Natural Resources Committee on March 18th, 2010

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

I'd like to ask Mr. Farrell a question.

Welcome, Jim. It's been a while since I've seen you.

I want to zero in on the $200 million silviculture and infrastructure joint program with Quebec. Can you give me some details of some of its components?

[Jim Farrell, Assistant Deputy Minister, Canadian Forest Service, Department of Natural Resources]

Sure. It was negotiated in the spring of 2009, shortly after the community adjustment fund was announced. The $200 million program essentially was a cost-shared program between the Government of Canada through the community adjustment fund, which was led by Canada Economic Development for Quebec Regions and the Province of Quebec. It was primarily targeted to get workers out in rural Quebec, primarily tree planting. There's the window of getting the funds and the program in place to allow the stock to be planted at the proper period of time in the spring.

A little later in the year there was an additional commitment of around $30 million to $35 million, which was essentially dedicated to improving and upgrading some of the rural access roads. They're widely available for use by hunters, fishers, and for recreation; they're not, certainly, strictly for the forest sector.

Those were the primary investments that were made in the spring. More recently we've had some discussions with Quebec, and we'll probably get back to those once the Quebec budget has been set in the next few days.

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

Is there any money allocated toward seedling growth?

[Jim Farrell]

At that time, the stock, Mr. Harris, was already in place. The stock was available at any of the greenhouses as well as the planting beds.

[The Chair, Conservative, Leon Benoit]

Your time is up, Mr. Harris. Thank you, and thank you for the answers.

We go now to Mr. Tonks for up to five minutes.

[Alan Tonks, Liberal, York South—Weston, ON]

Thank you, Mr. Chairman, and good morning.

The question I was going to ask the minister was one that attempted to link the strategic planning and policy development process with the estimates. In other words, here is the issue. The issue I think the committee would be interested in is the carbon capture and sequestration program. The economics that are driving the R and D investments presently price carbon between.... We've heard many different prices. The presumption is that for carbon capture and sequestration to be commercially viable and competitive, you'd need a price of around $30.

My question on the strategic side is, given that information, when does the department start to advise what the implementation schedule is for setting a price on carbon?

That's on the strategic side. Then, on the basis of what the answer to that is, when does the department advise the minister, concerning the investments in clean technologies—the $150 million that has been allocated in the 2009 budget—that this is the point, compared with the return projected on CCS, at which we start now to make investments in major clean technologies?

The second part of my question is, could you tell the committee what would be the priority list, in terms of investments in clean technologies, the commercialization of the R and D that has already been expended? Does the department have a plan to take, through the minister, a strategic direction with respect to CCS as it impacts upon clean technology research and its commercialization?

[The Chair, Conservative, Leon Benoit]

Ms. Doyle, go ahead.

[Cassie Doyle]

Thank you very much for an excellent question. It really gets to the core of the work that's done at NRCan.

Let me go back a couple of years. One thing the department undertook was to sponsor a major national panel on what Canada's priorities should be in the area of energy research and development. We had an august number of experts from across the country who provided over the course of a number of months information to the department.

One thing they said is that you have to look at what the energy profile of a country like Canada is. Given the dominance of fossil fuels as one part of Canada's mix—we're also blessed to have hydroelectricity and other sources of energy, but we have extensive reserves of coal, oil, and gas—any program for clean energy R and D must have as one of its core priorities investments in carbon capture and sequestration.

We are in good company, because this has also been identified by the G8 as being one of the priorities for the world in addressing GHG emissions. The largest source of emissions in Canada is the burning of coal, which is by far the largest—I think the top eight of the top ten emitters in Canada are coal-fired electricity power stations—and also the emerging and growing area of gas and oil exploration.

We have been providing advice to governments that carbon capture and sequestration must be a priority. At the same time, it's important that the committee understand that this is really new technology. We in Canada have been the leaders internationally, with the work that has taken place at Weyburn. We contribute to that early demonstration of sequestration and also do so in conjunction with the International Energy Agency.

It is recognized that the costs per tonne are fairly high. At the same time, if we assume that we're going to continue to use fossil fuels, which is a pretty safe assumption and one that experts are certainly in agreement with, then we need to address those emissions through that kind of technology.

We recommended that the government make a significant contribution to carbon capture and sequestration. We have already partnered with the Government of Saskatchewan and the Government of Alberta, which have both taken the same views over recent years. We are part of a commitment under the G8 to having 20 projects initiated by 2010. So Canada is in a fairly good position; I would just say that we're still in the very early stages. We're partnering with companies such as Shell and TransAlta. They're putting a significant amount of investment in, as are our partner provinces.

But when it comes to the actual level of what the cost will be per tonne, we are still in the early stages of understanding it, because of the amount of science that's going on now in the front-end engineering designs as well as the importance of what the actual cost will be. The important part to remember about this is that the real costs are around the capturing of carbon; that, we understand and know. In our own research facilities at NRCan and in conjunction with other researchers in Canada, that's been a primary area of focus.

What we really know is that this is a very important technology for Canada, given the profile of our energy system and given who the large emitters are in this country. That's what has been the driver. We've had a fair amount of dialogue on this, through both a national task force and a provincial task force out of Alberta, which continues to provide information and advice that this is where we need to focus as one of our top priorities. We also have investments in other areas that are really important for Canada. If we're going to drive and change the trajectory of emissions in Canada, it's going to require significant investments in carbon capture and sequestration.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Tonks.

Before we go on, I'd like to get a bit of direction from the committee as to how much time we should leave for votes on the supplementary estimates and the main estimates. It all depends on whether we're going to be debating motions or not.

All of you knowing that, is allowing 20 minutes enough, or 15 minutes? Give me some direction on that, if you would, before I go on to Mr. Shory, who is the next questioner.

Does 20 minutes sound reasonable?

[Some hon. members]

Yes.

[The Chair, Conservative, Leon Benoit]

Okay.

We go to Mr. Shory for five minutes.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Thank you, Mr. Chair, and thank you also to the department for coming here this morning.

We all know that Canada is just coming out of the worst recession since World War II. Through the economic action plan, $1 billion was allotted to the clean energy fund. What is the status of that clean energy fund? Anybody from the department can answer my question.

As a follow-up to that, earlier a comment was made by the minister, I believe, that $150 million had been reallocated for the home retrofit program. Why did we need to reallocate those funds?

[Cassie Doyle]

Thank you very much for the question.

There was indeed $1 billion allocated in Budget 2009 under the economic action plan for the clean energy fund. Perhaps I could just give you a quick update on the status of that fund. We have announced three carbon capture storage projects to date. All have been co-funded by the Province of Alberta. The investment from the federal government for those three projects was $466 million.

We've also announced 19 successful proposals from all regions of Canada for demonstration projects of renewable and alternative energy technologies, for a total clean energy fund commitment of $146 million.

Combined, these 23 projects will achieve co-funding leverage from the private sector and the provinces of approximately $3.6 billion and will lead to greenhouse gas reductions of close to six million tonnes per year by 2015.

As the minister mentioned earlier today, there was a decision to reallocate $205 million from the clean energy fund to the ecoEnergy retrofit. The reason for that is the enormous take-up of the retrofit program by Canadians who are interested in improving the efficiency of their own homes. It's one of the most popular programs under the economic action plan. It's one that has a significant multiplier when it comes to jobs and investment. So there was a decision made to reallocate from the clean energy fund to the retrofit fund.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Thank you.

Moving forward, we all know that our government's ecoEnergy biofuels initiative has been very successful to this point. It reduces greenhouse gas emissions from fuel use and it supports our economy by encouraging biofuel production. It also supports the commercialization of new biofuel technologies.

The government has reallocated an additional $8.6 million for ecoEnergy for biofuels. Why did the government reallocate this money? Also, do you feel that, this year, consumers can expect an additional incentive within the context of the ecoEnergy biofuels initiative?

[Cassie Doyle]

Thank you for your question on biofuels. I don't believe there was a reallocation in the area of ecoEnergy for biofuels, but it may be that biofuels are reflected in our supplementary estimates.

With a number of these programs, the reason there is movement between the years is that it very much depends on the take-up of the program. For those of us in the department, and working closely with the Department of Finance, it's often very difficult to project accurately exactly how the programs will be taken up within each fiscal year, because these are programs that operate over a number of years.

I believe the number you're referring to is $8.6 million that was provided under supplementary estimates (C) to accommodate amendments that were made to the payment methodology for incentives under this program. But this adjustment stays within the $1.5 billion multi-year funding profile of ecoEnergy for biofuels. It was essentially brought forward into this fiscal year to reflect some changes we've made in the program and the payment schedules on the program. That was done in consultation with the biofuels industry.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Shory.

We will go to Mr. Harris for five minutes.

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

Thank you, Mr. Chair.

There has been some talk about the regulatory reform plan, and I would like to talk about that area. I think we all have heard--I don't want to use the words “horror stories”--about the time required for anyone wanting to develop a mine or other type of natural resource harvest to get through the regulatory process.

Something else I'm hearing that I rather like is this talk about equivalence with the provinces from the natural resources department. Could you just give me a little thumbnail sketch of how that's going, and whether this equivalence idea could apply to the types of things that we would talk about with this department?

Mr. Chair, I'll also give Ms. Gallant the second half of my time, if I may.

[The Chair, Conservative, Leon Benoit]

Okay.

Go ahead, Ms. Doyle.

[Cassie Doyle]

Thank you for the question.

At Natural Resources Canada we have been working for the last few years on a major effort to improve the performance of the federal government's regulatory process. That has been undertaken through our major projects management office. It's a very small office, but it works very much in applying a more stringent project management approach with all of the regulatory agencies across the government, including our own, because we have a regulatory role at NRCan as well.

We had two mandates for that MPMO. One was to do just that--to apply a much rigorous project management approach. The second was to become a focal point within the Government of Canada for looking at how we could make some improvements to the way all our regulations and legislation work.

One thing announced in this recent budget was a move to have the Canadian Environmental Assessment Act and office enter into a memorandum of understanding--for instance, with the National Energy Board and the Canadian Nuclear Safety Commission--to ensure that if there is one project, there is one assessment.

That's where we want to move to enable the governments collectively to reduce duplication, particularly in the role of agencies. There have been calls on the part of a number of provincial governments to move toward that very same kind of approach. We've had some early opportunities with the Government of B.C. to have an agreement to substitute the provincial processes for the actual CEAA review in the federal government.

Most notably, there was the Highway 37 transmission line in northwest B.C. There is an MOU between Transport Canada and the Province of B.C. to ensure that we will actually use the environmental assessment and not require a duplicate assessment at the federal level. That is paving the way and giving us some pilots that we can study and analyze to see what the potential would be to move toward the concept of one project, one assessment. We are trying to reduce the number of agencies and the overhead on that front.

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

Thank you. That's encouraging to hear.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Harris.

Go ahead, Ms. Gallant, for about two minutes.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Thank you.

I would like to go back to the theme of Canada as a clean energy superpower. Certainly the people in Saskatchewan, where the uranium mines are, and the AECL workers were very pleased to see that Canada is going to be a player in the global renaissance of nuclear energy as part of the overall mix of energy.

We know that CANDU technology, for example, is among the cleanest in the world. In addition to nuclear energy, we have the expertise to test new fuels. In fact, Canada has played a leading role in nuclear non-proliferation by taking the warheads from Russia, for example, in the MOX fuel form and being able to test its use as fuel for energy, thereby making the warheads more valuable as a source of power than as a threat to human life.

In addition to the fuel research, we also have a situation with the spent fuel. Because our fuel is so clean, I want to distinguish between spent fuel and waste. In the case of spent fuel, we use only a fraction of the energy that's contained in a fuel rod. We are storing it in such a way that should uranium become very expensive, we can retrieve these rods. The overarching concern that Canadians have is the waste from nuclear fuel and the overall waste from the nuclear industry. There is waste from medical isotopes and waste from the old parts on refurbishments.

I'm very pleased to see some emphasis in the budget on the issue of nuclear waste. Would you describe how the budget and the estimates are addressing the issue of waste and how the money is being allocated?

[The Chair, Conservative, Leon Benoit]

Mr. Dupont, I'm going to have to ask you to do that very briefly, please. We're out of time here.

Go ahead.

[Serge Dupont]

You seem to suggest uncharacteristically, Mr. Chairman.

[Voices]

Oh, oh!