Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 5 - Evidence - December 7, 2004
OTTAWA, Tuesday, December 7, 2004
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 5:08 p.m. to examine and report on emerging issues related to its mandate.
Senator Tommy Banks (Chairman) in the chair.
[English]
The Chairman: Honourable senators, ladies and gentlemen, we are meeting as the Standing Senate Committee on Energy, the Environment and Natural Resources. We are pleased that the Minister of Natural Resources is here today. We await some of his colleagues. Minister Efford, please proceed.
The Honourable John Efford, P.C., M.P., Minister of Natural Resources Canada: Honourable senators —
The Chairman: Before you proceed, Minister, I wish to thank Ms. Paton for the kind letter she has given us.
Mr. Efford: Honourable senators, I am joined this evening by some of my officials who will help me answer your questions. Mr. Anderson and Mr. Brown will be along in a few minutes. Mr. Brown is from the energy policy sector.
I am pleased to respond to your questions on the priorities of my department. I am proud of my department and the role it plays in helping build the competitiveness of Canada's natural resources industries. I am proud of the role that those industries play in the Canadian economy.
This committee will be interested to know that in 2002, the natural resources industry accounted for nearly 13 per cent of Canada's gross domestic product. That is nearly four times the value of telecommunications, electronics and computer industries put together. The natural resources industries employed more than 940,000 people across the country.
Let me make one point very clear, Mr. Chairman: These natural resources jobs are not low-skill jobs in a low-tech industry. Rather, they are highly skilled jobs in a high-tech industry that relies upon knowledge, know-how and innovation to compete in a global economy. They rely as much on the resources between our ears as on the resources beneath our feet. I will give some specific examples of innovation at work in this department and in this sector.
One good example is Canada's and Natural Resources Canada's leadership in geomatics. Our GeoConnections program is at the forefront of putting geospatial information on the internet for anyone to use. It is a valuable tool for everyone from public health officials to national security officials, from municipal governments to Aboriginal communities.
In research and development, we are doing ground-breaking scientific work on understanding gas hydrates in the Arctic. This research may provide enormous new sources of energy for the future. Also in R & D we are very proud of our role as an early partner in pioneering hydrogen fuel cell technology companies such as Ballard Power. We have also partnered in a $20-million initiative to develop and test applications of fuel cell technology for underground mine production vehicles. Soon we may see fuel cells powering locomotives, scoop trams and service vehicles in the mining industry. There are many partners in this project, Mr. Chairman, including the Fuelcell Propulsion Institute, equipment manufacturers, mining companies, fuel cell suppliers, regulatory bodies, universities and consultants.
You can see, Mr. Chairman, that both my department and I are keen on promoting the natural resources industry as high-tech industries, using knowledge and innovation to compete globally.
Another one of my and my department's priorities is smart regulation. As you know, this is a government-wide priority and one of the five points in the strategy outlined in the Speech from the Throne to make the economy more innovative and productive. Smart regulation has been the subject of considerable attention among stakeholders and the media. In fact, in September, Chair Gaëtan Lussier tabled the report of the External Advisory Committee on Smart Regulation. The report calls for increased cooperation among governments, industry, non-government organizations and interested citizens so that Canada can have a regulatory environment that contributes to our high quality of life.
No sector has more to gain from smart regulation than the resource industries. We want a regulatory system that is not only friendly to the environment but also friendly to industry. These are not mutually exclusive objectives. In fact, the future competitiveness of the resource industries may well depend on how they deal with a triple bottom line: economic development, environmental protection and social stability.
In my own region, we have the Atlantic Energy Roundtable as a good example of how decision makers can work together to balance these three objectives. Government, industry and labour work together towards a vision of growing the offshore industry that contributes significantly to the economy and the social well-being of Atlantic Canada.
The Atlantic Energy Roundtable is working towards a goal of sustainable development in a socially responsible manner. It promotes transparent decision-making and open communication among governments, regulators and industry. The process itself demonstrates how we can bring all parties together to advance a common goal. This is the key to smart regulation.
Our third priority at NRCan is climate change. I have had the opportunity to review the report released by this committee last week on the One-Tonne Challenge. As the committee is aware, the challenge asks every Canadian to reduce annual greenhouse gas emissions by one tonne, which approximates about 20 per cent. That may sound like a lot but it is a small investment for a big return. Canadians clearly have an important role to play in a national goal to reduce emissions. They can make a difference in their individual choices, whether through heating, lighting, living space, or through moving from place to place.
Honourable senators, you have pointed out that advertising on climate change a couple of years ago had mixed results. That is one reason why we have developed the One-Tonne Challenge. We believe that this new program will be different. Some of you may have already seen the television advertisements featuring Rick Mercer in English and Pierre Lebeau in French that began to air across the country last night. This promotion is supported by the activities of business and industry partners as well as by community groups who are already involved in the One-Tonne Challenge. The One-Tonne Challenge will lead Canadians to the information and programs that the Government of Canada has created to help them take action. You have made a number of observations and recommendations on other ways to approach the One-Tonne Challenge. My department and I will be taking a close look at the opportunities the committee has identified.
Let me give you one example where it is clear that Canadians are eager to make a difference. In August 2003, the Government of Canada announced a $1-billion climate change initiative. One of the most popular of the initiatives is the EnerGuide for house retrofit incentives, which is a $73-million program that offers grants to encourage Canadians to make their homes more energy efficient. The average incentive for Canadians is around $1,000. The response has been astounding. Since the program was launched in October 2003, there have been 65,000 EnerGuide house evaluations and, thus far, 11,000 grants have been paid.
Natural Resources Canada addresses climate change in many other ways. We encourage renewable energy resources such as wind energy. The Speech from the Throne highlighted some of the opportunities we have to use this renewable form as part of the overall energy mix. In 2001, we invested $260 million in the Wind Power Production Incentive to quintuple the amount of energy from wind power available to Canadians. We expect that this program will lead to the development of 1,000 megawatts, which is enough electricity for more than 250,000 homes. The incentive is currently funding projects in six provinces. Last September, we announced the latest investment of $9 million in a new wind farm in Magrath, Alberta.
As I mentioned earlier, we invested in the research and development of hydrogen power fuel cells. Last March we announced support for Canada's first hydrogen highway that will run from Vancouver to Whistler in time for the 2010 Winter Olympics. We are also promoting these technologies around the world. Last week my department led a Canadian hydrogen and fuel cell delegation to India. We are also promoting ethanol as a more environmentally sustainable fuel. Last February, we invested $78 million to help six companies start building new ethanol plants across Canada. Yesterday we announced the second round of calls for our Ethanol Expansion Program. It is worth approximately $22 million, and that will bring the total to approximately $100 million.
Our climate change initiatives also includes finding innovative ways to store greenhouse gases in the ground through carbon dioxide sequestration. Last September, the international Greenhouse Gas Control Technologies Conference concluded that the geological conditions in the Weyburn oil field are favourable for long term storage of carbon dioxide. Natural Resources Canada has been supporting this project since it began four years ago.
Canada is one of the world's biggest per capita users of energy, and it is not hard to see why. We are a country of long distances, extreme climates and energy-intensive industries. This is an opportunity for us. By addressing our requirements for cleaner energy and more energy efficiency, we can lead the world in the development of technologies that we can sell to a global marketplace. This is our vision for the future of Canadian energy and other resources. It is a vision that I am sure this committee shares.
Before I invite the committee's questions, let me say a few words about energy policy in general. We want to ensure that development of our energy resources continues to attract investment and create jobs. We want to ensure that Canadians continue to have access to a secure supply of energy that will enhance the competitiveness of the Canadian industry. We want to reconcile the production and use of energy with our environmental objectives. We will use market forces to achieve these objectives. Competitive and innovative energy markets are more responsive to our energy needs than are government controls. When required, we will use regulation and focused interventions for the public good. We will work in close partnership with the provinces, which share responsibility for energy resources and their management.
In the Speech from the Throne the government made a commitment to building on the strength of our country and our people. The natural resources sectors and allied industries are a vital part of Canada's economy and society. I have outlined three areas where I think Natural Resources Canada can push this agenda in the coming months: innovation, smart regulation and responding to climate change. I have also shared a few thoughts on how I believe our policies can contribute to secure and environmentally sustainable energy production for Canadians.
I welcome this opportunity to work with a committee dedicated to the kind of issues that help Canada compete in a global economy. I look forward to working with you in the months ahead. Certainly, now we would be pleased to answer any questions.
Senator Spivak: Minister, your initiatives are most admirable. I had an energy audit of my home, which was built in 1911. It was very useful, and very expensive.
One of the major producers of greenhouse gases is the oil sands. I think it was Elizabeth May, who was here at one of our meetings, who pointed out that we will have a natural gas pipeline that will then be used to help the oil sands extract their oil or whatever. Are their greenhouse gas emissions a matter of concern to you? What about new technologies?
By the way, I know those companies are trying their best, but they cannot change fundamentally. What new technologies do you envision to help that process? Someone mentioned nuclear energy. Although I have been an opponent of nuclear energy, I am beginning to think that it is the best of the worst alternatives. Could you answer that question?
Mr. Efford: Senator, the oil sands has a tremendous reservoir of oil. Approximately 175 million barrels is the estimate for the future. Does that give us concern? The answer is yes. Every industry that is emitting emissions into the atmosphere gives us energy at all times whether it is on a small or large scale. With the Kyoto Protocol, we are working with all industries wherever possible to reduce greenhouse gas emissions.
For the most part, industries in this country, including the oil sands, are cooperative and are willing to work toward whatever measures that make good sense to put in place. The Mackenzie Pipeline will be built, and the gas will be going into the oil sands. Some of the gas will be exported, but a great portion will be going for production of the oil sands.
New technologies are coming on stream on a regular basis. Alberta, for example, recently announced a $27 billion program for wind energy. There are many technologies coming on stream.
I will ask Mr. Anderson to comment on any new technology into the oil fields.
Mr. Geroge R. M. Anderson, Deputy Minister of Natural Resources, Natural Resources Canada: Honourable senators, the oil sands, as you know, are a more energy intensive oil production than conventional oils. This is obviously a major preoccupation.
Senator Spivak: Excuse me. I wonder if, in your answer, you could indicate what percentage that oil sands production contributes to the greenhouse gas emissions in Canada?
Mr. Anderson: It is going up because production is rising. The numbers I carry in my head are for 2010. Do not shoot me if I am 5 per cent off. By that time, the entirety of the oil and gas business will be something like 38 per cent of our emissions.
Senator Spivak: Oh, my God.
Mr. Anderson: I would be guessing the share of the oil sands in that, but they would probably be half. I would say that they would be about 16 per cent, give or take a bit.
Emissions are rising. This is a preoccupation. However, many things are being done to look at better ways of producing the oil from new oil sands. We could send you material on that, if you would like.
Senator Spivak: That would be helpful.
Mr. Anderson: We have a laboratory in Alberta that specializes in oil sand technologies and works closely with the province. I will give examples. They are looking at different solvents that permit the oil to be recovered more easily. They are looking at the injection of CO2 back into the oil fields.
Senator Spivak: You can do that in the oil sands process as well?
Mr. Anderson: It could be, potentially, with the in situ recovery but not on the mining side. There is an experiment being conducted at the moment. We will see how it goes.
There is a technology called fire-flooding. You could put oxygen down into the reservoirs and then have subterranean fires that would make the oil more liquid. It would come up that way. That means that you are not using natural gas to provide heat; you are not having any combustion above ground to make that oil liquid. That, potentially, is quite a promising technology. A variety of technologies are being examined. One of the big issues is energy efficiency. Even if you use the same technology, doing things in a more efficient way reduces the emissions.
Senator Spivak: I am very much aware of the geopolitical value of the oil sands. I understand how important that is. What puzzles me, as it did Ms. May, is why would one use natural gas, which is a cleaner burning fuel, to produce a dirtier fuel? That solution does not seem to strike one intuitively as a sensible one if there are other things to be done.
The gas pipeline is a great idea, but then we should export the gas and not use it for the oil sands.
One more question because I know I will be cut off in a minute.
The Chairman: When have I ever cut you off?
Senator Spivak: Coal bed methane is another way in which you can get much natural gas. There are ways to produce it without the pollution that comes with it. Will the Department of Natural Resources be on the cutting edge of this technology? We know we have to have those oil sands. We should be interested in coal bed methane gas, because it is easily available. However, what are we doing to be smart about it instead of not smart?
Mr. Efford: I will answer the question in a general manner and then I will let the technicians answer in regard to the technology.
Natural Resources Canada is investing in every possible opportunity to be more energy wise.
Senator Spivak: I congratulate you.
Mr. Efford: We have invested billions of dollars over the years. We have taken every opportunity to use our resources in an environmentally friendly way, not only with coal, but with methane, natural gas and wind power. We are also investing in many different new technologies such as fuel cells and hydrates.
Our research and development is looking at alternative energies for the future. Some may not be possibly used as we are today, but the R&D that we are investing in gives us a wider opportunity to be more energy efficient and have a wider use of these resources in the future.
Ms. Margaret McCuaig-Johnson, Assistant Deputy Minister, Energy Technology and Programs Sector, Natural Resources Canada: I would like to reiterate what George Anderson has said about the research that we are doing at our laboratory at Devon, and making the processing and the processes of the development of energy much more efficient. It would be more cost-effective for the companies and give fewer emissions.
Senator Spivak: Cost-effective is very important.
Ms. McCuaig-Johnson: Exactly. The director of the laboratory at Devon was given a big award in the middle of October by the oil sands industries for the research that had been conducted at Devon that had made the industry much more effective. There was tremendous attendance by the industry for the award presentation.
There is one other specific technology in which I thought you would be interested. You mentioned the pipeline several times. I know that there is a technology that has been developed among a group consisting of one of our pipeline companies, a robotics and intelligent systems company and a fibre optics company. Fibre optics is put down the length of the pipeline. Through the intelligent systems operation, hairline cracks in a pipeline are detected before they could ever be found by investigators. That is a huge issue in terms of emissions from pipelines.
Senator Spivak: It is. I hope they get on to it in Iraq.
The Chairman: Does that also discover corrosion, or just cracks?
Ms. McCuaig-Johnston: Yes.
Senator Spivak: I know the companies are just as interested in finding environmentally safe solutions as is government. What percentage are the companies spending on R&D on the oil sands?
Ms. McCuaig-Johnston: I can find that for you in a moment.
Senator Angus: It sounds like there is a fair overlap between your department and Mr. Dion's department. Is that a fair comment?
Mr. Efford: There is some overlap, but I would rather look at it as a working relationship. We work closely together on sustainable development, the environment, as well as the economy.
Senator Angus: In that area — and you have devoted at least a third of your paper to climate change — I was interested in your opening statement. You never once mentioned the word ``Kyoto'' although you did in answering my colleague Senator Spivak. It snuck in there once.
I take it you use climate change and Kyoto almost synonymously because one is a way to deal with the other, I suppose. My question on that is we have been hearing about the goals and the commitments that, by signing on to the protocol, the Kyoto agreement, we have undertaken to meet — certain levels of reduction of greenhouse gas emissions and the like. In the case of individuals, it is probably around 32 megatons, whereas in the case of corporations it is a monstrous number.
Are these realistic targets? As the Minister of Natural Resources, working closely as you are with the Minister of the Environment and Sustainable Development, does Canada have a chance of meeting these goals?
Mr. Efford: First let us return to the original signing of the Kyoto Protocol. Canada signed on to very aggressive targets. Canada is not only setting its targets within Canada, but it wants to show leadership in the world. Like every program, there are always ups and downs and growing pains. The first round of the Kyoto Protocol will be completed by 2012. Then we will be going into the second round. Let us use a number of 50. If we accomplish 35 or 40 of that 50, and we carry five over into the next round, we will have come a long way.
Mr. Dion and I meet regularly. We discuss pretty well every day, not formally, but we chat about our goals. I go to hear his speeches and he comes to hear my speeches. We would like to be talking about things that we are doing and things that we can do and stop talking to the general public about the things that perhaps we cannot do. Best practices and reachable goals is the way that we should be going. Every tonne of emissions we do not allow to get into the atmosphere is a plus. Will we accomplish the 25 per cent in the auto industry? We will accomplish that. We will go a long way on the LFEs. Canada will show tremendous leadership worldwide by 2012 and we will be able to go forward, holding our heads high, in the second round.
Senator Angus: Can I take it from that answer that even if you cannot meet the specific targets that are clearly spelled out in that undertaking, as long as you feel we have made demonstrable progress, this would not cause us to pull out of Kyoto?
Mr. Efford: Absolutely not. You may have to change direction from time to time. We have many voluntary agreements and MOUs with different industry stakeholders. We may have to take different steps, create other backstop legislation and things like that. I like what Minister Dion is saying because I feel the same about a go-forward approach. Look to the past only to learn from the mistakes that we have made and not repeat them in the future. I favour a go-forward approach and showing leadership within the country, and encouraging Canadians to play a role wherever possible. I am willing to work with industry and industry is certainly willing to work with us, and show leadership in the world.
Senator Angus: That is admirable. Like Senator Spivak, you appear to be well intentioned.
However, what we have been hearing at this committee in recent weeks, over and over again, is that the tools are there, that the government has good intentions, sort of. We have heard from the commissioner on the environment. We have heard from knowledgeable experts from outside and, indeed, we have had Minister Dion here. We have also had the benefit of hearing the views — although not here yet — of the former Minister of the Environment who evinced in the national media what he called his very severe frustrations with what he perceives as a lack of commitment by his cabinet colleagues, by a lack of commitment by the government — your government — to be serious about these things.
Although the words are nice and the talking of the talk is pretty good, the walking of the talk is wanting. We had Dr. Toner here the other evening. He listed 10 major barriers that exist. He outlined in each case the way to get over the barriers. It all boiled down to the government not having its act together collectively. For example, many of the measures needed to make the One-Tonne Challenge work, for example, required the input of the Department of Finance and the minister. Yet, we notice the Minister of Finance is not on the ad hoc committee that has been set up by Minister Dion. We find that all of the witnesses tell us that the Department of Finance has the acceleration of a little Volkswagen on, and also the brakes of a Rolls Royce. In other words, to get them going on a new incentive you need big dynamite. I do not know what you are doing.
First, I hope you will not interpret these comments as being hostile or aggressive.
Mr. Efford: I am trying not to.
Senator Angus: We are hearing these things. I would like to know what you think of them. Do you agree with former minister Anderson — the other Mr. Anderson — or these other witnesses I have paraphrased?
Mr. Efford: Let me assure you, I will start in this way: I agree with this Mr. Anderson more than the other Mr. Anderson. Seriously, everyone has a right to be sceptical about issues. Sometimes, however, scepticism goes too far. It is not my place to judge the scepticism. Minister Dion has been a breath of fresh air for me since he became minister. He is very serious and committed about his job. I am touted as being more of an industry lobbyist than a minister, and I take exception to that. I can hold my head high and say that I am as much of an environmentalist as anyone in this country. I proved that when I was in the Government of Newfoundland and Labrador and in my home community in relation to things that I have done.
I take exception sometimes to the environmental groups who go overboard. One name was mentioned earlier, Elizabeth May. I have known Ms. May for a number of years, and I am sure Senator Adams will agree with this: Some of our people, we have been collectively fighting together from the north to Newfoundland, and they are still telling us that the seal population is becoming extinct when we have 10 million. What is becoming extinct are people living in those communities. I take some exception to that.
Let me give you some numbers. Overall, financial commitments of $3.7 billion have been made by the Government of Canada between 1998 and 2003 towards climate change. In a country with a population of 30 million, I believe that all Canadians should be saying that that is a very serious commitment. The Minister of Finance is not on the committee as a member, but the Minister of Finance is an ex officio member of all committees. He pulls the strings. The Government of Canada is very serious about the environment.
The one area of respect I have with the extreme environmental groups — and sometimes I have become angry with them, and you have probably heard me over the years give some speeches — but they keep us on our toes. There is nothing wrong with some scepticism or criticism to keep all of us as individuals on track — as we do with our own peers, in our own family lives.
Canada is not trailing in the world in its responsibilities and commitment to climate change. We are very committed. The Prime Minister, in the Speech from the Throne, outlined everything that we have done and everything that we intend to do, and the financial commitment is very strong. Time will tell.
I will conclude by saying this on this particular issue: The one thing that we do not do enough of — and we are guilty of that in the Department of Natural Resources — is talk about it. We do not boast about it enough. Arnold Schwarzenegger has a reputation for leading the United States in the reduction of fuel emissions in North America. That could not be further from the truth. Today, we are far ahead of what they are doing. Will they get ahead of us? They will have to do a much better job than they are doing now. We have a 25 per cent reduction goal which we hope to accomplish by 2010. We are already at 6 per cent.
Senator Spivak: Could you repeat that?
Mr. Efford: By 2009, California will only be at 4 per cent. They have some challenges with federal law and some industry challenges. They talk, brag and boast about it, and I am saying that we do not do enough of that.
Senator Angus: Minister, we are on your side and we like the words. The reality is that you must then take issue with the Commissioner of the Environment and Sustainable Development, Ms. Gélinas. She says there is a big environmental deficit that this government is racking up and that we are slipping down. The OECD has come down with a report and it is showing us slipping in our position of meeting the challenges, notwithstanding this money that has been spent and these tools that we have at our disposal.
I am not a great fan of the media buffs. This morning, Jeffrey Simpson had a big, 8-column piece crapping all over our report on the One-Tonne Challenge, which you happen to quite like, if I hear your testimony correctly. That is the cynical input we get from some of the members of the fourth estate. I found myself reading it and rereading it, trying to figure out if he is right. I am hoping that you folks will listen. You say you are listening. At the end of the day — as you say you proved in Newfoundland and Labrador — the proof of the pudding will be in the eating.
I would like to think that your goal would be that the Commissioner of the Environment and Sustainable Development will say next year in her report that the government has its act together and is using the tools at its disposal, and is really in an earnest and serious way trying to meet its goals on Kyoto. The evidence that we are hearing — and we are just little senators trying to do a good job for the country and to help you do yours — is that something is not being done correctly. I end, then, with a sort of rhetorical question.
Mr. Efford: I appreciate your comments. Let me just go back to the last part of your comment about the One-Tonne Challenge. We only launched the One-Tonne Challenge back in March.
Senator Angus: March of this year?
Mr. Efford: March of this year. It is a national program. We aim to engage and educate Canadians into energy efficiency. Let me tell you what I learned.
Senator Angus: I also want you to tell me what you are doing, too.
Mr. Efford: I will. I am talking about the One-Tonne Challenge. That started me thinking about what I am doing in my own household as a Canadian.
Senator Angus: Exactly. We all are doing that here.
Mr. Efford: I made some improvements. I turned off my hot water heater when I left home with my wife to come here to Ottawa. The house was closed up, so we do not turn it on. It takes time to educate and to draw conclusions from the One-Tonne Challenge in a short period of time. It takes time. The best education is getting into the schools. I must say the department is going very aggressively into the schools. I did that in a similar program in 1993 when I was Minister of Transportation in cleaning up our highways in Newfoundland.
Do we have a long way to go? Yes. Are we on the right track? Yes, we are. Do we deserve some criticism? Yes, we do. As Canadians, we should be very aware of what we are doing. We are only — I call it — in our infancy in dealing with climate change. This file will never be completed as long as the world remains.
I remember a couple of weeks ago, or last week when President Bush was here. He said that as world leaders we should realize what dealing with climate change is. He made two statements: If Canada shut down everything, just completely blanked out everything in this country, we would be less than 2 per cent of the emissions into the world, and Mount St. Helen's in the United States lets off more greenhouse gas emissions from that one volcano than all of the industries in the United States.
While we must recognize what is happening, we have our challenges and we have our needs. We have things to do, but Canada is doing it. For example, in the last budget for cleaning up our waste sites, we had $2 billion.
Mr. Anderson: Three.
Mr. Efford: $3 billion on top of this in cleaning up contaminated sites in this country. Maybe I should sit down with the environmental commissioner and learn what more things we should be doing.
Senator Angus: Do that.
Mr. Efford: We can do more. We can all learn from each other.
Senator Angus: Minister, I am on the other side of the table, but you sound like the right minister. I like hearing what you are saying. I urge you to sit down with the Commissioner of the Environment and to follow what happens at this committee. The transcripts are available literally within hours of each hearing, so go for it.
Mr. Anderson: I will add two things if I may. Most departments of government produce every three years a sustainable development reports and the Commissioner of the Environment has decided that our previous one and the one we have just brought out is the best in the package. As a department, we like to think we are performing very well in terms of defining our goals for sustainable development and measuring our outputs and all that type of thing.
On the One-Tonne Challenge, in the New Year I think you will be pleased to see the new campaign that will be coming out. One part of that will be partnerships. There are many partnerships that we have developed with the private sector. You will see point-of-sale promotions and that type of thing being linked into the broader campaign that will be coming out in the New Year.
Senator Angus: Is there a way that individuals could make a difference? Perhaps we can, with your and Minister Dion's leadership, because the vast amount of emissions, we are told, is on the roads — at least 50 per cent, apart from the big industrials. How can we convince the public that we can make a difference?
Mr. Efford: I think it will take a lot of education, a lot of talking, and a lot of promotion.
Senator Angus: Like this.
Mr. Efford: Yes, like this. The long-term goal is reaching the elementary and high schools, in getting to the youth because they are the best teachers and they are the best people to control the parents. Other things are happening. One of the factors, as you say, is the use of vehicles on the highways.
Senator Angus: Those SUVs are everywhere. Four out of five vehicles are SUVs.
Senator Spivak: Outlaw them.
Mr. Efford: It is amazing. I have said to some friends of mine back home when they pull into the gas station and they complain about the price of fuel back in Newfoundland — which is now 99 cents is litre — that they will buy a $70,000 vehicle. They do not complain about that. I think, over time, with the education, the cost of fuel and the economy, that will all change. The industry has to produce more small vehicles, more fuel-efficient vehicles and new technology will all come on stream. It will take time, energy and education and all of us working together towards this goal. Again, we have to talk and boast more about what we are doing, because we are doing a lot, but we are not talking about it. Americans are good about boasting. We are not.
The Chairman: Our next questioner is a senator who is well known to you. He is the one who keeps us honest on the north, Senator Adams.
Senator Adams: Minister, you mentioned about public health officials and security officials, from the municipal governments to the Aboriginal community. What does that mean, that in some ways you deal with the municipality and people in the community?
Mr. Efford: I did not hear the question.
Senator Adams: You mentioned the public health officials and the security officials, from the municipal governments to the Aboriginal communities, on the second page.
Mr. Efford: The other day, I gave a speech to a number of countries. I think representatives from 57 countries around the world were here. You all saw the news recently over the massive flooding in the Philippines. With the right information in the geomatics, these things can be predicted. In regard to public health, with the right information and technology, these can be used to pass information along to communities. That is the direction where I was leading and making those statements. It is a very responsible manner of informing people of security issues, health issues environmental nature, all those issues.
Mr. Anderson: Perhaps it would be helpful if I just explained what geomatics is. It is taking all kinds of data — it might be health data; it might be rainfall data, the quality of earth, security issues, roads, transport issues — all of this data is put together on a geographic basis so that you can use maps to see what is going on. This is very useful for these types of officials. If they want to ask, ``What are the links between these different issues?'' If you are having flooding and you are worried about what the flooding might be doing in terms of contaminating the water system, this type of data is available for that.
Senator Adams: Mostly you are talking about equipment, the type of equipment for safety wise and health and stuff.
Mr. Efford: You cannot stop the weather pattern but you can certainly predict it and prepare the people for it with much less of a hazard or tragedy than you could without compiling that information. Compiling that information and getting it out to the community, as the deputy has just said.
Senator Adams: In the meantime, you have new technology coming out or some kind of equipment from the satellite?
Mr. Efford: That is already there.
Senator Adams: My second question, I used to be an electrician at one time, but for the past 28 years I have been in the Senate. We have very high costs of power in the North, especially more this year because of the cost of fuel and everything. You mentioned that you will be spending another $26 million in Alberta. Alberta pays less per kilowatt hour than we pay where we live. Have you looked at the situation in the North, the high cost of living and who is more important when the government is putting more money into wind energy?
Mr. Efford: Absolutely. There is no area in Canada where we would not invest into partnerships with communities or with industry to expand the wind power. In the most recent budget, the Prime Minister was very clear on quadrupling the wind power energy in Canada from 1,000 to 4,000 megawatts. In the areas of Newfoundland where I live on the Atlantic coast there are now a couple of companies using provincial funds — I am not sure if they are using federal funding, but there are certainly partnerships with industry and governments for wind power.
Certainly, in the North they would be very susceptible to the adoption of wind power, what with the high cost of diesel. There are no restrictions on where we will or will not invest.
Mr. Anderson: All I will add is that we have been doing some work within the department on communities that are off the grid because they have the highest electricity costs in Canada. They are frequently burning a lot of diesel. I know you can get costs as high as 50 cents a kilowatt hour in Iqualuit.
Senator Adams: Or other places.
Mr. Anderson: Last night I was talking to the Deputy Minister of Indian and Northern Affairs. I have not told my Assistant Deputy Minister yet, Mr. Brown, but we agreed we would get together to look at some possibilities for the North. Somebody at this dinner that we were at was from Iqualuit. There are possibilities of small hydro — not that small, but relatively small hydro — in Nunavut as well.
Senator Adams: In the meantime —
Senator Spivak: The one on the river?
Senator Milne: The river does not run all year long.
Mr. Anderson: That is what I thought, but it is available 12 months of the year.
Senator Adams: In the meantime, the government is running it right now. It was called NTCO, the Northwest Territories Power Corporation, at one time. Now we have the Nunavut Power Corporation. It is separated. But for me, living in the community, most of the people are mechanics and operators and they do not come from the community. In the meantime, we have satellite dishes hooked up outside the power plant and people are watching it, monitoring how much power they put out. In the meantime, we lose a lot of money every year with the power corp.
Is there some way to look into how the government is operating? I think we should look into what we should base it on. We should be able to teach some of the people in the community how to operate the system, and the people who have to provide it, bring it to the community. It costs a lot of money to operate. That is why the power corp. could not operate, and now I see one increase two months ago and they wanted to raise the rates another 30 per cent. The public cannot afford it right now. Why do they want to raise it another 30 per cent? They already lose about $16 million a year or something like that in deficit.
In the meantime, I am glad you have a new calendar with the sun rising up there is the Great Spirit. Right now, I think she will not be coming out until some time in February and they have, at the top of the igloo, a wind generator. Showing it is nice. I would like the senator to come to the community. I met him last October and I asked him, when do you want to meet me? He said ``Wait until the sun is coming out.'' Now I can say that the sun is coming up and it will be rising maybe in the middle of February.
In the meantime, my question is that perhaps we should look into whether people in Nunavut should get into the windmill business. The system belongs to the power corporation, which is operating it. Not only that, we are looking at future increases in kilowatt hours.
The Chairman: Minister, you mentioned a quadrupling in the WPPI. We are wondering whether that will be four times as many generators, four times as many companies involved or a quadrupling of the existing wind farms? What will we quadruple in the WPPI?
Mr. Efford: We will increase our output from 1,000 megawatts to 4,000 megawatts.
The Chairman: How will we do that?
Mr. Efford: There will be investment from different companies and groups across Canada. There will not be one large turbine that will create 1,000 to 4,000 megawatts. There will be an expansion of wind turbines across the country — in the East, the West, the North and centrally. Canadians need to become more familiar with wind power.
While wind power is a natural power, it is not cheap. It is expensive right now, but it is an alternative energy for the future, and the more investment that is made today the more available it will be in the future, and at a lower cost.
I met a few days ago with Minister Duncan, the Minister of Energy for Ontario. He expects that there will be a manufacturing company set up in Ontario to make parts for wind turbines. The more of that that is done in Canada, the cheaper it will be. It will be 4,000 megawatts at the Whitby program, but it will not be committed to only a few; it will be as many as possible across the country.
The Chairman: Will that be achieved by quadrupling the incentives that are in place?
Mr. Anderson: We are looking at that. At the moment, we have a federal incentive that is matched by the provinces, and that seems to be adequate.
There is a question as to whether, as the cost of wind energy decreases, there would be adjustments to the incentives. Ministers will have to consider such things, but the goal is 4,000 megawatts.
Mr. Efford: The emerging renewable electricity programs are to encourage the production of electricity from emerging renewable sources, and there is $260,000 in wind power production incentives. That is in place, and the government will naturally be investing not only in wind power but in all sorts of alternative energies for the future.
The Chairman: Am I correct that with respect to quadrupling, it is a goal and not a commitment of funds or programs?
Mr. Anderson: It was in the Speech from the Throne but we have not yet announced the program details.
The Chairman: I would be grateful if, when you do, you would send the details to the clerk. We would be very interested in seeing them.
Senator Milne: Mr. Minister, you talked about $78 million to help six companies start building new ethanol plants. I understand that there was a proposal for one of these plants in Sudbury in Northern Ontario. Can you tell me what stage that is at?
Mr. Efford: The first $78 million was committed earlier this year to six or seven companies. We announced the second program just yesterday, and any companies that did not make the first round will be able to apply for the second round.
Senator Milne: Sudbury will get on the list for the second round?
Mr. Efford: If they so choose.
Senator Milne: I understand that they missed out in the first round.
Mr. Anderson: It will be by competition.
Senator Milne: You talked about gas hydrates. This is a subject that interests me very much. With the climate change that we are currently undergoing, if we do not come up soon with a way to use these gas hydrates that are buried either under the ocean or in the ground in the North, they will begin to show up where we do not want them to show up, that being in the atmosphere. If we are to use them, we had better get on with it. At what stage is that research? How close it is to a practicable result?
Mr. Anderson: These gas hydrates, as you know, are frozen.
Senator Milne: Precisely.
Mr. Anderson: They are frozen either in the permafrost or under the ocean. Most of them are under the ocean. Dr. Boon is the world's expert on the subject, and he can address this.
Dr. Jan Boon, Director General, Earth Sciences Sector, Geological Survey of Canada (GSC) — Sedimentary and Marine Geoscience Branch, Natural Resources Canada: With regard to where the gas hydrates occur —
Senator Milne: I know where they occur. I am wondering what stage the research is at?
Mr. Boon: We are negotiating with Japanese partners for an extended pilot test in the North. We do not yet know for sure how this will come about and how it will be done.
In a pilot test about two years ago, we injected heat into the formation and measured the amount of gas hydrate that was produced as a function of the heat. That was completely experimental. We were much more interested in whether that would work.
Senator Milne: You did not get an explosion?
Mr. Boon: Absolutely not. On the basis of the information from that test pilot, we have done some economic calculations and some recovery calculations. This is all fairly uncertain because the duration of the test was only three weeks, which is a very short period of time. We came up with a cost of production of close to $10 per million cubic feet, which is about double what it costs now. With a few more pilot projects in the North, we would have the information that would allow us to move ahead.
The oil sands were developed over the past 25 years and I would say that with respect to gas hydrates, we are now where we were with the oil sands in about 1975.
Senator Milne: So we are 30 years away?
Mr. Boon: The oil sands currently produce 25 to 30 per cent of our energy. It takes some time, but the point is that we think there is a good resource there. Of course it is risky, but it is a risk that is very well worth taking.
Senator Milne: I am not quarrelling with you on that. I am just pointing out that there may be some urgency to this because, as the climate warms and the ocean warms, these things will show up in the atmosphere.
Mr. Boon: Yes. However, they will not show up in a matter of 20 years.
Senator Milne: The tundra is melting pretty fast up there.
Mr. Boon: Yes, but the gas hydrates are about 1,000 metres deep. It will take more than 20 years.
Senator Angus: How many years will it take?
Mr. Boon: If you do the calculations on the fusion of heat from the surface down, it would be well over 80 or 90 years.
Mr. Efford: I understand your concern and your urgency. That is why money is being invested in research. That is why we are partnering with countries like Japan and exchanging technology information worldwide.
Senator Milne: The Japanese are doing a lot of work.
Mr. Efford: A lot of work is being done and a lot more needs to be done, and whatever time it takes, it will be done. Keep in mind that that is only one of the areas in which research and development is being done.
Senator Milne: I sincerely hope so.
This committee is now doing a study on water. Your sustainable development strategy in 2001 included commitments to develop a national groundwater strategy and a national groundwater database. What stage is that at?
Mr. Boon: NRCan has a groundwater program in which we work closely with a number of other federal government departments and also with all the provinces. We are currently mapping a number of aquifers across the country in cooperation with our partners. We hope to complete mapping the most important 20 per cent of them in about two years. The information that we gather is collected in a database that we are currently perfecting, which is partly functioning.
I should also add that there is a big program within Agriculture Canada called the National Land and Water Information System, and actually our databases will link to that system. They have invested something in the order of $78 million in this system. That is right now also in development. That relates not only to ground water but also to other types of water.
The Chairman: Mr. Boon, do you intend that eventually we will have, in effect, an atlas of the aquifers in Canada that are significant? You said that you are now looking at mapping 20 per cent of the most important ones, but there are others that are in other ways equally important; is that correct?
Mr. Boon: Yes, that is correct. The final aim would be to have good information on all aquifers in Canada. That would actually be for two reasons: First, you have to know the aquifers to be able to determine their sustainable yield, that is, how much ground water could you pump out without damaging the aquifer; and second, to determine how vulnerable these aquifers are to a number of things, including pollution and climate change.
The Chairman: With respect to the gas hydrates that are 1,000 or so metres below the surface of the earth, is it frozen 1,000 metres below the surface of the earth?
Mr. Boon: Actually, the gas hydrates occur just below the permafrost zone. The gas hydrates look like ice but they are actually not ice. When you take a cubic centimetre of gas hydrogen, it looks like ice, but when you put a match to it you end up with a nice flame and with 0.2 cubic centimetres of water.
The process looks at decomposing this compound so that you leave the water behind so that you can produce the gas. Once the water stays behind, it stays as water, although it is not necessarily frozen.
Mr. Anderson: We are working closely with the provinces on water. We have the knowledge of aquifers and the deeper geological structures, but the provinces have all the data on wells. Bringing that together is important.
Senator Milne: That is all mapped. In Ontario, the water level is all mapped everywhere.
Mr. Anderson: This is very much a federal-provincial exercise.
Mr. Efford: On the subject of gas hydrates, to follow up on what Dr. Boon has said, to put it in context, there is a paragraph I wish to refer to that talks about Canada's relatively modest investment of $2.1 million a year, but working with Japan that invests $118 million a year. The Geological Survey of Canada has gained worldwide recognition for its work in gas hydrates. In 2002, the Geological Survey of Canada worked with a consortium that included Japan, the United States, German and Indian partners; the Canadian industry and five major corporations and the International Continental Scientific Drilling Program. A lot of work is being done worldwide, and there is cooperation between many countries, which tells everybody how concerned we all are.
Senator Christensen: In regard to the aquifers that you are mapping, are these all new aquifers, or do you have a significant amount of data on some of the ones that you are now mapping?
Mr. Boon: We have information that is fairly spotty for some; it is not complete for any. Ground water information in Canada is fairly sparse. We have developed a standard and we have now one aquifer mapped to that standard. We are bringing some aquifers up to standard and some aquifers are far from the standard.
Senator Christensen: What is your finding on the data of what you have known in the past of these aquifers? Are you getting any results that you can make any predictions on in regard to the health of these aquifers?
Mr. Boon: Yes. In Canada, we are fortunate in the sense that the aquifers that we have been studying so far are not in danger.
Senator Spivak: Is that true even in Alberta?
Mr. Boon: In Alberta there are some that we know, and the Alberta government is aware of — for example, the Milk River aquifer has been producing — but they are not in danger of losing them. Let us put it that way. In Alberta, you are right, there is a big stretch, but the information that the Alberta government has on that particular one allows it to manage the situation.
Senator Christensen: I want to return to the other issues that we were dealing with. In 2002, the climate change plan that was issued for Canada, the Prime Minister said that that was inadequate. Does that mean that we have to go back and have another round table discussion with the provinces and territories before we proceed with that plan?
Mr. Efford: Yes. We are having continuous discussions with the provinces and territories, as we are with all stakeholders in Canada. As I said in my preamble earlier this evening, what we want to be doing is moving forward with the climate change program; not getting caught up into what is reachable or not reachable, but moving forward with best practices as an environmental, industry and NRCan position as well. We will take those types of approaches, but at the same time we must engage the provinces at every opportunity. The MOU must also be signed with the province, but also MOUs with industry stakeholders as well. That is in Mr. Brown's shop. Perhaps he would like to elaborate.
Mr. Howard Brown, Assistant Deputy Minister, Energy Policy Sector, Natural Resources Canada: Honourable senators, as the minister said, we have been working with industry and looking to move the large final emitters program together. We have also had extensive discussions with the provinces.
Minister Efford will be going to cabinet along with Minister Dion in the near future to look for some reaffirmation of some basic underlying principles and to propose some new approaches on some areas where we are stuck, and we may have to back out and talk to both industry and the provinces after that meeting of the cabinet committee.
Whether or not that would lead to a larger, higher level kind of round table with the provinces, I am not sure how productive that would be. Certainly, if it promised to be productive, federal ministers would be open to it.
Senator Christensen: Are we developing a new strategy and upgrading the previous one?
Mr. Anderson: I was just going to add that energy ministers have a regular meeting that was in Iqualuit this year.
Senator Adams: What month?
Mr. Anderson: July, as you might guess. Out of that meeting, a number of things are being done on a cooperative basis between the federal and provincial governments. We have a working group on energy efficiency, which is particularly looking at demand-side issues for utilities such as electricity and gas. We have a working group on renewable energy. We have a working group on science and technology. These are ongoing and they report back to energy ministers next September with, we hope, some action items.
Senator Christensen: In the Speech from the Throne there was an outline of a comprehensive strategy for the North dealing with sustainable economic development and human development to protect the northern environment. Where are we with that strategy? Is it being developed and, if so, how far along is it?
Mr. Efford: I had to leave a cabinet meeting on that subject this evening to come here to present to you people. That matter is ongoing.
Senator Christensen: When will we be seeing it, do you know, or when will it be coming out?
Mr. Efford: I cannot tell the Prime Minister what date, but he is working very aggressively on the northern strategy, and I suspect it will be some time early in the New Year.
Mr. Anderson: In the deputy ministerial appointments that were announced last week, a new associate deputy minister was assigned to the Department of Indian and Northern Affairs whose job it will be to help work on pulling this all together. There may be some announcements as early as January in the budget, but I think some of this will take us into the summer, or even the autumn.
Mr. Efford: The Prime Minister is very committed to the northern strategy.
Senator Christensen: Just to return to the study that we are doing now, we are trying to put parameters around our study on water. As you can well appreciate, it is a huge subject. Practically every area that you look at it is crying out for some attention and some direction. What would you recommend to our committee as the areas that perhaps we should be first turning our attentions to in order to come up with some useful recommendations to government?
Mr. Boon: It is difficult to start because, as you said, the area is vast. One comment that I should make, rather than making a statement about what are the highest priorities right now, from our perspective, as a general comment, water is a very important resource, and in certain parts of the country water will come under pressure over the next five to ten years. We ought to be prepared for that. For that, we need to know how much water we have, where it is and what its quality is. That is one side of it. The other side of it is that we must protect the quality of the water. We must ensure that it is not contaminated. We must also protect our water from overuse.
There is a little booklet called Water Follies which describes a number of situations in the United States where, because of a lack of regulation, or regulation based on the absence of science, some aquifers have been completely exhausted and are gone forever. These are the kinds of things in a big sense that we have to look at.
A working group from a number of federal government departments is working together and engaging the provinces to develop a federal fresh water research agenda that would be linked to the federal water framework.
Does this more or less answer your question?
Senator Christensen: Well, not particularly, but it was interesting.
Mr. Boon: I may have misunderstood the exact nature of your question. Perhaps you could try again if I missed the target.
Mr. Efford: What we should all be doing in committees is going back to the basics of encouraging and educating Canadians in better practices. I am a strong believer in that type of process and the practices that the average Canadian can be doing. Some of the things that I have seen in my own province of Newfoundland and Labrador are nothing short of criminal. We need to get out to the schools and start talking to the younger people who are, I think, more responsible. It is their future, and we have got to begin with the education. I am very strong on that type of approach, getting away from the technical thing that Dr. Boon just said. Those are the types of things of which we should be doing more.
Senator Milne: On the question of industry involvement, we have had a number of witnesses before the committee who have criticized Canadian industry for their lack of involvement in climate change issues. How would you, in your experience, characterize the involvement of Canadian industry, and what role do they play in the department's future plans? Will they be policy formers or policy takers?
Mr. Efford: Let me begin this way: After 20 years in politics, I do not think I have done anything that I have not been criticized for. It is common, and it is quite a thing to be critical. Industry is seen, by all of us, as the big bad guys who do not do enough. Is that a fair statement?
Senator Spivak: No.
Senator Milne: Not always, no.
Mr. Efford: People who own those industries are people like you and me, and they have families and a genuine interest in our country. Do they want to make money? Absolutely. They are very interested in climate change and the impact on the environment and in being more energy efficient. Number one, it saves them money. We have new technology partnering with industry and governments. Do they set the policy? No, we set the policy. Governments set the policy. Industry must work with governments.
I am an optimist by nature. I always have been. I see the good in everything. At times, if I have to take a pessimistic view and deal with it, then we will deal with it, whatever it takes.
Over all, I am pretty proud of what we are doing in Canada. We are not doing it alone. Governments cannot do it alone, provincially, federally or municipally. We must work with industry. Do we have a ways to go? Absolutely. I will not stand up and say that industry is not doing their part or does not want to do their part. Industry will do what they are reasonably expected to do. I will let Mr. Brown continue on a more technical approach, but the one thing I have said since I became the minister responsible for natural resources is that we have to develop and grow the economy of this country — it is a must — but not at the expense of the environment, nor should we be too environmentally controlled at the expense of industry. There must be a balance. The environment must be protected, and we must grow the economy.
We have over 1 million people working in natural resources. Do we want to shut the industries down and lay off 25, 30, 40, 50,000 people? That does not make sense. Industry must be responsible. Government sets the policies. We have to work with industry, and industry must work with governments.
Mr. Brown: I have spent the better part of the past two years talking to Canadian industry about implementing an emissions trading system to reduce emissions. Saying that Canadian industry is not very forward-thinking on this is kind of like saying, well, Canadians are not very forward-thinking. It is true of some of them, but there are other individuals who are very forward-thinking.
There is a group called the International Emissions Trading Association, a group of large multinationals from all over the world. The managing director of that company is Canadian and came from Ontario Power Generation. The past president is Canadian and came from TransAlta. Those companies were world pioneers in emissions trading. Dupont Canada put in place a world class chemical plant to reduce emissions. Companies like Ballard are really at the cutting edge of environmental technology. We certainly have a large number of companies that are very progressive on this issue. Others are rather less forward-thinking, but I think that is inevitable.
Mr. Efford: Could I ask a question? This is a test question. We are talking about Canadians and what we are doing. There are 22 bulbs up there. Are they energy efficient?
Senator Spivak: They should be.
Mr. Efford: They should be.
The Chairman: I am assured that they are.
Mr. Efford: That is part of the One-Tonne Challenge.
Senator Angus: My question relates to page 6 of your opening statement. I may have missed the answer, because I only joined the committee during this session of Parliament. You say:
Last March we announced support for Canada's first hydrogen highway that will run from Vancouver to Whistler in time for the 2010 Olympics.
I am quite curious about this highway. What is a hydrogen highway? What is the story there? It is not like the information highway, is it?
Mr. Efford: No.
Senator Angus: It sounds interesting.
Mr. Efford: Many vehicles will be used at those winter Olympics, and they must be able to obtain fuel.
Mr. Richard Davies, Manager, Office of Coordination and Technical Information, CanMet Energy Technology Centre, Energy Sector: It is basically a concept of a series of filling stations that would go from Vancouver up to Whistler. There is talk of including Victoria in that as well. It can include a mix of different types of filling stations, some producing hydrogen from electricity and maybe some from natural gas. We have not been restricted to industry's demands on that. Part of our support, the Prime Minister announced last March, was to hire a manager to work with industry to really set up the parameters of that project and to start some of the initial feasibility work for those stations. You can appreciate that when you are building an infrastructure, you are starting from scratch. There is a series of codes and standards work that needs to be done and getting all the loads for the stations. We also need vehicles for those stations so there are loads as well for the various stations. We are not actually building a road but we are building the stations along the road.
Senator Angus: Along the road that exists there now?
Mr. Efford: Yes.
Senator Angus: People will be able to drive their current gas-guzzling beasts up the road there. You should talk to them about that.
Mr. Efford: Some of the vehicles that will be used will be the alternative fuel vehicles of the future. Demonstration vehicles will be used. In order to do that, we will need filling stations to take care of those vehicles. Will our gas- guzzling vehicles still be used? Unfortunately, yes.
Senator Angus: There will be hybrid vehicles, so they might function on a blend of regular gas and ethanol, for example?
Mr. Davies: The hydrogen stations we are talking about would use either hydrogen fuel cell vehicles or hydrogen burned in natural gas.
Senator Angus: You buy Ballard Power; you do not buy ethanol stuff.
Mr. Davies: The vehicles will be running on hydrogen. Basically, the plan is that the vehicles, up to that period, would be showcase vehicles, especially given the worldwide attention.
Senator Spivak: But there are buses that run on hydrogen.
Mr. Efford: Some of those buses will be included.
Senator Spivak: They run in Chicago, do they not?
Mr. Davies: The Chicago field trials by Ballard has ended, but Ballard is selling buses to Europe now. I believe they have sold 20 or so.
Senator Spivak: The buses are in Japan and other places.
Mr. Davies: The plan would be to bring them to Vancouver and run a test fleet as well.
The Chairman: The hydrogen buses already run in Vancouver.
Mr. Davies: The buses have run in Vancouver, but they were a prototype bus. There is a full-cost bus. These are the next generation. These are pre-commercialization vehicles.
Mr. Anderson: It should be understood that we are quite far away from commercial hydrogen. This is all part of understanding the technology.
Senator Spivak: We understand that.
Mr. Anderson: There is technology with the filling stations; there is technology at the production of hydrogen.
Senator Angus: If you can pull it off, it is a super way to illustrate the science. You are talking, Minister, about communicating to Canadians, making them understand first how big the problem is, which people are starting to get. The younger generation understands it. It is guys like us who have to be born again. The government has announced the program. I did not know what it was but today I am hearing a bit about it. The whole world will be watching.
Mr. Efford: Absolutely.
Senator Angus: If we could have the slogan: Skip the bother, skip the fuss, take a hydrogen bus, and our Chairman will play.
The Chairman: Not only a gentleman but an artist.
I have a series of quickies, as they would have once been called on Reach for the Top, Minister and officials. You have complimented us kindly in your opening remarks about our report, which, as you know, certainly was not critical of the One-Tonne Challenge; in fact, it was hopeful of moving it along. We hope that the roiling of the waters has contributed to that. We hope it will make people at least more aware of what you do.
Do you believe that the information and coercion — if I can use that word — or moral suasion, will be, without financial incentives, enough to make the One-Tonne Challenge work?
Mr. Efford: Yes. In the case of the One-Tonne Challenge, different from the retrofitting of houses, we should go the education promotional route first. I think that will go a long way. If I am more energy efficient in the way I carry out my day-to-day life, I will make money and I will save money. Saving money is making money. I am serious. What I have done personally in my own home is amazing. I had to become Minister of Natural Resources before I did it, but that is where I learned how to do it.
The Chairman: We should rotate people very quickly through your office.
Mr. Efford: This is where the education comes in. Rick Mercer and Pierre Lebeau and the campaign they just started will go a long way. The more you talk about it, the more it will take on. We are investing millions of dollars into this nation-wide promotion program on the One-Tonne Challenge. There are other things that can be done. This is where the Minister of Finance can come into it. We are talking about new vehicles, fuel efficient vehicles. They cost more, so should there be tax incentives? Ontario believes strongly that there should be tax incentives. That is separate from the One-Tonne Challenge. That is into the larger scheme of things.
The Chairman: Dr. Boon, I suspect that we might be asking you to come and talk to us again. As has been said, we are after a study on water and we would be very anxious to learn more about the programs that already exist.
We have heard from the water people, and we are hearing, for example, from Dr. Schindler next week because we want to get different views. The nature of the question by Senator Christensen was: Do you have specific suggestions you can make to us? We have already determined that we are going to break our study of water into two main parts, east and west, because the situations are totally different in one than in the other, and into tiny, bite-sized bits. Do you have any suggestions as to where we should go first and what should be our first small, bitten off chunks of the question of water in the west, which is our first focus?
Mr. Boon: Alberta. The reason is that when you look on the map of North America at night and you see the lights, you can see that Alberta sticks up like a finger into the north, much farther than do the other provinces. That also means that Alberta is more populated in regions where other provinces are not. Also, Alberta has a number of industries that draw on water, and there is also a tourism industry for which water is important.
With respect to climate change, the southeastern part of Alberta would be affected very strongly by drought and, therefore, that would pose an additional burden. In addition, large portions of that province are already stressed for water, as we mentioned before.
The Chairman: Drought is one word, but desertification is another word, is it not?
Mr. Boon: It could be desertification depending on the severity of the drought.
The Chairman: Mr. Brown, you talked about trading. Trading is good, but emissions trading does not cut back any emissions. In fact, it allows emissions to continue, does it not?
Mr. Brown: That is not quite right. The logic of emissions trading is that the person who can reduce the emissions at lowest cost should do so. If he has cut back emissions by more than he is obligated to, he will have some that he can sell to someone else.
There is a particular issue with what has been called Russian hot air. The Russian hot air does not result in any emissions reductions but, in general, emissions trading certainly does result in emissions reductions.
The Chairman: I hope that it does.
Mr. Brown: Could I give you an example?
The Chairman: Please.
Mr. Brown: Probably the cheapest way in the world to reduce emissions is to reclaim methane from landfills in the Third World. You can go to Brazil, for example, and you can capture methane which, as you know, is a very potent greenhouse gas. I do not know what the latest figure is, but it is something in the order of a couple of bucks a ton. Suppose you have a Canadian company and it would cost them, let us say, $40 a ton to reduce emissions. Rather than spending the $40 a ton to reduce his emissions here, does it not make sense for him to spend the $2 a ton in Brazil? The reality is that the atmosphere does not care if you reduce in Canada or in Brazil.
The Chairman: That is true. There are no glass walls going to heaven.
Minister, what is happening with offshore drilling in the Pacific?
Mr. Efford: We are not there yet. Seriously, we received some time ago a Royal Society report. We just recently received the Priddle and the Cheryl Brooks reports, where she consulted with the Aboriginal communities. We are in the process of analyzing those reports. I will be talking to my cabinet colleagues in further detail in the near future in British Columbia. We will also be having further discussions with the Government of British Columbia, and sometime early in the New Year — I cannot put a date on it — I will be making a recommendation to the government on whether we keep the moratorium. There were four recommendations.
Mr. Anderson: Four options.
Mr. Efford: I should not say recommendations — four options. We will be looking at all of the options, and then I will be making a recommendation to government in the New Year.
The Chairman: Kyoto is interesting and sort of a moving target, it seems. Mr. Anderson has had things to say about it.
Most Canadians, I think, do not understand that even if we were to achieve Kyoto in spades, it is just the first, very tiny step in what we need to do with respect to changing our lives and the way we deal with things. Will we tell people that sometime?
Mr. Efford: We would have to go back to what we have referenced in a number of the points we have made between ourselves this evening, namely education, and talk more about what we are doing and need to do. I have said a couple of times already we are guilty as Canadians or as a government because we are not talking enough about what we are doing. The more we talk about it, the more we promote, and the more we educate, the more Canadians will understand it.
You are absolutely right: If you conducted a poll and you asked average Canadians what they know about the Kyoto file, I suspect they would say, like you and me, very little. When you are in the day-to-day lives of people, education, promotion and ideas, the One-Tonne Challenge is a big step towards dealing with the climate change part of the Kyoto file, but there are many other areas where we can do things like that. We are doing that, by the way. The One-Tonne Challenge is only one small relevant part of the Kyoto file.
The Chairman: Do you plan upon regulations with respect to what we traditionally call the ``large emitters''?
Mr. Efford: The LFEs, yes. Are you asking whether we are contemplating mandatory regulation?
The Chairman: Yes.
Mr. Efford: My focus is to work with industry to get MOUs signed with industry stakeholders. Once we get those MOUs signed, will we need some backstop legislation to ensure that the companies do it? Yes, we will.
The Chairman: Therefore, if it is necessary, but not necessarily.
Mr. Efford: I would not say ``not necessarily.'' I would say once we get the agreements with industry. We are looking at an approach with which I will go to cabinet and have some discussion on. No final decision has been made. I have had some discussions with my colleague Minister Dion. We will do whatever is necessary to move the files forward, and one of the files that we have some good results from is the auto industry.
Minister Dion and I met with the auto industry early in November, and we went there. We were both very clear and left a very clear message with the auto industry that we want to see results, and we want an early meeting before Christmas. They have come back to us and are requesting a meeting. They know we are serious. We believe we can do it with that kind of approach.
Senator Spivak: I know you stress education and so forth. I believe that that is the foundation. You must have education. When you look at the hole in the ozone, if we had waited for education, we would have had serious consequences. Everybody is talking about a lack of urgency. The Green Budget Coalition has a number of things, tax incentives and so forth, that the Department of Finance can institute, but none of that has happened yet. That is not a question of costing money, or very little of what they have suggested, according to them, has really happened. We are talking about tax incentives, for example, taxing inefficiency, taxing polluting and incentives to the other side. That is not something that necessarily costs money. It is forgone tax expenditures, I suppose.
Is part of your agenda to hasten these green budget kinds of things?
Mr. Efford: First, I do not agree with some of the statements being made this evening that Canadians, our governments — our people — do not see the urgency. I tell you seriously, we all see the urgency. Can some files be moved faster than others? Dr. Boon said clearly that his file on gas hydrates will take some time.
Government is doing many things in moving the files on an urgent matter and investing millions and billions of dollars in many different files. We are not talking about that enough, but maybe we should convey to your committee a detailed list of exactly what the government is doing.
When it comes to incentives, again I think I have mentioned the One-Tonne Challenge a number of times, but I must use it again as an example. I am something like Senator Adams, from the North. I do not have an extremely large home in Newfoundland, but my heating bill for my home averages, from November to the end of May, $600 a month.
Senator Spivak: Wow!
Mr. Efford: If I save 10 per cent, that is $60 a month.
Senator Christensen: You need a retrofit.
Mr. Efford: Believe me, I got that done.
Senator Spivak: High efficiency furnaces.
Mr. Efford: That is an incentive in itself. I have a four-wheel drive. That lease is up in a few months. I will not be getting another one because of the high cost of gas. There are many things we can do as Canadians. We believe in those incentives. A penny saved is a penny earned. You cannot give tax incentives on everything.
Let me tell you, I have said many times that Canada is the greatest country in the whole world. Look at our health care. We do not have to pay for health care in this country. When you go to the United States, where do we get the money to pay for that? We get it through taxes from our people. There are many incentives and ways to accomplish them.
Senator Kenny: Regarding offshore oil on the west coast, what is your experience, minister, in terms of problems with offshore drilling in Canada? I know that there has been a spill recently on the east coast. Generally speaking, the Beaufort and the east coast has been pretty safe.
Mr. Efford: Absolutely. I have been a strong promoter and advocate for the offshore oil and gas drilling off Nova Scotia and Newfoundland. I was Minister of Fisheries in Newfoundland and Labrador and worked cooperatively with the fishermen's union and oil and gas industry to make it happen. As a result, since we started producing oil on the Grand Banks of Newfoundland, a month ago Hibernia reached 5 million barrels of oil without a cupful spilled. Unfortunately, we had a problem with Terra Nova last week. However, I look at it this way: How many oil tankers have travelled across Canada and had an accident — spilled oil or chemicals or whatever? There is no such thing as a perfect situation.
The oil and gas industry today, with the technology that surrounds us — and it has been proven worldwide — is very safe; as safe as any other industry, whether it is on land or on the ocean. I will not quit on the oil and gas industry because we had a small spill just recently in Newfoundland, and which, when we look at it, maybe could have been preventable. With what we have done to date, that is the first one.
There are many opportunities. It is resources that we need; it grows the economy, but it has to be very environmentally friendly and we have to put every means in place to lessen the risk.
Senator Kenny: That is a really good answer because you got to my next question before I got to it. We have many vessels coming down from Alaska that are carrying oil. There was a significant spill in Long Beach a little over a decade ago. We had a spill in Vancouver harbour about the same time. How do you assess the risk of bringing oil into the country by ship versus us producing it ourselves?
Mr. Efford: Actually, it is interesting that you ask that question. Yesterday I did an interview with a local radio station back in Newfoundland because I am getting really concerned about the number of tankers that are coming into port in Newfoundland, plus the number of ships that bypass Newfoundland and go up to the Great Lakes. Bill C-15, which is now before the House for a vote, increases the minimum and maximum fines against ships dumping from their bilges. That is one of the biggest problems. We have lost something like 300,000 seabirds in the last decade off Newfoundland and Labrador. One bird is criminal, but that number takes it beyond all imagination.
The other thing for North America and a lot of the free world is that we have to be stricter on the types of vessels, the single hull versus the double-hull vessels, and strengthen the hulls. Those types of regulations must be brought in. You take an oil tanker carrying a million barrels — am I right when I say a million barrels of oil — can you imagine that tanker coming into one of the communities in one of the bays and hitting an ice storm or reef and cracking in two?
The one in Spain last year should be a lesson for us all to learn. There is a risk and there always will be, whether it is on land or sea. It is up to governments and agencies of governments to minimize the risk and enforce the regulations to lessen the risk of those things happening.
Senator Kenny: Minister, our understanding is that double-hull regulations are in place and they are coming forward; that that in fact is happening, is that not so?
Mr. Efford: That is correct.
Senator Kenny: This committee has received evidence in the past that fishing in the Gulf of Mexico was enhanced as a result of offshore drilling. Do you have any evidence to suggest that that is the case off the East Coast?
Mr. Efford: Fishing was enhanced because of offshore drilling?
Senator Kenny: Exactly. The fish liked the habitat better.
Mr. Efford: I will confess I have never heard that statement. I have never read it.
Senator Kenny: Mr. Anderson, you must have an answer.
Mr. Anderson: I am not the expert on this, but there is a bit of an artificial reef effect. In some cases, when they finish with offshore drill rigs, they tip them over and leave them there because they provide a habitat. Whether, on balance, people would say it is a positive or a negative for the whole operation, I do not know.
Senator Kenny: If you do not have spills —
Mr. Anderson: Absolutely.
Senator Kenny: Why do you say whether on balance? Why do you not know?
Mr. Anderson: I have never seen a full-blown study. This is anecdotal for me, really.
Senator Kenny: It seems that it is something that is pertinent to pursuing offshore drilling off the West Coast. If you can make a case that it will enhance the life of fishermen and give them a better opportunity to protect their livelihood, you might find oil men and fishermen enjoying a profitable existence.
Mr. Efford: We work very well with the oil industry off Newfoundland and Labrador — when I say ``we,'' I mean the fishing industry, because I have many family members who are in the fishing industry. I am hoping some of my people in the back are taking notes, but I would not mind searching that out. I can tell you there is a strange thing happening on the Grand Banks of Newfoundland because the cod stocks are refurbishing at a faster pace than we expected, considering the predator-prey relationship.
In the bays where I live, in Trinity and Conception Bay and those bays, I have been there all of my life and in the last 20-25 years, we have seen more fish in the last year than I have seen in the last 25 years at any one time. There is nature and the environment, and something is changing. There is something good happening.
Senator Kenny: You said the number of fish is going up?
Mr. Efford: Increasing stocks.
Senator Kenny: Do you attribute that to Terra Nova?
Mr. Efford: No, I do not.
Senator Milne: I was going to suggest salmon farms.
The Chairman: Minister and officials, thank you very much. You have been very generous with your time. There are long lists of questions that we have not asked you. When we come across them in the course of our next deliberations, I hope that you will permit us to contact your department and that you will answer our questions when and if you can. I hope that you will permit us, Minister, to ask some of your officials to come back and see us again on specific subjects.
Mr. Efford: Thank you very much, senators. I want to thank all the officials for sitting in the background, and Dr. Boon for running back and forth to the table.
Let me take this opportunity on behalf of my staff and myself — I may see some of the senators, maybe not all of you — to wish you a very merry Christmas and a happy New Year. Like I told my staff last year, and I will suggest the same thing this year, we have worked hard all year and now, let us take some time and enjoy our families and Christmas and celebrate.
The Chairman: Thank you.
The committee adjourned.