Natural Resources Committee on Dec. 4th, 2012

[Ryan Leef, Conservative, Yukon, YT]

Thank you, Mr. Chair, and thank you, Minister, for appearing today.

You touched on this toward the end of your statement, that Natural Resources is making large investments in electricity and renewables and bioenergy. In my riding, in Yukon Territory, we certainly benefited from the investment in the Mayo B hydroelectric project. That was the largest green infrastructure project at the time, I think, at $71 million. Obviously, it had a major impact in the Yukon on the clean energy we produce in supporting the communities.

I think a lot of Canadians were keenly attuned to the announcement the Prime Minister made on the Lower Churchill Falls project over the past weekend.

I'll give you an opportunity to speak more about the renewable energy projects in Canada generally.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Our government will support any clean energy project that is economically viable, that substantially reduces greenhouse gas emissions, and is of regional or national significance. As mentioned by the member for Yukon, this includes projects from coast to coast. The hydro project in Mayo B has significantly reduced the Yukon's reliance on emitting power sources. With this in mind, the Lower Churchill project will provide significant economic benefits to the Atlantic region and will help significantly reduce greenhouse gas emissions. In fact, Nalcor Energy estimates that the projects will help reduce up to 4.5 million tonnes of greenhouse gas emissions, which according to estimates is the equivalent of taking 3.2 million cars off the road.

In addition, in Newfoundland and Labrador, it's estimated the projects will generate $1.9 billion in income to labour and business, $290 million in taxes, and result in an average of 1,500 jobs during each year of construction, with peak employment during construction of approximately 3,100 people.

[Ryan Leef, Conservative, Yukon, YT]

Thank you.

You mentioned at the beginning of your statement that the economic action plan was introduced in 2008 to respond to the global recession, and accurately reflected, of course, that our top priorities have been to support jobs for Canadians and sustain Canada's economic growth. With that in mind, in previous testimony earlier today, Mr. Dupont talked about how the budget was doubled in 2008-09 and 2010-11 to support one-time economic action plan initiatives, and is now really just being restored to pre-recession levels.

Can you touch on what the doubling of those investments and the one-time economic action plan investments have meant, as we move forward in our current investments in the supplementary estimates (B), for innovation and market development? How has that doubling of investments helped support our innovation and market development?

Mr. Dupont, if you would like to support any response to this as well, feel free to comment.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Those investments covered a number of different areas.

I might mention as an example the forestry industry, where the government has invested more than $1.7 billion, and this is creating results with close to a 1,000% increase in Canadian softwood lumber exports to China.

The budget also provided over $100 million to support continuing transformation of the forestry industry in areas of innovation and market diversification. A couple of the examples are the expanding opportunities program to help to diversify Canadian wood and help develop the non-residential school and mid-rise construction markets in North America. Another is the forest innovation program of some $66 million to support the emergence of breakthrough technologies that will extract greater value from the wood we already harvest.

There are other areas such as the clean energy fund, which relates to, among other things, carbon capture and storage projects that we have been supportive of. I think it's understood that Canada is a leader in the field of carbon capture and storage at both the provincial and federal levels, and $2 billion has been invested in that particular innovative technology.

There have been a number of areas where the economic action plan response to the recession has not only enabled the country to emerge more quickly and in better economic shape than other countries, but has also enhanced particular industries in the natural resource area.

[Ryan Leef, Conservative, Yukon, YT]

I have one minute, so I have a quick question.

I noticed toward the end of your presentation you said that the government's economic action plan 2012 provides more than $690 million to make sure aboriginal youth are job ready.

I was in my riding two weekends ago and was able to announce $4 million for college training specifically related to the natural resources sector, taking opportunities that had been created through the economic action plan. Clearly, this level of investment around these natural resource sectors has come as a result of consultations with first nations people, identifying capacity issues and wanting to take advantage of this job market.

Could you touch on what you've heard from aboriginal and first nations communities about their desire to take advantage of the growing natural resource sector?

[The Chair, Conservative, Leon Benoit]

Answer very briefly, please, Minister.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Thank you for the question. It's a very important one, because it touches on a number of things.

One is the tremendous positive transformative implications of resource development for aboriginal communities. We're talking here about projects, as I mentioned, that could total some $650 billion, of which $100 billion is in the north. Many of these projects are at or near aboriginal communities, so there's a tremendous opportunity for them to participate economically in terms of jobs and so on. It's good for aboriginal communities, and it's good for development.

We have put in a very significant amount of money, almost $700 million, for training to get the communities, particularly the youth, ready to participate in the market and help the development to continue apace. I've had an opportunity to speak to aboriginal leaders. What we are doing from a government perspective is continuing to meet our constitutional responsibility for consultation and working with them as partners for the benefit of their communities.

[The Chair, Conservative, Leon Benoit]

Thank you, Minister. Thank you, Mr. Leef.

We go now to Mr. Julian, and if there's time left, Mr. Nicholls, for seven minutes.

Go ahead, please, sir.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you, Mr. Chair. Yes, I will be sharing my time with Mr. Nicholls.

I appreciate your being here today, Mr. Oliver. As you know, ministerial responsibility means answering questions, even embarrassing questions. I certainly hope Conservatives will allow the opposition members to ask those important questions today.

I'm struck by the allocation in the supplementary estimates of nearly $77 million going to AECL. As you remember, Mr. Oliver, very controversially last year the government sold off hundreds of millions of dollars in assets from AECL for the amount of $15 million. It was called a fire sale at the time. It was called a sweetheart deal. Even greater was the outrage and concern when it was learned just a few weeks later that AECL had actually negotiated an additional contract for $440 million that was part of this sweetheart package.

I note that in your presentation you mentioned a commitment to fiscal responsibility. Here we have a fire sale of government assets, where hundreds of millions of dollars of assets and a $440 million contract are sold off for $15 million. It would be like my saying I'm going to buy your car for $100, but you give me the car and $10,000 back. I think the public understands that was just a poorly negotiated, sweetheart, fire-sale deal.

My question for you is this. Is the $77 million serving to sweeten the pot for subsequent sales, or is that money that is being transferred to the buyer of AECL assets for $15 million?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Thank you for the question.

I have to note it was called a lot of things mainly by you and your party, so I don't think that necessarily reflected the views of Canadians.

The reason the CANDU reactor division of AECL was sold was to put an end to the very large demands for capital that the company was generating. In that regard we were therefore protecting Canadians. We also wanted to put it in the hands of a company with a great deal of expertise in the area and with experience and presence internationally.

As it turns out, at the end of the day, while this was a totally open process to buyers from the entire world, only one buyer remained at the table. We concluded a deal which, in our opinion, served the interests of Canadians and served them well.

In respect to the—

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Oliver, I'm going to have to interrupt you, because I have other questions, but thank you very much.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

I'd like to answer specifically on the $76.8 million.

[The Chair, Conservative, Leon Benoit]

Mr. Julian, give the minister a chance to answer, please.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Please go ahead.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

There is a supplementary estimate, which includes a total of about $77 million for Atomic Energy, which consists of $76.8 million required to continue to meet operational requirements for its nuclear laboratories—that money does not go to SNC-Lavalin—and $0.165 million, which represents a transfer to the Department of National Defence for the Canadian safety and security program for the acquisition of equipment.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you, Mr. Oliver.

I'm going to transfer things over to Mr. Nicholls.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Minister Oliver, my constituents are writing me letters and writing letters to the editor about wasteful government spending, namely the $4 million mentioned on page 108 for advertising programs. While you're doing this advertising, government is promoting itself while cutting valuable services and innovation in science. We tried to put the department back on track by proposing a study on innovation in the energy sector.

I can tell you that my constituents who are concerned about safety and pipelines don't appreciate being called radicals. They don't appreciate being called radicals on the public dime.

They write letters to me and they write letters to the editor. I notice you're a fan of writing letters to the editor too and attacking concerned citizens and journalists. Unlike $4 million spent in advertising, writing letters to the editor is free, so it's good: you're saving taxpayers' dollars by writing letters to the editor.

But certainly, with all the changes made to Bills C-38 and C-45, it will be difficult to convince Canadians that their interests will be taken into account. The changes made show that the government is not at all interested in incrementalism. They are instead showing that our government is a radical one. The power is concentrated in your office. You already have the ability to overturn the decisions of the National Energy Board.

Canadians are right. It's a split with the public. I can describe that as something radical.

Would you support what Premier Marois and Premier Redford proposed? Would you support the joint consultations with the provinces for projects that are under way, such as Enbridge's line 9?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

You are asking a lot questions and making a lot of accusations, but I will try to answer you.

First of all, I'm pleased that you read my letters to the editor. I think you will find a lot of information in them.

As to this oft-repeated and often mischaracterized statement about radicals, what I said was that there are some groups who are opposed to every form of resource development. Since making that statement, which was clear at the time, the facts have become even more abundantly obvious because there hasn't been a single major resource development in this country that has been proposed since I became Minister of Natural Resources that has not been opposed by some group or another. That is regrettable because I think analyzing the projects on their merits, and from a political perspective, waiting for the regulatory organization to make its independent, scientific, objective analysis and come to its conclusions, is what responsible parliamentarians should do.

You talked about advertising, so let me respond to that point, and then go on to some of the others.

Canada's natural resources play a crucial role by creating jobs and fostering economic growth in all regions of the country. Natural resources support close to 1.6 million jobs and place fifth overall in Canada's economic activities.

An additional amount of over $4 million will be used to purchase advertising that will appear on television and on the Internet.

The point is to provide facts to Canadians about measures taken by the government to protect the environment and provide other information on responsible resource development. All details regarding the advertisements will be published by the government in the annual report on government advertising activities.

[The Chair, Conservative, Leon Benoit]

Thank you, Minister, and thank you, Mr. Nicholls and Mr. Julian.

We go now to Mr. Eyking for up to seven minutes. Go ahead, please, Sir.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you, Chair.

Thank you, Minister, for coming.

A month ago, I led a delegation of MPs and senators from Atlantic Canada. We spent a few days in northern Alberta. We visited Syncrude's oil and gas operation. We visited the site where former Prime Minister Chrétien signed a big deal with the oil companies and the provinces, which kind of fostered the big development out there.

We also went to Fort McMurray and met with the chamber of commerce, the airport authority, a college, and MLAs. They see the big expansion.

It's just a note to you, Mr. Oliver, that you should tell your infrastructure minister to get up there. They need help with their expansion of the infrastructure, the airport, everything. They're busting at the seams.

You already mentioned in your briefing that you're well aware of the numbers, of the impact to the economy in that region. We're talking 20% of GDP in exports. When you look at the numbers, going from 1.5 million barrels a day to over 5 million barrels a day, the amount of increased production is going to be phenomenal.

I don't know if you have read the article in the latest The Economist. It pretty well states that your government has a great opportunity, if it handles it properly, but if it's not handled properly, we're going to lose that big opportunity and you're going to see the big players cutting back on their venture capital and investing.

We also met with stakeholders in Calgary. They see this as your government’s and the Prime Minister’s having to take the lead on this, just as they took the lead 150 years ago when the railroad was built. They have to take then lead on getting these pipelines in place. They cannot leave it to the private sector because the private sector is not going to be able to do this on its own.

I have a couple more comments. I'm on the foreign affairs committee. Right now, we're studying the future of the Arctic. That opens up not only a whole pile of challenges, but also opportunities, of which, as the minister, you're well aware. Just the other day a witness talked about the potential of piping oil to Churchill and oil tankers coming out of Churchill. It's a big challenge, but it could be an opportunity.

That all being said, and assuming you might be minister of this department for the next three years, you're going to see a ratcheting up of production out west. Of course, you're well aware that the United States is becoming more self-sufficient, and we need these other world markets. You mentioned that it has to come out of a pipeline one way or another.

My first big question is, what is your game plan, not only yours, personally, but with your colleagues as well? This can't be pulled off by your department alone. Therefore, what is your game plan along with your colleagues and your provincial counterparts? With reference to the railroad, in order for the railroad to be built 150 years ago, the Prime Minister had to take a real, vested interest in making that happen. I'm concerned about leaving it to the private sector.

If you're going to have this job for the next three years, what is your game plan to do this right, along with your colleagues and your provincial counterparts? If it's not done right, the capital would stop coming into the region, all those jobs out there would be lost, and we would lose this great opportunity for the economy.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Thank you for your question. I'm pleased you see the enormous economic potential for the Canadian economy, and for individual Canadians right across this country.

You say that the private sector can't do it on its own, and certainly government has its role too. I hope you're not suggesting, however, that the federal government support the resource companies because that's not where we're heading.

What we need, clearly, is a collaborative effort between the federal government and the provincial governments, and between the provincial governments themselves, because we are talking here about resources and responsibilities that the Constitution has divided between the two levels of government. Some are within federal jurisdiction, some are within provincial jurisdiction, and some are shared, and so we all have a critically important role in that regard.

I should also mention the role of the regulatory bodies. We have been very clear, as a government, that no project will go ahead unless it's safe for Canadians and safe for the environment. We take environmental protection and safety of Canadians very seriously. That is why, in our responsible resource development legislation, we put significant amounts of money into maritime safety and into pipeline safety. We will continue to move forward to make sure that the safety is utterly world-class. This means it's a never-ending task because as technology and science improve, we're going to require industry to move with them.

Our vision is long-term prosperity and security for Canadians, based upon the responsible development of our immense natural resources from coast to coast. Everything we're doing is geared to achieving that overarching objective.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Can you explain in a little more detail when you say that you are doing everything to do this? We're looking at a small window here, and what I heard from the oil companies is they do not want money to help build their pipelines. They don't need that money. They don't want this to go roughshod over people's land or create bad environmental practices. They want leadership from the Prime Minister and your colleagues.

You're talking about the provinces, but I'll go back to how we built the railroad: it has to come right from the Prime Minister's Office to push this and to sit down with premiers who have a problem with the line or whatever. I guess that's where I'm getting to. Is that going to be done? Can you sense that within your cabinet? Can you sense within your colleagues that this could be a great opportunity lost if you guys don't take the bull by the horns in the next couple of years?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Well, we of course have been actively involved in doing precisely what you're suggesting. Our low-tax policy for jobs and growth is entirely consistent with those objectives. The responsible resource development, which streamlines regulation while enhancing it at the same time, has been received exceptionally well in foreign countries that I have visited. I have been to China twice, to India and Japan twice, and to Korea, the Philippines, Europe, the United States, and Israel. We've been talking about and promoting the enormous natural resources of this country and we've been promoting free trade. We have been encouraging investment.

We're open for business and we're telling the world about the Canadian story. It is resonating extremely well. This is under the Prime Minister's leadership; he personally has been involved. My colleague, the Minister of International Trade, and I have been going to the markets where there is enormous complementarity. You see, Canada absolutely must diversify its markets in light of the fact that 90% of growth in demand in energy is going to come from non-OECD countries, and the U.S. is going to become energy—

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Self-sufficient.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

—self-sufficient.

We need this. Many of these countries in the Asia-Pacific market have a key strategic objective of diversifying their sources of supply.