Natural Resources Committee on June 2nd, 2015

[The Chair, Conservative, Leon Benoit]

Good afternoon, everyone.

We're here today pursuant to Standing Order 81(5) to examine the supplementary estimates (A) for 2015-16, vote 1a under Atomic Energy of Canada Limited, and votes 1a and 5a under Natural Resources. They were referred to the committee on Thursday, May 14, 2015.

We have one witness with us today, and others who, if need be, can be counted on, I'm sure. We have with us from the Department of Natural Resources, Kami Ramcharan, assistant deputy minister and chief financial officer, corporate management and services sector.

Welcome to you. Thank you very much for being here on such short notice. You do have a presentation, so go ahead with your presentation, please, then we'll get right to the questions and comments from members.

[Kami Ramcharan, Assistant Deputy Minister and Chief Financial Officer, Corporate Management and Services Sector, Department of Natural Resources]

Thank you, Mr. Chair. It's a pleasure to meet with the committee to discuss Natural Resources Canada's 2015-16 supplementary estimates (A).

Let me take a moment to briefly discuss my department's supplementary estimates. These estimates reflect the first change to planned budgetary spending since the main estimates. The supplementary estimates show current planned budgetary spending at $2.49 billion, which is an increase of $277.8 million from the originally approved 2015-16 budget of $2.21 billion, as outlined in our 2015-16 main estimates.

This increase is due to a number of factors across our operating vote, capital vote and our statutory authorities.

Within our operating and capital vote, there is a $231.3 million commitment to extend the nuclear legacy liabilities program for 2015-16. Launched in 2006, this program is implementing a multi-decade strategy to address long-standing Government of Canada liabilities, including radioactive waste, retired research facilities and related infrastructure, and contaminated lands at the Atomic Energy of Canada Limited research sites.

Significant progress has been made to date, and the 2015-16 funding will provide the necessary bridge to continue to control and reduce risks and liabilities at the sites until the restructuring of the nuclear laboratories is complete.

There's also a commitment of $5.3 million in operating funding and $38.6 million in capital funding for the federal infrastructure initiative to support the rehabilitation, repair, and modernization of many of Natural Resources Canada research facilities across Canada. From Dartmouth to Victoria to Alert, Natural Resources Canada's infrastructure projects will be carried out in 15 locations across Canada. Upgrades include things such as roofs, energy-efficient lighting, distribution panels, security systems, and energy-management control systems that will help our department move toward its goal of reducing greenhouse gas emissions and improving energy savings.

Additionally, the money will be used to make significant upgrades to laboratories that conduct critical research on our forests, geohazards, including earthquakes, and geosciences in both marine and land-based environments.

We will also be relocating a specialized geomagnetic calibration building from Ottawa to Fredericton. This specialized geomagnetic calibration building is used to calibrate equipment used in the national geomagnetic observatory network. This network provides measurements of the earth's magnetic field for navigation and to protect critical infrastructure such as power distribution and pipelines from the impacts of space weather.

These investments will not only help support Natural Resources Canada to continue to conduct leading-edge research, but they will also encourage job creation, economic growth, and long-term prosperity across the country.

Finally, there's $1.3 million in operating funds and $1 million in capital funds for the targeted geoscience initiative, a collaborative federal geoscience program to provide industry with the next generation of geoscience knowledge and innovative techniques to better detect deeply buried mineral deposits.

This initiative will continue to promote and support exploration and investment in Canada's mining sector, and to ensure that the sector continues to benefit from outstanding scientific research.

This is a collaborative federal initiative delivered in partnership with provincial and territorial geological surveyors and collaborators from industry and academia.

First funded in 2000 and renewed in 2003, 2005, 2010, and now in 2015, each renewal of the targeted geoscience initiative has been used as an opportunity to strategically refocus the program on the most pressing needs of mineral exploration and each phase has made significant progress in stimulating investment by and innovation in the Canadian mineral exploration industry.

The current phase of the TGI, phase 5, focuses on understanding the processes by which metals accumulate to form an economic mineral deposit. This new knowledge will allow exploration companies to expand their reach in targeted regions for exploration in order to discover a new buried mineral deposit at much greater depths and distances from known deposits. This initiative will support mining industries by developing knowledge and expertise to increase their competitiveness. It contributes to increased private sector exploration and successful discovery rates for base, precious, and other metals, grows the pool of highly qualified people available to industry, and extends the lives of existing mines and communities.

New geoscientific knowledge and methods provide industry with cutting-edge tools to stimulate private sector innovation and exploration for deeper mineral deposits and new emerging mining caps. More effective targeting of buried mineral deposits increases the likelihood of discovery and ensures the mining industry's long-term prosperity.

Exploration industry spending increased over $240 million in mining regions across Canada following the conclusion of phase 3 of the targeted geoscience initiative in 2010. The just-completed phase 4 has already outlined new regions of interest for mineral exploration, for example, a region that stretches from southeast Manitoba to northeast Quebec that is highly prospective for new nickel-chrome deposits.

Phase 4 of the targeted geoscience initiative released over 730 publicly available geoscience publications and delivered over 500 scientific presentations at conferences, workshops and events, helping industry in the development and planning of their exploration activities.

To date, the exploration industry across Canada has integrated over 50 new geoscience results that were developed during the fourth phase of the program. These have been used by industry to adapt their exploration approaches, for example, in Ontario's Ring of Fire region, in Saskatchewan's Athabasca Basin, and the Bathurst region of New Brunswick. TGI played a key role in training the next generation of highly qualified personnel with a fourth phase supporting over 133 students in their graduate-level research studies, equipping them with skills suitable for future employment in the mineral exploration sector.

In terms of statutory authorities there is also an increase of about $300,000, which is related to the statutory payments for the employee benefits plan. This includes costs to the government for the employer's matching contributions.

Mr. Chair, Natural Resources' 2015-16 supplementary estimates (A) clearly demonstrates how this department is committed to delivering on the Government of Canada's policy, program, and service delivery priorities and is doing so in a fiscally responsible manner.

Thank you, again, for the opportunity to appear before the committee.

[The Chair, Conservative, Leon Benoit]

Thank you very much for your presentation.

I have to admit I didn't expect such an interesting and encouraging presentation to go with the supplementary estimates (A). There were not a lot of numbers there but that was very interesting. Thank you very much.

We go now directly to questions and comments. In the seven-minute round we start with the Parliamentary Secretary to the Minister of Natural Resources, Ms. Block, followed by Mr. Caron, and then Mr. Regan.

Go ahead, please, Ms. Block. You have seven minutes.

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

Thank you very much, Mr. Chair.

Welcome. It's good to have you join us for this conversation on supplementary estimates (A). I should welcome all of the other departmental officials who are here to support you if needed. It's great.

I'm going to focus my questions on the nuclear legacy liabilities program and the votes that are included in the estimates on these programs.

These estimates propose $231.3 million in operating and capital to extend the nuclear legacy liabilities program. I understand that this program has made significant progress in addressing long-standing Government of Canada liabilities including radioactive waste, retired research facilities, and related infrastructure in contaminated lands. I know you mentioned it in your opening remarks, but could you expand a little on this program for the committee.

[Kami Ramcharan]

Thank you very much.

Basically, we have been able to reduce the liabilities and risk associated with this program. This program has been around since 2006 and has provided over $1.1 million, so basically $1 million, in funding over nine years to implement to the program up to March 2015. In February 2013, the Minister of Natural Resources announced that Canada would undertake a competitive procurement process to seek a contractor that will continue to manage the operations associated with managing our nuclear waste, and we're in the midst of doing that right now.

The program was extended $231.3 million for this current year's worth of funding. It hasn't been extended into the future at this point, because with the introduction of that new contractor model, it is expected to move from the department over to the contractor to deliver that.

The funds will also be used to make further progress on highly enriched uranium reparation initiatives, continue decommissioning activities at AECL's Chalk River and Whiteshell Laboratories, and implement initiatives and activities to prepare for the transition to the government-owned, contractor-operated management model, including upgrading the software system for the waste inventory database and advancing strategies and planning for future work.

This liability program is also recognized as part of the overall help to support the reduction of the $6.3 billion that are recognized in the public accounts of Canada as an environmental liability.

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

Thank you.

In your opening statement, you mentioned that the supplementary estimates show an increase of $277.8 million from the originally approved 2015-16 budget, as outlined in the main estimates.

Can you just explain for us what happens between the tabling and the approval of the main estimates and now, just a few months later, when we are here looking at a request for an increase? Can you tell me about that?

[Kami Ramcharan]

It's somewhat complicated. In the main estimates, these are things that we know at the time that they're published, and they usually start publishing them during the 2014 fiscal year. What's published in the mains are those things we know about.

As things evolve and things progress, we have different announcements, different submissions that we would submit to seek additional funding, so we would have done that since the mains, and on these three specific initiatives. One is for our infrastructure projects, the other for our nuclear legacy liabilities program, and the third for our targeted geoscience initiative. The targeted geoscience initiative is a renewal, as I mentioned in my opening comments. The infrastructure program is new funding for the department. It's something that was recently announced and we did all the work associated with doing it, but we didn't do it in time for it to be published in the mains. That's why it's being published in the supplementary estimates. It would have been the same for the nuclear legacy liabilities program. We have subsequently done the work and now it's included in the supplementary estimates.

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

I guess my next question for you is this. How does this funding fit into our government's commitment to establish a GOCO model?

[Kami Ramcharan]

The one piece I will talk to is the nuclear legacy liabilities program, and that's about decommissioning our waste initiative and I have my colleague J.F. here, who does know a lot about that. Maybe what I'll do is invite him to speak to how that program relates to the transfer to the new model.

[The Chair, Conservative, Leon Benoit]

Just identify yourself again and go ahead and make your comments.

Thank you for being here.

[Jean-Frédéric Lafaille, Director General, AECL Restructuring, Department of Natural Resources]

Thank you, Mr. Chair.

My name is Jean-Frédéric Lafaille, and I am the Director General of the sector called the Atomic Energy of Canada Limited Restructuring.

Thank you for the question. I think the question was about how this funding would relate to the implementation of the government-owned, contractor-operated model.

I will make a distinction from the nuclear legacy liabilities program that's been implemented for a number of years, and this will carry on going forward as there is a long-term plan to remediate any nuclear waste that's been accumulated over the past decades. That will carry on, but going forward it will be delivered under a different model. That model has it that a private sector company will be selected to actually manage the operations of the nuclear laboratories going forward, including the management of the waste that is currently being managed by the nuclear laboratories at Chalk River Laboratories, in particular, but also Whiteshell Laboratories.

The funding is being provided on a one-year basis to carry on the activities and will be renewed going forward to make sure that these nuclear wastes are being remediated over the long term. Does that answer the question?

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

Yes, I think so. It might have created another question, but—

[The Chair, Conservative, Leon Benoit]

Quickly.

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

The legacy waste program will be looking at managing the nuclear waste that's been created. The GOCO will be managing the waste that is created. Is that what I heard you say?

[Jean-Frédéric Lafaille]

Thank you for the question.

There is currently a 70-year plan established by the nuclear laboratories to remediate all the waste that's been accumulated since the 1940s, so that has to go on. It will be managed by the new operator taking charge of the operations of the laboratories.

The new waste that will be created as a result of nuclear operations will have to be taken care of as well, and for this new waste being created, the nuclear laboratories will ensure that whoever is the generator of the waste will be asked to fund this, to make sure that funds are being set aside to ensure there will be funds in the future to enable cleaning up this waste.

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

Thank you.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Block.

Mr. Caron, you have up to seven minutes.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you very much, Mr. Chair.

I also want to thank Ms. Ramcharan for joining us.

You were here when we asked questions about the main estimates. I asked two questions then, but I did not get any clear answers. I would like to make sure that there is some follow-up to those questions.

The first question was about the $80 million added to the National Energy Board's operating budget. At the time, I pointed out that the funding allocated to the NEB had been reduced by 15% to 20%, but that the $80-million amount constituted support since the latest budget. However, no one could tell me what that amount would be used for, since the main estimates had sort of kept in line with the budget announced by the government.

Do you have more details on the breakdown of that $80-million amount for the National Energy Board announced in the federal budget?

[Kami Ramcharan]

I'm going to check my notes to see if I have some information that can help explain the National Energy Board numbers. I have so many pieces of paper.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I understand Natural Resources is a large department.

[Kami Ramcharan]

Yes, and I want to make sure I give you the right answer. AECL has their own chief financial officer; we're just here representing the department.

I do have a response for you. With regard to how the 2015 budget funds requested by the National Energy Board will be used, the main responsibilities include the construction, operation, and abandonment of pipelines that cross international borders or provincial-territorial borders. The $80 million requested by the National Energy Board is dedicated over five years, starting in 2015-16. The funds support responsible resource development by contributing to the safety of energy transportation and infrastructure.

A portion of the estimates requested support the NEB's responsibility related to the safety of Canadians and protection of the environment during the construction, operation, and abandonment of pipelines. These activities include audit and compliance follow-ups, incident investigations, emergency management, post-decisions process management, and program support. The specific number of audits, inspections, emergency exercises, site visits and compliance meetings, and other compliance activities will be optimized to deliver the highest level of safety oversight. The remainder would support greater engagement with Canadians on NEB's role and mandate in the regulation and oversight of Canada's energy infrastructure.

Activities supporting this initiative include the communication officer duties, regulatory data collection and analysis, general public engagement, energy information collection and analysis, and program support.

Engagement with Canadians and public participation is also an important element of NEB's open and balanced regulatory process. The NEB plans to increase the number of opportunities for board members and staff to engage directly with Canadians. These activities strengthen the quality and credibility of decisions and recommendations. They also serve to inform the public of its role in our processes. The public is an important source of local and traditional knowledge about a project's physical site and potential impacts. Through public participation activities, project proponents can obtain information and better understanding to respond to public concerns and inform the public about decisions.

The NEB does not generate or participate in advertising campaigns. Notifications like the hearing order can be viewed on the NEB website and a public notice with the hearing order information is usually published in local newspapers.

That gives you a sense of what the money is for. It's pretty well for their regular operations.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I have one quick follow-up on this. I was listening, and I'm not sure if I heard anything about supplementary funds specifically for the hearing process—especially with the expanded role of the NEB—for new pipeline projects.

I haven't really seen or heard anything related to this, except maybe for that last part that you mentioned.

[Kami Ramcharan]

Unfortunately, I don't have any additional information on the supplementary estimates for NEB. We'll have to get back to you with that information.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I have one last question, and then I will let Mr. Rafferty take over.

Last time you appeared before us, I asked a question about the effectiveness of the $24-million advertising campaign to promote pipeline export projects toward the United States—more specifically, the Keystone pipeline.

Do you have more information about that campaign's effectiveness? A report was produced on the matter.

[Kami Ramcharan]

With respect to the advertising campaign, we did have an initiative where we had two years' worth of funding. In 2013, $30 million was allocated for the two-year stakeholder engagement outreach campaign. It involved two components. International stakeholder engagement, under the Go with Canada banner, supported development, testing, and execution of advertising in select Washington, D.C., print and online media, and in metro transit stations between May 2013 and May 2014.

Advertising yielded more than 95,000 unique visits to the Go with Canada website, with 90% of the visits from intended U.S. audiences in Washington, D.C. Results from the advertising evaluation conducted in February 2014 indicated that the advertising activities exceeded the Government of Canada's advertising standards and benchmarks.

In terms of our outreach fund, funding for federal departments and agencies to deliver tailored information and engagement projects targeting key international and domestic stakeholder groups...and there was grants and contributions funding to support—