Finance Committee on Nov. 2nd, 2010

[Christopher Wilson]

Clearly, there is an imbalance in the research allocation at the moment and we would like to see that addressed.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

An imbalance where?

[Christopher Wilson]

Well, actually two forms of imbalance. There's an imbalance between basic research and what you might call applied research or clinical research, which we'd like to have addressed, and fortunately there's movement in that direction.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Is that at the CIHR level?

[Christopher Wilson]

Yes, that's right. CIHR is moving to address that, and we support that move.

The other imbalance we've pointed out is that respiratory health research has historically been underfunded, and we'd like to see that addressed.

We're not, to be clear, raising equity issues about that, because we all know you can always point to somebody who gets more or less than you do. Rather, we are making an economic argument for it, that there is a crushing economic burden from lung disease, and to properly address that we need to see more of the knowledge from basic research translated into positive outcomes at the bedside.

I think you can see from the rather remarkable example that my colleague gave that simple applications of research at that level can have big impacts, not just on patient care but in a dramatic reduction of health care costs. Remember that COPD, the disease he was talking about, is one of the single most expensive diseases to treat.

We are asking for an additional allocation of $10 million to start movement in the direction of rebalancing that. We've specifically asked for the additional money to save you from having to make recommendations to take money from Peter to pay Paul. We're not suggesting that. We simply think it would make good economic sense to make better investments in lung health research.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you.

Mr. Paton, I guess I'm going to pick on you.

Perhaps the question would have been more geared to the Chamber of Commerce. But you're asking for tax reductions, accelerated capital cost.... As members of the finance committee, how do we reconcile that with what Mr. Wilson just said and previously what Ms. McInturff said? How do we balance? How do we make a decision on whether we recommend accelerated capital cost or putting more money toward pay equity or putting more money toward lung disease?

I could have asked other people, but I figured....

[Richard Paton]

Yes, thanks very much. I really appreciate that.

I've never envied the role of members of Parliament in making these kinds of decisions. I've always found these sessions fascinating because the richness of needs is always overpowering.

To make our case, though, first of all, it's not a tax reduction; it's a tax shift. I guess if you looked at it this way, by building a strong—

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

You're talking about the accelerated capital cost now, right?

[Richard Paton]

Yes.

By building a stronger economy with major capital investments in this country, you do generate jobs, growth—Mr. Lemoyne knows all about no jobs and growth—and that generates income for the country, which then will enable these other issues to be also applied.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Just quickly, could I get a guarantee that it will also increase productivity?

[Richard Paton]

Oh, and environmental improvement. Win-win-win.

[The Chair, Conservative, James Rajotte]

Monsieur Carrier.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Thank you, ladies and gentlemen.

You know, you are the last group we're meeting with in our pre-budget consultations, after hearing from over 100 groups. To me, the fact that Mr. Lemoyne is here really illustrates the flaw in our political system in this country, from the standpoint of equity. We see an entire community reduced to nothing, and its workers are not even entitled to employment insurance. That is a detail in itself, but because of the particular situation—the workers were locked out during the weeks preceding the plant closing—the people were not even eligible for our famous employment insurance scheme. I think that is a denial of social justice. On the other hand, there are other people, like those in the gas industry, who are well organized and who can bring us fine documents. And the community of 1,000 workers can't even prepare a document and have it translated into both languages. I think that is a demonstration of the bankruptcy of the system. All my congratulations, Mr. Lemoyne, for having the courage to come back here anyway.

Earlier, I sensed a certain openness on the part of a representative of the Conservative government, Mr. Généreux. I think he can understand that loan guarantees can be given. The government's answer, for two years, is that because it is an industry with no future and a smaller market, it doesn't want to give loan guarantees. But Mr. Lemoyne has in fact told us that the people who are working on preparing plans for reopening are not idiots. They know very well that it will not be profitable to produce the same things, so they are looking for other solutions. The very least would be to have a government that supports them, guides them, precisely so they can prepare a plan for reopening, and that tells them it thinks they are heading in the right direction and it's going to support them.

I hope wholeheartedly that the arguments made today will be enough to persuade the government once and for all to help entire communities that have been hit by the weakening of the forest industry in Quebec. This sector has been neglected, supposedly because there is no future in the forest and paper industries, and because, in any event, they are industries that are not viable. It has even been said that it would be prohibited under the NAFTA accords to provide loan guarantees, when the government's own negotiators have said it was allowed.

I hope there will be provisions in the next budget to assist communities that are organizing themselves. They aren't asking that the government take them over and tell them what to do. What we are seeing, in fact, is a desire to revive the industry by exploring other areas. Some companies have switched to rayon rather than producing paper. This is an existing field, it is an industry and a community that deserves to be encouraged. That is my comment on the subject.

I have one minute left. I have a question for the gas industry, a question that I think is important, in fact. From the presentation of your brief, I see that there is gas in abundance, there is a fine reserve. You are even exporting it to the United States. The question of shale gas exploitation generates a lot of opposition in Quebec, in particular because of the negative consequences for the environment. This is an area you are surely familiar with because it's gas. I am wondering whether it is essential to stimulate gas production, to go after the slightest gas resources that exist in our subsoil, even if it means destroying the environment.

[The Chair, Conservative, James Rajotte]

That's a big question. You have about 30 seconds.

[Timothy Egan]

I have 30 seconds for a response.

I'm sorry, I prefer to answer in English, if I may.

Is it essential to push for shale gas exploration? We're on the downstream side of the equation, not on the upstream. I think markets will decide where exploration and development is going to occur and then deliver to the downstream markets that we represent. However, the one point I want to emphasize is that the regulatory framework for shale gas exploration and development is evolving in certain jurisdictions like Quebec. It's much more robust in other jurisdictions.

It's under review across the country, and the industry is deeply concerned to make sure that it's as robust as possible to address the kinds of concerns that Quebeckers are raising. I think you've seen in the events going on in Quebec the active engagement of companies like Gaz Métro--and Sophie Brochu, the president of Gaz Métro, is one of my member companies--to ensure that the public feels they're getting as much information as possible and that the processes are as robust as possible.

[The Chair, Conservative, James Rajotte]

Thank you. Merci.

Mrs. Block, please.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you very much, Mr. Chair.

And thank you to all of our witnesses here today.

I believe Professor Lahey was here as a witness earlier in our consultation process speaking to a comprehensive submission on gender-based budgeting. I just want to get on the record that every proposal that goes to the Minister of Finance has a gender-based analysis included. I wanted to share that with you.

Ms. McInturff, I appreciated your submission, and I'm glad that you pointed out that women are not a special interest group and have similar interests and concerns as the other half of the population, which actually affords me the freedom to direct my questions to Mr. Egan and the Canadian Gas Association.

I understand that the Saskatchewan Research Council is involved in some technology research around new combined heat and power technology using natural gas. What I'm wondering is, what is the involvement of your industry and possible involvement of the Government of Canada in that? With this going on already, why would more assistance be required on energy efficiency?

[Timothy Egan]

Thank you for the question.

I think you're referring to a combined heat and power initiative that's under way with the Saskatchewan Research Council. One of my member companies is SaskEnergy, and they're one of the key funders of that initiative. Another company, SaskPower, the electrical generation and transmission and distribution company in Saskatchewan, is also involved as a key funder. NRCan is the third funder of that initiative.

The technology that is coming forward is for micro combined heat and power, which is an incredibly efficient technology, allowing for the better use of natural gas as a resource and allowing for the offsetting of potentially significant amounts of electrical generation in the province of Saskatchewan as this technology moves forward. It's early days. It requires a lot of investment to ensure that the technology can be developed properly, to ensure that deployment applications can be tested properly to see if they in fact will work in the micro applications. This requires resources. NRCan is at the table now. As this initiative moves forward, more resources are likely to be required.

I mentioned our ATI initiative. The reason for that initiative is to be able to pull resources in order to proceed with efforts to deploy this kind of technology. We believe the Government of Canada has a vested interest in being at the table for those sorts of efforts.

Many questions today have been around the challenges of balancing priorities and how as a committee you come forward with specific recommendations. You obviously have public policy objectives you are trying to meet. I would argue that some of those objectives are the delivery of environmental benefits, including reduced emissions; driving innovation, in order to see Canada be a leader in technology; and driving productivity. Initiatives like this combined heat and power program can actually deliver on all three.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Okay. Thank you.

[The Chair, Conservative, James Rajotte]

You have one and a half minutes.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

I was looking at the third recommendation that you have in this submission, to “Provide supportive measures to encourage natural gas use for long-haul and return-to-base transportation fleets”.

Can you expand on what you mean by supportive measures? I know that in your opening remarks you kind of ended there. Could you expand on what those might be?

[Timothy Egan]

Sure. With the chair's approval, I'm going to defer to my colleague, Alicia Milner, on this question.

[Alicia Milner, President, Canadian Natural Gas Vehicle Alliance]

What is proposed there is a tax credit that targets 50% of the incremental cost of natural gas heavy vehicles. The rationale, really, here is twofold. One, we have a sector of the economy that's totally dependent on one energy source, which is crude oil-based fuels, except for about 2%. There's a little bit of alternative fuels, but not much.

Second is the potential for significant emissions reductions. While passenger vehicles get a lot of attention, the reality in Canada is that 4% of the vehicles account for a third of our carbon emissions. It's a very difficult part of the economy to get at. We are a technology leader in Canada. We supply the engine technologies from two of our companies based in British Columbia. We supply them to more than 15 different bus and truck manufacturers already.

So we have an early lead. What the proposed measure here is intended to do is to really get these technologies into the market as vehicles turn on their normal cycle and replace them with a lower emission.

The other dimension to this, of course, is that this is a cost-effective fuel. For truckers who operate in a regional corridor, for instance, they could reduce their annual fuel cost by about $12,000 a year.

So it's really to help facilitate access for the fuel into a new market that's dominated by a relatively high-emission fuel.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Block.

Mr. Brison, the final round, please.