Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 6 - Evidence - October 3, 2006
OTTAWA, Tuesday, October 3, 2006
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 5:38 p.m. to examine and report on emerging issues related to its mandate.
Senator Tommy Banks (Chairman) in the chair.
[English]
The Chairman: We are here to meet with the Commissioner of the Environment and Sustainable Development and her staff in respect of matters that are presently before the committee, as well as anything that may arise out of the commissioner's report of September 28, which is her sixth report as commissioner.
I welcome you, commissioner, and your attendants. We are delighted to have you back again, and to hear whatever you would like to tell us about the state of affairs on which you have already reported in some detail in respect of the tabling of your report. Please proceed.
[Translation]
Johanne Gélinas, Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada: I am pleased to appear today to discuss my sixth report as Commissioner of the Environment and Sustainable Development. I am accompanied by David McBain, Richard Arseneault, Neil Maxwell and Kim Leach. My presentation will be a bit longer than normal, but only in order to cover the report.
This report is the fruit of 18 months of work. It deals mostly with the federal government's approach to climate change covering up to mid-June 2006. In the course of our audit work, we have tried to answer three basic questions: Is Canada on track to meet its emission reduction obligations? Is Canada ready to adapt to the impact of climate change? Is the government organized and managing well? The answer is no to all three questions.
It has become more and more obvious that Canada cannot meet its Kyoto Protocol commitments to reduce greenhouse gas. In fact, instead of decreasing, greenhouse gas emissions in Canada have increased by 27 per cent since 1990. Let me walk you through each of the five chapters of my report.
[English]
Chapter 1: Managing the Federal Approach to Climate Change addresses how the federal government is organized to manage its climate change activities, whether the government is able to report on the costs and the results of its efforts and on what basis it developed key targets for reduction in greenhouse gas emissions.
The chapter also addresses two new tools the government has chosen to help achieve its climate change objectives: a domestic system of trading greenhouse gas emissions, and Sustainable Development Technology Canada, a foundation set up to help reduce greenhouse gas emissions through technological innovation.
Government action has not been well organized or well managed. The government has not defined its leadership role, nor has it identified the responsibilities of each department. It has been unable to come up with the basic tools that it needs to measure its progress. Even though more than $6 billion of funding has been announced since 1997, the government still has no system to track the spending and results of its climate change activities. In other words, the government has no way of reporting returns on its investment.
Another major problem with the government's approach is its failure to address the biggest greenhouse gas emitters — transportation and heavy industry — which together represent the lion's share of all gas emissions in Canada.
In the transportation sector, which produces 25 per cent of all gas emissions, the only well-defined measure in place is a voluntary agreement with the car industry to reduce emissions by 5.3 megatons by 2010, which is only 2 per cent of the overall reduction needed to meet the Kyoto Protocol commitment. In addition, the agreement falls short in a few key areas for voluntary agreements — chiefly, the lack of a third-party independent verification of the model data and results that will be used to determine progress.
As for the industry sector, which is responsible for 53 per cent of all emissions, the government has steadily lowered greenhouse gas reduction targets since 2002. The reduction now expected from that sector could be only 30 megatons of the total reductions expected of 270 megatons needed to meet Kyoto's commitments.
In other words, according to the data that we collected during this year's audit, the two sectors responsible for 78 per cent of all Canada's emissions could contribute only around 20 per cent of the expected emission reductions. Even if the proposed measures are implemented, the measures will only, at best, slow down the growth in greenhouse gas emissions, not reduce them.
The two principal tools for reducing emissions — the system of large final emitters and the national emissions trading system — are still under construction after more than four years. Problems plague the system's development and the emissions trading system could end up costing taxpayers a lot of money. It is unclear whether and how the government will move forward with the key pieces of the previous plan — the large final emitters system, the emissions trading system, the climate fund and the offset system.
[Translation]
Chapter 2 deals with adaptation — that is, helping Canadians cope with the impact of climate change. Canadians have to be ready to face the spread of pests and diseases, more frequent droughts in the Prairies, and longer and more frequent heat waves and smog alerts.
Unfortunately, we found that adaptation is where the efforts of the government were especially disappointing. Despite commitments to take action going back to 1992, there is no federal strategy to specify how the effects of a changing climate would be managed. A strategy would also specify which department would do what and how decision makers would have access to critical climate information. For example, new data on the effects of heavy rains could point to a need for changes in the design of storm sewers.
The failure to make significant progress on adaptation efforts risks Canadians' social and economic well-being.
[English]
Chapter 3: Reducing Greenhouse Gas Emitted During Energy Consumption and Production looks at three Natural Resources Canada programs that each received $100 million or more to reduce greenhouse gas gases emitted during energy production and consumption. The three programs are the Wind Power Production Incentive, WPPI, for renewable energy; the EnerGuide for existing houses for energy efficiency, abolished in May 2006; and the Ethanol Expansion Program for renewable fuels.
While these programs yielded results, it was difficult to assess whether they reduced emissions as planned because their targets were unclear. There was also limited reporting of the results these programs achieved with the money spent. We expected Natural Resources Canada to tell Canadians how successful the programs were at reducing greenhouse gases, but with unclear targets and inconsistent public reporting, we wonder how parliamentarians could assess whether these programs are working.
Chapter 3 also looked at the federal effort to tackle emissions produced by the oil and gas industry. In its battle with climate change, the federal government has not taken into account the unprecedented boom in that sector. Emissions resulting from the increased exploitation of oil sands could double by 2015, cancelling out any other efforts to reduce greenhouse gases.
[Translation]
Chapter 4 concerns sustainable development strategies, which the federal government sees as one of the most important tools for achieving sustainable development.
Our findings this year represent good news, to a degree. In three quarters of the cases we examined, departments are making satisfactory progress on their strategy commitments.
Where we found departments making unsatisfactory progress, poor management systems were usually to blame. It is troubling that, after 10 years of experience, some departments are far from making progress.
The government still has not met its longstanding commitment to develop an overall environment and sustainable development plan, most recently promised for mid-2006. Your committee may wish to ask the government why the commitment has not been honoured.
[English]
Chapter 5, on environmental petitions, contains two parts: the annual report on petitions; and the results of an audit we conducted on a commitment made by Natural Resources Canada, Environment Canada and Public Works Canada to purchase 20 per cent of their power from green sources by 2006.
It is interesting to note that, increasingly, Canadians are raising the issues of climate change and air quality in environmental petitions. Canadians are informed and concerned about climate change.
Most responses addressed questions raised; some did not. An example of a response that did not address the questions posed is that of Finance Canada to Petition 158 concerning subsidies to the oil and gas industry and federal efforts to address climate change. Your committee may wish to ask Finance Canada to clearly explain the extent to which the sector is subsidized.
The government has not been able to deliver on its commitment to buy 20 per cent of its power from green sources by 2006, as it committed to in its response to a petition in 2002. As a result, the government has not contributed as expected to greenhouse gas emission reductions in Canada.
[Translation]
At the end of our audit, my conclusion is this: the federal government has done too little and acted too slowly on Canada's commitments to address the challenge of climate change. Looking forward, a massive scale up of effort is needed. I have identified five areas that I believe are crucial: provide sustained leadership, integrate energy and climate change, develop a plan to reduce greenhouse gas emissions, push ahead with adaptation, and assure governance and accountability.
Each area is important but the call for leadership by the federal government applies to them all.
I believe that there is an important opportunity for parliamentarians to pursue the concerns I have raised in my report. Clearly, there are many issues that government officials need to explain, among them: what progress is being made in developing a robust system for collecting and reporting information on expenditures and results?
How will departmental rules and responsibilities be clarified and what mechanisms to coordinate federal activities will be put in place? What was learned during the Treasury Board-led review of climate change programs and how is it being shared and used? How will departments go about clarifying what they expect to achieve with their emission reduction programs and how actual results will be reported?
[English]
This communication could be accomplished in a series of hearings on specific topics such as how to improve planning, accountability and governance where Environment Canada, Natural Resources Canada and the Treasury Board Secretariat officials could testify: how to improve individual climate change programs such WPPI, the transport sector MOU, and emission trading systems where Environment Canada and NRCan could testify again: how energy growth and climate change could be reconciled, including alternative energy where Environment Canada and Natural Resources Canada could again testify: and finally, how to move forward on adaptation where Environment Canada and Natural Resources Canada can testify.
[Translation]
The federal government has accepted all of my recommendations. Therefore, I expect the government's new plan to spell out clearly how these recommendations will be taken into account.
So when the new climate change plan is available, parliamentarians will be able to see how the government has responded to the specific recommendations made in my report, and the five areas I identified as crucial to future progress.
Mr. Chairman, that completes my opening statement. Now, I will be happy to answer your questions.
[English]
Senator Cochrane: I would like to thank you and your team, Ms. Gélinas, for producing yet another powerful report. You have received much coverage in the media and through various groups. That coverage says something for your work. All Canadians benefit from the work you do and we parliamentarians find tremendous value and fodder for change in your observations and recommendations.
The report finds that the federal government has, since the mid-1990s, announced over $6 billion in funding for climate change. The report, however, notes that the government does not yet have an effective government-wide system to track the expenditure of this $6 billion. We do not have a system to track how it was spent and whether those expenditures were good or bad. It is an eye-opener for parliamentarians to learn that we have spent that much money and have no way of knowing what we can improve upon.
Specifically, Canadians said that the EnerGuide program was a good program, but they appended many ``howevers'' to that judgment. I thought we would hear good things from that program, but there was not 100-per-cent improvement through it.
Would you elaborate on the EnerGuide program?
Ms. Gélinas: Thank you for your kind words about our report. I will share them with my staff tomorrow.
Before going to the EnerGuide program, there is much confusion about how much money was spent and how much money was announced. The $6.3 billion was money announced between 1997 and the 2005 budget. We were able to learn from Treasury Board that $1.6 million has been spent so far, so there is a nuance.
You referred to the absence of a government-wide tracking system. That was the case when we conducted the audit and it is still the case. If you want to avoid having me come back in two years to say that I cannot give you the right figures because there is no system, this issue should be addressed urgently at the administration level to ensure that the system is up and running as soon as possible.
With respect to the $1.6 billion, the information we received from Treasury Board was up to 2004. Between the end of fiscal 2004 and now, this information was not readily available and we have not had access to it. Therefore, we could not gather the latest information for you in terms of spending. That is another important point.
EnerGuide was one of the three programs that we looked at. I have said clearly that EnerGuide was making progress. This program was put in place in 1998, and at the time it was essentially a home evaluation program. Experts performed audits of houses and it was up to individuals to retrofit or renovate for more energy-efficient houses.
In 2003, the program was improved and a grant was attached to it. After the evaluation was performed, homeowners could get money through the EnerGuide program to make renovations. A graph in the report shows that at that point the program received more attention and more interest, as you can see from the two curves going in the same direction.
The program was set up to achieve a reduction of 2.2 megatons by 2010. One third of this objective has been achieved so far, and there is a long time before 2010 to reach that target.
Senator Cochrane: What other programs were you able to evaluate? Tell me what other programs you have found success in, even if it is only partial success.
Ms. Gélinas: Mr. McBain conducted the audit of the Wind Power Production Incentive program, WPPI. It was successful to a certain extent, as was the ethanol program.
I will ask Mr. McBain to give you more detail on what these programs have achieved.
David McBain, Director, Office of the Auditor General of Canada: The first program that Ms. Gélinas referred to is the Wind Power Production Incentive, which is a multi-year program that tries to make up the price differential for producing electricity by wind. It is set out with a 2010 target of .9 megatons per year. As of March of this year, as we report in our chapter, .36 megatons were achieved.
In total, $21 million has been spent to accomplish that objective and because it is a multi-year program and it pays only for the electricity that is produced, those expenditures will continue for the next eight or nine years.
The Chairman: Before you go on, Mr. McBain, I did not understand. Will there be similar ongoing expenditures so that in the next three years we will have spent $63 million, or are they one-time expenses that can be amortized over the time about which you are talking?
Mr. McBain: They are amortized over the period of the contribution agreement with the owners of the wind farms. For example, if a wind farm started producing electricity today, the contribution agreement with Natural Resources Canada says that National Resources Canada will pay that one cent premium for the next 10 years of operation. After that, you are on your own.
If you look at the chapter in more detail, you will see an exhibit that breaks out how much they have spent until now and what commitment they have made for those future-year payments. That total, by way of giving information, is $299 million.
The other program we looked at in detail was the Ethanol Expansion Program. In essence, that program attempts to expand the capacity to produce ethanol in Canada so that it can be blended with gasoline.
The principle underlying the program is that over the life cycle of producing the ethanol and consuming the blended gasoline, the program will reduce greenhouse gas emissions.
The program is relatively new and started only in 2003. Through a contribution agreement, the program offers money towards the construction of new or expanded facilities for producing the ethanol.
Again, another principle of the program is that it tries to leverage private sector investment. Through an investment of $100 million, the department estimates that approximately $1 billion, or closer to $900 million, will be invested in those projects. If the projects proceed as planned, they will produce enough ethanol to blend 35 per cent of the gasoline with 10 per cent ethanol.
I will not expand on that too much, because you can get caught up in the numbers and it is confusing.
The chapter shows that there are no greenhouse gas emission reductions to date because the first plant came online only at the beginning of this year, and our audit terminated before Natural Resources Canada had results for that particular facility.
The Chairman: Where is that?
Mr. McBain: That particular plant is in Weyburn, Saskatchewan.
Ms. Gélinas: These three programs, which are the most important ones in terms of funding, have been able to achieve a 1-megaton reduction so far, and the overall objective for these three programs is 5 megatons by 2010. That figure is important as we will talk later about how realistic it is to achieve the Kyoto target.
[Translation]
Senator Angus: I want to welcome you all to our committee. I also want to congratulate you on your report. Climate change is a priority for me.
[English]
You might find this question naive, but this report presupposes there is a thing called climate change. You do not define it at the beginning. Can you put it in perspective? Is it correct to understand that for you climate change is happening, it is a given, and that it is caused by greenhouse gas emissions?
Ms. Gélinas: We have taken that at face value. We have not challenged the science. It was accepted by the government that climate change was happening. There are consequences to climate change, as we can see from coast to coast to coast. We have not challenged that. That was not our mandate. If the government wants to challenge it, that is another story, but we have accepted the situation as recognized by the government and we have accepted that the Kyoto agreement was still a target that we need to achieve.
Senator Angus: Do any of you know any reasons why you could challenge it, or are we getting into the real fundamentals and we are way beyond that? Is that what I understand from all of you?
Ms. Gélinas: From this side of the table, we do not question that climate change is happening, based on all the information to which we had access and through interviews and discussions we had with the officials of the government.
Richard Arseneault, Principal, Office of the Auditor General of Canada: As part of the report we prepared, we also included what we called an overview on climate change, to provide background information to the readers about what climate change is, why it is important, and what the options are in terms of dealing with it. The federal government has accepted that climate change is a reality. The science behind climate change is being done internationally. An international panel of experts report their findings from time to time. Every time they report, it is worse in terms of the impact human beings are having on climate. Given that we take things from the soil and put them in the air, it appears there is an impact and that certain parts of Canada are suffering from it, the North in particular.
Senator Angus: That is fine. We have had the privilege of hearing experts from the international panel, trying to explain to lay people this important thing that faces all of mankind and our planet. There are still experts, naysayers though they may be, who say climate change is a cyclical thing and you do not look at the cycle in a 10-year perspective but rather in a millennium way. It is in the overview.
I was struck by the balanced nature of your report. You did not take a lot of prisoners. You were not selective. In this business, it is fair to do it that way and it is much more credible. I thought you did a good job in that respect.
Having said that, I was interested in your last comment that the government has accepted all your recommendations.
As I understand it, this report came out only in the last few days. We were all waiting with bated breath for last Wednesday or Thursday and our briefcases were okay for the weekend.
What was the process that the government would have accepted? You are able to come before us and look us in the eye and say the government is excited — I am encouraged by that. I would like to know how that happened and how you did it.
Ms. Gélinas: Thank you for that important question. Most people will think that the report comes as a surprise to most bureaucrats, which is not the case. We have a thorough process and we made sure since day one that when we start to design an audit, we have plenty of discussions with officials in the department.
Then comes a time when we present for the first time a written version of what will become the report, after which we can begin negotiations. The department may disagree with things; as long as they provide us with evidence and facts, we are open to making changes.
They see what we recommend for the first time. Having said that, we have discussions with the department officials beforehand so the recommendations will make sense to them too, because they are the ones who will implement those recommendations.
We go through that process for a couple of weeks. We have eight weeks between what we call ``the PX draft'' and the final draft for sign-off. The government was aware of the recommendations in May and they had plenty of time to look at the type of responses they would give to our report.
When we close the books, when we send the report to the publisher, the last thing we wait for are the responses from the government. Those responses are factored into our report, so the responses are in the public domain as we table the report.
Senator Angus: I have been privileged to be here for at least three of your reports. Is that procedure the normal one or was it special this time?
Ms. Gélinas: It is normal procedure in the AG's office.
Senator Angus: When you say the government, do you mean, in the jargon that we all understand in Ottawa, the government, the cabinet and the ministry?
Ms. Gélinas: No: discussions with government are at the bureaucratic level. It is up to the bureaucrats to share that information with ministers, but we do not do that and I do not do that. I inform ministers only in the last week before tabling — as I did last week two days before tabling, as a courtesy to ministers who are willing to hear from me — because it is their prerogative to set up a meeting.
Senator Angus: Was the feedback you received in that meeting that they accept all your recommendations?
Ms. Gélinas: I knew that beforehand because of the responses we received in mid-June.
Senator Angus: In past appearances before this committee, one thing that has been indelibly inscribed in my consciousness on this subject is — and I am paraphrasing what I heard you say so many times in both English and French — that the Canadian federal government has all the tools to deal effectively with the problems of environment that we faced. However, the government is not using them and, therefore, we have a terrible record. We have gone from number 4 in the OECD countries to number 27.
Now I read in your report tonight, and I listened carefully, the word ``tools'' comes up again. The government has been unable to come up with the basic tools that it needs to measure its progress — and you get into the $6 billion.
Among your recommendations, you indicate what those tools are. If I read the report well, leadership is the key. Is that correct? Can you develop that for me? What tool does this government need to bring to the party to deal effectively with those recommendations that it accepted?
Ms. Gélinas: It is not clear as we speak which tools this government will use. Beyond the fact that the government has said it accepts all my recommendations, we do not know the details and how those recommendations will be implemented.
For example, we are still waiting to see what is planned for emission trading. If the answer we receive is that emission trading will be looked at through the new green plan of the government and my recommendation will be factored into the plan, I cannot tell you exactly what the government plan is. I can tell you only that our recommendation, as a principle, has been accepted. I do not have a clue how this recommendation will be implemented. As we speak, I guess no one knows.
That is why I said that as we go forward, as we receive clarity from the government on the plan to address climate change, members of Parliament will have a key role to play in creating a better understanding of how my recommendations will be taken into account in the near future.
Senator Angus: I believe that inherent in your report are recommendations to indicate what those tools are. I chose the leadership one because you emphasized it heavily and I do not know what you mean by that.
In fairness, in the government before the present one, ministers who were named to the environment portfolio — and I think of Minister Anderson or Minister Dion — became green individuals. I felt they were sincere — perhaps misguided, I do not know — when they came to us. They seemed focused and determined to provide leadership for a positive environment plan for Canada.
As you said, they did not know how to use the tools properly and it all fizzled out — because your report is clear that it was a failure.
Ms. Gélinas: For me, leadership is different from tools. The tools are there: voluntary agreements, regulation, programs and strategies. Crystal clear at the beginning of my report I have said that the tools are there, the know-how is there and the expertise within the federal government is there. It is how the government uses those tools to achieve the overall objectives and targets.
Leadership is different. You can look at leadership from different angles. At the bureaucratic level, when it takes four years to develop a large final emitter system, and we know this system is key to reducing greenhouse gases, you may wonder where the leadership was.
When we have not been ready as a country — and the federal government in particular — to engage and have the provinces involved in looking at solutions to address climate change, there was probably a lack of leadership.
You can look at leadership in different ways. When we talked to the public servants, they said they were willing to move ahead but they needed direction from someone at the top to tell them what to do. This is another way to illustrate what leadership is and how leadership is so important at the highest level from a political standpoint, but also from an administrative standpoint.
The Chairman: I wanted a point of clarification: When you responded to Senator Angus, who asked you about government acceptance, you first said that when you mentioned that consultations were taking place with the government, you meant the bureaucracy.
Ms. Gélinas: Absolutely.
The Chairman: In respect of the undertaking to give effect to the recommendations in your report, I assume you mean the ministry. Am I correct on both counts?
Ms. Gélinas: You are right.
The Chairman: On one other point of clarification, the tools that you now refer to are the operative tools; the tools that were absent and referred to in the critical part of your report, were tools of measurement and evaluation. Is that correct?
Ms. Gélinas: Yes.
Senator Angus: Thank you for that clarification.
You indicated that roughly 78 per cent of the emissions come from the transportation industry and heavy industry. Does ``heavy industry'' include the oil and gas industry in your lexicon?
Ms. Gélinas: The industry sector represents mining and manufacturing, the oil and gas sector and thermal electricity. These three groups are within that 53 per cent, and transportation represents another 25 per cent. The industry sector as a whole represents 53 per cent of greenhouse gas emissions.
Senator Angus: At point 19 of Chapter 3 on page 4 of your handout we see the federal efforts to tackle emissions produced by the oil and gas industry. I happen to know through the grapevine that you personally went to Alberta to look at the oil sands situation for yourself. You say in your remarks that the federal government has not taken into account the unprecedented boom in that sector in its battle with climate change. Emissions resulting from increased exploitation of oil sands could double by 2015, which is within eight years, cancelling out any other efforts to reduce greenhouse gas emissions.
Can you elaborate on that? I am interested to know what your personal impression was when you went to Fort McMurray and that area.
Ms. Gélinas: I am not sure if my personal impression is of interest to senators. I will first talk about the oil and gas industry and the oil sands.
You went to the crucial point in my opening statement. Regardless of what we do in the coming years to address greenhouse gas reduction, if the government does not tackle the oil sands issue seriously everything else we do will be cancelled out. I consider the oil and gas sector to be no different than the other two sectors, and they produce about the same percentage of greenhouse gas. The oil sands are being exploited very rapidly. Technology is available to address reduction in that sector. The government expected to reduce greenhouse gas emissions in that sector by 20 megatons per year. At this stage, oil and gas represents 19 per cent of greenhouse gas emissions and the oil sands represent a fair percentage of that. As long as we do not address this particular issue and the government does not bring forward technologies to reduce greenhouse gases, we will see no result.
The overall objective is to bring the curve down. As I have said, whatever is put in place will reduce the rate of growth, at best, without addressing reductions.
Senator Angus: This morning we read that Minister Rona Ambrose met with the oil and gas industry in the last few days. She has announced that the problem cannot be fixed overnight, and although the technology is almost there we must give them a chance — the problem will be dealt with gradually, albeit urgently.
Did you see the reports this morning? Some people were saying, ``Here we go again. It will be the soft brush and nothing will get done.''
I thought the minister gave a cogent answer, but she was coached, obviously, by experts. What was your impression of that?
Ms. Gélinas: We all know there is no easy fix. We have a growing economy, which is good news, but because of that we have to be even more serious about addressing climate change. That is why we tried not to focus only on the Koyoto Protocol in the report. This is a milestone, but we talked about the need for the short term, that being the Koyoto Protocol, so between 2008 and 2012, but long-term objectives.
We also audited Sustainable Development Technology Canada, which is a foundation that tries to move technologies from laboratories to commercialization, and it is clear that this movement will not happen overnight. It takes time and that is why we need short-term targets as well as long-term targets to ensure that we have a system in place so the government can report back to Canadians on what is happening with climate change. Taxpayers' money is being spent and they have the right to know what is happening. We must have that system in place as soon as possible.
Senator Adams: You mentioned subsidies for oil and gas. The committee went to Fort McMurray last March. Another $6 billion is being invested in the oil sands there. I would like to have more information. Are the subsidies from the government meant to help reduce emissions or only to upgrade equipment? Over $1 billion has been spent so far. Is there any stipulation that subsidies from the government must be spent on improving the environment?
Ms. Gélinas: I went to Nunavut for the first time, and I hope to go again. It is a wonderful region of Canada.
We have not looked at subsidies per se. In my opening statement I referred to petitions, which are used by Canadians to ask questions of the federal government. We submitted a petition on questions related to subsidies in the oil and gas sector.
The only thing that we can share with you is the allegations in the petition, which are in the public domain, and the type of answers we received from, for example, the Department of Finance. Ms. Leach can walk you through that petition very rapidly.
Senator Fox: How does this petiton work? Is this a statutory right in legislation?
Ms. Gélinas: Yes: There are three components to my mandate. The first is to audit environmental issues of significant importance — so I can choose the ones I want to audit. The second is to report on an annual basis on progress made toward sustainable development in the federal government. The third is to be the guardian of the petition process, which is a way by which any Canadian, through me, can ask questions of any department of the federal government. The ministers are accountable and they have 120 days to respond through me to the petitioner.
Senator Fox: Can we do that, too?
Ms. Gélinas: It is an efficient way to obtain answers to your question.
Mr. Arseneault: In addition, we also do audits of the responses that ministers give to questions. Sometimes the ministers exaggerate the truth a bit.
The Chairman: No!
Mr. Arseneault: That is our experience.
Senator Adams: You talked about two things that I would like more information about, including better fuel efficiency for housing. We live in a cold country. Some of the houses that have been built before any policies for the environment are not really up to date. I think in 1970 the government upgraded 2,000 houses. In Nunavut, the funds were more for upgrading and better insulation for the houses. Between the 1970s and the 1980s, Canada Mortgage and Housing Corporation, CMHC, updated the attics. Some of the attics need ventilation. The ventilation goes close to the ground. The snow was fine and got into the attic. Some houses built between the 1970s and 1980s may be not up to date with the standards. How much benefit are we getting for the people in Nunavut for saving energy? My own house costs me about $400 a month to heat.
Ms. Gélinas: Let me share some information with you. The EnerGuide program for existing houses has been shown to improve energy efficiency on average per house by 27 per cent, which is significant.
Senator Adams: You are talking about across Canada. The government says we have so many per cent of people who own houses. It usually comes out as so many in a population area. Does it still work that way? Nunavut only has 30,000 people registered. Maybe we cannot afford the government policy. What population of a community are we talking about? We pay taxes like all Canadians. We want to know about the subsidies. Even my house, I cannot afford it. I cannot get the subsidies because I work for the government.
The Chairman: Senator Adams, the EnerGuide program about which you are talking is not based on per capita. It is based on your house. The same benefits are open to Canadians wherever they live.
Neil Maxwell, Principal, Office of the Auditor General of Canada: We have not looked in detail at the point that you have raised, but one important thing that we did look at in the report that has an impact on the North is the question of adaptation and the impacts that are happening. Those same houses that you talk about right now are at risk because of the loss of permafrost. The North is a place in Canada where we see the most extreme impacts in terms of loss of permafrost and global warming. It is quite profound. That was one of the more striking things we found in the audit.
We tried to stress that the whole question of adaptation is important. So much of the attention of the government has been on the question of trying to reduce those emissions. That is obviously important, but equally important is ensuring that the government equips all Canadians to adapt well to the changes that are inevitable. Our message, in short, was that the government has not done the thinking to figure out what it will do. It is at very early stages.
Senator Adams: I heard that the CBC local station studied some of the rivers in Nunavut. I just want to make sure that we have a right to study the river in Nunavut. Since the policy came out, there is a company that is not my company that studied this summer so far and spent over $300,000. They will spend another $4 million next year to study the future, the power dams and things like that. I want to make sure the Government of Canada bans the damming of the rivers. It is a waste of money. According to environmental regulations they are not allowed to dam any more. Right now they study any fish that go through some of the rivers. They want to adapt a power plant in the future for Nunavut. We do it right or are we supposed to move on? We have 26 communities. We have a power plant running diesels 365 days a year. I do not know how many emissions we are are putting out. Do you understand my question?
Ms. Gélinas: Yes, but I cannot answer your question. You can use the petition process if you want to ask the question and receive an answer.
The Chairman: All we have to do is make a petition of your question, Senator Adams, and address it to the commissioner and it will be answered. Remind us to do that and we shall.
[Translation]
Senator Tardif: Thank you for your excellent report. Ms. Gélinas, you say in the report that government action has not been well organized or well managed within the various departments and agencies, because a number of departments and agencies share responsibility. In your opinion, what kind of management could effectively connect this network of jurisdiction?
Ms. Gélinas: I am sure that everyone would like to know the answer to that question. First, I want to tell you what did not seem to work. On the one hand, there is no oversight at the upper level of the government. On the other hand, just because one department is responsible for one file does not mean it has the authority with regard to that file over the other departments, hence the importance of being able to work together on horizontal issues.
The Treasury Board Secretariat has been working on climate change for the past two or three years as a pilot project. It has developed a governance structure to ensure that there are mechanisms in place to clearly identify the roles and responsibilities of each department as well as the objectives, such as reducing greenhouse gas emissions, for example, in order to be able to measure each department's performance with regard to those objectives.
That pilot project is still underway. I would add that the whole issue of performance measurement and reporting is also absent. This has been mentioned several times this evening.
Until that problem is resolved, no matter what commitments each successive government makes, the situation is not going to change because we lack a good governance structure. If there is anything to be learned in auditing, it is that good management practices produce good results. It is no surprise that, with the results we see today, good management practices are lacking. The government must resolve this issue. That is why I mentioned Treasury Board because the two aspects missing from its management framework relate to governance and performance. Although Treasury Board has responded that they are currently identifying deadlines, it would be no doubt useful to ensure that Treasury Board delivers on its promises. A governance structure is clearly lacking.
Mr. Arseneault: It should be noted that there used to be the Climate Change Secretariat a few years back and that it ensured interdepartmental coordination. The Secretariat reported directly to the Deputy Minister of Natural Resources Canada and Environment Canada, and worked with all departments in order to, shall we say, foster a common direction. The important thing is that, before being dismantled, the Secretariat had produced a report on the expenditures related to the government performance programs. It was announced that the Secretariat would be replaced by another structure. As Ms. Gélinas indicated, Treasury Board got involved, following a pilot study, in the production of a map of all federal government programs.
The federal government had a series of programs in place. We had no idea of the scope of these programs. It was then decided to produce such a map. Once established, the map could help us create structures, carry out analyses and evaluate programs. This is what the system needed. Currently, Treasury Board plays a role, but they have clearly told us that they do not hold this function. Their role is simply to facilitate the process. Later on, we would need to identify who is truly responsible.
Ms. Gélinas: If I may add to that, the last time Canadians and parliamentarians received an update on the climate change file, was in 2003.
The government was committed to tabling its next performance report in 2008. That leaves close to two years before the next report. If the past is an indication of the future, it would be a good idea to question whether a report could be made public in 2008, given that delays put off publication of the government performance results.
[English]
Senator Cochrane: I have a Fisheries meeting at seven o'clock. The minister is appearing and I must be there.
I just wanted to ask you, Ms. Gélinas, what about the volunteer method of trying to improve on the gas emissions? Do you agree with the term ``volunteer'' and do you think it has worked in the past?
Ms. Gélinas: Are you referring to the voluntary agreement with the auto sector?
Senator Cochrane: Yes.
Ms. Gélinas: First, I should say that this is one of the tools in the toolbox. We have not taken any position on whether voluntary agreements are good or bad or better than regulation. What we have said for many years is that any voluntary agreement should be as rigorous and as robust as any other regulation, if you want to compare.
In this case, there are a couple of missing parts, but there is one big one, which is the third-party verification. You have an agreement between the auto sector and the Department of Natural Resources, but there is nothing in the agreement that has clearly specified that third-party verification will take place so that Canadians and parliamentarians will know how much progress this agreement is achieving. Because it is a voluntary agreement, it is more important than ever to have access to that kind of information.
In their response, the officials of the department have said that they will discuss that with the auto sector, but there was no firm commitment that such third-party verification will take place.
Senator Cochrane: When you visited the industry people out West, did you receive a good feeling that they were going forward, that they were looking at ways to adapt to emissions and climate change?
Ms. Gélinas: They told me a lot of good things. I should use your question as an opportunity to say that we have looked at the federal government's programs, policies and measures. We do not know that information in terms of what the industry itself, on an individual basis, is doing to reduce greenhouse gas. There might be a lot of good things — in fact, that is what they have told me — but as an auditor, I believe only what I see with evidence. In this case, I cannot tell, but the welcome was excellent.
[Translation]
Senator Tardif: I would like to come back to the issue of management of the former Secretariat. First off, I have three questions to ask you: Were reasons given for abolishing the Climate Change Secretariat? Was the Secretariat achieving results? Currently, is it the responsibility of Treasury Board to develop a climate change plan?
Ms. Gélinas: I will answer the last question and let Richard respond to the first two. Developing a plan is the primary responsibility of Environment Canada. What we have seen during our audit over the past year and half is that it is unclear who is responsible for what in a number of sectors. It is therefore important to specify roles and responsibilities. It is our understanding that Environment Canada is responsible for everything related to policy development and that Natural Resources Canada implements and administers most programs. The roles of all other departmental players are not clearly defined.
Senator Tardif: And who decides in the grey areas?
Mr. Arseneault: With regard to our recommendations within the commissioner's report, we did not even know to whom they should be addressed because it was unclear who was truly in charge at the departments. We spoke with them and they told that Environment Canada had the lead role.
Regarding your previous question on the dismantling of the Climate Change Secretariat, the government had decided that the Secretariat had fulfilled its function and that, at the time, there was a greater involvement from the central agencies, including Treasury Board, which has developed the pilot study. But the government had promised that there would be mechanisms to replace the Secretariat. These did not materialize. At the political level, there was a cabinet committee, which had been created by the former government, but we could not access information from those discussions. We could not really gauge the content of their discussions. Today, the committee no longer exists. We are in a situation where there is no real coordinating authority to follow up on performances and financial considerations.
Senator Tardif: Which committee no longer exists?
Mr. Arseneault: The ad hoc parliamentary committee on sustainable development.
Senator Tardif: The deputy ministers sat on that committee?
Mr. Arseneault: Ministers did. The committee was chaired by the Minister of Industry under the former government, but the new government did not choose to re-establish the committee, for now.
[English]
The Chairman: Along the same line of evaluation of what has occurred, commissioner, you said in your report and again today that the EnerGuide program and the energy audit program attached to it had a modicum of success: that it was functioning and achieving something.
Do you understand yet why that program was cancelled? Was it inefficient to a degree that it would be prudent to cancel it, or should we wait to see what will succeed it?
Ms. Gélinas: You must keep in mind that we looked only at three programs. Those three programs are not achieving significant reduction, and there is no silver bullet. Everything that can contribute to reducing greenhouse gas is probably welcome.
The other thing you must keep in mind, something we have not looked at ourselves, is that while we were doing our own audit, Treasury Board was performing a program review of all the climate change programs. Part of your answer is there. If you were to ask why this program was cut but not others, the Treasury Board would be able to answer that question.
I was asked again this morning: What about the other programs? How can we talk about efficiency of the program? I cannot talk about that because I focus only on three programs. I have provided the costs for those programs thus far and how much they have achieved. There is a list of other programs that have been reviewed and for which an analysis was done.
The Chairman: When you spoke about the ethanol plant, did you express an opinion — if not, do you or your people have one now — about the question of feed stock? There are two basic kinds of programs for making ethanol, one based on corn and the other on cellulose. I am glad to hear there is an up-and-running plant in Saskatchewan, which I presume is running on cellulose. Is that correct?
Mr. McBain: It is running on wheat.
The Chairman: That is too bad. I guess that answers my question.
Have you expressed a preference in respect of the efficacy, in selfish Canadian terms, of ethanol production using feed stock that is cellulose-based as opposed to corn based? If the investment will be made initially in ethanol plants in which corn is the feed stock, given the agricultural efficiencies that pertain to corn as opposed to cellulose, it will be cheaper in some cases for Canadian plants to buy American corn as feed stock. That would not be an efficient thing to do in terms of the Canadian economy. Did you express an opinion in that regard?
Ms. Gélinas: We have not looked at that issue. As a result, we have not commented in any way on feed stock.
Senator Angus: When you get right down to these issues of leadership and political will, they comes down to politics. Politics is the art of the possible.
I have heard it argued that Canadians as a people have a hard time relating to greenhouse gas emissions. They do not touch them and feel them. It does not give them a runny nose. They are interested in things in the environment that affect their health, such as mercury and what it does to pregnant women, or water pollution like we have at Lake Massawippi in Quebec as we speak, or Walkerton. If we can address those kinds of problems, we are certainly moving forward.
I am concerned, as a Canadian citizen and not wearing my hat as Conservative senator, that the proposed clean air act or whatever new plan will be unveiled within the next short period will not address the climate change issue as much as it will address clean air, clean water and health-affecting issues.
I appreciate your comments on that. Obviously, in reviewing your recommendations with the powers that be, I am sure in their acceptance of your recommendations and in the dialogue you have had, there must be a flavour of what is to come.
Ms. Gélinas: As the environmental auditor for the federal government, I audit whatever has been committed to in terms of deliverables. As an environmentalist, I would like it if we could cope with the big issues. Climate change is one of many issues that need to be dealt with.
Having said that, like all other Canadians, I look forward to the new plan and how climate change will be addressed. You know you will not get rid of me, so I will come year after year and audit progress and report back on what we have achieved.
In the past, I have covered many other issues. From my standpoint, they are all important. I am not the policy- maker. I am not the one who decides what the priorities should be. My concern and worry is always the same: Whatever has been committed to should be fulfilled and respected, and we must see results.
Canadians are looking for results, whatever the commitments may be. My job is to report back to you in terms of progress made. It is up to parliamentarians to keep the government's feet to the fire and accountable for results, to make necessary adjustments and to move on. We have so many issues to deal with. I am sure that we will never become bored dealing with environmental concerns.
The Chairman: Senator Angus raised an important point, for which I thank him.
Senator Angus: I am trying to get a good handle on this myself. Reading your report, the big climate change issues are not so much within the remit, if you will, of the average Canadian citizen. The One-Tonne Challenge was a good idea, but you could not get the buy-in, whether Rick Mercer promoted it or all kinds of money was spent on it. It was hard for people to see that it would make a difference. They can see a big difference in keeping the water and air clean.
With greenhouse gas, when you talk about the transportation sector, you talk about heavy industry with the three ``volets.'' These are government matters, and the government must act and bring in strict laws. They must enforce those laws. They must get rid of turf wars and jurisdictional disputes and all the things we hear about as inhibiting progress in this area. That is in the domain that only the government can fix. Am I right?
As I say, I have a sense this new plan will focus on issues that touch human beings directly, issues they can feel and see, and that go to their health.
We are doing a review with respect to that in this committee now, and we are wrestling with it. It is tough. We have been asked to participate in the review process of the Canadian Environment Protection Act, CEPA. It is a huge behemoth of legislation with 37 different bills and so on. We have chosen three areas to focus on. It is interesting. I referred to mercury earlier. We are getting right into it, and this week in fact. We will try to learn something about it and write a report as to the efficacy or otherwise of CEPA in dealing with that problem. We will deal with smog as another example, which seems to fit more into the clean air domain. You and some of your colleagues helped us focus our study on CEPA, Madam Commissioner, before Parliament rose in the spring, and it was helpful to us.
We are wrestling with these things, but climate change is just so mammoth and so big. I read this morning about the poor minister. I can see the boys and girls from the big oil and gas companies around the table saying, ``Ms. Ambrose, let us tell you what it is really like. We want to let you have a little...'' They turn on the overheads and the slides and they bring in the people the white jackets to show her the technology and they take her down the corridor into the lab to show her the incredible things that are coming down the pike in technology for extracting the bitumen and so on. Therefore I can see that suddenly she realizes that Rome will not be built in a day in that area and she will come back to Ottawa and get on with cleaning up the water in the Great Lakes, et cetera.
Ms. Gélinas: If I may say, this country is not up to the task if we have to stick to the Kyoto Protocol, or address climate change. It is not because the challenge is huge that we should not get on with the job and, there are steps that can be taken. We suggested a couple of things to address sooner rather than later, and I hope we will not get into a debate on climate change or something else, but we can deal with climate change in other issues that we need to deal with. If it fits with clean air, let us see, but what matters at the end of the day is what we have achieved.
Senator Angus: It is important that the government has the right advice. Your report and the input you and your colleagues can have can only be helpful. You heard me before and I am a very partisan individual, on the one hand, but whatever I may think about Stéphane Dion, I do not think he acted in bad faith. I think he gave it his best shot. I did not think he went about it the right way because you told us he did not. I do not think he was a bad guy who came in here and tried to screw up the environment portfolio, nor do I think David Anderson did, or others. However, I can see the $6 billion and your numbers, and we are shocked by that. We are here to try to help develop some public policy that will sharpen the point and focus the issues. Your mandate is tremendous. I think it is one of the great elements of our infrastructure in terms of the environment that we have you people, independent as you are of government, to help us in that exercise.
The Chairman: That kind of dialogue and discussion is exactly why we are here. We have to be, as you have said, hopeful that we will see good things, and we can also remember that none of these things are mutually exclusive. They scratch each other's back to a degree. If we fix smog, it will have a salutary effect to some degree upon greenhouse gases, GHGs. Am I right? There is some residual cross-over.
Ms. Gélinas: Someone will assume that.
Mr. Arseneault: It is true, but the challenge we have given ourselves through the Kyoto Protocol is so big that dealing with smog will not deal with that challenge completely, obviously.
Senator Angus: It will improve the quality of life though for people who live in Montreal.
Mr. Arseneault: You mentioned the Canadian Environmental Protection Act. What is the environment? The environment is the air we breathe, the water we drink, the soil that our forests are growing on and our agriculture. It is all of that. In fact, the government is already controlling some substances under CEPA that cause smog and we will audit that. I wanted to inform you of that.
Senator Angus: That is interesting. You mentioned, Ms. Gélinas, in your one of your answers that some of these issues come into sharper focus because of the North. We are fortunate to have Senator Adams and other senators from that part of the country. They are full of these stories, much more than someone who lives in Toronto or Montreal. They literally do not see the same wildlife on which they depend for their livelihood. They find the delicacies they used to eat are no longer edible. The mothers' milk is contaminated. It is right before their eyes and they see the rivers that were not there once. It is fascinating how Senator Adams really brings a viva voce reality check right into the room and it is one of the things that made me so interested. There is no question that global warming and its effects are happening — the warming and the receding of the glaciers and the opening up of the Northwest Passage — as maritime lawyers we are all gearing up to run big liner services from Antwerp to Beijing in three days where it usually takes three weeks. It is not that, which is one thing, but it is those terrible toxins and other things that we have done to our environment through these, such as mercury as I said. That one floats up North from the border industries.
How can you not address them if you are a responsible government and you have these fantastic natural resources on three coastlines?
The Chairman: We will get to those things. We have to do all of the above, of course.
There is a positive comment in your report about Sustainable Development Technology Canada. In fact, you used the most complimentary word of which an auditor is capable of uttering, ``satisfactory''. That warrants a parade with bands and banners.
Can you tell us, because of course we have to do regulatory things and we have to do carrots and sticks, but there is also an extent to which investment in technology will help us arrive at some of these things. Can you expand on your views in that respect, and of that arm's length agency in particular?
Ms. Gélinas: I will have Mr. Maxwell give more detail about that, as he performed the audit. I am glad though, you referred to that word ``satisfactory'' because when we say that to those who are audited they are mad at us that they receive only a ``satisfactory.'' From our point of view, that is the ultimate they can get.
Mr. Maxwell: Senator, you summed up in a few short sentences our opinion, which is that things were working well. We never give out these top ratings without some caveats, and basically our message was ``so far, so good.'' They have not been in business long, but we were impressed with what we saw. They have good procedures for picking technologies, and they make sure they have the experts around to pick wisely.
It is an important program also in the sense of illustrating why dealing with climate change in this country is such a long-term initiative. They have been in business since 2001, but because technology takes so long to come to fruition, they are only now seeing the first seven projects that they have funded make it to the point of commercialization — and that is just the start; they are nowhere near the marketplace yet.
It is a point we make about the plan and what we think is important in the new plan for climate change, and that is the long-term focus. So much of what we have talked about today is that you cannot turn around this greenhouse gas emission machine on a dime. You cannot bring those emissions down in the short term.
That is why Kyoto is such a daunting target. The commitment period starts in 14 months. There is little we can do now starting from scratch to make inroads on Kyoto. That is what we have said in our report. Mathematically, it becomes extremely difficult to turn that around quickly.
The plan has to be a strong, long-term plan that starts with a meaningful, aggressive, long-term target that would actually bring those greenhouse gas emissions down — and then working backwards toward those short-term targets. When we talked in the report about short-term targets, we said those short-term targets are important to keep the discipline to move toward the long-term targets. Technology is like that. It is a tool in the toolbox, but it will not pay back in the next year or two; it will pay back in the next decade — hopefully big time.
The Chairman: When those things reach the market and are practically applicable.
Senator Angus: What was that lab we went to?
The Chairman: The Alberta Research Council.
Senator Angus: It seemed to me the stuff was all ready to go.
The Chairman: It was ready to go in a tabletop model size. After that, they go to a mid-size and then a full blown plant; that is the process that, I think, is being talked about.
Ms. Gélinas: That is the niche this fills, which is an important one to get through commercialization.
The Chairman: That is where investors have a tough time. When it works here, it does not necessarily work over there. It is hard to predict.
With respect to that, I will ask you a rude question not directly related to your report, but rather to your professions.
We are concerned these days with efficacy, efficiency, transparency, openness and accountability — and rightly so. However, there is a point at which, in my view, the time, effort and money that is expended upon being open, accountable, efficient, and demonstrably above board, et cetera becomes, in itself, inefficient.
For example, in the last 20 months Sustainable Development Technology Canada has been the subject of six different audits. They now have a staff of 30 — it used to be seven or eight. They have often had 12 auditors of one kind or another in their plant, and sometimes more. Their estimate is that the person who came from the private sector into sustainable development to work as the liaison between them and industry now spends all of their time — not just part of it, all their time — dealing with matters of accountability, transparency and audits.
The executive director, Dr. Sharp, spends about 40 per cent of her time answering questions about audits, transparencies, accountability, efficacy and the like. This requirement is frustrating the board, which is comprised of industrial people — people in the oil business who want to get on with it. She is having a hard time getting out into the industry because of the time she spends meeting with KPMG and NRCan, doing evaluations, meeting with your office and with the Treasury Board audits, et cetera.
I said it was a rude question. Not counting yourself, is there some point at which the intense desire to be so clear, transparent and accountable begins to become in itself inefficient?
Ms. Gélinas: It is not a rude question. It is a fair question. We were fully aware from day one that getting into SDTC probably would add to the burden because they have gone through many audits. However, we need to step back a bit.
The Chairman: I am sorry to interrupt. They did not complain about this. I had to pry this out of them.
Ms. Gélinas: I doubt that Dr. Sharp complained about anything, to be honest. We had discussions with them. We tried to be as discrete as possible, even though we needed to do our job.
However, we need to step back a bit. You will remember all the discussions surrounding foundations. It was important for us, as the auditor of the federal government, with the credibility that our office has, to go there and report back to parliamentarians about how the first foundation was performing — because it was the first foundation that was audited by the Auditor General's office. We did not know what to expect, which is always the case when we audit.
I do not know if I can go as far as saying that they passed the test with almost flying colours — the satisfactory rating. It is probably good news even though that was hard on them because, as you said, they had a small team.
We do not need to make things so complicated. It is often because there is no governance structure and accountability in departments. This is Management 101. You need a tracking system and a reporting system to start with. That is much more than we often see in departments and it is no different with the sustainable development strategies. At least we were able to report that SDTC has that system in place. We are waiting now to see how the project will produce in terms of greenhouse gas.
Mr. Maxwell: As the commissioner said, we are conscious about that burden. Auditors do something that I am sure you will be pleased to know: if someone else has audited an area, we do not redo that work. We start by saying, can we place reliance on that work? We were able to do that in this instance and it saved SDTC and ourselves a lot of time.
Certainly, that concern was reflected in our report. We said that the two sponsoring departments have to be careful in overburdening SDTC in terms of these different mechanisms. If you look at any single mechanism in isolation, it can make a lot of sense. However, when you put them all together it can be overkill. There is a limit. We stress that in the report.
The other thing I wanted to add — I know you asked the question with respect to SDTC — if I look across all the different things we looked at in terms of climate change, there are not many areas where there is anywhere close to too much accountability. That is our point — since 2003, Canadians and parliamentarians have not been able to find out what the results were in terms of climate change. Now the promise is not until 2008, even though they said every two years Canadians and parliamentarians will have a report.
That is far from overkill.
The Chairman: Unlike other foundations that have been created by the previous government, this one does not have a huge capital amount of its own and it lives off the proceeds — like the Canadian Foundation for Innovation, CFI, for example. These people have $550 million to spend by 2010, is that correct?
Ms. Gélinas: The last commitment was 2010 and two extra years to spend the money.
The Chairman: Will they make it? Have they gone through a proportionate amount of that money? Do they have enough for the job they set out to do, or will they be able to spend that money efficiently between now and 2010?
Mr. Maxwell: That is one of the big issues they are struggling with. So far, they have spent only $25 million, which shows how long it takes to ramp up, to get into business and to find good projects. There is always the question of whether the mandate will be extended.
The Chairman: I ask the question only from the standpoint of efficiency because, as you said earlier, governments until now have said they will spend $6 billion and change on the environment. In fact, they have spent only $1.6 billion. The money that was committed, that one assumes was booked and available, was not spent because there were not any real places to spend the money with any degree of efficiency.
Are we in danger of that problem with sustainable development?
Mr. Maxwell: Conceivably, that could happen. It becomes important for that foundation to manage well. As time goes on, the foundation must ensure that it continues to pick good projects and it does not simply get to a point where it worries more about getting the money out the door than about what the money goes to.
So far, so good: We saw good due diligence and real concern to ensure that it spent the money wisely. That will be an important question in the future and probably a good thing for your committee to focus on in terms of the oversight of that foundation.
The Chairman: Have you any further advice, given the description by Senator Angus about the way we will attack the comprehensive review of CEPA with which we are charged? The three areas we will follow, and the order in which we now propose to follow them are: First, mercury as an element; second, perfluorocarbons, PFCs, a pollutant only made by humans; and third, smog. We have placed smog third because we anticipate a government program might be announced, a bill introduced or perhaps even an act passed, having to do with clean air, because we have been hearing that a lot. We put it third in order of what we will address lest we be overtaken by events.
Have you any advice in respect of either that plan or other routes you think we might follow, or things we should address specifically having to do with CEPA? Have we chosen wisely?
The plan is to follow those three rails. They will lead us in various directions and the questions on which we will focus in each of those three respects are how and how efficiently, if at all, is CEPA dealing with these three questions — one element, one man-made pollutant and one big problem, as microcosmic examples of the efficacy of CEPA.
We welcome your advice now or later. We have already received some advice, for which we are grateful. I am telling you what we have decided upon as a course of action and ask whether you think it is wise.
Ms. Gélinas: You are taking me by surprise and I have nothing to add at this stage. I will make an analogy between what you have decided to do and the climate change audit report we did.
When we began, climate change was so broad that we had to determine where we would put our energy and efforts. Having tabled our report, I am pleased that we decided almost two years ago to focus on answers to three simple questions.
I think it is wise to choose what you believe are the key issues rather than trying to cover the whole spectrum and not getting into depth on any one in particular. I think that approach pays off because we have been able to address some key weaknesses and come up with solutions. I believe that if you take that route too, even though you do not cover everything, you will produce recommendation on three specific aspects. That is an interesting approach, based on my own experience.
The Chairman: Thank you. We took our cue from you to a large degree.
Mr. Arseneault: It is wise to look at a naturally occurring substance such as mercury, which exists in nature. It was created by God. It existed before us and will exist after us. Those are special types of substances; they are not created by man, but man displaces them in the environment. There are management approaches to deal with that. We are exposed to so many man-made chemicals and it is a good idea to look at how things are done in that area.
Smog seems to be popular these days and it is probably a good idea to look at that as well.
What will you look at? Under CEPA, substances are assessed and declared toxic under the act. There is a definition of ``toxic'' in the act, and it is not necessarily the definition we all understand.
An assessment will often tell what the sources are and what should be regulated. You then want to find out whether control measures have been put in place by the government, and whether the measures are voluntary, guidelines, codes of practice or regulations. That is not to say which is better, but you should know whether what you put in place is functioning. If it is not functioning, you should make adjustments.
That is what you want to find out to learn whether CEPA works. That is exactly what we will attempt to do when looking at the smog substance under CEPA. A number of substances have been declared CEPA toxic and a number are managed and controlled through different measures. We want to find out whether things are working and, if they are not working, what is being done to make them work. We will ask the government those questions and you may want to ask similar questions.
The Chairman: We will be helpful to each other.
Thank you, Commissioner. This meeting has been helpful. I am sure we will see you again soon.
The committee adjourned.