Natural Resources Committee on April 16th, 2013

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

In the estimates there's an interesting sentence, and perhaps you can explain it to me. It says, “In addition, annual savings of $5 million beginning in 2012-2013 will be achieved through the International Assistance Envelope horizontal review.”

What does that mean?

[Serge Dupont]

What it means is that under the deficit reduction action plan all of the individual departments had to come forward with their efficiency savings. As I indicated, we came forward with the 10% for Natural Resources Canada.

Additionally, there was a horizontal exercise across the Government of Canada having to do with the international envelope, so funding of different kinds going to international initiatives. Of that, Natural Resources Canada contributed an amount of $5 million, which essentially is going to happen as we sunset the African forest initiative that we were running. It is the contribution by Natural Resources Canada to reduce spending in the international assistance envelope.

Is that clear?

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

It's a little more clear.

I want to pick up on a little bit of what Ms. Liu was initially commenting on about the DRAP and the reductions that you had. It says, “Internal corporate services will be reduced and NRCan’s organizational structure and operations will be streamlined.” There are 159 positions cut.

What is the department doing to ensure, going forward, that you actually are able to sustain those savings in the organization? What kind of metrics do you have in place to ensure that the savings will continue to accrue in the department?

[Serge Dupont]

That's a good question, Mr. Chair.

Number one, in terms of the savings continuing to accrue, these are ongoing adjustments to our resources. Those moneys are gone. They're not coming back.

What may happen in the future is the Minister of Finance looks at various proposals and may think at some point that we have an idea to generate value for Canadians, and decide to allocate new resources to Natural Resources Canada, but absent that, we have to live within our means. That means delivering on our commitments, and it means as well ensuring that we fulfill all of our internal responsibilities and we fulfill all of our reporting requirements. We do have to organize our business accordingly, and that means taking different initiatives. It means taking our libraries, which used to be on paper, and basically phasing them out and going to electronic libraries. It means reducing travel. It means reorganizing. It means merging various groups together to cut some overhead. We don't have a choice. This is an ongoing conversation among us to ensure that we live within those means.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Allen.

Mr. Trost, for five minutes.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Thank you, Mr. Chair.

I'd like to focus my questions on AECL. Its emphasis has changed somewhat over the years in terms of how the federal government relates to it. I hope I'm not covering any territory that anyone else has covered.

Looking through these basic numbers, we have 2011-12, the $537 million, main estimates of $103 million, and estimates to date of $345 million. Then, for 2013-14, we have the exact same $102 million in the main estimates going forward.

Could you break this down in a fair bit of detail, or in as much detail as three minutes will allow? I think to a lot of people it seems strange: you have estimates of $101 million, and then you have expenditures of $500 million or $300 million. Could you just break that down in terms of why there are the discrepancies, why going forward we're estimating again $102 million in 2013-14?

I would like you to break down all the constituent elements one more time for us, if possible.

[Serge Dupont]

I appreciate the question, Mr. Chair.

The $102 million is basically the base funding that has been there for a number of years for Chalk River Laboratories. It kind of funds the infrastructure. I mean, it's basically Canada's biggest lab, with roughly 3,000 people working there.

Basically there are three functions. I have the exact breakdown of the costs, but.... There is waste management in the sense that they do have to manage what is there historically, from post-war. There is, at this time, still production of medical isotopes. There is research being conducted on a National Research Universal reactor. There are services provided to CANDU owners and to the CANDU supply chain, basically science and technology services. That's kind of the gamut of services now.

The $102 million at this time, which is the money reflected in the main estimates, does not fulfill fully those obligations. That is why in successive budgets over the past number of years there have been announcements of additional support for Atomic Energy of Canada Ltd.

Now, some years back, that additional support covered not only laboratories but also the commercial part, which was trying to sell the reactors, basically unsuccessfully. That part is no longer receiving additional moneys in the budget. It is receiving in these main estimates, through what is statutory funding, $109 million. It is not going to SNC-Lavalin...or part of it is, indirectly, but essentially it is discharging our final responsibilities vis-à-vis the commercial part, which includes different commitments that we still need, including warranties for the work at reactors and so forth. That amount, which is $109 million now, is basically going down to zero, because we are phasing out totally our support for the commercial reactor side of it.

The $102 million has been supplemented this year by $141 million over two years in the budget. It will be reflected in the supplementary estimates for you. That is intended basically to allow Chalk River Laboratories to do the functions I stated earlier and to meet the regulatory requirements of the CNSC in so doing, ensuring that it's done safely and with proper protection for the environment.

So it's been a bit...over the last number of years, with part of it in the main estimates, part of it coming in supplementary estimates, because of the budget process. We don't have, fortunately, at this time—I guess we still kind of cross our fingers—bad surprises mid-year, like repairing the NRU, that require even further supplementary estimates to come before this committee.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

When can we expect, with the commercial liabilities that we're winding down, that in the estimates the expenses will be substantively gone? What is the last year we really anticipate having major costs based on that, looking forward?

[The Chair, Conservative, Leon Benoit]

Could I have a very short answer, please.

[Serge Dupont]

Yes.

The amount that was in the legislation for the divestiture of the commercial part was funding over five years, but it is basically declining rapidly. The $109 million is no longer. I mean, you're not going to see those numbers in future years. It's coming down. Within five years it's zero.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Trost.

Before we go to Mr. Julian, who will be our final questioner, I want to remind members that the meeting isn't over when—okay, it will be Monsieur Gravelle, I guess.

The meeting isn't over when Monsieur Gravelle asks his final question. We will need a couple of minutes after that to go through the votes on the main estimates. It should take just a couple of minutes.

Go ahead, Monsieur Gravelle.

[Claude Gravelle, NDP, Nickel Belt, ON]

Thank you, Mr. Chair.

Thank you, witnesses, for being here.

The last time you were here we talked a little bit about the Ring of Fire, and you mentioned it again today. Since that time a minister for the Ring of Fire has been appointed. We also understand there's a 15-department secretariat to coordinate the Ring of Fire. Can you supply us, please, with a list of those 15 departments that are involved in the Ring of Fire?

Also, since you appeared here last, the government took three expert witnesses to court to try to prevent them from testifying. Of course, the court ruled in favour of the witnesses. So mining companies still aren't getting good leadership for the Ring of Fire.

We really want to support this project. We want it to go forward, because it's going to create a lot of jobs. When we heard testimony in the committee when we studied the Ring of Fire, the first nations that came to testify were quite explicit that they really support the Ring of Fire and they want to work with the government and the companies. The companies said, “Tell us what the rules are and we will follow the rules”, but we're not getting this kind of leadership.

Would you agree that we need a better approach to the Ring of Fire?

[Serge Dupont]

You mentioned there is a minister who has responsibility for this. I'm not in the best position to judge what is happening on the ground there. You're quite right that there is broad support and opportunity. There is an effort.

Regarding the 15 departments, we could certainly get the list for you. I couldn't list them off the top, although you'd have your departments of transport and infrastructure, aboriginal affairs, and so forth, and they'd try to bring that together. We participate as well in some of the efforts. Through the major projects management office, we try to ensure that the regulatory process is moved along appropriately. We are aware that some parties would have preferred the panel process. The Minister of the Environment has decided that it will be moving through the standard kind of environmental assessments. It will still require the contribution of the best possible science.

I could not speak to the issue of the witnesses, or any of the legal issues around that. To be honest with you, I'm not familiar with those developments. I can only answer that the government, I think, and certainly officials, recognize it's really important to ensure that conditions are in place for those projects to succeed.

[Claude Gravelle, NDP, Nickel Belt, ON]

Thank you.

I want to talk a little bit on infrastructure. Is the federal government going to support an industrial road or a road that will give access to all the communities involved in the Ring of Fire?

[Serge Dupont]

Again, that question would be much better addressed to Minister Clement, or perhaps the department of transport and infrastructure. That would not be within my domain of responsibility or that of Natural Resources Canada or, indeed, that of Minister Oliver.

[Claude Gravelle, NDP, Nickel Belt, ON]

Okay.

There's a story today in the Financial Post that indicates that the Ring of Fire's in jeopardy because of a lack of leadership. They're not getting the leadership from the Ontario government, or obviously, from this federal government either. What's the plan for the Ring of Fire going ahead?

[Serge Dupont]

One of the critical dimensions in all of these projects is commodity prices and market signals. Those will have the dominant impact on whether things move forward or not. At the end of the day, it's going to be private investment that will be instrumental in making this happen or not. Governments are collaborating at the highest levels, for example, between Ottawa—the Government of Canada—and Ontario. I'm sure there is a common willingness to create the best conditions. At the end of the day, though, it's going to be really critical for the companies themselves to come forward on the basis of their plans to invest which will be influenced by commodity prices and other market signals.

[Claude Gravelle, NDP, Nickel Belt, ON]

I have one brief question.

To your knowledge, has the federal government been asked to participate in the infrastructure for the Ring of Fire?

[Serge Dupont]

I'm sure the question of infrastructure would have come up in the discussions between the two levels of government. That's not my specific domain of responsibility so I would rather let others answer questions on specific infrastructure plans in the Ring of Fire and in other parts of Canada.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Gravelle.

Thank you very much to the witnesses from the Department of Natural Resources, Serge Dupont, Anil Arora, and Kami Ramcharan, for being here today. Some good information was exchanged today on the main estimates. Just leave the table as you wish; we're going to go directly to the votes.

I will ask the questions in the order that they're normally asked on the main estimates for 2013–14.

NATURAL RESOURCES

Department

Vote 1—Operating expenditures..........$787,602,384

Vote 5—Capital expenditures..........$25,535,435

Vote 10—Grants and contributions..........$638,924,120

Atomic Energy of Canada Limited

Vote 15—Capital expenditures..........$102,143,000

Canadian Nuclear Safety Commission

Vote 20—Program expenditures..........$34,976,638

National Energy Board

Vote 25—Program expenditures..........$55,241,279

Northern Pipeline Agency

Vote 30—Program expenditures..........$3,003,000

(Votes 1, 5, 10, 15, 20, 25, and 30 agreed to on division)

[The Chair, Conservative, Leon Benoit]

Shall I report the votes under Natural Resources, less the amounts voted in interim supply, to the House?

[Some hon. members]

Agreed.

[An hon. member]

On division.

[The Chair, Conservative, Leon Benoit]

Thank you all very much. I will do that at the earliest opportunity. Thank you all for your participation in the meeting today. The bells are going for the votes.

The meeting is adjourned.