Thank you very much, Mr. Chairman.
I'm grateful for this opportunity to appear before the committee. I do have a presentation to make and then I'll be happy to answer questions from the committee.
I know there is a great concern about developments in the natural resources sector. I'm here today with a willingness to answer any questions that the committee may have.
Let me get straight to the point. The effects of the global economic recession are deepening. During 2008 there were numerous mill closures and slowdowns in the forest sector, resulting in more than 20,000 layoffs across the country. In the mining sector, since September of 2008 there have been 15 mine closures, with almost 9,500 individuals either losing their jobs, being laid off, or taking wage cuts to keep operations open. Last July a barrel of oil was almost $150, while six months later it was under $40. Employment in the energy sector has been in constant decline since the historic peak of 288,000 jobs reached in October of 2008. By January of 2009 it had dropped by 12,000 jobs, and it is still declining.
Given the importance of the natural resources sector to Canada's economy, these figures are a source of great concern.
Our government knew things were going to get difficult. In devising our economic action plan, we used reliable estimates and built in recognition of the possibility that the recession could become more severe and enduring. We have already reported on progress being made with the economic action plan, and it's clear to us that the best strategy is to continue to move swiftly to implement the action plan while regularly engaging affected sectors, provinces, territories, workers and communities to ensure programs adequately address the current challenges.
Our economic action plan for Canada is a sound strategy, and the International Monetary Fund has confirmed this. As you all know, despite the enormous challenges being faced today, world demand for Canada's energy and natural resources will return. When that occurs, we can expect a substantial boost to Canada's economy because of the central role played by natural resources here in our country.
We are committed, therefore, to two main priorities. The first is to support individual Canadians in communities hit hardest by the global economic downturn. The second is to ensure that the natural resources sector is best positioned to take full advantage of the recovery when it occurs.
These are the central themes of our Government of Canada's economic action plan. The plan aims to mitigate the effects of the global recession we're currently facing while providing opportunities to secure our long-term growth and prosperity.
Let me point out some of the ways in which this is being done. I'll focus on the forest sector as one example.
It is no secret that this is a difficult time for the forest sector. It is especially so for the workers and the communities who depend on it, and that's why we are now acting to provide new supports for the workers and communities hardest hit by the global recession. Right across Canada, many communities hit hard by the economic downturn will be eligible for funding under our economic action plan's $1 billion community adjustment fund, which builds on the work of the $1 billion community development trust first announced in Budget 2008.
Quebec, like many parts of the country, has been hit hard, as evidenced by the mill closures, the job losses, and the impacts on communities. This week our government and the Government of Quebec agreed to lead a Quebec-Canada task team to coordinate efforts to support the forest sector in Quebec.
Let me be clear on this: this is not about new money, but it is about shared interests. Quebec made forestry commitments in their recent budget, and clearly we did the same. They approached us to explore a mechanism to coordinate, collaborate on, and accelerate our respective programs in Quebec. This is about moving quickly to create results together.
In fact, we've recently used a similar federal-provincial task team approach in the forest sector in British Columbia to ensure effective and timely delivery of forestry programs there.
As a concrete example of moving quickly, I announced that we will be accelerating the delivery of $211 million to Quebec from the $1 billion community adjustment fund. The forestry sector has been identified as one of the priority areas that will benefit from this funding.
Our government is determined to stand behind this and other resource sectors, and to do everything we can to ensure their successful future. Consequently, under Canada's economic action plan, over the next two years $170 million will be invested in measures directed at the forest sector, adding to our already substantial investments in forest research and innovation and in the development of new markets for Canadian forest products. These funds will help develop pilot-scale projects demonstrating new products for use in commercial applications.
Investments are also being made in the transformative technologies program administered by FPInnovations in new areas such as nanotechnology. Another $50 million is designed to extend successful marketing initiatives such as the Canada Wood program, the Value to Wood program, and the Wood First program. These funds will also support large-scale demonstrations of Canadian wood uses in offshore markets.
To assist individuals suffering hardship, we are expanding regular EI benefits and work-sharing agreements and we are providing significant support to skills training programs to provide these individuals with the necessary tools to take advantage of new opportunities when the economy recovers. These measures are part of an $8.3 billion Canada skills and transition strategy launched by the economic action plan.
We're offering further financial assistance to the forest sector. In 2008, on commercial principles and at market rates, Export Development Canada provided $14 billion in commercial solutions to the forestry sector. EDC is a key player in providing credit insurance to the forest sector and has active relationships with approximately 80% of the industry. EDC served 534 different forestry companies in 2008.
Budget 2009 increases the authorized capital limits of EDC and the Business Development Bank of Canada by $1.5 billion each, and increases their associated borrowing limits as necessary to enhance their guarantee and insurance programs.
Before turning from the forest sector, Mr. Chairman, I would mention that the American kraft pulp producers have become eligible for an alternative fuel tax credit that is affecting the competitiveness of Canadian pulp producers. We are aware of the situation, we are concerned about the impacts of the subsidy on the Canadian forest industry, and we have raised this issue with the United States. The payments from the U.S. government to the U.S. industry are very large, and they are coming during a global recession, when all industries are struggling. Again I emphasize that we are very concerned about the situation, and we're determined to resolve it expeditiously.
Our economic action plan is providing initiatives that will benefit other natural resources industries as well. These initiatives invest in and build on Canada's strengths. They're not quick fixes; they are further investments that will help our industries in the short term and that also invest in Canada's long-term competitiveness. They are investments in people, in research, in our innovation systems, and in sustainability.
Canada's economic action plan included funding of $1 billion over five years to support clean energy technologies through a clean energy fund. This includes $150 million over five years for research and $850 million over five years for the development and demonstration of promising technologies, including large-scale carbon capture and storage products.
On March 26 I announced funding through the ecoENERGY technology initiative for eight projects that will further develop and demonstrate carbon capture and storage technologies. These projects will help us to address our challenge of finding cleaner ways to produce energy.
Canada's economic action plan is also providing tax and tariff relief to stimulate business investment. This is critical to our natural resources sectors. This includes the extension of the mineral exploration tax credit for flow-through share investors by one year. This measure will help junior mining companies access the venture capital they need to finance their exploration activities.
We're also permanently eliminating tariffs on a range of machinery and equipment, thus lowering costs for Canadian producers in a number of sectors, including forestry and energy. This measure alone is expected to save Canadian industry over $440 million over the next five years.
Our economic action plan is accelerating and expanding recent historic investments in infrastructure, with almost $12 billion in new infrastructure funding over two years. Our plan provides $1 billion over five years for a green infrastructure fund. Green infrastructure includes infrastructure that supports the creation of sustainable energy, such as modern energy transmission lines, and investing in wind and solar power. Sustainable energy infrastructure, such as modern transmission lines, will contribute to improved air quality and lower carbon emissions.
The fund will focus on a range of green priorities in the following categories: waste water infrastructure, green energy generation infrastructure, green energy transmission infrastructure, and solid waste infrastructure.
Mr. Chairman, while all of the measures I've cited will assist our natural resources sectors, there are other measures in the economic action plan that will also help by stimulating greater economic activity. For example, the economic action plan includes a $2 billion investment in social housing. We are working with our partners in the provinces and territories to build new social housing units, and to renovate and increase the energy efficiency of existing units.
We're encouraging people to buy homes, increasing the amount Canadians can take out of their RRSPs to buy a first home by $5,000. This is an increase of 25%. We're creating a new tax credit that will provide $750 in tax relief to help people with their closing costs. There's a new home renovation tax credit, providing up to $1,350 in tax relief for as many as 4.6 million families who will take advantage of this to improve their homes. We're adding another $300 million to the ecoENERGY home retrofit program. This investment will allow another 200,000 homeowners to benefit from the program over the next two years, generating as much as $2.4 billion in economic activity. Mr. Chairman, it is expected that these measures will have a particularly beneficial effect on the forest industry.
Before concluding, Mr. Chairman, I understand some committee members may have questions concerning activities at the Chalk River laboratories late last year. I'd be happy to address these questions during the question portion of today's meeting. Mr. Chairman, let me first remind the committee members that on February 5, I tabled reports in the House of Commons from Natural Resources Canada, the Canadian Nuclear Safety Commission, and Atomic Energy of Canada Limited regarding this event. These reports made clear that at no time was the public or the environment put at risk.
Mr. Chairman and members of the committee, to conclude, our government's investments through the economic action plan demonstrate recognition of the crucial role the natural resources sector plays in Canada's prosperity. These measures demonstrate recognition of the sector's singular direct importance in the lives of thousands of Canadians and hundreds of communities. Our economic action plan builds on actions that our government has already taken. These initiatives include investing in the geosciences and opening up Canada's north, in clean and renewable eco-energy technologies, in improving the efficiency of our regulatory system with a major projects management office, and in creating the most competitive business tax regime in the G-7. The plan utilizes previous successes to meet both short-term and long-term challenges, and to mitigate the effects of the recession, while providing a strong foundation for recovery, prosperity, and sustainability.
Now I'm happy to answer any questions that members of the committee may have. Thank you very much.
