Natural Resources Committee on May 4th, 2017

[The Chair, Liberal, James Maloney]

I will suspend for two minutes and then we'll resume.

[The Chair, Liberal, James Maloney]

We have just over 45 minutes for the balance of the meeting. I apologize to our witnesses. Before we get to you, we have some matters we have to deal with quickly.

Mr. Harvey, perhaps I'll simply turn it over to you.

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

Thank you, Mr. Chair.

Recently we had a submission sent around by the clerk of the committee about proposed travel to Washington by the natural resources committee. There have been several committees and groups of parliamentarians who have travelled to speak with U.S. decision-makers on Canada-U.S. policy. I think I agree with the analyst's proposal and the relative significance of our travelling as a committee to the United States. Today, however, is the deadline and I think if we work collaboratively over the coming months we could come up with a travel plan and itinerary that suits the needs of committee members and reflects the importance of Canada-U.S. trade relations, especially as it pertains to our softwood lumber industry and the energy sector. I feel it's a great opportunity for us to collectively advocate on behalf of Canada's natural resource sector and represent our Canadian interests in the United States, and I would welcome open comments. I think we should proceed with that study trip.

[The Chair, Liberal, James Maloney]

Thank you.

We were going to deal with this on Tuesday, but because of the evacuation due to the gas leak we weren't able to do it because the meeting was cancelled. Does anybody have any comments or questions with respect to what Mr. Harvey is proposing?

Mr. Barlow.

[John Barlow, Conservative, Foothills, AB]

Thank you, Mr. Chair.

I appreciate what Mr. Harvey's proposal is. I think certainly there is some merit in our having those discussions, but we will not support going down as a committee. When we go down as a committee, when we travel abroad, as the opposition we cannot be questioning or opposing government policy. We can't as a committee to go down and talk about some of the issues that we'll be supportive of when meeting other officials, so we will not be in support of Mr. Harvey's proposal.

[The Chair, Liberal, James Maloney]

Mr. Lemieux, and then Mr. McKay.

[Denis Lemieux, Liberal, Chicoutimi—Le Fjord, QC]

Mr. Chair, I quite like the idea of taking a trip to Washington, especially given the current context, in terms of the U.S. negotiations and the softwood lumber crisis. Both I and the people in my riding feel it is very important to send a delegation to Washington to explain Canada's view and demands. I am very much in favour of the proposal.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Lemieux.

Mr. McKay.

[John McKay, Liberal, Scarborough—Guildwood, ON]

I can't think of anything more important than members of Parliament, and indeed senators, flooding the United States at this time, particularly if we have any contacts with congressmen and senators. This is a very sensitive time in cross-border relationships. This committee is seized of two of the most sensitive files, namely, the energy file and the softwood lumber file. The more this committee and others go down, the more American congressmen and senators will be aware of the implications of any actions they might take.

Even though I'm not on this committee, I would say this is probably one of the two or three top committees to be travelling to the United States at this particular time. Yes, when we cross the border we are Team Canada. That's just the way it is. When I was sitting over there, I expected to be Team Canada. When we cross the border to come back again, we can don our partisan hats and take whatever positions the parties might adhere to.

It is critical, I would say, to use every contact we can possibly use. Every time there's a tweet, we twitch. It has enormous implications, so I think it is a core responsibility of members of Parliament from all parties to take this seriously.

[The Chair, Liberal, James Maloney]

Thank you.

Mr. Cannings.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I would agree with Mr. Barlow in the sense that, were I to go to Washington, I would like to be able to bring up issues and question officials and politicians about matters that may not be what the government wants to hear. It almost certainly may not be what the Conservative members want to hear.

I would agree with Mr. McKay that it's a very good idea that we go to Washington. It's just a matter of whether we go on our own or with the committee. I'm new at this. I haven't been involved in foreign travel by committees, so I don't know the restrictions and how this would play out. I would certainly learn a lot myself if the committee did travel there, but is that the best way for me to go to Washington? I don't know. I have some reservations.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Cannings.

Mr. Barlow, and then Mr. Harvey.

[John Barlow, Conservative, Foothills, AB]

I have a lot of respect for Mr. McKay, and I appreciate what he said. I believe we have our position on this, and I don't know if we need to keep debating it. I think we have issues in Canada that we need to resolve first when it comes to our energy sector. I think that's where our focus should be. If we want to go down to the United States individually with our points, we have the opportunity to do so and meet with stakeholders and have that discussion. I think it's open to all of us if we want to do that. I don't think we need to do it as a committee.

[The Chair, Liberal, James Maloney]

Mr. Harvey.

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

Just before we close this conversation—because I know we're going to close this conversation, and I think the outcome of it is inevitable—I would like to remind committee members that I have the utmost respect for everybody on this committee; but 30% of the U.S.'s uranium, 30% of their softwood lumber, 20% of their oil, and 10% of their natural gas come from Canada. So there are significant, relevant interests that Canada has in the United States that affect all of us, regardless of our feelings on the public policy that surrounds the governing of them within this country. There are relevant impacts on the entire Canadian industry, regardless of which side you sit on.

[The Chair, Liberal, James Maloney]

All right. I'm going to call the vote now.

(Motion agreed to [See Minutes of Proceedings]))

We'll get back to our witnesses. Our apologies, and gratitude for being patient.

We are joined by Cheri Crosby, and continue to be with Christyne Tremblay and Philip Jennings. Thank you for being here.

If you have any opening comments, you are of course free to make them. If not, we can open the floor to questions.

[Christyne Tremblay, Deputy Minister, Department of Natural Resources]

Mr. Chair, we can go directly to the questions. We are pleased to answer them.

[The Chair, Liberal, James Maloney]

In that case, thank you.

Mr. McKay, I believe you may have some questions.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Yes. I think it's a strange concept that when we're having a meeting on estimates we should ask questions about estimates. I know that's very old-fashioned of me.

The minister made an interesting statement and talked about the biggest decrease forecast to be a $335-million drop in the statutory Atlantic offshore amounts. The expenditures in 2015-16 were $347 million. The main estimates in 2016-17 are $743 million. Then you bump down to $408 million. That's a big drop. There wasn't actually much explanation as to the significance of that.

What I don't understand is the significance of this to your budget. It looks to me like it's a flow through. Am I correct about that? If it's a flow through, why does the department disclose it in this fashion? Why is it part of expenditures by program or purpose? Should it not be in some other category, money in and money out, and therefore not impacting on your actual budget?

[Christyne Tremblay]

Maybe I can answer why it's just a flow through. Really, we are working with the Atlantic offshore boards, and it's the transfer that we're doing to the provinces year after year to recognize another royalty...that we have to go to the board. The variation in the numbers is mainly due to the resource price, the production levels, and the operational costs. Technically, if you want to know

what it means from an accounting standpoint, I will let Ms. Crosby speak to that. If you want to know what it could mean for next year—

[John McKay, Liberal, Scarborough—Guildwood, ON]

It strikes me as quite strange. Why does this money not just go to Finance and not be part of your budget?

[Cheri Crosby, Assistant Deputy Minister and Chief Financial Officer, Department of Natural Resources]

Okay, that's a more complicated question, I would say. First of all, I'll give you a fancy accounting answer by saying, not very fancily, that this main estimates exercise is meant to be completely transparent by making reference to all dollars that come in and out, most of which we spend. As you pointed out, the statutory...is a flow through. But this document is meant to be transparent in terms of what money is coming in and what money is going out. The fact is that this committee doesn't in fact vote on that either, so it can be a bit confusing, even though it's in the main estimates. You're going to be voting on our operating expenditures, our capital expenditures, and our transfer payments, but not on the statutories, of course.

[John McKay, Liberal, Scarborough—Guildwood, ON]

It was raised in the speech, though, and it's your top line up here, but we're not going to talk about it. Okay.

[Cheri Crosby]

We can certainly talk about it. Yes.

[John McKay, Liberal, Scarborough—Guildwood, ON]

It just strikes me as strange. If it doesn't actually affect your budget, why is it here? If it's money in, money out, why shouldn't it be going into the finance department's revenues?