many agreements already in place between the provinces and the federal government around how the federal Fisheries Act is administered, and likewise for conservation authorities.

The question that arises for me is two-fold. One, when considering further delegation to the provinces, there may be questions around the legal authority, the constitutional authority, of provinces to manage fisheries, because that is a federal constitutional responsibility.

From a much closer to the ground perspective, as I said in my opening remarks, there are some very serious issues of resources, whether in the private sector, in the sector that I work in, or in the government sector.

As responsibilities shift, I would feel much safer and more compelled by those changes, if there were some analysis of the degree to which gaps exist in terms of the capacity to respond and protect water resources in fisheries, and some indication of where the resources will come from to fill those gaps.

[Anne Minh-Thu Quach, NDP, Beauharnois—Salaberry, QC]

Thank you.

I will continue. There could be resource-related risks, that is to say risks of potential contamination, since we would be letting the provinces manage that or letting the industry manage itself, which is completely senseless.

How could that negatively affect the economy? People do not stop saying that you have to be productive, you have to be competitive, but if we exploit all the resources any way we want, what will be left of them in three generations? Will people still be healthy? How can that affect the economy?

[Tony Maas]

Again, the answer to the latter part of your question is that it remains to be seen.

As an organization, we are very willing to engage in a constructive conversation about how to improve the effectiveness and efficiency of administration of the federal Fisheries Act. But as I said in my opening remarks, I see no reason for the rather sweeping changes.

One of the key challenges I have in understanding what might come to pass, or even speculating on it, is that there are so many undefined terms. While recognizing there's a regulatory process to follow and a commitment by Minister Ashfield to engage and consult with stakeholders—in a written statement, I believe, that he made—it's very challenging to even begin to wrap one's head around, particularly in the very short timeframes that are being proposed, complete definitions of terms that are not common in the current framework around fisheries management, such as “serious harm”, “permanent damage”.

It's a new game. As I said in my opening remarks, I have every faith that the scientific community would be willing to tackle that question, our organization included, but I think those definitions should precede enactment into law.

[Anne Minh-Thu Quach, NDP, Beauharnois—Salaberry, QC]

I have one final question, which concerns the Fisheries Act. The government eliminated more than 1,000 positions at the Department of Fisheries and Oceans this week. We have also learned that toxicology specialists, who are responsible for monitoring pollution in waterways, will be laid off or relocated.

Do you believe that Bill C-38 will help protect these lakes and rivers or that it will exacerbate the situation? What should this bill contain to improve the situation?

[Tony Maas]

I'm a member, in another kind of side gig, if you want to call it that, of a group called the Forum for Leadership on Water, or FLOW for short. In 2007 we released a report called Changing the Flow that identified, even at that point, the declining trend over the last two to three decades in the scientific capacity of the federal government to monitor and undertake scientific research. The recent reductions in DFO staff and staff in other agencies is just a further slide in that direction, raising significant concerns about the role that science can and should be playing in making these decisions.

[The Chair, Conservative, Blaine Calkins]

Thank you, Madame Quach. Your time has expired.

We now move on to Mr. Allen, for up to five minutes.

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

Thank you very much, Mr. Chair, and thank you to our witnesses for being here.

I'm going to focus my questions on the Canadian Electricity Association. I would like a clarification, following up on one of Mr. Anderson's questions.

Mr. Smith, you said in your opening remarks something about how you put your suggestions with respect to changes in the regulatory process as part of the pre-budget consultation. Was that part of a round table? Was that in a brief submitted to the finance minister or the online system that all Canadians had access to?

[Geoff Smith]

It would probably have been all of those. We take advantage of every opportunity available to the public and, of course, we pursue meetings with ministers' staff and parliamentarians at all levels and with officials. So if we have an opportunity to feed in our recommendations, we try to take advantage of and use that opportunity.

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

Thank you very much.

Mr. Toner, you talked about $347 billion of investments in energy assets that have to be made between 2011 and 2030 to address some of the aging energy infrastructure and those types of things, and you said that right now, it's 10 years from initiation to grid with some of these projects.

With that in mind, can you give me some examples of how this has played out under the current legislation. What I'd specifically like to understand is that if we don't have better, smarter regulation, what is going to be the impact on our electricity grid and the aging infrastructure?

The second part of that question is do you see any less rigour under this legislation than you now see to approve projects?

[Terry Toner]

I'll answer the second question first, which is simply that we don't see less rigour. Of course, people can interpret it as they see fit, and we don't predict that we're going to do anything less rigorous in terms of meeting our responsibilities, balancing social, environmental, and economic concerns.

As we outlined in our brief, it's a very important direction in consultation with stakeholders and also engaging with first nations well in advance. All of our companies are doing that in an attempt to do the very best we can to accelerate the possibility of reaching solid agreements, even before the processes come to the regulatory forum—and that is a common practice that we take. So industry has done that. We think it's the right thing to do.

The consequences in terms of the changes that we're going to have to undergo as a sector could be significant. Large projects, obviously, gain most of the attention but there are many medium sized and smaller projects that make up the day-to-day work that has to take place. Getting the process aligned so that the right amount of review is taking place, and indeed that we do engage with good science people and that people have a chance to bring forward their concerns and issues, we're in favour of, but we think that given the number of projects to replace some of our aging transmission across the country.... We've seen examples in the last few years of problems that have occurred there, and getting permission to do transmission projects is one of the challenges that we face. But dealing with the replacement of our fleet to address environmental air emission requirements is also going to cause a fairly substantive change in the type of generation that we have.

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

If the timelines continue the way they are, do you see any risk to our existing infrastructure grid and the stability of our electrical system?

[Terry Toner]

We do see risk and, as the previous speaker said, risk is a hard thing to assess. We assess it every day in terms of the reliability of our system, and across some of our major utilities in the country there's a tremendous amount of infrastructure that has been in place for a long period of time. A six or 10-year period to get those projects moving forward would put that at risk.

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

When you look at your membership and the membership profile, how many of your members are private investor utilities and how many are crown corporations such as NB Power, or Hydro-Québec, or others? Can you give me a rough number? The reason I'm asking you that question is that when you look at the process for approvals, we want to make sure that it's one project, one review, and there's the possibility of some of this going to the provinces.

Do you see—and I ask this question of hydro power—any potential for a conflict with the province being responsible for its own review of an electric utility that is a crown utility?

[Terry Toner]

The first question you ask is what type of membership makeup we have. Obviously several of our members are crown corporations—BC Hydro, Manitoba, Saskatchewan, New Brunswick, OPG, and parts of Newfoundland—but there are also a number of us that are privately held. Nova Scotia Power would be one, and many of the utilities in Alberta, and some of the other utilities across the country, Fortis, for example. So the answer is that we have a mixture.

We don't see a difficulty with the provincial government’s having a substantive role in these projects because today, on many projects, we take them through processes that are controlled by the province. The provinces have robust legislation and we follow that. We think we develop good, safe, and environmentally responsible projects.

[The Chair, Conservative, Blaine Calkins]

Mr. Allen, your time has expired.

Mr. Nicholls, go ahead for five minutes, please.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Mr. Everson, you cited the World Economic Forum report on competitiveness. I know it well. You also cited regulatory overburden as the main problem for Canada's competitiveness.

I want to point out to the committee that this is drawn from an executive opinion survey part of the report. It's based on perception and not science. It has a sample size of only 98 people from an online survey.

Now a quote in the main body of the report on Canada's competitiveness says that the main challenge is this:

As we have noted in recent years, improving the sophistication and innovative potential of the private sector, with greater R&D spending and producing goods and services higher on the value chain, would enhance Canada’s competitiveness and productive potential going into the future.

Would you agree with this section of the report? Just a simple yes or no would do.

[Warren Everson]

Absolutely, I agree.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Thank you.

So, given that many of the large oil development projects entail the export of raw resources rather than value-added products, this seems to be an especially misguided strategy to increase our competitiveness.

Would you agree with that, Ms. Forbes?

[Rachel Forbes]

Sorry, that the current strategy is misguided?

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Given that competitiveness shows that value-added is better, wouldn't you say that the current strategy of exporting all our raw materials outside of the country is misguided?

[Rachel Forbes]

Yes, and I do think it's a very short-term strategy. I think that part 3 ignores long-term costs, which is part of the problem with it.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

I want to return to an issue that Ms. Rempel seemed to misunderstand from your previous response. I understood you to say that there are timelines in CEAA 2012 for everyone except the proponent.

Why is this a problem?

[Rachel Forbes]

It's a problem because it's not applied fairly. I still think that's an area of uncertainty. It doesn't allow the public, first nations, or, potentially the civil servants involved in the process, the same certainty as it allows proponents.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

I want to return to the subject of pipelines in view of this idea of value added versus raw exports. If these projects are going to be fast-tracked, there might not be the proper consultation with first nations groups, with ordinary citizens, and even with economists. Economists might disagree with these projects because the projects might be lacking sound economic principles in the long term, as you mentioned. And because the power is passing to politicians rather than scientific bodies, these misguided principles might lead to decisions that override NEB decisions.

This is a problem, is it not, Ms. Forbes? The power is being taken away from the scientific body and given to politicians and cabinet. Can you elaborate on the problems this poses?