Natural Resources Committee on Nov. 22nd, 2007

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

Absolutely, this is very much to bring us into compliance with international standards with respect to the definitions and to the liability amount. I think you will find that when you hear from other witnesses as well.

[The Vice-Chair, Liberal, Lloyd St. Amand]

Thank you, Mr. Allen.

Minister, I know you're staying for the supplementary estimates review, but if you could direct to the clerk the documents that were requested, specifically Mr. Boshcoff's and Mr. Ouellet's requests, we'll look forward to that.

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

I'll direct all of those through the clerk so that they can be distributed to all members.

[The Vice-Chair, Liberal, Lloyd St. Amand]

I draw to the attention of the members of the committee a memo dated November 15 from the clerk, in small type, the subject Bill C-5, particularly the contact information for legislative counsel, Marie-Andrée Roy. If you have amendments to suggest, they should be directed to legislative counsel at one of the contact places indicated in the memorandum from the clerk.

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

Mr. Chair, just before you conclude, if there were further questions—as I understand, it's a technical bill—I would be more than happy to receive those in writing. We'll try to get you answers back as quickly as possible. Or if you wish to have officials back to answer questions of a technical nature to review this bill, we're more than happy to make them available to the committee at any time.

[The Vice-Chair, Liberal, Lloyd St. Amand]

Thank you for that offer, Minister.

I understand that Ms. Kirby and Mr. McCauley will be taking their leave from the table, and someone else will be joining us for our review of the estimates.

Thank you.

In the interest of utilizing the remaining 55 minutes or so of the committee's time, the minister, of course, remains with us and he's accompanied by Mr. Tobin, who is with the Department of Natural Resources, I presume.

Good morning, Mr. Tobin.

Minister, without further ado, if you wish to present to us with respect to the supplementary estimates, we are here and anxious to hear.

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

Thank you very much, Mr. Chair.

Again, I'm pleased to have Mr. Tobin here, the ADM at Natural Resources Canada for corporate finance; and I believe we have another ADM here, Phil Jennings, who heads up the major projects management office. So if you have some questions there, he might be able to give us some assistance.

Thank you for giving me the opportunity, and for your understanding and flexibility in accommodating my schedule so that I am able to come in and do these back to back.

Canada's natural resources are vital to Canada's economy. I'm committed to the sustainable development of our resources, which enhance our productivity and our competitiveness. At Natural Resources Canada, I'm working to combine economic opportunity with environmental and social responsibility.

Today I'd like to talk about the measures we are taking in four key areas. First is clean energy and climate change, specifically the development of improved energy technology that contributes to a cleaner, healthier environment by reducing greenhouse gases.

Second is forest sector competitiveness. We are all aware of the challenges this sector is facing. Natural Resources Canada is leading the forest industry's long-term competitive strategy and assisting the forest sector to meet the challenges of today.

Third, I want to touch upon Arctic sovereignty. Through NRCan's land mass and sea bed knowledge, and through the continued studies on the effects of climate change, my department is contributing to the economic and social development of northern Canadians, allowing Canada to better exercise its arctic sovereignty.

Lastly, there are the regulatory issues. The major projects management office will provide a single point of entry into the federal regulatory process for industry, while accounting for aboriginal issues and improving environmental integrity and health and safety concerns.

These four priorities are in keeping with those established in our government's Speech from the Throne and our broader government priorities.

Let me begin with clean energy and climate change. My goal as the Minister of Natural Resources is to help position Canada as a world leader in environmental responsibility through the development and use of natural resources, by increasing energy efficiency, by increasing the production of low emission energy, and by reducing the environmental impacts associated with energy use and production. We are well aware of the ever-increasing demand of energy.

Through my department, the Government of Canada is building on Canada's competitive advantage in the energy sector while embracing environmental and social sustainability. A number of key initiatives have been launched to help Canadians use energy more efficiently by boosting clean energy supplies and developing cleaner energy. Among these are the ecoEnergy initiatives.

The ecoEnergy efficiency initiative covers the cost of retrofitting programs for homes and personal and business use. In addition, the ecoEnergy renewable initiative supports clean power projects, providing incentives for wind, tidal, solar, and other clean projects.

Our government's renewable fuel strategy includes investments in support of the expansion of Canadian production of renewable fuels. Even more exciting is where we're going with the NextGen Biofuels Fund, a $500 million investment that will be administered through Sustainable Development Technology Canada to fund the next generation of renewable technologies.

My department also works with the energy industry and environmental stakeholders to find safer, cleaner, more efficient methods of developing Canada's energy resources. One of the innovative ideas we are contributing in this endeavour is RETScreen, which is empowering cleaner decisions around the world—and it's pretty cool technology if you ever have an opportunity to see it. It's something for the committee in the future, as we could make officials available to come to give you a demonstration of it. I was quite impressed when I saw it.

RETScreen is the leading software for assessing the viability of renewable energy and energy efficient technology projects. It was developed at NRCan. Some of its partners are NASA and other international ones. It's really leading the world in this type of technology; in fact, some of the states in the U.S. are actually putting RETScreen into their legislation as the standard that has to be achieved. So it's an example of some of the great work that is happening.

Just to give you an idea of the expanse of our involvement in energy technologies to improve the environment, we are helping to create technology road maps for clean energy by transforming Canada's electricity generation infrastructure; developing new combustion technologies to design combustion systems that are CO₂ neutral; and are working to make oil sands commercially feasible and environmentally sound.

Our priority is to address climate change through the reduction of greenhouse gas emissions while ensuring Canada's competitiveness and contributing to our economy and social well-being.

Let me quickly touch on the forest sector.

This sector contributes $36 billion to our economy. The industry, as we all know, is facing some very enormous challenges, and our government is trying to help them overcome this. We are committed to working with the forest sector through this difficult time. Right now, as you know, we are delivering $400 million in forestry initiatives. We are investing in research and development to help address breakthrough technologies that will expand traditional product lines and increase competitiveness. The forest industry long-term competitiveness initiative is an excellent example of collaboration with other government departments and the private sector.

One important area we're concentrating on is helping to combat the mountain pine beetle infestation, which is threatening forest communities and the forest industry primarily in the west. The federal mountain pine beetle program is focused on controlling the spread, supporting economic development in hard-hit communities, and protecting forest resources.

We turn to Arctic sovereignty.

We are seeing opportunities for social and economic development emerging across the Arctic. There are new challenges as international interest in the region is growing. As outlined in the Speech from the Throne, a priority of our government is to enhance specific scientific research in the north, and improve our knowledge through mapping and charting. In addition to supporting environmental stewardship, this research will allow Canada to better exercise its Arctic sovereignty and will also contribute to economic and social development for northern Canadians. Migration and adaptation to environment challenges in the natural resource sector need to become integral parts of the decision-making process. Environmental challenges also present opportunities for new technology solutions that through the expertise of Natural Resources Canada will place Canada at the forefront of modern sustainable resource development.

Finally, I'd like to discuss the importance of regulatory issues in meeting the Government of Canada's commitment to a modern, efficient, and effective system that will protect the environment and improve the competitiveness of our industries.

For key sectors of our economy, such as the traditional industries of forestry and mining, our government is delivering concrete results. Given the high commodity prices and the demand for resources, the number of major resource projects has grown by 200% in the last three years alone. The current regulatory system cannot keep up with the demand. That is why our government has placed a high priority on creating a new major projects management office, an initiative that will maintain Canada's world-class environmental standards, while cutting red tape and cutting the time it takes to get regulatory approval in half. It will provide a single point of entry into the federal process for industry and all Canadians. This initiative will improve the competitiveness in Canada's resource industries while providing the capacity needed to uphold our country's world-class environmental standards.

I should also add that as we improve the efficiency, transparency will also improve. Greater access will be provided to all Canadians to actually see where projects are in the regulatory process. I think that's very important as we strive to increase this efficiency.

The priorities I've outlined today are part of our government's commitment to deliver results for Canadians. Safeguarding the environment while protecting Canada's natural resources to the benefit of our country's economy and social well-being is my goal as the Minister of Natural Resources.

Mr. Chair, I'm pleased to take your questions.

[The Vice-Chair, Liberal, Lloyd St. Amand]

Thank you, Minister.

We will start our first round with Mr. Alghabra.

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

Thank you, Mr. Chair.

Thank you, Minister.

I want to comment on the discussion or the exchange that you and I had earlier. I want to say that while you did answer two of the questions about the waste and the standardization of technology, you actually, I think, raised more questions in my mind by saying that if we're not really going to....

I mean, most of these agreements are done to standardize and create efficiencies, so if we're not going to commit to taking the waste, which is part of the GNEP, and if we're not going to commit to standardizing technology, it really raises questions about why Canadians need to join this partnership. That's what I'm underscoring by stating that we need to have this debate. We need to have this discussion publicly and openly and transparently, so that we know what is it that we're moving towards.

I want to move on to the questions about the estimates. It was reported recently that Atomic Energy of Canada Limited is going to restructure itself. Was the department or was your office consulted on this restructuring?

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

The first question you raised was with respect to the GNEP. I can just say briefly, that's a principle: we are not going to accept other countries' spent nuclear fuel or nuclear waste. We've stated that very clearly and emphatically, and that's the way it is.

But there are other advantages. Again, we haven't made a decision, but the global nuclear energy partnership was looking at the entire fuel cycle. How do we maximize the energy we extract from the uranium? How do we become a lot better at recycling the fuel? How do we ensure we minimize the non-proliferation issues with respect to the waste? It's important as a country that we all work together on these areas.

These are some of the stated principles of the global nuclear energy partnership. The government has not made a decision. There are five or six countries. But there are clearly some very positive initiatives that the global nuclear energy partnership is undertaking. We participated at the first meeting in Vienna as an observer.

On your second question, with respect to some of the changes at Atomic Energy of Canada Limited, no; in fact these were decisions made by the corporation without consultation with the department. But they are quite common. Through the years at AECL, they've restructured numerous times as they strive to make themselves more efficient. These are internal changes in the reporting structure of the corporation to make their own efficiency as they look at their product lines. They're all internal in the reporting structure within the corporation itself. These were internal decisions made by AECL without consultation with Natural Resources Canada.

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

Does the government have any plans to privatize AECL or any segments of AECL?

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

There have been no decisions made with respect to that at all, although we do recognize there's a lot of increased interest in nuclear energy around the world, and we're seeing it here at home. There are a number of provinces that are expressing interest in building new reactors, which we haven't seen in literally decades.

This summer I was in Argentina. I signed an MOU with Argentina to do the initial discussions on a potential CANDU 6 in Argentina. Argentina currently has one CANDU 6 operating that has won international awards as the most efficient nuclear reactor operating anywhere in the world. Their performance has been outstanding. Their safety record has been impeccable.

We can be very proud of the Canadian performance record and the record of the CANDU reactors around the globe, and we are seeing increased activity. We want to ensure that there's a very optimistic future for AECL, and we're quite enthusiastic about that.

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

I share your pride and Canadians share your pride in AECL. That's why there are questions about what the future plans are for AECL. I'm not necessarily saying one way is bad or the other way is good. What I'm asking and what a lot of people are asking is what are their plans? What are the future plans, and are we going to have a public discussion about the direction in which this government wants to take AECL?

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

What I can tell you today is that the opportunities for AECL are increasing all the time. We have a feasibility study with the Province of New Brunswick for a second CANDU reactor in the province, the ACR-1000. Again, we're seeing increased interest from other provinces for new builds. So the prospects are looking very, very good.

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

Excuse me if I interrupt you, Minister. I understand that, but I think you're skirting or avoiding my question.

Does the government have any plan to privatize AECL? I know there are good prospects. I know there is a good future. I know we're very proud of its accomplishments, but that's my question.

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

The government has no plans at this time. It has not made any decision with respect to privatizing AECL.

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

Are there any internal discussions taking place about that issue?

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

I don't think there's any secret that from time to time, over the years, even before my time, when the Liberals were in office, what you have seen is a convergence of the nuclear industry around the globe. A number of the major players have come together and formed partnerships. In fact, AECL has SNC-Lavalin, Hitachi, and GE as partners they're working with as part of Team CANDU.

We do get inquiries from time to time from other people in the nuclear industry—and there's nothing unusual about that—expressing an interest in working with AECL, and some even going further than that. These are outside inquiries that are coming in. As I said, they happened well before we became the government, even though people have also expressed an interest since we've become the government. But we have made absolutely no decision with respect to that, other than we're quite enthusiastic about the opportunities for AECL in the future.

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

I know, but I want to make a short comment.

[The Vice-Chair, Liberal, Lloyd St. Amand]

Thank you, Mr. Alghabra.

Madame DeBellefeuille.

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

Thank you, Mr. Vice-Chair.

Minister, the more we promote nuclear energy and the more nuclear facilities there are in the world, the more waste there will be, the more the safety and environment of communities will be put in question and the more tools will be given to countries where there are geopolitical tensions enabling them to use uranium for weapons purposes. That risk does not seem to count in your analysis. You seem completely blinded by the business that can be done in the nuclear field, and you disregard this important part. We can't avoid it or prevent people from debating it.

Some articles say, for example, that Toronto wants stricter standards and that Canadian nuclear reactors are among the biggest emitters of radioactive hydrogen.

There are leaks. You can't say that everything is fine, everything is magical and that we're going to resolve the issue of GHGs with nuclear energy. I think it's unrealistic to think that. It's magical thinking. If you study nuclear energy, you'll see that, from the start of the cycle, that is from extraction—

[The Vice-Chair, Liberal, Lloyd St. Amand]

Excuse me, Madame DeBellefeuille--point of order.

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

Yes, I'm going back to finances. Pardon me, this is an impassioned debate. We'll have other opportunities to cross swords on this question.

I'm going to ask you a question on the budget, concerning the request for supplementary funding from Atomic Energy of Canada Limited, AECL. It is surprising to see that AECL is seeking more supplementary funding than what is in its annual budget. I did a little searching. Since at least 2003, AECL has been requesting quite significant budgets in each request for additional funding.

Why, minister? Is there a shortage of managers? Did the managers fail their management courses? They're seeking a surplus that goes beyond what's in the Main Estimates. Why aren't they able to plan and put that in the Main Estimates? I'll allow myself to be a bit cynical. Is it because they need money to pay for pages of advertising in La Presse and in the national newspapers in order to promote nuclear energy as clean energy?

I would like you to explain to me how these continuing increases are warranted, and I would like you to tell me when this will stop. When will the advanced CANDU reactor be ready to be marketed? How much money will Canadians give to develop this CANDU?

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

Thank you very much.

First, since you raised the issue of promoting nuclear, I just want to emphatically state that it's not my job to promote it at all, and that's not what I'm doing. It's purely the jurisdiction of the provinces to decide on their energy mix. Quebec and British Columbia are blessed with a lot of hydro, and that's where they may choose to get their energy. Other parts of the country may decide to use coal and are investing in clean-coal technologies. Almost 50% of Ontario's energy comes from nuclear. Quebec and New Brunswick also use nuclear.

Our first and foremost responsibility as a federal government is to ensure the safety and security of all Canadians. That's our number one priority with respect to nuclear. Obviously there are other issues that we have to deal with. But as the government responsible for the Canadian Nuclear Safety Commission, the regulator, that's our priority.

When a province makes a decision to build a new nuclear reactor, our job is to ensure that all the processes and resources are in place to go through those approvals and that we do a very thorough job to ensure safety and security.

We have many sources of energy across the country, and it's absolutely 100% provincial jurisdiction. If Quebec decides to build a new nuclear reactor, that's 100% their jurisdiction. We aren't involved in that in any way, shape, or form. Once they make that decision, our job as the regulator is to ensure the process is there to go through the environmental processes and all the correct approvals.

On the financial side—you raised AECL—one of the issues is specifically at our Chalk River research labs. The NRU reactor there produces medical isotopes. There are some health and safety issues there that have been overlooked for some time. They require some funds to meet those regulations, and as a government we have to provide the resources to do that. They've been ignored for a long time and have fallen into a.... Obviously they meet minimum safety standards, but they need to become compliant with other health and safety standards, and we have to address that. So you will see additional funding requests in the supplementary estimates for that.

How much will the taxpayer have to pay? I've emphatically stated that any new reactor to be built must be done on a commercial basis without government assistance. The record of the AECL on the CANDU and recent builds has been very good. We haven't built a new reactor in Canada in 25 to 30 years, but they've recently built two in Qinshan, China. They came in on time and under budget. So the recent record on new builds has been very good, but AECL has to compete with the rest of the competitors. It has to be done on a commercial basis, and we're confident they can do that.

[The Vice-Chair, Liberal, Lloyd St. Amand]

Thank you, Madame DeBellefeuille.

Ms. Bell.