Natural Resources Committee on March 27th, 2012

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Do you think that the conditions are really different two or three years later?

[Serge Dupont]

I am coming to that. This program has actually been a success; the impact on the competitiveness of the industry and the environmental performance has been and will be significant.

There are also other forestry sector programs that are due to expire, including market expansion and innovation. We will see what the budget has in store for those programs in the future.

There are also other programs where contributions are still made right now. There is the forestry industry transformation program. That's a $100 million program, phased over four years. Meanwhile, there is continued support for businesses.

We are working closely with the forestry industry, and, actually—I agree with the quote you mentioned—innovation and growth are at the heart of this industry's future prosperity.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

How is the federal government committing to act over the next few years, if there are cuts, as you say, if all the projects expire, if we have no idea what will be in the next budget, and if everyone agrees that this is the right direction?

[Serge Dupont]

Mr. Chair, we will have to wait for a few days. The committee will then have more answers than what I am able to provide today.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Dupont.

[The Chair, Conservative, Leon Benoit]

Thank you, Monsieur Lapointe. Your time is up.

We go now to Mr. Calkins. You have up to five minutes, please.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thank you, Mr. Chair.

This is my second round. I'll be asking some fairly specific questions in regard to the estimates. If I have any time remaining, I'll be sharing it with my colleagues.

In the operating expenditures for vote 1, contrary to what my colleagues across the table are saying—they're indicating that there are cuts to energy programs and so on—it looks like we have an increase in the ecoENERGY efficiency program of $33 million and an increase in the ecoENERGY innovative area of $32.7 million.

Could you explain to us what those increases in funding are directly attributed to and what the benefit is to Canadians?

[Serge Dupont]

I appreciate the challenge it can be sometimes for parliamentarians to look at main estimates versus main estimates and to interpret increases or decreases, because there can be different factors at play. In some cases, for example, what appears as a decrease is actually relative to a number that it was last year, not in main estimates but in supplementary estimates.

With regard to the two programs that you cited, on ecoENERGY efficiency and ecoENERGY innovation, those were announced last year in Budget 2011 and therefore were not found last year in the main estimates, but found their way into the supplementary estimates. That is simply the way the budget process works. Those are successful programs that were renewed.

I should mention as well, as this is pertinent to the issues concerning forestry, that our department, Natural Resources Canada, has been funded largely over the last number of years by what is called C-base funding, which is temporary funding. We're given moneys over a period of years and we have to go and report back on the results. If we show that the results were positive, then we are given another three or five years to continue with the same programs, or to modify the programs, based on the performance, based on the evaluations we conduct.

In terms of clean energy, we conducted those reviews, conducted the evaluations, and we were able to make the case to the Department of Finance and to the other authorities—obviously, the minister, and the Prime Minister, ultimately—that these were sensible programs, useful programs.

They were renewed in Budget 2011 to both foster greater efficiency in the use and production of energy and to create innovation. And we have there a competitive process where we are funding a range of energy innovation initiatives right across the country.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Is that funding going to move from C-base funding to a different level? These are taking these temporary programs.... Is that what I'm to understand is happening?

[Serge Dupont]

No, it remains temporary funding, but we're basically given another five years, or three years, depending. For example, last year there was a one-year renewal of some forestry programs, and we have to go back this year to make the case.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Okay.

I have a question for you about the decreased funding. I don't understand what the role is. I used to be on the fisheries committee, and we spent a lot of time talking about Arctic sea floor mapping and the various roles the Department of Fisheries and Oceans has when it comes to Canada's waters. But here I see a decrease in the United Nations Convention on the Law of the Sea of $5.9 million.

I'm wondering what Natural Resources role in that actually was, or is, or continues to be, and if the funding could be explained.

[Serge Dupont]

Sure.

Basically what Natural Resources Canada is doing with regard to the United Nations Convention on the Law of the Sea is defining the outer limit of the extended continental shelf in the Arctic and Atlantic oceans. That work basically involves geology. It involves expert geological resources that we're deploying in collaboration with Fisheries and Oceans and DFAIT, with a view to extending our continental shelf and for the claim we could have ultimately on resources under the seabed.

We've been working closely on that for a number of years now, and we have basically completed the scientific work; we've actually sent ships with various instrumentation to measure and to test, to try to assess, and to build a scientific case for the claim in terms of our continental shelf space. We are now at a stage where we will have to assemble that information to submit it in 2013 to UNCLOS. Therefore, the expenditures are going down because the bulk of the spending, sending the ships up there in the north, has basically been completed.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

All right. So it's not a program cut or anything; it's just that the work has been done and there's money left over.

[Serge Dupont]

That's right. It's the one shot we have to bring our scientific evidence to that international body to stake a claim on the continental shelf.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Okay.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Calkins.

We go now to Mr. Allen for up to five minutes. Go ahead, please.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you very much, Mr. Chair.

I want to pick up on one of the questions Mr. Lapointe was asking about the pulp and paper green transformation program. I see the decrease of $538.6 million, and I recognize that the program ends in 2012.

There was a process for that in which each of the companies eligible for funding under the pulp and paper green transformation program had to submit their projects for funding. Is that $1 billion fully subscribed, and do we expect a full payout of the $1 billion by 2012?

[Serge Dupont]

I could perhaps refer to one of my colleagues here, if he may come to the table.

We have contribution agreements in place for $950 million. These were essentially credits that had to be earned by the various producers, and we have contributions in place that could fund up to $950 million out of the $1 billion envelope.

But perhaps I could ask my colleague, Tom Rosser, who is responsible for the Canadian Forest Service, to answer more specifically.

[The Chair, Conservative, Leon Benoit]

Go ahead, please.

[Tom Rosser, Assistant Deputy Minister, Canadian Forest Service, Department of Natural Resources]

The deputy minister is quite correct. About $950 million of that $1 billion total was allocated to firms in the industry. Obviously, we still have a few days left in the program. We don't have precise figures, but our expectation is that the great majority of those funds will be invested in capital projects at pulp and paper mills across the country.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Okay, thank you.

The next question is about the major projects management office; I was asking the minister about that when he was in here before. One of the things I'd like to understand is the amount committed in the budget to the major projects management office and the future plans for that office.

[Serge Dupont]

Thank you for the question.

The major projects management office is another one of these temporarily funded programs. It originally had three-year funding at roughly $4 million per year, Mr. Chair, that we have used to do two things. One is to monitor all of the large projects under the MPMO, to do the tracking, to systematically do all the coordination of the regulatory work on all of these projects, an operational kind of function.

The other part of the office basically dealt with looking at how we could further improve the system, which is more policy development work, including a fair amount of discussion with provinces as to how we could better align our regulatory system with theirs. We've been working closely with some jurisdictions to assess the better opportunities to achieve regulatory alignment.

In our estimation, those two functions continue to be important. That said, those are part of the considerations going into a budget that will now decide what kind of funding there will be for the major projects management office going forward after March 31 of this year.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

So March 31 of this year is the sunset on that one as well?

[Serge Dupont]

Correct.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you very much. That's helpful.

I noticed a couple of increases in Sustainable Development Technology Canada under vote 10, under the grants and contributions. There's also $59.3 million under increased funding, which is statutory for the Canada Foundation for Sustainable Development Technology.

How do those two numbers work? Are they basically an increase in the estimates because of supps from last year? What is the reason for those increases?