Natural Resources Committee on April 11th, 2016

[Bob Hamilton]

Thank you for the question.

That program is very important for the forest industry.

I will ask Ms. Ramcharan to give you more details on the breakdown of the funding.

That program is among a large number of initiatives in this sector whose goal was to provide assistance and encourage renewal in the wake of 2008-2009. It was necessary for the sector to change its production methods and even its products.

That is one of the Natural Resources Canada programs that have been very successful. This encourages renewal in the sector. I think that we will continue to develop these kinds of programs in the future. I am talking about programs that act as catalysts for innovation in the forest industry, but also in other natural resource sectors.

I will yield the floor to Ms. Ramcharan, so that she can give you an exact breakdown of the amounts.

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

It's the industry forestry innovation technology. It's really bringing some technology to market. The breakdown would normally go between our regular operating funds and our grants and contributions.

In the first year, in 2016-17, we'll have roughly $2 million in our operating funds and $35 million in grants and contributions. That's kind of the profile that it would take over the next four years, with a very small amount to help the operations. The large percentage of it would be in grants and contributions. The majority of the overall $90 million that we have, a large percentage, if not 90% of the amounts, would be for grants and contributions.

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

That raises another question in my mind, concerning the model forest concept developed by the Canadian Forest Service and launched at the Earth Summit in Rio de Janeiro in 1992. Since then, about 15 model forests have been created in Canada.

Canadian model forests were financially supported by the federal government under the model forest program from 1992 to 2014. The program was cancelled in 2014, and only eight model forests remain.

Is the government planning to bring back the model forest program?

[Bob Hamilton]

I cannot speak for the government concerning policies, but I will ask the assistant deputy minister, Glenn Mason, who is responsible for the forest sector, to talk a bit about what the program was like in the past.

As for the future, the government will have to make a decision.

My colleague may be able to provide a bit more details on what the program was like in the past.

[Glenn Mason, Assistant Deputy Minister, Canadian Forest Service, Department of Natural Resources]

Thank you for the question.

You are right, the program was launched in Rio de Janeiro in 1992. We supported the program for years, but after a while, its funding was reduced. That happened when the latest government cuts were made. However, we continue to support international networks through the International Model Forest Network Secretariat under the responsibility of Natural Resources Canada.

The international program continues to grow spontaneously. There are about 59 of these model forests around the world, but we no longer fund them domestically.

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

Do I have a bit of time left?

[The Chair, Liberal, James Maloney]

You have one more minute.

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

Thank you.

Last week, the Government of Quebec announced its energy policy, which prominently features green energies and biofuels. The program that encourages investments in renewable energies—the ecoENERGY for biofuels initiative—ended in March 2016 at the federal level.

According to Natural Resources Canada, what will be the repercussions of those programs' sunsetting on the availability and accessibility of biofuels to replace fossil fuels in Canada?

[Bob Hamilton]

You are correct, the program has ended.

As for the future, that is a question the government will have to answer. The government decides what programs will be implemented.

As the minister said, $1 billion will be injected over the next four years in clean technologies or in various energy-related technologies.

We are now starting a consultation process with experts in the field to renew those programs. Funding may be allocated to a few biofuel programs, but it may not. We will see what will happen. Be that as it may, many investments will be made in technological developments. The government will then have to decide whether or not biofuels will be part of those programs.

Now that the program has ended, the government may start targeting new alternative fuel priorities. So new priorities will be defined and new programs created after the consultation period.

[The Chair, Liberal, James Maloney]

Mrs. Stubbs.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thanks, Mr. Chair, and thank you all for being here.

I asked the minister about the NEB and I would like to follow up with you for clarity and specifics on that issue if it is possible.

Regarding the minister's claim about a perceived lack of confidence in the review process, what evidence is there that this is indeed the case? What facts were used to determine that these transitional review measures are needed and how will they actually change or improve the work of the NEB?

For example, we all know upstream greenhouse gas emissions are already assessed by the provinces. This is a standard that doesn't apply to any other infrastructure project in any other sector. There aren't any specifics around when the crown has recently failed its duty to consult first nations. I would like to understand how the government got to the position that these new transitional measures were needed. What will be the actual impact on the NEB work?

In the case of the temporary commissioners, why are they needed, what will be the process, the timeline, the cost, and the parameters around their selection? Will there be new temporary commissioners appointed for every new project application that goes through the NEB process?

[Bob Hamilton]

In a couple of those questions, I think you're asking why the government decided to do this or that. Rather than respond to that since I'm part of the public service, I can explain to you some of the things that I understand people are saying and why the government might have chosen to do what it did.

Certainly, as we look at the pipelines and other projects that have been proposed in recent years, there has been a lot of debate and a lot of opposition. People have been questioning whether or not we have a good process in place, so the government said they going to review the environmental assessment process. They said that they were going to look at it to see if it's good as it should be and whether there are some things they should change to inspire greater confidence in the system as we go forward.

That review will start, but it's going to take some time. It's good to do that, but we actually have projects in front of us right now, so the government decided to put in place an interim strategy using the five principles. This is what we will do now while the review is under way. The principles, as you know, are things such as science-based evidence and greater consultation. I think that one of the issues we have seen in the reactions we get is that there's a need for greater involvement of communities, of indigenous communities as well as others enveloped in these major pipelines and projects.

We have put that in place, and that will apply until any new regime comes about.

Certainly, some of the key projects that are in front of us right now are the energy east pipeline, the Trans Mountain pipeline out west, the Pacific NorthWest project, and other LNG projects. We have a number there for which we have to decide what we will do. In its interim policy, the government decided to say that for two pipelines, Trans Mountain and energy east, we will extend the time to make the decision to allow greater consultation.

on the TMX process, the NEB part of it is almost over. We normally would give three months for the government to make its decision, based on the NEB report, and we've said that we'll give it another four months. That takes it out to probably the end of December of this year.

On energy east, it hasn't started yet, as the minister indicated, so there's more time to change the process and to do different things. One of the things that will be done is that for the period in which the NEB is reviewing it, the government will appoint three or four—I guess the number hasn't been determined—additional temporary members, which is allowed under the legislation, and then the chair of the NEB will decide what those people are to do. They could be involved in extra consultations along the route on the project itself, or on whatever the chair decides, but it's an opportunity to have more consultation and perhaps more balance in the makeup of the NEB people looking at this project. That will go on. Also, as part of the interim policy, that period was extended as well, so the government will take a bit more time for its decision.

That's how the interim policy will play out for those two pipelines.

I think your last question had to do with whether there will be new members appointed for every project. It's hard to say right now whether that will be the case. I would just say that this interim policy is in place while the government consults on what to do with the environmental assessment process more generally and on what to do about modernizing the NEB. These are measures that are in place until that's done, so I'm not clear on whether there will be other temporary members put in place for other projects.

[Shannon Stubbs, Conservative, Lakeland, AB]

Will the parameters and the determinants for the temporary appointments be made available publicly?

[Bob Hamilton]

My understanding is that these appointments will be made consistent with the government's new appointment policy that was laid out in the past few weeks. The government will be making these appointments consistent with that, in what I understand to be a very transparent process, so I'm expecting that there will be a lot of public information. Also, typically when we make big appointments like this, there would be an advertised process, so I'm expecting that there will be for this, in which case people will be able to see what the parameters of the job will be.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Hamilton.

Mr. Cannings, over to you.

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

In your department's report on plans and priorities, it shows planned spending on a category or program called “energy-efficient practices and lower-carbon energy sources”. It shows that funding will decline by more than $130 million between fiscal 2013-14 and next year. That's a reduction of 40%.

I want to know how much of this gap will be addressed by budget 2016, and how planned funding in the budget compares with the resources that were spent in 2013-14.

Right now the estimates for 2016-17 are $183 million, and that's a big decline. I wondered how the budget will address that shortfall.

[Bob Hamilton]

As the minister indicated in his remarks, this year a number of programs sunsetted or ended at the end of 2015-16. They were in a basket called “clean air agenda” or something to that effect, and it was energy efficiency, clean technology. Those programs were set up over a five-year period, and they were scheduled to expire at the end of last month.

Every time a government has that kind of a situation, they have to make a decision about whether we continue those, we increase them, or we decrease them. What we saw in budget 2016 in the area of energy efficiency, which you have raised, was there has been a commitment to spend $129 million over five years in the area of energy efficiency. That's in a sense a renewal or a continuation of those energy efficiency programs.

In the area of clean technology there was some additional money in this budget. There was some green infrastructure money for charging stations for electric vehicles, for example. There were some things there. But as the minister indicated, there was also another $1 billion set aside without a specific program beside it to look at clean technology investments in the natural resource area as well as other sectors going forward.

Some of what's going to continue over the next five-year period is going to be decided based on consultations that we will be having over the course of the coming months and conceivably could be set out in, say, the next budget.

There were programs that were in place. Some of the funding has gone forward. Some is going to be subjected to further consultation to see how best to spend that money. Another example of things that were continued and renewed was money spent on adaptation. There were programs in place for that, and that's continued for our international climate change negotiations.

I haven't given you an exact comparison—you may have noticed—between what's going to be spent over the next five years versus what was spent in 2013-14. I can endeavour to try to get you that answer, but unless Kami has it right at her disposal, which she might because she's the CFO—

[Kami Ramcharan]

I do have a little bit of detail for you.

Just in terms of the overall difference between the 2015-16 main estimates and the 2016-17 main estimates, roughly $70.6 million, much of it is, as Deputy Minister Hamilton has mentioned, related to the clean air agenda. We'll be seeing roughly a $30 million coming back into that area of spending this current fiscal year.

There are other two areas where we have had a little bit of a decrease. It really is related to our funding profile for these programs. We don't have funding profiles that are always constant throughout the entire program. They ramp up, and then they ramp down. One of those programs that is ramping down is the ecoENERGY for biofuels program. Its funding profile is going to go down about $20 million, which was expected.

The other area that we see a decrease in is the wind power program initiative, which is also going down roughly $13.6 million.

All of those things combined explain the $70-million difference between the 2015-16 main estimates and the 2016-17 main estimates.

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

I have a general question related to this. The budget contains detailed numbers on two years of budgeting out, but a lot of these programs seem to be rolled out over four or five years.

I don't expect you to have these numbers now. I think you alluded to that. Can we get a commitment for you to come back to the committee with detailed plans for the three years following the next two?

[Bob Hamilton]

Yes. Could I just make a commitment to come back after we talk to our Department of Finance colleagues about exactly what the numbers are, and we'll be happy to give you what we can?

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

Just to finish up quickly on NEB again, those numbers seem to be going down by $5 million in the coming year. With all the new commitments that you've made around the NEB, and the new work it has to do, why are the numbers going down instead of up? Maybe I don't understand this.

[Bob Hamilton]

My understanding is that the NEB numbers would be going up, although I might be caught. We have an interesting situation right now because we have the main estimates, followed by the budget. Obviously, anything that was in the budget is not included in the main estimates, but my understanding was that the numbers for the NEB were going up.

Kami, does that ring true?

[Kami Ramcharan]

I think that's the case; we have a bit of a timing issue. From what I understand, money is announced in the budget for NEB for this upcoming year. That would not be part of the mains right now.

[Bob Hamilton]

Perhaps what we could do to make life easier for all of us would be to take an NEB number that consolidates both the budget proposal—and it is still a proposal at this stage—with the main estimates and give that to the committee so you understand.

[The Chair, Liberal, James Maloney]

Thank you.

Mr. Harvey, we'll move over to you.