Public Accounts Committee on Oct. 5th, 2010

[The Chair, Liberal, Joe Volpe]

Mr. Wernick, that's actually three times that you've offered to provide something either to the member or members. We'll take you up on all three offers. You'll submit them all to the clerk and we'll distribute them for everybody, if you don't mind.

[Michael Wernick]

Absolutely.

[The Chair, Liberal, Joe Volpe]

Mr. Bevington, after careful consideration, in order to keep your smile always going, you'll continue for the next five.

[Dennis Bevington, NDP, Western Arctic, NT]

I just want to move on to mineral development, because I consider that to be one of the most interesting areas in the Northwest Territories that still remain under INAC control. I want to understand how your department views mineral development. What is your overall mandate for mineral development in the Northwest Territories? Do you have a fiduciary responsibility to maximize the benefits from mineral development for the people of the Northwest Territories?

[Michael Wernick]

I would say we have a balanced responsibility to promote economic development, much of which is going to be driven by resource industries, and mining seems to be a better bet than oil and gas these days. It will probably last longer, given the Chinese appetite for resource commodities. It's probably a better long-term play.

What we want to see in the north is sustainable mining with responsible environmental and social impacts. We don't want to see the Giant Mine repeated out of Faro. We want to have modern, what they call third-generation mining, as you know, and I know you're very familiar with this, Mr. Bevington. We're trying to promote a sustainable approach to mineral development. We think in NWT, in the Yukon, and in Nunavut, this can be one of the drivers.

To make a quick hand-off to my colleagues, if you know you're going to be pulling iron ore up the Mary River site in Nunavut for the next 35 years, you can actually do some human resource planning as to where those skilled workers will come from and where the people are, and that's why the agencies are able to actually do something that's more sustainable than fly in and fly out, bring some people in from Newfoundland and they go back after the project is finished--all apologies to that model. I think it's a very important thing.

Lastly, just to help the members understand, in the Northwest Territories and in Nunavut, INAC and the minister are basically the equivalent of a provincial lands department. We do a lot of the things you'd see in a provincial lands department. In the Yukon we were successful in devolving that to the territorial government and we've been trying to negotiate devolution to the other two territorial governments. We would like to get out of the land department business and give it to the public government in the north, where it should be.

[Dennis Bevington, NDP, Western Arctic, NT]

On that issue, when you consider that we're now looking at four diamond mines in the Northwest Territories, and diamonds are a very finite resource--diamonds might be forever, but our mines are very, very limited in their lifespans--what efforts has this department put into mineral development to ensure that we have a long-lasting industry in this regard? Where's the effort been in that regard? As you quite correctly point out, you're in charge. You make those decisions. We don't make those decisions in the Northwest Territories to maximize the return from our resources to ensure that our resources are sustainable in fashion.

[Michael Wernick]

There are a couple of things that may be helpful to the committee.

We don't control the world price of diamonds, tungsten, gold, or what not. What we can do to help private sector investors decide whether they want to pursue projects or not is lay on the science. As you know, in the north we barely scratched the surface on actually doing basic surveying and prospecting and knowing what's up there. Most of the focus that our colleagues at NRCan and others have done over the last few years is on the mapping, chartings, and getting the baseline in. Going with that is the environmental monitoring so you know what sort of ecosystem is up there if mining is introduced into it. I try to call it laying the foundation for that. The decisions on specific projects are going to be private sector investment decisions, whether to pursue it or not. How much public governments reap as benefits from that are a matter of fiscal arrangements between the federal government and the territories that are set by the Minister of Finance, and you know that debate very well. I think the best thing we can do is lay in really good baseline science for people to make smart decisions.

[The Chair, Liberal, Joe Volpe]

Mr. Bevington, thank you.

We'll go on to Mr. Shipley.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you, Mr. Chair, and thank you to all the witnesses.

It's an interesting one, Mr. Boothe. In the end of your conclusion, you talked about being committed to working with the Department of Indian Affairs and other partners in the Northwest Territories to plan and implement effective monitoring programs.

How is the working relationship and the coordination? It's not very often we end up with four departments that were expecting to come together in harmonization, where they actually have some different objectives, I would suspect, in the big principle of it all. Can I just ask you, since you had mentioned it, how is the working relationship in coordinating? I would see that as having some difficulty, but we also, on this side--on all sides, actually--see that this is significant and important to have.

[Paul Boothe]

Thank you for the question.

In this particular area, I would say that it's a very strong partnership. Our role is a bit of a supporting role. INAC's in the lead. Everything that I have learned about this has been that there has been a good partnership. The Environment Canada scientists are well supported by their INAC colleagues in doing their monitoring work. I would say, certainly in this case, it's a very productive partnership.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Mr. Shugart, in your presentation and in the report--more in your presentation--you talked about the skills training strategy assets, funding of approximately $1.6 billion over five years. You talked about how under Canada's economic action plan there would be an aboriginal skills employment partnership increase by $100 million.

How do you measure the impact and the number of people who would be affected by that? Secondly, how do you determine the dollar effectiveness, even though you will assess the impact? I see those as two different things.

[Ian Shugart]

Yes, I think that's quite right. Depending on the baseline circumstance of individuals in those communities, temporary work may be better than nothing at all, but what we're really after is the development of long-term employment prospects that flow from long-term sustainable economic development.

What we are about--in response to the observation that the Auditor General has made--is not the value per se of the investment and the jobs that are created; her report indicates that the communities have responded well to these programs and the objectives are clear. Going forward, we want to be able to demonstrate to parliamentarians that we know what has been achieved.

So I think in our case, we will continue the investment that Parliament provides for skills training and job development, but our emphasis at the moment is on how we go about that so that we can in fact demonstrate value over time. These strategic plans, these business plans that we will be developing with the organizations, will articulate what those goals are, what the provision will be for long-term benefit.

Then we've been developing indicators. We refer in our action plan to some of those, the impact of the program on the duration of client employment, the impact on earnings of the clients, one indicator being the reliance of the client on employment insurance or other forms of income support, and then various measures of satisfaction of the individuals who've been through those programs.

In time, as we develop those indicators through the employers and the employees, we will be able to demonstrate much more systematically the long-term value of these investments.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Madam Jauvin--

[The Chair, Liberal, Joe Volpe]

Mr. Shipley, sorry, I just checked. You were well over five minutes.

I'm going to go to Mr. Bagnell, who's taking the other Liberal question.

[Larry Bagnell, Liberal, Yukon, YT]

Thank you.

I thank all the witnesses for coming. It's great to see many of you again.

My questions are for Ms. Fraser. I'm always delighted to have you at committee.

On numerous occasions in the past you have talked about many problems with the implementation of land claims north of 60. In fact, this summer, when Michael Ignatieff and I toured the north, we heard those in spades again. However, in your speech here, in paragraph 5 you talk about agreements being finalized, including the Tlicho agreement, which was a self-government agreement. You said, “in our view the efforts to settle land claim and self government agreements represent a significant achievement and an important step”.

Yet less than a month ago I got input from the Dene that says once claims have been settled, the claimant groups have great difficulty in implementing their agreements. A case in point is the Tlicho government in the Northwest Territories. Tlicho are having difficulty implementing their agreement.

How do you reconcile your glowing speech with the problems you have seen in the past and what we heard this summer and in this recent letter on the implementation?

[Sheila Fraser]

In this report, we are actually quite positive about the work the department has done to settle the claims. We found they were flexible and that they used innovative approaches to try to reach an agreement. But as the member has mentioned, we've also done several audits of the implementation of these agreements and found many problems in them. I would say the major difficulty we note is that while there may be respective technical legal conditions, the overall intentions of the agreements are often not met, and even when we looked at ones like the Inuvialuit agreement, I remember that some 27 years after the agreement had been made there were still difficulties with transfers of land.

So implementation of these agreements is a challenge. This report was really focusing on the actual reaching of an agreement and the work the department did to do that.

[Larry Bagnell, Liberal, Yukon, YT]

In paragraph 7 of your remarks, you talked about the importance of the environment to aboriginal peoples in the north, etc., and that it's why you studied it. You “examined whether INAC and Environment Canada had established and implemented an adequate regulatory system in the Northwest Territories”.

An important component of a regulatory system is monitoring and enforcement. I just want you to comment on that, and I want to give two examples of potential lacks here.

First of all, the government recently closed the entire Canadian Foundation for Climate and Atmospheric Sciences. A lot of that monitoring in the north, the closest monitoring of climate to the North Pole, and all of the scientists are gone. So that's a reduction in monitoring.

The second point is that when the Law of the Sea extended the 100-mile limit to 200 miles, basically adding to Canada an area the size of Saskatchewan, the government, when asked in committee, said no, they had not included any monitoring ability or forces or enforcement ability, but maybe one environmental officer in Yellowknife, which, as you know, is not really close to being 100 miles offshore in the Northwest Territories. This is a theme, actually, of this government.

So do you have any comments on the lack of monitoring and enforcement and abilities and resources to do that?

[Sheila Fraser]

I'll ask the Commissioner of the Environment to respond.

[Scott Vaughan, Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada]

Thank you very much.

I think as the Auditor General mentioned, we've noted in the report that while Environment Canada does undertake, as the deputy mentioned, ongoing monitoring, it has limited monitoring capacity north of 60. We've already discussed INAC's cumulative environmental impact program. Their own 2005 evaluation said they were not delivering what they were required to do under the act.

There's of a broader question, which I think the deputy of INAC mentioned. As we've noted in the report, there are gaps in baseline information, and the point of cumulative effects is to understand how different environmental indicators fit together. This is particularly urgent in the context of the north because of the fragility of the ecosystems.

So there are gaps, as the honourable member mentioned. There's been a 63% reduction in the Bathurst caribou herd. But the broader question is what are the drivers of that? For that it is important to undertake a cumulative monitoring system to understand both conditions as well as linkages between the different environmental drivers.

So, yes, we've noted, first, that the cumulative impact system is incomplete and therefore that decision-making is not fully informed, and that there are gaps in critical information.

[Sheila Fraser]

If I could just add, Chair, we also mention in the report, even on the question of enforcement of licences and permits, that the department's target was to inspect 50% to 60% and that they were carrying out about 13% of the caseload. Now, what number it should be I think can be up for debate, but clearly we are saying that the department needs to be more risk-focused, needs to determine the inspections it should be doing, and then needs to carry them out.

[The Chair, Liberal, Joe Volpe]

Mr. Dreeshen.

[Earl Dreeshen, Conservative, Red Deer, AB]

Thank you very much.

It's great to see you folks again.

In Mr. Shugart's address there is a discussion of aboriginal skills and employment training strategies. I know you've already spoken somewhat of those when you were talking to Mr. Shipley about the dollars invested, but what I'd like to talk about are the three new strategic priorities you were speaking of: supporting skills development; the partnership in the private sectors in the provinces and the territories; and also the emphasis you have on accountability and results. I wonder if you could speak to those somewhat.

Then, Madam Fraser, I was just wondering if you could comment on whether you feel the strategies that are there adequately satisfy the concerns you identified.

[Ian Shugart]

Thank you, Mr. Chair.

The first two priorities, demand-driven skills development and fostering the partnerships with the private sector and with the governments in the territories, are really working out of this vision of sustainable long-term employment and the training that will enable that. We want there to be a skilled workforce in the north so that employers, as they invest and undertake development, can draw on the base of the population in the north, and not have to source their workforce from the south, frankly.

The best way to do this is to foster between the program and those who are going to be investing and undertaking the development the kinds of linkages, for example, so that long-term skills needs can be identified, depending on the type of economic activity that is going to occur. We can then come in through these training funds, working in partnership with others to provide the training capacity so that those workers will be there. Whatever form this needs to take, whether it's training or whether it's enabling the actual jobs, those two priorities really flow from that vision.

The third one, the emphasis on accountability and results, is really very much part of the modern requirement that we all live with. You, as members of the public accounts committee, focus on the Auditor General's documents, and we, as departments, endeavour to satisfy that we not only do good things with taxpayers' money but we can demonstrate that we have done worthwhile things with that money.

We want to do this in as efficient a way as possible, but part of the program will be how we set it up and deliver it. We will have these strategic business plans. We will try to avoid them being process and bureaucracy, but they have to be a joint product of the program and of the employers so that we can document what the objectives are.

Part of it is the data development and collection, and reporting out. We can then map what has actually been achieved and use intelligent indicators, sometimes using administrative data such as employment insurance claims, to be able to tell the duration of employment in a particular area, and then report that out and over time be able satisfy parliamentarians that the investments actually have made a difference in the north.

Along the way, we think we're going to be hearing from employers and from workers, and all of the multiplier effects from that, that these programs actually are working to build a long-term workforce in the north. That's how we see it all working together.

[Earl Dreeshen, Conservative, Red Deer, AB]

Madam Fraser, how do you feel about the process that has been outlined?

[Sheila Fraser]

As we note in the report, we found that the two programs we looked at in Human Resources and Skills Development Canada had clear objectives. They were well received by the communities. And they had short-term performance measures, such as the number of people who attended training or the number of people employed. The one element that was missing was the longer-term effects, but the deputy has responded to that, indicating some of the performance measures that might be used. That was really the missing element in those two programs we looked at.