Proceedings of the Standing Senate Committee on
National Finance
Issue 11 - Evidence - June 21, 2010 - Evening meeting
OTTAWA, Monday, June 21, 2010
The Standing Senate Committee on National Finance, to which was referred Bill C-9, An Act to implement certain provisions of the budget tabled in Parliament on March 4, 2010 and other measures, met this day at 6 p.m. to give consideration to the bill (topic: Parts 15 and 20).
Senator Joseph A. Day (Chair) in the chair.
[English]
The Chair: I call this meeting of the Standing Senate Committee on National Finance to order as we continue our study of Bill C-9, the implementation bill for Budget 2010. Over its previous eight meetings, this committee heard from the Minister of Finance and departmental officials who explained the provisions of 22 of the 24 parts thus far. This evening, we will hear from departmental officials on the remaining two parts of Bill C-9.
Both of these parts were scheduled for previous meetings but, due to time constraints, we were forced to carry over this work until this evening. I thank all officials for their patience and understanding.
Parts 15 and 20 pertain respectively to the Canada Post Corporation Act and the Canadian Environmental Assessment Act. We will begin with Part 15 and welcome back from Transport Canada, Katherine Moynihan, Director, Portfolio Management, Crown Corporation Governance, and April Nakatsu, Director General, Crown Corporation Governance.
Senators will recall that we had already begun to consider this part at an earlier meeting last week but ran out of time before we could get to questions in a significant way. Does Ms. Moynihan or Ms. Nakatsu have additional comments on these parts before we go to questions?
Katherine Moynihan, Director, Portfolio Management, Crown Corporation Governance, Transport Canada: Not at this point. We are happy to answer any further questions.
The Chair: There was one question last week of a foreign entity being a member of an international association that would allow Canada Post to receive some revenue if the mail were brought in.
Ms. Moynihan: As mail moves between postal administrations, a system of terminal dues allows payments to go from the country delivering the mail back to the country that first charged the postage for that mail.
The Chair: Is that based on an international agreement?
Ms. Moynihan: It falls under the universal postal union, UPU.
The Chair: If a particular company is not a member of the UPU, how does Canada Post ensure receipt of proper funding to remail in Canada?
Ms. Moynihan: The mail is always delivered by a postal administration, which receives the terminal dues from the postal administration that began the work of processing the mail. In the case of remail, mail may be taken from Canada, introduced into the mail system of Mexico, for example, for delivery in Italy. Mexico would pay terminal dues to Italy. Mexico would have collected the fees for the stamps, and Italy would collect the terminal dues to cover the cost of delivering the mail.
The Chair: Thank you. Hearing nothing further, I will go to Senator Ringuette, who was in the process of asking questions last day.
Senator Gerstein: For the record, I believe that Senator Ringuette was the sole questioner at the last meeting. She had close to 14 questions and ran out the clock. I hope that will be taken into consideration.
Senator Ringuette: I am sorry, chair, but I hope that we can look at the minutes on that because Senator Gerstein's estimate of 14 questions is not accurate. I was at my second question, which was on returns.
The Chair: You have made your point. Let us carry on.
Senator Ringuette: Ms. Moynihan, have you looked into the issue of returns that we discussed last week?
April Nakatsu, Director General, Crown Corporation Governance, Transport Canada: There really are no returns. I will explain remail. We are trying to allow companies in Canada to collect bulk mail. The remailer takes it to another country and puts it into their postal administration. That postal administration delivers it either within that foreign country or to a third country if it is not to come back to Canada. If it comes back to Canada, that will still be illegal. Our legislation will not change the fact that that would still be illegal. Remail is not to come back into Canada.
Senator Ringuette: I suppose there will always be undeliverables. If the return address is Canada, you have absolutely no means of identifying which remailer is responsible for paying Canada Post to deliver these undeliverables, which are usually in the vicinity of 10 per cent.
Ms. Nakatsu: It would have gone into the postal administration of another country and would have their stamp on it. Canada Post would be reimbursed by that postal administration.
Senator Ringuette: No. Canada Post would not be paid for returns. Who is the senior adviser in your department regarding Canada Post issues? Are you both senior advisors?
Ms. Nakatsu: The senior adviser to any minister is the deputy minister.
Senator Ringuette: I would think that the basic knowledge of returns would be known. Since it is not known, I will move on to other issues.
How many remailers do we have in Canada?
Ms. Moynihan: We understand from the Canadian international mail industry that there are hundreds of remail companies in Canada that employ thousands of people.
Senator Ringuette: We have hundreds of printing facilities that are not remailers. In Canada, we have three remailers: One is called G3 Worldwide, i.e. Sprint, which is a joint venture between SingPost, Dutch post and Royal Mail; another is known in Canada as DHL; and the third is Key Mail.
The Chair: Would you like to comment on that? Is it contrary to what you said?
Ms. Moynihan: It is contrary to the information we have from the association representing companies that identify themselves as being in the remail industry. The industry has told us that it works in a number of ways. Companies like printings shops and graphic designers produce mail and provide it to some of the companies that you mentioned for induction into another country's mail. That is not the only way that they are active in the remail industry. Some of them move their products across the border and introduce them directly into the United States Postal Service. They are remailers in their own right, I would say.
Senator Ringuette: In order to provide delivery of international mail, you need to have a universal postal union postal code. Which one of these three remailers or which one of the 100 printing businesses has a UPU code?
Ms. Moynihan: My understanding is that none of these companies is delivering the mail. In the cases of remail, the bulk mail is introduced into a postal system of another country, which handles the mail either within or transfers it to a third country for delivery by that third country's postal administration.
Senator Ringuette: Exactly, exactly. They use developing countries' minimum rates and bypass the UPU rules.
To my knowledge, UPU is not giving out any more postal codes. On average per year in Canada, there are 0.11- billion items outbound At least 10 per cent of that will be returns. You are saying that all of these remailers will have a return address in Canada. Therefore, the cost will be to Canada Post.
How will you compensate Canada Post for the cost of these returns?
Ms. Moynihan: My understanding, again from the industry, is that is not always the case. A number of these printing and graphics design firms are doing work for companies located outside of Canada, but they are able to compete to get that design business. In those cases, the return address might be in South Africa or Texas.
Senator Ringuette: It seems you have consulted quite a bit with the printing associations. How much have you consulted with Canada Post in regard to the issues?
Ms. Moynihan: We have discussed the issues with Canada Post. Also, the independent panel that recently conducted a review of Canada Post went out to a number of stakeholders and invited presentations. They have also received the views of companies like Canada Post itself, the Canadian International Mail Association and many others on a variety of issues, including remail.
Senator Ringuette: In the legislation, you do not have any mechanism to provide for refund to Canada for the cost incurred for the returns; you have no licensing mechanism in regard to providing the security and integrity of the mail, which is a mandate within UPU. How will you handle that?
Ms. Moynihan: The bill is designed to offer more choice to the Canadian and international marketplace for international mail services and to protect the jobs of the thousands of Canadians who are in the business. Canada Post is a very mature company that has made its estimations of the potential impact of this bill and it feels it is 0.5 per cent to 1 per cent of their annual revenues, and that they are well equipped to continue to compete in this industry, as they have for some 20 years.
Senator Ringuette: In regard to the deregulation of Canada Post, which this is, the same deregulation happened in the U.S. The U.S. last year had a $4-billion deficit. The same thing happened with Royal Mail, and they are facing that same kind of deficit. All the postal administrations that have deregulated have had billions in deficit.
I do not expect that Canada Post will have billions in deficit, but certainly they will be losing at least $180 million a year, some of which is paid to the shareholders — the Canadian taxpayer. How will you compensate for that?
Ms. Moynihan: I can only say that the remailers have been active in Canada for 20 years and for the vast majority of those years —
Senator Ringuette: Illegally.
Ms. Moynihan: — Canada Post has been turning a profit and, in most years, paying a dividend to the government. We can only look at the loss from the perspective of the loss that may be associated with the passage of this specific amendment. As I say, Canada Post expects that to be no more than $80 million, or about 1 per cent of their revenues. It is a much smaller amount.
Senator Ringuette: What was the dividend last year?
Ms. Moynihan: A dividend was not paid in 2009.
Senator Ringuette: It was $20 million in 2008.
Ms. Moynihan: I can double-check but it was in that neighbourhood.
Senator Ringuette: In regard to consultation, to which you referred to a minute ago, you indicated there was a review panel, which I have read extensively. The review panel, in regard to input that they have received, I look at the annex and they have received input from roughly 1,000 sources, from mail or meetings with municipal councils and stakeholders, and 75 per cent indicated that they were against the deregulation of Canada Post. That was in 2007.
Senator Runciman: Point of order. Senator Gerstein raised the issue of rotation at the outset, and Senator Ringuette has been questioning for over 10 minutes. There are 12 members on this committee, and others would like to participate. What is your rule with respect to rotation?
The Chair: My rule is, if others would like to participate, please indicate to me and the clerk will put the name down. I look at lists that I have before me. I am driven by the fact that we want to fully and extensively canvas each portion of this. I have three names on the list and I will ensure that each person has ample opportunity to ask any questions she or he wishes.
Senator Ringuette: Senator, I will not raise the policy issue with these officials of why it was a stand-alone bill in 2007, why it was a stand-alone bill in 2009, and suddenly it is in a budget bill without any kind of consultation.
Consultation was done in 2007 by the review panel.
Ms. Moynihan: In 2008.
Senator Ringuette: Seventy-five per cent indicated they were against the deregulation of Canada Post. I have here the results of an Ipsos Reid poll done in 2008.
The Chair: Are you getting into an argument now or still looking for information?
Senator Ringuette: The witness brought forward the issue of consultation.
The Chair: I will be as progressive in my interpretation of that as I can. Go ahead.
Senator Ringuette: Thank you.
Further to the review panel, an Ipsos Reid poll indicated that 69 per cent of respondents opposed deregulation.
The Chair: Any comment on that?
Ms. Moynihan: No.
Senator Ringuette: Are you the department that sponsored this Ipsos Reid poll?
Ms. Moynihan: I do not believe so. Did we sponsor the Ipsos Reid poll?
Ms. Nakatsu: No.
Ms. Moynihan: I do not believe so.
The Chair: May I put you on round two to give you a chance to grab a breath?
Senator Ringuette: Yes.
Senator Gerstein: Thank you, witnesses. I must start by saying — I think it was last week or the week before — that Senator Ringuette, in the chamber, indicated, with great passion I might say, her association with Canada Post as an employee. I just wanted to share with the committee it is with the same pride that I look back on my association with Canada Post as a director for a number of years and also chair of the audit committee.
Senator Campbell: I delivered mail one Christmas.
Senator Gerstein: I think we have something going. I am a major user of Canada Post, I want you to know.
I would like to start off, because the initial concept that is being thrown forward is that we are going through a massive deregulation of Canada Post. In fact, we are dealing with three lines — it does not even make a sentence in this bill. You are going to have to help me because I listened first to the president of Canada Post, and I think it is worth looking at what she said, which was that, generally speaking, she is in favour of open markets:
For us it is a revenue risk of $40 million to $80 million . . .
That number is against the $180 million which I heard mentioned just a moment ago, so I am not quite sure how we are reconciling this. We have an honourable senator suggesting it is $180 million and we have the president and the CEO of Canada Post indicating that it is $40 million to $80 million.
Then she goes on to say:
. . . it is a revenue risk of $40 million to $80 million of a total revenue stream of $7.3 billion. We will vigorously compete for that business. Just because a market is competitive does not mean that Canada Post is out of the game. Look at what we have managed to do in the parcel business. It is the most fiercely competitive business in the country, and we are by no means out of that game. We are in there ensuring that our share of the market stays with us.
In no way do I hear Canada Post giving up in this area. I do not think that remailers will put Canada Post under, which has been suggested by an honourable colleague. I want to make it clear that Bill C-9 does not take away the exclusive privilege. It applies only to a tiny — I emphasize tiny — segment of the mail. This is not what I would call the wholesale deregulation of Canada Post, but I leave that for you to comment on. This affects a tiny subsection of the mail, and I believe we can compete vigorously and successfully for that subsection. Of the many challenges that face Canada Post, I do not consider remailers to be anywhere near the top-10 list.
We have the president saying this. Now we go to the critic of Canada Post, Joe Volpe, who says in Hansard:
. . . this amendment to the Canada Post Corporation Act is really intended to protect the jobs of those small businesses that operate within the parameters of the Canada Post Corporation Act as they were interpreted until two years ago. That is all.
We go to the former leader of the Liberal Party of Canada, who wrote in a letter to the president of CUPE, Canadian union of public employees:
. . . it is important to note that international remailers have been operating in Canada for several decades now. The Liberal Party does not believe that hurting these small business owners would be in the best interests of Canadians.
I am hearing one focal point; it is all about saving and creating jobs in Canada. Ms. Moynihan, what is it I am missing in this?
The Chair: That sounded like a speech to me, but would you like to reply to that?
Senator Gerstein: It was a question, Mr. Chair.
Ms. Moynihan: I think there would not be many people more capable of speaking about the impact on Canada Post than its president.
The Chair: Maybe you would like to straighten out the record on that. Senator Gerstein referred to the president.
Ms. Moynihan: Yes. The quote that the senator read matches the transcript I read. I was not at the meeting, but it certainly lines up with what we have heard from Canada Post. They intend to vigorously pursue this business, as they have, as I said, for some 20 years.
The Chair: Ms. Greene is no longer the president. She has moved on.
Ms. Nakatsu: She is there until the middle of July.
Senator Gerstein: Ms. Greene was the president and she did say it.
The Chair: I am not objecting to that; I am just clarifying the record.
Ms. Moynihan: The outgoing CEO, and that was in her remarks to this committee at the end of April of this year.
The Chair: In fact, you used the exact same figures in your presentation — $40 million to $80 million per year out of a total revenue of $7.3 billion.
Ms. Moynihan: I wanted to give the committee the most recent estimate that we had available.
The Chair: We have the same figures from Ms. Greene of a month ago and also from this witness.
Senator Gerstein: Do you view this, Ms. Moynihan, as a deregulation of Canada Post? Would you frame the discussion we are having today in that term?
Ms. Moynihan: I am here mostly to explain what the provision would do to the exclusive privilege of Canada Post and some of the impact of that decision.
Senator Gerstein: I understand, and I thank you for that.
Senator Callbeck: With regard to the proposed change we are talking about, in answer to Senator Ringuette, you said that the company in Canada collects the bulk mail and then takes it outside of Canada and mails it to other countries, not back to Canada. How can you monitor that, if the mail is not coming back to Canada?
Ms. Moynihan: Certainly, the provision of the law in this amendment is clear that it would be illegal to have the mail return. I am not very familiar with Canada Post's inspection practices but, certainly, spot checks of return addresses would help to avoid that kind of possibility.
Senator Callbeck: However, you are not 100-per-cent sure how you will monitor this?
Ms. Moynihan: That would be something Canada Post would have to comment on, because that would be at the operational end of things. We have worked on the legislation that would ensure that it is not legal for that to happen. I would mention that that kind of remail is often called ABA. It goes from country A, let us say Canada, to a second country to be mailed, and then returns to Canada. That is not allowed by the universal postal union and it is not allowed around the world. It is well known that that will not be something that is allowed.
Senator Callbeck: Can you find out from Canada Post and let the clerk of the committee know how this will be monitored?
Ms. Moynihan: I will see what information we can find.
The Chair: We will have a panel of affected parties coming in due course, once we finish the government officials' side of the matter.
Senator Callbeck: I come from Prince Edward Island, which is mainly rural. Of course, Canada Post has an obligation to deliver mail in places where the private sector would never accept a delivery. Here, Canada Post will be losing some revenue, and I am concerned what effect the loss of that revenue will have on services, especially in rural Canada.
Ms. Moynihan: I can appreciate your concern. We are confident and Canada Post is confident that there will not be an impact on rural service. The government issued the Canadian postal service charter in September of 2009, which made clear that rural postal service is an integral part of Canada Post's universal postal obligation within Canada and set some specific standards for rural postal service provision.
As I said before, the revenue risk that Canada Post is projecting is up to 1 per cent of their revenues, so we would not expect to see any impact on rural service. As long as Canada Post continues to compete in this industry and to look for opportunities in other markets, they will be able to cover the cost of providing mail everywhere, in Prince Edward Island and the rest of the country.
Senator Callbeck: The question is where will they get those dollars? The letter volume is falling and the price of the service is capped, is it not?
Ms. Moynihan: No. The cap was removed last fall so, effective January of this year, there is a set pricing scheme that has been established for this year and the coming four years. The price cap has been removed. It is still a regulated price, controlled by the Governor-in-Council.
Senator Callbeck: What is the price? It is attached to what?
Ms. Moynihan: The price cap was on the basic letter rate, which is essentially the price for a standard-sized domestic letter, which is now 57 cents.
Senator Callbeck: Can that be raised?
Ms. Moynihan: The price cap can be raised through regulations by Canada Post, with the approval of the Governor- in-Council. The regulations, which came into effect in January of this year, set that rate for 2010, 2011, 2012, 2013 and 2014.
Senator Callbeck: The price cap cannot be raised unless the Governor-in-Council agrees?
Ms. Moynihan: If Canada Post makes new regulations and the GIC approves it, the price cap would change. However, we would expect that to be in place for five years. I believe that, when that change was made, the previous version of this bill, Bill C-44, was in the house at the time, so it was contemplated.
Senator Runciman: The practice of remailers in Canada is really nothing new, I gather. How long have remailers been operating in the country and competing with Canada Post, as this legislation will legalize, I guess?
Ms. Moynihan: Roughly 20 years.
Senator Runciman: Do you have any idea or has there been an estimate of the number of small businesses in Canada that operate as remailers?
Ms. Moynihan: It is somewhat difficult to find out exactly because there have been questions about the legal status of this kind of work. However, from what the Canadian International Mail Association has said, it is hundreds of companies and thousands of jobs.
Senator Runciman: That came out in the house committee as well, namely, that thousands of jobs could be lost if this legislation is not successful. I have a quote from a gentleman called Barry Sikora, a small businessman from British Columbia who testified before the House of Commons finance committee on Wednesday, May 12, 2010. He has been involved in the international mail industry for over 30 years, employing people for over 30 years. This is from the proceedings of the house committee. Mr. Sikora states:
. . . my company employed 31 people. We're not a huge corporation; we're an average business in the printing industry. Now, because of this situation . . .
By that he means the court challenge. He continues:
. . . we're down to 17 employees. Many of our customers have left us . . . ; they have taken their business to another country. They have forced our industry to lay off long-time employees and that's not a pleasant thing to do.
Already, his company had lost a significant amount of business. He was hoping that it would come back, but if the jobs and economic growth act did not pass, he felt that he would be out of business.
If you listen to Senator Ringuette, you might have the sense that the Liberal Party of Canada is opposed to this initiative, but Senator Gerstein quoted Stéphane Dion and Joe Volpe, and also John McKay, Mario Silva, Borys Wrzesnewskyj and Marlene Jennings, who wrote last year to urge the reintroduction of Bill C-14, to do what you are speaking to tonight, by saying that "If there is no movement in the House of Commons regarding the introduction of a bill addressing the matter, there is a strong likelihood that the court will not grant another stay, which would devastate the international mail industry. The industry risks being severely damaged, if not outright killed, unless speedy passage is given to a reintroduced Bill C-14 or its equivalent. In this period of economic downturn it is especially imperative that the Canadian government act in a timely manner to protect Canadian jobs. The introduction of Bill C-14 would lead directly to the protection of thousands of jobs in the international remailers industry."
Essentially, that is what this is doing. This is, word for word, apparently the same legislation introduced earlier in the house. You have concurred here this evening, I believe, that if this does not go through, thousands of jobs could be threatened.
Ms. Moynihan: If this is not passed, I would expect that the stay, which will be expiring on December 31 of this year, would be unlikely to be extended and we will certainly see companies moving out of this business.
The Chair: Thank you, Senator Runciman. Next, I have Senator Finley, whose senatorial designation is Ontario South Coast.
Senator Finley: I do not understand a great deal about the remailing business, but, from what I am hearing, it has several components. One is a mail distribution system and one is a printing element.
Do you know what the mix of employees would be between those two activities or are there others? Operationally, are those the two key areas?
Ms. Moynihan: I wish that I could give you more details on that. As I said, it has been difficult to get numbers.
The Canadian International Mail Association included in their submission to the independent review panel a study that they had previously produced for Transport Canada looking at the size of the industry in British Columbia alone. The document is peppered with caveats about how difficult it was for them, being in the industry, to get solid numbers from the other participants who were worried about repercussions given the legal questions about the status of the industry.
Senator Finley: Are you privy to Canada Post's strategic planning documents, business plans?
Ms. Moynihan: We work with them on their corporate plans, annual reports.
Senator Finley: What is Canada Post projecting in the share of the retail business and how much is that retained share worth to them?
Ms. Moynihan: I do not have how much the retained share is worth. The number that we have is the one that Senator Gerstein was quoting, but more could be lost.
Senator Finley: Forty million dollars to eighty million dollars could be what they are projecting to retain or, if the other remailers in the business and Canada Post were really bad at it, they would lose all of that.
If they kept all the business that they presumably are planning to keep, $40 million to $80 million, if they are so bad that they lose $40 million to $80 million, to nothing, which is what Senator Ringuette is suggesting — would that be the range that we are talking about in terms of their business plan?
Ms. Moynihan: There is a certain amount of the remail business that is currently with private remailers right now and not with Canada Post. The passage of the legislation is likely to result in that private industry growing — that is, more companies and more jobs, Mr. Sikora being able to rehire some. If that happens, then there could be a further $40 million to $80 million loss for Canada Post.
Senator Finley: Revenue level?
Ms. Moynihan: Yes, revenue loss. If the bill does not pass and the legislation is left as it was, we could see more job losses, as Mr. Sikora referred to in his testimony before the house committee. However, we cannot say with any certainty that all or even a large percentage of that business and, therefore, those jobs would be returning to Canada Post because we expect that much of that business will go overseas, for example, the business now that is going across the border and into the USPS, United States Postal Service. If it is not legal to have that stuff printed in Vancouver, then you will have it printed in Seattle and it will go into the USPS from there and there will not be any questions.
That said, the United States Postal Service does not mind if it is printed in Washington and shipped across the border to Vancouver and put into Canada Post.
Senator Finley: Do you know how many resources, assets and people — perhaps we might better ask Canada Post this question — are dedicated to that segment of their business called remailing?
Ms. Moynihan: That would be part of their overall mail processing. They have plants all across the country that are pulling in international mail. Sometimes it will be my Christmas cards to my Aunt Nora; in other cases, it will be a large bulk shipment from a Canadian company. That is going through the regular mail system, so it is on the same runs, in the same plant, and it is the same workers who are processing your phone bill that are processing the bulk mail that Canada Post is processing.
Senator Finley: You must have some idea — I would imagine those corporations would know — about sensitivity levels and elasticity levels in different components of their business, where it comes from, and how much they will dedicate to it in terms of their resources. If it does not pay them to do it, they will get out of the business. That is a fairly standard corporate process.
Ms. Moynihan: You are certainly right, senator. Canada Post is very familiar with their customer base that is producing bulk international mail. They know those customers very well. However, because international mail makes up a small proportion of the mail that Canada Post is processing, I would have to leave it to Canada Post to tell you for sure. The sensitivity may not be as much as one might anticipate in another industry because it is a small percentage of the volume of mail and they are processing mail across the entire country.
Senator Finley: I would assume that the outgoing president and CEO of Canada Post is familiar with all these plans and sensitivities. You would think she knows whereof she speaks. She would have a certain degree of expertise here that, perhaps, none of us around this table might share with her.
Ms. Moynihan: Perhaps, yes.
Senator Finley: I want to thank you. My mail comes on time and I am glad to see that Canada Post has recovered from the embarrassing process it went through during the sponsorship scandal.
The Chair: Thank you, Senator Finley. That was a good line of questioning. I appreciate your succinctness in asking those questions.
Senator Banks: I am an interloper in this committee and had not intended on asking any questions about this, but I was an early fan of the UPU. I was a stamp collector when I was a kid, so I learned a lot about the UPU. The concept of universal penny post, when it was first introduced in England, was that the density business would subsidize the not- dense business and that, therefore, there could be universal penny post.
Lest you harbour any delusions, I am unalterably opposed to this provision of this bill. I thank Senator Runciman for pointing out that Liberal senators sometimes have opinions of their own.
Did I understand you to say, Ms. Moynihan, that if I am a printer in Vancouver, I cannot print a piece of whatever it is, such as a brochure, and export it to the United States? I can, can I not? I have friends who do that so I am wondering whether they are breaking the law.
Ms. Moynihan: The courts have found that is not legal under the Canada Post Corporation Act as it exists now.
Senator Banks: I want to be very clear what I am asking you. If I am a printer in Vancouver, I cannot print a brochure ordered from, to use your example, Seattle and export that printing to Seattle, is that right?
Ms. Moynihan: For mail to —
Senator Banks: No, to print a brochure.
Ms. Moynihan: Honestly, I could not tell you about just the goods.
Senator Banks: I cannot print a United States postage stamp on it, but I can print it and export it, I think. My friend does. Therefore, the difference is whether there is a printed U.S. postage-paid notice on the piece of mail.
Ms. Nakatsu: No, the difference also would be if it is going into their postal system without any other work being done on it in the States. If you are just delivering it from the printer in Canada to an office in the States, who is then going to be distributing it in their office, that is fine. However, if that office is just putting their stamp on it from their own office machines and then mailing it, that would be considered remailing and it would be illegal.
Senator Banks: I have many friends who are breaking the law, as have remailers for the last 20 years broken the law.
Ms. Nakatsu: Yes.
Senator Banks: If we said we could save a lot of jobs by legalizing the presently illegal trade in, let us say, cigarettes around the Great Lakes, we would save a lot of jobs. However, they are illegal and we prosecute those folks.
I understood you to say that there was no dividend return from Canada Post last year, but in 2008 there was, and it was about $20 million. Is that right? In the best case scenario, if, according to the president of Canada Post, the corporation lost $40 million in revenues from the operations of remailers being legalized, would that not obviate the payment of a dividend?
Ms. Moynihan: It all depends on what happens to the rest of their revenues. Canada Post has indicated that they would be looking at other revenue opportunities.
Senator Banks: In 2008, if this had been in place and there had been a $40-million reduction in revenues, one assumes that would have had an impact on the dividend that would have been returned.
Ms. Moynihan: Yes; it would not have reduced it to zero, but it would have had an impact, if it was not compensated for.
Senator Banks: Canadians have gotten used to the idea that there is a certain integrity having to do with what used to be called the Royal Mail. If we were to pass this amendment to the act, do the people who provide these remailing services come under any sort of regulation, or are they free agents to do whatever they like — if they cannot return it or deliver it, they cannot? Is there any regulation that would apply to them that would be commensurate along with this legalization?
They will be legalized and compete with Canada Post. Canada Post is susceptible of regulations and legal constraint. Will there be a commensurate corollary set of regulations that would apply to remailers?
Ms. Moynihan: This amendment would not establish a regime like that. Essentially, it would be the same as the parcel service. We have not regulated the parcel or courier industry in Canada. Customers make their decisions based on what they know about the companies they are dealing with. Canada Post has been able to use that to its advantage to compete effectively in those markets.
Senator Ringuette: Following Senator Gerstein's recollection of the Canada Post CEO in front of this committee, I think it was at the end of April. That was Moya Greene and you have indicated that she is the ex-CEO.
Ms. Moynihan: The outgoing CEO.
Senator Ringuette: Where is Ms. Greene going?
Ms. Moynihan: I understand she has been appointed the CEO of the Royal Mail in the U.K.
Senator Ringuette: Is not the Royal Mail a partner in a remailing outfit in Canada?
Ms. Moynihan: I believe so.
Senator Ringuette: In your consultation, how many jobs will be lost at Canada Post?
Ms. Moynihan: None; we would not expect any job losses at Canada Post. Canada Post, as many of you will know, is quite a unionized company. The vast majority of the workforce is unionized and there are strong job security provisions in their collective agreements. It is also a large corporation, which has many opportunities to place workers whose specific position may no longer be required due to reduced operations in those areas. Therefore, we do not expect any job loss at Canada Post.
Senator Ringuette: Because of attrition, mostly; these jobs will not be filled by other people.
Ms. Moynihan: Attrition would certainly assist with that. There will be increased retirements in the coming years. However, this is a very large corporation with a lot of positions. With the job security provisions in the collective agreement, there is quite a complex procedure; if a position here is not required, then the process starts to make sure that person is given priority for a job in the local area.
Senator Ringuette: On a yearly basis, Canada Post has to face an additional 200,000 new addressees to deliver mail to. In their last report, they did an analysis of the delivery methods — door to door, centralized, group and so forth — and the average additional cost per year to Canada Post per new addressee is $156. That is $156 times 200,000; how will you compensate for that if you remove some income from them?
Ms. Moynihan: I still think that they are separate issues. Canada Post has been looking at their business plan globally. They have made their estimations and I believe that they know their business and their opportunities well. They have been very active, including in recent weeks, in pursuing new revenue generation opportunities.
They have a mandate in the Canada Post Corporation Act — and this amendment would not change that — to provide universal service and to do it in a manner that is financially self-sustaining. They have demonstrated their ability to do that for well over a decade.
Senator Ringuette: How many of the remailers — the printers you indicated earlier — in your consultations with them, have indicated they are already invading the national exclusive privilege of Canada Post, notwithstanding the outbound exclusive privilege of Canada Post which they have been gradually invading for the last 20 years?
Ms. Nakatsu: All our consultations were with the mailing association and not individual printers. The association did bring in some printers on occasion and they were all very clear that they would not interfere with the exclusive privilege within Canada; they all recognized that was Canada Post's and they would not interfere with that.
Senator Ringuette: Have you consulted Canada Post on that issue?
Ms. Nakatsu: Yes.
Senator Ringuette: What did they say?
Ms. Nakatsu: They are of the same view: If they find anybody violating that privilege, they are prosecuting.
Senator Ringuette: Exactly.
I think there were two prosecutions, among others, that we are talking about.
Ms. Moynihan, you indicated a few minutes ago that, in regard to returns, there were provisions in the law that cannot return. Could you specify?
Ms. Moynihan: I will flip to the actual amendment that is before the committee. The exclusive privilege would not apply to letters intended for delivery to an addressee outside Canada. Therefore, the exclusive privilege would continue to apply to any letters that are for delivery within Canada.
Senator Ringuette: That has nothing to do with returns.
Ms. Moynihan: Perhaps I misunderstood your reference to my earlier remarks.
Senator Ringuette: You were talking about returns. We were talking about them because the remailers' practice is that you have your envelope and your return address is in Canada. How will they be responsible for those undeliverable returns to Canada?
Ms. Moynihan: I believe my earlier comments were about how this provision would not allow the "ABA" remail where mail is shipped out of Canada for delivery back in Canada.
Senator Ringuette: That was in reference to what I was asking you earlier; the national exclusive privilege is already being breached in Canada. That will probably be the next lobbying mission that you will be receiving.
Nonetheless, I go back to the returns. If you do not licence these remailers with responsibility in regard to the costs of the undeliverable mail that will be returned to Canada Post, it is all the Canadian taxpayers who will have to bear the costs, because they are the shareholders of Canada Post.
There are three remailers in Canada right now, and none of them are Canadian-"born" and -operated companies. They are Dutch post, Royal Mail and SingPost. The lobbyists against Canada Post were very strong.
The Chair: Senator Ringuette, have you concluded?
Senator Ringuette: I want to reiterate that, notwithstanding this, this legislation is incomplete because it does not provide for any kind of certification or any kind of return cost provisions for those remailers. The taxpayers will have to foot the bill.
The Chair: We are getting into an argument.
Senator Ringuette: I know. That is why I said I should not say "you."
The Chair: Do you have any reply you would like to make to that? You are welcome to do so, if you wish.
Ms. Moynihan: No, that is fine.
The Chair: I would like to thank you, Ms. Moynihan, and you, Ms. Nakatsu, for being here and helping us with Part 15 of Bill C-9. Thank you very much.
We reconvene and we are dealing with Part 20, environmental assessment, found at page 704 of Bill C-9. I would like to welcome from the Canadian Environmental Assessment Agency, John D. Smith, Director, Legislative and Regulatory Affairs, and Steve Mongrain, Senior Policy Advisor.
Mr. Smith will give us a bit of an overview. The more you can refer us to clauses of the bill, the better; that will be very helpful in our understanding of what is meant to be achieved by the various clauses.
John D. Smith, Director, Legislative and Regulatory Affairs, Canadian Environmental Assessment Agency: It is a pleasure to be here this evening. I believe you have a short presentation that we have put together. The main purpose of the presentation is to walk you through the proposed changes included in Bill C-9.
With your indulgence, the first two pages of the presentation, past the title slide, are intended to give you a brief overview of what the federal environmental assessment process is all about, to give context for those changes.
With your indulgence I will deal with those first.
On slide 2, the environmental assessment process under the Canadian Environmental Assessment Act is what we call a self-assessment process. It is set up so that federal authorities, which are a variety of departments, boards, agencies, et cetera, must conduct an environmental assessment of a project that they enable to proceed by taking a certain decision on the project. The decisions are outlined there. If a department is a proponent of a project, if they provide funding or land or if they issue certain approvals, they are required to do an environmental assessment of the project. I would note that this system stands in contrast to what you have in provincial governments, where a single body is responsible for the environmental assessment. Federally, the responsibility is spread all across government.
Another feature of the system is that all projects require an environmental assessment unless they are otherwise excluded, so the concept of exclusions is fundamental to our system and important to make it work.
The bottom of the slide outlines four types of environmental assessments. The first one is called screening. It is a bit of a misnomer. It is a real environmental assessment. It is not like a triage. Those account for well over 99 per cent of the assessments done. Comprehensive studies are done on more major projects, such as mines or pipelines. Typically, we would have about 30 or 35 underway at any one time. Review panels are independent panels appointed by government to conduct an environmental assessment of the largest and most controversial projects. The fourth one, mediation, is something permitted under the act, but it is a process that has never been used.
Turning to the next slide, as a result of this system, we end up with approximately 50 federal authorities conducting about 6,000 environmental assessments every year. Amongst those, we find many small, relatively insignificant projects that undergo environmental assessment. For the major projects, we find that often multiple departments are responsible for the same environmental assessment. For example, a mine project might require permits from the Department of Fisheries and Oceans, DFO, Transport Canada and Natural Resources Canada, NRCan. Under this system, they are all individually responsible for conducting an environmental assessment of the project, making decisions about when to begin the assessment, what to look at and so on.
Partly as a result of this situation, the federal process is often prone to delays, and those delays cause duplication with provincial processes, which often start sooner. For example, it can take up to 16 months to decide on whether an environmental assessment is needed and the type of environmental assessment to be conducted federally. Meanwhile, the province has started and is well on the way in their assessment, perhaps finished. When the federal government comes along, they are redoing some of the work that has already been done.
Turning to the proposed amendments in Bill C-9, there are three main provisions to talk about, and these are targeted amendments to our legislation.
The first one, which is found in clause 2153 and Schedule 3, deals with exclusions for infrastructure projects. Clause 2153 is on page 705, and the reference to Schedule 3 is in clause 2161, which is on page 710, and then the schedule itself starts at page 877.
I mentioned that exclusions are not unusual. Exclusions have existed from the day that the act came into force. In fact, they are necessary in order for us to avoid doing environmental assessments of the most small, routine projects. Last year, temporary exclusions were made via regulation to exclude about 14 or 15 classes of infrastructure projects that were funded under a number of federal funding programs. Those exclusions in regulation had a sunset clause, which was March 2011, and the proposed amendments included in Bill C-9 would make those exclusions permanent by removing the sunset clause.
In addition, new authority would be provided to the Minister of the Environment whereby he could require an environmental assessment of a project that is otherwise excluded if he felt it was warranted by unanticipated environmental concerns. There is no similar provision in the legislation right now for the minister to otherwise bring such projects under an environmental assessment.
The Chair: Where is that found? Is it in clause 2161?
Mr. Smith: It is on page 707, and is proposed subclause 7.1(3) under clause 2153.
The next proposed amendment deals with scoping. Scoping is a process that is done early in environmental assessment, and refers to decisions that establish the boundaries of the environmental assessment. In other words, what specifically will you focus on during the assessment? Decisions on scoping are about what is included in the assessment. It is not about whether or not an assessment is done. The proposed amendment would provide to the Minister of the Environment the authority to set the scope of a project, and that authority includes the focus on certain components of the project. It does not extend to allowing him to exclude an assessment altogether. That decision is subject to conditions that he establishes and makes public. If I forgot to mention it, that is in clause 2155.
Finally, the last slide deals with proposed amendments to the comprehensive study process. As I mentioned, the comprehensive study process deals with major projects. It is a process that is prone to delays because of having multiple departments involved. There is a two-stage process, and the first stage is to determine the type of environmental assessment to be undertaken. The amendments would deal with this in two ways. I should say all of these are in clauses 2152, 2154, and 2156 to 2160. When I am done this slide, if you wish, I can walk you in detail through those amendments.
The major change would be that the Canadian Environmental Assessment Agency would be made responsible for the conduct of these comprehensive study assessments. The examples as listed here are large hydro dams, metal mines and oil sands projects. The agency would not be made responsible for projects regulated by the Canadian Nuclear Safety Commission, CNSC, or the National Energy Board, NEB. Both of those bodies are already responsible under the legislation for conducting environmental assessments, and they already do so. The amendments in Bill C-9 would not give them new authority. In fact, they give new authority to the Canadian Environmental Assessment Agency. This would be the first time in legislation that our agency would have direct responsibility for conducting environmental assessments.
I should clarify that the budget documents, not the budget bill but the documents themselves, made reference to delegation of environmental assessments. I think that has probably caused some confusion. The language there is perhaps unclear. That referred not to legislative change but using existing authority to make use of the NEB and CNSC public hearing process. We can talk about that in more detail, if you wish.
With the budget changes making the Canadian Environmental Assessment Agency responsible for comprehensive studies, there is a requirement to start earlier in the planning phase of a project. This will greatly strengthen coordination and cooperation with provincial assessments. The amendments maintain public participation opportunities, but it removes what is called a track decision step, which is the process that we would go through to determine what type of environmental assessment would be done.
As I mentioned, when dealing with amendments to existing legislation, sometimes it is not easy to pick them all out. If there is a desire, I can walk you through the specific clauses.
The Chair: I think it would be helpful. You have made a number of comments here, and it would be helpful to understand how it is being established.
Perhaps as you do so, at page 708 where we talk about the minister in scoping, limited to one or more components of the project, is "components of the project" a defined term?
Mr. Smith: No, but if you look at the sum total of a project, a scoping decision to look at one or more components, the minister could decide the assessment should focus on certain aspects of the project.
The Chair: "Certain aspects" and "components" are synonymous?
Mr. Smith: The term "components" does not have a defined term in the legislation.
The Chair: That is the kind of issue we are looking for. That will be a matter of litigation, I think, along the way. Some people may want to define that.
Mr. Smith: Perhaps. If you would like, I can walk you very briefly, clause by clause, through these things and show you where they are.
The Chair: Thank you. That will not take us long and would be helpful.
Mr. Smith: Clause 2152 is definitions to the amendments of comprehensive study and comprehensive study list. This is for the purpose of lining those definitions up with the changes that are made elsewhere. Clause 2153, as I mentioned, is the one that deals with the exclusions for infrastructure projects. The definitions import into the legislation some terms already defined in regulation.
Proposed subclause 7.1(2) lists the specific funding programs which provide funding for infrastructure projects, and the exclusions apply only to projects funded under those, and proposed subclause 7.1(3) is the one I mentioned where the minister can bring a project back in for assessment.
Clause 2154 is one clause dealing with the comprehensive study process. This clause gives the authority to the Canadian Environmental Assessment Agency to conduct a comprehensive study by giving them the power to exercise all of the powers and functions of departments that otherwise would do such studies. Partway through that clause it talks about where an environmental assessment of the project might be required, the agency shall commence an assessment, so that is the language that gets us started early.
Clause 2155 deals with scoping, the one we were talking about a moment ago, and then clause 2156 starts a series of clauses dealing with comprehensive studies. Clause 2156 takes current sections 21 and 21.2 of the act — and this is the track process that I talked about where we spent sometimes months determining what type of assessment to conduct — and replaces them with a straight requirement to do the comprehensive study and produce a report. Therefore, what is in the act now and not repeated here is the essence of what this change is all about.
The Chair: The comprehensive study replaces this track decision step, as you indicated, but it is not an environmental study, is it?
Mr. Smith: The comprehensive study is a type of environmental assessment, yes. The track decision process was instituted through legislative amendments in 2003. It was intended to avoid a potential problem whereby a project could undergo a comprehensive study type of assessment, come to the conclusion of it and then have the project referred to a review panel to redo the assessment. Proponents were concerned about that, justifiably. The fact of the matter is it had never occurred.
We put in the track decision process whereby early on, involving consultations and recommendations from the responsible department, the Minister of the Environment would decide at the beginning whether the project would undergo a comprehensive study or a review panel, and that decision was final so it was intended to provide certainty.
Unfortunately, it has led to these lengthy delays that I spoke about. It can take from 12 to 16 months to go through that process and the environmental assessment has not yet started; we are just going through the process of figuring out which track it will go on.
I have often said that we cured a hypothetical problem but created a real one, so part of these amendments are to get rid of that track process, which has not proved useful, which has caused delays.
The Chair: On page 2, your slide, you talked about the types of environmental assessments. This legislation will do away with screening and mediation and review panels?
Mr. Smith: No, it does not change any of those types of assessments that are required. The track process was a process within the comprehensive study process to early on decide whether the project would continue as a comprehensive study or be referred to a review panel. All types of environmental assessments remain; it is just one of the steps within the comprehensive study process that would be changed.
Steve Mongrain, Senior Policy Advisor, Canadian Environmental Assessment Agency: If I could elaborate on that, the comprehensive study process is reserved for the larger-scale, more significant projects where the Minister of the Environment determines that they are more likely to cause significant, adverse effects. It is on a list, regulations. It includes mandatory opportunities for public participation, mandatory follow-up programs. The public participation is also backed up by some modest participant funding.
The heart of the Bill C-9 amendments would, if passed, make our agency responsible for those comprehensive studies, not as is the case today — multiple federal departments, agencies and boards — with the exception of the National Energy Board projects and the Canadian Nuclear Safety Commission.
The Chair: Thank you. Mr. Smith, had you finished, or did I interrupt you?
Mr. Smith: No, there are a few more clauses to go, but the ones I have gone through are the heart of the amendments.
Clause 2157 replaces some language. It basically makes those existing clauses line up with the new process. Clause 2158 gives the agency the ability to terminate a comprehensive study if it is found that there is no federal decision involved. Clauses 2159 and 2160 deal with a public registry of environmental assessments that is on the Internet, and again, it tweaks those requirements to ensure they line up with the other amendments.
Clause 2161, as I mentioned before, refers to the schedule of exclusions. Clauses 2162 and 2163 are transition clauses, and then there is a whole series of clauses, 2164 to 2171, that repeal the exclusion regulations and repeal one other regulation that was put in place last spring.
The Chair: Thank you. That was helpful. We appreciate that.
Senator Finley: In actual fact, some of the questions that I had have been answered by our panel. I was interested in this particular part of the legislation and went back to review some previous government stances or political stances. I noted that, in the Speech from the Throne in 2004, the then-Liberal government said that it would work to get its own house in order; it would consolidate federal environmental assessments and would work with provinces and territories towards a unified and more effective assessment process for Canada by 2006.
Obviously, this did not happen. Would I be correct in saying this is one of the things we are trying to address with this piece of legislation?
Mr. Smith: Yes.
Senator Finley: Second, this was the sort of auditor general of the environment in the report of the commissioner, fall of 2009. This is very clear that, for projects where there is more than one responsible authority, disputes about projects' scope may cause serious delays in the environmental assessment process with related consequences for project implementation, and it goes on to mention that the Canadian Environmental Assessment Agency had worked with parties trying to resolve such disputes in the past with limited results. Would you say that this particular legislation might make that an easier process to avoid?
Mr. Smith: Certainly in the case of comprehensive studies where the Canadian Environmental Assessment Agency is given the authority for the assessments and all of the decisions necessary to get them underway and how to conduct them, then yes. We are not running away and hiding; we will be working closely with our colleagues and relying on expert departments for advice, but at the end of the day, when a decision needs to be taken, then the agency will have the authority to take that decision and get on with it.
Senator Finley: At the risk of appearing perhaps a bit repetitive, the 2006 Liberal platform again made reference to this: While recognizing provincial resource ownership in jurisdictional levels, government must assure competitiveness of energy in remaining sectors. It goes on to mention reduce overlapping and disjointed regulatory requirements, i.e. make regular, smarter and more efficient without compromising social and environmental goals. In fact, the Honourable Stéphane Dion, on November 23, 2005, made it clear that he was unveiling an action plan to consolidate federal environmental assessment processes.
It would appear to me, at least, that there is a common consensus on both sides of the house, probably on all sides of the house, to make this happen. Would you say, in the process you have designed, that you have taken into consideration, through any form of consultancy process, that this bill, in effect, fulfils what both sides of the house, at some point or another, have said they would like to see happen?
Mr. Smith: I am not in a position to comment on what various members may think, but the issue of diffuse accountability for environmental assessment is a long-standing one. It has been commented on several times. There are reports, for example, in addition to some of the things that were read out. In 2004, the external advisory committee for smart regulation took an extensive look at environmental assessment and commented on the issues that arise from diffuse accountability.
Provincial governments have commented the same. In fact, last year, the Canadian Council of Ministers of the Environment agreed on things that needed to be done to better make federal and provincial environmental assessments work together. They looked at a variety of issues, but one thing they looked at was — I forget the exact words — dealing with this issue of diffuse accountability in the government. The problems that it has caused have been long- standing, and many people have commented on it.
Senator Finley: Thank you.
Senator Neufeld: You talked about the Canadian Council of Ministers of the Environment. The Council of the Federation and all provincial premiers have also brought forward the concern to the different prime ministers that these issues must be addressed. You admitted that, but do you agree that —
Mr. Smith: There are others. There have been various commentators from public interest groups as well that have looked for a stronger role for the agency. There have been commentators from various viewpoints and for various reasons that looked at this issue of diffuse accountability and pointed to it as a problem.
Senator Neufeld: I am talking about the premiers from all across Canada, from all jurisdictions, territories and provinces.
Mr. Smith: Yes.
Senator McCoy: Thank you for including me in your committee for this process. As you know, I followed these issues when I was in the private sector, when I used to do this sort of thing.
What year was CEAA brought in, the Canadian Environmental Assessment Act?
Mr. Mongrain: The original bill was introduced in 1990, and the main part of it was brought into force in January 1995.
Senator McCoy: My recollection at that time is that many of us argued strongly for the agency, your agency, to be in fact an environmental czar. In other words, you would be the one who would direct traffic and make things happen within the federal government. Is that recollection correct?
Mr. Mongrain: It is slightly before my time at the agency, but it certainly reflects some of the discussions both Mr. Smith and I have had with staff who were around at that time. That was one of the fundamental debates with that new and revolutionary legislation at the time.
The issue came up as well during our five-year review in 1999 and 2000, and the amendments that resulted in 2003 kind of went halfway. You used the word "czar;" we became a federal coordinator for some of the larger projects.
The proposed amendments in Bill C-9 would give us legal responsibility for the delivery of these comprehensive studies.
Senator McCoy: It does give you responsibility, but it does not necessarily give you authority. Where does it tell you what authority you have over other departments and over all 6,000 environmental assessments? Or 30 or so a year, I think.
Mr. Smith: You scooped me on my first line, which was it only applies to comprehensive studies, as you mentioned.
The authority is in that clause I mentioned — clause 2154 — which puts a proposed new clause, 11.01. It is the line that says "the agency shall commence a comprehensive study and exercise the powers and perform the duties and functions of the responsible authority in relation to the project . . ." That applies from the time we would commence the project until the comprehensive study report is done.
As I mentioned in the opening presentation, the thing that triggers environmental assessment is when a department has a decision to make about providing land or funding or issuing permits. The legislation says they cannot do that until the environmental assessment is done and they have determined whether the effects are significant.
At the end of the process, they will still have that role. Leading up to it, doing the environmental assessment and producing the report, that clause gives us all the ability to exercise their powers, which means making all of their decisions. It is not so much forcing them to do things; we take on the role and do it ourselves.
Senator McCoy: It seems to me to be a major shift in how the federal government will approach some of its environmental responsibilities, and that is one of the reasons I suppose we all think this legislation should not be in the budget and that we should have more time to study it.
I cannot see how you will have the information that says when you receive the information. I see no process by which you will gather the information across the full country, from sea to shining sea, with all of these departments so that you would even know when you might be called upon to exercise your authority.
Mr. Smith: There are two parts to the answer to that question. First, proposed subclause (4) under clause 2154 puts a requirement on federal departments. It says that whenever they get information from a proponent about a project that might need a comprehensive study, they have to tell the agency. That is one way of doing it.
The other way is not laid out in here. In fact, the act generally does not put any direct obligation on industry proponents of projects. The act works through federal decisions, and when a federal decision is needed, then the department must make sure an environmental assessment is conducted before they take the decision, and out of that flows the need to gather information about the project.
Knowing that the Canadian Environmental Assessment Agency would be in the driver's seat on these projects, although they are not obligated to be, we expect that proponents will come to us directly. If they know they have a project that will have to undergo an environmental assessment and they know they will need the assessment before they get funding or land or permit, they are interested in having the process move quickly and they will come to us directly.
The other way is through provincial governments. Right now, that is often how the federal government hears about projects, because they will come into the provincial environmental assessment system and it will be obvious that a federal decision is needed and, therefore, the provinces will approach us.
Senator McCoy: It is still a bit murky, then. We are still a bit of "by gosh" and "by wish." We have not really established a well-defined process yet.
Mr. Smith: The process falls out of the requirements that are there.
Senator McCoy: That is what we have been saying for 20 years. You wanted to add something, Mr. Mongrain.
Mr. Mongrain: Yes. We are a small agency, but we have regional offices across the country and excellent working relationships with our provincial counterparts. The information flow, if you will, about potential projects that might trigger the system is actually one of its strengths. Where it falls down is that the act requires a certain amount of information, in some cases, for certain regulatory decisions that might trigger the requirement for an environmental assessment. Let me use an example to try to illustrate that.
A proponent will provide a project description for a large metal mine, let us say. For a department like Fisheries and Oceans to conclusively determine that a CEAA review is required, they need detailed engineering and design information so they can decide whether they will have to issue an authorization for the destruction of fish habitat. That can happen many months into the process and then provincial environmental assessments have already started. They are out of the gate and we are continually trying to catch up.
In clause 2154, we tweaked that requirement. The bill proposes that, where this information comes in the guise of a project description, where the project is on the comprehensive study list regulations and where it is reasonable to conclude that a federal EA, environmental assessment, might be required, then the Canadian Environmental Assessment Agency shall commence that environmental assessment. That allows us to start in sequence with our provincial counterparts and to harmonize the efforts into a single process that meets the legal requirements of the federal government and the government of the province that may also be required to do an EA.
On the initial part of your question, it is in the proponents' interest to get the information as soon as possible to the parties involved. That includes the CEAA, the provinces, officials from Natural Resources Canada, Major Projects Management Office, who testified before the committee last Friday, and other federal departments.
Senator McCoy: In the interests of time, I am skipping over things. There is a great deal more to be explored in what you had to say.
In my experience, you had one person in your office to deal with the entire Province of Alberta. You now have much more responsibility and you say that you are eager to take it on. Have you increased our operating funding? How many more people in Alberta can we expect?
Mr. Mongrain: We received an infusion of funding through Budget 2007 to give us a 60-per-cent increase. We have about 235 FTEs, full-time equivalents, across the country. Our Alberta office is one of the more active ones, followed by British Columbia, which is the largest of our regional operations. The Budget 2007 funding created the major projects management office and administratively provided us with more responsibility to do work on behalf of the federal responsible authorities. We already had a coordination function within the legislation. A cabinet directive was issued at the time to say that the agency should do more of the administrative work and report and document writing to help move the process on. We have engaged in that work. It did not go as far as providing any legal responsibility for these environmental assessments. Unfortunately, that has not resolved the problems of delay and duplication that we have seen over the course of the last 10 to 15 years.
Senator McCoy: Do you have more money now because you are going to solve it? You said that you had not been able to solve it in the last three years, despite all the best intentions. Will you get more people? A comprehensive study can take a crew of dozens to prosecute, as you know. Will you have the people power and the operating dollars?
Mr. Mongrain: We are already doing much of that work on behalf of the responsible authority. We firmly believe that we have the people power and the operating dollars. The missing piece in the puzzle was the legal authority to do so.
Senator McCoy: Do you mean the legal authority to tell the other departments what to do?
Mr. Mongrain: More a case of telling them to do it.
Senator McCoy: You mentioned exclusions, which have always been a feature of this legislative scheme, although very minor. They were like very small projects. In Bill C-9, the exclusions extend to highways, twinning of highways and major recreational facilities and goodness knows what else. I can repeat the list of all the items that are in the stimulus package. All of these big projects worth billions of dollars add up to quite a significant shift. This is a quantum leap, not a simple addition.
Mr. Smith: As you mentioned, some exclusions have been there since the beginning. There have been a number of rounds of amending the exclusion regulations. They have been added to a number of times over the years, most significantly in 2007.
One of the trends with the federal government increasingly involved in funding infrastructure projects, the federal environmental assessment process is bringing in projects that were not brought in before the CEAA was in place. That is one reason for a look at the exclusions.
A range of exclusions is proposed in the bill, some of which apply to the whole project and some of which apply to certain aspects of the project. You mentioned highways, not ones that are new, but it does not use the word "twinning." Rather, it includes the widening of highways by up to two lanes. It has a variety of other bounds around it in terms of being in or close to transportation or utility corridors and some conditions related to environmentally sensitive areas. Along with the various exclusions, there are bounds that limit the application of exclusions.
Senator McCoy: We do not have the time to explore this in greater depth. This is an environmental issue, not a financial issue. It seems that there is a potential conflict. At one point in the new act, notwithstanding anything in the legislation, including the exclusions, it says that one is required to do a comprehensive study. I attempted to cross- reference these things. The exclusion says that, within 300 metres of an existing right of way or close to or on land that is already industrially zoned, or words to that effect, whereas the comprehensive study list refers to a highway that is on a new right of way.
I can see where a new right of way might be required on a highway. I can see a conflict in that, and I am curious to know how you will work that out.
Mr. Smith: I might have to refer to my CEAA and regulations. My recollection of the comprehensive study requirements with highways referred to new highways of a certain length and new rights of way of a certain length. This exclusion applies to the widening of an existing highway. A widening of an existing highway that is not on the exclusion list would not trigger a comprehensive study. We were careful to ensure that there are no exclusions of projects that would require a comprehensive study. In fact, no such projects are excluded under the regulations. There are no new exclusions that have not been in place for the last year. Projects before those exclusions came in required a screening environmental assessment, not a comprehensive study.
Senator McCoy: We do not have the time to delve into it very much, and others are eager to ask questions, as we all are.
Senator Gerstein: Thank you, witnesses.
Standing in front of a mirror, one asks, "Mirror, mirror, on the wall, which is the greenest Canadian province of all?" The mirror, being very political said, "I do not know, but you might want to consider British Columbia as one of those on the list."
With that as background, it was of great interest to me that I read on May 27, 2010 an editorial that appeared in the Vancouver Sun. What attracted me to it was that it said:
Adding common sense to the environmental review process.
Anytime you see the words "common sense" in an editorial, it is always worth looking at twice. Even the common sense revolution, you know the background of that.
Let me quote what it said:
As anyone working on infrastructure projects in Canada, particularly in the resource sector, will attest, the current environmental review process can delay projects by years and dramatically drive up their costs.
The cause of this unfortunate state of affairs is that . . . the federal authorities have been duplicating effort already thoroughly and efficiently undertaken by their provincial counterparts.
Then it goes on to say:
Bill C-9 seeks to correct these deficiencies by putting the minister of the environment in charge. . . This doesn't mean the process is weakened. On the contrary, even routine public infrastructure projects that are exempt from review, could be subject to environmental assessment if the minister believed there was any chance of negative consequences.
The editorial concludes by declaring:
The inclusion of common sense in the environmental review process will benefit both the economy and the environment.
Would you agree that Part 20 contains a lot of common sense — something none of us use enough of?
Mr. Smith: My only comment would go back to some earlier comments I made, which is that the provisions in there deal with issues that have been around for a long time, that have been commented on by many people, and that we have known about for a long time.
Senator Gerstein: You are not uncomfortable with anything it says?
Mr. Smith: No.
The Chair: If they have been around for a long time, how did they find themselves in this budget implementation bill?
Senator Gerstein: It took a courageous government to move forward with these things.
Mr. Smith: There has been an evolution, and Mr. Mongrain talked about this using the comprehensive study process as an example. There has been an evolution over the years in trying to attack the problems in different ways, and an evolution in more authority for the agency. Mr. Mongrain talked about the federal environmental assessment coordinator provisions put in place in 2003 to try to better coordinate participants. The major projects initiative gave us more resources and, again, administratively more authority to do those. It is an evolution in the thinking.
We are expecting a fairly large increase in the number of comprehensive studies over the next few years, so that took the existing problems and shone a brighter light on them. With those potential increases in the number of comprehensive studies, existing problems become that much more magnified.
[Translation]
Senator Poulin: You said from the beginning that diffuse accountability for environmental assessment has been a long-standing issue. If memory serves, that constitutional responsibility is not clearly defined in terms of the federal government versus the provincial government.
Looking at the amendments to the bill from a holistic perspective, I wonder how the proposed amendments to the current legislation will help to clarify federal versus provincial responsibilities.
Mr. Smith: Indeed, the proposed amendments do not pertain to environmental assessment accountability directly. One of the most relevant amendments in that respect is the agency's ability to begin the environmental assessment earlier on in the process and to combine the two processes. But the bill does not really change or clarify federal versus provincial responsibilities.
Senator Poulin: I share Senator McCoy's frustration because the senators should have had more discussion around this issue, and that is especially true for the Standing Senate Committee on Energy, the Environment and Natural Resources, which has experts on all matters of environmental concern.
I have represented Northern Ontario in the Senate for 15 years, and this is a major concern to me. I must say I have received a number of complaints about the delays. Everyone knows that, for the private businesses moving forward with projects, time is money. Whether at the federal or provincial level, the delays are due to the whole process that private businesses have to go through.
But I agree with the process because the environment is an important concern to me. When you said that federally funded projects would no longer be required to undergo an environmental assessment, I did not understand the reasons for that.
Mr. Smith: The exclusions pertain specifically to 14 classes of infrastructure projects, not all of them. They are the projects included in the schedule of the bill, which were excluded last year pursuant to regulations. It does not include all government-funded projects, just those specific projects paid for through funding set out in the legislation.
Senator Poulin: I have a third and final question. I see that the agency will be taking on more responsibility, and it makes me think about the impact that will have on operations if the objectives set out in Bill C-9 are achieved. You told Senator McCoy this would not give rise to additional costs. I find that hard to believe if indeed you achieve all the objectives set out in Bill C-9.
Mr. Smith: I talked about the evolution that has gone on at the agency. Three years ago, we received a budget increase in the neighbourhood of 60 per cent to implement initiatives involving large projects, and because of that funding, we are able to meet the new requirements set out in the bill.
Senator Poulin: I know you have regional offices.
Mr. Smith: Yes.
Senator Poulin: Given Ontario's size and the tremendous number of environmental review requests in Northern Ontario, will an office be set up solely for Northern Ontario?
Mr. Smith: The Ontario regional office is currently located in Toronto, and it covers the entire province. We have not been given a budget for another regional office.
Senator Poulin: You might want to consider that. Now I will give my colleagues a chance to ask questions.
[English]
Senator Murray: The bill provides authority to the Minister of the Environment to set the scope and to establish the boundaries of an environmental assessment. Who does that now?
Mr. Smith: Right now, the responsibility is given to responsible authorities, which are all the departments, agencies, commissions, et cetera, that conduct the environmental assessment. This would allow the minister to determine if the assessment can focus on just part of the project.
Senator Murray: I see that. What is the rationale for the change?
Mr. Smith: Until earlier this year, departments that were conducting an environmental assessment could determine that they would focus the assessment on only certain parts of the project and, in some cases, this was becoming common practice.
In January of this year, a Supreme Court decision said that under the terms of the current law, they did have the discretion to determine the scope of the project but that the minimum project that would be subject to assessment would be the project as proposed by the proponent. In other words, the court ruled that the laws as written did not allow them to only look at certain parts of the project.
That Supreme Court decision was in many quarters viewed as being generally positive. In our assessment of the decision, one of the things we said was that it would eliminate some of the delays because departments would not spend a lot of time figuring out what the scope of the project was. However, it left situations where the sensible thing to do was to look at only certain components of the project, and that would not be possible anymore.
With the amendments, this does not go back to the situation as it was. It does not say that all departments can determine to focus the scope on certain components. It gives exclusive responsibility to the Minister of the Environment.
Senator Murray: Would the regulatory authorities, such as yours, NEB, or whoever, not be competent to decide on the boundaries of the scoping?
Mr. Smith: It is not a question of the competence of the authority. The law, as determined by the Supreme Court, said that you cannot narrow the scope beyond what the proponent has proposed.
Senator Murray: I understand that. The change that is being made is that those departments will no longer have that role; rather, the role is being accorded to the minister. My question is, why the minister? Why not the authority, the National Energy Board or whoever is going to hold the hearings?
Mr. Smith: The desire was not to return to the situation prior to the Supreme Court ruling, where all departments could choose to only look at part of the project. The desire was, if that was going to be the decision, then the assessment would only focus on certain components, that it would be the Minister of the Environment.
Senator Murray: Why the minister? That is my question. Perhaps I will ask him.
The Chair: We are on page 708, clause 2155. Senator Murray was just talking about proposed clause 15.1. Proposed subclause (2) says "the conditions referred to in subsection 35(1) . . ." That is in relation to which components would be scoped in. There is no time limit on that being made available to the public. Do you see that as a potential for delay?
Mr. Smith: I do not think so. I think the conditions would be made available in a timely manner, and I do not see that causing a delay in the decisions.
The Chair: You are confident that "in a timely manner" will be read into this even though it is not there?
Mr. Smith: In practice.
Senator Marshall: Mr. Smith, there is a specific section in the legislation that I would like you to comment on. When I read the legislation initially, I could not understand why we are going back so far.
Under clause 2153, and specifically on pages 706 and 707, it speaks about the environmental assessment and says certain projects have to be done and others do not have to be done. There is a reference to some of the federal funding mechanisms, such as the municipal rural infrastructure fund that was announced in Budget 2003. That was seven years ago, so why is that being referenced now? Are there still projects being carried out under that agreement?
Mr. Smith: Yes, there are still some projects under that agreement. There are not as many as there used to be. I do not have the exact figures, but there still are a few important projects coming through.
Senator Marshall: Even projects announced, say seven years ago, would fall under the new regime?
Mr. Smith: If they had been announced seven years ago, then if an environmental assessment was needed, it probably would have already been done, so this would in practice apply to new funding announcements under those funding programs.
Senator Marshall: That funding agreement is still in existence?
Mr. Smith: Yes.
Senator Marshall: In response to some of the other senators, you mentioned the impetus for the amendments and you referenced some of the mining projects. It seemed that some of these projects got caught up in a lengthy environmental process. You also spoke about road work.
I had read somewhere, probably on the Internet, about a gold mine in Northern New Brunswick. It took quite a while to have the assessment done for that project, and also for an iron ore company in Labrador. There is also reference to delays in Nova Scotia and New Brunswick.
Are you able to specifically talk about individual projects to give us an idea as to types of projects that took a long time as opposed to other projects? Are you able to be specific?
Mr. Mongrain: I think I can. The project in New Brunswick is a metal mine, Halfmile Lake. My wife and her family are from that region, near Bathurst.
Senator Marshall: I lived in Bathurst. That is why I ask.
Mr. Mongrain: The responsible federal players received a project description from the proponent four or five months ago. The province has already started its review based on that information, but the proponent is still waiting for a decision from the federal authorities as to whether there will be a requirement for a federal environmental assessment.
I understand the proponent has since redesigned the project, which would shift it from requiring a comprehensive study to being below that threshold. I cannot speak to their motives, but it is a case of redesigning a project to deal with the process. We like to see projects redesigned to protect the environment. That is one example in the Province of New Brunswick.
Senator Marshall: What about the project in Labrador? I am from Newfoundland and Labrador, and I thought there was an issue there.
Mr. Mongrain: There is a project that goes by the title of "direct shipping ore," which involves existing iron ore deposits close to the border with Quebec and the town of Schefferville.
What has happened with that project is that the proponent came in with its project description back in May of 2008. The Government of Newfoundland and Labrador has completed its environmental assessment. They have not yet issued their decision and the federal process is yet to start. There has been a notice of commencement, but it has not gotten under way. Now, the proponents have put the project on hold and will once again do some redesign work.
Senator Marshall: Will the proposed amendments address the problems that were encountered with the Bathurst mine and also the issue with regard to the iron ore in Labrador?
Mr. Mongrain: With the Bathurst mine, it was, as proposed, a comprehensive study-level project initially. If these amendments were passed, it would be the responsibility of our agency. Clause 2154 would require our agency to start that as soon as we have the information suggesting it is on the comprehensive study list and a federal environmental assessment might be required, rather than a confirmed trigger.
We would be able to start in sequence with our partners in New Brunswick, and be able to work together on the environmental issues associated with the project. Similarly, with the direct shipping ore project, we would be able to assess that through a harmonized process with the Government of Newfoundland and Labrador.
Senator Marshall: Are you saying theirs is done?
Mr. Mongrain: Theirs is done now. If this had been in place in 2008, we would have started in lockstep with the Government of Newfoundland and Labrador and brought the expertise of the federal government to the table to work with them. It would have prevented a case where a proponent might be faced with duplicate process requirements, and possibly environmental assessment requirements.
Senator Marshall: Regarding the Commissioner of the Environment and Sustainable Development — I think that is the formal title of the environmental officer within the Office of the Auditor General — would she have made any comments regarding the proposed legislation, or does she reserve judgment until after the fact?
Mr. Smith: The Commissioner of the Environment will look at how legislation is being implemented, but usually does not comment on policy issues. However, I think as we indicated earlier during some of the questions, her most recent report pointed to some of the issues like diffuse accountability that led to these amendments.
Senator Marshall: I guess we will hear from her at a later stage.
Mr. Mongrain: For the record, Scott Vaughan is the Commissioner of the Environment and Sustainable Development now.
The Chair: She is a he?
Mr. Mongrain: Yes, in this case.
Senator Ringuette: I have a follow-up question to Senator Marshall's question in regard to the Schefferville and Northern New Brunswick projects. What prevented you from starting? You say you did not start; what prevented you?
Mr. Mongrain: The decision on whether to start would not be with our agency; it would be with the federal department, under the current law.
Senator Ringuette: Are you saying that a different federal department would not initiate an environmental assessment project?
Mr. Mongrain: The federal department would if they have a decision; the law would require that. We are not in any way suggesting that federal authorities are not complying with the requirements of the Canadian Environmental Assessment Act.
However, the way the mechanism in the act triggers the process, the information they need is not generally available early in the planning phase of a project. They are continually going back to the proponents, requiring more engineering and design information to determine whether an environmental assessment is required.
Senator Ringuette: You would have to ask the same question to determine if an environmental assessment was required, correct?
Mr. Mongrain: Mr. Smith can help me out on this one. The way the clause is crafted, we would not need that level of detail any more.
Mr. Smith: The environmental assessment is required, as I mentioned, when a department has to make a decision. On these major resource projects, frequently it is issuing a regulatory permit. What departments tend to do — and from their perspective, it is quite legitimate — is that before they determine that an environmental assessment is needed, they want a fairly high degree of certainty that they will have to issue a permit.
As Mr. Mongrain mentioned, they look for a fairly detailed set of information and do not get started on the environmental assessment until they are certain they will have to issue a permit. Therefore, they need to know a lot about the project. From their perspective, it makes sense. Their core business is issuing those permits that might deal with fisheries or navigation or explosives.
When we did the last review of the act, we proposed, through policy, what is called the "in until out policy," which basically said if you think you are going to need an assessment, get one started. You can always stop it if you determine it is not needed, but start it early so you have the advantages we have talked about.
In essence, although you do not see the words there, in clause 2154, by saying that the agency will start the comprehensive study when an environmental assessment might be required, it basically sets the threshold that we are obligated to live by at a lower level than departments have been using. We get it started when we think it might be required; then we can do things in conjunction with the provinces.
Senator Ringuette: I would like to go to your slide 2. Your first point is that the federal authority must conduct an environmental assessment when they have a decision about a proposed project such as the proponent, a source of financial assistance — that would probably be federal — land manager or as a regulator. When you indicate "as a regulator," I suppose that would include interprovincial projects and international projects. Would they automatically be included in there?
Mr. Smith: Certain types of them. We have a regulation called the law list regulation, which lists the various types of federal permits, approvals, authorizations that trigger the environmental assessment.
Senator Ringuette: I will give you some examples and you tell me if they would require environmental assessments. For an interprovincial project such as a gas pipeline or a high-speed railway, would they require an environmental assessment automatically?
Mr. Smith: An interprovincial pipeline requires authorization by the National Energy Board, and that is one of the triggers for an environmental assessment. An interprovincial rail line —
Mr. Mongrain: High-speed rail would be regulated by the Canadian Transportation Agency. They would likely have decisions which would then trigger the requirement for an environmental assessment. The way the process works is that it is to inform federal decisions. Before you can take that federal decision, an environmental assessment has to be conducted.
For a high-speed rail project, I think the threshold is 200 kilometres per hour. That is not very high speed, but I guess it was in the mid-1990s when the comprehensive study list regulations were being put in place. It would trigger the requirement for what we call a comprehensive study.
Senator Ringuette: Whether this legislation is passed or not, the trigger would still be there, is that right?
Mr. Mongrain: The difference is who would be responsible for that comprehensive study.
Senator Ringuette: Okay. What about an international example like the Detroit-Windsor bridge?
Mr. Smith: That triggers a federal environmental assessment.
Senator Ringuette: Would the environmental assessment in these cases be comprehensive study?
Mr. Smith: It depends if it is listed on yet another regulation, the comprehensive study list regulations. I would have to look at the specifics in that regulation. Many of them come with thresholds of size or length to determine whether it is a comprehensive study type assessment or a screening assessment.
Senator Ringuette: For comprehensive study, if I understood it correctly, if an assessment is needed, the minister sets the scope of the assessment and the public conditions.
Mr. Smith: Under the proposed amendments, if a comprehensive study is needed, then it would be the Canadian Environmental Assessment Agency that would conduct the assessment.
Senator Ringuette: Would you set the scope and the public conditions?
Mr. Smith: We would have the responsibility for establishing the scope. However, if the scope was to be narrowed and only look at some components, that would have to be done by the Minister of the Environment.
Senator Ringuette: So the minister can direct you in regard to the scope of any comprehensive study, correct?
Mr. Smith: Yes, but his authority is not restricted just to comprehensive studies in that regard.
Senator Ringuette: But he can direct you regarding the scope of any comprehensive study.
Again, to ensure that everything is clear to me, let us turn to page 705, clause 2153. There is an entire slate of definitions here, and the last one at the bottom of the page talks about "water body", which:
includes a lake, a canal, a reservoir, an ocean, a river and its tributaries and a wetland, up to the annual high- water mark, but does not include a sewage or waste treatment lagoon, a mine tailings pond, an artificial irrigation pond, a dugout or a ditch that does not contain fish habitat . . .
Would you explain for me the definitions in here in relation to the schedule that is on page 877?
Mr. Smith: The definitions that appear on pages 705 and 706 are definitions that were copied from the current exclusion list regulations. Those terms are included in various ways in the exclusions.
Senator Ringuette: You must understand that regulations do not go before Parliament. They are only a within process, and they are not subject to the scrutiny of Parliament. This is what I am trying to identify in regard to regulations.
The Chair: A joint parliamentary committee scrutinizes regulations.
Senator Ringuette: Yes, but it does not go through all of Parliament. For instance, I do not think that the Standing Senate Committee on Energy, the Environment and Natural Resources saw those regulations.
The Chair: You might be right there. They might not have gone to that committee, but I did not want you to be misled. There is a Standing Joint Committee for the Scrutiny of Regulations, which is a joint committee of Parliament that reviews regulations.
Senator McCoy: Parliament does not approve them ahead of time. I think that is the senator's point.
The Chair: We are playing with semantics here. It does not go through the same process as legislation.
Senator Ringuette: I move on to the new proposed subclause 7.1(2), projects set out in schedule. An environmental assessment is not required under section 5 or sections 8 to 10.1, and so on. Is that in reference to the schedule on page 877?
Mr. Smith: Yes. If a project is of a type that appears in the schedule and is funded under one of the funds listed there, then it is excluded. The reference to section 5 or sections 8 to 10.1 in the act is actually the clause that says you have to do an environmental assessment.
Senator Ringuette: I look at page 877 and Schedule 3, proposed subclauses 5(1) and 5(2), which are mainly facilities, although there are some issues in regard to institutions. There is a big list of facilities there that could be questionable. Then it says: 8 to 10, and I presume 10 is inclusive.
Mr. Smith: Yes.
Senator Ringuette: There is a list of proposed construction, installation, operation, expansion or modification of an overpass, grade separator. All kinds of different projects are listed here that, as long as they receive federal funds, are automatically excluded.
Mr. Smith: It is the receipt of federal funds that triggers the environmental assessment, so if they have funding under one of the named funding programs and they are on that list of exclusions, then yes, they are excluded.
Senator Ringuette: They are excluded. That is quite a range.
On page 3 of your slides, the second bullet, "many routine projects with insignificant effects require environmental assessments." Here again, I am only supposing that we have to consider that comment along with the comments on page 2, the different types of environmental assessments. You say screening is 99 cent of your assessments.
Mr. Smith: Right.
Senator Ringuette: The comprehensive studies are only 1 per cent.
Mr. Smith: They are less than 1 per cent, yes.
Senator Ringuette: Would you say that your screening is an insignificant effect?
Mr. Smith: The legislation is structured such that the default type of environmental assessment is a screening type of assessment. A relatively small number of projects, where they have been identified in regulations as potentially having significant effects, are listed in regulations, and they undergo a comprehensive study, so the screening is a default and it picks up a wide range of projects.
Senator Ringuette: Could you identify for us examples of the many routine projects with insignificant effects?
Mr. Mongrain: Mr. Chair, I have some examples off the top of my head. We have a registry Internet site that includes all projects that are undergoing a federal environmental assessment. We get this question about what insignificant projects do require an EA, so I occasionally check it. In preparation last week and this week for this committee, I checked to see what has come up recently on our registry Internet site.
To give an example of some projects that have relatively insignificant effects, right now, at a national historic site, Parks Canada is replacing three propane toilets with three low-flush toilets. The way our act is structured and the way the exclusions are a sort of a blunt instrument to push things aside, that has triggered a requirement for a full environmental assessment at the screening level. With that comes a fair bit of analysis. I am not suggesting that the retrofit of three toilets at a national historic site should not be done responsibly and carefully, but from our perspective and our agency's perspective, it does not really warrant the application of the process in this act.
Senator McCoy: On a point of clarification, it would not be excluded. It would be an historic site.
Mr. Mongrain: That is right. It is not excluded. It is an example of a project that requires an EA.
Senator McCoy: That is not excluded under your new exclusions in the bill, is it?
Mr. Mongrain: No. Another example of small, insignificant projects that crop up from time to time is a water ski course of 250 metres on a developed lake in Quebec. It underwent a screening-level assessment. Some trees on a Canadian Forces base near a weather station were impeding the way the weather radar was working, so they had to do an environmental assessment of that project before they could remove the trees. Many projects, Mr. Chair, are captured under our process because it captures everything unless it is specifically excluded. When the exclusion list was developed in the mid-1990s and amended in 2007 and then again in 2009, no one thought of the toilet project necessarily, or the navigable waters project or the water ski course.
Senator Ringuette: I have one last question. On page 709, proposed subclause 21.1(1) indicates here that "Within 10 days after the inclusion on the Internet site of a notice of commencement of the comprehensive study . . ." — is that the only means though which you will publicize the study, through an Internet site? Then it follows with proposed subclause 21.1(2), "The notice must include the deadline and address for filing comments."
Let us say that a project is within a geographic region. Will you continue the process of advertising in the region that you will be starting an environmental study with regard to a certain project?
Mr. Smith: There are a number of notices provided throughout the comprehensive study process. The Internet site it refers to is the Canadian Environmental Assessment Registry Internet site, which is hosted on our website. It includes notices of commencement of all environmental assessments that are started. It is the main vehicle for informing the public about when environmental assessments are under way. It is used very heavily. I think most people who are interested in it know about it.
When there is a notice of a public meeting, for example, in addition to notices on the registry, there will be public notices provided. With respect to a notice of commencement, it would be the registry Internet site that is used to say something is getting under way. If there are other notices of public hearings, for example, then we would use other means of communicating it as well.
Mr. Mongrain: It varies from newspapers ads to radio ads, depending on the region in the country, the type of project and the level of public interest.
Senator Ringuette: Will the minister decide with regard to the public conditions of the assessment? That is part of this bill.
Mr. Mongrain: Not on a case-by-case basis. The scoping authority provided to the minister is discretionary authority for the minister to use, but we do not expect, nor would it be possible for the minister to make a scoping decision on all 6,000 environmental assessments. It is more the exception than the rule. It would be used where necessary by whatever project specific circumstances are at hand.
Senator Neufeld: Thank you for being here and explaining to us some of these changes, which, as you have more or less stated, we have known since 2003 or maybe even earlier that there were problems. We are finally getting to a process where — will it be perfect? I do not think anything is ever perfect, but it will be a heck of a lot better than what we have experienced in the past.
Coming from British Columbia, I have long advocated that we should have delegation, meaning that the federal government can delegate to the provinces environmental assessments and let the provinces do them. In the Province of British Columbia, we can delegate to the federal government right now and not do an environmental assessment at all.
The public and those people who invest billions of dollars in stuff wonder why in the world we have to do two environmental assessments that oftentimes cover much of the same ground. According to your chart, reducing the time it takes on average to decide who would be doing what from 16 months to 3 months is a huge step in the right direction. It will help the environment.
I am not saying everything should go through and that we should not have environmental assessments, but when Senator McCoy from Alberta talks about the projects ongoing in Alberta — although not as many as there are in British Columbia, by the way — it helps a lot because of the thousands of jobs created. In British Columbia, over $100 billion worth of investment held up in environmental assessments is not acceptable.
Assuming that everyone finally agrees, we get Bill C-9 passed and the world is in your hands, what happens to projects that have perhaps just started as compared to projects that would hit now? There must be a cut-off wherein you will decide what you will include and what you will not include.
Let us say something has been within DFO, NRCan and all the different bodies trying to decide who will be doing what. Will this now apply, go to the Minister of the Environment and they will decide whether it is the NEB, nuclear or goes to a comprehensive study? How do you determine that?
Mr. Smith: There are transitional provisions written into the bill in clause 2162, which says if a comprehensive study is under way and has reached the point — I talked about it earlier, this track decision process. That is where the minister decides whether it will continue as a comprehensive study or a panel, which is getting all the preliminaries out of the way and going into the meat of it.
If the minister has issued a track decision process or a decision, then the project will continue on under the process outlined in the current legislation. It would stay with the responsible authorities.
Any comprehensive study that has entered the process but has not gotten that far will go to the agency. We have a handle on the number. I do not have the figures with me, but I could get them if you would like. They are about the number of projects and where they are.
If the bill is passed and receives Royal Assent, these changes come into effect that day and the agency would be taking over. A comprehensive study that had not made it to a track decision would become the responsibility of the agency.
Senator Neufeld: That was my next question. Thank you for saying that.
I think we would like to receive the amount of projects, the dollar value and where they are at, which ones will fall which way. I think that would be much appreciated by everyone.
The Chair: Thank you, Senator Neufeld. I am looking for the coming-into-force section.
Senator Murray: Transitional provisions subsection.
The Chair: I see the transitional provisions, but is the coming into force part of that?
Mr. Smith: In one of your earlier hearings, I think you had witnesses who were lawyers but not legislative drafters. I am neither.
I believe that, if it is not specified otherwise, then provisions come into force upon Royal Assent. Therefore, in Part 20, you do not see a coming-into-force date because it is not there, which means it comes into force on Royal Assent.
Then clauses 2162 and 2163 are the transitional provisions. It is clause 2162 that says any comprehensive study is continued and completed as if the amendments had not happened. The language there is that the minister referred the project to the responsible authority to continue the comprehensive study; that is the end of the track decision process that I referred to.
The other transitional provisions tell us how to deal with timelines of projects that have already started. Some of the timelines date to the notice of commencement, so we would be required, for example, to put up a public notice within 10 days. We may have already passed that point, but we must still put up a public notice within 10 days of Royal Assent.
The Chair: If it turns out it is other than the day of Royal Assent, you will let us know. We will assume that to be the case.
Mr. Smith: If it is other than the day of Royal Assent, you would see a clause saying it comes into force on a certain date or on a date to be determined. There is not one there, so upon Royal Assent it becomes law.
The Chair: Thank you. Senator Dickson may be able to help us on this question.
Senator Dickson: I will not ask for a legal opinion, but I would like to follow up with a supplementary question to Senator Neufeld's line of questioning.
As I understand it, there are cooperation agreements between the agency and provinces and territories. What provinces and territories do not have cooperation agreements?
Mr. Smith: We do not have cooperation agreements with the four Atlantic provinces. However, even where those agreements do not exist, we routinely work closely with those provinces and develop agreements on the cooperative assessment of projects on a case-by-case basis.
Senator Dickson: Have you begun negotiations with the Atlantic provinces to have cooperation agreements? Who has to initiate that process?
Mr. Smith: It could be initiated on either side. We have had various discussions over the years with the provinces, and the interest comes and goes.
Mr. Mongrain: In terms of active and under way right now, I do not believe those files are going anywhere. We had discussions with Nova Scotia at one time and got towards an internal draft, but the determination was made to go no further and rely on project-specific arrangements and a close working relationship between our agency and the provincial governments.
With Newfoundland and Labrador, there was a draft agreement that went out for public consultation. Once again, it was decided not to proceed any further. I do not want to put words in their mouths, but this may hold true for the other Atlantic provinces. There had been indications at the officials' level that they might be more interested in these agreements where the body they are signing the agreement with, the entity, i.e. the Minister of the Environment, is able to deliver the process.
The problem under the existing bilateral agreements is it is the Minister of the Environment signing on behalf of the Government of Canada, but in terms of binding all the federal departments, agencies and boards to live within the letter and spirit of those arrangements, it does not always necessarily happen.
Senator Dickson: Under the new arrangement, it would be beneficial for the Atlantic provinces to have collaboration agreements, because then the minister will have certain authorities.
Mr. Mongrain: I would say it is advantageous. If they believe it is advantageous, we are more than willing to sit down with them. I think from their perspective, entering into an agreement, if the Bill C-9 amendments were in force, would have a higher likelihood that all of the requirements of the agreement will be met, and all of the exchanges for information and the cooperative arrangements occur as spelled out in the agreement.
Senator Dickson: My conclusion is it would be definitely to their advantage to have such an agreement.
Mr. Smith: Our preference is to have those agreements.
Senator Dickson: Because of the greater responsibilities of the minister.
The Chair: It is a conclusion that the province and the minister in the province would have to make.
Senator Dickson: I want to look out for home base.
Senator Banks: That is exactly what we are supposed to do, Senator Dickson. That is why we are here.
I think Mr. Smith is right when he talked about the coming into force, because when we look at the end of this bill, the coming-into-force provisions talk to things that are not this act, but also they talk about things that are not in the act that is amended immediately prior to the coming into force. It talks about other acts and uses the word "deemed" to have come into force at a different time, which is interesting. It is probably right, so on the day.
Senator Finley, Senator Gerstein and Senator Neufeld are right when they describe the intent to which this bill is partly addressed. It is the difficulty that has been posed over many years to patient capital, for example, in all kinds of investment, to put up with the gross inefficiency brought about by the fact that there are all these different orders of government that have authority of one kind or another to do environmental assessments, some of which come consecutively and not always together. That can put a big strain on patient capital.
There is no doubt that something must be done. The question is if this is the right way to do it. Senator McCoy is right, that looking at it whether this is the right way to do it in law, not regulation, is short time.
It is fair to say — and I come from this point of view — that mainly what this proposed set of amendments does is to say that before there was a huge list of things which were, as a matter of course of the law as it then existed, susceptible to environmental assessment.
This proposed set of amendments says, in the first place, there are a lot of them that will not be susceptible of federal environmental assessment anymore.
Second, there is a lot of new authority vested in the minister to decide, if there will be an assessment, what the aspects of the undertaking are that it will look at. That is what I am gathering from what you have said.
This makes permanent the regulations which were ostensibly temporary and which were brought into effect to take the infrastructure money and get it to work fast to say, because of the difficult economic and fiscal situation that Canada is in at the time, we have to get this money out. Everyone remembers the phrase "shovel ready." We have to get this money working fast and put people to work, so we will do some shortcuts here. That was the initial point.
Assuming that everything is getting better and that the infrastructure program has worked, why are we now making permanent those temporary exclusions which were for a specific purpose? Like the Income Tax Act, for example.
Mr. Smith: The exclusions are tied to being funded under certain funding programs, and a large number of those funding programs had a two-year lifespan. We have seen that they are coming to an end. Some of them — notably the Building Canada Plan — extend beyond the two-year time frame. What you would end up with is certain projects that may be at various stages of planning, and perhaps even implementation, that are captured by the exclusions. If the regulations sunset next March, they might be partway through and all of a sudden you would have to stop what you are doing and go back to do an environmental assessment on those projects that had already been under way in terms of planning or actual implementation.
Senator Banks: It would be fair, because this says what kind of environmental assessment is going normally to be done, to ask you to inform us all, because we do not all know, whether the four kinds of environmental assessments referred to at the bottom of page 2 of your presentation are hierarchical. Easy, tough, tougher, really mean — describe them to us, please.
Mr. Smith: We do not use those specific terms, but that is a reasonable hierarchy. They all have their features. Of the four, as I mentioned, mediation is a process that has never been used. The screening is the default for everything unless it undergoes another type of assessment.
Senator Banks: By "default" do you mean it is the less intrusive of them?
Mr. Smith: It is both. If a project is required to undergo an environmental assessment and is not specified otherwise, it undergoes a screening.
If it is a type of project listed in regulation as requiring a comprehensive study, it undergoes that. Comprehensive studies look at all the factors in a screening, some additional ones, and there is additional opportunity for public participation.
For projects where there is a potential for significant adverse effects or a public concern, then the Minister of the Environment can refer them to a review panel, which then holds public hearings and is an independent body that does the assessment and reports back to the government on the results.
Mr. Mongrain: A project that is undergoing a screening can be referred up to a review panel. The minister can reach in and refer it up. Sometimes the responsible authority suggests this because it is raising environmental issues or public concerns that warrant that type of independent review by experts and can undergo a review panel, as with a comprehensive study. They can all be bumped up.
Senator Banks: If this bill were to pass, that would still be the case?
Mr. Smith: Yes. This does not change the review panel process.
Senator Banks: A big deal could still be made to undergo a review panel? That is not being removed. It could be bumped up to that?
Mr. Smith: Right. The only thing being changed in that regard is this loop that I mentioned at the beginning of the comprehensive study process, which forces a decision every time: Will it stay as a comprehensive study or go to a panel? That process is removed, but the ability to go to a review panel is still there. It can either be requested by the responsible department, or the Minister of the Environment on his own can say that project should go to a review panel.
Senator Banks: If the Department of Fisheries and Oceans, let us say, requested that it go to a review panel, is it the case that that would perforce happen?
Mr. Smith: The Minister of the Environment would decide but, generally, if it is requested by a department, it will go to a review panel.
Mr. Mongrain: We have never had an instance where a request for a review panel has been turned down by a minister.
Senator Murray: I am intrigued by your statement that the screening is the default position. I presume a screening can be done very quickly.
Mr. Smith: Some screenings can be done quickly, but some can be quite lengthy.
Senator Murray: Why would a screening not be adequate for those toilets in that national park?
Mr. Mongrain: If I may, it is adequate. It is being done right now. The question from the honourable senator was to provide some examples of relatively insignificant projects.
The Chair: There was some type of environmental assessment, the screening.
Senator Murray: The screening could take a day.
Mr. Smith: No. It has to take longer than that. A screening, as I mentioned, is a bit of a misnomer. Normally, if you said "screening" to someone, they would think it would be like a triage process where you would flip through what needs an assessment. A screening, under the act, is actually a type of environmental assessment. Certain factors must be looked at, such as the potential environmental effects and the significance of those effects, as well as the potential for public concern. There is a requirement of posting information on the registry, and you cannot finish the process until 14 days after that notice has been published. The name "screening" does not do it justice. Screenings do not need to take a long time, but a minimum amount of work is needed.
Mr. Mongrain: There is a minimum amount of time within the act prior to posting a decision after a screening environmental process.
Senator Banks: It might be less long, but it is not going to be short.
We come now to the question of scoping. You are right that the minister does not presently have the authority to order something, and it is a good thing that he or she does. What we do with this act is remove many things from automatic federal assessment, and then we have a new provision that says: However, the minister can, in respect of those things that have been removed from automatic assessment, decide that there should be an assessment in this particular case.
If the minister decides that and then determines the scope of the assessment — let us say a mine, for example — and some aspect of that mine will put some effluent somewhere, and the Department of Fisheries and Oceans says they would like to have that looked at from the fisheries standpoint, the minister, having the capacity under this legislation to determine the scope and limit it to a component of the project — describe how that happens. Bear in mind we are not making policy or practice here; we are making law.
Does the minister have, under the amended act, the authority to say to DFO: No, we will not look at the fish in this question; we will only look at the ground in this question and whether it will hurt the habitat of burrowing owls?
Mr. Smith: If I could go back to the preamble of your question. You spoke about things being excluded and the minister bringing them back in and then setting the scope. You used the mine example. The mine is not on the list of exclusions, so the minister would not bring it back in.
Senator Banks: However, the scoping is.
Mr. Smith: Yes, so the mine would come in. The minister has not made a determination about the extent to which that scoping authority will be used, but he has indicated that it is not about reducing environmental protection.
Regardless of what decision the minister made about the scope of the environmental assessment, it does not remove any of the requirements, obligations or authorities of the Department of Fisheries and Oceans, or other regulators, to exercise their regulatory authority. If there were permits needed under the Fisheries Act, they would still do that, regardless of the environmental assessment.
However, if you had a project that posed potential significant effects on fisheries, again it is the minister's discretion, but I would be surprised if he would say let us scope that out. It would surprise me if that would happen. He has indicated the use of that authority is not about reducing environmental protection.
Senator Banks: We are, if this bill passes into law, reposing authority in the minister, which is new in that respect and others, over and above that that now exists; is that fair to say?
Mr. Smith: The authority right now in the act for determining the scope rests with the responsible authorities. As a result of the Supreme Court decision, they put some bounds on what decisions they could make, and this gives authority to the Minister of the Environment himself, and not to the others, to reduce the scope of the project by only looking at certain components.
Senator Banks: However, you said a minute ago that it does not reduce the authority of the others. Which is true, or are they both true? The minister gains additional authority, but it does not come from anywhere?
Mr. Smith: At the moment, the responsible authorities do not have the ability to say they will only look at certain components of the project.
Senator Banks: Let me put the question again. The minister gains authority. Does anyone lose authority?
Mr. Smith: No.
Mr. Mongrain: Maybe I can clarify. This might help address a question Senator Murray asked earlier.
Mr. Smith pointed to the Supreme Court MiningWatch decision in January of this year. Prior to that decision, any official in the department of any responsible authority implementing this act could make a scoping decision. We are talking 50 federal authorities and 6,000 environmental assessments. The law, as it was understood at the time — and this was backed up by some Federal Court of Appeal decisions — could make that scoping determination.
The Supreme Court, in January of this year, said there is authority in the act to scope but not to narrow the scope, only to broaden it, if the scope of the project is what is generally understood or proposed by the proponent.
The new authority in the bill is a discretionary authority for the Minister of the Environment to alter that scope of project if the circumstances warrant, and to limit it, if necessary. Why the Minister of the Environment? Our experience over 15 years showed us that, investing this type of authority in every official in all the departments that implement this act, was a recipe for disaster. The Commissioner of the Environment and Sustainable Development pointed that out in his report and concluded by saying that the agency has attempted to resolve these issues, but has had little success because the agency does not have that authority.
The problems occurred where you had more than one federal authority responsible for the same environmental assessment. No one is then effectively in charge, and there are, for valid and legitimate reasons, different opinions brought to the table. We had examples of the same project undergoing two different EAs by two different responsible authorities.
Senator Banks: Hypothetically, if this had been law at the time, the Supreme Court decision would have been different, would it not? The landscape would be different?
Mr. Smith: The landscape would be different.
Senator Banks: There are 6,000 assessments now by 50 different agencies. I assume that you will have anticipated how many federal assessments there will be, as opposed to 6,000, if this becomes law. What will that approximate number be, in your view?
Mr. Smith: The number will not change substantially because the exclusions on infrastructure projects were already in place for a year. Some of the estimates in the regulatory impact analysis statement talked about thousands of projects that would be excluded, but it is not reducing that 6,000. A lot more would have come into the system with the new infrastructure spending. Without the exclusions, we may have seen 8,000 or 10,000 assessments. The changes here are not expected to have a substantial effect on the number of assessments.
The Chair: We are into round two and these are short points of clarification.
Senator McCoy: Are we recalling this panel, Mr. Chair?
The Chair: Tonight is the end of phase one of our study. We will have a panel on environmental; in fact, we will have more than one panel on environmental.
Senator McCoy: I have two curiosities. Under the new section 7.3, which is outlined in clause 2153 of the bill, it says words to the effect that the minister can say, all right, it is an infrastructure project. It is on the exclusion list, but I want it back in because it is likely to have adverse environmental effects — or it may cause such effects. I think you said something in your presentation about unanticipated environmental concerns.
I want to know the process by which this voluntary recall will happen. It strikes me as getting to the essence of why you would not exclude some of these major infrastructure projects, in my view.
Mr. Smith: The process is not set out in the legislation, but there are a variety of ways that the minister could be informed about a project. We could hear about it; as I mentioned, we have regional offices around the country. Concerned citizens may hear about a project and could raise concerns that it is not being assessed. Departments who are administering funds might see a project and say this project looks like it meets the exclusion list but it has some characteristics that suggest that we should probably do an environmental assessment. Therefore, they could request it. There is any number of ways the minister could hear about it and make that decision.
Senator McCoy: Random.
Senator Banks: Also, the agency can do that arbitrarily by itself without the minister.
Mr. Smith: We do not have the authority to bring it in but we can advise the minister.
Senator Banks: In clause 2154, it says despite any other provisions of this act, if the agency considers that a project et cetera "might" be required, and if the other agencies are not looking after it, you can initiate it.
Mr. Smith: Except that 2154 applies to comprehensive studies, and there is nothing on the exclusion list that would trigger a comprehensive study. There is a hierarchy; the regulations specify that the Governor-in-Council can exclude projects where it is satisfied they have insignificant effects. Things undergo a comprehensive study when there may be significant effects, so the two do not overlap.
Senator McCoy: My other curiosity is section 21.1, which is included in clause 2156. The old 21.1 is removed and the new one just talks about putting information on the Internet.
The old 21.1 talked about the minister, after receiving a recommendation from the responsible authority — I think in connection with a comprehensive study; then the minister got to decide whether he was going to do a comprehensive study or do a review panel. That is gone.
Mr. Smith: Right.
Senator McCoy: Does that mean all review panels are gone?
Mr. Smith: No; the only thing that is gone is the mandatory process that applied to comprehensive studies. It had to go through this decision-making process. Before the environmental assessment itself got under way, the responsibility authority had to write a report to indicate whether or not they thought that the project could be assessed through a comprehensive study or if it needed a review panel assessment. It went to the minister; he made his decision and that decision was final.
What is being removed is that loop. However, the ability of departments to request a review panel or the ability of the minister on his own to initiate a review panel for a project that triggers an EA, that still remains.
Senator McCoy: That is in section 29 of the CEA Act, if I did my homework properly.
Mr. Smith: Right.
Senator McCoy: When do you get a review panel? How does that come out?
Mr. Smith: There are a number of ways it can come out. The most common way is that early on, whether it is a screening or a comprehensive study, the responsible authority would look at it and say, based on precedent, based on the characteristics of the project, this should undergo a review panel. Now, if the changes go through, for something starting as a comprehensive study, the agency would say this should undergo a review panel.
Senator McCoy: I think there are the best of intentions to have an efficient, risk-based approach to these processes, but I honestly do not whether this legislation is achieving it. There is still the potential to do things the old way, only you get to do it now instead of all the responsibilities.
Mr. Mongrain: That is the difference. You will have a single organization whose only mandate is environmental assessment seized with these larger, major projects, rather than three, four or five federal authorities with different mandates, interests and views about what should be assessed.
Will we be perfect? Of course not, but we will be doing our best.
Senator McCoy: Do you report to the Minister of the Environment?
Mr. Mongrain: That is correct.
Senator McCoy: Who does the MPMO reports to?
Mr. Mongrain: The Minister of Natural Resources.
Senator McCoy: With the 60 per cent increase in your budget three years ago that went to the MPMO, which is in NRCan, how will you manage?
Mr. Smith: That increase in budget was associated with the creation of the Major Projects Management Office and the whole initiative about better managing the environmental assessment and regulation of major projects. That money did not all go to the MPMO. They were created out of nothing so they got money to function; but out of all the five, six or seven departments that got money in that initiative, our agency got the biggest share.
Mr. Mongrain: We received $11 million; the MPMO received $4 million. That is reflective of the type of role that the government envisioned for the agency at that time. It is almost a case of the legislation starting to catch up with the resources and the administrative processes that have been put in place in the last three years.
The Chair: I presume those funds went through Main Estimates.
Mr. Mongrain: Yes, the regular budgetary process.
The Chair: We were the ones who voted to give you those funds. It is nice to know what we voted for.
Mr. Mongrain: We thank you.
Senator Ringuette: In the first part of our questioning, you constantly indicated that this was making temporary regulation into permanent law. That has been the recurring theme that you have been telling us. However, about three- quarters of the way through the meeting, you mentioned a Supreme Court decision in January of 2010.
Mr. Mongrain: Yes.
Senator Ringuette: That decision said that the scope had to be broader and could not be restricted from a benchmark. This legislation is actually reversing the Supreme Court decision in regard to scoping. There is no more benchmark, because whatever kind of qualitative or quantitative scoping will be decided by the minister, so therefore the Supreme Court decision is being reversed by this legislation.
Mr. Smith: Just to state again, the preamble to the question referred to making exclusions permanent, and that is a separate issue from the scoping.
The situation prior to the Supreme Court decision was that departments had the ability to determine the scope of the project. That language is still in the legislation and would still be there if these amendments passed. The departments determine the scope. Prior to the Supreme Court decision, departments could look at the whole project or they could look at only certain components of it. The Supreme Court said you can still determine the scope, but the minimum scope is what the proponent has proposed, and you can expand it. Before the Supreme Court decision, the scoping decision could be to look at only a few components, look at some components or look at everything. The Supreme Court said the minimum was the project as proposed by the proponent.
The proposed amendments do not turn the clock back to say all the departments and officials that Mr. Mongrain referred to can now go back and look at only a few components. The ability to adjust the scope now below what the proponent has proposed is only with the Minister of the Environment, so it is not turning the clock back to the way it was before.
Senator Ringuette: Whether you are looking at quality or quantity, the entire scoping is now within the hands and authority of the minister.
Mr. Smith: The authority to focus on only certain components of the program, yes.
The Chair: On behalf of the Standing Senate Committee on National Finance, I thank Mr. Smith and Mr. Mongrain from the Canadian Environmental Assessment Agency for being here and working us through Part 20 of Bill C-9. It was very helpful, and we thank you for your time.
Colleagues, we have now concluded Phase 1, which is the government officials explaining the bill to us. We have been very lenient in allowing questions by honourable senators to help understand the legislation, but we are going into Phase 2, which is panels of those affected or impacted by the legislation. The panels have a specific time, so we will have to watch the questioning much more closely so everyone has an opportunity to speak and ask questions during that defined time of the particular panels.
We will start at nine o'clock tomorrow morning with the Atomic Energy of Canada Limited issues, including the health aspect, the business aspect, the CANDU aspect and the general breadth of the legislation. Those items will be dealt with by different panels, and we will start at nine o'clock tomorrow morning with that.
You have also been provided with a copy of the report with respect to Supplementary Estimates (A). I know you have not had time to look at it yet, but if we could look at it sometime tomorrow — it would be nice to be able to perhaps look at it first thing in the afternoon session. Then, if we could get approval for this, we would like to file the report and get the time running on this report. We missed the receiving of the supply bill based on Supplementary Estimates (A) tonight, but that cannot be fully passed until such time as a report has been adopted by the Senate, according to the view of some. We would like to get it in there and worked through. Senator Gerstein and I will try to speak on that at some time. We also will have to, during our break, speak on the two supply bills. That is all we have to handle. It is just Bill C-9 and the two supply bills, so let us just keep at it. We are doing very well so far. Thank you all very much for hanging in there.
(The committee adjourned.)