Natural Resources Committee on April 11th, 2016

[Jim Carr, Liberal, Winnipeg South Centre, MB]

I would say those appointments would be made sometime after the proponent has lodged the application to the National Energy Board. That hasn't happened yet.

You know there was an attempt to do that, but the National Energy Board sent back 30,000 pages because they said it was too complicated even for their experts so I'm presuming some editing is going on right now.

Once the editing is done and the National Energy Board sees the application, then the clock begins to tick on the timelines that will govern the energy east review process. Sometime during that period we will give the National Energy Board more resources to do its job effectively.

[The Chair, Liberal, James Maloney]

That's a good segue, Minister. The clock is ticking.

I apologize, Ms. Stubbs, but we have to move on.

Over to you, Mr. Cannings.

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

Thank you again for coming here once again.

I'll start by asking about the Ring of Fire. I notice that in the estimates again there was no mention at all of funding to support the Ring of Fire. Neither was there any mention of it in the budget. The Province of Ontario has called for matching funds of $1 billion for infrastructure to unlock this potential. Where is this government's support for this huge development for the future of northern Ontario? Why is your ministry abandoning this region that's been hurting for so long?

[Jim Carr, Liberal, Winnipeg South Centre, MB]

I wouldn't describe it as abandonment, I would describe it as a keen interest in the priorities that the Government of Ontario advances to Canada for spending infrastructure dollars, based on the principle of provinces setting priorities.

It's a very timely question. Just within the last week I've had conversations with Minister Gravelle from the Government of Ontario and with Grand Chief Day about the Ring of Fire project. What I said to them I'll say publicly now, and to the committee, that when the Government of Ontario wants to approach Canada about what its priorities are for infrastructure spending, and if it is a priority of the Government of Ontario, working with indigenous communities, then the Government of Canada would be very pleased to sit down with Ontario and those communities to determine the best way forward.

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

Okay.

After going through these estimates, and having gone through the budget presented two weeks ago, it looks like much of the so-called new money for clean energy in budget 2016 is actually just filling holes left by the Conservatives and replacing sunsetted funds. There doesn't seem to be any new or change of direction here, let alone any real change.

How do you account for this?

[Jim Carr, Liberal, Winnipeg South Centre, MB]

I can't account for a lack of change, but I can reiterate the depth of change that's in this budget, as I reviewed during my remarks and would be glad to talk about now. There are significant investments in green infrastructure; significant investments in alternate sources of energy, in electric vehicles and in stations that will recharge those vehicles; major investments in innovation right across the government; and investments even in the oil sands of Alberta to build on some of the very good work that has already been established by Canada's Oil Sands Innovation Alliance, COSIA, which really is a model among those countries that seek to work together to increase their competitiveness internationally, that put aside intellectual property issues, that work as an industry. They have invested I think $1.3 billion in over 800 projects in order to advance the interests of Canada's oil and gas sector—together, without any attention being paid to what might be an advantage for a particular company.

There's plenty in this budget that goes beyond what past budgets have committed. It also looks to incentivize the private sector. We have a belief in the ingenuity, the innovative power, and the entrepreneurship of Canada's resource sector. We have seen it time and time again. I had the pleasure of speaking to the Prospectors & Developers Association meeting. The member from Portage—Lisgar was there. We were reminded yet again that Canada leads the world in sustainable development in mining. So we are investing in sustainable mining development as well.

How is this budget different from all other budgets? I would say significantly, in ways that are consistent with the campaign commitments we made to the Canadian people, consistent with the mandate letters given to us by the Prime Minister, and I think also consistent with what many of those sitting on the other side of the House would agree to be common national objectives.

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

We also see in the forest sector the sunsetting of a number of programs and initiatives, including forest innovation, expanding market opportunities, and investments in forest industry transformation. None of these were mentioned in your budget. In fact there doesn't seem to be any dedicated funding for forestry.

Given the hard times the sector has faced for a long time now—I was just at the Council of Forest Industries meeting in Kelowna last week, and I heard a lot about this—what are your plans beyond these initiatives? What help can this important sector, which is so important to so many provinces and communities, expect going forward?

[Jim Carr, Liberal, Winnipeg South Centre, MB]

We're expanding the market opportunities program by delivering $29.4 million over two years to increase offshore exports, to increase the use of wood in non-residential and mid-rise construction in North America, and to support environmental reputation through science. NRCan funds a maximum of 50% of the majority of activities. The forest innovation program is delivering $56.8 million over two years to support emerging and breakthrough technologies in bioenergy, nanotechnology, and next generation forest products. Those are two examples.

In investments in forest industry transformation, there is $190.4 million available between 2010 and 2018. This accelerates the commercialization of highly innovative, first-in-kind technology at Canadian forest facilities. Also, there is a $1-million investment in the aboriginal forestry initiative. As you know, the Prime Minister met with President Obama in the White House on March 12 and began a high-level conversation about renewing the softwood lumber agreement, asking officials to report back within 100 days.

For these and many other reasons, we are moving on the forestry front. We realize how essential the forestry sector is to Canada, and will continue to be.

[The Chair, Liberal, James Maloney]

Thank you. That's right on the button.

Mr. Serré, over to you.

[Marc Serré, Liberal, Nickel Belt, ON]

Thank you, Minister.

Thank you, Mr. Hamilton, for coming to the committee again today.

I hear my colleagues talking a lot about the impact that low oil pricing is having in Alberta and parts of the country. Northern Ontario and Canadian communities are also concerned about the drop in mineral pricing. According to Stats Canada, the job numbers last week showed Sudbury has the highest unemployment rate in Ontario, and the second highest in Canada.

The people in northern Ontario are also concerned about the missing opportunities we are having with the Ring of Fire, and the tremendous opportunity that this has as one of the most promising developments in the Canadian mining industry in the last hundred years. We've had companies like Noront Resources and KWG Resources that are really pleased with the budget in 2016. As you mentioned earlier, we've made significant investments with the municipalities in infrastructure and education capacity-building with first nations. The Ontario government is really pleased to finally have a partner at the table for resource-based initiatives like this.

My question to you is, when we look at the government's support for the Ring of Fire, for the mining industry...and it's also related to the investment of innovation and research for the forestry, mining, and all the resource-based...on the R and D.

[Jim Carr, Liberal, Winnipeg South Centre, MB]

I'm glad you asked that question because I can take a little bit more time to complete my answer from the previous question.

Forestry, as a part of a series of natural resource sectors, also qualifies for additional investment over time. For example, there is $1 billion over four years starting in 2017-18 to support clean technology in the forestry, fisheries, mining, energy, and agricultural sectors as part of the innovation agenda.

Also there is $87.2 million over two years for Natural Resources Canada projects across the country that support research in forestry, mining and minerals, earth sciences and mapping, and innovation in energy technology.

I also want to say that we know they impact families and individuals, and we try to make this a part of every answer we give to questions about low commodity prices. We know there is hardship when commodity prices are as low as they are, and we know that in Alberta times are tougher than they have been in a very long time. We're attentive to the statistics, but they're more than that, they have human consequences. That's why the government is responding, through transfers, through infrastructure investment, through changes to employment insurance, through these investments in new technologies that will ultimately rely on the innovative skill and, I would say, entrepreneurial genius of so many in Alberta who have built that economy, and will rebuild it again. Many of the investments are across the sectors of NRCan's responsibilities and the government, including forestry, mining, and oil and gas.

[Marc Serré, Liberal, Nickel Belt, ON]

I also wanted to ask, from an infrastructure perspective, about the investment that is needed in railway and roads to bring products to market, and how important that is. Our previous government had indicated that the roads and railway had to be funded completely by the private sector.

What is our role? We've had a budget that has looked at significant investments in roads and infrastructure across Canada. How important is that, to then be able to access mineral deposits such as in the Ring of Fire and other remote areas?

[Jim Carr, Liberal, Winnipeg South Centre, MB]

We are committed to funding infrastructure across the country. You know that these announcements will be made in a phased-in way, with certain priorities linked to those projects that are ready to go. You also know that the priorities of the Government of Canada will be linked directly to the priorities of the provinces and the municipalities. We have become far more flexible in the application of that funding formula. In the case where municipalities are unable to be equal partners, we will be partners with provinces on a fifty-fifty basis. That is where we take our cue. We understand that the local priorities are the ones that matter most. Those are the problems that we want to help solve, and those are the investments we want to make with our partners in the provinces. I would think that the Government of Canada would be keen to look at those priorities that are consistent with knitting together national transportation infrastructure, especially green infrastructure.

[The Chair, Liberal, James Maloney]

Very good. Thank you.

Mr. Barlow, it's over to you. We are now into the five-minute round.

[John Barlow, Conservative, Foothills, AB]

Thank you, Minister, for being here. I appreciate your time.

Looking through the mains, I'll quote the finance minister from his budget speech, “Wherever the sun shines and the wind blows, farmers and landowners can become energy producers. Particularly for rural regions hurt by falling commodity prices, the opportunities for economic diversification are enormous.”

Now, as much as that is not the greatest comment on what farmers, ranchers, and rural Canadians do, to me it sends a message that you are going to be looking at renewable energy as a way to diversify Canada's economy, which I think is something that all of us here would agree is worthwhile. However, when I look at the mains that you brought out, there is a decrease of $93 million in the clean air agenda program, a $70.6-million cut from the energy efficiency practices and lower carbon energy sources, a $21.8-million cut from the ecoENERGY for biofuels producer initiative, a $13.6-million cut in the wind power production incentive program, and an 85% cut in the responsible natural resource management program, a decrease of $163.5 million.

To me this sends a mixed message, if you are going to delay projects like energy east—I am not saying that we want to rubber-stamp it tomorrow, because it has to go through the program, but you have said you are going to delay it—and if you want us to look at other ways to make up the loss of these jobs, including 100,000 in Alberta alone. You have been saying that we are going to look at renewables as a way for these jobs to be found, and yet you are making substantial cuts to programs that help fund and innovate renewable energy.

[Jim Carr, Liberal, Winnipeg South Centre, MB]

Actually, those are sunsetted programs, funding of which has been replaced by initiatives in budget 2016-17. These are not cuts of investments in those areas. There are five-year tranches of funds that ran out in March 2016, and therefore it shows a reduction in funding. However, they have been replaced by new commitments and new investments in similar and additional projects in budget 2016-17.

[John Barlow, Conservative, Foothills, AB]

Can you give a couple of examples of what new programs are going to be available?

[Jim Carr, Liberal, Winnipeg South Centre, MB]

Yes, I have done that already.

I could give you other examples of investments in green infrastructure, innovation, electric vehicle storage, etc. When you total it, it's hundreds of millions of dollars of new investment, replacing some of the sunsetted programs to which you have just referred.

[John Barlow, Conservative, Foothills, AB]

Thank you.

You talked about some of these programs that are going to be changing, and Mr. Tan brought up Atomic Energy of Canada Limited. This is the first year that nuclear sites will be managed under a government-owned, contractor-operated model. This restructuring is reflected in massive increases in the estimates, from $119 million in 2015-16 to $968 million in 2016-17. This is an increase of about $850 million.

What is the reason for this restructuring, and what will be the benefits of it?

[Jim Carr, Liberal, Winnipeg South Centre, MB]

AECL is receiving $969 million in the 2016-17 main estimates that will allow AECL to carry out its mandate of managing Canada's radioactive waste and decommissioning responsibilities, and enable nuclear science and technology. Increased funding in 2016-17 will allow AECL to advance the decommissioning and remediation of old and contaminated infrastructure sites, and to revitalize the infrastructure at the Chalk River Laboratories. The government is investing $800 million over five years to renew those laboratories, including new and renewed science facilities that will serve the needs of Canadians as well as industry.

[John Barlow, Conservative, Foothills, AB]

What criteria was used when you were looking at some of these programs to determine which programs would be getting increases and which programs would either not be renewed or would be seeing decreases?

[Jim Carr, Liberal, Winnipeg South Centre, MB]

That's a really good question. I remember going back to my days as a legislator in Manitoba, a very long time ago, 1988 to 1992, when I was in opposition. I always thought it made total sense to every year at budget time pose the question, is a program working? If it's not working, how can we make it work? And it we can't, then we should stop funding it. That's the prism through which I look at all public expenditures.

We must be able to convince the people who brought us here, and the people who fund these programs, that they are being run effectively. My several months' experience as minister tells me that our senior public servants believe that to be a value and an important one of prudent budgeting as well. The way you go about it is you assess the impact, the effectiveness, and whether or not it's a justified renewal.

In the case we've been talking about over the last 10 minutes or so, some funds have been sunset, so the department looked at the best way to renew them, learning from the experiences over the last five years, so new dollars could be spent more effectively and more efficiently, in part on the strength of what we've learned from what happened the five years previously.

So I'm with you. There really ought to be a way of examining, rationally, why we're spending any dollars that taxpayers—

[John Barlow, Conservative, Foothills, AB]

Results-based budgeting is kind of what you're talking about?

[Jim Carr, Liberal, Winnipeg South Centre, MB]

That's the way I see it. That's my inclination. I spent 16 years as president of the Business Council of Manitoba. I have a respect for the importance of ensuring money that's spent is spent efficiently and in the best possible way.

I have every reason to believe the fine public servants of NRCan agree with that.

[The Chair, Liberal, James Maloney]

Thank you, Minister.

Mr. Harvey.