Madam Speaker, I would like to take this opportunity to address the motion put forward by the hon. member for Churchill River, so eloquently presented by his colleague this morning.
The member is proposing that the federal government subsidize natural gas expansion projects for remote communities as a way of reducing the cost of living for residents and achieving environmental benefits.
The hon. member should be thanked for his interest in this very valuable natural resource. Natural gas is a clean burning, efficient, cost effective fuel, which is why it has become one of Canada's number one natural resources.
Canada also has an abundant supply, with an estimated available total of between 559 trillion to 630 trillion cubic feet. It is the stated objective of our government to make Canada the world's smartest natural resources' steward, developer, user and exporter. In fact to become the world's smartest resource developer means, in part, adopting a considered, practical, market oriented approach that balances the needs of all interests. It is this type of approach that is behind the natural gas success story. It is a thriving, competitive industry that has followed a course of continuous growth.
In the mid-1980s the crude oil and natural gas markets in Canada were deregulated. For the Canadian natural gas industry this resulted in lower natural gas prices and a surge in natural gas activity.
Since then natural gas production, along with the associated transmission and distribution infrastructure, has increased at a healthy and in some cases dramatic pace. Expansions to Canada's natural gas infrastructure, whether of a local or international dimension, have been governed by a combination of economic opportunity, economic viability and technology development.
This is one reason we have difficulty in supporting the hon. member's motion. It is the government's current energy policy not to fund megaprojects, but to leave it to the competitive market to decide what goes forward and what does not. This policy has not resulted in a stalled natural gas industry. Far from it. The result has been some very exciting private sector driven developments, including the expansion of natural gas distribution and production into new, previously unserviced regions.
Consider the Sable offshore energy project to which the member referred. In late 1999 the natural gas resources from the Nova Scotia offshore began to flow. Sable natural gas was first discovered in the 1960s, but it has never been economically viable for production until now. Thanks to new drilling and production technology and new alliances between oil companies and engineering and construction contractors, the onshore Maritimes and Northeast Pipeline will make natural gas available in Nova Scotia and New Brunswick for the first time.
I am pleased that New Brunswick and Quebec are working together to extend the Sable natural gas pipeline system to northern New Brunswick and eastern Quebec as well. On February 28, 2000 the premier of New Brunswick and the premier of Quebec signed an MOU to work together in creating a favourable environment to develop an interconnection between the existing pipelines in their provinces.
Both premiers have stated very clearly that this project must proceed on a commercial basis and recognize that successful pipeline projects must be built on sound economic footings. I welcome their efforts and wish them success in assembling the necessary market support to move this project forward.
The building of laterals within a province, such as the hon. member is suggesting, falls under the jurisdiction of provincial governments; in the member for Churchill River's case, the Province of Saskatchewan. In these cases, expanding the distribution system is the responsibility of provincially regulated local distribution utilities. For example, in late 1999 TransGas of Saskatchewan completed a $6 million expansion to four rural communities north of Prince Albert.
Provincial regulators set financial tests for new projects. Where a project cannot generate enough revenue to justify its capital cost, the local distribution company will ask potential gas consumers to make financial contributions, known as grants in aid of construction, which will bring the project to the point of economic viability. If converting to natural gas offers an opportunity for reduced fuel bills, consumers can use a portion of their savings to finance the cost of conversion.
The most recently available data indicates that there were an average of 125,000 new residential natural gas hookups per year in Canada from 1995 to 1997. Of these customer additions, roughly 70,000 per year resulted from new construction and 55,000 were conversions from other energy sources. What this means is that fully 48% of Canadian homes are now gas heated on a normal commercial market driven supply system.
From an energy policy point of view it would not be sensible to depart from the basic principle that project economics will decide where laterals can be built.
Let me assure the House that the Government of Canada is also very sensitive to the fact that many rural and remote communities face high cost energy and general environmental sensitivity. That is why the Department of Natural Resources has specifically designed alternative and renewable energy programs as well as energy efficiency and conservation programs that will help these communities meet their energy needs and lower their cost of living as well as to receive environmental benefits.
Pursuing these initiatives is the most workable, economically viable and environmentally friendly way of meeting the needs of rural and remote areas. Adapting these new technologies could bring these communities savings of $200 million per year, not to mention significant environmental benefits.
For example, some communities are totally dependent upon fuel oil that is shipped in at great expense. There are new technology programs in the energy sector of NRCan that focus on developing alternative and renewable sources of supply, including bioenergy, small hydro, wind, photovoltaic and active solar energy.
In addition to these technology initiatives the department has developed tools to help communities analyze what kind of supply source would be reasonable and what they need to do to pursue it. Another initiative is the development of community energy systems to improve energy efficiency and to allow better use of waste heat. Under this approach energy use is reduced by integrating conventional energy supply, renewable energy sources, energy demands of the building, transportation and industrial sectors, and the use of waste heat.
The Minister of Natural Resources is also taking the lead by working to increase energy efficiency of buildings. Let us consider this example. In this year's federal budget the Minister of Finance announced that two funds with a total of $125 million would be created to support investment in green municipal infrastructure including projects to improve the energy efficiency of municipal buildings. It is important to develop the technology but people need to know about it.
Through ongoing information programs and sources the department is working to get the word out to rural and remote communities about alternative and energy efficiency technologies. Another initiative is the establishment of technical training and certification programs to help develop local expertise, which contributes to increased self-sufficiency.
One exciting dimension of the work in alternative power and energy efficiency is its global market potential. An estimated two billion people in the developing world do not have access to reliable energy supplies. The world market for Canadian know-how and technology is substantial. In addition, if Canada becomes the leading exporter of greenhouse gas technology, this country will be directly contributing to preventing climate change.
Canada's capacity to develop climate change mitigation technologies is already proven and it is growing. It is part and parcel of the overarching objective of the Minister of Natural Resources to establish Canada as the world's smartest resources developer. This means continuing to develop alternative and renewable energy sources and pushing ahead with more energy conservation and energy programs.
These initiatives are the best options for delivering a lower cost of living and environmental benefits to rural and remote communities. They are the wave of the future for rural and remote areas and for all of Canada.