Innovation, Science, Environment 08/09: Canadian Policies and Performance, 2008-2009 9780773575080

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Innovation, Science, and Environment

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Innovation, Science, and Environment Canadian Policies and Performance, 2008–2009 Edited by

glen toner

Published for The School of Public Policy and Administration Carleton University by McGill-Queen’s University Press Montreal & Kingston • London • Ithaca

© McGill-Queen’s University Press 2008 ISBN 978-0-7735-3394-3 (cloth) ISBN 978-0-7735-3395-0 (paper) Legal deposit second quarter 2008 Bibliothèque nationale du Québec Printed in Canada on acid-free paper. McGill-Queen’s University Press acknowledges the support of the Canada Council for the Arts for our publishing program. We also acknowledge the financial support of the Government of Canada through the Book Publishing Industry Development Program (bpidp) for our publishing activities.

Library and Archives Canada Cataloguing in Publication Innovation, science, environment : Canadian policies and performance, 2008-2009 / edited by Glen Toner. (Innovation, science, environment series ; 3) ISBN 978-0-7735-3394-3 (bound). – ISBN 978-0-7735-3395-0 (pbk.) 1. Environmental policy – Canada – Evaluation. 2. Sustainable development – Government policy – Canada. 3. Technological innovations – Government policy – Canada. 4. Science and state – Canada. I. Toner, Glen, 1952– II. Carleton University. School of Public Policy and Administration III. Series. GE190.C3I55 2008

352.7'450971

This book was typeset by Interscript in 10/12 Minion.

C2008-900415-9

Contents

Preface

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1 The Harper Minority Government and ISE: Second Year – Second Thoughts 3 Glen Toner 2 Missing the Opportunity: A Decade of Sustainable Development Strategies 30 François Bregha 3 Making a Better World, One Undertaking at a Time: Sustainability Assessment and Innovative Decision Making in Canada 53 Robert B. Gibson 4 Why Smart Growth Isn’t Working: An Examination of Ottawa’s Failure to Deliver Sustainable Urban Transit Robert Hilton and Christopher Stoney

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5 The Social Foundations for Sustainability: Carbon, Creativity, and the Failure of Canadian Forestry Strategy 93 David Robinson 6 Sticks, Carrots, and Sermons (and Workshops, too): Environment Canada and Calls for a Robust Bird Conservation Toolkit 112 Jeremy Wilson

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7 Uncertainty, Precaution, and Adaptive Management in Canadian Pesticide Regulation 132 C. Scott Findlay and Annik Deziel 8 Geological Carbon Storage: The Roles of Government and Industry in Risk Management 151 Rose Murphy and Mark Jaccard 9 Climate Change and Canada: Beyond Tomorrow Robert Paehlke

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10 The Development Agenda at WIPO: Where Is Canada? Sara Bannerman 11 Convergence and Science Management Jac van Beek and Frances Isaacs Contributors

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209

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Preface

This is the third edition of our annual volume of commentary and assessment of Canadian and related comparative innovation, science and environment (ISE) policies and institutions. It emerged out of a broader body of research and teaching at the Carleton Research Unit in Innovation, Science and Environment (cruise) and the School of Public Policy and Administration at Carleton University. Aimed at an audience of interested and informed Canadians involved in, or affected by, this crucial realm of Canadian policy, politics, and governance, the book examines the ISE policy priorities of the federal government. Chapters are also devoted to broader areas of federal-provincial and cities/communities involvement in these fields as well as the crucial international and comparative dimensions which impact on Canada. We are especially indebted to our roster of contributing academic and other expert research authors from across Canada for their insights. The book is structured on the basis of a general call for chapters in the ISE field, a number of which are then selected for inclusion by the editor. Our goal is to involve academics from across a variety of disciplines as well as doctoral students from across Canada doing advanced research in the ISE field and also expert practitioners from the public and private sectors. Thanks are due to Kimmie Huang and Alin Charriere at the School of Public Policy and Administration for their excellent research and technical support and to Joan McGilvray and her colleagues at McGill-Queen’s University Press for their always professional editorial and publishing expertise. These publications flow from the continuing support and scholarly

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stimulation provided by my colleagues at cruise and in the School of Public Policy and Administration at Carleton University. Glen Toner Ottawa December 2007

Innovation, Science, and Environment

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1 The Harper Minority Government and ISE: Second Year – Second Thoughts glen toner

The first two editions of this volume documented the transition of ISE policies from the Martin minority government to the Harper minority government. The majority of chapters in the first two editions were on the challenges associated with innovation and science. The majority of the chapters in this third volume are on environment. This shift in focus parallels the interesting transformation of environmental issues in the first 20 months of the Harper government. Upon arriving in power the Conservatives showed little interest and even less capacity to address the environment and sustainable development file. A junior Environment minister was appointed and the first actions were a reflexive chopping of Liberal climate change programs. The message sent was that this was not a file of interest to the new government: environment was not an imperative of their 2006 electoral campaign nor was it one of the famous ‘five priorities’ of the first Speech from the Throne (sft). But an interesting thing happened in 2006–07, which upset this world view and required second thoughts – the environment as a policy issue shot to the top of the public opinion polls.1 In the process environmental issues became a central focus of pitched parliamentary battles, animated media coverage in a most unfavourable way for the government, infiltrated Hollywood and the Nobel Prize, saw the junior minister dumped and a senior minister transferred into the portfolio, and caused a significant transformation in the government’s environmental policies. Perhaps then, it is not surprising that environmental policy issues comprise the majority of this year’s ISE volume chapters. Some of the broader political and economic drivers that have shaped ISE policy issues over the past year, in addition to the growing salience of

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environmental issues, have been a highly partisan and adversarial minority parliament, a highly centralized management style from the Prime Minister’s Office that is extraordinary even for the executive dominant Canadian political system, a Canadian dollar galloping past parity with the greenback, oil prices flirting with us$100 a barrel and appreciating mineral prices, a downturn in the American economy, an uncharacteristic weakness of the federal Liberal party both inside and outside Parliament, and the Conservatives nudging the magical 40 percent support level in the opinion polls but retaining weakness in central Canada and the big cities, which keeps them from majority government potential. For much of the first 20 months the government has governed like an opposition party in power, continually running against the record of the ‘normal governing party’ and it seemed forever reminding everyone that they were “Canada’s New Government.” This is the result of having been out of power for 13 years, being in a minority government position, and in constant ‘election readiness’ mode where the next election appears to be ‘just around the corner’. Indeed, the election style attack ads on Stephane Dion, the leader of the official opposition, in a non-campaign period reveals both this opposition mentality and the highly partisan mood … not to mention overflowing Conservative party coffers.

ise in the 14 o ctober 2007 speech from the throne As Bruce Doern reminds us, innovation and science policy issues are seldom “top of mind issues” for voters and public opinion, whereas the environment moves in and out of salience as a high profile concern.2 Reflecting the political drivers outlined above, it was not surprising to learn then that the second Conservative sft moved the environment into the new “top five” category. Still, it clearly comes in fifth after the more comfortable Conservative party priorities of strengthening Canada’s sovereignty and place in the world; building a stronger federation; providing economic leadership, and tackling crime. As Doern reminds us, science policies involve support for basic research and the education and training of a highly qualified science and technology (s&t) personnel in universities, hospitals, and private and government labs. Innovation policies are targeted more at the development of new products and processes and at generating institutional capacity through systems of innovation and clusters of complex multi-directional interactions among firms, universities, governments, and their variously networked s&t personnel. Most of these are based in Canada’s urban centres. Environment policies focus on cleaning up past mistakes, protecting life, sustaining natural capital and ecological heritage, and transitioning Canadian industrial production processes and everyday Canadian lifestyles off of the wasteful and polluting treadmill

5 The Harper Minority Government and ISE

of the 20th century and onto a sustainable development trajectory that overtime will minimize Canada’s ecological footprint and restore our health and ecological resources. An sft is an emphatically partisan document, in which the governing political party outlines its priorities for the Parliamentary session. This is particularly so in a minority government in which the governing party may be seeking to create the conditions to mastermind its own defeat. The October sft was followed two weeks later by the Economic Statement on 30 October 2007. Together these two agenda-setting events reveal the program of the Harper government. In the sft, under the heading “Strengthening Canada’s Sovereignty and Place in the World,” the Arctic was a focus. The emphasis is on protecting Canada’s traditional claims to sovereignty in the face of challenges from the Americans, Russians, Danes and others. The Arctic has already been effected by climate change and the prospects of routine commercial passage through the Northwest Passage and the potential for additional resource development are a preoccupation. There is a commitment to “build a world-class research station that will be on the cutting edge of Arctic issues, including environmental science and resource development.”3 As a means of asserting sovereignty there is a plan to complete a comprehensive map of Canada’s Arctic seabed. There is reference to increased military and coast guard presence in the Arctic to guard Canada’s far North and Northwest Passage. A consequence of the rapid decline of the Arctic ice cover is that increased resource development and commercial and military traffic in the region increases the chances of oil spills and other accidents leading to the degradation of the still fragile Arctic ecology.4 Indeed, the long-term prospects of the iconic Arctic polar bear have become central to the Canadian, and indeed global, consciousness of the negative impacts of climate change. In the sft discussion of providing effective economic leadership for a prosperous future, there is mention of the Conservative’s support for Canadian researchers and innovators in developing new ideas and bringing them to the marketplace through Canada’s s&t Strategy, discussed below. There is also mention of the benefits from the government’s promotion of biofuels for farmers.5 Nudging its way into fifth priority in the sft is “Improving the Environment and Health of Canadians.” The emphasis here is on the government’s approach to climate change, focusing on the need to pursue “a global consensus” that requires binding emission reduction targets for major developed and developing countries, while implementing a domestic approach that focuses beyond the Kyoto Protocol to 2020 and 2050 targets. The domestic approach, discussed below, includes binding emission reduction regulations and the establishment of a carbon emissions trading market. The sft also identifies the goal of adding to Canada’s suite of parks and protected spaces and developing a new water strategy to clean up major lakes and oceans and improve access to safe drinking water for First Nations. Largely

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because of arresting media images of contaminated products imported from China, there is also mention of the consumer safety impacts of products like food and toys. This may be the first time toys have made it into a sft, and it is for all the wrong reasons.

ise in the 30 o cto ber 2007 e c o n o m i c s tat e m e n t While federal government may have fixed the federal fiscal deficit and be moving toward bringing the debt-to-gdp to modern-day lows, the ecological and infrastructure deficits in the country are not fixed. The Commissioner of Environment and Sustainable Development (cesd) has argued that Canada is incurring an ecological deficit as it degrades its natural capital.6 In November 2007, the Federation of Canadian Municipalities released a study that calculated Canada’s municipal infrastructure deficit to be $123 billion. Much of Canada’s municipal infrastructure was built between the 1950s and 1970s. Natural aging and delayed maintenance throughout the fiscally difficult 1980s and 1990s have led to the accumulated problems of today.7 Therefore, the ISE related themes of the Economic Statement have to do explicitly with changes to the revenue side of the budget. The Economic Statement was explicitly designed as a pre-election platform of tax reductions for the “hard working middle-class families” that the Conservatives have identified as their electoral support base. Under the title “broad based tax ‘relief ’”8 the government does makes changes that are designed to enhance economic productivity and innovation, such as reducing corporate income taxes and paying down the federal debt. However, the additional reduction of the consumption based Goods and Services Tax (gst) by one percentage point is an explicitly politically driven move designed to appeal to the Conservative electoral base and to meet a previous commitment. It may prove to be “good politics” of a partisan sort if the Conservatives gain their majority but it is not good economics. The relatively modest savings Canadians will gain through a 2 percentage point reduction in the gst by January 2008 will have the effect of reducing federal revenues by $12 billion a year thereafter. Over a ten year period this will result in a revenue reduction of $120 billion, which alternatively could have been allocated to meet the municipal infrastructure deficit or targeted toward reducing the cost of capital investments in new machinery, energy efficient vehicles, cleaner production processes, and a host of other technological innovations, all of which could have made Canada a more productive, innovative, and environmentally healthy country.9 But this was not the choice of the Harper government. Instead, it chose to reduce the cost of consumption. Canada does not face a consumption deficit; indeed if anything we face an “over consumption” problem and the waste

7 The Harper Minority Government and ISE

management crisis in most of our municipalities is a significant consequence. We also face a productivity gap relative to competitors. The Institute for Competitiveness and Prosperity has recently argued that reductions in taxes on investment are far more effective than reductions in consumption taxes for long term economic well being.10 As the cesd has noted, Canada is also facing a sustainable development deficit. While many countries in the world are moving to reduce emissions and waste and create jobs by shifting taxes from jobs and investments (income, employment, and capital taxes) to consumption and pollution (consumption taxes and emission charges), Canada is not. 11 Economic and environmental goals were trumped by partisan electoral calculations as the Conservatives seek to connect directly with strategic voters in strategic ridings. What doesn’t make sense politically in this context is the contempt shown by Finance Minister Jim Flaherty for municipal government leaders. It is largely their lack of electoral success in Toronto, Montreal, Vancouver, and other cities that denies the Conservatives majority status. Yet in a post-Economic Statement speech Flaherty taunted the mayors of Canada’s big cities, calling them “grumpy,” “whiners,” and in financial difficulty because they don’t adequately control their spending, like the federal government. Even the mayor of solidly Conservative Calgary charged Flaherty with trivializing cities’ infrastructure needs”12 Using part of the federal surplus to drive the debt-to-gdp ratio toward the goal of 25 percent is a good thing, as it decreases interest payments for both current and future generations of Canadian tax payers. But the size of federal surpluses also reflects the fundamental mismatch of fiscal capacity amongst levels of governments in Canada. Of the average Canadian tax dollar, municipal governments get 8 cents, provincial governments 42 cents, and the federal government 50 cents. While a financially strong and fiscally prudent national government is important and something Canadian governments have struggled for over a decade to establish, this historic division of tax revenue means the federal government’s taxation, expenditure, and transfer decisions become determinative of the fiscal condition of other governments. While both Liberal and Conservative governments have recently used the overflowing federal coffers to increase transfers to the provinces and to cut deals with provinces who receive equalization payments, Canadian cities continue to struggle with budgetary shortfalls to maintain basic services and make capital expenses to replace leaking water pipes, weakened bridges and overpasses, congested roads, overburdened sewer systems, struggling transit systems, and core recreation and cultural infrastructure. This means that tax savings of a couple pennies on the dollar by Canadians at the federal level will have to be reclaimed at the municipal level through property tax increases, user fees, and increasingly ingenious other measures to pay basic bills. Canadian cities are the centres of the s&t, r&d, and innovation systems that the country relies on to generate and develop new ideas. Stresses on the quality

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of life in Canada’s cities have a direct impact on Canada’s ability to compete in the knowledge based economy, as quality of life considerations are a major factor in the global 21st Century competition for knowledge based workers.

ise in the 19 march 2007 budget The Budget Speech had some ISE specific focus under the themes of the environment and a knowledge advantage. It made the usual references to the spectacular beauty of the country and of the need to protect precious natural capital like Canada’s lakes, rivers, and oceans. Indeed there was a warning not to take for granted one of the planet’s largest supplies of fresh water and the beautiful oceans that surround Canada on three sides. This was by way of introducing a new National Water Strategy. The plan is to improve water quality in places such as the Lake Simcoe, Lake Winnipeg, and Great Lakes Basins. This sort of ecosystem based initiative is precisely the correct way to think and act and is a most welcome investment in Canada’s natural capital. Because all Canadians deserve clean and safe drinking water, a tough regulatory regime and standards are to be established on First Nations reserves and the government will help provinces and municipalities improve municipal sewer and water facilities. There was specific mention of a commitment to work with the provinces on tougher, more stringent regulations and controls to address municipal wastewater effluents.13 This, in part, reflects the new Environment minister’s shock upon learning that Canadian cities are still dumping raw sewage into rivers and oceans.14 In addition to halting the dumping of raw sewage into the Atlantic and Pacific, the sustainable development and protection of the oceans was to be achieved by creating nine marine protected areas, and by funding the purchase of six new coast guard vessels. More specifically the new National Water Strategy will include: • $11 million over two years to accelerate the clean-up of contaminated sentiments in eight areas of the Great Lakes Basin identified under the Canada-U.S. Great Lakes Water Quality Agreement, • $5 million over two years for the International Joint Commission to carry out a study with the U.S. on the flow of water out of Lake Superior, • $12 million over two years to support the clean-up of Lake Simcoe, • $7 million over two years to support the clean-up of Lake Winnipeg, • $19 million over two years to help clean and protect our oceans and support greater water pollution prevention, surveillance and enforcement along Canada’s coasts, • $324 to the Canadian Coast Guard for the procurement, operation and maintenance of an additional six new large vessels – four midshore patrol vessels and two offshore fishery science vessels.

9 The Harper Minority Government and ISE

Air quality improvements and greenhouse gas emission reductions were combined in the Clean Air Act. While the Clean Air Act did not get through Parliament without being amended dramatically by the opposition, the government is planning to bring forward those elements that had all-party support for further consideration. Budget 2007 reinstated a number of the programs which the Conservatives had initially cut, as part of a $1.5 billion Canada ecoTrust for Clean Air and Climate Change. They also established a rebate scheme to support the faster diffusion of more energy efficient vehicles into the economy while getting rid of older higher polluting cars and penalizing the purchase of gas guzzlers. Specific air and land improvement initiatives included: • Rebalancing the tax system to encourage investments by the oil sands and other sectors in clean and renewable energy while phasing out accelerated capital cost allowance for oil sands development, • $2 billion over seven years to support renewable fuel production in Canada, including biofuels, • A rebate of up to $2000 per vehicle to buyers of fuel-efficient vehicles and a Green Levy on new fuel-inefficient vehicles, • $36 million over the next two years for “scrappage” programs to get older vehicles off the road, • $110 million over two years for better implementation of the Species at Risk Act, • $22 million over two years to improve enforcement of environmental laws including increasing the number of enforcement officers by 50 percent, • $10 million over two years to create and expand protected areas: in the Northwest Territories, which includes part of the important boreal forest that stretches across Canada, • Investing $225 million with the Nature Conservancy of Canada to protect up to 2,000 square kilometres of ecologically sensitive land, and $30 million to safeguard the Great Bear Rainforest of the central coast of British Columbia.15 As part of the “Advantage Canada” long-term economic plan outlined in the fall of 2006, the Conservatives developed a theme called “A Knowledge Advantage.” This theme closely parallels the focus of this volume on innovation and science. The Budget Speech notes that the goal is to have the best-educated, most-skilled, and most flexible workforce in the world. The programs financed here are targeted at building capacity by increasing support for postsecondary education and skills training by enhancing graduate student support through the Canada Graduate Scholarships program. These prestigious scholarships celebrate Canada’s past creative genius by being dedicated

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to the memory of Frederick Banting, Charles Best, Alexander Graham Bell, and Joseph-Armand Bombardier. Specific funding initiatives include: • Beginning in 2008–09, $800 million per year to the Canada Social Transfer earmarked to improve Canada’s post-secondary education system, • $350 million over 2006–07 and the next two years to support Centres of Excellence in Commercialization and Research, • $510 million to support the Canada Foundation for Innovation, • $120 million to canarie for a next-generation research broadband network, • $85 million a year for research targeted to key priorities through the federal granting councils, • $15 million a year to the Indirect Costs of Research program, • $100 million for Genome Canada, • $30 million to the Rick Hansen Man in Motion Foundation for spinal cord research, • $11 million over two years to accelerate the creation of new business-led Networks of Centres of Excellence, • Spending $6 million in 2008–09 to shift the Natural Resources Canada canmet Materials Technology Laboratory to Hamilton.

c l i m at e c h a n g e The Intergovernmental Panel on Climate Change (ipcc) is the acknowledged global authority on the science of climate change. Its rigorous assessment process reviews the peer reviewed published research on climate change every five years to determine the state of scientific knowledge. The innovative and authoritative quality of its work resulted in the award of the 2007 Nobel Peace Prize.16 Its Fourth Assessment Report was released in 2007 and stated that the warming of the climate is unequivocal and that the global increases in carbon dioxide concentrations are due primarily to fossil fuel use and land-use change while those of methane and nitrous oxide are primarily due to agriculture.17 A prominent British study headed by Sir Nicholas Stern made the case for taking early action on economic grounds, estimating that the costs of mitigation at about one per cent of gdp by 2050 were a fraction of the costs and risks of the climate change avoided. “Mitigation – taking strong action to reduce emissions must be viewed as an investment, a cost incurred now and in the coming few decades to avoid the risks of severe consequences in the future. If these investments are made wisely, the costs will be manageable, and there will be a wide range of opportunities for growth and development along the way.” 18 In the face of this combination of scientific and economic evidence, public opinion in Canada swung solidly behind action on climate change and

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boosted the environment up the polls. Indeed, no other issue has caused the Harper government more critical press coverage or required it to reverse itself more from the positions it took upon becoming government. Simply put, the Conservatives were just not prepared to deal with this issue. Stephen Harper had earlier derided the scientific evidence of climate change and the international response of the un Framework Convention on Climate Change and its Kyoto Protocol, calling it in an infamous fundraising letter a socialist scheme to suck money out of wealth producing nations.19 Yet by the summer of 2007 he was quoting the ipcc in his speeches, noting that “the weight of scientific evidence holds that our atmosphere is getting hotter, that human activity is a significant contributor and that there will be serious consequences for all life on earth … the physical evidence is already there for all to see. For example, this year there is more ice-free, open water in the Northwest Passage, our Arctic waterway from the Atlantic to the Pacific, than has ever been recorded before. And, after a series of mild winters, out forests in British Columbia are being ravaged by a beetle that the cold used to contain to more southerly regions.”20 One thing that did become clear in the first year was that rookie Environment Minister Rona Ambrose had become a liability to the government for her handling of the climate change file both domestically and internationally. Some argued that it was not her fault. As the authors of Hot Air state “When the end came … the obituaries of her performance at Environment were cruel, but only somewhat deserved. She had been given few directions, had been surprised like the rest of government by the public mood shift, and had little guidance from a party platform that had relegated climate change to the margin.”21 She was dumped from the portfolio in January and replaced by cabinet heavyweight John Baird, who was enjoying star status at the time for having guided the government’s first major piece of legislation, the Federal Accountability Act, through Parliament. He would not be so lucky with his second major parliamentary endeavour. Bill C-30, the Clean Air Act, was badly beaten up at committee stage and returned to the House with numerous amendments that Baird would not accept. In fact, as a reflection of the peculiarities of a minority government, the Bill that did emerge victorious was Bill C-288, the Kyoto Protocol Implementation Act, a private member’s bill introduced by Liberal Pablo Rodriguez, which gained Royal Assent in June 2007. The Liberal government’s various climate change plans over the years relied on voluntary expenditure and subsidy programs. Despite cuts to many Liberal programs, the Conservatives continued to deploy these instruments, but added a regulatory twist. Budget 2006 introduced a public transit tax credit and a renewable fuel standard that requires five percent ethanol content in gasoline by 2010. Both of these instruments are very expensive and their utility in reducing greenhouse gases is hotly disputed. Mark Jaccard and

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his colleagues have run the numbers on the public transit tax credit and determined that it will cost $2000 for each tonne of carbon dioxide reduced.22 As mentioned above, ethanol’s CO2 reduction potential relates to how the ethanol is produced and how energy is produced to power biofuels refineries. While both programs are expensive and controversial, they do direct subsidies to constituencies the Conservatives would like to think will be politically appreciative. John Baird then introduced early in 2007 a series of programs that mimicked the Liberal programs they had cut in 2006: ecoEnergy Technology Initiative, ecoEnergy Efficiency Inititative, the ecoEnergy Renewable Initiative, and Canada ecoTrust.23 All used combinations of grants, subsidies, and tax incentives. The regulatory twist in approach was introduced by Baird in April 2007 in Turning the Corner: An Action Plan to Reduce Greenhouse Gases and Air Pollution.24 To set up their approach the Conservatives released a document that argued that meeting the Kyoto reductions in the 2008–12 target period as outlined in Bill C-288 would be ruinous “for Canadian families and businesses,” slamming the Canadian economy into a recession.25 Their reinvention of the Liberals’ spending programs blunted the criticism that they had no climate change programs. The April Turning the Corner announcements showed the Conservatives were willing to go further than the Liberals and use regulatory instruments to force reductions in air emissions. As the Regulatory Framework for Air Emissions stated, “Canada’s New Government has launched a concrete and realistic agenda to protect the health of Canadians, to improve environmental quality, and to position Canada as a clean energy superpower … the proposed framework is comprehensive and includes mandatory and enforceable reductions in emissions of greenhouse gases and air pollutants.”26 The plan included emission regulations for large industrial facilities, mandated emissions standards for cars and trucks, regulations for household appliances, phasing out incandescent light bulbs, and creating an emissions trading system for carbon. The framework targeted reductions to 20 percent below 2006 levels by 2020 and by 50–70 percent by 2050. Critics argued, however, that the flexibilities built into intensity targets for industry, mandatory vehicle efficiency standards, credits for early action, and purchases of credits from developing countries, and payments into a technology fund, instead of meeting reduction targets, will result in the government falling short of its goals. Jaccard and his colleagues have assessed the policy effectiveness of the Conservatives’ approach and concluded “Preliminary analysis suggests that the government’s current policies – which will fail to meet its 2020 and 2050 targets – will incur costs to the gdp comparable to those of more effective policies that would actually achieve its targets. Costs imposed by an economy-wide ghg tax, or an economy-wide emissions cap, would not be substantially different.”27

13 The Harper Minority Government and ISE

The sector and facility specific regulatory approach to air emissions did not appear to gain government support among key industrial and environmental groups either. In a quite extraordinary letter to the prime minster in July 2007 the leaders of key industrial associations and major environmental organizations raised concerns that the scale and complexity of the regulatory effort raised “substantive concerns with multiple elements of the Regulatory Framework.”28 At the time of writing, it remains to be seen how the regulatory approach will play out. Given that a major premise of the Regulatory Framework is “To address these challenges in a coordinated way will require nothing short of a complete transformation in the capital stock of energy producing and consuming businesses and households across Canada,” it is not surprising that the Framework contains a “technology fund”. Until 2018 firms can make payments to this fund in lieu of meeting their reduction obligations. Disbursements from this fund can be used to aid the transformation of the energy capital stock. Two examples given in the framework are expanding the eastwest electricity grid and building a pipeline in Alberta for CO2 transport as part of a future carbon capture and storage (ccs) project. In their chapter Rose Murphy and Mark Jaccard investigate some of the key issues associated with ccs, which is viewed as one of the key technological solutions to continued growth of the tar sands. Capturing, compressing, piping, and storing CO2 in depleted oil and gas reservoirs in Alberta are the sort of technology transformation solutions that would allow Canada to make the major reductions targeted for 2020 and 2050. They argue that a legal and regulatory framework that addresses the risks of ccs and the associated public concerns is urgently needed. This is most certainly the case, as this technology is emerging quickly with a demonstration project underway in Saskatchewan and oil and coal companies forming alliances to push public policy.29 Convinced by Al Gore, George Monbiot, and the science that we should be seeking ghg emission reductions in the 80–90 percent range by 2050, and inspired by the National Round Table’s work on long term reduction options discussed below, Bob Paehlke, in his chapter, explores the sorts of major social and technological transformations that will be required. With his focus on 2050 Paehlke challenges readers to think big, as big thinking will be required. In the first volume of this series, Bruce Doern identified the National Round Table on the Economy and Environment (nrtee), the Commissioner of Environment and Sustainable Development (cesd), and Sustainable Development Technology Canada (sdtc) as three of the key additions to “The New ISE Institutional System – 1990s to 2006.”30 All three institutions were centrally involved in the climate change story in important ways in 2006–07. sdtc was given responsibility by the government for investing up to $500 million in the NextGen biofuels fund. To date sdtc has invested nearly $300 million in clean technologies, in the process leveraging a billion dollars

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in investments from other investors. By investing $550 million by 2010 it should have leveraged between $1.6 and $2.2 billion of research investments.31 The nrtee, building on the conceptual work of Robert Socolow and Stephen Pacala,32 has been leading research on a long-term strategy on how Canada could by 2050 meet the energy needs of a growing economy while achieving reductions in ghg and improving air quality. This work focuses on developing a scenario in which advances in existing and near term technologies and behavioural changes contribute to a series of aggregate wedges which combine to achieve the reduction goals. Energy efficiency improvements play the most significant role. Increased oil and gas production can take place only if ccs is perfected. Electricity production will require a major contribution by clean coal technology. The study made the crucial point, however, that the major barrier to action in Canada is not technology but the “lack of long term signals indicating that ongoing ghg reductions will remain a priority. Such signals are needed to help the private sector make short-term and long-term investment decisions that take ghg reductions into consideration … A clear commitment to long-term ghg reductions will provide the signal that will allow investment decisions to be made in the context of sustainable growth and capital stock turnover, so that reductions can be achieved with a minimum of disruption.”33 The nrtee reported their work to the government in June 2006 and throughout the fall of 2006 held pubic outreach sessions on this work in major cities across Canada. Based on this work, the government asked the nrtee for advice on targets and scenarios for reducing emissions of air pollutants and ghg s in Canada in the medium- and long-term to 45 percent to 65 percent below 2003 levels. The Interim Report to the minister of the Environment estimated the costs associated with both slow and fast start scenarios. It concluded once again that “In order to meet deep ghg emission reduction targets, the immediate implementation of clear, consistent, and long-term policy (such as an emissions price) by the government is crucial. Such a policy will need to place a price on carbon, which could be implemented, for example, through an emissions cap and permit trading scheme or and emissions tax.”34 Because “Canada’s contribution to the international effort to reduce ghg emissions post-Kyoto has not yet been determined, but could end up calling for a “faster and deeper” reductions path than currently envisioned by the government,” the nrtee decided to examine deeper emission reduction in the order of 80 percent below 2003 levels. The Conservatives have stated that they continue to be committed to the un Framework Convention on Climate Change and its Kyoto Protocol, but have also stated that since Canada’s emissions in 2005 were 32.75 percent above the Canada’s Kyoto Protocol target, Canada will not be able to meet the target by 2008–12. As mentioned above, reflecting the minority government situation, Parliament passed Bill C-288 against the wishes of the government.

15 The Harper Minority Government and ISE

Because it is the law, the government and the nrtee had to produce reports in response to it in the fall of 2007.35 This is a peculiar minority government dance, and something Canadians, both private citizens and government officials, are not used to. In other words, despite Parliament’s “wishes,” the government will not put in place measures to meet Kyoto goals, as this would, it argues, drive the country into recession. At international meetings in 2007 such as the G-8, apec, and the Commonwealth, Harper consistently argued that all major global emitters must take on long term reduction targets in the post-Kyoto period. The Conservatives argue that Canada is willing to undertake binding emission reduction commitments if countries like China, India, and the U.S. do as well, as this is the only way to get meaningful long term reductions in greenhouse gases. Others argue that Canada and other developing countries have a moral responsibility to lead the way and that “there needs to be a clear differentiation between the types of commitments that are appropriate for a country like Canada that clearly needs to deepen its absolute emission reduction targets, and a country like China, India or Brazil.”36 The issue of putting in place a new set of negotiations to determine who will face binding targets postKyoto was the focus on the un Climate Change meeting in Bali, Indonesia, in December 2007. Harper lost an ideological soul mate and key ally on the international stage when John Howard, the former Australian prime minister, was retuned to private citizen status in the November 2007 Australian election. The new Australian Labor government moved quickly upon assuming office to ratify the Kyoto Protocol and take on binding targets. Still, Baird continued to focus on “getting specific commitments from all the major polluters”37 post-Kyoto at Bali. The 2006 Report to the House of Commons of Commissioner of Environment and Sustainable Development Johanne Gelinas focused on climate change. In was a hard-nosed and highly critical assessment of the Liberal’s track record, noting that “on the whole, the government’s response to climate change is not a good story. At a government-wide level, our audits revealed inadequate leadership, planning, and performance. To date, the approach has lacked foresight and direction and has created confusion and uncertainty for those trying to deal with it … Change is needed.”38 So while the cesd was highly critical of the Liberals, she put the Conservatives on notice that “Looking forward – a massive scale up of efforts in needed.”39 The press conference to launch the report and her appearances before the House Standing Committee on Environment and Sustainable Development were covered extensively in the media. A few months later Gelinas left the commissioner’s job under unclear circumstances. There was speculation that Gelinas had gone farther in her public pronouncements than was acceptable in the eyes of the auditor general for a second level official in an audit function in the Office of the Auditor General (oag).40

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This raised serious questions in the eyes of many commentators about the limited powers of the cesd within the current structural arrangement. Indeed, in early 2007, the Standing Committee on Environment and Sustainable Development held hearings on the issue and subsequently passed an Opposition motion to create an independent commissioner separate from the Office of the auditor general.41 The Auditor General, Sheila Fraser, subsequently appointed a Green Ribbon panel to assess the functions of the Office of the Commissioner within the oag. Its report was made public early in 2008. Some Liberals have acknowledged that they made a mistake in the 1995 when they placed the commissioner in the oag. John Godfrey, a current Liberal member of the Standing Committee on Environment and Sustainable Development, introduced a private member’s bill, Bill C-474, in November 2007 to require the government to develop and implement a National Sustainable Development Strategy and to create an independent Commissioner of Environment and Sustainable Development equivalent in stature to the auditor general.42 While such opposition bills usually do not become law, in a minority government situation, as we saw earlier, it is possible. The implications of this legislative initiative are not clear at the time of writing. Ron Thompson, the interim cesd, reported to Parliament in October 2007.43 The 2007 Report included a major chapter on Sustainable Development Strategies (sds), which federal departments had been developing every three years since 1997. The fourth generation of sds were tabled in Parliament in late 2006. Thompson was highly critical of the government’s performance: “It is clear that the strategies are not helping or encouraging departments to take environmental issues into account, as was envisioned when the government put the process in motion in 1995. The ambition and momentum that existed in the early stages of the government’s sustainable development strategy initiative has faded. In our view, the preparation and tabling of the strategies have become little more than a mechanical exercise, required to fulfill a statutory obligation. Departments may be meeting the letter of the law with their strategies but most are certainly not responding to the spirit of it.”44 The interim commissioner called on the government to find out why and to determine what needs to be done. The government has undertaken to respond within a year. Francois Bregha, in his chapter, investigates the sds process in four federal departments and agrees that while they represent a “missed opportunity” there is “a way forward” to making them effective instruments of change. 2 0 0 7 s c i e n c e a n d t e c h n o l o g y s t r at e g y In May the Harper Government introduced the s&t strategy Mobilizing Science and Technology to Canada’s Advantage. Industry Minister Maxime Bernier anchored the s&t framework within the larger Conservative

17 The Harper Minority Government and ISE

economic plan “Advantage Canada” that, as mentioned above, was introduced in November 2006. The s&t strategy is intended to guide future government s&t decision making. Bernier went on to say that “The most important role of the Government of Canada is to ensure a competitive market place and to foster an investment climate that encourages the private sector to innovate.”45 The s&t strategy had six chapters. The opening chapter defined the problems of Canadian performance while celebrating Canada’s achievements. There was the usual lament that Canada is not a productive as the us and that the “productivity gap” with the Americans has been widening since 1984. Canada’s private sector underperforms in Research and Development (r&d) compared to other oecd countries whereas our public expenditures are highest of the G-7 countries. While the private sector performed $14.7 billion of r&d in 2005, the higher education sector performed $9.9 billion in the same year with well under half of the number of r&d personnel. Interestingly, of the $9.3 billion of federal s&t expenditures in 2005–06, over half ($5 billion) was performed in-house in federal departments. Given that this Conservative government is strongly biased towards the private sector and believes in the importance of s&t as a source of national competitive advantage, yet is faced with a, relatively speaking, underperforming private sector, it is not surprising to learn that the subsequent chapters of the s&t Strategy seek to strengthen private sector r&d in Canada.46 There were three substantive chapters. The chapter “The Entrepreneurial Advantage – Making Canada a World Leader through s&t” had three themes. The first was titled “Fostering a Competitive and Dynamic Business Environment.” It identified the need to modernize the intellectual property, regulatory, and taxation regimes in Canada. It repeated the Budget 2007 commitments to establish an expert, independent panel to undertake a comprehensive review of Canada’s competition policies. The government had already declared that it wanted Canada to become one of the most investmentfriendly counties in the G-7 and reiterated the Budget’s goal of establishing the lowest tax rate on new business investment. The second theme was titled “Pursuing Public-Private Research and Commercialization Partnerships.” The key goal here is to generate more commercial outcomes from the Centres of Excellence program by introducing new business-led research networks. A key here is to develop “new approaches to transfer knowledge and technologies from the universities, research hospitals, and government laboratories to the private sector.”47 The third theme was on “Increasing the Impact of Federal Business r&d Assistance Programs.” It included replacing Technology Partnerships Canada with a new program, the Strategic Aerospace and Defence Initiative, and realigning programs and activities of existing organizations like the National Research Council of Canada, the Natural Sciences and Engineering Research Council of Canada, and the Business Development Bank of Canada to increase commercialization outcomes.

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The second substantive chapter was titled “Knowledge Economy – A 21st Century Research Plan.” The goal is to “Focus strategically on research in the national interest” such as environmental s&t, natural resources and energy, health and related life sciences, and information and communications technologies. A second theme identified Canada as having the highest public r&d performance of G-7 countries as a share of gdp. The s&t Strategy committed to maintaining this leadership position through ongoing support of initiatives like the Canada Foundation of Innovation, Canadian Institute for Advanced Research, and the Indirect Cost of Research Program. Perhaps reflecting the suspicion of members of the Conservative backbenches about university based research, the third theme of this section is titled “Enhancing Value for Money, Accountability, and the Responsiveness of Canada’s Three Granting Councils.” Under this rubric the government will intervene in the governance of the councils, separating the functions of the chair and president of the councils and announcing that it will use its appointment powers to the council’s governing bodies to add more business and community representation and influence. The fourth theme, “Exploring New Approaches to Federally Performed s&t,” argued that government should stick to s&t work that helps departments fulfill their policy and regulatory mandates. The Harper government is keen to transfer non-regulatory federal laboratories to universities or the private sector and have asked an independent expert panel to identify up to five laboratories that could be early candidates for transfer. Budget 2007 got the jump on this process by announcing that Natural Resources Canada’s canmet Materials Technology Laboratory would be relocated to the McMaster Innovation Park in Hamilton. The third substantive theme focused on “People Advantage – Growing Canada’s Base of Knowledge Workers.” Arguing that talented, skilled, creative people are the most critical element of successful national economy, the chapter had themes on “Enhancing Opportunities for s&t Graduates,” “Increasing the Supply of Highly Qualified and Globally Connected s&t Graduates,” and “Getting Canadians Excited about s&t.” To achieve these goals the government states it will decrease personal income taxes and make the tax system fairer in order to attract and retain highly skilled workers. It wants to work with the provinces to improve inter-provincial labour mobility and to improve foreign credential recognition. It also intends to modernize Canada’s system of student financial assistance and to better market Canada’s postsecondary education system to foreign students. It also committed to stable funding for post-secondary education through the transfer payments system. It concludes by noting that the government wants to increase scholarships, internships in the private sector, and foster a culture that values and rewards ingenuity and entrepreneurship. Making the sort of transformations outlined in the s&t Strategy will not be without its challenges. In their chapter Jac van Beek and Frances Isaacs are

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not unsympathetic to the goals of the s&t Strategy. However, they also recognize that working extensively with other disciplines and enterprises from other sectors to solve formidable societal issues requires science management competencies that are in short supply. They seek to understand, based on international experience, how a more conducive environment for coalescence and collaboration can be developed. Moreover, the intellectual property emerging from the r&d exercise is contested internationally. Sara Bannerman, in her chapter, explores the role that Canada has tried to play in attempting to address conflicts amongst blocks on nations, particularly the developed and developing worlds. The Conservatives’ s&t Strategy goals of greater commercialization of university generated ideas and stronger links between universities and companies can expect resistance. Harry Arthurs, a prominent Canadian academic, has criticized the approach of the s&t Strategy. It leads, in his opinion, to a productivity driven research culture that corrupts the academic enterprise. The culture shift the Conservatives are encouraging is condemned in no uncertain terms. “Undue emphasis on productivity, especially productivity which is market driven, creates pressures which jeopardize the integrity of scholars and their scholarship … Universities which endorse such relationships, and governments which promote or compel them, have to learn to anticipate and forestall their undesirable effects.”48

a n ov e rv i ew o f t h e c h a p t e r s francois bregha compares the sustainable development strategies of the departments of Environment, Industry, Natural Resources, and Transport. He finds the overall implementation process to be deeply disappointing and seriously flawed. The sds s have not become the change instruments they were intended to be within departments or across government. The department by department focus in the absence of a government-wide strategy has left them disconnected and disaggregated. With respect to their design, a lack of vision, insufficient use of the full range of appropriate policy instruments, and an odd emphasis on internal operations have limited their potential. From a public management perspective, a lack of accountability consequences at the implementation stage for department’s senior officials has meant that even the modest commitments of the published strategies have usually gone unfulfilled. The cesd has examined and deplored the department’s poor performance on an annual basis but the central agencies of government have been simply unwilling to take the steps required to make them meaningful. The lack of willingness of three Prime Minister’s Offices to hold the bureaucratic leadership accountable has had predictable results. Yet, within this overall sad story there are jewels of action and creativity in and by various departments. The concept of sustainable development challenges at a fundamental level the values, priorities, and incentives that have governed

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society and public policy. If Canada is to transition to a sustainability trajectory than several bureaucratic and political barriers will have to be addressed. Bregha explores several options which could help overcome these barriers. The reorientation that will be required to get Canadian public policy off the conveyor belt of “unsustainability” will require a paradigm shift. Paradigm shifts take time. While the sds instrument was initially crafted in the context of “paradigm shifting” it has lost focus and its system changing potential has been deflated. Interestingly, the unfolding story of the evolution of major project assessment processes in Canada tells a different tale in the institutionalization of sustainability values in the law, and in assessment and decision making processes. bob gibson reveals the innovative approach being used by the Joint Review Panel for the Mackenzie Gas Project. The planned $16 billion project to bring gas to southern markets, including to the energy intensive Alberta tar sands operations to produce steam to extract oil, raises a host of related sustainable development issues. Institutionally, the law, and attendant processes around assessment of projects in Canada over the last 30 years has continued to evolve and Gibson argues that the principles and tools being employed by the Joint Review Panel reveals a different kind of “institutional learning” than that revealed by Bregha over the much shorter life span of the sds. Gibson reviews several major environmental assessment experiences since the early 1970s to show an explicit pattern of legal and institutional capacity building and learning that has spawned and nurtured the innovative approach being followed by the Joint Review Panel in its current assessment process. For example, the “contribution to sustainability” test has become a major innovation in the evaluation of new undertakings. Simply put, a different set of questions are now being asked of major projects and Gibson explores what it means to take the “contribution to sustainability” principle seriously. He finds that the law matters and that the entrenchment of sustainable development in the Canadian Environmental Assessment Act, and similar provincial and territorial legal frameworks, and their application by independent review panels has contributed to the “gradual institutionalization of sustainability-oriented processes.” By applying a sustainability lens to its determination of “lasting net gains” and to “what is acceptable in the circumstances”, sustainability-based assessment forces the key trade-off decision making into the open. Paradigm shifting takes time and Gibson acknowledges that while sustainability-based evaluations and decisions remain primitive and are not yet firmly entrenched, the Mackenzie Panel represents a step towards authoritative acceptance, if not yet firm institutionalization, of the sustainability test. The transition to a sustainable development trajectory in Canada is increasingly focusing on the cities. robert hilton and christopher stoney show that like other socially transformative agendas, this one will be

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replete with setbacks and sidesteps as well as breakthroughs. One crucial transformation that has taken place in Canada in the past half century has been the reversal of Canada as a predominantly rural country to a nation where 80 percent of the population life in urban centres. Transportation systems are at the core of most urban quality of life concerns and at the centre of the urban sustainability debate. The authors reveal how local politics around an ostensibly sustainable light rail transit project in the city of Ottawa exposes how old fashioned ward politics, administrative secrecy, and meddling by politicians from other levels of government can undermine attempts to move toward Smart Growth urban redevelopment strategies informed by sustainability principles. While the lrt was initially sold as an example of a sustainable transportation project designed to get people out of single occupancy vehicles, their analysis shows that the project at virtually all its stages failed to live up to the principles of accountability, fiscal responsibility, participatory processes, use of partnerships and public engagement/awareness. In almost every way, this project ended up a diabolical “screwup” and “shattered dream” as the local media called it. In the meantime, urban roads congest despite huge expenditures on new roads on the outer suburban extremities of the city, “alternative” light rail proposals following existing rain lines to and fro are largely discredited before the ink is dry on reports, and the quality of life of citizens continues to decline. If the city that is host to the nation’s government and its key national institutions, home to major centres of education and research, and a highly educated population, struggles to implement the innovative 21st Century Smart Growth strategies it makes one wonder what is possible in Canada. Fortunately, the authors show that other Canadian municipalities are more advanced at implanting public transit systems and other central features of the new urbanism and smart growth that respond to the challenges to modern urban life. For those Ottawans who have traditionally looked at Toronto’s traffic congestion and smiled smugly, the laughs are getting harder to generate! david robinson reminds us that the struggle for sustainability continues to be played out in the forests and other resource based peripheries as well as the urban cores. He argues that while building on the forest resource is the only available development strategy for Northern Ontario, the most remarkable aspect of the policy regime in this region is the astonishing failure in the second half of the 20th century to convert the enormous natural resource base into viable economic development. Expanding value-added production is essentially the definition of building on the resource base. The failure to make a transition from commodity production to wood-based value-added production is the region’s key sustainability issue. Such forestbased communities are caught in a fundamental contradiction. Community survival may depend on increasing pre- and post-harvest value-added. Adding value requires a population with design and fabrication skills capable of

22 Glen Toner

attracting capital. It also requires access to the forest feedstreams. The existing large producers are evolving in the opposite direction, replacing labour with capital. To support producers and to maintain their competitiveness, public policy had generally encouraged concentration and consolidation of production. In other words, current policy and practice work powerfully against a sustainable value-added development strategy. Robinson builds theoretical and historical arguments about how to overcome the institutional barriers and develop a forestry policy designed to promote economic and social development in this region as an integral part of Canada’s climate change and social development strategies. As jeremy wilson notes, birds are a significant component of Canada’s natural capital and central to the countries identity. Extensive recovery plans have been launched in various parts of the country to rebuild populations of owls that burrow underground and of raptors that soar majestically overhead. They are stars of Canada Posts stamps and the raison d’etre of major conservation organizations. They have also been the core focus of public policy for a very long time. The 1916 Canada-U.S. Treaty for the Protection of Migratory Birds and its enabling legislation have spawned the growth of government agencies and triggered significant legislative and program responses. Wilson explores recent federal policy development and program management to raise questions about how well Canadians are doing as stewards of our natural capital. It is not an entirely happy story. Given the border hopping nature of the avian species, public policy management of program related to them invariably raise jurisdictional coordination issues both internationally and domestically. Wilson investigates the management of three major bird programs to reveal common themes. First, is the ongoing and prominent role of societal actors. Sophisticated and diverse environmental groups have revealed the flaws in existing approaches, helped develop the political will to do something about it, and cooperated in generating the policy approaches and enhancing the conservation toolkit. Resource industries, both at the firm and association level, have played various roles, sometimes oppositional, sometimes supportive. A second determinant factor is the scientific and policy capacity of Environment Canada and its agencies. These have been impacted by budgetary cuts over the past decade, but also relate to internal decisions made to allocate budgets between operations and research over the years. Science capability and renewal is an open question in the department. Third, is the ongoing Canadian dilemma of trying to generate and implement national policy in areas of trans-boundary issues, when the federal government is frankly reluctant to lead by asserting federal authorities in area where provincial jurisdiction exist. The policy tool kit too often gets reduced to financial bribery to the provinces to cooperate. The overall conclusion to this story is that it is, as usual, a work in progress but one that as recently as 2005 the Commissioner of Environment and Sustainable

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Development was able characterize as replete with a lack of coherent plans, stalled momentum on several fronts, unfulfilled commitments, and governance problems. While this assessment was made under the Liberals, there is little evidence that things have yet improved during the Conservative minority government. New normative frameworks like sustainable development spawn new analytical tools for understanding old problems and seeking different solutions. scott findlay and annik deziel assess new regulatory efforts to address old problems by employing innovative concepts. Pesticide use, and the associated health and environmental risks, has long been a major problem in both industrialized and developing countries and a central concern of traditional environmental and health policy. It is now at the eye of the storm in many countries, as our scientific understanding of how pesticide molecules impact human and environmental health have improved and as politicians respond increasingly with bans and more rigorous regulations. The remaining constant factor is that our management of these substances all share the common element of scientific uncertainty. New concepts such as the Precautionary Principle and new approaches such as the Principle of Adaptive Management have emerged out of various international processes to help address the uncertainty concern. Since the mid-1990s the main regulatory agency for managing pesticide regulations has been the Pest Management Regulatory Agency (pmra). Since the major revision of the Pest Control Products Act in 2002, pmra has had a statutory obligation to use the precautionary principle in re-evaluations and special reviews. Findlay and Deziel undertake a detailed review of how well the pmra is doing in applying the precautionary principle and applying adaptive management to its decision making processes. While these are early days in the use of these innovative ideas and there is considerable confusion about how to implement them in real world decision making, they are growing in popularity world wide. The authors find several serious problems in their application by pmra, but acknowledge that this is no doubt the case for other pesticide regulatory agencies. They offer recommendations for an improvement in the operations of the Canadian agency. As rose murphy and mark jaccard show, carbon dioxide capture and storage offers the promise that humanity can continue to enjoy the benefits of fossil fuel use, while reducing its impact on the global climate. Carbon dioxide would be captured from large point sources that burn fossil fuels, compressed and transported to a location suitable for long-term storage. Geological storage is the most promising of the storage options to date, and storage in the natural pore spaces of oil and gas fields and saline formations is relatively advanced. Canada may benefit from developing ccs due to its geology and the nature of its fossil fuel industry, and several major projects are currently under consideration. Geological carbon storage, however, is associated with local and global risks that – while they are believed to be small and

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manageable – entail potentially serious impacts, extend over the very longterm, and are uncertain. Widespread implementation of ccs cannot occur unless a legal and regulatory framework is established to govern geological storage and address the risks. Such a framework will be essential in gaining public confidence in the safety and effectiveness of ccs. The authors explore the Canadian context for ccs development, describe the risks related to geological storage, summarize what is known about the public perceptions of the technology, review the current legal and regulatory frameworks surrounding geological ccs, discuss the specific legal and regulatory gaps that need to be filled, and consider the issues and decisions governments will face as to how to allocate liability between the public and private sectors. robert paehlke challenges us to think long-term, very long term. Actually 43 years is not very long in climatic time but it is nearly half of a century for humans and much can change in that period. The world was a very different place in 1965. His chapter considers in broad terms what would be involved in meeting Canada’s Kyoto targets plus an additional reduction of 50 percent from that point by 2050, about 80 percent reduction from today. He makes two interesting observations in setting up his argument. First, Canada has the luxury of having many energy options, perhaps more than any other nation on earth. He notes that we know that a 50 percent reduction in our per capita emissions is possible because our G-7 partners Britain, Germany, France, and Japan are already at that level of per capita emissions compared to Canada. These are not backward developing countries. All have standards of living equivalent to Canada. Yet we are far less energy efficient than Europe and Japan. This is an intentionally provocative chapter. Paehlke addressed both the demand side of the equation arguing that energy prices, technologies, evolving tastes, and policy drivers can combine to make significant emission reductions across the spectrum of energy consumption. On the supply side, he says that one key to a low-carbon energy future is the amount of land per capita, the diversity of topography, the flow of water and wind, and the ecological and geophysical capacity to sequester carbon. Canada has abundance of all of these. He combines a range of renewable energy technologies in what he calls “toward a more compelling vision of Canada’s future energy production.” The wind resource plays a prominent role in Paehlke’s vision and yes some of it is audacious. One has to keep thinking about what life was like in 1965 as one ponders the thoroughgoing social transformation that can happen in 43 years. sara bannerman explores recent developments in the international intellectual property (ip) regime. Domestic and international institutions have been developed to regulate and monitor ip such as copyright, patents and trademarks. The World Intellectual Property Organization (wipo) is the international heart of intellectual property law. The creation, ownership, control, and sharing of ip are key elements of the innovation process and of the international development sphere. Recent technology breakthroughs in ict

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in particular have politicized this area and spawned global “open source” and “creative commons” movements which are raising fundamental questions about the current regime. In the context of the debate around “the development agenda” championed by developing countries at wipo she asks “Where is Canada?” in this particular dimension of the ISE universe. The main driver of dissent within the wipo has been the developing countries frustration with the rules and operations of the regime which, in their view, has favoured the developed countries which generate most of the ip. Interestingly, Canada, as a net importer of intellectual property has from an international political economy perspective, little to gain directly from increased intellectual property protection. Indeed, it is American intellectual property owners who stand to gain the most from such policies. Bannerman explores Canada’s diplomatic attempt in the early years of the 21st Century to play a “brokerage” role between the polarities forming in the initial phases of the arguments over the development agenda. While the broker role is one that Canada has often played in international and development issues under the Liberals, Bannerman asks whether this is likely to change under the Harper Conservatives. While the Conservatives have clearly attempted to distance themselves from the Liberal’s focus on Africa and aids, for example, and have aligned Canada more closely with the U.S. on trade and foreign policy issues, it is too early to know how the Conservatives will tilt. jac van beek and frances isaacs argue that there is an emerging phenomenon of converging scientific fields in the 21st Century. As scientists and engineers world wide look to fields beyond their own disciplines to solve fundamental or technical problems, their evolved discipline-specific management structures begin to break down. Convergence on a large scale leads to a more chaotic and complex world in which to manage and direct the outcomes of science at the same time that it leads to greater innovation and scientific breakthroughs. All countries are seeking effective solutions to overarching issues like health and wellness, safety and security, sustainable energy and environment, and economic well-being. Globally, s&t policy aims at resolving these issues by fostering innovation in the public and private sectors. The authors argue that the key to success at both the level of the s&t enterprise and national innovation system lies in successful management of s&t within the context of convergence. While convergence can open the door to innovation, it can also create chaos at the level of the researcher and require new tools and actions as the level of management. The scientific convergence phenomenon has challenged science organizations to create broader approaches to management, which, in turn, are forcing the organizations to question traditional assumptions about how they operate. They note that working extensively with other disciplines and enterprises from other sectors to solve formidable issues requires management competencies that are in short supply. The chapter proposes changes to Canada’s framework for science to create an environment more conducive to coalescence and collaboration.

26 Glen Toner

notes 1 “Environment tops Canadian worries,” Ottawa Citizen, January 31, 2007, A1. 2 See G. Bruce Doern, “The Martin Liberals: Changing ISE Policies and Institutions,” in G. Bruce Doern ed. Innovation, Science, Environment: Canadian Policies and Performance, 2006–2007 (McGill-Queen’s University Press, 2006), 3–34; and G. Bruce Doern, “The Reshaping of an Agenda for Innovation, Science, and Environment (ISE),” in G. Bruce Doern ed. Innovation, Science, Environment: Canadian Policies and Performance, 2007–2008 (McGill-Queen’s University Press, 2007), 3–31. 3 Canada, Speech from the Throne, October 14, 2007, 2. 4 A recent newspaper front page showed survivors of the Canadian cruise ship, The Explorer, floating in life rafts amongst iceberg as the shio sunk in the Antarctic after hitting an iceberg. “Calm, cold and adrift at sea,” Globe and Mail, November 24, 2007, 1. 5 There is an ongoing scientific debate about the role that first generation grain based ethanol production versus second generation cellulosic ethanol production, which uses agricultural and industrial waste as feedstock, can play in reducing energy use and reducing greenhouse gases. There is no economic debate however, that regulations requiring percentages of ethanol be blended into gasoline has had a huge beneficial impact on the rural economy, especially in the U.S. Farm state lawmakers in the U.S. Senate and Congress are contemplating energy bills that would increase the renewable fuels mandate to more than one trillion litres a year, more than five times the amount produced now. These programs have increased the price of ethanol producing crops such as corn. Both the Liberals and the Conservatives have introduced biofuel production incentives in Canada, but under the auspices of climate change not energy security policy. See “Corn-based ethanol burns U.S. Investors,” and “Area Plants unfazed by commodity price woes,” Both in Ottawa Citizen, November 27, 2007, D1. 6 Commissioner of Environment and Sustainable Development, 2002 Report to the House of Commons (Office of the Auditor General, 2002), Commissioner’s Perspective, 3–9. 7 See Saeed Mirza, Danger Ahead: The Coming Collapse of Canada’s Municipal Infrastructure (Federation of Canadian Municipalities, 2007). The study broke down the deficit into sub-deficits of key categories of municipal infrastructure: water and waste water systems ($31 billion); transportation ($21.7 billion); transit ($22.8 billion); waste management ($7.7 billion); community, recreation, cultural and social ($40.2 billion). 8 Canada, 2007 Economic Statement (Finance Canada, 2007). 9 See Glen Toner, ed. Sustainable Production: Building Canadian Capacity (ubc Press, 2006). 10 Institute for Competitiveness and Prosperity, Agenda for Canada’s Prosperity (icp, March 2007); see also Task Force on Competitiveness, Productivity, and Economic Progress, Path to the 2020 Prosperity Agenda (icp, November 2007).

27 The Harper Minority Government and ISE 11 Organization for Economic Cooperation and Development, Institutionalizing Sustainable Development (Paris, 2007). 12 “Save, don’t sulk, defiant Flaherty tells cities,” Globe and Mail, November 24, 2007, A13; The Conservatives committed in Budgets 2006 and 2007 to invest $33 billion over the next seven years in infrastructure. However, this includes an extension of the Gas Tax Fund transfer that the Liberals launched, and the investment in port and border crossing projects such as the Windsor-Detroit crossing. 13 The Canadian Council of Ministers of the Environment is currently working to coordinate federal-provincial-territorial standards for municipal waste water effluents. 14 In an interview with the Ottawa Citizen, Environment Minister John Baird is quoted as saying “It just shocked me to find that, in 2007, it was still legal to dump raw sewage into our oceans, rivers, and lakes. I mean that’s an environmental crime. We’ve got to act.” Donna Jacobs. “We’re off the bench and into the game,” Ottawa Citizen, November 12, 2007, A2. 15 The Conservatives have received some of their best press from the investments they have made in creating in new parks and protected spaces. See Don Martin, “Harper earns green stripes by protecting vast areas of northern land,” Ottawa Citizen, November 21, 2007, A6. 16 See R.K. Pachauri, Acceptance Speech for the Nobel Peace Prize Awarded to the Intergovernmental Panel on Climate Change (Oslo, December 10, 2007). 17 Intergovernmental Panel on Climate Change, Climate Change 2007: The Physical Science Basis (Paris, February 2007); Climate Change 2007: The Synthesis Report (Valencia, November 2007). 18 Nicholas Stern et al., The Stern Review: The Economics of Climate Change (London, U.K Treasury, 2006), i. 19 “Harper sought money for ‘battle of Kyoto,’” Globe and Mail, January 31, 2007, A12. 20 “Balance climate, economies, Harper urges,” Ottawa Citizen, September 7, 2007, A5. 21 Jeffrey Simpson, Mark Jaccard, and Nic Rivers, Hot Air: Meeting Canada’s Climate Change Challenge (McClelland and Stewart, 2007), 107. 22 Ibid. The authors conclude “The transit subsidy, in other words, will be an expensive program with marginal benefits for climate change, whatever its political attraction, making it even worse than anything the Liberals did.” 187. 23 For an assessment of these multimillion dollar programs see Mark Jaccard and Nic Rivers, “Estimating the Effect of the Canadian Government’s 2006–2007 Greenhouse Gas Policies” (C.D. Howe Institute Working Paper, June 2007). 24 Canada, Turning the Corner: An Action Plan to Reduce Greenhouse Gases and Air Pollution (Environment Canada, April 2007). 25 Canada, The Cost of Bill C-288 to Canadian Families and Businesses (Environment Canada, April 2007). 26 Canada, Regulatory Framework for Air Emissions (Environment Canada, April 2007) iii. 27 Jaccard and Rivers, 21. 28 Mining Association of Canada, Forest Products Association of Canada, Canadian Chemical Producers Associations, Pembina Institute, David Suzuki Foundation,

28 Glen Toner

29 30 31

32

33 34 35

36 37 38

39 40 41

42

43

Climate Action Network Canada, Sierra Club of Canada, Cement Association of Canada, Toxics Watch Society of Alberta, Letter to Prime Minister Stephen Harper on Consultations of the Regulatory Framework for Air Emissions (July 26, 2007). “Oilpatch alliance aims to cut greenhouse gases by13%: Cost of reduction programs in the billions,” Ottawa Citizen, December 4, 2007, D4. Doern, “The Martin Liberals: Changing ISE Policies and Institutions, 15–16. See the presentation by Vicky Sharpe, president and ceo, sdtc to the Conference Facing Forward – Looking Back: Charting Sustainable Development in Canada 1987–2007–2027 (Ottawa, October 19, 2007). See Robert Socolow and Stephen Pacala, “Stabilization Wedges: Solving the Climate Problem for the Next Fifty Years with Current Technology,” Science, 305, 13 (August 2004), 968–972; Robert Socolow and Stephen Pacala, “A Plan to Keep Carbon In Check,” Scientific American (September 2006), 50–57. National Round Table on the Economy and Environment, Advice on a Long-Term Strategy on Energy and Climate Change (Ottawa, June 2006), 4. National Round Table on the Economy and Environment, Interim Report to the Minister of the Environment (Ottawa, June 2007), 3. Canada, A Climate Change Plan for the Purposes of the Kyoto Protocol Implementation Act – 2007 (Environment Canada, 2007); National Round Table on the Environment and Economy, Response of the National Round Table on the Environment and Economy to its Obligations Under the Kyoto Protocol Implementation Act (Ottawa, September 2007). Matthew Bramley, the Pembina Institute, cited in “Politics aside, Bali is about harmful gas molecules and those who emit them,” Globe and Mail, December 3, 2007, A12. “Tories turn to ex-pq premier for Bali talks,” Globe and Mail, December 3, 2007, A1. Commissioner of Environment and Sustainable Development, 2006 Report to the House of Commons (Office of the Auditor General, 2006), Commissioner’s Perspective, 10–11. Ibid. “Fraser dumps Environment Commissioner,” Globe and Mail, January 31, 2007, A12; “Environment watchdog forced out,” Ottawa Citizen, January 31, 2007, A3. The author appeared as a witness before the Committee on February 12, 2007 on this issue along with Denis Desautels the former ag. Others who testified over several hearings were the current ag, the New Zealand Parliamentary Commissioner of the Environment and several Government of Canada officials. See House of Commons Canada, Bill C- 474, “An Act to require the development and implementation of a National Sustainable Development Strategy, the reporting of progress against a standard set of environmental indicators and the appointment of an independent Commissioner of Environment and Sustainable Development accountable to Parliament, and to adopt specific goals with respect to sustainable development in Canada, and to make consequential amendments to another Act. “Federal departments blowing smoke on green plans, report says,’ Globe and Mail, October 31, 2007, A4.

29 The Harper Minority Government and ISE 44 Commissioner of Environment and Sustainable Development, 2007 Report to the House of Commons (Office of the Auditor General, 2007), Commissioner’s Perspective, 2. 45 Canada, Mobilizing Science and Technology to Canada’s Advantage (Industry Canada, 2007), 3. 46 In a post s&t Strategy announcement interview, Harper lamented that “Our national science strategy has failed to harness market forces in the pursuit of scientific progress. As a result, our private sector investment in research and development has fallen below most of our major international competitors.” “$9.2B plan to privatize federal labs,” Ottawa Citizen, May 18, 2007, A4. 47 Ibid., 58. 48 “Publish-or-perish culture at universities harms public good: scholar,” Ottawa Citizen, November 3, 2007, A4.

2 Missing the Opportunity: A Decade of Sustainable Development Strategies1 françois bregha

In 1995, the Canadian Parliament amended the Auditor General Act to require most federal departments to prepare a comprehensive sustainable development strategy (sds) within two years and update it every three years thereafter. The purpose of these strategies is to “… outline concrete goals and action plans for integrating sustainable development into … policies, programs and operations” and “provide a benchmark against which progress towards sustainable development will be measured.”2 The amendment to the Auditor General Act raised high expectations when it was introduced into the House of Commons: sustainable development had been one of the four themes in the Liberal “Red Book” during the 1993 election campaign. Its main author, Paul Martin, the former Liberal environment critic, was now finance minister. Sheila Copps, the Environment Minister, also occupied the position of deputy prime minister. The fact that politicians knowledgeable about the environment were filling positions of real power implied that the Liberal government would move at least as aggressively in promoting sustainable development as the previous Conservative administration had with its 1990 Green Plan. More than two dozen federal departments and agencies have since tabled strategies (some voluntarily) in 1997, 2000, 2004 and 2006. After a decade of experience and four rounds of strategies, it is appropriate to ask whether departmental sustainable development strategies have become effective instruments of institutional and policy change: are they making a difference? Are they addressing the key sustainable development issues Canada faces? Are they helping the federal government promote more sustainable forms of development?

31 A Decade of Sustainable Development Strategies

There is no easy answer to these questions because there are many departments involved (31 at last count), the strategies vary in quality and no comprehensive evaluation of these strategies has been undertaken. However, the press release accompanying the fourth round of strategies in December 2006 was remarkably muted, acknowledging that “more needs to be done to improve sustainable development reporting” and that the government would “start looking at a range of options, including legislation around national sustainable development, [and] reviewing global best practices.”3 One can read between these lines an acknowledgement by the government that the experiment in institutional design embodied in the statutory obligation to prepare departmental sustainable development strategies has not met its own expectations. Our review below of the strategies tabled by four departments supports this assessment. As part of its implementation of the amendment to the Auditor General Act and in order to demonstrate its commitment to the strategies and facilitate their preparation, the government published in 1995 a Guide to Green Government, symbolically signed by all cabinet ministers, including the prime minister, setting out both the process departments were to follow and the main issues the strategies should address. The Guide lists the three essential characteristics of sustainable development strategies. They should be: • Comprehensive, dealing both with departmental policies and programs that influence the decisions of others, and with how the department manages its internal operations. • Results-oriented, identifying the main sustainable development results the department will achieve. • Developed in consultation with other departments and stakeholders. A review4 of international approaches shows that Canada’s approach of distributing responsibility for sustainable development to all government departments rather than having all departments subscribe to a government-wide strategy is unique. The Canadian approach offers a number of advantages: • It is legally mandated; • It results in public documents against which departments are audited by an independent third party – the Commissioner of the Environment and Sustainable Development (cesd); • By forcing departments to renew their strategies every three years, it promotes continuous improvement; • It forces all named departments to address the issues of sustainable development and therefore helps to raise awareness; and • It spells out a methodical and participatory process for developing strategies (which not all departments have always followed).

32 François Bregha

What has been the impact of these advantages? In this paper, we have selected four federal departments (Environment, Natural Resources, Industry and Transport) that, by virtue of their mandate, all have a central role to play in promoting sustainable development: • Environment Canada’s mandate is to preserve and enhance the quality of the natural environment; conserve Canada’s renewable resources; conserve and protect Canada’s water resources; forecast weather and environmental change; enforce rules relating to boundary waters; and coordinate environmental policies and programs for the federal government. • Industry Canada’s mission is to foster a growing competitive, productive and innovative, knowledge-based Canadian economy. Section 5 of the Department of Industry Act (1995) mandates the Minister to exercise his powers in a manner that will “strengthen the national economy and promote sustainable development.” • Natural Resources Canada’s latest sds states that “sustainable development is central to the mandate of Natural Resources Canada.”5 The Department of Natural Resources Act states that “in exercising the powers and performing the duties and functions assigned to the Minister … the Minister shall have regard to the sustainable development of Canada’s natural resources and the integrated management thereof.” • Transport Canada is responsible for the transportation policies and programs set by the Government of Canada. The department works to ensure that all parts of the transportation system work effectively and in an integrated manner. Its vision is “A transportation system in Canada that is recognized worldwide as safe and secure, efficient and environmentally responsible.” Together, these departments are responsible for managing many of the most difficult sustainable development issues Canada needs to address, including: • Climate change mitigation and adaptation: Climate change has emerged as a dominant domestic and international policy issue. Because of its northern latitude, Canada is particularly vulnerable to changes in the climate. Canada’s greenhouse gas emissions have continued to grow despite the government’s commitment to reduce them in line with Canada’s obligations under the Kyoto Protocol and are now some 25 per cent higher than they were in 1990; • Poor air quality: Poor air quality imposes significant costs on human health, the economy and ecosystems. The Ontario Medical Association estimates that poor air quality in that province alone, for example, “has resulted in crop damage estimated at $200 million per year; forest damage

33 A Decade of Sustainable Development Strategies

•

•

•

•

estimated at $77 million per year; lost productivity costing $374 million in 2005; and direct health care costs of $507 million per year.”6 Rising energy consumption: the production, transportation and use of various forms of energy remain among the main drivers of environmental degradation in Canada. Canadians are among the world’s highest per capita energy consumers; Weak industrial policy: a June 2007 Conference Board of Canada report expressed serious concerns about Canada’s innovation track record, concluding that “Canada is not keeping up with the top performers in the new global economy.”7 Unsustainable transportation patterns: Transport Canada notes that “transportation is fundamental to Canada’s economic prosperity and Canadians’ quality of life.”8 The continued reliance of Canadians on the automobile makes urban transportation both a major source of greenhouse gas emissions (25 percent of Canada’s total) and smog, and a contributor to urban sprawl; Threats to water quality and quantity: Important sources of Canada’s water supply, such as the Great Lakes, the Fraser River, and the St. Lawrence River continue to be seriously contaminated by toxic chemicals. Many of these are potentially dangerous to humans and already destructive to the aquatic ecosystems. There is also concern that climate change will alter precipitation patterns, increasing the risk of drought in certain regions (e.g., the southern Prairies) and adversely affecting water transportation and hydro-electric production in others (e.g., on the St. Lawrence).

These departments therefore face no shortage of difficult and important sustainable development issues to address. In this regard, the ultimate test of a sustainable development strategy must be the contribution it makes to moving society onto a more sustainable trajectory: in other words, are Canada’s transportation, industrial (including manufacturing, services and technology) and resource sectors more environmentally, socially and economically sustainable today than they were ten years ago?

a n a ly t i c a l a p p r o a c h While the Guide to Green Government provides general guidance to departments on how to prepare their strategies and what they should include, the architecture of individual strategies is quite varied. In particular, departments have used different terminologies to present their action plans, an approach that sometimes makes it difficult to compare strategies. We have standardized these presentations to facilitate our analysis by defining the term “goal” (sometimes also referred to as priorities, outcomes or strategies)

34 François Bregha

as a high-level direction and the term “target” to designate specific actions (sometimes also referred to as commitments).9 In determining whether the strategies were effective instruments of change, we asked whether the strategies: 1 2 3 4

Articulate a clear vision of sustainable development; Set priorities that address the core elements of the departments’ mandate; Deploy effective policy instruments to advance these priorities; and Make clear commitments that can be measured, monitored and reported.

I review each of these criteria in more detail below: 1 Articulate a vision of sustainable development reflecting the departmental mandate and, ideally, what outcomes the department is pursuing. Without a vision or a long-term goal, it is difficult to assess whether a particular sds is moving in the right direction. While many departments espouse the Brundtland definition of sd (“development that meets the needs of present generations without compromising the ability of future generations to meet their own needs”), this definition is too vague on its own to provide either guidance to departmental action or useful metrics to measure progress. Where the departmental vision is long-term, the sds should relate the action plan commitments in the short term (3 years) to the vision, and explain how the implementation of these actions will contribute to the vision.10 2 Priority-setting involves two dimensions, focus and materiality. Concerning focus, an sds must, by definition, be a priority-setting exercise because no single strategy can be expected to achieve its stated vision within a three-year horizon. A strategy that tries to do too much runs the risk of spreading resources too thinly to make a difference. Materiality is as important as focus. While all departments will have to make choices, some of these are likely to provide greater leverage for change than others. Departments should explain why the choices they make are the most appropriate given their mandates and circumstances. 3 Deploy appropriate instruments. The policy instruments available to individual departments typically include regulations, programs and exhortation (e.g., speeches, guidelines, awareness-raising, public education, information). Some departments also have access to economic instruments.11 Finance Canada has traditionally reserved fiscal instruments to itself (that is the power to tax or provide subsidies), meaning that they are only available for use where it (and cabinet) agree. While departments can choose how to combine these instruments to promote their sd objectives, experts agree that exhortation instruments are “softer” than the others because they provide no sanctions or incentives to change inappropriate

35 A Decade of Sustainable Development Strategies

and unsustainable practices.12 Departments that rely primarily on such instruments in their sds s are unlikely to promote either great or rapid changes within their organisations or among their stakeholders. For the purpose of this review, we have classified the various commitments departments make in their strategies in three categories: a Capacity-building: actions to increase a department’s capacity to promote sustainable development, such as awareness-raising, studies, policy analysis, surveys, internal training, consultations and the development of strategies and tools; b Green operations: actions to reduce the physical impact of the department’s operations on the environment, such as green procurement, increased energy efficiency and reductions in wastes; c Actions to influence the behaviour of Canadians: actions and tools aimed at changing the behaviour of decision-makers external to the Department, such as consumers, investors and industry managers through regulations and programs. These categories are not always mutually exclusive and commitments in the first and third categories in particular sometimes overlap. 4 Clarity of commitments. Precise commitments (with the attributes of “smart” targets13) provide a better indication of an sds’s intent and its likely impact than vague commitments. As a result, there is a positive correlation between the clarity of the commitments a department makes and the ability of observers to determine their likely impact.

findings So how do the strategies of the four departments under review live up to these criteria? We summarize our findings below for each department in tabular form and add our observations for each one. Table 1 Environment Canada (EC) Vision

Structure

Instruments

Clarity of commitments

sds 1, sustainable development strategy, 1997 Explicit vision statement

4 goals with 47 targets

26 targets on internal capacity-building, 11 on greening operations 10 on influencing the behaviour of Canadians

Targets are worded as long-term statements of intent rather than as specific targets.

36 François Bregha Table 1 Environment Canada (EC) (Continued) Vision

Structure

Instruments

Clarity of commitments

sds 2, environment canada’s sustainable development strategy 2001–2003 Implicit vision statement

8 goals under 4 themes (similar to the goals in sds 1) with 57 targets

20 targets on internal capacity-building, 9 on greening operations, 28 on influencing the behaviour of Canadians

Mix of specific and vague targets

sds 3, environment canada’s sustainable development strategy 2004–2006 Identical implicit vision statement

Same themes, this time 4 goals with 47 targets

12 targets on internal capacity-building, 7 on greening operations, 28 on influencing behaviour the behaviour of Canadians

Most commitments are vaguely worded

sds 4, environment canada’s sustainable development strategy 2007–2009 New implicit vision statement

4 different goals, with 30 targets

14 targets on internal capacity-building, 7 on green operations 9 on influencing the behaviour of Canadians

All commitments are worded vaguely

comments • ec has twin responsibilities in the sds process to produce its own sds and to coordinate federal action. It chairs the Interdepartmental Network on Sustainable Development Strategies and, while it existed, also chaired a deputy-ministers coordinating committee on sd. In 2006, it successfully coordinated the development of a government-wide reporting framework to allow the aggregation of many departmental commitments under six common themes. • With the exception of the third strategy, ec’s approach to sustainable development has been inward-looking with two thirds of the actions even in the fourth strategy directed at internal capacity-building and green operations. • ec has emphasized the need to improve societal decision-making in all its sdss. Its own efforts in this area, however, have been lacklustre. ec, for example, has an important role to play in providing environmental

37 A Decade of Sustainable Development Strategies

information to decision-makers. This information, however, is often dated or cannot be used easily.14 In 2006, ec abandoned a separate but related initiative, the development of national environmental objectives against which indicators could have been developed to assess the rate at which Canada was making progress in environmental protection and management. • An internal management review of the first sds concluded that “our first strategy was not seen as an effective strategy for change within the Department.”15 Weaknesses in internal management systems (e.g., related to the need for more targeted and measurable commitments, more outcomebased reporting and better monitoring and assessment systems) identified after the first strategy are restated in an internal examination of sds 3,16 implying that these deficiencies persisted for most of the period under examination. This analysis suggests that ec did not articulate targeted and measurable commitments in sds 4 either. • In 2006, ec aligns sds 4 more closely to its departmental Results Management Structure but at the cost of a break in continuity with the framework established in the two previous strategies. On balance, this should be a plus as it would integrate the sds more closely into the department’s management structure. • In 1997, ec was among the first to table its sds in order to serve as a model for other departments. In 2006, ec did not publish an action plan and made only vague commitments in its latest strategy.17 Notwithstanding its government-wide coordinating role, ec is no longer serving as a model to other departments. Table 2 Industry Canada Vision

Structure

Instruments

Clarity of commitments

sds 1, industry canada’s sustainable development strategy Implicit vision statement

4 goals, 9 commitments, 27 targets

12 commitments on internal capacity building, 1 on greening operations, 14 on influencing external behaviours

Most targets are vaguely worded

sds 2, industry canada’s sustainable development strategy 2001–2003 Explicit vision statement

3 goals, 9 commitments, 56 targets

28 commitments on internal capacity building, 3 on greening operations, 25 on influencing external behaviours

Mix of vague and specific targets

38 François Bregha Table 2 Industry Canada (Continued) Vision

Structure

Instruments

Clarity of commitments

sds 3, industry canada’s sustainable development strategy 2004–2006 Explicit vision statement

3 goals, 6 commitments, 32 targets

7 commitments on internal capacity building, 1 on greening operations, 24 on influencing external behaviours

Mix of vague and specific targets

sds 4, industry canada’s sustainable development strategy 2007–2009 Explicit vision statement

3 goals, 26 targets

11 commitments on internal capacity building, 2 on greening operations, 13 on influencing external behaviours

Mix of vague and specific targets

comments • Industry Canada’s sds s stand out from the other strategies examined here for placing greater emphasis on influencing the behaviour of Canadians than on internal activities. They resemble the other strategies for their reliance on “soft” policy instruments. • Industry Canada has produced sds s that are closely aligned with the Department’s mandate, strategic objectives, and existing strategies such as the Canadian Environmental Industry Strategy and Canada’s International Business Strategy. • Over time, Industry Canada has integrated its sds s into the Department’s regular corporate planning and reporting cycles including the Report on Plans and Priorities, the Department Performance Report, and the Corporate Priorities Plan. • Industry Canada has focussed its action items on the economic and environmental pillars of sustainable development and paid less, albeit growing, attention to the social pillar of sustainable development. • In her 2001 Annual Report, the cesd noted that Industry Canada had “a well-functioning sustainable development management system.”18 Two years later, the cesd gave the Department a favourable assessment for meeting its commitments to eco-efficiency and environmental technologies, and for producing a variety of information products and services.

39 A Decade of Sustainable Development Strategies Table 3 Natural Resources Canada (NRCan) Vision

Structure

Instruments

Clarity of commitments

sds 1, 1997, “safeguarding our assets, securing our future” No sd vision statement. nrc an presents instead a series of principles to guide its work.

4 goals and 68 targets

32 targets on capacity-building, 15 targets on greening operations 10 targets on influencing the behaviour of Canadians

Most target statements are not specific, measurable, actionable, resultsbased or timebound (smart)

85 targets on capacity-building, 26 targets on greening operations 51 targets on influencing the behaviour of Canadians

Most targets are smart

112 targets on capacity-building, 20 targets on greening operations 51 targets on influencing the behaviour of Canadians

Most targets are smart

32 targets on capacity-building, 14 targets on greening operations 8 targets on influencing the behaviour of Canadians

Targets are smart

sds 2, 2001 “now and for the future” Lengthy and comprehensive vision statement

5 goals and 163 targets

sds 3, 2004 “moving forward” New, shorter, vision statement

4 goals and 195 targets

sds 4, 2007–2009 “achieving results” The sds espouses the departmental vision statement

3 goals and 54 targets

40 François Bregha

comments • There is a lack of consistency in the vision statement from strategy to strategy even though one would intuitively expect this aspect of the strategy to remain constant over time as sustainable development by definition must involve a long-term transformational process. The link between the vision statements and the specific commitments made is clearer in recent strategies. • While the number of goals changes from strategy to strategy, the themes of improving decision-making and creating economic benefits remain constant throughout. More striking is an apparent change in tone between the first two and last two strategies which emphasize – but do not define – an international leadership role for the Department. • The large fluctuation in the number of targets does not necessarily provide an indicator of changes in the strategies’ scope because the targets are not formulated consistently from strategy to strategy. While targets were worded very specifically in sds 2 and 3, they were articulated at a higher level in the other strategies. • Despite the salience that climate change has acquired since Canada signed the Kyoto Protocol in 1997 (and ratified it in 2002), only one strategy (the third) identifies mitigating and adapting to climate change as a goal. While it is easy to understand why nrcan would have had difficulty making meaningful commitments on climate change at a time when the issue was heavily politicized and the country was ruled by two different minority governments in succession, the absence of such commitments from a department playing a central role on this file also shows how marginal the sds is in shaping government policy on important issues. • The strategies are consistently inward-looking. In 2006 still, more than half of the proposed actions consist of internal capacity-building and greening internal operations. This allocation of effort implies both that the Department considers that it still has some distance to go before it has the capacity needed to promote sustainable development outside its own operations and that and its ability to influence the behaviour of Canadians will remain limited in the near future. • The strategies include some regulatory initiatives and some programs (mostly in energy efficiency and renewable forms of energy), but nrcan shows a preference for “soft” instruments (e.g., information products). • nrcan has been a leader among federal departments in stating its commitments clearly and developing performance indicators. • nrcan’s sds process has helped to “mainstream” sustainable development in the Department. Sustainable development figures prominently in departmental planning documents and underpins the Department’s policy framework. nrcan also reports regularly on progress and integrates its sds planning into internal management processes (as Industry Canada and Transport Canada also do).

41 A Decade of Sustainable Development Strategies Table 4 Transport Canada Vision

Structure

Instruments

Clarity of commitments

sds 1, transport canada’s sustainable development strategy No explicit vision statement

8 challenges, 47 commitments, no targets

8 commitments on internal capacity building, 1 on greening operations, 38 on influencing external behaviours

Most commitments are vaguely worded

sds 2, transport canada’s sustainable development strategy 2001–2003 No explicit vision statement

7 challenges, 29 commitments, 111 targets

52 on internal capacity building, 12 on greening operations, 47 on influencing external behaviours

Mix of specific and vague targets

sds 3, transport canada’s sustainable development strategy 2004–2006 Implicit vision statement

7 challenges, 32 commitments, 173 targets

77 on internal capacity building, 13 on greening operations, 71 on influencing external behaviour

Mostly clear and focused commitments and targets connected to explicit timelines

sds 4, transport canada’s sustainable development strategy 2007–2009 Implicit vision statement for the sds but explicit vision statement for Sustainable Transportation

7 challenges, 21 commitments, 59 targets

31 on internal capacity building, 1 on greening operations, 27 on influencing external behaviour

Mostly clear and focused commitments and targets connected to explicit timelines

comments • Transport Canada has used a consistent framework to organise its sds since the second round. • In its latest sds, tc has identified three priorities (transportation in urban areas, freight and marine transportation) to focus its activities. • An internal management review noted effective progress tracking, coordination and information-sharing. It recommended improvements be made in performance measurement. • As in the case of other departments, there is an apparent disconnect between the sober analysis that tc presents of the many sustainable development challenges facing transportation and the complacent prescription

42 François Bregha

articulated around actions to “explore the need”, “facilitate”, “support and encourage or “promote”, all soft commitments. • Transport Canada has used iso 14000 principles to structure its strategy and design an environmental management system. • Uniquely among the departments reviewed, tc is making $1 million a year available to implement its latest sds.

assessment Incorporating sustainable development values and principles into government decision-making is a daunting process for a number of reasons. As Lafferty and Meadowcroft have noted, “sustainable development indicates an interdependent concern with: promoting human welfare; satisfying basic needs; protecting the environment; considering the fate of future generations; achieving equity between rich and poor; and participating on a broad basis in development decision making.”19 Governments have historically found it difficult to manage such horizontal concerns in decision-making structures characterized by sectoral focus, jurisdictional “stove-pipes” and short-term orientation. Determining whether sds s are effective change documents is necessarily a subjective exercise. All sds s can be said to have raised awareness of sustainable development within their departments. All lay the foundation for future interventions, either as a result of studies being undertaken or by greening government operations. The issue, therefore, is not so much whether the sds are change documents but whether they encourage change that is fast enough in light of the sustainable development challenges facing each department. Let us examine our findings again, this time for the four departments together. Vision By definition, vision statements are general statements of desired long-term conditions. They imply direction rather than state measurable objectives. If too general, however, vision statements lose their power of steering action. Each of the departments under review crafted vision statements to orient their sdss. These statements are vague (e.g., “highest practicable safety and security of life and property;” “attain the highest level of environmental quality”) and do not provide a picture of the world each department is striving to create through its strategy. In sds 2, nrcan was the only department among the four examined that tried to develop a scenario of what a sustainable future might look like that went beyond the short slogans most departments (and nrcan subsequently) have favoured. While this scenario can be criticized for being short on specifics, it still manages to articulate a series of desired outcomes related to resource development, energy use, environmental quality, decision-making

43 A Decade of Sustainable Development Strategies

processes and sustainable consumption that provides a fuller understanding of the future the Department was ostensibly pursuing through its strategy. Priorities There are two broad conclusions one can reach here. First, the sds s show a pronounced gap between the sustainable development challenges facing their departments and the solutions proposed to these challenges. While their introductory analyses are frank and comprehensive for the most part, the action plans are modest. Furthermore, for three departments, these plans are largely inward-looking. The number of commitments made in an sds provides an admittedly inexact proxy for the strategy’s emphasis as not all commitments carry the same weight. However, our examination of these sixteen sds s shows a clear pattern. After four rounds, three of the four departments (Industry Canada is the exception) continue to place relatively more emphasis on activities that are essentially internal in nature (i.e., departmental capacity-building and greening operations) rather than activities meant to influence the behaviour of Canadians. Yet, it is not the departments’ physical presence that creates a large ecological footprint but rather their policies and programs that encourage (or at least do not discourage) various forms of unsustainable activity. Given their stated policy goals, three of the four departments reviewed here (Environment, Natural Resources and Transport), all of which have major program responsibilities in areas that are fundamental to sustainable development, devote a disproportionate amount of effort on greening their own operations and building their own capacities relative to changing the behaviour of Canadians. In 1998, after the first round of strategies was tabled, the cesd described the strategies as a restatement of the status quo. In 2004, a review of Canada’s performance conducted by the Organisation for Economic Cooperation and Development (oecd) noted that “in most cases [departmental] sustainable development strategies … consist in repackaging current and planned activities and have little bearing on budget allocation.”20 In 2005, the cesd again reported that “The majority of strategies contain goals and objectives that focus more on process, activities and outputs than on long-term results”21 and that departmental commitments were usually neither measurable nor meaningful.22 Strategies do not affect setting of departmental priorities, resource allocation or human resources policies (recruitment, training, incentives). They are clearly not the government’s vehicle of choice to put forward major policy initiatives (e.g., climate change) let alone promote major changes in public behaviour. They are not therefore the change documents that several departments claimed in early years.23 After a decade, sds s still largely present inventories of activities that departments were already planning to carry out. In this regard, sds s have morphed from strategic plans into

44 François Bregha

communications tools, filled with inspirational statements about providing leadership and leading by example. On the basis of this last round, one is left unconvinced that departmental strategies will succeed in making the transition to more sustainable transportation or industrial production systems in a timely way; that they will limit pollution discharges within the absorptive capacity of ecosystems before these are degraded further; or that they represent a viable foundation for a national climate change mitigation strategy. Instrument choice Not only do the sds s focus many of their commitments inwards, their authors also show a predisposition to “soft” (e.g., making information available) as opposed to “hard” instruments (e.g., regulations) when they do target the behaviour of Canadians. While such soft instruments are essential, they are insufficient in and of themselves to achieve the vision of sustainable development departments have articulated, let alone to achieve them quickly. The reason is straightforward: although each department develops its own sds, it does so within an envelope of government-wide strategic choices that limit the scope of its action plan. If environmental protection and conservation are low on the government agenda (as it has been for most of the period under review), if the government favours voluntary approaches to more intrusive regulatory instruments, if the government is reluctant to use fiscal instruments (i.e., to price pollution) to correct market imperfections, departments will face a reduced menu of politically acceptable policy options. The government’s overall policy stance will therefore influence whether an individual sds is modest or ambitious. Clarity of commitments Over the years, the clarity of the commitments departments have made in their sds s has increased greatly. Three of the four departments we reviewed articulated their commitments using specific language and stating deadlines. Overall, the strategies are more focused, their targets are more precise and performance indicators are more rigorous (Environment Canada is the exception). All the strategies are also aligned more closely to broad departmental outcomes. These improvements are also manifested in efforts to create a common “look and feel” for the strategies in the fourth round.

c o n c lu s i o n On the basis of the above analysis, one is left to conclude that the sds s reviewed represent a conservative, low-risk, low-cost and low-reward,

45 A Decade of Sustainable Development Strategies

approach to sustainable development, notwithstanding much of the rhetoric that surrounds them. Except for Industry Canada, they are not comprehensive according to the meaning of the Guide to Green Government; none offers a benchmark against which to measure progress towards more sustainable forms of development. There are several broad reasons why departmental strategies have not lived up to expectations. While over the past decade, the cesd has identified a series of important deficiencies in the way departments were managing their strategy development and implementation processes,24 many of the causes are systemic in nature: • The amendments to the Auditor General Act encouraged departments to think short term by forcing them to renew their strategies every three years; • These same amendments reinforce the stovepipe nature of federal policymaking by making named ministers individually accountable for producing and tabling strategies, thereby discouraging collaboration. Most of the challenging sustainable development issues, however, such as climate change, biodiversity or competitiveness are horizontal issues requiring collaboration among several departments. While central agencies have developed horizontal planning frameworks for selected cross-cutting policy issues, they have not done so for sustainable development. The absence of overarching federal sustainable development goals has reinforced this decentralised approach; • Departments have a perverse incentive to make modest commitments in their strategies because they know their performance will be audited and reported publicly. The absence of new money further justifies a conservative approach. Parliament has not held ministers accountable for the quality of their sds or the implementation of their action plans and, as a result, there have been no consequences for producing poor strategies25; • The cesd has until recently emphasized process over results in her reports and has not taken full advantage of the powers she arguably has under the law.26 In early 2007, the Commissioner left as a result of an apparent policy disagreement with the Auditor General who announced at the same time a review the Office’s environmental and sustainable development audit practices27; • Departments are hostages to their political masters. One cannot fault a particular department for not addressing climate change more vigorously when the Cabinet as a whole is moving slowly on the issue; and • The departmental sds s represent an awkward add-on to the existing comprehensive governmental planning and reporting processes which include the Speech from the Throne at the beginning of a Parliamentary session, the government’s annual budget and annual departmental Reports on Planning and Priorities and Departmental Performance report. The sds

46 François Bregha

process sits uneasily within this pre-existing planning framework which provides the recognized instruments for priority-setting, resource allocation and accountability. Nevertheless, even taking these various barriers into account – specific and systemic, bureaucratic and political – one is left pondering the following questions: 1 Is the discipline of triennial sustainable development strategies compatible with the traditional bureaucratic and political desire for flexibility? As policy areas become more integrated (viz., climate change mitigation, sustainable consumption and production, transportation policy) and therefore more complex, there is an understandable tendency to resist long-range planning that may become obsolete and in any event may alienate vested interests. A minority government probably exacerbates this preoccupation with the short-term. 2 Are departmental strategies weak in part because the federal sustainable development process lacks a strong institutional champion? The indifference of central agencies to sustainable development has been noted elsewhere.28 Also at issue here is whether the cesd’s home within the Office of the Auditor General has prevented the commissioner from playing a greater and needed advocacy role. The auditor general does not comment on government policy and focuses her mandate on past events. This is appropriate where the overall policy framework – the mix of priorities, incentives and values that govern society – is fundamentally sound but the very concept of sustainable development challenges this framework to the core.29 Both the New Zealand and the British sustainable development commissioners have greater latitude to carry out their functions and have been able to champion needed reforms with fewer restrictions than their Canadian counterpart. 3 Are the observed weaknesses the result of flaws in the design of the instrument or do they arise from broader factors? It is difficult to argue that the current sustainable development planning process is limiting although it clearly lacks effective performance incentives. Is therefore a reason why federal departments are making such slow progress on sustainable development Canadians’ complacency about their environment? The still widely held image of Canada as a large, resource-rich and sparsely populated country is a poor foundation for aggressive action to control resource production or consumption. Northern Europe’s richer institutional and policy landscape in this area may result in part from these countries visibly living closer to their ecological limits. 4 After ten years, has the current decentralised sustainable development strategy process become an impediment to further federal progress on

47 A Decade of Sustainable Development Strategies

sustainable development rather than the hoped-for enabler? Do they buy the government time to postpone needed reforms? The preparation of some 30 sustainable development strategies every three years takes time and effort to produce and may divert limited resources from being allocated more effectively elsewhere. The habits and expectations acquired over four generations which lead the strategies to be modest and inwardlooking may also prove difficult to change. There are no easy answers to these questions but they demonstrate the need to analyse the effectiveness of sustainable development strategies in their appropriate institutional and political context rather than in isolation.

a way f o r wa r d This analysis demonstrates that departments need to rebalance their sds s in order to focus greater efforts on influencing the behaviour of external actors, while continuing to green their operations and enhance their internal capacities. In order to make this shift, departments will have to: • Articulate a vision of sustainable development, consistent with their mandate, that goes beyond rhetoric and addresses the priority issues they need to manage; • Apply policy instruments aimed at changing the behaviour of Canadians that offer a potential for greater impact; and • Correct the management weaknesses that the cesd has noted in many reports, including the lack of accountability for failure and the absence of incentives for performance. For their part, the Privy Council Office and Treasury Board Secretariat should conduct an evaluation of the sds process (including the role of the cesd, the nature of the requirement to produce sds s every three years and the Guide to Green Government) to document its successes and failures and serve as the basis for needed reforms to the process. Both central agencies need to be involved because the sds process raises machinery of government issues as well as planning and reporting issues. The various reports of the cesd as well as this analysis demonstrate that the departmental sds s are not influencing departmental decisions and are not commensurate to the scope of Canada’s sustainable development challenge. This evaluation should focus on how to: • Improve co-ordination and priority setting across the whole of government. There is a need to formulate overall priorities for the federal government, and to locate departmental objective within these priorities. This will

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provide greater coherence, a basis for adjudicating disputes between departments, and a framework against which to assess progress. This is best done within the context of a Federal sustainable development strategy. But it also suggests a key role for central agencies, such as the Department of Finance in strategic decision making around sustainable development. • Integrate sustainable development strategy processes with the operational planning of departments, and aligning the incentives and career advancement prospects for senior department managers more closely with achieving sustainable development strategy goals. As long as sustainable development strategies are managed independently of departmental planning processes (e.g., strategic plans, human resources, resource allocation), change will be frustrated. • Simplify and focus the federal departmental sustainable development strategy process, by concentrating on a narrower scope and a core set of departments and central agencies with critical responsibility for attaining sustainable development objectives. Other departments might be required to produce strategies less frequently and/or in a simplified format. In addition, Canada needs to look abroad for inspiration on how to revitalize its sustainable development efforts. If Canada could justifiably be proud of its innovation in environmental governance in the early 1990s, having launched initiatives as diverse as the Green Plan, strategic environmental assessment, the National Round Table on the Environment and the Economy as well as the sds process, 15 years later, Canada has become a laggard in environmental governance on the international scene.30 Several countries, particularly in northern Europe, now provide the exemplars of how to institutionalize the promotion of sustainable development: • Sweden, for example, has developed a comprehensive set of national environmental quality objectives to guide public policy, against which an independent commission report publicly every year; • Norway has shifted some of its taxes from labour to pollution to change some of the economic signals consumers and investors receive; • the United Kingdom has set up a comprehensive governance structure for sustainable development, with one government-wide strategy; • the Netherlands has struck public-private partnerships to transform the technological systems in key economic sectors and achieve major gains in energy efficiency. As one reviews the last decade’s experience with departmental sustainable development strategies, it is important to remember what is at stake. Various observers, including the cesd, have argued that Canada’s current pattern of development is not sustainable. On a per capita basis, Canadians consume

49 A Decade of Sustainable Development Strategies

more resources and emit more pollution than residents in most oecd countries.31 The impacts of these consumption patterns is evident in the health costs imposed by air pollution, the rising number of endangered species, disappearing prime agricultural land as a result of urban sprawl and overexploited renewable resources. The challenges posed by climate change are particularly daunting and may require significant investments in both adaptation and mitigation. Yet, the government’s response, as embodied in the departmental action plans, conveys little sense of urgency and appears disconnected from the challenges at hand. Departmental sds s were meant to be the federal government’s main tool to address these issues systematically. If these strategies are ineffective, the sustainability challenges we face will only grow in scale and complexity. While most departments can point to individual achievements after a decade of sustainable development planning and implementation, it is difficult to argue that Canada is more sustainable today as a result of the action plans tabled every three years in the various rounds of sdss. Indeed, the strategies reviewed here indicate that many of the commitments they make are immaterial and will not resolve the complex and inter-related sustainability issues Canada faces.

notes 1 This chapter draws from previous work conducted for the Office of the Commissioner of the Environment and Sustainable Development. I gratefully acknowledge research support received from Michael Gullo as well as helpful comments from Suzan Bowser, Alison Christie, Philippe Charest, Andrew Ferguson, Guy Laflamme, David McRobert, Pierre Sadik, Glen Toner, Georgina Wainwright-Kemdirim, and Greg Wilburn. 2 Government of Canada, A Guide to Green Government (Government of Canada, 1995), 1. 3 Environment Canada, “News Release: Minister Ambrose announces greater action and accountability on sustainable development,” (Environment Canada, December 14, 2006). 4 Axel Volkery, Darrel Swanson, Klaus Jacob, François Bregha, and Laszlo Pinter, “Coordinating Sustainable Development: An Evaluation of the State of Play,” in Martin Janicke and Klaus Jacob, eds., Environmental Governance in Global Perspective (Freie Universitat Berlin, 2006). 5 Natural Resources Canada, Sustainable Development Strategy (Natural Resources Canada, 2006), 2. 6 Government of Canada, “Backgrounder: Why do we need the Clean Air Act?” Available at www.ec.gc.ca; accessed October 20, 2006. 7 The Conference Board of Canada, How Canada Performs: A Report Card on Canada (Conference Board of Canada, 2007).

50 François Bregha 8 Transport Canada, Sustainable Development Strategy 2007–2009 (Transport Canada, 2006), v. 9 There have been several more-or-less successful efforts made to standardize the presentation of departmental action plans over the years. The absence of central agency guidance on this issue stands in sharp contrast to that provided for the preparation of other planning and reporting documents (e.g., detailed guidance on developing accountability frameworks, performance reports, reports on plans and priorities, etc.). 10 In 2003, the cesd developed in consultation with departments a set of expectations for the third round of strategies. The resulting document Sustainable Development Strategies: Making a Difference was endorsed by the deputy ministers’ Environment and Sustainable Development Coordinating Committee. Among others, these expectations included that departments would include in their sds their vision for sustainable development and measurable targets. 11 The Canadian Environmental Protection Act, for example, empowers the minister of the Environment to use some economic instruments such as fees. 12 There is an extensive literature on the effectiveness of various policy instruments. Information tools are usually ineffective on their own but can add to the effectiveness of other tools. Mark Jaccard offers an accessible analysis of policy instruments for environmental protection in his chapter “Mobilizing Producers towards Environmental Sustainability” in Glen Toner, ed., Sustainable Production (ubc Press, 2006). 13 smart targets Support strategic themes; are Measurable; are Action-oriented and achievable; are Resourced, relevant and realistic; and are Time-limited. 14 As an example, Environment Canada has never used the full potential of the information it collects under the National Pollutant Release Inventory as a tool of public policy to influence the behaviour of polluting entities even though us experience in designing such information systems and in “naming and shaming” corporate polluters has shown the value of such an approach (see Tom Tietenberg, “Disclosure strategies for pollution control” in Environmental and Resource Economics 11, 3–4 (1998), 587–602). In a different vein, Environment Canada has not succeeded after more than 15 years of experience in making its work on environmental indicators relevant to most decision-makers, in part because the indicators are not sufficiently integrated with discrete policy objectives. 15 Environment Canada, Sustainable Development Strategy (Environment Canada, 2001), 28. 16 Environment Canada, Sustainable Development Strategy (Environment Canada, 2006), 3. 17 The following example is typical of several of the ec commitments in its latest strategy: “Advance an effective process to work cooperatively with provinces and territories to inform the Department’s strategic decision-making in pursuing work on intergovernmental issues.” Environment Canada, Sustainable Development Strategy (Environment Canada, 2006), 29. 18 Cited in Industry Canada’s third sds (Industry Canada, 2004–2006), 6.

51 A Decade of Sustainable Development Strategies 19 William Lafferty and James Meadowcroft, eds., Implementing Sustainable Development (Oxford University Press, 2000), 19. 20 Organization for Economic Cooperation and Development (oecd), Environmental Performance Review: Canada (oecd, 2004), 97. 21 Commissioner of the Environment and Sustainable Development, Report of the Commissioner of the Environment and Sustainable Development to the House of Commons (Office of the Auditor General, 2005), Chapter 7, 17. 22 Commissioner of the Environment and Sustainable Development, Report of the Commissioner of the Environment and Sustainable Development to the House of Commons (Office of the Auditor General, 2005), Chapter 7, 4. 23 The Canadian International Development Agency (cida), for example, entitled its second sds “cida’s Sustainable Development Strategy 2001–2003: An Agenda for Change.” The Message from the Minister in Health Canada’s strategy described it as “a significant instrument of change.” The Executive Summary of the Department of Fisheries and Oceans’ strategy stated that its “sustainable development goals for 2001–2003 will be oriented to change, confirming and continuing the new strategic directions for the Department.” 24 See in particular the 2004 and 2005 reports from the commissioner of the Environment and Sustainable Development. 25 A similar situation exists in Ontario where various government ministries are required under the Environmental Bill of Rights to prepare “statements of environmental values.” Most of these statements are vague and have not been updated in many years in spite of several government re-organizations which have made some of these statements irrelevant to the new ministries. The Legislature has not taken up the issue despite several critical reports by the Environmental Commissioner of Ontario. 26 Section 23(2) of the Auditor General Act empowers the commissioner to “report to the House of Commons concerning anything that the commissioner considers should be brought to the attention of that House in relation to environmental and other aspects of sustainable development.” There has been a long debate as to whether the commissioner should be housed within the office of the auditor general or should be independent and whether she should limit herself to audits or also play the role of champion. 27 The results of the review were not available at the time of writing. 28 See for example François Bregha, “The Federal Sustainable Development Process: Why Incrementalism Is Not Enough,” in Bruce Doern, ed., Inovation, Science, Environment: Canadian Policies and Performance 2006–2007 (McGill-Queen’s University Press, 2006). 29 See the testimony by Glen Toner before the House of Commons Standing Committee on Environment and Sustainable Development, February 12, 2007. 30 Glen Toner, “From Early Frontrunner to Plodding Anchorman,” in Lafferty and Meadowcroft, Implementing Sustainable Development. 31 See for example: Environment Canada, The Need for Immediate Action – Canada’s New Clean Air Regulatory Agenda (Environment Canada, 2006). Organisation for

52 François Bregha Economic Cooperation and Development (oecd), Environmental Performance Review – Canada (oecd, 2004). Commission for Environmental Cooperation, The North American Mosaic (Commissions for Environmental Cooperation, 2002). David R. Boyd, Unnatural Law: Rethinking Canadian Environmental Law and Policy (Unipress, 2003).

3 Making a Better World, One Undertaking at a Time: Sustainability Assessment and Innovative Decision Making in Canada ro b e rt b. g i b s o n “In preparing for public hearings, the Proponent, Interveners and other participants should be aware that the Panel will evaluate the specific and overall sustainability effects of the proposed project and whether the proposed project will bring lasting net gains and whether the trade-offs made to ensure these gains are acceptable in the circumstances.” Joint Review Panel for the Mackenzie Gas Project, “Determination on Sufficiency” 18 July 2005

In August 2004, three authorities jointly announced the appointment of a new environmental assessment panel.1 The seven-member Joint Review Panel for the Mackenzie Gas Project would review and hold public hearings on a new proposal for pipelines and associated gas gathering facilities in the Mackenzie valley of the Northwest Territories. Along with the appointment notice and biographies of the Panel members, the authorities released the Panel’s terms of reference.2 It all seemed more or less as expected and media coverage was light. The business press had been covering the rise of the project for some time. With a $7.5 billion estimated cost (since risen to $16.3 billion), it was clearly a mega-project worthy of attention. The Panel announcement was treated as just another step in the project’s gradual entry into the approvals process. A few commentators reacted to the Panel appointment by remembering the death of earlier Mackenzie pipeline expectations in the mid-seventies following the celebrated inquiry led by Mr Justice Thomas Berger. Some speculated on the likely fate of the new initiative. But outside the Northwest Territories and a few circles in the hydrocarbon and investment industries, the Panel’s assignment was not much noticed, and the specifics of the terms of reference were largely ignored.

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On the surface this inattention was appropriate. The particular combination of authorities involved – the Inuvialuit Game Council representing the Inuvialuit people of the Mackenzie Delta and Beaufort Sea region, the Mackenzie Valley Environmental Impact Review Board representing Northwest Territories interests, and the Minister of the Environment representing the federal government – would qualify as extraordinary in most jurisdictions. So would the combination of backgrounds among the seven Panel members. In Canada, however, multi-jurisdictional and multistakeholder bodies with advisory authority are no longer unusual. Land claim agreements and a host of other legal and administrative advances over the past two decades have institutionalized many joint governance arrangements. Similarly, the appointees to the Panel, though certainly remarkable as individuals and as a combination, were not notably more exceptional than appointees to many other joint bodies. A quick glance might also reveal nothing very startling about the new Panel’s terms of reference. The scope of inquiry was broader than is common under the restricted definition of “environmental effect” in federal environmental assessment law, but was consistent with northern assessment practice and the requirements of the other legal authorities for the review. The bulk of the terms of reference document was devoted to setting out the major concerns to be addressed in the usual physical environment, biological environment and human environment categories. Attention to cumulative effects was included, but that too is now standard. Only a short section on principles for the assessment showed signs of innovation. But principles have often been treated as matters of vague intent rather than as serious requirements. Moreover, the language of the five principles – “contribution to sustainability, use and respect for traditional knowledge, recognition of land claims and treaties, recognition of diversity, [and] the precautionary approach”3 – mostly seemed familiar and agreeable. The principles were, however, not merely decorative. Although their meaning and implications were not discussed in any detail in the terms of reference, the clarifying notes clearly indicated that every one of the principles would, if taken seriously, require a substantial departure from business-as-usual decision making. All of the principles were relatively new to assessment applications, still being clarified and tested, and not yet well entrenched in methodology and practice. But they were products of extensive public policy and legal debates in Canada and beyond. Their application in environmental assessments was increasingly well supported by similar applications in other fields. And it soon became clear that the Panel would be taking the principles very seriously.

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the “contribution t o s u s ta i n a b i l i t y ” t e s t Of the five Mackenzie assessment principles, expectation that a project must make a “contribution to sustainability” might initially seem the most innocuous. Since its introduction into popular speech in the mid 1980s, the term “sustainability” has been famously slippery – widely embraced but used in many different ways by all manner of incompatible interests. Countless policy pronouncements have been wrapped in sustainability language without much apparent effect on clearly unsustainable practice. Many commentators have been tempted to declare the concept effectively meaningless. But two intersecting factors have been forcing clarification and influence. First, the wealth of literature and experimentation on sustainability’s meaning, implications and applications over the past twenty years has revealed not just a rich diversity of case and context-specific variations but also a basic set of common essentials.4 Second, over the same period sustainability has moved gradually from windy commitments, through inclusion in formal but nonbinding policy documents, to entrenchment in law, including the Canadian Environmental Assessment Act5 among many others. While this new legal status has given contending parties a more powerful incentive to co-opt the term for their particular purposes, it has also forced attention to clarifying the term’s meaning and implications. Decision makers are now effectively required to establish defensible and consistent usage. Including the “contribution to sustainability” principle in the terms of reference for Mackenzie Joint Panel was therefore a step likely to have important consequences. A clue to the significance of the “contribution to sustainability” principle was provided in the terms of reference document. After a few paragraphs noting the sustainability basics of “integrating environmental, socioeconomic and cultural factors into decision making”, “reconciling economic development, social equity and environmental quality” and considering project effects on “the ability of future generations to meet their own needs,” the document offered guidance on how to evaluate a project’s contribution to sustainability. It began with the essential test: “the extent to which a project makes a positive overall contribution towards environmental, social, cultural and economic sustainability.”6 A year later, the Panel provided additional detail. In a statement reporting that it now had a sufficient base of information for proceeding to public hearings, the Panel included the sentence reproduced at the beginning of this paper. Contribution to sustainability would be the central guiding consideration and the key test would be “whether the proposed project will bring lasting net gains and whether the trade-offs made to ensure these gains are acceptable in the circumstances.”7

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Neither the authorities who issued the terms of reference nor the Panel found it necessary to underline the innovative character and weight of their initiative. Perhaps they thought it would be obvious to the proponent and other participants. But for a broader audience two considerations are worth noting. The first is that “positive contribution to sustainability” and “lasting net gains” represent a much more demanding requirement than what had previously prevailed. Proponents in environmental assessments in Canada have traditionally been expected to demonstrate only that their proposed undertakings would avoid or mitigate any significant adverse effects. Demonstrating a positive contribution to sustainability is a much higher hurdle. The second factor is that the Mackenzie Gas Project is not well positioned to deliver lasting benefits. It is a non-renewable resource extraction and transportation project, with a life expectancy of perhaps 50 years. Most of the project jobs would be concentrated in a brief three to five year construction phase. Induced development of other gas fields could extend the employment boom but not indefinitely. Revenue flows too would continue only for the life of the project. Eventually, the project, jobs, revenues and resources would be done and gone. That is not to say that the Mackenzie Gas Project cannot deliver lasting benefits, if it proceeds. Thinking past the limited potential life of their nonrenewable resource project, the proponents along with the relevant governments, communities and other interests may well find ways to use project features, opportunities and resources to build a positive legacy. But this would not be usual or automatic. Even in easier, renewable resource cases, the requirement to demonstrate a positive contribution to sustainability is unlikely to be met though application of well established approaches using conventional thinking and existing capabilities. The contribution to sustainability test is a major innovation in the evaluation of new undertakings and in the character of associated decision making. Meeting that test will require no less significant innovation in the conception and design of new projects (and other undertakings subject to assessment requirements), in the character of government programming and financial management, and in the expectations and behaviour of affected communities. How much effective innovation the Mackenzie Panel will be able to inspire and demand in this case is not yet known. The Panel’s hearings, including its major sessions on sustainability, are now over and report drafting has begun, but it is not possible to predict with any confidence what the Panel will recommend or how the governments will respond. The Panel has only advisory powers and it is applying a new and difficult approval standard to a megaproject that has stirred big expectations. Whatever the Panel may say about the project’s lasting effects, the effective decisions will be made by the proponents and the relevant federal, territorial and aboriginal authorities.

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The Mackenzie case is, however, only one example of sustainability test application. Two previous hearing panels and two concurrent panels operating wholly or partly under the Canadian Environmental Assessment Act have adopted an explicitly sustainability-based approach.8 Several other major public processes in Canada have applied the same principle, though not necessarily using the same language or within the confines of environmental assessments.9 Sustainability-based assessments in various forms are also proliferating rapidly around the world.10 Interest in sustainability assessment is almost certain to increase as the deepening unsustainability of current practices and trends becomes more apparent. It is therefore sensible now to treat the Mackenzie case and other early explorations as usefully illustrative beginnings. This chapter uses the Mackenzie case as a basis for considering what it means to take a “contribution to sustainability” principle seriously, and what this innovation in environmental assessment and other similar processes means for decision making in Canada.

t h e r i s e o f s u s ta i n a b i l i t y in assessments and similar processes Proponents of major undertakings have always had to pay attention to costs and technical feasibility. Political acceptability has been another longstanding concern, especially for public sector proponents. And since the early 1970s, most jurisdictions have introduced approval requirements that encourage proponents to limit negative environmental effects. Some proponents – for example in regulated utilities and sectors using public resources (crown lands, bandwidth, etc.) – have also been obliged to address broader public interest obligations. Mostly, however, the underlying assumption has been that new economic activities are desirable and to be approved, even facilitated, so long as they do not involve significant associated damages. The role of approvals processes and authorities has been to keep the ball of progress rolling. Environmental assessment practice has accordingly focused on avoiding or mitigating significant adverse environmental effects, even when the framing legislation has been open to broader interpretation. The Canadian Environmental Assessment Act, for example, includes “actions that promote sustainable development” as one of its key purposes (section 4), but the legislated specifics and practical implementation have mostly focused on whether or not a proposed project will “cause significant adverse environmental effects that cannot be justified in the circumstances.”11 The older and generally more demanding Ontario Environmental Assessment Act aims for provincial “betterment,” requires proponents of undertakings to defend their purpose and rationale, and centres on a comparative evaluation of alternatives.12 As a

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result it has sometimes fostered welcome shifts from conventional solutions to more desirable, approaches – for example from simply expanded landfilling to waste management systems that integrate reduction, reuse and recycling as well as disposal. But even under the Ontario law, the dominant practical focus has been on mitigation of negative effects, not on ensuring lasting net gains. More ambitious approaches have been advocated and tested for some time now. Indeed the record stretches well back before the introduction of “contribution to sustainability” language. Most have been driven by particular case-specific circumstances – responses to the earlier failures of narrowly mitigative efforts or to the evident need for broad and farsighted initiatives to deal with looming conflicts and pressing demands – rather than by contribution to global solutions. For a long while, these ambitious assessments were doubly exceptional; they were highly unusual as well as especially admirable. But their diversity and common features deserve attention now that sustainability-based assessments are proliferating. Three examples – roughly one from each of the last three decades – may serve to illustrate the field. The Berger Inquiry (1974–77) In environmental assessment, the touchstone has always been Mr Justice Thomas Berger’s extraordinary Mackenzie Valley Pipeline Inquiry. In the early 1970s the Canadian government was actively pursuing what seemed to be a highly attractive development opportunity centred on a pipeline to ship northern natural gas to southern markets. The Americans had untapped gas reserves on the Alaskan north slope and more gas had been found in the Mackenzie Delta/Beaufort Sea region in Canada. Favouring a route that would permit exploitation of both sources, federal authorities were eager to approve a Mackenzie Valley pipeline proposal. But faced with emerging opposition centred on aboriginal rights and environmental impacts and encumbered by minority government status, they agreed to appoint an independent commissioner to consider suitable terms and conditions for pipeline permits. Berger, a British Columbia Supreme Court judge with considerable experience in aboriginal law, was selected. Under Berger’s leadership the inquiry did not follow the usual script. He chose to visit every potentially affected community, took community testimony as seriously as expert technical submissions, and provided intervener funding for participants not otherwise able to mount an effective case. Despite formal authority only to identify suitable approval conditions, he accepted presentations on a full suite of intersecting social, cultural, economic and ecological themes, recognizing that decisions on the proposed project would also be decisions on the broader future for the region. No

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less significantly, he attracted unprecedented attention to the little-populated and often disregarded but also mythic Canadian north. Extensive media coverage brought educational benefits well beyond the inquiry’s immediate audience and ensured that Berger’s conclusions, no matter how unconventional, could not be ignored. Berger’s final report, Northern Frontier, Northern Homeland,13 captured the essential tensions between the prevailing industrial and aboriginal views of a desirable future. But Berger did not presume irreconcilable differences. Instead he concluded that a fair and mutually beneficial accommodation was not plausible until land claims were resolved and the capacities of aboriginal communities’ and organizations were enhanced. Accordingly, his recommendations centred on providing sufficient time to resolve land claims and find ways of reconciling the competing visions. Berger proposed a ten year delay as the primary approval condition for pipeline development. The northern pipeline proposals soon died and Berger is often blamed for, or credited with, their demise. In retrospect, it seems more likely that financial reasons prevailed. By the time Berger’s inquiry and a parallel National Energy Board review were completed, major supplies of cheaper and more convenient natural gas were available in Alberta. Berger’s work was nonetheless powerful and ground breaking as a model for assessment and public hearing practice, especially in recognizing the interdependence of socioeconomic, cultural and ecological concerns; the value of broad public engagement, local knowledge and intervenor funding; and the importance of considering the implications of particular proposals for alternative futures. All of these are now key qualities of advanced sustainability assessments. Ontario’s Class Environmental Assessment of Timber Management on Crown Lands (1987–1994) Ontario has over 60 million hectares of inventoried forests, mostly under public ownership. The province’s forest products industry is economically important, politically influential and heavily reliant on harvesting from “crown lands.” But it is not the only user of the crown forests and by the 1980s Ontario was facing deepening conflicts over competing forest uses and growing criticism of established management practices. At the same time, the province was wrestling with how to apply its Environmental Assessment Act to timber management activities. The law covered all public sector undertakings, unless formally exempted, including plans as well as projects. For activities in crown forests, this could mean multitudes of individual assessments of particular plans for access roads, harvesting, renewal and maintenance, including pesticide spraying, and related undertakings. To buy time, the province issued a series of temporary exemptions while the

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Ministry of Natural Resources worked on an omnibus “class environmental assessment”14 that would address overall management issues and set up processes for developing and approving more specific plans for each of the 114 forest management units in the province. In 1987, after more than a decade of delay, the Ministry finally submitted its Class Environmental Assessment for Timber Management on Crown Lands in Ontario. Critics found the Ministry’s effort vague, narrowly focused on timber priorities, and unlikely to maintain forest values in perpetuity. Submission of the class assessment document was, however, only the first step in the process. Following the conventional Ontario process for major undertakings, the document was subjected to government review and then passed to a panel of the Environmental Assessment Board for public hearings. In this case, the hearings lasted nearly four years. Virtually everyone found them unacceptably long, difficult and costly. But by the end, the proponent had been forced to initiate a substantial policy shift that may not have been accomplished otherwise. Throughout all the years of exemptions and drafts prior to the hearings, Ministry officials had held firmly to their traditional focus on timber management in collaboration with the forest products industry, rather than integrated multi-purpose forest management engaging all forest interests. By the end of the hearings, the Ministry had adopted policy reforms recognizing non-timber uses of forest lands and planning initiatives placing more emphasis on broad consultation. In April 1994, when the Panel finally issued an approval with a long list of detailed conditions,15 the Ministry had a new “Policy Framework for Sustainable Forests” and the province was well on its way to passing a new Crown Forest Sustainability Act, responding to the issues raised at the hearings. The Ontario timber management case was not formally an exercise in sustainability assessment, though sustainability questions underlay all of the deliberations. The approach taken was also far too messy and difficult to qualify as exemplary. It nevertheless demonstrated the power of assessment processes to encourage sustainability-oriented reform of basic policies and processes in the face of stiff proponent resistance. Development of an Urban Growth Management Strategy for British Columbia’s Capital Regional District (1996–2003) In 1995 the British Columbia legislature passed a new law encouraging municipalities with increasing populations to prepare Regional Growth Strategies. As means of coordinating municipal action on regional issues, the strategies would be powerful. The more specific Official Community Plans of the participating municipalities would have to comply with approved strategies, as would infrastructure financing and other agreements with the

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province. In addition, the strategies were to facilitate pursuit of sustainability objectives. Mandatory strategy contents listed in the new law covered 14 goals, including reducing urban sprawl, protecting environmentally sensitive areas, providing affordable housing and decreasing pollution.16 One region that chose to prepare a growth strategy was the province’s Capital Regional District (crd) – the city of Victoria and 15 adjacent municipalities and electoral districts at the south end of Vancouver Island. The region’s population had been expanding quickly and the implications of substantial further increases worried many residents. Almost encircled by water, the crd has a limited land base for urban expansion and its remaining greenspaces, recreational areas and agricultural lands are highly valued. Many citizens recognized that their quality of life was vulnerable. As a result, public support for effective growth management was stronger in the crd than in many other expanding metropolitan areas. However, British Columbia does not have a tradition of strong regional governance and the crd as a regional authority is a creature of its constituent municipalities. Not surprisingly, development of the crd growth strategy took seven years. The deliberations followed a reasonably conventional rational planning process – information gathering, trend analysis, priorities identification, scenario comparisons and final negotiation of the details of the preferred option. But it was also consultative and underpinned by the province’s sustainability-based growth strategy goals. While much of the initiative and direction came from municipal leaders and the regional planning staff, key roles were played by a public advisory committee and a diversity of residents and citizens’ groups. Perhaps the most effective step was early depiction and publication of the business-as-usual scenario: the overall built-out effect of continued growth following the municipal plans then in place. Strongly negative public reaction to this scenario set the stage for more motivated examination of alternatives that would preserve desired qualities and promise a generally more desirable future. Negotiating the details of the strategy, especially concerning matters related to the placement and firmness of the urban containment boundary and the particular locations for densification within the boundary, was particularly difficult. Years of negotiation, mediation and compromise were needed before the crd Regional Growth Strategy was finally approved and adopted as a regional by-law in 2003 and the end result is not a model accomplishment for urban sustainability. The region is unlikely to be sustainable in 25 years even if the Strategy is applied fully. But the sustainabilitybased crd Strategy process and result represent a significant transition to a substantially different approach to urban growth, with important implications not just for planning policies and practice but also for associated infrastructure options, building design, services delivery, financing priorities and a host of other particulars.17

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The Three Cases Considered Together Although they span three decades and address different undertakings in different environments, the three cases share important characteristics. Chosen as examples of emerging sustainability assessment, all three cases centre on prospects for a more viable and desirable future. All feature integrated examination of multiple intersecting factors. All involved a diversity of interests, with significant roles for participants other than government officials and corporate representatives. All turned on efforts to reconcile objectives rather than select among conflicting positions, though none was fully successful in this. And in each case, the effective sustainability imperatives were driven and defined largely by the particular issues surrounding the undertaking, though the changes over time suggest a gradual institutionalization of sustainabilityoriented processes. The Berger Inquiry was established as an extraordinary public commission under the Territorial Lands Act, a law designed to facilitate and manage resource exploitation, not to address broad sustainability concerns. The assignment was to recommend terms and conditions for approvals, not to examine competing regional futures. Berger himself, particularly through his decision to adopt a broad interpretation of his mandate, deserves credit for the resulting innovations in hearings process and development assessment. But Berger did not create the situation before him. He merely proved willing and able to address the evident importance of the pipeline mega-project decision in defining the future of the Mackenzie Valley, and to listen seriously to the voices of the people who lived there as well as to the proponents and authorities who usually dominate such decision making. The Ontario timber management case was undertaken under legislation intended to ensure open examination of broad alternatives, considering social, economic, ecological and cultural effects and their interrelations. This legal framework mattered. It provided an established public hearings tool and facilitated efforts to force a generally unwilling proponent (the Ontario Ministry of Natural Resources) to defend and ultimately to revise its entrenched approach to forest management. As in the Berger case, the key driving imperatives were case-specific. Unsustainable practices were leading to evident forest resource depletion and rising conflicts among the multiple uses of the Crown forests. The formal assessment process did, however, provide a suitable venue. External authority was most evident in the crd initiative. It was undertaken under provincial legislation specially designed to foster growth strategy development. But not all growing regions leapt to embrace the opportunity and not all of those that did managed to give effective attention to sustainability issues. The provincial law’s framework of objectives and its provisions for assistance with mediation and negotiation were clearly important in the

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crd case. But much also depended on insightful municipal leaders, able regional planners, lessons from other innovative jurisdictions, time for learning and accommodation, and most importantly, active public interest organizations and citizens who recognized that what they most valued about their region was imperiled by further growth along the established path. Like its predecessors in these three earlier cases, the new Mackenzie Panel’s focus is largely the product of imperatives defined by the particulars of the proposed undertaking and the surrounding context. Some of that context is the legacy of regional and national history, including the earlier pipeline proposals, the Berger Inquiry and subsequent decades of deliberation on these and related matters. But also important are two other factors. The first is the precedent set by other broad assessment initiatives (some from the Canadian planning and project evaluation realms represented by the three cases discussed here, some from the larger realm of sustainabilityoriented innovations in Canada and beyond) and the gradual institutionalization of sustainability-based objectives, processes and capabilities. The second is the gradual emergence, after decades of deliberation and experiments, of widely shared basic agreement on the common basic requirements for moving towards sustainability. The new Mackenzie Panel therefore stands on the shoulders of many earlier pioneers in sustainability assessment. Its terms of reference, dictated by existing government authorities, represents the current stage of the long process of integrating sustainability imperatives in assessment institutions and rules. And its further steps – especially in setting out a clearer understanding of the higher “contribution to sustainability test” – may be expected to influence not just subsequent assessment panels but also other decision makers and decision participants in future cases.

t h e m a c k e n z i e pa n e l’ s i n n o vat i o n s The description of the “contribution to sustainability” test in the Mackenzie Panel’s terms of reference was not original. It followed, with only modest adjustments, the language used in the environmental impact statement guidelines issued by the Voisey’s Bay Mine and Mill Joint Panel in 1997 and the Red Hill Creek Expressway Review Panel in 1999. The significant difference was not in the wording but in the source. When the “contribution to sustainability” test was first adopted by the Voisey’s and Red Hill Panels, they were acting in light of the authorizing law but also stepping beyond established practice. Their interpretation of the law was not contradicted by the relevant governments (federal, provincial, Innu and Inuit authorities in the Voisey’s Bay case, the federal government alone for Red Hill), but not openly approved either. There is still no formal federal statement on the matter. By 2004, however, adoption of the contribution to

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sustainability test had moved upstream from panel guidelines to terms of reference dictated by government authorities. Implicitly at least, and for the purposes of the Mackenzie case at least, the authoritative institutions had accepted the higher test. The Panel itself pushed things further by specifying its commitment to the contribution to sustainability test and exploring the implications. The commitment was confirmed and clarified in the pre-hearing “Determination on Sufficiency” statement, a small part of which is quoted at the beginning of this chapter. The exploration of implications took the form of a special report on sustainability assessment criteria and frameworks, commissioned and published by the Panel, and presented for discussion at one of the early hearing sessions. Commitment to a sustainability-based framework for assessment In the “Determination on Sufficiency” statement, issued in August 2005, the Panel described how it would approach the contribution to sustainability question. The Panel reiterated its recognition of sustainability as “a fundamental purpose of environmental impact assessment” and stated that it “intends to approach sustainability as an important framework to evaluate the evidence and argument on the issues and questions that are before it.” It then provided notification that it would be evaluating “the specific and overall sustainability effects of the proposed project and whether the proposed project will bring lasting net gains and whether the trade-offs made to ensure these gains are acceptable in the circumstances.” And it listed six broad areas of concern relevant to making sustainability-based determinations in the case: • the capacity of natural systems to maintain their structure and functions and to support indigenous biological diversity and productivity; • the capacity of the social and economic systems of the human environment to achieve, maintain or enhance conditions of self-reliance and diversity; • the capacity of human environments, including local and regional institutions, to respond to and manage externally induced change; • the attainment and distribution of lasting and equitable social and economic benefits; • the rights of future generations to the sustainable use of renewable resources; and • protection and conservation of wildlife and the environment for present and future generations. The Panel concluded, “Throughout the remainder of the review, it is the Panel’s intention to direct questions specifically to these matters.”18

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Two components of the “Determination on Sufficiency” statement are worthy of particular attention. The first is the reference to a “sustainability framework” for evaluating the evidence and arguments. Careful structuring of a sustainability-based process is not new in Canadian practice. The crd growth strategy exercise, for example, used a framework of sorts based on the 14 goals in the provincial legislation, plus the results of regional visioning and scenario building. But the Mackenzie Panel’s emphasis on adopting a sustainability-based framework for evaluation was a first in Canadian project assessment. It indicated the Panel’s seriousness about applying the contribution to sustainability test and a determination to do so in a deliberately constructed way. This was confirmed when the Panel commissioned the criteria and frameworks report discussed below. Considering the Acceptability of Trade-offs The second remarkable component on the “Determination on Sufficiency” statement is attention to whether “the trade-offs” made to ensure “lasting net gains” are “acceptable in the circumstances.” While “lasting gains” might just be a synonym for contribution to sustainability, the specification of “net” gains points to a weighing of losses and risks against anticipated benefits. It points to trade-offs. And choosing to focus on the acceptability of trade-offs indicates that the Panel has grasped and is prepared to pursue one of the most important potentials of sustainability-based assessment. The acceptability of trade-offs “in the circumstances” refers to a difficult provision of the Canadian Environmental Assessment Act. Trade-offs are unfortunate but common features of decision making on significant undertakings. In narrow environmental assessment practice, where deliberations focus on mitigation of adverse effects, predicted negatives are typically identified and reported in recommendations to the ultimate decision-making authorities. What happens next is rarely visible to the public. But it often involves trade-offs – some adverse environmental effects are accepted in the interests of benefits judged to be more important. The Canadian Environmental Assessment Act provides for approval of projects that are expected have significant adverse environmental effects, so long as these effects are determined to be “acceptable in the circumstances.”19 The law provides no explicit criteria or any open process for judging acceptability in the circumstances. If, however, the “contribution to sustainable development” purpose of the law is taken seriously, as it is in the Mackenzie case, then the lasting net gains imperative emerges as the logical basis for evaluating what is “acceptable in the circumstances.” The basic test of acceptability is whether there are grounds for confidence that the undertaking will make a positive overall contribution to sustainability. Applying this test is properly the job of the assessment process – in the case the job of the Panel assisted by participants in the

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public hearings. And the deliberations are open. The trade-offs are identified and discussed in the process and the Panel’s evaluation is set out in its public report. Because consideration of overall sustainability effects requires attention to the full suite of interrelated social, economic, cultural and biophysical concerns, over the long as well as short term, there should be no serious factors outside the scope of the review. All matters relevant to the “acceptable in the circumstances” judgment can and should be covered in the assessment process. In effect, then, sustainability-based assessment forces the key tradeoff decision making into the open by establishing particular grounds for the evaluation and providing for open deliberation in the process. That is no small thing. Panel reports remain advisory. The authorities who receive panel recommendations retain their decision-making powers. They may choose to judge the trade-offs differently and take steps quite different from those recommended. But any such decisions would inevitably be compared to and judged in light of the conclusions reached in the open, comprehensive, sustainability-based panel reviews. There is no evidence that the Mackenzie Panel saw its “determination on sufficiency” comments as a broad challenge to established decision-making practices. But the Panel evidently recognized that in a sustainability-based assessment they are responsible for the key trade-off evaluations. Accordingly, the Panel moved to clarify how best to define and apply the contribution to sustainability test and the lasting net gains approach to considering trade-offs. The criteria and frameworks report After determining that the information base was sufficient for beginning the hearings, the Panel prepared a hearings schedule that reflected the central role for sustainability questions. Essentially, the hearings were designed to begin with consideration of sustainability assessment criteria and evaluations and to end with conclusions about the “net contribution of the project (in comparison with alternatives).”20 After an initial session describing the proposed project, the Panel devoted its first “technical” hearing session to examination of “general approaches and specific methods for evaluating and assessing information about project impacts (positive and negative) and their significance.”21 For these discussions and for the hearings generally, the Panel commissioned expert advisors to prepared reports on a set of key intersecting methodological matters: cumulative effects, significance determinations, effects indicators, and sustainability-based criteria and evaluations. The Panel was careful to note that it did not intend “at this stage … to endorse, recommend or justify any particular approach.”22 At the same time, however, it clearly wished to signal its commitment to clarifying the options and the issues.

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I was commissioned to prepare the report on “approaches to the application of sustainability-based assessment criteria, and evaluation of project contributions to sustainability.” As the panel knew, I had already written a monograph (funded the Canadian Environmental Assessment Agency’s research and development fund)23 and had completed a book24 on sustainability assessment. These works outlined a generic framework of broadly applicable criteria for evaluations and decisions along with explicit guidance for trade-off deliberations. Both the criteria and trade-off rules represented a synthesis of existing thinking and practice in sustainability applications, though they were framed to serve the particular needs of assessment deliberations.25 The key question for the Panel, however, was how a generic framework of this sort might be specified for use in the Mackenzie case. The criteria and frameworks report was completed in January 2006, published on the Panel’s website and presented for discussion in the Panel’s hearings in mid-February 2006.26 The report reviewed general approaches to sustainability, outlined sustainability assessment best practices and surveyed the main approaches in recent use. It then summarized generic criteria for assessment evaluations and decisions and presented a set of trade-off rules. The main focus, however, was on ways of combining these generic requirements for sustainability with attention to the major issues of the Mackenzie Gas Project case: the major concerns that emerge from the nature of the proposed project, the long history of debates about pipeline proposals and implications in the Mackenzie Valley area, and the broader context of hydrocarbon initiatives and northern development. In the end, the report set out a framework organized around the major case and context specific issues, supplemented where necessary with considerations drawn from the general requirements for sustainability assessments anywhere. The framework was essentially a structure for posing and answering questions in eleven categories: • biophysical, ecological and socio-ecological systems and traditional activities (with an emphasis on lasting effects of the project and related induced activities such as expanded hydrocarbon exploration and extraction in the area); • livelihoods and socio-economic well-being (including effects on currently negative trends and effects on livelihood foundations such as available resources, applicable skills, education, knowledge of the land); • equity (including the intergenerational as well as more immediate distribution of benefits and risks); • resource access, use and efficiency (including long term availability of natural gas and other energy and material resources); • boom and bust (taking into account the non-renewable nature of the resource being exploited by the project and by related induced activities);

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• bridging (preparations to use project-related opportunities and revenues to build a more sustainable base for post-project livelihoods); • capacity building (to address the abilities of authorities and communities to deal with project problems and take advantage of project opportunities); • preparedness in face of uncertainties (including design features that would permit adaptive adjustments and other responses to unanticipated factors); • interactions among effects (including the potential for mutually reinforcing positive and negative effects); • trade-offs (with particular attention to trade-offs that would offend the generic trade-off rules, which for example preclude any avoidable trade-off that would displace a significant adverse effect to the future); • alternatives (including the relative desirability, from a sustainability effects perspective, of different options for project scale, pace and timing, product end uses, revenue flows, capacity expectations, linkages to potentially induced undertakings, and bridging initiatives); • plus a concluding section for net results.27 The extent to which the Panel will use this particular framework is not yet known. For a variety of reasons, including court rulings and proponent delays for cost recalculations and related deliberations, the Panel’s hearing period was considerably extended. At the time of writing, the final hearing sessions have just ended. The Panel’s report will not be completed until some time in 2008. Indications of the Panel’s thinking about the framework issues are, however, available in recent Panel documents. The Panel’s final hearings sessions focused on three topics: cumulative impacts, sustainability and project contributions, and recommendations. To assist participants preparing for these sessions, the Panel released a revised guidance document that outlined the main discussion topics to be addressed. While the section for the sustainability and project contributions session is too long to be reproduced here, the following excerpt on the key questions concerning “the sustainability of net benefits” gives a good sense of the contents. It also indicates that the Panel is conceiving the issues in a way that at least parallels the approach and substance of the framework report. The Panel expects the sustainability and project contributions discussion to consider: What longer term possibilities (including Project-related induced developments) for sustainable livelihoods are anticipated and what programs and other initiatives are planned by the Proponents, by the gnwt, the Government of Canada and by aboriginal organizations to establish firm bridges to such livelihoods (in addition to dealing with existing concerns and with concerns anticipated during the life of the Project)?

69 Sustainability Assessment and Innovative Decision Making How might the anticipated or potential programs and other initiatives be affected by different assumptions about the size, direction and timing of revenue flows? How might these prospects be different if some alternative were pursued instead of the Project as proposed? What measures might be required to manage the pace and scale of future developments in the vicinity of the mgp in order to enhance the sustainability of livelihoods, communities, and regional economies?28

The Panel was not pointing to any particular conclusions on these matters. But its focus on lasting net benefits, with attention to long-term sustainable livelihoods and bridges to durable futures, is a long stride from concern only with minimizing adverse effects. No less indicative is the Panel’s evident commitment to using the lasting net effects focus in comparing not just project alternatives, but also project effects in combination with those of future developments in the area, plus the needs and capacities of management measures and programmes to deal with the overall effects and to guide changes towards more viable futures.

c o n c l u s i o n s : f r o m m i t i g at i n g adverse effects to ensuring t h e s u s ta i n a b i l i t y o f n e t b e n e f i t s Movement towards consistently broad, well integrated and forward looking approaches to important decisions in Canada is still in its early stages. Sustainability-based evaluations and decisions remain primitive and are not yet firmly entrenched, even though the first initiatives appeared decades ago. But the diversity, frequency and ambition of applications now appear to be growing quickly. Here I have focused largely on applications at the conjunction of planning and assessment. No doubt a broader ambit – including sustainability-driven undertakings throughout the public, private and civil society sectors – would have been more revealing. Nonetheless, it seems clear that a major transition is underway in the assessment of new undertakings, and that this transition is likely to encourage, perhaps even force, new thinking and practice in beyond its immediate sphere. The Mackenzie Gas Project assessment is a useful indicator. Unlike many pioneering examples of sustainability assessment, the Mackenzie case is not a one-off exception. The Mackenzie Panel was the third to adopt an explicit sustainability test under Canadian environmental assessment law and is taking advantage of its opportunity to build on the work of its predecessors. Moreover, as the first to be issued terms of reference with this mandate clearly stated, the Mackenzie Panel represents a step towards authoritative

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acceptance, if not yet firm institutionalization, of the sustainability test. And in its guidance materials and actions in commissioning related reports, the Panel has pushed sustainability assessment practice into more demanding areas of inquiry. It has given more careful attention to assessment criteria and decision frameworks, and its emphasis on lasting net benefits and attention to positive bridging from time-limited undertakings sets a new standard of expectations for governments as well as project proponents. Further steps will be needed to entrench “contribution to sustainability” as the basic test for new undertakings and to clarify what will be expected from proponents and other participants. Already, prospective proponents are anticipating sustainability effects questions in the approval process and are beginning to ask their advisors how to build an appropriate case. Beyond generic guidance, the answers are not readily at hand. There are also important uncertainties about the relationship between particular undertakings and the bigger sustainability issues that surround them. In the Mackenzie case, for example, key questions involve the cumulative effects of the pipeline plus other induced and accompanying undertakings (e.g. additional hydrocarbon exploration induced by the availability of a pipeline to transport the gas to market), and the product lifecycle effects, including the anticipated use of the Mackenzie gas in Alberta tarsands operations (to make the steam needed to extract the oil, which will in turn be used for various purposes, many of them probably difficult to justify on sustainability grounds).While the Mackenzie Panel has expressed interest in both matters,29 it has not been in a position to examine either in detail. The more broadly mandated strategic level assessments needed to address these bigger issues are not yet in place. It is reasonable to expect that the scope and clarity of sustainability assessment applications and expectations will continue to grow. Some of this will be driven by needs to address specific problems, especially where it is clear (as with urban sprawl, for example) that the current trajectory is unsupportable. Some will be driven by awareness of the overall global peril. According to current, possibly conservative estimates, our demands are now roughly 25 percent over the planet’s sustainable carrying capacity and rising.30 Meanwhile nearly half of the human population is living on less than $2 per day, and the gap between rich and poor is widening almost everywhere.31 No great insight is required to see those trends as a recipe for deepening insecurity and eventual disaster. The needed responses will have to be multiple, diverse and sensitive to the particulars of case and context. But consistent, law-based application of a basic “contribution to sustainability” test in the design and approval of new projects, plans, policies and programmes should play an important role. That is now underway in Canada.

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notes 1 Canadian Environmental Assessment Agency, “News Release: Federal Environment Minister, Chair of the Mackenzie Valley Environmental Impact Review Board and Chair of the Inuvialuit Game Council Establish Joint Review Panel for the Mackenzie Gas Project,” (Canadian Environmental Assessment Agency, 18 August 2004). 2 Inuvialuit Game Council (igc), Mackenzie Valley Environmental Impact Review Board (mveirb) and Minister of the Environment (Canada), Environmental Impact Assessment Terms of Reference for the Mackenzie Gas Project (August 2004). 3 igc, mveirb, and Canada, eia Terms of Reference, 3–7. 4 See Robert B. Gibson, with Selma Hassan, Susan Holtz, James Tansey, and Graham Whitelaw, Sustainability Assessment: Criteria and Processes (Earthscan, 2005), 38–65, 88–121. 5 Canada, Environmental Assessment Act, section 4(1)(b). 6 igc, mveirb, and Canada, eia Terms of Reference, 4. 7 Joint Review Panel for the Mackenzie Gas Project, Determination on Sufficiency (Inuvik, nwt, 18 July 2005), 5. 8 The earlier two were the Voisey’s Bay Mine and Mill project joint panel assessment in northern Labrador and the Red Hill Creek Expressway federal panel assessment in Hamilton, Ontario. The concurrent cases were the joint federal-provincial panel review of the proposed Whites Point Quarry and Marine Terminal in Nova Scotia and the joint Canada-British Columbia panel review of the Kemess North Copper–Gold Mine Project. Both of the latter panels reported in 2007, recommending against the proposed projects on the grounds that they did not meet the contribution to sustainability test. 9 Examples include the Georges Bank Hydrocarbon Moratorium Review Panel (see Natural Resources Canada and Nova Scotia Petroleum Directorate, Georges Bank Review Panel Report, June 1999. Available at www.cnsopb.ns.ca/archives/pdf/ georgesbankreport.pdf. 10 See Barry Dalal-Clayton and Barry Sadler, Sustainability Appraisal: Sourcebook and Reference Guide (Earthscan, forthcoming). 11 Canadian Environmental Assessment Act, sections 20(1) and 37(1). 12 Ontario, Environmental Assessment Act, sections 2 and 6.1(2). 13 Thomas R. Berger, Northern Frontier, Northern Homeland: The Report of the Mackenzie Valley Pipeline Inquiry, vol 1 (Supply and Services Canada, 1977). 14 Class environmental assessments in Ontario are typically used to set out streamlined planning and approval processes for categories of small scale, frequently recurring projects. Use of this tool for timber or forest management undertakings was creative and arguably inappropriate, but no more satisfactory option was easily at hand. 15 Environmental Assessment Board, Reasons for Decision and Decision: Class Environmental Assessment by the Ministry of Natural Resources for Timber Management on Crown Lands in Ontario (eab, April 1994).

72 Robert Gibson 16 British Columbia, Municipal Act, part 25, Regional Growth Strategies, section 849 (2). 17 For details on the crd case see Michelle Boyle, Robert B. Gibson and Deborah Curran, “If not here, then perhaps not anywhere: urban growth management as a tool for sustainability planning in British Columbia’s Capital Regional District,” Local Environment 9, 1 (2004), 21–43. 18 Joint Review Panel for the Mackenzie Gas Project, “Determination on Sufficiency,” 5. 19 Canadian Environmental Assessment Act, section 37(1)(a)(ii). 20 Joint Review Panel, “Topics and Locations of Community, General, and Technical Hearings” (Inuvik: jrp, 10 December 2005), 16. 21 Ibid., 6. 22 Ibid. 23 Robert B. Gibson, “Specification of Sustainability-based Environmental Assessment Decision Criteria and Implications for Determining ‘Significance’ in Environmental Assessment,” monograph prepared for the Canadian Environmental Assessment Agency Research and Development Programme, revised January 2002, 40. Available on ceaa website at http://www.ceaa-acee.gc.ca/015/0002/0009/index_e.htm, February 2002. 24 Gibson, et al., Sustainability Assessment: Criteria and Processes. 25 For example, the evaluation and decision criteria were built on the evident requirements for progress towards sustainability (requirements to be met by desirable undertakings), rather than on the usual components (e.g. the three legged stool of economic, social and ecological aspects) used in sustainability depictions. In other words the criteria were for pursuing sustainability, not for describing it. 26 Robert B. Gibson, “Sustainability-based Assessment Criteria and Associated Frameworks for Evaluations and Decisions: Theory, Practice and Implications for the Mackenzie Gas Project Review,” a report commissioned by and prepared for the Joint Review Panel for the Mackenzie Gas Project, final report 26 January 2006. Published on the Joint Review Panel website at http://www.ngps.nt.ca/ registryDetail_e.asp?CategoryID=271. 27 Ibid., 58–67. 28 Joint Review Panel for the Mackenzie Gas Project, “Guidance Document for Hearings: Topics and Locations of Community, General and Technical Hearings” (revised 13 July 2007) (Inuvik: jrp, 2007), 35. 29 For example, one of the questions raised by the Panel for the sustainability sessions requires attention both to induced effects and to the anticipated use of the gas: “Is the Project and the gas it will transport needed more now (taking into account the probable effect of the Project on other hydrocarbon activities in the Northwest Territories and the expected use of the extracted and transported gas) than it might be in the future?” – jrp, “Guidance Document for Hearings, 13 July 2007,” 36. 30 World Wildlife Fund, Zoological Society of London and Global Footprint Network, Living Planet Report 2006 (wwf, 2006).

73 Sustainability Assessment and Innovative Decision Making 31 World Bank, World Development Indicators 2007 (World Bank, April 2007); Worldwatch Institute, Vital Signs 2003 (Norton, 2003), 88–89. Income is not a sufficient measure of material deprivation and material deprivation is not a sufficient measure of poverty. The raw numbers on very low incomes nonetheless indicate that more resources will have to be allocated to very large numbers of people whose basic needs and reasonable expectations are not being met, at time when we are already living beyond our planetary means.

4 Why Smart Growth Isn’t Working: An Examination of Ottawa’s Failure to Deliver Sustainable Urban Transit r o b e r t h i lt o n a n d christopher stoney

In a recently published paper, the authors outlined the chain of events and issues that led to the demise of Ottawa’s proposed system for Light Rail Transit.1 In that paper we focused on the political, economic and governance factors that killed the project and left the City with sunk costs of $73 million and a legal claim for a further $170 million from Siemens, the company selected to build and maintain the project. In addition to analyzing these issues further, our main aim in this chapter is to explore the broader implications for the City’s strategy for “smart growth” development. Smart growth principles were embedded in both the provincial “vision” for how cities in Ontario should develop (Ontario Smart Growth 2001) and the City of Ottawa’s own strategic vision (Ottawa 20/20, 2003) which emphasized the need to reduce the City’s growing reliance on roads: “In support of the community’s growth management goals, this Master Plan strives to minimize the future need for new and widened roads while avoiding levels of congestion that would have unacceptable implications for Ottawa’s quality of life in terms of delay to persons and goods, air pollution and road safety.”2 The City of Ottawa’s proposed Light Rail Transit (lrt) system was intended to be the lynch pin of smart growth development and for many represented the dream of clean, sustainable growth. The lrt project would be the City’s largest ever project and was designed to showcase the benefits of tri-level intergovernmental funding agreements and demonstrate the virtues and efficiency of public-private partnership. However, when deeply divided city councilors voted to kill the project in December 2006, over six years of planning and 55 votes of council were overturned. The City’s transit plans were left in disarray and taxpayers are left facing potential bill in excess of $240 million.

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In addition to the financial costs, the city council and the wider public appear increasingly divided and disillusioned by the failure of lrt and the City’s inability to adhere to its smart-growth plans. In spite of ongoing research into the feasibility of alternative lrt plans, a comprehensive system could now be decades away. Moreover, there is increasing concern that the new mayor and the council are abandoning Ottawa 20/20, and the smart growth principles upon which it is based, in favour of traditional growth based on automobile usage and an expanded road building programme that will inevitably result in increased urban sprawl and higher levels of traffic congestion and pollution. Recent analysis of Ottawa’s current and projected road building by the office of local councillor Clive Doucet underline these concerns. The City is building roads faster than its population is growing: Ottawa has built 75 per cent more roads to serve a 40 per cent growth in population during the last 30 years and currently spends 19 per cent more per household on roads than the Ontario seven-city average and 43 per cent more than Toronto. Moreover, while Toronto and Montreal have both curtailed their road expansion in favour of rail and rapid transit, Ottawa is expected to set a new record in 2007 by building 200 kilometres of new roads compared to an average of about 100 kilometres in previous years.3 According to City of Ottawa Councillor Clive Doucet, “[W]e are already building roads faster than we can repair them. Only 40 per cent of the roads that need renewal will get fixed this year. This is our lowest rate of renewal ever.”4 Given all the planning, the strategic visioning and public commitments, the votes and the pressing need for an environmentally clean and efficient public transport system in the nation’s capital, how did this project become so badly derailed? In this paper we address these questions in order to inform current debates and practices concerning the development of smart-growth policies in Ottawa and other urban centres. These issues are particularly significant given that the federal government is looking to transfer billions of dollars over the next 5 years to municipalities to support investments in local infrastructure. The Harper government recently announced it will contribute a further $962 million to help extend Toronto’s subway extension of public transit into the York region north of the city. Meanwhile the Big City Mayors’ Caucus of the Federation of Canadian Municipalities (fcm) estimates that $4.2 billion annually will be required to support investments in Canada’s public transit systems. In addition to Toronto and Montreal’s expansion of their subway systems, “several other big cities are also looking at expanding or starting cheaper light-rail or street car systems.”5 This chapter will provide a brief overview of the Ottawa lrt project and outline the smart growth principles and commitments included in key planning documents by both the provincial government of Ontario and the City of Ottawa. In particular we focus on the principle of “A Responsible and

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Responsive City” in analysing the City’s transit plans. As one of seven principles established by the City to guide decisions affecting the management of growth in transportation, infrastructure and green space, this one was seen as critical to success and emphasised accountability, fiscal responsibility, an open and participatory process, partnerships and public awareness. We argue that in each of these areas the lrt project was flawed and that what emerged was a decision-making process characterised by secrecy, strategic misinformation and short-term political gain. As a result, the City of Ottawa undermined the lrt project and its long-term plans for smart growth. The case study illustrates that in areas as complex as transportation and urban growth, process is crucial if acceptable and sustainable outcomes are to emerge. Finally, given the ward centric, parochial nature of municipal politics, we question where smart growth and lrt in the city is headed and assess claims that the provincial government and/or a regional transport authority should play a greater role in overseeing major urban transport issues within the city region.

the case study Overview and Context Ottawa’s experiment with rail transit started in 2001 with the launching of the “O-train” pilot project, which the City’s promotional material described as an approach to public transit that was “modern,” “sophisticated,” and “environmentally friendly.”6 During the late 1990s, a number of factors had combined to make lrt an attractive option and put it firmly on the City’s agenda. Like most Canadian cities, Ottawa was experiencing rapid population growth: the City predicted an increase of 300,000 by 2021. This would push Ottawa’s population to about 1.2 million, adding significantly to development that would lead to more sprawl and traffic congestion. Consequently, the argument went, if Ottawa was to avoid the problems of larger cities, its transit system had to adapt accordingly to sustain the predicted growth. Ottawa also experienced rapid growth as a result of the provincial government’s decision in 2001 to amalgamate 12 area governments into one city. According to Gray, the momentum created by amalgamation created an unusual sense of optimism and confidence at the new Ottawa City Hall, particularly within the planning department: “No longer did the community have 12 different visions of the future. Instead, in 2001 planners and some politicians believed the municipality could build a model city that would be a fine place to live and a capital that would serve as a model to others.”7 Towards this end, Ottawa held a smart growth summit to plan how the city should develop by 2020. The product from this process – the City’s award winning

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strategic “20/20” vision master plan – was intended to guide the City’s future growth. The principles that were established included a distinct rural countryside, a green municipality and liveable communities served by transit. In order to achieve such aims and provide an alternative to sprawl, planners were keen to intensify the down town core. However, they also recognized that the intensification of development downtown would increase pressures on public transit. As Gray points out that is why light rail was a vital part of what planners hoped would be a new model city “You can’t intensify development in the core with roads at capacity and not have light-rail going downtown. There are simply too many people attempting to get jobs there.”8 In other words lrt was pivotal to the plans for shaping the city over the coming decades. The federal and provincial governments declared strong support for lrt in Ottawa and both announced they were prepared to invest $200 million in the project. On May 14, 2004, a federal government press release boasted that the $600 million project represented “the largest intergovernmental infrastructure announcement in the City’s history.” The decision to invest was facilitated by the fact that lrt, regarded as a progressive and environmentally clean urban project, was consistent with the political agendas of higher order governments. For the provincial government of Ontario, Premier Dalton McGuinty heralded the project, making a number of claims about its stature and importance for the city and its communities: “A world class public transportation system is a critical component of a strong community … This investment will help us build strong, wellplanned communities that provide a high quality of life. It is a great example of the City of Ottawa’s smart growth management plan put into action.”9 From a federal government’s perspective, renewed interest in Ottawa’s development can be understood as part of its urban agenda and, in particular, the “New Deal for Cities and Communities.” To secure a seat at the urban table, the federal government is usually required to contribute significant funding. Entering into tri-level agreements with provincial and municipal governments has provided the federal government with some influence over the development of cities and enabled them to leverage matching funds from the other levels of government. Public private partnerships (P3s) are increasingly the choice of delivery for major tri-level agreements. The Ottawa lrt project, on the other hand, was designed along the lines of a more traditional procurement for contracted services rather than a P3. The contracted private sector company was not required to contribute an equity share in the project and assumed little risk apart from those normally associated with performance standards associated with cost estimates of construction and the on-time completion of key deliverables. Following a competitive process during 2006, the bid from Siemens Canada PLC was selected to build the north-south lrt system in Ottawa.

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Smart Growth and LRT In January 2001, the Government of Ontario launched “Ontario Smart Growth,” which it defined as a “vision for promoting and planning for growth in ways that create strong economies, build vibrant communities and promote clean, healthy environments.” Smart Growth promised to reform the “business-as-usual” approach of government throughout the province: Ontario Smart Growth brings together priorities by linking decisions on transportation, the natural environment, infrastructure, planning and public investment. It will focus on promoting and managing growth and sustainable development, and expanding choice for the people of Ontario in areas such as transportation and housing. It will ensure that new development maximizes the efficient use of existing infrastructure, respects the environment, and is well-coordinated locally and regionally.10

Through Smart Growth the province sought to change the effects of growth-related sprawl by “making better decisions about infrastructure (that) promote a better use of resources through optimizing the use of existing infrastructure and guiding future decisions on infrastructure investments.”11 In order to achieve the goals of Smart Growth, however, the government emphasized that the change from “business-as-usual” also included the need to build strong support within communities. Rather than imposing solutions, the province sought to create a more collaborative approach: “At its core, Smart Growth is about building consensus and creating partnerships. That’s because growth issues cross municipal boundaries and government jurisdictions; they encompass such areas as transportation, infrastructure and land use; and they affect stakeholders differently. To get everyone working toward the same goals requires building consensus among key stakeholders, integrating decision-making within and among governments and gaining broad public support.”12 The Provincial Government convened a series of Smart Growth Panels across Ontario that were each given a mandate to provide advice on the future development priorities for their respective region. When the Eastern Ontario Smart Growth Panel was established on August 16, 2002, the Minister of Municipal Affairs and Housing “challenged panel members to think creatively and to come up with a bold new strategy to guide eastern Ontario’s growth over the next 30 years.”13 The Panel’s vision for 2035 called for a regional economy that would be “fuelled by its world-class educational institutions, leading-edge technology industries, agricultural assets, manufacturing and national resources in conjunction with first-class infrastructure and transportation.”14 The panel’s final report, “Shape the Future,” was issued in the fall of 2003. The panel’s report recognized that there were two patterns of growth for the

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region: Ottawa was expanding quickly; communities other than Ottawa, on the other hand, suffered from little or no growth. The high population growth in Ottawa was putting severe pressures on traffic congestion and land-use, requiring initiatives to cope more effectively with these problems. In other largely rural communities throughout the region, the issue was more about promoting growth to maintain their economic viability. The panel observed that transportation patterns in Ottawa strongly reflected consumer preferences for single occupant vehicles (sov). Citing data from Statistics Canada (2001) the report pointed out the disproportionate number of commuters in Ottawa who drove to work (60 per cent) versus those taking transit (20 per cent): “The growing dependency on the automobile, particularly single occupancy vehicles, increased truck traffic on highways and increased traffic congestion in larger urban centres, have the potential to seriously undermine the quality of life in eastern Ontario.”15 The panel’s solution to these problems called for more funding to improve transportation choices for commuters: “All levels of government should promote and adequately fund public transit in communities across the zone. The panel recognizes the importance of public transit in the City of Ottawa, and that the Ottawa-Carleton (oc) Transpo and other municipal transit systems should be adequately funded.”16 While the Province was launching Ontario Smart Growth, the City of Ottawa developed Ottawa 20/20, which it hailed as “a new approach to citybuilding.” City Council adopted the plan in September 2003 and described it as “a framework for managing growth over the next 20 years in ways that will reinforce the qualities that are most valued by the city’s residents: the availability of high-quality services; its reputation for innovative economic development and exciting job opportunities; liveable communities; diverse artistic and cultural life; varied housing forms; green and open spaces; and the heritage landmarks and landforms that distinguish Ottawa from all other cities.”17 A key component of Ottawa 20/20, the Official Plan outlined the City’s direction in three supporting plans: the Transportation Master Plan, the Infrastructure Master Plan, and the Greenspace Master Plan. The “Transportation Vision” in this plan called for the development of a transportation system by 2021 that would “enhance (Ottawa’s) quality of life, respect the natural environment, enhance the economy, and be managed in a responsible and responsive manner.” In order to achieve the targets set, the Transportation Plan recognized that a variety of approaches were needed to convince drivers to switch to transit: “Intensified and mixed land use patterns are making alternatives to driving more practical by bringing key destinations closer. Streetscaping and community design are making it easier to walk to transit stops and stations. New developments will be easy for transit users to reach, and transit stations are being integrated with areas of high residential and employment densities.”18

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While Light Rail was seen as a “complementary system” to Bus Rapid Transit (brt), the Transportation Master Plan clearly presented lrt as the mode of choice. lrt was promoted as “an elegant and affordable solution to the city’s transit needs over time.”19 In order to guide decisions affecting transportation and the management of growth, the City approved seven principles. Of these, the first – “A Responsible and Responsive City” – was emphasised as critical to its success and included the following elements: • Accountability – The City demonstrates leadership by following through and sticking to its decisions and by conducting on-going strategic monitoring and making appropriate adjustments. • Fiscal Responsibility – The City does not spend more than it can afford. It looks for innovative ways to fund and deliver services and makes efficient use of its infrastructure and resources. • Conduct an Open and Participatory Process – The City conducts business in a broad and open way that makes it easy for everyone to participate and collaborate. • Partnerships – The City works with other levels of government, the private sector and community-based organizations to achieve objectives. • Public Awareness – The City educates the public about important issues in order to raise awareness and understanding to enable the public to make knowledgeable choices. With the guidance provided by Ontario Smart Growth panels and Ottawa 20/20, it could be assumed that the City had ample oversight to help steer its decisions with respect to its proposal to build a Light Rail Transit system. To understand why the lrt failed we begin by looking at how the City failed to adhere to the first principle and subsequent criteria laid out clearly in its own strategic plans.

a n a ly s i s A Responsible and Responsive City? Accountability In Ottawa 20/20, the City defined accountability as a “demonstration of leadership.” The City’s success in this regard would be measured by the degree to which it “followed through” and delivered on its decisions. With respect to the lrt project, however, the actions of the City demonstrated weak and confusing leadership. Towards the end of the project the Council changed its decisions on critical issues with astonishing alacrity. A major factor in the lack of commitment shown by the council was the apparent loss of support for the lrt process and the plans to build a

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north-south route when many felt that the real congestion problems were east-west. During a turbulent municipal campaign in fall 2006, the northsouth lrt project became, along with taxation, the primary electoral issue. Bob Chiarelli, the incumbent mayor and principle driver of the lrt project, appeared to delay completion of the contract amid speculation that he was hoping to maximize political capital with an announcement just prior to the election date: “Ottawa’s light-rail plan could have gone ahead, until thenmayor Bob Chiarelli decided to showboat by not crossing all the Ts until he could be assured of a ceremonial sod-turning in the midst of last fall’s election campaign.”20 Chiarelli’s strategy backfired. The delay allowed John Baird – the former President of the Treasury Board – to call for another vote following the election of a new Council to ratify the City’s support for the project. The whole lrt debate was reopened during the municipal election campaign; the Mayor was subsequently defeated by Larry O’Brien, a novice politician whose campaign included the commitment to scrap the north-south lrt project and set up a transport committee to explore alternative options.21 Thus, while previous City Councils had voted 55 times over six years to support the implementation of lrt, a bitterly divided new Council22 decided by one vote to scrap the proposed north-south project. Moreover, within one week they conducted another vote on lrt: they now supported a new proposal that removed key parts of the lrt surface line into the downtown core. Instead, they committed the City to consider instead a tunnel – something that was not part of the original plan. Following the Council’s decision to eventually scrap all aspects of the north-south lrt project, and Mayor O’Brien’s decision to proceed with the creation of an “external advisory task force” to examine transportation options,23 there still appeared to be little faith or consistency on the part of Council with respect to lrt. As Randall Denley observed: “Rather than wait a few months for O’Brien’s task force to report on the big picture, councillors decided (on January 24) to spend $145 million as soon as possible on buses and transitway improvements. Aren’t these the same people who have spent the last few years telling us rail is our choice for the future?”24 In spite of their rhetorical commitment to leadership through consistent decision-making, Denley draws on a recent public opinion survey released by the Council to conclude that “the public is certainly not being fooled by the pretence of leadership councillors have been offering.”25 Despite the principles of “accountability” outlined in Ottawa 20/20 that required the City to conduct “on-going strategic monitoring and make appropriate adjustments” of its decisions, throughout the procurement process relating to the north-south lrt project, City staff and Councillors stuck doggedly to information, facts and figures that were often inaccurate and misleading. For example, despite the efforts of city bureaucrats to promote lrt

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as “an ideal and affordable solution for comfortably transporting high volumes of people into downtown cores,” Councillors came to realise late in the day – after the contract with Siemens was signed – that the “net increase” in ridership provided by the lrt was in fact minimal. One report estimated this figure to be as low as 1500 as opposed to the 40,000 figure often used to justify the project.26 Rather than a massive increase of new riders who would be attracted to the “fast, smooth, quiet and comfortable ride” offered by electric lrt, the proposed north-south line would mainly siphon existing commuters who were already using express buses. When doubts began to appear as to the “cost-benefit” of the north-south lrt, support for the project quickly faded. Likewise, the rationale for expanding Ottawa’s transit modality to include north-south lrt is based in large part on the City’s forecast of a population explosion over the next decade, particularly in suburban areas. While the City projected an increase of 180,000 in three suburban areas by 2021, other forecasts put the increase at closer to 30,000. The latest Statistics Canada census results reveal Ottawa’s growth rate to be 4.9 per cent for the last decade but in 2001 elected officials chose to base future needs on a projected growth rate of 11.5 per cent. Inflated growth projections present serious problems when they are used to justify costly public infrastructure expansion such as transit: “The city transit plan is predicated on a population number that is vastly in excess of reality. Without all those bums to put on oc Transpo seats, what kind of system do we really need? That’s probably the most critical populated related question.”27 The City’s former planning director informed councillors that his staff did not have sufficient time to present councillors with updated numbers before transit decisions were made. As Denley points out, “In other words, councillors are expected to make decisions in response to a ridership demand that simply doesn’t exist.”28 By failing to provide convincing arguments both in terms of added benefits that lrt would bring in improving levels of service for transit (frequency and reliability of service and reductions in commute times) and in attracting new riders and reducing road congestion, the north-south lrt became a project premised on faulty data and unrealistic assumptions. When combined with politically driven leadership and an inappropriate process, highly questionable decisions were inevitable. Fiscal Responsibility The City defined fiscal responsibility in Ottawa 20/20 as “not spend(ing) more than it can afford. It looks for innovative ways to fund and deliver services and makes efficient use of its infrastructure and resources.” A recent Ottawa Citizen editorial stated the obvious: “by flipflopping on rail, our city councillors are hurting taxpayers badly.”29 Given the sunk costs, the hours and resources wasted in planning, the pending lawsuit and zero returns, this is a massive understatement and hardly a shining example of “fiscal responsibility.”

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As the new mayor prepared to hand over Ottawa’s transit planning task to community volunteers in the new transit task force in January 2007, Denley’s verdict was unambiguous: “our highly paid experts and elected councilors have made a terrible mess of it. They poured millions of dollars and untold thousands of hours of staff time into a north-south rail plan that the public ultimately did not endorse. They’ve also spiked all the studies of the east-west rail plans. In truth, they have no plan, except a plan to spend.”30 Bemoaning the lack of fiscal responsibility, he added “It’s appalling that we have a majority on city council who believe it’s acceptable to launch a project worth hundreds of millions of dollars without knowing the real cost, the ridership or the benefits.” In contrast, he defends the federal and provincial government’s decision to withdraw funding and effectively kill the project arguing that they did exactly what they should have done: “exercise proper care in the spending of public money.”31 The principle of “fiscal responsibility” was also undermined by the tri-level government funding process. Following the cancellation of the project, the federal and provincial governments each moved quickly to clarify that, under the terms of their agreement to provide funding, they would not be liable to pay any of the $73 million already invested in the project, nor would they be liable to share any of the costs arising out of legal action taken against municipality. The fact that the entire cost of scrapping the project would fall to the City created a number of perverse incentives to proceed with the construction of the lrt despite the opinion of many that it was flawed, unpopular and a potential white elephant that would drain the city of resources to develop alternative transit plans in the future. For some, the fiscal irresponsibility demonstrated by the Council has prompted a serious rethink about the fiscal implications of “chasing the light rail dream” in the city: “The city’s grand plan calls for more than $4 billion in spending on transit capital to complete a system that will take the transit commuting number from 18 per cent to perhaps 25 per cent. It doesn’t seem much of a gain for the expense.”32 In terms of respecting the principle of “fiscal responsibility” by making use of existing infrastructure, the lrt plan was oblivious to the significant investments (over $500 million) made over twenty-five years to create Ottawa’s Bus Rapid Transit (brt) system, including the construction of 16 miles of bus dedicated “transitways” that incorporate 26 stations. The brt system was intentionally built to accommodate future conversion to lrt. As well, the lrt plan ignored the fact that the Ottawa-Gatineau region already has significant rail infrastructure. The Friends of the OTrain lobby group and the mayor’s subsequent task force on Transportation have both recommended greater use of these existing infrastructure assets in any future plans.

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Conduct an Open and Participatory Process According to the principle of “a responsible and responsive City,” the City of Ottawa was required to conduct business “in a broad and open way that makes it easy for everyone to participate and collaborate.” However, the process used by the City to manage the discussion and debate pertaining to the lrt project was antithetical to this principle: controversy surrounded the lack of public transparency and participation. The contracting process with Siemens, while not the only factor, played a key part in the City adopting an exclusive and often secretive approach to planning. This approach quickly backfired as withholding information about the true cost and scope of the project was the catalyst for triggering doubts about the viability of the 30-kilometre North-South project lrt. In addition, secrecy about the contract led to public uncertainty and suspicion about project costs, especially after the City signed the deal with just two months remaining before the date of the municipal election. As councillor El-Chantiry remarked: “the whole process has been shrouded in secrecy around its legal documents and finances, which has increased public suspicion … there’s a legitimate public concern that Ottawa could be building a municipal white elephant.”33 Councillor Maria McRae observed shortly before the Council decided to kill the project, the public was tired of the secrecy surrounding the signed contract with the Siemens-led consortium. “I think that’s wrong. Why the secrecy? … We’ve got a public that supports light rail. We’re just not sure about the route. The more we do in public, the better it will be.”34 City Councillor Rick Chiarelli suggested that, “The bidding process was set up to put an iron lock on information and so the information was coming to council sporadically and out of context. It became self-defeating.”35 Councillor Gord Hunter’s assessment was more blunt: “There seems to have been a concerted effort to hide the truth.”36 As the Ottawa Citizen claimed, this secrecy led to “structured confusion” and was to blame for the demise of a “flawed project.” As concern grew, it also led to the bizarre spectacle of city councillors having to vote on whether or not to go ahead with the city’s largest ever project without ever knowing the true costs, without ever seeing the contract and without ever knowing the legal costs and implications associated with cancelling the project (estimates ranged between zero dollars and the full cost of the project!). Even though lrt had become the defining issue in the November 2006 council and mayoral elections, the public and mayoral challengers were also in the dark about these key issues producing a bland debate couched in vague election slogans such as “fix it don’t nix it.” In justifying the need for secrecy surrounding the contract with Siemens, the City’s project manager explained that confidentiality provisions had to remain in effect, even after it was signed.37 The contract contained propriety information that would reveal the strategy used by the consortium in its

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banking arrangements and the detailed costs used to estimate project components. Such information would be useful to competitors in the commuter-rail business. Since each of the bidding consortia had invested at least $4 million in developing their proposals over six months, they were not willing to make all of the details in their plans public “without the financial reward of the contract.”38 The need for private sector partners to protect business information is in conflict with the demand for transparency in public works procurement processes. Even if an agreement of non-disclosure is signed between a municipal government and a private sector company, a contractual agreement that involves the expenditure of public funds is subject to provincial freedom of information law.39 A non-disclosure agreement could therefore be subject to legal challenge. As Councillor Rick Chiarelli pointed out, “There is a public interest to protect but council is not protecting that public interest by keeping the contract secret. The public should always be in the loop.”40 Unable to get access to the contract ourselves, it is still unclear to us how much of the secrecy surrounding the project was due to the private contractors and how much was due to the city. According to Guenther Scholz, the president and ceo of Siemens-Canada Ltd, the city was also responsible for inserting confidentiality into the contract.41 Irrespective of the source of the confidentiality, because the mayor was the only elected official to have seen the contract, this knowledge became a source of political power over other mayoral candidates, councillors and the public. Although we will never know the full extent or real source of the confidentiality, there is no question that involving the private sector in building public works projects creates a dilemma: “Where does the public’s right to know end, and when should the corporate right to privacy prevail?”42 Until such parameters are mutually defined and acceptable to all partners involved in public infrastructure projects such as the lrt, confusion and political opportunism will continue to dominate, antithetical as this is to the City’s principle that it will be “a responsible and responsive City” “that conducts business in a broad and open way that makes it easy for everyone to participate and collaborate.” Partnerships To be consistent with another principle of “a responsible and responsive City,” the city has declared that it needs to work with other levels of government, the private sector and community-based organizations to achieve objectives.” However, as we have pointed out, the issue of confidentiality when involving the private sector in building public works projects can run counter to the need to keep the public and community-based organizations “in the loop.” The debacle of the lrt project has also revealed the risks in working with other levels of government. Public uneasiness about the lrt contract with Siemens was reinforced by comments made in October 2006 by Federal Minister John Baird. After

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demanding to see the contract and reviewing it during the height of the municipal election, Baird publicly voiced his concerns about the due diligence that had been carried out and suggested that there was the potential for serious cost overruns for the project. He challenged cost estimates, citing the failure of the contract to adequately deal with a number of key elements of the project, such as the cost of the maintenance yard and a lack of contingency funds. In what turned out to be the beginning of the end for lrt in Ottawa, he also insisted that the council vote again to reaffirm the project following the mayoral and council elections, before the federal government would hand over the funding. For some Mr. Baird’s intervention was legitimate given the federal government had committed to investing $200 million in the project, his concern about the contract and the fact that the project had become a major election issue. However, others saw the federal intervention as political interference since the federal government does not have a constitutional right to intervene in municipal issues. Bitterness about the intervention was fuelled by speculation that Mr Baird, a long time adversary of Mayor Chiarelli since their time in provincial politics, favoured mayoral candidate Larry O’Brien who campaigned promising to reconsider the North-South rail project: “In fact documents obtained by the Ottawa Citizen through access to information suggest that Mr. Baird was practising partisan politics, something at which he is more adept than economics. In short, the then Treasury Board president was trying to destroy the mayoral campaign of his arch-political enemy, Bob Chiarelli. He succeeded at that admirably, even getting his political ally Larry O’Brien into the mayor’s chair.”43 When the council subsequently voted narrowly to scrap the project, supporters of lrt and local autonomy were quick to suggest that the timing and nature of Mr Baird’s intervention helped politicize an issue on which council had already voted positively 55 times over 6 years: “[Mr Baird’s] letter turned a done deal into open season. The project became a media and political feeding frenzy as old arguments were rethreaded into the sound bites of a municipal election.”44 Others were even more blunt in their assessment of Mr. Baird’s decision to force another vote describing his role as “misguided and very political … [when he] … stuck it to former mayor Bob Chiarelli.”45 As subsequent interventions by Premier McGuinty have demonstrated, tri-level partnership agreements are fraught with political and personal tensions that can easily undermine a project with low public support and poor leadership. Although the City embarked on a process to establish tri-level agreements with the federal and provincial governments to deliver lrt, we question the extent or degree to which those involved in the project endeavoured to “work with” the other levels of government. Working with partners must mean more than simply taking the money on offer before proceeding in a unilateral and secretive manner. While the federal and provincial governments are not

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without blame and the manner of their interventions has been unfortunate, had the City established widespread public support and genuine commitment from Council, federal and provincial politicians would not have been able or so eager to exploit weaknesses in the project, whatever their motives. Public Awareness Public awareness, the last criterion of the principle of “a responsible and responsive City,” demands that the City educate the public about important issues “in order to raise awareness and understanding to enable the public to make knowledgeable choices.” The City’s approach to “educating” the public about the value of lrt was more about marketing rather than “raising awareness and understanding” of proposed transit solutions and alternatives. On key issues such as the need for North-South lrt, population growth, ridership figures, the transportation master plan, contracts and costs, the City did little to educate the public while doing much to obfuscate and confuse rendering informed and “knowledgeable choices” impossible. Even the full projected costs of lrt project were never fully disclosed to the public. During the evaluation of the bids to construct the lrt, the City complicated what was understood to be the real cost of the project by making adjustments to what was to be included in the contract with the successful bidder. The winning bid from Siemens – its “Design-Build” price – was $721 million, which included the base rail project and the construction of a bridge. However, these costs excluded the maintenance yard and operation ($71.9 million in the winning bid from Siemens) as well as the maintenance costs over 15 years (the Siemens” bid was $159.6 million). As the Ottawa Citizen reported: “When all the components were added up, Siemens” bid came to $953.2 million … Throughout the light-rail discussions and citywide debate, however, the city constantly referred to the cost of the budget as $725 million. The primary focus on that base figure, to the exclusion of the additional costs, was a big part of the confusion and controversy that later engulfed the project and sank it.”46 City officials further complicated the process by excluding money for contingencies, property acquisition and utility relocation and later removed the cost of building a bridge (originally part of the bidding process) and water and sewer infrastructure that would be affected by the construction of the lrt. The “juggling of the numbers was confusing and misleading to the public, and made the project a tough sell.”47 In the search for answers as to why the project failed, some in the media have blamed the “botched” process that provided councillors and the public with insufficient information about the project costs and its overall benefits. Through documents obtained under freedom of information that provided insight into the “complex bidding process” for the project, the Citizen concluded that, “in the crucial first seven or eight weeks after Siemens won the

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bid, city bureaucrats, perhaps unwittingly, failed to publicly provide all the information they had on the scope and cost of the project.”48 There was certainly significant confusion about what the lrt project entailed. Councillors and members of the general public were unclear about the components that pertained directly to the construction of the electric train as well as the related infrastructure and its costs. As the Ottawa Citizen observed, the City was largely to blame: “Having tendered a project with several components, (city bureaucrats) only focused on the cost of the rail line in public discussions, ignoring other key parts and leaving themselves vulnerable to accusations that they were hiding the true costs.”49 As Councillor Diane Deans admitted, “I don’t think it was clear enough to the public what it was costing us and, to a certain extent, we allowed that to happen.”50 Although obfuscation and deliberate misrepresentation of costs and other information is common with most large-scale infrastructure projects, it is clearly inconsistent with the aims of “educating the public so they can make informed choices.” Deliberately understating costs and overstating benefits can be a successful strategy, but it is not without risks in the fish bowl of municipal politics where public and media scrutiny tends to be high, especially when other levels of government are financially implicated. Once it appears to the public that the full costs or facts are not being revealed to the public, the chances of success can diminish rapidly.

c o n c lu s i o n Implications for Smart Growth – where now? Since becoming mayor, Larry O’Brien has set out to chart a new course for the City of Ottawa. The Mayor’s Task Force on Transportation issued its final report on June 1, 2007, calling for a new approach that would create “a transit system that is enjoyable to ride, accessible, efficient, environmentally sound and developed in accordance with the principles of smart growth.”51 The proposed lrt system would “use existing rail corridors and rights-of-way to build an integrated, region-wide, light rail system modelled on the O-Train.” However, the Task Force acknowledged in the Report that it “had neither the ability nor the access to the necessary expertise in the time available to cost out (the) medium- and long-term recommendations.” Given the considerable concerns expressed about the “real” costs of building the recently failed lrt proposal, continued scepticism from the public/taxpayers can be expected. The Council has yet to pronounce itself on the approach outlined. Ken Gray describes the Mayor’s Task Force as “an abysmal failure” and sees a hidden motive in the “the vague and poorly costed report” that was produced. However, he believes that the failure of lrt would not be considered as “bad news” for the mayor: “He has been dubious about light rail from the

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beginning. His voters drive cars and want wider roads … Mr. O’Brien has promised four years of tax freezes. Without light rail, he failed to meet his zero target this year. If the previous rail plan would have cost property taxpayers five per cent on their bills, that would just take Mr. O’Brien farther from his freeze. So perhaps this plan was designed to fail. There is no way provincial and federal bureaucrats will approve such a slipshod scheme.”52 The mayor has also undertaken a series of consultations culminating in the creation of “draft Strategic Directions” that were “intended to guide the work of the City for the remainder of 2007 to the end of 2010 … Once approved, the Strategic Directions will be the basis for the development of a full City Corporate Plan.”53 Some on Council have expressed their concerns over this new “visioning” process, accusing the mayor of trying to rewrite major municipal policies.”54 When challenged that his efforts were being directed to “rewrite” the official plan for the City, the mayor responded that he was just “moving his mandate” forward: “I was elected on a mandate of change to run the city more like a business, and that’s what I’m doing.”55 However, the mayor’s attempt to “run the City as a business” ignores one of the key principles set out for municipal governments by the Province of Ontario as, “At its core, Smart Growth is about building consensus and creating partnerships … (getting) everyone working toward the same goals requires building consensus among key stakeholders, integrating decision-making within and among governments and gaining broad public support.”56 The mayor’s unilateralism, which may well be suited to that of a ceo in the private sector, is ill-suited to the complexities of consensus building and partnerships needed in municipal politics, particularly for a City that commits to Smart Growth practices. As well, the mayor’s intent to develop short-term priorities in a “City Corporate Plan” for the remainder of Council’s three-and-a-half-year term flies in the face of the 30-year framework in Ontario Smart Growth and the 20-year timeline for Ottawa 20/20. The City has demonstrated that it has the capacity to plan. Rather, its shortcomings are more in evidence during the implementation stage, as was made abundantly clear during the recently aborted lrt process. While defining the criteria of “a responsible and responsive city,” the City failed remarkably in acting in accordance with the expectations for accountability, fiscal responsibility, conducting an open and participatory process, working effectively in partnerships, and in educating the public about important issues. In our examination of the Ottawa lrt case study, we found that in order to adequately address complex issues associated with transportation and urban growth, process is crucial if acceptable and sustainable outcomes are to emerge. However, given the ward-centric, parochial nature of municipal politics in Ottawa, we question whether the Council is committed to implementing the principles of Smart Growth and the transportation solutions

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needed to deal with growth in the Ottawa region over the long term. Even if they are, having experienced the costly debacle of the failed lrt project, City of Ottawa taxpayers may provide intractable opposition to progressive urban transport solutions, especially as, through amalgamation and growth, many more of them now reside and work outside of the downtown core.57 While the Ontario government has taken a regional perspective of transportation priorities for the Greater Golden Horseshoe58 – establishing the Greater Toronto Transportation Authority and linking major investments within the region – a similar approach is noticeably absent for the eastern Ontario region. We believe that, to achieve the goals of Smart Growth and Ottawa 20/20, the province will need to intervene directly, perhaps creating a regional transportation authority such as that which exists in other city regions that would oversee major urban transport issues.59

notes 1 Christopher Stoney and Robert Hilton, “Dreams, Deception and Delusion: The Derailing of Ottawa’s Light Rail Transit Plans,” Revue Gouvernance 4, 1 (2007), available at: http://www.revuegouvernance.ca/home-en.html?&page_id=1&lang_ id=1& 2 City of Ottawa, 20/20 Transportation Master Plan (City of Ottawa, 2003). 3 Pierre Johnson, Office of Councillor Clive Doucet, email dated Tuesday June 12, 2007. 4 Clive Doucet, “On the Wrong Track,” Ottawa Citizen, June 16, 2007. 5 Jeff Gray, “Minding the gaps in funding for transit,” Globe and Mail, March 10, 2007, A7. 6 City of Ottawa, announcement May 23, 2003. 7 Ken Gray, “The kind of city we want,” Ottawa Citizen, February 23, 2007, F4. 8 Ibid. 9 News Release issued by Infrastructure Canada, “Long-Term Support for Ottawa Public Transit $600 Million Investment in Light Rail Transit,” May 14, 2004. 10 Ministry of Municipal Affairs of Ontario, Ontario Smart Growth Overview (Ministry of Municipal Affairs of Ontario, February 11, 2002). 11 Ibid., emphasis added. 12 Ministry of Municipal Affairs of Ontario, Smart Growth in Eastern Ontario (Ministry of Municipal Affairs of Ontario, June 13, 2003). 13 Eastern Ontario Smart Growth Panel, Shape the Future: Final Report of the Eastern Ontario Smart Growth Panel, (October 2003), 1, available at http://www.pir.gov.on.ca/ english/aboutpir/publications/EasternFinalENG.pdf 14 Ibid., 1. 15 Ibid., 8. 16 Ibid, 8. 17 City of Ottawa website, “A Window on Ottawa 20/20,” available at: http://ottawa.ca/ city_services/planningzoning/2020/window/wrapup1_en.shtml; accessed November 27, 2007.

91 Ottawa’s Failure to Deliver Sustainable Urban Transit 18 City of Ottawa, “City of Ottawa Master Transportation Plan,” previously available at: http://www.ottawa.ca/residents/lrt/master/index_en.shtml (no longer accessible). 19 Ibid. 20 David Reevely, “Climb on board the Meech train,” Ottawa Citizen, February 20, 2007, C4. 21 The mayoral race was actually a three way contest between two candidates (Bob Chiarelli and Alex Munter) broadly in favour of the lrt project and Larry O’Brien who opposed it. 22 The “new” Council in fact consisted of many faces from the previous Council. Apart from the new mayor, many councillors were re-elected. 23 The mandate of the mayor’s advisory committee is available at: http://www.ottawa.ca/ city_hall/mayor_council/mayor/terms_reference/index_en.html 24 Randall Denley, “City Hall’s not listening,” Ottawa Citizen, January 25, 2007, C1. 25 Randall Denley, “Council needs a leader: Can’t someone please stand up?” Ottawa Citizen, May 31, 2007, D1. 26 Mohammed Adam, “Shattered dream: How ‘structured confusion’ killed Ottawa’s light rail,” Ottawa Citizen, January 13, 2007, D7. 27 Randall Denley, “Planners should use real numbers,” Ottawa Citizen, March 14, 2007, C1. 28 Randall Denley, “City Hall’s not listening,” Ottawa Citizen, January 25, 2007, C1. 29 Ottawa Citizen, Editorial, “Think practical on rail plan,” June 7, 2007, D4. 30 Randall Denley, “City Hall’s not listening,” Ottawa Citizen, January 25, 2007, C1. 31 Randall Denley, “Finally, someone’s put a stop to light-rail madness,” Ottawa Citizen, December 13, 2006, C1. 32 Randall Denley, “Drop big rail dream, get on the bus,” Ottawa Citizen, June 19, 2007, C1. 33 Patrick Dare and Peter Lafaro, “McGuinty comments fire up north-south rail advocates,” Ottawa Citizen, February 23, 2007, F10. 34 Patrick Dare, “Councillors get pep talk on light rail: Many skeptical of benefit claims, upset details to be revealed in secret,” Ottawa Citizen, November 24, 2006, F1. 35 Mohammed Adam “Shattered dream …” Ottawa Citizen, January 13, 2007, D7. 36 Ibid. 37 Patrick Dare and Mohammed Adam, “Secret contract likely to remain so,” Ottawa Citizen, January 13, 2007, D1. 38 Ibid. 39 Ibid. 40 Ibid. 41 Mr. Scholz addressed a public audience at Carleton University, March 8, 2007, at which both authors were present. 42 Ibid. 43 Ken Gray, “Mr. Baird’s municipal preoccupation,” Ottawa Citizen, January 26, 2007, F4. 44 Clive Doucet, “Here’s what’s wrong with city hall,” Globe and Mail, December 27, 2006, A 21.

92 Robert Hilton and Christopher Stoney 45 46 47 48 49 50 51

52 53 54 55 56 57 58

59

Sue Sherring, “All council roads lead to nowhere,” Ottawa Sun, December 15, 2006. Mohammed Adam, “Shattered dream …” Ibid. Ibid. Ibid. Ibid. Mayor’s Task Force on Transportation, “Moving Ottawa: Final Report of the Mayor’s Task Force on Transportation (City of Ottawa, June 1, 2007), 5. Emphasis added. Available at http://moving-ottawa.ca/downloads/report-english.pdf. Ken Gray, “Say so long to the choo-choo,” Ottawa Citizen,June 15, 2007 , F4. City of Ottawa, Draft Strategic Directions, 2007, (City of Ottawa,), 3. Jake Rupert, “Doucet, mayor bicker over ‘visioning’,” Ottawa Citizen, July 10, 2007, C1. Ibid. Ministry of Municipal Affairs of Ontario, Smart Growth in Eastern Ontario. Rural residents were to be exempted from paying for the lrt project claiming successfully they would derive no benefit from it. In “Places to Grow: Better Choices. Brighter Future. The Growth Plan for the Greater Golden Horseshoe,” the Government of Ontario committed on June 16, 2006 “to deliver over $8.3 billion in infrastructure investment to the Greater Golden Horseshoe. The Growth Plan for the Greater Golden Horseshoe identifies transit investment as the first priority for moving people in the region. See www.pir.gov.on.ca. A successful model exists in B.C. The Greater Transportation Authority (Translink) provides coordinated planning, funding and oversight of service delivery for much of the province’s lower mainland.

5 The Social Foundations for Sustainability: Carbon, Creativity and the Failure of Canadian Forestry Strategy d av i d r o b i n s o n

The most remarkable aspect of the policy regime for Northern Ontario is its astonishing failure in the second half of the 20th century to convert the enormous natural resource base into viable economic development in the region. Building on the forest resource is the only available development strategy for Northern Ontario. Expanding value-added production is virtually the definition of building on the resource base. The failure to make a transition from commodity production to wood-based value-added production in Northern Ontario is the key economic policy issue for the region. In the absence of growth in secondary wood industry, labour-replacing technological change inevitably brings falling employment and closing mills. It is difficult to appreciate the magnitude of the resulting economic reversal. The population of White River, for example, a community dependent on a saw-mill that nearly closed in 2002 and is now scheduled to close later in 2007, fell 15.3 percent between 2001 and 2006. The nearest communities to the east declined as well. Wawa lost 12.6 percent of its population, Chapleau 16.9 percent, Hornepayne 11.2 percent, Dubreuilville 20.1 percent, and Manitouwadge, 22.0 percent. To the west, Nipigon lost 10.8 percent and Marathon 12.5 percent. Of the 133 Ontario communities identified as highly forest-sector dependent in the Ontario State of the Forest Report in 2001, almost 60 percent were described as “vulnerable” should their primary forest sector economic activity fail. The entire Thunder Bay district lost 1.2 percent of its population despite small gains in metropolitan Thunder Bay. To the east, the entire District of Algoma declined by almost 1 percent despite growth in the City of Sault Ste. Marie. Algoma has 0.86 of the population of pei in an area 8.5 times that of the island province. By way of contrast, Ontario’s

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population grew by 6.6 percent between 2001 and 2006, and Canada’s population by 5.4 percent. Even under the narrowest definition Canada’s forest sector is not producing economic development in Northern Ontario. The focus of this paper is the future of the forestry communities in Northern Ontario. Their general situation is similar to that of forestry communities in Quebec and the western provinces where the tenure regimes are similar. Because natural resources are within provincial jurisdiction and Canadian forests are largely owned by the provinces, forest policy succeeds and fails at the provincial level. The paper is organized as follows. Section 2 describes Northern Ontario, Section 3 summarizes the evolution of the current policy regime. Section 4 provides a link to the current environmental situation. Section 5 reviews the conditions for economic development in a resource based economy. The central problem, it is argued, is the assignment of property rights. Section 6 provides a theoretical analysis of the economics of forest tenure, showing why Canada’s commitments may require a shift to community-based forestry. Section 7 examines the limited and possibly devious Federal role and the final section offers a conclusion.

n o r t h e r n o n ta r i o Northern Ontario is large. It covers nearly ninety percent of the Province of Ontario’s land area. It might well have developed as a province like Saskatchewan, Manitoba or Alberta, but in the run-up to confederation it was swallowed by Upper Canada. If it had become a province, only bc and Quebec would be larger. The Thunder Bay District alone has an area 18.2 times that of Prince Edward Island and a population 14,000 larger. It would have the eighth largest provincial population, ahead of pei and Newfoundland (including Labrador). Its population is over seven times that of the three northern Territories together. With 43 percent of Ontario’s total aboriginal population, Northern Ontario is home for twice as many of aboriginal descent as any of Canada’s northern territories. The economy of Northern Ontario remains dramatically different from that of Southern Ontario. The region produces most of the province’s wood and metals, and the two sectors provide major export revenues. Diversification within the region is extremely limited, however. Compared to the rest of the province, only half as many Northerners work in finance, insurance, real estate and leasing, information, culture, and recreation, or science and technical services. The public sector – healthcare, education, and public administration – is disproportionately large. Because of the industrial structure of the region, 40.5 per cent of northern employees are unionized, compared to 28.5 per cent of employees in the province.1 Despite its size and distinct economy, Northern Ontario barely exists as an administrative unit. With fewer than 800,000 people, the region is divided

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into 10 territorial districts, 145 municipalities, two Local Health Integration Networks, 102 First Nations, and over 150 unincorporated communities, including 46 Local Services Boards, and 42 of Ontario’s 47 Sustainable Forest Licenses. Areas with municipal organization cover perhaps 10 per cent of the region. The rest of the land area is under direct provincial administration. According to a report prepared for the Pan Northern Steering Committee and the Department of Foreign Affairs & International Trade, the “development landscape is a patchwork of organizations that lack coordination.”2 Funding decisions for economic development are made by the appointed board of the Northern Ontario Heritage Fund and by FedNor, a federal agency. Neither employs development economists or planners. Where both Saskatchewan and pei enjoy the convenience of provincial accounts compiled by Statistics Canada, information on the northern economy is lumped in with the Ontario data. The general picture is of a region with severely limited autonomy that produces large resource-based export revenues with profits going to companies based outside of the region and taxes going to general provincial and federal revenue. This essentially colonial status is the underlying cause of the region’s economic retardation.

p o l i c y- d r i v e n e vo l u t i o n The situation in Ontario’s forestry sector is the almost inevitable result of a tenure system adopted over 180 years ago. Crown ownership with private harvesting was formally enshrined in the New Brunswick’s Crown Timber Act of 1837 and was made a principle of the British North America Act of 1867. Provincial ownership of and jurisdiction over natural resources differs little from the system of Royal monopoly abandoned long ago in the rest of the economy. In the early 20th century nearly one quarter of the Ontario government’s revenue was derived from the taxation of Northern Ontario resource, but income from harvesting charges is now only about $200 million in a total budget of $89 billion. The most imaginative and far-reaching economic development decision for Northern Ontario was the so-called “manufacturing condition” adopted in 1897 when Ontario banned the export of raw saw-logs. For decades before the protectionist U.S. Dingley tariff in 1897, Ontario white pine lumber exports to the us had been rising. Lumber was considered a manufactured good, so the tariff threatened lumber mills in Canada. The Ontario government responded by requiring all licence holders to manufacture their saw logs in Canada. The commitment to build, operate or supply an Ontario wood-processing plant remains one of the key requirements for granting long-term tenures. Cheap local hydroelectric power and improved transportation made it possible to attract mills and the population to operate them.

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As a result, primary processing, including pulp and paper mills3 would be located in the region. In the absence of an active policy of supporting woodbased secondary industry, however, most secondary processing would develop in southern Ontario or abroad. Of the 84,000 people directly employed in Ontario’s forest products industry in 2005, 26,000 were located in Northern Ontario. This included 4,800 in logging (out of 8,000 in Ontario), 11,800 in wood product manufacturing (out of 39,000 in Ontario), and 9,500 in paper manufacturing (out of 34,000 in Ontario). The basic structure of the northern forestry industry had important implications. First, once the wood supply was fully allocated there would be little further impetus to economic development. As the Forintek4 Technology Roadmap for the lumber industry notes, “any form of growth will have to be based on improved utilisation of the existing resource and process diversification towards value-added products.” Second, without growth in the secondary sector, scale economies and labour-saving technological change would eventually dominate and employment would inevitably fall: “the focus turned to reducing manpower costs.”5 From 1997 to 2001 forest sector labour productivity rose twice as fast as manufacturing productivity in general, and from 2001 to 2005 it rose at nearly five times manufacturing’s rate of 1.2 per cent. Gains were achieved partly by closing plants, a process that generally raises average productivity. Production volume kept rising more or less steadily until 2004, but employment started to decline in 2001. Between 2003 and 2005 a total of 2,200 direct jobs were lost in Ontario. Lumber industry jobs declined by 8.9 percent in 2006. National employment in the lumber industry plunged 27 percent from an all-time high of 74,145 in 2000 to 54,454 in 2006.6 Ontario’s legacy tenure system has proven incapable of supporting sustained economic and social development in the region.

the environment The key environmental issue is the uncertain but potentially dramatic impact of climate change on the region. There is consensus among scientific authorities that climate will change and that this change will affect Ontario’s natural resources.7 Models predict dramatic changes in forest composition and cover in Ontario based on changes in temperature and precipitation. The southern boundary of the true Boreal Forest Region8 will move northward by perhaps 300 km, displaced by the northward expansion of temperate conifer and hardwood species of the Great Lakes-St Lawrence Forest Region. The impact is uncertain because detailed research on the impacts for Northern Ontario was just beginning in late 2006.9 Even small climatic changes can have dramatic effects on the social fabric and economy of the region. The basic condition for ecological

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sustainability is that the sum of the harvest (H), loss to fire (L), and predation (P) (by insects) must not exceed growth (G) in a stable state or H + F +P ≤ G Projections vary, but given expected drying in the west of the province, possibly amplified by desertification in the prairies,10 growth is expected to decline in many areas. Insect losses are expected to increase by as much as 50 per cent as trees are stressed by reduced and increasingly variable moisture.11 Fire losses are expected to double.12 Reduced harvests will almost certainly be required to sustain the forests.13 At the same time the global importance of Ontario’s forests as a carbon sink is likely to increase. The region stores, according to estimates by ForestEthics, about 8.5 billion tonnes of carbon in its biomass and soils, roughly 17.5 percent of the total carbon stored in Canada’s entire Boreal forest. Maintaining the level of sequestration in standing wood and soils is likely to require increasingly intensive forest management. Low intensity management of the forest is now a high risk option. Without compensating measures the reduction in harvestable wood described above is likely to be accompanied by a major reduction in total carbon storage in boreal regions including Northern Ontario. A reasonable estimate14 of the value of annual carbon sequestration by Ontario sawmills is just over $28,000,00015 at current prices ($15/tonne). Pulp and paper products sequester additional carbon.16 If the provincial and federal governments can find a way monetize the service, as the Kyoto Accord permits, carbon sequestration in Northern Ontario forest products could provide a revenue stream of over $100 million annually to support the environmental services of forest communities. Canada is committed to the potentially conflicting goals of having as much forest as possible, capturing as much carbon as possible over the long-run and having as many long-lasting forest-based jobs as possible. The goals are compatible because the communities currently in decline live by harvesting wood, which is roughly 50 per cent carbon. These communities are the key to managing the boreal forest as a climate modification device. A more intensively managed forest would employ more people and produce more value than the current model while protecting and even expanding Canada’s large contribution to carbon sequestration.

conditions for development The puzzle of Northern Ontario’s development is that the presence of a large supply of wood, the availability of technology, capital and skilled immigrants, a sound education system, a stable government – all features that

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might support diversification around the basic resource – failed to attract or produce a population with the required skills and enterprise. The obvious explanation follows from the theory of comparative advantage – a region rich in resources will export resources. The “resource trap” theory provides a less optimistic explanation. As Sachs and Warner point out, “One of the surprising features of modern economic growth is that economies with abundant natural resources have tended to grow less rapidly than natural resourcescarce economies.”17 Northern Ontario is rich not only in forest resources, but also in mineral resources. Michael Ross18 compared the world’s 25 most mineral dependent states and discovered high mineral dependence was correlated to a host of development problems, including a low ranking on the Human Development Index, a high percentage of population in poverty, low economic growth, high under-five mortality, low life expectancy, high income inequality, vulnerability to economic shocks, and lack of government effectiveness. These are commonly seen as characteristics of developing countries, but they also characterize Northern Ontario relative to the rest of Canada. Resource supply does not necessarily create a resource trap. Recent trade theory has modified the traditional theory of comparative advantage. As the influential report “Canada at the Crossroads” pointed out in 1991, “the factors most important to modern industrial competition and to national prosperity are created, not inherited.”19 The government’s proper role, according to the theory,20 is to “promote upgrading” so that the country or a region keeps developing more advanced and more specialized productive capacity. Finland, for example, with a resource base similar to that of Northern Ontario, exports technology based on its resource sector and has successfully move into value-added wood products. The Finnish Value Added Wood Chain programme initiated in 1998 set out to double the gross sales of the value-added wood industry within ten years by increasing the value-added in Finnish wood products and expanding wood use. Significantly, the Finnish strategy drew directly on the evolving theory of clusters and created comparative advantage.21 The relevant policy question in this framework how to create a productive system that is advanced compared to those of other countries and regions. The question that should be asked first, however, is what has prevented Northern Ontario from building a vigorous secondary sector based on its initial comparative advantage in the primary sector. There are three partial answers – government neglect, industry self-interest, and feeble local institutions. Government in Ontario has supported industrial forestry and commodity exports literally from before confederation. It has focussed on improving the competitiveness of commodity production, which ultimately means replacing labour. It has not made a strong commitment, as both Finland and Sweden have, to the development of value-added industries in

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the forestry regions. Provincial policy actually discourages the development of value-added industry according to a report on encouraging investment in Northern Ontario: “A value added wood strategy to promote the attraction and development of this sector in Northern Ontario is made difficult due to the fibre control policies of the Ministry of Natural Resources and the anticipated fibre supply which is expected to peak in 5–7 years. As result, many existing businesses have to source their supply from other parts of Canada – Manitoba, B.C. and Quebec. Any new initiatives will face almost insurmountable difficulties in securing fibre or fibre approvals.”22 In essence we have a classic case of regulatory capture, in which a regulator intended to act in the public interest comes to be dominated by the vested interests of the existing incumbents in the industry that it oversees. The classic source is Stigler, who argued that “every industry or occupation that has enough political power to utilize the state will seek to control entry. In addition, the regulatory policy will often be so fashioned as to retard the rate of growth of new firms.”23 British Columbia provides evidence that primary producers have resisted the development of value added industry. The situation in Northern Ontario is similar but not as thoroughly documented. In 1993 the Select Standing Committee on Forests, Energy, Mines and Petroleum Resources of the bc Legislature reported24 that there was a “conflict” between the “primary sector and the value-added sector” in the province and that the value-added sector was not on “an equal footing” with the major forest companies which control the supply of lumber and hold tenure over the lion’s share of the forest resource. A 1999 report by the Council of Forest Industries, a trade organization of the big forestry companies in bc in British Columbia argued that increase the “amounts of wood … made available to value-added manufacturers.” would cause “problems.” In fact, Kozak et al report25 that the majority of bc’s secondary wood manufacturers were experiencing lumber procurement problems and “secondary producers that produce less than 1000 mbf per year are particularly disenfranchised.” Policies developed largely through collaboration with primary industry26 restrict the flow of wood to secondary producers. This is arguably the fundamental barrier to regional development because it creates a society dependent on the primary producers. In any “value-added product” the value that is added is the result of design and fabrications skills. Adding value requires a population with those skills. The population of Northern Ontario does not have the relative surplus of the skills required to add value to the wood supply at this time. When the supply of wood is locked up, local entrepreneurs and ordinary workers are disinclined to invest in capacity. Barriers to the flow of wood thus inhibit the growth of human capital needed for value added production, and since value-added secondary producers generate many more jobs per cubic meter of wood than primary producers, these barriers inhibit long-run development as well as immediate employment growth.

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t h e e l e m e n ta r y e c o n o m i c s o f t e n u r e There are strong reasons to believe that the institutions of forest tenure and management in Northern Ontario are a major cause of Northern Ontario’s under-development. Because Canada has very little experience with alternative forestry regimes, including community forestry, it is virtually impossible to use historical data to support or oppose a critique of the system. When experience offers no guidance, the systematic distillation and extension of experience known as “theory” is the main recourse. Applying standard economic theory yields strong and perhaps surprising results. The language of “forest values” is widely used even in policy documents. An uncontroversial principle is that the forests produce many quite distinct “values.” Companies value the wood, the tourism industry values access to the forests, hunters value wildlife for its recreational use and preservationists value wildlife for its own sake or for the diversity and stability it provides to the natural system. The Intergovernmental Panel on Climate Change values the forests and soils for their carbon storage, and watershed authorities value forests because they hold and purify water. Two distinct conceptual frameworks for multi-value processes can be applied. The most common is the externality approach, which shows why leaving out costs or benefits will lead to excess supply or insufficient effort. For example, if forest companies are not paid for carbon sequestration they will cut trees too soon. If roads are subsidized this will expand their use by truckers. The externality approach allows us to squeeze some subtle results out of the familiar supply and demand graph. The joint production model focuses on outputs instead of prices. We might for example, be able to enjoy both wood and recreational services from a forest. We can have some of both, but as we increase the amount of wood taken the recreational value of the forest will decline. The problem is to choose the right mix of these interconnected outputs. To see how the interplay of joint products and differing interests works, consider Figure 1, which shows the possible combinations of wood and recreation for a hypothetical forest. The curve is introduced as the “production possibilities frontier” or the “guns and butter frontier” in the first or second chapter of most first-year textbooks in economics. The ideal point on the curve depends on your point of view. A shareholder in a pulp mill prefers to see more wood harvested. A lodge-owner on the North Shore of Lake Superior, prefers to see less wood harvested. In Figure 1, S* and L* label respectively the most preferred combinations for a shareholder and a lodge owner. First-year textbooks don’t as a rule, introduce the possibility that there might be disagreement about the best combination to choose, but it is exactly that disagreement that makes the forestry problem interesting.

101 Carbon, Creativity, and the Failure of Canadian Forestry Strategy wood

S* C*

possible combinations of wood and recreation

L* recreation Figure 1 Possible combinations of the joint products

In a decentralized economy we assign responsibility to agents whose interests are reasonably well aligned with those of the public. The resulting decisions are roughly what the public wants most of the time. When the Crown first allocated forest rights to harvesters in exchange for Crown revenue, the forests were, from the Crown’s point of view, essentially uninhabited. Only timber values and Crown revenue mattered, and public and private interests were aligned. Changing the way property rights are assigned changes the way the forests are managed. If the owner of the lodge owned the forest company, she would choose some point like C* in Figure 1. The lodge-owner/shareholder would make a choice closer to what society as a whole would choose than either the forestry company or a simple lodge owner would. This is the main argument for privatising forests – a private owner might take all of the values into account. The exact point chosen would depend on the relative revenues to be earned from logging and tourism. If lumber prices were high the lodge-owner/shareholder might decide to sell off all the trees and retire to Florida. If it happened that the lodgeowner/shareholder lived in the region and had several children, she might lean farther towards the recreation values, or she might value the future productivity more heavily as a form of security for her children. Simple as it is, Figure 1 captures many of the relevant economic features of the forest tenure problem. It is clear that neither the lodge owner nor the forestry company should be entrusted with the entire forest. It might work to hand the entire forest, including the rights to the lodge, over to the forestry company. The company would then be like the lodge-owner/shareholder.

102 David Robinson wood

S*

R**

x

R*

x

C*

possible combinations of wood and recreation

L* recreation Figure 2 Regulation

This solution is essentially the same as privatizing the forest entirely, and it is the solution that many economists might suggest. Both Finland and the usa have largely private forests, more intensive forestry and relatively more valueadded wood industries. Although in principle the tenure-holder might be both lodge owner and shareholder, and might want exactly the mix that is best for society at large, such a fortunate coincidence of wants is unlikely. Canada therefore relies heavily on non-market mechanisms for forest management. Government decides how much wood should be taken. Government regulation often takes the form of a performance minimum – for example, by insisting that the company never let the recreational potential fall below R in Figure 2. Government should expect the company to comply only partially, choosing, for example, R*, which is better than S*. In this case the government represents the interests of both the company and the lodge owner, hands control to one side, and then tries to manipulate the behaviour of the agent that has been granted tenure. Regulation imposes “compliance costs” on firms, and generally calls for monitoring and enforcement expenditures by government. In practice the company would often choose R** and argue that it had in fact complied with the regulation. Shading compliance in this way is to be expected because there is often a great deal of money at stake. If the government chose to dispute the issue there would be additional legal costs. In general, if the public wants a small deviation from profit-making behaviour, the cost of regulation is small, but large adjustments can be very costly. A third alternative might be to hand control of the forest over to a body representing the local community, including both those who depend on

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wood

Community decisionmaking body

S*

x

C*

L* recreation Figure 3 Community control internalizes conflict and approximates the social optimum

logging and those who depend on tourism. This is the central element of the community forest approach. It solves the problem of aligning the interests of the decision makers with those of the general public by creating a corporate decision-maker that includes the interests of all the parties, as in Figure 3, and whose interests roughly correspond to the public interests. The extra curves in Figure 3 illustrate politically feasible tradeoffs for the community. They correspond to “social indifference curves” in elementary theory. The resulting decision would again fall somewhere near C*. Arguments that once led the provincial government to decentralizing the forest management plans also lead to local, public tenure-holding. The need for this local and public decision maker is already recognized in principle – the province has created the Local Citizen’s Committees and is now working on what it calls “cooperative sfl s.” Although lcc s are internal advisory bodies, and their membership is screened by district managers, they can serve to bring together the interests of most “stakeholders.” lcc s operate by consensus, and therefore cannot be expected to shift management decisions appreciable from those preferred by the tenure holders. The latest initiative of the Ontario Ministry of Natural Resources, Cooperative sfl s, consist of existing tenure holders, with some advisory participation by First Nations. Cooperative sfl s involve those who have the largest stakes in the existing tenure system. They represent an innovation in management process rather than a reform of the tenure system. Lukert27 has questioned whether the interests of communities are sufficiently aligned with those of the general public for community forestry to

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result in good management decisions. Are the interests of the public not adequately or even better represented by Queen’s Park operating through the Ministry of Natural Resources? Would community forestry produce more wealth than the current corporate tenure system with no higher compliance, monitoring and enforcement costs, or equal wealth with lower compliance, monitoring and enforcement costs? Theory suggests decisions would be both better and cheaper. Certainly community decision making would involve costs and conflict. It would be necessary to invest time and money in providing information, recording decisions, and facilitating public meetings. Two considerations are relevant. First, community decision making and participation will make new resources available for forest management – time and intelligence that is not available in the current system or that is used in oppositional ways. These resources are not costless in the broadest sense, but society is likely to be better off if they are directed toward solving communal problems. Second, and this is extremely important, at least some of the energy and time spent managing communal forests will produce social capital: it is an investment, not a cost. The management of community forests will develop more people with management skills and knowledge that can be used to promote the community. Community forestry itself is a form of joint production, with social capital the invisible and potentially undervalued second product. Lukert raises another important question. He correctly notes that the urban population also has a stake in the forests, and that the preferences of urban environmentalists might differ from those of northerners. Urban dwellers do not depend directly on industrial use of the forests, and have an interest in what Lukert calls passive rather than extractive uses – bird-watching as opposed to hunting, for example. The conflict is real and it is expressed quite vehemently from time to time. It does seem likely, however, that conflicts would be dealt with at least as well under community forestry as they are under corporate tenure. Community interests are generally well aligned with the larger social interest in any case. It is in the long-term interest of the people of the forest communities of Northern Ontario to increase the bioproductivity of the forests and to resist processes that will reduce the bioproductivity. It is in their long-run interest to promote carbon storage and to shift from producing short-lived carbon-based products to longer-lived ones. It is clearly in their interest to promote value-added forest products, which would increase employment and general revenues while allowing for a reduced total harvest. At the same time, the interests of multinational corporations increasingly diverge from those of both the community and the general public. Cubbage, Harou and Sills28 point out that we face a systematic shift in the demand for environmental services: “This rapid expansion in the uses of

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forests as countries develop, combined with the expanded definitions of forest values, forces us to re-think forest policies to achieve these broader social goals. Some traditional forest policies may help us achieve production and protection of a broader set of forest goods and services. However, it seems unlikely that a set of forest policy tools originally designed to achieve production goals will be equally well suited for broader conservation, amenity and social goals.”28 A final question raised by Lukert deserves attention. Why bother maintaining forestry communities that developed to serve an industrial mode that no longer needs them? The answer is not that the communities in some sense deserve special exemption from the forces of the market. A sentimental concern for a dying way of life may be a poor guide to forest policy. The argument rests on the increasing value of these communities to the rest of society. If, as seems likely, climate change, carbon sequestration programs and rising wood values call for more intensive forestry, the people in these communities will be needed. Furthermore, if the tenure system is reformed to encourage the development of value-added forestry – both pre-and post-harvest – then these communities will be the basis of wealth creation to the benefit of the larger society. The interests of the forest communities in Northern Ontario are aligned, not with current social policy, but with a more ambitions and forward-looking forestry policy for Ontario. Two more lessons can be extracted from the basic joint-production model. First, both loggers and the lodge-owners can increase their own payoff at the expense of the other’s. For the community forest organization at a point like C* a move that hurts one member at the expense of another generates no net value. A policy that moves the ppf outward, on the other hand, can benefit everyone. If the set of possible combinations could be expanded to the new dashed line, for example, both the forest company and the lodge owner could be given more of what they want. Any point of the line c-c is better for both. Not only does community decision making deal with certain conflicts, it aligns the interests of its members around constructive activities that increase the opportunities for all members. Expanding the PPF usually requires an investment. A company requires a guarantee that its tenure will last long enough to capture the benefits of the investment and a guarantee that other members of the community will not expropriate the gains from the investment. Neither guarantee is easily provided.29 On the other hand, since a community will expect to last a long time and since the community gains, no matter who receives the benefit, communities should be more willing to invest in increasing forest productivity. Community forestry is therefore more likely to lead to expanded forest productivity than the current tenure system is.

106 David Robinson wood

S*

C

C*

C

L* recreation Figure 4 Expanding productivity

There is another, more subtle, source of inefficiency in the existing tenure system. Even if we know an investment will lead to some point on the segment c-c, we may not know which point we will reach. From the point of a forest-product company, only the gains that the company receives affect the decision to invest. The possibility that others will capture the gains of an investment appears as a financial risk even though there may be no aggregate social risk. Economic theory predicts that whenever private risk exceeds social risk the private sector will under-invest. Community forestry can at least partially solve the four main failures of the existing tenures system, notably the lack of incentives for moving to value-added production, the lack of incentives to invest, the failure to take advantage of the full range of forest values, and the inability to mobilize local human resources and capital effectively. Theoretical considerations therefore strongly favour a change in the tenure system in Northern Ontario.

the federal role: c o v e r t c o m m u n i t y a n i m at i o n ? The federal government has accepted that there is a self-reinforcing climatedriven crisis in forestry and that the federal government has a role in containing the problem. In 2007, for example, the Conservative government committed $200 million to controlling the mountain pine beetle. The federal government has also committed hundreds of million over the years to replacing obsolete technology for forest firms. It continues to subsidize technology research for the forestry industry.

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The role of the federal government in forest management is limited by the constitutional division of powers, however. A long series of jurisdictional disputes settled in favour of the provinces left the federal government with trade issues, sustainability, and the right to fund provincial forest programs. It controls the land only in Native reserves, national parks, federal institutions. As Howlett30 points out, it has no direct interest in the forest rents, although it has considerable power over the industry, most notably through regulation of trade. After the National Forest Congress at Montebello Quebec in 1966 “failed to secure provincial approval of federal leadership in formulation of national forest policy,”31 Prime Minister Pearson dissolved the Department of Forests and began a process of terminating the shared-cost forestry programs put in place since 1950. The federal government continued to support forestry programs under specific agreements, especially those with a significant regional development component. In the face of the federal withdrawal, the Canadian Council of Resource and Environment Ministers and the Science Council of Canada stressed the need for a new national policy. After 1974 the federal government began providing funds to older pulp mills on an ad hoc basis. Interestingly, industry was reporting then as it is now that their technology was no longer competitive.32 Moreover, by 1980 the forestry industry was demanding that the Federal government halt its ad hoc subsidies to producers in specific regions or operating obsolete mills.33 By 1987, according to Howlett, the federal role in forest policy had shrunk to international trade and the sustainability issue both of which have strong international components. The Model Forest program, conceived in 1990 and initiated during the Rio Earth Summit in 1992, may have been an exception, since it gave the Canadian Forest service a direct role in managing certain forests and direct links with community activists within provincial boundaries. It was, however, obviously related to the international movement for sustainability. The Model Forest program had an Ontario analogue in Ontario in four pilot “community forests” launched by the ndp government of Bob Rae. The ndp came to power with a commitment to promoting community forests. The pilot projects were allowed to shrivel by the Conservative government of Mike Harris that followed Mr Rae. The federal government also continues to fund industry research organizations. feric (Forest Engineering Research Institute of Canada), Forintek and Paprican (Pulp and Paper Research Institute of Canada) have been brought together in FPInnovations. Forintek and Paprican had been publicly operated laboratories until they were privatized by Trudeau in 1978. They are dominated by the major forest companies but still largely funded by government. The Canadian Wood Fibre Centre of Natural Resources Canada, a virtual organization with staff scattered across the country, is a new addition to the older industry research centers.

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By 2006, faced with what was widely described as a crisis in the forestry sector, the federal government concluded that the Model Forest Program had been successful, that it could be ended, and that it was time to take another step. A call for proposals was issued for the Canadian Forest Service Forest Communities Program. The emphasis in the new program was much more clearly on communities and the sustainability of communities rather than on the needs of the industry: “This new program is designed to assist forestbased communities develop into environmentally sustainable entities with diverse and robust economies … by supporting communities’ efforts to manage the changes and challenges they face, and to develop the capacity to build on their strengths, identify opportunities and take effective action.”34 The program is very small: eleven projects with a maximum annual federal contribution of $325,000 per year brought the program spending to $17,875,000 for five years.35 Like the Model Forest Program, the Forest Community Program is delicately positioned within the federal jurisdiction but designed to generate a population of advocates that will act within provincial jurisdictions. It has two virtues from the federal point of view: it maintains an active role for the Canadian Forest Service in each province; and it allies the federal government with reformers at the community level, bypassing the alliance between companies and provincial governments to support communities as effective players in the forestry sector. It may be significant that one of the two proposals funded in Ontario is explicit about seeking community control of the region’s forests.36

c o n c lu s i o n Canada’s boreal forests are one of the world’s three greatest intact forest systems, one of its largest carbon sinks, and most important sequestration systems. They are also deeply integrated into human society, as the paper this book is written on, the stick framed-houses that dominate cities throughout much of the world and the ubiquitous role of toilet paper show. Our technologies and property relations have been remaking Canadian forests for centuries. Climate warming threatens to change them still more. If we left the forests alone today, bugs and fires would release enormous amounts of carbon, accelerating global warming, devastating forest communities, and shrinking the forest industry. Public policies will determine the nature of the forest economy for the next century, how many people live in northern Ontario, and how they relate to the forests. Automatic market processes are pushing toward a depopulated forest zone while social and environmental policies call for a forest system with more people producing more value than the current model. Both the existing tenure regime and current provincial policy inhibit the accumulation of the social and human capital required for managing climate change

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and for economic development of the region. Basic economic theory suggests that the existing tenure regime will not produced the necessary changes, but that community forestry on a sufficiently large scale would be consistent with the desired evolution of the forest economy.

notes 1 The rapid decline in well-paid unionized jobs in forestry is one of the most significant social processes underway. 2 Blais & Associates, “Pan –Northern Investment Attraction Strategy: Final Report.” Prepared for the Pan Northern Steering Committee and the Department of Foreign Affairs & International Trade, December 2006. 3 The “manufacturing condition” was applied to pulpwood in 1899. 4 Forintek Canada Corp. “Lumber and Value-Added Wood Products: Special Report, 2000.” (Forintek Canada, 2000). Forintek is a private, non-profit forest product research institute that began as the Forest Products Laboratory at McGill University in 1915. Another laboratory was created at ubc in 1918. The Laboratories were privatized under Trudeau but continue to be largely publicly supported. 5 Forintek, “Special Report.” 6 Statistics Canada. “The Canadian lumber industry: Recent trends,” “Analysis in Brief Series,” 11-621-MWE2007055. (Statistics Canada, 2007). 7 This sentence comes verbatim from the Ontario Ministry of Natural Resources “State of the Forest Report, 2001,” where it is the seventh in a list of problems and issues facing the Forest Program in Ontario. 8 Robert S. McAlpine, “The Impact of Climate Change on Forest Fires and Forest Fire Management in Ontario.” In The Impacts of Climate Change on Ontario’s Forests, eds. Lisa J Buse and S.J. Colombo, Forest research information paper 143. Sault Ste. Marie, Ontario Ministry of Natural Resources. (1998), 143. 9 Based on discussions with senior researchers in the Canadian Forestry Service and the Forest Service Branch of the Ontario Ministry of Natural Resources. 10 David J. Sauchyn, Elaine M. Barrow, Ron F. Hopkinson, Peter R. Leavitt, “Drylands: Holocene Climatic, Geomorphic and Cultural Change on the Canadian Prairies,” Géographie physique et quaternaire 56, 2–3 (2002) 131–34. 11 Insect losses could be much larger if the mountain pine beetle reaches Ontario. 12 Author’s estimates based on discussion with researchers in the Canadian Forests Service and the Forestry Service of Ontario’s Ministry of Natural Resources. Fire losses in particular are a policy variable – it is possible to reduce losses by investing in fire prevention and suppression and by altering silviculture practices. Similarly, insect predation can often be limited. Canada is a leader in biological methods of insect control. 13 Harvests are also projected to decrease by 7.2 percent between 2001 and 2010 as a result of inadequate reforestation previously (“State of the Forest 2001”). Actual harvest was 20–40 per cent below the available stock in the last two decades of the 20th century.

110 David Robinson 14 David. Robinson, “Economic Futures for the Northeast Superior Forest Communities Facing Climate Change.” inord Working Paper #1–07, prepared for the Future of Northern Ontario Forestry Workshop, Laurentian University, February 28, 2007. 15 The estimate is very conservative since the price of carbon emission is politically determined and has been kept artificially low according to the Climate Change Projects Office (ccpo) of the uk Department of Trade & Industry. (Carbon Prices. Available at: http://www.dti.gov.uk/files/file21144.pdf; accessed 7 November 2007). Were the price to rise to $30/tonne, the value would double. 16 Carbon sequestration in paper products is problematic. Studies such as “Carbon Sequestration in Wood and Paper Products” by Kenneth Skog and E. A. Nicholson (us Forest Service Gen.Tech. Rep. RMRS-GTR-59 2000) find high levels of sequestration because much paper ends up in anaerobic landfill. 17 Sachs, J. and A. Warner, “Natural Resource Abundance and Economic Growth,” Development Discussion Paper, No. 517a. (Harvard Institute for International Development,1995). 18 Michael Ross, Extractive Sectors and the Poor (Oxfam America, 2001). 19 Michael M. Porter, and the Monitor Company. Canada at the Crossroads: The Reality of a New Competitive Environment. Business Council on National Issues and Minister of Supply and Services (Government of Canada 1991). 20 R.L. Martin, and M.E. Porter. “Canadian Competitiveness Nine Years after the Crossroads,” Center for the Study of Living Standards (csls) Conference on the Canada – U.S. Productivity Gap. Proceedings. (csls, 2000). 21 Direct links between the large literature on cluster development and innovation systems and Finnish policy development can be seen in Pentti Hyttinen, Ari Mononen and Päivi Pelli, eds. Regional Development Based on Forest Resources – Theories and Practices. Proceedings of the International Seminar, Joensuu, Finland, 14–15 December 1995. 22 Blais & Associates. Pan-Northern Investment Attraction Strategy. 23 G. Stigler, “The theory of economic regulation,” Bell J. Economics and Management Science 2, 1 (1971), 3–21. 24 Legislative Assembly of British Columbia. Lumber Remanufacturing in British Columbia: First report. (Legislative Assembly of British Columbia, 1993). 25 R.A. Kozak, T.C. Maness, and T. Caldecott, “Solid Wood Supply Impediments for Secondary Wood Producers in British Columbia,” The Forestry Chronicle 79, 6 (2003), 1107–20. 26 Michael Howlett and Jeremy Rayner, “The Business Government Nexus: Principle Elements of the Dynamics of the Canadian Forest Policy Regime.” In Michael Howlett, ed., Canadian Forest Policy: Adapting to Change (University of Toronto Press, 2001). 27 Martin Lukert. “Are community Forests the Key to Sustainable Forest Management? Some Economic Considerations,” The Forestry Chronicle 75, 5 (1999), 789–92 . 28 Cubbage Frederick, Patrice Harou, and Erin Sills, “Policy Instruments to Enhance Multi-functional Forest Management,” Forest Policy and Economics 9 (2007), 833–51.

111 Carbon, Creativity, and the Failure of Canadian Forestry Strategy 29 This is the fundamental reason that part of the stumpage fees are used to pay for regeneration services. Firms are not expected to invest in regeneration because the tenure system does not let them capture all of the benefits reliably. 30 Michael Howlett, “The Federal Role in Canadian Forest Policy.” In Michael Howlett, ed., Canadian Forest Policy: Adapting to Change (University of Toronto Press, 2001). 31 Howlett, “The Federal Role.” 32 The “Report of the Task Force on the Forest Products Industry” prepared for the 1978 First Minister’s Conference on the Economy identified four concerns: (1) the cost disadvantage of Canadian producers, especially relative to us producers; (2) a poor climate for major new investments in Canada; (3) difficulties in generating capital; (4) forest resource problems. The list could be republished today. 33 Howlett, “The Federal Role.” 34 Natural Resources Canada. Call for Proposals, Canadian Forest Service Forest Community Program. 35 By way of comparison, Minister of Natural Resources Gary Lunn committed $400 million to the forestry sector as a whole in 2007. $70 million went to bringing the three research institutes, Ferric, Forintek, and Paprican, together under one roof. The previous liberal government had promised more than a billion dollars in aid for forest communities. 36 Sylvie Albert, David Robinson, Luc Duchesne, and David DeYoe, “Transition Strategy for the Northeast Superior Forest Community.” Application for a Forest Community Program, grant from Natural Resources Canada (available on request from author) October 31, 2006.

6 Sticks, Carrots, and Sermons (and Workshops, too): Environment Canada and Calls for a Robust Bird Conservation Toolkit jeremy wilson

Since we know more about birds than most other classes of organisms, we often use avian population trends as a basis for inferences about what is happening to biological diversity in general.1 In Canada, as elsewhere, the signs are ominous. In its Wild Species 2005 report, the Canadian Endangered Species Conservation Council estimates that 13 per cent of the 653 bird species that have been found in Canada are either extinct, extirpated, or in “not secure” categories (endangered, at risk, or “may be at risk”).2 The Committee on the Status of Endangered Wildlife in Canada (cosewic) currently lists 70 birds in its “species at risk” categories.3 Population trend data on non-endangered species indicate an equally disturbing situation. For example, according to the Canadian Shorebird Conservation Plan, “fully two-thirds of Canada’s shorebird populations show downward trends.”4 Analysis of trends for the nearly 300 species monitored over four decades by the Breeding Bird Survey shows that dozens of other bird species are experiencing population declines. This chapter examines Environment Canada’s (ec’s) migratory bird conservation program, using three case studies as a basis for reflections on the department’s responses to forces that threaten birds. These cases were chosen in order to illuminate the processes shaping ec’s response to arguments that regulatory components of its bird conservation toolkit be retained, expanded, or fortified. Our starting place is the notion that, given the complex constellation of factors threatening biodiversity, effective policy responses will be more likely where governments have recourse to the full policy instrument toolkit – sticks, carrots, and sermons. Sermons and carrots do have some advantages, but the effectiveness of these instruments will be greater where authorities

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can credibly threaten to deploy more coercive tools. In Canada and elsewhere, however, governments have for the past few decades sought to reduce reliance on regulatory tools. In the environmental policy field as in others, distrust of “command and control” approaches is one of the hallmark features of the “new governance.” An analysis of how ec has responded to calls for more robust regulation should, then, provide a useful angle from which to consider prospects for effective biodiversity policy. Before turning to our cases, we will introduce ec’s migratory bird conservation responsibilities and approaches.

e n v i r o n m e n t c a n a d a’ s b i r d c o n s e r vat i o n p r o g r a m s Migratory birds are at the centre of ec’s nature and biodiversity conservation projects. It currently lists the restoration, conservation, and enhancement of natural capital as one its three core strategic outcomes.5 It defines biodiversity conservation as one of the three program activities involved in achieving this outcome. Noting that its main biodiversity conservation strategy is “prevention” or “keeping common species common,” the department cites “maintenance of healthy levels of migratory bird populations” alongside “improvement in the status of threatened and endangered species” as key indicators of success in this program area. The roots of ec’s responsibilities for migratory birds can be traced to the 1916 Canada – U.S. Treaty for the Protection of Migratory Birds (or Migratory Birds Convention [mbc]), and the enabling legislation, the Migratory Birds Convention Act (mbca). Migratory birds have, from the outset, been the responsibility of the Canadian Wildlife Service (cws) and its predecessor agencies.6 The cws was a founding component of ec in 1971, and is currently part of ec’s Environmental Stewardship Branch. Although the cws’s organization, mandate, approaches, and preoccupations have changed significantly over its 60 year history, migratory birds have remained at the heart of its self definition. According to its 2000 Strategic Plan, the cws’s mission is to “conserve wildlife and the ecosystems of which they are part, with a particular focus on migratory birds and species at risk.”7 A description of the cws’s approach to bird conservation must highlight elements of both continuity and change. Throughout its history, it has emphasized science-based conservation, relied heavily on the cooperation of provincial wildlife agencies and Canadian conservation organization partners, and worked closely with U.S. conservation agencies and organizations. Its approaches have, however, evolved considerably in response to new problems, technologies, and opportunities. Most importantly, as demonstrated by the twenty year history of the North American Waterfowl Management Plan (nawmp), increased emphasis on habitat conservation

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has led to development of more complex partnership arrangements, especially cross-border ones.8 The cws, then, most definitely participated fully in ec’s post-1990 evolution towards what Bruce Doern describes as a “more networked” form of institution.9 Of particular importance are the cws’s partnerships with provincial wildlife agencies. These relationships have had their ups and downs. For example, officials from the two levels have generally collaborated amicably on issues arising from administration of the mbca, but the cws officials leading nawmp negotiations found the process of reaching an accord with the U.S. much more straightforward than the process of winning provincial backing.10 Historical analysis of the bird conservation relationship would no doubt turn up further evidence of both federal and provincial oscillations in assertiveness. It is not clear, however, whether in this small corner of the broad environmental policy field, these swings have rhymed with Kathryn Harrison’s theory of environmental federalism. She sees shifts in public environmental concern as a determinant of oscillations in the willingness of the federal government to occupy its environmental policy space under the constitution.11 The evolving inclinations of the cws with respect to policy instruments are not easy to summarize. In that it has always anchored its policy work on science, we can say that, like the agencies analyzed by Eric Montpetit in his work on agricultural pollution policy, the cws has favoured approaches based on “science-based persuasion.”12 The flipside of Montpetit’s argument – his claim concerning aversion to “command and control” regulatory approaches – also seems to be valid. The cws’s long involvement in the regulation of direct “take” (i.e. hunting), as well as Environment Canada’s traditional role in regulating pollution, has exerted a countervailing influence, but not one strong enough to produce regulatory responses to the forces responsible for habitat destruction. To the extent allowed by its resources, cws response to these forces has augmented science-based persuasion with incentives programs such as those delivered through the nawmp. Two other developments are germane. First, the cws has tried to broaden its bird foci beyond game birds. The shift to an “all birds” perspective was heralded most clearly by the mid-1990s commitment to the goals of the North American Bird Conservation Initiative. The scope and rapidity of this shift should not be exaggerated. As Burnett reminds us, the cws can point to decades of active research and conservation work on non-game birds – seabirds, shorebirds, and landbirds.13 Despite this work, however, its early emphasis on game birds was strong enough that, as Burnett notes, some observers suggested that cws really stood for “Canadian Waterfowl Service.” Second, since the early 1990s, the cws has been significantly influenced by growing societal concern about endangered species. Again, the shift was less abrupt than might be suggested by a quick survey of cws history. As its work with species such as the Whooping Crane and the Trumpeter Swan illustrates,

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the cws has long been involved in recovery planning, and as far back as the 1970s, it played a lead role in the construction of international and domestic endangered species policy.14 cws involvement with endangered species increased significantly, however, after Canada ratified the Convention on Biological Diversity (CBD) in 1992. The cws led development of the federalprovincial Accord for the Protection of Species at Risk (1996), and played a central role in the lengthy process that culminated in passage of the Species at Risk Act in 2002. Although they represent only a sample of the challenges facing those responsible for federal bird policy, the case studies that follow will add some layers to this introductory sketch.

b i l l c - 1 5 : a d d r e s s i n g s e a b i r d m o r ta l i t y Our first case centres on seabird mortality that results from chronic oil dumping by the shipping industry. Concerns about effects of discharges from bilge pumping have long been expressed by bird conservationists, particularly those near the southeast coast of Newfoundland, where an estimated 30 million seabirds winter each year. cws officials in Newfoundland began systematic analysis of the problem in 1984, establishing that oiling of birds on Canada’s east coast was a more serious problem than in comparable jurisdictions.15 During the 1980s and 1990s, a series of reports and workshops on the problem generated a long list of policy recommendations. Few of these were implemented. A September 2002 report by Francis Wiese for World Wildlife Fund Canada presented a comprehensive assessment of policy inadequacies. Using data from beached bird surveys, Wiese estimated that a minimum of 300,000 seabirds were killed annually by illegal discharges of oil from ships off Canada’s east coast.16 Compared to other jurisdictions, Canada was falling short in all aspects of enforcement, including surveillance, monitoring, investigation, detention, prosecution, and deterrents. Low fines were a particular problem. Noting that too many ship owners still viewed Canadian waters as a costeffective place to clear their bilges, Wiese recommended that Canada imitate policy initiatives that had proven effective elsewhere: intensified monitoring and enforcement, higher fines, and improved facilities for land-based disposal of bilge oil.17 Prospects for strong action had improved in 1999 with the appointment of David Anderson as minister of Environment. His initial foray into politics thirty years earlier had been galvanized by concerns about the potential environmental consequences of increased oil tanker traffic along the Pacific coast, and stints in the transport and fisheries portfolios had acquainted him with the scale and effects of chronic oil dumping. According to sources cited by Oil Spill Intelligence Reports, after taking over at ec, Anderson ordered officials to

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develop justifications for larger fines and to improve coordination with Transport Canada (tc). Canada should, he told officials, emulate the “name and shame” strategy guiding prosecutors in the U.S. and the U.K.18 A dramatic focusing event occurred in September 2002. A Radarsat satellite image identified a long oil slick behind the Tecam Sea, a Panamanianowned bulk carrier outbound from Quebec.19 After verifying the spill, an ec pollution-prevention officer ordered the ship to port, where its captain, chief engineer, and owner were charged with illegally dumping oil into Canadian waters. Soon, oiled seabirds began washing up on the Avalon Peninsula near an important seabird colony, Cape St. Mary’s Ecological Reserve. The next chapter in the story distressed environmentalists and ec officials. Despite the fact that the government’s case had been strengthened by oil fingerprinting and evidence from a careful inspection of the ship and its logbook, the federal Department of Justice decided to withdraw charges in April 2003. Prosecutors apparently believed their chances were undercut by legal ambiguities, particularly the question of whether ec had authority to enforce the mbca beyond Canada’s 12 mile territorial zone. When detained, the Tecam Sea had been well beyond that limit, although still within Canada’s 200-mile exclusive economic zone. This outcome also underlined concerns about chronic lack of cooperation between Transport Canada and Environment Canada, both of which had legislative powers to prosecute polluters. These problems were laid out in a cbc television news documentary that was credited with broadening and deepening public concern over the issue.20 The Tecam Sea case provided Anderson with the ammunition needed to win the support of cabinet colleagues. With room on the legislative timetable available as the 37th Parliament drew to a close, ec moved. George Finney, the Atlantic Canada director of its Environmental Conservation Branch, was summoned to Ottawa to lead a team mandated to draft mbca amendments. The results were unveiled in early 2004 as Bill C-34 and then, after it died on the order paper with the May 2004 election call, in amended form as Bill C-15 in the fall of 2004. It was quickly approved by Parliament and received Royal Assent in May 2005. The legislation amended the mbca in several important respects.21 It made it clear that the Act applies to the limit of the 200 mile exclusive economic zone. It expanded the Act’s purposes to include conserving migratory birds as well as protecting them, specified new prohibitions on depositing harmful substances, and enhanced regulation-making powers. It increased maximum fines for polluters to $1 million and, under an amendment added by the House of Commons Committee on Environment and Sustainable Development, established a new minimum fine. It bolstered detection, detainment, and enforcement powers. The government hoped that C-15 would be interpreted as harmonizing Canadian fines and enforcement provisions with those of the U.S., and

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would thus alter Canada’s image as a soft haven for marine polluters. It has subsequently tried to reinforce this message by trumpeting moves to improve detection capacity. For example, in November 2006, ec announced that its Canadian Ice Service branch was assuming operational responsibility for the Integrated Satellite Tracking of Pollution (istop) program, a collaborative project with Transport Canada and the Canadian Coast Guard that uses “satellite image information to direct surveillance aircraft to suspected oil spill sites.”22 For its part, tc has enhanced its National Aerial Surveillance Program by acquiring technologies that it says will, for the first time, enable it to track polluters in all weather conditions, night and day.23 It is too early to tell whether this package of regulatory initiatives has significantly reduced bird mortality due to chronic oil dumping. Here, as is so often the case, attempts to assess the impacts of biodiversity policy confront definitional and measurement challenges. Government records indicate, however, that the new regime has brought neither an increase in successful prosecutions, nor an increase in fines.24 As well, large numbers of “mystery spills” are still occurring.25 The following account, from the Director of wwf Canada’s Atlantic Marine Program, describes an April 2006 incident: “Bilge oil from an unidentified ship was illegally dumped off of southern Newfoundland killing thousands of seabirds and sea ducks. The oily waste was dumped near shore, during the start of the nesting season … Though efforts were made to determine the source of the oil, the responsible ship was never identified, and no charges were laid in association with the crime. This incident … is certainly not isolated.”26 This section has chronicled strong moves to bolster regulatory capacity, indicating that under certain conditions, ec is not reluctant to develop and utilize coercive measures to control those threatening bird habitat. While this is encouraging, it must be remembered that the package of conditions that facilitated and forced action were special – strong public concern, arresting media images, a striking focusing event, evidence that other nations had adopted stronger standards, exclusive federal jurisdiction, and an industry without provincial government allies.

t h e i n c i d e n ta l ta k e o f m i g r at o r y b i r d s b y t h e f o r e s t i n d u s t ry ec defines incidental take as the killing, destruction, or disturbance of birds, nests, or eggs as a result “legitimate human activities” not intended to have these impacts.27 In the late 1990s, the cws’s performance in regulating such damage became a concern for environmental non-governmental organizations (engos), as well as for forest companies worried about the potential economic impacts of engo-driven market-based campaigns and forestry certification initiatives. These concerns crystallized in 2002 when a coalition

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of environmental groups presented the Commission for Environmental Cooperation (cec) with a citizen submission under the terms of Articles 14–15 of the North American Agreement on Environmental Cooperation (naaec), the so-called nafta environmental side agreement.28 Articles 14–15 lay out a process by which organizations or individuals may allege that one of the nafta countries “is failing to effectively enforce its environmental law.” The “Ontario Logging” submission alleged that Canada had not effectively enforced s. 6(a) of the Migratory Birds Regulations (mbr) in respect to logging activities carried out during 2001 in central and northern Ontario, resulting in the destruction of 85,000 bird nests. This section of the mbr makes it an offence to disturb, destroy, or take a nest of a migratory bird without a permit, which can be issued only for limited purposes such as scientific research. According to the engo submission, the cws had been delivering an implicit but clear message to the forest industry: “The destruction of bird nests is illegal. We cannot officially authorize you to break the law. On the other hand, we take a common sense approach that allows you to go about this important economic activity without undue interference.”29 Although the submitters acknowledged that investigation and prosecution need not be the option of first choice in an effective enforcement regime, they argued that the cws’s refusal to use these instruments was inconsistent with its own enforcement policy, which says that prosecution should be regarded as a critical deterrence tool. Anticipating that Canada would contend that it was exercising reasonable discretion (and thus administering the law in an acceptable way under naaec Article 45[1]), the submission argued that “systematic failure to enforce against an entire industry known to engage in practices that violate the mbca cannot be a legitimate exercise of discretion.”30 Nor, the engos argued, could this approach be justified as a bona fide allocation of resources: the cws had not assessed the relative costs of various options or considered the argument that effective enforcement need not be costly. In its response, Canada denied that it had made a sweeping policy decision not to enforce, and noted that workshops had been held to promote forest industry compliance.31 Given its limited resources, its responsibility for a large geographical area, and the various possible targets of enforcement activity, some components of its migratory bird conservation program necessarily had to receive higher priority than others. With respect to forestry, it said, ec’s stance reflected the view that an effective long-term approach must begin with education and promotion of compliance. After a long process dictated by naaec rules for vetting submissions (and by some foot-dragging by the cec Council), the cec Secretariat’s Factual Record was released in February 2007. 32 It analyzed Ontario’s system for regulating environmental impacts of logging, and presented a critical evaluation of the federal performance. ec, it said, had been asked whether it had taken

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any of the possible enforcement actions listed in Article 5 of naaec, including, for example, monitoring compliance, investigating suspected violations, or seeking assurances of voluntary compliance. ec had provided no information indicating that any of these actions had been taken. The cws had, however, held workshops to promote compliance. 33 Progress was being made while the cec process unfolded. In 2004, a group of individuals from the forest industry, the pipeline industry, a major environmental organization (the Canadian Nature Federation), and three provincial governments met to develop proposals for regulatory changes. Working with advisory support from the cws, this Joint Working Group submitted its recommendations to ec in April 2004.34 Noting that Section 6(a) created legal uncertainty for both resource industries and ec, it proposed new rules under which forest companies could gain exemptions from this section by obtaining ministerial approval of “Activity-Specific Conservation Plans.” These plans would outline “strategies to avoid, minimize and mitigate” adverse effects, with the minister mandated to approve plans that he or she judged would meet the test of sustaining migratory bird populations and habitat. In order for the proposed system to work, ec would have to set clear conservation objectives. To do so, it would need better bird monitoring programs, requiring additional resources. The mbca and/or its regulations would have to be amended to give the cws the authority to implement the new regime. Initially at least, ec appeared keen to pursue the suggested approach. Its desire to do so was described in a 2003 submission to the government’s External Advisory Committee on Smart Regulation,35 and in a draft cws migratory birds plan released in mid-2004.36 Most importantly, during the same period, ec quietly slipped into Bill C-15 (discussed in the previous section) a mbca amendment that authorizes development of a regime for regulating incidental take. Since 2004, progress has slowed. Signs that the issue was not receiving high priority emerged in mid-2006 when cws officials released a draft discussion document that proposed, as a first step, consultations on a consultation strategy. A draft discussion paper that was to have been posted on the ec website by January 2007 has not appeared, although current ec plans list development of an incidental take regulation among its 2007–2008 regulatory initiatives.37It is not clear why the issue has not received higher priority. ec’s budgetary submission says that providing regulatory certainty for stakeholders is a key goal of its biodiversity program.38 The Factual Record did, as the engo s hoped, put the spotlight on the issue. Media coverage of the report was not flattering to the government; for example, the Globe and Mail offered this pithy summary: “The cec investigation found that while Environment Canada didn’t take any action against companies for destroying bird nests, it did hold a workshop with the industry to try to encourage it to comply with the law.”39 A path forward has been charted,

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and it has received support from both the engo and industry sides. The forest industry feels vulnerable on the issue. With more and more public attention focusing on boreal logging, forest companies fear that engos may follow-up on the Factual Record by raising Canada’s performance in market campaigns or battles over certification. Various hypotheses can be advanced to account for ec’s slow response. Developments have likely been affected by the organizational and personnel flux attending the recent merger of ec’s Environmental Protection and Environmental Conservation services into the new Environmental Stewardship Branch (esb), a development that appears to have distributed cws capacity and responsibilities to other units.40 In various respects, the path forward is no doubt proving to be less straightforward than some initially believed. The Joint Working Group’s suggested system raises difficult questions about involving ec in provincial forest practices regulation regimes, as well as worries about precedents. Development of a forestry-focused regime might generate pressure to construct parallel systems for regulating incidental take by other economic sectors, thus creating more potential political problems for the government. There is also concern about achieving an approach consistent with the yet-to-be-specified policy that will guide treatment of incidental take under the Species at Risk Act. ec has no doubt also had difficulty coming to grips with the challenges involved in building a scientific foundation for a regulatory regime. The cec Factual Record hinted at the difficulties, noting information gaps with respect to forest bird species, particularly in remote areas. ec officials had recommended a national landbird monitoring program to fill these gaps, but conservation priorities still had to be established, which among other things required a decision on “whether downward population trends for severely declining species that are still relatively widespread and common should be a trigger for conservation action.”41 ec has been trying to move ahead on at least some of these fronts. For example, the cws’s Prairie and Northern Region office has launched a western boreal initiative aimed at addressing gaps in understanding of boreal bird population trends.42 ec recently formed an “Incidental Take Core Working Group” and at the time of writing (summer 2007), the department was soliciting proposals for a contract to develop sample incidental take conservation plans for review by this working group.43 And, in collaboration with the Canadian Space Agency and other partners, ec has launched Space for Habitat, a project exploring the potential for a variety of satellite and airborne sensors to improve the delivery of wildlife conservation policy.44 The ec official leading the initiative has said that it was precipitated in part by the need to address the incidental take issue.45 Whether we view this exploration of innovative technology through an optimistic lens or through one sceptical of “techno-fixes,” it must be accepted

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that ec and the broader bird conservation community still face major scientific challenges with respect to the conservation of Canada’s land birds and their habitat. Objectives and priorities cannot be established without solid information on population trends and a good understanding of how bird populations are affected by landscape change. Construction of these foundations requires high quality monitoring programs and careful targeting of a wide assortment of scientific programs. As the Joint Working Group stressed, if ec is to lead in the development of this foundation, it will require more financial resources.

t h e s p e c i e s at r i s k a c t ( sara) sara received Royal Assent in December 2002, and came into force in three phases between March 2003 and June 2004. Its provisions can be summarized as follows. The scientific body responsible for classifying species, the Committee on the Status of Endangered Wildlife in Canada (cosewic), assesses the status of species and makes recommendations to the minister of Environment (and through her/him to cabinet) on the listing of species as extirpated, endangered, threatened, or of special concern. Listing triggers prohibitions, as well as recovery planning including critical habitat identification.46 The Act is quite complex, in large part because its protection measures vary depending on a) whether or not the species is under federal jurisdiction (aquatic species and bird species protected under the mbca), and b) whether or not the species’ territory is federal (National Parks, and areas protected under the mbca, the Canada Wildlife Act, or the Oceans Act). Further complexities await those delving into the Act’s details.47 As Mary Illical and Kathryn Harrison show, sara differs in three key respects from its U.S. counterpart, the Endangered Species Act (esa).48 First, in comparison to the esa’s heavy reliance on regulation, sara emphasizes voluntary, subsidized stewardship, promising that private interests will be compensated should regulation be necessary. Second, in contrast to the nondiscretionary, “action-forcing” language of the U.S. Act, sara gives considerable discretion to those implementing it. Third, sara defers to the provinces, while the esa lays a strong foundation for federal activism vis-à-vis the states. sara’s defining characteristics, Illical and Harrison argue, resulted from the interactive effects of institutional factors, interest group pressures, and what they call “negative lesson drawing.”49 Despite its emphasis on subsidized voluntary stewardship, sara does mix some sticks in with the carrots. Parts of the Act are couched in terms that open possibilities for federal regulation of private interests, enabling resort to restrictions on land use where measures to promote voluntary stewardship fail. Also, key sections allow for what can be thought of as federal regulation of the provinces. sara’s “emergency order” provisions (sections 80–2) enable

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the minister to protect any species deemed to face imminent threats to its survival or recovery. Its “safety net” sections (sections 34–35 on harming species and section 61 on critical habitat) assert federal authority to protect species at risk and their habitat across Canada. In the judgment of Illical and Harrison, these sections represent a bold but “not very credible assertion” of federal jurisdiction over endangered species across Canada.”50 Since sara came into force, environmental organizations have pressured the government to make forceful use of its discretionary powers, particularly those available under the emergency order and safety net sections. Once again, engos have used the cec citizen submission process to highlight concerns. In an October 2006 submission, a coalition of groups alleged that Canada is failing to enforce sara’s provisions on listing of species, preparation of recovery plans, identification of critical habitat, and national enforcement using the safety net and emergency order sections.51 We focus on these last sections. The engo coalition notes that sara’s provisions against harming species and their residences apply automatically only to federal jurisdiction species and to species on federal lands. The coalition acknowledges that the sections that allow the government to go further are discretionary, but says the minister of Environment must recommend protection (1) if “the laws of a province do not ‘effectively protect’ species, their residences or their critical habitat; or, (2) if a species faces imminent threat to its survival or recovery … While the ‘safety net’ and the ‘emergency order’ provisions give the minister of Environment discretion to act to enforce these provisions, as a matter of course in Canadian law, decision makers cannot exercise their discretion so as to frustrate the intention of law.”52 The coalition further concedes that “effective protection” is not defined in sara, but says that the meaning can be discerned from the Act’s stated purposes: preventing species from becoming extinct, and helping endangered or threatened species recover.53 By failing to use the safety net to deal with provinces such as Alberta and B.C. that do not have endangered species legislation, the federal government is failing to enforce sara, thus ensuring that it is not “an Act of national application.”54 The coalition focuses parallel arguments on the government’s failure to use the emergency order provisions. Citing the examples of the Northern Spotted Owl and the Woodland Caribou, it argues that the minister’s power under section 80 should have been used to protect species facing imminent threats. The Spotted Owl, of course, has been the subject of court challenges aimed at forcing use of the emergency order power. The history of this litigation is too lengthy to cover here. Interestingly, though, these legal initiatives have turned up evidence that federal officials have seriously considered intervening under sara’s emergency order provision. In a May 2004 letter, Environment Minister David Anderson sought “a strong public position from the bc government for protecting the Spotted Owl and its habitat,” telling bc’s Premier, “I cannot shy away from invoking the emergency order provisions

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of sara where circumstances warrant.”55 Even more striking are documents released as a result of a Sierra Legal Defence Fund (sldf) court challenge to the reasonableness of Environment Minister Rona Ambrose’s August 2006 decision not to intervene. These indicate that in April 2006, she received a memo from officials recommending that she ask Cabinet to deploy the emergency order power to protect some blocks of prime owl habitat.56 According to sldf lawyer Devon Page: “Of course there is a big difference between a memo recommending such action and an actual recommendation to Cabinet. But until we saw that memo, we’d never had any indication that the bureaucrats were trying to implement the legislation in a meaningful way. To me, it’s a glimmer of hope.”57 The first 30 months of sara implementation was assessed by Stratos Inc. in a report for ec released in mid-2006.58 Stratos offered a balanced treatment of the startup challenges: national implementation was still a work in progress, but federal and provincial/territorial governments were cooperating well. It pointed out, though, that in grappling with issues around the safety net and emergency order provisions, the government confronts a dilemma: “On the one hand, it faces legal challenges and risks in instances where it must rely on provincial/territorial contributions to federally legislated obligations to effectively protect species at risk and their habitat. On the other hand, there are risks that the generally positive federal/provincial/ territorial cooperation achieved to date through the Accord [for the protection of Species at Risk] could be undermined if the federal ‘safety net’ or other federal action is deemed necessary.”59 In another telling comment, Stratos said that provincial governments had told its researchers that they were reluctant to identify critical habitat in the absence of clear federal policy on issues such as compensation and protection measures. Perhaps prophetically, Stratos concluded: “These delays and challenges in identifying critical habitat could have significant repercussions on the progress made in implementing the Act.”60 In December 2006, the cec Secretariat decided that the allegations regarding listing timelines and the safety net did not satisfy Article 14 requirements. Canada was asked to respond to the other allegations, and did so February 2007.61 It said that further consideration of these claims would be inappropriate since engo litigation had put the sara sections at issue before the courts. Canada also reminded the Secretariat that naaec Article 45(1)(a) states that a Party is not failing to enforce if it is exercising reasonable discretion. As well, noting that the purpose of naaec Articles 14 and 15 is to examine particular fact-based incidents rather than broad allegations, it said that charges about failure to post recovery strategies lacked specificity and should be rejected. As their more wide-ranging responses to Stratos indicate, ec and other departments have been working to correct administrative deficiencies and fill

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policy gaps, including those underlined in the engo submission to the cec. These efforts have so far generated few clear-cut results. Environmentalists were, however, somewhat heartened by the government’s response to another bird-focused engo litigation initiative, a challenge to the failure to identify critical habitat in the initial recovery strategy for the Piping Plover. In February 2007 the government announced that critical habitat for this species would be identified, and that the backlog of recovery planning would be addressed.62 A month later, the Piping Plover Recovery Team released an addendum identifying critical habitat.63 Here, as in the politics surrounding other recovery plans, federal-provincial relations will once again be in the spotlight. In evaluating the adequacy of the critical habitat listed in recovery strategies, conservation organizations will be looking to see if lists have been “raked” to remove private and provincial lands, i.e. sites likely to generate controversy when protection measures start to be applied.

common themes The three cases examined in this chapter illustrate some of the forces that influence Canadian migratory bird conservation policy, particularly ec’s development and use of two key pieces of legislation, the mbca and the sara. Three themes stand out. The Prominent Role of Societal Actors In each case, developments were shaped by societal pressures, particularly those generated by environmental organizations. As have other policy processes examined in this book, these three introduce us to a sophisticated and diverse environmental movement, one capable, for example, of developing comprehensive scientific and policy analysis (illustrated by wwf Canada’s brief on the oiled bird problem), sustaining the lengthy initiatives needed to take advantage of various opportunities (apparent in the cec citizen submission processes), and working productively with adversaries (demonstrated by the cnf’s role in developing proposals on a new incidental take regime). Fuller exploration of any of these cases would illuminate many other dimensions of the environmental movement’s work, especially those illustrating the increasingly transnationalized nature of environmental strategies. The incidental take story, for example, has interacted with broader developments in boreal politics, where U.S.-based organizations such as Forestethics and the Boreal Songbird Initiative have pioneered new approaches to influencing governments and resource industries. Here and in the other cases, we have seen these industries, in turn, generate counteracting pressures of varying strengths. Although the constellation of forces buffeting ec varied from case to case, the net result in each has been pressure for fuller development and deployment of the regulatory parts of the biodiversity conservation toolkit. The

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factors shaping the government’s response to this pressure defy simple description, but the central story line revolves around interactions between ec (and cws) and the broader institutional setting. Many elements of the institutional context were in flux during the period under analysis, while within ec, perspectives shifted as changing capacities, responsibilities, and knowledge interacted with policy legacies and institutionalized habits. Two factors stand out as particularly important determinants of ec’s responses to calls for stronger use of regulatory tools. Specifically, these responses were shaped by: 1) capacity limitations, and 2) prevailing understandings and inclinations regarding federal assertiveness vis-à-vis the provinces. Departmental Capacity Problems ec was not prepared to face the manifold challenges involved in implementing sara. Those in the incidental take case are not of the same magnitude, but once again, the response indicates inadequate capacity. These difficulties must be put in the context of the agency’s budgetary situation. In the past twenty-five years, the cws has endured two major episodes of budget cutting.64 While digesting these cuts, the cws was trying to replace its traditional focus on waterfowl with an “all birds” perspective, and also being asked to take on expanded responsibilities for endangered species. Trying to do more with less naturally leads to problems. The problems exposed here also reflect the difficulties that the cws, ec, and the broader bird conservation community have had in developing “policy useful” knowledge. In a 2003 analysis, then cws Director General Trevor Swerdfager offered important perspectives on these challenges, arguing that the bird conservation community has to find a balance between its operational (“get things done”) and research (“study it more”) sides.65 An actionoriented approach must be balanced with one that promotes construction of knowledge on population trends, the effects of landscape changes, and the consequences of previous policy interventions. In Swerdfager’s view, an appropriate balance had not yet been found. “Staggering sums,” he says, have been invested in habitat conservation, with striking results. But, he continues, “similarly impressive progress in our ability to address the science side of the equation is not obvious. We lack a comprehensive habitat monitoring program and cannot depict with any confidence, changes in the Canadian habitat base over time and cannot determine what effect migratory birds conservation programs have had on the habitat base as a whole. We cannot point to a comprehensive body of knowledge outlining how waterfowl populations, to say nothing of other bird groups, have responded to habitat changes.” After enumerating additional examples of knowledge gaps, Swerdfager concludes: “When one compares the millions of dollars spent in Canada on conservation projects ‘on the ground’ and the funds devoted to research, monitoring and evaluation programming, it is hard to avoid the conclusion that we are out of balance.”

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It is too early to assess whether ec’s new organization and science plan66 will promote effective federal leadership in the bird conservation field. As Bruce Doern observes, ec’s science approach has reflected inherent tensions between two broad orientations: a research science approach and an assessment/ monitoring approach.67 The former is less reactive, allowing researchers more “freedom to roam,” while the latter, sometimes labeled “on demand” science, involves more routine data gathering and analysis such as that needed to support generalizations about environmental trends. Recent reorganization of ec’s science programs seems to open more space for the former approach, with one possible consequence being continued frustration for policy-makers who need reliable information on such things as bird population trends. It would, though, be premature to say more than that, as Doern shows, the nature of ec science is always shaped by historical legacies, shifting goals and opportunities, and internal tensions. To this, of course, we can add the obvious point that capacity constraints make it difficult to do any sort of science well. Federal reluctance to Lead the Development of Canadian Biodiversity Policy As do so many Canadian policy sagas, two of our cases show the effects of federal-provincial relations. Slow developments on the incidental take issue in part reflect qualms about involving ec in provincial logging practices regimes. sara implementation will continue to be shaped by federal-provincial interactions, specifically by the assertiveness of federal ministers and the cabinet. Since these cases have unfolded over relatively short periods, they cannot be used to test Kathryn Harrison’s theory of environmental federalism. As noted, she argues that oscillations in federal assertiveness correlate with cycles of public concern. Applying her insights, those looking for federal assertiveness on the bird file might hope that stronger federal initiatives will result from a recent upturn in environmental concern.68 It is not clear, however, how Harrison’s theory should be applied in disaggregated analysis of particular corners of the broad environmental policy field. One could argue, for instance, that the current upturn in concern relates largely to the salience of climate change and that if anything, this diminishes the chances that government or the public will give priority to biodiversity conservation. These considerations aside, it is difficult to see how strong federal leadership on biodiversity conservation could be accomplished except through major financial inducements to the provinces. One model for achieving that leadership can be found in the U.S. State Wildlife Grants program, inaugurated in 2000. Building on a long history of wildlife policy leadership, the U.S. federal government has used a conditional grant scheme to induce state governments to develop conservation plans aimed at preventing wildlife from becoming endangered. In the first six years of the program, states received over $350 million. The U.S. approach is, needless to say, a product of very different political institutions and history.

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c o n c lu s i o n In her 2005 assessment of progress on implementation of the Canadian Biodiversity Strategy, the Commissioner on Environment and Sustainable Development catalogued several problems underlying what she said was an unsatisfactory performance.69 These included a lack of coherent plans, stalled momentum on several fronts, unfulfilled commitments, and governance problems. The cases explored in this chapter indicate that the situation is not uniformly bleak. In this corner of the biodiversity field we have seen strong ec action on the oiled birds issue, as well as some progress in its response to the difficulties involved in implementing sara and regulating the incidental take of migratory birds. Our sketches of the latter two cases, however, provide some glimpses into why those looking for strong and quick action on biodiversity issues are often disappointed. In spite of the cws’s long and laudable history of working to conserve migratory birds, ec has had difficulty responding to new challenges. Although the reasons are manifold, capacity limitations must be near the top of the list. As the Environmental Commissioner of Ontario has recently emphasized, despite the best efforts of their officials, agencies asked to do with less will often end up doing less.70 This cannot but be a large problem when these agencies are at the same time being asked to do more.71

notes 1 John Tuxill and Chris Bright, “Losing Strands in the Web of Life,” in Worldwatch Institute (Lester Brown, project director), State of the World 1998 (W.W. Norton, 1998), 43–6. 2 Canadian Endangered Species Conservation Council, Wild Species 2005: The General Status of Species in Canada (Ottawa, 2006). 3 See cosewic, “Summary of cosewic assessment results as of April 2007.” Available at http://www.cosewic.gc.ca/rpts/Full_List_Species.html.; accessed July 7, 2007. 4 Garry Donaldson, Colleen Hyslop, Guy Morrison, Loney Dickson, and Ian Davidson (eds.), Canadian Shorebird Conservation Plan (Environment Canada, Canadian Wildlife Service, 2000), i. 5 Minister of Environment, Environment Canada 2007–8: Report on Plans and Priorities. Available at http://www.tbs-sct.gc.ca/rpp/0708/ec-ec/ec-ec_e.pdf; accessed June 21, 2007, 4–5, 19–21. 6 J. Alexander Burnett, A Passion for Wildlife: The History of the Canadian Wildlife Service (ubc Press, 2003), 12–14, 22, 26, 29–30. 7 Canadian Wildlife Service, Strategic Plan 2000: The Path Forward for Environment Canada’s Wildlife Conservation Program (Environment Canada, Canadian Wildlife Service, 2000), 12.

128 Jeremy Wilson 8 Jeremy Wilson, “‘New’ and ‘Old’ Modes of Environmental Governance: The Evolution of the North American Waterfowl Bird Policy Regime.” A paper presented to the Western Political Science Association Annual meeting, Albuquerque, March 2006. 9 G. Bruce Doern, “Environment Canada as a Networked Institution,” in Debora L. Van Nijnatten and Robert Boardman, eds., Canadian Environmental Policy: Context and Cases, Second ed. (Oxford University Press, 2002), 107–22. 10 Burnett, A Passion for Wildlife, 258–60, 164. 11 Kathryn Harrison, “Federal-Provincial Relations and the Environment: Unilateralism, Collaboration, and Rationalization,” in Van Nijnatten and Boardman, Canadian Environmental Policy, 133–4. 12 Eric Montpetit, “Sound Science and Moral Suasion, Not Regulation: Facing Difficult Decisions on Agricultural Non-Point-Source Pollution,” in Van Nijnatten and Boardman, Canadian Environmental Policy, 274–85. 13 Burnett, A Passion for Wildlife, 71–87. 14 Burnett, A Passion for Wildlife, Chap. 9. 15 Francis Wiese, Seabirds and Atlantic Canada’s Ship-Source Oil Pollution (World Wildlife Fund Canada, 2002), 9–10. 16 Wiese, Seabirds and Atlantic Canada’s Ship-Source Oil Pollution, 11–13. 17 Wiese, Seabirds and Atlantic Canada’s Ship-Source Oil Pollution, 40–5. 18 Oil Spill Intelligence Reports, 12 August 1999, as presented in Wiese, Seabirds and Atlantic Canada’s Ship-Source Oil Pollution, 69. 19 Harry Thurston, “Seabirds in the Wake,” Canadian Geographic 125, 5 (2005), 80–9. 20 cbc Country Canada, “The Tecam Sea: A Special Investigation,” Documentary reported by Reg Sherren, aired 23 November 2003. 21 See Kristen Douglas, Legislative Summary: Bill C-15: An Act to Amend the Migratory Birds Convention Act, 1994 and the Canadian Environmental Protection Act, 1999. (Library of Parliament: Parliamentary Information and Research Service, 15 December 2004). 22 Environment Canada, “Satellite Program Aims to Reduce Marine Pollution,” Environzine: Environment Canada’s Online Newsmagazine, 70 (6 November 2006). 23 Transport Canada, “Backgrounders: National Aerial Surveillance Program,” December 2006, available at http://www.tc.gc.ca/mediaroom/backgrounders/ b04-M126e.htm; accessed March 17, 2007. 24 Canada, “Enforcement – Offenders, Marine Pollution Prosecutions (2006–2007).” Available at: http://www.marinepollution.gc.ca/en/prosecutions/prosecutions.htm; accessed March 17, 2007. See also Transport Canada, “Prosecuting Marine Polluters,” December 2006. Available at: http://www.tc.gc.ca/mediaroom/backgrounders/b06M004e.htm; accessed March 17, 2007. 25 Transport Canada, “Backgrounder: Aerial Surveillance Program,” May 2006. Available at: http://www.marinepollution.gc.ca/en/surveillance/backgrounder/menu.htm; accessed March 17, 2007 . 26 Sarah Patton and Robert Rangeley, “Bilge Oil Blues,” June 2006. Available at: http:// www.elements.nb.ca/theme/oceans06/sarah/sarah.htm; accessed December 21, 2006.

129 Environment Canada and a Robust Bird Conservation Toolkit 27 Environment Canada, Solicitation K0A70-07-2006. Project Title: Migratory Birds Incidental Take Case Study (Environment Canada, 16 July 2007), 8. 28 Canadian Nature Federation et al., Submission to the Commission for Environmental Cooperation pursuant to article 14, North American Agreement on Environmental Cooperation, 2002. This section draws on Jeremy Wilson, “The Commission for Environmental Cooperation and North American Migratory Bird Conservation: The Potential of the naaec Citizen Submission Procedure,” Journal of International Wildlife Law and Policy 6, 3 (2003), 1–27. 29 Canadian Nature Federation et al., Submission to the Commission for Environmental Cooperation pursuant to article 14, North American Agreement on Environmental Cooperation, 8. 30 Canadian Nature Federation et al., Submission to the Commission for Environmental Cooperation pursuant to article 14, North American Agreement on Environmental Cooperation, 10. 31 Government of Canada, Response to Submission SEM-02-001 (Government of Canada, 11 April 2002). 32 Commission for Environmental Cooperation (cec), Factual Record Ontario Logging Submission (SEM-02-001) & Ontario Logging II Submission (SEM-04-006) (Montreal: cec, 2007). 33 cec, Factual Record Ontario Logging, 130, 8, 158–9. 34 Joint Working Group on Migratory Birds Conservation in the Forestry Sector, “Recommendations on Revisions to the Migratory Birds Convention Act: A Forestry Sector Case Study,” (Joint Working Group on Migratory Birds conservation in the Forestry Sector, 2 April 2004). 35 Environment Canada, “Compendium for Improving Environmental Regulation: An Environment Canada Perspectives Paper,” for the External Advisory Committee on Smart Regulation (Environment Canada, 23 May 2003), Section C. 36 cws, “Migratory Birds Program Plan –A component of the Canadian Wildlife Service Strategic Plan,” (Draft – June 2004 Version), 7, as quoted in cec, Factual Record Ontario Logging, 157. 37 Environment Canada, 2007–2008 Report on Plans and Priorities, Table 7. 38 Treasury Board of Canada, Secretariat, 2007–2008 Parts I and II – Main Estimates, Environment Department (Treasury Board of Canada, 2007), 188. 39 Martin Mittelstaedt, “Wildlife killers coddled, watchdog says,” Globe and Mail, February 6, 2007, A1. 40 See the ec Organization Chart at: http://www.ec.gc.ca/introec/mgmtframe/ organigram_e.pdf.; accessed June 25, 2007. 41 cec, Factual Record Ontario Logging, 8; see also 158–9, 139. 42 See Environment Canada, “Western Boreal Conservation Initiative” available at: http:// www.mb.ec.gc.ca/nature/ecosystems/wbci-icbo/index.en.html; accessed June 3, 2007. 43 Environment Canada, Solicitation K0A70-07-2006, 9. 44 Jason A. Duffe and Brenda R. Morehouse, “Space for Habitat: Adapting to Meet the Challenges of Habitat Conservation in the 21st Century,” poster presentation to

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45

46

47

48

49 50 51 52 53 54 55 56 57 58

59 60 61

62 63

64

Ecological Monitoring and Assessment Network: National Science Meeting, Winnipeg, November 2006, available at: http://www.eman-rese.ca/eman/reports/ meetings/national2006/posters.html; accessed March 17, 2007. Brenda Morehouse, “Space for Habitat Project: Concepts, Partnerships and Key Objectives,” available at: http://www.earthpace.com/resources/docs/ Spacefor HabitatWorkshopProceedings.pdf; accessed March 17, 2007. Sierra Club (U.S. and Canada) and 12 other organizations, Submission to the Commission for Environmental Cooperation Pursuant to Article 14, North American Agreement on Environmental Cooperation. 6 October 2006, 2. [Hereafter sara submission.] For example, on the rules regarding protection of critical habitat protection for migratory birds, see Kate Smallwood, A Guide to Canada’s Species at Risk Act (Sierra Legal Defence Fund, 2003), 30–4. Mary Illical and Kathryn Harrison, “Protecting Endangered Species in the us and Canada: The Role of Negative Lesson Drawing.” Presented at the annual meeting of the Association for Canadian Studies in the U.S., St. Louis, November 2005. Illical and Harrison, “Protecting Endangered Species, 3–4. Illical and Harrison, “Protecting Endangered Species, 31, 28. Sierra Club (U.S. and Canada) and 12 other organizations, sara submission. Sierra Club, sara submission, 9–10. Sierra Club, sara submission, 10. Sierra Club, sara submission, 11. Quoted in Sierra Legal Defence Fund, In Defence of Canada’s Spotted Owl (sldf, December 2005), 25. Sierra Legal Defence Fund, “Media Release: British Columbia government to capture last spotted owls,” 17 May 2007. Interview, 20 June 2007. Stratos Inc., Formative Evaluation of Federal Species at Risk Programs. Final Report, Prepared for Environment Canada, Fisheries and Oceans Canada, and Parks Canada Agency, (Stratos Inc., July 2006). Stratos, Formative Evaluation, 60–1. See also 16–7. Stratos, Formative Evaluation, 36. Government of Canada, “Response of The Government of Canada To Submission Sem – 06-005 On Enforcement Matters (Species At Risk),” (Government of Canada, 8 February 2007). Nature Canada, “Media Advisory: Feds Change Direction After Endangered Species Lawsuit,” (Nature Canada, 9 February 2007). See “Addendum To The Final Recovery Strategy For The Piping Plover,” 16 March 2007. Available at: http://www.sararegistry.gc.ca/virtual_sara/files/plans/Pipingper cent20Ploverper cent20circumcinctusper cent20addendumper cent5FMarper cent2016per cent202007per cent20Finalper cent20ENper cent2Epdf. Accessed July 21, 2007. Burnett, A Passion for Wildlife, 224–6; and Doern, “Environment Canada as a Networked Institution,” 111.

131 Environment Canada and a Robust Bird Conservation Toolkit 65 Trevor Swerdfager, The Search for Equilibrium Points: Balancing the Dynamic Tensions Confronting the Future of Migratory Birds Conservation in Canada (n.p. 2003), 6–9. 66 Environment Canada, “Environment Canada’s Science Plan” available at: http://www.ec.gc.ca/scitech/default.asp?lang=En&xml=616C9E06-414E-4A25BFFE-93D618800C4E; Accessed June 21, 2007. 67 Doern, “Environment Canada as a Networked Institution,” 117–8. 68 For example, see Campbell Clark, “Saving the environment overtakes stamping out corruption,” Globe and Mail, July 19, 2007, A6. 69 Commissioner of the Environment and Sustainable Development, “The 2005 Report of the Commissioner of the Environment and Sustainable Development” (Office of the Auditor General of Canada, 2005), Chapter 3. 70 Office of the Environmental Commissioner of Ontario, “Doing Less with Less: How Shortfalls in Budget, Staffing and In-house Expertise Are Hampering the Effectiveness of moe and mnr. A Special Report to the Legislative Assembly of Ontario.” (Office of the Environmental Commissioner of Ontario, 24 April 2007). 71 After this chapter was completed, potentially significant budget cuts at Environment Canada were revealed. In September 2007, cbc News reported that the budget of the Migratory Bird Program was to be cut by 50 per cent (see cbc, “Environment Canada budget cuts threaten wildlife programs,” September 18, 2007). Environment Canada officials later said that the cbc story was inaccurate, indicating to Nature Canada that the current year’s Migratory Birds Program budget cuts would be 42 per cent (see: http://72.14.253.104/search?q=cache:Jgj1DJXEu44J:www.vicnhs.bc.ca/ CNNcwsappeal.doc+Nature+Canada+cbc+leaked&hl=en&ct=clnk&cd=1&gl= ca&client=firefox-a.; accessed November 23, 2007).

7 Uncertainty, Precaution, and Adaptive Management in Canadian Pesticide Regulation c . s c o t t f i n d l ay a n d annik deziel1

The societal commitment to safeguarding the broad public interest in environment and public health must often be pursued within the confines of administrative and regulatory decision-making bodies. In Canada, such institutions have been legislatively charged with particular responsibilities over a broad range of issues, from new drugs to toxic substances to natural resources. The diversity of subject domains notwithstanding, all share the common element of scientific uncertainty. To address uncertainty and the potential for unanticipated adverse consequences, several general prescriptive principles have been advanced. Notable amongst these are the precautionary principle (pp) and the principle of adaptive management (pam), the focus of this chapter. These two principles aid decision-making in relation to uncertainty associated with certain types of health and environmental risks2. Though it has appeared in several guises, the pp asserts generally that when scientific uncertainty is high, and the potential for serious negative effects exists, administrative or regulatory decision-making should err on the side of caution.3 The pp has found growing recognition in international agreements including the Rio Declaration, the Montreal Protocol on Ozone Depleting Substances, the Kyoto Protocol and the Convention on Biodiversity. The underlying premises of the pam have important implications for administrative decision-making. First, adaptive management acknowledges that scientific understanding of any system will always be incomplete. Second, it is assumed that as scientific knowledge of the system in question improves, so too will the accuracy and reliability of decision-makers’ ability to predict outcomes. Third, decisions about the management of resources and the environment should be considered opportunities to gain enhanced

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understanding of the system under consideration. As such, management interventions should be regarded as experiments; the results should be assessed in a timely and efficacious manner; and the knowledge thereby accrued should be used to inform subsequent decision-making. Uncertainty lies at the heart of the issue of pesticide regulation. While there is little doubt that, at least historically, increased pesticide use has resulted in increased food production, there is mounting public and scientific concern about the environmental and human health risks associated with pesticide exposure4. Institutions responsible for pesticide regulation must weigh the economic benefits of pesticide use against the environmental and human health risks and are increasingly looking to general decision principles like the precautionary principle for guidance.5 In Canada, pesticide regulation is the responsibility of the Pesticide Management Regulatory Agency (pmra). In this chapter we provide an analysis of how uncertainty is treated in the current registration decision process, with particular emphasis on the use of the pp and pam. We conclude with some suggestions as to what is required to render the current decision process more precautionary and adaptive.

a b r i e f h i s to ry o f p e s t i c i d e regu l at i o n i n c a n a d a The recent history of federal pesticide regulation in Canada begins with the Pest Control Products Act (pcpa), proclaimed in 1969, and the associated Pesticide Control Products Regulations. In 1995, following recommendations made 5 years earlier by the Pesticide Registration Review Task Force, legislative authority for the pcpa was transferred to Health Canada and the Pest Management Regulatory Agency (pmra) was created. In 1999, the Commissioner on Environment and Sustainable Development issued a critical report on the state of pesticide regulation in Canada in general, and the pmra in particular, with special concern being expressed over the glacial pace of reforms concerned with pesticide re-evaluation6. In response pmra brought forward several regulatory and legislative reforms7 , which were, in turn, scrutinized carefully by an (ultimately) largely unimpressed Standing Committee on Environment and Sustainable Development (scesd). Their report highlighted “serious omissions and flaws”8 in the pmra reforms, which, in the committee’s view, stemmed from often conflicting pmra objectives. The scesd outlined 4 major principles which, in its view, should guide new pesticide regulation, including the need to (a) consider human health concerns and environmental protection as the first priority in regulatory decision-making; (b) ensure that a precautionary approach is taken in decision-making; and (c) to ensure an open and transparent regulatory process. The October 2000 “Government Response to the Report of the Standing

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Committee on Environment and Sustainable Development” described how the government places protection of human health and the environment as its top priority in regulating pesticides using a fundamentally precautionary approach, and in 2002, the minister of Health introduced the first substantive amendments to the pcpa in 31 years.

t h e s tat u t o r y c o n t e x t The Pest Control Products Act (pcpa) and associated regulations are the primary federal legislation for the regulation of pesticides in Canada. The Act governs pesticide importation, manufacture, sale and use and provides the authority for risk-based decision-making and risk management. Under the pcpa (1985), the Minister shall refuse to register, or amend the registration of a product, if: 18. (d) the use of the control product would lead to an unacceptable risk of harm to (i) things on or in relation to which the control product is intended to be used, or (ii) public health, plants, animals or the environment;

Thus with respect to impacts or effects, the critical regulatory question is whether the product in question poses “unacceptable” environmental or human health risks. The new Pest Control Products Act of 2002 received royal assent on Dec. 12, 2002, and came into force on June 28, 2006. The new act represents the response of the federal government in general, and Health Canada in particular, to the major criticisms pointed out by the scesd in 2000. The Act has as its primary objective the prevention of unacceptable risks to people and the environment from exposure to pesticides (pcpa 2002, section 4.1). Ancillary objectives include the promotion of sustainable development such that the needs of the present are met without compromising the ability of future generations to meet their needs (pcpa 2002, 4.2(a)), and the minimization of the health and environmental risks posed by pesticide products (pcpa 2002, 4.21(b)). The new act provides explicit authority for risk-based decisionmaking with the critical regulatory question being whether the product in question poses “unacceptable” risks to human health or the environment: (2) For the purposes of this Act, the health or environmental risks of a pest control product are acceptable if there is reasonable certainty that no harm to human health, future generations or the environment will result from exposure to or use of the product, taking into account its conditions or proposed conditions of registration (pcpa 2002, Interpretation).

The pmra is also responsible for regulating the nature and amount of pesticide residues in food under the Food and Drugs Act and Regulations. The

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Agency uses a risk assessment framework to evaluate the safety of pesticides in food, including analyses to determine the nature and level of pesticides that people might be exposed to in a single day. In rendering decisions, the agency must consider other legislation that may affect pest management such as the Pesticides Residues Compensation Act which provides for compensation of farmers whose agricultural products have been contaminated by pesticide residues.

p e s t i c i d e regi s t r at i o n : risk assessment and management pmra’s mandate is “To protect human health and the environment by minimizing the risks associated with pest control products in an open and transparent manner, while enabling access to pest management tools, namely, these products and sustainable pest management strategies.”9 Registration involves three stages. At the screening stage, the critical question is the extent to which the health and environment risks can be evaluated. On the basis of information submitted by the applicant, pmra evaluators may decide that information is lacking, inadequate or inconsistent, in which case applicants are asked to provide additional information. It is the applicant’s responsibility to provide all required information. Scientific studies submitted as part of the registration process are expected to conform to the oecd’s “Test Guidelines and Principles of Good Laboratory Practice,”10 and independent audits may be conducted under glp guidelines to verify data integrity. The primary objective of the screening stage is to determine whether submissions meet the agency requirements before undergoing detailed review. During the science review stage, information in the application is used to conduct a health risk assessment, an environmental risk assessment, and a value and efficacy assessment. Using primarily information provided by the applicant, (in principle) supplemented by information from other sources, three questions are addressed: (1) are the heath risks acceptable? (2) are the environmental risks acceptable? (3) can these risks be mitigated, and if so, how? For human health risk assessment, the main source of information for hazard identification are animal toxicological studies, and the pmra relies heavily on toxicological data to establish reference doses for acute and chronic effects to derive estimates of potential risks. With the exception of carcinogenic and mutagenic endpoints, the evaluation process assumes that toxic effects occur only after some dose (or exposure) threshold is exceeded. As such, the review process involves establishing a reference dose that takes into account both the acute and the chronic nature of the toxic effects. The starting point for the estimation of the reference dose is the No Observed Adverse Effect Level (noael), the highest dose at which no adverse effects are observed in animals exposed to the product in a manner representative of the route, frequency and duration of human exposure. The noael is

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then multiplied by two safety factors: (a) a 10-fold factor to account for extrapolation uncertainty from animals to humans; and (b) a second 10-fold factor to account for the variation in susceptibility within exposed (human) populations. The calculated reference dose for humans is therefore at least 100 times lower than the noael estimated from animal exposure studies. pmra evaluators then compare the reference dose to the estimated human exposure: if the latter is less than the former, the risk is considered acceptable. Cancer risks are estimated based on carcinogenicity studies in several species, along with in vitro and in vivo genotoxicity studies. Study results are then used in statistical models to estimate cancer risks at the lower levels of exposure observed in humans. These models provide estimates of the lifetime cancer risk associated with exposure to the product through ingestion or unintentional exposure. If the estimated lifetime cancer risk is less than 1 × 10-6, the risk is considered acceptable, while risks above 1 × 10-4 are considered unacceptable. Environmental risk assessment, in principle, includes not only an assessment of the impacts of the pesticide (and its breakdown products) on ecosystems where it is applied, but also on potential effects associated with its movement in groundwater or surface water, or atmospheric transport to remote areas. The assessment begins by identifying the environmental elements of concern, and selects indicator organisms on which to evaluate effects associated with exposure for specified environmental elements. Laboratory and field studies, including acute and chronic toxicity tests on a range of standard test organisms, are used to determine the dose–effect relationship of the pesticide and its major degradation products. Effects are both lethal and sub-lethal, including mortality, organ toxicity and reduced growth. The median lethal dose or the median lethal concentration (LD50 or LC50) and the median effective dose or the median effective concentration (ED50 or EC50) are determined, as well as the highest dose at which no effect is observed, the No Observed Effect Concentration (noec). Environmental exposures (concentrations) are usually estimated using fate-transport models that generate predictions of the transport of the product (and/or its degradation products) in different media (air, water, soil) as well as plant uptake and transfers along food chains. The assessment of risk is invariably based on a comparison of the noec in a relevant, sensitive species with the estimated (expected) environmental concentration (eec) in a relevant environmental component. The larger the ratio noec/eec, the lower the risk, with ratios below 1 considered unacceptable. As is the case with its counterparts in the United States and the oecd, pmra employs a risk-based decision process. To be registered, a pesticide must be deemed to pose no unacceptable health risks, no unacceptable environmental risks, and to be of significant value. If the risks to health and the environment are considered acceptable and the pesticide has value, the

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pesticide is registered, or re-registered. If a product is deemed to have value but the risks to health or the environment are considered unacceptable, pmra identifies measures intended to mitigate the identified risk(s) to an acceptable level. If identified mitigation measures are considered to render the product ineffective, then it is not registered. If the estimated mitigated risk to the environment or health is still unacceptable, then the product is not registered, or in the context of a re-evaluation, the registration of an existing pesticide is discontinued or phased out.

h o w d o e s t h e pmra h a n d l e u n c e r ta i n t y ? We reviewed the extent to which uncertainty, precaution, and adaptive management were being invoked or applied by the pmra, by examining all documents published on the pmra website (http://www.pmra-arla.gc.ca/english/ pubs/pubs-e.html) as of 1 Feb 1 200511. Our review included both qualitative and quantitative assessments. The former describes the extent to which the pmra, the pcpa and associated regulations address uncertainty, precaution and adaptive management, while the latter estimates the extent to which the pp or pam were applied in registration or re-evaluation decisions based on publicly available information. Quantitative analysis of registrations and re-evaluations was done using a questionnaire developed as part of a larger study.12 For each document, we assessed whether there was explicit or implicit reference to a precautionary approach or adaptive management. We then rated the strength of the reference to different elements of the precautionary approach (adaptive management) using a semantic congruence scale from 0–7, with 0 denoting an inability to assess, 1 that the element in question was not implied or implicated, and 7 that the element in question was strongly implied or implicated in the decision. The rated precautionary elements were: (1) the greater the potential severity of harm of an action (i.e., the decision to register or reregister a pesticide), the greater the evidence that such harm will not occur before the action is taken (in this instance, the product is registered); (2) the greater the potential spatial or temporal scale of an action, the greater the required evidence that the action is unlikely to be harmful before the action is pursued; (3) uncertainty surrounding expected outcomes of actions must be considered along with the expected outcomes of the actions themselves; (4) the greater the uncertainty about the predicted negative impacts of an action, the less likely it is that the action will be taken; (5) precautionary (either preventative or anticipatory) action does not require a high degree of scientific certainty concerning cause-effect relationships; (6) evidence is required that an action will not cause serious harm before it is taken, rather than an action is taken unless substantial evidence exists that it will cause serious harm.

138 Scott Findlay and Annik Deziel Table 1 Sources of scientific uncertainty and how they are addressed (PMRA Response) in pesticide registration decisions. Source of Scientific Uncertainty

pmra Response

Lack of knowledge on pesticide effects on health or environment

Re-evaluation and special review based on information accumulated since the original evaluation; safety factors for gaps in data base

Uncertainty around predicted effects of exposure on human health or the environment

Probabilistic risk assessment (in development); safety factors

Poor quality evidence (e.g. weakly circumstantial evidence)

Unable to assess based on reviewed information

Sparse empirical data (e.g. few studies)

Request for more data/information; temporary registration pending additional information

Extrapolation from small/short spatial or temporal scales to longer/larger spatiotemporal scale

Safety factors

Inter-species extrapolations

Safety factors

Extrapolation from laboratory exposureeffects to field exposure-effects

Field trials; safety factors

Inferences from single-ingredient studies to multiple-ingredient exposures

Cumulative effects assessment for pesticides of similar mode of action

Uncertainty about validity of modelling assumptions

Unable to assess based on reviewed information

The rated adaptive management elements were: (1) decisions are treated as scientific experiments (that is, are structured so as to allow testing of causal hypotheses); (2) predicted effects of alternative decisions are made explicit and considered; (3) knowledge accrued from past decisions is used to inform decision-making; (4) data and information on the effects of previous decisions are analyzed and assessed in a timely manner; (5) effects of previous decisions are systematically monitored; (6) predicted effects of decisions are systematically compared with observed effects as determined from monitoring or surveillance; (7) large discrepancies between observed and predicted effects of past decisions reduce the likelihood that the same decision will be made in future. As we did not have access to any of the documents or information that went into the decision process, the questionnaire was completed using only information supplied in, or inferred from, the final published or proposed decision. Table 1 shows major sources of uncertainty, and how they are addressed in the pmra risk assessment process. Several points are evident. First, it is

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primarily extrapolation uncertainties that, at least historically, have been given the most attention in the decision process; these uncertainties have been accommodated largely through the use of safety factors (see below). Second, while pmra has recently begun considering various probabilistic risk assessment methods for dealing with prediction uncertainty, historically all decisions were based on single point estimates (e.g. noael, reference doses, etc.) and safety factors. Third, pmra decisions have historically been based on single ingredient estimates; cumulative effects assessment have been developed only for multiple exposure scenarios where the ingredients in question have similar modes of action.13 Precisely how the various uncertainties are characterized during the risk assessment process is not evident from published documents. Particularly unclear is the extent to which uncertainty characterization is based on studies submitted by the applicant versus “external” research. Although pmra apparently uses a “weight of evidence” approach in risk assessment,14 precisely how far the evidentiary net is cast, how much of what is caught is discarded, and how evidentiary weight is determined, is unknown. The above discussion concerns scientific uncertainty, that is, scientific understanding of causal relationships. But there are other uncertainties. All registration decisions include specifications of how, when and where the product is to be used. Exposures are estimated based on the assumption that these instructions will be complied with. And in cases where the initial assessment concludes that the risks are unacceptable, proposed mitigation measures invariably take the form of reduced dosages or application rate, restricted timing of application, modified methods of application, and/or reduced area(s) of application. Of course, mitigation measures can only achieve the desired effect (i.e. rendering unacceptable risks acceptable) if they are complied with. Yet in 2003, the Commissioner for Environment and Sustainable Development15 noted that at the time of her assessment, pmra had no systematic method for monitoring (and hence, assessing) compliance with the pcpa or the associated regulations. It is, therefore, still an open question as to whether estimated exposure levels reflect actual exposure levels for registered products.

p r e c au t i o n a r i t y i n pmra decision-making The 1985 pcpa makes no reference to precautionary approaches, either implicitly or explicitly. However, pcpa (2002) states that in the case of reevaluations and special reviews: 20. (2) Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent adverse health impacts or environmental degradation.

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With respect to the issue of reversed onus of proof, the act is equally explicit. Section (7) states that during an application: 7. (6)(a) the applicant has the burden of persuading the Minister that the health and environmental risks and the value of the pest control product are acceptable.

Similarly, section 19 states that during an evaluation as part of a re-evaluation or special review: (b) the registrant has the burden of persuading the Minister that the health and environmental risks and the value of the pest control product are acceptable (19.1(b))

pcpa (2002) is clearly precautionary with respect to reversed onus of proof. However, for products deemed to pose risks of serious or irreversible effects, the act does not require the responsible authority to mitigate these risks. Rather, when such risks are identified, absence of strong evidence is, under the Act, not legitimate grounds for failing to institute mitigation measures. This leaves open the possibility that failure to mitigate may be justified on other grounds. Moreover, because mitigation measures are of a special sort, namely, those that are deemed cost-effective, the act does not rule out the postponing of decisions due to a lack of full scientific certainty in instances where cost-effective measures cannot be identified. The Pesticide Screening and Review Process The screening process is supposed to ensure that only complete submissions are brought forward for assessment: “Only products with a database that includes all of the required studies are allowed to progress within the evaluation process and reach the decision stage.”16 This notwithstanding, the cesd 17 noted that, historically at least, many applications were provided with temporary registrations pending additional information, information that would appear critical in the decision process. There are at least five elements of the review process that are in keeping with a precautionary approach. First, as noted above, applicants are obliged to adduce sufficient evidence to convince pmra that the product does not pose an unacceptable risk to either human health or the environment. The implication is that unless such evidence is adduced, pmra will not register a new product, nor re-register a product currently registered. Second, if there is evidence of serious or irreversible risks to either human health or the environment, a special review process may be triggered, at least in the case of reevaluations.18 In the past, special reviews have been conducted by pmra on a number of registered products, including lindane, carbofuran and organotin

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antifouling paints. Third, in setting reference doses for pesticides or active ingredients, the estimated noael from toxicity studies is invariably multiplied by 1–4 safety factors, so that estimated reference doses used in the risk assessments are often 100 – 3 000 times lower than the estimated noael.19 Fourth, pmra currently uses (estimated) aggregate exposures for single pesticide active ingredients,20 which in principle represent the cumulative exposure associated with all routes of exposure and are a substantial improvement over the single exposure assessments conducted in the early stages of pmra’s mandate. Fifth, in January 2003, the pmra issued a proposal to amend Division 15 of the Food and Drug Regulations, Regulation B.15.002(1), and revoke the 0.1 ppm General Maximum Residue Limit (gml), and to replace the gml with specific maximum residue levels (mrls) depending on the pesticide and food(s) in question. The use of the default level for domestic and imported foods permits unnecessarily high levels of pesticide residues in food. The proposed setting of specific mrls for each pesticide and food combination would bring Canada in line with regulatory practices elsewhere. Precaution in PMRA Decisions We reviewed 47 new registration decisions and 106 re-evaluations conducted during the period 1987–2005, during which time pcpa (1985) (not pcpa (2002)) was in force. Although none of the 153 reviewed decisions made explicit reference to precaution, 25 (18/47 = 38.3% of registrations and 7/106 = 6.6% of re-evaluation decisions) made reference to rationales that implied or implicated elements of a precautionary approach. Henceforth we refer to these decisions as “implicitly precautionary.” For the 25 implicitly precautionary registration, assessed decisions scored highly with respect to elements (1) and (6), but poorly with respect to all other elements (Figure 1). Elements (1) and (6) are clearly similar insofar as both are concerned with the reversed burden of proof; this similarity is reflected in the strong correlation (Spearman rank correlation = 0.87, df = 24, p < 0.001) between them. Thus, to the extent that stated rationales for past decisions have been implicitly precautionary, the implicated precautionary elements are almost exclusively those associated with a reversed onus of proof. Is PMRA Practicing Precaution? Historically, precaution in pmra decisions has taken primarily two forms: (1) the reversal of the onus of proof; and (2) in pesticide risk assessment, precautionary safety factors for estimating reference doses. More recently, additional precautionary elements have been introduced by moving from single to aggregate-exposure assessments, and to multiple exposure assessments for compounds of (putatively) similar modes of action.

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Under pcpa (2002) pmra has a statutory obligation to use the precautionary principle in re-evaluations and special reviews. At present, it is unclear to everyone – including pmra – how this obligation will affect decisions in general, and the risk assessment process in particular. This is why, in its 2003–2008 strategic plan, pmra notes that it intends to achieve its primary strategic objective by “developing new science policies, methodologies and guidelines to assess risk and value, including a pmra policy on use of the precautionary principle.”21. In developing such a policy, we recommend that pmra: 1 Make explicit what is required to trigger the application of precaution under pcpa (2002) 20.(2). In practice, this means that pmra must produce a set of guidelines as to what constitutes both necessary and sufficient evidence that a product poses a “serious risk” to human health or the environment; 2 Establish guidelines for how the “degree” or “extent” of precaution is determined in registration and (particularly) re-evaluation decisions. Some progress has been made on this front by other institutions. For example, the Government of Canada in its document “A Canadian Perspective on

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the Precautionary Approach/Principle,”22 notes, as a guiding principle, that “Precautionary measures should be proportional to the potential severity of the risk being addressed and to society’s chosen level of protection.” 3 Make explicit how, precisely, weight of scientific evidence is assessed during the review process, including details on what information sources were tapped for scientific information, how the published scientific literature was searched (e.g. search criteria), what criteria were used to determine whether a particular study was relevant to the decision at hand; and how the “weight of evidence” associated with both a particular study and the collection of studies was determined; 4 Make explicit how uncertainty is addressed in the decision process. There are different sources of scientific uncertainty, among which the appropriate method of accommodating uncertainty will vary considerably, both for the risk analysis itself23 and the ultimate decision.24 So far as we can ascertain, at present most of the attention at pmra is focused on extrapolation uncertainty, and its accommodation would appear to be almost entirely by way of safety factors. Yet other approaches exist. Popper et al.,25 for example, suggest that given the generally low predictive power (and hence, high uncertainty) associated with the most pressing environmental issues, uncertainty analysis should take the form of robustness analysis in which the question is not: what is the best decision based on predicted outcomes, but rather, which decision is most likely to produce reasonably satisfactory outcomes even if predictions are wrong?26 Interestingly, the failure of pmra to take precisely this approach to uncertainty analysis was criticised by the cesd.27

a da p t i ve m a nag e m e n t i n pmra d e c i s i o n - m a k i n g Active adaptive management involves treating management decisions as bona fide experiments.28 This implies that: (a) hypotheses are elaborated before decisions are taken; (b) predictions concerning the effects of alternate decisions are derived from this/these hypothesis/es; (c) outcomes of decisions are assessed and compared to predicted outcomes; and (d) information obtained from the comparison of observed and expected outcomes is used in subsequent decisions. The criterion for registration under both pcpa (2002) and pcpa (1985), namely, that the product does not pose an unacceptable risk to either human health or the environment, satisfies the criterion for a scientific hypothesis (sensu Popper29) provided that that possible observed effects of the product are assigned a priori to one of (at least) two categories: “acceptable” and “unacceptable.” A decision to register a product implies that pmra has

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(provisionally, at least) accepted as true the hypothesis that the product poses no unacceptable risk. The corresponding prediction is then that if the product is used, no unacceptable effects will be observed. Consequently, if unacceptable effects are observed, then the hypothesis is falsified. Observing unacceptable effects in turn requires not only effects monitoring, but monitoring designed to maximize the likelihood of detecting “unacceptable” effects. Clearly, if monitoring is such that “unacceptable” effects, even if present, are very unlikely to be detected, then their absence cannot be construed as supporting the hypothesis. From these considerations, the minimal requirements for truly adaptive decision-making by pmra are: (1) registration and re-evaluation decisions must be accompanied by an explicit and unambiguous statement of what are considered unacceptable effects to human health and the environment arising from pesticide use; (2) there must be systematic monitoring of effects of product use, where and when they are applied, and such monitoring must be designed in such a way as to maximize the detection of unacceptable effects; (3) there must be regular reviews of previous decisions; (4) there must exist the statutory authority to revoke or amend previous decisions on re-evaluation; and (5) there must be a systematic procedure for incorporating information from past decisions into current evaluations. The Pest Control Products Act Neither pcpa (1985) nor the associated Pest Control Product Regulations contain any specifications concerning monitoring of product effects, by either the applicant, the registrant (in the case of re-evaluation) or pmra. pcpa (2002) is a distinct improvement in three respects. First, it requires the registrant to maintain and report to the minister on product sales (pcpa 2002, 8(5)). The importance of a comprehensive sales database has been recognized for some time. In 1997, the joint federal-provincial-territorial National Pesticide Sales Database Working Group was established to identify effective approaches for data collection, retrieval, reporting and analysis, for all registered pesticide products. Members of national pesticide industry associations voluntarily contributed sales data for 1999 and 2000, which allowed the pmra to test database elements including data entry, database structure and reporting functionality. At present, a draft version of the database has been developed and tested, but has not yet been fully implemented. Second, the act obliges the minister to set up and maintain an electronic product registry that contains information about pest control products, including information about applications, registrations, re-evaluations and special reviews “(pcpa 2002, 42. (1)). Third, the act includes a mandatory adverse effects reporting provision for “any prescribed

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information that relates to the health or environmental risks or the value of the pest control product to the Minister within the prescribed time and in the form and manner directed by the Minister” (pcpa 2002, 13.a) The Pesticide Review Process In assessing the level of adaptation inherent to the pmra review process, we need first to distinguish between adaptive responses to new internal (to pmra) information versus adaptive responses to new external information. With respect to the latter, the review process does incorporate certain, comparatively minimal, adaptive elements. The minister must undertake a special review if new information constitutes “reasonable” grounds for the belief that the product poses unacceptable risks (pcpa 2002, 17(1)). Second, the minister has discretionary authority to initiate a re-evaluation or special review if she believes that the information required to adequately evaluate health and/or environmental risks has changed since the original registration (pcpa 2002, 16(1)). Third, the minister must initiate a re-evaluation within 15 years for all registered products (pcpa 2002, 16(2)(b)). Adaptive Management in PMRA Decisions Of the 153 reviewed decisions, none made explicit reference to adaptive management. However, 149 (46/47 = 97.9% of new applications and 103/106 = 97.2% of re-evaluation decisions) made reference to rationales that implied or implicated elements of an adaptive management approach. Henceforth we refer to these decisions as “implicitly adaptive.” For the 149 implicitly adaptive decisions, unlike the case of precaution, the score assigned to a particular adaptive management element depends on whether one considers “knowledge” and “past decisions” to refer to knowledge and past decisions of pmra only (internal knowledge and decisionmaking) versus scientific knowledge and/or past decisions generated by institutions other than pmra (external knowledge and decisions). Under the former interpretation, adaptive elements (3) – (7) by definition apply only to re-evaluations, so that new registrations can be evaluated only with respect to adaptive elements (1) and (2). Under the latter interpretation (i.e. where “past decisions” may be previous decisions by pmra or another regulatory agency), all elements apply to both registrations and re-evaluations. We use this interpretation here. The results of the analysis are striking (Fig. 2). In no instance was there any indication that pmra decisions were treated as a scientific experiment, in the sense described above (element 1; Fig. 2a, b). Elements (4)-(7) all require, minimally, reasonably systematic monitoring of the effects of past decisions, and – in the case of elements (6) and (7) – that predicted effects

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be made explicit when registration decisions are made. It is therefore unsurprising that scores on these elements are uniformly low. Is the PMRA Practicing Adaptive Management? The current level of active adaptive management at pmra is low. Although the review process lays out an explicit process for the estimation or risks to human health and the environment (pmra 2000), none of the 153 reviewed decisions included an explicit statement of the estimated risk to various endpoints; an explicit statement of the cut-off between acceptable and unacceptable risk; or (c) an explicit statement of what would be considered unacceptable observed effects. Because this information is not specified, no registration or re-evaluation decision can be considered a scientific hypothesis. Second, even if conditions (a) – (c) above were satisfied, pmra engages in virtually no systematic post-registration monitoring. pmra 30 reports that between 1998 and 2003, there were 180 compliance monitoring programs to evaluate compliance with terms and conditions of registration and/or label specifications. But these programs provide virtually no information on actual field exposures or effects. Exposure analysis was limited almost entirely to food residues31 and so far as we were able to determine, none of these results are publicly available. pmra recognizes this deficiency and has, apparently, “taken steps towards improving its current reporting of results, and has also commenced the development of a framework for generating a report of compliance activities to be posted on the Agency website.”32

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This fundamental problem for adaptive management may, at least partially, be overcome if the proposed adverse effects reporting regulation comes into force, and the proposed database is well designed, well-populated and well-functioning. But this will only partially resolve the problem, because as proposed, reporting will be the responsibility of the registrant, not pmra. As such, there is no proposal for a monitoring system that would allow for independent validation of registrant information. Third, although under pcpa (2002) the Minister may use information other than that submitted by the applicant or registrant, informal inquiries suggest that when external information is used, it usually takes the form of information provided by other regulatory agencies: only rarely do evaluators have the time to initiate – let alone complete – comprehensive reviews of the existing scientific literature on the effects of the products in question. Fourth, there is the issue of the interval between registration and reevaluation. In adaptive management, the rate of adaptation depends in part upon how rapidly new information is incorporated into the decision process. The glacial pace of re-evaluations has been a chronic problem with pmra for more than a decade. In our view, pmra will not make significant headway on the adaptive management front unless: 1 Regulatory decisions are formally treated as scientific hypotheses, that means, minimally, an explicit specification of (a) unacceptable effects; and (b) unacceptable risk in the context of any rendered decision. 2 In collaboration with other partners, the development and implementation of a systematic post-registration effects and exposure monitoring system, including an appropriate electronic registry and database. Section 12.1 of pcpa (2002) gives the Minister discretionary authority to require of a registrant post-registration information which might include monitoring of effects, and that indeed, such monitoring may be a condition of registration (pcpa 2002, 12.2). However, in none of the registration decisions we reviewed was post-registration effects monitoring a condition of registration. 3 A clear, well-defined protocol is implemented for the incorporation of new information, both internal and external, into the decision process.

c o n c lu s i o n Recognition of the uncertainty inherent in risk-based decision-making, and the corresponding adoption of the precautionary principle and adaptive management as tools to address this uncertainty, are increasingly common in legislation and policy world-wide. There is, however, considerable confusion about how to implement these principles in real-world decision-making.33 The pmra explicitly recognizes the need to address uncertainty through

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risk-based decision-making, and now has a legislative requirement both to incorporate precaution and to review past decisions, a core element of adaptive management. That being said, substantial problems remain. The key to operationalizing the precautionary principle is distinguishing between instances where the principle should be invoked versus those where it need not be, i.e. the “trigger.” Bona fide application of the pp will require that pmra make explicit the trigger that invokes the pp, how the required degree of precaution is determined once the pp is invoked, and how weight of evidence is determined. In a similar fashion, all risk-based regulatory decision-making involves the notion of acceptable hazard, effects, or (more generally) risk. For pmra, as for all other regulatory agencies that take a risk-based approach to decisionmaking, there are then two critical operational questions: (1) on what basis is the set of potential outcomes (e.g. estimated risks) partitioned into acceptable versus unacceptable?; and (2) given some partitioning criteria, to what degree can the assessment methodology accurately predict which class a particular putative stressor belongs? Answering these in turn, requires (a) an explicit statement of the criteria by which acceptable and unacceptable risks are distinguished; (b) appropriate post-decision monitoring programs to assess whether predicted acceptable effects were indeed acceptable as defined in (a); and (c) an explicit framework by which information obtained from both post-implementation monitoring and other sources is incorporated in updating the risk assessment At the present time, to our knowledge pmra has neither (a) nor (b) nor (c), and we are visited by the suspicion that it is by no means unique in this regard.

notes 1 We thank Jennifer Chandler, Nathalie Chalifour, Dan Lane, the late Andre Dabrowski, and especially Jamie Benidickson and Heather McLeod-Kilmurray for advice and comments, and Suzanne Monette for editorial assistance. Support for this research was provided by the Law Commission of Canada and the Social Sciences and Humanities Research Council of Canada. 2 For discussions of adaptive management, see: Crawford S. Holling, Adaptive Environmental Assessment and Management (John Wiley, 1978); Carl J. Walters, Adaptive Management of Renewable Resources (Macmillan, 1986); Kai N. Lee, “Appraising adaptive management,” Conservation Ecology 3, 2 (1999): 3; William Leiss, In the Chamber of Risks (McGill-Queens University Press, 2001). 3 Tim O’Riordan, James Cameron and Andrew Jordan, eds. Re-Interpreting the Precautionary Principle (Camera and May Ltd., 2001). 4 See, for example: Michael Alvanja, C.R. Michael, Jane A. Hoppin, and Freya Kamel, “Health Effects of Chronic Pesticide Exposure: Cancer and Neurotoxicity,” Annual Review of Public Health 25 (2004), 155–97; Margaret Sears, C. Robin Walker, R.H.C

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5 6

7 8

9 10 11

12

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van der Jagt, and P. Claman, “Pesticide Assessment: Protecting Public Health on the Home Turf,” Paediatrics and Child Health 11, 4 (2006), 229–34; Bernard Weiss, Sherita Amler, and Robert W. Amler, “Pesticides,” Pediatrics 113 (2004), 1030–36. Indur M. Goklany, The Precautionary Principle: A Critical Appraisal of Environmental Risk Assessment (Cato Institute, 2001). Commissioner of the Environment and Sustainable Development (cesd), “Report of the Commissioner of the Environment and Sustainable Development to the House of Commons.” (Office of the Auditor General of Canada, 1999), available at http://www.oag-bvg.gc.ca. Pest Management Regulatory Agency (pmra), “Proposed Amendments to the Pest Control Products Act” (Pest Management Regulatory Agency, 1999). Standing Committee on Environment and Sustainable Development (scesd), “Making the Right Choice for the Protection of Health and the Environment” (House of Commons Standing Committee on Environment and Sustainable Development, 2000), xvii. pmra, Strategic Plan 2003–2008. H114-14/2003E-PDF (Public Works and Government Services Canada, 2004), 4. pmra, Good Laboratory Practices, Regulatory Directive DIR 98–01 (Pest Management Regulatory Agency, 1998). Evaluated documents included New Pesticide documents (Regulatory Decision (rdd series), Proposed Regulatory Decision Documents (prdd), Regulatory Notes (reg series)), Regulatory Policies documents (including the bgr, dir (only years 1999–2004), dis, lps, pro, and spn series), Re-evaluation Documents, Agency Plans and Reports, Registration Guidance Documents, and International Documents. Jamie Benidickson et al., Practicing Precaution and Adaptive Management: Legal, Institutional and Procedural Dimensions of Scientific Uncertainty (Social Sciences and Humanities Research Council and Law Commission of Ontario, 2005). pmra, “Pest Management Regulatory Agency Progress Report, 1998–2003.” H114-13/ 2003E (Public Works and Government Services Canada, 2004). pmra, “A Decision Framework for Risk Assessment and Risk Management at the Pest Management Regulatory Agency.” Science Policy Notice SPN 2000–01 (Pest Management Regulatory Agency, 2000). Commissioner of the Environment and Sustainable Development (cesd), “Report of the Commissioner of the Environment and Sustainable Development to the House of Commons, Ch. 1. Managing the safety and accessibility of pesticides” (Office of the Auditor General, 2003), 23. pmra, “A Decision Framework for Risk Assessment and Risk Management at the Pest Management Regulatory Agency.” Science Policy Notice spn 2000–01, 44–5. cesd, Report of the Commissioner of the Environment and Sustainable Development to the House of Commons, 2003, Ch. 1, 9. pmra, “A Decision Framework for Risk Assessment and Risk Management at the Pest Management Regulatory Agency.” Science Policy Notice spn 2000–01.

150 Scott Findlay and Annik Deziel 19 pmra, “Assessing Exposures from Pesticides in Food: A User’s Guide.” Science Policy Notice spn 2003–03. (Pest Management Regulatory Agency, 2003). 20 pmra, “General Principles for Performing Aggregate Exposure and Risk Assessments,” Science Policy Notice spn 2003–04 (Pest Management Regulatory Agency, 2003). 21 pmra, “Strategic Plan 2003–2008,” H114-14/2003E-PDF, 11. 22 Government of Canada (GOC), “A Canadian Perspective on the Precautionary Approach/Principle. Discussion Document.” (Environment Canada, 2001), accessible at http://www.ec.gc.ca/econom/discussion_e.htm. 23 See for example Glen Suter, Ecological Risk Assessment (Lewis Publishers, 1993). 24 John Harwood and Kevin Stokes, “Coping with Uncertainty in Ecological Advice: Lessons from Fisheries,” Trends in Ecology and Evolution 18, 12 (2003), 617–22. 25 Steven Popper, Robert J. Lempert, and Steven C. Bankes, “Shaping the Future,” Scientific American 292, 4 (2005), 66–71. 26 For discussion of this principle, see for example Steven C. Bankes, “Tools and Techniques for Developing Policies for Complex and Uncertain Systems,” Proceedings of the National Academy of Sciences 99 (2002), 7263–7266, and Robert Lempert, “New Decision Sciences for Complex Systems,” Proceedings of the National Academy of Sciences 99 (2002), 7309–7313. 27 cesd, “Report of the Commissioner of the Environment and Sustainable Development to the House of Commons, 2003,” Ch. 1, 10. 28 Carl J. Walters and Crawford S. Holling, “Large-Scale Management Experiments and Learning by Doing,” Ecology 71, 6 (1990), 2060–68. 29 Karl Popper, Conjectures and Refutations: The Growth of Scientific Knowledge (Harper and Row, 1965). 30 pmra, “Pest Management Regulatory Agency Progress Report, 1998–2003,” H114-13/ 2003E (H114-13/2003E-PDF) (Minister of Public Works and Government Services, 2004). 31 pmra, “Pest Management Regulatory Agency Progress Report, 1998–2003,” H114-13/ 2003E (H114-13/2003E-PDF), 60. 32 pmra, “Pest Management Regulatory Agency Progress Report, 1998–2003,” H114-13/ 2003E (H114-13/2003E-PDF), 62. 33 Kumanan Wilson, Blair Leonard, Robert Wright, Ian Graham, John Moffet, Michael Pluscauskas, and Michael Wilson, “Application of the Precautionary Principle by Senior Policy Officials: Results of a Canadian survey,” Risk Analysis 26, 4 (2006), 981–88.

8 Geological Carbon Storage: The Roles of Government and Industry in Risk Management rose murphy and mar k jaccard

Carbon dioxide capture and storage (ccs) offers the promise that humanity can continue to enjoy the benefits of fossil fuel use, while reducing its impact on the global climate. Carbon dioxide (CO2) would be captured from large point sources that burn fossil fuels such as power plants, hydrogen production plants, and industrial facilities. It would then be compressed and transported by pipeline or ship to a location suitable for long-term storage. CO2 can be stored in onshore or offshore geological formations or in the ocean; through industrial processes it can also be fixed into mineral carbonates. Geological ccs is the most promising of these options to date. Storage in the natural pore spaces of oil and gas fields and saline formations1 is relatively advanced, using technologies developed in the oil and gas industry. Complete ccs systems can be assembled today from technologies that are well understood and have been used commercially. By implementing ccs, it may be possible to reduce the overall cost of greenhouse gas (ghg) emissions reduction.2 Canada may benefit from developing ccs due to our substantial fossil fuel endowment. Currently, several major projects are being considered. However, despite the advantages, geological storage is associated with local and global risks that could limit the implementation of ccs.3 Although these risks appear to be small, the potential for very large damages exists – especially at the local level. The risks of storage extend over very long time periods and are uncertain. We believe that ccs should not be ruled out as an option for ghg emissions reduction because of the risks, but should instead be fairly considered using consistent sustainability criteria that would be applied for comparing this option for low-emission use of fossil fuels with other options such as nuclear power, renewable forms of energy, and accelerated energy efficiency.

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A legal and regulatory framework that addresses the risks of ccs and the associated public concerns is urgently needed. The risks of geological storage could lead to public opposition to ccs, and “public perceptions can have a very significant, and frequently unanticipated, effect upon major planned projects involving new technologies and infrastructure.”4 In this chapter, we will review the Canadian context for ccs development, describe the risks related to geological ccs, summarize what is known about the public perception of ccs, review the current legal and regulatory frameworks surrounding geological ccs, briefly discuss the specific legal and regulatory gaps that need to be filled, consider in more detail liability issues and the decision governments will face as to how to allocate liability between the public and private sectors, and draw some brief conclusions.

t h e c a n a d i a n con t e x t f o r ccs Achieving deep ghg emissions reductions has been established as a Canadian government priority; however, the exploitation of our vast fossil fuel resources (in particular the oilsands) is associated with significant emissions. Through ccs, Canadian emissions could be significantly reduced without abandoning our fossil fuel resources. Abundant storage opportunities exist in our sedimentary basins, particularly the Western Canadian Sedimentary Basin where most of the country’s fossil fuel resources are found. Geological storage can be combined with enhanced oil and natural gas recovery, or coalbed methane extraction. The expertise of Canadian researchers and industry in areas related to ccs could lead to economic advantages in the future.5 A variety of ccs projects are being considered, with a major CO2 injection project already underway in Saskatchewan. The Weyburn enhanced oil recovery (eor) project in western Canada is an industrial-scale injection project with a program for monitoring and verification. Since 2000, a plant in North Dakota has been shipping CO2 to Saskatchewan for injection into an aging oil field to increase its yield by 30 per cent. The North Dakota plant is a coal gasification facility that produces a hydrogen-rich gas for industrial uses and a stream of CO2 as a byproduct. Instead of being vented to the atmosphere, 20 million tonnes of the CO2 will be shipped over the next thirty years to the Canadian field in a 320 kilometre pressurized pipeline. Industry, governments, and researchers are closely monitoring the project. SaskPower, a Crown corporation producing two-thirds of the electrical energy in Saskatchewan, recently proposed building a 300 megawatt “clean coal” plant at the Shand generating station near Estevan, Saskatchewan. The plant would be the first of its kind in the world, using pulverized-coal technology combined with carbon capture and geological storage to achieve near-zero emissions according to proponents. Three million tonnes of

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captured CO2 per year would be available for eor projects. SaskPower officials pointed out that a price for CO2 credits in the range of $50/tonne would make the proposed plant the cheapest generation option.6 The project was to be completed by 2012; however, in late 2007 the utility announced that it was putting the plans on hold because new power sources are needed in the next three years, not leaving enough time to implement the new technology at a reasonable cost. Plans for major pipeline infrastructure projects linking CO2 emissions sources with geological disposal and eor sites are currently being discussed at high levels in Canada. A group of 14 companies including major industrial stakeholders is proposing an Integrated CO2 Network (ICO2N) that would spread from Alberta into other parts of western Canada, eventually spanning the country and creating links with the us. The industry group stresses the need for cost sharing with government and further development of a policy framework to address climate change and ccs.7 Alberta has requested federal assistance in building a pipeline to move CO2 from its utilities and oilsands operations to storage sites hundreds of kilometres away. Initially, the cost of the 400 kilometre pipeline was estimated at $1.5 billion; however, recent estimates have been as high as $5 billion, including the costs of carbon capture. So far, the federal government has committed $156 million and has created a task force to study the feasibility of the Alberta project. ccs is even being considered in eastern Canada. A group of researchers at the University of Waterloo have investigated the possibility of capturing CO2 from coal-fired generation at Ontario Power Generation’s Nanticoke plant, located in southwestern Ontario, and injecting it under Lake Erie.8 The possibility of exporting CO2 to storage sites in the us (just as a us plant is sending CO2 to Weyburn Saskatchewan) is also being explored.

th e risks of geolo g ical ca r b on stor age The risks of geological carbon storage can be divided into local and global risks. Local health, safety and environmental impacts are associated with three processes. First, leakage from the storage formation could result in elevated concentrations of CO2 at the earth’s surface or in the shallow subsurface. An abrupt leak could occur as a result of a failure of the storage seal or injection well, travel of the CO2 up an abandoned well,9 accidental puncture of the reservoir by subsequent drilling activity, an earthquake or volcanic eruption, or gradual leakage to a confined space. Faults, fractures, or wells could be sources of gradual leaks. The impacts of a leak would depend on the resulting concentrations of CO2, as influenced by the rate (abrupt or gradual) and volume of the leak. At the surface, impacts would also be influenced by atmospheric conditions and topography – CO2 is denser than air and tends to accumulate in

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pits or depressions. Elevated concentrations of CO2 are known to cause physiological effects in humans and animals; suffocation is possible at high concentrations. Plants may be damaged or killed. In the second process, CO2 dissolved in subsurface fluids could have an impact on groundwater chemistry, leading to possible contamination of groundwater. Third, existing materials in the subsurface could be displaced by co 2 injection. This could cause ground heave and seismicity, and could result in the contamination of drinking water and damage to hydrocarbon and mineral resources.10 Global risk stems from the potential for co 2 to leak to the atmosphere from storage, reducing the effectiveness of geological storage. In fact, because some components of the ccs process consume energy from fossil fuels and generate their own co 2 emissions, leaky storage could actually result in a net increase in ghg emissions. The emissions would, however, be delayed in time.11 The risks of geological storage extend over very long time periods. If CO2 is injected deep enough into oil and gas fields or saline formations, it will gradually be immobilized by physical and geochemical trapping mechanisms.12 Prior to immobilization, however, there is a very long time period during which leakage can occur, potentially resulting in local and global impacts. Regulatory control will therefore be necessary over a much longer period of time than for most industrial activities. The local risks of geological storage may need to be addressed over a period of several thousand years, based on the estimated time required for CO2 to become trapped by dissolving into the waters of the geological formation.13 The Intergovernmental Panel on Climate Change (ipcc) provides some insight into the magnitude of the local and global risks associated with geological storage. It concludes that if storage sites are carefully selected, designed, and managed, “the local health, safety and environment risks of geological storage would be comparable to the risks of current activities such as natural gas storage, eor and deep underground disposal of acid gas.”14 For global risk, “observations from engineered and natural analogues as well as models suggest that the fraction retained … is very likely to exceed 99 per cent over 100 years and is likely to exceed 99per cent over 1,000 years.”15 The authors of a recent study from mit note, however, that “since the number of CO2 injection cases that are well studied (including field efforts) are exceedingly small, there is neither theoretical nor empirical basis to calculate CO2-risk pdfs [probability density functions].”16

p u b l i c p e r c e p t i o n o f ccs The chapter dealing with geological storage in the ipcc Special Report on Carbon Dioxide Capture and Storage summarizes the limited research that has been undertaken into public perceptions of ccs.17 Researchers face a lack of knowledge among members of the public of the climate change problem

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and potential mitigation options – ccs is particularly poorly understood. The authors of the ipcc chapter reviewed studies undertaken in the us, Europe, and Japan, but found that direct comparisons are constrained by methodological discrepancies. They suggest that in order for ccs to be viewed as a “credible technology,” climate change must be taken seriously, the need for significant reductions in CO2 must be understood, and ccs must be regarded as a benign and effective option for achieving such reductions and reducing the threat of climate change. Even if these conditions are met, negative perceptions could result in rejection of the technology. ccs may be seen as an “end of pipe” solution that does not address our dependence on fossil fuels and acts as a hindrance to an inevitable transition to renewable energy. Where acceptance of ccs is indicated, it is generally not “enthusiastic” but “reluctant.” A general acceptance of ccs does not indicate that storage will be tolerated at a particular location. A review for the Acceptance of Carbon dioxide Capture and Storage Economics, Policy and Technology (accept) project comes to many of the same conclusions as the ipcc chapter.18 The authors of the review note that greater attention to ccs by the media may be improving knowledge among the pubic. They summarize research to date as indicating a “more neutral than negative” perception of ccs, and emphasize the potential for non-governmental organizations (ngos) to influence public opinion. They explain that the ngo position on ccs is often conditional. A group might be strongly opposed if development of ccs is seen as displacing investment in renewable energy and energy efficiency measures, but somewhat supportive if it is seen as a bridge to a renewable energy economy. Vajjhala et al. observe that “public concerns about ccs are similar to concerns about many large facilities, including fear of leakages, health risks, environmental effects, and loss of property value.”19 Because some studies show increased public acceptance of ccs as more information is provided, they recommend that communication about technological aspects and risks be initiated early on. It will be especially important to educate those living close to proposed storage sites in order to avoid a numby (not under my backyard) response. Because the outcome of early projects will be crucial in shaping public opinion, Vajjhala et al. recommend that these be undertaken at the most suitable and secure sites, outside of ecologically sensitive areas. Sharp addresses public perceptions of geological storage in Canada based on two focus groups and an Internet-based survey.20 Overall, she found Canadians to be “slightly supportive” of storage. Respondents believed the technology would have a positive impact on the environment overall and considered the risks to be less than those associated with normal oil and gas industry operations, nuclear power, or coal-burning power plants. However, they perceived the risks of geological storage as being more important than the benefits – of greatest concern were “unknown future impacts,

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contamination of groundwater, the risk of a CO2 leak, and harm to plants and animals.”21 The results indicated that energy efficiency and renewable energy are much more popular options for Canadians than ccs; the latter must be maintained as part of a portfolio of ghg mitigation options in order to be supported. The majority of Canadians opposed to ccs would reduce their opposition given more information; strong regulation and monitoring involving the federal government, independent experts, and ngos; and no negative impact on funding for renewable energy and energy efficiency. Canadians could also be swayed by the implementation of ccs in other countries and by positive representation of the technology in the media. Survey results suggested that the most important characteristic of a ccs project as far as the Canadian public is concerned is the managing entity – there is a strong preference for management by government over management by industry. Provincial disaggregation showed that people in Alberta and Saskatchewan would like to see management at the provincial level, while in the rest of Canada the preference was for federal management.

c u r r e n t l e g a l a n d r e g u l at o r y f r a m e w o r k s f o r ccs The legal and regulatory framework that would currently apply to a ccs project with geological storage depends on whether onshore or offshore storage is proposed. Onshore storage activities fall under the authority of national, state, or provincial governing bodies22 – unless there are adverse effects across national borders, in which case international law would apply. In Canada, jurisdiction is shared between the provincial and federal levels of government. The provinces have jurisdiction over geological resources, and would be responsible for regulating with respect to the local risks of geological storage. Disposal of CO2 and hydrogen sulphide (H2S) mixtures (acid gas) resulting from sour gas processing is currently regulated by provincial entities such as the Energy and Utilities Board in Alberta. The federal government has jurisdiction when it comes to transboundary issues, trade, and the environment. A federal responsibility is therefore indicated when it comes to managing the global risk of ccs.23 Legislation governing mining, resource conservation, drinking water protection, waste disposal, oil and gas production, treatment of high pressurized gases, and other activities can be applied to onshore storage.24 In Canada and in other countries reviewed by the Organization for Economic Cooperation and Development (oecd) and the International Energy Agency (iea): “existing frameworks cover adequately or could be modified to cover adequately the … [capture], transport and possibly injection stages of ccs. There are serious gaps regarding long-term storage issues such as monitoring and liability. There is also no framework governing the valuation of CO2

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stored, emissions reduction and emission permits.”25 Countries wishing to pursue widespread development of ccs will need to develop their legal and regulatory frameworks to fill in the gaps identified. At the same time, they must reduce redundancies and streamline their regulatory processes.26 Offshore storage is subject to international legal agreements on the marine environment including the 1972 London Convention, the 1996 London Protocol, and the 1992 ospar convention.27 Because these treaties do not explicitly deal with ccs, legal uncertainties and inconsistencies arise from the interpretation of their general provisions. There is a need for the contracting parties to interpret, clarify, or, if necessary, amend these agreements.28, 29

gaps in the legal a n d r e g u l at o r y f r a m e w o r k s In order to clarify the regulatory environment surrounding ccs, it will be important to resolve questions regarding the classification of CO2. Is CO2 destined for geological storage a waste, and if so, to which category of waste does it belong? In most jurisdictions, designation as a waste would trigger the application of a regulatory structure meant to deal with substances that are hazardous or toxic to some degree. This situation could result in ccs projects facing more stringent requirements than necessary, given that CO2 is nontoxic at low concentrations. Classification as a waste could also have a negative influence on public perception. Classification should take into consideration the purity of the gas to be stored, as contaminants may be present.30 Vajjhala et al. recommend that CO2 be assigned its own classification in the context of ccs projects.31 The key legal and regulatory gaps that must be addressed to allow for implementation of geological storage on a large-scale may be categorized as follows: site assessment and selection, property rights and ownership, monitoring and verification, valuation of ccs for accounting and emissions trading, and the establishment of a liability regime. These categories are interrelated, with decisions in one area having the potential to influence others. The information collected during the site selection process could be used to determine monitoring requirements. Proper site selection and monitoring could prevent damages and associated liabilities. Ownership may help to establish the liable entity, and the liable entity will have a role to play in monitoring. Monitoring and verification will be needed to evaluate the global risk of ccs and to quantify its value for accounting and trading purposes. Policy decisions in many of these areas may require additional empirical information on the long-term risks of storage.32 There is a need to develop appropriate criteria to be used in assessing and selecting geological storage sites. Vajjhala et al. recommend a series of criteria including: the ability of the pore spaces in the geological formation to accept

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injected CO2, the potential of the site to hold CO2 over the long-term, the total capacity of the geological formation, the proximity of the site to sources of CO2 and necessary transportation infrastructure, the knowledge gained that could be transferred to other sites, and the geological stability of the region. They suggest that prospective sites could be assessed based on a series of weighted criteria, with the resulting scores used to determine the stringency of subsequent monitoring and review requirements.33 ccs raises questions to do with property rights and ownership that remain unresolved in most jurisdictions. Who owns the pore space in which CO2 would be stored? Could rights to use the pore space be granted separately from surface ownership? How will access to injection sites be obtained if the entity carrying out the storage project is not the owner of the surface land? How should potential damages to other property rights, such as rights to mineral resources and water, be addressed?34 Clarification is needed so that proponents and regulators will have more certainty with respect to their rights and liabilities. Monitoring and verification of geological storage will be necessary in order to detect leaks (and movements of the CO2 that could result in leaks) so that mitigating action may be taken, and evaluate performance in terms of how much CO2 is contained and how much leaks back to the atmosphere. Data will be collected through these activities that will further our scientific understanding of geological processes and the risks associated with ccs. During the injection phase, monitoring can also help optimize the efficiency of the project.35 Current injection activities are not subject to any long-term monitoring or verification requirements. A protocol on monitoring and verification should establish what level of monitoring is required, how data will be recorded, what entity will oversee the monitoring program, who will bear the costs of monitoring, and over what timeframe and at what frequency monitoring will occur.36 ccs is associated with global risk, meaning that the CO2 could leak from geological storage, reducing the effectiveness of ccs as an option for climate change mitigation. Because of this risk, it may be necessary to make a downward adjustment to the value of ccs under systems that account for ghg emissions and govern emissions trading. It will be difficult to establish a value for ccs because many of the factors involved are uncertain and disputed; these factors include the magnitude of releases that will occur in different time periods, the discount rate to be used in assessing future flows of costs and benefits, and the damages that will be associated with emissions in the future as compared to emissions in the present. Integration of ccs into the international climate regime, including the United Nations Framework Convention on Climate Change (unfccc), its Kyoto Protocol, and the European Union Emissions Trading Scheme (eu ets) will be necessary.

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There are a number of different ways of building a framework to govern geological ccs. Governments may choose to amend existing legislation or adopt a completely new framework specific to geological storage. Many countries prefer amendment on the grounds of efficiency and simplicity; however, this might not be enough in cases where there are large gaps in the existing regulatory framework. Different ways of sharing responsibility between national/sub-national and international governing bodies are possible.37 Vajjhala et al. recommend that minimum standards be established internationally, with countries and regions able to implement regulations that are more stringent or that apply to special cases.38 Preliminary regulations – including liability exemptions or limitations – could be put in place to allow and encourage demonstration projects.39 Wilson et al., however, caution against early regulation that is not based on “adequate understanding and debate,” and that may be difficult to amend later.40 Regulation may be procedural or performance-based. Procedural regulation specifies what an operator must do (how they must construct an injection well); while performancebased regulation specifies the outcome they must achieve (a maximum CO2 leakage rate).41

liabilit y for geolo g ical stor age The liability issues surrounding ccs have received little attention in the literature. A notable exception is the analysis by de Figueiredo et al.42 These authors describe three sources of liability associated with geological storage activities – operational liability, climate liability, and in situ liability. Operational liability stems from the environmental, health, and safety risks associated with CO2 capture, compression, transport, and injection into the storage formation. A successful framework for managing operational liability is already in place within the oil and gas industry. Climate liability is associated with the potential for CO2 to leak from storage reservoirs to the atmosphere, affecting the global climate. Climate liability is linked to the global risk of ccs. It is expected that this category of liability will be addressed primarily through accounting rules developed under national and international climate change regulatory regimes.43 We discussed the issue of valuing ccs for accounting and emissions trading purposes in the previous section. In situ liability arises from the local risks described below. Once CO2 enters the storage formation it is subject to in situ processes. Leakage and migration can cause public health, environmental, and ecosystem damages. In situ liability is regarded as the most important source of liability to consider over the long-term. De Figueiredo et al. also review the standards of liability under which a private firm might be required by the courts to pay compensation for in situ damages associated with geological carbon storage. The de Figueiredo et al.

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analysis is for the us, but may be applied to other countries because of general principles shared by major legal systems. Negligence – “the failure of a person to exercise reasonable care” – is the basis for establishing most accident claims in cases where liability is not specifically addressed by the law.44 Firms engaged in geological storage would have to exercise “the skill and knowledge normally possessed by members of the profession” in order to avoid being found negligent.45 The courts have found that the standard of due care under negligence law adequately addresses the risks associated with underground transmission of natural gas. For “abnormally dangerous activities,” de Figueiredo et al. explain that the courts or the legislature may impose “strict liability.” Strict liability holds a person liable for the harm caused by his or her actions whether reasonable care was exercised or not. This standard ensures that the entity with the greatest control over the risks of an activity is also responsible for any damage costs. Ultimately, the courts will decide whether geological ccs is dangerous enough to be subject to strict liability. The us Comprehensive Environmental Response, Compensation and Liability Act (cercla, also known as Superfund) imposes strict liability with respect to releases of hazardous wastes. In addition to strict liability, cercla assigns “joint and several liability.” Under joint and several liability, if two or more parties are found to be strictly liable, each of them can be held responsible for the full extent of the damages awarded in a case, regardless of who was at fault. In the application of joint and several liability to hazardous waste, parties that may be held liable for damages include those who currently own or operate the disposal facility, previous owners or operators, firms that generated or transported the waste, and even intermediaries who arranged for transportation. While the judiciary has final authority with respect to liability issues, there is a clear role for governments to play in developing legislation to address responsibility for possible in situ damages related to ccs. According to the oecd/iea, “any framework should ensure the continuous existence of a liable entity.”46 The key issues to be decided relate to the allocation of in situ liability between the public and private sectors over time. Possible responses will be described below in the context of a spectrum from public to private liability (Figure 1). These responses include public liability, limited private liability, private liability imposed through strict liability, and shared private liability through insurance mechanisms. Liability can be transferred from the private to the public sector, a process referred to as “project abandonment.”47 A framework for addressing liability can combine more than one of these elements. The Price-Anderson Act regulating the us nuclear industry limits private liability, and requires operators to carry private insurance and participate in a joint insurance pool. Keith and Wilson argue that liability for geological storage must ultimately be public because of the long timescales involved. Private liability is not

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Public Public liability liability

Limited Limitedprivate private liability liability

Private Private liability liability

Shared private Polluter pays; Shared private Polluter pays; liability (insurance) strict liability (insurance) strict liability liability Project abandonment Project abandonment Figure 1 Possible responses to allocating in situ liability for geological carbon storage, arranged on a spectrum between public and private liability

viable because the lifetime of a company is too short, and long-lived companies tend to offload outstanding liabilities onto smaller, more short-lived companies.48 Record keeping in the public sector is believed to be more effective than in the private sector, although it is not clear whether even a system of public liability could assure monitoring and verification, as well as the dissemination of information on storage locations to other users of the subsurface over the long-term.49 Keith and Wilson view the advantages (reducing CO2 emissions to the atmosphere at a relatively low cost) and disadvantages (potential for leaks resulting in future emissions, damage to the surface environment) of ccs as fundamentally public in nature.50 A mix of private and public liability is also possible; the main way this has been achieved in analogous situations is by limiting the damages for which private companies may be held responsible. To explore this possibility further it is useful to review how indemnity legislation has been applied to the nuclear industry. In the us, the Price-Anderson Act of 1957 requires all nuclear plants to acquire us$200 million in private insurance. In addition, each plant must contribute to a joint insurance pool to cover up to us$9.3 billion in damages. Beyond the us$9.5 billion available from industry, the federal government assumes liability.51 In Canada, the liability of a nuclear operator for any single accident is limited to $75 million (Canadian) by the 1970 Nuclear Liability Act. There are disadvantages to limiting the liability of nuclear operators that are also relevant in considering liability protection for ccs. In 1993, ShraderFrechette estimated that liability coverage under the Price-Anderson Act was less than 5 per cent of the cost of cleaning up after the Chernobyl accident.52 Critics have argued that the level of public subsidy implicit in the lack of private insurance coverage encourages nuclear energy at the expense of other energy sources and erodes safety incentives.53 Liability limits could have a negative impact on the public’s perception of ccs if government is seen as subsidizing it over other options for ghg mitigation like renewable energy and energy efficiency. Furthermore, liability caps have in the past been reserved for situations of catastrophic and uninsurable risk such as nuclear

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accidents and terrorism. Liability limits for geological ccs could therefore create associations detrimental to public perception.54 Indemnity protection for nuclear operators has faced constitutional challenges in Canada, the us, and other jurisdictions. In the early 1990s, the Canadian Nuclear Liability Act was subject to several years of litigation. It was argued by a group of concerned parties including the City of Toronto that the Charter of Rights assures Canadians of their right to compensation if unduly deprived of “life, liberty and security of the person,” and that in limiting such compensation the Nuclear Liability Act is unconstitutional. Although the legal challenges were ultimately unsuccessful, the ethical question remains: Should the Canadian government be limiting the compensation rights of its citizens in the event of a nuclear accident?55 The European Union’s Directive on Environmental Liability, adopted in 2004 and to be implemented by 2007, takes a “polluter pays” approach. The purpose of the directive is to prevent damage to habitats, protected species, and water resources; and contamination of land that threatens human health. Economic loss, personal injury, and property damage are not covered. Strict liability applies to damage to land, water, and biodiversity resulting from “dangerous activities;” while fault-based liability applies to damage to biodiversity resulting from non-dangerous activities.56 It is believed that carbon storage would be considered a dangerous activity under the Directive, meaning that some types of in situ damages would be covered by strict liability.57 A polluter pays regime with strict liability is located at the private liability end of the spectrum in Figure 1. The European Commission’s White Paper on Environmental Liability notes that in recent years, national and international liability regimes emphasizing the polluter pays principle for environmental damages have tended to rely on strict liability because fault can be especially difficult to establish in environmental liability cases.58 Under strict liability, it is not necessary to demonstrate that a party is at fault, only that that their act (or omission) caused damage. The authors provide further justification for strict liability on an ethical basis – those engaged in inherently dangerous activities should be responsible for related damages, not the victim(s) or the general public. Strict liability creates appropriate incentives for firms to reduce the risks associated with their activities, but can discourage the private sector from engaging in activities to which this liability standard applies. If the private sector is required to bear the in situ liability associated with ccs, measures may need to be put in place to ensure that owners and operators have access to adequate financial resources to cover damages. Insurance, special funds, or financial guarantees may be required. De Figueiredo et al. describe the requirements for demonstrating financial responsibility under the Underground Injection Control Program in the us.59

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Insurance is effectively a mechanism for sharing private liability among a number of firms. If research indicates that the risks of ccs are low enough and predictable enough, private companies may be willing to supply insurance. The European Commission emphasizes the importance of insurability, but explains that “insurance availability for environmental risks, and in particular for natural resource damage, is likely to develop gradually.” This is because widely accepted methods for quantifying environmental damage have yet to be developed. The situation “justifies a cautious approach in setting up the liability regime.”60 In the absence of private insurance, shared liability could be established by requiring companies active in geological ccs to participate in a joint insurance pool, as us nuclear plants must do under the Price-Anderson Act. A liability regime could mandate a shift in liability over time from private companies to government. Keith and Wilson refer to this process as “project abandonment” and draw a parallel with the abandonment of individual wells in the oil and gas industry.61 They note that in an application to ccs, project abandonment might entail more stringent and general requirements of the private operator. If a clear and orderly transfer mechanism is not in place, Keith and Wilson warn that uncertainty about long-term liability will discourage private companies from getting involved in ccs projects. A group of authors at mit propose that liability should rest with industry in the near term (possibly 10 to 20 years after injection of the CO2) before being transferred to government. The transfer of responsibility would be subject to the private firm demonstrating that a series of regulatory criteria have been met.62 A transfer of responsibility to government also implies a transfer of ownership of the storage site and a transfer of monitoring and reporting duties.63

conclusions Canada may have a strategic interest in developing ccs due to our geology and the nature of our fossil fuel industry, and several major projects are currently under consideration. Geological carbon storage, however, is associated with local and global risks that – while they are believed to be small and manageable – entail potentially serious impacts, extend over the very long-term, and are uncertain. Widespread implementation of ccs cannot occur unless a legal and regulatory framework is established to govern geological storage and address the risks. Such a framework will be essential in gaining public confidence in the safety and effectiveness of ccs. If Canadian governments and stakeholders in industry wish to develop ccs as an option for ghg emissions reduction, public concerns will need to be addressed. Research into public perceptions indicates that this can be done through education about climate change and ccs; a strong regulatory

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environment; management by provincial governments, the federal government, or some combination of both; and continued funding for energy efficiency and renewable energy as alternatives for ghg reduction. Elements of the legal and regulatory framework that are particularly important in terms of public perception are site assessment and selection, monitoring and verification, and liability. It may be necessary to address negative perceptions about the role ccs could play in prolonging fossil fuel dependence. ngos and the media could be very influential in swaying public opinion about geological storage. A legal and regulatory framework for geological ccs must consider whether or not CO2 is a waste and must address current regulatory gaps – notably in site assessment and selection, property rights and ownership, monitoring and verification, valuation of ccs for accounting and emissions trading, and liability. Process decisions will determine the extent to which existing legal and regulatory frameworks are used, and the allocation of responsibility for governance between national/sub-national and international governing bodies. In Canada, jurisdiction over geological storage is shared between the provincial and federal levels of government – as a general rule, it is likely that the provinces will regulate with respect to local risks, while the federal government will be responsible for addressing global risk. A key issue that legislators in Canada and elsewhere will need to resolve is how to allocate liability for ccs – especially in situ geological storage liability linked to the local risks – between the public and private sectors over time. Public liability could address long-term risks more effectively and would encourage private sector participation in ccs. On the other hand, private liability – and in particular strict liability – creates a stronger incentive for companies to minimize risk, and does not implicitly subsidize ccs over other options for ghg mitigation. The burden of private liability need not fall on the individual firm; it may be shared within the private sector through insurance mechanisms. If insurance carriers are not able to provide enough insurance, companies engaged in geological ccs could be required to contribute to a joint insurance pool. Insurance and other mechanisms may be necessary in the case of private liability to ensure that firms will have the resources to provide adequate compensation if an accident occurs. A compromise between public and private liability could be achieved by limiting the liability of the private sector, as has been done in the nuclear industry. However, the ethics of limiting the due process rights of citizens in the event of an accident are questionable. Addressing liability for geological ccs in this way could also damage public confidence by giving the impression that the risks are catastrophic and uninsurable.64 Liability may be shifted from industry to government over time, possibly through a process of “project abandonment.”65

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acknowled gements Funding assistance for this research was provided by the Natural Sciences and Engineering Research Council of Canada (nserc).

notes 1 Saline formations are sedimentary rocks saturated with waters containing high concentrations of dissolved salts. 2 ipcc (Intergovernmental Panel on Climate Change), “Summary for Policymakers,” ipcc Special Report on Carbon Dioxide Capture and Storage. (Cambridge University Press, 2005), 1–16. 3 Risk takes into account the magnitude of a potential impact as well as its probability of occurrence. 4 H. de Coninck, J. Anderson, P. Curnow, T. Flach, O. Flagstad, H. Groenenberg, C. Norton, D. Reiner, and S. Shackley, Acceptability of CO2 Capture and Storage: A Review of Legal, Regulatory, Economic and Social Aspects of CO2 Capture and Storage. (Energy Research Centre of the Netherlands, 2006), 22. 5 Natural Resources Canada, Canada’s CO2 Capture and Storage Technology Roadmap. (Natural Resources Canada, 2006). 6 B. Johnstone, “Clean-coal plant contemplated,” The Leader-Post, 31 March 2006. Available at http://www.canada.com/reginaleaderpost/news/ story.html?id=5956d85d-3e0f-48ea-8ae6-c8121e5c6223&k=68895; accessed 13 Sept. 2007. 7 G. Jaremko, “Massive plan would capture carbon; Group lays groundwork for costly scheme to bury greenhouse gases,” The Edmonton Journal, June 6, 2007, E11. 8 A. Shafeen, E. Croiset, P.L. Douglas, and I. Chatzis, “CO2 Sequestration in Ontario, Canada. Part I: Storage Evaluation of Potential Reservoirs,” Energy Conversion and Management 45 (2004), 2645–59; A. Shafeen, E. Croiset, P.L. Douglas, and I. Chatzis, “CO2 Sequestration in Ontario, Canada. Part II: Cost Estimation,” Energy Conversion and Management 45 (2004), 3207–17. 9 Abandoned wells are an issue because drilling for hydrocarbon exploration and production has occurred at many potential CO2 storage sites. 10 E.J. Wilson, T.L. Johnson, and D.W. Keith, “Regulating the Ultimate Sink: Managing the Risks of Geologic CO2 Storage,” Environmental Science and Technology 37 (2003), 3476–83; S. Benson, P. Cook, and multiple co-authors, “Underground Geological Storage,” in B. Metz, O. Davidson, H.C. de Coninck, M. Loos, and L.A. Meyer, eds., ipcc Special Report on Carbon Dioxide Capture and Storage. (Cambridge University Press, 2005), 195–276; ipcc, “Summary for Policymakers;” P. Freund, A. Adegbulugbe, O. Christophersen, H. Ishitani, W. Moomaw, and J. Moreira, “Introduction,” in B. Metz, O. Davidson, H.C. de Coninck, M. Loos, and L. A. Meyer, eds., ipcc Special Report on Carbon Dioxide Capture and Storage. (Cambridge University Press, 2005), 51–74.

166 Rose Murphy and Mark Jaccard 11 Wilson et al., “Regulating the Ultimate Sink.” 12 ipcc, “Summary for Policymakers.” 13 M. Stenhouse, M. Wilson, H. Herzog, B. Cassidy, M. Kozak, and W. Zhou, Regulatory Issues Associated with the Long-Term Storage of CO2. (Monitor Scientific LLC, 2004). 14 ipcc, “Summary for Policymakers,” 12. 15 ipcc, “Summary for Policymakers,” 14. The ipcc uses the term “very likely” to indicate a probability between 90 and 99 per cent; “likely” indicates a probability between 66 and 90 per cent. 16 S. Ansolabehere and multiple co-authors, The Future of Coal: An Interdisciplinary mit Study (Massachusetts Institute of Technology, 2007). 17 Benson et al., “Underground Geological Storage.” 18 De Coninck et al., Acceptability of CO2 Capture and Storage. 19 S. Vajjhala, J. Gode, and A. Torvanger, An International Regulatory Framework for Risk Governance of Carbon Capture and Storage. (Resources for the Future, 2007), 9. 20 J. Sharp, Public Attitudes Toward Geological Disposal of Carbon Dioxide in Canada, Master’s Thesis. (School of Resource and Environmental Management, Simon Fraser University, 2005). 21 Sharp, Public Attitudes, v. 22 Regional authority over onshore storage is also possible, as in the case of the European Union. 23 oecd/iea (Organization for Economic Cooperation and Development / International Energy Agency), Legal Aspects of Storing CO2. (Paris, 2005); D.W. Keith, Towards a Strategy for Implementing CO2 Capture and Storage in Canada. (Environment Canada, 2002). 24 Benson et al., “Underground Geological Storage.” 25 oecd/iea, Legal Aspects of Storing CO2, 34. 26 oecd/iea, Legal Aspects of Storing CO2. 27 The Convention for the Protection of the Marine Environment of the North-East Atlantic is known as the ospar Convention. 28 oecd/iea, Legal Aspects of Storing CO2. 29 The London Protocol was amended in November 2006 to permit storage of CO2 in sub-seabed formations. 30 oecd/iea, Legal Aspects of Storing CO2; Vajjhala et al., An International Regulatory Framework. 31 Vajjhala et al., An International Regulatory Framework . 32 oecd/iea, Legal Aspects of Storing CO2. 33 Vajjhala et al., An International Regulatory Framework . 34 Benson et al., “Underground Geological Storage.” 35 Benson et al., “Underground Geological Storage;” Ansolabehere et al., The Future of Coal; oecd/iea, Legal Aspects of Storing CO2. 36 oecd/iea, Legal Aspects of Storing CO2; Ansolabehere et al., The Future of Coal; Vajjhala et al., An International Regulatory Framework. 37 oecd/iea, Legal Aspects of Storing CO2.

167 Geological Carbon Storage 38 39 40 41 42

43

44 45 46 47

48 49 50

51 52 53 54 55 56 57 58 59 60 61 62 63 64 65

Vajjhala et al., An International Regulatory Framework. oecd/iea, Legal Aspects of Storing CO2. Wilson et al., “Regulating the Ultimate Sink,” 3476. Wilson et al., “Regulating the Ultimate Sink.” M.A. de Figueiredo, D.M. Reiner, and H.J. Herzog, “Framing the Long-Term In Situ Liability Issue for Geologic Carbon Storage in the United States,” Mitigation and Adaptation Strategies for Global Change 10 (2006), 647–657. iea Greenhouse Gas r&d Programme, Overview of Long Term Framework for CO2 Capture and Storage. (Cheltenham, United Kingdom: iea Greenhouse Gas r&d Programme, 2004); De Coninck et al., Acceptability of CO2 Capture and Storage. De Figueiredo, “Framing the Long-Term In Situ Liability Issue,” 649. De Figueiredo, “Framing the Long-Term In Situ Liability Issue,” 649. oecd/iea, Legal Aspects of Storing CO2, 38. D. Keith and M. Wilson, Developing Recommendations for the Management of Geologic Storage of CO2 in Canada, Report prepared for Environment Canada, Saskatchewan Industry and Resources, Alberta Environment, and British Columbia Energy and Mines (2002). Keith and Wilson, Developing Recommendations. Benson et al., “Underground Geological Storage.” Keith and Wilson reach this conclusion because the benefits and risks of ccs extend for centuries into the future and are essentially global. The present discussion, however, focuses on in situ liability stemming from the local risks of ccs. De Figueiredo, “Framing the Long-Term In Situ Liability Issue.” K. S. Shrader-Frechette, Burying Uncertainty: Risk and the Case Against Geological Disposal of Nuclear Waste, (University of California Press, 1993). A. Heyes and C. Heyes, “An Empirical Analysis of the Nuclear Liability Act (1970) in Canada,” Resource and Energy Economics 22 (2000): 91–101. De Figueiredo, “Framing the Long-Term In Situ Liability Issue.” Heyes and Heyes, “An Empirical Analysis.” De Coninck et al., Acceptability of CO2 Capture and Storage. Stenhouse et al., Regulatory Issues. European Commission, White Paper on Environmental Liability, (European Union Commission, 2000). De Figueiredo, “Framing the Long-Term In Situ Liability Issue.” European Commission, White Paper on Environmental Liability, 23. Keith and Wilson, “Developing Recommendations.” Ansolabehere et al., The Future of Coal. Vajjhala et al., An International Regulatory Framework. De Figueiredo, “Framing the Long-Term In Situ Liability Issue.” Keith and Wilson, Developing Recommendations.

9 Climate Change and Canada: Beyond Tomorrow r o b e r t pa e h l k e

Canada’s climate change commitments require urgent action that produces rapid results. Canada’s carbon emissions could still be reduced in the short term, though given a decade of delays that might be characterized as denial and dithering, meeting Canada’s 2012 Kyoto target will almost certainly be out of reach by the time this chapter is published.1 Nonetheless, relatively quick gains could be achieved by phasing out Ontario’s coal-fired power plants, mandating rapid energy efficiency improvements especially in the retail and commercial sector, subsidizing public transit fares even to levels that are normal in cities in the United States, declaring a moratorium on tar sands development until extraction can be made carbon neutral (something that could be achieved before any as yet unannounced initiatives are in place), establishing a carbon tax and/or carbon cap and trade system, and by continuing to encourage the installation of improved lighting and heating technologies. Such initiatives are necessary, but given the scope and scale of the problem we also must think bigger and more long-term. Prime Minister Harper pushed in the direction of long-term thinking with his emphasis on targets for the year 2050 at the 2007 G8 meetings in Germany. Needless to say the opposition parties, environmental organizations, and many Canadians believe that he was primarily trying to distract from the fact that he had opposed signing Kyoto in the first place and that he dismantled a number of existing initiatives on assuming office. Critics have asserted that he now wants to distract Canadians and the world from Canada’s failure to meet its Kyoto commitments. The fact is that Kyoto requires that Canada get to 6 per cent below 1990 greenhouse gas (ghg) emissions and by 2004 Canada was 27 per cent above

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that level.2 Emissions have risen further since. Significantly, in Alberta emissions have risen by an astonishing 40 per cent since 1990. All four federal opposition parties have argued that Canada should not give up on meeting Kyoto targets and say that if we do not succeed or come close we will have an almost insurmountable task before us for the period that follows 2012. The Harper government for its part does not at present anticipate meeting our 2012 requirements by 2020.3 Regardless of how one feels about the possibility of meeting Canada’s Kyoto commitments, or how hard the nation should try to come close, thinking about 2050 remains an important undertaking. Japan and most European nations are already committed to reducing ghg emissions by a further 50 per cent before 2050.4 This paper considers in broad terms what would be involved in meeting Canada’s Kyoto targets plus an additional reduction of 50 per cent from that point by 2050. Mercifully, 2050 is a very long time away. While it is difficult to think in such a time frame, given the vast array of uncertainties, it is clear that we can presume that a great deal can change in that time frame, both socially and technologically.

thinking about 2050: setting a clear and bold objective Canada has the luxury of having many energy options, perhaps more of them than any other nation on earth. Given the array of options, in a time frame like 2050 we could easily reduce ghg emissions per capita, and even absolutely, by 50 per cent. In fact this paper discusses some of the ways we might audaciously go further than that. But first, how do we know that a 50 per cent reduction is possible? Because France, Britain, Germany, and Japan are already at that level of emissions on a per capita basis compared to Canada. And, they propose to reduce their emissions by a further 50 per cent. Indeed, George Monbiot has written a book detailing how even greater reductions might be possible. He outlines how it might be possible for Britain to reduce its emissions by further 80 per cent in that sort of time frame. As well, Al Gore has called on developed nations to attempt 90 per cent reductions.5 Thus, to achieve a 50 per cent reduction “all” Canada would need to do is to get to where the rich and comfortable nations of Europe are now by a point in time that is more than four decades in the future. Moreover, given the diversity of Canada’s energy options compared to Europe, if Europe can achieve a 50 per cent reduction from where they are now, Canada should be able to do better, especially on a per capita basis.6 In a long time frame, given its wealth and technological capabilities, Canada just has more present energy inefficiency to eliminate and more low-carbon energy supply options. Rapid energy use curtailment could produce economic disruptions, but a

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long process, if only we have the political will to put it in place, should at most only minimally slow the economy as a whole. What must be done? To begin with the obvious, Canada is far less energy efficient than Europe and Japan are now. To cut our demand by half we need to do some of what Europe has done mostly because their energy prices have been higher for decades and some of what they assume they can do between now and 2050. But we can do more than that including some things that Europe cannot do so easily. How do we know? We know because one key to low-carbon energy lies in the amount of land per capita, the diversity of topography, the flow of water and wind, and the ecological and geophysical capacity to sequester carbon. We win on every count. In the 1970s, province by province soft energy path studies showed that it was possible over this sort of time frame to replace the fossil fuels that Canada used primarily with wood-based alcohol and other biomass materials and wind energy. Given Canada’s land mass, this possibility remains and such an undertaking would not compete with agricultural uses and drive up the price of grain. But time has rendered wind energy even more promising economically and Canada is blessed with vast coastlines and an astonishing array of suitable windy locations from the prairies to the far North. And, we begin with more hydro power than Europe (other than Russia) or Japan could ever dream of. More recently, the array of possibilities available to Canada in terms of efficiency improvements and low carbon supply sources has been set out in the excellent study produced in 2006 for the National Round Table on the Environment and the Economy (nrtee).7 This review identifies and evaluates more than thirty options and concludes that “there can be a domestic solution to making significant ghg reductions by mid-century” and “increasing energy efficiency is key – by doing so we could achieve approximately 40 per cent of our goal of a 60 per cent reduction in ghg emissions.”8 Indeed, looking item by item through the Appendix of this study, one sees that only about one third of the total savings achieved is strictly speaking the result of new (mostly renewable) sources of supply. There are several substantial items in the mix that are neither new non-carbon supply sources nor energy efficiency gains. For example, five percent of the total gain comes from switching to lower carbon fuels (using more propane and compressed natural gas in the transportation sector). And, 11.6 per cent of the national gain by mid-century could in their estimation come from carbon capture and storage (all within the energy industry in Alberta and Saskatchewan where underground sequestration is a technically viable possibility). Going item by item it is clear that about 2/3 of the gains come from efficiency gains and from items like those above in that they are not new, noncarbon supply sources. The remaining 1/3 comes from a mixture of wind, nuclear, hydro, solar, wave/tidal, geothermal, biomass, and cogeneration

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(also actually more an efficiency gain than a new source of supply). The other conclusion that stands out on reading the report is that more might be done especially in terms of non-fossil supply over that time frame. For example, on wind energy the report assumes that “just over four times” the capacity already committed will be completed by 2050. This is a conservative estimate of what is possible in this time frame. And rightly so, any long term study of this sort should be constructed using conservative assumptions. There is also, however, something to be gained in being more hopeful and speculative. Effective action on something as politically daunting as climate change (a future problem requiring tough political decisions immediately) requires assuming that large changes are possible. Otherwise everyone assumes that modest and guarded projections from present realities are the best that can be hoped for. What we have going for us is that, as noted, many short term changes are possible, and continuous incremental change can produce dramatic shifts in the long term. That is what the nrtee study does and it does it prudently and intelligently, but we need also to think about, given the time frame involved, are more unpredictable elements. Looking back to circa 1965, who would have predicted computers and the internet, rapid economic growth in China and India, or an environmental movement of on-going political and economic consequence? Both the nrtee study and this wilder speculation can help to make a low carbon future feasible by helping to make it believable. Monbiot’s sketch of a comfortable, almost-carbon-free, future Britain helps to make that future possible and many Britons are now prepared to give it a collective try. Canada’s problem has been that we just cannot get started. We won’t take real steps like requiring that the tar sands wait until the extraction process can be a low carbon process (using sequestration, geothermal, nuclear power in whatever combination), instituting a carbon tax, or putting in tough building standards on energy quickly. Accordingly, my inclination, on reading of the nrtee report, is to want to paint a picture filled with wilder possibilities and to push the overall projections a little harder to the point where Canadians might seek to achieve “50+50 by ’50”. That is the nation’s long range goal would be a 50 per cent reduction in demand and the provision of 50 per cent of remaining demand from non-fossil sources by 2050. This is a bumper sticker slogan, but clear and simple overall targets are important. Presumably this goal would begin from the point where our Kyoto targets are met and that then is clearly a stunning difference from where we are today. What might a Canada that met such a goal look like? As noted, in broad terms a point more than half-way to the goal would look a lot like Europe looks now. But what are the major differences? European cities are more compact – distances are typically shorter to a neighborhood café or a place to shop or work. European public transit is far, far better

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and it is seamless. In Zurich one gets off a plane and the train to downtown is right there inside the airport a few steps from where you come off the plane and it leaves every few minutes. Why on earth would you drive to the airport or take a taxi? The difference in energy use has little to do with climate or the comparative size of nations. Compact fluorescent lights are more widely used, cars are smaller, industries are systematically more energy efficient, and wind energy has been adopted sooner. Much of a shift of this sort is captured in the nrtee report. Commercial and residential lighting is altered and vehicle fuel efficiency is projected to improve continuously from 2005 to 2050 by greater than 2 per cent per year. Urban form is shifted sufficiently to account for 6.4 per cent of the overall projected reduction in ghg s. Water heaters and washing machines are switched to models now more widely used in Europe than here and public transit improvements will lure more passengers. Even though Europe is not perfect (those hyper-cheap airfares will unnecessarily increase air travel), all of these changes are for the better. What is often not appreciated in the debate is the extent to which most of the things that need to be done regarding climate change need to be done in any case because of peak oil. The major difference is the treatment of coal – which can only be used in a low-carbon as opposed to a post-oil future if technologies that remove, capture and permanently entrap carbon are developed and utilized. Otherwise the energy efficiency/renewable energy transformation necessary to address climate change is necessary in any case to avoid the economic disruption that would come with rapidly rising oil process and curtailed supplies. The transition from fossil fuels will only be non-disruptive if it is accomplished gradually over an extended time frame. There is likely no way to make a transition from conventional oil on an emergency basis without provoking a deep recession. People sense this risk, but do not appreciate how different the effects of a long, slow transition might be. The tragedy is that we did not make permanent the gains that were made in the “energy crisis” period from 1979 to 1985 and extend them in the two decades since. That extended setback, a reversion to old bad habits and the invention of new ones, has made today’s task all the more difficult. It also indicates just how entrenched are the forces that urge wasteful energy practices in North America. Today’s assessments look remarkably like the many assessments that were produced in the late 1970s and early 1980s and that for the most part disappeared when oil prices fell in 1985, ironically in large part in response to energy conservation successes. We need to be firm in our resolve to see through the transition this time (for example by placing a floor price on energy through carbon taxes that take effect should oil prices fall).9 Europe for decades has had dramatically higher gasoline taxes than North America

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and that is a principle reason why they have reshaped their cities and created far better public transportation systems. What are underemphasized in most assessments are some of the possibilities that are uniquely Canadian and could produce even greater change than is ordinarily anticipated. Five of these possibilities, some of them a little out of the box if not perhaps off the wall, are set out in the balance of this chapter.

finding significant carbon reductions Dramatic change needs to start very soon. Even if Canada’s Kyoto commitment is a lost cause, Canada is so far out of compliance that we need to demonstrate in dramatic fashion both to the world and to ourselves that we are serious. The best place to begin, in my view, is in the heart of the ghg machine – in Alberta’s energy sector. The need to do this lays in part in the reason for not doing it thus far – the political power of the energy industry and the strategic implications of delaying any increases Canada’s energy exports. Acting effectively would demonstrate that Canada was serious about climate change and would make future actions seem politically easy by comparison. At the heart of the matter here are two facts: oil from the tar sands at present results in up to three times the ghg s of an equivalent amount of oil from conventional sources and production from the tar sands is projected to increase from today’s one million barrels per day to five million barrels per day by 2050.10 There is little reason to think that Canadian oil consumption will increase in this period. All of the increase is intended for export primarily to the United States which for obvious reasons is increasingly oriented toward reducing its dependence on oil from the Middle East. Increased ghg output from the tar sands is one of the principle reasons that Canada is so challenged to meet its Kyoto commitments, but at the same time the tar sands also provides the possibility for very large reductions that are not available to European nations. Some argue that this level of production will exhaust all available supplies of fresh water in northern Alberta and clearly water may turn out to be a limiting factor even if the contribution to climate change is reduced, mitigated or ignored. More than that, dramatic reductions in ghg s from the tar sands should be technically feasible in the short to medium term. At present tar sands extractors are burning vast quantities of natural gas, a premium fuel, to heat the bitumen so that it can be pumped or so that usable fuel can be separated from sand. That natural gas could instead be used to fuel vehicles, replace coal-fired power plants, or oil-fired home furnaces. There are alternatives to the use of natural gas in tar sands extraction including geothermal energy or nuclear power. Alternatively, the carbon produced in extraction and processing could be captured and sequestered in depleting oil wells.11

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The nrtee looks to gradual change with regard to tar sands, but dramatic action regarding large final emitters (lfes) including coal-fired power plants, refineries, and tar sands operations could go a long way toward getting Canada nearer to compliance with its climate change obligations. These lfes have not been pressed or required to find ways to reduce or eliminate their emissions. The Pembina Institute, which has studied the issue extensively, stresses that almost 50 per cent of Canada’s ghg emissions come from these sources, but the federal government’s proposed ghg reduction targets call for only 13 per cent of the necessary reductions to occur there. And, Pembina adds, “… we are concerned about a series of loopholes in the proposed lfe system that would result in it delivering even fewer emission reductions and transferring liability to the government.”12 Given the scale of expansion on the table for tar sands expansion, there is a good argument for delaying rapid expansion until alternative technologies can be incorporated in operations. A 2005 study by the Canadian Energy Research Institute (ceri) estimated that between 2000 and 2020 tar sands economic activities would total a staggering $885 billion dollars, with $634 billion of that taking place in Alberta and $102 billion in Ontario.13 By 2004 41 per cent of Canadian oil production was in the form of unprocessed bitumen. By 2017 production of this material will have increased by threefold. Total tar sands output stood at 1.1 million barrels/day in 2005 and ceri projected that that total would rise to 4.2 million barrels/day by 2020. Without a technological transformation in extraction many of the proposed steps on ghg reduction could be dwarfed by increases from this sector. It is revealing to compare ghg emissions associated with tar sands production to the sorts of items emphasized in the government’s well-publicized One Tonne Challenge. If one million Canadians switched from automobiles to transit, the ghg savings would be roughly one million tonnes. If every Canadian household switched one incandescent bulb for a compact fluorescent bulb the savings would be 400,000 tonnes.14 But at the same time the increase in ghg emissions from oil sands extraction and production (excluding the use of the end product in a vehicle or factory) by 2015 is anticipated to be 100,000,000 tonnes. Clearly this would easily eclipse the amount that could be saved were every Canadian to switch to transit (tough to do in rural areas or small towns) and replace every light bulb and a whole lot of refrigerators and windows and washing machines. The scale of ghg s coming from the oil and gas sector is also borne out in the following statistic. Alberta produces 73.2 tonnes of ghg s per capita, triple the amount per capita that is emitted in the United States and six times the amount emitted per capita in Quebec where hydro-electric power is a leading energy source.15 If tar sands output triples over the coming fifteen years without a change in technology Alberta’s ghg production will almost certainly be even more out of line with the Canadian, North American, and

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global norm. If Alberta were a nation it would be the richest industrial country in the world and the largest per capita producer of greenhouse gases.16 This reality puts an exclamation point on the earlier point regarding the need for the government to demonstrate to Canadians that it is serious about ghg reductions and that no sector of society is exempt from making a contribution. If Canadians are going to be expected to purchase expensive hybrid vehicles, drive less, replace all the windows and half of the appliances in their houses, they will need to believe that their positive steps are not being offset by energy industry activities oriented primarily to increasing energy exports. Canadians may well be willing to act, but they will need to see government and the energy sector demonstrating seriousness as well. In addition, as the nrtee Report and others have noted, any technological breakthrough on permanent carbon storage would be of enormous significance and has the potential to create a very substantial export opportunity. Some nations, such as China and Germany, have relatively limited domestic energy options other than coal and would provide an eager market if the storage possibilities were available to them. This would presumably be true even if their coal could be used in some nearby nation (such as Norway) that had a carbon storage possibility and could export some of the electricity produced with that coal. The second possible energy efficiency option to be examined here is the renovation of existing building stocks and the establishment of stringent building codes regarding energy efficiency for all new buildings. Some North American jurisdictions have moved ahead on these fronts already. The City of Toronto established a rotating fund for investments in improved energy efficiency in homes and apartments and the City of Austin, Texas has adopted very stringent energy efficiency building codes for all future homes constructed within the city limits. The New Democratic Party (ndp) has proposed that the Toronto scheme be taken Canada wide as a federal ghg initiative. This option, as well as the tougher energy efficiency requirements for new buildings, is especially suited to Canada in that our more severe climate will help to create greater energy savings per dollar invested in efficiency renovations. The ndp proposes to create rotating investment funds that recover and reinvest monies that result from reduced demand. This approach had its beginnings in the Toronto Atmospheric Fund and federal ndp policy now calls for a number of these funds: for housing, for municipalities, and for industry.17 ndp leader Jack Layton speaks enthusiastically about the jobs potential of this approach and notes that Germany “with a Conservative government” is aiming to renovate 5 per cent of its housing stock per year.18 By way of comparison, the nrtee study calls for renovating 2.5–3 per cent of Canada’s existing housing stock per year and the creation of efficiency standards for new homes. The ndp plan makes proposals that would make

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their more ambitious goal feasible including restoration of the Ener-Guide for Houses Retrofit Incentive Program and the Ener-Guide for Low-Income Households (phased out in 2006 by the Harper government), a system of grants, loans, or loan guarantees, the establishment of a National Building Code for energy efficiency, and a requirement to meet it in order to quality for Canadian Mortgage and Housing Corporation insurance. The ndp envisages considerable savings (42 Mt of carbon dioxide) within 7 years from this and other residential measures and foresees the creation of 190,000 jobs. Here I think it is fair to say that both the ndp and the nrtee report may have been disingenuous about how difficult getting these kinds of savings may be in the case of old home retrofits (while improved appliance and new home efficiency standards may more easily achieve what is expected). The question is how consistently will renovators achieve what is expected and, more importantly, how many people will even try to do what it takes? Jack Layton has successfully renovated his own Toronto older home, but not everyone would likely be as determined to succeed as he was. The primary problem is that there are many variables that discourage uptake on the modest incentives to action that might be offered by government. Payback times on efficiency renovations are often slow (in many cases ten years or more if energy prices are not rising rapidly) and the up front costs are pretty substantial (in the thousands compared to the hundreds for a new, more energy efficient washer or refrigerator). The outcomes are also less certain. More than that many homeowners may move long before the payback is achieved and often for reasons beyond their control (transfer, job loss, or a growing family). Or, older homeowners may be unsure that they will live long enough or be able to maintain their home for ten or even five years. On top of these concerns is a problem that few discuss: tenants often pay for heat and it only makes sense in terms of reaping capital improvements for landlords to pay for renovations (and they may have little incentive to do so in terms of reduced heating costs). Thus assumptions about the rate of uptake on renovations may be optimistic (nrtee assumes 90 per cent participation by 2050 with 30 per cent average efficiency gains in detached homes and the ndp proposal seems to indicate proceeding more rapidly). It is not that these goals could not be achieved, but it will take a significant policy effort beyond tax breaks or even grants (certifying renovators, perhaps requiring audits or renovations to a certain standard prior to re-sale, forcing landlords to pay for heating costs and perhaps giving them a substantial tax break on efficiency renovations, putting a floor on future energy prices or taxing energy more heavily and using the money to virtually pay for renovations). It is not clear what it would take, but that is a discussion that needs to occur if anticipated available gains are to be realized. All and all this particular possibility is more politically challenging than some might allow. On the other hand these may be challenges worth

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accepting because the potential gains are very substantial. There are also gains in skilled employment in jobs that cannot for the most part be exported unless someone can figure out a way to transport Canada’s housing stock to Asia and back at low cost. More than that, if one assumes that energy prices will rise (a safe societal bet even though every individual is not necessarily prepared to make it), the gains to the Canadian economy are twofold (householders are free to spend avoided energy costs in other ways and Canada can sell the saved energy elsewhere or hold it for a day when prices are even higher). Indeed, since a commitment to effective action on climate change is also at bottom a commitment to higher energy prices in the long run, the gains noted above can be assured if tax shifting from income to energy, for example, were part of a nation’s long-term effort. An assured long, slow rise in energy prices would allow for the possibility of funding a national home renovation program using an initial public investment in a capital pool that reproduced itself out of future energy savings (homeowners are fronted the money which is recovered as they continue to pay even perhaps a little less than they might have paid for energy). The homeowner then reaps the full benefit further down the road and in effect cannot lose on the deal assuming that the renovations achieve a reasonable level of success. The broad point is that the full array of climate change policies depends on long-term macro-economic decisions regarding energy pricing. That is the central lesson of the 1980s. It is no longer acceptable that efficiency gains result in falling oil prices and a resurgence of demand (and increased ghg emissions). In effect, the decline of the tail-finned behemoth cannot again be but a precursor of the suv. European-level energy taxation encourages better public transit, more compact cities, more energy efficient appliances and industries, and smarter choices by consumers and home-owners. It is politically challenging to say things like this out loud, but the entire array of policies offered by the ndp, Liberals, and the Greens, as well as those itemized so meticulously by the nrtee study, depend at least in part on assuring that higher energy prices are a part of Canada’s future. Making them predictably so will help us all to do more easily what we already know are the right things to do.

lo n g e r- t e r m c a r b o n r e d u c t i o n o p t i o n s Two of the three options discussed in this and the next section are on the supply side and each of the three may have the potential to exceed the gains estimated in the nrtee study. This is not surprising because all three are longer term options and none has the sort of sure results that can be included in what must be a methodologically conservative forecast. Where the gains within Canada’s fossil fuels industries and our residential sector urgently

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require a rapid start, the upside potential of the three options discussed here will not be realized quickly. The three longer-term options are: the substitution of communications for transportation, non-grain biofuels, and very large scale wind production. The latter two, to be discussed in the next section, take advantage of Canada’s vast and diverse topography. Substituting communications for transportation usually focuses on telecommuting, emphasizing jobs that allow working from home by utilizing newer communications technologies especially the internet and mobile communications. However, the full potential in terms of carbon savings may well turn out to be much larger than that, especially as these technologies continue to evolve. The nrtee includes this item, but does not anticipate a large scope for savings. The savings associated with increased “telecommuting and substitution of communications for travel” are .3 per cent of the total savings identified in the study and are confined to a small annual reduction in light vehicle use. This may well prove to be an unduly modest estimate given the time frame. It is possible that more substantial saving can be achieved. The possibilities are diverse and admittedly speculative, but the potential for energy and time savings are considerable. It is important to note here that adoption of communications for transportation innovations would be greatly encouraged by rising energy prices. Moreover, wider adoption could also be deliberately promoted by government and institutional policies. Let us try to imagine what might be possible. The year 2050 is a very long way off. Will there be any need for a post office (as distinct from irregular package delivery) by that point in time? Indeed, will any form of access to information require the transportation of either people or materials? Will not more and more conferences and business meetings utilize advanced conferencing technologies in lieu of high-cost air or automobile travel? Even if such events still occur might not those coming from the greatest distances choose to interact virtually and attend in person only irregularly? Could schooling not be delivered to private homes or very small neighbourhood settings some days of the week while continuing to allow for learning through face-to-face learning on other days? Technologies exist now for meetings of all kinds that allow for some attendees to attend meetings in person and others to attend via teleconferencing with all participants, both actual and virtual, seemingly in place around a table. This and many of the changes suggested above would see reduced use of more than light vehicles and allow reduced use of air and bus travel as well. The possibilities in terms of electronic interactivity are only just beginning to be explored. Consider the delivery of seemingly-live specialized arts experiences. The Metropolitan Opera this past year was for the first time broadcast via satellite into thousands of theatres around the world live from New York City. As the live audience enters the Met the assembling is conveyed on

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screen. As the Met orchestra is tuning, the audience is also filing into the many local theatres as attendees socialize with others in the many audiences. Attendees can also socialize over snacks at intermission and go to a restaurant with friends afterwards. Moreover, the performance experience is actually better than live performance in some ways. Virtual attendees see the facial expressions of the performers as well as the face and gestures of the conductor and the members of the orchestra. They also get to visit backstage. It is as if everyone were in Manhattan without the high rents or, in terms of our consideration here, air travel. If the experience is perhaps a little short of live in terms of sound quality (that is debatable in a surround sound theatre), by 2050 (or 2010) that will not likely be the case. The virtual audience at several performances I attended was moved to applause even though the applause could not (yet) be heard by the performers. I was able to walk to the performances I attended, then to dinner nearby, and back home afterwards – energy demand was minimal and satisfaction maximal. The performances are especially appreciated in smaller centers that would not otherwise have the opportunity to hear a live opera performance. Live performances of many types could be delivered in similar manner and travel correspondingly reduced considerably. Similarly, professional conferences could be organized regionally with national interaction, greatly reducing the need for travel. As well, satellite offices or campuses could reduce the need for daily travel with little loss of effective interactivity especially if co-workers or students and teachers were able to meet live for some interactions rather than for all. Other possibilities include: computer organized carpooling opportunities, buses and trains that automatically send out continuous actual arrival times at stops via text messaging to mobile devices on request or computer-routed home pick-up minivans in lieu of one-on-one taxis or solo driving. Communications improvements could aid enormously in encouraging modal shifts from private to public or cooperative transportation modes resulting in significant energy savings. There are many other possibilities that are not predictable, but the potentials are enormous and Canada throughout its history has been notable in its pioneering communications initiatives. As television rooms in homes evolve into communications rooms, many reasons for daily travel could fade. Faceto-face interactions could be more often neighbourhood oriented. Business of all kinds, or interacting with distant relations, could be more frequent but more often virtual. New technologies would make such interactions far more satisfying than a phone call if one could transmit images of a newly redecorated room, or children’s art, or show friends and relatives how one’s garden was doing. Business communications received from home could also in some cases be more effective. Products could be shown in use and many options and

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possible designs illustrated virtually almost as effectively as in person. Faceto-face interactions would not be eliminated, nor need they be. They only need be less frequent. More and more occupations could shift to working on one’s own through virtual interaction with other members of a work group supplemented by weekly or monthly face-to-face meetings. Not only would energy be saved, but so too would time and money, not just by employees and employers but for the economy as a whole as roads become less congested and commutes and deliveries more timely. E-commerce as well is likely to be more efficient in energy terms than brick-and-mortar shopping. Instead of a thousand individual trips to a store, there could be one delivery system for any number of sellers and buyers and total trips could be reduced. So too could the number of outlets that must be constructed and heated. Obviously some purchases work better virtually than others, but an overall trend would involve significant energy reductions. Why make two trips to a video store when the film could as easily be downloaded electronically with but a whisper of energy by comparison? Selection is improved, access is instantaneous, and travel is diminished. Moreover, completely new forms of interactivity could emerge. Look at the effect on political life associated with the emergence of blogs and u-tube (both in their infancy). Extensive and effective interactions and engagement can increasing become virtual. Political conventions could be supplanted by linked local town halls. Board and council meeting for all manner of organizations could be handled virtually and be more frequent if necessary (and less lengthy since easier to accomplish), but only rarely need they be face-to-face and then primarily for enhanced sociability and the building mutual trust. The one risk I can see in terms of ghg emissions in substitutions of this sort is that people might more frequently opt to live at greater distances from work – to save money, to find a more beautiful setting for a home, or to live nearer to friends and relatives (rather than work). Then, though commuting to work might be less frequent it would be over a greater distance and the gains would be correspondingly diminished. As with all things this risk would decline with higher energy and transportation costs. Or, if necessary, telecommuting employees could be encouraged to live within some reasonable distance of the office with which they are affiliated to facilitate the calling of priority face-to-face meetings on short notice. Overall, the potential for substituting communications for transportation has great potential for improving and enriching our lives while allowing them to be less energy intensive. It could produce even more dramatic results if people truly felt both a moral obligation and economic pressure utilize in imaginative ways all of the options that do emerge over time to simply spend more time working and interacting virtually and less time traveling in order to do so in person.

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t o wa r d a m o r e c o m p e l l i n g v i s i o n o f c a n a d a’ s f u t u r e e n e r g y p r o d u c t i o n Prime Minister Harper and others in his government have called for a madein-Canada climate change plan. What this has come to mean in effect is accepting that Canada will fall short on its Kyoto obligations and may limit itself in accepting future global expectations. An alternative sense of a distinctively Canadian approach to climate change would be one that takes fuller advantage of Canada’s unique capacities regarding energy. Such a plan might at this point require more time than Kyoto encompasses, but accept the responsibilities associated with the fact that there are few nations with the array of possibilities open to Canada and seeks in the longer term to perform in exemplary fashion. Canada’s potential for world leadership in the production of cellulosic ethanol and wind energy are two examples of what might be possible. Both are significant possibilities, but at this point only possibilities and thus difficult to incorporate into a study like that done by nrtee. Nonetheless, with concerted effort, both could be underway on a large scale well before 2050. Cellulosic ethanol is perhaps now the more mundane of the two. Even George W. Bush, not noted for forward thinking on energy matters, has spoken of switch grass as a substitute for the corn-based ethanol that has commanded massive public subsidies in the United States and driven up the price of tortillas in Mexico. There are two important differences between grain-based ethanol and cellulosic ethanol. One, some cellulostic ethanol crops can have higher per acre yields with lower fossil-based production inputs and two, celluslosic feedstock can in some cases be grown on nonagricultural lands. Canada has such lands in considerable abundance. In the 1970s, in response to the energy crisis of the time, a group of Canadian researchers set out to do province by province estimates of the potential for what was called at the time a soft energy path.19 Today the same general findings could be seen to address concerns regarding climate change. The studies emphasized energy efficiency improvements and sought benign and renewable energy sources to meet remaining demand. The supply sources that were identified were all low carbon options even though at the time climate change was all but unconsidered. A leading renewable energy source that was identified for Canada was methanol from wood wastes, municipal wastes, agricultural wastes, and tree farms with rapidly growing tree species expressly planted for the purpose. Specifically, for example, soft path researchers concluded (in 1978) that by 2025 Ontario could produce 70 per cent of energy demand from renewable sources (having improved energy efficiency considerably).20 Those sources prominently included both wind energy and biomass-based liquid fuels.

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More contemporary fuel crop preferences are switch grass and giant reed – plants that can (using U.S. figures) yield 2000 gallons per acre per year compared to corn that can yield 400 gallons per acre per year and sugar can that yields 600 gallons per acre per year.21 Yields of this sort are needed if this source is to supply the larger share of U.S. transportation fuel, but even somewhat lower yields could result in a significant contribution. However, yield levels are very important economically because high yield on feedstock significantly lowers the energy needed to harvest and transport the material to production facilities. An interesting additional possibility as a feedstock “crop” is algae produced in ponds. Algae, some claim, can generate yields of up to 90,000 litres/hectare as compared to 1200 litres/hectare for canola (which has a similar yield to corn).22 One of the leading technologies for the production of cellulosic ethanol has been developed by a Canadian firm, the Iogen Corporation, which operates a plant near Ottawa. Iogen is one of six cellulosic firms sharing in funds for plant construction from the U.S. Department of Energy. Some critics, however, have questioned whether Iogen has yet gotten significant net energy results or outputs that a more than a percentage of nominal plant capacity.23 Given the potential carbon benefits of cellulosic ethanol and the land area in Canada that might be used to produce fuel crops, however, pilot operations are arguably worth the effort and the expenditure of public money. Another of the firms funded by the U.S. doe, Range Fuels, is based in Colorado and will construct a plant in Georgia to produce 100,000,000 gallons of ethanol per year from wood wastes from Georgia’s pine forests. Some of this material will have been gathered in any case and the remainder could be harvested in association with the clearing and replanting process. However, as with Iogen, net energy results are yet to be demonstrated in a large-scale operation. The Canadian forest sector already utilizes a proportion of its on-site wood wastes to fuel sawmill and pulp and paper operations. There are also some facilities that produce uniform wood pellets as a home heating fuel. Large scale ethanol production from wood has not been attempted. One company, the Lignol Corporation which has licensed General Electric technology, claims that it could supply the equivalent of British Columbia’s gasoline demand for perhaps two decades or more from the trees in that province that have been killed by the mountain pine beetle (whose habitat has ironically been expanded by climate change).24 All and all biofuels are potentially a major energy source in Canada and, so long as there is not undue emphasis on grain-based fuels with high energy inputs, hold out the prospect of being carbon neutral especially if crops awaiting harvest are sequestering more carbon than might have been held by plants that might otherwise grow on the same land. This would be especially the case to the extent that dense tree crops replace less intensive growth and

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that processing plants are located near to cropping areas. Overall, it has been estimated that biofuels could provide 25 per cent of Canada’s energy needs.25 In addition, Canada’s massive land area opens the possibility of providing a significant carbon sink through carbon-smart changes in land use. To appreciate the compelling character of wind energy as a future option in Canada, consider for a moment what stands out in the book by George Monbiot as a part of his long-term post-carbon vision of Great Britain. For me the gripping vision was not the wave and wind power that might be captured off Britain’s shores or the prospect that Briton’s would need to come to terms with riding inter-city buses. The vision that stopped me in my tracks, amid the bravely hopeful picture of the future that Monbiot paints by emphasizing the joys of a hot shower and varied locally produced foodstuffs, was the vision of much of the Sahara desert covered in solar panels producing perpetual low-carbon energy for North Africa and Europe. That vision made the rest seem so much less something so parsimonious and noble as to be beyond political likelihood. That image and the potential of this combined vision are saleable if not stunning when the other leading alternatives seem to be oil wars and freezing in the dark. Some of the same nations that are presently being drained of oil, and many others whose present is impoverished, may turn out to have a critical role in the long-term global future. However, this time producing energy could produce jobs in some numbers and the energy will be created perpetually without poisoning the air and heating the planet. The total amount of energy from a solar Sahara could even be enough for hundreds of millions of people to live in reasonable, if less wasteful, comfort. With a solar Sahara the internet could continue to unfold its communications miracle and Europeans could continue to find their way about after dark and to keep their beer cold (unless for some bizarre reason they prefer it warm). Energy would continue to generate substantial income for producing nations some of which currently face a doubtful future, though their pricing leverage might be diminished somewhat by the fact that what is withheld from the market today could not be held and sold tomorrow. There is much to be said for this possible future, but mostly it is a compelling vision of a benign and perpetual resource that, unlike many others, is very substantial. The vision creates the feel of a late 21st or early 22nd century that is both possible and desirable. Without that vision that I, for one, could easier imagine some nations willfully adopting to expand coal use or just conclude that future generations will have to look after themselves. The tangible possibility of a benign and at least moderately abundant future is deeply important – possible and positive futures can help to prevent present and near future horrors – oil wars over the last dregs not the least among them. Canada is similarly blessed and then some. Canada not only has the tar sands, hydro-electric abundance, and the potential for biofuels, but it has

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another potentially inspiring possibility – one comparable to Solar Sahara. For the future billboards and bumper stickers it might be labeled North Wind. There are wind-rich lands in Canada’s middle and far north every bit as vast as the Sahara. The wind energy that could be produced across the vast expanses near to and north of the tree line is staggering. Denmark envisions producing much of its electrical energy from the wind on its coasts. All of Denmark, along with the wind-rich regions of Spain and Germany (Europe’s other big wind producers), could be misplaced in Canada’s North and be overlooked for years. The bottom line is that Canada has 243, 792 kilometres of coastline, a truly astounding figure that suggests wild calculations. Using only 5 per cent of that coastline with 10 5 mw wind turbines per kilometre (or a larger number of smaller units) would result in 600,000 mw of capacity – more than 120 Pickering 8-unit nuclear stations and far more than could possibly be used within Canada. One hastens to add here that 5mw of capacity does not necessarily yield an even flow of energy constantly or continuously, but neither do nuclear stations yield their listed capacity all that reliably. Moreover, if one is only using a small fraction of coastline (obviously far less than 5 per cent), one could select both high average wind speeds and a diversity of windy seasons and times. Needless to say there are considerable challenges involved in any major wind energy undertaking, especially in the far north, but it would not be a compelling vision if there were not formidable challenges. Some of the challenges are readily apparent and my partial and tentative answers may hold up over time, or may not. We are, I happily acknowledge, in the realm of pure speculation here, but speculation is an important part of imagining viable long-term futures. First, could wind turbines endure winters in the far north? Monbiot pictures his British wind and wave machines somewhere out in the North Atlantic and the English Channel among other locations. Canada’s could at least be on land, albeit land a fair bit colder much of the year. But consider what we already do by way of deep winter enterprises. There is year-round offshore drilling off Newfoundland and Labrador and there are wondrous Canada-made machines that function in outer space. It is certainly possible to make wind turbines that function well in the Canadian North, especially if the designs are developed and tested over time. The time to begin is now, building them to replace diesel turbines fueled with oil that at present is shipped in over vast distances at staggering cost. Use the wind to supply the energy for most settlements and every city in Canada’s far north – learn to build machines that can withstand the Canadian climate and let those living there learn how to install and maintain them. Such a deliberately created set of capabilities is a form of insurance for an energy-starved human future. It is also useful in its own right as a way to transform the Canadian North. Even if only successful on a limited scale the

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result would be an exportable technology – to Alaska, to Russia, to Scandinavia and as a general means of supporting permanent settlements where they are not easily maintained. Beyond this there is also possible long-term future possibilities described below that depend on many things that cannot be known at this point in time. Nonetheless, I for one would be prepared to bet that in time the large-scale production of wind energy in the Canadian north will be a very welcome option. In both coastal and non-coastal areas, the prairies and elsewhere, Canada could produce very large amounts of wind energy. Indeed, as noted, the potential amounts are almost unlimited. Wind turbines in the 2 mw range are now being installed in some locations around the world and Monbiot discusses the feasibility of machines of up to ten megawatts. There are no trees or large building to promote turbulence in the north. There are few other users of northern coastlines and no cottagers to object to lost vistas. The area of average high wind speeds in the middle and far north of Canada is vast. The wind energy potential of the nation has already been neatly mapped by the Canadian Wind Atlas.26 This vast territory is sufficiently windy that ecologically and socially problematic locations could simply be avoided. Unlike oil and gas which is only available in the few particular locations and therefore is painfully difficult to resist development, wind in the north is sufficiently distributed that development in any one or several locations could simply be deferred to others. Moreover, the cost of land is very low and virtually all of the northern lands in Canada are in public ownership in any case or might be part of lands claims settlements where ecologically benign development opportunities would, generally speaking, be welcome. The largest challenge would be to find a way to move the energy to more populated regions. From relatively southern locations (on the windy shores and offshore of James Bay, for example) wind energy could travel via existing electricity transmission corridors. At more northern middle latitudes on western shores of Hudson Bay links could be built to the grid in Manitoba. Wind regimes are also strong elsewhere – in Quebec (Gaspé), Newfoundland and Labrador, Alberta or British Columbia often not at a great distance from where hydroelectric power is already produced. But what of sites in the distant North, even north of the Arctic circle? What is feasible there beyond self-supply for the region? The problem would be the cost of very long transmission lines and transmission loses on those lines. Some of these losses might be reduced through using high voltage dc transmission lines, as discussed quite extensively by Monbiot. Crucially, the transmission loses over great distances do not increase for High Voltage Direct Current cables and one 1700 kilometres long already exists in the Congo.27 There could also be a made-in-Canada solution for the utilization of wind energy produced in the far north.

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One possibility might be the conversion of electricity to hydrogen via electrolysis and the utilization of by then already existing natural gas pipelines once natural gas from the region is exhausted (which will not be a very long time into the future if it is extensively used for tar sands extraction). The cost of vast northern wind farms transmitting via High Voltage Direct Current cables or producing hydrogen for pipeline transmission may prove to be economically feasible in 20 or 30 or 50 years. By then Saudi Arabia may be producing more solar electricity than oil and, if the world can avoid economic collapse along the way, almost any price for clean energy may prove feasible, especially in North America. The scale of the Canadian north is almost unimaginable. The development of wind energy in that region has staggering potential, enough perhaps to help to realize the vision of Richard Rohmer regarding a Mid-Canada Corridor stretching across the nation. The production of relatively benign energy might also be contemplated in Siberia and in the northern regions of Scandinavia if the technologies can be perfected. Indeed, there is every reason to seek cooperation in this endeavor with other northern nations, all of which are technologically sophisticated and oriented to effective climate change action.

c o n c lu s i o n : t h i n k i n g b i g i n a b i g c o u n t ry Canada has energy opportunities beyond the reach or hope of most nations. In all likelihood Canada will have a fossil fuel reserve even after Saudi Arabia is bereft of oil. We also have as impressive an array of renewable energy opportunities as any nation – save perhaps Russia or those nations with an abundance of steady solar energy falling on vast open spaces. We also have technological capabilities and historically wasteful energy habits that can be corrected relatively painlessly – it is easier to switch from a behemoth to a lighter car or transit than from a lighter car or transit to a bicycle. That abundance of options comes with a set of responsibilities. Using less energy in some nations could mean that more people will go hungry. Even if dealing with climate change costs a point or two of gdp over two decades that is a trivial price to pay. It is not even certain that it is true. Energy innovators might well gain gdp through trade. Moreover, Canadians can hardly miss climate change because some of the most visible changes are occurring in our own north. We really have no excuse at all for not being a global leader on this issue. Indeed the responsibility is even greater because of our geographic and economic location. Prime Minister Harper seems to understand this. Canada could be a bridge between Europe, the clear global leader on climate change, and the United States, perhaps the leading laggard. But we do not live up to our obligations by providing the United States and ourselves with go slow

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cover. We live up to our obligations by pressing tough standards on all North American utilities, appliances, vehicles, and the oil sector itself. We live up to our obligations by seeking either a continent wide carbon tax or establishing a tough cap-and-trade system or both. To achieve such things Canada may well need to join with California and other progressive U.S. states and cities to press these measures on the U.S. government. We could add to the pressure by allowing the expansion of tar sands production only as and when the industry can have low carbon extraction options in place (be that the use of geothermal or nuclear energy or carbon sequestration). But, should that requirement be met we can ease other pressures on the Americans by allowing increased exports of energy from the tar sands and from our cellulosic ethanol plants and wind farms. Getting to the point where we are willing to take and urge tough measures requires only that we see that climate change is but one of the risks of energy irresponsibility. Inaction is a thorough failure of foresight. The other risks include wars and economic collapse – both likely to come with any abrupt decline in energy availability. The only solution is to make the transition as gradual as possible and that requires starting now and moving at a steady and deliberate pace with no repeat of post-1985 backsliding. The lead time on a thoroughgoing energy transformation is massive. It will take the better part of a century to phase out the use of fossil fuels, but it is obvious that the process will be less fraught the earlier it gets underway. There are no guarantees that all of the alternatives combined will be sufficient to maintain a human population in excess of 10 billion in even today’s levels of comfort which are already inadequate for many. There is little doubt that if the world can make such a transition, Canada can do it with room to spare. We are blessed with options and are accordingly obliged to develop them to their fullest, to show the world what is possible, and to help others for whom it will be an even greater challenge to make their own transition.

notes 1 At this point massive purchase of low cost carbon reductions on the international market would likely be insufficient since it is unlikely that the work could be completed and certified in this time frame. I take it to be too late now, for example, for closure and replacement of Canada’s large coal-fired power plants. 2 Martin Mittelstaedt, “Canada’s green record beyond pale.” Available at: www.theglobeandmail.com; accessed 4 June, 2007. The most recent figure now has Canada at 33 per cent above 1990 levels. 3 Specifically the announced target is to reduce emissions by 20 per cent from 2006 levels by 2020, a goal well short of the 6 per cent below 1990 by 2012 required by the treaty to which Canada is a party.

188 Robert Paehlke 4 Justin McCurry, “Japan calls for 50% reduction in emissions by 2050.” Available at: www.guardian.co.uk; (24 May, 2007). 5 George Monbiot, Heat: How to Stop the Planet from Burning. (Doubleday Canada, 2006) and Al Gore, “Moving Beyond Kyoto.” Available at www.nytimes.com; accessed July 1, 2007. 6 The generalizations here are complicated by the fact that Canada, given its immigration policies, is likely to have more rapid population growth than Europe. 7 nrtee, Advice on a Long-term Strategy on Energy and Climate Change. (nrtee, June, 2006). 8 nrtee, Advice on a Long-term Strategy on Energy and Climate Change, 1 (Summary of Key Findings). 9 Everyone would then understand that high energy prices are here to stay and make their investment decisions accordingly. This bitter pill could come with an offsetting reduction in income or payroll taxes to ease the burden and keep the effect on government revenues neutral. 10 Dan Woynillowicz, Oil Sands Fever. Available at: http://www.oilsandswatch.org/pub/ 203; accessed 7 November, 2007. See p. 22 for the average ratio of ghg s associated with tar sands to those associated with conventional oil. In situ oil sands are likely to result in higher levels than mined oil sands. 11 See the discussion in nrtee, p. 18. 12 See www.climate.pembina.org/work/lfe. 13 Govinda R. Timilsina, Nicole LeBlanc, and Thorn Walden, Economic Impacts of Alberta’s Oil Sands, Volume I. (Canadian Energy Research Institute, 2005), Study No. 110. 14 Both figures available at: www.cbc.ca/news/background/kyoto/climatechange; accessed 20 May, 2007. 15 Indeed the Bloc Quebecois makes this particular case on its website – see www.blocquebecois.org. 16 The point is also made on the website of the Bloc Quebecois and is also discussed in Robert Paehlke and Nicola Ross, “Greening Politics: Canada’s Leaders Strut Their Colours on the Political Stage,” in Alternatives: Canadian Environmental Ideas + Action 33 (June, 2007), 20–24. 17 See www.ndp.ca. 18 Telephone interview with Jack Layton, December, 2006. 19 See Amory Lovins, “Lovins on Soft Paths vs. Hard Paths,” Alternatives 8 (Summer/ Fall, 1978), 4–9. 20 See Chris Conway and Robert Crow, “The Case of Ontario,” in Alternatives 8 (Summer/Fall, 1978), 29–34. 21 Eugene Bukoveczky, “Ethanol Baby Steps.” Available at: www.investopedia.com; accessed 5 March, 2007. A comparison of yields of switchgrass and Miscanthus x giganteus grown in Illinois was presented on July 10, 2007 at the American Society of Plant Biologists in Chicago. The summary finding was that the latter had yields that were twice those of switchgrass.

189 Climate Change and Canada 22 Amanda Leigh Haag, “Algae Blooms Again,” www.nature.com/news (May 31, 2007). 23 See, for example, Tad Patzek, “The Cellulosic Ethanol Delusion,” Energy Resources Digest, 28 June 2007, Item 9. 24 Bill Bradshaw, “Cellulosic ethanol: the savior of the North American forest industry?” BioFuel Review. Available at: http://www.lignol.ca/files/LignolBioFuel%20June%2007.pdf; accessed 7 November 2007. 25 See David Layzell and Doug James, “Challenge Paper,” (November 23, 2005) available at: www.biocap.ca/files/challenge/BioenergyCD_ChallengePaper.pdf and Suzanne M. Wood and David Layzell, “A Canadian Biomass Inventory: Feedstocks for a Bio-based Economy,” available at: http://www.biocap.ca/images/pdfs/BIOCAP_ Biomass_Inventory.pdf; accessed 7 November 2007. 26 See www.windatlas.ca. 27 See Monbiot, Heat, 104.

10 The Development Agenda at WIPO: Where Is Canada? sara bannerman

The World Intellectual Property Organization (wipo) has long acted as the international heart of intellectual property law.1 wipo was established as a specialized agency of the United Nations (un) in 1970, and its institutional predecessors date back to the 1880s. One hundred and seventy-one countries currently subscribe to wipo’s Berne Convention on copyright (established in 1886), which ensures that a copyright-holder’s rights in one country will be recognized in another. Similarly, wipo’s Paris Convention (established in 1883) has created an international system of patent protection. wipo is also the administrative centre of the world intellectual property system, housing the international filing and registration systems for patents and trademarks, providing educational programs and workshops about the intellectual property system, and assisting developing countries in setting up intellectual property law and institutions. There are opposing views on the role of intellectual property in economic development. wipo has long argued that the implementation of intellectual property policies in developing countries encourages economic growth by providing incentives to authors and inventors for creativity and innovation, encouraging research and development, and providing security to those who invest in intellectual property products and related industries. Critics of the role of intellectual property in development take a different view for a number of reasons. First, they point to high prices charged by developed country rights-holders for textbooks and pharmaceuticals sold in developing countries, and the resulting inaccessibility of learning materials and medical treatments in those countries. This creates a barrier to economic growth, they argue. Further, while much is done by wipo and developed countries to

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protect and enforce intellectual property, they argue that there is relatively little corresponding emphasis to ensure that public policy measures are in place to create affordable modes of access to such vital products. Third, critics note that some knowledge in developing countries is ancient and/or communal and, thus, not amenable to being patented or copyrighted. The international intellectual property system, they argue, does little to protect such knowledge from being exploited by foreigners for profit or to ensure that such profit returns to the communities from which the knowledge originates. Finally, critics argue that the main producers and exporters of intellectual property reside in developed countries; and that intellectual property protection, therefore, serves primarily developed country interests. In the face of political battles over the role of intellectual property in development, the legitimacy of wipo has recently been questioned. A 2004 proposal to wipo’s General Assembly from a group of developing nations (“Proposal by Argentina And Brazil for the Establishment of a Development Agenda for wipo”) raised issue with both the basic assumption that intellectual property protection contributes positively to international development, and wipo’s core mandate, which is “to promote the protection of intellectual property throughout the world through cooperation among States.”2 This proposal launched “the development agenda”, a series of high-profile international meetings at wipo in which wipo’s mandate, impartiality, transparency, and core activities, as well as intellectual property’s contribution to international development, were broadly questioned. As Christopher May notes, “At the centre of the Development Agenda is a critique of the wipo that suggests it represents a narrowly focussed set of political economic interests that seek to expand the realm of commodified knowledge and information for their own commercial advantage.”3 The result of the development agenda discussions, which are still ongoing, will certainly affect the perceived legitimacy of wipo as an organization and the reputation of the international intellectual property system as a whole. What role have developed countries, and Canada in particular, played in responding to the challenge presented by the Friends of Development? In this chapter I will review the discussions at wipo resulting from the 2004 proposal, the positions taken on the issues addressed, and Canada’s position and role within the debates. I will argue that, in the initial phases of the development agenda discussions, Canada’s allegiance to the group of industrialized nations had loosened somewhat, and that Canada took the position of a middle power, forming a bridge between developed and developing countries. I will then argue that, in the less polarized debates that have followed, Canada and other developed countries encouraged the discussions along, allowing many of the less challenging proposals to pass, and softening more radical proposals. Developed countries as a whole have blocked or softened numerous proposals, such as those that called for major institutional changes at

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wipo, proposals that encouraged too strongly the exploitation of publicinterest flexibilities built in to intellectual property treaties, proposals that fell too far outside wipo’s focus on intellectual property, and proposals that called for new intellectual property treaties. Finally, I will explain the positions taken by Canada from five perspectives: first, as an international political/economic strategy; second, as a domestic strategy catering to Canadian interest groups; third, as a function of traditional party politics; fourth, from the perspective of intellectual property policy directions being taken at a domestic level; and finally, as a function of conditions within the international intellectual property system. Questions remain about whether the development agenda will concede any real gains to developing countries within the international intellectual property system. Many of the developing countries’ most potent proposals have been diluted, and none of the proposals for changes to treaties or new treaties have survived at all. I will explain that there are important reasons for this softening, arguing that, while many of the most challenging demands of developing countries have been dropped, the proposals that remain are consistent with wipo’s emphasis since the mid-nineties on providing assistance and advice to developing countries and, further, that these proposals are important and do have the potential to benefit developing countries by encouraging the implementation of provisions and flexibilities that already exist within the international intellectual property system.

t h e d ev e lo p m e n t ag e n da Friends of Development Positions during the Initial Phases: 2004 and 2005 In 2004, a group that would later call themselves “Friends of Development” (Argentina, Bolivia, Brazil, Cuba, the Dominican Republic, Ecuador, Iran, Kenya, Sierra Leone, South Africa, the Republic of Tanzania and Venezuela), led by Argentina and Brazil, presented a proposal at the wipo General Assembly that questioned intellectual property’s contribution to international development, as well as wipo’s mandate, the impartiality of wipo’s core activities, and the transparency and openness of the organization. The first year of discussions that resulted from the proposal were polarized around the first two items, concerning the role of intellectual property in development and wipo’s mandate, the most contentious issues in the proposal. These items, especially the issue of wipo’s mandate, were eventually dropped, although the question of the role of intellectual property in development has remained a theme in many of the proposals that have come forward. The third and fourth items, concerning the impartiality of wipo’s core activities and the transparency and openness of the organization, became, in later phases, points of focus in the development agenda.

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In initial phases the Friends of Development disputed the exclusive emphasis often placed on the benefits of intellectual property protection and the direct relationship often drawn between the protection of intellectual property and development. They focussed on what they saw as the costs of intellectual property protection, such the high prices of scientific and educational materials, medicine, and technology, arguing that there was a need to ensure that intellectual property operates “in a manner that is supportive of and does not run counter to the public health objectives of all countries,” and noting that “ip protection is a policy instrument the operation of which may, in actual practice, produce benefits as well as costs, which may vary in accordance with a country’s level of development. Action is therefore needed to ensure, in all countries, that the costs do not outweigh the benefits of ip protection.”4 The Friends of Development also questioned the exclusive emphasis placed in wipo’s mandate on intellectual property protection. Friends of Development argued that there should be a corresponding emphasis on development in wipo’s mandate and activities. As Christopher May notes, “this attempt to shift the wipo’s priorities [was] underpinned by the argument that as the wipo is a specialized agency of the un it should share the un’s focus on global developmental issues rather than a more technical focus on the governance and protection of ipr s.”5 A reformulation of wipo’s mandate was felt to be necessary because developed countries had, in past negotiations, claimed that development issues fell outside wipo’s mandate. The link with the un, and wipo’s formal commitment as a un specialized agency to facilitate technology transfer “in order to accelerate economic, social and cultural development,” was what allowed the Friends of Development to counter these claims. Finally, the Friends of Development argued for increased participation from non-governmental organizations (ngo s) that represented the public interest. In this, they addressed concerns that wipo was dominated by intellectual property rights-holder interests. The proposal of Friends of Development set in motion a series of debates centring on wipo’s mandate and the role of the intellectual property system in promoting development objectives and “the public interest.” “Such a debate,” argued the Delegation from Brazil, “was necessary for the sake of wipo, for its legitimacy and credibility as an institution.”6 During the first phase of development agenda discussions, from 2005 to 2006, this debate was very much polarized, especially in discussions about the role of intellectual property in development and wipo’s mandate, as I will outline below. Country Positions during the Initial Phases: 2004 and 2005 In the first phases of discussion at wipo resulting from the introduction of the “Proposal by Argentina and Brazil for the Establishment of a Development Agenda for wipo,” a number of camps formed. First, of course, was the Friends

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of Development position. Other camps included the African group, the group of least developed countries (ldc s), the Asian group, the industrialized countries (referred to as “Group B”), the European Community, the group of Middle-Eastern countries, and the United States. I will outline their views, in order from the most supportive of the Friends of Development proposal to the least. There was wide divergence between those that were supportive of the Friends of Development proposal and those that were not. The Friends of Development position was broadly supported by the African group and the group of ldc s. These two groups, however, wished to see the agenda taken further, with additional reforms called for and a focusing of concerns around the issues most important to ldc s, such as the implementation of a wipo trust fund for ldc s, or mechanisms to reduce and reverse the brain drain out of Africa. The Asian group also strongly supported the Friends of Development proposals. India, associated with this group, was often one of the most outspoken about development issues. At the introduction of the Friends of Development proposal, for example, India criticized developed countries as intellectual property “rent-seekers.” The delegation’s intervention has been summarized as follows: Given the huge disparities existing across the world, it could be questioned whether ip harmonization benefited developing countries. The developed countries continued to pay lip service to “development” in the context of intellectual property protection, but they did so rather self-servingly. The term “development” as used by these countries, including in wipo, meant quite the opposite of what developing countries understood when they referred to the development dimension. According to developed countries, development meant increasing a developing country’s capacity to provide protection to the overwhelmingly developed country owners of ip rights. This was indeed a strange interpretation of the term “development dimension”. A wipo development agenda would need to take into account any possible negative impact on the users of ip, on consumers at large, or on public policy in general, not just the promotion of the interest of intellectual property owners.7

Group B of industrialized countries and the European Community welcomed the introduction of proposals on the development agenda, but saw them as an opportunity for stocktaking, of summing-up the contributions of wipo and intellectual property to development, which the groups portrayed as generally being positive. These groups opposed any major reforms such as changes to wipo’s mandate or structure, the addition of any new bodies at wipo, or any new treaties. A group of Middle-Eastern countries supported a set of ideas outlined by Bahrain, which emphasized the positive contribution of intellectual property protection to development and called for more assistance from developed

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countries and wipo in the use of the intellectual property system by developing countries. Bahrain, like Group B, objected to any calling into question of the functioning or management of wipo as a part of the development agenda discussions. Some have speculated that this position might be attributed to Bahrain’s progress in negotiating a free trade agreement with the United States, under which the country had agreed to stronger intellectual property rights protections.8 The position of the United States ran largely counter to the Friends of Development proposals. “It felt that the proposal submitted by Argentina and Brazil, and its co-sponsors appeared to be premised on the misconceptions – first, that strong intellectual property protection might be detrimental to global development goals, and, second, that wipo had disregarded development concerns.”9 The United States’ position was that: “Development, in general, was the domain of other un Agencies, not wipo. The Delegation stated that wipo must continue to focus on promoting intellectual property protection. It did not believe that the un needed another development agency as it already had several such agencies, exclusively devoted to, and with specific competence in development, such as unctad and the undp.”10 The United States argued that wipo had done good work in the area of development and that, in any case, countries were free to participate or not participate in wipo treaties: “It recalled that wipo treaties included flexibilities for developing countries and that began with the fact that those treaties were not mandatory, since no country was forced by wipo to adhere to any of its treaties.”11 To this train of thought, Brazil would later respond: “It added that the issue at hand was not really the choice, or the sovereign rights to adhere or not to a specific treaty, but the expectation that the Member States of the Organization should have the right to actually influence the substance of those treaties. … It felt that the idea of a member-driven organization meant that all countries should be equally entitled to put forth their views, and to influence the process itself of negotiating treaties, so that they could take all their concerns on board.”12 Recent Phases: 2006 and 2007 In 2006 and 2007 the development agenda discussions were less polarized. The challenge in these phases of discussion was to formulate a list of proposals to present to wipo’s general assembly for adoption. Developed countries, during these negotiations, largely supported the inclusion of many of the Friends of Development proposals on this list after several contentious issues from the first phase of discussions were dropped. Some proposals pointing to the potential costs of intellectual property were retained, as were proposals regarding transparency and accountability and ngo inclusion. The most contentious proposal, relating to wipo’s mandate, however, was set aside.

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The question about the general role of intellectual property protection in development – whether intellectual property might sometimes involve costs as well as benefits to developing countries – was carried forward in several proposals and was not a major stopping point in this phase of negotiation. While some countries still bristled at the idea that intellectual property could be anything but beneficial to development, proposals that wipo should take into account “a balance between costs and benefits” of intellectual property protection were allowed to go forward.13 One of the most contentious and polarizing issues of the development agenda was dropped: the question of rewriting wipo’s mandate. Developing countries now agreed that the development agenda could be carried forward within wipo’s existing mandate. It was decided that the issue of wipo’s mandate should now be treated as secondary but that if development agenda proposals were side-tracked over claims that they were not compatible with wipo’s mandate, the issue of the mandate would be raised again. Following that decision in July 2005, the issue of wipo’s mandate was largely dropped as a point of discussion. Discussions in 2006 and 2007 led to the adoption of a set of broad-ranging proposals addressing concerns about wipo’s impartiality and transparency with regard to the assistance it provides developing countries and the inclusion of ngo s in wipo activities. Proposals to help countries deal with intellectual property-related anti-competitive practices, to consider preservation of the public domain and analyse its benefits, to expand activities to bridge the digital divide, to study constraints that intellectual property protection places on the informal sector, to advise developing countries on the use of intellectual property flexibilities, to support a robust public domain, and to further study the impact of wipo’s activities on development, also went forward. Although many of the main elements of the Friends’ proposal were retained, others were not. Proposals calling for major institutional changes at wipo, such as the creation of an independent research office to evaluate the impact of wipo’s programs and activities on developing countries, or a new organizational body to deal with issues of technology transfer, were replaced by proposals to undertake new impact studies and to include technology transfer issues under existing bodies. Proposals that called on wipo to encourage the full exploitation of flexibilities built into the intellectual property system (encouraging developing countries to adopt compulsory licensing, or to create broad exceptions to intellectual property protection) were replaced by milder proposals to address flexibilities in working documents, in norm-setting activities, and in technical assistance and advice provided to developing countries. Proposals that fell too far outside wipo’s focus on intellectual property, such as proposals calling on wipo to create model competition laws as a way of helping developing countries to protect themselves from the unfair exploitation of intellectual property monopolies, were set aside and replaced by

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proposals to encourage information exchange on competition policy’s intersections with intellectual property, to include relevant competition policy issues in working documents, and to provide technical assistance to developing countries on such issues. Finally, proposals that involved new treaties, such as a treaty on access to knowledge, were dropped in the wake of proposals simply to encourage discussions on access to knowledge and other treaty-related issues. In sum, many of the Friends of Development’s proposals were retained throughout the development agenda discussions and were adopted for implementation by the wipo General Assembly in September 2007. However, the main point of contention, a change in wipo’s mandate, had to be dropped from discussion in order for negotiations to carry forward and for concrete proposals to be formulated.

c a n a d a’ s p o s i t i o n I will focus on five aspects of Canada’s participation in the debates on the development agenda. First, I will show that Canada at times diverged from the position of the Group B, staking out a middle ground between the Friends of Development position and that of the industrialized countries. Second, Canada’s attempts at agenda setting were interpreted on one hand as being constructive attempts to move a stalled discussion forward, and on the other hand as being an attempt to dilute and weaken the Friends of Development position. Third, Canada’s International Development Research Centre (idrc) and the Canadian International Development Agency (cida) played a role in the discussions through their funding of research brought to the discussions by ngo s.14 Fourth, in the more recent and less polarized phase of discussions, Canada encouraged and supported most proposals, sought to create middle ground on issues, and hosted a knowledge-sharing side event. Early Phases: 2004 and 2005 Howard Knopf, a leading lawyer in Canada on intellectual property issues, noted of the development agenda discussions that “many bets may be off as to the future predictable groupings of countries in respect of ip issues.”15 While Canada normally associates itself with the Group B of industrialized nations, and indeed represented Group B at the 2004 wipo General Assembly, Canada often took a middle position between the polarities forming in the initial phases of arguments over the development agenda, sometimes diverging somewhat from the Group B position in its own comments. Canada staked out an intermediary position during the first phases in several ways. First, Canada agreed with the Friends of Development that intellectual property should be thought of not as “an end in itself but as a means to help achieve the economic, social and cultural well being of individuals in

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societies across the planet.”16 Canada’s position on the role of intellectual property in development set out a middle ground, claiming neither that strong intellectual property protection was necessary to development nor that it hindered development, but that “effective balance and flexible ip frameworks” could promote “social and cultural benefits for communities.”17 Second, when the European Community and United States opposed changes to the wipo mandate, Canada postponed taking a position on the issue, saying that it was still evaluating the question. Third, whereas the Group B position was that wipo was doing a commendable job in incorporating development objectives into its work, Canada argued that there was still room for improvement. Finally, on the question of ngo participation at wipo, Canada supported the call to increase that participation on the condition that the state-driven nature of wipo be preserved. This careful position fell between Group B’s and United States’ insistence that ngo participation was at a healthy level and the Friends of Development position that there was a need to increase the participation of public interest ngo s. On the whole, Canada’s position in the first phase of the development agenda debates was characteristic of middle-power leadership, focused on “diplomacy geared to mitigating conflict and building consensus and cooperation.” Andrew Fenton Cooper and Richard Higgott argue that middle-power diplomacy “can be an important antidote to rigidity in the international system in the face of major power inertia.”18 Canada’s attempts to break the forces of procedural inertia that had stalled the first and second round of meetings were met with mixed reactions. Substantive debate had been held up in the face of disagreements about how to proceed – or, in fact, begin – the discussions. In response, Canada suggested structuring the discussion around basic themes as a way to organize debate and move forward. Not everyone agreed. Disagreement over control of the development agenda, and whether to focus discussion around Friends of Development documents and proposals, or whether to formulate a comprehensive list of proposals from all countries organized by themes, was a recurring problem that at times threatened to put an end to development agenda proceedings altogether. The Friends of Development, at one point, refused to continue development agenda meetings because of concerns over this issue. However, a themed list of proposals from all countries did eventually form the basis for discussion, despite the reservations of the Friends of Development. The Canadian International Development Agency (cida) and the International Development Research Centre (idrc) also became involved in the development agenda discussions. Those organizations had funded a number of papers relating to the development agenda.19 In particular, Consumers International presented the findings of their idrc-funded paper, “Copyright and Access to Knowledge: Policy Recommendations on Flexibilities in

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Copyright Laws,” at the wipo development agenda meetings. They strongly criticized the legislative advice wipo provided to countries, noting that wipo did not encourage countries to take advantage of the public interest flexibilities available under wipo treaties – that, in fact, wipo in some cases discouraged the implementation of such flexibilities. The group used strong words to describe wipo’s legislative assistance: “wipo is misleading developing countries. It is inconceivable for a United Nations body like wipo to not act in the best interests of its member states. wipo’s actions are a disservice to developing countries.”20 As a result of the Consumers International report and related criticism of wipo’s assistance to developing countries, many proposals, as noted above, have been made that would help to resolve these types of concerns. These proposals, which deal with the impartiality and transparency of wipo activities, and which have been driven by criticism funded by Canada, have become a major focus of the development agenda. Recent Phases: 2006 and 2007 In the 2006–2007 phases of discussion Canada, like other Group B countries, largely played the role of a good international citizen. Canada generally supported proposals that were made and, at times, raised useful technical concerns about some of the proposals. At the development agenda meetings of July 2007 Canada hosted a sideevent on the relationship between competition policy and intellectual property. Generally, the role of competition law with regard to intellectual property is to prevent the abuse or anticompetitive use of intellectual property rights, such as predatory pricing (selling intellectual property products like software or computer hardware in developing countries below cost with the intention of squeezing local companies out of the market), refusing to license software or other intellectual property products to local firms to sell at reasonable rates, or tying the use of a purchased product to the purchase of a particular type software required to use that product. Thus, competition law can be seen as an essential element of a properly functioning intellectual property system. However, competition laws and agencies in developing countries are often non-existent or too poorly resourced to be effective. At the side-event, Canadian delegate Alan Gunderson of Canada’s Competition Bureau outlined recent studies on the relationship between intellectual property and competition law in Canada. While Canada’s presentation did not deal with developing countries in particular, it was intended as a form of knowledge sharing about the relationship between competition policy and intellectual property. Such knowledge sharing is called for in several of the development agenda proposals now going forward.

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Finally, Canada supported holding discussions on access to knowledge at wipo but did not support proposals for a “treaty” or “mechanism” on access to knowledge. wipo records note that there was some reluctance on the part of Group B generally regarding not only a “treaty” or “mechanism” on access to knowledge, but also regarding the inclusion of the phrase “access to knowledge” in the development agenda proposals. In the end, the phrase was retained at developing countries’ insistence; a proposal for wipo to discuss initiatives and strengthen its work in facilitating developing countries’ “access to knowledge and technology” was agreed upon, while proposals for the establishment of an international treaty on access to knowledge were dropped.

t h e l o g i c o f c a n a d a’ s p o s i t i o n s Canada’s positions on the wipo development agenda can be viewed, first, as part of an international political/economic strategy; second, as part of a domestic strategy that caters to Canadian interest groups; third, as a function of traditional party politics; fourth, as a function of Canadian interests in a well-functioning intellectual property system; and finally, as being reflective of past experience and current trends in the international intellectual property system. First, Canada’s positions can be seen as an international politicaleconomic strategy. Canada, as a net intellectual property importer, has little to gain directly from increased intellectual property protection; it is American intellectual property owners who stand to gain the most from such policies. As such, Canada’s position is similar to that of developing countries, who are also net intellectual property importers. Canada’s sympathy with developing countries, and that of other Group B countries, can further be explained by the economic interests that developed countries hold in the economic growth of developing countries, which creates export markets. As such, developed countries have economic interests in both the health of developing country populations and in such things as technology transfer to developing countries. At the same time, from an international political economy perspective any hesitations about a treaty on access to knowledge on the part of Group B countries might be attributed to pressure from the United States, whose advocacy for strong intellectual property protection is part of a strategy to protect its large intellectual property industries. Second, from the perspective of domestic politics, Canada’s middle position throughout much of the development agenda talks might have been catering somewhat to the international development community in Canada, who are likely quite interested in the progress of the negotiations, and to other stakeholders sympathetic with many of the developing country positions. These include a growing number of open-source groups; consumer groups including Consumers International (especially since there

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was Canadian involvement in the Consumers International presentation at the development agenda talks, which likely drew Canadian eyes); Internet civil rights groups such as the Electronic Frontier Foundation, in which Canadians participate and whose Canadian staff attended the wipo meetings; and library groups, traditional defenders of flexibilities in intellectual property protection. These groups have, over the years, grown more active not only on the domestic stage, but also at wipo and other international fora. As well, Canada’s – and other developed countries’ – interest in development issues can be linked to strong government support for the un and un agencies, as well as the recent international emphasis on the un’s Millennium Development Goals. At the same time, the Canadian delegation would have had to keep in mind the very powerful industry groups with interests in strong intellectual property protection who are also quite vocal in Canadian political media, including the Canadian Recording Industry Association and the Recording Industry Association of America. It is possible, however, that the latter groups would have been somewhat preoccupied with other more prominent wipo negotiations, such as debates over broadcast treaty rights, which have also been ongoing throughout the term of the development agenda negotiations and have garnered more attention. Nevertheless, it may be to the influence of these groups in Group B countries generally that any reservations about “access to knowledge” and other development agenda issues can be attributed. Third, traditional party politics may have played a role in the positions taken by the Canadian delegation. Throughout the first phases of the development agenda, in 2004–2005, the centre-left Liberal Party of Canada was in power. The right-of-centre Conservative Party came to power in Canada in February 2006, just as the second less polarized phase of the development agenda discussions began. The Liberal government can therefore take credit for most of the actions taken by the Canadian delegations to create a middle ground between Group B and developing countries, while the Conservative government is ultimately responsible for Canada’s encouragement of many of the developing country proposals, the Canadian side-event on competition policy, and positions taken by Canadian delegates on the issue of “access to knowledge”. Some domestic stakeholder groups are becoming more politically powerful at a domestic level, and some more liberal intellectual property policies and alternative licensing practices are becoming associated with party politics. Open source21 and online civil rights organizations now regularly advocate political action via petitions and letters to members of parliament, and certain groups have attempted to raise open source and user rights issues as election issues in Canada. Moreover, some politicians have affiliated themselves with such movements. In one recent example from the United States, presidential candidate Barack Obama has advocated Creative Commons

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licensing of presidential debates, under which copyright holders would voluntarily give up many of their rights in the debates so that they could be freely reproduced by the general public. Despite these examples, it is still difficult to pin particular intellectual property policies, which do not have strong left-right political associations, to traditional political party politics. It is, however, possible to examine the stances taken by the Canadian delegation from the perspective of each political party’s approach to international relations. The Liberal Party attempted to create an image of Canada as a good international citizen with deep commonalities with many countries. Liberal Prime Minister Jean Chrétien described this image in a speech titled “The Canadian Way in the 21st Century”: “Canada’s international voice draws on its distinct advantage as a multi-cultural society where people have roots in virtually every country in the world … Canada speaks to the world through the values that can be traced to our origins of ‘peace, order and good government’.”22 Some of the Liberal government’s positions on intellectual property have been associated with this image of Canada as a good international citizen. The Liberal government in 2004 adjusted domestic patent policies as part of what was called the “Jean Chrétien Pledge to Africa.” The purpose of the Pledge was to allow the production in Canada of generic pharmaceutical products for export to developing and least-developed countries to counter hiv/aids, malaria, tuberculosis and other diseases, circumventing normal patent regimes. These policies were perhaps vaguely reminiscent of earlier policies on the compulsory licensing of pharmaceuticals for domestic use under the Liberal Trudeau government. The Conservative government has been criticized for its apparently more distant stances on both hiv/aids and aid to developing countries. Conservative Prime Minister Stephen Harper declined to attend the International aids Conference when it was held in Toronto in 2006. (The Conservative government did, however, announce an hiv vaccine research centre, to be built in Canada, in February 2007.) Harper also declined to meet with Irish musician Bono, activist on African relief, at the June 2007 meeting of the G8. The Conservative government, and Harper in particular, was then singled out by Bono in criticisms of developed country governments for failing to keep promises on international aid: “I said some years ago that the world needs more Canada and I meant it and I was looking for leadership. I can’t believe that this Canada has become a laggard.” (Harper countered by saying that Canada would meet its aid commitments.) The Liberal Party has traditionally attempted to take stances that were more strongly independent of American policy preferences than the Conservative government has, diverging on various foreign policy issues, including the war in Iraq. The Conservative government, on the other hand, has been criticized for perceptions that it is moving too much in sync with American foreign policy.

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While Canada’s objections to an access to knowledge treaty would have been somewhat in line with American positions on the same issue, they do not necessarily reflect a generally more Conservative approach to the development agenda. Canada’s position on this issue and others are consistent with Canada’s earlier attempts to create a middle ground on various issues. On access to knowledge, Canada’s position can be seen as falling between that of the Friends of Development, who wished to see a commitment to a treaty on access to knowledge, and those who objected to proposals on “access to knowledge” altogether. As such, it is difficult to view Canada’s positions in the latter phases as catering any more to American positions than they had in the earlier phases. Fourth, Canada’s representatives to wipo are experts working the field of intellectual property in Canada – whether at the Canadian Intellectual Property Office, the Intellectual Property, Information and Technology Trade Policy Division of Foreign Affairs, or the intellectual property sections of Canadian Heritage and Industry Canada. They are therefore aware of the domestic directions being taken in intellectual property policy. Canada is currently in the process of reforming its copyright legislation and is considering whether to implement the 1996 wipo Internet treaties and how, if it did so, it might make use of flexibilities available on the issues of user rights, digital rights management technologies, rights management information, educational use of copyrighted material, and other issues. Domestic policies make use not only of the elements of intellectual property treaties that support the protection of intellectual property; they also implement a number of the flexibilities provided in the treaties. Therefore, while Canada’s position may be viewed as being more conciliatory towards developing countries than that of the United States, Canada’s position has generally reflected the interests not only of developing countries, but also of many developed countries, in intellectual property rules that include public interest provisions. As Howard Knopf argues, “The issues of the knowledge gap and the digital divide so eloquently set forth in the Brazilian and Argentine statement on a development agenda are no longer simply North-South issues. They are increasingly internal issues in the world’s richest economies.”23 The Canadian delegation also commented that “some of the concerns expressed by specific developing countries were shared by developed countries.”24 Finally, while developed countries do have many interests in common with developing countries, they do not have the required political will to push for new treaties or major changes that would benefit developing countries. Past discussions geared towards major concessions to developing countries have threatened to tear the international intellectual property system apart. Debates about the favouring of rights-holders’ interests within the patent system were waged in the 1950s at the United International Bureau for the Protection of Intellectual Property (birpi), the predecessor of wipo; and Brazilian leadership on development issues in intellectual property began not

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in 2004 but in 1961, when Brazil and Bolivia presented draft resolutions to the un to resolve developing country problems within the intellectual property system.25 By the late 1960s the gap between what developing countries were demanding and what developed countries were willing to accept at wipo negotiations was so wide on many intellectual property issues that developed and developing countries alike considered leaving the wipo system on copyright entirely.26 Should that happen, international intellectual property rules would be negotiated country-by-country on a bilateral or multilateral basis rather than through wipo’s broader international system. Indeed, intellectual property provisions have already been incorporated into World Trade Organization (wto) agreements and American free trade agreements negotiated country-by-country, a system in which developing countries often concede to American wishes on intellectual property in exchange for other benefits in areas such as agriculture. While developed and developing countries remain party to the wipo system, it has been sapped of much of its power through these developments. As such, dreams of new or updated wipo treaties favourable to developing countries have not been allowed to take centre stage to the same extent that they did in the 1960s and 70s. Along with the Friends of Development’s challenges to wipo’s mandate and legitimacy, wipo has recently faced additional problems. On the heels of the June 2007 development agenda meetings came the failure of talks at wipo to agree to negotiate a new treaty to protect broadcasters from signal theft. wipo’s failure to initiate new treaties, and the encroachment of trade agreements into wipo’s domain of intellectual property, threaten wipo’s prestigious place at the centre of the intellectual property system. In the face of these challenges, the future role of wipo and its prominence in the international intellectual property system has come into doubt. As such, wipo cannot afford to alienate any part of its membership. wipo has, however, been able to maintain a distinct role in some areas. As a result of a 1996 agreement between wipo and the wto setting out the “division of labour” between the two organizations, wipo has expanded its role in providing advice and assistance to developing countries.27 This, not coincidentally, is one of the major points of focus of the development agenda proposals. Thus, advice and assistance is one area in which wipo has been able to carve a niche for itself, and upon which there has been room for agreement among member countries. International economic relations, domestic interests, party politics, technical concerns specific to domestic intellectual property systems, and concerns about the structure of the international intellectual property system in general are all major factors in the positions that developed countries take in support or otherwise of developing countries’ interests on the international stage. Such factors have both encouraged and limited developed countries’ support for the development agenda.

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c o n c lu s i o n At first glance the development agenda proposals that were allowed to go forward to the 2007 General Assembly of wipo might seem somewhat mild. The focus of the proposals is on the operations of wipo and on assistance provided to developing countries rather than on concrete treaty provisions or relief from treaty obligations for developing countries. Treaty-related agenda items that have gone forward propose only to accelerate existing processes without prejudice as to their outcome, and new treaties that might benefit developing countries, such as one on access to knowledge, have been nixed. In a number of ways, conditions have been favourable for the Friends of Development initiative. There has been an international emphasis on development goals, rising numbers of stakeholders in developed countries share common interests with developing countries, and the open source and Creative Commons28 movements have made political headway. Despite this, it seems that that less has been envisioned and achieved at the current development agenda talks than has been achieved in the past and elsewhere. The Doha round at the wto gave a concrete affirmation of the ability of developing countries to use flexibilities provided for under the wto’s “Agreement on Trade-Related Aspects of Intellectual Property Rights” (trips) in 2001, and 1967–1971 wipo negotiations led to a protocol to the Berne Convention with special provisions for developing countries on translation of copyrighted works. Nothing of that calibre appears as a part of the wipo development agenda today. However, the proposals going forward from the development agenda discussions, unlike the provisions carved out in the Doha round or the 1971 Berne protocol, concentrate on the advice and assistance provided by wipo to developing countries in the implementation of intellectual property agreements, advice on the use of flexibilities and provisions provided for developing countries, and the transparency of this advice and assistance. Such a program appears to be very much needed. It is also consistent with wipo’s increased emphasis, since the trips agreement, on technical assistance and capacity building. Indeed, it may be wise for wipo member countries to continue to focus on the transparency and direction of wipo advice and assistance, rather than on adding to a list of provisions carved out for developing countries that are rarely put into practice. While the Doha round and the 1971 Berne protocol might have been negotiating successes and excellent demonstrations of goodwill on all sides, there have been important problems in the implementation of both. Oxfam has said that “many developed countries and pharmaceutical companies [are] not honouring the Doha Declaration’s intent.”29 Although Canada was the first country to implement the Doha Declaration, the “Jean Chrétien Pledge to Africa Act” has been criticized as being ineffectual. To date the legislation has been used

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once; whether this will lead to further use remains to be seen. As for the 1971 Berne Protocol, only a few developing countries have signed on, and fewer still have implemented it.30 It remains to be seen how these proposals, adopted by the wipo General Assembly in September 2007, will be implemented. wipo could secure its institutional place in the international intellectual property system by becoming a true intellectual heart, as well as the administrative centre, of that system. The development agenda negotiations, which have stirred wideranging debates at wipo that go to the core of the intellectual property system, have been a step in this direction. Even if wipo were unable to carry out further large scale treaty-making activities, its role in assisting with the implementation of treaties, including the provisions provided for the benefit of developing countries, is and could be a tremendous service to both developing and developed countries who have thus far struggled to make such provisions work in practice. Furthermore, if wipo were indeed to take up a larger role in studying the effects of such treaties, separating itself from the interests that typically dominate treaty-making activities, it could play a necessary role in questioning or confirming the legitimacy of such systems. Such a role would require the high degree of transparency and independence that developing countries have demanded as a part of the development agenda. Other international organizations have begun to ask questions about the role of intellectual property in developing countries.31 If wipo is to stand among them, it must ask those questions too.

notes 1 Copyrights, patents, and trademarks are all forms of intellectual property. Copyright grants exclusive rights over a literary or artistic work; patents protect inventions; and trademarks give the owner the exclusive use of a word or phrase used to identify specific goods or services. Intellectual property protection is provided internationally through international agreements and systems administered by the World Intellectual Property Organization (wipo). 2 World Intellectual Property Organization, “Convention Establishing the World Intellectual Property Organization, signed at Stockholm on July 14, 1967 and as amended on September 28, 1979.” All proposals discussed in this paper are available on wipo’s web site, www.wipo.int. Specific documents will be cited here, for brevity, by their wipo document codes (e.g. WA/GA/31/11). 3 Christopher May, The World Intellectual Property Organization: Resurgence and the Development Agenda, (Routledge, 2006), 4. 4 wipo, WA/GA/31/11, Item II. 5 May, The World Intellectual Property Organization, 4. 6 wipo, WO/GA/31/15, Item 153.

207 The Development Agenda at WIPO 7 wipo, WO/GA/31, Item 201. 8 Intellectual Property Watch, wipo Development Agenda Meeting Opens with New, Modified Proposals. 21 July 2005. http://www.ip-watch.org/weblog/index.php?p= 67&res=1024&print=0 (accessed 27 June 2007) 9 wipo, WO/GA/31/15, Item 195. 10 wipo, IIM/1/6, Item 35. 11 wipo, WO/GA/31/15, Item 195. 12 wipo, IIM/3/3, Item 48. 13 wipo, PCDA/3/3 Prov., Annex I, Items 10 and 18. 14 idrc funding for the Consumers International project spanned from October 2004 to October 2006. I worked at idrc from April 2007 to August 2007 in the same branch that funded that project. 15 Howard Knopf, “Towards a Positive Agenda for International Copyright Reform from a Developed Country’s Perspective,” Presented at “unctad-ictsd Dialogues in ipr s and Sustainable Development: Intellectual Property and Sustainable Development: Revising the Agenda in a New Context,” 24–28 October 2005, Bellagio, Italy, 5. 16 wipo, WO/GA/31/15, Item 173. 17 wipo, IIM/1/6, Item 62. 18 Andrew Fenton Cooper and Richard Higgott. Middle Power Leadership in the International Order: An Issue-Specific Model for the 1990s. Centre for International Trade and Investment Policy Studies Working Paper 92–01, Carleton University, Ottawa, 34. 19 cida has funded a number of papers on intellectual property and development by the Quaker International Affairs Program. See http://www.qiap.ca/pages/ publications.html (accessed 29 June 2007). 20 Consumers International, “Statement by Consumers International to the Provisional Committee on Proposals Related to a wipo Development Agenda, First Session,” Geneva, 20–24 February, 2006, 3. http://www.consumersinternational.org/ Shared_ASP_Files/UploadedFiles/37D39AB8-1657-4FE6-A6DE43A498078629_CIWIPOstatement.doc (accessed 27 June 2007) 21 The open source software movement encourages the use of open source software licensing. An open source software license requires, among other things, that the source code for the software be made freely available to the public and that modifications and derivatives of the software by the public be allowed. 22 “The Canadian Way in the 21st Century,” paper presented by Jean Chrétien to the Progressive Governance for the 21st Century conference, June, 2000. http://pm.gc.ca/ default.asp?Language=E&Page=keyinitiatives&Sub=TheCanadianWayinthestCen (accessed 2 January 2002) 23 Knopf, “Towards a Positive Agenda”: 8. 24 wipo, IIM/2/10, Item 51. 25 Andréa Koury Menescal, “Changing wipo’S Ways? The 2004 Development Agenda in Historical Perspective.” The Journal of World Intellectual Property 8, 6 (2005), 763–67.

208 Sara Bannerman 26 Sam Ricketson and Jane Ginsberg, Intellectual Copyright and Neighbouring Rights: The Berne Convention and Beyond. Volume 2, 2nd ed. (Oxford University Press, 2005), 899–963. 27 May, The World Intellectual Property Organization, 34 and 56. 28 The Creative Commons movement, like open source software movement, encourages the free dissemination to the public, without monetary reward, of copyright works. Creative Commons licenses can be applied to books, music, and multimedia creations. 29 “arv s Still Scarce Years after wto Declaration,” All Africa Global Media, 16 November 2006. 30 Ricketson and Ginsberg, International Copyright and Neighbouring Rights, 957. 31 For example, see reports by the World Health Organization’s Commission on Intellectual Property Rights, Innovation and Public Health; the World Bank; and Oxfam.

11 Convergence and Science Management j a c va n b e e k a n d frances isaacs

Convergence and science management examines the need for stronger management of science and technology (s&t) at both the enterprise and national innovation system levels, given the emerging phenomenon of converging scientific fields. It is important to recognize that the phenomenon is a natural one, driven by curiosity and the quest for knowledge rather than engineered or imposed by organizations or governments. As scientists and engineers look world wide to other fields beyond their own disciplines to solve fundamental or technical problems, their evolved discipline-specific management structures begin to break down. While convergence can be seen as a desired unification of science and knowledge1 or alternatively as a disintegration of traditional disciplines, this chapter takes the perspective that s&t convergence is simply driven by researchers’ needs to solve a problem. However, convergence on a large scale leads to a more chaotic and complex environment in which to manage and direct the outcomes of science at the same time as it leads to greater innovation and scientific breakthroughs. This dichotomy has an impact on both s&t enterprises and national innovation systems.2 Developed and developing nations alike need beneficial outcomes of science – effective solutions to overarching issues such as health and wellness, safety and security, sustainable energy and environment, and economic well-being. Global s&t policy trends aim at resolving these issues by fostering innovation in the private and public sector through support in two areas: innovative, entrepreneurial companies that can use s&t to advantage to develop globally competitive, new products and services; and research undertaken by universities and government s&t organizations toward advancing knowledge, commercialization or national objectives.

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This chapter argues that success of both the s&t enterprise and the national innovation system lies in successful management of s&t within the context of convergence. Convergence opens the door to innovation. While a kind of creative chaos is needed at the researcher level to accomplish innovative, problem-solving, new tools and actions are needed at the management level to bring results to fruition in an environment where traditional management structures are becoming inadequate. Converging science has challenged science organizations to create broader scope and “open” approaches to management which, in turn, are forcing organizations to question traditional assumptions about how they operate. Working extensively with other disciplines and enterprises from other sectors to solve formidable issues requires management competencies that are in short supply. Drawing upon this view of science management, alterations to our national framework for science as a critical element of a competitive economy are proposed to create an environment more conducive to coalescence and collaborative effort.

c a n a d a’s p o s i t i o n i n t h e c u r r e n t s&t e n v i r o n m e n t Canadians are increasingly looking to s&t for responses to a wide range of challenges and opportunities that affect our social and economic well-being. s&t is fundamental to understanding and responding to ongoing pressing issues, such as environmentally induced toxins in fish, genetically modified foods and species at risk. s&t also plays a vital role in Canada’s response to crises, such as global terrorism, extreme weather incidents, and such threats to human and economic health as severe acute respiratory syndrome (sars), West Nile virus, Bovine Spongiform Encephalopathy (bse), and avian influenza. Consequently, s&t plays an increasingly critical role in informing government policy and decision-making on a wide range of issues. These issues are becoming more multi-dimensional in nature, crossing or transcending the traditional boundaries associated with institutions, sectors, scientific disciplines and geopolitical borders. Not only must Canada respond to the pervasiveness of s&t-based issues, it must also adapt to ongoing changes in the very nature of the s&t enterprise itself. The rapid pace of discovery and technological change continuously challenges our society’s capacity to respond to the pressing issues of the day. Advances in s&t are leading us to places we had not anticipated, stimulating our society to grapple with novel issues unforeseen by previous generations. Our social institutions and policies – our capacity to address the social and ethical implications of new discoveries – are struggling to keep pace. We are also witnessing greater internationalization of the performance and use of s&t. Both a high reliance on external sources for technology and networking between partners belonging to the same country or across national

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borders is increasing.3 This is a reflection of global opportunities as well as the emergence of global problems, as noted above, that cross traditional geopolitical boundaries in an increasingly interdependent world. It is also driven, in part, by the ongoing escalation of research costs, by the need for multinational facilities to conduct “big science,” and by recognition of the diffusion of s&t expertise throughout the world. As researchers seek to solve problems by reaching across disciplines, and enterprises seek to innovate more rapidly or diversely, national innovation systems must change to accommodate. The Organization for Economic Cooperation and Development (oecd) has noted that, since the 1990s, science systems in oecd countries have experienced increasing pressures for change.4 s&t convergence has been identified as one of several reasons for those pressures, which also include science moving rapidly on many fronts at once, the increasing complexity and costliness of modern science, and limited experience in new systems for managing s&t. The oecd has identified a set of common challenges for countries world wide that include: • • • • • •

• • • • •

Changing needs of a more diverse set of stakeholders; Emerging opportunities, multidisciplinarity and synergy; Ensuring long-term sustainability of the research enterprise; Preserving the integrity and cohesion of the science system; Sustaining the health of a more adaptive scientific enterprise over the long term; Maintaining breadth and diversity in the research portfolio – balancing allocation of resources on focus in one area while maintaining flexibility for other research areas; Ensuring resilience to external shocks – greater vulnerability of the science system to the business cycle and sudden changes in business strategies; Securing sufficient funding for infrastructure as unit cost and obsolescence has accelerated; Adjusting to changing government missions; Aging staff profile; and Ensuring the supply of human resources.

Since it is now well recognized that science and innovation significantly contribute to economic growth and social welfare, science systems in oecd countries are under increasing pressure to reform in response to new challenges. As Canada grapples with these challenges as well as the proliferation of s&t-based issues and the changing nature of the s&t enterprise, concerns have been raised about the country’s capacity to: • Make sound policy and regulatory decisions based on reliable s&t inputs, especially in areas of scientific uncertainty and those areas that lack scientific consensus;

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• Develop and commercialize new discoveries; and • Contribute to improved competitiveness in the global economy and enhanced social benefits and quality of life at home. Canada is facing a downward trend in competitiveness. It was ranked 16th on the World Economic Forum’s 2006 Global Competitive Index, where it was 13th in 2005.5 National competitiveness, as seen by the World Economic Forum, is based on a set of combined factors, policies, and institutions that determine the level of a country’s productivity. In order to increase their capacity for innovation and improve their global competitive position, countries focus resources on r&d in ways that reflect their national s&t priorities and strategies. While the size of different countries’ economies vary, it is important to understand the relative weight that each country invests in research and development (r&d) over all as well as within the sectors of business, university and higher education, and government research. According to the index, Canada’s major weaknesses include relatively weak university-industrial collaborations and failure to align government procurement with innovation policy. Of critical importance, however, Canada lags other oecd countries in Gross Expenditures on r&d (gerd) and r&d Expenditures in the Business sector (berd) relative to Gross Domestic Product (gdp). Canada’s most recent s&t framework notes that 54 per cent of Canada’s r&d is performed by business, which is below the oecd average of 68 per cent.6 Thus Canada’s r&d strategy is to mobilize s&t to create a competitive and dynamic business environment, which also involves understanding the dynamics within s&t.

t h e b e n e f i t s o f s&t c o n n e c t e d n e s s Canada will only be able to respond effectively to the types of challenges and opportunities posed by s&t convergence with a mature innovation system characterized by the connectedness of its public and private sector s&t enterprises. Given the modest size of Canada’s economy and population, a network that can enable ever-changing connections and coalesce around opportunities or challenges is one of the few means for Canada to be truly competitive on the global stage. Such a network would: • Improve government decision-making by broadening the spectrum of sound scientific information and advice to inform policy and regulatory decisions; • Better mobilize knowledge to assure synergies and enhance the sharing of information that not only transmits knowledge, but also creates opportunities to generate new knowledge, translates knowledge into new applications, and facilitates the dissemination and commercialization of results; • Allow the country to keep pace with other countries by connecting to global science communities and their developments;

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• Make possible the leveraging of resources by enabling the “right” expertise and resources to be brought to bear on challenges and opportunities; • Provide the mechanism for mentoring graduate students and postdoctoral researchers, thus enhancing the productivity of individual scientists, as well as preparing the next generation of scientists and engineers; and • Foster a common “language” of science by facilitating the coordination and synthesis of scientific results and the development of consistent standards, definitions and protocols for reporting data across organizations and disciplines.

convergence introduces a g r e at e r d e g r e e o f c o m p l e x i t y t o s&t In today’s world of technology development, the lines of unique specialization are disappearing. Scientific and technology development more often incorporates technologies from a multitude of fields, blending information technologies, biotechnologies, materials sciences, chemistry and others. Converging technologies are enabling technologies and knowledge systems – inclusive of the s&t institutions as part of the system – that enable each other in the pursuit of a common goal. A partial pathway is conceived in Figure 1. This definition captures the scientific and technical potential of convergent technologies and suggests opportunities for research priorities. The disciplines of nanotechnology, biotechnology, information technology and cognitive science (nbic) have been presented as central to convergence.7 These technologies enable each other in the following ways: • Information and communications technologies (ict) enable other technologies conceptually through an ability to represent ever more physical states as information and model processes with a variety of computational methods. Instrumentally, information technology provides the computing power that is essential to the research process in all technical disciplines. From a communications perspective, ict enables dispersed collaborative effort across a multitude of regions, computing platforms, time zones, etc. It enables biotechnology by providing the means to model complex processes and thereby solve difficult research problems. It enables nanoscience and nanoengineering through precision control of patterning and intervention. In addition, simulation software can enable nano-bio research in environmental monitoring. • Biotechnology enables other technologies conceptually by identifying chemical-physical processes and algorithmic structures in living systems that are traced to their material basis in cellular and genetic organization. Instrumentally, biotechnology enables nanoscience and nanoengineering by providing mechanisms of cellular recognition and targeted transport.

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Knowledge

Integrating disciplines

Sustainable Development

National Initiatives

Nanotechnology Technology Clusters

Involving other disciplines

Biotechnology Consortia

Advanced Materials

Market, academic and industry receptors

Fundamental and Applied research

Physics

Chemistry

Within a discipline

Biology

Partnerships

Technology transfer

Innovation systems

Social Capital Figure 1 Converging pathways of disciplines and platforms

It promises to enable information technology by developing, for example, the foundations for DNA-based computing. In addition, biomimetics and the investigation of cellular motors can enable nano-info research in nanorobotics. • Energy technologies create new technologies for the generation, transport, storage, and use of energy and can develop solutions for the exploitation of renewable energies that are maximally adapted to local conditions. The creation of these solutions requires the collaboration not only of photovoltaic, hydrogen, geothermal and solar energy researchers, but also of geologists, geographers, anthropologists, and economists. Once creative solutions are found under local constraints, many may prove to be highly transportable and marketable. Buildings will generate and share energy among each other, invisibly small renewable energy collectors may be integrated in devices in a manner that emulates nature, new energy carriers and forms of energy storage will be explored. This research works toward the goal of meeting nearly all energy needs through locally generated renewable energy. • Environmental technologies will require a collaboration of social scientists, nanotechnologists, process engineers and others to ensure that: – “More efficient use of natural resources contributes to the economy’s productivity at the same time as reducing environmental degradation;”

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– “Reducing air pollution and noise can avoid significant impacts on health;” and – “Reducing transport congestion reduces lost time and therefore costs for both individuals and business.” These goals address problems at a systems level and relate engineering solutions to social and ultimately economic effects. • Nanoscience and nanoengineering enable other technologies conceptually by providing a common framework for all hardware-level engineering problems. Because everything consists of molecules, in principle, one thing can be integrated with another. An understanding of properties at the nanoscale allows for the realization of desirable architectures at the microand macroscale. Nanoscience and nanoengineering enables biotechnology instrumentally by developing new imaging techniques, probes, and sensors. Nanotechnology contributes to the miniaturization demands of information technology. In addition, nanochips and nanosensors are set to enable advances in the new world of bioinformatics. Many determinants will shape each technology’s outcome, such as the reliance on an enabling infrastructure, the degree of government intervention, or market demand. As a consequence, forecasters routinely seek to summarize the major challenges that these or predicted technologies need to address. At the highest level, each must solve societal problems, benefit individuals, and generate wealth. The timing and extent to which various technologies are able to address those challenges will shape the extent of their impact. Inherent in the above examples of convergent technologies is the blending of disciplines, for example, the blending of information technologies with biotechnologies for the Human Genome Project, advances in material sciences that can be applied in fuel cell technologies, or photonics advances applied in telecommunications technologies.

har nessing the dynamics of convergence by mobilizing knowledge Convergent technologies can make better use of existing knowledge by discovering productive relationships with enabling technologies and knowledge systems. It can also stimulate basic research and the generation of new knowledge. The maintenance of basic research activities is important as applied research ultimately relies on the “stored knowledge” of basic research.8 Both of these above approaches call for new methods of conducting research. Enabling technologies and knowledge systems in the engineering, natural, social, and human sciences at regional, national, and international levels may all be called upon in a collaborative research program. This approach to research will require a growing importance of the research team “assembly” function, the way

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research is conducted, and the capacity to communicate across scientific domains with the requisite comprehension among all team members. Interdisciplinary Excellence Convergent technologies research programs require and produce new standards for interdisciplinary research. Interdisciplinarity usually means that researchers from various disciplines pool intellectual and technical resources as they address a problem together. This form of interdisciplinarity is insufficient when the convergent technologies’ agenda-setting process requires critical and comparative assessments of the viability of proposals. Mutual criticism across disciplinary boundaries is required especially when current or medium-term limits of convergent technologies research need to be determined. Such mutual constructive criticism presupposes understanding and trust. Funding incentives for collaborative research is not enough to produce this kind of interdisciplinarity. Widening the Circles of Convergence Today, the “circles of convergence” are formed through a self-assembly process whereby a project’s researchers themselves invite collaborations from complementary disciplines as they are recognized – reactive to the needs of the project. Future research efforts will likely start with the formation of collaborative relationships to explore the possible interdisciplinary benefits and proactively identify research agendas. An awareness of the overall process of convergence will facilitate its capacity for innovation as “nbic demands a set of abstract but meaningful concepts that encompass many lower-level concepts and usefully integrate diverse fields.”9 Thus, there will likely be a function to coordinate discussions, ensure transparency, and create resources such as an Internet platform, a database of surveys of enabling technologies research, and a partnering exchange for convergent technologies proposals. Furthermore, there have already been numerous discussions about how to establish open access in publishing and scientific data. The function may also promote convergent technologies research by negotiating strategic sites for vertical convergent technologies interventions that cut across work programs. Such a function will organize the production of knowledge (i.e. research) by way of four main goals: • To provide coordination devices that enable and support learning by accelerating and supporting the diffusion of new technological know-how; • To ensure the exploitation of complementarities becomes possible, which is a crucial prerequisite to master modern technological solutions that are characterized by complexity and a multitude of involved knowledge fields;

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• To constitute an organizational setting that allows for the exploration ofsynergies through the amalgamation of different technological competencies; and • To provide a reward structure for creative and entrepreneurial engineering that seeks to integrate economic opportunity with public good. Challenges for Convergent Technologies Efforts Convergent technologies research will require new models to “product development,” peer review processes, ownership of and rights to intellectual property (ip), and a host of other issues. Many of the existing precepts about the conduct of research will be challenged and likely spawn new approaches. Convergent technologies require a transparent and open political process. Because of its openly political character, research utilizing convergent technologies can build trust, create legitimacy, and draw on public debate as a resource and inspiration for convergent technologies agendas. A proposed framework for governance of converging technologies10 includes the key principles of: • • • •

Participation of those involved or impacted by the new technologies; Transparency; Participant responsibility; and Strategic planning.

Within the proposed framework, management of converging technologies requires: • Respect for concerns such as information technology privacy, access to medical advancements and potential toxicity of new nano-materials; • Long term concerns such as human development. Governance of converging technologies can be identified at the levels of: • • • •

Adapting existing regulations and organizations; Establishing new programs, regulations and organizations; Building capacity in national policies and institutions; and Developing international agreements and partnerships.

convergent technolo gies a d d c o m p l e x i t y t o s&t m a n a g e m e n t With the degree of uncertainty and pace of change accelerated by convergence, the key to coalescing different discipline configurations to address

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an issue of national or global concern is increasingly found in both national and enterprise governance and management capacity to organize and rapidly re-allocate resources and talent. Each context within the innovation system and s&t landscape has its own operating environment, with some drivers that are specific to each and some that are shared. Shared drivers include foresight, r&d funding both for short term and longer term pipelines, portfolio management, project management and management of highly qualified personnel (hqp). Identification of the changing core competencies needed for convergent technologies and the subsequent selecting, securing, training and management of hqp comes to the forefront. Shared management issues, for example, include enabling hqp to manage their own careers while conducting r&d aligned with the organization’s objectives. Incentives could include innovative non-monetary compensations, such as “blue sky” time allotments, state-of-the-art facilities and attendance at international conferences and meetings where leading edge knowledge is first made available. As technologies converge, this interchange amplifies, becomes more complex and difficult to manage – and becomes more critical to the objectives of the enterprise. As changes are driven by movement from conception to commercialization, a framework of analysis needs to be introduced that explores not only the dynamics of market-pull versus technology-push within science organizations but also explores the tension between r&d capacity and the ability to generate economic, environmental and social value. Identifying and analyzing risk becomes paramount as uncertainty increases regarding “foreseeability” of convergent technologies’ future directions.

t h e m a j o r pa r a m e t e r s of a management fr ame Many organizations are questioning basic management principles and practices to assure successful performance in this drastically different environment. For its part, the National Research Council of Canada (nrc) has evolved a self-assessment approach that codifies, to some extent, expectations of its management cadre. We are introducing some elements of this framework to highlight the parameters of science management when one integrates convergence as a condition of how one needs to work as a manager in a science-based enterprise. The scope and breadth of management and the levers of control are very different than conventional management wisdom. NRC’s Research Management Framework The Research Management tool developed at nrc 11 includes seven broad research management areas, each containing five to seven codified

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organizational practice areas. Its primary function is self-assessment. The broad areas, generally described, are: • Strategy, Planning and Governance, in which decisions are taken on research and innovation direction and decision-making processes; • Program/ Project Management, in which research and innovation direction is translated into actual programs and projects; • Partnerships and Stakeholder Relations, where research collaboration or research impact moves projects forward; • Enabling Work Environment, which involves the necessary infrastructure and elements to carry out the research projects; • Highly Qualified Personnel / High Quality People (hqp), which encompasses the skilled workers able to carry out research and innovation projects; • Knowledge Management and Intelligence, where hqp are guided in carrying out projects and the s&t management decision-makers are guided in research and innovation direction; and • Technology Transfer and Commercialization, where research projects result in new, innovative, commercially viable, globally competitive products and processes that contribute to economic success.

s&t m a n a g e m e n t k e y s : s t r at e g y, o p e r at i o n s a n d e x e c u t i o n It is important to remember that convergent science is driven by the knowledge and creativity of the scientists themselves with the primary aim of advancing science and only secondarily managing it. This emphasis arises from a long tradition where advancing scientific excellence prevailed over cost containment and other management considerations. It also arises from an earlier era which had fewer escalating costs or rapidly moving scientific fronts. In a sense, convergence, through its focus on problem-solving, is a continuation of the impetus to enable research to follow its own path. However, within the context of convergence and other elements of an increasingly complex operating environment, the approach of keeping management in the background begins to break down. A framework of management practices has the effect of stabilizing and moving science forward through strategy, operations and execution. Strategy Strategy includes leadership; governance and accountability; roadmapping; research strategy; operational planning; values and ethics; and funding approaches. The last point clearly focuses on the aforementioned escalating costs of s&t. The organization best able to take flexible, innovative approaches

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to finding and securing funding will have the strongest chance of survival. Knowing where to best place resources secured through new funding is found in the practice of roadmapping – understanding scenarios of how technology development and markets might unfold – and developing research strategy accordingly. Implementing that strategy successfully involves extensive and thorough operational planning. To accomplish the kind of decision-making needed for this work, the model places focus on leadership, clear roles and reporting structures within governance and accountability areas and well defined values and ethics. Operations Strategy begins to merge with operations at the program/project level where broad directions are translated through project assessment and selection, portfolio management, project management, performance management, resource management and risk management. Projects are increasingly being selected on the basis of a set of criteria aligned with goals found in the organization’s strategic plan. Most funding agencies are now demanding both a strategic and research plan as part of their assessment processes. The mix of projects in a portfolio approach ensures the necessary balance to carry out the research strategy. The managing of projects in this domain is best described as an art as the end point is not well defined and serendipity often creates new directions. Regardless, projects need to be managed, results or outcomes and impacts need to be tracked and measured, resources need to be monitored, and risks need to be mitigated, both those associated with a particular project and with the inherently risky nature of research in general. While project management is important within the context of the organization, it is also important to involve the organization’s partners through practices focused on partnership selection, collaborative arrangements, managing stakeholder relations, international relations and outreach, community building, and maintaining quality service standards. Partnerships enable an organization to leverage internal resources, both in terms of funding and human resources or infrastructure capacity. Typically, this not only involves collaborations with industry, universities and other government departments, but maintaining an increasingly complex and wider range of stakeholders relations with the private and public sectors from the international to the local community level. Quality service standards for all partners and stakeholders need to be consistently maintained. Of critical importance are the people who carry out the above projects and the environment in which they work. These balance two conflicting needs: developing an innovative and creative environment for research while focusing on the consistent management of the research itself. Considerations include sustaining an innovative research culture, promoting internal communications and coordination, utilizing enabling management tools and

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practices, integrating specialist support, providing facilities and equipment, and managing occupational health and safety. hqp includes attracting and retaining top quality research staff, selecting, training and developing both research managers and technical staff, and maintaining both researcher performance and a sustainable workforce. Management of hqp may also include placement and, in cases where flexibility is needed, redirection. Execution The area of operations merges with execution in the movement of the research toward two important end-states: knowledge management and intelligence (including knowledge creation and innovation, research data management, knowledge sharing, external intelligence, knowledge dissemination externally and management of corporate knowledge) and technology transfer and commercialization (management of intellectual property, market assessment, a commercialization business plan, technology and knowledge transfer and commercialization support). A key result of research is knowledge – and its management is key to harnessing s&t convergence. Similarly, intelligence gathered in the areas of new and emerging knowledge can help managers understand trends and potential directions for allocating resources to research. Technology transfer and commercialization involves tangible results of the research – the development of intellectual property into innovative products and processes that can compete in a global market. Continuously building on prior knowledge contributes to the capabilities of the enterprise.12 Further areas of consideration for managing s&t within the context of the “science-based revolution” of convergence are: • Accumulating a widening set of in-house multidisciplinary capabilities and core technical competencies; • Formation of complex strategic alliances and networks with other enterprises; • Locating r&d facilities where geographically dispersed sources of expertise are located; • At a national level, building world-class s&t infrastructure to contribute to firms’ competitiveness and to attract investment and researchers; and • Despite globalization, maintaining a national presence in specific technologies and industries.13

h ow a fr a m e wo r k a d d re s s e s c h a l l e n g e s o f s&t m a n a g e m e n t Canada is not alone in the need to develop sound practices for the management of science and the harnessing of convergent s&t. The 1990s and the

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new millennium brought a wide range of rapidly evolving trends in s&t globally and a subsequent paradigm shift in ways of managing s&t 14. The pace of evolution has been stepped up. Organizations that do not respond to the need for innovation in an innovative way will find themselves competing with entities that have instituted and are learning to master management of their skills – management giving them the competitive advantage. This also emphasizes a fundamental point that science is no longer simply for science’s sake – even in universities – and that the majority of investors expect that science must serve a greater need of public good through the health and safety of a country’s people or the country’s economic development through its innovative companies. Decision-making Approach There are broad areas of decision-making that cause stress in science organizations, elements of which include: • • • • •

Difficulty in forecasting future science and technology developments; Inherent risk in undertaking scientific endeavours; Selection of the right projects and the right mix of projects; Hiring the best personnel for the job when competition for hqp is strong; Ensuring that competencies have been well identified as it is difficult to redirect hqp whose careers are developed over the long term; • Buying the right equipment and instrumentation for long term use, especially where work is resource intensive and state-of-the art is a draw to attract and retain hqp; • Using resources to patent intellectual property that may or may not make it to market; and • Balancing sometimes conflicting demands of stakeholders, including balancing commercialization with science for the public good. These areas are highly “unknowable,” which results in decision-making stress. In these situations, there can never be enough information. Standard management practices can act as a proxy for being informed but a management framework, to be of value, needs adjusting in areas of relative uncertainty and with experience in decision making in highly ambiguous circumstances. Management practices also change with the evolution of the organization’s goals and activities from conception to commercialization. Within a context of s&t convergence, new modes of interaction, working together, and developing results will change the focus of adjustment. While it is important for an organization to maintain rigorous management practices, it is critical for the organization to remain agile, flexible and nimble as it transforms itself and its management practices to meet new needs. Therefore, while broad prescribed

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management practices serve to improve management capacity if adopted, they must be shaped and managers must innovate in their execution of such practices. A broad descriptive model describing the broad characteristics of the ideal organization is useful if it is aimed at enabling the broad defined tasks of the organization. One such model is explored below.

wi n n e r s a n d l o s e r s – n i m b l e ve r s u s “ p e r m a n e n t ly fa i l i n g ” o r g a n i z at i o n s i n r e s p o n d i n g t o i n n o vat i o n The global context of innovation for many organizations may be characterized as uncertain. Not all organizations are sufficiently adaptive when faced with the uncertainty of new developments or disruptive technologies from unpredictable sources. Indeed, there are many writings describing the key characteristics of effective, responsive organizations in the face of change, challenge or adversity.15 First, a resilient organization requires a greater willingness to access information from multiple sources for richer content, and to avoid guidance by those with a vested interest in the status quo. Cross functional teamwork, effective listening to contrary voices and an ability to accept and integrate data from a range of sources – all provide a key starting point for effective resilience. The second characteristic of a resilient organization involves generating a portfolio of strategic options. Resilient organizations do not just develop a portfolio of research platforms or product innovations; they build a portfolio of discovery fields or experimental business strategies, often mining ideas from all parts of the organization or from other organizations in different sectors. To be resilient, an organization should earmark some portion of its capital expenditures – 20 to 30 per cent – to test new strategies and radically adjust aspects of its business model, such as funding or alliances. The transformation can be profound, involving, for example, a private sector firm shifting from selling high-margin products to selling services, or involving customers in strategic planning. The third characteristic of resilient organizations is their careful examination of resource allocation. Most companies create budgets based on the legacy principle: if a program has been successful, it deserves funds in the future. The resilient solution is to use market-based or policy-based mechanisms to manage resources so that funding of known opportunities is balanced by an appetite for new ventures. It has been noted that r&d “comes at a cost and is as capable of destroying value as creating it” as underinvestment can deteriorate competitive position and overinvestment can erode a company’s capital base.16 Finally, resilience is likely to get a boost from more effective governance that not only provides better safeguards against wrongdoing, but also

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improves leadership. Directors or leaders, feeling pressure from stakeholder / shareholder activists, litigators, and regulators, will have to ensure that management has a plan for the future that does not just relive the past, and provides the right resources to promote resilience. Organizations faced with threat, challenge or adversity that do not possess these characteristics of resilience, are likely to fail. This includes organizations in the public sector or, in the private sector, where more than 8000 businesses fail each year in Canada. Some potential design principles and practices for resilient enterprises are found in Table 1 below. Changing Assumptions As well as innovating within such a framework, management approaches and practices must change because the assumptions that underlie our present approach to science management have changed: • Economics – as convergence takes hold, there is a movement to more fluid structures and a change in the sources of economic value, as well as an increased complexity of uncertainty, risk and return; • The Value of Relationships – investment in relationships becomes as important as investments in equipment or staff; • Sequencing and Time – concurrent activity, multi-tasking within converging streams of discovery and technology development suggest a re-visit of project management approaches; • Control versus influence – with multi-party teams, issues of ownership and management have emerged; and • Shared Accountability – establishing responsibility is being re-thought within a convergence context. As a consequence of these layers of change – broad frame, changes in assumptions and management practices – it is apparent, according to the most recent report of the Institute for Competitiveness and Prosperity17 that many organizations face a management gap as a direct result of the changes in external forces.

i m p l i c at i o n s f o r a n at i o n a l s y s t e m Building on the lessons of using a management tool within a science environment, the next step is to examine the implications that can be drawn for the broader science system in this country. Clearly, there is a question of how to strengthen the linkages amongst the various organizations that constitute the innovation system, “better to address early the long-term issues related to

Table 1 Design Principles and Practices Organization or System Design Principle

Practice

Foresight Capacity (an ability to anticipate)

Scenarios planning; roadmapping; Delphi approaches

Seeing the organization as others experience it and deliberately informing business processes, structures and information flows toward these needs

Client surveys; stakeholder relations; interactive programming and web systems

A portfolio of relevant initiatives – short term, long term, balance of appropriate disciplines, etc.

Organization focus on a strategic purpose; program managers tightly connected to external committees with responsibility for reviews focused on excellence or alignment of projects with strategic directions

An efficient stream-lined intra-enterprise operation that makes possible crossenterprise cooperation, displaying a change-ready mind set

“Privatized” labs and independent management of approved projects; collaborative networks; constant consultations

Streamlined and simplified vertical and line management structures

Program managers with dual responsibility: ensure relevance of projects and nurture disciplines through investment in property and equipment

Dynamic management process to resolve short and long term trade-offs (setting priorities, allocating resources)

Privatized labs and universities compete for centrally allocated funding

Narrowed scope of the line manager’s role in the creation of defined outcomes

Project management; risk management;

Deployment of off-line teams to discover new wealth-creating opportunities, enhance infrastructure or explore new technology platforms (supported by common project management infrastructure, standards, protocols)

Horizontal program management; matrix structures; fluid movement between industry, universities, government research; greater collaboration and flexibility in government programming

Development of talent marketplaces (a marketplace to help researchers explore alternative opportunities; mechanisms to enable exchanges)

New approaches to rewards and benefits to attract hqp

Willingness and ability to be “knowledgeably nimble” in a constantly shifting landscape, and the resolve to take rapid action in response to new information, uncertainty and continually changing external factors (incentives and supports for suppliers to codify knowledge and capability to offer easy access for buyers)

Integrating management competencies with s&t competencies; hiring for and training in management skills and decision-making

Development of managed internal knowledge markets (incentives and supports for suppliers to codify knowledge and capability to offer easy access for buyers)

Use of s&t “language translators” to increase greater access to technical ideas

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revolutionary implications of converging technologies in a responsible government-sponsored framework, than trying to adjust developments later.”18 Coalescing disciplines and organizations around issues of national interest or within broad technology platforms that represent the convergence of disciplines, is a fundamental feature of the way science will need to be developed and applied. Organizations related to the nbic disciplines will be especially important. Key challenges include understanding the complex interactions within the technology as well as outside its domain, evaluating the evolution of the technology, and identifying and implementing measures to shape its future development. Many oecd countries are finding new ways to respond to the “triple helix” of industry-university-government relations in innovation systems. This model relates to the complexity that occurs when the three environments interact with and have an impact upon one another: industry, which focuses on wealth generation; academia, which focuses on “novelty” or knowledge production; and government, which focuses on public control.19 It describes the co-evolution of the relationships, functions and interactions of the many layers within a national innovation system. In an era when scarce resources need to be targeted precisely and the intricate relationships that create innovation identified and nurtured, broad changes in innovation system policies are wide spread. Innovation systems and s&t organizations abroad have included a wide range of varying responses: • Increased investment in public sector research – where investment in government research organizations might not be keeping pace with increased investment in universities; • Alternatively, public laboratories being reduced in number or transferred to universities; • Greater support for universities and industry to lead innovation through greater collaboration; • A focus on commercialization of university research and more cooperation between research institutes and industry; and • A focus on investing in basic science. Several ingredients for a national capacity for greater connectedness present themselves, given the common elements and enterprises among national innovation systems. Vision and Commitment Success in achieving a linked s&t system begins with commitment, at senior political and bureaucratic levels and in central agencies, to the importance of s&t and to linkages as a legitimate means to pursue national policy objectives.

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Senior political officials and public servants will need to embrace a vision of a linked s&t system and champion collaboration to ensure that it is adopted as a fundamental component of government s&t culture. Leading by example, they would be able to demonstrate that collaboration is a core approach to doing business and a legitimate means of achieving the objectives of the organization. The government will not be successful in addressing the complexities around s&t collaboration without this vision and conviction. Innovation Environment The effectiveness of a linked science and innovation system is directly related to the independent strength of each of the three main contributing sectors: government, industry and academia. In order for linkages to flourish, each of the key participating sectors must be strong in its own right so that each can “carry its weight” as a viable partner in a linked system. The government needs to contribute to this by promoting an environment in which innovation can thrive, facilitating the health of the three sectors so that each is well positioned to contribute to a networked national s&t system, and actions such as the following: • Government commits to its role in the national science and innovation system at a level commensurate with its mandated responsibilities and emerging s&t priorities by ensuring that science-based departments and agencies (sbdas) have the capacity to deliver on their s&t roles in a healthy, supportive work environment that is conducive to the conduct of modern science. Sufficient capacity includes a dynamic, high calibre s&t work force; modern facilities, platforms and equipment; and predictable, adequate financial resources. This means identifying the capacity needed to address current needs and evolving challenges and opportunities. • Government promotes an environment in which innovation can thrive in academia, including, among other things, continued government funding as well as support for state of the art science infrastructure, collaboration with industry and commercialization of ip. • Government supports industrial capacity through the use of the tax system and other mechanisms to encourage Canadian pools of private capital, such as venture capital and institutional funds, to invest in the domestic innovating community. This community consists not only of the relatively few large, research-intensive companies, but also a significant population of small and medium-sized enterprises (sme s) that, with infusions of management expertise and capital, have the potential to make significant contributions to Canada’s national science and innovation system. As the private sector is the principal actor in the final stages of the innovation cycle, ensuring its robustness is vital to Canada’s continued

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prosperity. The government needs to foster a national climate in which s&t innovation is perceived by investment managers as a profitable, high-growth opportunity. sme s working in the nbic areas of convergent science particularly need to be supported. • Government continues efforts to support industrial r&d through tax incentives, direct grants and subsidies, and industrial support programs. Funding support, like departments, tends to be structured vertically, administered by a number of organizations, with each subject to unique rules, regulations and monitoring processes. Breaking down the compartmentalization of federal support for industrial innovation would be more consistent with the vision of innovation as a single, flexible and seamless process from research to commercialization. So-called “one-stop shopping” for industrial innovation support could help relieve the administrative burden on sme s.

c o m m u n i c at i o n An effective, linked s&t system is characterized by a broad, deep and regular flow of information and knowledge within and among the key sectors and disciplines. The government is better positioned to pull together the “best and the brightest” to respond to emerging national crises and opportunities in a timely, coherent way in a system where information and knowledge sharing is already routine. Recent s&t-related crises in this country have highlighted the importance of this capacity. Governments will need to demonstrate the political will to share s&t information and knowledge. Transparency and openness is particularly important to the success of a linked s&t system. Leading by example, senior political officials and public servants could effectively foster a culture that embraces the concept that sharing knowledge is power. Fostering ongoing individual and institutional relationships across departments, sectors and disciplines is an effective way to encourage the sharing of information and knowledge. To this end, the government could explore options for co-location of s&t facilities, both among government departments and between government and academic or industrial organizations. Co-location can be pursued as a general operating principle, in the absence of immediate, specific collaborative initiatives. The act of co-location itself can foster a physical environment conducive to information and knowledge sharing and the promotion of personal and institutional relationships, on which specific collaborative initiatives can be built in the future. There are other mechanisms that can facilitate individual and institutional relationships on an ongoing basis, for example: • Promoting greater mobility for scientists, both within government and among government, industry, academia and not-for-profit

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organizations, through more flexible human resource policies and programs such as interchanges; • Supporting the attendance of government scientists and policy analysts at key national and international multi-sectoral conferences to facilitate informal networking; and • Seeking out more opportunities for flexible work arrangements for government scientists, such as dual appointments (e.g. adjunct professorships) and joint appointments with other bodies, especially universities. Accountability and Funding Tension between vertical accountabilities and horizontal responsibilities is a key issue relevant from the ministerial level down through the ranks of the public service. As noted earlier, the structure of the federal s&t system is characterized by vertical departments focused on their specific organizational missions and jurisdictions. In Canada’s parliamentary system, each minister is individually accountable to Parliament for his or her department’s activities and for the decisions made or deferred related to the department’s mandate, including funding of different elements in the national system that are related to s&t and innovation. Departmental officials, in turn, are accountable to the minister. Reconciling this vertical accountability with the collective, horizontal responsibility of a linked s&t system is one of the biggest challenges to fostering an effective linked national science and innovation system.

f u t u r e d e v e l o p m e n t o f s&t i n c a n a d a Broadly speaking, the kinds of actions noted above would lead to four broad related pathways for the future development of science and technology in Canada. Solution Orientation A focus on solutions involves helping to realign existing science capacity to solve domestic and global challenges in key areas, including health, the environment and energy, and creating national funding envelopes addressed at particular critical issues (like the Gates Grand Challenges) that encourage the scientific, academic and business community to self-organize across sectors, jurisdictions and technology platforms, in order to access the targeted funds. The recent federal government’s decision (Fall Update 2005) to focus five per cent of federal r&d towards the challenges of developing countries is one example of this focus on solutions, while the priority areas included in the federal science and technology strategy suggests on-going

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interest in common priorities. These include understanding s&t as a source of national competitive advantage, understanding its changing context and the roles of Canada’s key players, and focusing on three s&t advantages: entrepreneurial, knowledge, and people.20 SME Problem Solving Focusing on sme s involves coordinating access to comprehensive commercialization services for private sector sme firms that would provide critical science and r&d services. This could include access to laboratories, equipment, researchers, and s&t advice as well as providing solutions to specific industry problems. This would involve focusing federal direct r&d as much on market outcomes and results, as on scientific excellence. Market Intelligence It is important to remember that Canada imports 96 per cent of its global knowledge. Market intelligence involves expanding national s&t knowledge networks (e.g. nrc-Canada Institute for Scientific and Technical Information, government departments and agencies, and universities) to access and exploit international s&t knowledge. It includes a focus on acquiring and adapting existing innovative technologies, rather than necessarily inventing them, as well as developing market intelligence and expertise in such areas as: • • • • •

New frontier science and technology development; Networking and partnership opportunities; Intellectual Property identification and capture; Talent recruitment; and Emerging market intelligence capture. National Coordinating Mechanism or Process

National coordination would involve establishing a new mechanism or process to monitor performance of the national s&t innovation system, determine whether or not it is meeting the needs of private sector and public institutions, and recommend adjustments and investments accordingly. The role of this national “centre” would be to: • Identify key national s&t and commercialization priorities; • Monitor the performance of the overall system in achieving national public policy objectives and in assisting Canadian industry to be competitive in global markets; and • Identify areas for potential improvement.

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The key management task is “how to organize and manage the r&d and innovation process in conditions of increasing complexity, rapid change, the erosion of boundaries between different scientific and engineering fields, the convergence of previously unrelated fields and consequent discontinuities.”21 In many ways, the organizations themselves may need to begin to converge to realize greater problem-solving and knowledge-sharing capacity for this management process.

conclusion Convergence of science fields lends itself to the notion of s&t connectedness and a linked system. As researchers find counterparts and knowledge in other fields that can add a new perspective and expertise to problem-solving, so too can organizations and enterprises connect to optimize the knowledge gain and transfer that leads to innovation. Key to this process for researchers, enterprises and national innovation systems alike is the understanding of the elements involved in the strategy, operations and execution of developing linkages. For Canada to derive the most benefit from s&t convergence, the management system needed in enterprises needs to extend to the national innovation system itself.

notes 1 For example, refer to the work of E.O. Wilson. 2 For example, refer to the work of Bengt-Ake Lundvall, Henry Etzkowitz, and Loet Leydesdorff. 3 Jacob Edler, Frieder Mayer-Krahmer, and Guido Reger, “Changes in the Strategic Management of Technology: Results of a global benchmarking study,” Journal of r&d Management 32, 2 (2002), 49. 4 Organization for Economic Cooperation and Development, Governance of Public Research: Toward Better Practices (Paris: oecd, 2003), chapter 1. 5 World Economic Forum, The Global Competitiveness Report (World Economic Forum, 2006), global competitive index rankings. 6 Industry Canada, Mobilizing Science and Technology to Canada’s Advantage (Industry Canada, 2007), 25. 7 William Sims Bainbridge and Mihail C. Roco, “Reality of Rapid Convergence,” Annals of the New York Academy of Sciences 1093 (2006), ix–xiv. 8 David H. Henard and Ann M. McFayden, “The Complementary Roles of Applied and Basic Research: A Knowledge-Based Perspective,” Journal of Product Innovation Management 22, 6 (2005), 503–514. 9 William Sims Bainbridge, “Transformative Concepts in Scientific Convergence,” Annals of the New York Academy of Sciences 1093 (2006), 41. 10 Mihail C. Roco, “Progress in Governance of Converging Technologies Integrated from the Nanoscale,” Annals of the New York Academy of Sciences 1093 (2006). 3–19.

232 Jac van Beek and Frances Isaacs 11 Flavia Leung, “Supporting More Effective Management Practices within a Public Scientific Research Organization – A Canadian Experience,” International Association for the Management of Technology (iamot 2006): presentation. 12 Shantha Liyangage, Ross Barnard, “What Is the Value of Firms’ Prior Knowledge? Building Organizational Knowledge Capabilities,” Singapore Management Review 24, 3 (2002), 35. 13 Lakis C. Kaounides, “Science, Technology, and Global Competitive Advantage: The Strategic Implications of Emerging Technologies for Corporations and Nations,” International Studies of Management and Organization 29, 1 (1999), 54–55. 14 See for example, Philip A. Roussel, Kamal N. Saad, and Tamara J. Erickson, Third Generation r&d: Managing the Link to Corporate Strategy; (Harvard Business School, 1991) or C.W. Bowman, Intangibles: Exploring the Full Depth of Issues, (Grafiks Marketing and Communications, 2006). 15 M.W. Meyer and L.G. Zucker, Permanently Failing Organization (Sage, 1989). 16 F. Peter Boer, Financial Management of r&d 2002. Available at www.boer.org; accessed 8 June 2007. 17 Institute for Competitiveness and Prosperity, Agenda for Canada’s Prosperity: Report on Canada 4, March, 2007. 18 Roco, “Progress in Governance of Converging Technologies,” 2. 19 Loet Leydesdorff and Martin Meyer, “Triple Helix indicators of knowledge-based innovation systems,” Research Policy 35 (2006). Available at http://users.fmg.uva.nl/ lleydesdorff/rp06th5/index.htm; accessed 8 June, 2007. 20 Industry Canada, Mobilizing Science and Technology to Canada’s Advantage (Industry Canada, 2007), chapters 1–2. 21 Kaounides, “Science, Technology and Global Competitive Advantage,” 76.

Contributors

s a r a b a n n e r m a n is a PhD candidate at Carleton University’s School of Journalism and Communication. She is writing her dissertation on Canadian copyright history. f r a n ç o i s b r e g h a is a principal with Stratos Inc., an Ottawa-based sustainability consultancy. Over the last decade, he has advised the Commissioner of the Environment and Sustainable Development and helped almost a dozen departments and agencies with various aspects of their sustainable development strategies. Since the late 1980s, he has specialized in the analysis and design of tools and approaches that integrate environmental and economic considerations in public policy. a n n i k d e z i e l is a graduate of the Environmental Sciences undergraduate program at the University of Ottawa and a former research associate at the Institute of Environment. s c o t t f i n d l ay is an associate professor of Biology and director of the Institute of Environment at the University of Ottawa and research associate at the Centre for Cancer Therapeutics at the Ottawa Hospital Research Institute. His research interests include ecological risk assessment, methods for assessing the scientific weight of evidence, and the role of Darwinian evolution in cancer progression and therapeutic resistance. r o b e r t b . g i b s o n is a professor of Environment and Resource Studies at the University of Waterloo. His research and applied work focus on integrating sustainability considerations in land-use decisionmaking in urban

234 Contributors

growth management, corporate greening initiatives, special area governance, and environmental assessments at the project and strategic levels. He has been co-editor, editor, or editorial board chair of Alternatives Journal since 1984. r o b e r t h i lt o n is a visiting fellow with the School of Public Policy and Administration at Carleton University. His research interests include the impact of municipal infrastructure on sustainable development and the means of engaging citizens in decisions about infrastructure choices and the levels of service provided. f r a n c e s i s a a c s is a policy analyst with the National Research Council of Canada. Her research interests are in the areas of science and technology policy and research and development management. m a r k j a c c a r d is professor of Resource and Environmental Management at Simon Fraser University, with a focus on sustainable energy policy modeling. He is currently convening lead author for policy in the Global Energy Assessment, a member of Canada’s National Roundtable on the Environment and the Economy, and climate policy advisor to Canada’s Council of Chief Executive Officers and to the British Columbia government’s Climate Action Team. rose murphy is a research associate with the resource and environmental management program at Simon Fraser University. Her research interests include sustainable energy policy modeling, risk management for carbon capture and storage, electricity supply planning, and energy policy aspects of international development. r o b e r t pa e h l k e is professor emeritus in the Environmental and Resource Studies Program at Trent University. His most recent books are Democracy’s Dilemma: Environment, Social Equity and the Global Economy (MIT Press, 2004) and Some Like It Cold (Between the Lines, 2008). d av i d r o b i n s o n is an associate professor of Economics at Laurentian University in Sudbury. He has been working on economic development issues in Northern Ontario since 1990, focusing most recently on communities in the forestry sector. He is also co-author of The Topology of the 2x2 Games: A New Periodic Table (Routledge, 2005) and carries on an active research program in Game Theory. c h r i s t o p h e r s t o n e y is an associate professor in Carleton University’s School of Public Policy and Administration where he is director of the Centre

235 Contributors

for Urban Research and Education (cure). His current research includes evaluating the administration and expenditure of the federal gas tax by provinces and cities across Canada with respect to governance, strategic and sustainability criteria, and the use of community engagement in place-based neighbourhood planning and emergency management and preparedness. He also writes on intergovernmental relations and various aspects of Canadian public policy such as regulation, procurement and infrastructure, and aspects of public management, including accountability, strategy, performance, and evaluation. glen toner is professor of Public Policy and Director of the Carleton Research Unit in Innovation, Science, and Environment (cruise) in the School of Public Policy and Administration at Carleton University. His research interests lie in the challenge of institutionalizing sustainable development in the decisionmaking and administrative systems of the public sector and in the adoption of sustainability imperatives in the private sector. His most recent edited work in this area is Sustainable Production: Building Canadian Capacity (ubc Press, 2006). jac van beek is vice president, Programs and Planning at the Canada Foundation for Innovation and adjunct professor, Telfer School of Management, University of Ottawa. As a planner and executive, his career interests have focused on issues of science and science management in fields as diverse as biotechnology, aerospace, research in construction, chemical processing, and information management. His policy and management work has included pioneering work in strategic planning, science management, technology cluster development, collaborative ventures, commercialization, and regulation. jeremy wilson is professor of Political Science at the University of Victoria, where he teaches courses on public policy and environmental politics. His current research focuses on the development of transnational migratory bird policy networks and institutions.