Evidence of meeting #16 for Natural Resources in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was wood.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Mark Corey  Assistant Deputy Minister, Energy Sector, Department of Natural Resources
Tom Rosser  Assistant Deputy Minister, Canadian Forest Service, Department of Natural Resources
Cécile Cléroux  Assistant Deputy Minister, AECL Restructuring, Department of Natural Resources
Jonathan Will  Director General, Energy Resources Branch, Department of Natural Resources
Jeff Labonté  Director General, Petroleum Resources Branch, Department of Natural Resources

3:55 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

Pardon me?

3:55 p.m.

NDP

Kennedy Stewart NDP Burnaby—Douglas, BC

I'm just trying to clarify whether all these discussions are moving towards a new national energy program, or whether we're not moving towards one.

3:55 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

We are not going to have another NEP—period.

3:55 p.m.

NDP

Kennedy Stewart NDP Burnaby—Douglas, BC

Do you have any plans for a strategy, then?

3:55 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

I couldn't imagine—

3:55 p.m.

NDP

Kennedy Stewart NDP Burnaby—Douglas, BC

Do you have any plans for a national strategy?

3:55 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

Pardon me?

3:55 p.m.

NDP

Kennedy Stewart NDP Burnaby—Douglas, BC

Do you have any plans for a national strategy?

3:55 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

As I said, we believe in a national, pan-Canadian collaborative approach—

3:55 p.m.

NDP

Kennedy Stewart NDP Burnaby—Douglas, BC

When can we see the details for this new strategy?

3:55 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

We're working on a number of different areas regarding efficiency, clean energy, regulation, and the smart grid.

3:55 p.m.

NDP

Kennedy Stewart NDP Burnaby—Douglas, BC

Can we have some dates, though? This committee will probably be involved. We're just wondering whether we can have some dates regarding when we might see some of this work.

3:55 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

We're going to be meeting again, I think in September, in Charlottetown. In the meantime, the officials from my department are working with their counterparts in the provinces and territories.

3:55 p.m.

Conservative

The Chair Conservative Leon Benoit

Thank you, Mr. Stewart.

I would like to ask questioners to give the minister reasonable time to answer the question. There are times, of course, when witnesses tend to drag out an answer. In that situation, it's fine, but that wasn't happening here. I'd encourage all members to make sure you give the minister reasonable time for a response.

Mr. Trudeau is next, for the Liberal Party.

3:55 p.m.

Liberal

Justin Trudeau Liberal Papineau, QC

Thank you, Chair.

Turning now to the sale of the commercial division of AECL to SNC-Lavalin, reports have that sale as coming in at $15 million for the federal government, with significant outlays of $285 million in costs associated with the sale and $75 million on workforce transition. Those are the costs this year associated with selling off this commercial division. What do we predict are going to be the continuing costs to Canadian taxpayers in years to come associated with this sale of the commercial division?

3:55 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

Thank you for the question.

As you know, AECL has been heavily supported by Canadian taxpayers for decades, and that's why our government moved forward to sell the CANDU reactor division to SNC-Lavalin, to protect taxpayers' interests while ensuring the continued strength of Canada's nuclear sector. We were fortunate that SNC-Lavalin was the last bidder standing. We had an open bidding process, as you know, and every one of the other bidders dropped out. Fortunately, SNC-Lavalin, a Canadian company, has an international presence and a lot of expertise in this area, and so we felt very comfortable selling it to them. It's in good hands.

As to the funding, we wanted to stop the additional liability acquired relating to new builds, but we of course retain the liability that we have had. It could not be passed on to the new buyer. The funding allocated to AECL will enable it to meet operational requirements and contractual obligations and cover costs associated with the divestiture of the CANDU reactor division.

I can't give you a specific number, however, about the process going forward. We have ongoing responsibility in respect to reactors that were built before.

November 28th, 2011 / 4 p.m.

Liberal

Justin Trudeau Liberal Papineau, QC

Thank you. That's one of the overall concerns.

You talk about the sale as being a way of limiting liabilities to the taxpayer because, yes, the taxpayer has been on the hook for many hundreds of millions associated with the nuclear industry in Canada. However, then we look at the fact that in Ontario, the Darlington reactor purchase, without government's back-stopping of CANDU reactors, is probably not going to go for a CANDU reactor. The refurbishment of the Point Lepreau reactors also has us significantly on the hook from being over-budget.

My concern is that we've managed to sell off the commercial division in such a way that we will remain on the hook for a while, and I'm not certain we've had any guarantees from SNC-Lavalin that it is intending to continue to develop and research new iterations of Canadian reactors. I think there's a real concern that it's just going to putter along as long as the government continues to send it money to do what it has to do, but will get out of the new reactor business, which is something that requires billions of dollars of investment perhaps more suited to government than private companies.

So I guess my question is this. Is the intention of this government that we simply get out of the nuclear industry altogether? Is that where we're doing? What sort of guarantees did we get from SNC that it would still be investing in research and upgrades and new technology around a significant source of energy?

4 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

In respect to the second-last point, this government supports a strong, dynamic and competitive nuclear industry. Actually that's one of the reasons we wanted to pass on the CANDU reactor to a strong private sector company.

We've been clear ever since we announced the sale that the liability is going to continue to be the responsibility of the government. It's common practice and you can't expect a new company to take over these contracts. They're contracts that were signed between AECL and the project proponents prior to the divestiture. So it's important to note that these contracts were the responsibility of the government. Whether we divested or didn't divest, the same cost would have been booked no matter if we had moved forward or we didn't. They do show one of the important reasons that we did move forward, that it shouldn't be the responsibility of taxpayers to pay for losses of what is essentially a commercial business going forward. These costs have been in the billings in the last few years, so future liabilities won't be the responsibility of taxpayers. The risk will now be borne by the new company.

As to SNC-Lavalin's intent, it made a significant investment. It is devoting a lot of time and attention. Clearly it sees potential here—and, in fact, we're encouraged that it's moving in the right direction. SNC is strong, and a strong private sector partner is what we need. I think there is a real potential still for CANDU technology. I'm pleased that the CANDU division of SNC already signed a contract with Argentina to refurbish a reactor.

4:05 p.m.

Liberal

Justin Trudeau Liberal Papineau, QC

I'm sorry, Minister, but I would just like to change tack now. Thank you for your answer.

4:05 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

Sure.

4:05 p.m.

Liberal

Justin Trudeau Liberal Papineau, QC

One of my concerns is that AECL's commercial division and the division for isotopes, etc., worked hand in hand with a lot of institutional cooperation and compatibility. Are we now worried, or what kind of safeguards do we have to make sure that we're not losing institutional knowledge and expertise by separating entities that in the past leaned on each other quite significantly and worked together quite harmoniously?

4:05 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

We expect there will be a continued relationship on this area between SNC-Lavalin and other companies. We retain the responsibility to provide research. We have the nuclear labs in Chalk River, as you know. We expect to see that kind of scientific interchange continue for a healthy industry.

4:05 p.m.

Conservative

The Chair Conservative Leon Benoit

Thank you, Minister.

You're out of time, Mr. Trudeau.

We go now to the government side for a five-minute round.

Mr. Trost, you'll have up to five minutes.

4:05 p.m.

Conservative

Bradley Trost Conservative Saskatoon—Humboldt, SK

Thank you, Mr. Chair, and thank you, Mr. Minister, for being here.

In my seven years in the House of Commons, I've seen quite a few ministers, and I think this is about the fourth or fifth natural resources minister I've had the privilege of questioning. Welcome to our committee.

One of the things we hear frequently about from industry is regulation, regulation, and more regulation. I see that in these supplemental estimates we're asking for another $13 million for the Canadian Nuclear Safety Commission, a couple of million dollars more for the Northern Pipeline Agency, and also for the National Energy Board. That brings to mind how absolutely important regulation is, particularly in the natural resources sector. In these last few months we've been doing a study on natural resource issues in the north, particularly mining issues, and one of the things that has come up over and over again is regulatory frustrations. There have been some comments about the Major Projects Management Office. It seems to be expediting some things, but there have been other frustrations that have been expressed.

Looking at this new money and other moneys that have gone into regulatory issues and into making regulations work better, what specifically is your department and your ministry doing to assist our companies to work through the regulatory process in a more efficient and streamlined way?

4:05 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

Thank you. This is a really important issue.

Canada is emerging as an energy superpower, and already is one in the mining area. Regulatory reform is actually the key to ensuring the future development of our resources. As I've said on a number of occasions, and most recently in a speech to the Manning Institute, there's too much duplication of effort and there are too many regulatory hurdles that need to be reformed. That's why in the Speech from the Throne we made it a priority to overhaul our regulatory system. This will involve moving to a one project, one review system that will provide predictable and timely regulatory review for the sector.

It's very important that we do this without undermining the regulatory integrity that is so important to ensuring that we address the environmental issues in a responsible way. There is no need and no desire and no intent to undermine that regulatory authority, but we need to make the system more efficient, less duplicative and, above all, more timely. Excess delay can undermine the economic viability of a project, and it can impede our progress.

We're looking at some $500 billion in new projects in the next 10 years. If they are delayed by years, this has a terrible impact on the economy; it means jobs are not created as soon as they otherwise would be and that some projects may actually not go ahead. So this is an important issue. It's highly complex, but we have to get on to it, and this government is absolutely determined to do that.

So we give this a high priority, and I'm talking to my colleagues about this. I know that the Minister of the Environment is very much seized of this issue. We're taking a whole-of-government approach and expect to make some progress in this matter.