Bill C-4 -- the first Bill I introduced in the Senate   April 26, 2001

Hon. Nick G. Sibbeston moved the second reading of Bill C-4, to establish a foundation to fund sustainable development technology.

He said: Honourable senators, I am pleased to rise today to move second reading of Bill C-4. This is the first bill that I have had the privilege to introduce in the Senate.

Hon. Senators: Hear, hear!

Senator Sibbeston: Honourable senators, to lend some context to my remarks, I would point out that we live in era in which we face many challenges and opportunities. Sustainable development is one such challenge, and it is one that Canada must face head on, if we are to continue to integrate economic and social progress.

One way to address sustainable development is with new ideas, new knowledge and new technologies. In essence, sustainable development hinges on our capacity to innovate.

Honourable senators, when we look back at the last decade to such things as the reduction of automotive emissions, the abatement of air pollution, improvements in energy efficiency and technologies to enhance oil recovery, which at the same time reduce the environmental footprint, the common factor has been new thinking, and new and affordable technologies. Innovation has helped us progress as a society, and it will continue to do so in the future. New technological innovations are indispensable to our success.

Bill C-4 would establish the Canada Foundation for Sustainable Development Technology. This foundation would administer the sustainable development technology fund of $100 million that was announced in Budget 2000. This is but one way the Government of Canada is delivering on its key themes of innovation, quality of life and climate change and clean air.

The initial focus of the foundation will be on climate change and clean air, because these are two major environmental challenges of our time. The social and environmental benefits are universal and potentially large. For example, there are already signs of climate warming in the McKenzie Valley in Northern Canada, where I come from. The McKenzie Basin, which includes parts of the three territories as well as Northern British Columbia, Alberta and Saskatchewan, has experienced a warming trend of 1.5 degrees centigrade this century. The McKenzie Valley impact study of 1997 highlighted that regional effects of climate warming would involve landslides from permafrost thaw, reductions in water levels, increases in forest fires and reduction in forest yield. Changes in climate could have snowballing effects. Changes in vegetation and water levels could affect wildlife migration and reproduction. This could affect the sustainability of native lifestyles, so even though the people of the North have caused little of the problem, the impact on them could be significant. I have always been personally amazed that pollution from southern industrial areas shows up far in the North, in the lichen and eventually the animals that eat the lichen. That is why we need the foundation to fund technology projects that could help mitigate the release of pollutants and greenhouse gases that cause climate change.

The foundation will operate at arm's-length from the government in order to provide a new vehicle for engaging Canadians and fostering the long-term collaboration that is necessary to tackle the sustainable development challenge. The foundation will operate close to the private sector and will enhance its engagement in these tough policy issues of climate change and clean air.

The foundation will provide funding for projects that help reduce greenhouse gas emissions, reduce the carbon intensity of energy systems, increase energy efficiency, capture, use and store carbon dioxide, lower volatile organic compounds, nitrogen oxides and fine particles released in the air, and so on.

Honourable senators, technologies are needed in all regions of the country, from north to south, from west to east. Some technologies can be put to use in all regions, while others are specific to local conditions and circumstances. For example, in the North, there is an opportunity to determine how to safely extract methane gas hydrates found in the permafrost and below the sea floor so that it can be used as a potential new source of clean energy.

In remote communities, technologies to produce wind-generated electricity, with traditional diesel generation, could help reduce greenhouse gas emissions and also reduce air pollutants that can cause health problems.

Ultimately, the extent to which the fund advances the cause of sustainable development depends on good targeting, good management and good administration. Bill C-4 provides for good governance practices through the foundation's organizational structure, its legal status and its operational practices.

Bill C-4 calls for the creation of a board of directors. The board would operate at arm's length from the government. The board would be an executive group. It would supervise the management of services of the foundation and, subject to the foundation's bylaws, it would exercise all its powers.

The second component of the governance structure is a group representing stakeholders and potential clients of the foundation. We call the people on this body "members of the foundation." They will review the activities of the board of directors.

The board would consist of 15 directors, all of whom would be from outside government. The first six members and the chairperson would be government appointees. The other eight would be appointed by members of the foundation.

Membership would be balanced in terms of expertise. The board would comprise directors who collectively represent the whole spectrum of sustainable technology development in Canada: public, private, academic and not-for-profit.

Last, but not least, the board will have balance in a geographic sense, with members drawn from all regions of Canada.

In the other place, there was debate on the checks and balances that the government would have over the foundation. Bill C-4 also prescribes measures to ensure prudent financial management and accountability, requiring the foundation to establish sound financial and management controls and to appoint an independent auditor to verify the effectiveness of these controls.

The legislation also requires the annual reports to include an evaluation of results achieved by the funding of projects year by year and accumulatively since the start of the foundation. This report will be publicly available and will be tabled in Parliament.

In addition, the detailed terms and conditions associated with the management of the fund are contained in a funding agreement between the Government of Canada and the foundation. The Auditor General of Canada will have scrutiny over the funding agreement.

Honourable senators, Bill C-4 does more than outline the machinery. It spells out who is eligible to receive funding. To accelerate technological innovation and foster partnerships, no single entity will be eligible. Instead, private-sector commercial corporations, universities, not-for-profit organizations, industrial associations and research institutes will have to band together to form partnerships and apply for funding together.

By supporting collaborative arrangements rather than single entities and by ensuring that funds are leveraged from the private sector, the proposed foundation will support measures to get new technologies into the economy quickly and efficiently so that all Canadians may benefit. Collaboration amongst the diverse actors will accelerate the development and demonstration of new sustainable development technologies.

In today's global economy, one has to be aware of activities and opportunities abroad. However, one must also strive to ensure that our own companies have the greatest chance of succeeding - of succeeding abroad and here at home. As such, Bill C-4 stipulates that the fund will support projects that are primarily carried on in Canada and that eligible recipients enter into collaborative arrangements that are established in Canada with Canadian organizations.

Activities of the proposed foundation will complement leverage and work compatibly with ongoing federal and provincial programs related to climate change and clean air, including those of the federal Program of Energy Research and Development, the Natural Sciences and Engineering Research Council, the Canada Foundation for Innovation, the Industrial Research Assistance Program, Technology Early Action Measures, and Technology Partnerships Canada.

In addition, the foundation's activities will allow Canadians to be one step closer to meeting international commitments on climate change and clean air.

To allow the government to start implementing the mandate of the fund as soon as possible, Bill C-4 also contains conditional clauses that provide for the Governor in Council to designate a private sector foundation to serve as a foundation in accordance with the requirements of the legislation. The legislation stipulates that in this eventuality the assets and liabilities of the private sector foundation would be transferred to the foundation and that its board of directors and corporation membership would dissolve, thus triggering the appointments of the board and the members of the foundation as stipulated in the legislation.

These conditional clauses are also contingency clauses, insurance against unnecessary slippage of schedule in the start-up phase. In the event of administrative or other delays of process, they would allow the government to fulfil its promise to establish the fund.

During the debate in the other place, members of Parliament were concerned about the fact that the bill did not contain a cap on the maximum allowable funding for each project. Let me assure honourable senators that the terms and conditions in the funding agreement specify that the foundation is to lever investments from other sources. The foundation will fund on average 33 per cent of eligible project costs. However, it will never fund more than 50 per cent of eligible costs of a particular project. This requirement is consistent with the promotion of teamwork and a good predictor of a project's success when proponents are willing to put up some of their money.

Before I close, honourable senators, let me briefly summarize the history of Bill C-4. The legislation is based upon more than two years of the most open, transparent and comprehensive consultation. The provinces were thoroughly involved in the process, as were the municipalities, the private sector, and academic institutions and non-governmental organizations. Every aspect of Canadian life was consulted in the two-year process. The sustainable development technology foundation is the product of that process.

Dialogue on the bill continued even after the bill was tabled in the other place on February 2. As a result, clarifying amendments were presented to the House of Commons Committee on Aboriginal Affairs, Northern Development and Natural Resources. After vigorous and constructive discussion, the legislation and the clarifying amendments received approval from the committee and from the other place.

In this new millennium, Canada must lead the world as a living model of sustainable development. To meet the challenges of climate change and clean air we must maintain the momentum. We must keep moving forward in knowledge and technology. We must develop new energy mixes. We must transfer every part of the energy chain from production to end use. The legislation now before you, honourable senators, will help us reach that goal.