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

[The Chair, Conservative, Blaine Calkins]

Good evening, ladies and gentlemen. We're already a minute or so past 6:30. I have quorum at the table. We have a list of witnesses here that we need to get through.

We have Mr. Tony Maas from the World Wildlife Fund, who is the director of its freshwater program. From the National Energy Board, we have with us Mr. Robert Steedman, their chief environmental officer; from the Canadian Chamber of Commerce, Mr. Warren Everson, senior vice-president for policy; from the West Coast Environmental Law Association, Ms. Rachel Forbes, staff counsel; and from the Canadian Electricity Association, Mr. Geoff Smith, director of government relations.

We start off with your presentations for up to 10 minutes, then we will proceed to rounds of questions.

Colleagues, I've been very generous with allocating time, but we do have to consider our draft report tonight and we will probably be making sure that we end promptly when this part of the meeting is due to end.

Mr. Maas, are you prepared to go?

[Tony Maas, Director, Freshwater Program, World Wildlife Fund (Canada)]

Yes, sir, I think I am.

[The Chair, Conservative, Blaine Calkins]

I will go in the order in which I mentioned your names. That's the order that appears on our agenda.

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

[Tony Maas]

Thank you to the Chair, first and foremost, and to the members of the committee for the invitation to speak here today on part 3 of Bill C-38, the budget implementation bill.

As introduced, my name is Tony Maas. I am the national freshwater program director for WWF-Canada. We are, as I think most folks know, one of Canada's largest and oldest conservation organizations. We have staff and offices from coast to coast to coast. Importantly, our work is science based and it is solutions oriented.

I'll talk a bit about our freshwater program as context. Our overarching aim is really about protecting and restoring the health of aquatic ecosystems so that we and future generations can benefit from the many values they provide, whether that's clean water and recreational opportunities, or habitat for fish and water fowl.

With this as context, and given my area of expertise, I'm going to focus my comments primarily on changes to the federal Fisheries Act that are proposed in Bill C-38.

The Fisheries Act is widely recognized as one of the strongest legal tools that Canadians have to protect fish and their habitat, including the water that the fish depend on, water that needs to be of a quality that doesn't poison them, water that shows up at the right time and in the right quantity to maintain their habitat. This, of course, is the same water that we all drink and swim in and use in our recreation. So in addition to protecting fish and fish habitat, the act has provided an extra layer of security around the water resources that we all depend on.

Is the act and how it's currently administered perfect in my view? Well, no, actually it's not. I think there's plenty of room for improvement. But the opportunities for improvement relate largely, in my mind, to how it is applied in a management context, not to the fundamental principle of protecting fish and fish habitat—which certainly holds water today more than ever, given that the numbers of endangered fish across the country continue to grow, and pressure on our rivers, lakes and wetlands mounts.

Let me give you three specific concerns relating to the changes to the Fisheries Act proposed by Bill C-38. First is the narrowing of the act's scope to include only commercial, recreational, and aboriginal fisheries. Creating a system that is based on determining what rivers and lakes deserve protection means, by definition, that some will be left without protection under the act. Does this mean, for example, that wilderness waterways that are not presently fished by commercial or recreational interests or aboriginal peoples get left out? What about streams that are currently being restored to support future recreational fisheries? There's a lot of hard work, including work by our own organization, and dollars that go into restoring the great ecosystems with the intent of having viable recreational and sport fisheries.

So my point is that while the terms “commercial”, “recreational”, and “aboriginal” fishery are defined in Bill C-38, the complete lack of detail on what the scientific basis and decision-making process used to establish which fisheries and waters are in and which are out makes it very difficult to assess the impacts of these changes and what they will mean on the ground.

Our second concern is the shifting of the rationale for prohibition from harmful alteration and destruction of fish habitat—which I'm sure that we in this room all know as the HAD provision—to a test of serious harm defined as “the death of fish or permanent alteration or destruction of habitat”. This would shift the litmus test from a precautionary approach based on accumulated expert scientific advice concerning potential impacts of a project or undertaking to an as of yet scientifically undefined test of serious harm and permanent damage. Again, I'm not saying these new terms cannot be defined by science, but I do assert that when it comes to management and protection of natural resources, like the fisheries and the ecosystems that sustain them, a clear definition of foundational scientific concepts and criteria should proceed, not follow, legal and policy reform.

Finally, our third concern is the exemptions and delegation of responsibility. The provisions in the act that allow for the exemption of certain works, undertakings, and activities, and certain fisheries or waters have the potential to significantly undercut the important influence of scientific experts in the civil service who have the required knowledge to properly assess the impacts of a project and the sensitivities of particular habitats and waters.

On the issue of delegation, I believe there's significant benefit actually in working with provinces and territories to make implementation of the Fisheries Act more efficient, and I would observe that many delegation arrangements already exist to allow provinces and territories—and in the case of Ontario, where I live, the conservation authorities—to administer authorizations under the act. It is unclear, however, what if any additional responsibilities are contemplated for provinces and territories under the changes proposed in Bill C-38 and, more importantly, whether the provinces and the territories—and in the case of Ontario, where I live, the conservation authorities—have the capacity, particularly in these uncertain economic times, to take on additional responsibilities without additional resources.

For me, what is more concerning about the delegation possibilities in the proposed bill is the potential to also allow for delegation to industry or developers the responsibility to authorize adverse impacts on fish and fish habitat, which ostensibly is leaving the fox in charge of the hen house. Such authorization should remain in the hands of government agencies that are by definition bound to make decisions in the public interest.

I'll wrap up with a few more comments that are largely related to the process by which the changes to the Fisheries Act are being brought forward. I noted at the outset that we as an organization are solutions based. The success of our solutions is very much a product of our efforts to create and sustain diverse and often challenging relationships and partnerships that cut across civil society, government and, most importantly, often business and industry.

I believe the process by which the changes to the Fisheries Act, and for that matter, changes to environmental regulations more broadly, are being brought forward through the omnibus budget bill stands to undermine the very important progress that has been made over the last 20 to 30 years in developing strong, functional partnerships between industry and NGOs. Businesses—at least those that we have worked with—recognize the importance of ensuring and enhancing their social licence to operate.

Strong environmental laws are a foundation of this social licence to operate. They allow industry to function knowing that they have the support of Canadians because governments have ensured that rigorous protections of our environments are in place. When we erode those protections, in my view we begin to erode the potential for businesses to operate in a sustainable way in this country.

If I can leave you with just one message, it is this. Improvements to administration of the Fisheries Act do not require the significant changes to legislation proposed in Bill C-38. They are of a nature related to management functions and those can be resolved without these reforms. To that end, I would finish by urging you, the members of this committee, to use your influence to separate the reforms to the Fisheries Act from Bill C-38 so that they can be addressed in a timely but thorough manner through a reasoned multi-stakeholder and, importantly, a science-based consultation process, so that we can together work towards the goal of creating solutions to protect and restore the health of our remarkable freshwater fisheries and the habitats and ecosystems that sustain them.

I thank you for your time. I look forward to your questions.

[The Chair, Conservative, Blaine Calkins]

Thank you very much, Mr. Maas.

We now go to the National Energy Board, with Mr. Robert Steedman, for up to 10 minutes, please.

[Dr. Robert Steedman, Chief Environment Officer, National Energy Board]

Thank you, Mr. Chairman, and honourable members, for the opportunity to appear before you today and to support your review of part 3 of Bill C-38.

The National Energy Board's purpose is to regulate pipelines, energy development, and trade in the Canadian public interest. The board is accountable to Parliament and reports to Parliament through the Minister of Natural Resources. The board regulates the construction and operation of interprovincial and international oil and gas and commodity pipelines and international power lines. We also regulate oil and gas exploration and development on frontier lands and offshore areas not covered by provincial/federal co-management agreements. The NEB's regulatory oversight extends over 71,000 kilometres of pipeline that criss-crosses most of our country and approximately 1,400 kilometres of international power lines. The board does not regulate energy projects that are wholly contained within a province.

The NEB holds the companies it regulates accountable for the safety of their facilities and for the protection of the environment in which they operate. Our safety programs are designed to make sure companies are effective in managing safety and environmental protection throughout the entire life cycle of a pipeline, from design to construction, to operation, and through to abandonment.

As we audit and inspect for compliance, we look for evidence of management systems that provide a strong foundation for a pervasive culture of safety, forcefully affirmed by the organization’s leadership, rigorously documented in writing, known to all employees, and consistently implemented in the field.

The board has an advisory function under the NEB Act, and in this role it reviews and analyzes matters within its jurisdiction and provides information and advice on aspects of energy supply, transmission, and disposition in and outside Canada.

The board holds a public hearing for any application to build a pipeline over 40 kilometres long and for a variety of other energy regulatory matters. In assessing a project, the NEB considers all factors relevant to the public interest, including the environmental effects of the project.

We have significant experience in considering potential environmental effects when making our regulatory decisions, and we have been conducting environmental assessments under the Canadian Environmental Assessment Act since it came into force in 1995. In recent years the NEB has conducted about 30 screening-level environmental assessments per year. Many of these screening-level assessments were part of a public hearing. The board has conducted comprehensive studies and review panels under the CEAA, all in association with a public hearing under the NEB Act.

The National Energy Board has the mandate, processes, and capacity to conduct technically rigorous, publicly transparent, and inclusive environmental assessments for any facility we would regulate. The NEB has approximately 50 environment, socio-economic, lands, and stakeholder engagement specialists, and 40 safety and engineering specialists on staff. As a life cycle regulator, the NEB attaches environmental conditions to project approvals, which we monitor and enforce beyond the environmental assessment phase, from project approval, through construction, operation, and eventual abandonment.

Throughout the entire life span of a project, we monitor to ensure that the company is managing its project so that it is operated in a manner that is safe and secure and protects the environment. Our compliance and verification program includes such activities as audits, construction and safety inspections, compliance meetings, emergency exercise assessments, and investigations.

If we find that a company is not complying with its regulatory obligations, we use a range of tools to enforce our decisions, uphold safety, and protect the environment. These tools range from an oral request for immediate compliance to criminal prosecution. They also include orders to stop work or modify the operation of a facility.

Should proposed legislative changes be enacted, then the NEB would operate within that updated framework. The NEB would continue to conduct its independent, fair, and accessible environmental assessment and regulatory review process for major pipeline projects. We would recommend terms and conditions to make the project safe for people and the environment.

The legislative changes address the timelines for NEB regulatory assessment and provide the GIC, the Governor in Council, with the responsibility to make the go or no-go decision for issuing a pipeline certificate. The proposed timelines are consistent with the NEB’s historical performance, and tools are provided to deal with contingencies. Currently, the NEB makes a decision, but an order from Governor in Council is required before a certificate for a project can be issued. This would change so that GIC makes the decision and is not simply approving the NEB decision. Further, in situations where the NEB does not recommend approval, the analysis and recommended terms and conditions would be provided to GIC for the final decision.

Thank you for the opportunity to provide this overview of the National Energy Board's mandate and regulatory approach. I'd be pleased to answer any questions.

[The Chair, Conservative, Blaine Calkins]

Thank you very much, Mr. Steedman.

We now move to the Canadian Chamber of Commerce and Mr. Warren Everson, senior vice-president of policy.

[Warren Everson, Senior Vice-President, Policy, Canadian Chamber of Commerce]

Thank you very much, Mr. Chairman. I appreciate the opportunity to be here. I suspect, given the lateness of the hour and the number of evening meetings you've had this week, that I'm appreciating my being here a lot more than you are. But I do appreciate the committee's taking the time to hear from us and I commend you for your diligence. I've been reading the transcripts through the week and you've certainly provided the opportunity for a very vigorous debate.

The Canadian Chamber of Commerce is a big organization, the largest business association in Canada. We have more than 700 direct members and a network of chambers of commerce and boards of trade that represents nearly 200,000 businesses across the country. I mention this not to boast but just to say that in establishing our policies we have a resolution process that culminates in the adoption of resolutions at our annual meetings. I feel that we're credible, and that our resolutions represent a large constituency.

I'm going to use the short time I have for this statement to talk about context. I'm sure we'll get to the details of part 3 in our questions.

In February, the Canadian Chamber of Commerce issued a paper called, “The Top 10 Barriers to Competitiveness in Canada”. It was prepared in consultation with our membership. Very prominent among the barriers that we identified was regulatory inefficiency. We have long argued that the current federal environmental regulatory system is flawed, extremely inefficient, and has unnecessary duplication that hampers competitiveness in the Canadian economy while sometimes doing very little to improve environmental protection.

The federal assessment regime affects a very broad range of Canadian businesses in every industry in every region. It's not about one particular sector or industry. I have members in the renewable energy business who feel that they will benefit significantly by reforms in this area.

Canada needs an environmental regulatory system that accomplishes two things. First, it has to protect the environment, human health, and society. We have at the chamber a long record of environmental regulation proposals in support of environmental regulation. We see it as a cornerstone and not an impediment to business competitiveness. I hope I can be believed on that point. The chamber believes that good regulation is a solid contributor to business competitiveness. We look around the world and see that some of the most competitive economies in the world—Sweden, Switzerland, Singapore, and Finland—are heavily regulated societies. So we are not opposed to regulation, but we call for efficient and competent regulation.

Second, the system has to provide proponents and opponents with a timely and predictable process. In this regard, the current system is clearly failing and failing quite badly. In 2011, the World Economic Forum listed an inefficient bureaucratic process as the most problematic factor in doing business in Canada. If we were setting out to design a review process from scratch, I suspect that nobody would design the system we have in Canada today—two sovereign governments with equal authority, both conducting an assessment of the same project independently, usually without any cooperation between them.

In the submission to the CEAA review this winter, the B.C. government attacked the inefficiencies of having two separate information registries, two different public consultation requirements, two different technical reports. B.C. noted that it had ruled on 115 environmental assessment certificates under its own act since 1995, and in 50% of those cases an environmental assessment was also triggered. In one of those cases, the federal government assessment disagreed with the province. This is a very ludicrous and wasteful situation. As parliamentarians, you have an opportunity to fix it.

It isn't only proponents who are protesting. In a submission to the same CEAA review, Jamie Kneen from MiningWatch Canada called the current system a “dog's breakfast”. He said, “This makes the public and the community groups ask why they should bother and why they should go back to this if the process is going to be that inconsistent”.

This is a point I often make in speeches that I give to the chamber network. Opponents to projects are very often community groups with limited funding. They are often using volunteers. Long, drawn-out proposal assessments are not in their interest either.

In addition to the incompetence of the administration of the act, there's the uncertainty. Toby Heaps at Corporate Knights wrote in February that:

There are several barriers to building a clean energy pan-Canadian highway with multiple north-south chutes, but the biggest one is red tape. New grid roll-outs are so bogged down in red tape that the timescales would test the patience of the pharaohs who used to build pyramids – whoever starts a project is unlikely to be alive by the time it comes to fruition.

This is not a situation that we can live with as a country. The implications of inefficiencies spread out in all directions.

I'm sure everybody here is conscious that oil and gas represents 27% of the capitalization of our stock market and that more than 40% of the issues on the stock market are mining stocks. There are an awful lot of people who don't care whatsoever about those industries, but whose personal wealth is nonetheless deeply leveraged against our success. They may not know that their public pensions, their private pensions, and their retirement plans are being supported by the success of the natural resources industries, but you know it here in Parliament.

I saw that you also heard testimony this week from the American Federation of Labor. Chris Smillie was here. He talked about how uncertainty rolls back into training and into worker preparation. At the chamber, we're running a major skills project this year. We constantly hear from the community colleges about uncertainty. They cannot offer training programs until they know that there's a reasonable chance their students will be employed. So they wait, and they wait, and they wait, and while they're waiting, generations of students come through, take a look, see what's offered, choose other careers, and move off. It's a very unfortunate situation, and one that Canada cannot actually sustain for very much longer because of the need that we have for workers.

Tens of thousands of businesses in our membership share that same story of uncertainty damaging their prospects, suppliers, engineers, transporters, and builders. None of them are calling for weak regulation; all of them are calling for better regulation.

Thank you very much.

[The Chair, Conservative, Blaine Calkins]

Thank you, Mr. Everson.

We now move to Ms. Rachel Forbes of the West Coast Environmental Law Association, for up to 10 minutes.

[Rachel Forbes, Staff Counsel, West Coast Environmental Law Association]

Thank you for having me here this evening.

I am representing the West Coast Environmental Law Association. We are a B.C.-based environmental law, advocacy, and analysis organization. We are one of Canada's oldest environmental law organizations and have been providing legal support to British Columbians to ensure that their voices are heard on important environmental issues. We have worked to secure strong environmental laws in B.C. and throughout Canada for decades. West Coast Environmental Law was actually involved prior to during the drafting of CEAA when it was enacted. We have had a role on the environment and planning assessment caucus for years, as well as on the now defunct regulatory advisory committee. We have been actively involved in this round of review, repeal, and now replacement of the Canadian Environmental Assessment Act since the standing committee's review back in the autumn.

I don't want to be repetitive. I know you have heard a lot of submissions over the last few days. I'm going to start by saying we would also endorse the submissions of some of the other witnesses you have heard from, including MiningWatch Canada, the Assembly of First Nations, Ecojustice, and World Wildlife Fund Canada. There are others we would probably agree with in part.

I want to focus here on three different issues. We actually have one main recommendation for the committee. Then, being lawyers, we have a bunch of alternatives if the committee doesn't want to accept that one. I understand the four pillars of the government's responsible resource development plan are to create more predictable and timely reviews, less duplication in reviewing projects, strong environmental protection, and enhanced consultation with aboriginal peoples. We would also support those as part of a robust regulatory regime for environmental assessment and environmental regulation writ large. However, we don't think that part 3 of Bill C-38 accomplishes any of those, and we think that in some cases it actually hinders them.

We think that part 3 will actually result in weakened protection for fish and species at risk. An entirely new and actually less comprehensive environmental assessment process will see the federal government retreat from a strong role and smart regulations, not just from a lot of regulation. We think there are broad and seemingly unchecked decision-making powers given to cabinet and to ministers, which will result in less accountability and fewer opportunities for public participation and public oversight.

Can we still work towards those four goals that we all seem to actually agree on at the core, but which we have different ways of getting at philosophically? Yes. We think doing so would actually require a significant shift in the legislative process that is under way right now and a complete rewriting of part 3, and that goes to our first recommendation. It probably isn't a shock to anybody that we would hope the subcommittee would recommend to the finance committee the removal of part 3 in its entirety from Bill C-38. We would recommend conducting further scientific, factual, and legal studies and having fulsome, open consultation on amendments to the environmental assessment aspects of it, as well as on other environmental regulation, including that on fisheries and species at risk. That would include contemplated regulations, schedules, and other information that neither the public nor parliamentarians, to my knowledge, are privy to at this point.

After such study and consultation is complete—which in fairness I think would take months, not a couple of weeks—stand-alone bills could be introduced in the House and could go through a proper, legitimate process that actually gives people faith in the process and legitimizes it, regardless of what the actual contents of the bill and the act are. I think the process here and the review of CEAA that has gone on are flawed. Jamie Kneen touched on this the other night when he talked about referral to standing committee for a review, the process that happened at the standing committee, the dissenting reports from that, and then a lot of rhetoric that has ended up in a whole repeal and replace which is smushed into a budget bill where it doesn't belong. I think we need to step back and actually do this properly, regardless of what the content is or what one would say about that.

We believe that's the only way to ensure that the proposed new legislation is reviewed and modified in a fact-based, scientifically, legally defensible way. I know that some members of this subcommittee have spoken about the desire to move away from talking points and rhetoric in drafting a report. I would certainly endorse that. I worry that there's actually a lot of facts, science, and law missing right now that would hinder one's ability to write such a fact-based report. I talked about missing regulations and missing schedules. We haven't heard a lot about how this is actually going to be implemented, and I think that if and when it is implemented, it's going to lead to a lot of uncertainty. People have talked about that as well in terms of what this means on the ground to proponents. What does it mean to the public? What does it mean to first nations? Timelines are uncertain, the process is uncertain, public servants are probably uncertain, so I think things need to be thought out a little bit more thoroughly.

Should the subcommittee not take on our first recommendation, we would, as the alternative, ask that part 3 at least be delayed until regulations and schedules can be produced and people can review them properly. I think the one regulation that no one's heard anything about, the project list regulation, is really pivotal to understanding the legal, scientific, on-the-ground, economic and profit implications of the rest of this new act. It would really be a shame to see it introduced at the last minute and just thrown in without any consultation on it.

Related to this, another recommendation aims at increasing the transparency and accountability of the process. Just last year the Government of Canada signed onto the open government partnership, an international partnership to adhere to accountability, transparency, and open dialogue on controversial issues. While they have made some progress on that in terms of freedom of information, there's been a lot of things in this process, in reviewing and revising environmental regulation, that have flown in the face of that. Again, to put faith in the process, both from an environmental organization and a lot of proponents' perspectives, clearly, this proposed legislation is creating a lot of controversy. A lot of people are interested in it. We need to know more about it and where it's coming from, why it's so urgent. If it is so urgent, why weren't we doing it before when we were doing the review of CCEA?

Finally, our other main recommendation is that in drafting any environmental assessment and environmental regulation legislation, it should take account of the top ten principles for strong environmental law that West Coast Environmental Law and some of our partners released in February. These include things like smart regulation. We released the principles in February because we knew that changes to environmental assessment were coming. We are currently in the process of creating a report card for this bill and whether or not it matches up to those principles. Not surprisingly, we don't think it does, but we do think that working towards those principles—those are public participation, increasing the legitimate role for aboriginal peoples, and the sustainability approach.... In fact, the sustainability approach is a key one, because we see a lot of compartmentalization in the new CCEA 2012 and not a lot of understanding or respect for the fact that we live in ecosystems that are connected. That's not just in CCEA 2012, but in the rest of the bill as well.

You'll see in my written brief that we actually have ten recommendations that are small amendments to the existing part 3 of the legislation that we would like to see made if that part is goes forward. It's things like allowing the National Energy Board to retain its independence, rescinding proposed amendments to the Fisheries Act, and going back to the drawing board with those. It also includes some things about species at risk, permits, and retaining the current triggering approach for environmental assessment rather than going to a project list. There are some other ones in there.

I think I'm probably running out of time No? I can keep going. All right.

[The Chair, Conservative, Blaine Calkins]

You have 15 more seconds.

[Rachel Forbes]

Furthermore, you should include timelines in the environmental assessment process that hold proponents to a predictable, certain timeline, not just that other people who are participating in the process. I think that's a huge problem. From our perspective, it's often the proponents, when they're needing to provide more information or asking for delays, who cause delays in the process and we'd really like to see those kinds of timelines, if they're going to be out there, applied equally to all parties.

[The Chair, Conservative, Blaine Calkins]

Thank you, Ms. Forbes.

Our final presentation is from Mr. Geoff Smith from the Canadian Electricity Association.

Mr. Smith, I believe you will be doing the first part of the presentation. Then Mr. Terry Toner will come to the table to finish and take questions.

You have up to 10 minutes, please, Mr. Smith.

[Geoff Smith, Director, Government Relations, Canadian Electricity Association]

Thanks, Mr. Chair.

We often talk about natural resources being the backbone of Canada's economy, but rarely discussed is the central role that electricity plays in our daily lives. Every day CEA members generate, transmit, and distribute electricity to industrial, commercial, residential, and institutional customers across Canada. The energy we make, move, and sell is essential to our homes, hospitals, airports, and businesses, including needed power for resource development.

Founded in 1891, CEA's membership includes publicly- and investor-owned major electric utilities across the country, provincial system operators, power marketers who trade and sell electricity, and more than 40 companies representing various aspects of the electricity value chain. This includes technology providers; manufacturers of electricity meters, cables, and transformers; and representatives from the legal, financial, construction, and consulting fields.

While the integral role of electricity in our society seems fairly obvious, most Canadians take the convenience and reliability of our product for granted. That is likely a result of our industry's excellent record on reliability, of which we are very proud. You flip the switch and there it is.

Even lesser known are the attributes of our actual electricity grid in Canada. If you can just pretend for a moment that I'm Alex Trebek and it's time for final Jeopardy!, today's topic is electricity. Your clue: this percentage of Canada's electricity is generated from non-emitting sources. The answer is that over 80% of Canada's electricity today is generated from non-emitting sources such as hydro, nuclear, and increasingly from renewable sources such as wind, solar, and tidal.

As we move toward the future the demands placed upon our sector will result in innovation and cleaner use of fossil fuels, and extensive construction of other generation including natural gas, wind, solar, tidal, and other distributed generation—of course, all matched with enabling transmission and distribution infrastructure. Additionally, electricity will play an assisting role for other sectors that are also reducing emissions. I'm talking, of course, of electric vehicles and the transportation sector being a great example.

In addition to all of that, our reliable but aging electricity system, the grid itself, requires replacement and renewal. The Conference Board recently released a report projecting that $347 billion in investment will be necessary between 2011 and 2030. It's somewhat fitting that the significant investment in and transformation of our electricity system and its infrastructure is paralleled by the modernization of federal environmental legislation taking place today and through Bill C-38.

Individual CEA members are focused and committed to a vision of sustainability that includes environmental, societal, and economic considerations as part of a holistic approach to managing impacts. CEA's sustainable electricity program is the embodiment of this approach. It's a mandatory sector-wide sustainability initiative that measures performance in all three areas of sustainability. It is externally verified and guided by a public advisory panel comprised of several distinguished Canadians and chaired by the Honourable Mike Harcourt. The program is just one reflection of the commitment by CEA members to provide electricity to Canadians in a sustainable manner.

Our appearance today at the subcommittee is a suitable bookend to our presentation to the finance committee back in September. As part of pre-budget consultations we outlined some recommendations to the Environmental Assessment Act, the Species at Risk Act, and the Fisheries Act to help enable investment in the renewal of our system. That brings us to the changes we're discussing today in part 3 of Bill C-38.

I'm joined by Terry Toner. Terry is the director of environmental services for Nova Scotia Power, which is an Emera company. He chairs our CEA stewardship task group and is the vice-chair of several working groups we have with our friends at the Canadian Hydropower Association that focus on the Environmental Assessment Act and the Species at Risk Act.

I will call on Terry to join me to go into a little more detail.

[Terry Toner, Chair, Stewardship Task Group, Director, Environmental Services, Nova Scotia Power Inc, Canadian Electricity Association]

Thank you.

Since the inception of the Canadian Environmental Assessment Act, the world, the economy, society, and environmental legislation and policy have changed considerably. Provincial governments have refined their laws and regulations not only to address emerging issues but also to make the review processes more nimble.

The federal government has added the Species at Risk Act and numerous policies, including wetland policy. At the staff professional level, the government has developed appropriate tools such as a risk management framework, an ecosystem approach, and many best practices and standards to manage day-to-day work. However, until Bill C-38 was introduced, federal law had not kept pace. Duplication of process and unnecessarily long timeframes introduce costs, delay, and uncertainty, with limited additional environmental benefit.

In some cases, regulatory approval processes, combined with construction periods, have totalled more than 10 years from project initiation to grid connection. Of those 10 years, approximately four years are spent in the federal EA process. Delays often take place before a review has even begun. Under the current system, it can take a surprisingly long amount of time to mobilize federal officials from the various agencies and departments that are required to be involved, and for them to decide whether they're going to participate at all, and if so, to provide early input such as terms of reference for an assessment.

The changes in part 3 of Bill C-38 represent a major step in the direction of having the right process evaluating the right project. The term “fit for purpose” comes to mind. Clarity of who leads the major environmental assessments has been achieved, and consistency among the process leaders—the Canadian Environmental Assessment Agency, the NEB, and the Canadian Nuclear Safety Commission—has been improved. Subject to defined criteria, review under provincial process is also possible under certain circumstances, and where it makes sense. And the new focus on larger project EAs within the federal jurisdiction will focus resources more appropriately and on projects of national interest. Existing acts can be used for many of the more straightforward projects, for example, the Fisheries Act.

The efficiencies realized by the changes in Bill C-38 will in no way diminish the efforts and actions of the Canadian Electricity Association's member companies in protecting the environment throughout project design, construction, and operation. In addition, public consultation is essential and an ongoing exercise for electricity companies, and it is an important element of the project approval process. Our companies already engage the public on potential projects before any federal or provincial reviews have even been initiated. The very nature of our business has created a culture of consultation. Almost everything that an electric utility does requires some element of public consultation, from rate applications, to integrated resource planning, to simple day-to-day consultation and interactions with constituencies and our customers. We want to make sure that we are getting things right.

The CEA, in concert with the Canadian Hydropower Association, has identified a few areas where the process can be further optimized, either within the bill or in subsequent regulations. Two examples would be better alignment between the EA conditions and those of downstream authorizations, and the ability for the minister to amend conditions in a decision statement to reflect new information that might come to light.

With regard to Bill C-38's changes to the Fisheries Act, the CEA believes that the changes are positive in that they do the following things: they retain a strong focus on protection of fish and fish habitat; they focus DFO efforts more toward commercial, recreational, and aboriginal fisheries, the original intention of the act; they provide mechanisms to take full advantage of best practices and standards; they place an emphasis on more holistic management, looking at permanent harm and an ecosystem approach and overarching fisheries management objectives; they also introduce the concept of ecologically sensitive areas, a positive step toward protecting those areas that are in the most need; and they encourage partnership and innovative thinking.

We look forward to the opportunity to engage in the development of regulations that will implement these changes. CEA members are in unanimous agreement that the proposed changes in part 3 of Bill C-38 to the Canadian Environmental Assessment Act, the Fisheries Act, and the Species at Risk Act, have the potential to greatly improve regulatory processes for existing electricity operations and to improve approval timelines for projects in development.

[The Chair, Conservative, Blaine Calkins]

Thank you very much, Mr. Toner.

We will now proceed to the question and answer portion. We'll start with our first round. Members will have up to seven minutes for their questions and answers. If we can get the witnesses to keep their remarks brief and concise, we can have as many questions and answers as possible.

We will start now with Ms. Ambler, for up to seven minutes, please.

[Stella Ambler, Conservative, Mississauga South, ON]

Thank you, Mr. Chair, and thank you to all of our witnesses for appearing here this evening. My questions are for Mr. Everson.

Chambers across the country have been very supportive of this legislation and of our responsible resource development plan. Why is it so important that we act now to improve Canada's regulatory system in order to attract investment and see resource projects move ahead safely in the years ahead? In other words, when major projects are stuck in an inefficient regulatory system, what is the impact upon job creation and economic investment?

[Warren Everson]

That's what we used to call a leading question.

[Stella Ambler, Conservative, Mississauga South, ON]

Indeed it is.

[Warren Everson]

I think all of the people who have supported the legislation have made the point that delay in an answer, on an assessment in particular, is destructive of investment opportunities, employment, and development, whether the answer is yes or no.

I don't believe we want to say that a project should go ahead if it's destructive of the environment, but the longer a delay occurs, the more the market finds some other place to invest its money, either somewhere else in Canada or somewhere else around the world.

I think you heard testimony from the hydroelectric association pointing out that the process to approve a hydroelectric development typically takes up to four years, and in that time investors can go into other forms of energy generation—maybe less clean energy generation—and invest their money there.

Obviously we believe that, especially now, Canada has a remarkable opportunity to exploit its natural resources successfully and professionally, and that this is a requirement for our economy.

[Stella Ambler, Conservative, Mississauga South, ON]

In fact, the president and CEO of the chamber, Perrin Beatty, identified, as you did tonight, regulatory inefficiency as one of the top 10 barriers to Canadian competitiveness. He talked about drawn-out, duplicative reviews, which are, he said, bad for everyone.

I'd like to also ask you whether, as part of a national organization, you would agree with my colleagues opposite that when the economy in western Canada is doing well, it must necessarily be to the detriment of central Canada's economy? Or would you agree that the abundance of natural resources from coast to coast to coast means that investment in resource projects can benefit many or all regions and many sectors of the Canadian economy?

[Warren Everson]

I certainly agree with the second part of your question.

I think that one of the challenges Canada has is adjusting to how very significant the oil and gas industry has become in our economy. I calculate that it's almost twice as large now as the auto industry. I think it's relatively easy for us in eastern Canada to think of it as a western phenomenon, but the more I learn about it, the more I realize that the implications of that industry are being felt all across the country, in every line of work.

One of the ones I mentioned is that there is a huge preoccupation of our membership with human resources and skills. There aren't enough people in western Canada to service just those industries, let alone all the other industries that are supported by it. So an entire national agenda, a national strategy around manpower related to natural resources, is appropriate.

But I also want to make the point—and I'll keep my answers shorter in the future—that I was in Newfoundland a couple of weeks ago. It was an under-employed province for all of my life; now it's an over-employed province. They have massive natural resources projects that are going to make it possible for the province to be entirely employed and will require many immigrants.

In P.E.I., one of their major plans is to move to wind energy in a very big way—I think it's up to 40%. And there are oil and gas developments all over the east coast.

There's the Ring of Fire, the Plan Nord, there's no part of this country that is not heavily involved in effective and efficient exploitation of natural resources.

[Stella Ambler, Conservative, Mississauga South, ON]

Thank you. I appreciate the examples. I'm sure you could give many.

How would you describe your stakeholders' commitment to caring for Canada's great environmental endowment?

[Warren Everson]

The chamber network, representing all the chambers and boards of trade across the country, routinely produces quite a bit of policy on environmental protection and the sanctity of environment. I think the organization generally reflects Canadian values, that you don't get a do-over when you are assessing environmental impact.

I can't think of a business client who has come to us and said we need weaker regulation. The frustration is almost always with the operation of the regulation.

[Stella Ambler, Conservative, Mississauga South, ON]

How would part 3 of Bill C-38 affect your stakeholders' ability to do business and create jobs?

What I'm getting at is to ask whether there is a downside. Or is there a part of the legislation that you think is really great in terms of your stakeholders' ability to create jobs? I'll stop there.