Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 12 - Evidence - Afternoon meeting
WINNIPEG, Wednesday, December 7, 2011
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 1:28 p.m. to study the current state and future of Canada's energy sector (including alternative energy).
Senator W. David Angus (Chair) in the chair.
[English]
The Chair: Good afternoon, everybody. I am calling to order this meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources.
We are here today in the province of Manitoba, in the city of Winnipeg, and we have had a great morning of hearings. Yesterday we spent time with Manitoba Hydro. We saw their great new building and met with their senior management team and got a good orientation as to how energy is distributed and how it is generated in this province.
This morning, we heard some interesting points of view. We are blessed this afternoon, to have before us three representatives of the Manitoba Sustainable Energy Association: Carl Cunningham, Chair of the Board, Roger Haynes, Director; and Marie Haynes, Director.
Carl Cunningham, Chair of the Board, Manitoba Sustainable Energy Association: Thank you very much for the opportunity to appear before you.
Am I correct that each of you has a deck of 13 pages? There was also a brochure about the Manitoba Sustainable Energy Association that went around.
I did not see anyone shaking their heads so I will assume that everyone has it.
I want to mention that I will slip and say ``ManSEA'' from time to time. ``ManSEA'' is a short form for the Manitoba Sustainable Energy Association.
The second slide shows a little bit about why ManSEA came into being. It was created by individuals and organizations within Manitoba who have been working in the renewable energy field and there was seen to be a need for a unified voice coming to policy-makers.
The mission is to promote the use and production of renewable, sustainable and environmentally friendly energy sources within Manitoba. The membership was open to individuals including landowners, farmers, other interested individuals, non-profit organizations such as development corporations, municipalities including towns, villages and cities, and companies that were active in the renewable energy field.
ManSEA was founded in 2005, and just a little background for why that happened. In the period from approximately 2000 to 2006, there were a number of activities in Manitoba dealing with renewable energy. One was straw to ethanol. The Iogen Corporation based out of Ottawa was interested in setting up a plant in Western Canada and looked at sites in Manitoba, Saskatchewan, and Alberta. As yet, it has not happened, but they were looking at an enzymatic process for changing cellulose and hemicellulose from straw into ethanol. Iogen is an enzyme company based in Ottawa.
Another one is the first wind farm in Manitoba was established near the community of St. Leon. It was 99 megawatts, approximately 66 turbines. After it had been established, Manitoba Hydro invited expressions of interest for the development of up to 1,000 megawatts of wind power and there were a number of expressions of interest that went back to Manitoba Hydro.
You mentioned that you were visiting with Manitoba Hydro yesterday. I do not know whether that filtered into the discussions there, but there are now two wind farms in Manitoba with one at St. Joseph that has come on line as well.
One other point we wanted to make was that the name of the organization is the Manitoba Sustainable Energy Association as opposed to Manitoba renewable energy association. The distinction to me means that the results of research that determine whether projects are sustainable as opposed to simply renewable energy projects are significant.
Going on to the third slide, activities of ManSEA: One has been to provide information about renewable energy projects in various locations in Manitoba. There were a number of half or full day information meetings in various rural locations throughout the province two, three, four years ago. The agendas were developed with local advisory committees and topics included wind power, small-scale ethanol, geothermal and various other renewable energy topics, with attendance varying from 15 individuals to over 100. In a couple of these meetings, there were a number of schools which sent some classes to those meetings.
Another activity of ManSEA is it supports and assists with the organization of conferences on renewable energy topics. One example there was the provincial biomass conference. There have been other conferences into which we have had input.
The third bullet point there, participates on the Borderland School Division Committee to establish courses in alternative energies at the high school level. It is a new curriculum being established for September 2012. It will be open to all Manitoba schools once established. That is just a little more of a description of something within the provincial education system that indicates an interest in alternative energy and a request to ManSEA for someone to sit on their advisory committee.
The next slide, number 4, shows some examples of technology within the renewable energy field in Manitoba. I will not spend any time on that.
You are aware of Manitoba Hydro. You met with them. There are some wind farms. We have a grain to ethanol plant at Minnedosa in Western Manitoba and there are various other examples.
If there is a wish on the part of the committee to get a data base of all existing projects, we would be happy to assist with that, but you are likely more familiar than we are with all the different projects.
The Chair: That is very kind. We will take you up on that.
Mr. Cunningham: In a way, it is surprising that you hear of greenhouses being heated with so-called waste from the flax plants. There is one at Carman.
Am I correct that you would like to have as up-to-date a list of all the projects that are available?
The Chair: That would be very helpful, sir.
Mr. Cunningham: We certainly have geothermal heating in effect. Solar systems in Manitoba have been slow to come into existence. Are there senators here from Ontario?
The Chair: We have had witnesses from the solar industry in Ontario and they say there is more sun shining there than there is in Manitoba. We do not know what to believe.
Mr. Cunningham: In Manitoba, it is difficult to make the case for solar energy because we are blessed with having electricity available to us through Manitoba Hydro at the lowest rate, or if not, very close.
The Chair: We are told that wherever there is big hydro, there is a complementarity with hydro and wind. Maybe it is simply lip service that big hydro is paying to another form of sustainability, but it seems to be that there is wind in Quebec, B.C. and Manitoba.
Mr. Cunningham: There is another very interesting issue in that in Manitoba, there are a lot of existing dams. There is electricity from infrastructure that was put into place a number of years ago. If that infrastructure were built at this time, the cost of the electricity from that would be considerably different from what Manitoba Hydro is able to provide to us.
Senator Neufeld: Still, even if it was built today, it is still a lot cheaper than solar. I believe that Ontario's feed-in tariff was $0.85. It is $850 a megawatt. If you are going to build new generation today from large hydro, it is probably about $85 a megawatt, or at the high end, $90. There is a significant gap.
Mr. Cunningham: I would agree with you. Even with some of the advances, one of the statistics that came out was that the cost per unit of area of solar panel had decreased by 40 per cent in the past relatively short time, but as you point out, it has a long way to go. There are some other examples, and indeed, if documenting the existing projects would be helpful, we would be more than glad to provide what we are aware of.
We had agricultural residue for heating and production of compressed burning fuels from municipal and agricultural waste.
On the next slide on page 5 are examples of renewable energy projects being developed in Manitoba. The first slide has the five projects that Manitoba Hydro has under way. The first one is replacing heavy fuel oil with pyrolysis oil at a pulp and paper mill to fuel a boiler and steam turbine combined heat and power system. That is at The Pas, Ensign Technologies out of Ontario with their technology and Tolko Industries in The Pas. On the Manitoba Hydro website, they said they have had a demonstration of the use of pyrolysis oil at Tolko.
I am afraid that I cannot give you an up-to-date state at which the other four projects are. Did Manitoba Hydro update you on those projects when you visited them?
The Chair: Yes. Not all these ones. They did mention that one in The Pas and they mentioned some hydro run-of- the-river new things they have on the drawing board. I do not think they went into these details, so please proceed.
Mr. Cunningham: Indeed, I can mention them, but I am afraid I cannot give you an accurate update. We as directors of the ManSEA would like to have an update on these as well, and when we get that, we would be happy to forward it to you, if it would be helpful.
We know that there is a microgasifier at a tree nursery to gasify wood waste into heat and power for the facilities. Is that Pineland? It is converting wood waste to heat recovered by an Organic Rankine Cycle combined heat and power system. I am sorry; I do not know where it is.
I would like to talk about the conversion of wood and waste crops to biochar for community scale heat and power in Winnipeg. Biochar is an interesting aspect in itself of heating the biomass in the absence of oxygen so that it reduces the volume. One of the big problems with biomass for fuel is if it has to be transported long distance, it is so bulky, and this process reduces the volume much more than it does reduce the heat value. There is a loss in heat value, but yet there is a gain in terms of transportability.
The fifth one is the conversion of livestock manure to fuel using anaerobic digestion. We hear many reports in other parts of the world of very successful methane capture processes, and yet we do not have that many in Manitoba. Indeed we would like to be updated on that one as well.
Going on to the next slide, number 6, these are some projects which are being developed. Elton Energy Cooperative, Elton is a rural municipality in the western part of the province just north of Brandon and it is a proposed community wind project and also a community power investment model. The proposal is for two wind turbines to be owned and controlled by Manitobans and to use a community power investment model to handle the financing and administration and to provide a return to the community.
If this community power investment model can be put in place, it is a way that community members can participate, not only in the ownership but also in the operation of a project. It is hoped that if it proves successful, it can be duplicated in other locations.
The Chair: Just so I understand, this would be enough energy to satisfy the needs of the Elton community or not? It would just be a percentage thereof and it would be plugged into the grid.
Mr. Cunningham: It could be connected to the grid and it would need a power purchase agreement with Manitoba Hydro. It is in the process of developing the background material to approach Manitoba Hydro to get that power purchase agreement.
To me, it has the advantage of having distributed power, not all the power needed in one area, but if this type of a system were available in various locations, it would provide a back-up to existing ones.
Roger and Marie Haynes at Franklin have a research project on the growing and use of willow in biomass heat. Hopefully, during questions, you will be able to ask them for further information about that. Franklin is between Minnedosa and Neepawa in the western half of the province.
Providence College, south of Winnipeg at Otterburne has instituted the infrastructure for using biomass pellets for heat. The biomass pellets are from waste wood from a furniture manufacturer here in Winnipeg. They are looking at some other renewable energy additions in terms of putting up a wind turbine at their facilities as well.
There are greenhouses with passive solar heating, fabric that allows the heat from the sun's rays during the day to be captured inside the greenhouse and then a method to keep them from escaping.
There is the use of cattails from Lake Winnipeg for biomass, which will reduce the blue-green algae in the lake. It is a research project that is a rather novel idea, producing energy while cutting down on algae problems.
The Chair: Does the blue-green algae come from the cattails originally?
Mr. Cunningham: The algae grows on nutrients in the water and so do the cattails, so if the cattails can be harvested and removed from that ecosystem, then some of the phosphorus will be removed from that system. This does not remove the algae but it takes away a portion of their feed.
The Chair: Right. I only ask that question as someone who has a home on a lake that has blue-green algae, and I was wondering how the energy that will be produced from the biomass source will be used to further reduce the blue-green algae. It will not. It is just one less nutrient.
Mr. Cunningham: It is the nutrient removal.
In terms of future projects, ethanol from cellulose and hemicellulose from straw, we have been waiting and waiting for that to happen. The Iogen plant in Ottawa operates on an example basis, a research basis, and they produce the ethanol. I have forgotten the exact procedure, whether they just get to the sugar solution and then it goes to Montreal for the fermentation process, but they do have a demonstration project actually producing ethanol from straw. The issue that this can help avoid is the food versus fuel debate that is facing Americans with corn that is being used for ethanol.
To me, a rather novel project is producing ammonia from electricity. I did not realize that that was the way that ammonia was first produced, using electrolysis of water to get the hydrogen and then combining that with nitrogen in the air.
The main way that it is done now is to get the hydrogen from natural gas. In Brandon, we have a large fertilizer plant there which gets the hydrogen from natural gas and produces ammonia from it.
This is a way that electricity could be used to produce ammonia and therefore fertilizer. There is a campus of the University of Minnesota, at Morris, Minnesota, that has a demonstration plant where they produce fertilizer for the local community.
One of the things we were asked was how we viewed the role that the federal government could play. The next five slides provide some comments about a sustainable energy strategy or framework.
The first one is on collection and dissemination of information. The second one is on encouraging input from individuals, organizations and corporations. The third one is on economics. The fourth one is on preparing workers and the fifth one is on education programs.
To go through them in a little more detail, on slide 7, promoting the sharing of information, we are always very interested in best practices, things that have worked in other situations. As we go through some of these, we will likely be commenting on things that we think our organization should be doing as well, but in this context, we are saying that if the federal government can do something in these areas, we think it would be complementary.
This includes documenting existing projects, supporting the development of a national network of organizations and individuals active in this field and disseminating the results of renewable energy research to interested parties.
We see some examples where it would be helpful to have these best practices. I noted one here on my own on the speaking points that have gone to your staff.
Passive solar heated greenhouses have had some problems with the blankets that are lowered over the greenhouses at night to trap the heat inside the structures. That has been because of freezing, because of ice build-up. If there are other materials which could be used, that would solve that problem. Learning about other instances would be very helpful.
On slide 8, assisting in the building of capacity of community members, encouraging individuals to organize and share information about renewable energy concepts and projects, providing opportunities for individuals to present and discuss details of energy projects. The example that I wanted to mention to you here was that the Southwest Fibre Co-op was established to potentially supply straw to a straw-to-ethanol plant, and the issue here was that there needs to be a way that the product that goes into a process provides some return to, in this case, the agriculture producers. For the company, if they purchased it for the lowest price, that is good for them, but it may not ensure a long-term supply. So if the capacity of community members can be developed so that they can organize in such a way as to get the best results, that would be to the advantage of everyone.
Slide 9: support the development of businesses within the renewable energy field, provide research and development support comparable to other industries, clarify permitting procedures, whether engineering studies or environmental assessments, necessary for the establishment of renewable energy projects. If there is an analysis of the business, it can help a new business being established if there is comparable support for these industries. Some projects cannot make use of tax concessions, so having a research or an exploration tax credit similar to what forestry or mining would have had is of no help to a beginning industry. If it were possible to have an analysis of government support to businesses so that each industry could be treated in a comparable manner, it would be a way that these new organizations would be able to become established. Without it, they are at a disadvantage because they cannot make use of tax credits or flow- through shares.
Slide number 10 is on the development of the labour component, to identify the necessary labour standards so that appropriately trained workers will be available for various jobs. We see the potential for there being a number of people employed in the industry, so being prepared for that would be helpful.
Slide 11, support education programs in renewable energy development. I realize that education is a provincial jurisdiction, but if there are some supports for something that could apply to elementary, high school and college students, then it would help prepare us all for the future.
The ManSEA perspective for Manitoba is on slide 12. Some of the opportunities and challenges for Manitoba include, just to mention here, the Port of Churchill, the potential for the export of biomass pellets from Churchill to Europe.
We know that wood pellets manufactured in B.C. are being shipped to Europe through the Panama Canal, so the question is, are there some possibilities for Manitoba or indeed for other parts of Canada? When you start considering that, why not use the biomass pellets manufactured here? Why not use them in Canada? Manitoba will ban the use of coal in 2014 so there are some potential uses. There are other forms of densified biomass, biomass cubes. Prairie Bio Energy at La Broquerie southeast of Winnipeg manufactures cubes. They take less energy to densify.
The last one I want to mention is urban and rural concerns. There is excess residue near Winnipeg that is often burned in the fall, and causes some problems for Winnipeg. There is the potential for that to be used for energy within Winnipeg or within Manitoba.
From a ManSEA perspective for Manitoba, slide 12, we see that it is through education at all levels that the protection and improvement of the environment can take place. The labour force required to work in the renewable energy field is huge. The present generation in our school system and future generations needs to be educated so that alternative sustainable, clean energy can be part of the future and this future will provide sustainable employment for generations to come.
If there are questions, I am sure Roger and Marie will be able to answer them.
The Chair: I think you said Manitoba has banned all use of coal as of 2014?
Roger Haynes, Director, Manitoba Sustainable Energy Association: There are only two places in Manitoba that will be using coal. One is the power generation plant owned by Manitoba Hydro at Brandon, which comes on basically as an emergency supply, and the other one has to do with some lime kilns north of Winnipeg. Exactly what the process is I do not know, but those are the only two places that will be allowed to use coal.
There will be a coal tax coming on in January of 2012. Depending on the type of coal used, that will vary from $14 to $43 a tonne.
The Chair: How will it be determined, whether it is 14 or 40? It is like a carbon tax, is it?
Mr. Haynes: It is like a carbon tax but it will depend on the quality of coal used.
The Chair: Its cleanness.
Marie Haynes, Director, Manitoba Sustainable Energy Association: The most expensive tax will be on anthracite.
Senator Mitchell: We have heard a great deal from traditional energy companies and others concerned with industry from that side, industry associations, that there is a problem with overlap, duplication, delays as a result of environmental review of projects.
You mentioned in your presentation on slide 9 that it would be useful to clarify the permitting procedures for renewable energy projects. Then you went on to talk about these but not so much in the sense of environmental review, but more in the sense of some advantages, for example, that might apply to mining, but would not apply to start-up renewable energy.
Is there a problem, a lack of expertise, a lack of an established track to run on, with respect to renewable energy project environmental reviews?
Mr. Cunningham: I am aware that in the news recently, there has been some talk about wind farms in Ontario. People are talking about the flicker, those things that are causing discomfort or concern. If there is solid information, making that information available when other projects are being proposed would be very helpful and would probably speed up the process. Make information available to other projects so that they can build on it as opposed to duplicating it.
Another issue with wind turbines is flyways for migrating birds. If that information can be established, then it should be able to be used in other contexts with other projects.
Does anything come to mind about the permitting of various boilers?
Mr. Haynes: There are some successful willow projects in Quebec in the Montreal area heating greenhouses. To get hold of that information is extremely difficult. We spent a great deal of time trying to get hold of that information using Internet, using whatever means we could. If that information could be disseminated somehow through organizations, it would make things a lot easier.
There are differences between the West and the East, but if you have the information, it makes life easier.
Senator Mitchell: Our study is focusing on a range of things, one of which is energy literacy, and a subset or corollary of that is this idea that where there is really good information that other people could use, not just the general public but somebody like you who wants to advance a project in a similar area, that it would be useful if you could have easy access to that.
Part of the problem with that is companies not wanting to put out proprietary information. I know one of the major European car manufacturers will always reveal any information it has that enhances auto safety. That is one thing, they consent to do that. The information that is held by the greenhouse project heating project in Quebec might actually be proprietary and that is why you cannot get it.
How do you deal with that kind of problem?
Mr. Haynes: You can tell by my accent and my wife's, we are European. I can ring up virtually anywhere in Europe and be given information quickly and easily. People just want to promote it and allow it to go forward.
I have been able to ring Uppsala University and talk to a Dr. Stig Larsson, who is basically the grandfather of willow projects. Yet if I bring that information back to say the Canadian Forestry Service in Edmonton, I have a great deal of difficulty getting similar information. Edmonton should have the information that we can use because it is here in Canada. Yet Uppsala will give me information a lot more easily than I can get it from Edmonton.
Senator Mitchell: You did mention pricing carbon in one specific case, I think, the coal price. Do you think more generally, the projects that you are talking about would be incented, as they say these days, if we had a carbon price, and if so, what kind of carbon price would you suggest?
Mr. Haynes: As a result of a fairly recent report that was done on the project we are involved in, somebody from B.C. approached us for carbon credits, because we are planting trees. I will be absolutely honest. That is something we have not even got into.
The problems we have encountered with just the basics of growing willow in Western Canada has overwhelmed us. Right from the very start, we had no idea, but first problem we encountered was storage. Nobody knew how to store the cuttings here. Then planting and how you plant them, how you make it economic, what type of cuttings to use. These are all things that we literally, and my wife I am sure will vouch for this, have been overwhelmed with.
I believe that down the road, yes, there must be carbon credits somewhere. How it fits into the whole project, I honestly do not know.
Senator Banks: Mr. Cunningham, you said you need to have a unified voice. To give you an example, if the Canadian Manufacturers Association goes to pound on somebody's desk about something, they will have gone to their community and they can speak with authority because they will have found some common voice, but that is how they attack.
You are part of an attack that is sort of like this. We heard this morning from the Manitoba Environmental Industries Association which is doing the same thing that you are doing. Why do we hear everywhere we go in the country from a whole lot of relatively small organizations saying the same thing instead of one big organization saying it?
Mr. Cunningham: Your point is well taken. Indeed, we need to search out the other organizations and work together. You are referring to organizations with different names, yet there is overlap.
Senator Banks: Organizations that agree with you. You were talking a minute ago, Mr. Haynes, about the availability of information. The fact is that that communications shortfall surely is one of the problems derived from the fact of a number of relatively smaller organizations saying the same thing instead of searching each other out and getting together and saying it with a louder voice and a bigger hammer.
Mr. Haynes: Can I give you an example of this? In our project, we have been funded by a federal organization called MRAC.
The Chair: What is it called?
Mr. Haynes: MRAC.
Ms. Haynes: It is the Manitoba Rural Adaptation Council but it gets its funding federally.
Mr. Haynes: They thought that our project was very successful. In fact, they have asked us to go on and take more funding from them. The information that we got, that we found we were able to pass back, how do we get that information further on? It basically goes onto their website, but it goes no further. We feel that in Western Canada, what we were able to find would have been useful to other people.
I do not particularly want to not share the problems and the solutions that we found. I want to share it with other people so that it helps everybody.
Senator Banks: I understand that. Have you shared it with the Manitoba Environmental Industries Association?
Mr. Haynes: No.
Ms. Haynes: Let me add that the Manitoba Environmental Industries Association has been at some of the conferences where we have presented and we have tried to present it as far as possible at all the conferences we have been invited to present at.
I know for a fact that they have been there, so they are aware of our research work. Whether they have got it on their website or not, I would not like to say.
Senator Banks: I am not asking you for a solution but just pointing out that larger numbers of people representing larger interests saying the same thing speaks louder than 10 different organizations individually saying the same thing.
Ms. Haynes: I take your point, but the problem is that that is an industry association. We are not considered an industry.
Senator Banks: You can take that into account. You said that our long-term prosperity and quality of life depend on reducing our dependency on the use of fossil fuels. Why do you think that?
Mr. Haynes: I do not think we said that.
Senator Banks: It says that in your brochure.
Mr. Cunningham: And your question is?
Senator Banks: Why do you think that?
Mr. Cunningham: Whether fossil fuels are going to run out?
Senator Banks: No. You said our quality of life depends on reducing our dependency on the use of fossil fuels. Why do you think that?
Mr. Haynes: Can I answer that in one way? I would think and I could guarantee that I am the only person here who has been severely affected health-wise by fossil fuels.
I was actually born in London in the early part of the 1940s. I suffered during the smog of the late 1940s, early 1950s. One of the reasons I moved to Canada was this is a clean, green country. I would hate to put any human being through the smog that we endured. My mother and I lived in London and we were put off London transport because the drivers of the buses could not see traffic lights. All transport stopped. We had to make our way home.
If environment is not important, and I have suffered it, then you really have no idea what poor environment is.
Ms. Haynes: I can back that up. I was brought up in the industrial north of England in a town where there was coal mining and cotton industry.
At the age of 12, we were transported approximately nine miles to school on two separate bus journeys. We were sent home from school one day at one o'clock and we managed the first five miles back to the centre of the town we lived in. We then made chains to walk from gaslight to gaslight, and the first person did not give loose of the first gas lamp until the person at the front of the chain was holding the next one because the smog was so thick you could not see them.
That area of Lancashire that I was brought up in, when I was growing up, the buildings were black. Shortly before we came with our children to Canada, we took them back to that area to show them where I had been brought up. The coal mines were gone. The cotton industry was gone. The buildings had been cleaned up and they were all cream. I have no recollection of that as a youngster.
Yes, as my husband said, we came to Canada because your air is clear. You the majority of time have good water. You have no noise pollution. Certainly in Manitoba, we do not have noise pollution. We do not have light pollution.
We tell people there are two things we never experienced till we emigrated here. We had never heard silence and we had never saw darkness.
Yes, the reduction of fossil fuel use, at the very least the emissions, because the emission control from fossil fuels is not good in Canada is important. Because there are so few people and there is so much space, this does not seem to have the same effect as it does in smaller countries where the land mass is much smaller and the population is far greater. Even though you do not see the effect, it is still having an effect on the environment, and that is why it is important.
Senator Banks: My last question is related to my first one. You talked about the fact that your organization welcomes as members companies that are in the renewable energy field. The people who are spending more money than anybody else on renewable energy are companies like Shell, Exxon and Phillips. Are they members of your organization? Have you invited them? Have they shown any interest? Have you asked them?
Ms. Haynes: We have not asked them. We have not gotten that big. We are still at a very small stage, and to be quite honest, because we are ordinary people, we were not aware that we could actually do that. We as an organization could do with some guidance ourselves.
Senator Banks: We could all continually do with guidance.
Senator Neufeld: Your comments about why you moved here are relatively forceful, and you are right. I never experienced that and I was born at about the same time you were.
What is interesting to me is that groups are coming to us and telling us that we should emulate some of the things that are happening in Europe because we are doing it wrong here. This kind of sets a different tone to what I had been thinking.
I think each place is different and we have to use different ideas in different places to reach those goals that you talk about, clean air and clean water. The Elton Energy Cooperative you say is searching for a PPA, power purchase agreement, with Manitoba Hydro. Can you tell me what kind of money you are looking for in that power purchase agreement for that wind energy? Is it far enough along or is that proprietary? If it is, I am fine with that.
Mr. Cunningham: The way that project is going to work is using that community power investment model where it looks at the expenses and, in a transparent manner, provides that information and works back to what the necessary price per kilowatt hour would be to make it possible. It could be comparable to what is provided in Ontario, for example, where it is $0.11 to $0.13 a kilowatt hour for electricity.
Perhaps the difference here is that there is a return to the community. Some would go to the investor. It is a cooperative. It would not be one or two people owning the project. It would be a cooperative of a number of people, and there would be a return to the community from that.
Senator Neufeld: I understand what you are talking about. The $0.11 to $0.13 gives me some sense of —
Mr. Cunningham: It is not strictly the feed-in tariff idea that Ontario has used. It is working backwards.
Senator Neufeld: Mr. Haynes, can I ask you about willow for biomass heat? What do you mean? Is it burning it to create heat? What are you doing?
Mr. Haynes: I will tell you how the project started for us. We came to Canada to farm, and the first year was a good one. We moved in 1997, and 1998 was a good year. The following year, 1999, was a disaster. It was one of those wet years when virtually the whole area planted nothing. You can take one bad year. Then 2000 was another bad year. We had four and a half inches of rain in the first week in September when all our crops were ready to harvest. We could not get on to them.
We decided to go back to what we knew, which was cattle farming. I had been dairy farming all my life, and then lo and behold, BSE. We had just started to get into the cow-calf industry when BSE hit. What do you do in a situation like that? Farming is my life.
I went back to people I knew. Why can we not grow our own food here? We can get the right sort of greenhouse situation, grow the food locally instead of importing it from California or Mexico or wherever, not knowing what is in it. Let us grow what we do well and can grow well here.
I got a small greenhouse with a new type of covering. How do I heat it? I did quite a lot of research using the Internet, picking up the phone — people who can talk English. I do not unfortunately speak another language.
I decided that willow seemed to be the thing that other countries were doing, particularly Sweden, Northern Ireland and even down in the state universities in New York. They have done a lot of research on this. It is a crop that you can harvest basically every three years. You can chip it using agricultural machinery. It can be used for heat, and in a lot of cases now, it is being used for power.
To me, it was an ordinary crop that farmers can grow. We have seen here in Manitoba this year a lot of land that is very marginal, has been inundated with water, has been lined with water pretty close to the surface. This is a crop that will grow in that situation.
Moisture at this moment, since we have been in Canada, has been a bigger problem than drought. I do not doubt that drought will become a problem in the future. Once you get this crop established, it can grow in virtually all conditions.
The other thing I like about it is it can also be used for phytoremediation, cleaning up of municipal lagoons, dirty water, on sites that have industrial waste. It can be used in all situations.
Senator Neufeld: I have been through a plant or two in Sweden where they grow willow and generate electricity and use the waste heat for community heat so I am familiar with that.
Senator Brown: I think you have got some pretty good ideas in here in these 12 pages. Have you actually sent them to the federal government or to Minister Kent and the environmental people?
Mr. Cunningham: No, we have not. It is the Manitoba Sustainable Energy Association, and as I mentioned, there was considerable activity a few years ago and then a lapse in activity. We are just trying to get the organization rejuvenated now. We certainly would be happy to share the information with anyone who would listen.
Senator Brown: I think you should do that, and then send the information to all the other provinces. That is one of the things that keeps us apart. We keep on doing one thing only in our own province and we do not have enough information about what our people are trying to do.
The Chair: It is great work you are doing and we salute you. The way you put the presentation to us pointing out areas where the feds could help is extremely useful for us.
On the face of it, energy, the environment, natural resources, are provincial matters in this country. Sometimes people suggest that the title of our committee is rather oxymoronic. You have pointed out there is an overriding role for the federal government. It is part of the national interest in nation building to try to clean this place up and avoid those black buildings in Northern England.
We are privileged to have before us from the Business Council of Manitoba Jim Carr, President and CEO.
Jim is the founding president and CEO of this business council and has served in this position since 1998. You are a glutton for punishment, sir. His career spans a variety of interests beginning as an oboe player — what about that, Senator Banks, an oboe player — with the Winnipeg Symphony Orchestra.
He became director of development with the WSO and then executive director of the Manitoba Arts Council. He then graduated with a joint honors degree in history and international relations from McGill, a great university, by the way, in Montreal, Quebec, from whence Senator Massicotte and I hail. Mr. Carr established a consulting practice and wrote for The Globe and Mail and the Winnipeg Free Press before being hired as executive director of external relations for the University of Winnipeg.
Mr. Carr was elected to the Manitoba legislature in 1988, becoming deputy leader of the Liberal Party. He was a member of both the Meech Lake and Charlottetown constitutional task forces. From 1992 to 1997, Mr. Carr was on the editorial board of the Winnipeg Free Press. His foreign assignments included the Team Canada mission to Korea, Thailand and the Philippines and coverage of the first Palestinian election on the West Bank and Gaza.
In 1996, he was awarded the Commonwealth Fellowship for Study in London. Jim is currently a board member of the Winnipeg Airports Authority and the Art V. Morrow Centre for Peace and Justice at St. Paul's College, University of Manitoba, and director emeritus with the Canada West Foundation, from whom we have heard in our study.
Mr. Carr was inducted into the Order of Manitoba on July 12, 2011, very recently. Congratulations, sir.
He has come to share some thoughts with us on the mission that we are on, which is drawing inexorably to a close, we have been at it for nearly three years, talking energy with the people of Canada and trying to develop a more efficient way forward for a greener and cleaner and more sustainable and efficient way to use energy in this country.
Jim Carr, President and Chief Executive Officer, Business Council of Manitoba: Welcome to Manitoba. This is an important day for us. As you made your way around the city this morning and this afternoon, if you saw that people had a spring in their step and a smile on their faces, it is because we beat the Boston Bruins last night.
The Chair: After they had won 11 out of 12 games.
Mr. Carr: Yes. Now you know why we have a smile on our face. We feel very proud to be playing in the National Hockey League again.
I am particularly happy to share the room with my old pal, Bert Brown. We go back a long way. We go back to the Meech Lake wars. I think the first time we met was in Banff in probably the spring of 1990. We both believed passionately, and still do, in some concepts of federalism and the Canadian confederation. I am delighted that you are here along with your colleagues.
Senators, I want to tell you a story, and then we can get into some of the details as you wish.
It was just over two years ago, in September of 2009, that the Energy and Environment Committee of the Business Council of Manitoba, a group of 75 chief executive officers of Manitoba's leading companies, was debating what constructive role could Manitoba play to try and find ways of weaving all of the energy assets of Canada into some kind of coherent pattern.
We thought that the assets that we boast and the natural bounty which is ours alone were not sufficient. There were other provinces with much greater assets than ours, but we did have the power to convene a meeting, and we had an idea, and the idea was, what would happen if we called the president of all of Canada's major think tanks and invited them to Winnipeg to see if we could establish a framework for a Canadian energy strategy.
So I went upstairs in our building and had a chat with Roger Gibbins on the phone and with David Reynolds, who at the time was President of the International Institute for Sustainable Development, and we divvied up the list. We took three or four names each and we called them and invited them to a meeting in Winnipeg, and they all came.
The Chair: The Winnipeg Consensus Group.
Mr. Carr: That is the Winnipeg Consensus Group. I am speaking on behalf of the group.
This was the first time in Canadian history when the presidents of the country's major think tanks were in the same place at the same time talking about the same thing. That in itself is no guarantee of a consensus, but we locked everybody up in our boardroom and we spent eight or 10 hours debating, and lo and behold, we came out with a framework for a Canadian energy strategy.
It is not enough just for think tanks to agree on a way forward, so we invited about 60 chief executive officers or their designates and leaders of the NGO community to a conference in Banff the following spring, April 8 to 10, 2010, and we, in an effort to try to broaden and deepen the consensus, reached out to this variety of interests in the vague hope that maybe we could keep the consensus alive, and guess what, we did. We came out of Banff with a Winnipeg Consensus plus.
We were encouraged by the roll we were on so why stop, and organized yet another meeting in Winnipeg in March of the following year, 2011. This time we invited deputy ministers from across the country, so we had the Alberta deputy, who at the time was chair of the Provincial Council of Deputy Ministers of Energy, Peter Watson, who is now, by the way, the clerk of the council in Alberta, and the federal deputy minister and a number of others.
We did not ask them to join in a discussion of the points of consensus, but we wanted to invite government in to the conversation that we were having, and they came.
Well, because of the strength of our work — and, Senator Banks, I am very conscious of the point you were making with the other witness. Would it not be more powerful if many people spoke about the same thing with a united voice? That is exactly what we are doing and that is exactly what we did, so much so that the ministers of energy invited us to make a presentation in Kananaskis for their annual meeting that was held in that gorgeous place last summer. Remarkably, the entire agenda of the meeting that day was devoted to a Canadian energy strategy.
Well, just go back two years when we decided to call these people and invite them to a meeting. Nobody was talking about a Canadian energy strategy, for a whole bunch of bad reasons. All of a sudden, you have an image of Pierre Trudeau and the National Energy Program. It is a verboten set of phrases that cannot be used in parts of the country. Yet oddly enough and remarkably, it is Alberta in many ways that is leading this national conversation for a variety of very good reasons.
To move the chronology from today and forward into the next number of months, the Winnipeg Consensus Group will gather in Halifax at the end of February and prepare a way forward document that we will submit to the Council of the Federation. The premiers are meeting in Halifax in July of 2012 and the ministers of energy will convene in Charlottetown in September of 2012. Our ambition is to firmly place this framework on the national agenda through the Council of the Federation and round 2 with the ministers who have shown a serious interest in the subject.
This really is a case study on how to create the power of advocacy sufficient to give politicians a comfort zone to talk about a set of issues that they had not had the comfort to discuss publicly at least in a meaningful way until those outside of government were able to create the space. That is what we did. That is what we are going to do.
I will give you some of the common themes that we have articulated in several papers, and they are available on the website of the Canada West Foundation, on the website of the Business Council of Manitoba and probably on the website of every other think tank that is part of the Winnipeg Consensus.
We found that there was an overarching conclusion that a national energy conversation is what we need in the country and we need it now and we need it urgently. As we look at other countries around the world, in many ways we are behind.
Actually, it is interesting because one of the stimuli to action was when President Obama came to Ottawa, it was his first foreign trip as President of the United States, and he met with Prime Minister Harper and part of the concluding press conference was the invitation from President Obama to engage Canada in a continental energy discussion.
Many of us said to each other, well, how are we going to do that since we do not have a Canadian position? Well, maybe we should set about on this very difficult and complex road of trying to find the common ground.
Overwhelmingly, in all the research that has been done over the last number years, there was consensus that that had to happen. We had inspiration from the Prime Minister himself, who said, are Canadians ready to mobilize in a national project of environmental protection for this generation and future generations? I believe we are. Canada must not merely be an energy superpower but a clean energy superpower.
If we needed the political will to be reinforced and motivated to continue our work then certainly it came from the Prime Minister. May I say, senator, it came from you too and it came from your committee. You said the message is clear. There is urgent need for a national discussion on energy. Canada requires a comprehensive Canadian sustainable energy strategy now. You said that in 2011, and this paper I have is full of really good quotes from you and your committee, for which you should be congratulated because you too are ahead of the curve.
To me, as someone who believes profoundly in the role and the importance of the Canadian Senate, that is a very valuable way of positively contributing and constructively adding to a conversation that is long overdue.
There are common themes. If you want to get into some of them in any more detail in the question period, I would be glad to do it.
We have to see that Canada's energy diversity is a strength. What a marvellous and diverse set of assets we have. We are second in the world in proven oil reserves, third in proven uranium reserves, second in hydroelectric production, fourth in economically exploitable hydroelectric capacity and twelfth in proven coal reserves.
Our geographic scale and diversity also create great potential for renewable energy including hydro, biomass, wind, geothermal, solar and tidal. The diversity and extent of our assets from coast to coast is impressive and really makes us a world leader in diverse energy.
We must ensure robust environmental stewardship. You cannot talk about energy without talking about the environment. That, senators, I think is a bit of a problem because the silos of government are such that when you cross portfolios and when you have a discussion of both energy and the environment, you run into difficulty in ministries. One feels as if it is transgressing the terrain of the other.
Well, when you are having a national conversation, I think it is more important to look at the big picture than it is to be obstructed or face barriers with the small stuff that really ought not to matter so much. The Senate of Canada is probably a great place where that can happen. There is a strong agreement that a Canadian energy strategy has to be aligned with and facilitate robust environmental stewardship. That is obvious.
Another area where we found a fair bit of common ground was setting a price for carbon. Do you want it to be any more controversial than that? We know that there have been political leaders in Canada who have lost their jobs trying to sell a platform of carbon pricing, and that is why it has become such an incendiary device in the political parlance.
You know what we did? This is interesting. You will remember what I am about to tell you if you do not remember anything else. When we asked those 65 or 70 people in Banff whether or not they thought that a price for carbon and a pricing policy would be good for Canada, every single hand in the room went up, every hand. That was across every sector of the energy economy, hydroelectricity, oil and gas, biomass, ethanol, solar, you name it. They all said that you have to have a price point. Business wants the certainty of a formula rather than the uncertainty of an endless conversation that leads nowhere. We have established a subgroup of the Winnipeg Consensus to look in depth at the strategy of setting carbon.
The other theme is that we have to transform the demand side of the energy system. Demand side management is essential. Conservation and literacy have to be part of the vernacular and they have to be part of a coordinated policy.
I understand you have met with Manitoba Hydro. It is a national leader, probably an international leader with the Power Smart program. It understands demand side management as the best way of establishing a coherent and progressive energy policy. It is the energy that you do not use which is so valuable and so much more important than the energy that we ultimately have to generate.
Also, we have to strengthen Canada's position in the world. We ought to be international leaders in the production, in the intelligent consumption and in the distribution of energy. At the same time, we have to diversify our markets. We do not have to go any further than the events of the last number of weeks to realize how important it is for Canada to diversify its export markets in energy. The Prime Minister himself has said that.
As we run into increasingly complex problems in the United States on pipeline transmissions, it is a reminder and reinforces the importance of looking beyond the borders of the continent to export our energy virtually world-wide.
The message here is that when you have people of like mind and in common cause who speak together with an overriding and overreaching national purpose, you never know what good may come of it. If the Winnipeg Consensus were to fold its tent today, if I were to go back and say to my colleagues that I think that we have secured this item on the national agenda, then what we have done would be sufficient for me to feel as if we had done a great deal.
I want to thank you for the attention and the care that you have taken with this conversation and for coming to Winnipeg to invite those of us who think this is the centre of the world for more reasons than hockey to share some thoughts with you, and I would be pleased to engage in a conversation.
The Chair: Jim, it is music to my ears, not only what you are doing and how you have described what you are doing, but the generous comments you made about our work.
I think you know we did spend a couple hours yesterday afternoon with Dan Gagnier before we met with the hydro folks and last week we were in Vancouver, Edmonton and Calgary. We met with EPIC and with David Emerson. We met with a lot of the people who are on the same wavelength and of the consensus. Dan was saying he is the Vice Chair of EPIC.
Mr. Carr: He is also the Chair of the International Institute of Sustainable Development.
The Chair: Exactly, and we were in that office. I see him in Montreal wearing 12 other hats. They are all sustainable and they are all glued to his skull.
You mentioned Charlottetown, these different dates that are coming up in the summer and the fall of 2012. Of course, we are focusing on bringing our report out in June of 2012. In Dan's case, he said EPIC has their mandate. They are focusing on one thing. They are making their report, end of mandate. You have more or less suggested that the consensus group is going to bring its final message and then if it registers, you will feel you have done a great thing for Canada.
That is sort of what we are saying to ourselves. We are reaching the stage where we are asking, how are we going to bring this all together and how are we going to present it to be effective.
I think that is the same with the consensus group. With the Brenda Kennys or the Emersons and the Gagniers and yourself of this world, there are so many articulate spokespersons now, and not all with a clear agenda of their own. I do not think you are particularly identified with any special economic interest group, so you have more credibility.
We think we do at the Senate, where we are Liberals and Conservatives but we are non-partisan within this committee. We try not to be partisan.
With the business of pricing carbon, you mentioned a political reality that should not be a reality. As one witness told us in Calgary, get it right. It was not a rejection of pricing carbon. It was a rejection of Stéphane Dion as a man.
It is not a bad argument, and I am going to deliver it right to the Prime Minister next Monday afternoon. Why should we be spooked? Every witness we have heard from, like everyone at your big Banff meeting with 65 or 70 people, is in agreement.
We have differing views on the committee about how it should happen. One of our members was a minister in B.C. and they introduced a kind of a carbon tax. Alberta has a different kind. We met with the former godfather of the oil sands who is now basically running the implementation of their carbon tax and how to spend the monies on sustainable projects.
We have seen all of this stuff and we applaud it all. We are just trying to see how we can lever what we have learned and the ideas we have formed into something useful, just like you concluded. Is there anything you can add to help us in that regard?
Mr. Carr: I have a suggestion. You are all well connected people. Talk to your friends who are running the provinces and get this thing on the agenda of the Council of the Federation. That would be a very important political step. We had a bad sequence of meetings last summer because the ministers met in Kananaskis and then within three or four days of that, the premiers met, so there was not enough time to get it set up.
When Premier Selinger had an informal conversation with his colleagues when the Council of the Federation met in Winnipeg, there was some discussion but it was not a formal agenda item. If you could use your offices and your contacts and your influence, working with us and others, to ask the premiers to bear down on this and then to mandate down to the ministers who meet after them this year. That is why I say it is a better sequence.
The premiers meet in July and the ministers meet in September. If out of the Council of the Federation meeting comes a mandate to the ministers that is as specific as it can be, and we will give particular recommendations to the premiers, then that would be very helpful.
We also learned something else about this whole process of consensus building. It is fairly easy to get a consensus at the high level. It sounds a little like motherhood, but it is when you drill down into the bedrock that the consensus begins to splinter.
Our strategy has been to find consensus down to where we can manage to maintain that consensus and then broaden and deepen the groups who are advocating the same positions within the same strategy and then to look at ways and processes through which we can begin to dig down a little bit deeper.
The Chair: I think that is why your number one principle is that there is strength in our diversity. These different agendas that come out when you drill down a bit, if you hit some aquifer when you are trying to frac up some shale gas, are different in every corner of the nation.
Even if there is hydro like in Newfoundland and Labrador, the issues are slightly different there. The Aboriginal situation is different with Muskrat Falls. The coming together of the four Atlantic Canadian provinces is unusual, we found. They have not had a history of being able to work cooperatively. They seem to have bought in to working cooperatively on not having Nova Scotia or even New Brunswick be at the end of the line in terms of access to really good and reasonably priced power.
You made an interesting point about demand side management. We are going to come out with our report and it is going to precede all this action that is going to take place in the summer, so that is a great idea.
We have one of the premiers coming in here in a few minutes so that should be a good start.
Mr. Carr: Who has been very supportive of the Winnipeg Consensus Group.
The Chair: Has he?
Mr. Carr: Yes. As a matter of fact, we had a conversation with him within days of him becoming premier. Within two or three days, he met the Winnipeg Consensus Group before it had achieved a consensus. He came to greet the presidents of all the think tanks and wished us well and he has been supportive ever since. In fact, a reference to the Winnipeg Consensus was in a Throne Speech of this government. So they have been a supporter from day 1.
The Chair: It is interesting that you are able to lever that, because even though it is called the Winnipeg Consensus Group, it is because you called the powerbrokers to convene.
Mr. Carr: Birthplace.
The Chair: Now you have got the branding. We hope it is going to be the Senator Richard Neufeld way forward, or skip the bother, skip the fuss, we are taking a public service bus.
Senator Mitchell: That was very inspirational and very powerful. I was going to ask if you had the chance to ask the Premier of Manitoba something, what would it be, but I think you just answered that.
Mr. Carr: Yes, get it on that agenda. He has already spoken positively about it with his colleagues. There are several premiers who are clearly on side. There are others who are not yet well enough briefed, so we will make sure they are.
Again, to your point, senator, if we can have many points of access, then the combination and the accumulation of the messaging can become quite impactful.
Senator Mitchell: You will have great support from the Premier of Alberta, I am sure.
Mr. Carr: Yes, she has been on the road talking about this.
Senator Mitchell: If you were to sit down with premiers, what would you say they should put on the agenda specifically next summer? What four or five points would you ask them to discuss? Would it be how to coordinate with federal leadership, would it be a carbon tax? Would it be east-west grids?
Mr. Carr: I think the expansion of export markets, regulation, literacy, demand side management. They will not touch carbon pricing. We will have to do that for them.
Senator Mitchell: Labour strategy?
Mr. Carr: Labour strategy and then federal-provincial processes will be very important. We have been careful not to get into a discussion of jurisdiction here. No one wants to conjure up the bad old bogeyman days.
How are the translators going to handle ``bogeyman''? Can you handle that? I want to know what you say.
Senator Banks: They are interpreters, not translators.
Mr. Carr: That is even worse. You could use body language.
But we are going to do more than that, senator. We are actually going to formulate before the premiers meet an answer to your question that will be coherent, I hope, and digestible.
Senator Mitchell: When you say you would not raise the matter of a carbon price, you will handle that some other way, what is that other way? Is it just to sustain this idea that there is a great deal of consensus around it?
Mr. Carr: We have a group of very smart people who are digging down into the carbon pricing set of issues. We are not telling the premiers they should not discuss it. We are mindful of the politics of it. It is not as simple a matter of saying let us go home now, Senator Angus. It is a matter of saying that the work the consensus group probably will see has reached a point at which we can say well done. All of these think tanks are full of smart people with resources.
Believe me, the Canada West Foundation has a role to play in continuing this discussion and so does the Public Policy Forum and so does the National Round Table on the Environment and the Economy. So does the Institute for Research on Public Policy. So does the Conference Board of Canada. So does ISD. So does the Pembina Institute. All of them were part of this consensus group.
It is not as if the body of knowledge that has been accumulated and the particular expertise that can be used to further that body of knowledge is going to disappear. Who knows, maybe we will decide that it is so much fun, we are not prepared to go home yet.
The Chair: Is there a secretariat?
Mr. Carr: A shoestring.
The Chair: Do you have an office?
Mr. Carr: No. It is a loose network of like-minded people, and we use friends who are the glue and we have a tiny budget and we are just throwing in our own resources, human resources and otherwise, to make sure that the glue continues to adhere.
Senator Mitchell: I think this is very insightful. You have laid out how we get it on the agenda of the premiers, the Council of Premiers of the Federation, but how do we get it on the agenda of the Prime Minister?
While jurisdictions I agree do not want to get into it, but there has not even been a First Ministers' Conference in six years. How do you get that agenda?
Mr. Carr: Incrementally and with some savvy. Joe Oliver was present at Kananaskis, so the meeting of the energy ministers includes the federal minister. He was a part of the communiqué that talked about an action plan. It did not talk specifically about a Canadian energy strategy, but it did specifically talk about a framework of action, and he was a part of that. If you look at his speeches, you can see that there is a fair bit of sympathy for the objectives that we are collectively trying to achieve.
Then I do not have to teach a group of senators how to influence prime ministers. You first of all need the force of argument. If you do not have the force of argument, then everything else is a shell game. So you have to be persuasive, and I think we are very persuasive.
Then you have to say, well, what is in it for me? You have to answer a question that speaks to the national interest from the perspective of this Prime Minister, and I think that is possible too. You also have to stay in close touch with senior members of the Public Service who are involved in the file, and the more networking you can do at the senior levels of both the public and the private sectors and get the messaging right and consistent, the better chance that the Prime Minister will say that the time has now come for us to lead this parade. We can lead it for a while, but hopefully one day he will.
The Chair: With the agenda, you are looking for a one-line item, right, a national energy strategy?
Mr. Carr: We probably can handle three or four lines. It can have components. The components that would make sense to be included in an agenda item of the premiers that would be sufficient to get them to mandate something to the ministers would include several of the substantial items that we talked about a minute ago, and those that lend themselves to the least controversial routes in that you want some policy successes.
You want to be able to say by going down the road of cooperation on this file, we have actually achieved something measurable and important for Canada. Once that has been accomplished, it is a little bit easier to keep going down that road.
The Chair: When is that meeting?
Mr. Carr: The premiers' meeting is July in Halifax. I think it is toward the end of July.
Senator Mitchell: David Emerson appeared before us in Calgary and we were talking around this as well. He made a point that is not inconsistent at all with what you are saying.
He is saying, as I think about it now, the premiers could begin to identify these areas and then get deputy ministers and ministerial officials across the country working in teams on these things, building up a certain critical threshold, at which point action could be taken and it would actually drive the need to take it and get the Prime Minister's attention.
Mr. Carr: They have done that already and they are doing it right now. There is a committee of deputy ministers at work as we speak preparing for the next meeting of the ministers of energy in Charlottetown in September around the action framework that was a part of their communiqué.
What we are saying is that if they have the additional political jolt of the premiers mandating it, so much the better.
Senator Banks: I am going to ask you the question that I have asked others before and that has sort of been asked before here too. You have been around a bit and you have survived the orchestral wars, and if you can survive that, you can survive anything.
Mr. Carr: Yes, you are right.
Senator Banks: I want to ask previous questions in a different way.
We heard earlier that Mr. Dion was defeated because of Mr. Dion. If that is true, it is also the case that in that election, there was a demonstrable expression of antipathy by Canadians to the concept of paying anything, giving up anything, notwithstanding that every Canadian says the environment is the most important thing in the world to me. Then NIMBY and BANANA kick in. BANANA means build absolutely nothing anywhere near anybody.
You said earlier that you were mindful, as I am sure you are, of the politics of this question. We have been hearing this for two and a half years in the present study of the committee, and the Senate has been hearing this for 11 years that I know of. When I first came the Senate they were talking about it.
Exactly as you described happened in Banff, when asked the question, do we need a price on carbon, nobody has ever demurred from that. Nobody has ever said no, we do not need a price on carbon. Everybody has said we need the certainty of it. Just tell us what the rules are and we will find a way to deal with it.
A couple of people have tap-danced around it a little bit, but almost everybody has said the most efficient way to do that is with a tax, or whatever you want to call it. Alberta calls it a performance levy or a disincentive or something but it is a tax. They say that that is a superior methodology in every respect to either regulation or cap and trade or any other device that you might find because it is clear, transparent, you cannot diddle around with it. It is not susceptible to manipulation by who knows what.
So everybody sits around and says that. The industry says it, the NGOs say it, the ENGOs say it. The people say it if you ask them, but then at the end of every one of those conversations, it comes to the line, but of course we cannot do that. Can you talk about the politics of that?
Mr. Carr: Warren Buffett and the Business Council of Manitoba are the only two institutions I know in the world who are advocating a tax increase. There may be a few others.
Warren Buffett wants to tax the rich, the very rich. The Business Council of Manitoba is advocating a 1 per cent increase in the provincial sales tax in Manitoba. Why? Because we are facing an infrastructure deficit so severe that we are going to bankrupt our children and our grandchildren. Unless we start paying now, we are in for a rude awakening. Already it is a disaster and it is just getting worse.
Senator Banks: Let us presume the supreme logic of that. Now translate that to political action. Which politician is going to go out on a campaign and say I am in favour of increasing your sales tax?
Mr. Carr: None yet. So we are saying it, and that gives them room. We will continue to say it and we are building a coalition of others who are saying the same thing. At a certain point, it is less daunting for a political leader to agree that you need to look at the revenue side of the problem as well as the expense side of the problem.
The same thing could be argued in moving towards carbon pricing, whether it is a tax or levy. Language does count, by the way, so I am not being dismissive or cavalier about how it is described. But if you begin to develop a whole constituency of people who make a cogent argument why this is necessary and you contrast that against the cost of doing nothing, I think most rational political leaders will agree.
There is another point to be made. You may think this is a tangent, but I do not think it is. We have the most progressive immigration policy in Canada here in Manitoba. You could argue that it is the most progressive in the world. When we started our advocacy for enhanced immigration in 1999, we were bringing in 3,000 immigrants. Now we are bringing in 16,000. It is a transformative policy.
Why was that policy successful? Because it was bipartisan. The provincial nominee program was signed in the first place by the Filmon Conservative government with the Chrétien Liberals. It was deepened, broadened, made more effective by the Doer New Democrats and the Liberals in Ottawa and then by the Harper Conservatives, so everybody could take credit for the policy.
Where is the next area of major policy movement in Canada where there can be a bipartisan agreement on objectives? When you agree that it is a good thing for Manitoba to move to 15,000 immigrants, they can fight all day about why it is not going faster or there are insufficient settlement services to ease transition for people who come here, but if you can agree on the objective, then you have come a long way.
I would look at that as a model of creating a bipartisan approach to an important cluster of policies for Canada where the bitterness and hard edges of partisanship become less important than the greater objective. If you can support that bipartisanship all along the way, with a building consensus across every sector of the economy and society, then you have a chance. I do not know any other way of doing it and I would not give up.
Senator Banks: I just remembered what the name of the carbon tax in Alberta is. It is a ``compliance fee.''
You said that if you drilled down below the surface of what happened at Banff and Winnipeg, the consensus begins to splinter.
Mr. Carr: Could.
Senator Banks: Could but has not yet?
Mr. Carr: No, we have not hit any bedrock yet because we I think have been alert enough to know where it might come and stop short of there, because the last thing we want to do is break up around two or three issues where the consensus cannot be sustained.
Senator Banks: Before step one.
Mr. Carr: Yes. Then alongside that, there has to be a way of going forward, the process stuff, which is just as important as the substance in a country like this one. You know what I mean.
Senator Banks: Yes, we do.
Senator Brown: Mr. Carr, I just want to ask if I could get a copy of that paper.
Mr. Carr: We will make sure that you all have a copy of the common ground paper and any other documents associated with the Winnipeg Consensus, with pleasure.
Senator Neufeld: Mr. Carr, some of the things that you have spoken about are very interesting. In Alberta, they did not call it a carbon tax. They called it what, a comfort tax?
Senator Banks: Compliance.
Senator Neufeld: A compliance tax. That is on those that are over 150,000 tonnes. In B.C., it actually hits everyone right from the homeowner on up. I mean I have a carbon tax attached to my bill from PNG for heating my home and I pay at the pumps.
I guess the step for that premier would be a little bit easier than it would be for other premiers to move forward. I would be interested to know what your feelings are about, just for clarity, calling it a tax. We did call it a carbon tax in B.C., and we did win an election right after that.
What would you envision would happen to those dollars that are collected? You do not have to drill real deep, but do you have some sense of what happens? If it goes to Ottawa to be redistributed, I think you are going to have some problems. Certainly from a British Columbian standpoint, I would have some problems with that.
How do you actually decide what that is going to go to? Is it left up to the provinces to decide how they want to do it? Ours is revenue neutral to government. It goes back in the form of reduced personal taxes and corporate taxes and business taxes.
What is your sense of where you go from saying we need a price on carbon?
Mr. Carr: You let me, through that insightful question, senator, continue my description of our proposal to create a provincial sales tax hike for infrastructure. The money in our proposal must be used only for infrastructure.
This is not another opportunity for governments to fund programming or to fund what it funds now. This would be a 10-year time limited levy that could only be used for approved infrastructure projects, so it would be precisely directed. That is one way of going about it.
I think Canadians would be far more receptive to the idea of a carbon tax or a carbon levy if they knew that the money that was being collected by the levy was being used to mitigate the impact of greenhouse gas emissions and was part of a wider strategy to clean up the country.
My political instinct tells me that if you can direct the resources in a way that people can see them, understand the relationship between the levy and how the levy is being used within the context of this file, you have a better chance of getting public acceptance.
Senator Neufeld: All that is good. I do not disagree with that at all. But if it is taken centrally and redistributed, and Alberta would be the largest contributor guaranteed, is Alberta going to be happy with that being distributed in other parts of Canada rather than actually staying in Alberta? Right now, the money that their carbon tax collects stays within Alberta for the things that you talked about. Are you thinking in your mind that they would be happy with saying that half of it can go to some other province because they are developing something to do with some renewable energy that we are not?
Mr. Carr: You are in a much better position to answer that question than I am but it is implicit in the way —
Senator Neufeld: I am asking for your input. Let me tell you, you are not the only one who has danced around it.
Mr. Carr: I am not dancing around it. I do not know the answer.
It does remind me of the debate over equalization that we have had in Canada since the Rowell-Sirois report and whether or not as a fundamental tenet of federalism, there ought to be a wealth redistributive kind of a mechanism that we call equalization. Some people like it, some people do not, and where you stand probably depends on where you sit.
I would not for a second think that the debate in Alberta would be an easy one. You have to put some faith, though, in the capacity of the national leadership to come to grips with these conundrums as we have done with the equalization formula. Not everybody likes it that is the consensus. We renegotiate it. We are about to renegotiate in 2014 a massive redistribution from the Government of Canada to the provinces on the subject of health care. We are up to it.
If you are asking me if I were Prime Minister what regimes that I might impose, that is another question, but I do not intend to run for public office. I have already done that.
The Chair: I want to thank you very sincerely on behalf of the committee for your appearance. I think it is very timely that you have put it the way you have. We are clearly on common ground and we are trying to do the same thing in many ways.
I can see strengths that your group has that we do not have, but I think our potential for getting the right ears to listen might be better. I do not know. It depends how clearly focused our message becomes.
In that regard, I really hope we can work together with you. I am asking for your help as we go forward. If there are too many cooks, as we all know, the broth gets spoiled. There are a lot of cooks working on the same kind of stuff. I just have a feeling not of unease, not anticipation either, but of slight concern.
Mr. Carr: We would be content in crafting the recipe.
The Chair: Very good, cook.
Senators, we are very privileged and proud to have before us this afternoon the Premier of Manitoba, recently elected. I do not know if it is proper to say he was re-elected, but I know he was premier when the election started.
We are welcoming Greg Selinger, who became Manitoba's twenty-first premier on October 19. He was first elected as an MLA for St. Boniface in 1999. He was re-elected in 2003 and 2007 and is now serving his third term in the legislature.
Greg was appointed by Premier Gary Doer to the finance portfolio on October 5, 1999, and as you know, Gary is now our very distinguished ambassador to the United States.
At that time, Greg was also appointed minister responsible for the French language services and for the Crown Corporations, Public Review and Accountability Act. In 2001 he was charged with the Civil Service Commission and in 2006 became minister responsible for Manitoba Hydro. Best of all, the Liquor Control Commission and the Manitoba Lotteries Corporation were added to his responsibilities in 2007.
Greg has a PhD from the London School of Economics, a master's degree in public administration from Queen's and a bachelor of social work degree from the University of Manitoba.
Mr. Premier, we have had a wonderful visit so far. It is a fitting conclusion to our deliberations for you to share some of your very precious time with us.
We had a wonderful visit with Manitoba Hydro yesterday. They gave up a lot of their time. They hosted us, they provided great hospitality, focus and insight into the subject matter that we are here to look at. The man who designed and runs the building they are in took us from pillar to post and it is really a remarkable building, unique in the world. This is a landmark for you folks here that no one can take away. Then seven of the senior management team met with us in a boardroom and discussed all the issues. Then they hosted a dinner and even more of their team were present. We had a lovely time. You can call it a working dinner, but with all the best aspects to it.
Today, we have been flat out hearing different witnesses as we near the end of our study on Canada's energy sector with a view to trying to see a way forward. As we were just discussing with Jim Carr, of course, many groups are conducting studies like that and we are hoping there is not too much duplication.
We will be coming out with our report in June and it can perhaps provide if not a stepping stone at least a framework for the rest of the summer and fall when the premiers will be getting together, when the ministers will be getting together, and we are hopeful that the agenda of the premiers' meeting will have something very specific on this subject.
Hon. Gregory Selinger, Premier of Manitoba: Thank you, Mr. Chair, for being here in Winnipeg and spending time with us. It sounds like you have enjoyed some Manitoba hospitality. I am glad to see you are in town for other reasons than going to a hockey game. We still have many things to discuss besides the Jets hockey, which is the big attraction these days.
I am going to talk a bit about hydro in Manitoba, even though you have had exposure to the Crown corporation, and how hydro can be a source of economic development, in particular for First Nations.
I want to talk in particular about a pan-Canadian grid for hydro with a focus on an east-west grid and then about the role of hydro in terms of reliability, energy security and how it can help us on the climate change file. Regardless of what happens with Kyoto, it is still an issue out there and something we can be a leader in. Then I will talk briefly about streamlining the regulatory process and why it is important to move forward on projects such as clean energy in this country.
Manitoba Hydro is our oil, that is what we often say, but cleaner and greener is our argument. That is in no way meant to disparage what other people are developing, but it is how we position ourselves. We think it has tremendous downstream potential, not just for our province and not just for jurisdictions to the south of us, but can play a very important role in providing energy to our neighbours both to the east and west of us.
In Manitoba, we do argue that we have the lowest rates in North America and about 98 per cent of power provided to Manitobans is from hydroelectricity. Recently we have been supplementing that power with things like wind and geothermal as the main supplementary sources.
We are embarking in the next 15 years on about a $18 billion investment plan in hydro to build some major dams and some transmission capacity in this province to add to our reliability, and we anticipate exports could be in the order of over $2l billion in the next 20 years, so as you can see, we look at it as a major source of economic activity in the province.
One of the things we have learned as we have gone along, when you look at the experience in other jurisdictions, is that people want reliable power. They want affordable power but they also want power with a good reputation, and that is some form of clean, green power.
One of the decisions we made actually before the 2007 election was to build additional transmission capacity on the west side of the province versus the east side. We have run two elections on this now. We would like to think that has given us a mandate to proceed with a buy poll on the west side of the province closer to Saskatchewan as opposed to on the east side where we are working toward a UNESCO World Heritage designation for about 45,000 square kilometres of southern boreal forest which we consider to be pristine boreal forest and a tremendous resource for storing carbon dioxide, a tremendous resource for ecotourism and a tremendous long-term opportunity for First Nations on that side to have a sustainable economy based on the value of protecting large boreal landscapes.
Large landscapes around the world, just as an aside, are becoming a big issue, as you know. If you go up into a satellite and look down on the world, a lot of large green spaces, whether the Amazon, the Florida Everglades or boreal forests, are being sliced and diced by various intrusions by humans into them. There is a growing imperative that we think globally about protecting some of our planet in terms of its ecological capacities to continue to provide clean air and water to the rest of us from which we all benefit.
We only get concerned about these things when we see the absence of them in our cities and communities. We have not hit that wall yet in Canada, but we think we can be a source of a sustainable environment and a sustainable planet by protecting things like the boreal forests.
We are making the long-term decision to take a longer route on the transmission line, and we have had a very dynamic discussion about it, both in the corridors of Manitobans' power holders but also in the public debate around elections as well.
Hydroelectricity is also a huge opportunity for First Nations because where we build the dams is in the traditional territory of our Northern Aboriginal peoples, both Metis and First Nations, and we have decided to use a different development model now than that which occurred in the 1970s.
When we decide to move forward on hydro development, we spend a lot of time with First Nations partners who are citizens of the province and work out an agreement where they are beneficiaries of the economic development that occurs when you build a new dam, beneficiaries not just in terms of the jobs and the training which is fundamental to building their capacity to participate in the economy, but they are also business partners with us in terms of being equity stakeholders in the generating facilities.
This is a new approach and all the environmental issues that we can identify are addressed before we build the project or even vote about going ahead with the project. We put in place what we call adverse effect agreements, which can be 70 years in duration, with First Nations partners to address issues of cultural integrity, environmental issues, ability to sustainably use the land for food and shelter and other economic opportunities.
This is an approach we have taken with them. We are just at the point of completing what is called Wasquatum and it is an approach that we are continuing with our next major dam, which is about a $5.6 billion project called Keeyask.
All the First Nations in that area, we have spent several years working with them to address their concerns, meeting all our constitutional requirements under section 35 in terms of proper consultation and accommodation, but really forging a relationship which will allow them to benefit from the hydro development that we are going to proceed with and be full partners with us as we go forward.
As you know, these issues are important issues for the country because if you ignore these realities, and I see a former energy minister in the room with me here who had dealt with them in another jurisdiction, then it becomes a source of conflict and it can actually tie you up in a lot of litigation and reputational damage to the energy source itself and to the province.
We are working at it in a way that we think will generate the kind of healthy relationship that will allow economic development to occur for the benefit of all the people in the area.
One of the central concerns that we have when we do hydro development or dam development is to avoid flooding. We are building essentially low head dams now where there is less flooding. The Wasquatum dam that we just completed really had no flooding. The next one we are building is about three square kilometres of flooding, which is less than a farm these days, much smaller than the original footprint.
So you give up some kilowatts of power in order to have a more sustainable development model and we have changed our views so that we do not just see the land as large and unoccupied but we see the land as peopled by First Nations citizens and they want to make sure that the land that they occupy is sustainable land and does not put them in difficulty with flooding issues.
In the 1970s when we came out of the hydro development we did there, we had to put in place what we call a Northern Flood Agreement with an arbitrator and we spent close to $900 million in compensation after the dams were built. The approach we take now tries to address all those issues before we start so that we are doing them properly.
There are four communities left in Manitoba that rely on diesel fuel and they are far off the grid, so we are working closely with them to move away from diesel into things like wind power and biofuels and have a more sustainable source of energy for them as well. That is an ongoing issue that needs to be addressed in many Northern communities where they are diesel-reliant all over Northern Canada. We think we could actually be a source of energy to some of our Northern partners as well, such as Nunavut.
On the east-west grid, one of the more interesting developments we have had is we started our first ever joint cabinet meetings with the Government of Saskatchewan two years ago. This is kind of surprising when you think that you have been beside another province since its inception and we did not have a formal mechanism for getting together and talking about things.
We have had two joint cabinet meetings and one of the central issues we have been talking about is how we can share energy with each other. As you know, Saskatchewan has a large reliance on coal at this stage of the game, and they are looking for alternative ways to continue to grow their economy with sustainable energy. We think we can be a partner with them in doing that.
We are looking at upgrading some of our existing transmission capacity and then looking downstream. When you build hydro in the country, you have to have a vision that is not just 10 years out or even 15 years out. You have to have a vision of what the potential is 25 or 30 years out because, as you will probably know from visiting with hydro, it is very capital intensive to build these facilities. All the money goes up front and you take loans out to build these facilities and you spend billions of dollars before a kilowatt of energy flows.
That creates lots of opportunity for people to talk in absolute terms about the cost of doing these things, but once the dam is built, it lasts you 70, 80, 90 years with proper maintenance. So the incremental costs of running a new dam are actually quite small. They are really the cost of renting the water resource and paying what you call a water power rental fee.
It is very capital intensive up front and then the operating costs once you get a dam in place are relatively small. Really the only incremental costs are your wages, so the rest of it is worked out in terms of capital maintenance.
The east-west grid provides an opportunity for us to start having a vision for a grid across the whole country for energy security purposes. It has been talked about for a long time, but markets have always been more accessible and more lucrative if we flow energy south.
If you look across the country, just about all of our energy and transmission ability flows across the American border into larger markets that have high energy prices and like to see our source of power as a form of base power down there.
We are no different. Our major customers are Minnesota and we will be in Wisconsin and we are looking at opportunities to further provide them power. We have signed about $7 billion worth of contracts that we want to deliver on as we build Keeyask in the future.
We think a vision of having an east-west grid for the whole country would be a positive one and that we should look at that. We know Ontario needs to build more and replace more of its power. They are phasing out their coal plants. We know Saskatchewan needs new sources of energy. We know that even Alberta, with all of its abundant resources and the discussion around the XL pipeline wants to continue to shrink its carbon footprint on any energy that it develops, and we think hydroelectricity can be part of a solution on having a good reputation for the whole country on a clean energy strategy.
We want to leave you with that thought about the role of hydro in helping Canada enhance its energy reputation and its reputation as a source of clean energy for the world, but also developing an east-west grid for the whole country would be a tremendous source of employment and innovation and investment over the next several years.
When we built the railway, and there are lots of books written about it, it was always filled with controversy and created the myths that we live by in this country, but it also bound the country together. What are our national projects these days that are binding us together?
In the 1950s, we created the welfare state, things like medicare and family allowances which were other sources of identity in the country. In the 1980s, we did things like the Charter of Rights, and that was a new source of common identity in the country.
What are the identity features we are trying to build for ourselves now? I would like to ask you to consider the idea of having a national energy grid or a pan-Canadian energy grid, an energy security for the country, as being another source of security that we can build a common identity around and a common way of supporting each other to develop our economies in the future.
We think there is a good vision there that we can think about as we look at how we develop our energy resources.
We also think that hydro development and clean energy development can be a source of economic innovation in the country. We actually recently just identified that we are going to have some challenges meeting our Kyoto targets.
We actually legislated meeting our Kyoto targets by 2012, a tall order. We are going to meet it for 2010. It is going to be more difficult to meet it for 2012, but as we look back on our experience of trying to meet that Kyoto target, we found that we did a lot of things that made a positive difference.
We brought in an ethanol mandate in Manitoba for automobile fuels. We brought in a biodiesel mandate for farm equipment and trucks. Forty per cent of the geothermal installations in Canada are in Manitoba where we have 4 per cent of the population.
We took energy efficiency programs from being the worst or number 10 to number 1 in the last couple of years, and Hydro probably told you about that if they were talking about their Power Smart program.
So having ambitious targets on things like climate change or economic innovation in the energy field allow us to move forward with new ways of doing things which create opportunities not only for the local economy but for exporting these technologies around the world.
There was a Royal Commission in Manitoba back in the day, 30, 40 years ago, which actually thought hydro development in the north was totally impractical because they could not figure out how to transmit it to the south. Manitoba Hydro is now a world leader in high-voltage direct-current transmission because we solved that problem through technological innovation and now we work with jurisdictions around the world on how to move electricity over long distances.
If we put these challenges in front of us, it allows us to move forward with our human ingenuity to solve these problems and to create new sources of expertise and services that we can export around the world. I do not think we should ever underestimate our capacity to meet those challenges and then to help and work with other jurisdictions to do that.
Energy security, I think, is another thing that we have to think about as a country, not just North American energy security, which is obviously a big deal in the United States as they try to wean themselves off of certain sources of oil, but energy security for Canada itself. We want to have energy security and an east-west grid and a commitment to working with each other on clean electrical energy would be another source of energy security for the country.
It also would allow us to move forward on climate change issues. Regardless of whether there is another Kyoto treaty or not, climate change, except for a small minority, is an accepted reality, something we have to address globally.
As we address climate change, Canada is very well positioned to have sources of energy that do not generate carbon dioxide and climate change emissions. We can be very innovative in how we meet some of these tests with the way we develop our energy resources among ourselves and that can make a contribution to the world.
We know that Canada is not one of the major emitters on a global basis. In Manitoba, we have about 3 per cent of the carbon dioxide emissions in the country while we are 4 per cent of the population so we actually have a very high standard right now with hydroelectricity where we do not generate as many emissions as others, but that is not the point.
The point is that planet and climate change issues travel across borders. If it is a problem somewhere else, it is eventually going to be a problem for us, and it is a solution here that eventually contributes to the reduction of greenhouse gas emissions elsewhere.
Our exports alone into the United States, if they counted under Kyoto, would more than meet the standard very early on. The amount of electricity we export to the United States would have more than allowed us to meet the Kyoto standard years ago.
If there was the ability to count protecting things like boreal forests under some form of international climate change treaty and all the peat that is protected there, we would have again more than met our climate change objectives early on in the game.
Those factors are not currently part of the metrics that we use to measure climate change progress, but they are things that make a huge difference in the world in reducing greenhouse gas emissions.
National energy security could be identified as one of our infrastructure priorities as we go forward. We know there are lots of other infrastructure priorities, roads, sewer and water, but energy is a huge one as well for the country.
The last point I want to make is that as we move forward on this, and we know there is a fragile economic climate out there, we know that the American economy is still working hard to recover, we know there is a lot of fragility in Europe right now with some of the crises they are dealing with, if we can streamline our regulatory processes on some of these major projects to build clean energy in the country, it will be source of economic growth in the next decade.
There has been a lot of talk by us as politicians about streamlining regulatory procedures. We are not there yet and I think any recommendations that the Senate committee can make about how we can streamline our approval processes for projects without compromising on the environmental criteria that we need to meet, without compromising on our need do these things properly, but just moving these things along in a more timely fashion, would help. It might require more resources, tighter timelines and a faster ability to turn these things around.
On our Wasquatum project, which was actually one of our smaller energy projects, it took four years to get the environmental reviews done. That is four years. That is a long time before you even start building. It is a decade before you get a dam finished.
I am quite happy to try to get re-elected for another decade, but that is usually longer than the life of a government that initiates a project like that.
If we want to get results, I think we have to have a regulatory process which does the job thoroughly without compromising all the issues around the environment that need to be addressed, but does it more rapidly and efficiently in order to get things moving and make decisions one way or the other.
I will end my presentation and answer any questions you might wish to ask me.
Senator Massicotte: We have gone across Canada and are finishing our tour of the Prairie provinces later this week.
Most witnesses acknowledge and agree there is a time-and-change effect caused by humans. They then nearly all agree that there should be a trans-Canadian plan to deal with climate change. I will not use the words ``national energy policy'' or ``strategy,'' but there has to be a coordinated effort. They also all agree that you have got to price carbon and they nearly all agree that it should be by way of a tax. Would you agree with those four issues as well and would you contribute to that solution?
Mr. Selinger: I think there are a number of different approaches to how we price carbon. Some of it could be cap and trade, some of it might be a carbon tax. There is a lot of resistance to taxes generally. We have been looking how to participate in a cap-and-trade scheme with provinces to the west of us and some of the American states, and have been doing a lot of work on the actual machinery for that to be able to occur. It is not quite there yet. We voluntarily participate on the Chicago Climate Exchange already. Hydro has been a participant for several years now on trading credits for clean energy projects they develop.
Yes, if you want to deal with the externality of carbon dioxide, you have to have some way of recognizing the cost of it. I think we have to keep an open mind on how to do that, but the one we have been pursuing and taking a look at is the cap-and-trade model.
Senator Massicotte: Economic theory suggests that you should do full pricing, excluding externalities.
Now I jump to your comment of an east-west electric grid. If that was in place and you had pricing on carbon, do you think that would now be economically justified? Obviously, economics to date has suggested that north-south seems to be the most economical sharing of those benefits. There is also complementary need relative to the time of the year, time of the day. However, there comes a point where common, pure economic sense would justify east-west if you had carbon pricing?
Mr. Selinger: It would certainly change the calculation on it because it would be a more competitive source of energy, where other sources of energy had a price on them for any carbon emissions. So you are right. It would change the economics of it.
Senator Massicotte: Enough that it would justify it?
Mr. Selinger: I have not done the calculations, but it would definitely change it in the right direction. Even cap and trade would do that. It would change the economics of it.
Even in the absence of those price mechanisms right now, just the notion of reliable, secure, clean energy is becoming more attractive because for traditional sources of energy, the prices are going up. Even on some of the older, dirtier sources of energy, the prices are going up.
Even on some of the newer ones such as nuclear, there are always massive challenges in keeping prices contained and cost controls within all of those.
We think, even under present economic circumstances, there is a problem right now in North America with things like shale gas and a slow economy in the States. It does change some of the prices for spot sales, but most jurisdictions are looking for reliable, clean energy and are prepared to pay a good price for that if they can get a long-term contract on supply.
You are right. As we look at how to take into account climate change effects in terms of how we account for it in terms of pricing, that will change the economics of it. Everybody has said that but there has been a great deal of difficulty in North America arriving there. It has been done more in Europe.
Senator Massicotte: With an east-west grid, you have to look upon your immediate neighbours and their immediate neighbours because transportation costs go up.
Have you approached Saskatchewan and Alberta and possibly Ontario to say, let us connect, let us share the costs and let us get there? What has been the result of those discussions?
Mr. Selinger: There is very active interest in hydro to the east and to the west of us, particularly right now to the west of us.
For example, Jim Prentice, when he was last Minister of the Environment, brought in regulations to phase out coal plants after their useful life has come to an end and put higher standards in place for what coal plants can emit. That changes the economics right there. Those are things that are helpful contributions to replacing energy that creates a lot of carbon dioxide with energy that produces far less of it, so those kinds of mechanisms are already moving the policy in the right direction for our clean energy strategy for the whole country.
Over and above that, I think we should not ever underestimate the value of a good reputation for our energy. I have talked about that briefly, but I think you folks are as aware of it as I am, but a good reputation for your energy also gives you a better price.
Senator Massicotte: Talking about nuclear, you used to have a nuclear facility in this province with AECL. That got shut down a couple of years ago. That is very clean energy. Why did that disappear? Would you do it today?
Mr. Selinger: Manitoba has not pursued that. We do not have uranium in the province and we have abundant sources of hydroelectricity, which is much more proven technology.
Those scientists in the Pinawa area have gone on to make great contributions in the community. They have taken their expertise and applied it to research, for example, on how to use isotopes for medical purposes. Some of them have gone into the mining sector; some of them have become local leaders and have taken on other professions.
There is human capital that came out of the Pinawa nuclear research station. They are now specializing in how to deal with nuclear waste. They are developing a lot of expertise on how you deal with the nuclear waste issue, which is the single biggest factor holding back nuclear.
There is the risk, as we have seen out of Japan, and then there is the issue of what you do with the waste. Those issues really are barriers to nuclear being fully accepted in the country and create a lot of reticence among the citizenry, almost universally these days, particularly since Japan. After Japan, Germany decided to shut down all its nuclear plants. Yes, nuclear is still being developed. It is not a preferred energy source for us when we have an abundance of clean hydroelectricity, but I have to say the scientists in the Pinawa area that are still focusing on how to store nuclear waste are making very significant research and development contributions to addressing that issue, which is an issue around the world. But we are not looking at it as a source of energy.
The Chair: You have made reference quite strongly to an east-west grid and Senator Massicotte touched on it as well. When you were going into detail, you talked about Manitoba westward through Saskatchewan, which I can understand, and even beyond.
We are being told that if there is going to be an east-west grid in Canada, it would have to be from the east sort of to Lake Superior and then another one from here west. When you are talking about an east-west grid, you do not mean an integrated grid right across the whole nation, or do you?
Mr. Selinger: I think a grid across the whole nation would ideally be the right way to go. We would have to have the technical discussion on that.
We have had discussions with Ontario. As you know, Ontario's energy policy has been fluid over the last several years.
The Chair: To say the least.
Mr. Selinger: They have had tremendous debt to deal with coming out of the 1990s and then they have had issues of commitments around reducing coal use. As you know, they are pursuing a clean energy strategy with respect to renewables, including small hydro. They do not have a lot left, as I understand it, but they have pursued solar and wind and there has been lots of issues about feed-in tariffs and the costs of that and Auditor General's reports.
Ontario is pursuing a clean energy strategy, and I think, if I understand them correctly, and I am not speaking for them, nuclear is still one of their options for providing base power in the province. Hydroelectricity is an option for them as well. We are very open to having that discussion with them.
The big nut to crack going east is transmission, because as soon as you get to the Great Lakes, it is a long way. It is completely doable technically. The question becomes who pays for it and how does it get paid for and what is the role of the various levels of government and the private sector in providing that transmission capacity. That has always been the biggest psychological and maybe financial challenge to looking at the eastern alternative.
There are several ways to come at that. One is over the top. Other possibilities are through the United States, where we are already flowing energy into Minnesota and east to Wisconsin. We all participate in an energy network in mid- Western Canada and the United States where we back each other up on energy supply.
As we look at how we support each other on energy supply throughout North America, there are possibilities of serving our neighbours to the east of us through these partnerships throughout North America as well.
There are challenges with transmission in the United States too. There is a different legal system, the role of eminent domain and the role of the federal regulator, but everybody is seized with how you can build more transmission. We know there is always controversy around transmission.
One of the biggest factors is the NIMBY syndrome and how you deal with that. Everybody recognizes that there needs to be more transmission and a smarter grid as well. We have to use new technology to make the grid more efficient and make better use of the grid so we can useless energy to supply more efficiently the needs of the economy in North America.
There are lots of advances being made there but one of the things that has become very clear is it requires very significant investment to get the more efficient and more connected grid throughout North America. So it requires a pan-Canadian strategy and it requires the will of the governments to decide they want to move forward on these issues.
The Chair: It is not something then to be dismissed out of hand?
Mr. Selinger: Not at all.
The Chair: That is the point I wanted to make.
Senator Mitchell: This was quite a powerful and inspirational presentation, really a breakthrough on the east-west grid idea which has languished in our discussions to some extent. You are the first person who has had a vision for it and has elevated its possibilities.
As we have conducted these hearings for over two and a half years, it has become clear that there are areas of consensus. How broad they are yet remains to be seen. But the question of pricing carbon was quite a revelation to us and quite exciting for some of us to learn that business, NGOs, governments are coming together and saying that we need to price it.
There is the sense of a need for a national labour strategy and you have alluded to it with respect to the Aboriginal workforce, which is critical if we are going to develop in Alberta, I am from Alberta, in the way the future seems to be unfolding.
Despite the fact that there is this consensus, there is still clearly a need for leadership and there is lots of it coming from Manitoba. Your efficiency programs are reflected in that remarkable building which is state of the art world- wide. The Winnipeg Consensus has developed from here, generated from here. We had a very powerful presentation from Mr. Carr.
Nevertheless, we need national leadership. A first step in that regard rests with the premiers, many of whom are talking like you are talking, and certainly the Kananaskis meeting underlined that there is some consensus there. What are the chances of having a national energy strategy with some of the elements that you have raised here and others have raised placed on the agenda of the next premiers' conference in the summer next year?
Mr. Selinger: I would say the chances are decent. We are discussing it more and more informally and we are talking about it more with each other. I think the XL pipeline issue sort of triggered more interest in a Canadian clean energy strategy. I think the provinces are all willing to engage in that discussion.
Clearly the federal government has to be part of that discussion as well, but I do think that all of this is moving in the right direction. You have mentioned the Winnipeg Consensus and the role of the business community, and Jim Carr is here, in trying to forge a Canadian strategy on energy for the country. That is extremely helpful.
I introduced that when we had the Council of the Federation meeting here in Winnipeg. We circulated the document and got people to start thinking about it.
It takes time for these things to percolate and for people to become more tuned in to how they can play a leadership role within that. That is why I am presenting here today. It is building a critical mass of awareness and opinion among decision makers and people in the country and the media to start thinking big about these opportunities.
As we start thinking big about these opportunities, we start looking at how we can realize them and work together to achieve these things. I think this is part of the process that we are going through right here and now.
Senator Mitchell: I for one certainly would, and I think our committee would probably generally encourage that initiative.
You mentioned two things at the federal level, a general comment that we need to have leadership from the federal government in this process as well, and you said something I think is very telling. That is that we need to have public international acceptance of our products and of our reputation. Otherwise it begins to cost all of us, not just Alberta, Keystone, what is going on in Europe with respect to fuel quality standards.
Also there are some elements in the U.S. that would like to see hydro from Canada designated as not truly renewable so we need to engage the federal government. How do you do that?
Is this a role for a first ministers' conference any time soon? Would that be a direction you could see yourself going out of a premiers' conference next summer?
Mr. Selinger: I think all those possibilities would be helpful if there is a willingness to do it. I was down in the States last year and met with Senator Bingaman, who is very interested in the energy question, chairs a committee that relates to those factors. He is looking at clean energy strategy for the States. We were discussing with him the role of hydroelectricity as part of his clean energy strategy, and that was very helpful.
We need that constant stream of communication at all levels, regionally as well as at the Canadian level with our potential partners in these matters, to be able to continue to build that awareness.
In the United States, hydroelectricity at one time had the same challenges as it had in Canada. There was a lot of riparian damage and flooding that came out of that. It created some historic issues, putting value as a clean energy source clearly in front of the public.
Business is being done differently now. Attitudes are changing and people see the value of it, but you have to keep working at these things for people to fully appreciate them.
Senator Mitchell: It has been said by a minister in Alberta, whom Senator Banks and I met with, that it is not enough just for the Province of Alberta to be speaking internationally because these countries do not view a province as the font of information from Canada. It is Canada that needs to be doing that.
One of the themes that we have heard a lot of and you have mentioned it is the question of delays in environmental review. Clearly there is room at the federal level and it has been worked on I think to bring together the three or four different agencies that overlap there, and perhaps there is overlap provincially in agencies within Manitoba, I do not know, but the really tough nut to crunch is the question of overlap and duplication between the two levels.
Have you given some thought to how that can be reconciled? Is it that a province should be prepared to delegate upwards or that the feds should be prepared to delegate downwards?
Mr. Selinger: We have preferred to use our own Clean Environment Commission to review our projects and we have the public regulator, the Public Utilities Board, which regulates hydro. Last time when we did Wasquatum, our first major project of the last decade, we had a joint panel to streamline at our own level.
I think there are challenges with having a federal-provincial joint panel, even though it sounds like the right thing to do. They operate under different legislative mandates and I think those mandates can be difficult to reconcile and can cause some problems.
Our preference at the moment is to be able to do it provincially when it is our own energy sources within Manitoba and to do it as efficiently as possible. We like to be able to have our own regulator that looks after it because your own regulator will hold the hearings, will provide intervener funding, will do all the due diligence necessary to address the issues.
Senator Banks: The chair and I are both aware, and I think all of us are, of the fact that there are places in this country where, when we ask provincial premiers and their ministers to come and speak with us, they refuse. We are delighted that you have not. That is one of the ways that sets you apart from some of your colleagues.
There are two other ways that I am going to ask you about. You referred to them already but I am going to ask you to just expand on your position a little bit because you are clearly a leader. You are marching to a drum that is not shared entirely across the country.
The two are as follows: We have heard in the two and a half years that we have been at this pretty well universally that the preferred, most efficient, least susceptible of manipulation means of applying a price to carbon is a tax. You have just expressed your preference for cap and trade. I would like you to expand on that a little bit.
The second thing I would like you to expand on, if you would, is the east-west grid. As you have heard before from others, the one thing which we have heard unanimously from everybody who has talked to the question is that an east- west grid is simply not doable for a number of economic and technical reasons, not the least of which is that the markets are too small going west and that Alberta and British Columbia use a different kind of phased electricity.
We have heard universally about the impracticality and virtual impossibility of an east-west grid, and we have heard pretty well universally that the best way to establish a price on carbon is a tax. Please tell us about those two things.
Mr. Selinger: We have preferred cap and trade because it does not get us into the debate about tax or no tax, which sometimes moves away from the central question of climate change and gets into the tax issue. Cap and trade allows you to be more specific in identifying who has to reduce their emissions. It allows you to target the larger emitters in that regard.
Senator Banks: Do we not all have to reduce emissions?
Mr. Selinger: We do, but some generate more emissions than others. For example, our Power Smart programs in Manitoba do not tax people but they give them incentives to reduce their use of carbon dioxide. They are very popular here.
Maybe it is our Manitoba mentality, but we like to fix up our homes and we like to do it in a way that is socially and environmentally responsible, and that saves us a few bucks too when we do it. That is not a bad thing. It is an all around good investment.
It just makes sense to encourage those kinds of choices on behalf of Canadians to participate in making things better and also helping themselves deal with their cost of living issues.
For example, we put a program in place on high-efficiency gas furnaces for low-income families in Manitoba and we structured it so that the minute you install that high-efficiency furnace, the cost of financing that is less than the savings you will get every month on the energy by using the high-efficiency furnace, so you are net better off the day you start participating in reducing greenhouse gas emissions by having a high-efficiency furnace.
That is a win for the low-income family. They are saving money every month, and it is a win for the environment, so it is all around good. The cost of that for Hydro is they help keep the cost of the furnace as low as possible and help with the contractors. They do a lot of things to make it easier for people to exercise that option.
We have an eco-grant currently in Canada right now, it will not necessarily continue beyond next spring, that is a budget decision, but it has been a very useful grant. We topped it up in Manitoba and are moving forward. Thousands of Manitobans are participating in insulating basements and doing things that reduce energy use.
Energy efficiency and reducing demand for energy is still the most cost effective way to reduce our carbon footprint and to help people save money. People like practical solutions. At least in Manitoba they do. They like practical solutions where they can be involved in solving the problem and seeing benefits for themselves as they do that.
On the question of the east-west grid, yes, the cycles of the energy change as you move west and east, and you usually need some form of converter station to harmonize those things. There has to be a commitment in investing in the technologies which allow energy to move east and west. There is nothing particularly new about that. It is a capital cost. You have to be able to want to do it, but when we send high voltage direct current over long distances, we still have to convert it back to usable energy when it hits the marketplace where it is going to be used.
There are costs in doing that and they are not trivial, but it is part of the commitment to building that capacity. Then over time, if we build an east-west system, there is the potential for harmonization.
Every 10, 20 years, you advance the technologies, you replace technologies. Over time, you could perhaps harmonize these so they are more compatible with each other.
Senator Banks: Senator Brown, Senator Mitchell and I are all Albertans. We would love to buy electricity at $0.09 cents. Why has it not happened?
Mr. Selinger: Because I do not think we focused on looking at each other as suppliers and customers for each other. I think we focused on the more lucrative markets to the south of us. Our orientation has tended to be north and south. It is easier to transmit into Minnesota right now than it is to Alberta. However, where are the growing economies right now? Western Canada. So the opportunity is there if we think ahead.
Western Canada has very strong growth in the economic and global economy right now with commodities, with the demand for many of the things we have in our jurisdiction. Clean energy can be part of that growth story, I think to our mutual advantage.
Senator Neufeld: Premier, it is good to see you again. We have participated in a few federal-provincial meetings over the years in our respective roles, and I congratulate you on your recent election as Premier of Manitoba. We are happy to be here and we are getting some really good information.
I think the east-west grid, had it been practical and economical, would have been built probably quite a long time ago. There are some challenges moving forward with that.
I am happy to hear that Saskatchewan and Manitoba are having discussions about that because I think that is where it needs to start happening, at your level, between premiers. Maybe some of those inhibitions will be removed.
I want to talk about some other things. In Canada, almost 70 per cent of our electricity is clean. Most countries would love to have the system that Canadians depend on. Obviously there are some places that have not had a lot of choice about clean electricity and years ago built coal plants because that was very cheap and could provide energy to the people cheaply.
I think we have a very good system. Can it be better? Yes, it can. What do you do about the rest of the greenhouse gas generators in Manitoba, transportation, those kinds of things? I know that in B.C., 35 per cent or something comes from vehicles. I cannot imagine it is much different in Manitoba.
You have a wealth of electricity that is clean, the same as we do, but there is another part of it that we have to really get at. How do we deal with that and what are your thoughts there?
Mr. Selinger: I think we have started to move on it with things like ethanol mandates where we have a certain mix in the fuels of an energy source like ethanol or biodiesel which helps reduce emissions there. The standards we set for the engines and the efficiency of the engines, most of that is driven outside of Canada because we are not the major market in North America, but even the Obama administration, in spite of all the barriers it has had around climate change, is moving on it.
As recently as last week, there are stories coming out of the States saying that they are going to really up the standards for fuel efficiency on vehicles starting in 2017 with 2012 to 2016 being a ramp-up to getting the mileage per gallon of fuel much more efficient.
We can participate in those things. It is probably something we have to participate in not just on a provincial level but really at almost a North American level. I think there is a lot that can be done there, using biofuels, getting the proper mix.
Biofuels are more challenging in cold climates, as you know. We have some variability in our regulations. You can use a weaker mix in the winter and a stronger mix in the summer to achieve an overall target.
We have to be sensible about these things, but then continue to invest in the technologies which allow our engines to use these fuels and allow the engines to have much more fuel efficiency when they consume the fuel.
Lots can be done there. You are right: The transportation sector is a major sector. This is where railways are coming back into vogue, as you will know. It is no accident that Warren Buffett bought Burlington Northern Santa Fe. The amount of fuel they consume per tonne of cargo they move is actually extremely efficient.
One of the first things we did to build the country, the railway, is starting to come back in vogue as a mover of goods because of their efficiency in doing that and the smaller footprint that they have for doing that. We have some existing infrastructure and technologies which can really help us do things properly and reduce our footprint in the transportation sector.
Senator Neufeld: I agree. Rail is increasing all over North America for some of those reasons.
What is your thought process on moving to natural gas, LNG, as a fuel? We know that on the east coast, there is now a route with Robert Trucking actually purchasing some 200 or 300 natural gas-fired trucks. Alberta and British Columbia are in the same position on this side of the continent. There is even new technology in using LNG for powering locomotives and huge horsepower engines.
What is your thought process on that from a Manitoba point of view?
Mr. Selinger: We have not explored it a huge amount at this stage of the game. We do actually have some smaller companies that are developing that technology and exporting it around the world, including to places like China, but with the low price for natural gas right now, it seems like an obvious opportunity to use that fuel for transportation.
I think it is a huge opportunity, and in Manitoba, we are pursuing the electrification of our transportation system as well. We have, as you know, the largest bus manufacturing capacity in North America right here with New Flyer and Motor Coach and we have signed deals with Nissan and Mitsubishi and now Toyota and General Motors as well where we are looking at how to electrify buses, for example.
We expect we will have the first fully electric bus available for demonstration in 2012, so we can start looking at how we can modernize our ability to move people with electric vehicles.
The one thing that has happened by itself, we had an incentive with the federal government on buying hybrid vehicles. In the last decade, you can see that our taxi industry has gone from using large vehicles to just about all Toyotas now, or a good percentage of them.
People will take advantage of the opportunity if they see a bottom line positive outcome for themselves. LNG I think can actually generate bottom line savings for people that use it and I think some of the electrification of our vehicles, especially for high-use vehicles, can pay some real dividends as well.
Senator Neufeld: I think both are very good, using them in the situations where they make the best sense.
I was happy to hear about regulations and the dual process with the federal government. I was about that close to getting the federal government to adopt an amendment that would see the federal government actually delegating to the provincial government if they felt their processes were good enough to do those projects.
I know the previous premier of B.C., Premier Campbell, advocated for that very hard for a long time with the federal government to have it interchangeable. I am glad to see that you are as well. I am sure Alberta is much the same and probably Saskatchewan. I do not know about Eastern Canada.
I am happy to hear that you will advocate that. I am happy to hear that you are thinking that same way, that although it will take some jiggling, we have to do it to actually process stuff faster.
Site C, for instance, we think it is going to be probably four years or five years before it is through the environmental process, and that is too long.
Senator Sibbeston: My question deals with the issue of First Nations. It seems historically First Nations have used the environmental process in order to slow projects down and raise concerns about the environment, but really also raise issues about their land rights. When there is discussion about the regulatory process, it concerns me that we would want to streamline them. I wonder whether this then will be a disadvantage to First Nations.
Other people have said that we have moved a long way as a country in that projects and governments and companies can no longer just intrude and run roughshod over First Nations and their lands. Can you comment on that, please?
Mr. Selinger: You raise an interesting point, senator. Before we even apply for the environmental review process, we have done all this work with First Nations citizens to come to agreement how to proceed together to apply for the environmental licence.
You are right. In the absence of a real willingness to work with First Nations, they use the environmental process to make their point about what is being ignored. Where I think we can demonstrate that our First Nations and the government come together to ask for an expedited licensing procedure and everybody is pleased with all the work we have done to address environmental concerns and to accommodate their use of the land and their opportunity to participate in the project, then we can have a more efficient licensing process.
I think you are right. I do not think we want to use an expedited process to ignore concerns. I think we want to look at how the relationship has been built before we get to the environmental process to see if it justifies an expedited approach.
The Chair: ``Consultation and cooperation,'' are those not the buzzwords?
Senator Massicotte: We heard witnesses earlier talking about renewable energy. We all know the theory about pricing or economic theory, making sure that externalities are considered. That is a signal to the consumer to consider and make good choices.
With the very low hydro costs in this province, and there are two other provinces with similar circumstances, you are effectively discouraging conversion to other green energies, not necessarily cleaner because hydro is very clean. Therefore, they would suggest that the hydro costs should go up, and I can predict your response, to basically allow a fairer and more level playing field.
One could also make the argument that your east-west argument is so significant and has so much merit that a solution is to charge your own consumer a more fair hydro rate, from maybe $0.06 to $0.09, and use that extra money to justify capital projects. Somebody has to pay for it. Having predicted your answer, what are your comments about those issues?
Mr. Selinger: You are not going to see me sitting here advocating higher rates to consumers in Manitoba because it is a source of our affordability advantage in the province.
The theory is one thing. What is the practice? Manitobans participate massively in energy efficiency programs when they are given the opportunity to do that, for example, just making loans available for Power Smart or energy efficiency programs on your hydro bill. Installing geothermal has been a tremendous way of easing the ability for people to participate in clean energy technologies.
I have visited a bed and breakfast in another province. The owner wanted to install geothermal in his bed and breakfast. It was a nightmare to get financing for it, just to get the financing arranged, because his utility did not provide that for him, whereas in Manitoba, the utility provides it for you at a very reasonable rate of interest over five, six years and will help you arrange all of that.
I think we can do things that will encourage the use of greener technologies and we know it is working in the province. When you have got 40 per cent of the geothermal in the country and 4 per cent of the population, you can see there is a tremendous interest in it, and it gives them a bottom line outcome. There is more capital up front to do it and some incentives to reduce that capital cost and the ease of financing has made it much more possible and interesting for people to do that.
The other thing they like about it is they like the predictability of their energy prices. That is an incentive to participate in cleaner energy too, because natural gas prices always have market variability to them and a lot of people like the predictability of a geothermal technology or using energy efficiency programs because they then know what their costs are going to be. Especially as they move towards retirement, they like predictable energy costs to be able to stay in their homes.
I think there is the economic theory and then I think there is human behaviour, and humans like to do things that save themselves money and do the right thing and they also like the predictability of prices. They do not like to be whacked over the head with a big increase in prices as an incentive. They see that as something else.
Senator Massicotte: You mentioned earlier your approach to new dams is no flooding. I have never heard of that, but I am not an expert in this sector. We see other provinces talk of new projects where they are proposing significant flooding. One could say the reason you are doing that is you are taking an easier route to avoid conflict and avoid tough negotiations.
I suspect the output, the loss in kilowatts, is significant, maybe relative to the costs. How do you respond to that argument?
Mr. Selinger: I would not call it the easy route to try to build a consensus where everybody sees benefits of doing a project. I would say that takes more time and patience and more respect for the views of the people affected by it. When we build our economy, we want to build an economy where we have winners, not winners and losers.
As to flooding significant areas, let me give you an example. When we came into office, there were different hydro rates in the north and in rural areas than there were in the city because you can deliver energy to a greater number of people in a smaller area. The people in the north were saying, ``Why are we paying higher energy rates? It is our energy you are using in the south.'' There was kind of an equity or a social justice argument versus the market argument that you have different rates. If you have a sparse population in a remote territory, it is more expensive to service.
We decided to go with one rate for the whole province. It has been very popular. People do not remember it now because it was done several years ago, but one rate for the whole province was a way of building a sense of community in the province that everybody should benefit from the clean energy we have and see the benefit on their bills.
Then we went out and worked with all those communities to do energy efficiency programs so they can reduce their bills further, because every kilowatt of power saved in Manitoba is one more we have available for export, which gets us a higher revenue, which in turn allows us to keep rates reasonable in the province.
I would say that the idea of building our energy exports, both east and west as well as south, allows us to retain an affordable cost of living in the province, which people value.
Senator Massicotte: The last time we met with Manitoba Hydro executives, they presented three new projects being planned in next couple of decades. Take any one of them. If you allow flooding, is it a significant increase in kilowatt output? If you increase the area and said, I made a deal with the Aboriginals, they are on side, they agree, they are getting percentage of upside so maybe they could agree.
Mr. Selinger: They did not, that is the whole point. We have a relationship where we listen to each other and they did not want the flooding. So we did not flood.
They agreed to the three square kilometres after several years of discussion but they did not want the flooding because that is where they live, hunt, and trap. That is their traditional territory.
When we looked at the 1970s, we are still paying compensation payments for the flooding that occurred there, up to close to a $1 billion now. I am not sure it is cost beneficial to do it in a way that generates a lot of social division and environmental damage. I think the long-term costs of that are often underestimated before we deal with all those issues.
The Chair: Are you going to tell the premier when it is you are moving back to Manitoba? I think he has done a good job of convincing you.
Mr. Selinger: Senator Massicotte is helping us already with some of our cultural institutions in St. Boniface. He helped with Cercle Molière so he is welcome back any time.
Senator Banks: We have heard universally from practically everybody about the necessity to make the regulatory processes more efficient. Hearing it from a premier is quite a different matter.
Pretend I am a tree hugger. You referred differently before to the fact that there are different jurisdictional questions, and therefore, different legislation that has to be dealt with. So convince me that the matters that are referred to in, for example, the Fisheries Act and the Species at Risk Act can well be taken care of and that streamlining and efficiency does not amount to less rigor.
Mr. Selinger: This is the role of intervener funding. A lot of time, groups do not feel they have sufficient resources to make their case and they ask for more time to do that. If we provide sufficient intervener funding so they can make a thorough case for their concerns, you can still do it in a more timely fashion. So it is a question of how we resource some of these processes as well.
A lot of times, the resistance comes because people feel they have not been adequately heard. They do not feel they are adequately resourced to do that, and even when you do resource people, some ask for more. I think if you have a process of proper intervener funding, reasonable timelines, opportunities to critique the research and to generate your own research, then you can still do things efficiently without affecting the environment.
Senator Banks: Will your provincial boards apply the concerns that are expressed in the Species at Risk Act and the Fisheries Act?
Mr. Selinger: They will apply their criteria, but they are not going to follow the exact legislative regime of the federal government. They are going to follow the provincial regime, and there are some differences in the way they approach it. They approach the total environmental impact; they do not necessarily drive down to specific species on every little item. These are some of the things we have to consider. Do we take an entire process and drive it down to one specific adverse effect or do we look at all the effects and what the proper balance is for how the environment is protected and how we proceed on clean energy projects?
You are pitting one type of environmental concern against another one in terms of climate change, et cetera, and where do we need to go to get the best benefit for human communities.
Senator Brown: I have a very short question. I was glad to hear you use the word ``expedite'' because that is exactly what I want to talk about.
I think that timelines of ten years or even four years for provincial and federal studies on the environment are way too long, that we should be able to hold each one in one or two years. It is costing humongous amounts of money to have those things held up, for power and for energy, whatever proposal is done.
I worked with TransAlta over four years and it takes them 14 years to build a power plant. I think somebody is not working hard enough.
Mr. Selinger: When I say that we should make decisions, I do not say in any way we should short-change the environmental issues that have to be addressed. That is why I mention intervener funding. We all know you get a project done faster if you have sufficient resources to do it. That can include the environmental reviews. If groups feel that they are adequately supported and funded and have a chance for standing in these processes, they can make their points, they can be considered carefully and decisions can be made.
It is about finding the right way to move forward, to have a good environment and to protect any at-risk species and at the same time provide ourselves with clean energy which can be a substitute for other forms of energy which are having more negative impacts on us.
Senator Brown: You do not need to study animals for 10 years to learn about their environments.
Mr. Selinger: If we fund the scientists to have their say, I think they can give us better information in a more timely fashion.
Senator Brown: We can put time allocation on it, if nothing else.
The Chair: Premier Selinger, this has been a wonderful session, a great hour. You have been patient with us, forthcoming and candid. As you said, you want to get the message out. You got it out loud and clear. You are very much on the same wavelength we are on. It has been a tremendous afternoon.
(The committee adjourned.)