Natural Resources Committee on Nov. 27th, 2013

[The Chair, Conservative, Leon Benoit]

Good afternoon, everyone.

We're here today of course with Minister Oliver, the minister for Natural Resources, for the first hour. With him is Deputy Minister Serge Dupont.

Thank you both very much for being here today.

We're here, of course, to deal with the supplementary estimates (B). I would ask you to focus your questions around the information in the supplementary estimates (B).

Minister, do you have opening comments?

[Joe Oliver, Conservative, Minister of Natural Resources]

I do. Thank you, Mr. Chair.

Good afternoon, everyone. Thank you for the opportunity to meet with the committee.

Mr. Chair and members of the committee, when disaster struck the world economy, our government showed leadership and navigated Canada through the worst recession in a generation. In a volatile world our nation has weathered the global recession better than most. In fact, the Canadian economy has experienced the best performance in the G-7 over the recovery in terms of both output and job creation. Since the depth of the global recession, we have seen over one million net new Canadian jobs.

Today, our government is leading by example. We're keeping taxes low, eliminating red tape, reducing the regulatory burden and promoting free trade and innovation.

In spite of continued instability in many other nations, our government is taking action to ensure that Canada remains one of the most attractive destinations for investment in the world. Our prudent approach to fiscal management has not gone unnoticed. And like our resources, Canada's economy is now the envy of the world.

Our credit rating is a solid triple A, and for the sixth straight year the World Economic Forum ranked Canadian banks as the soundest in the world.

Both the Organisation for Economic Co-operation and Development and the International Monetary Fund predict Canada will be among the leaders in economic growth in the industrialized world over the next two years.

Mr. Chair, these aren't just statistics. Behind the numbers is a robust economic performance that has a direct impact on millions of Canadian households right across the country. Key to that performance is the ongoing strength of Canada's natural resources.

For decades Canada's natural resources have been the backbone of our economy and our standard of living, and that is still the case today. They're an integral part of our Canadian identity and they help provide us with a quality of life that is second to none.

Together natural resources directly account for more than 13% of our gross domestic product and more than 50% of our merchandise exports. When you include the supply chain that provides goods and services to the resource sectors, natural resources account for almost one-fifth of our economic activity, 1.8 million direct and indirect jobs, and $32 billion in revenue to governments to support crucial social programs. Energy resources are an enormous part of that equation.

As I noted last year at a similar appearance before this committee, one of our government's top priorities is to diversify its energy markets, particularly to the Asia-Pacific region where demand is growing. This is especially important since our country currently exports virtually all of its exports of oil and gas to the United States, where recent discoveries of tight oil and shale gas mean the U.S. will need fewer Canadian resources in the future.

A number of proposed projects will help diversify our markets and create jobs and growth for Canadians. Of course, there are proposals for pipelines to the west coast that would help open up lucrative new markets in Asia for Canada's energy projects.

I understand that the NDP leader has problems with geography. He has said that, believe it or not, New Brunswick is actually closer to China than British Columbia is. Well, I don't believe it, because it is actually more than twice the nautical distance, and if Mr. Mulcair needs any help, I can provide a little gift of a globe to him. Maybe he was thinking we could ship the oil by airplane, but that's farther as well. I think tankers would be a more efficient sort of way and they would lower the carbon footprint.

Do we have a problem, Mr. Chair?

[The Chair, Conservative, Leon Benoit]

Not at all, Minister. No.

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

Thank you very much.

While these proposals are perhaps the most well-known, there are a number of other pipeline proposals that clearly demonstrate the advantages Canada offers. For example, the proposed Keystone XL pipeline would feed western Canadian heavy crude to refineries on the U.S. Gulf Coast. Enbridge is proposing to reverse the flow of its Line 9 pipeline to carry oil eastward to refineries in Quebec City and Montreal.

TransCanada's Energy East proposal would extend part of its mainline and convert it from gas to oil. It would connect terminals in Quebec City and Saint John for refining and for export. All these proposals will be thoroughly reviewed by our independent regulator to ensure that decisions are based on science and safe for the environment. But they do show that Canada is and will remain open to an ambitious trade agenda.

We're committed to furthering Canadian trade, because we know that by promoting Canadian resources abroad we're positioning Canada for success at home. Truly, Canada is standing on the brink of opportunities unlike anything we have seen in the past. Over the next decade, several hundred major resource projects are planned or under way in Canada, representing investments of more than $650 billion. These projects will help to create thousands of high-quality, well-paid jobs for Canadians in every sector of our economy and every corner of our country. Creating jobs and securing economic growth remains our government's top priority.

Our commitment is reflected in Natural Resources Canada's budget. With our supplementary estimates (B), Natural Resources Canada's 2013-14 funding will show total budgetary authorities of $2.8 billion. NRCan's supplementary request calls for additional funding of $1.9 million.

Mr. Chair, this net funding request of $1.9 million is the result of various proposed funding increases and transfers. There are a number of such funding priorities, including an outreach program to expand market opportunities in Canada and abroad and to provide concrete facts about the importance of Canada's natural resources sector and what our government is doing to promote safe and responsible resource development. This campaign will strengthen Canada's brand as a global leader in responsible resource development.

There is additional funding to advance geoscience and our geological knowledge by renewing the geo-mapping for energy and minerals program in Canada's north. Our government is committed to helping unlock the full mineral and energy potential of the north. Over the next 10 years, it is estimated that GEM will generate more than $500 million in economic activity through private sector exploration of new energy and mineral resources.

There's money earmarked to map the Atlantic and Arctic seabed as part of Canada's bid to redefine our coastal boundaries under the United Nations Convention on the Law of the Sea, also referred to as UNCLOS. This initiative will help expand Canada's borders and allow us to claim new seabed to advance Canada's interests.

During the past year, I have travelled across Canada and the world promoting our trade program and many of the great programs I just mentioned.

At the heart of our work was the responsible resource development plan, which will make Canada more competitive, create jobs and growth, and protect our natural environment.

My department continued to support the revitalization of the mining and forest industries, preserving jobs and stabilizing communities.

With an eye on the future, we continue to invest in science and technology, securing agreements with other levels of government and other countries on collaborative approaches to energy, such as the Canada-Korea Energy Dialogue and the Statement of Oil and Gas Cooperation.

Mr. Chair, members of the committee, there's no question that Canada's natural resources are setting the stage for a new era of jobs, growth, and prosperity for Canadians. Right now the potential for growth has never been greater. Our government is determined to seize this opportunity and capture the Canadian advantage today to create long-term prosperity for tomorrow.

Thank you again for the opportunity to appear before the committee. I'm happy to answer any questions you may have.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Minister Oliver, for your presentation today.

We will go directly to questions and comments, starting with Mr. Trost, followed by Mr. Julian and Mr. Regan in the first round.

Mr. Trost, you have up to seven minutes. Go ahead, please.

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

Thank you, Mr. Chair.

Thank you, Mr. Minister, for being here today.

Having been on this committee in one form or another since 2004, I have to admit that I really enjoy your zeal for your post and the energy you put for it. Not every minister I've had before me over those years has seemed to enjoy the file quite the way you do.

With that in mind, and looking at a few things here, one of the things I often note about natural resource issues is that while we think of them in purely economic terms, they are often sovereignty-related. They are issues that define our boundaries, who we are as a country, and how we control our own destiny. One of the issues, and one of the expenditures you brought up in your speaking notes, has to do with funding to prepare for Canada's submission to the Commission on the Limits of the Continental Shelf under the United Nations Convention on the Law of the Sea.

Could you elaborate a little bit on why roughly $1.3 million, under supplementary estimates (B), is being allocated for that? I am aware of other countries, Russia, etc., being engaged in similar sorts of exercises, but I don't think this is for spending for the science; this looks like something a little bit different.

Could you elaborate on why the supplementary (B)s ask for $1.3 million for that?

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

Thank you very much for your comments and for raising this very important question, which, as you say, does advance Canada's interest in terms of our ability to exploit our natural resources beyond the 200-mile continental shelf.

Under the United Nations Convention on the Law of the Sea, or UNCLOS, all coastal states are entitled to a continental shelf of 200 nautical miles. Countries, however, may define the continental shelf limits beyond 200 miles if certain criteria are met under UNCLOS.

A provisional analysis demonstrated that Canada has a large extended continental shelf in both the Atlantic and Arctic oceans. Working with DFAIT and Fisheries and Oceans, we've allocated $109 million since 2004 to fund the extended continental shelf program. That includes a large research initiative to survey the ocean seabed. This is of course important, because if resources, valuable resources, are found, they would accrue to Canada's economic benefit.

The program is on track to make a strong submission to the commission this December. The 2013-14 funding will help complete the scientific, technical, and legal work required to prepare the submission, and has already helped us to do that.

Extending our continental shelf program will be, as I say, a huge gain for Canada's resource development. It's a key element in the federal government's northern strategy and statement on Canada's Arctic foreign policy in exercising Canada's northern sovereignty.

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

So this extra money is not just for legal fees. This also could go for scientific and other technical...for all the needs in there.

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

Yes. That is correct.

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

Over the years we've done quite a few studies—one we did last year about Canada's northern resources: the potential for developing in the north. We're currently doing one on rare earth minerals.

Everything we do when it comes to hardrock mining in this country is based upon a very basic geological understanding. For people who aren't in this industry, it's the basic infrastructure. In the same way that roads are important to certain industries, basic geological information is important to the mining industry, be it magnetic information, gravity, aeromag, various things like that.

With that in mind, I see there is a funding increase of $6.2 million to the GEM program.

Could you provide a little more information about where that funding is going and the thinking on this program that has been going on for...I've lost track of how many years now.

Where specifically is the $6.2 million headed?

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

The geo-mapping for energy and minerals program, the GEM program, has been used to identify areas of high potential, as you say for rare earths, in addition to gold, nickel, platinum group elements, base metals, and diamonds. The exploration industry is beginning to follow up on these leads and will be better prepared to make discoveries as a result of the GEM program. Past experiences indicate that geo-mapping program results are used by the private sector to help target their exploration programs to discover new resources.

In fact, studies suggest that $100 million of investment in GEM will result in upwards of $500 million to be spent by the private sector in exploration related to the GEM results. This five-to-one ratio has been pretty steady over some considerable period of time—

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

Mr. Minister, that's just the exploration rate, not the spinoffs if mines are found, etc.

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

That's right, and then, of course, development follows that. It's directly contributing to economic development objectives in Canada's north. It's very important.

The industry, individual companies, are not going to do this type of perspective analysis. When we do it, we make it available online, free to everyone. It results in a kind of gold rush environment, and it results in exploration dollars on that very significant ratio. It has proven to be very successful.

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

In specific, I think there was an extra $6.2 million noted for here. There was $6,074,120, and $140,000 on top of that. That's part of the overall program. That's not the entirety of it.

What's the specific request for, in the supplementary (B)s?

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

Well, the supplementary estimates (B) relate to the addition that we're asking for.

The program was renewed for seven years in August 2013 for an additional $100 million. It was first launched in 2008 as a five-year, $100 million initiative, and now we're continuing it. This additional funding will help us achieve the objectives.

[The Chair, Conservative, Leon Benoit]

Thank you, Minister.

Thank you, Mr. Trost.

Mr. Julian, you have up to seven minutes.

Go ahead, please.

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

Thank you, Minister Oliver, for coming here today.

I must admit that was quite a bizarre partisan attack in the middle of your presentation, and it brings to mind—

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

Well, it was a geographical challenge—

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

—when I think back to April 16 and you appeared before committee. At that time you almost apologized for previous bizarre attacks you had made. You called the people in British Columbia—the 80% of British Columbians who are concerned about northern gateway—radicals. You almost apologized and I thought things were going better, but unfortunately today I think you put your foot back in your mouth. I'm a little saddened by this.

I'd like to get right to the supplementary estimates. You have $12.5 million in the supplementary (B)s. I would like to know, given that there were other reports that we've heard of other advertising spending, how much money your department is spending on advertising in fiscal year 2013-14.

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

First of all, let me correct a misstatement. I never attacked all British Columbians. That's simply false, and you know it.

Secondly, I can see why you're saddened. I brought out the fact that your leader said it was closer to China from the east coast than from the west coast—

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

Could you answer the question, please, Minister?

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

—When, in fact, it's twice—

[The Chair, Conservative, Leon Benoit]

Mr. Julian, do not interrupt the minister when he's answering, please.

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

—when, in fact, it's twice as long. That's pretty embarrassing, and I'm sure it's pretty sad for you to have the public—

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

Can you answer the question about advertising—