Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 3 - Evidence - April 22, 2010
OTTAWA, Thursday, April 22, 2010
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 8:34 a.m. to study the current state and future of Canada's energy sector (including alternative energy); and for the clause-by-clause consideration of Bill S-210, An Act to amend the Federal Sustainable Development Act and the Auditor General Act (involvement of Parliament).
Senator W. David Angus (Chair) in the chair.
[English]
The Chair: Good morning and welcome to honourable senators, guests and Ms. Elizabeth Beale, our witness today.
This is an ongoing session of the Standing Senate Committee on Energy, the Environment and Natural Resources. We continue our study into the energy sector and in the development, hopefully, of a framework for a national clean energy policy for the government. We have conducted all kinds of hearings on this subject and ultimately plan to go out into at least four regions of the country to hold round tables and take further soundings.
We are in the final weeks of phase 1 of our study, in which committee members are attempting to develop a literacy in this complex sector that involves the overlap of energy and the environment and the involvement of all of the issues arising from global warming and climate change and how they affect the energy sector and drive the need for new clean energy technology.
We are pleased to have our witness here, Ms. Elizabeth Beale, President and CEO of the Atlantic Provinces Economic Council, APEC. I have been privileged in other committees, in the Banking Committee in particular, to hear from APEC and to have its perspective. I cannot think of a better organization to come and share the Atlantic perspective with us.
Ms. Beale has been president and CEO of APEC since 1996. Prior to that, she worked for 10 years as a consulting economist advising senior levels of government on regional planning and economic strategies for Atlantic Canada. Her policy and research interests cover a wide range of topics related to the economy of Atlantic Canada, including energy, labour market and innovation strategies. Ms. Beale has authored numerous studies on public policy topics and is a frequent media commentator.
Ms. Beale, we all have a copy of your brief. Thank you for that. Please proceed with your presentation.
Elizabeth Beale, President and CEO, Atlantic Provinces Economic Council: Thank you very much for the invitation to address you today. I have appeared before a number of committees over the years but never related to this topic, so I am happy to throw in some comments on this. I have about 15 minutes of remarks before we open it up, if that suits you. I handed out three documents. The first is the outline of the presentation, and there is some material in that. The second contains two of our regular quarterly publications, one that itemizes energy production around the region and another on greenhouse gas, GHG, emissions. I will refer to both of those in my comments.
As an overview, I will cover what is happening with energy assets and production in Atlantic Canada, the role of the energy sector in the region's economy — because there have been significant changes in the region due to the investment and production in this sector — and the important topic of climate change challenges and how that fits into the policy issues now. I will conclude by highlighting the issues around a clean energy strategy and where we go with that from Atlantic Canada's perspective.
APEC is an independent, not-for-profit public policy organization. We were founded in the 1950s jointly by business and by the provinces in Atlantic Canada. We are member-based, and our members include a broad cross- section of the private sector, governments in the region, many labour organizations and many other institutions right across Atlantic Canada. We produce regular reports and specialized studies on economic trends. We hold consultations frequently on topics — including this one — and we hold conferences for our members. We are a broad- based organization.
This topic, of course, is highly important to our deliberations on the future of the region's economy. I will also mention that we are not alone on that. We now work with a network of Canadian public policy think tanks on the topic of a clean energy strategy. I know you have heard from previous witnesses who are also part of that group, and I am pleased that we are part of that initiative and working together on such an important topic.
If you turn to page 4 of this publication, you will see a map, and on the facing page is a list of projects, or a map of where production is happening. I think it is easy to see it on a map like this if you are not familiar with what is happening in Atlantic Canada. Of course, there has been a tremendous investment in various energy assets over the past 15 years, all driven by demand, in particular in the northeastern United States. We now have a full spectrum of activity. The biggest play at the current time is with respect to offshore oil on the Grand Banks of Newfoundland and Labrador.
There are now three fields in production, the Hibernia field, the largest field, which came into production in 1997. Development is under way on the Hibernia South project and further delineation of that field. The second project is Terra Nova, which started in 2002, and the White Rose project began in 2005. Those are three large fields operating with a continued expanded delineation of those fields currently. A fourth field, Hebron, is scheduled to come into production in 2017.
In total, Newfoundland and Labrador produces about 11.5 per cent of all oil in Canada. That is a significant share, although I will identify that that will be a declining share as further production comes into stream in Western Canada. Nevertheless, it is very significant.
There is also a much smaller play around natural gas, in particular the Sable natural gas project that began production in 1999. Production in that field is small and now on the decline. A new field, Deep Panuke, is in development and due to come into play in 2011.
Most of the gas from Nova Scotia's offshore is shipped into the New England market. We now also have some natural gas, shale gas, onshore and further exploration to that field. Most of that shale gas is either being used locally or diverted into the current pipeline. Natural gas has much smaller play in the region's economy than offshore oil.
There are also significant hydro assets, particularly in Labrador, although there is also hydro in New Brunswick and on the island of Newfoundland and in Nova Scotia. The Upper Churchill Falls project opened in 1969. You will all be familiar with that project. It is still very controversial in terms of the rights to that power currently being held by Quebec to 2041.
Newfoundland and Labrador now has a very aggressive energy strategy. The province has formed Nalcor Energy and expanded its role in energy development. It now has significant plans to develop the Lower Churchill. There are some dates in here, although I would not pay much attention to the dates because they are always changing for these large projects, but obviously that is a very significant opportunity for that province and also for Canada overall.
There is also nuclear activity in the region, although the reactor is currently not operating because it is undergoing a large refurbishment. That reactor is at Point Lepreau, New Brunswick. The timing of when it will be brought back on stream has been delayed several times.
There are also three refineries operating in the region. The largest refinery in Canada operates in Saint John, New Brunswick. That is an Irving Oil refinery. A new liquefied natural gas, LNG, plant was brought into production in Saint John also in 2009.
You will notice a focus of industrial activity in the Saint John area. In fact, New Brunswick has had fairly ambitious plans to develop an energy hub in that area. Currently some of that further development is shelved because of issues around long-term pricing of various energy opportunities.
Of course, that LNG plant, which has a number of partners in it, eventually hopes to access the natural gas coming from Newfoundland and Labrador. Currently it is being brought in from Trinidad and Tobago, but in the long run the plant hopes to link up to what is happening on the Grand Banks.
There is a steady expansion, as there is in all jurisdictions at the moment, around renewables. A number of wind farms have now been established in Atlantic Canada. The largest ones are in Prince Edward Island and now in New Brunswick, but all jurisdictions have set ambitious targets on this. As you will see, one of the issues for Atlantic Canada is its dependence on fossil fuels for electrical generation. Issues around setting renewable targets and moving in on them are very important to the region.
Lastly, I will mention that of course the developments on the energy front are very much linked into the ability to get the energy to market, so transmission and interconnectivity are important. The Maritimes & Northeast Pipeline was built in 1999 to bring Sable gas down to U.S. markets. The Brunswick Pipeline now connects that with the Canaport LNG plant, and we have also seen some expansion of transmission between New Brunswick and Maine to facilitate electricity exports. There are continued discussions about beefing up the corridor generally between New Brunswick and Maine to facilitate additional energy exports. It is worth pointing out that three of the provinces, Newfoundland and Labrador, Nova Scotia and Prince Edward Island, must go through New Brunswick or somewhere in order to access exports into the U.S. market.
I will identify a few points, particularly with respect to going back to offshore oil, since that is the most significant driver of activity and investment in the region. First, the reserves have been much larger than initially thought for all the fields. In other words, further delineation has helped to expand the size of those fields. However, even with that, we have already passed peak production, based on what we know now about the size of activity. We get a boost up again in production when the Hebron project comes onside, but then it starts to decline starting about 2023. That is already a big issue. Further exploration activity is a big challenge and a frequent topic of discussion in the industry and in governments in Newfoundland and Labrador, particularly, and also in Nova Scotia.
We have not seen a robust platform for exploration compared to many other frontier areas around the world. It reflects the fact that some of the results have been very disappointing on the natural gas side, and certainly that has deterred further investment there. Also, it simply reflects the fact that there are enormous costs in dealing with these harsh environments, and that is significant not only for Atlantic Canada. If we move further into frontier developments right across Canada, we have to think about whether we are providing adequate incentives to get those plays off the ground.
The province, very significantly, has acquired a stake. I mentioned that Newfoundland and Labrador has a very significant stake in this industry, and indeed it has now exercised that through purchasing an equity stake in the Hebron project and also in the Hibernia South project. I think the province would be willing to go further if there is an opportunity on those developments. You only have to think back to the province's experience with what happened with the Upper Churchill developments to realize that it takes very seriously the opportunity and the need to have a strong provincial presence in the development of these large energy resources.
The developments on the offshore have been facilitated by the accords, the Canada-Newfoundland Atlantic Accord, which was established in 1985, and the Canada-Nova Scotia offshore accord agreement that was established in 1982. They allow the provinces to tax the resource as if they were the owners. They have also provided transitional protection for loose losses and equalizational, although you will see that is no longer relevant in Newfoundland and Labrador's case, because it has become a "have'' province. More important, the accords provide a good model for management of the resource, joint jurisdiction management, and they have led to strong standards with respect to health and safety and drilling and production. Regarding the early fears that we did not have a strong regulatory framework and that developments were being held up by the inconsistent application of rules, you hear very few complaints now by industry, relatively speaking, on that front. In other words, we have moved to a good model under the accords, and this committee may want to look at that in its thinking about how to do this on a nationwide basis.
Let me move on to the third point in the presentation, the role of the energy sector in Atlantic Canada. The energy sector is clearly the most important source now of investment in Atlantic Canada's economy. Our organization undertakes a detailed survey of investment annually, and for the last 10 years, the investment coming from the energy sector has ranged between 55 per cent and 65 per cent of all investment in Atlantic Canada consistently over our surveys. That activity is concentrated in Newfoundland and Labrador, as you will note from the chart in that section.
It has been a primary driver of output growth. Over 25 per cent of output in the region's economy has been driven just by that sector directly. However, it has enormous implications for a host of other industries, for example, the professional services and all the supply companies that now sell into the industry. It is having an enormous impact, if you look at the St. John's, Newfoundland, area at residential and commercial construction. It is an enormous driver of growth. In Newfoundland and Labrador's economy, it has been responsible for close to 65 per cent of output growth, the mining and energy sector together, over the past 10 years. It is very significant, yet its employment impact is very small. Only about 18,000 people are employed directly in the industry across Atlantic Canada. That reflects the highly capital-intensive nature of offshore projects. This is very different from offshore energy on land developments. That is an enormous challenge, clearly, on the economic diversification front for a province like Newfoundland and Labrador that has lost an employment base, an important industry like fisheries, and does not have the opportunity to replace those jobs in its new big play on the northern side.
Looking ahead, investment in Atlantic Canada will continue to be dominated by what is happening in the energy sector, whether an expansion of current fields, whether some opportunities on the mining field are also extremely important. A graph at the top of page 3 highlights and gives you a relative proportion. For those of you familiar with what is hanging out there in terms of oil sands development for Alberta, this gives you a sense proportionately of the relative level of investment for Atlantic Canada.
Energy has grown to become the most significant source of merchandise exports from the region. A large part of that is what is coming out of the Saint John oil refinery, but it also includes other energy products, although you will note the price impact fell substantially in 2009. However, overall, it is significantly replacing some of the product that has been lost in other resource areas. Indeed, both the share and the absolute value of products, such as forestry, have dipped in this region over the last few years.
On the royalty side, the impact has been considerable, particularly in Newfoundland and Labrador. It now accounts for approximately one third of that province's revenue base. About $7.5 billion in offshore royalties have flowed into Newfoundland and Labrador as of the end of March, and the Hibernia project alone is expected to produce another $13 billion. The royalties are very much weighted on the back end of the project, so they climb as production increases. That province also should get another $13 billion just from the Hibernia South project. It is an enormous boon, but also clearly with a finite time period in mind, unless further exploration results in further production.
The significance of this for Newfoundland and Labrador is considerable. It has moved indeed off equalization into have-province status, just by the nature of these developments.
Regarding the climate change challenges, we have one of our small report cards on this from 18 months ago. One thing to note is that Atlantic Canada's emissions fell considerably over the last few years until 2005. We moved more or less in step with the Canadian economy up to that point.
In 2005 those emissions fell. That was due in large part to the downsizing of industrial activity, particularly in the forest sector, which places a heavy demand on electricity generation. A lot of the GHG emissions in Atlantic Canada are related to our reliance on fossil fuels for electrical generation.
We may want to discuss the proposed sale of New Brunswick Power to Hydro-Québec. You may see a clue to why that deal came on the table when you see what happened to decline in emissions here. Of course, the forest industry in Atlantic Canada is heavily concentrated in New Brunswick, which is the most export-intensive province, or was until the growth in the energy side in Newfoundland and Labrador. New Brunswick lost a large number of mills starting in the mid part of this decade, and it was a tremendous push by the province to acquire cheaper power through Hydro- Québec that led to the decision to enter into that deal. That was really the driving force, and I think you see it reflected in that slide.
However, emissions from Nova Scotia and New Brunswick are still above the national average due to a strong reliance on fossil fuels for electrical generation. In Nova Scotia, for example, about 90 per cent of the current generation comes from coal. That is obviously an enormous challenge for the province for the future in terms of strategies on renewable resources and risks to the cost structure when and if we do start pricing carbon, and even without that in terms of our ability to export into the United States. It could have an impact on the export of renewable resources if we do not reduce our reliance on fossil fuels in Nova Scotia.
As a result, we have seen a steady expansion of wind energy, in particular, but the province is also doing exploratory work on tidal, and there are proposals on the biomass front. The provinces are also looking at areas such as feed-in tariffs to properly incent this.
I will conclude with some comments on the clean energy strategy and its appropriateness and importance for Atlantic Canada. Clearly, this is an important sector for Atlantic Canada. In fact, you need only look at what has happened in Newfoundland and Labrador to realize how it has already revolutionized the region's economy. Issues around the environment are very much front and centre. We have to look at this as a dual platform. The three Maritime provinces are struggling with their reliance on fossil fuels, and we need a lot of thinking about how we, as a country, provide the appropriate framework to encourage that to change.
There are issues around improving the security of supply. Natural gas is currently not widely available in Atlantic Canada. We are not part of the network of pipelines that benefit many other parts of the country. Under a national clean energy strategy we need a consistent and transparent framework on the regulatory front. I will come back to the comments on the accords and a model for how jurisdictions can work together appropriately to establish that.
The discussions on the development of a national energy grid are important for Atlantic Canada, although there are already significant discussions in the region on whether we could establish a regional grid to help provinces get access to Labrador hydro, for example. As you know, that must come to the region either through Quebec or via an undersea cable. There is not a lot of public information out on the true costs or ability to deliver on that, and that is one of the challenges in moving forward on this topic in the region. We have a complex structure of four provinces, but we also have within that two private companies, Nova Scotia Power, with its holding company Emera, and Maritime Electric and Fortis in Prince Edward Island. It is a complex challenge with two Crown corporations and two private interests that need to be considered.
Finally, the issues around the offshore and further exploration are important for Atlantic Canada. Unlike the oil sands, we do not face an extended period of potential growth. It has a finite production. In Nova Scotia we had a small oil field develop and then fade to obscurity, and we now see a similar thing happening with natural gas. We know that without the right exploration, that industry could be curtailed over a period of time.
I will conclude my remarks there. I hope that I have provided an overview.
The Chair: Thank you very much, Ms. Beale. That was a comprehensive presentation.
I believe that I heard you say "three Atlantic provinces.'' Is Newfoundland and Labrador not included in that?
Ms. Beale: I will clarify that. The three Maritime provinces, which are adjacent to one another, are Prince Edward Island, Nova Scotia and New Brunswick. Newfoundland and Labrador is not considered a Maritime province. It of course came into Confederation much later. However, it is considered one of the four Atlantic provinces, so when you use the title "Atlantic,'' you are usually talking about the four, and the Maritimes is three.
The Chair: Some people suggest that all together it is a kingdom, with the king up in St. John's. However, those of us in Central Canada here do not know about that.
Senator Mitchell: Thank you, Ms. Beale, for that precise and explicit explanation of economics and energy in the Atlantic.
We are studying a range of things, one of which is energy security, which is an issue in the Maritimes. I think I understand what you said, but please clarify it for me. I think you are saying that currently you are not energy sufficient with oil and gas but that with the Grand Banks you would be. Is that correct?
Ms. Beale: In terms of use within the region, most of the oil that is produced within the region goes for export. The Saint John refinery also imports a considerable amount of crude to refine and then re-export. I do not know that we actually talk about Atlantic Canada as being self-sufficient on the oil front, because most of the industry is export- focused.
Senator Mitchell: Why is that? Why are you not trying to be self-sufficient? Is it just not economically practical? Do you not use enough oil?
Ms. Beale: The population of Atlantic Canada is very small, only 2.2 million, so it has been designed as an export- focused industry.
If you are asking what else we could do to add value to the level of production we have rather than simply exporting it, that is an important topic. That will appear in discussions around building up the industry. For example, at one time there was the intention to develop a further LNG plant in Nova Scotia and to use it as a base for a petro-chemical industry in the province. That is now off the table. Similar discussions have occurred around other industrial strategies in Newfoundland and Labrador about what we can do on further refining. It is not an irrelevant topic, but it is export- focused at this time.
Senator Mitchell: Adding value to production is also a huge issue in the West. We export so much, and we are always struggling with how to keep some of our production to add value.
You said that 90 per cent of your power production is coal-fired and that it is a big issue with respect to GHG emissions that needs to be dealt with. In that regard are you suggesting carbon capture and storage? If so, what is happening to develop that?
Ms. Beale: There are some discussions on carbon capture and storage in Nova Scotia. Nothing on that is active at the current time as far as I am aware. When you get to your specific industry witnesses, you will have to find those who know more about the geological capacity for carbon storage in Nova Scotia.
This is a significant discussion for Nova Scotia. Lumping issues together across the Atlantic region on GHG emissions is always difficult. Newfoundland and Labrador still has considerable hydro capacity driving its electrical generation. Its focus on renewable sources is minimal as a result.
New Brunswick also has significant hydro capacity, and although the Point Lepreau nuclear plant is down currently, that will be coming on stream. Reducing reliance on and closing fossil fuel plants in New Brunswick is already under way. The province has had a drop in its requirements because of the industrial demand, which I commented on earlier. New Brunswick is able to move on that in a more orderly fashion.
The largest challenge is what is happening in Nova Scotia because it continues to burn coal. The province used to produce the coal. The coal mines closed relatively recently. There is some discussion about the possibility of opening some of the mines again. However, in the long run, the province recognizes that we need to tackle this issue.
Consumers already pay a premium on electrical costs in the province. Frankly, we will pay an enormous premium if we do not adapt successfully to this ahead of any pricing of carbon.
Senator Mitchell: That is the first time I have heard a witness say there could be an impact on Canada's ability to export energy to the U.S. if they begin to get serious about carbon emissions and its impact.
If you were the Prime Minister for a day and had to make the decision between cap and trade and carbon tax, what would you do in pricing carbon?
Ms. Beale: I looked at testimony from a few other witnesses. You will not get an interesting answer from me; you will get the same answer you get from all economists.
Senator Mitchell: Which is?
Ms. Beale: We all prefer a carbon tax. There is not much disagreement amongst us. We clearly need price signals. You are asking companies to make investments without any knowledge about how this will emerge on the price side of the equation. We all know this must be dealt with. The most consistent and transparent way to do it is with a tax. We can get into a discussion on how feasible it is to move in that direction, but it is an important point.
Senator Neufeld: I am from British Columbia. When I was an energy minister, we attempted, as have other governments in British Columbia, to open up new offshore opportunities for British Columbia. The opposition is enormous.
We studied what happened in Atlantic Canada, in the Gulf of Mexico and in Alaska. How were you able to get past how it would affect the fishing industry on the Grand Banks? Was the fishing industry already gone by the time the offshore oil and gas industry was started there, making it an easier process? I know it could take a long time to answer that question, but could you provide a short answer?
Ms. Beale: At the early stages of project development and exploration in the 1980s and 1990s, considerable opposition to offshore development came from some resource sectors. It is not that the discussion did not happen; there was a strong opposition. However, we had changes within those industries during the development time frame. Fishing's profile started to wane somewhat in Atlantic Canada by the early 1990s. That reduced some of the pressure from that particular industry.
More relevant is that the consultation projects on the development took an open attitude. That happened both in Nova Scotia in hearings on the Sable project and more recently on the Deep Panuke project. That also happened in Newfoundland and Labrador. The consultation process has been handled well in the region; at least, that is my impression. It helped to mitigate some opposition to the development.
Offshore development is still an important issue for Atlantic Canada, particularly in more vulnerable areas around the Bay of Fundy. There is a considerable process regarding shipping lanes that go through some of the vulnerable areas. That has also been an issue in Maine on the development of industrial energy projects in that state.
Parts of particular areas in Nova Scotia do not allow exploration because of their vulnerability, such as Georges Bank. There is pressure to open up in these areas. The issue may be low-key, but it is still an undercurrent in ongoing developments.
Senator Neufeld: I would like to clarify a question asked by Senator Mitchell. Is there enough oil produced in Atlantic Canada to keep the refining capability operating? If not, where do imports come from to keep those refineries operating?
Ms. Beale: Those questions should be addressed to the particular industry proponents.
The refinery has been there for a long period of time. It operated on imported product long before oil developments were under way in Atlantic Canada. We now move more of that crude oil into refining in Atlantic Canada rather than shipping it directly as crude out of the region. However, we have a global oil market. I understand that the refinery accesses the best price and product, wherever it is in the world. The refinery is a significant supplier of the U.S. market, not only into New England, but much further afield.
Senator Neufeld: I appreciate that you say I should be asking the refiners. However, regarding the question of whether there is enough oil in Atlantic Canada for the refineries, I gather the answer is, no. Is it correct to say that Venezuela supplies a lot of crude?
Ms. Beale: Yes, I believe so.
Senator Neufeld: I am glad to know that, because some Venezuelan crude is not that clean, and when we talk about oil sands production there is a lot of controversy around that. That was my reason for the question.
I will move to questions on greenhouse gas emissions. Page 5 of your presentation states:
Atlantic GHG emissions grew steadily from 1990 to 2005 in step with national rates of growth until 2005. Since then, emissions have declined due to a downsizing of the forest sector in Atlantic Canada.
We have a huge forest sector in British Columbia but it is not a great contributor to GHGs. Would that decline be related to the energy generated by coal to keep those facilities running? Is that the connection in the GHGs, or am I incorrect?
Ms. Beale: I do not know enough about the forest industry in BC to know how they run their mills. In Atlantic Canada, there have been changes over the years in the mills. Certainly, they used a substantial amount of electricity from the main provider in the province, which was being generated by burning fossil fuels.
Senator Neufeld: Thank you.
Senator Massicotte: Ms. Beale, your summary is most helpful.
You stated in your report that the need for energy in Newfoundland and Labrador and in most of the Atlantic provinces is down because the demand by the forestry industry is down. You also indicated that that is the case for Newfoundland and Labrador in respect of their future dam projects, and yet they still talk about the Lower Churchill project. You commented that there is probably a need for discussion on a national grid.
It would appear that there might not be a need for the Lower Churchill project unless there is a national grid. How do you think the federal government should achieve that direction? Currently, this power falls under provincial jurisdiction. Is there a role for the federal government? How do you see that working?
Ms. Beale: I will tackle the issue of the development of hydro power first and then I will reflect on the grid.
Newfoundland and Labrador is a small province. I am not trying to speak for the province, but the focus of its energy plan has been to develop its energy assets for export. There is no need to develop those assets for use within the province. The Upper Churchill has produced for export from the province for many years. A Lower Churchill project would fall as well into that mode. However, as part of the Lower Churchill plan, there is no line to bring Labrador power over across the Strait of Belle Isle to Newfoundland. An important part of the current strategy is to develop Lower Churchill so that the power can be brought over to Newfoundland. However, that is a small portion of the total output that would occur from the Lower Churchill. The focus of the project remains as an export product.
Do we need a national grid in order to allow the transmission of power across jurisdictions? We already have a system of open access tariffs that jurisdictions are required to operate as an ability to export to the U.S. However, as you know, many barriers limit the capacity, one of which is the enormous infrastructure requirements. Just think about how to move electricity from Labrador Hydro more effectively into Atlantic Canada or even into large export markets. We have to think about the appropriate infrastructure and how to provide it. Would this be assisted by the development of a national or regional grid, as is being proposed?
I have asked it as question because I still have questions about what exactly it would entail and how it would work.
Senator Massicotte: On that note, we often read in the newspaper that Newfoundland and Labrador is somewhat critical of Quebec's level of cooperation. It often urges the federal government to become involved and be the arbiter or to use some of its existing laws on cross-border provincial trade.
Is it a political issue or a serious legal issue to think that the federal government should become involved and impose its will on these provinces?
Ms. Beale: I understand there are active legal issues around that in Quebec. Yes, I think it is a serious issue from Newfoundland and Labrador's point of view, and it should be an issue of concern to all of us. It is an important rent in our federation and our federal-provincial relations in this country. I do not think we should ever minimize the importance of that dispute. It is unclear whether having a national framework would help us to resolve some of those issues. It would not be a case of interfering in jurisdictions as much as setting clear rules for how we expect the provinces to work together on important industries such as energy.
It is an ongoing issue, and Newfoundland and Labrador has taken great exception to it. It is their view that Quebec has interfered in the plans of Newfoundland and Labrador to develop the Lower Churchill project. As well, there are pricing issues in terms of gaining access to the tariff, moving the product through Quebec and setting a fair price on transmission.
Senator Banks: You said that the proportion of oil that is refined and exported, as opposed to crude export, has improved. Do you know what that percentage is?
Ms. Beale: I am sorry I do not have that figure. I should not guess because likely I would be wrong.
Senator Banks: We can ask the representatives from the refineries about that.
You made a passing reference to tidal power. Is that because it is still not significant and remains on the maybe list?
Ms. Beale: This is relatively new technology. Offshore tidal facilities are operating in other parts of the world, but every location and jurisdiction has its particular issues regarding the most important technology or most effective technology to bring tidal power. We have had tidal power in Nova Scotia since the mid-1970s, but it still has not moved on the production side. Currently, we have a new round of technology exploration in the Bay of Fundy on tidal power, in which AMIRA International is investing. However, I have not flagged it as significant because it is still out there in terms of our ability to think about it as a contribution to production.
Senator Banks: Matters of national policy, particularly having to do with subsidies, are most often dealt with at their beginning and sometimes at their end by legislation. This committee had the sad duty of considering and then acting to put the last nail in the coffin of Cape Breton coal. It was a sad decision to make, but it was made nonetheless. Now we hear from time to time that the Donkin mine might be up and running again. Apparently, it has been pumped out, and I gather there are new proprietors. Can you tell us where that is?
Ms. Beale: I have only a layman's understanding of that.
Senator Banks: As do we.
Ms. Beale: I probably do not have much more information to offer on that. That is what I understand. It has not been dead for long, but now there is the possibility of its being resurrected. That has some significance because of where it is located. Cape Breton Island is one of the most economically depressed regions of Nova Scotia, so the prospect of a revival of the coal industry offers considerable local encouragement.
Senator Banks: Do you know whether the proprietors are local?
Ms. Beale: No. I am sorry; I cannot comment on that.
Senator Banks: We will find out otherwise.
The Chair: We note that Xstrata is one of the big companies.
Ms. Beale: That is right. Xstrata is already active in Atlantic Canada with other mining activity.
Senator Banks: We continually talk about national goals for emissions reductions. From the standpoint of Atlantic Canada, a national goal is a simple thing to talk about, but there are huge disparities in both the resources and the consumption of energy from all sources in different provinces and different regions of the country.
What is your Atlantic development view of the practicality and the means by which those goals can fairly be distributed among the respective regions or provinces?
Ms. Beale: Do you mean the goals around a clean energy strategy and whether we can build up a system that would be fair across regions of Canada?
Senator Banks: Yes. We have undertaken a national goal of reduction. It is one thing to do that in Manitoba; it is quite another thing to do it in Alberta or in Newfoundland and Labrador. Will it work? Will it be fair? Will it arrive at a good and reasonable conclusion?
Ms. Beale: I think it has to. With respect to some of the discussion that the committee has already had around the kind of framework you want, the framework should provide the right incentives in terms of an effective regulatory structure and should not favour one form of energy over another. Those are all fundamental principles, such as the ability to enhance the role of technology and innovation in the energy sector. Those are all pivotal to the success of an energy strategy.
From Atlantic Canada's point of view, we have a considerable amount to gain from a national framework that might set targets on emission reductions or might encourage price setting for carbon. This might encourage the development of further cross-provincial transmission capacity. It might encourage the region to think together about its ability to enhance its exports into the U.S. but also benefit the energy cost structure within the region.
Atlantic Canada is often a creation in name alone. It has no jurisdictional mandate, so it requires all proponents coming to the table and seeing there is something in it for them. At the moment, it works better to just go it alone, or that certainly has worked better in the past. A national strategy would create some of those ties that would help the region come together.
To be candid, the region will face the challenges in terms of reducing its emissions. We have moved into a world that is dominated by that, so having a national framework assists but does not necessarily hinder Atlantic Canada.
Senator Brown: I am amazed by your effort to provide us information on Atlantic Canada's energy. I have been there half a dozen times, but until now, Churchill Falls and Hibernia were pretty much all I knew about it. I have always been fascinated.
Senator Banks asked a question I wanted to ask, but I will ask it again, and that is about tidal power. It fascinated me every time I was there. Can you tell us what the biggest project produces in megawatts so far? Has anyone calculated the potential of tidal power? I am fascinated by the fact that the ocean disappears overnight and comes back every day.
Ms. Beale: The Bay of Fundy is quite an exceptional place. I hope you are all voting for it. Is the voting still open to make it one of the Seven Wonders of the World? It is a pretty remarkable place.
I am sorry; I cannot satisfy your request for more information. This is where you start to realize that I am an economist and not an expert in the energy sector. However, if the committee is interested, I know the companies behind that would be delighted to spend time with you in order to illustrate what is happening.
To clarify, I think they would agree that it will be a long time before we move into any kind of viable production from tidal power. At this point they are exploring what turbines will work best with the harsh conditions in the Bay of Fundy, which has the highest tides in the world, and there is an enormous flow of water through those turbines.
Senator St. Germain: Ms. Beale, thank you for being here this morning. Senator Massicotte's question related to a real interest I have. How much is the environment suffering from the fact that the Lower Churchill and these various dams are not being developed? They appear to be hindered by jurisdictional disputes amongst provinces. I bring this up because in the other committees I sit on and chair, we see that jurisdictional disputes are unbelievable in this country as compared to what is happening in Europe, with the Europeans working together on education and various other issues.
You made reference to an underwater transmission line. Is the hindrance created by the difference of opinions regarding how all this should proceed that great? Generating electrical power is the cleanest energy you can have, yet the battle taking place between Newfoundland and Quebec over the Upper Churchill project is historic. Do you have any comment on that? It ties in as well with what was happening with New Brunswick and Quebec in the deal that fell apart at the last minute, and I think that was mostly for political reasons.
Ms. Beale: There is clearly an enormous opportunity for the country in the development of further hydro power in Labrador. It not only benefits Newfoundland and Labrador; it clearly has widespread benefits for the country.
Do we have estimates of what accessing that would do either to the cost structure or to reducing GHG emissions? There are no studies on that. That is one of the challenges with trying to push ahead public policy in an area where we simply do not have public analysis available.
One way to access further hydro from Labrador is that it would have to come through transmission from Quebec, as the Upper Churchill currently does, but, of course, that part does not come into the three Maritime provinces. The proposal was that Hydro-Québec's power would come in through the sale of NB Power, but that is now off the table.
Is there an ability to bring that in? Yes. However, then the issue is at what cost.
The other proposal would be to create an undersea link. Newfoundland and Labrador already intends to transmit hydro power from the Lower Churchill to the island of Newfoundland. It would be a matter of building further undersea links from Newfoundland to Nova Scotia or New Brunswick.
However, it should be recognized that the bulk of that power generation would still be for export. It would go from Nova Scotia and New Brunswick into the northeastern United States. The Maritime provinces do not provide a large enough market to create an incentive for the entire project to come into the Maritimes. It still has to be thought of as an export project to be viable.
Do we know the costs? We did an extensive study and have another extensive study under way regarding the proposed sale of NB Power. All sorts of costs were thrown around about the true cost of building undersea links. They ranged all the way from $2 billion to $4 billion. However, we simply do not have that information available publicly. We are looking at a public policy choice without information on the table.
Senator St. Germain: Would a national grid policy possibly open up some of these opportunities that do not exist currently because of jurisdictional disputes?
Ms. Beale: That is correct. It would also allow jurisdictions to look at these as large policy issues and to explore the cost implications for jurisdictions involved or for the country overall. We simply do not have that mechanism currently. The cards are held closely by the individual companies engaged or by individual governments.
Senator Seidman: Toward the end of your summer 2009 report on energy production and projects in Atlantic Canada, you pointed to a potential challenge in finding skilled workers. You say such workers are generally in short supply in the region, and this could lead to increased costs or project delays.
Skills shortages have not been raised to date in our study. That is not part of our terms of reference. However, you say we ought to be aware of it as the shortage of skills could represent a speed bump on the road to better energy policy.
Beyond significant investments and skills training by both the federal and the provincial governments, have you any suggestions about what needs to be done to address these shortages as they pertain specifically to the energy sector?
Ms. Beale: Skilled labour shortages is an important topic. I did not raise it under the mandate of this committee, but we have looked at it extensively. When oil sands activity ramps up — whenever that is — it will indeed have an impact in Atlantic Canada because it will pull skilled labour out of the region, as it has done consistently. There is a steady out-migration of workers from Atlantic Canada whenever large projects ramp up in Western Canada. This is particularly true for younger age groups.
As to how jurisdictions deal with that, most provinces in Atlantic Canada have policies or programs under way to provide additional training in selected industrial trades, those where pressures are greatest. However, that does not necessarily mean the region will capture and retain those individuals when they finish their training.
One issue for Atlantic Canada is the large, lumpy scale of project development, whether it is large mining development in Voisey's Bay or another new project on the offshore. The development phase is relatively short even if it stretches over several years. Most jobs are in the development stage, and when that is done, the individual is left looking elsewhere for work. The scale of projects in Western Canada has created a steady pull for labour. It is not an easy problem to fix.
The Chair: I should note — partly in jest — that our retired colleague, former premier John Buchanan, who would be well known to you, used to suggest to us that the easy solution for the Maritime provinces' labour shortage would be to close Fort McMurray. However, our Alberta friends did not think that was such a great idea.
I want to ask a couple of questions in the absence of any advocate for Prince Edward Island. The map you referred us to on page 3 or 4 of the publication appears to show that the province has some wind power facilities, but no other sources of energy.
Could you comment on the wind generation situation in P.E.I., any other sources they have and how this relatively small population in the province gets its power?
Ms. Beale: The province buys the majority of its power from New Brunswick. It has moved more steadily into wind power development; P.E.I. was an early proponent of that. It also produces wind power for export. However, the province also does a lot on demand-side management. Costs are relatively high simply because P.E.I. is reliant on energy sources from outside the province. There are also a number of interesting platforms using waste heat within the city of Charlottetown.
Industry demands are proportionately small. P.E.I. does not have the same demands as many other jurisdictions on the industry side.
The Chair: We hear all kinds of comments about whether Canada, with only 32 million people and given the cost of development, should look at bigger sources of energy rather than solar and wind. Professor David Keith talked to us about that this week.
It seems to me, based not only on what you have said but also on what I have heard through the grapevine, that P.E.I. could be self-sufficient just from the wind power. Is that correct?
Ms. Beale: I am not sure. P.E.I. was certainly a supporter of getting access to Quebec hydro if the deal went through with New Brunswick, because it saw that as a real asset. I do not think it is in the cards for P.E.I. to be self-sufficient in its energy needs from wind power. However, the province certainly has a good profile from its wind power developments.
The Chair: It has. I was expecting our new colleague, Senator Dickson, to talk about those issues. He is shy in the morning.
Senator Frum: In addition to reopening the CANDU reactor, you mentioned a feasibility study on a second reactor. The intention is to replace coal generation of electricity with nuclear. How do those conversations happen on a political level in that region?
Ms. Beale: I will clarify that the reference to a second reactor was in this publication from last summer. Since then, plans for a second reactor are not on the table in the current environment. Indeed, the proposals to get the existing reactor back online have been delayed continually such that we are looking now at 2011.
Yes, there is an attitude against further nuclear developments in New Brunswick. Certainly, there is some opposition to a second reactor. However, the dynamic in Atlantic Canada is different than it is in many other parts of the country in terms of large-scale energy-intensive activity, which reflects that the economy has not been as robust over many years. The three Maritime provinces have been the slowest growing part of Canada for the last 10 to 15 years. The population in many parts of the region is desperate for further industrial development, but there is opposition to the development of liquid gas facilities or further development of nuclear and coal facilities. It would be impossible in New England to develop many of these facilities in the current environment. The regulatory environment is so constrained and there is such great public opposition in urban areas. However, in Atlantic Canada, where the population is still eager for industrial development, there is much less opposition.
The Chair: We are starting to hear more and more such interest expressed, but it is a complicated issue. At Point Lepreau nuclear facility, the repair and overhaul will be completed. Obviously, big brother will pay for most of it. Would the addition of another reactor or other kind of facility in the Maritimes meet the power needs?
Ms. Beale: A large portion of power produced at Point Lepreau has been exported to the United States. Thinking of it simply in terms of domestic production and use in Atlantic Canada might not be quite the right thing to envisage, given that there is still a hefty export responsibility. I would have to look at that issue. Certainly, Nova Scotia has legislation that restricts the development and production. Senator Dickson might know more about that than I do. My sense is that there is much less opposition to that than there would have been in the past. Does that set the framework over the long term for the ability to develop nuclear? At the moment, all the problems of the Point Lepreau refurbishment are related to the high cost and the associated costs of the power that must be purchased to compensate for the losses. However, once it is back on stream, it will be a tremendous boon to low-cost energy.
The Chair: You are saying that there are no NIMBY — "not in my backyard'' — issues because they were dealt with back in the early 1970s and 1980s in New Brunswick.
Ms. Beale: If I say there are no NIMBY issues, you will immediately start to be plastered with complaints from Atlantic Canada that I have ignored.
The Chair: I shall not put those words in your mouth.
Ms. Beale: I do not want to say that. I am trying to put it in the context of why there is not as much opposition in a region that traditionally has been slower growing and is more desperate for industrial activity.
Senator Dickson: Ms. Beale, thank you for the excellent presentation on behalf of Atlantic Canada. As usual, it was detailed and thorough.
I understand what is happening out West with cooperation among the premiers on environmental emissions legislation. Which province in Atlantic Canada has the most stringent environmental legislation? To what degree is there cooperation among the Atlantic provinces? Do the three Maritime provinces get along? Do they work together? Is there compatible legislation? Where does Newfoundland and Labrador fit into this?
Ms. Beale: I cannot provide a comparison across the provinces of the level of environmental controls. Certainly, New Brunswick has had a fairly aggressive strategy on this. Some credit has to be given to that province for setting such a path over a number of years.
On the issues around cooperation, it is true that on energy policy and strategies in particular there has been great opposition to any kind of joint integration. That was one of the negative outcomes of the proposed sale of NB Power to Hydro-Québec, because it caused enormous tensions within Atlantic Canada. There was vocal opposition from Premier Danny Williams in Newfoundland and Labrador as well as quieter concerns expressed in Nova Scotia. While the process was under way, the deal was revised with respect to selling transmission assets, and that reflected in part those kinds of pressures.
My perception is that the provinces work very well together on the small issues but not necessarily on the big issues, and I would categorize energy and the environment as big issues. Newfoundland and Labrador would take great exception to any kind of interference in the development of what it sees as its assets for the prime benefit of its province. However, all of the provinces have tended to try to hold their respective energy developments for their own benefit. In many ways, the legislation on the accords has encouraged that because it provides a platform between the federal government and the individual provinces rather than being a broader basis.
Senator Dickson: What is the market catchment area in the United States for power generated in Atlantic Canada? Is it a growing market?
Ms. Beale: I would address that kind of question to some of the big exporters, AMIRA International or J.D. Irving, Limited because they are directly engaged. They will have a much better view. We know generally where the power goes, and the largest portion goes to the Boston area. However, as to the broader catchment area, that would be answered more effectively by industry.
Senator Dickson: I would like your comments on cooperation and Quebec. My recollection is that when the premiers get together, they call it a meeting of the Maritime premiers. When Premier Williams comes in, they call it a meeting of the Atlantic premiers. When the governors from the U.S. get involved, they call it a meeting with Eastern Canadian premiers. That is when Quebec comes on board.
I appreciate your comments. My recollection is that in the 1980s the driver in Nova Scotia was coal. It was king and provided a huge economic benefit to Nova Scotia. There were mines in Cape Breton and it was moving forward, but they could not have a Maritime energy corporation. Today, coal is no longer king. It comes from wherever.
It is the same thing in New Brunswick. I give much credit to New Brunswick for coming up with the concept of an energy core in Saint John. I can understand that. I likewise give credit to Premier Ghiz, who is proposing, as I understand it, a second transmission line under the Prince Edward Island causeway.
How do you feel about a greater degree of cooperation, not only among the Atlantic provinces — considering that some of the drivers want to be individualistic because they want the benefits at home as the benefits are not there — but also bringing Quebec on board? You have the West out there, and those provinces are well-organized, believe me. We have Ontario, and no comment there; Ontario is always well-organized. Then there is us down East. I like Quebec; it should come on board or we should try to get it on board. That is my personal opinion. It will take a long time; I will not be around for it. I appreciate your comments.
Ms. Beale: Should we create a bubble around Atlantic Canada and try to go it alone? No, I do not think we should. I do not think that is a good idea. Many people in the region think we could do that. I am not convinced. That is why all the focus on this is still around an export industry for Atlantic Canada. We are such a small region. Do we need to tackle this? Yes, we do, because if our cost structure gets out of whack on electricity production in the region, this could significantly deter industrial development in a province like Nova Scotia if we do not deal with it. This is important. Can we do it alone? No, I do not think we can.
However, there is such antagonism at the moment, both publicly and behind the scenes, between Quebec and Newfoundland and Labrador that trying to get a five-province initiative together might be challenging in the current climate. That might be exactly why we need the umbrella of a national energy strategy — to help us reach beyond those issues. I am pragmatic. I think the Atlantic provinces will cooperate when they need to.
With respect to your point about coal production in Nova Scotia, I think the Maritime Energy Corporation was formed in the late 1960s. Therefore, we have been thinking about these things for a long time but not doing anything for exactly the reason that it was easy for each province to produce and use its own electricity. The conditions have now changed. We now need to think about those things. We cannot address security of supply unless we think about cross-provincial transmission. We have all sorts of common challenges on the environmental front. You cannot just stop at the border when you address those, so we have to broaden out the platform. Should we bring Quebec in? Yes, absolutely.
Senator Mitchell: I want to follow up on your position on carbon tax. It is interesting that in our study, time after time, industry and associations such as yours have indicated that, given a choice, they would go with a carbon tax. I am interested in that.
Yesterday someone suggested to me that it is just another way to delay. I am not suggesting that you are saying that. I am sure you come to that conclusion with an economist's view in mind. It is interesting. There is a clear distinction between just taking it for the sake of delay as a tactical move — making it more difficult, as we are now moving on to cap and trade, by saying, "We do not like cap and trade; we want a carbon tax'' — and driving for a carbon tax. That distinction would be whether advocacy is involved.
Are you aware of advocacy amongst businesses in the Maritimes for a specific solution like carbon tax over cap and trade for this issue? Is it within the purview of your organization to advocate one way or another on that issue?
Ms. Beale: Could we advocate? Yes, certainly we could. We have not done that yet. We might move in this area and be more aggressive on that just because we have now marked this as an area that we are doing more work in.
In terms of the attitude towards carbon tax versus cap and trade in Atlantic Canada, I think there is still very limited public understanding of even the broader issues around why we need to set targets on emission control. I think the public are highly confused on this, and the debate at the international level has not helped. For example, many Nova Scotians are only starting to come to terms with the fact that they are large emitters, and they will face an unfortunate cost horizon unless we deal with reducing our emissions quickly in the province.
I do not think the majority of the population fundamentally understands the issues. I think the delays in fully implementing any kind of program simply gave people the impression that they would not have to deal with this during their working life or during the working life of their companies. As long as they would not face a 20 per cent or 30 per cent increase in the next couple years, people were willing to forget it, thinking it would be well into the future before they had to deal with this.
Senator Neufeld: British Columbia has a carbon tax. I disagree; I think people quite understand that they are asking to have something happen, at least where I come from.
I have had discussions about a national energy strategy with the chair and with this committee. I am from Western Canada, and I remember very well the National Energy Program. I certainly do not want to end up someplace there.
When you talk about a national energy strategy as it relates to Eastern Canada, are you talking about how you get a grid in place? If it is for export, I think Canada should not pay for that. It should be funded through a system whereby if you export, you must export for enough money to pay for it. I am getting a mixed message, and I am not sure where you are coming from.
Ms. Beale: I asked it as a question because I am not offering it as a proposal, certainly not at this stage. Those are the kinds of questions we have to think through. For example, why should Canada make investments in infrastructure to provide a grid? The same kind of question arose between Manitoba Hydro and Ontario. There are issues there on the transmission side. Wherever you look, the question of roles remains an issue. It is not only about electricity transmission. Anytime you get in there and provide some kind of incentive, you are also distorting the competitive costs for other providers. You are interfering in that.
I think the role a national energy strategy has is in setting some large global parameters for an industry that is so vital to Canada's future. In many ways, the history of the National Energy Program is the reason we do not have that in place.
I now get a different feeling from industry in both Eastern and Western Canada on the need to come forward on the big issues that may be blocking our ability to move the industry ahead. That would be relevant for export from the oil sands to wherever, as it would be for export of product outside of the province.
Infrastructure may be a part of it, but I am not necessarily putting a proposal ahead on that front. A common regulatory environment and setting clear targets for what we want in emission reductions are as important as how we think about the issues around infrastructure.
Senator Dickson: I agree with Senator Neufeld, although for a different reason probably. The National Energy Program was a disaster. Forget that for a moment, though.
Negotiating the Nova Scotia-Canada offshore deal, to briefly talk about this province, did not have a lot of studies. One way of quickly overcoming the regulatory environment in Canada — the provinces, the politics and so on — was for Nova Scotia to have the right to own, on a commercial basis, both the offshore and the onshore transmission line.
I do not want to go into the history of that, but would it not be solved if the committee looked at it on a reasonable basis and took a leadership role in bringing the four Atlantic provinces and Quebec together? We could start out over in Hull and eventually we get them over here, or we go over there and put a paper on the table.
As Senator Neufeld says, the transmission system must pay for itself. We, whoever that is, would all have an equity position in that transmission system. The model is the Maritimes & Northeast Pipeline. It is still there, and I think it is a pretty good model. I would like your comments. You may want to think more about it and come back.
Ms. Beale: That is an interesting idea. How we can move this ahead in a practical way at the current time is one of the issues we are looking at. We may have more to say on that later.
The Chair: Ms. Beale, if you are agreeable, I will ask you to stay there, and we will attend to this other item of business without suspending. Then we will express our thanks in a more fulsome way. Also, I have a specific request to you. Is that all right with you?
Ms. Beale: Yes.
The Chair: Colleagues, we will now move to the second item on the agenda, which is consideration of Bill S-210, a private member's bill sponsored by Senator Banks. It has been seen by this committee before and was considered, studied and returned without amendment to the Senate chamber. It went through the Senate and got as far as the House of Commons and almost enactment when we had a prorogation.
The bill is back before us in an identical form. I had Senator Banks provide a summary, which was distributed to everyone. The steering committee felt that would be adequate for the new members — Senator Frum and one or two others who were not here the last time — to avoid us bringing various witnesses in again. That seemed to be the unanimous recommendation of the steering committee.
Our decision and recommendation was that we would have Senator Banks say a few words about the bill to remind us. I would then go immediately to clause-by-clause consideration this morning. Is everyone comfortable with that procedure?
Senator Neufeld: Yes.
The Chair: You all have the document that was prepared, so I think everything is on the rails. It was dated April 10.
Senator Banks: Colleagues, I am grateful if you will proceed as the chair has suggested. To be sure that we understand, there is a standing rule in the House of Commons that states that when bills have been interrupted there by prorogation, they can be reinstated at the position they were in immediately prior to prorogation, provided the Senate passes them again in exactly the same form and returns the bill to the House of Commons.
If this committee were today to recommend that it be reported without amendment, and if the Senate then agreed to pass it at third reading again, Bill S-210 would be restored in the House of Commons to the committee stage. It had already received second reading debate there and had passed with the unanimous consent of all parties in the House of Commons. It had been sent to committee for study, which was regarded by most there as a formality, and, as the chair has said, it would likely then have been brought into law.
This bill seeks to amend two existing statutes; the first is the Federal Sustainable Development Act and the second is the Auditor General Act.
With respect to the Federal Sustainable Development Act, the bill is to correct the omission from that act of the participation by the Senate in all of the reports and deliberations that accrue as the result of sustainable development reports from the government and from its various departments.
In the case of the Auditor General Act, the amendment is specifically at the request of the Auditor General. It is to remove some of the constraint on the number of occasions in a parliamentary session on which the Commissioner of the Environment and Sustainable Development, which is a function of the Auditor General, has the opportunity to report to the House of Commons on items that may arise.
For example, in the present state and without this amendment, if the commissioner were to report to the House of Commons in September and something occurred in October, it would be 11 months before he or she could report once again to the House of Commons. This bill relaxes that constraint considerably.
I hope that you will agree, and I urge you to agree to vote so that the chair can report this bill without amendment to the chamber forthwith. I am hopeful that the chamber will support its passage again at third reading so that it can be returned unchanged to the House of Commons.
The Chair: Are there any questions for Senator Banks?
I see that everyone is closely scrutinizing this bill. Therefore, that gives me confidence that you will grant leave unanimously, pursuant to rule 96(7.1), to dispense with clause-by-clause consideration of this bill, which is entitled Bill S-210, An Act to amend the Federal Sustainable Development Act and the Auditor General Act (involvement of Parliament).
Do I have that unanimous consent?
Hon. Senators: Agreed.
The Chair: Thank you, colleagues.
Shall the bill carry?
Hon. Senators: Agreed.
The Chair: I declare the bill carried.
Shall I report the bill to the Senate without amendment?
Hon. Senators: Agreed.
The Chair: I declare that carried unanimously. At the earliest possible date, I shall report the bill back to the Senate without amendment, Senator Banks.
Senator Banks: Thank you, chair and colleagues.
The Chair: That may have been an interesting interlude for you, Ms. Beale. This is how the workings of legislators sometimes unfold.
I thought the session this morning was particularly constructive. You brought to the table exactly what we were looking for. In areas where you felt you needed your membership or the actual private sector companies to add value, you made it clear. That was a good road map for us.
Our intention, as I said earlier, is ultimately to go to your region and hold some round table discussions and public hearings on these matters. In the meantime, if it is practical, could you circulate to the relevant members of the Atlantic Provinces Economic Council these questions that you will see clearly from the transcript, which I believe you can access, and perhaps give us in writing, through the clerk, any comments they might have? The phase of our study where we go to the round tables will not be until later this year — October, at the earliest. Could you do that?
Ms. Beale: Sure.
The Chair: I would like to thank you very much.
Senator Massicotte: Perhaps Senator Neufeld can help me here. I am trying to understand the issue of hydro exports to the United States. In Quebec this week, there was a major article criticizing the Quebec government for the new plant it wants to construct; I think it is 450 megawatts. The article said that in this year, the average price Quebec got from exports to the United States is 6 cents a kilowatt. The article said the cost to produce a new plant is 10 cents a kilowatt. I think 7 cents a kilowatt was mentioned to me.
How much is it for transmission lines — let us say for Lower Churchill — relative to that total replacement cost for producing a power plant and getting distribution? Is it a big component of the total cost? When we get to 7 cents or 10 cents, are transmission lines a big number?
The Chair: I am afraid I will have to declare an end to the committee. The question is on the record. We will be meeting regularly, but the people are in the room for the next committee. I promised the clerk that not only will the Senators win the next game, but that we will give her the room in time.
To conclude, it is so kind of you to come and share your thoughts with us. Many thanks, and I hope to reconvene with you in the Maritimes.
(The committee adjourned.)