Natural Resources Committee on March 18th, 2010

[The Chair, Conservative, Leon Benoit]

Good morning, everyone. We are here this morning pursuant to Standing Order 81(5) to deal with the supplementary estimates (C) from 2009-10, votes 1c, 5c, 10c, and 25c under Natural Resources, referred to the committee on Wednesday, March 3, 2010.

We have appearing with us today for the first time the Honourable Christian Paradis, Minister of Natural Resources. Minister, I would like to first of all welcome you to our committee and to thank you very much for coming so soon. It is very helpful to our committee to have you appear so soon, and it is much appreciated.

We don't have a lot of time today, so I would like you to open with your remarks. If you could, please identify the witnesses with you. I think we know them--they were before our committee last year on several occasions--but if you could do that and then go ahead with your comments, then we'll get directly to questions.

Welcome, Minister.

[Christian Paradis, Conservative, Minister of Natural Resources]

Thank you, Chair, and thank you for inviting me. It was important for me to come soon.

This is our first opportunity to meet since I was appointed the Minister of Natural Resources last January and the committee resumed its work.

I'm looking forward to working with each of you. Please let me introduce those who are with me today: Cassie Doyle is the deputy minister, and Serge Dupont is special advisor on nuclear energy policy.

Mr. Chair, honourable members, each of us is pleased to see signs of economic recovery taking hold in this country. A modest expansion has begun, and independent forecasters expect the Canadian economic recovery to build momentum through the current year.

Our government's top priority is to follow through on this recovery, to complete the second year of Canada's Economic Action Plan and to continue creating jobs and growth. That includes making sure our natural resources sector emerges from the recession able to compete in a changing global marketplace.

Despite the global recession, Canada's natural resources sector recently accounted for 12% of Canada's GDP. It provided jobs for more than 850,000 Canadians, and contributed $122 billion to our trade surplus. These are not small numbers. And there is every reason to believe that Canada's natural resources and related industries will continue to be a major factor in generating jobs and growth for our country.

This will not happen if we fail to take deliberate action. However, by making targeted investments and by working together with provinces, territories, and our partners in the natural resources sector, we can ensure that Canada will succeed on the world stage.

Taking deliberate action is what we have done since taking office. We first made targeted investments in forestry, in mining, in clean energy solutions and technologies. Then we invested almost $30 billion in Year One of Canada's Economic Action Plan, now, in Year Two of the Economic Action Plan, we continue to invest in Canada's natural resources sector. For example, through Canada's Economic Action Plan, the government has invested in the Canadian Energy Fund to support the development and demonstration of promising technologies, including large-scale carbon capture and storage projects.

For example, through Canada's economic action plan our government is providing $795 million for a clean energy fund to support the development and demonstration of promising technologies, including large-scale carbon capture and storage projects.

The ecoEnergy retrofit homes program is another example of a successful initiative under the economic action plan. Our government has provided $745 million to this program since its creation four years ago. Our government will continue to support clean energy technologies, and it will review energy efficiency and emissions reduction programs to ensure they are effective.

Our energy resource endowment provides Canada with an unparalleled economic advantage that we must leverage to secure our place as a Clean Energy Superpower and a leader in green job creation. We are also positioning Canada's nuclear industry to capitalize on global opportunities, beginning with the restructuring of Atomic Energy of Canada Limited. And we are supporting AECL's work to return the National Research Universal reactor to service. The health and safety of Canadians remains the Government of Canada's top priority.

The government has instructed AECL to make the return to service of the National Research Universal reactor its highest priority, consistent with maintaining the highest standards of safety and security. Budget 2010 is investing $35 million in research and development of alternate sources of medical isotopes, $10 million to support clinical trials of alternate imaging technologies and $3 million to work with stakeholders to optimize the use of isotopes in the health system.

Our forest sector is an important contributor to the Canadian economy. Measures introduced under the economic action plan, along with other initiatives, are supporting this sector in the considerable challenges they face.

As part of the Economic Action Plan, a total of $170 million is supporting market diversification and innovation initiatives for the forestry sector. This includes research and demonstration projects on new forest products and initiatives to assist forestry companies in marketing innovative products internationally.

Canada and Quebec have announced a joint funding of $200 million to support silviculture in the province of Quebec and the restoration of infrastructure on Quebec public lands.

These projects were the result of work by a joint Canada-Quebec forestry task team. The task team was created to develop solutions aimed at helping the forestry industry restructure and to support workers and communities. A new Canada-Quebec working group has also been established for that purpose.

In addition, a $1-billion Pulp and Paper Green Transformation Program is helping pulp and paper mills in all regions to reduce greenhouse gas emission while assisting them in becoming leaders in the production of renewable energy from biomass.

Budget 2010 is building on these important investments by providing $100 million over the next four years to support clean energy generation in Canada's forestry sector through a new Next Generation Renewable Power Initiative. This funding will further support the development, commercialization and implementation of emerging clean energy technologies and this sector, which could include new biofuels, renewable electricity and biochemicals.

We need to instill more clarity in Canada's regulatory system, because with clarity comes certainty. This is a priority for me and for our government. Improving the regulatory review process for large energy and mining projects will enable job creation and economic development.

As you know, in 2008, my department created a major projects management office, or MPMO. The MPMO is making the federal regulatory process more predictable and more efficient. There are more than five dozen projects moving through the MPMO system.

We are now in the process of establishing Northern Project Management Offices to coordinate approvals in each of the three territories. And our government is taking reform a step further. The Speech from the Throne outlined our commitment to create a strong investment climate and support the responsible development of Canada's energy and mineral resources.

We will simplify project reviews and replace the current maze of regulations with clear processes that offer improved environmental protection and greater certainty to the industry.

Mr. Chair and members of the committee: Canada's natural resources and their related industries are the cornerstone of our economy. The economy and environmental strength of this sector is essential to jobs and growth in our country. My government has recognized this from the beginning. It has taken deliberate action to reinforce the fact, and it will continue to do so in the future.

I thank you again for this opportunity and would be pleased to answer any questions you might have.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Minister, for your presentation.

We will go directly to questions, starting with the official opposition.

Mr. Regan, you have up to seven minutes. Go ahead, please.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you very much, Mr. Chairman.

Minister, thank you for coming and I hope to see you back here often.

Can you tell us the percentage of the department's budget increase this year compared to the 2009-10 fiscal year and the percentage by which the 2009-10 budget increase is a result of supplementary estimates?

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

First of all, thank you for the question.

I think that the main increase is due to the fact that we are now in the second year of our economic action plan. As you know, this was a two year plan. Projects which have been assessed, are now being launched. Obviously, there will be expenditures in order to implement the economic action plan, meaning moving on to the feasibility stage, and investing funds.

[Geoff Regan, Liberal, Halifax West, NS]

Minister, what I'm looking for is the percentage increase this year—

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

Let me give you some figures.

[Geoff Regan, Liberal, Halifax West, NS]

—in the budget compared to 2009-10 in the coming year, and the percentage by which the 2009-10 budget increased as a result of the supplementary estimates.

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

I have the exact figures here. We are going from $3.6 billion to $4.4 billion, which represents a net increase for this year of $812.8 million or 22%.

[Geoff Regan, Liberal, Halifax West, NS]

Vingt-deux pour cent, okay.

That's the answer to the first question about the increase in the budget compared to the 2009-10 year. The other question was the percentage by which the 2009-10 budget increased as a result of the supplementary estimates.

Perhaps if you don't have it available right away you could provide it to the committee?

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

Yes, sure.

[Geoff Regan, Liberal, Halifax West, NS]

There's $72 million in supplementary estimates for ongoing repairs of the NRU at Chalk River. Is that just for 2009-10, and how much is budgeted for 2010-11?

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

Oui effectivement, the $72 million is for only 2009-10.

[Geoff Regan, Liberal, Halifax West, NS]

So how much is budgeted for 2010-11 for repairs to the NRU?

[Serge Dupont, Special Advisor on Nuclear Energy Policy to the Minister of Natural Resources, Department of Natural Resources]

Sir, there is no specific allocation at this time. There's an allocation in the budget for Atomic Energy of Canada Limited that comprises funds that will be required to provide for the supply of medical isotopes. But of course at this time, with the project continuing, and, as you know, continuing into 2010-11, precise estimates for the cost of the return to service are not available at this time.

[Geoff Regan, Liberal, Halifax West, NS]

So in terms of allocating that amount for other things, it's pretty hard to specify exactly how much is going where when you can't say how much is set aside for this purpose, right?

I mean, obviously, it's a challenge, because we're still waiting to find out what's going to happen.

How much have you budgeted to implement the recommendations of your expert review panel, and when do you intend to respond to the review panel recommendations? Exactly how much of the 2010 budget is being set aside to lay the groundwork for a new research reactor in Chalk River?

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

Currently, our government is studying the report.

First, we know that it is impossible, with regard to a research reactor, to establish a business case solely on the production of isotopes. A broader perspective is essential. That is why many questions about this are now being asked.

Our response to this report will be made public shortly.

[Geoff Regan, Liberal, Halifax West, NS]

So in relation to this, is anything in the 2010 budget set aside to lay the groundwork for a new research reactor at Chalk River?

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

No.

[Geoff Regan, Liberal, Halifax West, NS]

There's nothing. There's nothing in the 2010-11 budget for a new reactor at Chalk River?

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

As I was saying, first a position on the report will need to be taken. That is what our government is currently doing. In the 2010 budget, the amounts set aside are being used essentially for the purposes that the assistant deputy minister just told you about.

[Geoff Regan, Liberal, Halifax West, NS]

Of the $1 billion green infrastructure fund, $200 million was budgeted for 2009--

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

As I said in my speech, there are funds specifically set aside for alternative sources of isotopes. Some $35 million over two years is allocated in Natural Resources Canada's budget. In addition, $13 million are allocated to Health Canada for clinical trials and to coordinate with medical experts.

[Geoff Regan, Liberal, Halifax West, NS]

But at this stage, none of that is set aside for laying the groundwork for a new reactor at Chalk River?

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

No.