Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce

Issue No. 16 - Evidence - March 9, 2017


OTTAWA, Thursday, March 9, 2017

The Standing Senate Committee on Banking, Trade and Commerce met this day at 10:34 a.m. to study and report on the development of a national corridor in Canada as a means of enhancing and facilitating commerce and internal trade.

Senator David Tkachuk (Chair) in the chair.

[English]

The Chair: Good morning and welcome colleagues and members of the general public who are following today's proceedings of the Standing Senate Committee on Banking, Trade and Commerce either here in the room or listening via the Web. My name is David Tkachuk. I am the chair of the committee. Today is our meeting number 13 on the subject of our study on the development of a national corridor in Canada as a means of enhancing and facilitating commerce and internal trade. During the first part of our meeting today, I am pleased to welcome John McCauley, Director General, Regional Operations Sector, from the Canadian Environmental Assessment Agency. Thank you for being with us today, Mr. McCauley. Please proceed with your opening remarks, after which we will go to a question and answer session.

John McCauley, Director General, Regional Operations Sector, Canadian Environmental Assessment Agency: It's a pleasure to be here today and to assist you in your study of the national corridor concept.

I have a short slide presentation, which I believe has been distributed, and I will focus my remarks on how environmental assessment may apply and assist in furthering the development of this concept. By way of context, for those of you who aren't familiar with my organization, the Canadian Environmental Assessment Agency, we report directly to the Minister of Environment and Climate Change. We produce high-quality environmental assessments to inform decision making in support of sustainable development. We are one of three organizations under the Canadian Environmental Assessment Act that carry out environmental assessments, with the others being the National Energy Board for projects they regulate and the Canadian Nuclear Safety Commission for projects they regulate. We manage the environmental assessment process for projects. We also have a program that supports and provides for funding to assist the public to participate in environmental assessment. We serve as the coordinator for consultation with indigenous groups during the EA process for projects we manage. We have a compliance and enforcement program that makes sure that the mitigation measures are, in fact, being implemented and are working as intended. We work with our colleagues in other jurisdictions across the country to ensure cooperation and uniformity in how environmental assessment is carried out, and, finally, we work with our colleagues internationally to exchange best practices in environmental assessment.

The second slide sets out some general points in relation to environmental assessment. Mr. Chairman, as you may know, EA is based on the idea that it's more cost effective and prudent to make changes to projects to take into account environmental issues before construction and before environmental harm can occur.

It's used as a planning tool throughout the world, and I think it's important to keep that notion of a planning tool in mind as you consider its use and applicability to the Northern corridor concept.

In Canada, the original process was a three-page cabinet directive that was introduced in 1974. Since that time, requirements have been codified in legislation and regulation, and we have introduced more precision but, as well, more complexity. However, the fundamental purpose of taking into account environmental matters early in the planning process has remained a fundamental element. Environmental assessment also allows the views of all interested and affected parties to be brought to bear through the process in a coordinated way. Finally, the Government of Canada integrates, to the greatest extent possible, consultation with indigenous peoples in the environmental assessment process.

The third slide sets out some of the likely relevant EA legislation that might apply to this concept of the Northern corridor or the national corridor, as well as any future projects that may be located within the corridor. In identifying the likely legislation that might apply, we looked at the paper that had been produced by the University of Calgary and CIRANO around the concept, and so it's not surprising that, given the nature of the proposal, it's pan-Canadian focus crossing multiple jurisdictions and large geographic scope, multiple levels of environmental assessment would be required for projects that might be located within the corridor. The Canadian Environmental Assessment Act 2012, or CEAA 2012, sets out EA requirements for projects that have effects that may link to federal jurisdiction.

It has limited application North of 60 degrees. North of 60 degrees, federal legislation has been enacted through land claim agreements, such as the Mackenzie Valley Resource Management Act, that set out EA requirements.

It's not surprising that all provinces have environmental assessment processes, with standards and requirements as well. One of the purposes of CEAA 2012 is to promote cooperation and coordination between the federal government and provincial governments in the conduct of environmental assessment. We spend a lot of time working with our colleagues in other jurisdictions through bilateral arrangements and project-specific agreements to ensure that cooperative assessments are carried out. It is a way to reduce duplication, while respecting the constitutional powers and legal responsibilities of each order of government.

The fourth slide outlines elements that could support the development of a strategic approach to furthering this Northern corridor concept. While CEAA 2012 is largely focused on examining the adverse projects of a specific proposal, say a mine in a particular location, there are provisions that enable the examination of the effects of existing and future projects within a particular region. Those provisions are referred to as the regional study provisions, and authority is provided to the minister to establish a committee and to set the terms of reference of that committee to examine the effects of existing and potential future projects within a particular area or a particular region. They allow the committee to be established jointly with jurisdictions and to provide for public participation in the carrying out of that regional study.

The concept of a committee would most likely be modelled on how review panels work under the legislation, which is a group of experts appointed by the Minister of the Environment who have some level of knowledge relevant to the effects of potential projects that may be carried out. We see a number of strategic advantages to making use of the regional study provisions in furthering the concept of a national or Northern corridor. They provide a broad framework for furthering the development of the concept and for building support among potentially affected communities. Routing options could be considered in a strategic, transparent and step-wise fashion through the regional study. Consideration can be given, in a preliminary sense, to the kinds of environmental issues that will need to be managed and the strategies that could be employed to manage those issues. Finally, it's also a means to enable cooperation with other jurisdictions that may have an interest or may be affected by the concept. While the provisions are relatively new — they were introduced in 2012 and have not been used to date — this notion of examining, through environmental assessment, as a concept has been done before. You may recall that the Seaborn Panel, in the late 1990s, looked at the concept of nuclear fuel waste disposal. It was a technical concept. It wasn't located in a specific place but rather the conceptual nature of the proposal, so there is some experience in doing that.

The fifth slide describes some of the considerations that we would suggest, based on experience, are important if you were going to have a successful regional study and employ them in examining the concept of a Northern corridor. Typically, we deal with a single project and a single proponent. For a concept like a Northern corridor, it would be important to have a champion for that proposal who can serve as the convening body and move the proposal forward.

As well, it will be important to make sure there are sufficient resources provided to allow the committee to carry out its work, allow the public to participate and to access federal science and expertise to support the committee's work. Finally, given the nature of the proposal, it will be important to have willing jurisdictions participate.

The sixth slide outlines some of the linkages between a potential regional study and the subsequent project specific EAs that would be required, and it's important to think about how a regional study would be structured to take full advantage of how it could enable and complement future project specific EAs.

One of the benefits of carrying out a potential strategic regional study would be that it would lay the groundwork for future project approvals as they came forward. It would generate the information necessary to carry out those assessments and identify specific route options, environmentally sensitive areas to avoid, how it could link with other infrastructure. There may also be opportunities to bundle potential future projects together to facilitate a more streamlined environmental assessment based on the information and analysis that would be contained in a regional study.

It would facilitate coordination and cooperation among the jurisdictions that have an interest in projects, and in the corridor itself, in order to avoid duplication. It's important to note, for any potential pipeline projects that might be located within the corridor, CEAA 2012 sets out that it is the responsibility of the National Energy Board to carry out EAs of those kinds of projects. However, the National Energy Board could use the results of the regional study to inform their environmental assessments of pipeline projects.

In the seventh and last slide, as you may know, the Minister of Environment and Climate Change has appointed an expert panel to carry out a review of the environmental assessment processes. That panel is expected to produce its report at the end of March. You may be interested to know that there have been a number of interventions before that panel calling for a greater use of strategic approaches, like the one you are examining for the northern corridor, and like the ones embodied in the regional study provisions in our legislation. So there is interest out there in this kind of approach at a strategic regional level.

Finally, I want to remind you that environmental assessment isn't the final step in bringing projects to fruition. There are many subsequent regulatory requirements at all levels of government that would be required to enable actual projects to be implemented. With that, I am happy to answer any questions you may have.

Senator Tannas: Thank you very much for being here. This is terrific. I have two straightforward questions. Given that this would be a multi-use corridor, in your mind does that create any kind of an insurmountable problem in the environmental assessment process? That's my first question. Second, we're going to be faced with a decision on whether or not to recommend the next step in the study and more feasibility around it. We've had representations from First Nations groups that are into major project initiatives; certainly the University of Calgary has proposed that they would like to take their study to the next level.

Would you see that as one more preliminary study, one step closer but still very tight, and that it would be appropriate for an environmental assessment activity to take place or should maybe wait a bit further down the road?

Mr. McCauley: On the first question, in terms of the multi-use nature of the corridor, I think that can be accommodated within the environmental assessment process, particularly if you take advantage of the regional study provisions. If you think of the regional studies akin to a land use plan, which looks at multiple uses by definition, it can be structured in such a way. We need to work with the other jurisdictions who are implicated to do that.

I would encourage you to think broadly in the sense that there may be opportunities, from an environmental protection perspective, to use the corridor to link protected areas, for example. I don't think the multi-use issue is an insurmountable issue. It can be accommodated.

In terms of the second question and the timing of the next activity, one of the advantages of the regional study provisions is the legislative provisions are relatively wide open, so you have flexibility in terms of how you design and set the terms of reference for that. It could be employed at the next step and, as I said in my remarks, one of the issues around it is who is the champion for this activity and who would be the one making the representation to the committee and helping the committee to understand how it could work.

The more definition that you have, the better suited the regional study provisions are, but there is some flexibility in the provisions to adjust it to particular needs.

Senator Black: If the champion, to use your words, was the Government of Canada, would you recommend this in the Canadian interest? Does that in any way affect your thinking around process?

Mr. McCauley: No, I don't think it does. The act contemplates that the government could be a proponent of projects, for example, and that has happened in the past. We're independent in the sense that we report directly to the Minister of Environment and provide advice directly to her, but it can be other departments or entities that lead projects.

Senator Black: Building on Senator Tannas' question, if that were to be the case, there are obviously a lot of preliminary conversations that would need to go on. Can your agency be part of those conversations?

Mr. McCauley: Yes, I think so, and it has relevance in terms of how to set the terms of reference for the committee and study.

Senator Black: You could be a participant in preliminary work.

Mr. McCauley: The act indicates that the agency has a role in providing support to committees when they are established, so yes.

Senator Black: Tremendous presentation. Thank you.

Senator Galvez: I'm so happy to see that the agency has recovered some of its past activity and it's very refreshing. For 20 years I gave the course on environmental evaluation assessment at the University of Laval in Quebec City. Last year, I had 300 students, civil engineers taking this course.

One of my worries on the environmental evaluation of multiple projects is the cumulative effects. As you said, the proponent comes and that's the evaluation for its own project and its own corridor. It has a very narrow study zone, but now with this corridor, I'm reading there are a lot of multiple uses. Will you be worrying about supervising or foreseeing these cumulative impacts for the corridor?

Mr. McCauley: That's a great question and given that you have taught environmental assessment, I better be careful in my answer.

The impetus for the provisions, one of the main reasons was how to manage cumulative effects and the recognition that it's difficult, if not impossible, on a project-by-project basis to do so. The provisions were introduced to take a regional approach that would allow a more effective way to manage cumulative effects.

You can accommodate the management and assessment of cumulative effects in a regional study. That's one of the reasons why the provisions exist and one of our roles, when we get down to project assessment, is actually from a compliance and enforcement perspective. It's to ensure the mitigation measures are being applied as they were committed to in the environmental assessment, and to make sure they have the intended results.

The way the process works is the minister issues a decision statement, which includes legally binding conditions that the proponent must comply with, and so then we monitor the proponent's performance relative to those conditions.

Senator Galvez: Climate change is affecting Canada in an intense way, but even more in the North. The permafrost is not there, and these pipelines and highways will have to be designed taking all of these changes into consideration.

We all know that when we come to cost, it's better to plan before than when it comes to mitigation, because when we have to mitigate it costs more. How are you going to take that into consideration?

Mr. McCauley: That's a great question. The way an environmental assessment works at the federal level, we have an explicit requirement to look not only at the effects of the project on the environment, but look at the effects of the environment on the project. We do explicitly look at things like climate change, changes in forest fire or those activities that may affect the project. We do look at that in the environmental assessment, so yes, it's taken into account.

Senator Enverga: Thank you for the presentation. On your strategic approach for conditions for success, you mentioned that funding would be necessary for the committee that would be appointed by the Minister of Environment and Climate Change. Can you tell me if there is any timeline? When will this committee be established? When will the funding come? Will it be a federal committee that will oversee all the action to make this happen?

Mr. McCauley: Good question. The provisions in the law give the minister the flexibility to establish a committee in situations where there is only federal interest and jurisdiction. But also to establish a committee jointly with other jurisdictions where there are multiple interests or jurisdictions. The committee can be established among all the participants or all the jurisdictions that may be affected by the concept.

The reason I raise the resources issue is that there are no provisions in the legislation to recover the costs of carrying out the work of the committee. My agency isn't resourced to do this work, although it is our responsibility and we would obviously work to support the committee as best we can. If we are going to set one up, it will be important to make sure there are sufficient resources required to allow the committee to carry out its work, the public to participate, and that federal experts can provide their expertise and science.

Senator Enverga: Is there any legislation in the works that may make this happen?

Mr. McCauley: As I said, the minister struck an expert panel to review environmental assessment processes, and their recommendations are due at the end of the month. This issue of regional approaches has been raised. I don't have any insight as to what they might be recommending, but we expect that given people have raised this issue in their sessions, the expert panel will have some advice.

Senator Gold: Thank you for being here. In contemplating a project of this scope, and your agency's part in the overall regulatory framework, what worries you the most about a project like this, and what should we be most worried about?

Mr. McCauley: I would say the scope worries me. It is still a conceptual idea, and I think there needs to be more work to try and refine that idea. Otherwise, you can spend a lot of time and effort that may not be productive; so I would encourage if there is a way to try to add more specificity to the concept, what it is and what it is not. That worries me.

It's a question of figuring out, if we went down that path, what do you want the regional study to accomplish? That can be translated into the mandate of the committee, and they can carry out the work. Given that the proposal is pan- Canadian and it touches so many parts of the country and so many communities, it will be important to have a process that people will have confidence that it's going to represent their views, that they will have a chance to participate and their issues will be identified and addressed through that.

Senator Gold: Given the scope and the inevitable length of time all these processes will take to get organized, much less be implemented, there will be changes of government in so many jurisdictions. Do you have a concern about the sustainability of a project of this kind, given the changing political landscape?

Mr. McCauley: To me a frequent criticism of the regional study provisions is there is always an impetus to move quickly because we have projects we need to move forward. This concept provides an opportunity to do some longer- term planning to put in place conditions that will support project development, not in the immediate future, but in the medium term and longer term. You need to be thinking about that.

I can't say whether a change in government would change the level of support for the concept. If you strike the committee and they have a mandate, then they would be expected to continue that mandate until they finish it.

The Chair: You have addressed the national corridor, but you also talked about a regional corridor. When you say "regional corridor,'' what do you mean? Is it two provinces? Do you mean the West or the East?

Mr. McCauley: I'm referring to a national corridor. I'm using the word "regional'' because that's the phrase that's in our legislation. I did note in the University of Calgary study they had an offshoot up the Mackenzie Valley and one to Churchill. You would look at the entire proposal.

Senator Ringuette: First of all, thank you very much. You've given us hope, I think. When you say you need the resources, I would say that when the committee is trying to study a proposed pipeline that the resources to do the study have to come from the proponent of the project. This is not the same situation.

Could it be possible within your legislative framework that Infrastructure Canada would act as the general proponent of the project and would provide the resources for the committee?

Mr. McCauley: There is nothing that would prevent that from happening.

Senator Galvez: I'm happy to see that we are planning ahead; this is so important. With climate change, for sure we're going to go more and more to the North and construct. This will bring a lot of activity in the construction and building.

We know that the building code is something that is done by NRCan and that it is basic, and then provinces, depending on their ideas, choose to adopt or improve it, according to their needs.

Given that these projects are going to be construction-intensive, would it be a good idea that you talk to the building code people and start thinking about the rules that need to be applied for construction in the North in the context of climate change?

Mr. McCauley: It would be important to have discussions on a number of levels around a range of issues like that one as the concept moves forward. Given that there is a longer-term view to the corridor and how it would be put in place, trying to identify what might be the standard two years from now will be an issue that we'll need to be looking at for sure.

Senator Smith: What feedback, if any, have you received from the provinces in terms of the Ring of Fire in Ontario or the Quebec Plan Nord program? Have you received specific ideas from the provinces as to what they want to do? As we look at this massive project, which if implemented properly would be a game changer, I always ask whether you do the whole project at once or in pieces. There appear to be three pieces. Then, do you tie it to your priorities in terms of trade? If our priority now is to really focus on Asia, especially from the agriculture sector, then you think that maybe the western opportunity would be the one to focus on. What type of interaction, if any, have you had from provinces? Obviously, we will have to get the provinces heavily committed to this to be an active participant, plus the indigenous people, of course.

Mr. McCauley: I agree with you. I think the provinces will play a key role in terms of how this moves forward and in what form it moves forward. We haven't, that I'm aware of, had discussions with the provinces about this concept or about their particular interests around regions in the provinces that they may want to link to the concept.

We do have assessments of active projects underway in some of those locations, but it's on a project-by-project basis, not in this sort of regional sense.

Senator Smith: How would you stimulate? Who would be the initiator to get the provinces involved?

Mr. McCauley: I think there are probably a couple of avenues. Some of that comes back to who the champion is for moving this concept forward. So that is one area.

Then, on the environmental and regulatory side, we have a committee of EA administrators that we talk to on a regular basis across the provinces. There are ways in which we have a number of federal-provincial territorial committees that we could start to engage if this proposal is moving forward and there is desire to try to do something from a regional study or environmental-assessment perspective.

Senator Smith: Understanding your concept, of course, it has to be a national initiative. Within the national initiative of the federal government, what would be the key department initiating a leadership position?

Mr. McCauley: I'm not sure. On the face of it, Infrastructure Canada.

Senator Smith: Let me ask you in a different way. Who would be potentially two or three options that could look at something like this so that I am not putting you on the spot to get a direct answer?

Mr. McCauley: I think Infrastructure Canada, obviously, may have a role given the nature of it. As I understand it, you also have the desire to have pipelines and power lines in that. That would seem to implicate the National Energy Board, and Natural Resources Canada would have an interest in mining. I think they have been here to speak to you about some of their interests. Those seem to me to be the ones potentially.

Senator Smith: Within Infrastructure, maybe the Infrastructure Bank would be a key player because they are tied into the pension funds. Maybe that can stimulate some interest and maybe some funding for the project.

Senator Black: Can you help us to understand how we might be able to recommend or construct a one-window environmental approach, whereby the proponent doesn't need to talk to Ottawa and then talk to seven or eight provinces? Is that possible? If so, how does it get done?

Mr. McCauley: One of the ways it could happen is through a multilateral agreement among the provinces and the federal government as to how the environmental assessment responsibilities would be discharged. We work cooperatively with the provinces on project assessments, so that may be one vehicle to do that.

Some of it depends on the specifics of the proposal as to where it is and how big it is and what is included in it, but probably that would be, at least off the top of my head, the place to start.

Senator Black: So it is possible in your view that that will be the process that you would recommend us looking at?

Mr. McCauley: Yes.

Senator Black: Great. Thank you, sir.

Senator Galvez: In traditional environmental impact assessments, we concentrate on assessing the impacts on humans and the environment, mostly in safety and security. But today we have other frameworks of evaluation associated with carbon emissions and greenhouse effects. Before you, we heard from the president of the steel association talking to us and saying that Canadian steel has a very low footprint compared to that of China and Korea. Yet, we keep using this steel. In parenthesis, I could say that it is of less quality than the Canadian steel.

In your new environmental assessment framework, are you going to add some new ways of evaluating this impact and include these footprint evaluations?

Mr. McCauley: Under the current legislation and in accordance with the interim approach and principles that the government adopted in January of last year, we now take into account upstream GHG emissions that relate to projects. We also looked at direct greenhouse gas emissions.

As to what might be in the future, what changes may be introduced as a result of the recommendations of the expert panel? I don't have any insight as to where they may go, but I think those kinds of subjects have been raised with them. We will wait to see what advice they have at the end of March.

The Chair: If there are no more questions, thank you very much, Mr. McCauley. It is very much appreciated.

It gives me great pleasure to welcome, from the Freight Management Association of Canada, Robert Ballantyne, who is the President. Thank you for being with us today, Mr. Ballantyne, and contributing to our study.

Please begin with your opening remarks and then we will go to a question and answer session.

Robert Ballantyne, President, Freight Management Association of Canada: Thank you very much, Mr. Chair and honourable senators. It is always a pleasure to appear before Senate committees. It is usually the Transport Committee that I see so it is really of interest to me to meet with this committee. I have been promoted; I guess that is what one would say.

The Chair: It is the first committee that the Senate established under the federation, the only committee, actually. It used to have 50 members, so I am glad you are only sitting with a few of us.

Mr. Ballantyne: The Freight Management Association of Canada appreciates the opportunity to come and present our views on the proposed Northern corridor. FMA has been representing the views of shippers since 1916 and focuses exclusively on freight transportation issues as they impact the success of Canadian industry in domestic and export markets. Last year was a real milestone. It was our centennial year. In passing, I must say that I was not at the very first meeting.

The 90 companies that are members of FMA are from all parts of Canada and from most industrial sectors, including mining, forest products, agriculture, food processing, manufacturing and retailing. FMA members contribute over $100 billion to the Canadian economy and purchase more than $4 billion worth of freight transportation by air, freight, marine, rail, truck and intermodal. A number of FMA member companies are household names. A list of member companies has been provided. I think they are attached to the speaking notes.

Looking at the proposed northern corridor, the proposal envisages a bold, imaginative undertaking that would require broad consensus and buy-in from all levels of government, from the population generally, from First Nations people in particular and also from major private sector players across the economy.

It is acknowledged that the proponents are putting forth a "concept'' and are proposing an extensive research program to determine if this is a viable project. For an undertaking of this magnitude an extensive research project is a necessary first step.

A unique element of the proposal is that this would be a multi-use corridor that would include rail, road transport along with electrical telecommunications transmission, and facilities presumably would include pipelines for oil and gas transmission. The proposal envisages a corridor of up to several kilometres in width which would facilitate its multi-use nature.

The proponents are putting forth the idea that "such a comprehensive approach may be more viable than a series of incremental steps because it provides greater room for accommodation of diverse interests.'' This is an interesting observation but will only be proven by application. Opposition to all major infrastructure projects does not lead one to think that such a major undertaking would be subject to less opposition. Concern about river crossings jeopardizing permafrost and other delicate land areas and interfering with animal migration routes will be part of the formal environmental assessments and will also be of concern to environmental activists and some First Nations groups.

Next are my comments on the proposal. Most of my comments will be limited to the potential impacts on shippers but here are a few general comments first.

Probably the last project in Canada that was proposed with this scope and magnitude was the building of the Canadian Pacific Railway, starting in 1881. This was a nation-building project that had broad strategic reasons for moving forward in addition to support for commercial developments. It was a condition of British Columbia joining Confederation and a necessary infrastructure development to open the West and to keep the American expansionists from moving north.

Strategic concerns influenced the right of the CPR. The government wanted it to be as close as possible to the U.S. border. This led to the use of the very difficult Rogers Pass route through the Rockies rather than the easier Yellowhead Pass that became the route of what is now Canadian National Railway. The difficulties with the Rogers Pass, and the growing traffic in the 1970s and 1980s, led the Canadian Pacific Railway to undertake their most recent major infrastructure project of approximately $800 million to build the Mount Macdonald project under the Rogers Pass in the 1980s to improve the route for westward trains. The CPR shareholders funded the entire project. There was no government money in it.

I mention this example as it appears that the proposed northern corridor may have similar strategic considerations as the proponents suggest and that these strategic considerations could have an impact on the route chosen, even if it is not the most appropriate route from an engineering perspective.

As a former railway civil engineer, I should point out that the low rolling resistance of the steel wheel on the steel rail is the reason why railways are so energy efficient. The downside of this characteristic is that the railway grades must be kept to a minimum, generally about 1 per cent. That is about a one-foot rise in every hundred feet of distance. This means that railway location engineering may not always be compatible with the less restrictive grade requirements of roads, pipelines, et cetera, that may share the corridor.

Looking at it from a shipper perspective, the growth in the Canadian and world economies requires that transportation infrastructure and facilities keep up with the demand. While the large land mass is the source of much of Canada's wealth, it is also a formidable barrier for Canadian producers to get their products to global markets in a timely manner and at a competitive cost.

As the proponents note, there is a considerable growth in Canadian trade with Asia and with the signing of the CETA agreement, there are expectations of a significant increase in Canada-EU trade. The growth in international trade will lead to more imports, as well as more exports, as many consumer goods originate in Asia. As the Canadian population expands, the demand for internationally sourced consumer goods will continue to rise.

The viability of the proposed northern corridor will depend on the level of commercial activity that will be served by such a corridor. While it is anticipated that much of this will come from the forestry and mining industries that may emerge in the geographical areas close to the corridor, there may be advantages to exporters and importers in the southerly more developed parts of Canada as well. A good example of this growth of traffic is the growth of traffic through the Port of Prince Rupert. Container lines calling at Prince Rupert have found transit time advantages from unloading at Prince Rupert for speedy rail movement by Canadian National Railways to Chicago and other U.S. midwestern markets and to southern Ontario markets.

In summary, FMA understands that the proponents are now requesting up to $800,000 in funding for phase 1 research to determine both the need and the viability of the project. The "three pillars'' of phase 1 that they propose seem reasonable; that is, physical dimensions, routing the location and the engineering considerations; second, the financial dimensions, cost benefit analysis and financing options; and, third, land ownership issues, namely, community involvement, governance issues, et cetera.

This seems a reasonable first step. The summary is relatively modest and FMA would recommend that the Senate support the proponent's request for federal government funding.

Thank you very much. I would be pleased to enter into any discussion with you.

The Chair: Thank you, Mr. Ballantyne.

Senator Galvez: You are correct when you say that concerns about river crossings and jeopardizing permafrost, et cetera, are delicate issues. That is correct, for sure. However, in the past we didn't have the same design and lineal parameters that we have now because humans learn by mistakes. We learned the mistakes the hard way. We put trains close to cities, which is why Lac Mégantic happened. We now have experience and that is why we should modify these things.

Give me your impression. I am hoping that will modify the way new projects will come to light and be developed. That is, the layout, the design and the materials will be thought about in a different way. My question about the building code and construction is this: Do you talk to the people involved in construction?

Mr. Ballantyne: With construction there would be a lot happening and many different groups and people and experts involved.

First, your point is well taken. All the regulatory hoops would have to be jumped through before the project could go ahead. Over the decades, these have increased.

I think back to the building of the St. Lawrence Seaway. That project started and took about five years. We couldn't even do an environmental assessment for something like the St. Lawrence Seaway in less than 15 or 20 years now. I am not sure that is an improvement but that is the way things are.

The reality of the world is as it is. The environmental requirements do have to be met. Also, the obvious engineering work has to be done in terms of the geotechnical work; that is, what are the soil conditions? What are things like that which must be dealt with? All those things have to be done in a way that meets society's requirements. You are quite right; society's requirements have changed dramatically over all those years.

Having been involved in this stuff for coming up to about 57 years, I've seen a lot of changes in that aspect of this kind of thing. I hope that answers your question.

Senator Galvez: At the end of your presentation, you recommended that we give $100,000. I am replacing someone here, so I am not aware of the project that requested the $100,000. Does that refer to the Calgary university?

Mr. Ballantyne: Yes.

Senator Galvez: Is it a university that should do this type of study, or should it be a consortium? What is your opinion on that?

Mr. Ballantyne: As I understand the proposal from the School of Public Policy at the University of Calgary, they put forward this proposal — I see this as a preliminary proposal — then they are proposing the very next step, what they call "phase 1'' of a research project. They are asking for $800,000 to carry out this first research project, which they describe as only "phase 1.'' Presumably, assuming that went ahead, then you would start to drill down in even more detail, for example, what are the prospects for the use; what are the costs and benefits; what are all the environmental concerns, in a detailed way going forward. I assume this would be done by the people at the School of Public Policy and their partners, an organization called CIRANO. There is nothing that explains what CIRANO is, so I'm not sure who they are, but I think they would carry it on further. They indicate they would bring in other university people and experts as required.

Senator Tannas: Just for your edification, Senator Galvez, we are not here to study an $800,000 study; we are here to study the northern corridor. The University of Calgary made a pitch that one of the recommendations that they'd like us to make to the government is to fund this study, but we have heard from others who want to be involved, so it is not just "take this or not.''

Thank you for being here. Your presentation was very clear. You have 57 years in business. You talked about the railway. We would never get the railway built today. We would never get the St. Lawrence Seaway built today.

Mr. Ballantyne: No, that is right.

Senator Tannas: If you were a betting man, 57 years forward, some guy is driving a truck across the country on the northern corridor route. Will he say, "Man, somebody had some foresight,'' or do you think it will be an empty highway, a white elephant? If you were a betting man, which will it be?

Mr. Ballantyne: Obviously, it's hard to look 57 years into the future. It is easier to look 57 years back, to tell you the truth.

I would be reasonably optimistic about this. I think the country will continue to develop. I think that the resources we have in this country are almost not matched anywhere else in the world. This speaks well, I think, to the future for Canada and for the Canadian North. I would expect there is at least a reasonable possibility that, in a sense, it would be like the Canadian Pacific Railway. It would open up the country and that in itself would cause development to happen. It is like a lot of government-type infrastructure such as roads, where governments will build a road or a subway in downtown Toronto or whatever, and that sparks further private development. I would be optimistic that it would do that.

Senator Gold: CIRANO is the Centre for Interuniversity Research and Analysis of Organizations. It is based in Montreal.

Mr. Ballantyne: Thank you.

Senator Gold: We heard from a previous witness about the importance of narrowing the scope of this project, which is currently conceptual in nature, so as to better understand and evaluate it.

In light of your expertise and the folks you represent, you mention on page 3 of your written remarks that much depends on the level of commercial activity that the corridor would support.

From your point of view, from the shipper's point of view, if you had to draw the map to narrow the scope, what should the route be?

Mr. Ballantyne: That's a very difficult one. First, in the report, the route they are showing is very vague and notional, somewhere fairly close to the top of the three Prairie provinces, that borders the three Prairie provinces.

In coming up with a final route design, it would be useful to look at what the developmental possibilities might be. I was here for part of the previous speaker's discussion with you, and there was some discussion, I think, about the Ring of Fire in Ontario. Clearly, it would be useful to have the route available to that area. I think one of the problems with any development of the Ring of Fire has been the problem of no one being sure what kind of infrastructure they want for it and where it should go. I think that would be useful. I think in other parts of the country, too, if it were a case of looking at the forestry implications, the potential mining implications or resources that might benefit from this, then that would probably help in developing the more detailed route for it.

Senator Plett: I want to go a little further on your comments about the environmental studies that would now need to take place for the St. Lawrence Seaway and further to what Senator Tannas spoke about, namely, that the railway could never be built now.

Many of us have travelled to China many times. I know this might be a bit of a loaded question, and I don't want it to be. Senator Day and I certainly have travelled around China a fair bit. We visited the port in Shanghai, which is the largest container port in the world, I believe. They built a road of about 30 or 35 kilometres and they built a bridge to the port. The bridge is 32 kilometres long. They built the world's largest container port, and this took about a year and a half. Do they have zero environmental studies? Clearly, they have enough studies so that they know the infrastructure will stay standing. It is a great road, and I am sure the bridge is a sound bridge. Will we just continue to lose ground because we are going overboard one way and they are maybe going overboard the other way? What is the solution here?

Mr. Ballantyne: You raise some interesting points. I have been to China a number of times, but I have no idea what their environmental assessment processes are. I suspect that if they aren't well developed, they will develop, so I think they will get more like us.

I think we could improve our environmental assessment processes in Canada. You were talking to the previous speaker about the issue of both federal and provincial environmental requirements. It's not clear to me why there has to be more than one environmental assessment anywhere in the country. Why can't there be one environmental assessment that would meet both federal and provincial requirements? I think that would be useful.

I think a good example of the difficulty in getting things done is the Gordie Howe Bridge between Windsor and Detroit. This is a little bridge — not very big at all — and there is no shovel in the ground, yet it has been talked about and studied for 20 years.

We have to find a way to improve the speed with which we can deal with the environmental requirements, but also the speed with which we can plan and get these projects going.

I contrasted the Gordie Howe Bridge with the St. Lawrence Seaway. It was a bi-national major project, maybe the biggest single civil engineering project in North America in the 20th century. Both Canada and the U.S. were able to get this done and do the construction in about five or six years. It's just incredible. We couldn't come even remotely close to that in this day and age, so I think there is a lot of work.

Senator Plett: Is that because it takes that long to do the assessment and there are too many groups, or is it because every time an assessment gets done we have some group that is protesting it and we have to start all over again?

Mr. Ballantyne: It depends on each project; it won't be exactly the same. It's a series of things. The delays are not always the environmental assessments. In some cases, there are other regulatory requirements that have to be met as well.

For the Gordie Howe Bridge, there were state requirements from Michigan that weren't necessarily environmental. There were approval sign-offs by the U.S. federal government, similar things in Canada as well.

We build up so much regulation or law that projects have to meet that they really are time consuming, and I think there are cases where people don't approve and will use whatever access they have to the courts to delay them as well. That happens. Again, I go back to the St. Lawrence Seaway. There were villages that were put under water in Ontario. The authorities in Ontario and the federal government were able to buy the people's private properties and there wasn't that much pushback that I can recall. I was pretty young at the time, but I do recall it.

There are things that were done then that wouldn't be acceptable now in terms of forcing people out of their houses and so on. That's how we got Upper Canada Village. A lot of those houses that were moved from those villages were put in Upper Canada Village.

The Chair: If there are no more questions, thank you so much, Mr. Ballantyne. That was very informative, very enjoyable.

Before we say good-bye to Mr. Ballantyne, the meeting on March 30 will have about an hour for in camera discussion. We will talk about our trip, our budget and about the Copyright Board. You have all seen the letter that we got back from the Copyright Board. We haven't heard anything more on the question of whether they will look at the board while they're studying the legislation. So I want to have a little discussion amongst all of us to see, if it's going to be stuck in the mud, whether we might want to unstick it here and have a couple of hearings or two on the board itself.

That's what we will be doing and if there is anything else you want to add to the in camera portion, please drop me a note and I'll put it on the agenda.

Senator Black: Does the clerk have any sense about timing of a potential visit to the U.S. so we can start to hold time?

The Chair: The first week of May is what we're looking at.

Senator Black: The first week of May, Energy is travelling to Atlantic Canada. That's why I want to get —

The Chair: We'll talk about it. We'll never be able to satisfy everyone's itinerary, so we will have to do the best we can and go from there. Otherwise, we will never get it done. We'll do the best we can and we'll talk about it.

Senator Massicotte: Could I ask Senator Plett about how his bill is coming along?

Senator Plett: I apologize it didn't get out yesterday. It is complete, it is being translated and I am very hopeful that you will have it sometime today.

The Chair: Anything else? The meeting is adjourned and we'll see you after the break.

(The committee adjourned.)