ARCHIVED - Natural Resources Canada

• Previous Page
• Table of Contents
• Next Page

This page has been archived.

Section II – Analysis of Performance by Program Activity

This section provides a summary of planned and actual spending by program activity along with a summary of key accomplishments.

* In RPP 2006-07, planned spending for these items was presented under Priority #1 (Improve Resource Sector Productivity and Competitiveness); #2 (Advance Resource Efficiency and Conservation); #3 (Ensure the Safety and Security of People and Resources); #4 (Provide Science, Information and Tools for Decision-Making & Support Responsible Development of Canada's North); Other (Other Supporting and Enabling Initiatives/Services).**The apparent increase in corporate management costs reflects a change in reporting of some corporate activities (i.e., shared services, communications and information technology) which were previously included in sector/program sub-activities in the planned spending column. This change was made to improve accountability and transparency associated with reporting of these areas.

Operating Context

NRCan plays a pivotal role in the collection and dissemination of public-good and public-knowledge earth sciences information of major importance to Canada's energy, mining and forestry resources, among others.

Canada is a global leader in natural resource development. However, Canada's mineral and conventional energy reserves are declining, thus threatening the livelihood of many communities and negatively affecting the Canadian economy (natural resources account for 13 percent of GDP and employ close to 1 million people). Public geoscience knowledge is a key factor in stimulating investment to find additional resources and in providing practical experience for the next generation of scientists and technicians.

Some 10 million Canadians rely on groundwater for their drinking water. Yet the majority of Canadian aquifers have not been characterized in detail. Population growth, pollution, changing climate and increased urbanization are putting pressure on this resource. In addition, resource industries are also highly reliant on water, including the oil, gas and the emerging coalbed methane extraction sectors.

Canadians are using geospatial information and tools more than ever, including products such as Google Earth, satellite imagery and commercial global positioning systems (GPS) devices. However, much of this information changes rapidly and is often incomplete, making maintenance and new additions extremely important.

Changes in our climate are having a significant impact on Canadians, including the increased frequency and severity of extreme weather events (heat waves, flood and droughts), thawing of permafrost and the loss of northern ice, to name a few. These impacts poses increasing risks to Canadians health and safety, infrastructure, water and natural ecosystems. However, adaptation to climate change also provides the opportunity to capture potential benefits such as increased productivity from existing crop species as well as the possibility of developing new crop types.

Canadians face a wide range of infrequent natural hazards, including earthquakes, landslides and floods. More people, and the corresponding infrastructure, is affected as the population grows and becomes concentrated in particular areas of the country.

Key Accomplishments

NRCan has increased mineral and energy exploration investment made by the private sector as a result of public geoscience investments. It has done so through the following programs and initiatives.

Under the Targeted Geoscience Initiative 3 (TGI 3), there has been an increase in private sector exploration expenditures in the TGI 3 areas of Flin Flon, Abitibi, Bathurst and the Cordillera which is estimated at $50 million to date. In addition, four more drilling targets have been identified in these areas. Studies of the TGI found that a $1 million investment in geoscience leveraged $5 million in industry exploration and resulted in discoveries worth $125 million in mineral resources.

The Northern Resource Development Program has made significant progress toward an expanded and improved public geoscience knowledge base for the territories and the northern parts of the provinces. The new maps and supporting analytical work have led to significant new land acquisition by exploration companies. In addition, new maps and geochemical analysis of north-western Alberta and north-eastern B.C. have led to new exploration for diamonds and zinc.

As part of work related to the United Nations Convention on the Law of the Sea, the Department conducted surveys to establish outer coastal limits, including bathymetric surveys on the Grand Bank to establish the outer limit of the continental shelf in that area. This work is important in that it helps to confirm the extent of the outer limits, and may increase the size of the limits of Canada's offshore claim.

The National Energy Board and key Canadian energy groups, such as the Petroleum Technology Alliance of Canada, now recognize gas hydrates as a potential component of Canada's future gas supply. The Department is contributing to the progress that has been made towards a better understanding of the physical properties of gas hydrates, leading to the completion of revised estimates of gas hydrate resources in the Mackenzie Delta and Beaufort Sea.

Through the Secure Canadian Energy Supply Program, NRCan has been focusing on both conventional and unconventional basin resource assessments, including uranium, energy groundwater and Mackenzie Valley northern energy development. The Department provided input into the Mackenzie Valley pipeline project, including geoscience data in support of overall project design, environmental impact mitigation and land-use decisions. In addition, NRCan provided expert advice in support of a major groundwater survey that was carried out by the Alberta Energy and Utility Board.

As part of work undertaken to meet the Minister's responsibility under the Canada Lands Surveys Act, the Department maintained the standards for surveys, monitored compliance, managed the legal surveys records and provided access to key administrative datasets through GeoGratis, GeoBase and the Canada Lands Surveys Records. This information is widely used by land owners and land administering agencies and departments of the federal, territorial and Aboriginal governments.

NRCan maps and products are being used to support oceans management and policy decisions, such as identifying sensitive marine habitats in the Queen Charlotte Basin, Beaufort Sea and Placentia Bay, and as input to planning in the five Large Ocean Management Areas such as the East Scotian Shelf.

NRCan assessments of environmental hazards provide key data to support reduced stress on environmental ecosystems and human health. The Department's Environment and Health Program included the signing of collaborative agreements with a mining operator in British Columbia (B.C.) to develop environmental models to reduce the risk of exposure to the surrounding ecosystems. In addition, NRCan provided legislated environmental and resources assessments, used in projects such as the licensing phase for the Victor Diamond mine.

The Department's Groundwater Mapping Program identifies, maps and assesses prioritized regional-scale aquifers of Canada to estimate groundwater availability, vulnerability and sustainability. There are thirty key aquifers across Canada of which nine have been mapped and included in the National Groundwater Database.

Through its Environment and Health Program, NRCan is on target to produce a national forest fire facility with a focus on burn area inventory within its Canadian National Wildland Fire Information System by 2009. The Department, working with Health Canada, the Nova Scotia Department of Health Promotion and Protection and the Nova Scotia Department of Energy, undertook risk assessments associated with human exposure to potentially toxic metals associated with historic gold mines in Nova Scotia.

The degree of vulnerability of Canadians to various risks associated with climate change depends not just on the physical impacts, but also on their preparedness and capacity to respond.

In collaboration with Hydro-Quebec and Manitoba Hydro, NRCan is working to assess climate-related trends and variability in water supply using paleoclimatic data. In addition, the Department provided geospatial information and expertise to Agriculture and Agri-food Canada to be used to develop crop yield projections in the prairie provinces. These projections indicate that some crops such as spring wheat, may see significant decreases in yield in the future. The Department also provided new information, along with expert advice, on sea level rise and subsidence in the Fraser Delta to the municipal and regional authorities in support of revised flood risk management plans.

NRCan provides decision-makers with accurate and timely geospatial information which, in turn, provides organizations with the tools to safeguard communities and infrastructure.

For example, the North Atlantic Tsunami Warning System became operational in January 2007 in response to the need to protect Canadians. The system is based largely on the NRCan seismic network.

In addition, NRCan carried out several key geohazard assessments, including: applied earthquake studies in the urban areas of southwest B.C.; tsunami investigation on probable height of tsunami waves in order to develop appropriate preparedness; risk assessment analyses for B.C. Emergency Preparedness; and earthquake studies for the Ottawa and Quebec City areas. The Department also worked closely with the Canadian National Committee for Earthquake Engineering, ensuring uptake of earthquake information by the engineering community and its inclusion in the next version of the Canadian Building Code.

As part of Canada's obligations under the 1925 Treaty, the International Boundary Commission undertook emergency repairs to the Point Roberts range towers. In addition, boundary vista clearing took place along 218 km of border between Quebec/Maine and B.C./Southeast Alaska. All projects were completed on time and budget.

* In RPP 2006-07, planned spending for these items was presented under Priority #1 (Improve Resource Sector Productivity and Competitiveness); #2 (Advance Resource Efficiency and Conservation); #3 (Ensure the Safety and Security of People and Resources); #4 (Provide Science, Information and Tools for Decision-Making & Support Responsible Development of Canada's North); Other (Other Supporting and Enabling Initiatives/Services).

** Planned spending excludes $110M for the Newfoundland Fiscal Equalization Offset Payments; and $65M received via the Supplementary Estimates for activities related to the safe decommissioning of shutdown buildings and contaminated lands in order to meet federal regulatory requirements, and for the long-term strategy needed for the disposal of nuclear wastes (Nuclear Legacy Liabilities Program). ***The apparent increase in corporate management costs reflects a change in reporting of some corporate activities (i.e., shared services, communications and information technology) which were previously included in sector/program sub-activities in the planned spending column. This change was made to improve accountability and transparency associated with reporting of these areas.

Operating Context

Canadians enjoy an abundant and diverse supply of energy that is secure and reliable. As a net exporter of energy, Canada contributes to global energy security and diversity. In fact, Canada's energy production and exports are expected to increase over the next several decades.

While increasing international concerns over energy security and rising energy prices have resulted in a massive boom for Canada's energy sector, and our economy, there is also a growing need to address global environmental issues.

Effective regulations to protect the environment and ensure public health and safety are needed while taking into account the socio-economic importance of new energy projects to Canada. There is also a need for increased investment in energy technology, improving energy efficiency and conservation, and strengthening collaboration between governments and industry in these areas.

In the 2006 Speech from the Throne, the Government identified the reduction of air pollution and greenhouse gas (GHG) emissions as one of its priorities. Air pollution affects the health of Canadians and the environment in many ways, while GHG emissions contribute to global climate change.

As the lead federal department on natural resources, NRCan is significantly involved in addressing this priority. Indeed, energy production and consumption are responsible for a large proportion of emissions that affect the quality of air. Transportation, fossil fuel-fired electric power and upstream oil and gas activities produce over 80 percent of domestic emissions of nitrogen oxides, which are key to the formation of ground-level ozone and particulate matter (the main components of urban smog). These same sources also account for 40 percent of Canada's emissions of sulphur oxide, an important precursor to acid rain. Coal-fired electric power alone is responsible for 34 percent of domestic mercury emissions. Energy production and consumption also accounts for over 80 percent of GHG emissions. "Canada's Energy Outlook: The Reference Case 2006" suggests that fossil fuels will remain, under a business-as-usual scenario, the leading source of energy for Canadians for years to come.

The Government of Canada's Clean Air Agenda represents a new approach to reducing GHG emissions and improving air quality which will balance environmental protection while encouraging economic growth.

Key Accomplishments

Energy is a major pillar of the Canadian economy, representing 5.8 percent of our GDP in 2006. Canada's energy exports were $86 billion in 2006, representing approximately 19 percent of its merchandise trade exports. These figures are a strong indication of solid performance in the energy sector and suggest that Canada's energy policy is sound and appropriate. While air emissions from energy have increased with economic growth, progress is being made. For instance, Canada's emissions intensity, expressed as carbon dioxide (CO2) emissions from fuel combustion per unit of GDP, declined by 16 percent between 1990 and 2005.

At the 2006 Council of Energy Ministers' (CEM) meeting held in Whitehorse, federal-provincial and territorial ministers discussed emerging opportunities and challenges facing the Canadian energy sector. To this end, ministers identified three key priorities: regulatory efficiency, energy technology development and innovation, and energy efficiency. They committed to increasing their collaborative efforts in these priority areas.

The Department played a critical role to support the Government in developing and implementing the Clean Air Agenda. The work of the Department led to the announcement, in January 2007, of an investment of $2 billion in a suite of ecoENERGY Initiatives to encourage energy efficiency, increase the production of renewable energy from emerging sources, and reduce the environmental impact of conventional energy sources.

The Department has updated its modeling system on energy and emissions. The modeling system has been used to produce a new long-term projection of Canada's energy demand, supply and related GHG emissions ("Canada's Energy Outlook: The Reference Case 2006"), published in October 2006. The new Energy Outlook informs future policy development related to energy and the environment.

The Opportunities Envelope (OE), an initiative co-led by NRCan and Environment Canada, provided federal financial assistance to GHG mitigation projects and programs proposed by provinces and territories within their respective jurisdictions. Over the course of 2006-07, work continued in negotiating and signing contribution agreements for these initiatives that had previously been approved. In total, 23 contribution agreements were signed with the provincial/territorial proponents, representing a total estimated contribution spending of over $35 million. The funded initiatives are expected to reduce annual GHG emissions by some two megatonnes in 2008 and beyond, which meets program expectations. They should also abate local air pollution as well as lower energy costs for business, households and utilities.

During 2006-07, NRCan continued to play an active role in engaging with other countries on a bilateral and multilateral basis to promote Canadian energy policy approaches - the establishment of fair, transparent, predictable and stable economic, legal and regulatory frameworks - which helped to ensure fair access to foreign markets for Canadian energy companies.

Internationally, we represented Canada in various policy and technical fora to promote energy security and the clean and efficient production and use of energy. These fora include the: International Energy Agency; North American Energy Working Group; Asia-Pacific Economic Cooperation Energy Working Group (APEC EWG) and the U.N. Commission on Sustainable Development. We worked closely with DFAIT on the energy aspects of the G8 and participated in the Gleneagles Dialogue Process.

On the bilateral side, the U.S. remains a key partner. We have continued to work together during the past year to strengthen energy security and reliability and address the environmental impacts of energy production and use through collaboration on energy market and regulatory issues, increasing energy efficiency, and advancing energy S&T. We are also working with Mexico, through the Canada-Mexico Partnership Energy Working Group; and with the Asia Pacific region through the APEC EWG; and also with China through the Canada-China Joint Working Group on Energy Cooperation.

Through the past year, the nexus of energy and climate change has become a paramount issue at many high-level international discussions. NRCan represented Canada's interests on energy, technology, adaptation and forestry at international fora, both within and outside the U.N. processes. Under the U.N., the Department participated in policy development and negotiations at the Conference of the Parties to the Climate Change Convention (COP12) in Nairobi. It is engaged in the development of the architecture for the post-2012 agreement under the Kyoto Protocol. NRCan also led Canada's negotiations for the Experts Group on Technology Transfer and made strategic contributions to our Umbrella Group and European Union allies. We worked within other international bodies including the Organization for Economic Co-operation and Development (OECD) Annex 1 Experts group, the Centre for Clean Air Policy, and the Carbon Sequestration Leadership Forum, particularly relating the G8 request for early opportunities in Carbon Capture and Storage.

The Department explored options to support low-impact renewable electricity sources such as wind, biomass, geothermal, hydro and ocean energy.

The Wind Power Production Incentive (WPPI) program entered into its final year. In total, 22 wind farms are receiving support under the program, representing 924 megawatts of wind energy capacity and total federal government investment of $314 million. The program had an objective of encouraging 1000 megawatts of new capacity by March 2007. An internal audit of the program found that there are opportunities for improvement with respect to program design, financial management and program administration. Details available at http://www.nrcan.gc.ca/dmo/aeb/aeb-rpts-e.htm.

Under the Renewable Energy Deployment Initiative (REDI), 426 industrial, commercial and institutional solar and biomass heating systems have been installed, and 6 solar domestic air and water heating pilot initiatives have resulted in 368 installed solar heating systems in the residential sector.

The government fully supports nuclear power as part of the Canadian energy mix as a stable source of base load generation with minimal climate change impacts. Over the course of the year, the government moved forward on two important policy issues - its review of the Nuclear Liability Act and its review of options for the long-term management of nuclear fuel waste.

This was the first year of implementation of Canada's long-term strategy to deal with nuclear legacy liabilities at Atomic Energy Canada Limited (AECL) research sites. Significant progress was made. A new waste analysis facility was constructed at Chalk River Laboratories, two shutdown buildings were decontaminated and demolished, and selected buried radioactive wastes were recovered and transferred to secure storage. Decommissioning work also proceeded at the Whiteshell Laboratories near Pinawa, Manitoba. NRCan is responsible for policy direction and oversight, including control of funding, and AECL is responsible for carrying out the work.

The Department made progress on its programs to address the cleanup of radioactive wastes. Canada entered into a Memorandum of Agreement with Saskatchewan to clean up Did you know? Public consultation efforts appear to be building public confidence in nuclear fuel cycle activities. Polling in the Port Hope area indicated that years of discussion and education have yielded steady growth in community awareness and understanding of waste cleanup efforts. Today, 73 percent of local residents are confident in the Government's proposal. Industry has also been active. Over 50,000 Canadians participated in helping the Nuclear Waste Management Organization develop recommendations on the long-term management of nuclear fuel waste for their report to the Minister of NRCan. legacy uranium mine and mill sites in northern Saskatchewan. Canada and Saskatchewan will each contribute $12.3 million to the $31.6 million estimated cost. Canada made a $1.1 million contribution to the project to enable the environmental assessment to be completed, meeting program expectations.

In terms of the cleanup of historic wastes in the Port Hope area of Ontario, a screening report was prepared and released on the cleanup and long-term management of historic wastes in the Municipality of Port Hope. The screening report concluded that the Port Hope Project is not likely to cause significant adverse environmental effects and the project is now moving to the licensing phase. The environmental assessment process of the Port Granby Project was delayed at the request of the Municipality.

As part of the Frontier and Offshore Regulatory Renewal Initiative (FORRI), amendments to the flow testing requirement in the current Drilling Regulations were promulgated. The amendment was a key deliverable of the Atlantic Energy Roundtable. It is expected that the amendment will reduce the cost to operators of drilling an offshore well by $10 million to $30 million, depending on the type of rig, water depth, and reservoir depth. Following consultation with industry, the combined Drilling and Production Regulations were re-drafted to be more goal-oriented. Stakeholder consultations on the new goal-oriented regulations were initiated at the end of the fiscal year. The drafting of new goal-oriented Diving Regulations was also initiated in 2006-07.

NRCan provided technical expertise to the Joint Review Panel for the Mackenzie Gas Project (MGP). In addition, NRCan participated and provided policy and market advice in discussions with the MGP proponents concerning financial support for the project. The Department also established and led an interdepartmental committee for an Alaskan natural gas pipeline. The committee reviewed the design of a regulatory/environmental review process to satisfy the requirements of federal, provincial governments and First Nation.

Moreover, NRCan created the Fuel Focus web site which contains clear, transparent and timely information on fuel prices, oil and gasoline markets, ways to manage energy costs and weekly petroleum product prices for 60 Canadian cities. In addition, the Department created a bi-weekly report providing readers with regular information on the various aspects of the gasoline market in Canada in an effort to raise awareness of the economic drivers influencing petroleum prices.

The Department's programs to improve energy efficiency and increase the production and use of alternative transportation fuels contribute to progress in key trends in Canada's energy use. From 1990 to 2004 (the latest year for which data are available), Canada's energy efficiency improved by an estimated 14 percent. In 2004 alone, these improvements reduced energy use by 902.7 petajoules from what it would have been.

Over 3000 commercial, institutional and multi-unit residential organizations across Canada were members of the Existing Buildings Initiative (EBI) by the end of 2006-07. Projects that received financial incentives under EBI averaged about 20 percent energy savings, meeting program expectations.

For new construction, NRCan validated the design of 254 buildings to an average design performance of 36 percent better than the Model National Energy Code for Buildings, in 2006-07. The number of registered users of NRCan's building design energy simulation/compliance software increased to 6500, an increase of more than 1000, meeting program expectations.

In 2006-07, the EnerGuide for Houses Retrofit Incentive was wound down, with NRCan processing more than 105,000 grants. Carbon dioxide reductions of 902,000 tonnes were achieved over the life of the program, surpassing the target of 800,000 tonnes. With respect to building energy codes, the Canadian Commission on Building and Fire Codes approved a new business plan submitted by the NRCan-supported Buildings Energy Code Collaborative to update the Model National Energy Code for Buildings.

Through its equipment programs, NRCan sets energy efficiency standards and regulations and encourages the purchase of highly efficient products. The Energy Efficiency Regulations cover product groups that consume approximately 80 percent of the energy used in the residential Did you know? Through the Ethanol Expansion Program (EEP), NRCan increased renewable transportation fuel production and use in Canada. In 2006-07, four new ethanol plants that were allocated $51 million under the EEP were completed and started producing fuel ethanol. These four plants added 480 million litres to the Canadian annual ethanol production capacity that was 200 million litres. Four more ethanol plants under the EEP started construction in 2006-07 with a total an annual production capacity of 390 million litres. EEP started construction in 2006-07 with a total annual production capacity of 390 million litres.

The EEP was developed to support the 2002 Climate Change Plan for Canada target of having 10 percent ethanol in 35 percent of the gasoline supply. This represents approximately 1.4 billion litres of annual ethanol production. Current production capacity of 680 million litres represents 49 percent of this target.sector and 50 percent in the commercial and institutional sector. Canada's energy efficiency regulations are among the most stringent in the world. In 2006-07, Amendment 9 to the Energy Efficiency Regulations was finalized. The estimated energy saving impact of this amendment is 1.64 Petajoules by 2010.

To influence the manufacture and availability of more efficient products, Canada adopted the internationally recognized ENERGY STARR symbol for a number of product categories in the residential, commercial and industrial sectors. Activities related to ENERGY STAR in Canada have led to an increase in awareness and take up of ENERGY STAR qualified products. The unaided awareness level has consistently increased from 13 percent in 2001 to 48 percent in 2006.

The Canadian Industry Program for Energy Conservation (CIPEC) is a unique industry-government partnership that is committed to promoting and encouraging energy efficiency improvements through voluntary action across Canada's industrial sectors (see http://www.oee.nrcan.gc.ca/ industrial/cipec.cfm). In 2006-07, the uptake of tools and services by industrial companies in CIPEC activities exceeded expectations; for example, 1303 people from the industrial sector attended Dollars to $ense workshops in 2006-07, leading to energy and GHG savings of 1.9 PJ and 208 kt. Energy audits conducted at 137 industrial facilities saved 2 PJ of energy and 137 kt of emissions also in 2006-07.

NRCan manages the 2005 voluntary agreement between the Government of Canada and the Canadian automotive industry to reduce GHG emissions from cars and light trucks by 5.3 Mt per year by 2010. The first progress update, prepared by the Joint Government-Industry GHG MOU Committee, was released in June 2006.

NRCan's demonstration of three "Star Trucks" has had an impact on the specification improvements of 66 trucks to date, resulting in GHG reductions of 2,000 tonnes per truck per year. NRCan conducted Fuel Management 101 workshops, and the 5th annual Truck Stop Quiet Zone campaign in which 70 truck stops participated, meeting program expectations.

Of the 400,000 new drivers taking driver education annually, 130,000 are exposed to NRCan's AUTO$MART Driver Education program. Currently, 33 percent of driver instructors in Canada have received driver training kits and/or training. There is a high rate of turnover in this industry; as a result, the target for this program is to ensure that, at all times, 50 percent of driver instructors are informed about energy efficient driving.

Idle free campaigns supported by NRCan have been conducted in communities that represent 32 percent of the Canadian population. Approximately 100 communities have independently launched a campaign and 90 percent will continue with their campaign in 2007-08. Many communities are implementing idling by-laws: 25 communities have already done so and 25 more are in the planning stages. Moreover, Be Tire Smart campaigns have been conducted in several regions with an estimated reach of six million Canadians. Based on surveys, the number of individuals that properly inflate their tires by measuring the tire pressure at least once a month has increased by 25 percent from 2003 to 2007.

NRCan is contributing to Canada's Clean Air Agenda, in part, through the ecoENERGY Technology Initiative, a major component of the energy S&T portfolio. The S&T programs are aimed at finding long-term solutions to reducing and eliminating air pollutants from the production and use of energy by developing and disseminating new knowledge and new technologies through research, development and demonstration (R,D&D) initiatives in clean fossil fuels, clean integrated electricity including clean coal, carbon capture and storage, distributed power generation, next generation nuclear, bio-based energy systems, low emission industrial systems, clean transportation systems, and the built environment, including renewable energy.

NRCan is advancing the secure and clean development of Canada's resources by providing expert scientific, technological and economic knowledge by working in partnership with all levels of government, universities, research institutes, the private sector, and international organizations. Its R,D&D activities advance scientific knowledge in support of policy development and regulatory initiatives, including technological advancement such as the creation of new materials, devices, products, processes, or improvement of existing ones. Later-stage development and demonstration help advance the commercialization and market uptake of the new technologies.

Over the past year, significant progress was made advancing technologies along the innovation curve. Many projects moved from bench-scale research to pilot-scale research, pilot-scale research to demonstration, and demonstration to commercialization (233 basic research projects; 237 applied research projects; 73 pilot plant activities; and 29 demonstration projects).

Technology successes resulted in more efficient and effective use of natural resources and advanced Canada's efforts to develop a cleaner, safer and more sustainable energy system. Advances in technology performance improved deployment prospects and helped increase the use of multiple energy sources for on- and off-grid power generation. Other work led to reductions in the energy intensity of Canada's industrial sectors, while efforts to shepherd innovative technologies from concept to commercialization dramatically reduced the time it takes getting technologies into the marketplace.

Some research led to new energy innovative processes and procedures, while others reduced harmful air emissions, saved money and increased comfort. Other outcomes and partnerships helped increase Canadians' scientific knowledge, strengthened our standing in the international community and increased our exports of innovative technologies (486 and 481 formal collaborations on domestic and international projects, respectively).

Many new codes, standards and regulations were developed, updated, adapted and enacted over the past year: 36 codes were published; 1005 presentations were made by scientists in the programs; 109 MOU and 36 patents were active; 9 patents and 55 licenses were issued. This breaks down barriers to adopting new technologies and advances market penetration, while also leading to a competitive advantage for Canadian industry. The enhanced regulatory environment helped channel and focus private industry creativity, thereby advancing Canadian competitiveness and ensuring better access to world markets.

It is through broad and far reaching strategic research and investments that our healthy and successful energy S&T organization helped Canadians derive new economic, environmental and social benefits. A small sample of the many achievements over the past year include:

• publication of the Canadian Hydrogen Installation Code as a National Standard for Canada;
• development of Canada's first certification program for solar domestic hot water systems, enabling these systems to be installed anywhere in Canada;
• established standards and codes for photovoltaic systems in Canada - past products were approved on a case-by-case basis, but last year, 159 products from 12 manufacturers listed to CSA 107.1-01 and 277 modules from 11 manufacturers listed in ULC-1703;
• instrumental in the ongoing Code Commission updating the Model National Energy Code for Buildings;
• discovered a novel physical process to reduce the viscosity of bitumen - the technology has the potential to monetize low value heavy oil reserves and could see widespread application at small scale production sites in Alberta and Saskatchewan within 10 years;
• sold eighteen licenses worldwide of AnemoScope, a wind mapping software, including Canada and such countries as the United Kingdom, France, Germany, Spain, and South Korea;
• helped develop a more efficient small hydro turbine with reduced operating costs for one of the most commonly used worldwide - its installation in China established the value of Canadian hydro power expertise in a market with more than 50 per cent of the world's small hydro power;
• supported development of the energy efficient Zone Comfort - a forced zone air system giving occupants independent control of the temperature in different parts of their homes;
• installed a 335kW natural gas combined heat and emergency power system at a long-term care facility to replace the oil-fired emergency plant - a critical component of this project was a revision to the CSA 282 code which previously did not allow natural gas to be used in emergency power systems;
• assisted in the development and installation of a new pulp and paper mill biomass waste digester that displaced natural gas, reduced amount of sludge going to landfill and resulted in a number of other Canadian companies to consider this option;
• provided key information on new testing procedures to the design of a commercial bitumen extraction plant;
• provided expertise on global ice loads on offshore structures used in the CSA Offshore Structures Code S471 and incorporated into the International Organization for Standardization TC67/SC7 Arctic Structures Standard; in addition, researchers provided key input leading to a new Emergency Evacuation and Rescue procedure from offshore platforms;
• instrumental in achieving improved efficiency of hydro turbines and generators with energy savings from the project outcomes yielding 1.1 PJ/yr; and with $4 billion in worldwide sales, a cumulative impact of 8 PJ of energy saved and corresponding CO2 emission reduction of 700 ktonnes.

* In RPP 2006-07, planned spending for these items was presented under Priority #1 (Improve Resource Sector Productivity and Competitiveness); #2 (Advance Resource Efficiency and Conservation); #3 (Ensure the Safety and Security of People and Resources); #4 (Provide Science, Information and Tools for Decision-Making & Support Responsible Development of Canada's North); Other (Other Supporting and Enabling Initiatives/Services).

** Planned spending excludes $30M received via the Supplementary Estimates in support of the federal response to the Mountain Pine Beetle infestation in B.C. ***The apparent increase in corporate management costs reflects a change in reporting of some corporate activities (i.e., shared services, communications and information technology) which were previously included in sector/program sub-activities in the planned spending column. This change was made to improve accountability and transparency associated with reporting of these areas.

Operating Context

Canada's forests are our largest and most important biological resource. As one of the pillars of the Canadian economy, the forest sector was built on abundant, high-quality forests, and affordable energy resources. But in today's globalized economy, competitors have access to cheaper wood, faster-growing trees, lower-cost labor, and - in some cases - a lighter regulatory burden. Given the nature of this competitive environment, Canada's forest sector cannot maintain the status quo, waiting for the next up-turn in the business cycle to sustain its leadership.

The forest sector in Canada is passing through a period of structural change, and this has necessitated a shift in thinking. To remain competitive, Canada must capitalize on the skills, innovation, and creativity of our talented people to realize new and expanded value from forests, while setting a global standard for sustainability. The forest industry will drive its own future, but NRCan has not exempted itself from the need to contribute to this transformation by:

• embracing the inevitability of change and resisting the status quo;
• shifting the current thinking from the manufacturing of products to the knowledge economy;
• investing in people, innovation, and market development;
• setting new standards of social and environmental responsibility; and,
• encouraging the sector to become smarter, faster, and more efficient than the global competition.

By taking action in areas where it has a legitimate role, NRCan has been contributing to the forest sector's future success and worldwide competitiveness. This has included promoting and conducting forest R&D, and developing policies that reduce barriers to innovation and facilitate investments. NRCan has created value by promoting a culture of innovation, increasing investments to promote new technologies, and by improving the effectiveness of its R&D expenditures.

Forest disturbances such as wildland fire, insect infestations, diseases, and extreme weather events have always had a significant impact on Canada's forests. A long-standing objective of NRCan has been to work with partners to develop and implement effective, long-term disturbance mitigation and adaptation strategies that include prevention, suppression, salvage and reforestation. The establishment and use of a national framework to assess indicators of forest sustainability, and the continuous improvement in the understanding of how these indicators of sustainability are affected by the interactions of human activities with natural processes are key elements of this effort to which NRCan has contributed. In working with its partners, NRCan has continued to strive to ensure that the best, most accurate and up-to-date knowledge of Canada's forest ecosystems is both available, and considered in forest management decision making.

Beginning in fiscal 2006-07, NRCan embarked upon a $322.5 million investment program to address key forest sector challenges, including forest industry long-term competitiveness, and forest pest management, in particular to address the current MPB infestation in B.C. This funding is part of the $400 million announced in Budget 2006 to assist the forest industry.

NRCan delivers its forest sector work within the framework of the following six expected results. These activities are interrelated elements of a comprehensive approach for influencing the future success of Canada's forest sector. NRCan has continued to pursue these expected results/activities through coordinated action with other federal departments, provinces and territories, industry players, and non-governmental organizations.

Key Accomplishments

The long-term economic growth of the Canadian forest industry is dependant upon its ability to remain competitive in an increasingly globalized economy. NRCan continues to work closely with public and private sector partners to develop a national approach to forest sector innovation that will allow the sector to become more effective and efficient than the global competition while setting new standards for sustainable forest management (SFM).

In January 2007, Canada's three existing forest products research institutes - Paprican, FERIC, and Forintek - announced their intent to merge, creating one of the world's largest forest sector research organizations. The newly consolidated institute - to be known as FPInnovations - also includes the NRCan-created Canadian Wood Fibre Centre (CWFC), which was launched in April 2006, and which conducts targeted research aimed at increasing value from Canadian forests. Funding from FILCS supported the development of FPInnovations, as well as full implementation of the CWFC.

Following the launch of the CWFC, a design team comprised of representatives from NRCan, the research institutes, industry, the provinces, and academia was created to establish and validate research priorities. Through this work, the design team delivered a draft development plan to articulate the mission, vision, and objectives of the Centre.

In partnership with the Canadian Council of Forest Ministers (CCFM), NRCan initiated work towards a successor to the current National Forest Strategy, which will expire in May 2008. During fiscal 2006-07, NRCan worked with provinces and territories to develop a discussion paper for the new strategy that proposes a vision and principles for SFM in Canada, as well as potential issues to be addressed.

NRCan is committed to developing a science-based approach to assist the forest sector in adapting to, and mitigating the impacts of climate change. The Department works to address forest-related aspects of climate change in partnership with other federal government departments, provincial and territorial governments, industry, academia, and other governmental and non-governmental organizations across Canada and throughout the world.

Throughout 2006-07, extensive work continued on improving the forest sector's ability to understand, predict, and assess changes to ecosystems as a result of climate change. NRCan has taken a leading role in determining possible climate-induced changes to natural forest disturbance regimes, such as fire, insect infestations, and disease.

NRCan assisted Environment Canada in successfully meeting a reporting commitment to the United Nations Framework Convention on Climate Change (UNFCCC) with its forest-sector contribution to the April 2006 National Inventory Report of Greenhouse Gas Sources and Sinks. NRCan also continues to improve information on forest contributions to climate change targets through the development of the National Forest Carbon Monitoring, Accounting, and Reporting System. An integrated science/policy risk analysis was completed around the question of whether to count Canada's managed forest towards Kyoto Protocol targets. Working closely with provinces and territories, the analysis used a sophisticated carbon budget model, and integrated the best science available, to estimate the probability of the managed forest being a sink or a source in the 2008-12 time period. This work resulted in the advice to exclude the managed forest under Kyoto.

It is the objective of NRCan to increase Canada's ability to advance the interests of its domestic forest sector at an international level. It is also the objective of NRCan to contribute to the development and implementation, within Canada, of the highest standards of SFM, and to encourage the acceptance and emulation of equally high standards by other forest countries.

To this end, NRCan has been partnering with the Department of Foreign Affairs and International Trade (DFAIT) and the Canadian International Development Agency (CIDA) in the leadership of an international effort to develop a legally binding instrument for sustainable forest management. To this end, NRCan, DFAIT, and CIDA co-hosted and attended meetings of 20 like-minded countries during 2006-07. NRCan coordinates Canada's input to these processes from domestic forest sector stakeholders such as the CCFM, the Canadian Environmental Network, and the National Aboriginal Forestry Association.

Together with DFAIT, NRCan also pursued preparations for Canada to become a signatory to the latest revision (January 2006) of the International Tropical Timber Agreement which aims to both conserve tropical forests and assist tropical-forest countries to develop economically. Moreover, recognizing the mutual interest of Canada and Russia in sound forest management, both countries signed a Statement of Technical Cooperation for a three-year period, with a view to improve sustainable management of the Russian forest. In 2006-07, significant progress was achieved towards introducing Canadian tools in Russia for fire management and forest carbon monitoring with a view of helping the country achieve its greenhouse gas reduction objectives.

Since the onset of the MPB infestation in B.C., NRCan has been working closely with its provincial counterparts to deliver a comprehensive, integrated strategy to combat the infestation. In 2006-07, the Department completed its work under the current MPB initiative and committed to continue and expand upon its success with the announcement of the new, $200-million Federal Response to the MPB. Along with protecting forest resources and communities, and recovering economic value from beetle-killed trees, these programs are developing measures for controlling the eastern spread of the MPB into Alberta and the boreal forest. More information on these initiatives can be found at http://www.tbs-sct.gc.ca/est-pre/estime.asp and http://mpb.cfs.nrcan.gc.ca.

The threat posed by the MPB demonstrates the impact that forest pests can have on communities, the economy, and the environment. NRCan is working in close collaboration with the CCFM and other federal, provincial, and territorial agencies to integrate forest pest management through the development of a National Forest Pest Strategy (NFPS). In 2006-07, CCFM members approved the NFPS prospectus and established a senior level steering group with representation from NRCan, the Canadian Food Inspection Agency, and the provinces of Alberta, B.C. and Ontario to deliver a draft strategy by September 2007.

Through its partnership with the CCFM and the provinces, NRCan is playing a major role in the implementation of the Canadian Wildland Fire Strategy (CWFS) which consists of developing fire danger rating systems, national fire data archives, public safety information, and enhanced risk assessment capabilities.

NRCan continues to provide S&T knowledge and expertise that supports the sustainable development of the forest sector. With the implementation of Phase III of the Genomics Initiative, NRCan is developing leading edge S&T to predict forest productivity, as well as susceptibility to pests and other natural disturbances. Ecosystem-based forest management practices are leading to improvements in conservation and sustainable management of Canada's forest resources.

Canada's forest-based communities are currently facing difficult challenges as a consequence of forest industry restructuring, changing markets, increased international competition, and major natural disturbances such as wildland fire and the current MPB infestation in Western Canada.

Canada's Model Forest Program (MFP) encourages the development, at the community level, of innovative practices and tools in sustainable forest management. Specific achievements include the support of over 250 research, demonstration and outreach partnership projects across Canada, and the engagement of approximately 500 partners drawn from industry, provincial governments, Aboriginal organizations, environmental and community groups. Fiscal year 2006-07 marked the final full year of operations for the MFP. After 15 years, the program will come to an end in summer 2007. Building on the success of the MFP, work has been finalized on a successor program, the Forest Communities Program (FCP). The new FCP will continue to use a community-based approach to address local challenges, but will shift the focus of activities from sustainable forest management to developing and sharing innovative tools and practices, which advance the sustainability of forest communities.

The First Nations Forestry Program (FNFP) supports projects that build the capacity and technical skills of First Nations to sustainably manage their forest lands and participate in forest development opportunities both on, and off reserve. For example, the program provides ongoing support for the Aboriginal Skills and Employment Partnership forestry initiative in New Brunswick, a five-year initiative that will produce forestry training for over 500 Aboriginal persons and job placements for over 100. Moreover, the FNFP is working with the Whitefeather initiative in Northern Ontario, and the First Nations in the Interlake region of Manitoba to develop regional-scale capacity-building forestry projects, and co-sponsored a major study and workshop in Whitehorse on Aboriginal forestry opportunities in the Yukon. The FNFP is jointly funded by NRCan and Indian and Northern Affairs Canada and delivered in partnership with First Nations.

During 2006-07, approximately 150 capacity-building projects, involving 155 First Nations communities, were funded by the FNFP. The program expended a total of $3.8 million, leveraging additional cash and in-kind contributions from partners for a total project value of $13.7 million.

The South Moresby Forest Replacement Account (SMFRA) was initially established to offset the losses in timber supply and forest-based employment on the Haida Gwaii/Queen Charlotte Islands (QCI) following the creation in 1987 of the South Moresby National Park Reserve (now called the Gwaii Haanas National Park Reserve and Haida Heritage Site). In March 2007, NRCan, Environment Canada and the Province of B.C. transferred $25.46 million ($24.0 million plus $1.46 million in accrued interest) of remaining funds from the SMFRA to the Gwaii Forest Charitable Trust, a locally-managed vehicle for the support of projects that contribute to the long-term sustainability of forest resources and community stability on the QCI. These funds were held in a special account in the B.C. Consolidated Revenue Fund. The transfer effectively terminated the SMFRA.

Over its lifetime, SMFRA made a positive contribution to the QCI economy and its communities, and helped to offset losses in local economic activity resulting from timber supply and employment reductions consequent to the creation of the Park Reserve. The delivery of, and participation in SMFRA evolved over time to better meet local needs and further involve local on-island participation.

Canada's forest industry is facing structural changes that are challenging its ability to compete in its key traditional markets. NRCan's response to these challenges is part of FILCS, including the expansion of both the Canada Wood Export and Value to Wood programs, as well as a new program - North American Wood First - designed to increase wood usage in the region's recreational, commercial and institutional applications. In addition, FILCS supports the development and adaptation of emerging and breakthrough technologies, such as conversion of forest biomass to new products (including fuels, chemicals and materials), biotechnology, and nanotechnology.

As a result of NRCan's efforts under the Canada Wood Export Program, rapid advances are being made in regulatory frameworks that enable wood use in China, Korea, Japan and other key markets. Since inception of the program in 2002, the annual volume of lumber sales in China has tripled to an estimated $90 million in 2007. In the Japan market, the program has helped maintain and grow Canadian dimensional lumber share and has re-positioned coastal B.C. lumber products to develop new opportunities. Sales into Korea have shown solid growth with volumes and sales return doubling over the last four years. Canadian speciality lumber product exports (particularly Western Red Cedar) have experienced a 30 percent increase in volume sales over the past three years in the United Kingdom market.

Detailed performance information for the Canada Wood Export Program can be found at http://www.tbs-sct.gc.ca/est-pre/estime.asp.

* In RPP 2006-07, planned spending for these items was presented under Priority #1 (Improve Resource Sector Productivity and Competitiveness); #2 (Advance Resource Efficiency and Conservation); #3 (Ensure the Safety and Security of People and Resources); #4 (Provide Science, Information and Tools for Decision-Making & Support Responsible Development of Canada's North); Other (Other Supporting and Enabling Initiatives/Services). **The apparent increase in corporate management costs reflects a change in reporting of some corporate activities (i.e., shared services, communications and information technology) which were previously included in sector/program sub-activities in the planned spending column. This change was made to improve accountability and transparency associated with reporting of these areas.

Operating Context

The minerals and metals sector in Canada is an innovative, knowledge-based and widely diversified cluster involving extensive physical and human capital across the country, and connecting communities and regions with the global economy. It is an integral part of the socio-economic fabric of Canada, making major contributions domestically and internationally.

Strong market conditions stimulated by the growth of emerging economies, particularly in Asia, continue to feed a recent boom in the minerals and metals sector. Prices in global markets are near historically high levels. The levels of production, exploration and investment in the Canadian minerals and metals sector reflect this strength.

Production of most commodities increased in value in 2006 for a total of $33.6 billion, a 22.7 percent increase over 2005. Capital investment in the mining and mineral processing industries increased from $7.4 billion in 2005 to $7.5 billion in 2006. Canada's total exploration and deposit appraisal expenditures increased by 32 percent to $1.7 billion. New mine development in Canada was robust, with B.C. showing particular buoyancy. Total expenditure in mine complex development was $4.1 billion in 2006, an increase from $3.8 billion in 2005.

Strong commodity prices have also been accompanied by elevated levels of mergers and acquisitions worldwide and increased competition for access to ores and concentrates. In this regard, 2006 witnessed two of Canada's largest and oldest base-metal producers - Inco and Falconbridge - being absorbed into the operations of major global mining companies. Other mergers and takeovers affected uranium exploration and steel. In 2006, the total of such acquisitions was valued in excess of $40 billion. The scenario was quite different regarding gold as merger and acquisition activity was driven by Canadian companies acquiring other Canadian companies or smaller foreign companies. During 2006, companies like Barrick Gold Corporation (now ranked first worldwide in gold output), Goldcorp Inc. (ranked eighth), Kinross Gold Corporation (ranked eleventh) and IAMGold Corporation (ranked fifteenth) emerged as key players in the gold commodity sector. Companies such as Placer Dome Inc. and Cambior Inc. may no longer exist, but their assets remain under Canadian control.

Mining sectors are challenged to remain globally competitive and achieve strong environmental performance. For example, new mining projects require timely approvals so as to benefit from current market conditions; however, regulations are necessary to mitigate possible adverse effects of such projects. As a result, regulatory efficiency and effectiveness have become a key priority. Internationally, some countries have been very active in developing regulatory regimes to address the environmental and health effects of minerals and metals. While Canada supports their goals, the design of some initiatives has caused concerns over possible barriers to trade and negative effects on Canada and other minerals and metals producers. In this global industry where investment flows, economic efficiency and environmental performance are all interlinked, Canada has to assess international trends in policy and regulation. Canada continues to play a proactive role internationally in building agreement on common approaches, based on sustainable mining practices and technologies, and on robust development models that effectively and efficiently address the economic, environmental and social needs of producer countries and the global community.

Domestic challenges include the emergence of labour shortages, cost pressures associated with declining reserves, more complex or lower ore grades, the need to mine less accessible ores, distances to markets, and regulatory inefficiencies. The Government of Canada is working with the provinces, territories and stakeholders to address some of these issues and assure the future ability of the minerals and metals sector to contribute to Canadian well-being and prosperity.

It is also important to recognize Canada's strengths and areas of opportunity in the minerals and metals sector. Much of Canada's landmass has yet to be fully explored with current technologies. Diamonds have renewed the face of mining in Canada and world-class, base-metal discoveries such as Voisey's Bay are certain to reoccur. The knowledge capital resident in both public and private sectors and Canadian mining skills are respected throughout the world, and Canada is viewed as a safe destination for investment. The close proximity of Aboriginal communities to mining sites and the rapidly growing population of Aboriginal youth could help address the shortage of mine workers. NRCan and other government departments are helping to increase awareness among Aboriginal peoples of the potential for economic and social advancement offered by mineral development. Aboriginal peoples have shown strong interest and participation in developing the capacity to benefit from mineral opportunities. It is also necessary to continue the sector's record of strong performance results and high productivity growth which, building on excellent Canadian talent and technological innovation, has traditionally underpinned Canadian success.

Key Accomplishments

NRCan strives to promote an internationally competitive investment climate for the mineral industry within Canada. Based on 2006 exploration budget data, Canada has excelled in attracting the attention of investors in search of new mineral deposits. With more than 19 percent of the world's total exploration budget, Canada remained the single largest exploration investment recipient in the world.

Within Canada, the Department has contributed to public awareness of exploration tax incentives through information sessions across Canada. Also, it continues to provide leadership to the Intergovernmental Working Group on the Mineral Industry and advice and analysis to the Canadian Mines Ministers, Finance Canada and the Canada Revenue Agency on proposed improvements to Canada's mining taxation regime and its administration.

To attract international investment in Canada's exploration and mining industry, presentations were given at key financial centres in Asia and Europe on the competitive advantages of the fiscal regime in Canada. Foreign direct investment increased dramatically in the last two years, driven by higher commodity prices and the favourable investment climate.

Despite intense competition from the United Kingdom, Canada has maintained its lead position in worldwide exploration and mineral development related equity financing. In 2006, Canadian-based companies raised more than $11 billion through Canadian financial institutions, or just under 40 percent of all equity, worldwide, for mineral exploration and development.

Canadian proven and probable (mineable) reserves of base metals and precious metals have been generally declining for more than twenty-five years. However, sustained high levels of exploration have led to modest improvements in the reserves of most base metals.

As part of the Action Plan of federal, provincial and territorial ministers, approved under their Framework for Action at the 2006 Mines Ministers' Conference, and to respond to a growing demand from Aboriginal communities across Canada, NRCan, in partnership with INAC, provincial governments and exploration and mining associations, held four pilot information sessions on exploration and mining for Aboriginal communities (in northern Ontario, Quebec's North Shore, northern Quebec, and Vancouver, B.C.). These sessions helped to increase community knowledge of mining activities and potential benefits and opportunities offered by participation in mineral projects. NRCan, in partnership with the Prospectors and Developers Association of Canada, the Mining Association of Canada, the Canadian Aboriginal Minerals Association (CAMA) and INAC also released a Mining Information Kit for Aboriginal Communities which promotes understanding by Aboriginal peoples and communities of all aspects of mining development for sound decision making (http://www.nrcan.gc.ca/mms/abor-auto/mine-kit_e.htm).

Panel participants discuss Aboriginal involvment in mining at a workshop in the Philippines (March 2007). From left to right: Canadian Ambassador to the Philippines Peter Sutherland; National Commission of Indigenous Peoples (NCIP) Chairperson Janette Serrano-Reisland; INAC's International Relations Director Marilyn Whitaker; NRCan's Rural, Aboriginal and Northern Communities Director Bruno Bond; Adam Lewis of Makivik Corporation; Canadian Aboriginal Minerals Association Vice-President Jerry Asp. Photo: NCIP

The information kit attracted strong interest from Indigenous peoples and organizations worldwide (e.g. Philippines, Peru, Ecuador, Australia, Norway, New Caledonia) that have now adopted it. In March 2007, at the invitation of the Commission of Indigenous Peoples of Philippines, NRCan, together with INAC and DFAIT, conducted capacity building workshops in Manila and Davao City which shared Canadian expertise and information on Aboriginal participation in the mining industry and responsible mineral development. Other Canadian participants included CAMA and Nunavik's Makivik Corporation.

In 2006-07, NRCan continued to lead, in partnership with provinces and territories under the umbrella of the Federal-Provincial-Territorial Committee on Mineral Statistics, the collection of a comprehensive and comparable set of statistics on mineral resource development activity from grass-roots exploration to mining projects. This unique set of public statistics was used to produce Map K300A entitled, Exploration, Deposit appraisal and Mine Complex Development Activity - Selection of Most Capital Intensive Projects for 2005. This map was adapted to produce a simplified version that includes Aboriginal communities, a useful tool to demonstrate the importance of the mining sector in Canada.

In 2006-07, NRCan used Canada's position as chair of the Intergovernmental Forum on Mining, Metals and Sustainable Development to increase membership from 33 to 37 countries. New members include Mexico and India, both of which are major producers, while India is also an increasingly important user of minerals and metals. The forum is an effective partnership to enhance the contribution of mining, minerals and metals to sustainable development. Through a substantive work program, the forum aims to develop a consensus and ensure comprehensive input by members to deliberations of the United Nations Commission on Sustainable Development (UNCSD).

NRCan worked with the forum and other bodies (APEC Ministers Responsible for Mining, the Africa Mining Partnership, Mines Ministers of the Americas) on joint work programs to increase the social and economic benefits of minerals and metals, and to address environmental, health and social impacts through improved governance, transparency, accountability, stakeholder participation and capacity building.

NRCan represented Canada in negotiating the Budapest Statement on Mercury, Lead and Cadmium at the Intergovernmental Forum on Chemical Safety (IFCS). The Budapest Statement promotes partnerships and gives priority to measures that address risks to human health and the environment from mercury releases. The IFCS forwarded the Statement to the United Nations Environment Program (UNEP) for consideration and UNEP established an ad hoc working group to review global approaches to deal with mercury releases. This will allow Canadian negotiators to seek global solutions to the long-range transport and deposition of mercury in the Arctic.

Canada also succeeded, based on NRCan's advice, in obtaining agreement in global negotiations at the Strategic Approach to International Chemicals Management's (SAICM) 1st International Conference on Chemicals Management on the value of adopting a risk-based approach towards the regulation of minerals and metals and continued support for existing multilateral and regional agreements. This agreement establishes the operating parameters for the SAICM and avoids duplication at the international level.

Minerals and metals S&T at NRCan consists of two main streams: i) technologies for mining and mineral processing; and ii) the fabrication and processing of metals alloys, metallic composites, and other advanced materials. The benefits include greater economic efficiency and productivity, improved environmental performance, and reduced risk to the health and safety of Canadians. Examples of projects undertaken in 2006-07 include the following:

• a project aimed at using bioleaching for the recovery of metals with the objective of establishing whether this technology could increase recoveries from low-grade Canadian base-metal deposits; if successful, this project could improve the economic viability of these deposits;
• the Diesel Emissions Evaluation Program developed and transferred knowledge of best practices to industry and to health and safety regulators, and led to the development of ceramic filters that significantly reduce emissions of fine particulates into the underground mine environment;
• a project was established to assess the environmental aspects of a proposed new method of tailings disposal at the Iron Ore Company of Canada's Wabush Lake mine in Labrador;
• a field study was initiated to provide a better indication of the maximum percentages of supplementary cementing materials that could be used in concrete exposed to de-icing salts; and
• the assessment of key properties of pipeline materials, including the fracture resistance and mechanical properties of high-strength steel pipe, the weldability of the pipe to ensure sufficient strength, and the corrosion protection afforded by coatings was undertaken.

Lightweight materials such as magnesium, aluminum, and ultra-high strength steel are being considered for automotive applications because of their potential to reduce weight, improve fuel efficiency (regardless of the fuel used), and reduce emissions. During 2006-07, NRCan continued to be the Secretariat for the Canadian Lightweight Materials Research Initiative (CLiMRI), a government-academic-industry research network that funds projects on the development of lightweight materials and components for fuel-efficient vehicles. Examples of CLiMRI projects include the following:

• research was conducted on key technological challenges to the use of aluminum in diesel engines that operate at high temperatures and pressures;
• studies examined the casting of components with very thin walls for structural applications- prototype castings showed a weight reduction from 14 kg to 9 kg;
• NRCan co-initiated, with the U.S. Department of Energy (USDOE), an international research program to develop a magnesium-intensive automobile front-end; this project involved partnering with USDOE, the U.S. Automotive Materials Partnership, and China's Ministry of Science and Technology; and
• in another Canada-US joint effort, a redesigned engine cradle resulted in a 35 percent weight reduction in comparison with the aluminum counterpart; and a 78 percent weight reduction when compared with the steel equivalent.

NRCan's Non-Destructive Testing Program (NDT) certifies personnel who apply non-destructive test methods to inspect critical components in engineered structures such as aircraft, nuclear reactors and pipelines. In 2006-07, the Department certified 556 inspectors (an increase of 12 percent from 2005-06) and renewed the certificates of 1,412 inspectors. At the end of March 2007, 4,590 inspectors held 11,500 certificates under the program.

Work continued during 2006-07 on the relocation of the CANMET Materials, Technology Laboratory to McMaster University in Hamilton, Ontario. Budget 2007 provided $6 million for annual operating costs, building on the $40 million for one-time relocation costs which was announced in Budget 2006. Further information on the Government's S&T Strategy can be found at the Industry Canada web site (http://ic.gc.ca).

Explosives, including propellants and pyrotechnics, are vital to the economy of Canada and the well-being of Canadians. Their uses include mining, road construction, the entertainment industry, and the automotive industry (as propellants for air bags). Explosives safety and security continue to be a high priority for Canadians. In 2006-07, there were no significant explosives-related accidents and thefts of explosives were lower than in the previous two years. In the security field, regulations were published in the Canada Gazette related to explosive precursors, and enhanced explosives security programs, including proposed background security checks for explosives possessors, were further developed.

During 2006-07, work continued to protect people and infrastructure from the effects of deliberate or accidental explosions. NRCan provided advice and research on the possible impact of blasts on key infrastructure and buildings, as well as advice on blast mitigation to stakeholders in critical sectors, such as pipelines and the electricity and nuclear industries. NRCan provided further research support to explosives risk management in 2006-07 through its safety-related test work, which included an investigation of the dangers of new firework formulations, a new test to address transportation hazards and an examination of the sensitivity of stored fireworks to bullet impact. Surveys of clients revealed a high level of satisfaction.

During 2006, NRCan collected and collated data from minerals and mining surveys in a timely fashion. Analyses and statistical information were provided to Statistics Canada, provinces and territories, in accordance with the agreed schedule. Comprehensive and accurate information and reports were made available through various channels including web and paper media.

NRCan also fulfilled its statutory obligations with respect to the environmental assessment of mining projects as a responsible authority under the Canadian Environmental Assessment Act (CEAA), northern resource management statutes and the Nunavut Land Claim Agreement. Four environmental assessments were concluded in 2006-07, including the comprehensive study of the Galore Creek project in British Columbia, managed as a pilot project pursuant to the 2005 Cabinet Directive on the implementation of CEAA. NRCan's work in support of regulatory streamlining in 2006-07 included an agreement among federal departments to make the process for determining the scope of projects under the CEAA more timely and efficient. NRCan also worked with the provinces, territories and other federal departments to develop recommendations for the Mines' Ministers on an improved regulatory framework for mining that is consistent, timely, predictable, effective in protecting the environment and coordinated across jurisdictions. These recommendations will be presented to Canada's mines ministers at their September 2007 conference.

The Canadian diamond trade is subject to import and export restrictions limited to the list of participants in the Kimberley Process Certification Scheme. The Export and Import of Rough Diamonds Act (EIRDA) provides the statutory authority for Canada to meet its obligations under the Kimberley Process while minimizing the administrative burden on Canadian diamond industry clients. In the 2006 calendar year, all 271 shipments for export and 320 shipments for import were with Kimberley Process participants, thus ensuring Canada met its obligations.

Operating Context

With respect to our organizational environment, NRCan is experiencing some significant challenges. For example, the Department has to maintain its key physical infrastructure when about 77 percent of its real property - largely in the National Capital Region (NCR) - is more than 35 years old. On the information management and information technology side (IM/IT), challenges in remaining technologically current to meet certain administrative and knowledge management requirements are being addressed through focused management.

NRCan has challenges in attracting and retaining highly qualified personnel. Currently, the annual recruitment rate is 7.9 percent with an annual separation rate of 8.6 percent. It is estimated that one-quarter of the Department's workforce will be eligible to retire by 2011.

¹The resources for this program activity are distributed across all other program activities.

Key Accomplishments

Critical to the delivery of programs is its enabling infrastructure: equipment, real property and information technology. During 2006-07, a Long Term Capital Plan was developed and conditionally approved. In the area of real property, the Department invested $2.5 million in recapitalization; this is below the standard benchmark of 4 percent, which would have required NRCan to invest $41.6 million, a shortfall of $39.1 million. Recapitalization remains an ongoing challenge for the Department since the current capital allocation is inadequate to prevent the progressive deterioration of facilities.

To assist mitigating overall real property risks, the Department commenced implementation of a national real property framework to enable investment prioritization. In addition, NRCan has begun the development of a real property rationalization strategy to reduce risk and make best use of the limited funding. NRCan, in partnership with PWGSC, delivered key planning elements toward a Booth Street redevelopment project in the NCR.

In supporting of the government-wide HR renewal priority, NRCan advanced its own HR renewal agenda to form the basis for the departmental HR plan. Other important initiatives include enhancing the EX Performance Management Program and commencing work on HR performance measurement framework. Also, the Department has been successful in meeting the requirement for on-line assessments with 93 percent of all managers fulfilling this requirement.

In supporting of the government-wide HR renewal priority, NRCan advanced its own HR renewal agenda to form the basis for the departmental HR plan. Other important initiatives include enhancing the EX Performance Management Program and commencing work on HR performance measurement framework. Also, the Department has been successful in meeting the requirement for on-line assessments with 93 percent of all managers fulfilling this requirement.

NRCan, as a knowledge-based organization, relies on its IT and IM for success. Fiscal year 2006-07 witnessed several achievements. For instance, NRCan moved towards an enterprise approach to IT and IM planning and investing by completing an IM Strategy Framework and commencing work on an IM Strategy. In addition, the I-Vision, a Strategic Roadmap initiative, was advanced and an IT infrastructure funding model was implemented. Success also depends on having a secure IT environment. Overall, the Department achieved 92 percent compliance with the Management of IT Security Standard (MITSS) and completed assessments of 8 critical business functions. Another achievement is the former sector libraries in the NCR and across Canada amalgamated into the NRCan library in December 2006. This means that the 13 libraries are now under one administration and speak with one voice for the Department.

Significant progress on specific items identified in the Management Accountability Framework (MAF) assessments include:

• completed a budget management framework to improve ability to forecast and manage our budget;
• implemented a new grants and contributions unit and created new procedures for approval;
• implemented a Transfer Payment Review Committee chaired by the Associate DM;
• published the Risk Management Policy and Guidelines;
• commenced work on a new Corporate Risk Profile; and
• begun implementation of the 2006-2011 Employment Equity Action Plan.

In 2006-07, the Department generated savings of $3.3 million through its Shared Services Initiative. These savings were achieved by consolidating selected administrative services, standardizing processes and capitalizing on the buying power of the Department through smarter procurement. For example, savings were realized through a request for volume discount of computer desktops, the rationalization of IT networks and servers, and standing offers for translation services. The shortfall in target savings was due in part to a lack of sufficient HR, operational and technical capacity to implement projects to achieve additional savings.

The 2006 Management Accountability Framework (MAF) assessment confirms that the evaluation function meets the requirements of the TB Evaluation Policy and is rated as "strong" by TBS. The assessment finds that NRCan evaluations have a strong focus on program improvement, performance, relevance and value for money. The assessment also finds that the evaluation function strongly supports expenditure and policy decision-making as evidenced by a deputy-chaired evaluation committee that oversees activities from evaluation planning to the implementation of recommendations and action plans.

Even though the Office of the Comptroller General 2006 MAF-based assessment rated the internal audit function as "acceptable", it was noted that some improvements in planning and reporting are required.

NRCan fleshed out its S&T contribution for natural resources and earth sciences in the context of departmental strategic direction and the evolving federal S&T landscape. These efforts were aimed at achieving a clearer understanding of NRCan's S&T role in the innovation system, to address barriers that inhibit a strong departmental positioning, and to provide the knowledge and insight to guide NRCan's investments and actions in the next decade.

In addition, the Department participated in the Federal Laboratory Infrastructure Project to influence federal strategies, policies, practices that impact on the Department. In consultation with 13 federal science-based departments and agencies, NRCan developed a prototype for a new horizontal information architecture for federal S&T presence on the Internet. A Collections Management Framework was developed to improve efficiencies, horizontal management and planning for future strategic investments for NRCan physical collections. In the same vein, the Department approved the Career Progression Management Framework for Federal Researchers - co-developed by the Government of Canada and the Professional Institute of Public Service - with a view to ensure that all science managers align their research to governmental priorities.

The Department implemented its first web-based S&T Information Management System (STIMS) which is totally aligned to the departmental Program Activity Architecture. The intent is to improve the collection, tracking and reporting of accurate and reliable performance information for sounder decision-making.

• Previous Page
• Table of Contents
• Next Page