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I am pleased to present the 2007-08 Report on Plans and Priorities for Natural Resources Canada (NRCan).
Natural resources are vital to Canada's economy, contributing almost 13 percent of our gross domestic product and a record $93.4 billion to our trade surplus. Looking ahead, the resource sectors will offer unprecedented opportunities for jobs and growth in communities across Canada.
To ensure that Canadians fully realize the benefits from our resource strengths, NRCan will work diligently to build competitive advantage for the nation's resource sectors. We will do so by leveraging the ingenuity and skill of its workforce, its scientific and technological excellence, and its world-class governance structures. We will ensure that Canadians continue to derive the greatest economic benefit from development of their natural resources, while still achieving demanding social and environmental goals.
The production and use of energy is just one area in which the government is taking decisive action. Our Government's ambitious Clean Air Act will regulate air pollution and greenhouse gas emissions from key sectors for the first time in history. NRCan will work with Environment Canada and stakeholders to implement this commitment in a fair, effective and timely manner.
Over the coming year, NRCan will also move forward in implementing the ecoENERGY initiatives announced in January 2007. Investments in science and technology will make it possible to use clean energy technologies in energy production and use, and reduce greenhouse gas emissions. Energy efficiency programs and regulations will give Canadians practical opportunities to improve the environment in their daily activities. Finally, investments in renewable energy will offer cleaner and more diversified energy choices to Canadians.
Regulatory efficiency is one of my major priorities. The current system is struggling to meet demands at a time of almost unparalleled opportunity in the mining and energy sectors. We will work toward streamlining the regulatory process to enhance economic growth and address environmental and social issues.
Looking at Canada's forest industry, we will pursue the transformation of this sector with stakeholders through innovation, technology and creativity. With Budget 2006 funding, NRCan will play a leading role in this pursuit, providing policy, programming and partnering support. We are also at the forefront of helping the forest sector and affected communities deal with the unprecedented Mountain Pine Beetle infestation, which continues to threaten the ecological and economic viability of boreal forests.
Finally, in order to strengthen the competitiveness of the mining industry, NRCan will lead efforts to promote innovation, improve the investment climate and combat restrictions to market access, while ensuring the commitment to corporate social responsibility at home and abroad.
Canadians have expressed their desire for the responsible development and use of their natural resources. NRCan is responding with clear and demonstrable results. As we move forward, we will continue to ensure that the economic, environmental and social needs of Canadians are paramount in the work of NRCan and your Government.
We will focus on Canada becoming a new kind of global economic leader – one known for making environmental and social responsibility part of its approach to growth.
NRCan will better position Canada to achieve sustainable growth in a global marketplace, and I look forward to leading the way.
I submit, for tabling in Parliament, the 2007-08 Report on Plans and Priorities (RPP) for Natural Resources Canada.
This document has been prepared based on the reporting principles contained in the Guide to the Preparation of Part III of the 2007-08 Estimates: Report on Plans and Priorities and Departmental Performance Report.
Cassie J. Doyle
NRCan's mandate is to develop, implement and deliver policies, programs, science and technology (S&T) for the sustainable development and responsible use of Canada's mineral, energy and forestry resources. The department is also responsible for developing an understanding of Canada's landmass and collecting and disseminating information on resource development. NRCan also maintains key roles related to the safety and security of people and natural resources, including security of natural resource infrastructure and supply.
NRCan's Minister is responsible for, or has responsibilities under, more than 30 Acts of Parliament. The core powers, duties and functions are set forth in the Department of Natural Resources Act, the Resources and Technical Surveys Act, and the Forestry Act. The remaining Acts set out the terms for the management of Crown lands and of Canada's natural resource policies, including energy and nuclear policy.
Our work is concentrated in areas of core federal jurisdiction, which includes:
In carrying out these responsibilities, NRCan works closely with other federal departments with resource-related responsibilities, and supports the federal role in regional development and Aboriginal affairs in matters related to the resource sectors. NRCan also works in areas of shared responsibility with the provinces.
|$2,153.5 M / 4,289 FTEs||$1,887.5 M / 4,127 FTEs||$1,784.4 M / 4,117 FTEs|
Canada's vast resources have shaped our history, generating wealth and a distinctive way of life for generations of Canadians. Natural resources are a cornerstone of our success as a modern industrial society from before Confederation to the beginning of the 21st century. We have used our resource assets to our advantage, turning Canada into a world leading commodity producer with related strengths in financial services, engineering, environmental consultancy, manufacturing and specialized technologies and services.
Yet, as Canada moves towards a future characterized by a rapidly changing global economy and growing environmental uncertainty, we need to ask ourselves a key question – does Canada have the right approach to ensuring sustainable resource growth now and in the future? More than ever before, we need to recognize that, in the 21st century, vast natural resource endowments are not a sufficient condition of economic success, a better quality of life or a healthy environment. For example, other countries that exceed Canada's natural resource endowment are not realizing the same economic and environmental successes that we enjoy. Possessing more of the world's natural resources is not what matters most. It is how you use and build upon these endowments that counts.
To build a more sustainable resource future, we must increasingly focus our efforts in the areas where we can build competitive advantage in today's global knowledge economy and society. This means focusing on strengths and centering our efforts around the three attributes of globally dynamic economies:
In short, Canada needs a natural resources strategy for the 21st century. A strategy that will help build robust competitive advantage while embracing environmental and social sustainability. A story that better positions us to navigate the forces of globalization and environmental uncertainty, recognizing that natural resources are an integral part of our economy and way of life, now and in the future.
Impact of Emerging Economies and Global Demand – The rise of China and India as engines of growth in the global economy is increasing demand for Canada's natural resources. As these economies develop, their needs for energy, vital minerals and metals, and forest products will only grow (e.g., in base metals, copper, aluminum, nickel and zinc, China accounts for 20 percent of global demand). This strong Asian demand, coupled with the U.S. insatiable appetite, continues to support historically high commodity prices. As a net exporter of resources, this implies a wealth gain for Canada. But, at the same time we are facing increasing competition from resource-rich emerging markets such as Russia, Brazil and China. This places a strong emphasis on the need for Canadians to continuously innovate, expand into new markets and move up the global value chain in order to remain competitive.
There is a strong economic upside for Canada, but there are also risks. Commodity booms are cyclical, with some lasting longer than others depending on the extent of demand, pace of new project investments and the health of the global economy. The risk factors to growth – U.S. economic slowdown, the potential overheating of the Chinese economy – should not be underestimated. As well, while Canada is in the enviable position of facing hundreds of billions of dollars in potential new resource investments, this is creating real economic strains – from skilled labor shortages, pressing needs for new infrastructure, to regulatory bottlenecks and insufficient capacity to deal with a range of issues including the engagement of Aboriginal peoples.
Natural Resources and the Environment – The linkages between natural resources, the environment and sustainability are critical. As rising demand puts increasing pressure on our natural resources, including water, this, in turn, places the spotlight on important environmental issues both within Canada and internationally – from rising greenhouse gas emissions (GHGs), air pollution, damage to the boreal forest (e.g., pests, forest fires), rising water usage and quality issues, to the changing North. In this context, sound management of our natural resource endowments, which is shared with the provinces and territories, is extremely important for the quality of life and well being of all Canadians.
Both Canada and the global community need to find effective ways of reconciling the increasing demand for vital resources, especially fossil fuels, with the adverse environmental impacts this increased usage generates. Among other things, this means placing a high priority on using regulation wisely to reduce the environmental footprint of industrial production and our modern way of life. It means setting long-term goals for GHG reductions, reducing air pollution and creating new energy efficiency standards. It also means investing strategically in a clean energy agenda focused on promoting smarter energy use, increasing the supply of clean energy and addressing the emissions from conventional sources of energy.
Increasing Knowledge Intensity and Access to Skilled People – In order to stay at the forefront of today's global economy, businesses must act smarter, build alliances and participate in global knowledge-supply chains, generate new ideas and products, and use highly knowledge-intensive processes and technologies. Canada's natural resources sectors are no exception. Some Canadian resource companies are recognized leaders for their use of new technologies, engineering expertise, and sustainable resource practices. Yet, at the macro level, the research and development (R&D) intensity of our resource sectors has declined significantly since the early 1990s. Whereas their R&D/gross domestic product ratio once outperformed Canada's business sector average, it is now less than half.
As the knowledge intensity of economic activity increases, so does the skill requirements. The need for more skilled people, when coupled with an aging population, foretells challenges ahead. There are serious implications for Canada's natural resources industries, some of which, such as oil sands and mining, are already experiencing significant labor shortages.
Corporate Environment – To ensure that NRCan is prepared and properly positioned to deliver on the priorities of Canadians and their Government, the Department has undertaken an exercise in renewal. Through this process, NRCan will develop an integrated natural resource policy framework to guide its work going forward. As a result, NRCan's Program Activity Architecture will be revised in the 2008-09 fiscal year to better link the work of the Department with the requirements of Canadians and their government, as well as reflect the new realities of today's global knowledge economy. It is our intention to shift from an approach that examines natural resources by sector to an integrated model where the economic, environmental, and social needs of Canadians are paramount. This new model will be focused on the dynamics of sustainable growth for current and future generations. It will be focused on helping to turn Canada into a new kind of global leader, one known for its environmentally and socially sustainable approaches to growth. By organizing and reporting on the work of the Department in a new manner, NRCan will be better able to prioritize and integrate its policies, programs, and science, as well as ensure that it remains relevant and responsive to Canadians.
|Clean air for all Canadians||previous commitment|
|Smarter, faster and more effective regulation||ongoing|
|Enhancing Canada's forest sector competitiveness||previous commitment|
|Mitigating the impact of the Mountain Pine Beetle infestation||previous commitment|
|Strengthening Canada's mining industry||ongoing|
* An ongoing priority has no end date; a previously committed priority has an estimated end date and was committed to in prior budgets or main estimates documents.
Clean Air for All Canadians – By introducing Canada's Clean Air Act, the Government has committed to better protecting Canadians from the negative effects of air pollution and GHGs. For the first time, a federal regulatory framework will be put in place to bring about real reductions in air pollutants and GHG emissions. NRCan is working with Environment Canada to implement this commitment in a fair, effective, and timely manner, consulting with stakeholders and the natural resource industries affected by these new regulations. Through the Clean Air Act, NRCan is responsible for proposed changes to the Energy Efficiency Act to strengthen and broaden the government's ability to improve the energy performance of equipment and appliances.
The Department is also pursuing initiatives that promote clean energy. Our objectives are to reduce the harmful effects of energy production and consumption that accounts for 85 percent of smog-causing nitrogen oxide emissions and 80 percent of Canada's annual GHG emissions, while generating innovative technologies that Canada can market abroad. NRCan will help Canada realize this cleaner, healthier, and more prosperous future by providing leadership, expertise, and support in three critical areas:
Smarter, Faster and More Effective Regulation – Canada is currently experiencing unprecedented growth in natural resource projects, with as much as $300 billion in major developments possible over the next decade. An efficient and effective federal regulatory system is key to its responsible and sustainable development, however, the existing system is struggling to meet existing demands. This undermines the competitiveness of the Canadian economy, as well as potentially compromising our ability to effectively address environmental and social issues. NRCan’s Deputy Minister is leading a collaborative interdepartmental task force of major regulatory and environmental assessment departments and agencies to improve the effectiveness and performance of the regulatory system for major resource projects. The task force is advancing comprehensive solutions which will enhance efficiency, accountability and predictability of the system, while strengthening the government’s ability to address critical social and environmental issues. Research efforts like a regulatory mapping initiative and expansion of NRCan's BizPaL+ pilot project, which is being undertaken in collaboration with Industry Canada, also offer potential for improving the federal regulatory system. In areas where NRCan plays a lead regulatory role, we will continue to work with our partners to renew and modernize regulatory frameworks in order to better protect the health and safety of Canadians, safeguard our natural environment, and support industry growth and investment consistent with sustainable development.
Enhancing Canada's Forest Sector Competitiveness – Canada's forest sector is undergoing a major transition, looking to ensure its success in today's global economy. With international competitors leveraging their access to cheaper wood, faster growing trees, lower-cost labor and lighter regulatory burdens, Canada's abundant forest resources are no longer sufficient for securing the long-term viability of the sector. To succeed, Canada is pursuing greater value from its forest assets through innovation, technology, and creativity. Budget 2006 is assisting this transition, providing funding to strengthen the long-term competitiveness of the forestry sector. NRCan will have a leading role, providing policy, programming, and partnering support for the sector in the areas of science and technology, R&D, market access, and environment standards.
Mitigating the Impact of the Mountain Pine Beetle Infestation – The devastation inflicted on much of Canada's west coast by the Mountain Pine Beetle is virtually unprecedented. Current and future economic losses to the forest sector are in the billions of dollars, while the possible spread of the infestation threatens the ecological and economic viability of the boreal forests across Canada. The Government of Canada has therefore taken immediate action. Budget 2006 committed significant funding to combat the pine beetle infestation, with NRCan playing a key role in the implementation of these commitments. Moving forward, NRCan, in collaboration with the provinces and territories, is also leading the development of a national forest pest strategy. The strategy will examine the issue of forest pests across Canada to better assess risks and address impacts on forest ecology, industry, and dependant communities.
Strengthening Canada's Mining Industry – Junior and intermediate mining companies, which are small and medium enterprises (SMEs), account for the vast majority of Canadian projects at home and abroad, and for two-thirds of total exploration spending in Canada. These SMEs represent an excellent economic and social opportunity for Canada, especially in rural, northern and Aboriginal communities. However, they face numerous challenges, such as declining domestic reserves, the regulatory burden, intense global competition for investment, human resources shortfalls, and local opposition to mining projects. To overcome these challenges and to capitalize on current strong commodity prices, NRCan will lead efforts in promoting innovation, improving the domestic investment climate (including a single-window approach to the regulatory process), minimizing or eliminating unnecessary restrictions on market access, and encouraging corporate social responsibility both at home and abroad.
|Program Activity*||Expected Results||Planned Spending (M$)||Contributes to the following priority|
|Strategic Outcome – Canadians derive sustainable social and economic benefits from the assessment, development and use of energy, forest and mineral resources, and have the knowledge to mitigate environmental impacts and respond effectively to natural and man-made hazards|
|Earth Sciences||Earth sciences knowledge and tools enable Canadians to achieve economic opportunities, a clean environment, and adapt to a changing climate, in safety and security||233.8||226.3||204.6||
|Energy**||Canadians benefit economically, environmentally, and socially from the sustainable production, development and use of Canada's abundant energy resources||1,593.9||1,337.9||1,390.3||
|Sustainable Forest||Healthy forests continue to provide balanced social, environmental and economic benefits to Canadians||268.3||264.8||121.9||
|Minerals and Metals||Canadians derive sustainable, social and economic net benefits from the assessment, development and use of mineral expertise, mineral resources and related industries||57.5||58.5||67.6||
* NRCan's program activities contributes to the achievement of the following Government of Canada strategic outcomes: strong economic growth; an innovative and knowledge-based economy; a clean and healthy environment; a fair and secure marketplace; a strong and mutually beneficial North American partnership; and a prosperous Canada through global commerce.
** Planned spending includes statutory programs – Atlantic offshore: $1,050.6M for 2007-08; $991.7M for 2008-09 and $1,070.9M for 2009-10.
*** Planned spending for the corporate management program activity has been distributed across all program activities.