Good morning and thank you.
Mr. Chair and members of the committee, thank you for the opportunity to meet with this committee. As a government, our number-one priority is jobs and economic growth.
We're concentrated on putting in place the economic fundamentals that will ensure Canada will prosper in the 21st century. We're lowering personal and corporate taxes, cutting red tape, investing in innovation, and promoting free trade.
It's not a coincidence that Forbes magazine ranked Canada as the best country in the world in which to do business, and we want to keep it that way. Both the IMF and the OECD predict that Canada's economic growth will be among the best this year and next in the G-7.
Canada's natural resources have underpinned Canada's strength, with energy, minerals, and forest products accounting for more than 10% of Canada's gross domestic product. Our natural resource sectors directly employ over 790,000 Canadians, generating economic activity right across the country, including in remote and aboriginal communities.
There is a tremendous new global opportunity for Canada to thrive economically if we make the right decisions today to capitalize on our resource development potential. Over the next ten years, we're looking at as much as $500 billion in new energy and mining investment in major projects across Canada. The investments in these sectors are not limited to major projects. There are also the day-to-day investments in new machinery, equipment and buildings. According to Statistics Canada, our natural resource sectors intend on spending $125 billion on new capital investments this year. This represents nearly one-third of the $400 billion in investment intentions across the broader economy.
Imagine what kind of investment that would mean for jobs and growth in our economy. Imagine what that investment would mean to generating billions of dollars in tax revenues, revenues that go to support health care, education, roads and bridges, and other important services and programs that give us the quality of life we enjoy in this great country.
But we cannot simply take those investments for granted. These companies have the opportunity to invest around the world. Without a strong investment-friendly atmosphere, they will simply take that capital elsewhere. We're going to have to compete for them, just like we're going to have to compete for global markets.
If we want to succeed, we have to get our outdated regulatory system right. The existing regulatory system was developed and added to over the course of many years without much consideration for the overall effect. The result is a tangled web of rules and procedures. We're reviewing literally thousands of small projects every year, projects that even the Canadian Environmental Assessment Agency says have virtually no impact on the environment.
This is a disincentive to investment that can cost Canadians good, well-paying jobs and jeopardize the economic viability of major projects. You need to keep in mind that the market for capital is as competitive as any market in the world.
Canada is not the only country that can provide the resources to growing economies in the Asia-Pacific region. For example, Australia is approximately the same distance from China and has a very similar economy to Canada. They have already taken action to tap the Chinese market and have progressed further down that road. If we want to get into this market, we need to move quickly or the opportunity will pass us by. I am confident that we can achieve a regulatory system that does its job to protect Canadians and the environment but, at the same time, supports Canada’s competitive advantage.
Mr. Chair, let me now turn to the proposed spending under review by this committee. Let me emphasize at the outset that when it comes to spending, our government will continue on the path of prudent fiscal management.
The $2.8 billion in proposed spending for 2012-13 in my department can be broken down into three major categories of expenditures: 40%, or $1.12 billion, is for statutory payments that flow to the provinces of Newfoundland and Labrador and Nova Scotia under the offshore accords; 32%, or $892 million, is for grants and contributions paid under different statutory or program authorities; and 28%, or $778 million, comprises the operating expenditures of the department, including salaries, contributions to employee benefit plans, and other operating and maintenance costs.
Through funding we receive from Parliament, Natural Resources Canada is able to make a significant difference in our energy, forestry, and mining sectors. We are building on an impressive track record in research and innovation across all our natural resource sectors.
For example, in energy we are investing $14 million in Aquistore, a carbon capture and storage demonstration project in Estevan, Saskatchewan. The Aquistore project, which I had the opportunity of visiting, will examine the potential for deep CO2 storage in southeastern Saskatchewan. Canada is in an excellent position to lead the world in the development, implementation, and deployment of carbon capture and storage technology.
In forestry we've invested in the CelluForce facility in Windsor, Quebec, the world's first commercial-scale producer of nanocrystalline cellulose, or NCC, a company I also had the privilege of visiting.
Canada is becoming a global leader in transforming this organic material into a broad range of new industrial and consumer products. Our investments in research and development are also supporting the competitiveness of Canada's mining industry.
Our CANMET mining and mineral sciences labs have developed an enhanced leaching process for recovering precious metals. Companies using this new process have reportedly experienced productivity gains totalling $28 million.
We're also helping to unlock the vast potential of Canada's north. Natural Resources Canada is Canada's leading centre of expertise for receiving, managing, and interpreting remotely sensed data by satellites and aircraft. We're using remote sensing to help ensure the health, safety, and security of Canadians. For more than 50 years, the polar continental shelf program has been helping scientists to unlock the mysteries of Canada's north.
This program supports a wide variety of scientific research, ranging from archaeology and geosciences to climatology and wild life studies. Every year, it provides air and ground support to about 130 scientific groups from more than 40 government departments and universities—from across Canada and around the world. Researchers heading up to Canada's High Arctic know they can count on this program to provide reliable and cost-effective source of equipment, supplies, support and expert advice.
A $100 million GEM program, the geomapping for energy and mineral initiative, is about to enter its fourth field season. The program is modernizing geological methods and techniques to map Canada's northern resource potential. We've identified areas of high potential, not only for gold, but for nickel, platinum group elements, rare metals, base metals, and diamonds. GEM data is not just fuelling current exploration activity, it is laying a robust, modern foundation for years of future exploration, development, and land use planning.
These are only a few examples of concrete initiatives of the government to help make Canada a global leader in the responsible development and use of natural resources.
Mr. Chair and members of the committee, I have provided a brief overview to help set the context for our discussions.
Let me conclude by emphasizing that responsible resource development is vitally important to the continued health of Canada's economy.
Canada's abundant natural resources have an enormous potential to stimulate jobs and growth in a period of global economic uncertainty. The work of Natural Resources Canada and its portfolio agencies play a critical role in helping to unleash this potential.
I welcome your support in approving the proposed estimates, and I'm pleased to take your questions.