Natural Resources Committee on Feb. 12th, 2008

[Jim Farrell]

I can, but I could offer, Mr. Chair, to provide the committee with some of the projects and some of the studies that are ongoing, both within the department and in collaboration with FPInnovations around this issue of reducing GHG emissions from the forest product sector.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Farrell. I appreciate that.

Your time is up, Monsieur Ouellet.

We will go now to the government side, to Mr. Allen, for up to five minutes.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you, Mr. Chair.

Thank you, witnesses, for appearing today.

I'd be interested to get your numbers on the changes in the forestry industry, because I was presented with a pre-budget brief from the president of the New Brunswick Forest Products Association who said there's a study referenced by APEC saying that there were 8,000 jobs just in Atlantic Canada that were lost in the forestry industry between 2004 and 2006. That does not include 2007, in which a number of sawmills as well as large pulp and paper mills in New Brunswick closed down, including those in Miramichi, Bathurst, and Dalhousie. I'd be interested to know what's going on there. As well, with the dollar exchange, every penny it goes up costs the industry about $5 million in Atlantic Canada.

One of the comments that was made was that some of the forest innovation side has been traditionally delivered by ACOA, through the Atlantic Innovation Fund. The challenge with that fund is that you apply once per year, and it's slow on the innovation side. One of the questions was whether, given the challenges, there would be the possibility of a dedicated fund for innovation.

I see that FPInnovations is like that. What is the delivery mechanism for these funds from the innovation program, and is it based on initial individual applications or is it based geographically, or how is that delivered?

[Jim Farrell]

Thank you for the question.

The funds are delivered through FPInnovations and through their own staff. For example, they are expanding their presence in Atlantic Canada, and more specifically through some of the universities, like the University of New Brunswick.

For example, the UNB wood products research group is actively engaged in our Value to Wood program. In that Value to Wood program we see experts. Many of these industrial advisors actually locate in smaller communities and go out and actually visit facilities and give advice to owners. So there is no allocation per se, but provinces like New Brunswick and Nova Scotia have been very active in terms of making contributions as well, and universities, again, specifically UNB, are actively involved in this program.

As I say, there's no regional breakdown in terms of allocation, but there certainly has been pretty active engagement from places like Atlantic Canada, and more specifically the University of New Brunswick.

I believe we just recently got notice of a joint project that was submitted by the FPInnovations' Paprican to the Atlantic Innovation Fund around some research to be undertaken in collaboration with UNB. I can certainly get you more information on that, Mr. Allen.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

One of the comments in the presentation that was made concerned the transportation of wood products and the fact that if anything moves in New Brunswick, it typically moves by truck, because we have very limited rail. What are some of the details with respect to wood products transportation that we're investigating?

[Jim Farrell]

FPInnovations is made up of four divisions, and one of those divisions is the Forest Engineering Research Institute of Canada. Their focus is harvesting and transportation. They're looking at all kinds of ways to essentially reduce the cost and minimize the environmental impact of transportation. That includes things like how you put bigger loads on trucks without having a negative impact on the roads and the highways they go across, by using variable tire inflation and tire sizes. It's all designed around how you actually get fibre to the mill in the most cost-effective way.

They've also looked at biodiesel in trucks in various configurations that meet safety requirements, but, again, that are able to get your unit cost, delivery cost, down.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Do I have any time left?

[The Chair, Conservative, Leon Benoit]

You have about a minute.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Here is a last question, then.

We recognize that a significant number of the issues in this are provincial. Energy cost, wood supply, and those types of things are all provincial jurisdictional issues.

Concerning some of the programs we've talked about involving biomass, generation, and those types of things, how are we succeeding in reconciling the challenges between the provinces and the federal government with respect to delivery of these and the frustration from local people who are trying to access these funds? I see, as part of any programming we do, that it's always a challenge to deliver when we get into a battle of wills with the provinces on it.

How are we reconciling some of those challenges between federal and provincial jurisdiction?

[Jim Farrell]

Perhaps I could talk about FPInnovations as a model.

The board of directors is made up of representatives of most of the provinces as well as many of the primary and secondary industries, plus the federal government. There's a great deal of discussion at that level to try to reconcile the most effective way to deliver regional value and regional programs. That's a model we use through FPInnovations in setting priorities, which is a national process that involves all the regions of the country.

Another mechanism we have, in terms of dealing with such broader policy issues as the wildland fire strategy or the national forest pest strategy, is through the Canadian Council of Forest Ministers. All of the provinces and territories are involved in it. Taking into account the various ways they collect information and deliver their services, we try to create a model for the country that reflects those regional interests, because the provinces and territories are at the table, and we actually do that.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Allen.

Thank you very much, Deputy Minister and Mr. Farrell, for coming for this first hour.

Of course, Deputy Minister, you'll be back for the second hour right away. You may start now to get prepared for the second session and have your appropriate officials come to the table. Thank you very much for your presentations and for answering the questions in the first hour.

Committee members, we will continue.

We have to deal with the budget to provide funds for witnesses who require their costs to be paid for this forestry study. I'll read the motion. You have in front of you the sheet that outlines the amount requested, $39,000.

Is there any discussion on that motion, or can we just go to...? I'll read the motion:

That the proposed operational budget in the amount of $39,000, for the period of 2007 to 2008 in relation to its study on the unique opportunities and challenges facing the forest products industry, be adopted.

If someone would move that motion, then we can have a discussion.

Mr. Allen moves it.

Is there any discussion on the motion?

Seeing none, is it agreed?

(Motion agreed to)

[The Chair, Conservative, Leon Benoit]

I can see that we have at the table the deputy minister.

Deputy Minister, would you introduce your official to the committee?

I understand we have a very short presentation, so we'll get right to questions. If the official opposition is ready with questions, Mr. Alghabra, we'll start with you.

But first, Ms. Doyle, your presentation, and again, please introduce your official.

[Cassie Doyle]

Thank you very much, Mr. Chair.

I'm happy to introduce Sue Kirby, who's the assistant deputy minister of the energy sector at NRCan.

As you know, I was here on January 16 with my minister, so I just want to give you a bit of an update of what has happened since that time, really, on how we're moving forward.

It's obvious from the events of last November and December that the earliest possible notification to the Government of Canada of a potential interruption in the supply of medical isotopes is essential. I want to let members know that we now have in place a communications protocol that will assure timely communication at the appropriate levels among AECL, NRCan, and Health Canada. I believe that copies of the protocol have already been tabled at this committee.

Under the terms of the protocol, AECL has agreed to inform both NRCan and Health Canada of any situation with the NRU reactor at the Chalk River laboratories, which is, in general, both planned or unplanned, any situation that would affect the supply of isotopes. AECL will immediately inform me, as deputy minister, and my colleague, the deputy minister of Health Canada. So this protocol establishes a clear line of accountability and a responsibility between NRCan, Health Canada, and of course AECL. With this in place, I'm confident that the situation that occurred in November and December will not be repeated.

I also want to touch on the restructuring that is under way, the review of the restructuring of AECL, which was announced by the government on November 29. During the period of this review, it was deemed important that there be very close communication between the shareholder--the responsibilities of the shareholder are vested in the Minister of Natural Resources--and AECL. To that end, I and the deputy of Industry Canada have been appointed to the board of AECL, to ensure strong communication during the period of this review and good governance, of course all in the aim of creating a strong future for AECL.

Those are my opening comments, Mr. Chair. I understand there's been a considerable amount of discussion by this committee. As you know, I was here on January 16 and answered questions at that time, but Sue and I would be very happy to answer further questions from the committee.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Deputy Minister.

We are, of course, in the second hour back to the study of nuclear safety issues, including the safety issues at the Chalk River nuclear reactor.

Mr. Alghabra, you have up to seven minutes of questioning. Go ahead, please.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Thank you, Mr. Chair.

Again, thank you, Deputy Minister, for coming back. You are right, this has been an important topic that this committee has taken a considerable time in examining. We still have some questions, and I'm happy you're back here to help us understand some of the pending issues.

You were appointed to the board of directors of AECL on December 3. Is that correct?

[Cassie Doyle]

Mr. Chairman, that is correct.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

When were you notified of the intention of that appointment? When did you know that was going to happen?

[Cassie Doyle]

I was aware of the government's intent to appoint me to the board perhaps about a week ahead of the actual appointment. I wasn't aware of when the actual appointment went through exactly.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

So what does that make it, November 25?

[Cassie Doyle]

Yes. I'm not certain. I could provide you with the exact date, but it would have been some time in late November.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Did it have anything to do with the NRU issue?

[Cassie Doyle]

No, Mr. Chair. The intent of my appointment, as I explained, was to ensure that there would be close communication around the review of AECL, during the review of AECL, which was announced on November 29.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

So your appointment to AECL had nothing to do with what happened with NRU at the time of the discussions? We heard, from previous testimony, from other stakeholders, that this issue had become an urgent issue on November 22, and obviously your admission today of this change of communication is a reflection of that reality.

So your appointment had nothing to do with the NRU issue?

[Cassie Doyle]

Mr. Chair, my knowledge is that there was absolutely no connection between the NRU issue and my appointment to the board of AECL.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Okay.

You also told us that you were with the minister on two occasions, in conversation with Ms. Keen—I think on December 5 and December 8. Is that correct?