Natural Resources Committee on Oct. 5th, 2006

[Johanne Gélinas]

Thank you.

[The Vice-Chair, Liberal, Alan Tonks]

Merci.

Madam Commissioner, if you wish to redirect to any of your colleagues, please feel free to do so.

[Johanne Gélinas]

Thank you very much.

[The Vice-Chair, Liberal, Alan Tonks]

The next questioner is Mr. Bevington.

[Dennis Bevington, NDP, Western Arctic, NT]

Thank you, Commissioner.

I will focus my questions on the emissions from the oil and gas sector. You say quite clearly that with the proposed expansion of this sector, we'll overshadow any other greenhouse gas reductions we may make in the system. Maybe you would like to elaborate on that a little.

[Johanne Gélinas]

First of all, the information we received from the oil and gas sector came in large part from the National Energy Board, and was vetted by the Department of Natural Resources.

What we have said is that if we look at the exploitation of the oil sands between now and 2015, the emissions will double, on the assumption that production will triple and maybe quadruple. When you look at the numbers, as we speak, the oil sands produce around 35 megatonnes of emissions. That will take us to 70 megatonnes if we double it. If you look at what was in place when we did the audit and what should be up and running in a couple of years, it's basic math. Whatever is put forward in terms of effort, we'll never be able to reduce the emissions. At best it might be able to reduce the rate of growth, and if nothing is done in the oil sands sector it may not even be able to reduce the rate of growth.

[Dennis Bevington, NDP, Western Arctic, NT]

NRCan, the federal government, has some responsibility for energy, as you point out in your book. You've mentioned the National Energy Board. Did you examine their mandate? Would the mandate of the National Energy Board allow greenhouse gas emissions to be taken into account at the project development or approval stage?

[Johanne Gélinas]

We haven't looked at the mandate of the National Energy Board. We have looked, essentially, at the federal programs, strategies, and policies to address climate change.

It's important to emphasize that we haven't considered what is going on in the industry per se. To reduce greenhouse gases, there must be technologies in place and energy efficiency programs in some of the facilities. Our mandate was to look at the federal government.

[Dennis Bevington, NDP, Western Arctic, NT]

But if the federal government needs to produce a strategy for greenhouse gas emission reduction, and it doesn't have control over this sector, then the strategy is going to be very difficult to carry into effect.

You mentioned the constitutional division of responsibilities for energy. Dd you draw any conclusions about any of the tools that could be used by the federal government to rein in the emissions from the oil and gas sector?

[Johanne Gélinas]

First of all, we haven't looked at strategy. There's no strategy as we speak. We can only audit what exists.

We have said in many different places in the report that even though natural resources is a shared jurisdiction, the federal government has a lot of tools in its toolbox—voluntary agreements, regulation such as CEPA, tax incentives. There are a lot of things that could be used.

The reason we said the government has not tackled the oil sands is that when you look at the overall programs and strategies, there was nothing put in place to address this sector.

[Dennis Bevington, NDP, Western Arctic, NT]

You talked about the carbon dioxide capture and storage initiative. There's one project that's been up and running for five years, and it's taken its target of 3.5 million tonnes and reduced it by 2.5%.

Did you look at the costing of this program versus the results it was delivering?

[Johanne Gélinas]

I will go with your latter point and ask my colleague to give you the details on the numbers. I don't know all of them by heart.

We haven't done a cost-benefit analysis for all the programs we looked at, so we cannot comment on the efficiency of them. We looked at only three. If you take the example of natural resources, there were more than 30 programs we could have looked at, but we decided to focus on three.

[Richard Arseneault, Principal, Office of the Auditor General of Canada]

The oil and gas sector is part of the LFE, the large final emitters. The previous government was going to regulate that sector through the Canadian Environmental Protection Act, which is an act that serves to protect Canadians. It is concerned with pollution prevention—protecting our air quality, our water quality, and the soil. The oil and gas sector is included in the LFEs, the large emitters. There was a target being negotiated with industry. It was being reduced with time, but at least it was a start.

[The Vice-Chair, Liberal, Alan Tonks]

Mr. Paradis.

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Thank you, Mr. Chairman.

Commissioner, I want to thank you for being here today. I have two questions, one which is of a general nature, and the other, more specific.

Commissioner, I recall that we had a discussion in the spring at this Committee with respect with your 2005 Report. Some of the troubling issues are mentioned once again, and therefore, I find it rather amusing when I hear my colleague talking about an improvement in the last two years. You particularly emphasize the lack of leadership as explaining the poor results we are seeing today.

In that regard, how do you explain the five points you raised in paragraph 25 of your presentation? Billions of dollars have been invested, particularly to reduce greenhouse gases, and yet there are no results. Is that reflected in these five points? Are they a solution we should be paying particular attention to, so that the money invested finally leads to concrete result?

[Johanne Gélinas]

Let's look at those points again. Leadership has to be demonstrated in a number of ways. It has to be demonstrated at the political level, by the political leadership. It also has to be demonstrated at the level of the public service. If there is a national goal, a common goal, that must be visible in departmental activities and priorities. It should also be seen in the context of federal-provincial relations, or in the industry's desire and interest in helping to find solutions. Leadership has to be demonstrated across the board. Given the kind of results we have attained so far, it is clear that the government will have to show strong leadership in order to tackle the problem head on.

There are some issues that remain and which will not change, such as governance and accountability. At this time, those problems have yet to be resolved. If you decided tomorrow that you wanted to have the most recent information available, it could be very difficult for you to get that information, because the system that would enable you to do it has not been implemented. It's important that parliamentarians ensure that the commitment to implement this system is honoured as quickly as possible.

I can give you other examples. For several years now, we have pointed to the fact that this whole file has been transferred from one department to the other. There have been different ministers and deputy ministers involved. That leads to all kinds of delays, and often, a loss of momentum. That's why things slid somewhat and we are now seeing these kinds of results.

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Thank you.

Before we leave that point, I'd like to give you an example. The current government has pledged to table its own green plan. There has been positive feedback from Quebec, specifically the Ministry of the Environment, which has said it feels confident about what is going to be brought forward.

Further on in your report, I read that when provincial incentives are in place, the federal measures are enhanced; in other words, there is leverage on both sides. Is this an example of leadership that should be followed?

I also want to talk about the EnerGuide program. In your report--and you repeated that today--you say that the targets were not clearly defined. People did a lot of renovations, but I'm wondering whether they wouldn't have done them anyway. I'm not saying that the process would have been as efficient had there not been an assessment. There are many different possibilities.

Was that one of the examples you relied on in concluding that the targets were not clearly defined and they should be clarified?

[Johanne Gélinas]

I'll start by answering your question about the EnerGuide. It just isn't true that the program was not well structured or well managed. The targets were well defined at some point, but they changed, and the appropriate adjustment was never made.

As for whether people would have renovated their houses anyway, I obviously can't answer that question. However, I do know that in 2003, when the government enhanced the EnerGuide program by adding an energy efficiency assessment and analysis, we noted that Canadians were much more interested in availing themselves of the grant; there is a graph on that in that chapter of the report. However, a prior assessment had to have been carried out.

As regards leadership, I will simply say that an auditor always expects to see results and does not base her opinion on words alone.

[The Vice-Chair, Liberal, Alan Tonks]

Thank you.

Members, we'll now go through our second round, and I have Mr. St. Amand, Mr. Ouellet, and Mr. Allen on this one.

Mr. St. Amand.

[Lloyd St. Amand, Liberal, Brant, ON]

Thank you, Mr. Chair, and thank you, Ms. Gélinas and the other panel members, for your work on this and for your cogent presentation today.

If I can summarize at least components of your report, it seems to me that Canadians, arguably more than ever, are aware of climate change as an atmospheric problem. Certainly the surveys and anecdotal evidence would point to Canadians being engaged in this issue, and your report recommends, among other things, that the federal government must show leadership with respect to climate change. Is that fair to say so far?

[Johanne Gélinas]

Whoever the government of the day is, leadership is needed.

[Lloyd St. Amand, Liberal, Brant, ON]

To this point, having studied the issue over a period of time, the money was seemingly allocated to a greater or lesser extent, some $6 billion. It would seem as a reflection of that allocation that the political will was there, if I may, but the reporting techniques, the missing of targets, and the tracking of results came up rather short. Is that a fair summary?

[Johanne Gélinas]

It's more than that. Tools that were announced are not up and running as of today. If we again look at the two key sectors--transportation and industry--beyond some approaches that were proposed, there was really nothing that could have given us some very strong indication that we were going to achieve the Kyoto target. It's more than just a lack of good accountability and good systems in place so that we can track money and results. It's more what was put in place. If we go back to 2000, 2002, 2005, the three plans have not achieved as much as they should have.

[Lloyd St. Amand, Liberal, Brant, ON]

If I could then be a little forward looking, I'm looking at chapter 3, Madam Gélinas, of your report, on page 22, paragraph or item 3.61. You make a recommendation that

Natural Resources Canada, on behalf of the Government of Canada, should make clear to Parliament by the end of 2006 how and to what degree the country will reduce greenhouse gas emissions in the oil and gas sector, both in the immediate and longer term.

I presume what follows is essentially the response from Natural Resources Canada. Is that fair to say?

[Johanne Gélinas]

Yes.