Proceedings of the Standing Senate Committee on
National Finance
Issue 15 - Evidence - July 6, 2010 - Morning meeting
OTTAWA, Tuesday, July 6, 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 9:03 a.m. to give consideration to the bill (topic: Parts 3 and 15).
Senator Joseph A. Day (Chair) in the chair.
[English]
The Chair: I call this nineteenth meeting of the Standing Senate Committee on National Finance to order. We are dealing with Bill C-9, the proposed budget implementation act 2010.
The committee began its work by hearing from departmental officials, who explained the provisions of each of the 24 parts of this bill. However, some of these explanations elicited policy questions that officials were naturally unable to speak to. Amongst others, Parts 3 and 15, which deal with the Air Travellers Security Charge and Canada Post, respectively, caught the attention of members of this committee.
While the Minister of Transport himself was not able to appear, we are pleased to welcome the Honourable Rob Merrifield, Minister of State (Transport), who will help address our outstanding questions in relation to these parts. I am sure you will take back our best wishes to the Minister of Transport as well. I am sorry we were not able to get together, but we are pleased you were able to make yourself available.
[Translation]
Colleagues, we have only one hour with the minister this morning.
[English]
He is accompanied by André Morency, Assistant Deputy Minister, Corporate Services and Crown Corporation Governance, Transport Canada. We could ask you all kinds of questions. Laureen Kinney, Acting Assistant Deputy Minister, Safety and Security Group, also from Transport Canada, I think we have met previously along the way. It is always a pleasure to have you back.
Minister Merrifield, please take the floor, and we will follow with questions.
Hon. Rob Merrifield, P.C., M.P., Minister of State (Transport): I want to thank you for inviting me. I do have the responsibility of looking after the Crown corporations under transport, so Parts 3 and 15 in Bill C-9 are my direct responsibility. I will take your comments and concerns back to Minister Baird.
I do want to address aviation security as well as Canada Post and the remailers in my opening remarks. I know you have been concerned about some of these issues, as all Canadians are.
First, with respect to airport security, when it comes to the security of our travellers, it is obviously the number one priority of our government and will stay that way. It is evolving, complex and dynamic because it changes depending upon the terrorist attack of the day.
We have seen what has happened since 9/11, which was the beginning of CATSA, the Canadian Air Transport Security Authority. It started in 2002, and its role is to be able to ensure those pre-boarding are screened appropriately, including the passenger, the carry-on bags and the checked luggage. We are also looking at non-passenger screening with regard to restricted areas to make sure we track and screen those individuals appropriately.
CATSA itself continues to respond to those challenges based on the risk management of the day and the efficiency of air transportation with respect to the national and international legal frameworks, because we are all in this together; it does not matter where you board a plane in the world. I was in Mexico City and in Tokyo, Japan, with U.S. Secretary of State Napolitano with respective countries looking at an international protocol for aviation security. It is important that when it comes to airport security, we are not in this alone but as a globe collectively.
We saw changes happen when liquid explosives got onto a plane in London to land in the United States and Canada; that made toothpaste toxic instantly. We have seen regulations change when we saw what happened December 25 with what we termed the "diaper bomber." As terrorists test our systems and challenge new ways of being able to attack us, it changes our aviation security systems.
With regard to what happened December 25, we instantly moved into another level of security, the millimetre scanner. We have 23 of them in operation, and we have ordered 59 more; they will be rolled out in due course in our respective airports with the priority being on international travel to the United States.
To let you and Canadians know, 550 plus planes travel from Canada to the United States; 85 per cent of our international travel is to the U.S. When December 25 came along and the United States imposed 100 per cent restriction and 100 per cent secondary screening of all passengers going into the U.S., it crippled our ability to handle that for that time period until we had some relief with regard to it. We were successful in the long run, but it was very taxing.
On top of that, in our 2010 budget we have allocated $95 million for cargo security funding, and we have the $1.5 billion over a five-year period, which is for the first time secure five-year money for the running of security at airports and CATSA. That gives us some flexibility with regard to long-term planning, which has been a weak link we have had with CATSA over time.
We are now moving into an area across this country where it is important not only that we have the long-term money, the $1.5 billion, but also that we ensure we use that money as efficiently as we possibly can. It was not only the dollars in the budget but also the announcement of a major review of CATSA, making certain that we deal with those dollars in the most effective and efficient way without compromising security.
Security is always paramount, and we will never put Canadians at risk. When individuals in Canada get on a plane, they should be able to expect that plane to land safely, and we will do everything we possibly can to make sure that is the case. That is the mandate of CATSA, and we will not compromise on that.
I will now turn to the secondary issue, which is Canada Post and the remailers. Canada Post is a Crown corporation. Its mandate, ensuring that the postal service gets through and that mail is delivered, is fundamental to Canadians. To ensure that, we did something unique. For the first time in Canada and in Canadian history, last September we brought in a service charter. The Canadian Postal Service Charter is an agreement between Canada Post and the people of Canada to be committed to a universal system, an effective and an economically viable postal service. On top of that, within that charter, we have retained a moratorium on any rural post office closures. That is where we are at with it.
Bill C-9 permitted the companies to compete. The changes we are making permit companies to compete on the worldwide outbound international mail market in Canada and to actually have that grow.
Specifically, this amendment would allow only letter exporters to collect letters in Canada for transmittal and delivery outside of Canada. The practice is called remailing and allows companies to collect large quantities of mail for businesses and customers and consolidate and transmit it through other country postal systems rather than where the mail originated. If this legislation passes, Canadian businesses will have a choice and opportunity for their outbound international mail.
Be assured that this amendment retains Canada Post's exclusive privilege to collect and deliver mail within Canada, as has been the case for decades. It also will allow Canada Post to compete in that international mail service, and I am sure Canada Post will.
These international remailers have been in operation for decades in this country. It is all about protecting their jobs. Our position is clear as a government. We are strongly committed to saving those jobs. There are thousands of them. It is simply the right thing to do at this time.
Thank you for allowing me to open with those remarks, and I would entertain any questions you might have.
The Chair: Thank you, Minister Merrifield. A number of senators have indicated an interest in participating in a discussion. As the minister's time is fixed, I will restrict each senator to five minutes for the first round so that everyone gets a chance. I will start with the deputy chair of the committee, Senator Gerstein, from Toronto.
Senator Gerstein: Thank you, witnesses, in particular Minister Merrifield, for attending.
I would like to talk about Part 15 for a moment. It is easy to talk about Part 15 because it is only 20 words in a multi-page bill. I suspect you might be aware that on a per-word basis, I think, we have spent more time on these 20 words than on any other part of the bill.
Mr. Minister, although you were not here, I must say we have had some very interesting witnesses appear before us. Ms. Henny Penny came and, out of these 20 words, indicated that the sky was falling and that she could clearly see the end of Canada Post entirely. Linguists appeared before us. As much as I looked at the 20 words, they saw words that even with my reading glasses I could not see: privatization; restructuring; and reduction of service, particularly in rural delivery areas. That was another category. Then, of course, on top of all of those we had the conspiracy theorists. There is clearly, they suggested, a secret agenda within these 20 words, a slippery slope, a thin edge of the wedge.
Now, a number of senators, particularly on this side, and there could be a couple on the other side as well, read the 20 words very simply and said it appears to be status quo, no change; in fact, it is almost less than status quo because for 25 years we have been doing this, and even status quo changes in 25 years. We are just doing what we have always done.
Could you expand on that? Are we missing something, since we have had so many other people indicate their views?
The Chair: How could you possibly expand on that?
Mr. Merrifield: Let me try. Some people are phobic about it, and you have to perhaps analyze their agenda. However, have no misunderstanding: When it comes to international mail, the bill does not in any way compromise the exclusive privilege of Canada Post to handle domestic mail. That is Canada Post's mandate. That is what it has to do, and it has to do it as efficiently and effectively as it possibly can. We are going through a major revitalization of Canada Post at the present time so that it will last long into the 21st century and will be able to compete with any postal service anywhere in the world.
If you read your papers this morning, you saw Canada Post has been allowed to do a significant amount of borrowing to be able to move into that revitalization process. We have just opened up a major sorting factory in Winnipeg, and I was pleased to be there. You should take the time to go through that facility. It will put into vivid example what we are doing with Canada Post.
Those who think the sky is falling and that there is an agenda to do anything other than to ensure Canada Post fulfills its mandate are simply wrong. Canada Post will be in a better position to be able to compete with the international remailers and to go into that international market. The bill does not compromise Canada Post's ability to do that. I believe in the long run it will make Canada Post even stronger.
Senator Gerstein: Thank you very much, Mr. Minister. That is very helpful.
Senator Ringuette: If you want to take on the issue of 20 words, maybe you can tell us why these 20 words were first in a budget bill called Bill C-14 in 2007, which was sent to committee and died in committee; then it was brought back as Bill C-44, which died in the House of Commons at first reading, and those 20 words did not even go to committee. Then Parliament was prorogued, and this stand-alone bill that had been around for three years, these 20 words, all of a sudden is part of a 900-page budget bill.
I think the 20 words have accumulated quite a lot of interest in those three years, especially as we have letters of commitment from the government to do extensive study. One letter here reads as follows:
I can assure you that the federal government has no plans to privatize Canada Post. Furthermore, I should note that no changes to Canada Post's exclusive privilege would be considered without thorough policy analysis. As you are aware, the Canada Post Corporation Act defines Canada Post's exclusive privilege; thus, any changes to that privilege would require legislative amendment and public debate in Parliament.
I guess those 20 words did not get the real public debate they were entitled to.
There is a question of balance with regard to the Canada Post Corporation Act, and it is the exclusive privilege that is matched with an obligation, whether for domestic or international. With the removal of its international exclusive privilege and all the commercial volume, how can we expect Canada Post to compete? We were told yesterday definitely that the remailers, which are the foreign postal administrations operating in this country to siphon Canada Post's volume, want only to get to the volume. Canada Post's basic infrastructure and cost for picking up and delivering will stay, but the cream will be siphoned from its revenue.
How will the government balance that, and where, with regard to this balancing of privilege and obligation, is the obligation with regard to the remailers? I do not see their obligation in those 20 words in front of us.
Mr. Merrifield: You brought up a number of different issues there. On the public debate side, that is a very good point: Where is the public debate?
I do not know whether the committee is aware — I am sure the questioner is — that a major corporate review of Canada Post was conducted a year and a half ago. It was an extensive process with a considerable amount of independent review. This panel actually consulted broadly. The recommendations coming out of that review were that there should be a service charter and that these 20 words should be changed in this legislation.
When it comes to the House of Commons and understanding that we are in a minority situation, I want to make the committee aware that we do not work in isolation. We work with our colleagues on all sides of the house. I have a considerable number of letters here that have come to me and have been written asking us to put these 20 words into law to protect these thousands of jobs that have been there for 25-plus years. These letters are not just from any ordinary members of Parliament, although some of them are. These are from Liberal members of Parliament, but also from the then leader of the Liberal Party of Canada, Stéphane Dion. He said:
. . . re-mailers 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 agree with him.
Senator Murray: Then why did you not proceed with the bill, minister, three years ago?
Mr. Merrifield: I got another letter from the senior critic of transport, Mr. Volpe, who said the very same thing.
I have been lobbied extensively by the members in the house on this, and they are right. The reason this proposed piece of legislation is there is because there has been a challenge in the courts; there has been a stay or an appeal that will expire in December 2010. It is very important that this piece of legislation be put in a bill like this and be put forward so that there is clarity around these jobs that we are protecting. It does not compromise Canada Post.
I would say Canada Post is in a great spot to go after that cream, if that is what you want to call it, off its bottom line. I believe you have had testimony here, and we certainly have had testimony before the committee in the House of Commons, from the CEO of Canada Post, suggesting that it is certainly prepared to compete in this area and this does not compromise Canada Post's ability to follow through on their mandate, which is the exclusive privilege of delivering mail to Canadians for Canadians.
Senator Marshall: Welcome, minister, to you and your officials. I also have a question on Part 15, Canada Post, because we have had quite a few witnesses here to discuss that section, most recently yesterday. We have heard from Canada Post and also from some small-business owners.
I would like your views on what you think the impact of this amendment will be once it is passed. Canada Post has indicated that it is willing to compete for the business. Small-business owners have indicated that their businesses have suffered quite significantly because this has been in dispute. Could elaborate on where you think the impact of this legislation is going?
Mr. Merrifield: To some degree, it is hypothetical. We do not know 100 per cent, although it will be status quo. I believe your colleague indicated that these 20 words really solidify the status quo, which is the ability of the international remailers to be able to continue to be employed in Canada.
We are allowing Canada Post to compete in this market in a more effective way as the corporation moves forward. I do not expect any skies to fall. The earth will not rumble. This will be status quo as we move forward, but it does add clarity around the ability of the international remailers to be able to compete for that international mail.
Senator Marshall: We did have one witness in particular who felt this amendment would lead to the demise of rural Canada. Could you comment on that?
Mr. Merrifield: I am a rural Canadian. I have lived on a fourth-generation dairy farm, now cropland farm, all my life, so, believe me, I would never do anything that would compromise the rural community. That is a massive leap, suggesting that these 20 words would compromise rural delivery in any way, shape or form. We have made certain of that with our charter, making sure there is a moratorium on closure of post offices, as well as making certain that there is a universal service there, and an obligation.
It is a bit of a stretch to call them post offices, but there are some in remote, rural areas that have only one postal worker in a community, quite often in his or her living room or small quarters. When that outlet burns down or the postal worker retires or dies, there is difficulty finding someone to take on that mail delivery service.
Under the charter — and this has worked effectively in a number of cases since it was brought in last September — Canada Post is obligated to consult, to do its best to ensure that delivery is not compromised. It is all about making sure the mail gets through, which is a fundamental of Canada Post since the Pony Express. That will not change.
Mail is changing in Canada with the advent of the communication age, the Internet and people banking online; there is to some degree a reduction of mail. At the same time, we are also seeing advances in mail as a result of the amount of buying that is done through the Internet and other places, and more parcels are going through the mail. The marketplace is shifting somewhat, but Canadians need to feel comfortable that their mail will get through and their parcels will be delivered.
The Chair: Minister, if you could keep your answers a little tighter, we would appreciate it. There might have been a follow-up question, but she lost her time.
Senator Baker: Minister, the government is substantially increasing the tax — I call it a tax — on airline tickets. These are substantial increases, ranging, on a normal ticket, from $7 up to $14, $12 up to $24, and so on as you go on. Canadians understand that you are already collecting enough money through the Air Travellers Security Charge, so what is the explanation for these substantial increases? The chair has asked you to try to keep your answers short.
Mr. Merrifield: You asked a specific question and I can keep my answer short. The charge has gone from $4.90 to $7.48 for a domestic one-way flight. You say that is a significant increase. That is actually a significant decrease from when the charge was implemented by the Liberal government in 2002 and it started at $12. From 2002 until now, it has actually gone down from $12 to $7.48.
Senator Baker: Each of these amendments has a range; where it was $4.67, it is now $7.12. That is the one you just read. The maximum was $9.33, and now it is $14.25. Each of these amendments increased something that is already in the act. Do you not agree?
Mr. Merrifield: No. You are right to some degree. We moved the air security tax up to reflect the $1.5 billion that we put for a five-year time period. No question about that. It is down to $4.90 from where it was in 2002, which was $12. We moved it up to $7.48. The other one you mentioned, the domestic round trip, was $9.80 and it moved to $14.96, but it was $24.
Senator Baker: That is imaginative.
Mr. Merrifield: Those are real numbers.
Senator Baker: You are amending a bill. You are amending the act, and your amendments increase all charges presently in the act. I can understand what you are saying, that if you go back to 2000 or 1990, the charge could have been higher in any one given year.
Mr. Merrifield: This is 2002 after 9/11 hit and when CATSA was established.
Senator Baker: You are not increasing the rates at all in this bill?
Mr. Merrifield: Sure we are. We are increasing them from $4.90 to $7.48, but they are down from where they were. That is what I am saying.
Senator Baker: There are nine different rates, whether you are travelling inside Canada or whether you bought your ticket for another place outside of the continent.
Mr. Merrifield: Do you want me to go through them all?
Senator Baker: I thought that was your next step, but let me go on to something that is probably indefensible.
The second portion of the amendments to the act will amend the regulations on the interest rates to be paid back by the minister. It says in the bill, clause 94(1), ". . . the sum of the basic rate in respect of the particular quarter and 2 per cent." I do not want people's eyes to cloud over, but the base rate is the short-term, three-month rate of Treasury Board bills sold at auction, as I understand it from you. The point is this: You are reducing it to zero, because you say that only the base rate in respect of a particular quarter will be paid by the minister to a corporation. The base rate today would be something like 0.01 per cent or 0.02 per cent. Why are you reducing that to the base rate? That is money that is now due from the ministry to someone who has overpaid.
Mr. Merrifield: For a total clarification on that, you should ask the Department of Finance Canada, because that department sets this rate, not Transport Canada.
Senator Baker: But you are the Minister of Transport.
Mr. Merrifield: That is true, but Finance Canada collects these funds and set this up. I believe you are talking about the rate from the time that Finance Canada collects the money to the time it is given out and the difference between the two.
Senator Baker: It is the amendment in this bill.
Mr. Merrifield: I think that is where it is. I think that is the interest rate from the time Finance Canada collects the money to the time the money is paid out.
Senator Baker: The change that is being made in the amendments to the Air Travellers Security Charge is to reduce the charge by 2 per cent. I get the impression that perhaps we should be asking this question of someone else.
Mr. Merrifield: You should be asking the Department of Finance Canada if you want anything clearer than that, because I do not have anything more than that.
The Chair: The minister and the parliamentary secretary are both away. We will try to find someone else. Thank you.
Mr. Merrifield: I can do that on your behalf and get the information to the committee.
The Chair: That would be very helpful.
Senator Baker: Can you explain why you are not paying interest to someone to whom you owe money?
The Chair: At the same time, can you tell us how much you anticipate will be collected with this fee? We have heard various figures like $590 million to make up for the $350 million that you have asked for in Supplementary Estimates (A). The numbers do not balance.
Mr. Merrifield: Let us get those numbers from the Department of Finance for you, and then you can share them with committee.
The Chair: It goes through general revenue and makes it difficult to understand what is going on.
Mr. Merrifield: We do not know how many passengers, so we are estimating.
The Chair: I understand.
Senator Finley: Minister, I want to talk about air security in particular.
As a fairly frequent traveler, as are most of the people around this table, I have a sense of security when I get on an airplane in Canada that I will actually get off the airplane at the appointed time and place.
I asked this question of CATSA, and the witnesses were somewhat coy about answering it. I can understand why. What has been the growth pattern of terrorist threats or hijacking threats or potential incidents since 2002? With the amount of security that we are seeing, one would assume that it is much higher than it was. Can you give us an overview of how that particular market is developing?
Mr. Merrifield: One is one too many every time you have a significant one, like the attack or potential attack of December 25. I think people around this room and the people of Canada need to realize exactly how devastating that attack could have been. Thank goodness it did not work, but it did breach our security.
We have to shore up security. That is why it is fluid. We have to make certain that we are not, as some people would say, the weak link in security, that Canada does not fall behind. We have to do everything we possibly can to make certain that when people get on a plane, it is as safe as it can be. That is our objective, albeit this is not an exact science. Not only did we announce the millimetre scanner, which is another layer of security, but we are also looking at behaviour observation, which has been brought in by a number of countries. It moves the security back from the line that you go through at CATSA to the time you drive up to the airport in your car to the time you get on the plane. It is a deeper and more integrated approach to a layer of security at our airports. We are working on a made-in-Canada approach now. It is out to tender, and we are proceeding step-by-step with regard to that.
Are the threats real? Yes, they are real. Should Canadians expect that we are dealing with them in an effective way? Yes. The $1.5 billion that we have brought in with this budget is long-term money so that we can plan in a much better way. We are doing a major review, because you can always do things more efficiently. You can target things. We have seen new equipment, for example, better X-ray equipment that can see the fluids within suitcases. However, we have not relaxed any regulations. Although better equipment is there, we have installed doors before the cockpits of airplanes. Now is an appropriate time to pause, take a step back and ask, "Are we really hitting security where it is at?" It is all done on a risk-management basis. That is what we are doing at the present time, so that we know that, in Canada, we are spending the dollars most efficiently and effectively without compromising security, and we are making security even better.
Senator Mitchell: It is good to have you here this morning. The idea that the fees were higher in 2002 should be put into context. That was six months after 9/11. A lot capital investment had to be made, from restructuring airports across the country to establishing new lines of communication and new communications systems, and so on. It was very expensive. How do we know that that expense was not necessarily sustained, or the tax that was supporting it? Well, you have been running it on $4 dollars and some cents for the last year or two or thereabouts since you have been in government. We have gone from $12 to $4. Why do we have to raise it 50 per cent now, particularly when a good chunk of that money is not going to CATSA? It is not covering security anyway. It is going to general revenues, which means it is not an air travellers security charge. In fact, you said it — and, it was wonderful music to my ears, in the sense that you are getting it — it is an air travellers security tax.
I do not like taxes. Your government says it does not like taxes. Why did you increase this tax by 50 per cent?
Mr. Merrifield: If I said it was a tax, I misspoke.
Senator Mitchell: I am sure you did.
Mr. Merrifield: Have that stricken from the record. It is a charge.
Senator Mitchell: Why increase this tax by 50 per cent in this context when the money is not going to security? Let us not use security as a rouse — security is extremely important — just to raise a tax to help you figure out the deficit problem, as big as it is.
Mr. Merrifield: There is a review on what it takes to be able to handle the costs. There is no question that CATSA has increased its equipment. The prices for X-rays, explosive detection devices, scanners, behaviour observation, and so on, have all increased. In 2002, we had about 3,000 employees; we now have over 6,000. The costs are increasing for security at airports, based on the potential attacks that have happened since and what has happened with regard to fluids. When CATSA first came into being in 2002, who would have thought that you would have to worry about toothpaste, fluids, and so on as we do today.
This is a dynamic, evolving process. It is not an exact science. We do the best we can, dealing with international standards, as well as making certain that we do what is right for Canadians in the process of keeping their security safe. This charge is there to have, as much as possible, secure funding so that we know we have the dollars to make certain, regardless of the politics of the day, that we can fulfill the $1.5-billion obligation and that security is not compromised.
Senator Mitchell: Speaking of international standards, with this raise, Canada will now have the highest airport travellers security tax in the world on international flights. Are you suggesting that we need that much more money than the rest of the world to provide security? When I get on a plane at an American airline I feel safe. If I get on a Lufthansa or British Airways flight I would feel safe, but none of those are charging their travellers what we are charging international travellers.
Mr. Merrifield: I will not talk about what other countries do. I can tell you what we are doing.
We are doing it to make certain we have the dollars to fulfill the obligation we have to Canadians that when they get on a plane, the safety and security measures are taken seriously and are not compromised by the politics of the day or the dollars.
In the process of looking at this, when I was in Mexico City I was talking to people from Chile, Dominican Republic, Mexico and many other countries. They are all wrestling with the same thing, wondering how to fulfill their obligation with the dollars. When I was in Tokyo they were all talking about it the same way. I cannot say what the other countries will do. We take this seriously. Security is up front; it is the number one priority for Canadians, and they can feel confident and comfortable that we are doing everything we can to do it as effectively and efficiently as possible.
Senator Mitchell: You said, "outside the politics of the day." There are lots of politics of the day in the United States, and the U.S. is charging less. There are lots of politics of the day in Britain and Chile, surely, and they are charging less. Does it raise for you some sense of concern that maybe we are not doing this as efficiently as other countries might be, that we need to look at the management of it, particularly in the context of the huge deficit that could reflect the same concerns I have about the efficacy of your government?
Mr. Merrifield: Absolutely. That is why we are doing the review. We are looking at absolutely everything in the review. Is CATSA the right vehicle? Are we doing it in the most efficient way possible to handle our obligation, which is the security of our aircraft and of the Canadians and individuals in those aircraft? That is why we are doing that review, and it is extensive.
The Chair: This may put it in context — and Ms. Kinney was taking notes here. We received evidence before this committee during these hearings that this 52 per cent increase will result in consolidated revenue of an estimated $590 million a year; $590 million times five years takes up to $2.95 billion over five years, assuming similar usage of the system. The government in its budget committed $1.5 billion. There is a difference between $1.5 billion and $2.95 billion. We are trying to figure out where that money is going and what it will be used for. That is what many of these questions are going to. There is quite a discrepancy and no accountability.
Mr. Merrifield: That is why we are doing a major review of CATSA right now, to determine whether we are doing it as efficiently as possible. Is the charge appropriate when we come to the end of the day? Are there other areas of security that we need to be looking at to make certain our passengers are safe? All of that is in the review.
The Chair: I know you will not give us the review because it is not complete, but we are looking for the information that would help us with this discrepancy.
Senator Callbeck: That is along the lines of the questions I want to ask you. Witnesses here the other day pointed out clearly with statistics that the amount of money the government will take in far exceeds what is being spent on security, and it is going to help pay down the deficit. Do you dispute that?
Mr. Merrifield: I will have the department speak to that.
Laureen Kinney, Acting Assistant Deputy Minister, Safety and Security Group, Transport Canada: I am not completely familiar with the estimates they did, but I have a couple of points on that. One is that the funding raised by the Air Travellers Security Charge, the ATSC, goes to CATSA and that $1.5 billion, including the previous reference level they had in place as well.
There are small amounts funded by Transport Canada's aviation security, and some funding goes to the RCMP's protective policing, aviation and security program, where there are air marshals on board the aircraft. There is funding there.
The total income and revenue of the ATSC goes entirely to aviation security but not entirely to CATSA. That is one issue.
The second issue is the transparency of that funding. This again is a Department of Finance area. Finance Canada brings in the income and tracks this costing. That department makes some of these estimates of what is needed in the future and the rates that are required to do that. It uses some of Transport Canada's forecasts of passenger traffic.
One point I would make is that the Office of the Auditor General reviews the five-year balancing of the ATSC income versus the aviation security expenditures. If I recall correctly, that is done on a yearly or a biennial basis and the tracking of whether or not the funds are equivalent to the costs is published. Again, it goes over a five-year period, and there are ups and downs during that period and emergencies that come up, such as the Christmas events. The Department of Finance would have to speak to that in more detail. I believe the latest report on that calculation on the past, if you will, is coming out fairly soon, but again, that is a Department of Finance area. That is done by the Office of the Auditor General, and it looks at the income received, the revenues received versus the spending.
Mr. Merrifield: We can get those numbers from the Department of Finance. I think there are some discrepancies.
The Chair: It would save us a lot of anguish if you could do that for us.
Senator Callbeck: You will get those figures then, will you?
How much of this $1.5 billion that will be spent on airport security will go to the new machines?
Mr. Merrifield: You are talking about the millimetre scanners. The new machines are about $250,000 each. It is about $15 million. It is not the highest-cost item, but we are doing it over a period of time; 23 are in operation now and 59 have been ordered.
Senator Callbeck: Of the $1.5 billion that will be spent in the next five years, what percentage is going to the machines?
Mr. Merrifield: The machines are not a large amount. I believe it is $15 million.
Senator Callbeck: Is there other equipment?
Mr. Merrifield: Yes. This started in 2009. There was a considerable amount of refurbishment of the equipment. If you go to airports you see the blue X-ray machines that are much larger and more detailed, three dimensional. I believe they are in all of our Class 1 airports at the present time. That equipment is changing and we also have the explosive detection equipment and the millimetre scanner equipment. As well, underneath the equipment you are not seeing the X-ray machines that are actually checking your checked bags. That has been improved and is continuing to be improved as we move forward.
Senator Callbeck: Roughly what percentage of this $1.5 billion will be spent on new equipment?
Mr. Merrifield: I do not have the actual percentage.
Ms. Kinney: The numbers are not finalized, and the corporate plans are still being reviewed. Of course, each year there are amendments to that, reflecting the current environment. Over a five-year period I believe the estimate is approximately $20 million for equipment per year. We can get some information for you when the corporate plan is published. It is a significant amount, but I do not have the percentage.
Senator Callbeck: Did you say it is a significant amount or an insignificant amount?
Mr. Merrifield: It is a significant amount.
The Chair: I would say $1.5 billion is significant.
Senator Callbeck: Once this new equipment is bought, if it is $1 billion, does that mean that the rates —
Mr. Merrifield: No, it will not be $1 billion. It is $100 million. It is big, but the $1.5 billion over the five-year period actually will continue to move on the refurbishment of the equipment that is necessary at our airports as is. When you move into other layers of security, these funds will probably not be enough.
Senator Callbeck: Are you going to send us information?
Mr. Merrifield: We will try to rectify the information that you received with regard to finance.
Senator Callbeck: This is a big jump for Canadians to have to pay for flights. We were told the other day that a 1 per cent increase in that cost can mean a 1 per cent decrease in travellers. That will have a serious effect on tourism across this country.
Mr. Merrifield: No; let us get real. We are talking about an increase of less than the cost of a cup of Starbucks coffee per one-way flight. We had the airport authorities in and the airlines in. They move fees up a considerable amount, and they are saying they have a hard time competing, but they have moved. Parking has gone up in Edmonton; it doubled in the last year and they did not think anything of it. The airlines are charging $25 for an extra seat, pillows, and earphones. We are not talking much more than a pair of headset earphones in a plane here for security. Therefore let us not get crazy with the numbers.
Senator Neufeld: I have two questions; one about Canada Post and one about CATSA. Where I live in Fort St. John, Canada Post has always provided good service. I have been able to get my mail all the time. I have always depended on it, and they are friendly people there. I did not know Canada Post had exclusive privileges for some things that happened outside of its borders, but the bill says, "The exclusive privilege referred to in subsection 14(1) does not apply to letters intended for delivery to an addressee outside Canada."
How long has Canada Post had that exclusive privilege?
Mr. Merrifield: This was challenged in the courts, and the courts said that the way our laws were interpreted would allow Canada Post that exclusive privilege, and that is why we have to change it in the Canada Post Corporation Act. That is why it is in this bill.
Right now there is an appeal process; that appeal comes due in December, so it is critical that it be in this piece of legislation. Earlier you asked why it is here; it is here because of that. We want to put some security on those jobs that are being compromised by the lack of understanding in light of the court case that was ruled on.
Senator Neufeld: Do I understand correctly that Canada Post has always had an exclusive privilege up until this process?
Mr. Merrifield: I guess that is the way the courts have interpreted it, yes.
Senator Neufeld: If that is the case, I would assume that Canada Post is probably pretty competitive. I would think any Crown corporation would think it is pretty competitive with the private sector after having years of opportunity to actually figure out how to do it the most and best and cheapest way. Canada Post has actually had a good shot at it. The CEO and president of Canada Post told us here in a statement that she is comfortable with Canada Post's being able to compete in that marketplace and in fact looks forward to competing in that marketplace.
Would you agree with what she said, which is that Canada Post has the people and the ability and can go out and compete in the open field with the private sector to provide that service?
Mr. Merrifield: Certainly. I have talked to Moya Greene about this. She is the CEO of Canada Post. She feels comfortable that she will be able to compete. The sky will not fall. For the session to open with a question as to what will happen with those 20 words, really nothing other than the security of those thousands of jobs. Canada Post will compete well and in the long run will be the better for it.
The Chair: I will now ask senators to pose their questions and I will get the questions on the record so that senators have had an opportunity, and Mr. Morency and Ms. Kinney can jot down the questions. If they have to undertake to give us answers in writing, that will be fine.
Senator Murray: With regard to the airport security fee, I hear supporters saying we have to pay a price to ensure the security of airline passengers. I agree with that; I believe we all do.
The opponents, including the people from the airline industry who were here, and it has been echoed around the table, say that you are overcharging and that some of this money is going to the general purposes of the government. I hear what Ms. Kinney says about that, but at the end of the day we are relying on the Department of Finance, and I suppose the truth will come out when the Parliamentary Budget Officer or the Auditor General gets at this, perhaps some years down the road.
With regard to the post office, you do not expect me to be inspired or embarrassed by what Liberal members have told you. It does raise a question. If you had all this support, why did you not bring this bill forward long ago when it was a stand-alone piece of legislation? It is not as if the House of Commons was suffering from agenda overload.
Last night we had someone from Solidarité rurale du Québec, who expressed all the preoccupations that Senator Gerstein and others have referred to: privatization, deregulation, rural post offices and so forth. I think you understand the concerns of rural people. You are old enough to remember the controversies about branch lines and grain elevators and all the rest of it, so you cannot just dismiss what they say; you have to understand where they are coming from. I am sure you do. I had to say to her that while it is entirely conceivable that the government plans to do all the evil things she suggests, it is not those 20 words that will let the government do them.
It does raise the question of what is the government's vision for Canada Post. Do you exclude deregulation or privatization of Canada Post or part of it?
Finally, perhaps someone can write to me about this. It is not quite off subject. I come new to this. My understanding is that there was a contradiction between the English and French versions of the law as it stood and it was Canada Post that went to court. I presume that was under a previous government. Canada Post went to court presumably with a view to eliminating the competition. Does one of your officials know the story as to why they did that?
The Chair: Next is Senator Runciman. We will get the questions on the record first.
Senator Runciman: I want to say off the top I am not a Starbucks drinker, I am a Tim Horton's drinker. I have to say I believe most Canadians would be very appreciative and are appreciative that what you are doing to protect travellers through the air system of this country is worth the investment; it is an insurance policy that I think we all feel a great deal more comfortable about.
Senator Mitchell talked about the unique circumstances after 2001 to justify the charge that was levied at the time when this charge was brought into existence. You might want to expand on this, but I believe these were unique circumstances.
The charges in the case of domestic flights are about 50 per cent less than they were in 2002, and for international travel they are 40 per cent less than they were in 2002. You face some unique circumstances with the requirements placed on you by the United States in the wake of, as you described it, the diaper bomber and the new challenges facing all of us internationally in security issues. I thought perhaps you could expand a little more on some of the pressures you faced having to respond very rapidly to new requirements.
Senator Banks: Minister, perhaps I am antediluvian, but I think there are some things that cannot be treated in a purely business context, and they include the police, the fire department and the post office. Universal penny post was invented on the basis of the assumption that the easy, high-density delivery would cover the cost of delivering mail to the Hebrides, so that everyone had equal access. I am concerned about the removal of certain long-standing — one could say forever — privileges and monopolies — let us call them what they are — of Canada Post.
We are told that Canada Post is sanguine about this change, but it was, as Senator Moore pointed out, Canada Post who took the matter to court, so I suspect that in the long term they are not all that sanguine about it.
My question has to do with airport security. Ms. Kinney said that the ATSC goes entirely to air travel security. I commend to your attention, minister, a report, The Myth of Security at Canada's Airports, issued by the Standing Senate Committee on National Security and Defence, which dealt with the matter of airport security. That committee, of which three members of this committee were a part, also issued two other relevant reports. I think you would find the reports very useful.
During the course of that report, we tried to make a connection between the revenues that were derived at the time from the ATSC and the amount of money spent on people, equipment and all kinds of other things, and we were not successful in doing that. Having been told that it all goes toward air travel, we look forward to finding out whether that will be the case in the future, because it has not been the case in the past.
Senator Moore: Thank you, minister and witnesses, for being here.
We cannot talk about 2002 and $12 as the context for which the current increase is put before us. That was start-up time. No one knew what would be needed, and the charges came down. We have to deal with the last couple of years. It is not appropriate, and it is a bit mischievous, to suggest that 2002 is where we are coming from.
Senator Banks mentioned reports. The Standing Senate Committee on National Security and Defence did three reports. I believe it was the last one in which we dealt with behaviour observation. We heard a witness from Israel, and you may want to look at his testimony, if you have not already. It was quite instructive. He had ideas and approaches that have now been put in place there. Some may be extreme and some may not be, but it might be helpful to you.
With regard to the scanners, during prorogation the Liberal Party had a session on airport security where we learned that an individual in Montreal had developed a scanner technology that scanned the body without showing details. I do not know whether you are aware of that. It went a long way to removing the privacy concerns of passengers. I mentioned this to members of the Homeland Security Committee in the United States in February, and they were keen on it. It might be another leading Canadian technology that we could prove in our country and push internationally.
I, too, will be interested in seeing where the $1.4 billion is going. We have $100 million for equipment and then there is a gap. It would not cost that much to do a study, so I look forward to the details on that.
The Chair: Minister, unfortunately our time is up. You could spend the next hour discussing the questions that have been raised.
If you have any closing remarks on any of the questions, that would be fine. If you could provide us with written answers as quickly as possible, that would be very much appreciated.
Mr. Merrifield: I can address most of this in a couple of minutes.
The vision for the post office is transformation. It will be more modern than ever before. Its equipment is archaic. The only place we could get people to fix it is at the Smithsonian in Washington. Canada Post is going through a major revitalization and transformation. You can be assured that our vision is for Canada Post to be able to fulfill its mandate in the most efficient way possible. It is revolutionary compared to what has been done with Canada Post for many years.
On airport security, you are absolutely right about behaviour observation. Millimetre wave is the safest equipment. It has been well accepted as far as the comfort zone, and we are concerned about the comfort of the passenger. It is not compulsory. Anyone who does not want to go through a millimetre wave scanner can have a pat-down instead, but 90 per cent plus choose the millimetre wave. It produces 1,000 times less radiation than an ordinary cell phone.
Canadians are more concerned about safety than privacy. Those who analyse the millimetre waves have no contact with the passengers, as they are in a different room.
We will get you the numbers you requested. The Department of Finance does the numbers, not Transport Canada. We deal with security, and we expend the money we have in the most efficient and effective way possible. We will continue to do that, and we will continue our review to ensure that Canadians are safe and that our postal system is strong.
The Chair: Mr. Minister, on behalf of the Standing Senate Committee on National Finance, which is studying Bill C-9, which has 24 parts, 900 pages and 2,208 clauses, we appreciate your attendance here today to help us understand two portions of it.
Mr. Morency and Ms. Kinney, thank you very much for being here.
Senators, we will not be quite as tight with time on this next panel. We are dealing with Part 20 of Bill C-9, which deals with environmental assessment. We have previously heard from departmental officials, and we will now begin hearing from outside stakeholders in relation to this part of the budget implementation bill.
In this panel, we are pleased to welcome Ms. Elizabeth May, the leader of the Green Party of Canada; Mr. Stephen Hazell, a lawyer with Ecojustice; and Barry Turner, former Member of Parliament and chair of the Green Budget Coalition.
Elizabeth May, Green Party of Canada: Future member of the Senate.
The Chair: We have nothing to say about that. That is the Governor General's prerogative.
[Translation]
We have an hour and a half with this group of witnesses. We will start with Ms. May. You have the floor.
[English]
Ms. May: I am very much indebted to this committee for inviting me to testify. I hope you will accept my apologies for not having a written brief for you. This is a matter close to my heart, long-standing in my previous career practising environmental law with people as fine as Stephen Hazell and working with former colleagues such as Barry Turner, whom I first met when he was a member of Parliament.
I am joined here today, although he will not be testifying, by Ard Van Leeuwen, Finance Critic with the Green Party of Canada. We have worked closely together on preparation of the budgetary measures that we put forward as a political party. I plan to set aside politics and just speak to you as a concerned Canadian, as much as it is humanly possible to set aside politics in this place.
Bill C-9 is called the "Jobs and Economic Growth Act." This is a piece of Orwellian titling. I would urge you to go back and reread 1984 and perhaps suggest they should not call a bill that has nothing to do with jobs and economic growth the "Jobs and Economic Growth Act." This could be called the "Parliamentarians Reduction Act." I will concentrate on Part 20 of this bill and the process, but I want to beg you not to allow the continued deterioration of the role of proper parliamentary procedure in the face of ruthlessness.
It is not appropriate to lard a budgetary measure with things that have nothing to do with the budget. It was done last year, egregiously in 2009, to gut the Navigable Waters Protection Act, and Senator McCoy and Senator Murray and others spoke up against that, to remove the right to pay equity of women in the federal civil service and to change the thresholds for review under the foreign investment review act. This was all done in a budget bill, and it was all explained: "You do not have to wonder why this was done. There is no hidden agenda." It was all explained in the pages of The Globe and Mail that this was all about a minority government ruling like a majority and knowing that if other parties did not want to go into an election, then the government could stick anything it wanted into a budget bill. This year, if anything, it is much worse.
I am concerned about all the changes — to Canada Post, to the sale of AECL, to the changes that affect airline fees. The changes do not have any proper place in a budget bill. This is a duplicitous process that threatens the foundations of Canada's tradition and proper budgetary process. As such, even having these measures in a budget bill is an abuse of process.
I have had some long involvement with environmental assessment in Canada, so I want to speak to that primarily. Environmental assessment in this country started with an environmental assessment review process. It was initially a guideline and then became a guideline order. We have a tradition of federal environmental assessment in Canada that goes back to 1979. Through successive governments, there has always been an effort to improve the process to make it more predictable. I was working in the office of the federal Minister of the Environment at the time that we took the proposal from the Canadian Environmental Assessment Agency to Privy Council Office, to the people at the machinery of government, for permission to legislate so that we would have a predictable and fair process at the federal level for environmental review. That little meeting with machinery of government was back in 1987, so it has been a long process.
The bill came into law in 1995, I believe, and since then, the Canadian environmental assessment process and the Canadian Environmental Assessment Act have further formalized, streamlined, and reduced duplication of all kinds by agreeing to joint federal-provincial hearings. We have seen measures to reduce the levels of hearings to increase the likelihood of quicker reviews. This happened when we had two streams created in amendment. There were some projects that went to comprehensive study, and the decision was made in that set of amendments that a comprehensive study process could not later be booted up to a panel review, and some projects could go to panel review. Increasingly, we have had predictability with joint federal-provincial panels whenever there was an item of joint federal-provincial concern.
These processes have not lengthened the time for approval of projects, but they have consistently improved the planning and development of projects. Out of all the thousands and thousands of environmental assessment reviews that have happened in this country, maybe twice a panel review has actually said a project cannot go ahead. It is not as if the environmental assessment review process has stood in the way of jobs or economic growth. It never has. It has allowed large-scale projects to decide that something can be modified or steps can be taken to mitigate.
The foundation, the cornerstone of Canadian environmental assessment law has been the principle of public participation. This is reduced in several ways in this bill. I will speak briefly about the changes to energy projects, to scoping, and to public involvement and consultation.
In the wake of the BP oil disaster, do you senators really want to be remembered as the people who reduced the ability of Canadians to review the environmental impact of energy projects? This is critical. I know it is not fair that it lands on your plate. It should never have gotten as far as this. A reduction in the protections and environmental review of energy projects at this time is not the will of the Canadian people, and it would never get through without extensive hearings if it were not stuffed into a budget bill.
I will give you a real-life example, and then I will move on. Yes, the government will tell you that environmental reviews will still happen, and they will happen with other agencies — agencies that do not have the experience, the tradition or the practices of the Canadian Environmental Assessment Agency or the Canadian Environmental Assessment Act. Specifically, we were told that nuclear projects will be reviewed by the Canadian Nuclear Safety Commission and that other energy projects will be reviewed by the National Energy Board.
In the case of offshore oil, it will be either the National Energy Board, the Canada-Newfoundland Offshore Petroleum Board or the Canada-Nove Scotia Offshore Petroleum Board. I have a lot of experience with the latter two. They are not of the order of professionalism of the National Energy Board. They represent the kind of agency that is completely unprepared, and I will use the word "incompetent," to deal with environmental reviews of offshore energy projects before they take place.
They recently, without any review at all, announced that oil drilling is to be permitted next to the Magdalen Islands in the heart of the Gulf of St. Lawrence. No review, no discussion. They think they can do seismic testing and start drilling within a year inside the Gulf of St. Lawrence. That is the kind of thing that could happen far more routinely. The way to avoid anything off our coasts like the BP oil disaster is thorough advanced review before a project is approved, and we are weakening that in this bill.
Second is scoping. This is a deliberate attempt, quite clearly and obviously; there is no hidden story here. The Supreme Court of Canada recently ruled in the Red Chris mine case, an open-pit copper and gold mine in B.C., that the Minister of the Environment was wrong to scope the project in such a way that they would only study the tailings ponds and some ancillary measures but not the mine itself. The Supreme Court spoke clearly to the right of public consultation for environmental review and to the importance of scoping to review the entire project.
This is separate from energy projects. With all projects across Canada, the Minister of the Environment will be empowered under this act to describe the project any way he or she wants. If you have a great big mine, you can do an environmental review on a tiny little road. That is the effect of gutting the Canadian Environmental Assessment Act in this bill. It is directly overturning the Supreme Court of Canada, which a legislative body has the right to do, I grant you, but stuffing it in a budget bill is just wrong.
Lastly, with respect to public consultation, comprehensive study as defined under the Canadian Environmental Assessment Act is specifically and only for really big projects, the kinds of things you want to make sure you give proper and adequate review. The set of amendments under Part 20 removes public consultation rights in those processes.
In the guise of a budgetary measure, in this session of Parliament, if the Senate does not stand up and stop this, we will see the clock go back on environmental assessment in this country to before 1979. You will be gutting a process that has taken decades to work up.
I beg of you, I will not make any bones about it, no matter what your party affiliation or what you might think of this, this is the time to stand up and protect this Parliament, our processes and traditions and not allow us to move into a U.S.- like budget process where everything and the kitchen sink can be larded into a bill and shoved down the throats of parliamentarians, with the additional threat in Canada, not in the United States, of everyone being scared of an election. It is just wrong, and you have to know that.
Stephen Hazell, Lawyer, Ecojustice: Thank you for the opportunity to appear. I am here on behalf of Ecojustice, a national public interest law firm, and the Sierra Club of Canada, where I formerly was director but am no longer.
The Canadian Environmental Assessment Act really needs fundamental reform, but going about it through an omnibus budget bill is not the way to do it. The problems with the act are deeply interconnected and cannot be addressed by a patchwork of band-aid solutions. Effective reform of the legislation must recognize this interconnectedness and design solutions as a package.
Ecojustice and the Sierra Club of Canada are extremely concerned that the Canadian Environmental Assessment Act, or CEAA, is being weakened through a series of piecemeal statutory and regulatory changes without benefit of serious parliamentary or public discussion, when a more comprehensive and integrated response to reform is required.
I want to run briefly through some of these various piecemeal changes that I have mentioned, of which Bill C-9 is just the most recent.
A year ago, as Ms. May mentioned, we went through the same sort of deal, where a budget implementation bill was tabled and many amendments were made to the Navigable Waters Protection Act. One primary purpose of those amendments at that time was to basically dismantle federal environmental assessment of obstructions to navigation. Canadians' right to navigate was also taken out in the process, but mainly it was about how we can limit the amount of federal environment assessment that goes on. That was one set.
A number of senators of this committee were at the time members of the Standing Senate Committee on Energy, the Environment and Natural Resources, including Senator Neufeld, Senator McCoy and Senator Mitchell, I believe. I am not sure whether Senator Banks was still on the committee. We talked about it then, and at that time I expressed my concern about this approach of using an omnibus bill to go about making changes to the Canadian Environmental Assessment Act. As we know, that budget was passed unamended.
There have been a number of regulatory changes, and I will not go through those, but the effect has been over the past few years to reduce the number of environmental assessments that are done federally. At one point we were up to as many as 7,000 assessments being done every year, and now the number is much smaller than that. Certainly several thousands have been taken out.
I think a more comprehensive review could be undertaken and I believe will be undertaken when the House of Commons Standing Committee on Environment and Sustainable Development takes up the seven-year review of the Canadian Environmental Assessment Act in the fall. I believe there has been a reference to that effect by the house. I want to get to that in a moment.
One thought to put in your mind about Bill C-9 and the changes being made there is that one of the most egregious is the provision that allows projects to be scoped down by executive fiat. Ms. May mentioned the Red Chris case, which basically said that the Supreme Court recognized that a project is a project for environmental assessment. That is, if you have a tar sands mine, then the tar sands mine is the project and should be the one assessed for the purpose of the federal environment assessment.
Hitherto, there was some ability to scope that down. Bill C-9 allows that scoping down to be done by the Canadian Environmental Assessment Agency. In effect, you could get a tar sands mine listed on the Comprehensive Study List Regulations that, for the purpose of the federal review, would be a stream crossing. The federal review would not have anything to do with all of the important things going on, like climate change, air pollution or the destruction of boreal forests. We would focus on the stream crossing, perhaps a road going across the stream and the minor impacts that that stream crossing would have on fish habitat. We think this is very suspect.
The main point that I want to make today is that we really need to have a comprehensive review. There is a vehicle for doing that. The Canadian Environmental Assessment Act requires that the seven-year review be started as of June of this year, and the House of Commons will get going on that through its Environment and Sustainable Development Committee in the fall, which is a good thing. That has great potential and potential for engaging the public.
Why do we actually need Part 20? Why do we need to do this now, when we know we have this comprehensive review coming up in a matter of months? I do not really understand why that is the case.
In terms of recommendations by Ecojustice and Sierra Club Canada, we want first to encourage the Senate's National Finance Committee to restate its long-standing opposition to government's — Liberal and Conservative governments alike — use of budget bills to legislate on matters unrelated to budgets.
Second, we recommend that you amend Bill C-9 to remove the environmental assessment provisions, Part 20, from the bill.
Third, we suggest you refer the provisions of Bill C-9 on environmental assessment to the House of Commons Environment and Sustainable Development Committee for its consideration as part of the upcoming seven-year review.
Finally, I am aware of Senator Murray's efforts in the Senate to split the bill, and I understand that effort was not successful. We deeply regret that it was not, so I will suggest something else by way of a secondary recommendation.
If this committee cannot see its way clear to amending Bill C-9 to delete Part 20 of the bill, I would suggest that at a minimum you recommend that the House of Commons consider these amendments that are going forward now as part of its review so that the House of Commons committee would look at the full suite of these ad hoc and piecemeal changes that have happened over the past number of months. Then perhaps we can have a good discussion about what needs to happen to have a more effective Canadian Environmental Assessment Act.
Perhaps as a teaser for what I am talking about when I say there is an opportunity that all parties can support for a more effective act, I would say we have to figure out how we can use the environmental assessment process to address government priorities. Climate change is a clear priority of this government. We can talk about whether the government has been effective, but they have said it is important to them to deal with climate change. Are we using the Canadian Environmental Assessment Act to address climate change? No, we are not. It is shameful that we are not. Projects are going forward like the Kearl tar sands project, the equivalent of putting 800,000 cars on the road, with hardly a passing word from the panel on climate issues.
Are we looking at air pollution issues, which is a strong priority of this Prime Minister? Generally speaking, we are not doing that very well. We can rewrite this bill and we can try to focus on stuff that is important to the government itself, or so it says.
A different idea is that one of the biggest problems proponents have with environmental assessment, with federal environmental assessment in particular, is the great amount of time they spend gathering information about the project. This is a significant burden for proponents. There are other ways of coming at this so that proponents face less of an information-gathering burden.
In my opinion, we do not have a proper information management system at the federal level to ensure that information gathered about one tar sands mine is actually used for the next one. We do not have a good system on that. Amendments relating to follow-up were passed a number of years ago, but that is another area where the federal government could add a lot of value.
To go back to the main point, why are we going through this nickel-and-dime process on the environmental assessment process, which is important to the future of this country, when we should be putting our eggs in the basket of the seven-year review? We hope this committee could support that seven-year review process in whatever recommendations come out of these proceedings today.
Barry Turner, Chair, Green Budget Coalition: Thank you for the invitation to appear before you. Before I begin, I would wish Senator Demers a speedy recovery in the hospital in Montreal.
On April 21, 2010, the Green Budget Coalition issued a media release critical of Bill C-9:
"The budget should not be used as a mechanism for weakening Canada's environmental protection laws," explained Barry Turner, Chair of the GBC.
I was unanimously re-elected chair in April of this year by the 21 largest conservation environmental groups in the country, collectively representing over 600,000 members. The Green Budget Coalition is in its eleventh year now.
On May 11, 2010, before the House of Commons Standing Committee on Finance, the Green Budget Coalition's manager, Andrew Van Iterson, said:
. . . the Green Budget Coalition requests that you remove the amendments to CEAA from Bill C-9 in order that these proposed changes can receive full parliamentary review, including a thorough review by your esteemed colleagues on the House of Commons Standing Committee on Environment and Sustainable Development.
In the interim, senators, nothing has changed in the coalition's collective mind. In the interests of transparency and accountability, these proposed changes to the Canadian Environmental Assessment Act should be fully subject to proper review.
To quote my recently departed grandmother — Senator Murray, you may know the Grimes family from the Ottawa Valley. My grandmother was a Grimes and was a great, wise woman: "Good governments do good things. Great governments do the right thing." Thank you.
The Chair: Thank you very much. That is a good quote to remember. I agree we are fortunate to have here a number of members of the Senate committee that deals with the environment and natural resources, and I will start with the former chair of that committee, Senator Banks from Alberta.
Senator Banks: Thank you, witnesses. There are those of us on this committee who agree with what you said.
Correct me if I am wrong, but I think that the provisions essentially that are contained in this act were put in place temporarily, rather like the income tax, I guess, to allow for efficiency in the introduction of budget money in the infrastructure money, for example, to ensure, to use the colloquial phrase at the time, it got to the shovels-in-the-ground projects and that it got there fast in order to stimulate the economy. Have I got it right that these are essentially the measures that were then introduced and were temporary?
Ms. May: Those measures are a very small portion of the overall package, so small, in fact, that my comments did not touch on them, and I do not think Ecojustice's comments did either.
Mr. Hazell: To answer your question directly, yes. Ms. May is quite right. There is one section that deals with this. This is problematic as well. If I could elaborate, as you said, a year ago changes to the regulations under the Canadian Environmental Assessment Act ensured that there would be no federal assessment for a variety of projects pursuant to the stimulus package. They were put forward on that basis a little over a year ago as a temporary measure.
These regulatory changes have been upgraded to statutory changes, so they are now all written into the act. I am a lawyer, and I think it most extraordinary that one would put this stuff in the legislation. Clearly the government decided it got away with it the first time around, so let us do it again. There is some concern that the regulatory authority for making these exclusions a year ago was not properly followed, that there was no adequate regulatory authority. Ecojustice and Sierra Club were in the process of an application for a judicial review on this, and our legal point in court has been made moot by these changes to the act.
Ms. May: Removing energy projects from environmental assessment, stopping public consultation rights to a comprehensive study and legislating that a minister of the environment can describe a great big project in a trivial way as he or she chooses for political expediency — those changes are not temporary. They are being written into this act, and they have nothing to do with infrastructure.
Senator Banks: That was my point. They were supposed to be economic stimulus allowances, and they are now being put into law.
Here is an argument. If you get together the money to build a big project, private money let us say, you need a lot of patient capital because those things take a long time. If you have assessment after assessment after assessment and on and on, and they sometimes go on for months if not years, that tends to drive away patient capital or make it impatient and to place an impediment in the way of development. The argument is that this is merely a way of getting rid of redundancies and overkill in respect of looking at these questions and making things better for business while maintaining a certain balance.
Ms. May: We have heard that argument of duplication for a very long time. There is very little evidence for it. The House of Commons committee, when examining it in the past, could not find evidence for it.
Let us say there had been that problem in the past. Previous amendments to the Canadian Environmental Assessment Act dealt with that directly by saying that where we had both federal and provincial jurisdiction over a project, panels would proceed as joint federal-provincial review panels.
Senator Banks: That is already in place.
Ms. May: Yes. I agree with you that capital needs to be patient, and the costs to an investor in a large-scale project in Canada of following through with the environmental assessment program is essentially a drop in the bucket in their overall costs of proceeding.
The Canadian Environmental Assessment Act is clear on this point. Environmental assessment is to begin as early in the planning process as possible. That is deliberately so that there are no delays. Therefore, if your environmental review process begins at the very beginning of the germ of an idea to go ahead with something, then you are doing your environmental assessment that works along in tandem with whatever other regulatory hurdles there are. It informs the planning process. It creates better projects. It allows the proponents to say they will do better, or do more, as in the following examples. An oriented strand board mill in Manitoba said it would put in a higher grade of scrubber to get more toxics out of the air before it reaches that air shed, because the people can see the studies are coming along. The Al-Pac mill in Alberta, during the environmental assessment review process, said it could do better than it had been planning to do on the elimination of toxics at that mill. Things happen through the process of environmental review that result in better projects. Environmental reviews have not slowed down projects, despite all the rhetoric to that effect.
Mr. Turner: Senator, you may be right about affecting reluctant capital over the long term.
Senator Banks: I did not say I was right; I said that was an argument.
Mr. Turner: I said "may" as well.
Burying this kind of environmental legislative change in a federal budget is the wrong process. That is what we are saying here. There is a better, healthier, more democratic, transparent mechanism to discuss environmental changes in our legislation, and that is through the House of Commons Standing Committee on Environment and Sustainable Development.
Mr. Hazell: I want to provide the reference to the points Ms. May made. As far back as 1997, the House of Commons Standing Committee on Environment and Sustainable Development reported that ". . . there is insufficient evidence of overlap and duplication of environmental regulations or activities of the federal and provincial/territorial governments." Some years later, the Minister of the Environment reported that the federal environmental assessment system had been successful in avoiding duplication with the provinces. That report found that of the 7,000 federal assessments conducted annually, only 80 to 100 were subjected to any type of provincial assessment.
In the cases where there is some overlap and there is a provincial and federal assessment happening, the Canadian Environmental Assessment Agency has made a tremendous effort to ensure that appropriate coordination of assessments happens. The agency has established offices across Canada, and they are there to ensure that things move expeditiously. Cabinet directives have been issued on this. There has been a huge amount of effort to ensure there is no duplication and overlap in federal-provincial assessments.
As Ms. May suggested, this idea that there is duplication and overlap is a handy hot button to push, but really, as the House of Commons committee has found and ministers of the environment in the previous governments have found, it does not exist.
Senator Neufeld: I was involved a bit with environmental assessments in my previous life before coming to the Senate. I have experienced some of the delays, and I am not saying all the delays are always the federal government. There are some delays provincially as well. None of it is perfect.
Ms. May, you said that nothing has stopped jobs. I have always been of the opinion that "no" is an answer, too. You do not have to drag it out for years to give that kind of answer if in fact that is what the project requires — or "yes" as an answer.
I know there were a significant number of projects in British Columbia. In fact, when I was in the British Columbia government, almost half of all the projects being reviewed by the Canadian Environmental Assessment Agency were in British Columbia, and some were held up for a number of years.
As I understand the act, the act still applies, and the environmental assessment still applies, but at the front end, which you spoke about, the decision is made quicker on where it goes, so the process can begin. In most cases, the federal government usually figures out what it will do on average 16 months after a project is started in a province. That is where they start. To go in tandem with the provincial process is tough. During that 16 months, as Senator Banks has said, you need patient capital.
I am not saying every project should go ahead. Neither is the federal government, but it is trying to speed up a process, not relinquishing any responsibility that is already there in the act — and it is not. All the minister has the right to do instead of everyone sitting in their offices deciding who will do what for many months is make a decision that this board or that commission, the National Energy Board or the Canadian Environmental Assessment Agency or the Canadian Nuclear Safety Commission, will make those decisions.
Is there anything wrong with that process, still using all the things there, all the processes? Nothing has changed in the act to make it less of an environmental study, but it makes the process a little more efficient. I think you almost have to agree with me that efficiency is not a bad thing.
Ms. May: I would agree that efficiency is not a bad thing, but that is not what this does. This guts the environmental assessment process and does it permanently, unless a future government changes it back.
This is more than saying what agency energy projects go to. I think most of your comments were directed to the idea that energy projects would go to either the Canadian Nuclear Safety Commission, the National Energy Board, the Canada-Newfoundland Offshore Petroleum Board or the Canada-Nova Scotia Offshore Petroleum Board. The scoping of the act, the changes to overturn the Supreme Court of Canada's view of proper environmental assessment, definitely changed the environmental assessment process. It is not to say that everything is the same but for a few tiny changes. They have created an opportunity for environmental assessment to be made a joke, a complete mockery of environment assessment, by allowing a minister to decide what part of a project is to be reviewed and not the whole project. That is a significant concern.
Sometimes you protect jobs by getting a proper environmental review done. I wish there had been some review of the Westray Mine before they went ahead with that. The methane levels, the kind of things that would have given people pause before pushing ahead, which resulted in the worst mining disaster in recent history, had no environmental review.
The last environmental review I was involved with before getting involved with politics was the joint federal- provincial review of the remediation of the Sydney Tar Ponds. Start to finish, from the decision of the Minister of the Environment to appoint a joint federal-provincial panel, they concluded their work in less than a year. It was some four years later that the province went ahead to say that is what they will do. Sadly, they did not read the report of the panel review. If they had, they would have realized that what they are now funding with federal taxpayers' money will not work. You cannot make the case that that process was slowed up.
I know there are many concerns about the B.C. environmental assessment process, and I am not here to speak to that. Good, shared, federal-provincial action can be efficient. It does protect jobs. It protects lives and health and results in better projects.
Senator Neufeld: At the end of the day we can agree to disagree on a number of things, and that will be one. I do not believe, by any stretch of the imagination, that this bill or these changes actually gut the Canadian Environmental Assessment Act in Canada. I think to say that it would go pre-1979 is wrong.
I heard similar remarks when we did the Navigable Waters Protection Act last year. The world was going to end. People were not going to be able to canoe down creeks and rivers, and so on. I do not know whether that has happened; I have not read anything about it. Has that happened anywhere since those changes went into effect across Canada? Has there been reasonable stoppage of people who have been using navigable waters from using them since those changes?
Mr. Hazell: The issue is not whether people have been stopped from taking their canoes down the river. The issue is whether or not a dam will be built across a river that boaters and canoeists, and so on, have been using without their being notified or being able to participate in any process at all.
There is this idea that the provincial systems are great and the federal system is just duplicating all this great work that is happening at the provincial level. The problem is that the provincial processes are weak and getting weaker all the time. The Ontario process, for example, does not assess private projects at all. It only deals with public sector projects. How can there possibly be any duplication? One of the biggest infrastructure projects in Ottawa is being proposed. It is a major new bridge for cars and trucks that will be built across the Ottawa River. There is no Ontario environmental assessment, period. There are some questions about whether there will be a federal environmental assessment. Minister Baird can say, "This Kettle Island bridge will be built with infrastructure money. I can decree that I do not need a permit under the Navigable Waters Protection Act." Therefore, there will be no federal environmental assessment either. The idea that the provincial systems are wonderful and will save the day is not how we see it.
Ms. May: In direct response to what happened in the last year, since the changes put forward in the Navigable Waters Protection Act, the one case of which I am aware is the Victoria Harbour mega-yacht marina that is being put through. Transport Canada said there were no environmental impacts. They scoped down the concerns that they should have had about how the Canadian Environmental Assessment Act considers environment. You need to turn your mind to this because you may be thinking "environment" means trees and flowers. The Canadian Environmental Assessment Act and its process scopes environmental impacts to include social and economic impacts. It is the only piece of legislation we have that directs the minds of those doing the study to what are the alternatives and whether alternatives have been considered.
In the case of the mega marina, the group most aggrieved are the paddlers and the kayakers who will find that they have lost access to the routes they used to have. There is a tremendous controversy there over the way Transport Canada has rubber stamped a project with minimal consultation with the public. In terms of environmental impacts, they deliberately stated what happens to the water quality in Victoria Harbour and not that broader understanding of what environment means. It is now going to court because they failed to pay proper attention to environmental impacts.
The effect of changing a law is not what you see in one year. When you say that the objective definition of what is navigable becomes a ministerial decision in the absence of criteria, you have opened the door to future abuse. There is no question about that.
I am sorry, Senator Neufeld, but I beg you to look again at what happens when the minister can choose to say that a large project can be scoped for a tiny little aspect. That, sir, guts the Canadian Environmental Assessment Act. It is in this bill, and it should not be there.
Senator Neufeld: I am not here to defend every province's environmental assessment. I know British Columbia's relatively well, and I think it is a relatively good assessment. That is not the issue here, though. The issue is how do we successfully get projects to a stage where there is either a yes or a no. In my reading of it, this bill does not gut the Canadian Environmental Assessment Act. It makes the act work a bit better for all Canadians, whether or not you are opposed to every project.
I guess no navigable waters were affected last year, when the whole world was going to fall down and everything was going wrong. I get it from both of you that there were none —
Ms. May: Did you misunderstand my answer about Victoria Harbour?
Senator Neufeld: Let me finish. That was the question, and I did not get an answer.
The premiers from across Canada and the territorial leaders prior to this government have been lobbying the federal government to get together so that we can have environmental assessments that make good sense for Canadians and that look out for the environment — and I do not need a lecture on what environmental assessments are — and that look at jobs and economic activity in a more holistic way. That is what premiers and territorial leaders across Canada have been doing for a number of years, not just in the past four years.
You said that changes were made to accommodate some of those things. Nothing should stand still. We should be able to make it better as we move forward all the time. That is one thing that I know. I know the premiers, and I have seen their letters. I know where they are coming from when they ask that we actually work toward a better system while maintaining the Canadian Environmental Assessment Act. That is there, and I believe that is what it does.
The Chair: You agreed to disagree with Senator Neufeld, but is there any other brief comment?
Ms. May: If these changes were defensible, why are they stuffed in a budget bill where no one has had adequate time to review them in the House of Commons?
Senator McCoy: Thank you for coming here today. I was looking for a report on plans and priorities that the Canadian Environmental Assessment Agency has built. I want to explore the thrust of your comments, which is yes we could do better at the federal level.
I think there is fundamental agreement that there is a great desire on everyone's part to have a more effective — I will not say "efficient" — environmental assessment process. In part, this series of amendments is attempting to go one step further. It also seems to me that it was written in a hurry and that they have the whole thing wrong. I have a lot of sympathy for Mr. Hazell's comments, which were that you cannot do it piecemeal. They have thrown the baby out with the bath water.
That is a long preamble, but I want to ask you about this provision that allows the Canadian Environmental Assessment Agency to become the responsible authority on things that do not go to the National Energy Board and to other energy boards or to the Canadian Nuclear Safety Commission. You used to work there, did you not, Mr. Hazell?
Mr. Hazell: I did, yes.
Senator McCoy: You are familiar with them, then.
Mr. Hazell: I am familiar with the agency, and I was the director of regulatory affairs at the time the act was brought into force.
Senator McCoy: The comprehensive study is a large project, as you have said. The responsible authority shall ensure that a comprehensive study will be done. That is what this new section 21 says. It says somewhere else that the agency will be that responsible authority.
Do you think they are equipped to do that?
Mr. Hazell: The Canadian Environmental Assessment Agency has been carrying out comprehensive studies for at least a decade now. I am not sure when this amendment was brought forward. The agency has significant capacity to do comprehensive studies.
There is an argument that, given how other departments have not done so terribly well in fulfilling their roles as responsible authorities — I am thinking in particular of the Department of Fisheries and Oceans, which I grant is operating with antique legislation that was not designed with environmental assessments in mind — we would all be well served if there were more centralization of functions at the Canadian Environmental Assessment Agency. You would get more standardized approaches and you could ensure better coordination with the provinces. When you have several responsible authorities, such as the Department of Fisheries and Oceans and perhaps the Department of Transport or Environment Canada, and they are all chattering about how it should go, it is easier to have one agency say, "This is the way it will be. We are the ones who will deal with the problem."
There is an argument for centralizing some of the functions, but let us have that discussion in the context of the act as a whole and not come at it in this piecemeal way. I do not see that the act has been improved or that the process has been improved by any of these changes that have been happening over the past four or five years. I just see greater confusion as to what will happen. Trying to make sense of all of this stuff is difficult, even for lawyers.
Senator McCoy: I have read the Red Chris mine decision. It seems to me that the Supreme Court of Canada judgment said you cannot scope down a project in order to avoid taking a certain track under the act, but once you are on a track, you can certainly do things to minimize duplication, delays and unnecessary work. You take the description as the proponent gives it; if it is on the comprehensive list, you are into a comprehensive study or a review panel, right?
Mr. Hazell: That is right.
Senator McCoy: Once you are there, there are provisions in the act, and the judge actually said to make use of them, which I am not sure the federal civil servants did in the Red Chris case. It seems to me that this proposed legislation, which introduces the new section 15.1, is an overreaction to what the judge said. Would you agree with that?
Mr. Hazell: Yes, I would agree with that.
Ms. May: I agree with everything you said, Senator McCoy.
The Chair: I think Mr. Hazell wanted to comment.
Mr. Hazell: No. Thank you, chair.
Senator McCoy: They have definitely thrown out the public participation.
Ms. May: That is for comprehensive study.
Senator McCoy: That is on the front end. They have definitely thrown out the requirement for a report to the minister to decide whether it would be either a comprehensive study or a review panel. That is what Senator Neufeld is saying: We need to shorten the front end of the process so that there are not so many delays at the federal level.
Now we have the situation where we are trying to correct a management problem with a legislative solution, in my view. You have agreed with me as to what I have characterized the changes to be.
Ms. May: I think we have not so much a management issue as a political issue. When you read the budget text, not the bill itself, Bill C-9, but a section of the budget that is strangely called "Green Jobs and Growth" but then goes on to describe massive energy projects, uranium mines, coal, natural gas and oil, it does not mention anything that I would consider green. However, that section of the budget is where the government raised the issue for the first time that energy projects would be removed from the Canadian Environmental Assessment Act and would go to those other agencies. I am not certain that will in any way speed up a process.
I do not know that the Canadian Nuclear Safety Commission will find it has adequate resources to do environmental assessments or will know how to do them. Let us assume the Canadian Nuclear Safety Commission, following what must have been a chilling effect of having its president fired for following the law, does the kind of job it has done. I have appeared before their members on behalf of non-governmental organizations' concerns in the past before coming involved with the political party. The Canadian Nuclear Safety Commission will now find itself mandated for some large and important environmental reviews if a new nuclear reactor is proposed, bearing in mind that no new nuclear reactor has been approved in this country since 1978. It will be a long process; it could be difficult.
The energy projects have been taken away from the Canadian Environmental Assessment Act regime altogether. I may be wrong, but my assumption is that it goes to the Nuclear Safety Commission and they have the whole job. How do they know how to proceed? The National Energy Board is a very interesting agency, but let us be clear. I practised law in the past and appeared before the National Energy Board, which is a quasi-judicial body. It makes it harder for the average member of the public or a First Nations community to participate in the hearings. You pretty much have to hire a lawyer to get there. I am sure you are familiar with the fact that once you hire a lawyer to get there, things do not necessarily go faster.
We are taking bodies that were never created to do environmental assessments and public participation. They have been mandated under the bill to provide public participant funding to agencies that never did that: the Canadian Nuclear Safety Commission, the National Energy Board and the other ancillary offshore boards, the Canada-Nova Scotia Offshore Petroleum Board and the Canada-Newfoundland and Labrador Offshore Petroleum Board. At least in the first instance, it is not necessarily clear to me, unless these agencies plan to make a mockery of the job they have just been given, that anything will go faster, because they are entering unknown territory in which they will have to develop a public participant scheme. They will have to figure out how to accommodate public participation in a quasi-judicial process. In other words, I predict a mess.
Senator Gerstein: Ms. May, many consider B.C. to be a very green province. I believe that is where you are thinking of running the next time.
Ms. May: I have lived in British Columbia for the last year.
Senator Gerstein: Would you agree it is a very green province?
Ms. May: Every part of Canada is green.
Senator Gerstein: Many consider that to be a green province, and many consider The Vancouver Sun to be a leading paper and a most influential newspaper, probably the most influential newspaper in B.C. It was with some interest that I read its editorial of May 27, 2010, entitled "Adding common sense to the environmental review process." We do not often get common sense in politics. If I may just read in part:
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.
The article goes on to say that Bill C-9 — the bill we are talking about today —
. . . 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 . . .
— hence, why it is in this budget bill —
. . . and the environment.
How do you respond to this?
Ms. May: The greenest part of British Columbia is Southern Vancouver Island, where the Victoria Times Colonist had an editorial that mirrored that of The Globe and Mail nationally to say that this was bad process.
Senator Gerstein: I do not think this was The Globe and Mail. This is The Vancouver Sun.
Ms. May: I know you said The Vancouver Sun. The Globe and Mail, the Victoria Times Colonist and other papers across this country have pointed out that it is dangerous to start the process —
Senator Gerstein: I am not talking about the editorial in the Victoria Times Colonist.
The Chair: Senator Gerstein, let her finish.
Senator Gerstein: She is not responding to my question. I am talking about an editorial in The Vancouver Sun.
Ms. May: The Vancouver Sun editorial is The Vancouver Sun editorial. The Victoria Times Colonist had an editorial that said this was bad process to lard things that were non-budgetary into a budget bill; so did the national paper The Globe and Mail, and so have other papers across Canada. I will not comment on The Vancouver Sun editorial process other than to say that it is a minority even among newspapers that wrote editorials on this topic.
Senator Gerstein: Would you not think it is common sense, though, what they are talking about doing?
Ms. May: I think that putting non-budgetary matters into a bill is wrong in principle. It is an abuse of process. It is so deeply wrong that we should not even be seeing this bill at this table.
Senator Gerstein: Well, it is good to see something that is common sense.
Senator Mitchell: The government is very good at spinning issues and branding its positions and taking what looks to be an irrefutable value that might apply over here and applying it to something else and trying to justify, and often with some success.
What they have done here really is couched the environmental assessment reduction initiative in this idea, which we have heard and you have said, that duplication, delay and all these reasons will mean projects will not get built.
Is it not the case that there are many reasons that major projects are delayed, and they are not, as you are saying, just, if at all, environmental assessment issues? There are oil price issues if they drop; there are interest rate issues if they go up; and there are any number of reasons why things can be delayed. There are recessions that stop projects as well.
Could you explain this idea that environmental assessments do not delay and maybe give us some idea of what does delay projects?
Mr. Hazell: Environmental assessment is often a convenient whipping boy. I have been involved in the environmental assessment of the Mackenzie gas project, which has taken an awfully long time, and no one is happy about that. There have been all sorts of delays in that. Part of it relates to the comprehensive claims regimes that are established in the Northwest Territories and the fact that we had to have two separate hearing processes. That was unfortunate, but the law drove that.
Many of the delays in the Mackenzie gas project were because the proponent itself downed tools. They said they would not continue with this until they have some benefit agreements signed with First Nations peoples. That happened for a number of different reasons during the course of that very long review process. It is convenient at the end of the day, but now, people looking back on the Mackenzie gas project say, "That took five years. How terribly inefficient the government is," and so on.
Certainly that was part of it, but another major part of it was that Imperial Oil and the other companies were using the leverage they had in the political system so that they could pay less to First Nations and Inuit communities.
Ms. May: I would agree with that. I would again draw our attention to the fact that the environmental assessment process is to begin as early as is practicable, as early in the planning process as possible. Ministerial directive in ordering reviews can also set timelines. That is a far more efficient way to deal with this issue than to start trying to parcel out environmental reviews to different agencies that do not necessarily have any experience doing them.
Again, I go back to the review of the Sydney tar ponds. It was unusual at the time, but Minister Dion, when he was Minister of the Environment, set a specific due date; he said he wanted it done by such-and-such a date and it was done. The average review time for environmental reviews at the time, I believe, was nine months. It can be done start to finish very efficiently.
What are the reasons for delays? Again, Imperial oil did not have approval from headquarters to proceed with the project. They also were using the time; in pursuing the environmental assessment, they would hold up and they were late tabling their full review. A lot of the delays were due to the proponent in that instance, and yet environmental assessment is held up as a whipping boy.
Senator Mitchell: The biggest case made under that argument is the idea that there is duplication. It seems to me to be logically impossible that there would be a great deal of that in any event. First there are the joint commissions, as you have pointed out, but also there are completely and utterly different jurisdictions that are covered by completely and utterly different bills. Under the Navigable Waters Protection Act, no review is done by the province. Under migratory birds, I do not think there is a review done by the province. There is no logical argument or reason why there should be an actual overlap and why these things could not be done simultaneously anyway, if they are not already.
Ms. May: The interesting thing is that this government is taking apart environmental assessment and arguing that these things can be done provincially and that the federal government does not want to get in their way. However, it took a bold step, which we support, to say we should have a national securities commission. I do not understand. To be able to have fair and predictable regime, sometimes you need to ensure you have one overarching piece of legislation and one place people go. A national securities commission makes sense in logic. Why it is then that this government wants to dismantle the environmental assessment regime?
Senator Mitchell: My final question stems from something Mr. Hazell said that really caught me, and it has been reiterated by others. An oil sands project, for instance, can be scoped down to a river, and no consideration whatsoever need be given to climate change implications.
I want to make that point more than anything, but do you think that is at the back of their minds? About this time when they should be getting really focused on climate change — they should have a long time ago — they are actually finding yet another way to diminish and reduce their focus on that.
Mr. Hazell: I do not know what the motives are for doing this. There is perhaps a sense on the government's part that the tar sands development is for the province to decide and that the federal government really should not be getting involved in that at all. These should be provincial decisions, and the province should go ahead with them. Maybe that really is where the government is coming from. However, on the other hand, we do have international obligations with respect to climate change. We do have laws passed by this Parliament relating to reducing greenhouse gas emissions. Why should we not be using the environmental assessment legislation to try to influence developments such as tar sands, which are carbon-intensive, in order to meet our international and other legal obligations? It may be a philosophy of government that the federal government really should not be having anything to do with regulating large-scale non-renewable resource development.
Senator Callbeck: Ms. May, you mentioned that public consultation rights would be removed. Senator McCoy referred to this. Will this be in the comprehensive studies? I would like you to talk about this and explain the whole thing.
Ms. May: The amendments to the Canadian Environmental Assessment Act created this fork in the road for large projects, so that it was either going to be a panel review or a comprehensive study. Up to that point there had been the notion they could be sequential. You could go to a comprehensive study and then conclude that you really need a panel review because there are sufficient levels of public concern. The act was changed, being driven by the very concerns that Senator Neufeld has spoken to. I believe the concerns that have been raised here have been dealt with in the way the act has been amended.
One of the elements of concern was that it just created a big stop sign on large projects that says they will go to comprehensive study and they will not go any further. You could never get it to a panel review from there. Because a cornerstone of the act and its principles has always been public participation and consultation, they made sure that the comprehensive study process, which I want to underscore, is entirely a paper process. It means that there are reports available for the public to read and opportunities for the public to create written submissions, but it has no hearings and no public face. Comprehensive studies are a paper process with rights of the public to access information and to file written comments. That aspect of public consultation will be removed if this bill is passed.
It does not cost the government a lot and it does not slow things down. However, for all projects to be dealt with under the Canadian Environmental Assessment Act, if they are large enough to be designated for comprehensive study, the public will no longer have a right to obtain the information being reviewed by the agency or to file written comments.
Senator Callbeck: Will you give a few examples of comprehensive studies in Atlantic Canada where there was public consultation that would not have happened under Bill C-9?
Ms. May: The Confederation Bridge was a panel review, and that was before they created this bifurcated process where you go one way or the other and a comprehensive study can never go to a panel review.
There was a comprehensive study review of an aquaculture project in St. Ann's Bay. Transport Canada was involved because it involved navigable waters since the mussel buoys would make it difficult to navigate that waterway. Transport Canada, Coast Guard, the Department of Fisheries and Oceans and Environment Canada shared jurisdiction through a comprehensive study. There were rights of public participation through paper comments. The public would no longer have the right to do that.
Senator Callbeck: I thought you said they would still be able to make submissions.
Ms. May: No. This proposed law changes that. The public consultation rights to comprehensive study, as described in Bill C-9, would mean no rights to information or to file written comments on comprehensive studies. I believe it was in 2001 that the government changed the act to say that they were listening to the people who were constantly lobbying the government about the phantom duplications that no one can find in real life. They said there would be either a panel or a comprehensive study, and since the comprehensive study would not have hearings, they would enshrine in the law the right of public consultation on them. This legislation takes away that right to file written comments. Under Bill C-9 it will become a black-box process.
Senator Callbeck: Under public consultation the public has no say whatsoever?
Ms. May: The public will still have a right to appear if it is a panel review, but not on comprehensive studies. They are the rarest of rare.
Senator Ringuette: I want to put on the record a letter that was sent to the members of this committee as an opinion from the Canadian Bar Association with regard to Part 20, which we are currently considering. They say:
Part 20 proposes significant amendments to the Canadian Environmental Assessment Act (CEAA). In our view, those provisions should be struck from Bill C-9, contained in a stand-alone Bill and subject to informed and focused public consultation and consideration by Parliament.
The Canadian Bar Association has the same view as the three of you have proposed.
Mr. Hazell, you indicated earlier that in Ontario no provincial environmental assessment is done on privately funded projects.
Mr. Hazell: That is correct, unless it is designated by the provincial Minister of the Environment. They are generally not reviewed by the provincial government, but they may be designated.
Senator Ringuette: I will give you an example and ask for your comments. In the last few months, some proposals have been made public that Canadian tax dollars would be given to a U.S. family-owned company to build a second bridge between Windsor and Detroit. Because it is private money, although it comes from federal taxpayers, there would be no Ontario assessment, or only if directed by the provincial minister. Is that correct?
Mr. Hazell: My understanding of that Detroit-Windsor bridge is that the Ontario process is being applied because some Crown land is involved. I am not that familiar with the project, but it is my understanding that the Ontario provincial government is currently involved in the assessment of that project. However, they have decided that they will not be involved in the Kettle Island crossing here in Ottawa.
Senator Ringuette: How would this legislation affect the Detroit project?
Mr. Hazell: It would be handled under the cooperation agreements between the provincial and the federal governments. I am sure that the federal government has a role in the assessment of this Detroit-Windsor crossing, but I am not familiar with the details of that.
Ms. May: It is an international waterway.
Mr. Hazell: It may be subject to the Navigable Waters Protection Act licensing. We do not know that, because Minister Baird could say that we do not really need it for that.
Senator Ringuette: Because of the decision in scope that this legislation gives?
Mr. Hazell: No, because of last year's changes and the broad authority that the Minister of Transport has to decree that for any given project, no matter how big it is or how much obstruction to navigation there is, there is no need for a Navigable Waters Protection Act licence and hence no need for a federal environmental assessment. In this case, I think the federal government is involved. That situation has not arisen, but it could have.
The Chair: On behalf of the Standing Senate Committee on National Finance, thank you very much Mr. Turner, Ms. May and Mr. Hazell for helping us.
Ms. May: I am deeply grateful for the opportunity to speak to members of the Senate. I urge you to look at this and see if you cannot ensure that the damage that will be done by this bill is arrested.
(The committee adjourned.)