Natural Resources Committee on May 9th, 2007

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

I'm sorry, Mr. Lunn...

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

Let me finish.

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

I simply want...

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

You've asked three other questions. I'll try to get through them really quickly.

You talked about the limited scope of the projects in some of these. In fact, that's the opposite. I'll give you some hard examples, and I know they look similar to some of the previous government's programs.

The previous government brought in, in their last year of office, a program called the WPPI, a wind incentive production program. The WPPI program actually was exclusively only for wind. It didn't provide any incentives for renewable energy. We brought in our ecoENERGY renewable initiative incentive to provide a production incentive, very similar to the previous one except we have included renewable energy such as biomass, tidal, small hydro things, and obviously wind and solar. These were not included in there. And we have other separate programs for solar heating and so on and so forth. So we've actually expanded the scope of some of these projects to invite more renewable energy.

You've talked about files in your office about damage to victims. I can only say that people have signed contracts, signed contribution agreements. We are honouring all of those. I've expressed that in the House. I've expressed that, and I would be more than happy to look at specific files, if you provide them to me. The department will look at them. If they're signed contribution agreements or contracts, we are honouring each and every one of those. I made that very clear on the day we announced that we would not be proceeding because we didn't feel this program was efficient. And we have even stronger and better programs in place now.

That information's been very, very clear. There have been a few members from all parties who have brought files forward to me, and I take them to my officials and we look at them. If someone's fallen through the cracks, we're fixing them. So the government has no intention of not honouring signed contributions or contracts. In fact, we've been receiving quite positive feedback on our new energy efficiency initiative.

I appreciate your comments and the work of the Library of Parliament. I acknowledge there are some similarities, stuff that's working. I have no problem saying yes, we need to do this. I've said many times, the largest untapped source of energy in this country is the energy we waste. Energy efficiency is so important, but it's equally important how we spend the taxpayers' hard-earned dollars--that we spend those efficiently as well.

Admittedly, we're making some changes, but we think we've got the right ones.

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

Minister, could you ask your staff to table the details of the $71.2 million increase in the professional and special services budget? Could you possibly provide the committee with that information?

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

I think we're thinking it's related to the nuclear waste liabilities, but I will commit that we'll look into this and we'll get back to the committee. If it's something we can disclose, I'm more than happy to do so. I'm all for full transparency, so we will follow that up. If there's something that I can possibly send back to the chair of your committee, we'd be more than happy to share that with you. We'll look into what we can and cannot provide and we'll try to get you a very direct answer as soon as possible.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Minister, and thank you, Madame DeBellefeuille.

We're heading a little closer to eight or nine minutes for the first two, so Madam Bell, you may go a little bit longer, just this once.

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

So I get ten minutes?

Thank you, Minister, for attending and for your opening remarks. I was taking notes on some of the things you said. You mentioned $2 billion for biofuels--and underneath that you talked about logging debris as one of the sources that you would see using--and also $125 million for the forest sector. I think you mentioned that money was in part to be used for making sure that logging communities and resource communities are viable.

I just want to talk a little bit about something I brought up with you at your last visit to this committee, which was log exports. I've asked you those questions in the past, and you said to me that this is a serious issue and that your government would be looking into it and that I had your commitment that you would do everything you could to mitigate the job losses that are a direct result of log exports. Since then I've seen an increase in my community and others on that front, and it's becoming an issue for the sustainability of some of the smaller resource-based communities.

I've spoken with managers of forest companies who say that it's not profitable for them to bring logging debris out of the forest and that it's cheaper to leave it there, which is unfortunate. They also talk about the environmental aspect of leaving some of that debris on the floor. It may look bad, but I understand that it's compost at some point.

Log exports are causing the shutdown of more and more of our mills in British Columbia, and probably everywhere else. In fact, in my riding a mill was shut down for two weeks because they couldn't get logs, and yet there's a log dump just up the road, and they go by on ships on a daily basis, and they go by on trucks, but our mills can't get them. I'm just wondering if you would commit to supporting the industry in getting those logs, instead of them all being shipped out. They say that it's too expensive. I'm afraid that we're going to lose the only remaining mills that we have.

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

Thank you for your questions.

You've touched on a number of issues. Let me talk about the log exports, because obviously that's something very dear to your heart. You and I are both from Vancouver Island. It's not an issue in the rest of British Columbia; predominantly it's a Vancouver Island issue.

With respect to using the forestry debris, there are really opportunities in the heartland of British Columbia, where we have the pine beetle kill. There are things like the pellet industry, in which they use all that kind of forestry debris, as well as some of the beetle wood. There are some pretty keen opportunities there.

With regard to log exports specifically, first of all, what happens now is that no logs are exported unless no company in that area is interested in them. In fact, if somebody wants to export logs, they have to go to an agency, and they would actually advertise that these logs are going to be available. They would go out to all of the local industry. If nobody's interested in these logs, then they're deemed to be excess, and they would receive a permit to export a certain amount of logs.

I understand your concern. We've seen some of the more inefficient mills close right across parts of Canada, and they're struggling.

One of the proposals that has been put on the table is a suggestion for a lumber equivalent export tax, and we're looking at that proposal. One of the disadvantages on log export is logs can be exported, and they're not paying any of the export taxes that softwood lumber would actually have to pay. So if we actually put on an export tax, that would put it at a level playing field. It would at least level the playing field where they're processed on either side of the border.

That's something Minister Emerson is looking at. It's being looked at with the province. We actually work together. The federal government is responsible for logs coming off private lands for export, and the provincial government is responsible for logs coming off crown lands, so it really has to be looked at together. That's one of the areas they are looking at to help these communities protect those jobs.

I hear your concerns loud and clear, but I want to stress that there is absolutely not one log that goes across the border that is not first offered to all the local industry people; they all have access to it first. They have first right of refusal, if I can use that, and only then would an export permit be issued, and it's only for a certain amount. That process is actually done jointly, with both crown and private lands; they use a similar process.

You touched on $125 million. What did we do with that money? We made a commitment, as you know, of $200 million to help the forest industry become more competitive. We went to organizations like FPAC, the Forest Products Association of Canada, and asked them how we could best help the industry. We asked them to tell us what their industry was telling them.

They gave us some very clear suggestions. One of the things we did was bring together Paprican, FERIC, and Forintek, three individual research institutes, under one umbrella, called FPInnovations. This is now the largest public-private forestry research institution in the world.

Its board of directors is made up of forest company CEOs, and they set the priorities. They're deciding how to move this forward. They're deciding the priorities for this funding.

We're listening to the industry. We're going to the industry. As a government we're asking how we can best help, and that's been the result of our actions.

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

I thank you for that.

I want to change topics and ask you about the security of our supply of natural gas. We have approximately seven years of reserves left in this country. I'm wondering what this government is doing about securing a supply of natural gas for Canadians.

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

Well, as you know, we're an integrated energy market. We export $80 billion to $90 billion a year of energy, predominantly to United States. It is actually one of the strongest parts of our Canadian economy.

We're constantly working with the energy sector on efficiency initiatives. We're looking at alternative fuel sources. We're investing in renewable fuels.

I understand your concern. I actually think the natural gas reserves are larger than seven years' worth. We're looking at the Mackenzie Valley pipeline, which opens up another entire area.

The short answer, and I don't mind saying this, is we have to decrease our dependency on fossil fuels. It's so important. If you think about it globally, right now we burn a thousand barrels of oil per second in the world, every single second. We burn 85 million barrels of oil.

It ties into natural gas becoming more efficient. We can't continue to sustain this consumption. It's why we're investing in alternative energies, renewable energy, and energy efficiency to try to decrease our dependency on fossil fuels.

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

Thanks.

I have one more quick question.

[The Chair, Conservative, Lee Richardson]

I'm sorry, but I think you're going to have to wait. Nine minutes is the running average this afternoon.

We may not get to everybody on the second round, because everybody's gone over their time.

I'll now go to Mr. Trost.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Yes, I'll be splitting my time with Mr. Harris. If the minister can keep the answers short, both Mr. Harris and I can get our questions in.

I have a few questions on the nuclear issue. I'm very much supportive of the whole nuclear industry, and so forth, but I like things to not be subsidized by the government.

One of the complaints we've had from outside is that AECL is always subsidized and has been subsidized for many years. In looking through some of the estimates here, the commercial business activity is self-sustaining, but government provides spending for some of the R and D facilities and operations. Could you explain it a little and put it on the record?

Essentially, what I'm looking for is this. What would be the subsidy to AECL? What is it really, when they are fulfilling non-commercial aspects for the government, for basic R and D safety issues that would need to be done even if AECL was privatized, closed, or commercial? I'm trying to get at the bottom line number we would still be spending if AECL's commercial units were privatized or something else was done by the government.

After that, do you have any more comments about things the government is doing on the nuclear file that's promoting it? I know there are large provincial areas of jurisdiction, but more general comments on the nuclear industry would be appreciated, as far as your vision for that industry.

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

Why am I not surprised by that? Perhaps you can give me a warning when my time is up. I could spend a lot of time on this file.

First of all, we have committed $75 million in this budget for research on the advanced CANDU reactor. A lot of money has gone into this research up to now, and this is sort of the last installment to complete this research. It would be irresponsible for our government not to complete the research on this next-generation reactor. I appreciate the involvement of AECL and the commercialization.

So we are making investments like that. In fact, we're in a nuclear renaissance. We're seeing interest around the globe and in Canada as well. I don't think it's any secret we're seeing activity here in Ontario. We're hearing about activity in New Brunswick on refurbishments. We're hearing of new reactors. The industry sector in Alberta is talking about it as a potential source of energy to reduce natural gas consumption in the oil sands. They're looking at it as a clean source of energy. From purely an environmental perspective, nuclear is absolutely emission-free, pollutant-free, and greenhouse-gas-free.

Ultimately it's a decision that will be made by each individual province on whether this is an energy mix that they want to pursue. We'll be there to support them.

I can't speculate on what kind of research dollars will go into it in the future. I think it's very important--and I've said this publicly before--that AECL is commercially viable and competitive on its own without government assistance. It's essential as we move forward.

I think the opportunities are very good for AECL, from the interest we're seeing. We want to promote all sources of energy, renewable energy. We want to promote clean coal technology, but you can't discount the potential enormous interest that's coming forward in nuclear, for no other reason than it's a clean form of energy.

We'll continue to make the investments we need as we move forward. One of my first investments as minister was $500 million for the nuclear waste legacy issues at Chalk River.

So these are things we are doing, but I wouldn't want to try to speculate where we will spend our research dollars in the future.

Let me add one last point. I think it's important to note that about 50% of the world's medical isotopes are produced at Chalk River--50% of what is used for nuclear medicine. That's quite remarkable when you think about it. There has been a lot of research, so it's not just energy generation.

[The Chair, Conservative, Lee Richardson]

Mr. Harris.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Thank you.

Minister, probably a lot of people from British Columbia and Alberta are watching this program. I understand it's being broadcast.

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

I know my mother will see it.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Or they will see it over the next several weeks as it's repeated.

A considerable amount of money has been committed to fighting the mountain pine beetle and mitigating the damage. For clarity, could you give us perhaps some examples of how that funding will be spent in support of mitigating the damage that the mountain pine beetle has done?

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

I'd be happy to, Mr. Harris. I can tell you about some of the broad-theme areas in which we're looking at spending this money.

First of all, wherever they're telling us that we need to be spending on mitigation, wherever they think there's an opportunity for...and I don't want to use the word “containment”, because you and I both know how much they've chewed in British Columbia. But if there are opportunities to stop the advancement--and obviously the biggest area is in trying to prevent it from moving into Alberta and the boreal forests--we are making those investments.

Those investments, those cheques, have been written. The money has flowed through to the province. In this area we're working jointly with the province. I believe we spent about $24 million in this area in the last fiscal year. We'll probably spend a similar amount in this fiscal year.

We're also looking at initiatives with the province on fire suppression work around communities that are surrounded by the infestation. Obviously it changes the fuel dynamics of the forestry floor and the forests. Again, we're working in partnership with the province on fire suppression work.

Obviously the other area that's very important is economic development. We can't spend all this money just on research. We don't think that's the right thing to do. There are some good things being done, but at the end of the day, we have to look at where the greatest investments are. Again, we're looking at initiatives in conjunction with the province, matching dollars with the province for large public economic infrastructure, for what we know are the great drivers--things like airports, bridges, opportunities in the railroads. We're looking at infrastructure like that and at smaller-based community economic development projects going out into the heartland of the pine beetle area and talking to these local communities.

These will be coming forward. They're not there yet. Again, we're in discussions with the province to ensure that there are matching dollars, so that the communities can tell us, “Here are some priorities where we think we can make investments in our communities that will really help move the economy forward.”

I want to add one thing, because I think it's very important that we send this message as well. The forest industry is very important to our economy nationally, right across the country, and obviously in British Columbia. British Columbia produces about 50% of the softwood lumber in Canada. We believe the softwood lumber industry will be strong for decades and decades to come in British Columbia. We're there to work with the forest industry as well. It's very important that we work there, doing the research on how to use this fibre, on how long will it last, on how to accelerate the recovery of this fibre.

So those are areas in which we're also making an investment, Mr. Harris. We're in this for the long haul, as you know. We've committed $1 billion over ten years. You can be sure that we will be investing that in all of these ways to deal with the mountain pine beetle in this area.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Thank you.

I have one final question, if I may. There are centres of forest excellence at universities and colleges throughout the interior of B.C. Can we expect that the expertise that's available there would be part of the pine beetle mitigation, funding programs to look at new and innovative ways to use wood that has been damaged by the beetle, and indeed to learn more about the pine beetle itself?

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

Without question we would welcome that from the local colleges. I know in your city, you have the University of Northern British Columbia. Some great work is being done there.

So we would not only welcome it but encourage it. I know that Dr. Allan Carroll, a leading scientist in our department at the Pacific Forestry Centre, works on a regular basis with the funding. We actually have staff from Natural Resources Canada located right in the University of Northern British Columbia, working on these types of projects. We look forward to a continuing engagement.

Some of these people, those who are living right in the heartland of the pine beetle, know it best. They're witnessing it, they're experiencing it, they're seeing it, and they're listening to the experts and the people in the industry as well. We're really proud to have them as partners. You can count on our continuing to engage them and helping to provide the resources to do the work.

[The Chair, Conservative, Lee Richardson]

Thank you, Minister, and thank you, Mr. Harris.

We're going to have to go quickly here.

Mr. St. Amand, we have about five minutes. You're going to end up sharing that with Mr. Ouellet just so that we can get everybody in.

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

Minister Lunn, thank you for coming this afternoon.

Let me be as candid and direct as I can be. The nub of the concerns that have been expressed by David Suzuki and Al Gore, among others, and shared by millions of Canadians, I dare say, is that your government continues to defer to the oil and gas sector, particularly regarding the oil sands.

They're concerned, for instance, about the announcement of intensity-based targets, not overall targets. They're concerned about our targets, or your government's targets, such as they exist, well short of what has been announced in the United Kingdom and France.

I understand that there's a report indicating that the oil sands are now going to be exempt from any regulations or controls on emissions that result in smog. I'd like to ask you directly, is that the case? Are we going to hear about that? Or can you unequivocally say no, they will not be exempt from such controls or regulations?

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

Thank you very much.

First, I can unequivocally say as directly as possible that they will absolutely not be exempt. In fact, every sector is going to be required to reduce greenhouse gases, and every sector is also going to be required to reduce smog.

You talk about intensity-based, and yes, there is intensity-based. But we believe that through aggressive targets, we can get to real reductions. We can turn the graph and start to go down.

All of our targets far exceed anything the previous Liberal government brought in. Even in terms of the plans brought in by them in 2005, just before they were thrown out of office, the numbers are absolutely and unequivocally far more severe.

The numbers speak for themselves: greenhouse gases are plus 35%. Let me put this in perspective. When they had 15 years, they could have gone from zero to minus 6%. Now we're at plus 35%, and they're saying, well, in five years, can't you go from plus 35% to minus 6%? It's not possible without having a devastating impact on the economy. So it's not possible, but—