Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 2 - Evidence - March 30, 2010
OTTAWA, Tuesday, March 30, 2010
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 5:13 p.m. to study the current state and future of Canada's energy sector (including alternative energy).
The Honourable David W. Angus (Chair) in the chair.
[Translation]
The Chair: Welcome to this meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources. I am Senator David Angus and I represent the province of Quebec and the Senate. I am chair of this committee.
[English]
Tonight, colleagues, we will be continuing our study for a framework policy strategy for the energy sector. We are very privileged to have with us the recently appointed Minister of Natural Resources for Canada, Mr. Paradis.
[Translation]
Mr. Paradis was first elected to the House of Commons in 2006 and was re-elected in 2008 in the riding of Mégantic—L'Érable. That is a very special constituency in Quebec. He was appointed Secretary of State to the Department of Agriculture in January 2007 and Minister of Public Works and Government Services in June 2008.
Before being elected to Parliament, Mr. Paradis practised corporate law. He holds a bachelor's degree in civil law from the University of Sherbrooke, in the Eastern Townships of Quebec, and a master's degree in corporate law from Laval University.
[English]
Minister, it is a pleasure for me to welcome you here this evening with your two colleagues from your department, Malcolm Brown, Associate Deputy Minister and Carol Buckley, Acting Assistant Deputy Minister, Energy Sector. Welcome to you all.
I wanted to start by introducing my deputy chair, Senator Grant Mitchell from Alberta; our two researchers from the Library of Parliament; Senator Paul Massicotte from Quebec; and Senator Richard Neufeld, former Minister of Natural Resources in the great province of British Columbia. Senator Neufeld is a relatively new senator but he is like a veteran already, and we are delighted to have him on our committee.
To my left is our clerk, Lynn Gordon, who is doing an outstanding job for this committee, and Senator Dan Lang from Yukon.
[Translation]
Senator Seidman: Another Quebecer among the members of our committee.
[English]
The Chair: Senator Robert Peterson from the great province of Saskatchewan has an active role in this whole subject matter involving energy.
Minister, as I explained to you, and I would like to reiterate for our viewers, we are on the CPAC network and on the World Wide Web. To everyone here in the room who is not a member of the committee and all the viewers out there, I welcome you all as we continue our study in the energy sector.
I have provided the minister with the terms of reference specifically.
[Translation]
These are the terms of reference that we have received from our colleagues in the Senate. We have already completed eight months of study, and we started with the very complex field of energy because we think there is currently an urgent need in Canada to implement a framework policy in the energy field. The players and the companies involved in this field want to have an idea of the government's policies before investing large amounts of money. It is with this in view that we started this study.
We intend to table a preliminary report by preparing a summary of the first phase of our study around June 20 this year.
[English]
Colleagues, I took the liberty of meeting with the minister so that we would get the full benefit of his appearance here tonight. I can assure everyone that he is very committed to his challenging portfolio and very supportive of the work that he now understands we are doing — and I believe a great believer in the Senate committee system. We are delighted.
[Translation]
Without further ado, the floor is yours.
[English]
I understand you will have an opening statement. Will your colleagues also give a statement?
Hon. Christian Paradis, P.C., M.P., Minister of Natural Resources: No.
The Chair: Then we will have questions. I asked the minister whether he will be leaving quickly, and he said that he is at our service and available to respond as we see fit. Hopefully we will have a terrific session this evening, minister. The floor is yours.
Mr. Paradis: I think you were advised that I have to quit at 6:20 p.m., if it is not done. Is that all right?
The Chair: If at 6:20 p.m. we are in the middle of a critical question and the bells are not ringing in the House of Commons, you might see your way clear to staying a bit longer, but obviously we will respect your schedule. We are delighted you could come at all.
A new senator has just arrived here, filling in this evening — Senator Nancy Greene from the great province of British Columbia. She is representing one of our senators who is out of town tonight.
[Translation]
Mr. Paradis: I am grateful for this kind invitation. As the committee works toward recommending a long-term vision for Canada's energy sector, I would like to share my outlook on this subject and to hear yours.
Since becoming minister, I have been listening closely to people in the sector, the stakeholders, to understand their vision for the future of Canada's energy sector. Many of them have called for Canadian governments — I am talking about the stakeholders, of course — to establish a national energy strategy, an idea that I know your committee has been examining, as you just said, Mr. Chairman.
Canada is at an important point for energy policy development, as growing energy demand and regulatory complexity combine with the need to meet our climate change goals. This is the backdrop to a number of issues.
This context presents challenges but also an opportunity for Canada to become a clean energy super power. To realize this opportunity, we will continue our dialogue with Canadians, our many partners in industry, civil society, and other levels of government. I will also be watching the deliberations of your committee with great interest.
[English]
The core principles of Canada's energy policies are sound. They include a market orientation, respect for jurisdictional authority, and targeted interventions, such as promoting the development of clean energy.
Going forward, we have committed to achieving an absolute reduction in greenhouse gas emissions of 17 per cent by 2020 compared to 2005 levels. The federal government cannot meet these goals alone. Collaboration with provinces and industry will be key to achieving a balanced approach to energy policy.
[Translation]
Our efforts on climate change and clean energy production must be situated within an evolving environment. The outcomes from Copenhagen have reinforced the need to achieve our 2020 targets, and we will do so in alignment with our largest trading partner, the United States.
The world is moving towards a low carbon economy. Canada has the opportunity to be at the forefront by leveraging its strengths in clean energy technology. Science and technology, research and development, and the successful commercialization of new technologies will be at the heart of success in this new world.
My department, Natural Resources Canada, is aware that Canada must be at the cutting edge of progress and that is why we invest in scientific research and development in our energy sector.
For example, in Budget 2010, the government announced $100 million over four years for the Next Generation Renewable Power Initiative in the forestry sector. This funding will support the development, commercialization and implementation of advanced clean energy technologies in the forestry sector.
Our economic action plan contains other very positive provisions such as the Clean Energy Fund to support the development and demonstration of promising technologies, including major carbon capture and storage projects.
[English]
Since 2006, the Government of Canada has invested close to $10 billion to reduce greenhouse gas emissions and to build a more sustainable environment through investments in green infrastructure, energy efficiency, clean energy technologies and the production of cleaner energy and cleaner fuels. These programs are expected to result in total annual greenhouse gas reductions of 19 megatonnes by 2012.
Some of these programs will sunset in 2011. As we look to the next generation of programs, the Speech from the Throne provides the following direction: First, we will review energy efficiency and emissions reduction programs to ensure they are effective. Second, we will position Canada's nuclear industry to capitalize on the opportunities of the global nuclear renaissance. Third, the Speech from the Throne highlighted our commitment to create a positive investment climate to support the responsible development of Canada's energy resources.
To achieve this, we will simplify the project evaluation process and replace the current complex review process with clear processes that offer better environmental protection and greater certainty within the industry. This is another certainty the industry is seeking. In short, we want less bureaucracy and better environmental protection.
[Translation]
Today, we are leaders in fields as diverse as carbon capture and storage techniques and building design that promotes energy efficiency. But we also want to be leading innovators in other areas such as renewable energy from forest biomass.
[English]
We must continue to find enough ideas to create a fundamental change in our energy mix to include an even greater portion from renewable energy sources.
[Translation]
As the committee prepares its final report, it is important to note that future efforts in energy should contribute to reducing GHG emissions, be aligned with the United States, promoting leading-edge technology, create benefits such as jobs and new businesses, and take advantage of measures taken by other stakeholders such as the provinces and the private sector.
Our government is already taking action on these issues and I will continue meeting with stakeholders to listen to their views.
I thank you in advance for your questions, your deliberations and especially your recommendations.
The Chair: Thank you very much, minister.
[English]
At this point, I would like to introduce another senator who has arrived. Senator Elaine McCoy is from Alberta.
Senator Mitchell: Mr. Minister, it is great to have you here; we appreciate your comments. They certainly hit the highlights. The questions I have relate to the specifics and level of commitment to achieve them. This will be critical to know how to position our report and recommendations.
I do not think you mention cap and trade in this document. Do you remain fundamentally committed to cap and trade, and would you proceed with it even if the U.S. does not end up doing it?
The Chair: I would point out that the minister is the energy minister, not the environment minister.
Senator Mitchell: Cap and trade will directly affect many of the things the minister has to deal with.
Mr. Paradis: My colleague Jim Prentice is the leader on that file. He obviously works closely with the United States on this. The clean energy dialogue is still ongoing in which cap and trade is also discussed.
I am working closely with Jim Prentice on this to determine the outcomes of these discussions. The challenges for our department are to ensure we seize opportunities and targeted investments to ensure we achieve our goals on this objective. This is my position on that.
Senator Mitchell: You talk about renewable and clean energy and leading technologies. For example, you say that clean energy technology will allow Canada to be at the forefront in leveraging our strength. What certainly must be on your mind is the target wherein 90 per cent of our electricity generation should be clean and should be achieved by 2020. We are nine and a half years away from that date. You alluded to money for an alternative renewable energy program for forestry companies. However, there does not seem to be much else to achieve that.
What is your sense of whether Canada can meet the 2020 target for clean energy?
Mr. Paradis: About 75 per cent of our electricity is generated from clean sources today. We invested a tremendous amount of money in the ecoENERGY initiative in 2007. Approximately $1.48 billion was in Budget 2007 to be spent by the end of fiscal year 2011. Our goal was to create 4,000 megawatts from renewable energy sources.
[Translation]
That goal will have been achieved.
[English]
We are over 4,000 megawatts now and money is still ongoing for the year coming here. There will be more projects, so we will be at about 4,500 megawatts. It has reached that so far. We will exceed that by the end of 2011.
Carol Buckley, Acting Assistant Deputy Minister, Energy Sector, Natural Resources Canada: Yes, we will.
Mr. Paradis: We should not insulate the investment we are seeing. The $100 million over four years is a new investment, but there are some investments that were budgeted before which are still ongoing.
Senator Mitchell: The ecoENERGY program, the one you were referring to, with the 4,000 megawatts or 4,500 megawatts, has not been refunded; you have not decided to put more money into that despite the fact that it is very successful. Are you considering that you might?
Mr. Paradis: Yes. We must ensure that it is clear that money is still flowing for the coming years. Of course, it will be reviewed in the next year to see what our government's direction will be to ensure we have a wise and targeted investment. I will be working on the energy efficiency standards as well. We want to have good energy efficiency standards.
If your committee studied these points, I would be more than happy to look at your report on those. We are reviewing it now.
I will speak in French just to make sure it is clear.
[Translation]
There are a lot of investments and the issue for responsible public management is to see where that produces results and where it produces fewer results and how to optimize resources, which is the exercise that must be carried out, but especially bearing in mind our main objective, which is to achieve 90 per cent clean energy that will generate electricity in the economy of tomorrow, that is in 2020. This is feasible, but we must assess all opportunities.
[English]
The Chair: I want to introduce another senator who just came in, Senator Banks from Albert, my predecessor chairman of this committee.
Senator Neufeld: Welcome. Thank you for appearing. I am happy you are here, listening to our questions.
Perhaps I did not understand you, but did you say that in getting to 90 per cent clean electricity by 2020, we are at 75 per cent now and we need another 4,000 megawatts?
Mr. Paradis: No. What I am saying is that at this point we have 75 per cent clean electricity. There is still 15 per cent to reach by 2020.
My point is that we are up front on this because in 2007 we started with big investments. Our goal at that time was to generate 4,000 megawatts, and we are already there now. There are projects and monies still flowing for the next year, so we will exceed this.
Senator Neufeld: Those projects will be basically all across Canada?
Mr. Paradis: Sure.
Senator Neufeld: If it is not too much work, could we get a note through the clerk of where those projects are that add up to that 4,000 megawatts?
Mr. Paradis: I had a note here before, but I can provide the committee with that. I can provide how many megawatts were created, the exact number, the projects that are ongoing with the money that will flow in the next year with an estimated final result. It is feasible. I will provide the committee with this note.
The Chair: If your officials can deal with Ms. Gordon and send us that material, we would appreciate it very much. There were other things that we will get to later.
Senator Neufeld: Thank you. Also through the economic action plan, $1 billion was allocated to the Clean Energy Fund. If you do not mind could you briefly tell us where we are at with that and how well that is moving along, minister.
[Translation]
The Chair: Minister, please feel free to speak French. We have simultaneous interpretation.
Mr. Paradis: Absolutely, Mr. Chairman. Sometimes that makes me practise my English.
The Chair: Which is excellent.
In the Clean Energy Fund, funding has been announced. First, some of it was redirected to the ecoENERGY Renovation initiative which has been a very significant success.
[English]
We will give you the exact numbers.
[Translation]
However, major carbon capture and storage projects are now committed. I am trying to separate them for you so this is clear.
[English]
Some public projects have been announced so far. The Biomass-based Urban Central Heating Demonstration project went from $2.5 million to $5 million allocated so far. It is in Quebec. Another one is Wind and Storage Demonstration in a First Nations Community, which went from $2.5 million to $5 million; it is in Cowessess, Saskatchewan. There is the Interactive Smart Zone Demonstration in Quebec, in Boucherville, with Hydro-Québec — from $5 million to $10 million. There is the Northern Application of a Geothermal District Heating System project, up to $10 million; that is in Yellowknife, Northwest Territories. There are also bigger projects of carbon capture and storage.
[Translation]
That is how the funding has been divided. There is a reallocation for the ecoENERGY Renovation program, plus smaller-scale demonstration projects and major carbon capture and storage projects.
[English]
Malcolm Brown, Associate Deputy Minister, Natural Resources Canada: There are Shell Quest and TransAlta.
Mr. Paradis: TransAlta has Project Pioneer. In Saskatchewan there is the reference facility.
Mr. Brown: Those are examples of significant projects. The total commitment is $750 million.
Senator Neufeld: Could the minister send us something through the clerk?
Mr. Paradis: We should have a chart, and then you could see them. I tried to explain the three sections to make it clear, but so far in the big projects there is $750 million allocated, plus the demonstrations, plus the reallocation and the ecoENERGY retrofit. It adds up to $1 billion.
Senator Neufeld: Our notes from the Library of Parliament say — and this was apparently in the budget — that responsibility for environmental assessments for energy projects will be delegated from the Canadian Environmental Assessment Agency to the National Energy Board and the Canadian Nuclear Safety Commission for projects falling under their respective areas of expertise.
Do you think that will be difficult? I am familiar with the National Energy Board and the Canadian Environmental Assessment Agency, to a degree. Will it be an easy transition for that to come over to you? I am not asking the question about nuclear. I am talking about energy projects — a large gas plant, a large carbon capture and storage project, those kinds of things. Will they be delegated over to the National Energy Board to do the environmental assessment?
Mr. Paradis: Yes. The idea here is to identify the overlaps, avoid them and make sure there is no duplication. What we announced in the Speech from the Throne that will be in the Budget Implementation Act is a result. Some work was done before that upfront, so yes, I think it is good news there, and there is a will from the industry. Industry has been consulted quite a bit. They are willing us to go that way. There are projects in the pipelines, and it will be increased greatly when that issue has been addressed.
[Translation]
The transition will not happen by itself. There will no doubt be certain adjustments, but I am very confident that will be done gradually.
[English]
The Chair: You are suggesting, Senator Neufeld, that this may be a more difficult transition than it appears from the Speech from the Throne, and I guess you might want to just point out why or suggest that in a question. I do not want to pre-empt you.
Senator Neufeld: That is what I was going to do.
From British Columbia's standpoint for quite a number of years, and since I arrived here over a year ago, I have been working with Minister Prentice on an amendment to the Canadian Environmental Assessment Act that would allow a minister to make a decision to accept a provincial environmental assessment for a project, instead of doing two. Even harmonization is not really harmonization, and I think you understand that, because the decisions are never made at the same time, and some provinces have timelines on decisions. In British Columbia we have one; you have to give a decision in a certain amount of time.
I thought that was moving along relatively smoothly. Large projects in the oil and gas industry are quite large. I know the National Energy Board deals with things that go across borders, but the way this was worded caught me by surprise because Environment Canada is planning on transferring some of the responsibility to you folks.
Do we have to look at the legislation for you to be able to say that a provincial environmental assessment is good enough for this project? Do you know what I mean? I want to cut out all the stuff too. I am saying let us do it once and do it well and get on with things.
[Translation]
Mr. Paradis: I understand your question. First of all, what we ultimately want is a project, a review process. We can optimize the assessments, that is to say focus on the environmental assessment, not create a bureaucratic monster.
The Canadian Nuclear Safety Commission and the National Energy Board will be involved. They will essentially play the same role as the Canadian Environmental Assessment Agency used to play, but in their own jurisdiction where they have expertise. That is the first exercise that we have conducted at the federal level. That requires legislative amendments because we need funding for this kind of process.
However, I am not in a position to go any further. This is a job that I am doing jointly with Minister Prentice. We are following a roadmap and the procedure will have to be monitored. We intend to move on this file so that things get done. There are consultations that must be conducted with the provinces, particularly with British Columbia, because of the similarities in the act. Environment Canada is working on that. The important thing to remember is this.
[English]
The bottom line is one project and one review, so we want to streamline the entire process that way.
The Chair: Good luck. This is a good initiative.
Mr. Paradis: This is a big chunk.
[Translation]
Senator Massicotte: Thank you for being here today, minister. I would like to address the issue of energy and environmental policy. I believe that many Canadians are frustrated that we do not have a national policy. They get the impression that we are not moving quickly enough to meet the Earth's needs.
The argument that is raised quite often, and that I find logical, is that, if we say that petroleum and oil are a global commodity, we cannot impose a tax or cost on our producers when the entire world does not tax those products. If we tax something that the United States does not tax, our producers will not be competitive. I accept that argument because, as a businessman, I find it logical.
However, we can see that some countries, such as Denmark, produce a lot of oil but have nevertheless made a lot of progress toward controlling pollution. I am trying to understand. We say we cannot do that because we will not be competitive and we have to wait for the Americans; this is a global commodity. Denmark is still highly competitive. It nevertheless is very successful with regard to GDP. How can we understand the actual obstacle? A number of countries have moved quickly, despite the fact that there was no global agreement.
Mr. Paradis: When we examine the question, consider three points: security of energy supply, economic prosperity and responsibility for resource exploitation. With these three factors, we cover quite a lot of ground with regard to legislation and regulation. If we consider responsibility, this is in the area of environmental impact, whereas security is in the area of supply, as such.
I arrived in the department on January 28, I examined the file, and I travelled across the country. The task is to see how we can optimize our action and align it with the United States, our principal trading partner. We know that North America has its own special characteristics. Europe is a much smaller continent in terms of land area and does not have the same climate. Aligning ourselves with the United States is a challenge in itself because of distance and climate. Our climate is colder than that of the United States. That is why the dialogue on clean energy with our neighbours to the south is fundamental in my view. As for our integrated power system, each of us has our own way of doing things, but I believe we can learn from each other.
With regard to the industry in general, I saw that there was interest in a national strategy. I was very cautious in my opening remarks. The federal government wants to take on a leadership role, but it cannot do it alone. The issue is to have an open and informed dialogue with the provinces, the municipalities and the industry, by maintaining dialogue with our principal trading partner, the United States. There is currently movement, but a number of issues are still outstanding.
Senator Massicotte: Are we necessarily dependent on the Americans? If the Americans do nothing by 2012 or 2013, does that mean that we in Canada will not have a national strategy before the Americans reach their own conclusion?
Mr. Paradis: Not at all. There has been a lot of progress in that area since the heads of state announced this a year ago. We have to maintain a dialogue. That does not prevent us from looking at market opportunities for our businesses or from seeing how we can match that with the provinces in terms of regulation. There is always the matter of jurisdiction. We talk a lot about electricity and clean energy with smart power grids and so on, but the fact nevertheless remains that the provinces have jurisdiction over this matter. There are a lot of challenges that must be met, but, at the same time, a lot that can result in a lot of opportunities.
So the idea is to cooperate. I think the key to success is cooperation.
Senator Massicotte: You are saying: We are not waiting for the Americans; we are working very hard with the provinces; we are developing a policy and a Canadian national strategy in cooperation with the provinces, and we will not wait for the Americans. Is my understanding correct?
Mr. Paradis: No. Pardon me, I may have expressed myself poorly. If the U.S. Congress or Senate do not move before 2012, we will do nothing; that is not what I meant. For example, the investments we have made since 2007 are much more significant over time than what the Americans have done in clean energy. That is one example. We decided to invest immediately.
What I also mean is that, at the same time, when I tell you about the North American bloc, when we align our targets with those of the Americans, which are those for 2020, the goal is still to ensure a certain degree of competitiveness north of the border. And the example I gave shows that there is already a regional specificity in Canada. The climate is a factor. It is much more intense than in the United States; that is undeniable. That already raises certain issues. That is why everyone must take a look, together, as partners, at what we can do in that regard.
[English]
The Chair: Senator Massicotte, if we have time we can come back to you, but the answers and the questions are quite long. If we can try to shorten them a bit, that would be great.
Senator Peterson: Thank you, minister, for your presentation.
I want clarity on one thing so I have it right. In terms of the government, electricity provided by non-emitting sources, are we at 75 per cent now? Would that include coal-fired electrical generation?
Mr. Paradis: No, 75 per cent comes from the unpolluted, the clean energy.
Mr. Brown: Non-emitting or renewable.
Mr. Paradis: Non-emitting.
The Chair: An example would be nuclear.
Senator Peterson: If that is for all of Canada, great. Members of our committee just attended an energy conference in Vancouver, and at one of the sessions on greenhouse gases, one of the experts said that if we have no carbon capture and storage we do not have a solution to the problem. I am from Saskatchewan. The International Test Centre for CO2 Capture at the University of Regina is very close to commercialization of carbon capture. In fact, they have a demonstration project at Boundary Dam coal-fired generating station right now. Does the Government of Canada provide any financial support in this regard, and if not, would you consider it?
Mr. Paradis: Are you speaking about that specific project?
Senator Peterson: You spoke about the money being spent on carbon capture and storage, shale, TransAlta, and so on.
The Chair: No, he wants to know whether you are asking for federal money specifically for the Boundary Dam project.
Senator Peterson: I am asking that because it is under way, but they are doing a lot of work on CO2 capture. They are not on the list, so have you considered them? They are well along. I think these other ones are just starting.
Ms. Buckley: We are doing Weyburn.
Mr. Brown: We are working with the Saskatchewan reference facility as well.
Mr. Paradis: So these are the two projects now?
Mr. Brown: In Saskatchewan, yes
Mr. Paradis: Can you give more detail about Weyburn?
Ms. Buckley: Senator, were you asking about the Boundary Dam project?
Senator Peterson: No, I am asking about the International Test Centre for CO2 Capture, which is at the University of Regina. They have been working for over five years now, and they are close to commercialization of carbon capture. I do not know whether this exists anywhere else.
I do not know whether they are getting any funding, but if they are that close, why would they not receive funding? That is my question.
Mr. Paradis: I understand. We will have to check.
Ms. Buckley: I am familiar with the testing that is being done at Weyburn, but you are referring to the tests at Regina. We can look that up and get that information to you.
Senator Peterson: In Weyburn they are bringing CO2 in from North Dakota.
Ms. Buckley: Yes.
Senator Peterson: This is totally different.
Mr. Paradis: How much money would you like?
Senator Peterson: How about $315.8 million as a starter?
Senator Lang: Thank you for coming this evening. I agree that we need to pay attention to what the United States is doing and work in conjunction with them as best we can. At the same time, we have to take the leadership role that is required for us as a country. You have touched on that as well.
To clarify, presently 75 per cent of our electricity being provided is non-pollutant, and we are looking at a target of 90 per cent. To get from that 75 per cent to 90 per cent, how many megawatts in total is that for the country? Second, what costs have been projected to get to that point, and will it be cost-shared with the provinces?
Mr. Paradis: Yes. For example, the $1.48 billion that we have invested since 2007 generated more than the 4,000 megawatts. The funds were combined sometimes with the provinces. I do not have all the numbers in the chart here, but it is feasible to provide, so we will get that to you; I would be happy to share all of these numbers with you.
Senator Lang: Just to follow up, was it 4,000 megawatts that we had to produce to get to the 90 per cent?
Mr. Paradis: No, no, no. That is already done. We are at that stage now; 4,000 megawatts has been reached. It was our goal from 2007, regardless of the percentage.
[Translation]
The actual situation is that 75 per cent of electricity emissions are non-polluting and we want to achieve 90 per cent. That is not at the chart or macro level. That will have to be checked.
[English]
I would be happy to share the numbers with you.
Senator Lang: If I could just clarify, for that other 15 per cent, I was wondering what the number is in megawatts, what the projected costs are and who would be responsible financially in the next almost 10 years.
Mr. Paradis: Yes.
Senator Lang: I think there has been some talk about going ahead with geothermal home energy generation. Could you perhaps inform us of where you are at and what you are looking at?
Mr. Paradis: Geothermal? I am not clear on that.
Mr. Brown: I might turn that over to our colleague who is responsible for, among many things, the Office of Energy Efficiency; she will be in a position to answer your question in greater detail.
Ms. Buckley: We have a home retrofit program where the federal government provides incentives to homeowners who will make energy efficiency improvements in their homes, and all but one of the provinces and territories has a companion program with that. That has become a very powerful way to reach into Canadians' homes and get them to do something about their energy use and make it more efficient.
We do provide a grant for heat pumps, air-to-air and ground-to-air exchange heat pumps, in order to introduce that technology into the home front. It is not particularly economic for homeowners. It takes a fairly significant subvention to make that appealing, but the take-up has been satisfactory, and we have started to see a stronger interest from homeowners in a technology that is generally not in people's range of investment interests.
As we think about what we might do in the future, as the general retrofit becomes more commonplace, we would look at newer and more expensive technologies, so geothermal is a technology we would like to develop as a stronger role in reducing energy use in the residential sector. We have done some work in bringing a new technology on board with the existing program and will be studying in detail how we could bring that kind of technology forward.
I could easily provide you with the statistics by province of what the take-up looks like over the past three years, because the uptake has been substantial.
Senator Lang: It would be interesting if you could provide us with those statistics. I have a general question concerning the jurisdiction between the federal government and your multiple partners out there — the 13 different jurisdictions and their constitutional responsibilities. I see where your problem lies in trying to come up with a national energy strategy, because everything you do will not necessarily fit one thing.
I would like to hear what your plans are specifically with the provinces, bringing them into the tent so that everyone is walking lockstep in the same direction, because I think there is a political will out there in the country. Will there be a series of ministers' meetings and other meetings for the next number of years to get the political winds going in the right direction?
Mr. Paradis: That is the ultimate question here. Stakeholders have to be involved.
[Translation]
Mr. Paradis: If the stakeholders express a wish.
[English]
If work is being done on the ground, down the road, provinces, the federal government and everyone will be involved.
[Translation]
Everyone will be concerned at one point or another. That is why, when I answered Senator Massicotte's question, I kept going back to the concept of cooperation.
This is not something that the federal government can do alone, at the risk of dictating standards that might have harmful effects on industry or at the provincial level. I do not think that telling authorities what to do in their jurisdiction is a viable way of doing things. Everything has to be done on a cooperative basis. Since I have only been in my position since January 18, I listen, but I have not heard the kind of signals you are telling me about and I think the way to do things is through cooperation.
With respect to the report that will be tabled in June, I imagine that there will be very interesting references since you have been studying the matter for eight months. You must have heard from stakeholders in committee, and it will be interesting for me to examine that very closely.
[English]
The Chair: Senator Lang, you may recall we were at GLOBE energy conference in Vancouver last week on the subject of geothermal for cooling in the summer and heating in the winter. We heard about a project on Vancouver Island where to do it by geothermal would cost $30,000 more.
One developer said, "I do not need the extra subsidy to do it geothermal because I can do it by doing away with other things, like granite counters on the kitchen tables and those kinds of bells and whistles we have become used to in the old way." In other words, it is part of that new paradigm; it is not necessarily prohibitively expensive to do geothermal if one makes the other sacrifices.
[Translation]
I want to introduce Senator Claude Carignan from Quebec, who has just arrived.
[English]
Senator Seidman: Thank you for appearing tonight, minister. In preparing for this meeting, I read about the renewable strategy that industry is advancing, looking for new opportunities in the bio-economy. Could you tell us perhaps what these opportunities are? Are they real? Will they create jobs and wealth? What is the government doing to help advance that strategy?
Mr. Paradis: I want to make sure I understand your question. Are you talking about opportunities in the bio-economy itself?
Senator Seidman: Exactly. Could you talk about what the opportunities perhaps are in the bio-economy? Are they real opportunities?
Mr. Paradis: Yes, of course. In the forestry sector, we budgeted $100 million for the next four years. Basically, we are following the recommendation of the Forest Products Association of Canada.
[Translation]
If we take the example of a sawmill that carries on normal operations, compared to a business that wants to go into forest bioeconomics, the one cannot operate without the other. The conventional sawmill can optimize its operations by going into bioeconomics, but no business will start up based simply on bioeconomics.
Today, in view of the circumstances of the forest industry, with all its restructuring, it is not as obvious as it was in previous years that that kind of sawmill would currently open.
The Forest Products Association of Canada tells us that there is a way to combine everything and to encourage existing sawmills to optimize and use products that were given at the time and to derive income from them today. This is an opportunity since we are both consolidating sustainable development, reducing greenhouse gas emissions, and, together, we are keeping our forest industry on a sustainable basis. This is very eloquent example that is having a definite impact on jobs in the country, and it is a very good investment.
[English]
Senator McCoy: Thank you, minister, for appearing and thank you for your kind words about our report. I think our final report is a year this June. My heart stopped for a minute; I hope you are not expecting us to give you final advice three months from now, because it is a massive subject. As you are evidencing yourself, it is something rather difficult to get our head around.
The Chair: I did tell the minister earlier today that our hope is that we would be able to have a preliminary phase 1 report that would set a road map of where we are going with our strategy.
Mr. Paradis: I said final, but I understand it is phase 1.
The Chair: He is willing to help us as well.
Senator McCoy: I would hate to disappoint you with a misapprehension there. It is well worth waiting for and exploring in great depth.
To give your staff a little bit of assistance, I am pretty sure it was two years ago, or it might have been three years ago, that there was the big announcement, the press release with your minister then for a $250-million investment in Boundary Dam, which was immediately matched the next day by the Saskatchewan government, for a carbon capture and storage demonstration project, although some people are saying they have not got the cheque yet. Maybe that was Senator Peterson's comment.
Senator Peterson: They had the joint Montana and Saskatchewan project; other money has not shown up yet.
The Chair: The American money?
Senator Peterson: It is on the table, but that is another project.
Senator McCoy: That is a third project, yes.
The Chair: We have a lot of fundraisers around the table here. We have to get them to work.
Senator McCoy: I am from Alberta and I remember because I was green with envy at the time. I know that we are very interested in carbon capture and storage technology, needless to say, with our particular mix of industries. Alberta has put $2 billion into these three projects that we have mentioned already tonight — Shell Quest, TransAlta and the pipeline. I think the company has put in something like $500 million, and the federal government put something like $470 million into those three pilot projects.
I do not particularly want to embarrass you, minister, but I have this ongoing question in my head. If we are, as your Prime Minister likes to say, becoming a super energy power —
The Chair: Clean energy superpower.
Senator McCoy: A clean energy superpower. If all of this energy is primarily coming from Western Canada, Saskatchewan, Alberta and B.C., and if the only way we can sell our product is into international markets, because we are not big enough to absorb it ourselves, how will we do that without massive investment in the research and development of the technologies? How will we do that unless we have the full dollar-for-dollar matching funds from the federal government, since it really will benefit all of the country?
That is what I keep wondering. I will throw the question over to you and, if nothing else, I would like the question to stay with you so that you can be mulling it over. I know you are new in your portfolio, but it seems to be one of those questions we all have to come to terms with.
[Translation]
The Chair: Do you understand?
Mr. Paradis: Yes, absolutely. Thank you for your question. I do not claim to have all the answers. However, the carbon capture and storage project is essential. There are still a lot of coal-fired power stations, particularly in Saskatchewan, in the West. We know that the solution may lie in that direction. My department is very active. We are very aggressive with regard to economic viability. There is still some development that can be done. That is why we are investing on a massive scale. One billion dollars has been announced in general, but we have managed to make reallocations to optimize our investment.
There are also other sources that cannot be neglected. We know that there is a lot of energy coming from the West. With regard to natural gas, there are all the shale gas reserves. There is a lot of opportunity in that area. We have to cooperate with the provinces and see how we can optimize all that. I think renewable energies can be part of that energy mix. Wind and other energies are back-up technologies that can support existing conventional grids. I am aware that a lot of progress remains to be made.
I would say that, in general, I foresee the energy future heading in that direction. Yes, a lot of progress remains to be made, but we must optimize resources depending on the region where we are, and I have every hope we can do that. There are new market opportunities internationally.
[English]
The United States is our biggest customer, but we can go anywhere else in the world, and I understand the industry is now making efforts to improve its communication strategy. Now they are being attacked on that. It comes to where I was at the beginning: the way to go is conservation and work together to ensure we position ourselves as a future clean energy superpower.
Senator McCoy: I think you are beginning to struggle perhaps with some of the same questions we are. One way I have found myself sorting through the various issues is to think of us as a Canadian market, where it seems to me we need to concern ourselves with consumption, and then as a global market, a Canada in the world, and that is where we are exporting. One of our great hopes had been to sell our oil, natural gas and to some extent our electricity — I am from Western Canada so I am thinking oil and gas — into markets other than the United States.
Our great hope in that regard was resting on two things. One is an oil pipeline, called the Northern Gateway Pipeline, from Edmonton to Kitimat, and the other is a proposed liquid natural gas plant in the same vicinity. Now we know that the Northern Gateway Pipeline has come under considerable international and First Nations criticism and is likely to be blocked.
The Chair: Do you have a question?
Senator McCoy: I am asking what your intervention is likely to be in that connection. Also, if you can see beyond that particular project, how could we possibly become a superpower if we are not able to get to market?
Mr. Paradis: The Northern Gateway Pipeline is an important project. There is now a combined effort from the Canadian Environmental Assessment Agency and the National Energy Board, which are working together, and I am aware of the complexity of the files. I am confident that we can have an open process where interested parties, including Aboriginal groups, can make their views known and file evidence. We have an opportunity here to expand our markets anywhere else in the world. Of course, it is those kinds of challenges that we have to get over, but I am confident that this is feasible. This is an important part here.
If I go back east to my part of the country, some people will ask why Quebec is investing so much in wind energy. It is because now they invest a lot in the North for the dams and they want to go into the northeastern part of the United States. With wind power, they will be able to feed local needs, but always keeping in mind that these technologies are not sustainable by themselves. They must be at the time. This is how I explain it.
I watch those things very closely. As minister, my challenge is to be aware of the regional specificities and then work in consultation with stakeholders, provinces and all the interested parties.
Senator Banks: I have two questions. The first concerns energy security. We have the Energy Supplies Emergency Act, which is supposed to take care of things when energy supplies — and I am talking about oil — run low. In other countries, specifically the United States, we could be taken and shown the tanks in which that energy supply exists. In Canada, at least according to our latest information, it is sort of a notional emergency supply. In other words, there is no place where there is an emergency supply of oil. Are we still okay with that? Are we comfortable with that? Are we planning to change that?
Mr. Paradis: Frankly, I will have to make up my mind on this. I will have to be briefed more deeply on this issue. We discussed some issues when I was told the minister can have power over interventions, but I did not get to the bottom of the parameters you just asked me about. I will keep that in mind, and I will ask for more briefings on that.
Senator Banks: Thank you. With respect to geothermal, I think Ms. Buckley said that it is not economically viable right now. Would that be changed simply by the economy of scale, or is it that in this climate, in this country, ground-source heat pumps just do not work well enough to be worthwhile?
Ms. Buckley: It certainly is a function of the small market and the maturity or lack of maturity of the technology. This country has phenomenal resources that can be more effective when we have greater economies of scale in the production, sale, distribution and knowledge around the technology being applied in the home and in other settings, such as commercial and industrial as well. Certainly it is very promising; we are not doomed to have a low penetration of it just because of the geography. The geography helps us. We have a tremendous natural supply.
Senator Banks: Is the government investing in helping to mature that technology, as you put it?
The Chair: Are you addressing that to Ms. Buckley or to both? I do not think the minister was listening to the dialogue. Can you answer that, madam? Please do.
Ms. Buckley: Yes. I do not have at my fingertips the research and development support we have provided, but we can certainly provide that. We have been very involved in that for 10 or 15 years or more. As well, we have tremendous capacity to do the mapping of the earth, the actual land mass. We have a map of geothermal opportunities across Canada. Knowing where the resource is, where it is strongest and where it is most cost-effectively harvested is an important part of exploiting the resources.
Senator Banks: When that is available, could you provide it to the clerk?
Ms. Buckley: Yes.
Senator Banks: Thank you.
Mr. Paradis: We will check that out. I will ensure a follow-up to your first question.
Senator Banks: Thank you.
Senator Raine: We built a retirement home last year and put in geothermal. When we started building, we thought it would have a ten-year pay back. By the time we finished, it was going to be a seven-year payback, which is wonderful when you are building on a fixed income. I think all new homes, where the resources are available, should have some kind of incentive to put it in.
There was a report in 2006, Canada's Energy Outlook: The Reference Case 2006. I was wondering whether Natural Resources Canada will release a new version of the energy outlook that would identify pressure points and emerging issues in the energy markets that we are dealing with. I am not on the file, but I would find that document very interesting.
I keep hearing that Internet servers are huge users of electricity. As we plan for our energy uses, we are cutting down and putting in florescent bulbs, but we are using the Internet more. How do we balance that out?
Mr. Paradis: I understand a report is coming. We will be more than happy to share it when it comes to my office. There will be good updates there.
Geothermal is the kind of thing we have to keep in mind under the review I will be doing in the next year. There are many promising technologies like this. We have to go further. There is tidal, for example, in Nova Scotia, where it is not as easy to do carbon capture and storage as it is out West because the geology is not the same. We have to keep these new technologies in mind. They are part of the solution there. There were some investments, as I said at the beginning. Some of them were useful, and some of them did not work as we expected, but they are the kind of thing we have to keep in mind during the inventory of all the data that we have.
I do not have the responses here for everything, because it is a very large field, but I am taking the Internet issue to note as well, because when we speak about energy, it is very interesting to see that the bigger use of energy is the energy sleeping in appliances. We have to address that as well. These appliances, such as televisions, DVD players and things like that, are one of the biggest sources of used energy. We have to address these kinds of things as well. It is very interesting.
The Chair: On the servers for Internet users, did I understand the minister to say there was a report on that very subject coming? Is that what the answer was?
Mr. Brown: No. A semi-regular energy outlook is produced by the department. We are in the process of developing it now, and we will bring it forward to the minister. It is a broader examination of the outlook for energy.
The Chair: It was not specific to the servers.
Mr. Brown: No. It will look at projections around energy demand and that sort of thing. Work is being done in the department around regulations and improving energy efficiency. If you like, we can have Ms. Buckley add a few comments.
Ms. Buckley: We do have some investigations into the energy use of servers, and it is actually quite an important area of growth. The things that we plug into the wall have grown in energy use by 105 per cent since 1990. Many of the things we use now did not even exist in the 1990s. A lot of energy is being used here, as the minister says. We do have a report investigating the energy used by servers and the growth, and we have mechanisms through our regulations, as the minister mentioned, to start to address these things.
The Chair: Is that something you could provide to us?
Ms. Buckley: Yes, this would be public.
The Chair: Could you send those to us, please? It is key to hear from you, minister, and your people about the use of energy in this very short period of time, not in the transportation sector or the areas we traditionally think are gobbling up energy, but right in our hotels and homes where we plug in. We come with these big briefcases full of appliances and computers and plug them in. When you go to a hotel now, there are 11 outlets instead of the one there used to be. Clearly, this is in your focus.
Mr. Paradis: I am running late.
[Translation]
The Chair: Senator Carignan will be the last person to ask questions. Senator Massicotte may have a supplementary question, but we will finish with those two senators.
Mr. Paradis: All right. Excellent.
Senator Carignan: I believe that my question is for Ms. Buckley. I did not have the opportunity to hear as much of the testimony as I would have liked.
My question concerns geothermal energy. In another life, I was the mayor of a municipality and I had to build two buildings, an indoor soccer complex and an indoor pool.
We used geothermal energy in both cases, together with solar walls. The combination of the two achieved very good efficiency and energy productivity gains.
The problem we encountered, in view of the bureaucratic requirements for achieving and justifying the gains, were so significant in terms of energy studies, and we also had to have silver LEED certification, for example, that we could get no grants. And, in our view, the economic cost of silver LEED certification was not worth the small environmental gain that would have achieved.
I experienced that situation from an institutional viewpoint, and also from an individual viewpoint because I wanted to get a residential energy grant. And in both cases, the bureaucracy discourages us, at both the institutional and personal levels.
Do you have a plan to reduce and limit bureaucracy? When you replace your 25-year-old windows, you obviously achieve a gain, an energy saving. You do not need an engineer or an inspector to come and tell you how to use the grant. You know that, when you switch to geothermal or a solar wall, you achieve energy gains. You do not need bureaucracy to understand that.
Is there a plan to try to reduce bureaucratic requirements and to ensure not only energy efficiency, but also economic efficiency?
[English]
Mr. Brown: We are always looking for feedback on how we can improve application processes, and I take your comments as feedback on how to improve application processes. That is very helpful.
There have been other examples where the process has been quite efficient. As one of her many tasks, Ms. Buckley runs the ecoENERGY Retrofit — Homes program where hundreds of thousands of people have made applications. The program has been very successful, and I think the department has found a balance there in terms of managing risk and ensuring the work is done and done appropriately and at the same time in a way that allows the public to move quickly through the process. Ms. Buckley, do you want to add anything specific?
Ms. Buckley: Just that when we are using public funds, we have a real obligation to ensure that the work meets certain specificity. If a building is getting a subvention or a home retrofit is getting a grant, we want to make sure that the work was done and that it will save the energy that we expect it will save. That is why a certain level of bureaucracy is required. The return on investment in many cases is sufficient that homeowners or building owners do not need to get a subvention. In that case, they can avoid that level of bureaucracy.
As Mr. Brown has said, I certainly understand the frustration that homeowners, building owners and others feel when they have to go through a process and get feedback from a qualified adviser to help them with what they know they want to do. My response would be that we balance public funds against the certainty and the credibility, and homeowners and business owners can decide to invest in these things on their merits without getting the support of public money if they do not want to go through.
We are always balancing the need for credibility and scrutiny and trying to improve the investment.
The Chair: As asked by Senator Carignan, is there no specific plan in place along those lines?
Mr. Brown: A plan to improve the process and reduce the bureaucracy?
The Chair: Yes.
Mr. Brown: We are always looking at ways of reducing it.
Mr. Paradis: We started a review last year, and it is part of an ongoing process.
Mr. Brown: I am confident there will continue to be interest in finding ways to streamline processes.
Using home energy retrofit as an example, the program has been developed such that there is a high level of efficiency. There are tens of thousands of applications, and they seem to be running quite smoothly.
Where there are larger projects, as the one you described in your time as mayor, there are more complexities. I think that is where the system learns and tries to improve. There is no formal plan in that sense, but as we administer these programs, when and if new ones come, we are constantly looking to ensure that we have learned from the best practices of previous programming and not repeat the practices that have been less than ideal.
[Translation]
Mr. Paradis: Four years ago, I was parliamentary secretary at Natural Resources Canada. The EnerGuide program was in place at the time. People registered for that program and got an assessment. That assessment was paid for by the government, even if those people were not doing the work. Today, however, with the ecoENERGY program, people have to pay the cost of the assessment, whether they are going ahead with the work or not. We can therefore see that gains have been made in that regard and there has been an improvement in that kind of situation. However, we must continue to ensure that the process is as simple as possible.
On a larger scale, this is the reasoning we used in our regulatory reform for major energy projects. The complexity of the process is such that it impedes projects. We are therefore trying to harmonize everything in order to make life easier for investors, of course, but also to ensure that the environmental assessment is more efficient. Instead of questioning the manner in which the environmental assessment is conducted, we are talking more about the reason for it. Unfortunately, that is where we stand in certain respects.
The Chair: Honourable senators, the minister must leave us shortly.
[English]
Senator Raine has a supplementary, Senator Massicotte has one, and then we will have to wrap it up.
Senator Raine: I know a lot about the LEED standards — Leadership in Energy and Environmental Design standards. Is that ever used as an incentive, such that if you build your buildings to the LEED standards, you could receive some help?
Mr. Paradis: No, not as I understand it in our department. Having been Minister of Public Works and Government Services, I know we use the LEED standard for building repairs and new buildings. For the federal government, these are their standards. In government, this is part of their program.
[Translation]
Senator Massicotte: The goal for Canada is to reduce its CO2 levels by 17 per cent relative to 2005 by 2020. Where do we stand today?
Mr. Paradis: I am not in a position to present you those figures. We will have to check.
I will conclude by saying the following. I am here as Minister of Natural Resources. This is my first appearance before your committee. I now have a good idea of your way of proceeding. The challenge for the Minister of Natural Resources is to work jointly with the Minister of the Environment. That is what we are doing, and things are going very well. The Minister of the Environment focuses on climate and climate change, whereas we address energy efficiency and greenhouse gas reductions through new technologies.
This issue comes up often and we will check the data on this subject. If figures are available, we will provide them to the committee. However, I would like to reassure the committee. The innovation, investment and support aspects concern Natural Resources Canada. The regulatory aspect more concerns Environment Canada.
Once again, we must work hand in hand to achieve better results, and that is how we are proceeding.
The Chair: On behalf of my colleagues and myself, I want to thank you sincerely, Minister Paradis.
[English]
As you have said, this is your first appearance before our committee.
[Translation]
Now you have a clearer understanding of the subject of our study.
[English]
You have indicated your willingness to keep in touch with us and, indeed, to come back.
[Translation]
Mr. Paradis: It is very important to do a follow-up. I am aware that we do not have all the answers. However, this appearance gives me an idea of the subject of your proceedings.
The Chair: As you have noted, we have not addressed the topics of nuclear energy or wave energy. The scope of the problem is extraordinary. It is a major challenge for us. We can only imagine the challenge it represents for you.
[English]
In that spirit, I believe there will be some legislation possibly coming our way from your way, and you will no doubt be here to advocate for that legislation. That will be an opportunity to continue this dialogue.
We all appreciated you appearing, Minister Paradis. Thank you very much.
(The committee adjourned.)