Natural Resources Committee on Nov. 25th, 2014

[The Chair, Conservative, Leon Benoit]

Good morning, everyone.

Welcome, committee members and witnesses today.

As everyone knows, we are here today to deal with the supplementary estimates (B) for 2014-15: vote 1b under Atomic Energy of Canada Limited, vote 1b under the National Energy Board, and votes 1b, 5b, and, 10b under Natural Resources. These were referred to the committee on Wednesday, November 5, 2014.

With us today on our first panel of witnesses is the Honourable Greg Rickford, Minister of Natural Resources. Welcome to you, sir, and thank you for coming on such short notice. The committee appreciates it very much. With the minister from the Department of Natural Resources we have Bob Hamilton, deputy minister. Welcome to you, sir, as well.

We have the minister here for the first hour today, then we go to departmental officials for the second hour. I would encourage members to keep their questions focused on the supplementary estimates (B).

Minister, please go ahead with your opening statement and then we'll go directly to questions and comments by members of the committee.

[Greg Rickford, Conservative, Minister of Natural Resources]

Thank you, Mr. Chair. I want to thank all members of the committee for this opportunity.

Perhaps I may say a few words to set the context for some more specific details around the supplementary estimates and questions that you may have today.

I think we all understand the importance of natural resources and their industries and that they account for 20% of Canada's GDP. Natural resources in Canada are the source of more than two million jobs across the country and, notably, are the largest employer of first nations. Resource development also acts as a vital driver for growth of our economy overall, whether this is in manufacturing, transportation, and/or in particular with energy needed to power our industries.

Resource development helps communities thrive, contributing to social programs, education and public infrastructure, and enhancing our quality of life.

Mr. Chair, there are certain things we need to do to ensure communities and all of Canada continue to thrive from natural resource development.

I'd like to talk about three particular areas that have been the focus of some of my more recent activities.

First, the changing global demand issues, challenges, and opportunities around market diversification and access to our resources.

On a global scale we're told that by 2035 the world will need a third more energy than is being consumed today. Almost all of the increased demand will come from non-OECD countries. This is not only for energy. There is a soaring demand for our minerals and the manufacturing that they make possible. Think of it this way: by 2025, China alone will need five million new buildings including 30,000 new skyscrapers. In India, fully 80% of the infrastructure it will need by 2030 has not even been built yet.

For Canada, colleagues, this shift in potential demand from Canadian resources offers an exciting new possibility to provide energy and resources that will drive growth and improve the quality of life of millions of people around the globe, as well as contributing to international stability. As recent events in Europe have made evident, energy security has become a tool for exercising foreign policy, making energy security a matter of national, continental, and global security. As countries in Europe and elsewhere seek to diversify both the types of energy they use and suppliers of that energy, we believe Canada is well positioned, reliable, secure, and responsible.

Canada is facing a golden opportunity, perhaps once in a generation as some have framed it, to diversify our markets in the resource sector. In the case of energy alone, this is now a strategic imperative as the United States, virtually our only customer for oil and gas, produces more and more of its own fuels. As America unlocks its shale and tight oil formations, it's transforming its energy relationship with Canada and the world, so the implications could not be clearer for Canada. Market diversification, market access, and product diversification are imperatives. If we miss this opportunity, particularly over the medium term, in the development of these resources and the infrastructure required to support their transportation, we will be missing out on an excellent opportunity for this country.

Let me talk about the second piece then, environmental performance.

While our government sees the imperative to act, and act quickly, we are committed to ensuring that our resources are developed in a responsible manner. Our bottom line is simple: in Canada, no project proceeds unless and until a thorough and independent review demonstrates it to be safe for the public and the environment.

Over the past year, we have stepped up our game with new measures to enhance our world-class pipelines and marine safety systems.

I'll turn to community engagement.

Equally important, our government has taken concrete action to engage aboriginal communities in all aspects of resource development. This includes establishing our Major Projects Management Office-West and the tripartite energy forum as part of our continuing response to the report by Douglas Eyford, Special Federal Representative for West Coast Energy Infrastructure.

Finally, on supplementary estimates (B) specifically, Mr. Chair, let me now provide you with a brief overview of my department's supplementary estimates. These estimates bring the total budgetary authorities for NRCan in the current fiscal year to just under $2.81 billion when including the main estimates, the supplementary estimates (A), the supplementary estimates (B), and direct transfers. This is an overall proposed net increase of just under $35 million in Natural Resources Canada's total budgetary resources in 2014-15.

Increases to the supplementary estimates (B) include $18.8 million to support our work in defining the limits of Canada's continental shelf in the Arctic Ocean, including the North Pole, which will help inform Canada's submission to the United Nations Commission on the Limits of the Continental Shelf. This is a priority under the northern strategy and the statement on Arctic foreign policy. Also related to the northern strategy is a transfer of $2.1 million from National Defence to Natural Resources. This is for the ongoing operation and maintenance of NRCan's Resolute facility, and related logistical support for the Canadian Armed Forces Arctic training centre. A transfer of $1.7 million from Aboriginal Affairs and Northern Development will enable my department to deliver cost-effective, safe, and efficient field logistics for the Canadian High Arctic research station science and technology program.

The committee will note that these estimates include a further $2.5 million to facilitate aboriginal participation in west coast energy development, a direct response to the report prepared by Mr. Eyford.

Also included in the estimates is $7.6 million for the renewal of the investments in forest industry transformation program. The program supports the development and commercialization of technologies that will enable Canada's forest industry to develop a more diversified and higher-value mix of products. This is crucial to the forest sector's global competitiveness, as is the $1.5 million for the genomics research and development initiative. This funding supports research that is directed toward improving forest health and supporting Canada's forest industry.

Also within my portfolio as Minister of Natural Resources, the estimates include $6.5 million for the National Energy Board. This primarily relates to the reviews of the TransCanada Pipelines Energy East and Imperial Deep Water Offshore Well megaproject applications, as well as funding for increased public awareness of pipeline safety.

And Atomic Energy of Canada Limited, or AECL, is completing the discharge of the liabilities related to AECL's former commercial division, divested in 2011. To this effect, supplementary estimates (B) include $35 million for a payment made by AECL to Bruce Power relating to the now completed refurbishment of two nuclear power reactors in Ontario.

In conclusion, Mr. Chair, these targeted fiscally responsible investments support our government's ongoing commitment to enabling Canada's natural resource sector to deliver the benefits that are of such fundamental importance to Canadians in a way that is safe and socially and environmentally responsible, and respects our constitutional obligations and opportunities for aboriginal people.

Thank you again for the opportunity to meet with the committee.

I look forward to taking your questions.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Minister, for your presentation. That's very helpful information for the committee.

We go now to the seven-minute rounds, starting with Ms. Block, parliamentary secretary to the minister, followed by Ms. Charlton from the official opposition, and Mr. Regan from the Liberal party.

Please go ahead, Ms. Block, for up to seven minutes.

[Chris Charlton, NDP, Hamilton Mountain, ON]

On a point of order, Mr. Chair, I just wonder if the parliamentary secretary to the minister might just want to have this conversation in his office and whether the parliamentary secretary would give us her seven minutes.

[The Chair, Conservative, Leon Benoit]

I don't think that was really a point of order. In fact, I would suggest that was mischievous.

Ms. Block, go ahead, please.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

I just want to give my colleague an “E” for effort.

Thank you very much, Mr. Chair.

I welcome you, Minister Rickford and Deputy Minister Hamilton, to this meeting. We look forward to being able to discuss with you our supplementary estimates.

I do want to thank you both for the excellent leadership you are providing to our nation in the responsible development of our natural resources and also pass through you to the department how much we appreciate the excellent work they are doing on behalf of our country.

As you well know, the natural resources sector is the largest private employer of first nations people in Canada. That's not news to you, sir. In reviewing these estimates, I note that $2.5 million, in vote 1 under operating in the supplementary estimates (B), is for aboriginal participation in west coast energy development.

Could you provide us with more details on how these funds will further enable first nations to make important contributions as full partners in the development of our natural resources?

[Greg Rickford, Conservative, Kenora, ON]

I appreciate this opportunity to talk to the committee about what I believe represents an exciting opportunity. The announcement and subsequent opening of the major projects management office west in Vancouver is a clear signal of what the federal government intends to do in terms of engaging with British Columbia first nations. This is intended, colleagues, to be a single window to coordinate extensive engagement with first nations and, actually, with industry. I want to emphasize that this will be focused on enabling first nations communities to take advantage of the business opportunities, increasing employment opportunities through training and skills development, and working to enhance environmental safety.

The government's supplementary estimates include funding to support this engagement with first nations in British Columbia specifically in order to understand the key issues and opportunities to support their participation in resource projects, and more specifically, energy-related projects.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

I also note on the same page of the estimates, page 2-64, further down there's a line item with regard to authorities to support comprehensive claims and self-government negotiations in British Columbia. We know that modern treaties are the most comprehensive way of addressing aboriginal rights and title. They resolve questions of uncertainty with respect to ownership or use of land and resources. They also provide first nations with the economic and social tools to promote self-reliant communities and the capacity to identify and implement their own solutions to difficult economic and social problems. All in all, modern treaties are, I think, good for all Canadians.

I've already highlighted the line item in the estimates about authorities supporting comprehensive claims and self-government negotiations. How does this item contribute to these benefits?

[Greg Rickford, Conservative, Kenora, ON]

We're proud to be a part of this process because I think negotiated treaties will provide the certainty that British Columbia needs.

There are, with things like liquified natural gas, opportunities there; a chance to create a strong economic base for first nations and full partnership with industry and other levels of government.

This item indicates that funding is to provide technical and professional expertise and services to the regional claims, and treaty negotiators in British Columbia renewed for an additional two years. This include services for legal surveys, land management, and land tenure regimes, as well as forest management and assessment.

There are also tools for the support of other processes that may go on in the instance of resource development: cultural mapping and traditional land use planning to name a few.

The renewed funds and the authorities allow NRCan to continue supporting the negotiation of comprehensive land claim agreements, including self-government agreements in British Columbia for the period of April 1, 2014, to March 31, 2016. This funding was introduced under our government in 2008 to 2009.

Modern treaty negotiations flow from the agreement of Canada, British Columbia, and first nations to establish that new relationship based on trust, mutual respect, and understanding, and for the purposes of natural resources to support a process where first nations have the opportunity to become involved in all aspects of responsible resource development.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

We know, Minister, you've had different experiences working with first nations in previous professions that you've served in. You're also aware of the Eyford report that was brought forward. Could you speak to how some of these initiatives flow out of the Eyford report?

[Greg Rickford, Conservative, Kenora, ON]

Much of the focus in my own professional experience, and now in my political capacities, has been on the contributions and the capacity of first nations to participate, particularly in the environmental assessment processes, the National Energy Board, and joint review panels.

I have seen first-hand, as a nurse living on the north British Columbia coast and in my own district with Webequie first nations, the incredible contributions that they can make to these processes, which should pre-empt any plans for resource development.

Whether it's cultural mapping, traditional land use planning, or marine safety, it's my view and my experience that they have significant contributions to make any of these processes, any of these exercises, and the opportunity itself, safer and more environmentally responsible. That level of engagement and integration is a proxy for the success of any given project.

[The Chair, Conservative, Leon Benoit]

Thank you, Minister.

Thank you, Ms. Block.

We go now to Ms. Charlton, up to seven minutes. Go ahead, please.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Thank you very much, Minister, for spending time with us this morning. Seven minutes isn't enough to explore everything we'd like to chat with you about, but hopefully you'll come back sometime soon.

Let me begin by focusing on some of the comments that you made about community engagement and the NEB. A lot of Canadians, especially in recent months, have been concerned about the fact that there are not a lot of forums left for citizens to express their opinions and their concerns about some of the energy projects in our country. For recent reference you may want to think about the folks who are currently protesting on Burnaby Mountain with respect to Kinder Morgan.

My first question to you is, do you agree with your predecessor that folks who are engaging in the process in this way are radicals?

[Greg Rickford, Conservative, Kenora, ON]

What I would say, Mr. Chair, is that the expectation of the general public, and certainly that of our government, is for peaceful protest. I respect and understand that. It has become part of the process of certain projects and often more. Otherwise that's a matter for local officials to deal with.

[Chris Charlton, NDP, Hamilton Mountain, ON]

I think people do want to participate in the process. They want to do so peacefully, and they've been searching for opportunities to give an informed and significant voice to the concerns that they have. I think recent changes to the NEB Act, though, have made that increasingly difficult for them. We're seeing increasing unrest and, as you know, there are ongoing legal battles around both Kinder Morgan and around Northern Gateway. Would you agree that perhaps the process isn't delivering the kind of predictability and certainty that Canadians need and deserve? Have you thought at all about reversing those changes to the NEB process?

[Greg Rickford, Conservative, Kenora, ON]

Respectfully, Mr. Chair, I don't think we would want to reverse changes that have given the National Energy Board broader powers of enforcement and investigation. Those are as substantive as anything. Understanding that the National Energy Board is committed to and focused on safety information for Canadians, in particular with respect to compliance and enforcement actions, the NEB's increase in funding is primarily due to its review of TransCanada's Energy East and Imperial deepwater offshore well applications. As my colleague might know, Mr. Chair, the NEB's funding is cost-recovered from the energy industry. But I can tell you—and this is a message that I have been sending consistently to folks—that the federal government clearly understands its role, and the need for an independent science and fact-based review process that makes accommodations for people who are most directly impacted by a given project, and for any and all technical expertise that's science and fact-based, pertaining to that particular project.

I would conclude, Mr. Chair, by saying that the federal government regulates 73,000 kilometres of pipelines here in Canada and we have a 99.999% safety record. I think that's worth sharing with folks, in particular in the debate about any specific pipeline project, but also with regard to pipelines in general.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Thank you very much, Minister. I want to follow up on the changes to the NEB. You talk about science-based decision-making, but the reality is that your government has deliberately and systematically eliminated the opportunity for public participation. In your presentation, just moments ago, you talked about the need for community engagement, and yet up in Burnaby Mountain the first nations have been quite clear that they have not been consulted. I think there are changes to the NEB Act and to the process that people are hungering for. I think we could expand assessment criteria to include things like better consultation. We could of course also include things like greenhouse gas emissions, jobs, national and regional energy security, and as I mentioned earlier, respecting our obligations to first nations.

I'd ask you again, specifically regarding public consultation, would you not agree that we can and must do better, and that Canadians are, in fact, telling you that at this very moment on Burnaby Mountain?

[Greg Rickford, Conservative, Kenora, ON]

Look, obviously I am seized of the National Energy Board in the portfolio of Natural Resources Canada. It is a robust and independent regulatory body that, in our view, conducts a rigorous science and fact-based review of projects. In fairness, Mr. Chair, I suspect that there will always be a difference of opinion on the amount of time and the scope of engagement. I think that, consistently, the National Energy Board has more than adequately provided for that through thousands of inputs. There are several different fora through which this can come into the National Energy Board: written, viva voce, and the like. I think that that opportunity exists, and I think that the National Energy Board has to hear from those most directly affected by a given project, and of course, those with relevant expertise on the matter. For our part then, in interpreting—

[Chris Charlton, NDP, Hamilton Mountain, ON]

I only have one minute left.

[Greg Rickford, Conservative, Kenora, ON]

Sorry. We've been clear. Projects will only proceed if they're safe for Canadians and safe for the environment. Mr. Chair, I think we've demonstrated a commitment to that in decisions I'm sure this member doesn't want to raise, where we've made difficult decisions in British Columbia around certain projects, but....

[Chris Charlton, NDP, Hamilton Mountain, ON]

Let me just follow up with one more minor question.

You mention in your presentation that there is money for aboriginal consultation for west coast energy development. Is it only on the west coast? What are your plans in the rest of the country?

[Greg Rickford, Conservative, Kenora, ON]

That's a good question.

The major projects management office west is focused on British Columbia. Certainly, with respect to any other major project the National Energy Board, as we identified in the supplementary estimates, will have a more expansive review process, so there will be opportunities there for first nations. Since that has just been submitted to the National Energy Board, I can't really comment on those specific plans, but whether it's our pipeline safety act in particular, which will be forthcoming.... We're focused on ensuring that first nations have a substantive and ample opportunity to participate in safety, prevention, preparedness, and the response elements of that legislative framework.

[The Chair, Conservative, Leon Benoit]

Thank you, Minister.

Thank you, Ms. Charlton.

Mr. Regan, for up to seven minutes. Go ahead, please.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you, Chair.

Thank you, Minister.

“Viva voce“, you're sounding more like a lawyer than a nurse, Mr. Minister.

Let me ask you about the $35 million being paid to AECL so that it can transfer it to Bruce Power. What's that for?

[Greg Rickford, Conservative, Kenora, ON]

Let me refer to the specific supplementary estimate line here.

The $35 million payment, Mr. Chair, was made by the AECL to Bruce Power as part of a negotiated settlement of a contractual legal issue with respect to the now completed refurbishment of the two nuclear reactors in Ontario. The details of it are confidential, but these estimates also include a transfer of $285,000 from National Defence to AECL's role in the Canadian safety and security program. It's a federally funded science and technology program aimed to strengthen Canada's ability to address natural disasters, serious accidents, crime, and terrorism.