Natural Resources Committee on March 27th, 2012

[Serge Dupont]

I was responding to a specific question as to whether we had a study that would tie the differential between WTI and Brent to the price of gasoline. My answer to that was no.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

How about a slightly wider study, then?

[Serge Dupont]

Again, we don't purport to try to project or forecast gasoline prices.

[The Chair, Conservative, Leon Benoit]

Thank you. Your time is up.

We go now to the government side. Mr. Daniel, for up to five minutes. Go ahead, please.

[Joe Daniel, Conservative, Don Valley East, ON]

Thank you, Mr. Chair, and thank you, gentlemen, for being here with us.

We've noticed the way the main estimates are divided down into 40%, 32%, and 28%. I wonder if you'd talk a bit more about the 32% that is $892 million for grants and contributions. Are there any specific programs or issues as to how that is broken down? Can you talk a little bit about that?

[Serge Dupont]

Sure. Actually, the information is quite transparent there for parliamentarians. If one turns to page 260 of the main estimates, if those are handy to the members of the committee, Mr. Chair, you will see there the major categories of transfers that include grants and contributions. I think what one would call the big-ticket items are the clean energy fund, the ecoENERGY for biofuels program, the ecoENERGY for renewable power program—that's in 2012-13. The estimates are there—and there is a legacy program still paying moneys out, the wind power production incentive contribution program. As well there are investments in forest industry transformation. Last year, of course, there was the pulp and paper green transformation program. You see that one at the bottom part of the page.

Those are the kinds of initiatives the department has been conducting, and typically through competitive processes, where different proposals come in, we analyze them and they pay moneys out to proponents based on a range of criteria and circumstances.

[Joe Daniel, Conservative, Don Valley East, ON]

Thank you.

If we take a look at these, we see there's been a substantial increase in the clean energy fund. Are there any specific focus areas that this money is going to? Can you expand on that a little bit for us?

[Serge Dupont]

Sure, and if you'll allow me just to flip to...so I can be a bit more precise about it—or not. It's going to be easier if I don't go through all the paper.

Essentially, the clean energy fund was a $1 billion five-year program. When it was introduced over five years, it would have been at $200 million each year. The reality is that this largely has to be very responsive to proponent proposals, including carbon capture and storage sequestration. We have three large projects that have been earmarked, representing $465 million of that original billion dollar amount. For those, we have to be responsive to when the private sector participant is actually going to go ahead with a program.

What you're seeing here is not so much an increase as a reprofiling of moneys to try to align it better. We're simply changing the distribution of the billion dollars over the five years to better align with the requirements of the project partners we have.

Overall, of the billion dollars, I should add, $205 million was moved over to home retrofit programs. That was a Budget 2010 decision, I believe. Beyond that, we're essentially trying to work with the outstanding portion of that program and make it work as best we can.

Apart from the carbon capture and storage projects, we've funded over 20 projects—clean energy demonstration projects—across Canada, which I could elaborate upon if there is time or inclination.

[Joe Daniel, Conservative, Don Valley East, ON]

Maybe you could expand a little bit on some of those projects. Clearly, carbon dioxide is one of the big issues, but there are other....

[Serge Dupont]

I've got it here, if you'll allow me.

There are actually 19 demonstration projects, apart from the carbon capture and storage. The carbon capture and storage that we've announced, where funds are committed, are the Shell Quest project, which is carbon capture and storage in an upgrader in Alberta; the Project Pioneer, which would be essentially using carbon capture and storage technology in a coal-fired power plant; and the Alberta trunk line, which would essentially fund a pipeline to stimulate enhanced total recovery and at the same time carbon sequestration.

Apart from that, demonstration projects included renewable and alternative energy technologies, including smart-grid technologies. For example, there have been 19 successful proposals from all regions of Canada that we have funded. And of course we could give the committee a full list of those projects and the types of activities they've been funding.

[Joe Daniel, Conservative, Don Valley East, ON]

From the carbon capture programs, do we have any sense of how efficiently or how well or how much we could potentially reduce the carbon footprint for this country?

[Serge Dupont]

We're looking at demonstrating technologies in these programs.

Certainly, even internationally, when the International Energy Agency has looked at how carbon could be reduced in the world, there is a very substantial portion in its scenarios that is most aggressive in terms of reduction of GHGs that count on this technology.

I think the number that would come from carbon capture and storage technology is in the range of 20% of their emission reductions. It's really important for us, as Canada—and Canada has leadership and knowledge in this, in Saskatchewan notably—to fully explore that technology, to work in partnership with those who have the expertise in the private sector or in academia in Saskatchewan, for example, so that we fully assess the potential, which could be quite substantial, to store carbon and therefore improve the GHG performance of the economy.

[Joe Daniel, Conservative, Don Valley East, ON]

So it's a good investment.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Daniel. Your time is up.

[Serge Dupont]

It certainly is a worthwhile investment to test technology.

[The Chair, Conservative, Leon Benoit]

Thank you. We go now to Mr. Gravelle.

If there is time left, then we go to Mr. Lapointe and Madame Day.

[Claude Gravelle, NDP, Nickel Belt, ON]

I have a very quick question for Mr. Dupont.

When Mr. Corey was here in November, we asked him the following question: can you tell us the total tax dollars for renewable energy versus tax breaks for oil and gas? He gave us the answer to the first question on renewable energy.

Can you supply to this committee the tax breaks for oil and gas companies?

[Serge Dupont]

What is sometimes referred to as “tax expenditures” are reported by the Department of Finance typically on an annual basis. I don't have those numbers with me, and there is always a lot of debate about what a tax expenditure is versus what is quite simply a recognition of an expense to earn income.

I would like to defer to my colleagues in tax policy in the Department of Finance to answer those kinds of questions.

[Claude Gravelle, NDP, Nickel Belt, ON]

Thank you.

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

Mr. Dupont, you are fully bilingual, correct?

[Serge Dupont]

Yes, absolutely.

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

I urge you to demonstrate a degree of good faith when answering this question. My question doesn’t have to do with the contested notion of the so-called safe handling of asbestos; it has to do with the collapse of the asbestos mining industry. Mines have no longer been operated in months.

So does this year’s budget include an adequate economic transition plan to help the asbestos region? If so, what is it? If not, why not?

[Serge Dupont]

Mr. Chair, I was asked to demonstrate good faith, and I have taken note of that. That being said, the hon. member will understand that I am in no position to discuss what the budget might include in any way, shape or form.

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

I have also taken note.

The pulp and paper green transformation program (PPGTP) is facing cuts in the amount of $550 million. Yet the CEO of the Forest Products Association of Canada testified before the Standing Committee on Natural Resources and said the following:

...the most strategic investment lies in focusing on those things that transform the industry, things that support the change, such as export development, R and D, environmental reputation, and green transformation. That's what we're hoping to see from the next budget. More important, this is what we're hoping to see over many years.

So why are there such cuts in the sector when continuing the program could, as it says on the Natural Resources Canada site, “secure jobs through forest sector innovation and renewal” for many years to come?

[Serge Dupont]

Thank you for the question.

The pulp and paper green transformation program was initially announced as a temporary three-year program with $1 billion available to address specific market conditions.