Natural Resources Committee on Oct. 25th, 2012

[Dr. Marc D'Iorio]

Beyond the source, it's also a question of the host rock. It also depends on some regulations, in some cases.

[David McGuinty, Liberal, Ottawa South, ON]

Okay.

Several years ago, Canada produced the world's first set of acceptable eco-efficiency metrics. It developed a water intensity metric, a materials intensity metric, and an energy intensity metric. These were developed with the Canadian Institute of Chartered Accountants and became the baseline of measurement for the entire OECD.

Where is Canada now, having developed these metrics—not just, for example, in terms of competitiveness in the marketplace, so that we could compare Procter & Gamble's performance against Monsanto's performance, but also because the financial services markets in Canada have been screaming for metrics to allow investors to make decisions based on real metrics? For example, they would want to invest in this company versus that company because its eco-efficiency performance is higher or lower.

Where are we now? Are these metrics being used by your team internally within the department, or have you seen this development move forward?

[Martin Aubé]

I'm not knowledgeable on that subject. We could definitely find out more information. I don't know whether my colleague Marc is aware of it, but I am not.

[David McGuinty, Liberal, Ottawa South, ON]

So to your knowledge, we're not using these metrics, which we developed together as a country and which are now being used, by the way, widely across the OECD? We're not playing in that?

[Martin Aubé]

I'm saying I'm not aware of it, but we can definitely find out; we can go back to the department and get back to you on how these are being used within Natural Resources Canada.

[David McGuinty, Liberal, Ottawa South, ON]

That would be really helpful. Thank you.

Can I take one step back on the financing side, on innovation? Is there anybody on your team or in your department who can help us understand some of the really creative and new financing innovation that's going on? This is before supply; these are choices being made either by private sector investors or by the national government in fiscal instruments, and they are the fiscal signals being sent to the marketplace.

Do you have a team inside the department that is helping think through creativity and innovation in that context?

[Dr. Marc D'Iorio]

Again focusing on the energy supply side right now and the innovation side, it's not something we do internally with financing. What we're really trying to promote right now is collaboration, both nationally among different elements of the innovation system as well as internationally.

Most of the innovation in the world occurs outside Canadian borders. It's how you tap into that best expertise and try to put in place the right types of partnership with respect to being able to....

[David McGuinty, Liberal, Ottawa South, ON]

Mr. Chair, it would be helpful if we could get some indication of whether there is more information inside the department that connects this question of the supply side and the fiscal measures that are in place, because they're integrally connected. I think people often make choices and become innovative on the basis of the tax or fiscal measures that are in place.

I'm not sure whether our witnesses can help us figure that out by getting us a briefing of some kind, but I leave it in your good hands.

[The Chair, Conservative, Leon Benoit]

We've noted that, and Monsieur Aubé has agreed to try to put that together, I think.

We go now to the five-minute round, starting with Mr. Allen.

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

Thank you, Mr. Chair.

Thank you to our witnesses for being here.

I'd like to start with slide 8. I'm going to follow up a little on Mr. Julian's request for further information.

This one is all public R and D spending. If you use the U.S. as an example, would that include federal and state spending? in the U.S. there are a lot of municipal utilities as well. Would this include their investment too?

[Dr. Marc D'Iorio]

Yes, it's meant to include all public investments, whether municipal, provincial or state, or—

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

Okay. If you're going to provide information that will break this out nationally and everything else, we should make sure it is normalized for the same things, because there could be a higher percentage of responsibility in some countries. For example, as you have correctly pointed out, the provincial governments have the majority responsibility for energy in Canada. I'd like to see the numbers normalized for that a little bit.

[Dr. Marc D'Iorio]

What happens is that what is reported to the IEA is reported as an aggregate number for public spending, because different federations have different mechanisms. In some countries, states or provinces do not invest to the extent of producing a public investment number.

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

Exactly. For example, in some countries in Europe it would be much higher on a national basis, because there wouldn't be provincial and state spending, so that might be a fishing expedition.

Anyway, slide 9 talks a little bit about private investment. When you talked about private investment, you said it was mostly in the fossil fuel area. I think I heard that right.

Can you tell us why there might be a lag in other sectors in terms of what they're matching from our government funding and public spending?

[Dr. Marc D'Iorio]

As you know, the fossil fuel area is a very active area economically. It contributes a lot directly to GDP. It's an area in which industy has to meet increasingly stringent regulations. Industry is investing a lot; it is also reorganizing itself a bit differently. The Canadian oil sands industry alliance is a good example of how industry is trying to mobilize itself to address some of the challenges it faces in environmental performance.

A number of companies have not only agreed to pool some funding for the research but to pool their IP as well. There are a large number of contracts being put in place, and actually some economists at Harvard are now looking at this model to see how well it is going to do in achieving environmental performance through pooling industrial funding. Because of the pressures now to do better as far as environmental impact goes, we see much more investment by the private sector, but also more innovative models for their ways of working together.

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

Mr. Aubé, do you have a comment?

[Martin Aubé]

Yes. I want to add a little bit on the clean technology side, which includes renewable energy and energy efficiency companies and all that.

There is a lot of R and D happening. The latest report by Analytica Advisors estimated that the industry is worth about $9 billion, and they're investing almost $1 billion in R and D, which is about 11%, so there are some pockets of these industries that are still quite active on the R and D side.

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

That's helpful, because it leads me to my next question.

We're starting to see that even in the clean tech area—wind and other things—we're getting a “not in my back yard” syndrome happening. When you consider that and look at shale gas and other types of initiatives—even small micro-hydro, which seems to be making a little bit of a recovery now—are such organizations as wind power groups pooling together? I can see that some of these initiatives are going to have a significant impact on their ability to expand, if they're not innovative in coming up with ways to lower the anxiety of the public.

Are you seeing continuing investment in those areas related to some of the health issues that are perceived to be present in the wind industry?

[Dr. Marc D'Iorio]

Broadly, yes, we are. The question of public acceptance of any development, whether it be of fossil fuel or shale gas or a large-scale deployment of renewable technologies, is increasingly present. Work being performed now increasingly tries to look at the social science side of things as well as the physical science side of things, to become able to better communicate with the public and understand what the concerns are and address them effectively, not only with respect to where something is situated but also with respect to what the real risks are and what choices one has to make.

Shale gas is definitely a good example of that.

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

Continuing with that, the U.S. is going extensively into shale gas, and they have tremendous reserves that they are talking about. These are reducing their dependence on imports into the U.S.

We have tremendous reserves in Canada as well. Are we taking an initiative in the department, working with the agencies with respect to water usage, fracking chemicals, and things such as that? How much work is going on in that area right now?

[Dr. Marc D'Iorio]

It's a provincial jurisdiction in most cases. We do work with the provinces. The role of the federal government is often to provide science to inform decisions on regulations and policy.

Under the new ecoENERGY innovation initiative, seven different projects are being performed that look at the impact of fracking, the impact on groundwater, and the potential impact on seismicity. These studies use a lot of departmental assets to understand the real impacts of these developments.

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

Okay, thank you.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Allen.

We go now to Mr. Leef.

[Ryan Leef, Conservative, Yukon, YT]

Thank you, Mr. Chair, and my thanks to our witnesses for appearing.

A little earlier you talked about collaboration between government and industry. Some of these projects tie nicely into investments that Environment Canada makes as well. They manage the Green Infrastructure Fund, correct?

[Martin Aubé]

I think that's through the Federation of Canadian Municipalities, but I'm not sure.