Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 14 - Evidence
OTTAWA, Tuesday, February 27, 2007
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 6:30 p.m. to examine and report on emerging issues related to its mandate.
Senator Tommy Banks (Chairman) in the chair.
[English]
The Chairman: Honourable senators, this is a meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources. Appearing before us today — and we are very delighted by that fact — is the Honourable Gary Lunn, Minister of Natural Resources Canada. Accompanying him is his Deputy Minister, Cassie Doyle.
My name is Tommy Banks. I am a senator from Alberta and I have the pleasure of chairing the committee. I would like to introduce the other members of the committee, beginning with Senator Mira Spivak from Manitoba; Senator Maria Chaput, also from Manitoba; Senator David Angus from Quebec; Senator David Tkachuk from Saskatchewan, a Prairie chicken like me; Senator Pat Carney, representing British Columbia; Senator Lorna Milne from Ontario; Senator Joan Fraser from Quebec; Senator Grant Mitchell from the glorious province of Alberta; and Senator Willie Adams, who represents Nunavut.
We are delighted that you are with us, minister. I hope you will have some things to tell us — and perhaps Deputy Minister Doyle will as well — and that you will permit us to ask you questions thereafter. You have the floor, sir.
Hon. Gary Lunn, P.C., M.P., Minister of Natural Resources: Thank you very much, Chair, and all the senators for inviting me. The last time I was here, it was to appear before the Standing Senate Committee on Agriculture and Forestry. We had a great few hours.
Just before I start, if I may, I have a few officials here with me. You introduced my deputy minister, Cassie Doyle, but we also have Brian Emmett, who is the Assistant Deputy Minister of the Policy Sector. Howard Brown is our energy guru. Margaret McCuaig-Johnston, who does all of our technology and energy efficiency programs and Mark Corey, who does our sciences. They do a great job over there and quite often we forget to acknowledge the great work that they do. I would just like to start there.
The Chairman: If it is appropriate, and you feel so disposed, please invite them to join us at the table when and if you would like.
Mr. Lunn: They usually just throw things at me when I get off-message.
This is the first time I have had the privilege of appearing before this committee. I know we have had some difficulty scheduling this meeting, so I apologize for that. I am very pleased to be here.
I will try to abbreviate my remarks to some degree. I know we are about an hour late but I will stay as long as I can. I do have another engagement at 7:30 p.m. but maybe we can push that a little bit so we will leave time for questions.
Canada's natural resources form a vital part of our economy and our society. This has been the case since well before Confederation. Given today's global demand for natural resources, it will likely remain the case for many years to come.
The natural resource sector and the industries it supports are the lifeblood of hundreds of communities in every single part of Canada, including remote northern and aboriginal communities. Forestry, energy, minerals, metals, earth sciences and their allied industries account for some 13 per cent of Canada's GDP and more than 40 per cent of our total exports. Almost 1 million Canadians are directly employed by natural resources enterprises, and even more are employed indirectly.
The question that faces each generation of Canadians is how best we can exercise our stewardship over this very rich natural endowment. How best can we sensibly use it, responsibly maintain it and properly preserve it for now and future generations to come?
This afternoon, I would like to give a brief account of what we have been doing as a government. Obviously, I would look forward to your suggestions and questions. I will be trying to abbreviate some of these prepared comments so I will not be following the text.
The Chairman: You are free to do what you like. We have no text.
Mr. Lunn: Great, that is even better.
The Chairman: We do not know if you are tap-dancing or not.
Mr. Lunn: They stopped giving out the notes because quite often I would not read them.
When we took office, we had a look at our priorities and what we needed to do. There were well over 100 climate change programs in place when we took over the government. Some were quite good, but some were not effective at all. Some were not doing what they were supposed to be doing, so we had a look at those and said to ourselves: How can we focus our energies to really make a difference?
As I said earlier, in Canada we have an abundance of natural resources. It is well known that we have the second largest oil reserves in the world, vast supplies of uranium, great mines — we have all the ingredients to be an energy superpower and it is important to be known as a clean energy superpower.
We, as a government, decided to focus our priorities on three areas. First, we want to use technology to clean up our conventional energy. Right now, there are many opportunities in some very specific areas, which I will get to in more detail. If we use technology to clean up our conventional energy, we have a lot of fossil fuels that we will be using for many years to come.
Second, the largest source of untapped energy in this country is the energy we waste. We have to become more efficient; we have to do a far better job. The other area we looked at is that we want to put a lot more renewable energy on the grid. That is equally important.
How can we best deliver this program? We came up with what we called our eco energy initiatives. We invested $1.48 billion in our renewable energy initiative and we have expanded that. Some people will recall that there was a similar program of just over 1,000 megawatts in the past, but it was somewhat restrictive. We have expanded this program to include renewable energies such as small hydro, tidal, solar, wind and biomass. We want all of these sectors to flourish, but let them compete.
To give you an example, when the Prime Minister and I made this announcement in January, we went out to Victoria. Right off the coast of Victoria, last fall, we installed the first tidal turbine in North America. It was quite a remarkable feat. Think of it as a wind turbine that you turn upside down and stick in the water. It runs on the tidal currents as opposed to the rise and fall of the tides. It is a very predictable form of energy that produces electricity 16 hours per day. It is doing very well, just as an example. There is an enormous amount of energy in the oceans that we can harness.
That was the second initiative that we announced. The first was our eco energy technology initiative. We announced $230 million, a targeted investment that we want to see focussed on things such as clean coal technology, and carbon capture and storage. On clean coal, the scientists at the NRCan labs here in Bells Corner are doing a process that they call oxyfuel. They have the ability today to remove up to 90 per cent of the pollutants of burning coal by gasification of the coal. If that is combined with carbon sequestration, we have a very clean form of energy. Again, we want to invest in order to have a focussed approach on things such as that, as well as carbon capture and storage.
With regard to energy efficiency, we invested $300 million in a consumer program. It is very important that we engage the consumer. It is easy for us to put pictures on the front page of the newspapers or the national news of the refineries and the oil sands. However, it is important also to remember that every single drop that these refineries produce — every drop of oil, every drop of gasoline, every drop of natural gas — we all use to drive our cars, heat our homes and generate electricity for those homes. We believe that the consumer has to be part of the solution; that was our eco-energy initiative.
Since that time, the Minister of Environment has announced a $1.5 billion trust fund. We will tap into this fund to go after the priorities where the provinces think they can make the greatest gains in greenhouse gas reduction. We think we have the right approach. We have been getting some pretty positive feedback on the initiatives and we are excited about them as we move forward this year to see the results and work with the provinces on this.
Before I go to questions, if I can just take a minute, there is one other issue on which I think it is important to touch, which is regulatory reform. This is another huge priority for our government. Right now, the Deputy Minister has been chairing a task force. How many DMs are there in your committee? Are there nine or ten deputy ministers? Looking as a whole at the way in which we regulate the project approval process within the federal government, we could do a lot better job.
We get a lot of complaints that are somewhat segregated. There is the Department of Fisheries and Oceans, Environment Canada, Natural Resources Canada, Industry Canada, Transport Canada and others. The process can be quite slow and cumbersome. We want to bring that together so that we have a single window approach or a major project approval office with defined time lines. We firmly believe that by doing this we can have stronger results. By no means do you compromise the integrity of the process but, by doing this, we can create certainty for the industry to flourish, which we think is very important.
We would like, at some point, to take that even one step further, and bring in the provinces on a cooperative approach. I can report to the committee that the provinces have all shown a keen interest in this project as well. This is another project that we are working on that we think is very important. It is a high priority for our government and something with which we would be pleased to work with you, listen to your suggestions and report back to you as this project evolves.
I intended to touch briefly on the mountain pine beetle and our forestry initiatives. I did go over this area with your Forestry and Agricultural Committee. Perhaps I should just leave that one since we are short on time. If there are members of the committee who wish to raise it, they may.
Let me conclude my remarks by saying that I have just tried to give you a brief synopsis of a few of the initiatives on which we are working. In light of our time constraint, perhaps I will end there and we can open the floor to questions.
The Chairman: As you wish, minister. Ms. Doyle, do you want to add anything before we go to questions.
Ms. Doyle: No, thank you.
The Chairman: There is one senator who will be asking you a question about the mountain pine beetle. It was discussed before we got here. I have a list senators who have questions: Senator Milne, Senator Angus, Senator Fraser and Senator Carney.
Senator Milne: Minister Lunn, I am sure that you know, since we have discussed it before, that this committee conducted an 18-month study on the need for households to do their fair share of reducing greenhouse gas emissions. In particular, we looked at the one-tonne challenge. We came up with more than a dozen recommendations on how the federal government could improve and build on the success of the program. It was very clear to us from the outset that encouraging Canadians to act at the consumer level would be critical in Canada's meeting its Kyoto commitments.
I must say I was very disappointed when the decision was made on April 13, 2006 to eliminate all funding for the one-tonne challenge. Could you please explain to me why the government decided it would no longer promote the reduction of greenhouse gas emissions within Canadian households? You said that you wanted to be a clean energy superpower, but that does not excuse cutting programs that were working.
Mr. Lunn: Let me say that we absolutely are committed to reducing greenhouse gases and engaging the consumer and being energy efficient, not only in households but working with industry as well. We want to see where we can get the greatest value. With respect specifically to the one-tonne challenge, we did not see that as working. It is a matter of priorities. I am one who likes to look forward, even though I remember our fun trips that we had in Strasbourg and working together.
Senator Milne: I would not dare tell you what to do now, but I did then.
Mr. Lunn: I want to say that we made some hard decisions on programs that we did not think were delivering results. The one-tonne challenge was one of those. This was an advertising campaign on television and we believed that we could better spend those dollars in a more effective way. We launched our ecoENERGY Efficiency Initiative and we believe that we have quite a winning solution.
One of our greatest concerns, just following up on energy efficiency and the old EnerGuide Program, is that only around 50-cents of each dollar actually went into the home retrofits. The rest went into audits and administration, which I accept are important. What was most troubling were the numbers presented to me. Of all the people who had audits done, audits that were subsidised by the taxpayer, 70 per cent did not do any renovations; only 30 per cent did the renovations. The question then was: how could we tighten this up, how could we make this more effective, how could we get greater results, and greater greenhouse gas reductions? That is what we have developed in our ecoENERGY Efficiency Initiative where we believe that 90-cents of every dollar will go directly to retrofits for the consumer.
I must admit that the response we have seen from the public in the last year on climate change and the environment has been phenomenal. I will just mention one point to illustrate where the public is going on this issue. We have all seen some of the polling. A year ago we had a general election. Right at time, you had the one-tonne challenge program. Only a few per cent of the public thought that this was a big issue. In the last federal election, the issue was hardly raised.
Today it is top of mind for Canadians. They want to make choices and we think that is great. We are quite pleased that we have been able to punch through and that the Canadian public is so engaged in this file. We will all have to roll up our sleeves and do our best to make it work. Spending millions of dollars in an advertising program when, clearly, all the polling and all the evidence suggest that Canadian people are very engaged in this file does not make sense. We should spend that money on other priorities.
Senator Milne: You may want to consider that spending money on an advertising program is what raised the awareness of the one-tonne challenge. Through access to information requests, I have been able to obtain some of the documents that were given to you when you first became minister. The briefing, and this was in February of 2006, stated that awareness of the one-tonne challenge has risen significantly from six per cent to 51 per cent in the last year and is strong in every region of Canada. One third of Canadians reported taking action. Four million Canadians have visited the one-tonne challenge website to date and more than 1.3 million copies of the one-tonne challenge guide have been distributed.
It sounds to me as though there was quite a bit of uptake even back at the very beginning of your mandate. You were briefed on that, and the uptake was by the general Canadian public for this one-tonne challenge. One third of Canadians have taken action to reduce their greenhouse gas emissions. Why did you feel it necessary to cancel that program, to stop it?
Mr. Lunn: It is a matter of priorities. Looking back at that time frame when that television campaign was happening, this issue was receiving low single digits in the polls as an issue that was important to Canadians. It was behind so many other issues. We have taken a different approach.
Senator Milne: Fifty-one per cent is not too small.
Mr. Lunn: I would submit that we have been very successful in our ecoENERGY Efficiency Initiative and other initiatives in raising the profile of this issue, where Canadians are engaged. I had an opportunity the meet with the big five automakers and they have seen it as well. They have said that in the last six months the increase in the demand by the consumer for more energy-efficient vehicles is just dramatic. They are in a race to build the most energy-efficient vehicles because their lives depend on it.
I think it is wonderful that the public has embraced this file. We all know that there are a number of other outside forces that are driving the awareness of this file. Coming back to the senator's specific question, it is a matter of priorities. We wanted to spend the dollars, not on television commercials but on where we can actually see greenhouse gas reductions, where we can see energy efficiencies, where we can invest in technologies, where we can put more renewable energy on the grid. These are priorities set down by the Prime Minister and as I am sure most senators are aware around the table, you must set priorities; you must have a focussed, direct approach, and we think this focussed approach is allowing us to get things done.
Senator Milne: Minister Lunn, you are leading quite nicely into my next question because I know that you referred to the one-tonne challenge in the other place and you have done so again tonight, as just an advertising campaign. I quote again from this same briefing: "The program has attracted considerable interest from business, industry and other stakeholders. Home Depot, General Motors, Ford, Via Rail, SaskEnergy, Hudson's Bay Company and Canadian Tire are among many partners working with the program to promote energy efficiency and conservation as a way to address climate change. Approximately 450 companies have registered to use on-line materials produced for internal employment awareness programs, and more than 40 communities are involved in delivering challenge activities at the local level."
Was the funding of the programs that involved businesses and industry cut when the One-Tonne Challenge was cut as well? What about community efforts at the same time?
Mr. Lunn: Let me give you a specific example. You asked me whether funding was cut to some programs. The answer is, absolutely. We made changes because we believed that we had to do so. The commercial building incentive program is one where incentives were made for commercial buildings to reduce their consumption. That program got some results. However, do you know to whom we cut cheques? We cut cheques to the Royal Bank of Canada, to McDonald's, and to Zellers. When I say "we," I mean the previous government. I can list off many others. I believe Canadian Tire was on that list. We do not think that taxpayers should be paying these very profitable corporations to do energy retrofits, so we made changes. We think we have made the right changes.
Yes, we are not shy about saying that these changes had to be made. I come back to the record of the previous Liberal government on greenhouse gas emissions. We all know the story there. Emissions were up 35 per cent when we took office. We must turn around that curve. We must work together in order to see significant reductions in greenhouse gases. That is exactly what our focused approach is doing.
I can give you other examples on different programs, of which there are many. There are over a hundred programs. With the greatest intentions in the world, however, you can spread yourself so thin that you lose focus. All of these programs are out there, but they are not enough connected; they are not working together. If you spread yourself too thin, you will not do a very good job on any of them.
I would submit that you need to have a direct, focused approach. Referring to the One-Tonne Challenge program to which you keep returning, I do not believe we need to spend millions of dollars engaging the Canadian people. There are other tools that we can use to achieve the very same goals. I would argue that for a variety of reasons the public is very engaged on climate change and on reducing greenhouse gases. We think that is a wonderful thing. Let me just share one thing with you, senator.
The uptake on our energy efficiency programs for residences is higher than it has ever been with any previous programs. We cancelled the EnerGuide because we thought that we could do a better job. We can make it more efficient and deliver more greenhouse gas reductions for the same amount of dollars. The uptake on these programs was enormous. The department is still doing audits today on the old EnerGuide program, and they are still sending out cheques. As you know, when a program is cut, it is not a case of just throwing a switch. That program has to be wound down. That program will not end until the end of March of this year. However, we made changes, and we think we have made the right changes.
I firmly believe today that we did not need the One-Tonne Challenge advertising campaign. There were other tools in our chest that were not costing the taxpayers millions of dollars, and that money could be better spent on programs to reduce greenhouse gases.
Senator Angus: Welcome, minister. I am delighted that you could make it to the committee, and I hope you will have occasion to come back because these issues that we are all so interested in, you will find, are very fully aired at this committee. I found it a tremendous eye-opener. I want you to know that I am a friend and supporter of yours, and a friend and supporter of Canada's new government.
Mr. Lunn: I am very much aware of that.
Senator Angus: I have an easy question for you, but I also have a more difficult question. This is the easy question, minister. You have referred to the EnerGuide program. Several weeks ago, you announced a new eco-energy retrofit initiative to become effective on April 1. Basically, it is a similar type of program. It has been met with a fair amount of positive acclaim. Yet, at the same time there were critics, as there always are, saying you took too long to do it, and why. I thought this would be a good forum for you to explain why you did away with the one and brought in the other, and why there was a time delay.
Mr. Lunn: There is some overlap. We looked at all of the programs and we asked, "Can we do a better job?" I have to admit the officials worked a great deal on this one. We asked, "Where can we make some improvements?" We looked at this one and decided that there were some lessons that we could learn, so we made some changes. The biggest one was that of the government-funded audits performed that were subsidized by the taxpayer, 70 per cent of the people who had these audits done did not do any renovations. Only 30 per cent went on to do retrofits. I asked, "How is that efficient?" If 70 per cent of the people are doing nothing, that is not really helping the environment. We have to do a better job.
One of the greatest changes we made is for the consumer to pay for their audit on the front end, because we want to engage them. If we get their buy-in and they have to pay for their own audits, they are far more likely to follow through and do the retrofits. Having said that, we have increased the amount that they can receive to do the retrofits, so at the end of the day the consumer who follows through and does the energy savings will receive up to 25 per cent more in total than they would have done under the previous program.
Some have argued that we have wasted a year. That is simply not true. The old EnerGuide program wound down, and for this one cheques will not flow until April 1, but some people are able to do audits now and the start the process.
Let me share a funny story. When we announced this program, I got a phone call on my cell phone one night. I was not at home. It was from a lady from Atlantic Canada, who said, "This is your Aunt Mary." I do not even have an Aunt Mary, but I listened to her. She wanted to know how to put new windows in her house. It turned out that she was my wife's aunt. I asked, "How did you get my cell phone number?" She said, "I talked to your son, David, at the house and I told him I was Aunt Mary." I got calls from people I did not even know. I created a lot of work for the department the next day. There were hits on the website. The response to this program has been phenomenal. We are really encouraged by this response, that the Canadian people want to engage in making these retrofits. Again, we think that 90 cents on every single taxpayer dollar will go directly to home retrofits under this program. We think that that is a great thing.
Senator Angus: I am glad you answered that question, and I know it was a very tough one. I have two other questions to put to you. You may remember that a year ago I went down to Montreal on your behalf, as you were otherwise engaged with an urgent matter here in Ottawa. It was to announce a solar energy project involving government funding at Concordia University in a joint operation. I was not aware of the extent to which we were starting to make progress in mining this source of energy. Of course, we are also hearing a lot about nuclear energy. There has been much talk in the last several weeks about nuclear energy in the oil patch, in the tar sands area. This committee has travelled to a number of European countries looking at what they are doing. Some of us were more surprised than others to find that in France, something in the order of 80 per cent of their electricity is generated by nuclear power.
Can you tell the committee to what degree you and Canada's new government are bringing in solar energy on the one hand and nuclear energy on the other, and where we are at in these two critical areas?
Mr. Lunn: Let me address solar energy. Solar energy is relatively expensive but it has a promising outlook. Coal is around 4 cents a kilowatt; large-scale hydro can be about 6 cents; wind is about 8 cents a kilowatt; tidal energy is coming in at around 10 cents a kilowatt; and nuclear energy is 8 to 10 cents a kilowatt. These are rough numbers, and a number of factors can change all of them. Solar energy can be 20 to 25 cents a kilowatt. Having said that, it is showing extraordinary promise and the cost is coming down. That is why we want to continue to invest in the research. We announced about $36 million in our eco-energy heat program, which is for solar heating, something that is somewhat economical. It is better than 25 cents. In fact, it is quite efficient to do solar heating in that regard.
I think it is important that we continue to do this work and advance these technologies. I am a journeyman carpenter. I designed and built my own home and I get quite involved in the industry. The systems available today are not just solar panels. There are integrated building products such as with roof shingles that are solar panels. Aesthetically, they look great. The same thing applies with wall panels. I think we will see the day, 15 or 20 years from now, when we can build new homes that are zero net users of energy. If we include the types of technologies that are the most energy efficient type of appliances and the most efficient types of heating systems, such as ground source heat pumps, and combine the technologies available today, we can build homes that are zero net users of energy. I think it is important that we continue to do this work.
Our government continues to invest in projects. The TriGem project in Toronto is the largest solar building in Canada. They have done a fabulous job with that project. A company in Victoria called Carmanah Technologies does all the solar work there. For example, they do the solar buoys in the ocean and they also do crosswalks for schools. With a remote, they punch one button and it programs for the whole school year. Our airport at the air base in Kandahar is completely lit with solar lighting. Lots of specialty applications exist, but it is important that we invest in these technologies.
With respect to nuclear energy, Canada is truly blessed with many forms of energy, and uranium is one of them. As probably many members of the committee are aware, 50 per cent of Ontario's power is nuclear today. It is a reliable, base-load form of energy. It is important to note that every region of Canada is different, and ultimately it is up to each province to decide on their energy mix. British Columbia may decide to develop more large-scale hydro; they have that potential. Ontario and New Brunswick may decide that they want more nuclear. It is important that the provinces make those decisions.
On nuclear energy, it is important to note that, purely from an environmental perspective, there are zero greenhouse gas emissions from nuclear — that is, zero NOx and SOx pollutants — combining with the importance of air quality and the impact it has on our health. Senator Milne is from the Toronto area, where air quality is an important issue. We should be open to looking at the science of nuclear power and to asking: What is in the best interest of Canadians?
Finally, it is important to note where the technology for nuclear power is going. On generation 4, there are many countries working on this next technology where they can minimize the storage issues.
Senator Angus: The nuclear waste?
Mr. Lunn: I will use non-technical language. Basically, they can extract more energy out of their uranium. It does not become benign; storage is still an issue, but that is the direction in which it is headed. We must be open to all of these forms of energy. A diverse supply of energy in our energy grid gives us far greater energy security. We should be open to nuclear energy for those options. Ultimately, it is important for the provinces to make those decisions.
Industry in Alberta is looking at options for the oil sands because they use an extraordinary amount of natural gas to recover the oil from the bitumen, from the sand. They use, basically, heat and steam. Some people believe we should explore that option. We should look at the science and be open to that.
Senator Angus: The minister says that we should be open. He has referred to the provinces being the ones who should make the decisions. The gist of my question on nuclear energy was this: What, specifically, is Canada's new government doing to encourage the use of nuclear power in its negotiations with the various provinces and the big corporations out there?
Mr. Lunn: I want to stress that it is each province's decision. Exciting things are being done in renewable energy, and nuclear may fit for one province more than for another. We need to let them make their decisions, but we should be there to support them and to support the industry. I think we are doing a great job at that.
As well, as everyone is aware, the important issue is not only of reducing greenhouse gases but also of cleaning up our air because of the direct links to our health. For those reasons alone, one cannot discount nuclear. It is a clean form of energy.
The Chairman: I must do some housekeeping. I apologize, colleagues, because in this place, Minister, we do not have, as you can see, time limits on people, but I will impose some now.
I know, Minister, that you have another meeting at 8:00.
Mr. Lunn: It is at 7:30. I will go to 7:45.
The Chairman: That would be helpful. If you can do that, we can give senators five minutes for the question and the answer. I will go to the rules of the other place and be cruel about the cut-offs.
Senator Fraser: Minister, welcome. I have a suggestion before I get to my question, which is that you do with the One-Tonne Challenge what you have done with some of the other environmental programs that have been revised under new titles and new guises. Imitation is the sincerest form of flattery. I do not mind seeing good ideas revived. Even if the One-Tonne Challenge was only an advertising program, advertising works; advertising changes human behaviour. My suggestion, which you do not have to endorse instantly, but I would ask you to think about it, is that you bring that program back but in an improved form. Call it the two-tonne target or the five-tonne, whatever is alliterative there. I believe that program did contribute to the raising of public awareness. I base that on what people tell me, although not everyone. You do not have to have an audit in order to change your personal behaviour but if you can be shown — as that program did — ways in which you personally can make a difference and target something and say, "I got some of my tonne there," I think that is constructive.
My question has to do with the eco-energy retrofit program, which used to be called EnerGuide. In its new guise, it is not exactly the same program as it was. It is encouraging to hear that there is a lot of take-up for that, but I am still a little concerned about some of the elements of it and, in particular, this one. As I understand it, Canada's present government budgeted something like $700 million less for the eco-energy retrofit program than Canada's previous government budgeted for the EnerGuide program. Of that huge budget cut, more than $0.5 billion under the previous government was targeted for low-income families. I have no survey data on this, but I suspect that low-income families are more likely than other families to live in houses that are not as energy efficient as they might be. They may live in older or poorer housing, and they do not have the money to pay up front for retrofits. They probably do not even have the money to pay for an audit, let alone for the renovations that would be necessary.
Can you tell me why this program does not include a component that is specifically and proactively targeted at that segment of the population? You might get good statistical results if you could do that.
Mr. Lunn: Thank you for your suggestion. It reminds me of my one-watt story. I am not a big fan of the One-Tonne Challenge, but I like the one-watt. It is an area I am looking at in energy efficiency.
When TVs are turned off, most of them still draw between 25 and 40 watts of electricity. We have technology today that causes a TV that is turned off to draw only one watt of electricity. We are looking at that for appliances such as VCRs, DVDs, programmable coffee pots and televisions. Imagine how much energy we could save if all TVs, which are off most of the time, were drawing one watt instead of 25 watts when they are off. I will take your suggestion under advisement.
We looked at the issue of low-income people. Our goal is to reduce greenhouse gases. That is what we want most to do, and that is what this exercise is all about. We want to include not only low-income people but everyone. Everyone around this table is eligible. The amount of money you receive is directly dependent on how much energy savings you can achieve, and how much energy you save will depend on how much grant you will receive. The federal government has other programs for low-income people. Through CMHC, they can receive grants to do retrofits to their homes. We did not want to duplicate that program but, rather, to have a targeted focus.
This whole exercise is about reducing greenhouse gases, which is why we went with this program. Everyone is eligible. The amount of the grant has been increased by 25 per cent over any previous programs. It is a focused approach, and its focus is reducing greenhouse gases.
Senator Carney: I should explain that I have a conflict of interest because the minister is my MP.
I will confine myself to two questions in two different areas. I sympathize with your need to prioritize. I remember that 20-odd years ago, when I sat in your chair as minister, I received a letter from the Maritimes which read, "Thank you very much for the cheque for the installation. Now will you please send me $800 for the gas furnace."
I thought that perhaps we are getting into an area of entitlement that we should study, which we did at the time. It is difficult to choose. At that time we held the first seminar on hydrogen. We did some work in all of these areas, and 23 years later, nothing much has happened on it.
What percentage of our energy needs do you think will be met by these alternative energies in the next 10 years, vis-à-vis our reliance on the traditional forms of energy? As we are talking about what percentage of our needs will be met by alternative energies and what percentage will be met by conventional sources, where are you on the big projects such as reducing energy use in the oil sands; on the Alaska pipeline; and on your favourite subject, the B.C. oil and gas moratorium? What is the cut between alternative energy and conventional energy sources for the foreseeable future?
Mr. Lunn: I am currently reading a book entitled A Thousand Barrels a Second, which is worth a look. In this world we burn 1,000 barrels of oil a second, almost 86 million barrels a day. That is not sustainable. We have to change our ways. We cannot continue consuming that much oil.
Senator Carney: What will we do?
Mr. Lunn: There are different priorities and mixes. Prince Edward Island's target is 15 per cent wind, and they are very excited about renewable wind energy. We are looking at opportunities for wind in British Columbia. Tidal turbines are only scratching the surface. The amount of potential energy in our oceans is enormous. I cannot tell you the percentages; I would just be making a wild guess. However, there is a great opportunity to put much more renewable energy on the grid and to develop it.
In places like the oil sands, with regard to carbon capture and storage, there are two ways in which we can dramatically reduce the amount of greenhouse gases we put into the atmosphere from the big projects. One is CO2 sequestration.
Senator Carney: What are you doing in the department on these issues? What will come out of the pipeline in terms of the industry initiatives?
Mr. Lunn: I believe that in the next one or two years you will see projects on commercial CO2 sequestration. You will see the beginnings of a pipeline grid in places like Alberta. We will capture the greenhouse gases in places like the oil sands and the large refineries in Fort McMurray and put them back into the ground, deep into the enhanced oil recovery or the saline aquifers.
Senator Carney: As we do with natural gas.
Mr. Lunn: Yes. That is how advanced we are in that department. We are not doing this alone. We are investing heavily and working with our provincial counterparts and with industry. All of these players have a keen appetite to make it happen. We are very keen on working on renewable energy. Something else that shows enormous promise is clean coal.
Senator Carney: What about the Alaska pipeline, the Mackenzie pipeline and the offshore? Please talk about the big project side of your portfolio.
Mr. Lunn: The pipelines are very big projects. The Mackenzie Valley is a $15 to $20 billion project. The Alaska pipeline is upwards of $30 to $40 billion. The Mackenzie Valley is in its final stages of regulatory approval. I believe there is another year to go before that process is completed. Imperial Oil has invested $0.5 billion in the Mackenzie Valley already. Minister Prentice is the lead on that file. He has done a great job in resolving many of the First Nations issues, although there are still a few outstanding. Those projects are being worked on very aggressively, and we are making significant progress.
The offshore is not something we are considering at this time. I believe there is more science to be done before we can consider it and, more important, there is much work to do with the First Nations before we can go there, and we are not prepared to do it at this time.
Senator Adams: Thank you for coming, Minister. I am glad to hear that you are a journeyman carpenter. When the Prime Minister called me to offer me the appointment to the Senate, I said that I could not come to Ottawa. He asked why. I said that I did not want to hold up the work of the carpenters, as I had two houses to wire.
You mentioned tidal turbines in B.C. In Nunavut, we are interested in windmills. I have spoken to some of the power operators there. They are hoping to provide every household with 1,500 kilowatts of power, and cut down the costs.
Mr. Lunn: Fifteen hundred kilowatts with the wind?
Senator Adams: That is using a generator with a windmill. I used to be an electrician. The lights in a house use 1,500 kilowatts of power. The wind is able to reduce the power coming to the house. You can hook it into the stove or hot water tank or your dryer instead of the main power coming into the house. That is the kind of things we are looking at for the future in Nunavut.
We have a lot of tide. In the summer, when you fly over, you can see the tide coming into the rivers up the coast. As soon as the tide goes out, the current changes.
Mr. Lunn: We would love to work with you on the wind project. Obviously you are a prime candidate in places such as that for our eco-energy renewable initiative where there is a subsidy for wind. Our department would be glad to work with any of your constituents who had such projects and wanted to go forward.
The tidal aspect is exciting. We saw projects in the Bay of Fundy 15 or 20 years ago. There were a lot of environmental issues, such as silting, and the projects were not that successful. This current tidal turbine in British Columbia is in one of the most ecologically sensitive areas on the West Coast. It is at Race Rocks Research Station. There is an enormous amount of marine life around. It is a slow rpm turbine that is five metres in diameter and very predictable. I believe it needs about a three-knot current, and it is on the currents. The people who installed this turbine are called Clean Current, and it has been very successful.
Following the installation of this tidal turbine, which was the first one in North America, six tidal turbines have been installed in the East River in New York, and they are now providing electricity to low-cost housing units in New York City. This technology is growing rapidly. It is out of sight, out of mind. The transmission cables are on the ocean floor. The technology is in its infancy, but when you get a technology such as tidal turbines which, out of the gate, comes in at around 10 cents a kilowatt, that is impressive, and it will only get better from here. We would like to work with you.
Senator Adams: Households are paying about 45 cents a kilowatt, and the commercial rate is about 50 cents a kilowatt. It is expensive up there in Nunavut.
Mr. Lunn: It is quite expensive.
Senator Adams: I would like to see more work done in the future. In the winter time, the water between the islands cannot freeze because there is so much current because of the tide coming in and going out. I would like to see that as being a renewable resource in the future for Nunavut.
Mr. Lunn: These turbines are about seven metres under the water. I do not know how deep the ice is up there.
Senator Adams: We go up to five, six or seven feet. In some places, it cannot freeze. We have lots of water, and the tide is up to 14 feet a day, every six hours.
The Chairman: Maybe they can find a new kind of turbine, Minister.
Senator Tkachuk: Several issues are specific to my province as well. I have always believed in research and development on the energy file and that clean technology was our best vehicle, although I am inquisitive about wind and all of these other exotic things that we have been trying. I know the hydrogen project has been around since the 1970s. In Utah, there was a Ballard type of business with buses driving on hydrogen, and it was to be the energy of the future.
In our province, we have a lot of coal. We get our power from coal. It is 4 cents a kilowatt. There is room to clean it and still be competitive to the other sources, which are 10 cents, 8 cents and 7 cents, to produce the power, and of course then there is nuclear energy.
Specifically on coal, when we are talking about research and development, what are we doing with coal to encourage companies to find ways to produce clean coal energy? I think that would be terrific in our province because we have so much of it. What is the government doing towards that end?
Mr. Lunn: We are investing heavily. One of our labs out at Bells Corners is focused completely on the process of a combustion chamber for the burning of coal called oxyfuel. I am not a technical expert, but I believe they remove the nitrogen before they combust the coal, and they can remove almost all of the pollutants. It is the gasification of coal. We are still investing heavily in that research. The Canadian Clean Power Coalition is working on something for Saskatchewan. I will talk about that in a minute.
One of the exciting parts of the gasification of coal is that, in the process, the CO2 is almost in a state where it is much easier to capture. Some of the challenge, when putting the CO2 up the stacks, is in getting to the point where you can capture it before it goes into the atmosphere. On the gasification of coal, I understand that, technically, we are three-quarters of the way there, or a lot closer to the point where we can actually capture it, and then we will be at the point where we can put it in a pipe and direct it back into the ground.
I think it is critically important that we invest heavily in this research. The Saskatchewan government is looking at putting in the first commercial clean coal oxyfuel electricity generation in Saskatchewan using the research that we are doing right here in the NRCan labs.
I was in China last November. China is putting 1,000 megawatts of new energy on the grid every single week. That involves an increase in nuclear reactor activity or a new coal-fired generator every single week. Right now, 80 per cent of their electricity is dirty coal. Imagine what would happen in places like India if we were to develop this technology here and keep advancing with it? The scientists all tell me that they believe we can get to zero-emission coal-fired electricity generation. If we take that technology and deploy it in places such as China and India, we will do more for the global environment than you can imagine.
We are all familiar with what is happening in the economy in China. They have the largest migration of mankind, with 15 to 18 million people moving from the countryside to the cities every year. Those people need homes, energy and power. It is an enormous challenge. I think this type of research is absolutely of the utmost importance.
Saskatchewan is playing a leading role in the nuclear industry as well. We have the largest uranium reserves in Saskatchewan in the entire world. From an environmental point of view, it is very clean.
Senator Mitchell: I want to thank Minister Lunn for being here. I am trying to keep an open mind. I believe this is the most important issue facing this country in maybe 50 years, if not ever. I believe that this is an unbelievable opportunity for this country to provide leadership. I think that, Mr. Minister, in your portfolio, you have been given a responsibility that is perhaps unparalleled in the history of this country. I am listening, and I sense some eagerness about this, but I do not sense any real commitment or fundamental seriousness about it. In the end, when I hear you talk about crosswalk lights and solar buoys and star lighting, solar lighting in Kandahar, I think I am getting spun here. If we could harness the spin, perhaps we would find that we have a new alternative source of energy that might solve a whole bunch of problems.
I see this as an unbelievable opportunity for this country to take a leadership role in the world in this respect. The economies of the future will be economies based on environmental technology and environmental initiative and I do not know of very many cases where strong, enlightened environmental policy or strong, enlightened environmental commercial initiative has ever hurt an economy or ever hurt a business. On the contrary, it has helped. I hear Minister Baird saying things like it will collapse the economy, like what happened to the Russian economy, and I want to ask him what evidence he has on which to base that opinion.
What I want the see is some seriousness. These are all great ideas but let us start with objectives; specific managerial objectives. On these programs, these half-hearted reinstatements of our programs, could you give me specific numbers about how many megatonnes of CO2 those programs will reduce? Second, could you give your overall objectives, relative to Kyoto objectives, on how many megatonnes your government is committing itself to reducing by 2012? I want to see clear cut numbers; I want to see seriousness from a government that has twice voted against Kyoto. Every time you get a chance, you kill it.
Mr. Lunn: I am trying to be constructive, and when I was asked about solar, I was being realistic; there is no spin there. Twenty-five cents a kilowatt is expensive, but some exiting things are happening in that field, so I am giving you real answers.
Do you want the talk about commitment? We have been in office for just over one year. In one year we have put a billion and a half dollars into our trust fund for the provinces to enable them to look at their priorities, and we have put $2 billion into eco-energy efficiency. We have getting the job done. I want to compliment the people in the department. They have been phenomenal to work with. They say: Here are the priorities, here is the focus, and here is where we are going.
I cannot restrain myself, Senator Mitchell, after you made your comments. The old Liberal government, after being in power for 13 years and after all the bluster about reducing greenhouse gases, were over by 35 per cent when we took office. Their targets were not realistic. They had no plan. Then in the dying days of their government, after 13 years in office, they decided to get serious about this venture. Their 2005 budget book said that they wanted to spend $200 million in targeted CO2 sequestration, in cleaning, capture and storage. How much money did they spend? They did not spend a nickel. In a year, the Conservative government came in and got the job done. This Prime Minister is focussed. This is the first government that has ever undertaken to regulate every single sector on reducing greenhouse gases: these are the facts. If you want to ask me that kind of question, you must expect to get this type of response.
I cannot give you the number where I will be in 2012. You know that we will be announcing these targets very soon. I will say one thing on the targets: I know what happened on the watch of the previous government. They came with minus six per cent and we know what was done; they did not get the job done.
If you look at our notice of intent that we announced last fall, we intend to consult; we will not make up the numbers. We are consulting with every single sector, all of them. We are looking at the automotive sector, forestry, oil and gas, mining and energy. All of them are being consulted, and we will come up with a plan with tough targets. They will be tough, but they will be achievable and they will be enforced. I submit the difference between our government and the last one is that we are delivering, and we are getting the job done.
Senator Mitchell: I submit that you did not start to look at this file until the polls told you that it was an issue, and leadership lies in not waiting for the polls to tell you it is an issue. Also, it was not 13 years. Kyoto was not ratified until 1997 and was not invoked until 2005. Within eight months, Stéphane Dion brought in a program which would have reduced our greenhouse gases by 270 megatonnes, and if that did not do it then he had three more years in which to do it. What happened? You cancelled every program.
The Chairman: Senator Mitchell, you must allow the Minister about 20 seconds to respond to what you just said.
Mr. Lunn: You speak of Stéphane Dion. He was there the entire time at the cabinet table. They did not get the job done. They signed the Kyoto protocol in 1997. That was ten years ago. What is their record?
The Chairman: Order, order.
Senator Spivak: Regarding nuclear power, it may interest you to know that the top environmentalist, such as James Lovelock and also Lester Brown, are absolutely in favour of nuclear because they do not think that there is enough time for the other types of energy to evolve.
First of all, on energy efficient cars: Do you intend to introduce the California standard? Second, on oil sands: Do you intend to have intensity targets which, as you know, will result in a huge increase in greenhouse gas emissions? Third, on the coal issue, I agree with you that that is a key area but I thought there was already technology, maybe not for zero emissions but there is very good technology for clean coal, except that it costs more money.
The question is: what is the Canadian government doing to influence China, or in getting the developed countries to influence China, because that is the serious threat to our world? We could say "If you want to sell those products to us, do not build those dirty coal-fired generating stations." I think they are building something like four a week at the moment.
The Chairman: Senator, you have asked three questions.
Mr. Lunn: I will just say this is one sentence: I try to be constructive and work with all senators, and will come back to your committee if invited, Mr Chair.
The Chairman: You certainly will be.
Mr. Lunn: When I am engaged by one of our honourable colleagues, I cannot resist in engaging back.
Senator Spivak: You are talking on my time. It is not fair.
Mr. Lunn: Nuclear has great potential, and where the technology is going has even greater potential. However, it is important to note that it does not happen overnight. It would take 10 to 15 years if we made that kind of decision.
Regarding California emissions standards, I cannot tell you what we will be doing in that respect. You must wait for some announcements.
I just want to make a comment on this point. California emissions standards, I believe, do not come into force in 2010; they come into effect in 2009. They are actually not in force yet. There are 12 states in the U.S. where the public is driving this issue. I think we will get behind whatever is called for. We have an integrated automotive industry between Canada and the U.S. We cannot have this patchwork quilt. It is important that we drive the entire industry, both in Canada and the U.S., to become more energy efficient and produce more energy efficient cars. The consumer is leading this movement from the front and we will be there to work with the consumer. I think we will see some very positive outcomes.
Senator Spivak: What about intensity targets?
Mr. Lunn: Under the previous plan of the Liberal government, it was all intensity, but we are hoping to transition at an earlier time, to go to hard caps. I think that is really important. The targets have to be tough; they have to be realistic and they have to be enforced. If we do not have targets that we enforce to the letter but, at the same time, we are levying very heavy fines and penalties for those who do not comply with those targets, then I would submit that we might not have a workable system. Not a great deal was done under the old government, so we want to come up with targets that are enforceable so that we will see real, meaningful greenhouse gas reductions.
I just ask you to keep an open mind, look at the big picture and say yes, we can make some real, significant reductions. I think, overall, you will see that we have an incredibly ambitious plan.
Senator Spivak: Minister, you know that the industries themselves are asking for real targets. Jeffrey Rubin and top economists are saying that intensity target will not give you a reduction in greenhouse gas emissions.
Mr. Lunn: I think with our approach you will see a reduction in greenhouse gases. You will see an incredible action, and it will be measureable. It will not happen tomorrow but it will happen soon. We are engaging the public now and we have an ambitious, aggressive, phase-in approach. I agree with some senators who said that an enormous opportunity exists today, and we are seizing that opportunity. When you look at the totality of our plan, you will be very impressed.
I have been to China, and the Chinese realize that they have an enormous problem with air quality, and they want to work with us on clean coal. Minister Flaherty and Minister Emerson have travelled to China. They have had positive discussions there, and there will be great opportunities to take our technology to places such as China.
[Translation]
Senator Chaput: My question concerns the partnership between the federal government, the provinces and Northern Canada. As you know, the Liberals used to have a fund for partnerships with the provinces. That fund was an incentive to support them and encourage them in their initiatives to protect the environment and natural resources.
Your government has chosen another approach. Mr. Harper has said that, in discussions on the fiscal imbalance, he would talk about some form of support for environmental protection.
How will your government decide on the support it will give to the various provinces and territories? How will you assess the scope of their plan? I assume you will select certain targets. What will be the measurable targets?
[English]
Mr. Lunn: We are very much engaged with every sector in this process, which we began early last fall. There have been two to three cabinet meetings each week on this subject, which have lasted sometimes until 10 p.m. It has been a long process and we are getting close. I will leave it at that.
With regard to working with the provinces, there is much that the federal government can do. We must show leadership and we must make specific investments in specific areas, and that is exactly what we are doing, as I outlined at the outset.
As well, the Prime Minister announced an eco-trust fund in the amount of $1.5 billion. This fund has committed $349 million to the Province of Quebec. Every region, every territory and every province of Canada will receive a portion of this eco-trust fund, and each province or territory will decide how best they can reduce their greenhouse gases, what their priorities are and where they can make the greatest gains. We think that an investment of $1.5 billion is significant and we hope that the other political parties will support this venture.
At the end of the day, we all need to work together to focus on solutions — whether it be the House and the Senate, the Liberal Party and the Conservative Party, or industry, government and academia. The only way in which we will make the greatest gains is if we all roll up our sleeves and work together to make this happen. There has been some remarkable cooperation to date, and I am confident that that can continue.
[Translation]
Senator Chaput: Are other provinces ready to approach you for assistance? Apart from Quebec, have any other provinces developed a plan?
[English]
Mr. Lunn: I believe there have been discussions with other provinces as well. It is my understanding, and I am quite confident in saying this, that no province or territory will be left out.
Senator Carney: I want to say to Senator Mitchell: Do not dismiss technologies such as solar marine buoys. I live on a coast that is 25,000 kilometres long.
The Chairman: Do you have a question for the minister?
Senator Carney: That kind of Canadian technology saves hundreds of millions of dollars and many lives.
Minister, in B.C. we live with the results of climate change in the form of the pine beetle, which is ravaging our B.C. interior and communities. When will the money flow to the communities?
Mr. Lunn: For the record, that money is flowing now. We are working with B.C. on this problem. Some reports on the problem have already appeared, and our government has made a commitment of $1 billion over the next ten years.
This is an enormous problem. When you look at the map, you can see that the entire centre of British Columbia has been ravaged by the pine beetle. The B.C. forest service has told us what they need for mitigation. We have funded 100 per cent that effort of the B.C. forest service in the amount of $23 million. Money has been approved and we are working with the B.C. forest service on how to get this money out on fire suppression. We are listening to the scientists. Certain work is done in certain seasons and not in other seasons. It does not make sense to spend that money now when it would be more effective to spend it in the spring. We are really engaged in listening to the scientists about their priorities. As well, we are investing in economic diversification.
Senator Carney knows well that many coastal communities rely heavily on a single industry. The potential economic downturn because of the devastation caused by the pine beetle means a need to invest in other economic opportunities. The money is flowing. The letters have gone out to the B.C. forest service and they have given us their priorities on mitigation, where and when they need to spend the money, what they need to do and how much they need to spend. We have fully funded their priorities one hundred per cent; not our priorities.
We are in this project for the long haul because in this there will be no short-term gain. Some will argue that we should be spending more at the back end as the problem becomes more serious, such as on jobs. We are in for the long haul and a $1-billion commitment over 10 years is unprecedented.
The Chairman: I will ask four quick questions about which I will send you a note and ask you to respond. Is Clean Current Power Systems Incorporated a Canadian company?
Mr. Lunn: I believe that it is but we will send you a response on that.
The Chairman: With respect to Senator Spivak's question, the California emissions standards and Canada's emissions standards would occupy such a large part of the industry that their requirements, taken together, would be irrefutable. We have been saying that for years, so I will ask you to respond to that specifically.
My next one is with regard to the oil sands regulations. I am an Albertan. Will everyone else respond and will everyone else be regulated because the oil sands alone are not the largest emitters.
My last question is on the $1.5-billion investment made by the government. If it is being distributed to the provinces on a per capita basis, does that make sense, given the level of output of emissions in the respective provinces, which is not on a per capita basis?
Mr. Lunn: I will give you a two-minute response and we will follow up with a written response. Clean Current Power Systems Inc. is based in Vancouver and is a Canadian company. They are quite excited about the work that they are doing on the tidal turbines. Yes, every single sector will be regulated, whether it be the electricity sector or other sectors. You are right, senator; the oil sands are major emitters and we tend to start off with the big ones, but eventually all of them will be regulated. For the record, the oil sands today account for about 5 to 6 per cent of our emissions.
The Chairman: Everyone is targeting the oil sands.
Mr. Lunn: The electricity sector is responsible for 36 per cent of greenhouse gas emissions. That important fact should be on the table.
What were your last two questions?
The Chairman: Is the $1.5-billion investment being distributed on a per capita basis?
Mr. Lunn: I do not have the formulas with me but I believe it is the standard formula in every province.
The Chairman: Thank you, Minister Lunn.
Mr. Lunn: I look forward to my return.
The committee adjourned.