Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 17 - Evidence of June 12, 2003
OTTAWA, Thursday, June 12, 2003
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 8:39 a.m. to examine and report on emerging issues related to its mandate (implementation of Kyoto).
Senator Tommy Banks (Chairman) in the Chair.
[English]
The Chairman: We are continuing today our efforts to examine and report upon emerging issues relating to our overall mandate including the implementation of Kyoto.
This morning we are pleased to have with us witnesses from the National Roundtable on the Environment and the Economy. We have with us Mr. David McGuinty and Mr. Alex Wood.
I presume, gentlemen, that you have some things to say to us before we regale you with questions.
Please proceed.
Mr. David McGuinty, CEO and President, National Roundtable on the Environment and the Economy (NRTEE): Mr. Chairman, I would like to take about 15 or 20 minutes to walk you through a few things that the round table is pursuing. You have at least two reports distributed to you this morning. The first report is our report on indicators. The second one is the work we have released two weeks ago in Winnipeg at the annual general meeting of the Federation of Canadian Municipalities on environmental quality in Canadian cities and the federal role.
Before getting into the details of both reports and making some remarks on ecological fiscal reform —how the tax system can be used to achieve environmental improvements — I want to talk to you about the national round table because some of you may not know what we do.
It is a departmental corporation at the Privy Council Office. It was created in 1994, and it reports directly to the Prime Minister. It is the Prime Minister's advisory council on environment and economy issues.
We spend much time as an independent federal agency doing consultations. We spend most of our time meeting with groups that never would meet together in a normal course of fashion. We have 25 members around the round table. They are appointed by the Prime Minister. They come from every walk of life. There are industrialists, environmentalists, labour leaders, First Nations leaders and others. There are no politicians on the table, and there are no government officials. It is truly a civil society gathering, as they say.
We have worked hard in the last 10 years to keep the organization independent and to create a neutral forum. It is a safe haven for real full and frank debate on what is going on around these issues regarding sustainable development.
We are not in the problem business. We are in the solutions business. We spend much time putting forward balanced, reasoned and practical recommendations for change. When you look at both those reports you will see that they very much speak to that kind of recommendation.
The bottom line is that we believe in the round table that an investment in the environment is an investment in the economy. We work from the basis that environmental injury is deficit spending and that there are many, many instances of market failure in the Canadian society that have to be corrected. Once they are corrected, they will lead to both enhanced environmental and economic efficiency.
This belief guides much of our work. The two areas that I will speak on today are our work on indicators and our examination of fiscal policy in the context of this climate change giant that we are trying to wrestle to the ground.
Both of these areas, indicators and climate change, are predicated on the knowledge that healthy ecosystems are major producers of wealth. This is not just about the environment. We can forget about running a prosperous economy long term if we damage the ecosystems that give us free clean air, free clean water, free wood fibre and free pollination without which we cannot live, a stable climate and other crucial goods and services that we simply cannot any longer take for granted and leave unvalued.
We will be talking today, and we will continue to talk about on an ongoing basis in all our programs, that it is now time to revisit the economic architecture of the country and how we make decisions. We have to expand our frame of reference, and we need, at the same time, to begin taking into account the long-term effects of economic activity on our natural environment.
We rely on various macro-economic indicators every single day to make decisions such as the gross domestic product, the GDP. We need the GDP because it helps us support decision making on economic development. However, these economic indicators, while they get all the attention, do not provide us with any sense as to whether current economic activity is affecting the prospects for future generations.
It is precisely because of this imbalance that the Government of Canada, through its then Minister of Finance, Paul Martin, asked the round table nearly three years ago to work with Statistics Canada and Environment Canada, to come up with a small number of new national indicators that would supplement economic indicators like the GDP. One of our biggest challenges, which we have captured in this report on indicators, was making the indicators clear and easy to use while making them relevant in an economic context. We focused on the concept of "capital," which is an economic term that refers to assets that we will need in the future to sustain production.
In particular, we worked on devising indicators that can address the state of what we are calling our "natural capital," as opposed to our built capital, financial capital, social capital, or human capital. We need indicators especially for ecosystem services for which there are simply no substitutes as of yet.
There will be selected indicators and measure, for the first time on a national basis. They measure some of our most basic and crucial types of natural capital, such as air quality, water quality, greenhouse gas emissions, and the extent of two types of key ecosystems — forests and wetlands.
One indicator of human capital, educational attainment, was included in the final list. This indicator was included because it reveals how our investment in a well-educated workforce will help us prepare to compete in a global knowledge-based economy, where the most important input is brainpower.
These capital indicators, taken together with more traditional economic indicators, are finally going to begin to provide us with a powerful sense of the state of Canada's environment, economy and society.
In particular, these indicators are important climate-change policy tools. Some, like the greenhouse gas indicator, are directly linked to the issue. Others, such as the wetlands indicator, will help determine the impacts stemming from climate change. Yet, again, forest cover is important, not only because we are a nation of forests and water, but also because forests will continue to play an important role in sequestering carbon as we desperately seek to drop our greenhouse gas emissions by some 30 per cent.
The government, in its 2002 budget, referred this to us. At that time Mr. Martin rose in the house and said of all the single measures I could introduce in a budget speech, this announcement and these indicators have the capacity to have more influence on Canadian society than anything else.
The first thing we did, as we normally do when we get an assignment, was to convene a broad multi-stakeholder working group, a steering committee. This is the product of indicator experts, government officials, private sector representatives, bankers, economists, environmentalists, labour leaders, and Aboriginal leaders. They either brought invaluable direct experience as indicator experts, or they gave us a reality check.
We went beyond that. We also took these indicators out to 1,650 other Canadians. We were astonished when we held our first meeting; we were expecting 250 folks and 850 registered. We also worked with approximately 70 scientists and statisticians to ensure what we were creating were technically and credibly robust.
It became apparent to us, during all the deliberations, that the data, the information on all types of capital should be connected to Canada's system of national accounts.
This is the system of national accounts that is held by Statistics Canada. It is the information system that supports the key macro-economic indicators. The GDP reflects many things. The data to backstop and support the GDP is held in the system of national accounts. The incorporation of data on natural, human and social capital into this system of national accounts may sound like an esoteric thing, but doing so will make Canada the global leader in analyzing the connections between the environment, the economy and our overall societal well-being.
For the last three years, the World Bank, the United Nations and the OECD have been all over this initiative because they are working with many countries, and others are working on their own, trying to find the pathway forward to better track natural capital in the context of their economic and other forms of capital.
Determining better climate change policy is a concrete example of the benefits of expanding our system of national accounts. We must to be able to assess policy options in this area, where information will be required on the impacts of climate change; the economic activities that lead to climate change; and the costs of reducing emissions that lead to climate change.
We already have some basic data in each of these areas, but meshing them into one coherent picture is impossible today. We simply cannot link the environment and the economy together from a statistical point of view. It is something we need to learn to do, and we need to learn to do it fast.
As a result of this report, Statistics Canada has created a detailed, long-term plan as to how they believe the accounts should be expanded. They are openly acknowledging that while creating accounts is one thing, populating them or backfilling them with data is something altogether different.
That brings me to one of the strongest findings emanating from this process. When we were trying to determine which indicators would be recommended in this report, we were truly astonished at the lack of good-quality, regularly updated, national information on even basic environmental issues, like water and forests. Imagine, a nation of water and forests, we cannot tell you today what the state of our water and forests are.
However, the program participants did manage to create some basic robust indicators in these areas, but they are very much the exception.
In cooperation with all levels of government, we need to rebuild or sometimes build our information systems in the area of the environment. That is why this report also strongly supports something called the Canadian Information System for the Environment. This was created by Environment Canada to catalyze the creation of a system that collects the appropriate information, shares it and makes it accessible to all Canadians.
The indicators, the system of national accounts being revisited, and the Canadian Information System for the Environment will bring an integrated vision that will help safeguard our future prosperity. It will also require strong departmental cooperation, one that both Environment Canada and Statistics Canada have begun to develop and are determined to continue. We are now helping both departments by presenting our recommendations to cabinet. The environment minister has committed to advising his cabinet colleagues on how to respond to the proposals presented to you today.
Our work asks a simple question, which we are convinced now resonates with Canadian citizens. This is the question: Are we living today beyond our environmental means and compromising the ability of future generations to enjoy a high quality of life? Should environmental injury not be viewed, and monetized, as deficit spending? Citizens now expect the complete avoidance of deficits everywhere. When it comes to nature, are we running an ecological deficit and can we afford one?
That brings me to the second theme of this morning's presentation, which is the question of fiscal policy.
I want to turn to the question of climate change and tax policy. I would like to draw your attention to what we see as three challenges facing Canada as it moves forward to implement its climate change commitments.
The first of these has to do with the absence of a clear, long-term strategy that examines our energy future in the context of what we know about our climate change commitments. As you are no doubt aware, or maybe you are not, the U.K. government recently released a white paper entitled, "Our Energy Future: Creating a Low Carbon Economy." This work brings together analysis of U.K. energy supply and demand out to the year 2050, with a set of commitments relating to carbon emissions. This is an exercise that has been replicated in many other OECD countries, but not in Canada.
The major advantage of such a document is that it provides a clear road map to the general public and policy- makers on how elements as diverse as transportation, agriculture, innovation and education, health and the environments, to name but a few, come together around the issue of energy and climate change. It provides a framework for how public investments can, and will be, made. It also lays out clear expectations that help shape long- term business planning and investments.
Let us not forget 86 or 87 per cent of all greenhouse gas emissions come from the exploitation, the transformation and the consumption of fossil fuels. Climate change is not a pollution issue. Climate change is an energy issue.
Such an exercise has not been undertaken in Canada. The National Energy Board has conducted only a small scenario-building exercise relating to energy supply and demand to 2025 for Canada. It is descriptive, not prescriptive. You cannot look to that document and say, "I see where we are going." Recently, Mr. Anderson made comment about the need for Canada to carry out just such long-term planning in relation to energy and climate change, so we are encouraged.
The second challenge relates to the absence of coordinated decision-making governance architecture, in government at large. The round table has seen over 10 years of practice, not theory, repeatedly in its work, that there continues to be a miss-match between the kinds of horizontal thinking and decision-making that is implicit in these issues of sustainable development, and the basic structures that exist for public policy making in Canada.
This is a difficult question and one for which we do not have an answer or a silver bullet. We are, however, just launching a new program on governance and sustainability and we would be pleased to come back and share some findings with you in about a year from now.
The third challenge I want to highlight relates to the use of economic and tax instruments in the attainment of objectives in this area of climate change.
The basic fundamental truth — and this will come as no surprise to most of you — is that our use of tax and other economic instruments to positively affect outcomes on climate change is weak. This situation means that Canadian governments, and I stress governments, have not capitalized on the potential major impact that a creative and concerted use of fiscal policy can have on addressing climate change.
I will highlight two programs that have direct relevance to this question. The first program is on ecological fiscal reform and urban sustainability, which you will find in the report; and the second is on ecological fiscal reform and energy, a program Mr. Wood is now driving with another team.
The question of urban sustainability has a direct bearing on the issue of climate change because it intersects with things like public transit, urban form and energy use. We are 82 per cent urban now. We will be 90 per cent urban in 20 years. Not only will we be 90 per cent urban, but also by 2008 the globe will be, for the first time in human history, an urban population. More people will be living in urban centres than rural areas across the planet by then. As 1.8 billion more people come on this planet in the next 25 years — that is almost two more Chinas — 90 per cent of them are going to be living in developing country cities. It is about the cities going forward.
Our recently released report identifies recommendations for how fiscal policy — how we spend, how we incent, how we disincent and how we tax — can be used to promote urban sustainability with beneficial impacts on climate change.
We are calling for recommendations in this report in four key categories. First, the federal government has to get its house in order. Second, we have to support urban transit more meaningfully than we have been. Third, we must look at how we are supporting the construction of infrastructure in cities. What kind of infrastructure? Is it sustainable? Is it more roads? Finally, we need to encourage the efficient use of energy and land. We have, for example, recommendations here to amend the accelerated capital cost allowance tax treatment in the Canadian Income Tax Act.
We also have a program on ecological fiscal reform on energy. We are looking at how fiscal policy can be used over the long term to promote the reduction of carbon emissions from Canadian energy systems, both in absolute terms and as a ratio of the Canadian GDP. We are looking at three different sectors that we feel have the potential to contribute favourably to what we call long-term decarbonisation of Canadian energy sources, but in which a number of obstacles still remain that might be addressed using fiscal and other economic instruments.
Those sectors are: hydrogen, the hydrogen economy; energy efficiency, what we can be doing from a fiscal perspective to drive up energy efficiency in Canada; and renewable energy. Our objective at the end of this series of three case studies is to put forward some pragmatic, robust and evidence-based options for change — practical recommendations to the government at large, and to the Department of Finance specifically. We hope to extract some general lessons from the case studies that will relate to the kind of framework of policies Canada will need to promote and set up long term to help drive down our carbon emission reductions.
This is in the future. I would like to turn to the more general issue of what fiscal policy looks like now in relation to climate change commitments. There are measures in place but the policy is weak. There are a number of tax measures, spending programs and initiatives that have an indirect bearing on the issue. What there is, however, is terribly piecemeal. It does not target the individual Canadian consumer per se, nor does it provide the broad wholesale base of fiscal support enjoyed by other parts of the energy sector. There is yet no evidence of the targeted measures announced in the government's climate change plan.
I will close here by looping back to our earlier observation of a need for an overarching vision. There is no explicit alignment of fiscal policy with a broader challenge posed by climate change. There is no alignment at the federal level, but more importantly, there is no alignment among all three orders of government. If you were to cut a vertical swath between the federal, provincial and municipal governments, there are many measures that work at cross-purposes, not only at the federal level but also among the three. Given how critical our energy sector is to the health of our economy, given how substantial these climate change challenges are that lie ahead of us as a nation — with 30 per cent greenhouse gas reductions that we are supposed to achieve by roughly 2012 — this is a situation that is very troubling for us and concerns us greatly.
The Chairman: Thank you for bringing these reports, which I assure you will have our attention. I had a chance to peek at the older of them, and the work you are doing is admirable.
I really like what you had to say about using tax and fiscal measures as a tool rather than as a blunt instrument — although it might be hard to disguise them in that way. Would you talk for a moment about the fact, when the government is balancing its books — which it must strive to do — tax forgiveness and tax breaks and rebates and the like are exactly the same when it comes down to it as writing a cheque. This relates somewhat to what you said about being able to monetize our natural assets. However, when we are talking about things you can actually spend and send back and forth to people in terms of cheques or paper money, when a government is talking about making tax breaks for a corporation for doing a good thing as opposed to an unthinking thing — or to someone to buy a better furnace or fix up the insulation on their house — it is exactly the same as writing a cheque. There is no difference; when the accounting is done, the bottom line is affected in the same way. Are you finding fertile ground in the Department of Finance when you talk about things upon which those ideas can fall?
Mr. McGuinty: Let me backtrack for a second. There is a broad spectrum of approaches to achieving the appropriate balance between our economic growth, our environmental integrity and overall societal well-being. Governments often speak about an optimal policy mix between, for example, command and control regulation and pure volunteerism — companies or sectors who say we will do this ourselves or governments who say, on the other hand, you will do that all right. There are all kinds of measures in that range.
Our experience is that, in Canada, we are in a state of infancy with respect to exploring how fiscal measures could be used to achieve that optimal policy mix — to achieve the proper balance between economic growth, environmental integrity and societal well-being. Environmentalists, with many of whom we work, often talk about letting economic prices tell the environmental truth. For example, if you run another wastewater pipe through a farmer's field into a new suburban development, I can assure you the citizens who are buying their lots and building their homes are not paying the full price for those services. We do not have full costing for basic services like water and wastewater. This is throughout the system.
The Department of Finance often talks about its responsibility as being removing impediments that get in the way of the operation of the free market. Its job is to remove impediments that are market failures.
The department has also argued in the past that, for example, the Income Tax Act is not a tool to achieve public policy ends. I do not know, I went to law school and I read the Income Tax Act and my recollection is that it is full of public policy objectives. In fact, it is an interesting document that collects and helps to redistribute wealth. To argue that the role is not to achieve the balance I spoke of earlier is nonsense.
The difficulty is in breaking through the barrier that I can describe this way: Canadians understand that if they want education systems, they have to pay. If they want health care they have to pay. If they want infrastructure, they have to pay for that too. However, they want a free environment, and they do not want to pay for it.
This is the difficulty now. We now have to move across a line in economic thinking where we must begin internalizing costs that remain external. This is what the Kyoto Protocol has done for us. The Kyoto Protocol is as they say on Sesame Street, "One thing is not like the others."
Kyoto is not like the other multilateral environmental agreements that we have signed because the Kyoto Protocol has monetized carbon. It has put a dollar value on carbon.
The owner of an Ottawa taxi fleet asked what it means to him. It is simple. He will have to pay for the right to emit greenhouse gases into the atmosphere because the atmosphere is absorbing those wastes. The atmosphere is processing them. Until now, as an economic input, he has not been called upon to factor in those costs. He will now have to do that.
The difficulty is bucking up against 125 years of economic thinking. Economists tell me this all the time when I speak about wetlands. Wetlands are that swamp that we drained to put into marginal agricultural production for which there are incentives for farmers to do so. Why are they doing this? They do it because there is no dollar value on the functioning of a wetlands.
We know that wetlands are hundreds of millions of years old. They are perfect, free, water and air filters for the planet. Canada has 26 per cent of the globe's wetlands. They filter the air and water as no other system can. We have not devised a technological device that can do it as well.
Economists say to prove that wetlands are worth something. My comment is always the same. I say, "Sorry, that is intellectually dishonest." The social science of economics is failing to measure natural capital, which is as indispensable to the functioning of our economy, as is our human, built and financial capital.
To think that you will be able to run the planet without wetlands is nonsense. There is a reverse onus. The economist should prove that the wetlands is worth zero, and then we can talk.
The Chairman: That back 160 acres of wetlands has been monetized, because when I bought it, I did not pay the same amount of money as if it were not half under water, and if it were tillable. I paid less for that section of land than I would have if it were flat and dry. I hope that it would not be dry, but not wetland. It has been monetized on the down side. That is to say, that land is worth less.
Mr. McGuinty: The price you may have paid for that back 160 acres does not reflect the ecosystem that the wetlands provides. There should be a monetary value possible to assign to a functioning ecosystem. It provides water filtration.
There was a town recently in Saskatchewan that had serious water problems. I think that they approached Ducks Unlimited, which had maintained water systems in Saskatchewan. It was able to provide in a balanced and sustainable way the water supply that town desperately needed.
I will give you another example of monetization. Five or six years ago, New York City desperately needed a new water treatment system. They got full costing on an up-to-date, technological wastewater treatment facility. It was priced somewhere between $8 billion and $12 billion. It was for the entire city of New York.
That was expensive. They deconstructed and examined seriously from where the water came. It came from up north in the Catskill Mountains. The administrator of New York City felt that they could do the job better. They went upstate and purchased huge tracts of land. They took the land out of circulation forever. They reclaimed and preserved all kinds of wetlands. They paid cities and towns upstream for their new water treatment facilities. They determined that there was a much more long-term sustainable solution using an integrated watershed management approach. They accomplished the entire thing for less than $4 billion.
If you look at eco-service systems as simply something that can be dealt with without anything economic consequence then that is what will happen. It will be treated the same as it has been since the Industrial Revolution. It is for free.
If you were buying the land, and you were paying more because there might a tax measure on the books that rewarded you for keeping that wetland intact, as the Americans have done, then it would be a different story.
The Chairman: Have you made specific recommendations to the Department of Finance about measures having to do with tax that Canadians could easily grasp and put into place today? If you have, what has been the response from finance?
Mr. McGuinty: We have made dozens of recommendations. Some of the recommendations are expenditure-related and some are tax-related.
We have had success, I would say, 30 per cent of the time. Sixty to 70 per cent of the time we continue to move to advocate the take up of those measures, but some of them are costly.
Tragically for us, we feel that we are doing it in a way that is sometimes piecemeal. We will take the notion of sustainable development and disaggregate it into pieces that people will understand. We will look at environmental quality. We will look at the Brownfields Challenge, for example.
In each area, we will make specific tax recommendations. That which the government promised in the first and second red books has never been delivered. The government had promised to go through the entire fiscal structure of the country and look at it through a lens of sustainable development. They were to determine what signals were being sent out, and the signals citizens were getting. It was very practical speaking. This report on urban design singles out one measure.
If you buy a brand new home today on a green field on the outskirts of Toronto, Ottawa or any city, you get a one- third GST rebate. Most of those homes are being built on farmers' fields. We are building the way we were building in the early 20th century.
You get a one-third GST rebate to buy that house. You get a provincial land transfer tax deduction as well, in Ontario.
Let us say that you buy a triplex in the center of any city, keeping that home in the 100-year-old housing stock world. You spend $150,000 in renovations and turn it into an R2000 property. You have increased densification, which is the stated policy of every major city in Canada. You get no reward. There are no tax benefits. This is just a small example of how the system is not aligned with the overall priorities in the area.
The Chairman: You probably would have aggrandized the property, and the assessment would be higher.
Senator Milne: It might be valuable for the committee to have a list of the recommendations that you have made to the tax department.
The Chairman: Could you do that for us?
Mr. McGuinty: We could.
The Chairman: We would be intrigued to know those recommendations. Could you tell us about the 30 per cent recommendations that were adopted and 70 per cent that were not?
Senator Finnerty: You were at the meeting of the Federation of Canadian Municipalities. Were you able to convince any of the reeves or mayors? Did you get feedback from them or make them understand what is happening?
Mr. McGuinty: Sure. We were flattered and pleased to hear that when the 20 big city mayors huddled at their annual dinner meeting, they said that there were two things of note at their AGM.
First was Mr. Martin's leadership speech on tax room for gas tax for cities, to pump more income into cities. Second was this report.
I cannot comment on the merits, as we have done no studies on a gas tax offset to cities. We are finding this whole area is very much an ice-floe-to-ice-floe measure. Cities say they want more money from the federal government, and the government says no, they are already pumping infrastructure money into the cities. Six months later, the cities come back and ask for a tax-deductible transit pass — no. A year later, they want a part of the gas tax — maybe: one says yes, one says no.
What we do not have is a serious examination at the federal-provincial and fiscal levels as we migrate. We are morphing into 12 city-states. That is the future of this country. We are not concerned about rural issues, parts of the country that are emptying out. We see no evidence that this is slowing down, but there is no coherent examination of fiscal policy.
We delivered a message to the big-city mayors in the report, that it is time now to get very detailed about how to go forward and generate the kind of options, because we do not think you are getting them.
Senator Finnerty: Do you think they took it seriously?
Mr. McGuinty: Every major Canadian city that I know of is running a deficit this year. With the downloading in certain provinces, they are cash-strapped. Canadian cities are hamstrung; they are shackled, compared to their European and American counterparts. I was down in Philadelphia touring the hollowing out of the city, but it also charges a 3 per cent income tax. No Canadian city has that power.
There are other revenue-raising tools that Canadian cities do not possess. They have property taxes, bylaws and development charges and that is about it.
The Chairman: They also have a different constitution.
Senator Merchant: I wish you all the luck in the world because I do not know that we are going to be able to engage the public. Do you find that the individual person is engaged in this battle? It is individuals that are producing about a quarter, I think, of the greenhouse gases. Increasing taxes, raising prices, what was the response of the taxi driver after you told him he would have to pay for it?
Mr. McGuinty: It was fascinating because the particular owner of that taxi fleet happens to be heavily linked in with Ballard Power. We had an interesting demonstration project for the country by taking 100 or 200 of his cabs and running them on fuel cells for three years.
The question of public engagement is a good one. The first thing I would say is there is room for public mobilization using price signals. I am a huge fan of price signals. I used to live in Rome, Italy, and I paid Canadian $2.25 per litre for gas. I can assure you I was more careful about my driving than I am here. The price signals are a huge area to re- evaluate.
With respect to Canadians understanding the issue, I think Canadians are beginning to understand that something is wrong. I think that when Toronto hits 50 to 65 bad air days this summer, they are going to link not necessarily their air quality challenge with the Kyoto Protocol or greenhouse gases, which they should not be doing, but they will link it with health. They will link it with not being able to put their asthmatic kids out. They will link it with the preponderance of EpiPens in kids' school drawers. They will link it with not being able to take parents and grandparents out. They will get the challenge in economic terms. They understand that it is costing the Toronto economy about $1 billion a year because of gridlock. In our just-in-time delivery world, our factories today are trucks on highways. That is where most of our inventory is held, in the new economy.
They are not sure what Kyoto means. One of the things I have been supplicating with respect to ministers is, if we make this real, then this is a revolution. For 10, 15 or 20 years hence, we should be using Kyoto as a fundamental rallying cry.
Another thing we have discovered is there are too many issues around the environment. I do not know of a single environment issue: I know about environment, economy and societal well-being issues because they are linked. Too many of these issues are painted as pain, grief and cost.
Crazy people who hug threes, put spikes in trees, I do not want to deal with this. This is about economic opportunity. This is about remaining wealthy. We went into the city business five years ago with Mike Harcourt, the former Premier of British Columbia. We went around the Ottawa bubble and talked about the city crisis, which is coming on, whether we like it or not. People were polite and deferential, listened and did not have time for us.
We went back to the drawing board and said this is not working. We went down to the World Bank, met with the president and came up with the numbers. We identified the $1-trillion urban infrastructure economy, second only to international tourism, with a rapidly urbanizing globe. We figured out that Canada was getting less than 1 per cent of its share of the opportunities globally. We told that story and frankly within seven weeks the Prime Minister launched the sustainable cities initiative, funding for which he doubled in Johannesburg six months ago.
If you flip it on its head with Canadians, you say this is not just about penalizing you and forcing you out of your cars and those other things that are often portrayed, it is about new jobs and positioning Canada as a global supplier of sustainable solutions for the planet. The last time I looked these issues are not going away, they will only get worse. If you flip it that way and make it economic opportunity, maybe you get more buy-in.
Senator Merchant: I have some charts here. I have a comparison of global emissions. I am starting out in 1990, which is going back 10 years and then I will tell you what is happening in 2000. They rank different countries. In Canada, we emit 22 tons per capita, the U.S. emits 25, but we are very high, we are big polluters. We are twice as dirty as Europe, four times the Middle East, more than twice Japan, seven times as dirty as China, and eight times as dirty as India.
I think Canada has a big job to try and get our house in order in fairness to the world, but my concern is we cannot seem to get the United States to sign on to the Kyoto Protocol. In terms of competitiveness with the U.S., how does this affect our industries and our competitiveness?
Mr. McGuinty: That is a huge question, a good question, but a huge question. Many of you have been around the world. I had the privilege of living almost nine years abroad and travelled widely, lived in Africa, and lived in Europe. This country is wealthy beyond belief for most people on the planet. Its perception internationally is big, green, few people, and very wealthy.
From the roundtable's perspective, the members are unanimous in this respect. Canada has an obligation to show leadership. It was the western industrialized economies that built their economies on the back of the atmosphere. Let us be honest about it. Now, the question is: How can the industrialized world move forward to begin — sometimes the best way to begin is just to begin — how will we begin to bring down, for example, the kind of ratio you were quoting?
Certainly, there is a feeling behind the ratification drivers that Canada has a global responsibility to do this, because of its position in the world, because of its wealth and because it built its economy largely on the back of the atmosphere, like the United States and Western Europe.
The question of competitive linking to the United States is a complicated question that I am not that well suited to answer. There are some advocates who say it is best for Canada to get into the Kyoto Protocol sooner rather than later because we will pay much less for carbon. I think the Government of Canada has acted on that belief by capping per- ton charges of carbon at $15. If the price of carbon exceeds $15 per ton, the Government of Canada has said it is prepared to indemnify Canadian actors, who will be paying now for the right to pollute.
There are others who say, no, this is simply going to make us uncompetitive vis-à-vis our American counterparts. Yet, again, Mr. Bush saw fit to say in his State of the Union address that the American administration was going to move very aggressively to actually use the fiscal and tax system to incent a further decarbonization, or less carbon- intensive economy in the United States. How this will settle, I cannot predict. I do not know. We have not been working on that question. Mr. Wood can probably add more.
However, while we have an energy market here under NAFTA, it has always been perplexing to me why we do not have serious discussions ongoing about a NAFTA-wide greenhouse gas response. The economies being as linked as they are, Canada driving the free trade agreement of the Americas to expand our reach to Tierra del Fuego, why is it that we are fully engaged on the Kyoto Protocol side, but we are not fully engaged in discussions with Washington and Mexico City, for example?
It seems to me to be a great mystery. I do not know whether that is simply because the momentum behind the international deal was such that we were there and helping to drive it and we have been there since the late 1980s and so on, but it is perplexing.
Mr. Alex Wood, Policy Advisor, National Roundtable on the Environment and the Economy (NRTEE): On the question of what is happening in the United States and how it impacts our particular situation vis-à-vis Kyoto, one of the interesting aspects is that from what we know — and people we talk to quite a bit in Washington have held this up as a general trend — the American response toward Kyoto is very much toward the specifics of the Kyoto Protocol itself. Even the Republican administration recognizes there are, beyond Kyoto, a certain number of protocols that will come into place that the United States fully intends to be a very active participant in.
The other part of that, of course, is that there is sort of a gulf in public perception between what the administration says at a fairly high level on the Kyoto Protocol and the kind of steps they are taking on hydrogen and clean coal at the federal level, and the kind of steps being promoted in certain of the states, for example. One interesting point to illustrate this is that last year — this was reported about three or four months ago in the papers — carbon emissions in Canada increased; in the United States they decreased. That is largely a function of action at the state level.
Another related point is that, for the North American economy, what has been happening, if you take our different industrial sectors, carbon emissions are actually decreasing over time as a general trend. The one sector where that is not true is transportation. The transportation sector, meaning the auto industry, is a North American sector, an integrated North American economy essentially.
The long-term policy direction in that area is being driven by the state of California. California has the seventh or eighth largest economy in the world by itself. It has the most restrictive air-quality and carbon-emission control measures in place for the transportation sector. All of the automakers are developing technologies that are basically servicing, at this point, the California marketplace. What you have there is a clear example of a state having put in place a framework of policies that is driving this kind of virtuous cycle when it comes to the development of environmental technologies that we think should be replicated at a national level in Canada, or else we will pay a large cost for this.
I have talked to people in the hydrogen business here in Canada who say, we see what is happening in Canada, we read between the lines, but we are not getting a lot of support, either in public statements or in actual money from the federal government. We look at the state of California, where our natural market is likely to be, and we have to start drawing some conclusions about where our future lies. That is the kind of context we are facing there.
Senator Merchant: We are familiar with California. In Canada in the 10 years between 1990 and 2002, our carbon emissions rose by 18 per cent.
Mr. Wood: One of the interesting aspects to this that I have always thought does not get enough public discussion is that competitiveness is largely determined, as we are coming to understand now, by the issue of productivity. How many of our resources go into producing one unit of GDP in the rawest term? There was some interesting discussion in the paper the other day that got me thinking. The article in the paper was saying that we face a real productivity crisis in Canada when it comes to our human resources. We may be at the point right now where we cannot push worker productivity beyond what it already is.
What I have found interesting about that part of the productivity argument is that it does not seem to focus on the issue of energy. There are good reasons why we are one of the most energy-intensive economies in the world — the weather, the distances involved. Part of that, surely, represents an opportunity for Canada. Energy is a substantial input into our industrial economy. Any marginal improvement we make in the use of our energy makes us a more competitive economy. Any measure, presumably, that translates into a more productive use of that key input makes us a more competitive economy.
Senator Milne: Mr. McGuinty, you spoke of the need for a horizontal approach to the whole problem that you are facing with trying to convince government. Yet in the federal government, as you know, all the departments are basically silos. They are vertical. If you had a wish list, what would be your top three wishes to see what should be done at the federal level for cooperation between departments to try to make this more of a horizontal approach by the government?
Mr. McGuinty: Triple the power of the Senate committees is what Mr. Wood was saying to me.
I think there have been some interesting developments and precedents in other places. The French government, for example, has just collapsed a few of its ministries into one — a ministry for sustainable development.
When Mr. Charest was leader of the Progressive Conservative Party of Canada, he proposed in a platform document that three or four federal departments be collapsed into one federal department for sustainable development. He is now bringing some of that change to the Province of Quebec. The British Columbia government is experimenting with a new ministry where two or three previously disaggregated activities are brought together under one ministry.
The Kyoto Protocol has finally impressed upon the centre of the government, in particular the Privy Council Office, Treasury Board and the Department of Finance, that the same old treatment of these issues will not necessarily work. It will be hard to delegate this responsibility to just one line department to take the lead.
It reminds me of the first time in Canadian history that we brought together 25 deputy ministers and assistant deputy ministers into a room at the Chateau Laurier with 40 outside leaders from Canadian society, including religious, environmental and industrial leaders. We organized the day that eight deputy ministers would have to get up in front of the clerk, who was co-hosting the meeting with us, and present these eight cross-cutting themes in all the sustainable development strategies that these departments must now prepare for the commissioner.
At the end of the day, one of the participants from outside government said, "This has been just fantastic. I can't believe this sophisticated system, and I cannot believe these eight cross-cutting themes are really robust. It is very interesting, but I have one question for you." The question he then posed was: "Who is in charge here?"
My first wish would be that an undersecretary of cabinet at PCO be appointed with specific responsibility for sustainable development in the federal government. The old expression that we heard at the dinner table with 10 kids was, "Sorry, we will not have a situation where everybody's job is nobody's job."
The notion appears in this area of sustainable development that everybody's job becomes nobody's job. There is no line of accountability ending anywhere.
The darnedest thing about sustainable development is that there could only be one minister responsible for it. That is the Prime Minister. That is why this national round table was situated by Parliament in 1994 in the Prime Minister's department. Only the Prime Minister could be sending the kind of super departmental messages that have to be sent.
At the same time, we have not seen an investment in the official world of government where questions find their way on to someone's table. That would be one of my first recommendations for change.
My second recommendation for change would be to revisit the employment contracts of every single deputy minister in the federal government. To revisit the operative paragraph that deals with performance in sustainable development. Their performance should be evaluated more robustly with key indicators on what they have and have not done.
My third recommendation would be to create a cabinet committee for sustainable development. We do not have such a committee now.
These issues are the most important issues. In a way, this is probably the most complex public policy nut that we will have to crack in the next 25 to 50 years.
My key recommendations would be those three in that order.
Senator Milne: Mr. McGuinty is writing our report for us.
Mr. McGuinty: As long as there is no attribution.
Senator Milne: I understand that yesterday the government threw another $74 million into the kitty for home refitting, which will do about 74,000 homes, if they stick to their $1,000 per home policy. Do you think that this is a valuable beginning to helping individuals meet their one-ton challenge?
Mr. McGuinty: Yes, it is a valuable beginning. It is a $74 million announcement. I do not know where it fits into a larger overall approach to Canadian society.
Some of the provinces are doing some creative things. The Province of Ontario, for example, has a rebate up to a $1000 for an alternatively power-fuelled vehicle. In fact, I hate to admit it but I think that I have only one of the few natural-gas-powered vans in this city, which I purchased from a car dealer who took it in from a trade-in from the Senate. I am driving one of your vans, and my kids appreciate it.
We got a thousand dollar rebate from the Ontario government because it is an alternative-powered vehicle. I think it is a good beginning.
I do not know whether that kind of energy retrofit will be the best bang for our buck. I do not know if the cost benefit analyses have been done. Certainly, I know the government wants to reach out and touch Canadians and say, "You can do this. This one-ton challenge is something you can meet in simple terms. By the way we are putting some cash behind it."
Same as you, I saw the announcement for the first time yesterday while I was in Toronto. I don't know how it fits.
Mr. Wood: We have done some analysis on other types of fiscal instruments and on things such as sulphur content in various fuels. One of the big questions that comes up in the course of determining these tax instruments is: "How high do they need to be, or how large do they need to be to effect change in people's behaviour?"
I assume that some analyses have been done to set that particular level. It is always helpful when we face situations like that to cast them in our personal situation. Would a thousand dollars make a difference in the kinds of decisions that I face on a retrofit? It would probably sweeten the pot a bit. However, I may not be the typical Canadian when it comes those kind of decisions, working where I do.
It certainly is a step in the right direction. We have found with the one-ton challenge that in the federal register there are very few targets for the individual consumer.
We did some quick analysis of the stuff that we know about before coming here. The excise tax exemption on ethanol and other alternative fuels is the only type of tax that targets specifically the consumer. There are some taxes that go toward the natural gas vehicles. The rebate that Mr. McGuinty received expired in 2002 and has not been renewed.
Senator Milne: That was an Ontario program, not the federal government.
Mr. Wood: There was a federal one that expired in 2002, but Ontario and B.C. are the only provinces that have a rebate currently.
Most of the federal tax measures that go toward this are targeted at corporations or institutions for the production of renewable power, for example. It is not on the consumption side of renewable power. There is no fiscal incentive that gives me a rebate for buying green power. It all goes toward the person who is putting up the windmill.
There definitely needs to be more backfill in the area of the one-ton goal. However, as Mr. McGuinty said, it is a step in the right direction.
The Chairman: One of the reasons for that is given in the deliberations that are now underway in the special ad hoc committee of cabinet. That group is trying to determine how, where and in what way to spend the $1.7 billion set aside for this.
One of the arguments is that that money should be spent where it can be spent with the greatest immediate efficacy. Where can we spend it so that we can reduce the emissions in the cheapest way possible? The "cheapest way possible" is not ever a phrase that applies to consumer efforts.
The "cheapest way possible" in the first instance applies to the big, overarching efforts, such as refitting federal buildings. I think that they will consider the fact that maybe the lion's share ought to go to the immediate, biggest- bang-for-the-buck, cheapest means of reducing emissions. We are hopeful that they will also bear in mind that other things need incentives and that other things need to be highlighted and assisted.
Senator Milne: Ethanol is not one of the most efficient ways of reducing carbon emissions.
The Chairman: It is not the cheapest. That is right.
Mr. McGuinty: Mr. Chairman, that raises a theme that repeats in the urban report. To what extent has the federal government revisited its procurement policies? Physician, heal thyself. Has it got its house in order? Has it mined as deeply and widely as it could in this area? With everything it procures, why is the federal government building buildings today, more than occasionally, on greenfield sites? When the Auditor General has compelled it this year to disclose its liability for its own contaminated sites, much less others' contaminated brownfield sites, why are we not showing the way?
If we could can harness the power of procurement of the federal government at some $180 billion dollars, the Province of Ontario which is close to $90 billion, and every other province and municipality in this country, all of a sudden, you are providing one heck of a market pull. It is a different kind of story.
Minister Anderson was on the Hill yesterday and we heard him defend that there are now one or two other ministers who are driving Toyota Pria or Honda Civic cars. Why are we not actually seriously greening 25,000 vehicles to E-85 standards, or these kinds of things? This is basic. The kind of traction that you would have expected to see has not occurred. However, the power of procurement is another fiscal tool, a spending power tool that I do not think we have harnessed.
The Chairman: We are going to be pursuing that assiduously because there is a law in Canada, which is a law that emanated from a senator, which requires — it does not encourage but requires — that federal fleets do certain things with respect to obtaining alternative fuels whenever and wherever they can. It is not being observed. We will be pursuing that assiduously.
Sorry to have interjected but I wanted us all to know this.
Senator Christensen: Getting the public involved in the issue is a difficult situation. Yet, the public is willing to become involved, if they can have some evidence that something they can do will make a difference, and that it is not just a local problem, but a global one.
Your example of Toronto with air quality this summer is a good one because although, perhaps, in Toronto the air quality will be very bad, that air will also migrate into communities that are surrounding it, and into cottage country where people who have escaped from Toronto will be seeing the effects of it. Suddenly it comes home that it is not just a Toronto problem, it is a problem in other areas.
In the area in the Yukon from which I come, we are fortunate to have clean air. On a couple of occasions within the last year, our atmosphere became hazy, red sun and all the rest of it. On one occasion it was from dust storms in Mongolia and on another, just two weeks ago, from huge forest fires in Russia. Yet, we were seeing the major effects of this in the Yukon. This brings it home to people that what happens here does not stay here, and what happens some place else ends up in our area.
Once people are aware of these things, and we have an obligation to see that they become aware, in a real way — acid rain was a good example — once it started hitting people in their fishing hole, things started to happen.
Your observation that in the long term, the growth in the urban centres, and this is something we have seen the statistics on and you have highlighted it, and greenhouse gases and transportation are issues in huge centres and are going to be exacerbated by this.
We look at the municipal level and the major problems they have with infrastructure. We could use zoning codes and building requirements, because when you are planning to build you have to provide parking for X number of places, to eliminate those sorts of things. When some infrastructure has to pass a parking lot, it is not getting the taxation and it is costing the city a lot of money to run services by that parking lot. If you are eliminating that requirement at the municipal level, forcing people to pay higher parking fees on a limited amount of parking, and gradually phasing out that parking and increasing your infrastructure within that city, you could go a long way. I am certain London is doing this now with the ticketing. Have you heard of other area centres that are following London's lead? Are they still in the forefront?
Mr. McGuinty: The City of Athens tried this about a decade ago. They said on certain days you could go downtown if your licence plate ended with an odd number and other days you could go downtown with even numbers. What they found was car sales doubled because people bought two cars.
To prise people out of their cars is difficult. The Japanese evidence we have seen indicates it is hard to prise people out of their cars.
I would return to some of the things you said. Yes, I think in some cases there is a feeling of both hopelessness and helplessness. It is too big. Flick the channel.
I remember coming in from Pearson airport one time, the main highway was so blocked they took me through Forest Hill or some lovely area, and it struck me at that time that air quality in Toronto was like death. It is a great equalizer; rich or poor you are breathing the same air. Whether you have a $1 million estate in Georgian Bay, if that air is wafting northwest you are still going to get it. It affects everybody.
You know what has not happened, in my estimation? I do not think we have seen a serious mobilization of Canadian goodwill on these issues for a long time.
I do not think we have seen it since acid rain. Mr. Martin came to Toronto and gave a speech when he was Minister of Finance for 625 financial services executives on this notion of indicators. He got up and said, "I am here to tell you I can't tell what the true health and wealth of this country is because all I have are economic indicators. So I need more."
He also said that he thought there was a real need to mobilize Canadians the way they were mobilized around deficit elimination. He went on to explain that, in his wildest dreams, he never would have thought it possible to inject into the Canadian lexicon deficit elimination in people people's daily use of English and other languages.
I do not think we have had a rallying cry in Canada in the last 20 years on these issues. I said to Minister Anderson and Minister Graham, who were looking at environment and foreign policy, if you are going to do Kyoto, if you are serious about it, say so and do so. Commit to it for a decade or two. Rally people around the notion that this is the right thing to do and put the flesh on the skeleton as you are going forward.
There are other examples in these two reports, but chiefly this urban one, which talks, for example, about the federal government putting five cents into infrastructure. Should the government put five cents into infrastructure, much less $1 billion, if there are no conditions? Should we not ask municipalities to come up with plans that are more sustainable in nature before we start matching funding?
The Federal government and provinces are not always in line with municipal authorities. Ottawa is in a situation where it is in discussions with the federal government because the federal government would like to write a $40 million cheque to build a convention centre. The city council and administration have said, we don't want $40 million for a convention centre, we need $40 million for public transit. That is our priority.
So you are getting not only systemic problems with the tax system, but now you are getting deliberate spending objectives that run counter or at cross purposes to this local community of 800,000 people. That example is so counterintuitive to common sense that I wonder why it is still happening.
Senator Christensen: You brought up the issue of the perception of the environment and environmentalists. It is time that we tried to change that to global health, both fiscal and physical, and get away from the word "environment" altogether because it is dragging baggage. There is an attitude of them and us for industry and environment. It is a constant clash, and the two are not mutually exclusive.
It is not that way in the real world, but that is the perception. In promotion and things, as we are trying to make these changes, we have to get away from that and find something that people will feel we are doing together. As people, we are concerned about the planet.
Mr. McGuinty: We asked the Conference Board of Canada three years ago to do a paper to show the difference between the competitive position of the city and the quality of its environment, to try to connect the two dots. We could not do it. We could not find the methodologies to allow us to connect those dots and show them as a straight line. However, there is increasing evidence that there is at least a dotted line between the two.
Richard Florida's work on cities is an example. We need creative impulses in the cities as we continue to move out of the natural resource sector and into another kind of economy. We know that environmental inputs are a factor for people deciding to move somewhere or to raise their family somewhere.
In 50 years, possibly the sale of portable back packs with oxygen masks will increase the GDP, but I do not think that most people would want to move to a place where that is potentially the requirement. It is a wild-eyed idea, but I think you get the drift.
Senator Christensen: Those living in urban centres have to be made aware somehow of the fact that for industry to be physically and environmentally responsible as they develop will cost money. That cost must be passed on to the consumer. The consumer should understand that.
You cannot load it on industry. Industry can be responsible but when they are in rural areas having to meet higher standards, we, as consumers, must be willing to pay those extra costs. They are often cheaper than correcting the errors down the road.
Senator Eyton: Unless it is imported from China.
Senator Christensen: What happens in China affects us. It is coming at us all the time through the jet stream.
Senator Eyton: That was not the point.
Senator Christensen: I know what you are saying.
Mr. McGuinty: The Chinese government is extremely concerned. Through some sophisticated epidemiological studies in certain parts of China, they are seeing a 1.5 to 2 point drop in IQ of their children as a result of toxicity of pollution. It is serious business now. They are very concerned.
Senator Eyton: I have enjoyed hearing your comments and the questions. I confess, and it may be entirely my fault, that I had never heard of the national roundtable until this morning.
I was trying to catch up, and I read your mandate and your mission statement quickly. I will read that quickly and then put a question mark behind from my quick examination. I will not ask all my questions because it would take too long.
Your document reads:
The Roundtable is composed of a chair and up to 24 distinguished Canadians. These individuals are appointed by the Prime Minister as opinion leaders representing a variety of regions and sectors of Canadian society including business, labour academia, environmental organizations and First Nations. Members of the National Roundtable meet as a roundtable four times a year to review and discuss the ongoing work of the agency, set priorities, and initiate new activities.
On the last one, is it paper or an ongoing effect? I looked at the membership and listened to your comments.
It really comes down to three or four questions. First, are you satisfied with the mandate and mission as it is stated in these reports? Are you satisfied with the progress that you have made to date? Do you feel that you are getting the attention and cooperation of your critical partners in this effort because you are working largely in their areas? You are working in the same areas as the provinces, cities and business. You are quite apart from consumers who are ever present.
It seems to me those three — cities, provinces and businesses — have to be engaged in at least looking at the make- up. It does not seem to me that they are, particularly given the manner you came into being and the way in which your members are appointed.
Have you been critical of some of the initiatives that are popular? I will give you an example. I have never seen a suitable economic rationale for ethanol as a fuel additive. It is a popular thing, and people talk about it a bit. However, as an economic solution to some of the problems we are talking about today, it does not make sense at all. Have you been critical of some of those initiatives?
What is the best thing that you have done in the last year or so? I would like an example of a concrete, on-the- ground result that you have accomplished.
Mr. McGuinty: Let me start with the mandate, senator. The national roundtable began as an idea driven by Canadian environment and energy ministers in the late 1980s. It coincided with Maurice Strong being put on a plane, with the support of the Canadian government when Mr. Charest was the Minister of Environment, to fly to 100 or more capitals and getting folks riled up to go to the 1992 Earth Summit.
The roundtable was a kind of program inside Environment Canada when it began in the late 1980s and early 1990s. The earliest versions were chaired by the Minister of the Environment. There was then a deliberate decision made to take it out of the Environment Canada setting and make it a standalone, independent agency at PCO reporting to the Prime Minister because of the nature of the issues with which it dealt. That happened to coincide with Canada's promise, along with 120 other countries in 1992, to create a national council for sustainable development.
There was a recognition that if we were to get somewhere else without spending much time figuring out where that was, we needed to get there together. We needed to start dialogue and processes that would bring better dialogue between industrialists, environmentalists, labour leaders and other actors in the scientific community. It is like the notion of co-managing our way forward.
We are satisfied with the mandate. It is so broad that you can drive a truck through it.
I came to the roundtable in late 1994, early 1995. It was roughly a year old when I arrived. There was an awful lot of debate at the beginning about what sustainable development was or whether this was a sustainable development agency or environment economy agency.
The notion of having more debates on what sustainable development is or is not is off the table.
None of the members are asking for clarification in this regard. Through practice, we have evolved an approach to this issue by disaggregating the notion of sustainable development into issues or bite-size pieces Canadians can understand.
I often describe it this way. Sustainable development is not a destination; it is a direction. It is 50,000 pieces of a puzzle in a puzzle box, and there is no cover picture. My own view, after 20 years in the business, is someone who tells me what the cover picture looks like, as far as I am concerned, is a terrible thinker or a liar. We cannot get our heads around what the world will look like one hundred years from now or beyond.
Let us deal with specific issues that Canadians can understand. I am disappointed to hear that this was the first you have heard of us, although when I was hired, that was the first I heard of it. Every senator and member of Parliament has been receiving our report for almost eight years, so we will have lunch together and get down to it. It is the volume of things hitting your offices as well.
I am pleased to say we have no difficulty now convening attention and cooperation. The power we convene in an agency that reports to the Prime Minister, frankly, only gets you so far. It is not something that we use on a regular basis, namely, you should come because this is the Prime Minister's agency. "So what?" someone might ask.
We have brought an approach to these issues — consultation, analysis, debate — which is tight. It is serious. We do not waste people's time, and we do not have any problem convening folks from the provinces and, certainly, not from the cities. We wrote the foundational document for years for the cities in this country, proving and showing how different their powers were compared to American and European cities. We have no difficulty getting folks to the table. Cooperation is not a problem.
Getting attention is a different matter. If what you mean by "attention" is actually take-up of results, that is more difficult. We are an advisory council, but I daresay we do more than other councils in terms of driving the results forward, doing the advocacy and the outreach, lobbying to get the word out and convincing folks this is a good way to go. We have had some success. It depends on the area.
The other thing is, how do you know you are responsible for it? As the deputy chief negotiator for NAFTA said, it is amazing what you can accomplish in the city when you do not have to take credit for it. How do you know that something released three or four years ago did not find its way through the system? How do we know that the recommendation we made three years ago to the federal government on enhancing the funding of education for Aboriginal Canadians between the ages of 25 and 45 in the Northwest Territories, which was announced in this budget, that those two dots are connected? It is not as if the minister calls and tells us he took our advice and put it in. Sometimes we see overt recognition in reflection of what we have done, and oftentimes, it may be something covert or implicit.
We are seen by the bureaucracy and the senior officials as an interesting place that is generating creative ideas to which they can toss hot potatoes. There are some issues that the Department of Finance, a Prime Minister or a cabinet minister cannot handle and will say, "What about the national roundtable looking at it," as then Minister Martin did on both this indicator's work. As he did when we devised Canada's first national approach to cleaning up 35,000 brownfields in our cities, announced in the budget of 2001. That is one measure of success. We have been in five consecutive budgets in a row, two in which we have been given responsibilities in the budget speech.
Have we been critical of popular initiatives? We describe ourselves as neither apologists nor critics for the government. Our role is to push the envelope of thinking and provide solutions. We provide new approaches; send the flare up in the sky, for example, when an issue is not being properly dealt with, or is a ticking time-bomb issue, as the brownfields were. We were out there in the wilderness for five years in brownfields and people were asking, "What are brownfields?" We knew all along that the government was sitting on billions of dollars of liabilities in its own contaminated sites and that this was increasingly hollowing out Canadian cities. Look at the Kingston waterfront.
We were like Wayne Gretzky trying to know where the puck was going to be. We have picked issues and kept them going.
There are many concrete results. One of the sharper pieces was the work we did a couple of years ago in the Maritimes when we were called in by a couple of members of the roundtable from New Brunswick and Nova Scotia. They said the next East Coast cod fishery collapse waiting to happen is going on in our forest industry. It is the next concern, particularly in New Brunswick, with so much privately held land. People were over-harvesting at a rate that was unsustainable. There were no tax incentives and no silviculture planning that would say to me — for example, inheriting a property from my grandparents or parents — why should I not just go shave this down and clip the coupon? Pulp prices were high, paper prices were higher, so why not go out and sell your trees?
We devised with Revenue Canada, who launched two successive interpretation bulletins, new tax measures, the last segment of which was just announced in the last budget, where the tax treatment of private woodlots now is much more akin to the tax treatment of farms. If there is an intergenerational transfer, there are tax concessions that are made to incent people with the proper silviculture plans, and we defined what the plans were. Those were picked up by the New Brunswick government under Frank McKenna and made operational immediately. That has had a direct bearing on the overall sustainability of private woodlots across the country. That is one example of quite a few I could point to.
The Chairman: You have given us the direction of a number of questions in areas that we would like to explore with you. We are now constrained unfortunately by time because another committee is scheduled for this room. Would you be prepared to come back and meet with us sometime again after a decent interval has evolved? Is it agreeable to senators to take to heart what we have heard today and the reports we have been given today, and formulate different questions to give to the witnesses in advance? Then, the next time they come back we can get closer to the bone than we have been able to do today? I have pages of questions I would like to ask. Is that agreeable, honourable senators?
Hon. Senators: Agreed.
Senator Eyton: I loved Senator Milne's wish list, which is always helpful, and you gave three, but that kind of thinking is helpful to this committee and me.
The Chairman: That would be very good for us to have. If you would appear again, we would be grateful, because as you know from the line of questioning, we found this extremely valuable and interesting. There is an enormous concomitance between where you are going and where we want to go. I believe we can effect some synergies there.
Senator Finnerty: I have seen your book, Mr. McGuinty, and I wondered where those recommendations were going, whether they were going in a deep hole or whatever. I have a lot of questions about those recommendations, and I look forward to your coming back.
Mr. McGuinty: We would be pleased to come back. We could have spent the entire morning just on this urban report. We tried to give you a flavour today, but, at any time, we will be delighted to come back.
The Chairman: We will take you up on that.
The committee adjourned.