Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 15 - Evidence - June 7, 2005
OTTAWA, Tuesday, June 7, 2005
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 5:10 p.m. to examine and report on emerging issues related to its mandate.
Senator Tommy Banks (Chairman) in the chair.
[English]
The Chairman: I am very pleased to welcome our guests, Mr. Alex Himelfarb and Mr. Simon Kennedy, who are here to tell us about the business end of the government application of matters having to do with sustainable development respecting a report about which I have just apprised Mr. Himelfarb. We would be pleased if you would give your opening statement and then entertain questions.
Mr. Alex Himelfarb, Clerk of the Privy Council and Secretary to the Cabinet, Privy Council Office: Thank you for the invitation. I am accompanied by somebody who actually knows something about environment. I like to bring one person who knows things when I appear.
I will be brief in my introductory comments. I am interested in your questions. I have been given a fair heads-up by the chair about the impending disaster for government noted by your report and the sense that we have not moved sticks and carrots quickly or coherently enough to be confident that real change will occur. The report is perhaps timely, because I honestly believe that the government is beginning to turn the corner in some areas, and I will speak to some of those areas today.
I believe government's efforts are significant in this. It began with the last two Speeches from the Throne in which the government spoke to ensuring that sustainable development was fully integrated in decision making. That is more than the current directive in force that environmental assessment be a part of every memorandum to cabinet, where relevant. Government has invested in the kinds of indicators that measure air quality, water quality and biodiversity. We cannot only track progress but also force it, because there is a determination to have that information out and available to the public.
Those indicators would start to play into our major policy process, not only on discreet decisions such as memoranda to cabinet, but also on strategic directions. Government has made that commitment. We realize this, and the Commissioner of the Environment and Sustainable Development has made it clear that to do this we need a sustainable development plan that has some edge to it and sets out not only the priorities but also some of the means, incentives and disincentives that would allow us to make progress.
Prime Minister Martin established a cabinet committee chaired by the Minister of Industry, with key ministers represented, to develop just such a framework, which they have done. We have been consulting Ms. Gélinas on the framework that we will then use to develop a concrete, sustainable development plan. I am from PCO so allow me to talk about process.
In support of that, we have launched a committee of deputy ministers chaired by the Deputy Minister of Environment to drive a truly horizontal approach to pursue the framework, deliver on the plan, and look at an integrated approach to environmental science around water, air and greenhouse gas emissions. We are beginning to pull our act together with a science-based approach and to rationalize and improve our regulatory approach. That committee is up and running and making progress.
The first concrete product that has emerged from this is the green plan for climate change; there will be other green plans. This set of plans for climate change had to be a priority because we were falling significantly behind in our international commitments. The development of the green plan helped to shape the budget, which is greener than we have had for quite some time. The plan takes it to the next step in creating pressure on future budgets because the resource requirements to make that plan real are greater than the resources allocated. I will speak to the key elements of that plan.
As I said, I have no substantive expertise but the elements suggest a strategic direction. In both the budget and the plan we have the most ambitious use of market or fiscal instruments that Canada has ever undertaken. That is true for specific fiscal incentives for energy alternatives and is CCA for environmental purposes, explicitly for technology investments in environmental sustainability. This is the first time we have created such a significant set of tax measures. I would guess that it is the most significant set that Canada has ever undertaken. I am not an expert in measures but the notion that we are using market and fiscal measures makes a huge statement.
I would add that we have also asked the round table on the environment to look at fee-bates, not only for environmentally sound items but also for environmentally unsound products. The idea there is to offer sticks and carrots. Fee-bates are good because they contain incentives and disincentives. The round table on the environment has been asked to advise the government on the use of fee-bates, particularly in the auto sector. The Department of Finance published a background document as part of the budget that shows the framework for going forward on the continued use of fiscal measures for environmental purposes. It has launched a national dialogue for the first time in Canada.
The first big element is truly an ambitious set of fiscal incentives. The program of initiatives for wind power and other energy alternatives has been launched. There are a number of refit issues such that we are building on past successes and taking them further. The package is more impressive than the media coverage has shown. It will take us to new places and is a shift in paradigm because it is a commitment to market forces for environmental purposes.
The second big element is the climate fund, which is also a market-based approach because it includes buying credits. People will actually sell their emission reductions to get the investments up front that they need to achieve those emission reductions. The climate fund, which has not been designed, will have $1 billion. The plan says that as it is approved and government makes it work, emissions will have to be reduced in order to obtain the money. That is the way the plan works. As it is approved it will grow and grow significantly, I would suggest by billions. The focus here is firms.
The third big element is a partnership fund with the provinces. Although we did not do our targets based on provinces, we know that we will not achieve this without such partnerships. We have a framework to develop MOUs with the provinces and some money set aside so that we can step up to the table to contribute to real, measurable emission reductions as well as other kinds of demonstration projects that might have relevance for other parts of Canada. There will likely be a preference for things such as east-west transmission from Manitoba and Ontario, where multiple provinces and all Canadians benefit. Canada's new railway might well be an infrastructure of sustainable energy. This third element will be the basis for new partnerships with the provinces.
The fourth big element is the many programs. We have some at the Department of Natural Resources and a few at the Department of Environment, some of which work quite well and some less well. We have committed $2 billion to review those programs and move them from less functioning to better functioning. That includes not only how we produce but how we consume and live our daily lives. The One-tonne Challenge and many individual consumer programs are included in this as well as production elements. We are rationalizing that, and one of the jobs of this new cabinet committee is to ensure that every dollar of this will go toward something that works and that we keep moving money from what works less well to what works better.
The final element is the new partnership with cities and communities that will be based on a commitment to sustainability. We are talking about making the gas tax transfer not only as a fiscal instrument but also to create more liveable urban communities. Each city that receives these resources has to do a sustainability plan. It is meant to be partly a culture shift, and the incentive is a lot of money. Getting the money is the carrot; losing the money is the stick.
The idea is that every community in Canada will sooner or later prepare a sustainability plan. This will not happen in two weeks, but B.C. is showing leadership here. This is pretty exciting. That is just the climate change plan, but you see the direction in which we are going. There is a real commitment to market instruments.
There are two pieces that are not about expenditures that would add to this. One piece is the new compliance deal with the auto sector, which serves air, generally, much more than climate change. The other piece is the heavy emitters, which we call LFEs, which are somewhat controversial. The industry thinks we went too far and the environmentalists think we did not go far enough. However, we built a baseline upon which to grow.
In the auto sector it is a voluntary compliance and we have absolutely preserved the right to regulate as required. It is very controversial to use compliance for voluntary measures, but we have a baseline and we have the auto sector committed to reporting on a regular basis so that we can track whether this compliance approach works. We upped the ante a bit to justify compliance. If it does not work, they know that they will be regulated.
On the LFEs, we will go to a regulatory approach. You will have heard about some ambiguity in terms of budget controversy and the exact legislative framework we may use, but it is not ambiguous. We will legislate; that is not up for discussion. Frankly, they have bought in; they know that this is the reality.
As I said, we have a baseline for those two sectors to make truly transformative change. Obviously, we could have gone faster and further, but we have a very good base upon which to build.
I described the climate change plan not because it is the beginning and end of what we are doing, but because it gives you a good feeling of the kinds of instruments we have: investment in technology, market incentives, disincentives and a regulatory approach wherever necessary.
The plan also includes real commitments to public education and information, knowing that a culture change will be built in the schools, the workplace and community organizations. We are looking to the long term. We are looking for a true shift to sustainability in how we produce, consume and live our lives.
You have read a lot of articles about whether we will meet our short-term targets on climate change. It is our intention to do so.
Ours is the most detailed plan, save France's, in the world. Most countries avoid the counting game. We have not because we know how numbers discipline. We know that as we fall behind we will pay a price, and that is a good discipline. Our plan is quite detailed. We will have a nature plan with sustainable parks and wilderness places, and we will roll out a much more committed strategy to sustainable development that will really take hold.
In previous reports, Ms. Gélinas has often dealt with the role of PCO. There is no question that to do this you need a horizontal, coherent and integrated approach. Every department must be involved. The Department of Public Works and Government Services is looking seriously at greening procurement and property management. That will be huge. Every department matters. DIAND is looking seriously at water on reserves. There is no department that does not have federal water or land responsibilities. Every property manager and procurer of materials should be informed by sustainability.
In PCO we have not built a secretariat as some hoped we would. That is because one of the key roles of PCO, apart from coherence, is to challenge policies as they are formulated. There is a real conflict when we are the driver of the policy as well as the challenger. That is why we created this other committee. It is not because we have no interest or responsibility for leadership in this area. We absolutely do.
We are the support to the ministerial committee on sustainable development. We structure the deputies committee and bring them in to ensure that progress is being made, and we challenge. We create the process for memoranda to cabinet and require that environmental considerations are built into that. Our role is not exactly the role Ms. Gélinas recommended, but I think she would say that, with the framework and the committee structure, we are making progress, although perhaps at a rate significantly slower than she would have hoped.
Senator Angus: Thank you very much, Mr. Himelfarb and Mr. Kennedy, for your appearance here this evening. I have been a student of government in Canada for many years. Each day as a senator is a new revelation to me on how this mammoth operation works. I see you as the general manager of one of the biggest businesses in Canada. Your responsibilities are awesome and, from what I can see, you carry them out very well, but that is from quite a distant view.
Mr. Himelfarb: I like your view a lot.
Senator Angus: When the chairman told me you would be appearing before the committee tonight I was pleased, because what we are doing to our planet is of great concern to everyone.
Listening to Commissioner Gélinas and then listening to you talk about her is almost like being on two different planets. I know that you are trying to do your best with the tools available, but it seems to me that the Commissioner of the Environment and Sustainable Development is not at all happy with the way things are going. She believes that we have all the tools of the trade — you referred to technology, market measures and the like — but we are not using them.
The chairman indicated that we are about to release a report. We are very anxious to help you in any way we can to do the things that the commissioner would like you to do. What can we do to give you more power to bring in these measures? What you have said sounds great, but I do not see evidence of results. Is there something we can say in our report that would help you, in the highly professional civil service that you direct, to urge the government to provide you with what you need?
You have talked about the budget and about the greenest of the green. Frankly, I do not see it. The witnesses who come here tell us that it is not there. The commissioner tells us that it is not there. The former Minister of the Environment tells us, and tells the public, that he is so frustrated he cannot get the job done. This is not a real question; yet I want you to comment.
Mr. Himelfarb: It is a real question and I take your comments seriously. I will not speak for Ms. Gélinas; it would not be appropriate. I have a huge regard for the role she plays. I think she has been an instrument for positive change. Do not take anything I say as presuming that she is satisfied. I recognize that her level of dissatisfaction has been a positive thing.
Senator Angus: We would like to quadruple her budget and give her an army of policemen.
Mr. Himelfarb: I have no views on these things as a public servant, but she is a tremendously positive asset.
I am surprised that the media have not covered more clearly how profoundly green the budget is. The budget is not very old; it is recent. The budget is a statement of commitment. The climate fund and the agency that will run it do not exist yet. Money is set aside in the budget, but the body does not exist yet. The partnership fund set aside in the budget has not been distributed because the MOUs are not in place. We are at a key point.
Senator Angus: There are good intentions.
Mr. Himelfarb: It is more than that. There is money in the bank. Money is actually set aside and commitments have been made.
Senator Angus: Of which budget are we speaking? Is thisBill C-48 or Bill C-43?
Mr. Himelfarb: It is money almost in the bank.
Senator Angus: Is it Mr. Layton's budget?
Mr. Himelfarb: It is the budget package, as I think of it.
Senator Buchanan: You will not be caught on that one, will you?
Senator Angus: We will get the straight goods. This man is a straight shooter.
Mr. Himelfarb: The commitments are in the budget. The plan goes further and specifies what they will look like. It sets the principles to guide us. However, it is a plan and people are hungry for action. People have heard this previously, but we have never before had this level of financial commitment. I would argue that we now have the leadership. Minister Dion was here and said that there is not a problem with leadership. We now have a cabinet committee driving this agenda and a deputies committee driving this agenda, but we have work to do that is largely cultural. Money will be spent on these things. Those commitments are made, assuming political things over which we have no control. The plan is real and will be revised annually because these things have to be ever greened. It is more ambitious than anything we have ever undertaken.
The history of disappointment has made people cautious.
Senator Angus: It has made people cynical.
Mr. Himelfarb: I hope not.
Senator Angus: With regard to Kyoto targets, you have talked about this or that. The conventional wisdom, as conveyed to us at least, is that it is unrealistic to think Canada could meet its commitments under the Kyoto agreement. However, at least we are on board and I can see that a little bit of good is better than all bad.
I was interested in your concept of an oversight secretariat in your office that will hold all these different elements of government to account on environmental issues, as opposed to having a secretariat. Rather, you say you prefer to play a challenge function.
I like the idea. Will it have teeth? You have so many other things on your plate. It would be music to our ears if we could go away tonight believing that that challenge function will hold them to account, including the Department of Finance.
Mr. Himelfarb: That is a fair question. I could give you another promise, saying of course we will.
Let me tell you the concrete steps that we have taken. We have beefed up our expertise in the centre. We do not talk much about it, but we have gone to the voluntary sector, to the Suzuki Foundation, and we have beefed up. Our challenge is substantive, not process. We have more expertise than we have had, not to pretend to be the policy centre but to be effective in our challenge. As part of it, we have to have performance management agreements that actually affect salaries. We have done it already with key departments. We have to go beyond the key departments to start building other departments into this, I know that. That is concrete.
I can tell you that the only public policy my kids care about is green and global. I believe that if we do not do it, we will lose the planet, obviously, and Canadians in the short term as well. Canadians are ahead of us on this; they see it.
Do not mistake how much we have done. There is CEPA, species-at-risk legislation, the enforcement regimes and the greater investment in enforcement. I know that much of what I have said is process waiting for product. We have more in place right now with the investment, the legislative framework and the key people driving change than I think we have had since I have been in government.
Senator Angus: To go back to my first question, could we do or say anything that would help sharpen the teeth and make the challengers more challenging?
Mr. Himelfarb: It is interesting. I will do an unpaid, self-serving political announcement. What follows will be entirely self-serving; I give you full warning.
I meet with the various environmental groups and people — Elizabeth May, the Sierra Club and Suzuki — all the time because they are a huge part of keeping us honest and moving forward. I always tell them to recognize the progress and to urge us forward. Do not pretend away the progress. It makes it look as though all the investment was for nothing.
Senator Angus: That could apply to us as well.
Mr. Himelfarb: I would not be presumptuous.
The Chairman: I will ask a question before proceeding to others on precisely this point. Mr. Himelfarb, it is microcosmic and anecdotal, but I would describe some of the reasons behind our misgivings about this and about our general attitude as it being promises, promises, promises.
This week I met, on another matter entirely, the assistant deputy minister directly in charge of spending a significant amount of money for the government. Incidental to the other matters that are going on, I asked about refitting and taking green things into account in new capital undertakings that are to be made. The answer I got, which was extremely proficient, full and clear was, ``Well, we will begin to look at that sometime, but there are other considerations that get in the way sometimes and we will not be able to do all that.'' I got quite specific. I got down to light bulbs, windows, ground source heat pumps and cogeneration — all those things that can be looked at. I made the point that the government is asking industry to get on board this effort and to deal with questions having to do with climate change and, in particular, with respect to Kyoto, greenhouse gas emissions and their reduction, but we can hardly ask others to do that if we do not in some large measure lead the parade and show by example. We specifically cannot do that if we have egregious examples of very large landlords, which, as you said, many government departments are, who are demonstrably not doing those things, yet at the same time we are out spending millions of dollars on television commercials urging people to do it. We are looking at a continually smaller, ever-decreasing distance between promise and action, but they still have not connected. That is, in a more rude way, what Senator Angus was getting at.
Mr. Himelfarb: I could go through the government and give you positive anecdotes, anecdotes about a Deputy Minister of Finance who gets it and is putting in fiscal measures and actually thinks that is the way to drive policy. The Deputy Minister of Environment drives a Prius, however painful that may be.
The Chairman: That is setting a good example.
Mr. Himelfarb: I can give you repeated examples of people converting their fuel sources. Unfortunately, I can give you examples exactly as you gave me. The question is to make the culture or paradigm shift. This sounds cliché, but we have enough critical mass that you now are an outlier if you are doing the wrong thing.
Senator Angus: One person came in and pointed up to these lights and gave us a number of ideas of how we could reduce consumption. That could be done in all these rooms.
Mr. Himelfarb: Today I met with the Deputy Minister of Public Works and Government Services, effectively our biggest landlord, and a real estate leader from the private sector to put in place a plan to manage our real property holdings in a way that is better than what we are asking from the private sector. In fact, we lose credibility if we are not leading by example. I would say the same thing regarding the Green Procurement Initiative, where green and heritage preservation is built into our procurement real property management.
We have a ways to go, and yes, that is yet another commitment, but money has been put aside. Our shareholders will not let us get away with less, and it is the right thing to do. I can give you more anecdotes that are positive than I could have a while ago.
If I may make one comment, Mr. Kennedy has just mademe aware of another promise. Our climate change plancommits the federal government to cut its emissions by one third, not 8 per cent.
The Chairman: Is that the present figure?
Senator Angus: That is emissions by when?
Senator Cochrane: By what year?
Mr. Kennedy: During the Kyoto period, so during 2008-12.
Senator Cochrane: Of the five elements you gave us — the tax measures, the climate fund, the partnership with provinces, the programs on the environment, the partnership with cities and so on — which ones are not designed? You say some of them are not designed yet. You mentioned the climate fund is not designed yet.
Mr. Himelfarb: The partnership fund is not designed yet.
Senator Cochrane: That is another one. That is number two. The first one is designed already: the tax measures and fiscal instruments.
Mr. Himelfarb: The big programs are designed, but we are redesigning. They are going out and the money is being spent, but we are constantly renewing them. The ones that do not work are being shifted. We are redesigning but we are not waiting for perfect design to move.
Senator Cochrane: Have you had partnership with the provinces?
Mr. Himelfarb: We have MOUs in place, but they were somewhat generic because our plans were generic. Now that we have a concrete plan, we are updating them. We are talking to Ontario, Nova Scotia, Manitoba, to the ones eager to get on board who have clarity of vision of how they would like to move, and the take-up is huge.
Senator Cochrane: Are all the provinces agreeable to this?
Mr. Himelfarb: I anticipate no difficulty.
Senator Cochrane: What about the environment programs? Do you have those designed?
Mr. Himelfarb: By the way, with some provinces we probably talk more about climate change than Kyoto. We will have to adapt our thinking, but we can make progress with every province. There is not a provincial government that is not trying to do something smart about climate change.
Senator Cochrane: What about cities and communities?
Mr. Himelfarb: Again, in the new deal for cities, we have worked through the provinces and are requiring sustainable plans from the cities and expecting that key to those plans will be environmental progress, climate change progress. As well, in the budget package there is a focus on transit as the major infrastructural investment, as a direct and quantifiable way of reducing emissions in the large and gateway cities.
Senator Cochrane: What about cleaning up rivers?
Mr. Himelfarb: We have two very significant programs, one on contaminated water and land sites.
Senator Cochrane: You have that in place already, do you?
Mr. Himelfarb: It was announced a couple of budgets ago and is being implemented. It includes federal lands for which we have direct responsibility and, therefore, liability, but it also includes Sydney Tar Ponds and a couple of uranium fields in the north that are polluting the waters, where the liability is indirect but we know the urgency is huge. That is in place. The other big program in place and being implemented is cleaning up the water on reserves.
Senator Cochrane: Have you had any assessments done on anything you have done up to this point?
Mr. Himelfarb: It is premature. This has only been in place for a few years, but all these initiatives require review. I am not sure when the next review will be, but all of them require that.
Senator Cochrane: Do you not have a time frame for review?
Mr. Himelfarb: We do. I do not have that with me. I can get back to the committee with that information. There are cyclical reviews.
Senator Cochrane: For all of the five subcategories?
Mr. Himelfarb: That is correct.
The Chairman: We would be grateful if you could provide that to the clerk.
Senator Cochrane: Now that the government has created a cabinet committee on sustainable development, does the Privy Council Office screen proposals that are put forward to cabinet in order to ensure that they are consistent with Canada's sustainable development objectives?
Mr. Himelfarb: That is built into our standing orders. We are required to do that.
Senator Cochrane: Your office does that?
Mr. Himelfarb: Yes.
Senator Cochrane: Does your office screen everything that comes from every department?
Mr. Himelfarb: Yes.
Senator Cochrane: Another concern I have is in regard to departments. What is there to bring a greater coordination and cooperation among the federal departments on this important issue?
Mr. Himelfarb: The key to that is this new Environment and Sustainable Development Coordinating Committee led by the Deputy Minister of Environment. I just point out that the act that established the Department of Environment mandates the department to coordinate policies and activities regarding the environment on behalf of the government. We have now given them a mandate from PCO. It is a mandated deputies committee to coordinate on behalf of the government. We pull them in on a regular basis to PCO to hear how they are doing.
Senator Cochrane: Every department is mandated within their jurisdiction to ensure they will be consistent with Canada's sustainable development objectives; is that correct?
Mr. Himelfarb: Yes.
Senator Cochrane: Every single department?
Mr. Himelfarb: Yes. We have work to do to make that real. Right now we have standing orders to do an environmental assessment for any memorandum of cabinet. We have to review that, and it is reviewed as part of the normal policy process. The answer is yes. I think some would say we have to do a significant amount more to make that specific and give it teeth.
Senator Cochrane: How long do you think that will take?
Mr. Himelfarb: Very quickly, we have the framework that has been approved by cabinet. We have to do the strategy. We want to work with the Commissioner of the Environment and Sustainable Development to ensure that everybody is in the tent. We are very close.
Senator Cochrane: Very close is how close? Can you be specific?
Mr. Himelfarb: I will try to get back to you with a time frame on this.
Senator Cochrane: We would like to have a time frame.
Mr. Himelfarb: We will try to give you a timetable.
Senator Cochrane: Have you taken steps, Mr. Himelfarb, to ensure that senior public servants in keen, sustainable development portfolios remain long enough to complete important initiatives such as the implementation of the Kyoto Protocol? It is important that public servants stay in their positions long enough to finish the project they started. At times, they move from department to department and never have the same objective. I would like to have them in place long enough to complete a project, especially when it comes to such things as meeting our commitment to the Kyoto Protocol and implementing it.
Mr. Himelfarb: The professional, non-partisan public service of which you speak is proud of the continuity it provides in times of change. It is not entirely in control of some of the variables that you mention, including that the Charter of Rights and Freedoms applies to deputy ministers who choose to retire. Yes, continuity is hugely important, and there is a significant amount of continuity. One of the great contributions of a professional, non-partisan public service is to provide that continuity. I take your point that that continuity matters.
Senator Milne: Mr. Himelfarb, when you speak about sustainable development of environmental matters to the cabinet committee on environmental matters, I have a problem with the fact that it is an ad hoc committee. I believe that sends out the message that this is not an important issue because an ad hoc committee will disappear one day. I am also concerned about the makeup of that committee because the most important department, as far as sustainable development is concerned, is not the Department of Environment but rather the Department of Finance, and that minister is not on that committee. The Minister of Finance should be on that committee and perhaps should chair that committee. It is a big concern. This visible message could be sent out but that is not being done.
You spoke about the committee of deputy ministers. How do you select which DMs from which department? Is there one deputy minister in each department who is mandated with sustainable development?
Mr. Himelfarb: There is only one deputy minister per department.
Senator Milne: I am thinking of Minister Emerson's Department of Industry, Library and Archives Canada, Census of Canada, and Stats Canada.
Mr. Himelfarb: There is one deputy minister.
Senator Milne: These deputy ministers do not have the same status. I thought they did have the same status.
Mr. Himelfarb: No.
Senator Milne: I am learning. When they come together, how can you measure progress? Are you using your review process to measure the fact that they are actually moving their departments forward, or is it still too early?
Mr. Himelfarb: We have started, though I cannot pretend it is hugely objective because we do not have good baseline data. We have invested in Stats Canada to develop strong indicators that were recommended to us by the round table. One of the mandates of the cabinet committee is to develop an accountability framework that would allow us to measure progress more precisely and with more rigour. That is a huge outcome. There is only one deputy minister per department. I understand what you are saying about these agency heads, but each deputy minister has portfolio responsibilities. They are in place to represent and communicate back to those agencies so that they have a collective voice and receive messages.
In terms of the structure and timing of the committee, I understand that is an important question. The mandate of the committee was to develop the framework, which is done, and the strategy that the commissioner has demanded of us and has said is overdue, which we will drive, and the framework for accountability and any recommendations they have about machinery going forward, including cabinet machinery. When they report, they will be answering that question about the long term. We wanted a small, tight committee; the Minister of Finance is an ex officio member.
Senator Milne: It is an ad hoc committee.
Mr. Himelfarb: It is a small, tight committee that actually produces a product in a timely way, does not run a long process, and produces a framework and a strategy so that we can measure progress and any frameworks on machinery, including cabinet processes, to ensure that we achieve all the goals that we have set for ourselves.
Senator Milne: I wish you luck. It still sounds to me as though you are keeping your fingers crossed.
Mr. Himelfarb: I do not think so. You have to work to have a plan. We could work willy-nilly and do 212 actions but they have to be coordinated and systematic to change culture. I do not think this is a case of closing our eyes and hoping for the best. This is moving forward and making the best effort.
Senator Milne: My concerns are centred mainly on the Department of Finance and what kind of progress it might make on reorienting the tax system to support sustainable development goals. You spoke to fee-bates in the auto sector. Are they looking seriously at that? It has been successful in areas of the United States where people are now buying environmentally friendly autos.
Mr. Himelfarb: A section in the budget describes the fee-bates issue and commits to reviewing it for Canada's purposes. The private sector round table has been mandated by the Prime Minister to make recommendations to the government before the next budget. That is real and the tax measures in the budget are real. I do not know why there is not greater visibility.
The Commissioner of the Environment and Sustainable Development has been very frustrated and has made known to us Department of Finance reluctance to use fiscal measures to achieve environmental goals. I know that, and let me be the first/last to defend the Department of Finance. They have taken moves but whether they are sufficient I will leave to the committee to review and determine. We should acknowledge that this is the first significant attempt by Canada to follow the OEC's recommendations about using ``carrots and sticks'' to make changes happen. Is it everything that the environmentalists want? Is it everything that we will do? No, but it is a beginning. We are not closing our eyes and hoping that it gets done.
Senator Milne: Mr. Himelfarb, as Clerk of the Privy Council, what is your role in ensuring that your fiscal policy is consistent with sustainable development?
Mr. Himelfarb: I play a challenge role, similar to PCO. My role is to advise the Prime Minister on the coherence of the policy agenda. Part of that coherence is whether we are using fiscal measures to achieve the great national objectives, the environment being one. We do it to help people with caregiving and with access to education. We use fiscal incentives for learning and family policy as well as for great national purposes.
It is clear that one of the great national purposes that will join this country going forward is the environment and sustainable development, and it would be my job to advise on the extent to which we are making progress on coherence in our use of fiscal instruments.
Senator Milne: With that and Kyoto objectives in mind, do you think that sustainability within a generation is a feasible objective for Canada? Our international reputation in this area is falling. Can we rebuild it?
Mr. Himelfarb: I believe that we can be a leader in environmental sustainable development within a generation. I can see it in the Oceans Action Plan which was also funded in the budget. I can see it in the commitment to ecological integrity and the expansion of the parks system. I can see it in our commitment to marine and wilderness areas and conservation. I know that many people criticize the One-Tonne Challenge, but it is about providing the education to make this a truly national project, because it is not only government but all of us who have to commit. I can see us becoming a leader as a result of our very ambitious green plan. I can see it in a budget that has opened the door to fiscal incentives. I can see it, but it will take a lot of work. I think that Canadians will insist on it, and the younger generation of Canadians will demand it.
Senator Milne: What can you say about Canada putting its money where its mouth is and supporting the scientific research that is the base for all this to be built upon? I do not see that happening.
Mr. Himelfarb: In the last seven or eight years, we have put $12 billion to $13 billion into science and research. Health and environmental sciences have been key in that. Those are two areas in which we can become a world leader.
Senator Milne: I will let you follow that up on groundwater research in the West, Mr. Chairman.
The Chairman: We are embarked upon such a study, Mr. Himelfarb, and we will let you know the results when we have completed it.
Senator Buchanan: I also wondered why the Minister of Finance is not a permanent member, or even the chairman, of the cabinet committee. He directs the money and I think he should be a permanent member of the cabinet committee on sustainable development.
Mr. Himelfarb: It would be inappropriate for me to talk much about the structure of cabinet committees, but I understand the question. It is normal to make the Minister of Finance an ex officio member of almost all our committees. However, it would be very unusual to make the Minister of Finance the chair of the committee.
Senator Buchanan: Why is the President of the Treasury Board not on your committee?
Mr. Himelfarb: He is an ex officio member as well. We have tried to keep all the central agencies of finance as neutral participants that are learning. You can argue that there are better ways, but that is the thinking that went into it.
Senator Buchanan: You mentioned the tar ponds, which have been around for 100 years. The tar ponds have been a whipping project for governments. I know all about it.
We saw the first agreement on the tar ponds in the 1980s. That agreement was to assess the requirements and the various proposals for the cleanup, to choose one and to implement it. It is more than 20 years since we signed that agreement. Since then, between $50 million and $70 million have been wasted on the tar ponds, and they are exactly as they were back then.
The latest proposals that were made to the federal government and, I suspect, to your deputy ministers committee, should have been acted on, but they are looking at doing yet another assessment. The tar ponds have been assessed an incredible number of times, yet I understand there is to be still another assessment. Is that the decision of the cabinet committee?
Mr. Himelfarb: I will not pretend to be an expert on this. You probably have more expertise on the tar ponds than I do. However, I do know that there is a plan to do another review. I know there is much controversy locally and provincially, and among environmentalists, about the best technology to clean it up. Some would like to cover it up and others would like to do more fundamental things.
Senator Buchanan: I mentioned this to then minister David Anderson when he appeared before this committee. Did you know that we have had previous tar ponds in Canada? There have been tar ponds in Michigan and Pennsylvania and Buffalo, New York. One of the largest, caused by runoff of tar from coke ovens from the 1920s to the 1950s, has for years been one of the nicest baseball fields in the area.
The tar ponds should have been coffer-dammed and filled in years ago. However, you cannot do that nowadays, because of people like my dear friend Elizabeth May.
We visited CANMET in Alberta, and I was intrigued by some of the things they are doing in the tar sands there. A scientist there said that the tar ponds could have been cleaned up years ago using a chemical method of solidifying the bitumen. They do that in the West and no one knows the tar pond ever existed, because it totally solidifies. That is what we should be doing with the tar ponds in Nova Scotia.
Now, more than 20 years later, we will have another panel review. It is interesting that some of the people who are demanding another review today were saying 10 or 15 years ago that we should get on with the job, that we did not need any more assessments. Bruno Marocchio and others are now saying that we must have more environmental assessments and more panel discussions. More money will be wasted.
Mr. Himelfarb: First, friendly disputes such as you have with Ms. May can also be found in the community, and as the technology evolves, the potential to achieve something is greater. There are understandable disputes about how to do it, and that panel will resolve those disputes. We will make progress.
You made the point about how much time we spend on regulating. If we do not get smarter on that, it will not be only you who is frustrated. You raise an important point that must be part of any environmental plan. We must get smarter on the regulatory process.
Senator Buchanan: When there is a project like that, get it done.
The Chairman: I do remember the scientist to whom we spoke who said that. He said, ``I will fix it right now.'' Perhaps Mr. Himelfarb can bring some influence to bear in that respect. He might be able to shortcut the product.
Senator Nancy Ruth: I am the new girl on the block, and from Toronto. What understanding do you have that the press or the media are reluctant to give the government the kudos that it should receive? I am enchanted with your suggestion that we should perhaps say that the government is doing good things and this moral suasion is in fact a function for us senators. It highly amuses me. I assume that is because the government has no disincentive, other than being thrown out of power, or incentive to change what it does on its property.
Why will the press not cover the good stuff? Why is that happening?
Mr. Himelfarb: I will not even begin to speculate because then they will start talking about me.
Senator Angus: They are all wearing a wire.
Mr. Himelfarb: I love the media.
Senator Nancy Ruth: Canada is stacking up next to France, and your kids are saying ``Go green, go global.'' This is happening all over the country and yet everything gets dumped on.
Mr. Himelfarb: There are several things. One of them is that it is the media's position to play the role of opposition. They have done that for quite a while. I will not comment on the role of the media in Canada because it would not be appropriate for me to do so.
The other thing is: where is the beef? Let us see the action. We want to see movement and change on the ground. We want to see things.
I am saying that that is imminent. We will start getting some of the kudos when it is visible.
Senator Nancy Ruth: That will be in retrospect, like Mr. Mulroney.
Mr. Himelfarb: Massive change often happens in retrospect. Massive change happens with things that are truly boring to talk about, like frameworks. Who wants to talk about a framework? How do you go out to Canada and say, ``Hey, we have an environmental framework?'' People say, ``My child has asthma. How does a framework help?'' After the framework we have a plan; then we build the consensus on delivering the plan; then we have this machinery to underpin the plan. I have everybody asleep.
Concrete things about a measurable decline in pollutants, about more liveable cities, about lower degrees of asthma among children, are the things that resonate. They will want to see the results. In my view, that is fair enough.
I have been in the game long enough to see that we are moving in a concerted and coordinated way to something very significant. I believe that there will be a turnaround when people see the results in the quality of their lives in their community and they see the indicators starting to report real progress.
Senator Nancy Ruth: Hopefully.
Mr. Himelfarb: Yes, I hope.
Senator Cochrane: Various businesses within the country have appeared before us and have shown us what they are doing in regard to reaching the Kyoto Protocol targets. There have been really good projects, such as light bulbs and wind generation. There is also a company in Quebec, I think, working on sun panels for homes and offices, which will save much electricity and money in various homes and offices.
How is the government educating the general public about what they can do now in regard to some of these ideas?
Mr. Himelfarb: There is a website that provides information. Pamphlets are sent out regularly. We are providing information and educational materials for all kinds of institutions. We are actually doing quite a lot. We are compiling that information not only in Environment Canada but NRCan. A fair bit of work has been done. The climate change plan was done in very close cooperation with some of these industries that you are talking about, including the wind power people, who helped us design an incentive system that would work.
It has been assessed and it is almost never enough; but that kind of work is being done.
Senator Cochrane: Does your office have a list of companies that are already implementing some of these ideas?
Mr. Himelfarb: My office does not, but Environment Canada and NRCan do.
Senator Cochrane: In Environment Canada they do?
Mr. Himelfarb: I do not know if they would compile lists. They certainly would have leaders in the industry, if that is what you are asking.
Senator Cochrane: You have a list of those with Environment Canada, do you?
Mr. Himelfarb: I assume they would have lists. We can certainly check and get back to the clerk.
Senator Cochrane: Many of these companies are wonderful. Will we give them incentives to pursue what they are doing? These are new projects that will be helpful right across the country.
Mr. Himelfarb: The last budget announced huge incentives not only for wind power — and quite a massive expansion of the existing incentives for wind power — but emulated that by building incentives for all alternatives. It is already in place to incent exactly that kind of innovation.
Senator Cochrane: Will there be an equal incentive for all alternatives?
Mr. Himelfarb: Yes, there will be incentives that are meaningful and that actually incent behaviour. Again, we will review that on a regular basis. If it is not enough or if it is not working, we will make the adjustments. That is the window now for the first time ever.
Senator Angus: Do I correctly infer that you know the answer to that new trivia question: Who was the greenest Prime Minister ever?
Mr. Himelfarb: I have a professional commitment to answer, ``The Prime Minister of the day.'' We just get greener and greener.
Senator Angus: I thought we could take advantage of your presence here to ask you the answer to a hot potato that is before us at the moment, an environmental issue relating to Devils Lake, and in your larger role more than just the challenger on sustainable development issues. This is a matter involving a Canadian initiative with our neighbours to the south to try to get them to come to the International Joint Commission. Can you tell us of any recent development that would encourage us and allay our concerns?
Mr. Himelfarb: I do not want to give false optimism, but it is within days that the Prime Minister spoke to the President on this issue.
Senator Angus: We heard that they spoke on the phone.
Mr. Himelfarb: We are working hugely and closely with Premier Doer on this issue and working step by step with him, with the governors, with the President, with all the key players, to ensure there is a full awareness of the situation. We are looking at contingencies. Our preference, and I believe Premier Doer's preference, would be a negotiated solution.
Senator Angus: I am pleased to hear that. I am trying to paraphrase your answer, because I think it is accurate: We are doing everything we can as the federal government to try to get a satisfactory resolution of this difficult issue.
Mr. Himelfarb: I wish I had just said exactly that.
Senator Angus: Second: If we do not succeed, you said we are developing contingency plans. The chairman and I were discussing the other night what happens if they go ahead on July 1 and start sending water from Devils Lake into the Cheyenne River.
Mr. Himelfarb: I am comfortable saying our first priority is to find a negotiated solution.
Senator Angus: Are there physical viable contingencies?
Senator Milne: Other than damming the river?
Senator Angus: Or declaring war or things like that?
Mr. Himelfarb: It would be a mistake for me to talk about contingencies before we have exploited all the opportunities for a negotiated settlement.
Senator Angus: The committee is doing a study on water. We were quite shocked to find out there has never been a fully comprehensive mapping of the water aquifers in the country. As we heard more and more evidence, especially about Western Canada and desertification and the imminent threat thereof, we wonder if this is something the government is focused on. If not, get ready because we will be reporting soon.
Mr. Himelfarb: I do not know what part that plays in our framework or strategy. Obviously, I just do not know the answer.
Senator Angus: It is important.
Mr. Kennedy: Have you already spoken to Agriculture and Agri-Food Canada? A lot of money has been invested in mapping surface water as well as the underground aquifers. Some work has been done, and this spans a number of departments: Environment Canada and AAFC. I know the Prairie Farm Rehabilitation Administration at one point had some significant work done to pull together all those databases assembled all across the government to have a single view of the surface water, the underground water and the soil types with a view to better managing water resources, particularly out West. They have pilot projects they have run.
It might be worth having your staff follow up on that. I do not have a lot of detail, but it is a good example where they try to take information from a number of different departments, compiled at significant expense over a number of years, and take advantage of the new technology to bring it all together in one place to have a much better picture of what is happening with water. That would be the PFRA that has been leading that.
The Chairman: You are right, Mr. Kennedy. That has happened in the past. You said the function of the PFRA so far has been one of coordinating the information as opposed to obtaining the information. Our understanding so far is that the amount of federal government funding which used to be in place and which was given to universities and scientific research undertakings to provide things like measurement of rivers and the velocity and volume at which they move and aquifers and the like, has fallen off so substantially in the past few years as to bring it nearly to a halt. Part of the impetus behind our study is, to be overly simple, that we can all live without oil though it would be inconvenient. We can all live without coal though it would be inconvenient. However, we cannot live without water. We are running out of it pretty fast.
As Senator Angus has said, we will be looking at this very closely and over a long period of time. It will be a long time before we are able to issue our first interim report on that.
You talked about coordinating departments and that is one of the reasons we are glad Mr. Himelfarb is here today, because our limited experience in this is that the cooperative nature of one government department to the other is a joke, not to put it too plainly. Government departments are sometimes notoriously uncooperative with each other and that is something we all need to address.
Senator Milne: They vigorously defend their own turf.
The Chairman: It is turf war time. That is part of what we are getting at. There are parts of Western Canada, where I live, where if you were to have the temerity to state you were with the federal government doing anything you would be lynched and ridden out of town on a rail after you were dead.
The one exception to that, the one agency that is held in very high regard, particularly by rural Albertans, is the PFRA. This is an editorial and unsolicited comment: They have been underfunded in terms of the good they have done in the past few years. It ought to be re-inflated because it is very highly regarded.
Mr. Himelfarb, I know that we cannot measure the success of an undertaking by how many meetings have been held on it, but I have two specific questions with respect to the committee of cabinet that Minister Emerson chairs and the committee of deputy ministers chaired by the Deputy Minister of the Environment.
How often do they meet? How regularly do they meet? I am not talking about specific numbers, although if you could find those out and let the clerk know, we would appreciate that. It is an unfair report card, but we have partial information that they do not function all that regularly or that often or that well. Can you disabuse us of that impression?
Mr. Himelfarb: The cabinet committee, because it has ashort-term life, has met pretty intensely.
Mr. Kennedy: When the House has been in session, if you average it out, it would be every week and a half to two weeks.
Mr. Himelfarb: It is pretty intense. They are very much on top of the big issues such as the auto deal and the LFEs, the large final emitters.
Senator Angus: Do they keep minutes?
Mr. Himelfarb: Yes, and they keep records of decisions that are ratified by full cabinet. In that sense, they have a decision capacity with full cabinet ratification. It is quite formalized and very intense. The deputies committee is getting stronger. It started probably fairly weakly. There was an enormous tension in developing the climate change plan you may have read about in the newspapers. I always figure if something is worth doing it is worth fighting about. We managed to do it and fight about it.
That is getting better and clearer direction, but how do we rationalize water science dinner meetings, informal meetings that might not have shown up as formal meetings? It is the same deputies because they are managing science departments. We know it is not just how much we invest; if we do not get the right science priorities or reconcile our science, there is not enough money in the world to do it right.
The other issue is where you get clear public purpose, like sustainability and environmental stewardship. We do, as a public service, overcome turf. We do learn to work with each other. It may not come naturally and easily but it comes. We are seeing one of the great signs of progress: true collaboration and collegiality among the science departments. That is starting to reconcile our science priorities and align our actions. There has been a lot of noise in the media getting here. There was fighting and strongly held views and divergent views. That is not unhealthy when you are dealing with big issues, as long as you overcome them.
The Chairman: You should see some of our meetings. This comes down to the deputies who will implement some of these things. You have confidence that there will be collegiality among that committee in achieving the goals, however unhappy they might be about it, which the government sets out?
Mr. Himelfarb: There will be glitches, Mr. Chairman. There will be fights yet unfought. However, yes, I see an alignment, a real collaboration and a commitment to higher purpose. That is what most of them joined on for.
The Chairman: One last question about a matter that was brought up in this committee before in a different context, with respect to the large industrial emitters. The problem we saw was that, for example, if we draw a line next Tuesday and say that we will credit you with everything good that you do after that — that this will be measured in the exchange or however this will happen in the selling or buying of credits, but that is the cut-off — what you will do thereby is to punish some of the good guys who started doing the work before the line was drawn in the sand, who have been working at this for years and who have achieved a great deal. In the various programs that you talked about, is care being taken that the good guys are not being punished?
Mr. Himelfarb: One of the principles that guided us is that you do not punish first movers. Part of the reason we were criticized by environmentalists for not having a target as large as we had hoped is that we had to reconcile and rebalance so that we were not punishing people who took strong and early action. That is an important principle that you do not punish first movers. Therefore, instead of the original reduction in targets that we had a few years ago in our plan, we have come in short.
One of the tensions in climate change is to have a serious go at meeting the short-term targets that we signed on to by virtue of Kyoto and to take those seriously. That is an important discipline. Climate change is a multilateral thing. It is a global problem that needs a global solution. That was the only global game in town; we signed on and we have to take it seriously and be disciplined by the targets. However, we have to ensure, at all times, that we are not sacrificing the long-time fundamental paradigm shifts and investments in rethinking how we run those sectors; we do not want to inhibit that.
Part of what we have done is not punish first movers, but also not ``disincent'' long-term, fundamental, transformative change. That is the balance we have tried to strike. We have even created this fund that allows industries to invest in technologies that would impact technology improvements beyond 2012, beyond the 2008-12 target. In the end, this must be an enduring commitment and we have to build beyond 2012.
The Chairman: This is merely the first step. We hope people figure that out pretty soon.
Senator Milne: My question is a follow up to the first part of yours and to what Senator Cochrane was talking about in regard to incentives. Has this committee of deputy ministers thought about, considered or implemented any kinds of incentives to senior people within their departments who are starting to implement some of these things that they should be doing in the departments? Have they thought about holding out the carrot to their own people?
Mr. Himelfarb: Some departments have done that. We have not done that in a systematic way.
Senator Milne: Maybe it is time.
Mr. Himelfarb: Maybe it is time.
The Chairman: Mr. Himelfarb, you talk about the climate fund and that it has to do with purchasing credits of one kind or another. It has not yet been formally established but eventually, if we are to do this purchasing of credits, surely there will be an exchange somewhere. There already is, sort of, in Chicago. Do you anticipate that the climate fund you are talking about will turn into or perform the function of an exchange in this country?
Mr. Himelfarb: Yes, more or less. This is trying to emulate that kind of exchange.
Senator Milne: There is a significant amount of interest in this country in having an exchange.
Mr. Kennedy: One of the things, honourable senators, about a climate fund goes to the transformative nature that Mr. Himelfarb talked about before. One of the things that is not maybe adequately publicized about the climate fund, the partnership fund, the large final emitter system, is that there is a whole set of underlying accounting rules that are under development and have been under development for some time around how you give value to carbon. How do you measure it? How can you trade it from one person to another? In much the same way as in the economy, we have rules around inventory, assets and depreciation. You need to develop a set of rules like that for things you want to control like pollutants — the issue of bringing those into the economic structure. It is called the offset system.
There is a design team that has been working in the government to develop this measuring and accounting system for carbon. In a sense, it will be the foundation on which the climate fund and the partnership fund will sit. Those funds will dispense money for eligible projects, determine who should get the resources and who has the best projects. The accounting for that will be managed by a fairly elaborate exchange system that you have noted, senator, in terms of how that is worked.
In a way, that is the essence of what we are trying to achieve in terms of integrating environment into economy. It is to actually put a price on carbon so that people can measure this as a pollutant that can be controlled or that has value for some industries that use carbon.
The Chairman: Mr. Kennedy, there are people in this country who, in respect of various aspects of various industrial sectors, would have terror struck into their hearts by the words ``a whole bunch of people in government have been working on this plan for a long time.'' I can give you a list. Are the industrial sectors to whom these things will apply fully engaged in this and being consulted now by the people who are designing these systems, so that someone has the opportunity of saying, ``That is completely wrong; that is completely out to lunch and has nothing to do with the way things actually work?''
Mr. Kennedy: Yes, senator, absolutely. I should probably differentiate. In terms of the work that is going on, it is designed in a way to fulfill the sorts of things that industries have asked for all along. They would like the flexibility if they are having trouble in their own operations, for example, implementing a new technology. If they see some promising ability to reduce carbon by investing in a project elsewhere, the system is in place to allow them to do that accounting and get credit for it. This system is really designed to allow that flexibility to let the market operate. It is not about imposing taxes or any of those sorts of things. It is about having a market for carbon so that people can buy it, trade it and do those sorts of things.
Senator Milne: My office has been approached by a group who is interested in doing this type of thing. We were told specifically that there would not be an exchange run in Canada by Environment Canada, that they would register credits as to who owns what but not do any sort of trading or oversee any kind of trading here whatsoever. That is leaving Canadian industry up in the air over this.
Mr. Himelfarb: We have not committed to the kind of commodities exchange and carbon that some people want.
Senator Milne: Will they have to do it in Europe? In Chicago?
Mr. Himelfarb: Honestly, we do not know the exact answers about how some of the market forces will work. This is like introducing a new commodity into the economy. It is a pretty major thing. How do you let the market forces change price?
If we will allow industry to buy their way out of some of the reductions by investing in technology, what is the size of investment? There is a huge amount of foundational work that is going on now with industry because industry wants it. Industry wants some clarity and some sense of how we will protect them against huge price increases. We are working closely with them in a way that I think many of the sectors will say is more responsive than they had anticipated.
The Chairman: Thank you very much, Mr. Himelfarb and Mr. Kennedy.
Mr. Himelfarb: Thank you very much.
The Chairman: You have been most useful to our discussions. Is there anything you would like to add before you leave us, sir?
Mr. Himelfarb: It is a pleasure to be here.
Senator Angus: Come again.
Mr. Himelfarb: I look forward to coming again.
The Chairman: We will look forward to the clerk receiving those bits of information that you will send to us.
Mr. Himelfarb: I will get that as quickly as we can.
The Chairman: Thank you very much.
The committee continued in camera.