Natural Resources Committee on April 16th, 2013

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Thank you, Mr. Chair.

I'd like to talk a little bit later about innovation and new products and technologies, but before doing that, at committee over the last few months we've heard a lot about involving our aboriginal communities. I want to talk about some of the specific places that Natural Resources is connecting with the aboriginal communities and how we're inviting their participation and working with them in order that they will be able to enjoy the benefits of natural resources that so many other communities have had.

We had a number of discussions—and Mr. Gravelle is still here—about the Ring of Fire and the potential in that area for aboriginal communities to be fully engaged in the whole process of developing the natural resources. I'm wondering if you would take a few minutes to touch on where we are working with aboriginal communities and how we're bringing them in and working with them in terms of natural resources.

[Serge Dupont]

Thank you, Mr. Chair.

It is indeed an important and to some extent historic kind of opportunity to further the relationship with the aboriginal communities around resource development. At Natural Resources Canada we interact and try to make contributions to that relationship in different ways, in particular through the major project management office, which brings together all of the major regulatory departments in Ottawa.

We try to coordinate our action there, in particular as regards the proper consultation process that has to take place where resource development occurs, obviously ensuring that the crown fulfills its constitutional duty to consult, ensuring as well that there is guidance to industry in engaging with aboriginal communities in moving forward projects, working with provinces as well to better align our processes.

More recently, and perhaps in a more focused kind of manner, you are aware that the government appointed a special representative in Mr. Doug Eyford in western Canada to engage with aboriginal communities on the question of west coast energy infrastructure. It is an effort that has to take place across Canada, whether for the Ring of Fire or for western energy infrastructure. That development must take place in consultation with aboriginal Canadians, and those opportunities must be seized to improve their economic and social conditions.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

When we're talking about 600 projects and $650 billion over the next 10 years, I'm wondering what role Natural Resources plays in job creation.

Do you see yourselves as having a role in that area?

[Serge Dupont]

We have roles in many facets of this. For example, the work we do as regards the regulatory process and ensuring the regulatory process is run in a coordinated manner among all the different federal partners through the MPMO, major project management office, is important.

We are fundamentally a science-based department as well. Whether it's in forestry, energy or mining, we ensure that we bring forward knowledge, and with it the skills that will allow our industry to continue to compete. Also, we ensure we are responsive to various initiatives, including the science and other programs. Those industries are more and more sensitive to the environmental dimension that is important to Canadians as well as to our brand globally.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

We're talking about investment. On page 239, I think it talks about increasing investment and innovation for new products by $30 million.

I'm wondering whether you could talk about the highlights of what you see being those areas of innovation. I'm interested in forest products innovation and some of the things that are happening there. I've been able to tour one of those labs.

What are the highlights of where you see the innovation funding going? In particular, if you want to talk about forestry, I think that would be of interest.

[Serge Dupont]

If you wish to have further details on forestry, we have someone here who could speak more to some of the details.

There's really two aspects of innovation in the forestry sector. One is developing the markets, and I think the minister spoke a bit about that, but innovation from a technology standpoint also needs to develop new higher value-added products, new ways of ensuring that Canada not only sells two-by-fours but that we're able to develop new products like cross-laminated timber. We're also looking into next generation type of products that use wood fibre, to essentially develop the substitutes for plastics and other materials with high resistance and excellent properties.

It's really thinking about making operations more efficient, through process improvements in some cases, developing new products to tap into new markets, and geographically finding those markets so we can sell the products.

It's really working on all of the above.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

This may be more to Mr. Arora.

In terms of the innovation in the science area, what really attracts your attention?

[Anil Arora, Assistant Deputy Minister, Science and Policy Integration, Department of Natural Resources]

Specifically on the forest side?

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

No, outside of that as well. We heard a little bit about forestry.

What do you find is going to be fascinating in the next year?

[Anil Arora]

I think Mr. Dupont has spoken a bit about the forest products and some of the value add and innovation that's going into creating those value-added products, beyond selling timber and two-by-fours.

On the mining side, there are some really exciting possibilities. We have a major initiative called the green mining initiative. We're working with industry to see how mining can be done in a more responsible way to reduce the use of water, reduce the footprint of mining itself, for example, how you reduce the amount of waste rock that is produced or how you decrease the amount of energy or ventilation demand. That initiative of the government, $8 million, is leveraging six-fold with industry investment and trying to actually implement those kinds of initiatives and that science in mining.

On the energy side, there has been tremendous work, ranging from new sources of energy, clean sources of energy, to even looking at renewables. We have made significant progress on a number of those fronts, both domestically as well as in partnership internationally.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Anderson.

We now go to the New Democratic Party. Ms. Liu will be followed by Mr. Nicholls, if there's time.

Please go ahead, Ms. Liu.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Thank you, Mr. Chair.

I would like to thank our witness for coming here to be with us this afternoon.

Mr. Dupont, I would like to ask you a question about Gentilly-1.

We know that the Quebec Minister of Natural Resources, Martine Ouellet, said that she was concerned about the decision made by Atomic Energy of Canada Limited to postpone the dismantling of Gentilly-1 from 40 to 90 years.

Considering that the Government of Quebec has renounced the use of nuclear energy and will begin to dismantle Gentilly-2, would it be possible for the federal government to coordinate the dismantling of these two nuclear facilities?

[The Chair, Conservative, Leon Benoit]

Monsieur Dupont, please respond.

[Serge Dupont]

I believe so.

Atomic Energy of Canada should initiate discussions on this matter. Atomic Energy of Canada manages the Nuclear Legacy Liabilities Program on our behalf. Atomic Energy of Canada and Hydro Quebec need to discuss matters to ensure that the reactors are disabled in a harmonious and cost-effective manner and that operations are well-coordinated. These discussions therefore need to take place. Clearly, Atomic Energy of Canada's timetable will also, I believe, be flexible on this matter.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Thank you.

I wanted to underscore the need to take quick action.

Given that the same expertise is required to dismantle both reactors, and that for the past 35 years, we have been paying for Gentilly-1, which was in operation for only 183 days, do you feel that there is some urgency here?

[Serge Dupont]

I am not a physicist, but we do have some around the table.

We must remember that the dismantling of a nuclear reactor does not take place overnight, even if it is urgent. This is a long process. We also need to have a long-term plan for the disposal of these assets and equipment and we have to provide for long-term security. We need a multi-year, serious plan. This process is long and quite costly. There is undoubtedly a feeling of urgency, but I think that first and foremost, there is a very strong feeling of responsibility.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

As you related to us briefly, extending the dormancy phase will entail additional costs with respect to the decommissioning and management of nuclear waste. What do you estimate the cost of this postponement will be with respect to the liabilities?

[Serge Dupont]

Pardon me, I did not hear your question very well.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Given the timetable that you have implemented, how much will the additional costs amount to for the decommissioning and management of waste?

[Serge Dupont]

The entire program, which includes waste currently located in Chalk River, Ontario, waste near the Bruce nuclear reactor in Ontario and at Gentilly-1, as well as other equipment located in various regions of Canada, such as in Whiteshell, Manitoba, is a waste management program that will be recorded as a liability for the Government of Canada.

Atomic Energy of Canada recently announced that this liability, which is standing at $2.4 billion, will be increased to reflect the fact that, in particular, there will be a need to carry over further the indirect costs on the direct costs of waste management. Internationally, this has proven to be costly and lengthy.

Moreover, nuclear fuel is the responsibility of corporations that manage nuclear reactors. It must necessarily be included in the long-term management cost in electricity rates.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Thank you.

Let's now take a look at reductions in the public service, particularly in the area of science. We know that these cutbacks are going to hurt and that the total budget of the department has been reduced by more than $2 billion compared to the budget in 2010-2011. Which Department of Natural Resources sectors have been the hardest hit over the past three years?

[Serge Dupont]

Thank you for your question.

You cited some very significant figures with respect to spending cuts. Many of these expenditures are in fact transfers, meaning contributions and grants to other sectors. That is not necessarily reflected in the operating costs of the department and has no bearing on our ability to contribute to science.

However, as part of the deficit reduction exercise in the 2012 Economic Action Plan, we had to reduce our envelope by 10%. That measure unavoidably led to staff reduction. We went through the exercise and made the subsequent calculations. In answer to your question, we did not cut back in the scientific sector any more than we did in other sectors.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Could you tell me the total number of positions eliminated as well as the number of scientific positions eliminated?

[Serge Dupont]

As part of the Deficit Reduction Action Plan, we had to cut 160 positions.

In our department, approximately 40% of our staff have a scientific mission and duties. The ratio is more or less the same for our deficit reduction exercise. We did not target scientific positions more than any others. We did not spare them either. Indeed, this would be less the 40% because we made significant reductions, particularly in our internal administrative duties.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

One hundred and sixty positions, that is a lot.

The main estimates call for a $22 million decrease for the Geo-mapping for Energy and Minerals program. This committee did a great deal of work on a report containing recommendations intended for the federal government. The sector concerned also made recommendations.

Why did the federal government not consider these recommendations?