Finance Committee on May 11th, 2010

[The Chair, Conservative, James Rajotte]

I call to order meeting number 18 of the Standing Committee on Finance. We are continuing our examination of Bill C-9, an act to implement certain provisions of the budget, tabled in Parliament on March 4, 2010.

We have two panels before us this afternoon and evening. I want to welcome all the witnesses and thank them for coming in today. We have six organizations here with us. We have the Canadian Environmental Law Association, the Green Budget Coalition, MiningWatch Canada, the Canadian Union of Postal Workers, and Ecojustice Canada. We have by teleconference from Calgary the Alberta Wilderness Association.

We have five minutes for an opening presentation for each organization and for logistics. We'll start with the Alberta Wilderness Association.

Ms. Kwasniak, can you hear me?

[Arlene Kwasniak, Representative, Alberta Wilderness Association]

Yes, I can.

[The Chair, Conservative, James Rajotte]

Can you begin your presentation? You have five minutes for an opening statement, please.

[Arlene Kwasniak]

Okay. Thank you. I wasn't expecting to go first, but here we go.

Thank you for this opportunity to connect remotely. I represent the Alberta Wilderness Association, which is the oldest conservation organization in Alberta, dating back to 1965. We promote wilderness, wild lands, and ecosystem protection generally, so of course environmental assessment is very important to us.

We'd like to stress the importance of strong, effective, federal environmental assessment in Canada. The federal government has exclusive constitutional legislative jurisdiction over a number of heads, including our fisheries, navigation, oceans, and others. If the federal government doesn't appropriately assess projects that impact these heads of power, no other level of government can constitutionally do it. So it's really important that the federal government keep its very strong role in environmental assessment.

I'd like to say that what is happening now in Bill C-9 and some other events that preceded it in the last couple of years is defying a long tradition of legislative requirements and general comprehensive consultation for the CEAA and its regulations and policy.

I'd like to highlight a couple of things, and they're all set out in my brief. The CEAA took five years to develop. Obviously the government considered it to be very important legislation that impacted people, the environment, and the whole face of Canada. That is why it had such extensive consultation. The government formed the regulatory advisory committee, which advises the federal minister on CEAA matters. It was very instrumental in developing the key regulations under the CEAA, and has worked for several years to assist the government in the development of regulations and policy.

The first five-year review took three years, because it took that long to make sure the act was properly reviewed. The second review is scheduled to happen later this year. The act itself requires a comprehensive, substantive review of the provisions of the act.

I would like to suggest that there has been a recent demise in consultations having to do with the CEAA and an avoidance of the legislative requirement for consultations for substantive changes. This is very clear in the budget implementation bill of 2010.

In my brief I lay out a number of events prior to this budget bill, but I'm going to leave it to you to look at them, because I certainly don't have the time in these five minutes. I want to go right to the budget bill itself, because a number of destructive substantive changes to CEAA are buried in this bill.

For example, proposed section 15.1 would give the environment minister the right to slice and dice projects so that only one component was assessed. This provision completely undermines the potential application of the act and could result in significant environmental impacts not being assessed and mitigated. It will certainly diminish public participation. It also overrides a recent Supreme Court of Canada case that says a project is a project is a project, and the CEAA requires the assessment of projects, and not bits and pieces of them.

Finally, this provision opens the door for uneven and unfair application of the CEAA. There are no statutory conditions governing the exercise of the minister's discretion, except that the minister must set some conditions, whatever they might be. So I think that all interested persons, including regulated industry, should be very concerned about this.

There are also provisions that exempt most Building Canada plan projects from environmental assessment. These provisions, which are currently in the exclusion list regulation, have been challenged by the Sierra Club of Canada. Curiously, this bill purports to put these exclusions in the act, making that part of the challenge moot.

The exclusion list regulation can only, by the act itself, include projects that are known to have insignificant environmental effects. It's clear that this list of Building Canada plan projects could have any range of environmental impacts, so they certainly don't belong in the exclusion list legislation.

The addition to the act gets around that problem, but what it also does is completely undermine the logic and coherence of the CEAA. The CEAA requires that a project that triggers the act because there's a federal interest in the project be assessed no matter what its environmental impacts are, unless it's on the exclusion list. Putting this exemption in the act completely undermines that. Also under the act, the level of assessment depends upon the level of environmental impacts.

I'm done?

[The Chair, Conservative, James Rajotte]

We're getting close. Could I ask you to wrap up very briefly?

[Arlene Kwasniak]

Okay.

I just wanted to finally say that an omnibus budget bill is really no place for such amendments. There's been no public stakeholder and aboriginal consultation. There could be environmental degradation and impacts on human health through the lack of environmental assessment of projects. It defies, I would say, the will of Parliament by pre-empting the seven-year review, disregards a twenty-year tradition of broad consultation, and undermines the logic and coherence of the act.

I want to close by citing the Senate Standing Committee on National Finance report on the budget implementation act of 2009, which strongly criticized using budget bills to essentially sneak in substantive provisions to other legislation, and asked the government to cease using these bills for that reason.

[The Chair, Conservative, James Rajotte]

Thank you very much, Ms. Kwasniak.

We will now go the Canadian Environmental Law Association, please.

[Richard Lindgren, Counsel, Canadian Environmental Law Association]

Thank you, Mr. Chair.

I'd like to begin by thanking the committee for inviting us to speak to Bill C-9.

As you know, CELA is a public interest law group that was founded in 1970. Our mandate is to use and improve environmental laws in order to protect the environment and to protect public health and safety. We basically represent citizens and public interest groups before the courts and tribunals in order to protect the environment and human health.

CELA has long advocated for effective and enforceable and equitable environmental assessment legislation at the federal level. For example, about 20 years ago I appeared before a parliamentary committee to speak to CEAA when it was first being debated. It seems like only yesterday, but I guess it was 20 years ago. I also participated in the five-year review that occurred from 2000 to 2003.

I should also note the fact that we have intervened in the Supreme Court of Canada in various cases involving federal EA requirements. For example, I was counsel for the six environmental groups that intervened in the MiningWatch case decided by the Supreme Court of Canada earlier this year.

Mr. Chair and members of the committee, based on our experience and our public interest perspective, we have very serious and fundamental concerns about the Bill C-9 proposals to amend CEAA. Our main concerns were outlined in a letter that I sent to Prime Minister Harper back in April, before the bill was referred to this committee. I have provided a copy of my letter to the committee clerk for distribution. My understanding is that it has been translated and distributed to the committee.

In essence, our letter raises three main concerns about the Bill C-9 proposals to amend CEAA. First, CELA objects to the process that's being used to enact these amendments. In our opinion, proposed changes to CEAA should not be buried in a budget bill. Instead, any proposed amendments to the act should be brought forward and proceeded with as stand-alone legislation that's subject to full parliamentary debate and meaningful public consultation, neither of which has occurred in this case to this point. That's our first objection.

The second objection is to the timing of the proposed amendments. As the committee is aware, these amendments have been introduced just as the mandatory seven-year review of CEAA is about to commence. In our opinion, the 2010 review is by far the preferable forum for discussing and debating and developing changes to Canada's national EA statute.

Thirdly, and perhaps most importantly, we object to the content of the proposed amendments. In our opinion, Bill C-9 does not reflect sound public policy. To the contrary, it is our view that most of the amendments weaken or roll back existing EA requirements under CEAA and do not adequately address the various priorities or matters that really do need some legislative attention under CEAA.

Like the previous speaker, I am particularly concerned about the proposal in Bill C-9 to empower the environment minister basically to redefine the scope of projects as they go through the CEAA process. In our opinion, Mr. Chair, that proposal is likely to result in more delay, more uncertainty, and more litigation as the minister attempts on a case-by-case basis to scope out or screen out the most contentious or most environmentally significant components of a project. That's the very type of project-splitting that the Supreme Court of Canada disallowed in its MiningWatch decision. So why would we revisit it through this proposed amendment?

For those reasons, Mr. Chair, CELA does not support the proposed amendments to CEAA. We would respectfully request that this committee do everything in its power to delete or defer or defeat the proposed amendments to CEAA.

Thank you.

[The Chair, Conservative, James Rajotte]

Okay. Thank you very much for your presentation.

We'll now hear from the Green Budget Coalition.

[Andrew Van Iterson, Manager, Green Budget Coalition]

Mr. Chairman, honourable committee members, thank you for inviting me to speak to you today. I'm here on behalf of the Green Budget Coalition, which as some of you know is unique in bringing together 21 of Canada's leading environmental and conservation organizations, representing over 600,000 Canadians, including Ducks Unlimited, the Nature Conservancy of Canada, Nature Canada, Équiterre, World Wildlife Fund Canada, as well as three of the groups speaking to you today: Ecojustice, CELA, and MiningWatch.

The Green Budget Coalition has been working cooperatively since 1999 to assist the federal government to develop and implement strategic budgetary and fiscal measures critical to achieving long-term environmental sustainability, with a particular emphasis on achieving a green economy by implementing a fair price on pollution and the consumption of non-renewable resources.

We make public statements on rare occasions. This is one instance when it was obvious to us there was a need to speak out. We issued a press release--which should be in front of you--on April 21 to that effect. We sent it to you that day as well.

The Green Budget Coalition essentially has two clear messages to convey to the committee regarding the proposed changes to the Canadian Environmental Assessment Act in Bill C-9. Firstly, we feel it is not acceptable to use omnibus budget legislation to weaken Canada's environmental protection laws. Second, the Green Budget Coalition requests that you remove the amendments to CEAA from Bill C-9 in order that these proposed changes can receive full parliamentary review, including a thorough review by your esteemed colleagues on the House of Commons Standing Committee on Environment and Sustainable Development.

Canada's environmental protection laws play a fundamental role in preserving and improving Canadians' enviable quality of life and in guiding us toward sustainability by reconciling the economic, social, and environmental elements of development projects. In the interest of transparency and accountability, any proposed changes to these laws deserve the full benefit of government review, including the consideration of the environment committee and a separate vote by parliamentarians without an election hanging in the balance.

As you know, the CEAA contains a statutory provision for review scheduled to begin in the next few months. By making amendments to the CEAA part of the budget bill and subject to a confidence vote, the important stakeholder consultation process involved in this review will essentially be pre-empted, as MPs will be forced to either accept these changes in CEAA or else trigger an election. This leaves little room outside of this 90-minute session for the full discussion, consultation, and debate that these amendments deserve and would otherwise receive.

I would also like to draw your attention to the Senate finance committee's report on the 2009 budget implementation act, dated June 2009. Among only nine recommendations that the Senate finance committee made, the majority of the Senate committee specifically recommended that the government cease the use of such omnibus legislation to introduce budget implementation measures. It also included four options as observations regarding how the Senate finance committee might respond to a future omnibus bill. These included dividing the bill into parts so that the relevant committee could address each component, deleting all non-budgetary provisions, and considering only those elements that are budgetary in nature.

You might be interested that a majority of those Senate finance committee members are still in place on that committee for both the government and the opposition, so they may not be so eager to receive the budget act as it stands right now, either.

In closing, I would like to reiterate the Green Budget Coalition's prime recommendations. In the interest of transparency and accountability, and given the great importance of environmental protection laws to Canadians' well-being now and for generations to come, please remove the amendments to CEAA from Bill C-9 in order that these proposed changes can receive full parliamentary review, including a thorough review by the House of Commons Standing Committee on Environment and Sustainable Development.

Thank you for your time. Merci.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now hear from MiningWatch Canada.

[Jamie Kneen, Co-Manager, MiningWatch Canada]

Mr. Chair, members of the committee, good afternoon and thank you for the opportunity to speak today.

By way of introduction, MiningWatch Canada is a pan-Canadian coalition of 20 environmental, aboriginal, social justice, development, and labour organizations that advocate for responsible mining practices and policies in Canada and by Canadian companies operating internationally.

Environmental assessment is one of the areas MiningWatch has worked closely in, in terms of policy development, as well as working directly on a number of project-specific environmental assessments.

One of the most surprising aspects of this work has been the level of interest from the public. Communities potentially affected by mining projects are naturally very interested in the assessment of those projects, but so is the broader public, and we receive a constant stream of inquiries and requests for information and assistance.

Environmental assessment, or EA, is sometimes seen as a somewhat technocratic and esoteric process. It can certainly be complex and inaccessible. Yet people are adamant that we need strong and consistent EA processes, and they are willing to invest considerable time and energy in trying to understand the process and participate effectively in project assessments. They tell us what an important part of working together for sustainable development it is.

On January 21 of this year, not four months ago, the Supreme Court of Canada unanimously decided a case brought by MiningWatch Canada over the federal government's handling of the proposed Red Chris copper and gold mine in north-central British Columbia. The court ruled that the federal government cannot assess only part of a project, or split projects into artificially small parts, to avoid rigorous environmental assessments. The ruling guaranteed that the public would be consulted about major industrial projects, including large metal mines and tar sands developments.

The bill before you today includes amendments to the Canadian Environmental Assessment Act that would effectively reverse the Supreme Court ruling. These amendments should be removed from Bill C-9.

With support from Ecojustice and the broader environmental community, we have fought through the courts for three and a half years to try to correct profound deficiencies in the application of CEAA. It is with great dismay that we now see those same deficiencies being deliberately re-created, only now in the text of the act itself. What's perhaps most unfortunate about the proposed changes is that they won't address the actual issues with the act that they're supposed to resolve. There is in fact a structural problem with the way CEAA is framed that creates delays through a late triggering of an environmental assessment. By the time a permit or licence application is filed triggering the act, a project can be well along in its planning stages. A major projects management office was created a little over two years ago to help resolve this contradiction by identifying projects earlier on, although it's hard to determine at this relatively early point how effective it has been.

The Supreme Court decision on Red Chris should also help eliminate delays by clarifying the decisions that responsible authorities are required to make under the act. The Department of Fisheries and Oceans, for example, does not have to spend months and months trying to figure out how to avoid triggering an environmental assessment or how to reconfigure a project proposal to avoid a comprehensive study, if it simply accepts the project as proposed and assumes its responsibility.

By the same token, if there is a clear mandate behind the federal involvement in joint processes with other jurisdictions, then there is no need for protracted negotiations around the EA process itself. By putting arbitrary ministerial discretion on scoping into the act, the proposed changes will essentially re-create the situation that we fought through the courts to clarify.

MiningWatch Canada has always pressed for a strong federal role in environmental assessment, partly because of the consistency and accessibility that it brings, but primarily because of the federal jurisdiction in a number of critical areas, as has already been mentioned. But let me provide a concrete example.

The proposed Prosperity copper and gold mine in British Columbia is currently undergoing both a provincial assessment and a panel review under CEAA. If the project were to proceed as presented, it would have serious detrimental environmental effects, including the draining of Teztan Biny or Fish Lake to make way for the mine. I have provided you with a picture of this, so that you have an image of Fish Lake. The project would also have serious impacts on the Xeni Gwet'n and Tsilhqot'in people.

The federal panel review has been hearing evidence from the affected communities, independent fisheries experts, and social scientists. Serious shortcomings in the proponents' proposals have been identified and are being reviewed. Meanwhile, the provincial review has been completed and the project has been approved by the B.C. government.

The other picture I have is of the Kemess mine, just so you have an idea of what will take the place of Fish Lake. It's a large open-pit copper-gold mine, barely a few hundred kilometres away and very similar in ecological terms. But if it weren't for the federal review, there would be no meaningful consideration of significant issues around the project's impacts on water and fisheries, and the interests of the Xeni Gwet'in First Nation and the Tsilhqot'in national government.

The Canadian Environmental Assessment Act is a critical element in Canada's legal framework for sustainable development and environmental protection. It has its strengths and shortcomings, but there are also processes established to build on those strengths and to address those deficiencies, and they should be used to their fullest. Substantially weakening the act will deprive Canadians of one of the best and in some cases one of the only tools they have to ensure that vested interests and poorly considered projects do not compromise environmental, social, and economic sustainability.

Thank you for your consideration.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We will now hear from the Canadian Union of Postal Workers.

[Denis Lemelin, National President, Canadian Union of Postal Workers]

Thank you, Mr. Chairman, committee members. I'll be making my presentation in French.

On behalf of the Canadian Union of Postal Workers, I want to thank you for the opportunity to appear before this committee on Part 15 of Bill C-9. CUPW represents 54,000 workers in rural and urban communities from coast to coast to coast. A majority of our members work for Canada Post.

CUPW would like to urge this committee to give this very small part of Bill C-9 a very large amount of attention as it amounts to partial deregulation of our public post office. In Canada, letter mail is regulated for a reason. Canada Post has an exclusive privilege to handle letters so that it is able to generate enough money to provide affordable postal service to everyone, no matter where they live in our huge country. This privilege includes both domestic and international letters. We believe it will become increasingly difficult for Canada Post to provide universal postal service if the government erodes the very mechanism that funds this service—the exclusive privilege.

Canada Post’s exclusive privilege to handle letters has received remarkably little attention over the years. But international mailers, who are currently carrying international letters in violation of the law, have recently taken issue with this privilege and waged a campaign to undermine our post office’s right to handle international letters. Canada Post estimates that international mailers siphon off $60 million to $80 million per year in business. Its concerns with remailers have grown as the international mail business has grown and as remailers have unfairly competed for international mail by exploiting the two-tier terminal dues system adopted by the Universal Postal Union in 1999.

It is our understanding that Canada Post attempted to address its concerns with international mailers through negotiations and finally through legal action against two of the largest companies, Spring and Key Mail. One ruling by the Court of Appeal for Ontario stressed the importance of the exclusive privilege in serving rural and remote communities and noted that international mailers such as Spring Canada are not required to bear the high cost of providing services to the more remote regions of Canada. The corporation won this legal challenge all the way to the Supreme Court of Canada.

After this victory, a coalition of private Canadian and international mail companies called the Canadian International Mail Association (CIMA), hired a lobbyist in an attempt to convince parliamentarians to remove international letters from Canada Post’s exclusive privilege to handle letters. The government initially defended the importance of the exclusive privilege but it was not long before it started to reconsider its position, presumably because of the CIMA lobby. Nevertheless, the government did promise, in a letter to CUPW, that no changes to Canada Post's exclusive privilege would be considered without thorough policy analysis. We would like to point out that, to date, there has been no serious review or thorough policy analysis of the international mail issue or the impact of removing international letters from Canada Post’s exclusive privilege.

The government’s recent strategic review of Canada Post did not look at these issues. Unfortunately, this did not stop the review’s advisory panel from recommending against deregulation of letter mail, with the exception of international letters. It simply doesn’t make sense to be proposing legislation before you look at the relevant issues. The proposed legislation doesn’t make much sense either. Canada Post’s letter mail volumes declined for the first time in 2008 and again in 2009. The corporation clearly needs international letters as a source of revenue to maintain and improve public postal service. Furthermore, most people in this country are opposed to deregulation of Canada Post. They do not support eroding or eliminating Canada Post’s exclusive privilege. Close to 70% of people oppose postal deregulation according to a 2008 Ipsos Reid poll.

Some remailers have argued that the French version of the Canada Post Corporation Act should carry no weight and that the English version would prevail. This argument has been rejected by the courts, as a result of which those businesses are now outlaws.

I draw your attention to the two recommendations we are submitting to the committee. They appear on the last page. We are asking that Part 15 of Bill C-9 be withdrawn. We're also asking that measures be taken to shut down the five or six international mail companies that are violating the law and that there be consultations with Canada Post and CUPW concerning the possibility of offering employment to workers at these companies. That's important for us. I think we'll have to debate the question of the jobs that are at issue.

Thank you for listening. I'll be very pleased to answer your questions.

[The Chair, Conservative, James Rajotte]

Thank you.

Next we will hear from Ecojustice Canada.

[Stephen Hazell, Associate, Ecojustice Canada]

Thank you, Mr. Chair.

Thank you for the opportunity to speak before the committee today.

I'm here on behalf of Ecojustice, as well as Sierra Club Canada. Ecojustice, formerly known as the Sierra Legal Defence Fund, is Canada's largest public interest environmental law organization. Ecojustice is a charitable organization with a mission to protect the environment through litigation and law reform.

Sierra Club Canada is also a national environmental organization that is grassroots in nature and devoted to protecting global ecosystems.

I'm going to speak in English. However, we can answer questions in French.

There's a broad consensus among people who concern themselves with environmental assessment that the Canadian Environmental Assessment Act needs reform. That's not really the question. The question is who's going to undertake the reforms. Ecojustice and Sierra Club Canada are extremely concerned that the act is being weakened through a series of piecemeal statutory amendments and regulatory changes without benefit of serious parliamentary or public discussion, when a more comprehensive and integrated response to reform is required.

I would ask two questions. First, what's the rush in getting this bill through as part of the omnibus budget legislation? What's the big hurry? As my colleagues have mentioned, we have the seven-year review coming up. Under law, it must be initiated in June of this year.

Second, are members of this committee comfortable addressing this environmental law? You're a finance committee. Why are you being asked to deal with environmental assessment legislation, which is complicated? It's important, but it's also complicated. You have a committee of the House of Commons whose job that is. The environment and sustainable development committee has that job. It's done reviews of CEAA before. Why isn't it being asked to do it this time?

As I've mentioned, there have been a number of piecemeal changes, of which this bill is only the most recent. Last year there were a number of changes to environmental assessment law that were also introduced through omnibus budget legislation. There were amendments to the Navigable Waters Protection Act, which had the effect of eliminating thousands of environmental assessments of projects, such as dams and bridges, that obstruct navigation and also sometimes have adverse environmental effects. These amendments were also not related to the budget, just as the provisions of part 19 and part 20 in this bill are not related to the budget. They also receive little discussion in Parliament.

This wasn't the only piecemeal change that we've seen before. In the budget from last year, we also had some regulatory changes that were announced, which also removed environmental assessment requirements. These regulations were not gazetted in Canada Gazette part I, which is very common, and the fact that they were not so gazetted is a breach of the government's regulatory policy. Secondly, these regulations were not referred through the regulatory advisory committee set up close to 20 years ago by the government of Brian Mulroney to provide assistance to the government in regulatory changes and statutory changes in environmental assessment issues.

We also understand the government is considering another bill on environmental assessment to be brought forward, we're not sure when. The minister spoke on this a year ago. We'll just have to see when that bill comes forward. There was a presentation from the Canadian Environmental Assessment Agency, which I have included as part of my package.

Ecojustice and Sierra Club Canada don't accept the arguments that these changes are needed to avoid overlap and duplication. There have been several studies done on the extent to which there is overlap and duplication with federal environmental assessments. Both of these studies have found that there is very little. There was a 1997 study by the House of Commons environment committee, and in 2001 the federal environment minister reported that the federal EA system had been successful in avoiding duplication with the provinces.

Here are some suggestions for what this committee can do about all of this. Ecojustice and Sierra Club Canada are recommending that these environmental assessment provisions, parts 19 and 20, be deleted from Bill C-9. That's the first step. But we also suggest that this committee request that the House of Commons refer part 19 and part 20 to the environment and sustainable development committee for its consideration as part of the upcoming seven-year review of the Canadian Environmental Assessment Act.

We would suggest that the House of Commons environment committee should be allowed to do its job and carry out its legal mandate to have a considered, deliberate discussion about federal environmental assessment so that Canada can have an effective and efficient law, something that I think all of us around the table want to have.

Thank you, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll now go to members' questions. Mr. McCallum, you have seven minutes.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you, Mr. Chair.

Thank you all for being with us today. The individual from Calgary I believe is still with us.

[Arlene Kwasniak]

Yes, I am.

[John McCallum, Liberal, Markham—Unionville, ON]

Good. Let me begin with the environment, because there are five presenters. I think I know the answer, but I just want to make sure that everybody's on the same page. I believe all of you would agree that this bill isn't just a case of streamlining or reducing overlap and duplication. It substantively weakens environmental protection. Is that correct?

[Stephen Hazell]

Absolutely.

[A voice]

Yes.

[John McCallum, Liberal, Markham—Unionville, ON]

Everybody agree?

[Arlene Kwasniak]

Yes.

[John McCallum, Liberal, Markham—Unionville, ON]

The second question I want to ask is one of process. To what extent were any of you or the groups that you represent consulted by the government prior to this legislation appearing before us?