Natural Resources Committee on Nov. 7th, 2006

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

First of all, I'm very confident. I know Mr. Brown well. I'm sure we'll have to check the record, but in all of my dealings, his department invests heavily in research on water, on the water shortages. We recognize the challenges we're facing there, and they partner with industry in the department in doing a lot of work. So there absolutely is a role for government and will continue to be. We seem to have gotten some wires crossed, but I don't believe that's the view of the department, nor of Mr. Brown. I'm quite happy to state that on the record.

You've asked a number of questions, as you did your first time, so it's hard for me to keep up to you, Mr. Cullen, on all your questions.

You talked about the decrease in the departmental budget. In fact, the budget this year in the department has increased by $340 million, or 31%--this year over last year---so I'm not sure where you're getting all your numbers from.

Oh, I see where you're getting your numbers from.

The overall budget has increased, but virtually all of that increase in the departmental budget, I think, just for the record, is going through to the Newfoundland and Labrador agreement, and Nova Scotia, on offshore revenues. Basically, we collect them from the industry, and then we just flow them through to the province. So that's the reason for those numbers, if you actually see that.

What was one of your other questions?

[Roy Cullen, Liberal, Etobicoke North, ON]

Is the takeover of natural resource companies by foreign companies an issue for you? Do you worry about that at all?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

Yes, it is an issue. We think publicly traded companies are an interest where we have to let the markets.... We've seen that with the whole Falconbridge and Inco process. The market is going to come up with the best conclusion.

But I think it's a very valid concern to be raised. If you're going to see a foreign state-owned company wanting to take over a company here in natural resources, that's very much worthy of a debate, and we should have a good, wholesome discussion on that. That's another issue that we haven't faced in this country, but I think it merits that we have a hard look at that, if we ever cross that road.

It's after five o'clock now, Mr. Chair. Perhaps I can leave the committee with one thought, because I know the committee is committed to doing some extraordinary work.

We have a couple more short questions? Sure. Why don't we do those quickly, then?

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Minister.

I think I will ask for your indulgence. We did, for the first time, get to the fourth round; Mr. Cullen began. I think it's only fair to allow the others to complete their final questions. So can we keep it tight?

I'll ask Madame DeBellefeuille to begin.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry, QC]

Thank you, Mr. Minister, for staying on a little longer in our committee. We don't see you very often, and so we would like to take advantage of your presence.

With all due respect, I found your reply somewhat simplistic, when you tossed the issue of the accelerated capital cost allowance tax incentives into the Minister of Finance's court. That's too easy. I expected a Minister of Natural Resources to influence the Minister of Finance in order to promote the renewable energy file and convince him that he could recover the funds. Normally, a Minister of Finance likes to recover poorly used funds. In the case of this tax incentive, it is obvious that the oil and gas industries that harness the oil sands no longer need this incentive. Various witnesses have told us that the oil and gas industries would not stop operating and investing if this incentive were removed. You're not very convincing, Mr. Minister, when you reply that it is none of your business and that you will send my regards to the Minister of Finance. On the contrary, I think that it is your job to demonstrate your leadership and convince him to recover these amounts.

Furthermore, you say that wind energy is important. You also state that you cannot make any announcement and that it is not your fault. You also claim that you cannot give us any indication on the possible continuation of the WPPI program.

Can you explain why you cut the Renewable Power Production Incentive, when this announcement had created very specific expectations in the industry, which was counting on this contribution to launch cogeneration projects, for example?

I think there is a difference between your wishes and your priorities, and the importance you are giving it in your budget. As a new member of Parliament, I am somewhat surprised, Mr. Minister, by the lack of coherence between your wishes and your desires and the money you are earmarking in various programs and in the budget.

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

Let me simply say that you're absolutely right. It's not that I'm trying to lay fault on--

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry, QC]

We rarely hear that from a Minister.

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

I'm simply saying it's a fact. You'll have to wait and see on some of these initiatives you've talked about.

With respect to the depreciation, what it really is on the oil sands is financial policy, and it's ultimately the decision of the Minister of Finance. Now, you may not like that; you may wish it was my decision. But it's the decision of the Minister of Finance. As you are fully aware, budgetary matters are held very tight. They're not released in advance. They can have impacts on markets. That's why I offered no comment on that.

The process is to make these presentations to the finance committee in their pre-budget consultations. They go away and write their report, and they make that presentation to the Minister of Finance. Then on budget day we find out the results of that. That's the way the process works.

I don't think it would be prudent for me to start speculating on any of those matters, one way or the other. As much as you would like me to, I'm not going to.

Thank you.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Is there any time left, Mr. Chair?

[The Chair, Conservative, Lee Richardson]

All right. Very short.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

In his report of 2006, the Commissioner for the Environment and Sustainable Development confirms the importance of leadership, and implies that the government should develop a clear sustainable development strategy.

Have you started preparing a federal sustainable development strategy, especially applicable to oil sands and striking a balance between your Department's global warming file and Canada's Clean Air Act?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

Let's say that I have read the report of the Commissioner of the Environment as well, as you have. We take her recommendations in the report very seriously. As I said earlier, we have launched our Clean Air Act, which we think is a very bold and innovative approach, regulating every single sector on both greenhouse gas emissions and pollutions, for the first time in Canadian history.

I don't think we should be minimizing the approach this government is taking and the potential impact it will have, but we're also looking at the other recommendations of the Commissioner of the Environment on a number of fronts. At the end of the day, we'll be held accountable for our actions. All of our decisions are focused on delivering results for Canadians, and that's exactly what we're doing.

[The Chair, Conservative, Lee Richardson]

Thank you.

Ms. Bell is next.

[Catherine Bell, NDP, Vancouver Island North, BC]

Thank you.

I would like to go back to the chrysotile asbestos issue, because it was brought up again in between.

I have to let you know where I'm coming from on this. This is a hazardous material. All asbestos is known to cause cancer--not just chrysotile, but it is included. What I'm saying is that it's irresponsible of Canada to be funding an organization that is promoting this material to developing countries because it's cheap. You said it is a cheap source of building material, but it's mixed in with cement. It is in a powdered form. When it is used in these developing countries for building houses, in time it's going to deteriorate, and people don't know its toxicity. What I'm saying is that we cannot turn a blind eye to the health and safety of people in other countries just to have a cheap source of building materials.

We're not attacking the industry in Canada. In Canada we recognize that there are safety procedures that are followed. What I'm saying is that in other countries that's not necessarily the case.

I want to ask another question. You talked about sustainable development. For me sustainable development means there is something left for the future, for our grandchildren. What's happening with the forestry industry in British Columbia and across this country is that we're seeing the export of raw logs at an alarming rate. I know the federal government has jurisdiction over private lands with respect to the export of raw logs. Will Natural Resources Canada, with their commitment to sustainable practices and sustainable industry, commit to banning the export of raw logs and maintaining jobs for the future of Canada's forest industry in our communities?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

Thank you very much.

First of all, let me touch on your first question concerning chrysotile.I think you asked me earlier about that, about the funding. It has not been raised, just for the record. The funding is $250,000--$125,000 of that comes from the Province of Quebec and $125,000 is coming from Natural Resources Canada. So we provide $125,000 a year, again in partnership with the Province of Quebec, to promote safe use.

I will just say this on chrysotile. Chrysotile is an asbestos fibre. There are six known asbestos fibres. Of the six known asbestos fibres, chrysotile--and the science is not disputed--is the least carcinogenic. There's also science out there that suggests that the man-made substitutes, which are produced primarily in Europe, are far more carcinogenic than chrysotile, and that is science that's out there. That is why we have asked for studies to be done to compare the two, because we want the absolute straight scientific evidence so we can make this decision based on science. There is a lot of research out there that suggests that.

That's the position of the government. And again, I can tell you that I have visited these plants in Quebec myself and have seen first-hand how it's done, how it is packaged, and I was very impressed.

We've also talked about when it's used by countries that do use it. I know that some people suggest that bags are ripped open and that people are digging it out with their hands. But I'm told that these entire packages go into machines where the bags and everything are shredded. The fibres are then put inside concrete and in various products in which the fibres are encased inside, that, I would submit, provide a lot of social good. They provide a lot of housing in countries where there may not be alternatives.

In fairness, there's science on the other side too. Mr. Martin knows that. I know that. But I think it's important that we get the absolute straight goods and that we ask for that information. We've asked the World Health Organization to do those comparative analyses, not us. We've asked for that information. Let's get the straight facts in front of us, and let's make these decisions based on science. That's the position of the Government of Canada.

Oh, I'm sorry, I said funds come from the Government of Quebec. It's another federal agency. So I apologize. It's $125,000 from Natural Resources Canada and another $125,000 from a federal agency, for a total of $250,000 in federal dollars to promote safe use. Thank you for that.

On the issue of raw logs, I'm very much aware of this. I'm from Vancouver Island, as you know, Ms. Bell. I can let you know that I've had many conversations with the Minister of Forests and Range. There's provincial jurisdiction here. We were successful in negotiating language in the softwood lumber agreement with the United States so we can revisit this, and we have a side letter of agreement.

We believe that the lumber produced from these logs, which are coming primarily from private lands, as you know, should be exempted from the softwood lumber agreement, much as the Maritimes are. We think that would provide enough of an advantage that we could process those logs on Vancouver Island. We could keep the jobs for the forest industry on Vancouver Island. That's what we're all striving to do.

You have my commitment. We're aggressively pursuing this in the interests of the forest industry in British Columbia and on Vancouver Island, and hopefully, we can reach a satisfactory conclusion, because at the end of day, we're most interested in those workers on Vancouver Island and having those processing jobs stay right there.

Thank you.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Minister.

Mr. Paradis.

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

Mr. Chairman, thank you.

Mr. Minister, I see that time is flying by. Thank you for appearing before the Committee today. Before you leave us though, can you tell us how you feel about the Department's upcoming challenges?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

I like to categorize them as opportunities. There are enormous opportunities on the technology front. Canada is emerging as an energy superpower. We're one of the largest producers of oil; I think we are the fourth or fifth largest producer of oil in the world. There's natural gas, we have uranium, and we have nuclear here. We have some of the most extraordinary sites for renewable energy such as wind. So it's very important that as we emerge as an energy superpower, we emerge as a country that delivers clean energy. It's very, very important.

So I think those are exciting opportunities as we pursue these--the development of clean coal technology, the development of CO₂ sequestration. These are exciting opportunities for our country. They could have enormous benefits on the global environment as we move forward, especially if we can deploy these technologies to other parts of the world that may not have them.

In conclusion, Mr. Chair, I would also like to invite the committee.... One area that I think could stand to have a lot of work done is regulatory reform. I know there has been work done, but I would be quite interested in seeing where the opportunities are in improving our regulatory approval process between federal departments, within the provinces. Where are the inefficiencies now and how can we get a stronger outcome that would in fact have better results for the environment as well? I would be quite interested to see if the committee ever had time to pursue something like that. I think that would be very useful for the government.

With that, I think time is short. I thank you for inviting me to the committee, and I always look forward to reappearing.

[The Chair, Conservative, Lee Richardson]

Thank you very much, Mr. Minister. I do appreciate your staying to allow everyone to ask all the questions.

I think a number of the questions asked were related to the estimates. It is the last item on our agenda and I'm going to have to move quickly to that, having allowed these extra questions.

Thank you, Mr. Minister, for appearing.

Pursuant to the order of reference made on Monday, October 30, we have the supplementary estimates, Natural Resources.

Shall vote 1a carry?

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Chair, I was just going to say that I don't know how we can cut more. They've already slashed it enough, so I'll be supporting that vote.

[The Chair, Conservative, Lee Richardson]

All right.

NATURAL RESOURCES Department Vote 1a--Operating expenditures..........$111,717,415

(Vote 1a agreed to)

[The Chair, Conservative, Lee Richardson]

Shall vote 10a carry?

Ms. Bell.

[Catherine Bell, NDP, Vancouver Island North, BC]

I'd like to move that vote 10a be reduced by $249,999 to bring it down to $1.

[The Chair, Conservative, Lee Richardson]

Ms. Bell has moved that vote 10a in the amount of $21,661,710 be reduced by $21,661,709.

[Catherine Bell, NDP, Vancouver Island North, BC]

No, reduced by $249,999, and perhaps I can explain.