Committee of the Whole (House of Commons) 2021-22 Supplementary Estimates (B) December 7 and 8, 2021

Table of Contents

Canada Revenue Agency
Supplementary Estimates B
Tax evasion and aggressive non-compliance
Pandemic response benefits
Cyber and account security

Natural Resources Canada
Overview of Natural Resources Canada’s Supplementary Estimates (B) 2021-2022
Energy Transition
Forest Sector Issues
Pipeline Issues

Canadian Heritage
2021-22 Supplementary Estimates (B) – Canadian Heritage
2021-22 Supplementary Estimates (B) – Portfolio Organizations
Budget 2021 Recovery and Reopening Initiatives for the Arts, Cultural, Heritage and Sport Sectors
Media in the Digital Age
Support for Indigenous Languages

Tourism
2021-22 Supplementary Estimates B
Canada Tourism Recovery Strategy

Canada Revenue Agency

CRA: Supplementary Estimates B

Issue

This is to confirm that the CRA does not have items in these Supplementary Estimates B.

Response

• The CRA does not have items in these Supplementary Estimates B.

CRA: Tax evasion and aggressive non-compliance

Issue

Combatting tax evasion, aggressive tax avoidance, tax fraud, and other financial crimes is important for the protection of Canada’s tax base. The CRA’s compliance efforts ensure that taxpayers maintain their confidence and trust in the Canadian tax system by fairly administering Canada’s tax laws.

Response

• Canada has one of the highest voluntary tax compliance rates in the world, but there is still a small minority choosing not to pay their fair share. 
• Tax evasion and aggressive tax avoidance deprive our country of important revenues that help fund essential programs and services. 
• The Government is committed to protecting the integrity of the Canadian tax system by combating tax evasion and aggressive tax avoidance on all levels in Canada and abroad. 
• As a result of investments of over $1 billion, the CRA increased its ability to identify and target aggressive tax planning, and as of March 2021, these investments have already identified over $5 billion in additional gross federal tax revenues. 
• Data leaks like the Pandora Papers and recent Budget investments in data and reporting, such as electronic fund transfers, the Common Reporting Standard, and Country-by-Country Reporting, provide useful insights and ensure that the CRA has many resources at its disposal to ensure non-compliance is identified and addressed. The CRA intends to analyze the data very carefully once it becomes available, and review anyone who appears to have not met their tax obligations.

Pandemic response benefits

Issue

The CRA is striving to maintain a balance between making the COVID-19 emergency and recovery benefits and subsidies accessible to those who urgently need them while providing safeguards to protect Canadians’ identities, the integrity of the programs and to prevent high-risk and/or fraudulent applications.

Response

• Since the beginning of the COVID-19 pandemic, the CRA has designed and rolled out in record time 9 emergency response benefit and subsidy programs and provided 2 additional benefits payments, which have delivered urgently needed income support to millions of individuals and businesses. The eligibility criteria for COVID-19 benefits and subsidies were designed in the legislation enacted by Parliament to be as inclusive as possible so that workers who needed support could receive it.
• On October 21, 2021, the Government of Canada announced its intention to extend, modify and introduce new COVID-19 benefits and programs. These measures include the Canada Recovery Caregiving Benefit, the Canada Recovery Sickness Benefit, the Canada Recovery Hiring Program, the Tourism and Hospitality Recovery Program, the Hardest-Hit Business Recovery Program, and the Canada Worker Lockdown Benefit. The CRA is working closely with the Department of Finance Canada in order to be able to implement and administer these programs in a timely manner following their approval.
• Those who received benefit or subsidy payments, and are later determined to have been ineligible, will be required to repay those amounts. In the context of the ongoing pandemic, payment arrangement parameters have been expanded to give Canadians more time and flexibility to repay based on their ability to pay. Individuals who cannot make a payment in full are advised to contact the CRA to make a payment arrangement that’s right for them.

CRA: Cyber and account security

Issue

Since the summer of 2020, the CRA has experienced an increase in suspicious activity on user accounts. These events have largely been driven by the CRA’s key role in administering COVID-19 benefits and services, which have provided an impetus for bad actors to attempt to exploit the CRA’s systems and procedures.

Response

• The CRA has an in-depth defense approach to security and does not rely on any single solution. This layered approach defends CRA systems from cyber attacks.
• To ensure Canadians can feel confident and safe using its online services, the CRA has implemented additional security measures, including multi-factor authentication.
• However, no organization is immune to cyber incidents or fraudulent activity.
• Taxpayers who are confirmed victims of identity fraud are not held responsible for any money paid out to scammers using their identity, and are offered credit monitoring and protection services free of charge.
• The CRA will continue working to adjust and improve its security measures in response to an ever evolving threat environment and continuing intrusion attempts.

Natural Resources Canada

Overview of Natural Resources Canada’s Supplementary Estimates (B) 2021-2022

Issue

Natural Resources Canada’s (NRCan) Supplementary Estimates (B) for the 2021–2022 fiscal year were tabled by the President of the Treasury Board on November 26, 2021. NRCan is asking Parliament to review an increase of $71.4 million in the SEB.

Response

• NRCan is asking Parliament to review an increase of $71.4 million in the Supplementary Estimates (B) for the 2021-2022 fiscal year.
• With the approval of these Estimates, NRCan’s authorities will increase from $2,619.1 million to $2,690.5 million.
• This increase in funding supports delivery of NRCan’s mandate, including delivery of programs announced in Budget 2021.
• For example, these estimates seek $23.6M to transition diesel reliant Indigenous communities onto clean energy to ensure that communities that currently rely on diesel have the opportunity to be powered by clean, reliable energy.
• Providing the tools, resources and opportunities for Indigenous peoples to play a leadership role in the clean energy transition is not only necessary for us to meet our 2050 goals, it is key to meeting the Government’s overall reconciliation objectives.
• The estimates also seek $14.4M to support the wildfire and flood preparedness and response capacity to make communities safer and more resilient.
• Through this funding, the Government of Canada is helping strengthen the resiliency of Canadians to natural disaster events.

Background

Supplementary Estimates (B) 2020-21 include:

1.  Approved Treasury Board Submissions ($63.5M)

• Funding for the Canadian data receiving infrastructure for the Space‑Based Earth Observation Network ($5.3 million) to replace and expand critical but aging ground‑based infrastructure.
• Funding to transition diesel‑reliant Indigenous communities onto clean energy ($23.6 million) to ensure that Indigenous and remote communities that currently rely on diesel have the opportunity to be powered by clean, reliable energy.
• Funding to support the wildfire and flood preparedness and response capacity ($14.4 million) to make the communities safer and more resilient.
• Funding to stimulate the development of Canadian critical mineral value chains ($10.9 million) and establish a Critical Minerals Centre of Excellence.
• Funding for the Polar Continental Shelf Program ($9.3M) to meet the demand for logistics support.

2.  Approved Re-profiles ($7.0M)

• Funding to support the Impact Canada Initiative ($3.5M) and facilitate the successful completion of clean technology challenges.
• Funding for the Earthquake Early Warning System ($2.6M) to protect the safety of Canadians and buildings and infrastructure with the procurement and installation of sensors.
• Funding for the Innovative Solutions Canada ($0.9M) to support innovators in solving problems that the Government of Canada has identified and test new technologies.

3.  Updating Statutory Items ($0.9M)

• Funding to support the Climate Action Support Payments - Energy Manager program ($0.9M) to support industrial, commercial and institutional facilities in adopting energy efficiency solutions.

4.  Canada Energy Regulator ($110.9M)

• The Canadian Energy Regulator (CER) is seeking to transfer $100,000 from contributions to grants within its Participant Funding Program.
• Total funding for 2021-2022 is currently $110.9M. It includes the original $108.1M plus $2.8M in operating budget carry forward funding.

Energy Transition

Issue

The opposition has previously raised criticisms regarding the federal government's approach to energy transition measures. Some opposition parties have raised criticism that initiatives towards energy transition have not been implemented fast enough or are insufficient to combat climate change. Other opposition criticisms denounce the negative effects this would have on the traditional energy sector, forcing closures in the industry. Criticism has also included acceptance of the closure of the traditional energy sector, but concerns regarding the adequacy of measures to support job or income loss.

Response

• The Government of Canada is committed to exceeding a 40 to 45 percent reduction in its greenhouse gas emissions by 2030, and reaching net-zero greenhouse gas emissions by 2050.
• The transformation of energy production and use will be key to allowing Canada to reach these targets, which is why this is a focus of Canada’s climate plan.
• Our plan also includes over $53 billion in green recovery investments since 2020.
• We are making generational investments in clean energy to help power the global transition to net-zero, building on our energy advantage, skilled and diverse workforce, and sound governance,
• We are also expanding on our success as the third-largest producer of hydroelectricity; a global leader in new solar and wind power; and a driver of clean fuels production, including hydrogen and biofuels.
• We are a recognized leader in clean technologies such as hydrogen fuel cells, smart grid systems, energy storage and carbon capture.
• We are phasing out unabated domestic coal-fired electricity by 2030, and we are investing $185 million to support coal workers and their communities as they transition to a clean energy future. Our Government is committed to accelerating our path to a 100 percent net-zero electricity future.
• We will also work with industry and PTs in decarbonising the oil and gas sector and setting a cap on emissions while maintaining competitiveness, energy security, affordability, and market access.
• At COP 26, Canada signed a statement to further prioritize support for clean technology and end new direct public support for the international unabated fossil fuel sector by the end of 2022.
• We remain committed to phasing out or rationalizing inefficient fossil fuel subsidies. Canada has already taken actions to phase out or rationalize eight tax measures supporting the fossil fuel sector.
• We can’t achieve its goals without the active participation of Indigenous communities, other levels of government, and the private sector.

Background

Canada’s 2019 GHG emissions represented 730 megatons (Mt) of CO2 equivalent (CO2eq), a decrease of 9 Mt from 2005 levels. Energy production and use is the source of 81% of Canada’s GHG emissions. This represents less than 2% of global emissions.

Canada’s Nationally Determined Contribution, submitted in July 2021, is a GHG emissions reduction of 40-45% below 2005 levels by 2030 (406-443 Mt CO2e). The Canadian Net-Zero Emissions Accountability Act (CNZEAA), which came into force in June 2021, enshrines the goal of net-zero emissions by 2050.

From 2015 to 2019, Canada’s federal government invested roughly $60 billion in climate action and clean growth, guided by the 2016 Pan-Canadian Framework on Clean Growth and Climate Change (PCF), Canada’s first climate plan developed with provinces and territories. In December 2020, the Government released its Strengthened Climate Plan (SCP), A Healthy Environment, A Healthy Economy, which estimated that implementation of the SCP would bring emissions to 31% below 2005 levels by 2030.

In addition to the suite of federal policies, programs and investments under the SCP, the plan also introduced an escalation of the national carbon price by $15 per ton of CO2eq annually, to reach $170 per ton of CO2eq in 2030. Since October 2020, the federal government has invested $53.6 billion towards Canada’s green recovery, including $15 billion for policies and programs under the SCP, $14.9 billion for public transit projects, and $17.6 billion under Budget 2021 to fund further climate measures.

Budget 2021 estimated that the new funding, together with increased partnership and regulatory alignment with the United States, put Canada on track to achieve a 36% reduction in GHG emissions below 2005 levels by 2030.

In addition, the CNZEAA provides a legally-binding process for the federal government to set emissions reduction targets and plans for the years 2030, 2035, 2040 and 2045, as well as an interim objective for 2026. It also establishes an independent advisory body mandated to provide advice on achieving net-zero emissions by 2050. The CNZEAA requires the Minister of Environment and Climate to release a 2030 emission reduction plan by December 29, 2021, with the potential for a 90-day extension.

Forest Sector Issues

Issue

Some opposition parties have been critical of a perceived lack of support for the forestry sector, particularly when compared to the support provided to the energy sector. Opposition parties have also been critical of the amount of trees planted to-date as part of the Two 2 Billion Trees initiative, as well as ongoing criticism of the sufficiency of efforts to curtail deforestation in offsetting gains made by the tree-planting program and advance Indigenous Reconciliation through the forest industry.

Response

2 Billion Trees

• Canada’s plan to plant two billion trees over the next ten years is projected to reduce greenhouse gas emissions by up to 12 megatonnes annually by 2050. Based on current estimates, this initiative will have led to more than 30 million trees planted this year.
• The 2 Billion Trees program builds on Canada’s efforts to advance tree planting as an important part of the solution to climate change. With a $3.2 billion investment, we are on track to reach this target over the next decade, which will cover an area equivalent to 1.1 million hectares, create 4,300 Canadian jobs, and store up to 12 megatonnes of carbon dioxide per year by 2050, contributing to our target of net-zero by 2050. Tree planting activities will increase the resilience of communities and Canada’s forests to climate change related events, including wildland fire, floods, and extreme heat events.

Curtailing Deforestation

• Canada has 9% of the world’s forests at 347 million hectares and is a world leader in sustainable forest management, with one of the world’s lowest annual deforestation rates at .02 percent. Between 1990 and 2018, less than half of one percent of Canada’s total forest area was converted to other land uses.
• Canada’s forests are monitored very closely. Each year, the Government of Canada publishes its State of Canada’s Forests annual report, which tracks a number of indicators pertaining to sustainability.

Investments in Forest Industry Transformation

• Since 2010, the Investments in Forest Industry Transformation (IFIT) program has supported innovative projects in the Canadian forest sector. To date, the IFIT program has successfully funded 51 Capital Investment projects for over $220 million with 61 percent of projects creating new products or diversifying recipients product offerings. This program effectively supports forest-reliant communities and improves the environmental performance of the sector.
• Budget 2021 announced an additional $54.8 million over two years, starting in 2021-22, to enhance the capacity of the IFIT program, including working with municipalities and community organizations ready for new forest-based economic opportunities.

Indigenous Forestry Initiative

• The Government of Canada is investing in Indigenous-led, forest-based economic development projects across the country to promote new economic opportunities in the forest sector and in their communities.
• By investing in Indigenous participation in the forest sector, we can advance Indigenous self-determination, close socio-economic gaps and provide greener solutions that tackle climate change and transition toward a net-zero economy.

Background

2 Billion Trees

The program will work on a cost-shared basis, with provinces, territories, NGOs, private landowners, Indigenous communities and organizations, municipalities, and others to plant two billion trees by 2030-2031. In its first year, the program achieved results beyond expectations: over 30 million trees are expected to be planted at more than 500 sites in all provinces. A call for proposals in December 2021 will result in longer-term agreements to secure planting (and related seeds/seedlings) over 10 years. After a slower ramp up period (to enable greenhouses to produce the required seedlings), by 2026, the program aims to support the planting of 250-350 million trees annually, incremental to 500 million planted in Canada each year.

An external Advisory Committee supports implementation of the Nature Climate Solutions Fund by providing advice on Indigenous traditional knowledge, GHG impacts, and assessing/achieving NBCS co-benefits (such as for biodiversity and human well-being).

Curtailing Deforestation

Provinces are responsible for forest management across more than 90% of Canada’s forested lands. The Government of Canada works closely with the provinces, communities, Indigenous groups, and industry to promote sustainable forest management. At COP26 Canada joined 140 other Parties representing 90% of the world’s forests to endorse the Glasgow Leaders’ Declaration on Forests and Land Use to end net deforestation, especially in tropical forest countries. Canada also participated in the Forest Finance Pledge, contributing to a $12 billion global financial package for forests and land use in tropical countries.

Indigenous Forestry Initiative

The Indigenous Forestry Initiative supports forest-based Indigenous economic development projects including institutional leadership; studies and planning; training-to-employment; and capital support for forestry and forest products manufacturing start-ups and expansions. Since 2017, Canada has invested $20.9 million to support 128 projects with rural and remote Indigenous communities. This has enabled the start-up or expansion of 41 businesses, the creation of over 692 jobs, and an almost 2-to-1 leveraging ratio in partner investments.

Following the 3-year, $15.6 million expansion of the program in Budget 2019, the IFI has, to-date, committed $7.2 million of the $13 million in contributions available to communities. The remaining $5.8 million in contributions through 2023 will be committed against the record 130 applications received by the Program in July 2021, which collectively sought over $70 million.

Investments in Forest Industry Transformation

Established in 2010, the objective of the Investments in Forest Industry Transformation (IFIT) program is to support forest industry transformation that will make the forest industry more commercially and environmentally sustainable, by investing in innovative technologies that lead to a more diversified product mix. The program supports projects that will implement transformative technologies and facilitate their adoption by the forest sector, for new or existing markets. In particular, the program focuses on low-carbon projects that result in new or diversified revenue streams (e.g. bioenergy, biomaterials, biochemicals and next generation building products).

Pipeline Issues

Issue

Opposition parties have criticized the Government of Canada's handling of the Trans Mountain Expansion project (TMX) and the cross-border Enbridge Line 5. TMX has been a critical issue for intergovernmental and Indigenous relations, while Line 5 has become a diplomatic issue with the United States. Opposition has claimed that the federal government's support for the energy sector is insufficient and that regulatory requirements are too burdensome. While other opposition argue that support for the energy sector has been too strong, and is counter to emission reduction goals.

Response

Oil & Gas Sector Competitiveness

• Canada’s oil and gas industry operates under world class regulatory regimes that ensure safety and environmental responsibility. 
• Supporting industry decarbonisation will position it to remain competitive and continue to support communities, jobs and Canada’s economy. 
• According to the International Energy Agency’s World Energy Outlook, as global markets become more carbon constrained, oil and gas will still comprise a significant part of the energy mix for the foreseeable future.
• The Canadian oil and gas sector will have a significant role to play in providing global markets with responsibly produced petroleum products.
• As a leading energy exporter, market access is a critical component for the sector’s success. That is why the government approved the Trans Mountain Expansion and the Enbridge Line 3 replacement project. It is also why we continue to defend the ongoing operation of Enbridge’s Line 5.  
• In 2018, the Government of Canada made a strategic investment in the LNG Canada project, which at $40 billion represents the largest private investment in our nation’s history. This project will create over 10,000 jobs in Canada in construction, and will support global emissions reduction and energy transition efforts.
• When COVID-19 first hit our shores, our government stepped up to get oil and gas workers back on the job while boosting environmental performance. We worked with Alberta, British Columbia, Saskatchewan, and the Orphan Wells Association to invest $1.7 billion for orphan and abandoned well reclamation in Western Canada.
• We launched the Emissions Reductions Fund, a $750 million fund aimed at supporting the sector’s innovation efforts while reducing emissions and environmental impacts.
• We invested $320 million to support jobs and investment in the Newfoundland and Labrador offshore.

TMX

• TMX is over 40% complete and has created over 11,300 jobs in British Columbia and Alberta to-date. 
• Once complete, the project will triple the capacity of the Trans Mountain System to transport 890,000 barrels of Canadian oil products per day.
• The Government of Canada has full confidence in Trans Mountain Corporation’s ability to safely operate the Trans Mountain Pipeline System and construct the Expansion Project. We also have confidence in the Canada Energy Regulator to oversee TMC’s compliance with safety and emergency response requirements.

Line 5

• Line 5 connects western Canadian oil and natural gas liquids to central Canadian refineries, supporting the economies of Alberta, Saskatchewan, Ontario and Quebec, and supplies feedstock to refineries in Michigan, Pennsylvania and Ohio, as well as Eastern Canada. It provides essential fuels to heat homes and power the economy in the entire Great Lakes region.
• A shutdown of this critical pipeline infrastructure would have a profound impact on jobs and supply chains, raise the cost of supplies in the region, and take a financial toll on many Canadian and United States refineries and businesses.
• This is why Canada is working hard to avoid a shutdown and support Line 5’s continued safe operation.
• By invoking the 1977 Transit Pipeline Treaty, Canada is acting to protect its national energy and economic interests. We did not take this decision lightly, and have pursued other avenues before invoking the Treaty’s dispute mechanism to no avail.

Enbridge Line 3 Replacement Project (if pressed)

• Now completed in Canada and the U.S., the Line 3 Replacement Project will transport 760,000 barrels of oil per day — over 370,000 new barrels per day in additional export capacity.
• Line 3 has generated thousands of full-time jobs during construction, replacing the aging pipeline with a new pipeline, built to modern standards. This will improve the integrity of the pipeline network, reduce the transportation of oil by rail and on public roads, and increase environmental safety.

Oil & Gas Sector Emissions Cap

• During COP26, the Government of Canada pledged to put a hard cap on greenhouse gas emissions from the oil and gas sector. This would see emissions limited to current levels and decreased every five years until they are carbon neutral by 2050.
• The government is seeking the advice of the Net-zero Advisory Body on how to move forward. We will also work with provincial and territorial partners and industry to ensure the continued success of the oil and gas sector.
• It is incumbent on us to look at all of the levers that we can pull at the governmental level, alongside industry, to rapidly reduce emissions.
• As the world shifts to a cleaner and greener economy, Canada will continue to take a leadership role on climate change to create new middle class jobs across all sectors and build a cleaner future for everyone.  

Background

Oil and Gas Sector Competitiveness

Emissions Reduction Fund (ERF): The Government of Canada created the $750 million during the pandemic to assist oil and gas workers by assisting onshore and offshore firms to reduce their methane and greenhouse gas emissions. The ERF is also helping to advance environmental research and decarbonize the oil and gas sector so that it is even more globally competitive in the post –pandemic economy.

Orphan & Inactive Well Funding: Canada has provided more than $1.7 billion for AB, BC, and SK to clean up inactive and orphan oil and gas wells to help address their environmental impacts and create thousands of jobs. It has allowed landowners to nominate sites and provided opportunities for many important Indigenous businesses.

Newfoundland and Labrador offshore funding: $320M is being distributed through an interprovincial task force, which recommended a two stream approach. Stream one totals $288M and targets operators of existing offshore installations ($38M allocated to support Hibernia ); the remaining $32M is allocated to stream two to support the service and supply community.

Trans Mountain Expansion Project (TMX)

TMX twins the existing 1,147 km Trans Mountain oil pipeline, built in 1953, which runs from Edmonton, Alberta to the Westridge Marine Terminal in Burnaby, British Columbia. In 2017, an Indigenous Advisory and Monitoring Committee for TMX (TMX-IAMC) was created that brings together 13 Indigenous and six senior federal representatives to provide advice to regulators and to ensure meaningful Indigenous monitoring of TMX and the existing pipeline. 

Canada acquired the Trans Mountain Pipeline and associated assets in 2018. Trans Mountain Corporation (TMC) is a federal Crown corporation, accountable to the Minister of Finance as a subsidiary of the Canada Development Investment Corporation. Natural Resources Canada plays a leadership role in coordinating whole of government implementation of Canada’s commitments to Indigenous groups whose rights and interests are impacted by the project, including related policy, regulatory, engagement and program delivery.

The Government of Canada approved the TMX project for a second time in June 2019. The project is subject to 156 binding conditions, overseen by the Canada Energy Regulator. When TMX was approved in 2019, $450 million was allocated to federal departments to implement the eight TMX accommodation measures designed to address potential impacts to Indigenous rights, and to respond to the CER’s 16 recommendations for TMX. Canada continues to work with Indigenous groups to ensure fulfillment of these commitments.

Line 5

Enbridge Line 5 supplies the majority of the crude oil for Ontario and Quebec refineries, and is the only pipeline capable of providing the feedstock used to produce propane at the Sarnia fractionator (an important supplier for the entire Great Lakes region).

Line 5 is a 1,038-kilometre oil and natural gas liquids pipeline stretching from Superior, Wisconsin to Sarnia, Ontario, and built in 1953. It travels through Michigan. This includes a 7.2 kilometre section at the bottom of the Great Lakes, under the Straits of Mackinac. The underwater segment of Line 5 has never leaked. It was found to be in good condition in several inspections, however Michigan is concerned from a spill into the Great Lakes from a rupture in the pipeline, or from an accidental ship anchor strike.

To lower the risk of a spill in the Straits to virtually zero, Enbridge proposes to fund and construct a tunnel under the Great Lakes to house Line 5. However, state and federal regulatory approvals for construction are delayed and will take an additional two years to secure.

In November 2020, Michigan announced it was revoking Enbridge’s 1953 authorization (‘easement’) to operate the pipeline across the Straits of Mackinac and demanded that the company cease operations by May 12, 2021. However, Line 5 remains in operation, as Michigan’s revocation requires a court order to give it effect. The case is currently before US federal court. 

Michigan’s action contravenes the 1977 Canada-US Transit Pipelines Treaty. On October 4, 2021, Canada invoked article IX(1) of the 1977 Transit Pipeline Treaty, which means that Canada and the U.S. governments will begin formal negotiations and could eventually enter formal dispute settlement arbitration that would likely last for many months.

Line 3 Replacement Project

Enbridge’s Line 3 Replacement Project replaces an existing aging pipeline infrastructure from Hardisty, Alberta, to Superior, Wisconsin, with new thicker pipe and modern safeguards to improve safety and integrity of the energy network. The replacement will restore export capacity and add 370,000 barrels per day, for a total of 760,000 barrels per day of western Canadian oil to the U.S.

After six years of environmental and regulatory assessments and extensive litigation, Enbridge completed construction of the last section in Minnesota and began cross-border operations on Oct 1, 2021. Pipeline operations have been met by protests by environmental and Indigenous activists. Some opponents have asked President Biden to revoke existing federal permits and have lawsuits pending in the courts.

Oil & Gas Sector Emissions Cap

Canada is the first major oil-producing country moving to propose capping and reducing pollution from the oil and gas sector to net zero by 2050. To help do this at a pace and scale needed to achieve the shared goal of net zero by 2050, the Government of Canada will set 5-year targets, and will also ensure that the sector makes a meaningful contribution to meeting Canada’s 2030 climate goals. The government is seeking the advice of the Net-Zero Advisory Body on how best to move forward on this approach.

Canadian Heritage

2021-22 Supplementary Estimates (B) – Canadian Heritage

Issue

The 2021-22 Supplementary Estimates (B) represents a total net increase of $126.1 million for the department.

Response

• The net impact for Canadian Heritage is a Vote 1 – Operating increase of 
   $22.4 million, a Vote 5 – Grants and Contributions increase of $103.1 million, and a Statutory appropriation increase of $0.6 million. Some of the key initiatives included in these Estimates are:
• Supporting Canada’s Artists & Live Music Sector and Canada as Guest of Honour at the 2021 Frankfurt Book Fair to support Canada’s live music sector and Canadian artists through the pandemic, extend sunsetting funding for the Canada Music Fund and continue the government’s support of Canada as Guest of Honour at the 2021 Frankfurt Book Fair.
• Funding for the Indigenous Reconciliation and Strength for Indigenous Women and Girls through Sport for Social Development and Community Sport for All initiatives to ensure that Indigenous women and girls have access to meaningful sports activities through the Sport for Social Development in Indigenous Communities Initiative, to respond to the Final Report of the National Inquiry into Missing and Murdered Indigenous Women and Girls and to support organized sport at the community level to help Canadians and communities recover from the impacts of COVID-19.
• Additional funding to Indigenous communities in their efforts to reclaim, revitalize, maintain and strengthen Indigenous languages as part of the Government of Canada’s strategy to respond to the Final Report of the National Inquiry into Missing and Murdered Indigenous Women and Girls and in support of the implementation of the Indigenous Languages Act.

Background

The net increase for the department of Canadian Heritage is explained by the following items:

• Supporting Canada’s Artists & Live Music Sector and Canada as Guest of Honour at the 2021 Frankfurt Book Fair – Total: $57,153,085 (including statutory)
• Funding for the Indigenous Reconciliation and Strength for Indigenous Women and Girls through Sport for Social Development and Community Sport for All initiatives – Total: $42,812,127 (including statutory)
• Additional funding to Indigenous communities in their efforts to reclaim, revitalize, maintain and strengthen Indigenous languages – Total: $34,573,341 (including statutory)
• Supporting performing arts festivals, cultural events, arts and heritage institutions, celebrations, and commemorations that make communities stronger, including funding for commemoration activities associated with residential schools and the National Day for Truth and Reconciliation and funding for enhanced commemoration of the history of residential schools and for the Residential Schools National Monument – Total: $28,366,706 (including statutory)
• Funding for the Canadian Race Relations Foundation to complement the Department of Canadian Heritage’s anti-racism efforts by managing activities aimed at empowering racialized Canadians and helping community groups to combat racism in all its forms. The total cost of the proposal is $11 million over two years; $6 million in 2021-22 and $5 million in 2022-23. Funds are received by Canadian Heritage and then transferred to the Foundation in these Estimates.
• Funding to Support Digital Access to Heritage for Canadian Heritage’s Museums Assistance Program to support the digitization of information and collections by non-national museums and heritage institutions.– Total: $4,838,569 (including statutory)
• For the Hosting program, reprofile of 2020-21 funds for a total amount of $10,480,873 ($4,350,040 to 2021-22 and $,6,130,833 to 2022-23) for the rescheduling of major events due to the COVID-19 pandemic.
• Transfer to Telefilm Canada for the Arts, Culture, Heritage and Sport Recovery Fund – Total: $16,000,00 and Transfer to Canada Council for the Arts and Telefilm Canada for the Reopening Fund for events and in-person experiences – Total: $30,000,000. Following Budget 2021 announcements, the department of Canadian Heritage received $250 million through its Supplementary Budget Estimate process (A) of 2021-22 for the Arts, Culture, Heritage and Sport Recovery Fund, and for the Reopening Fund for events and in-person experiences. This current Supplementary Budget Estimates process (B) of 2021-22 will reflect the allocation to portfolio organizations for 2021-22.

2021-22 Supplementary Estimates (B) – Portfolio Organizations

Issue

Supplementary Estimates (B) 2021-22 – Canadian Heritage Portfolio Organizations

Response

• The overall impact of Supplementary Estimates (B) 2021-22 for the Canadian Heritage Portfolio organizations is an increase in funding of $157.2 million.
• The tabling of 2021-22 Supplementary Estimates (B) demonstrates this Government’s commitment to our Portfolio organizations and to Canadian culture and heritage during these challenging times.

Background

The following is a summary of the most notable items in Supplementary Estimates B for the Canadian Heritage Portfolio organizations:

Canada Council for the Arts

As announced on June 28, 2021, the Canada Council for the Arts will receive funding of $25,000,000 to enable recipients of core funding to invest in activities aimed at re-engaging existing audiences and building new ones.

Horizontal item – National Museums and the National Battlefields Commission (Budget 2021) 

Funding of $34.1 million to address financial pressures caused by COVID-19 and program integrity issues

Canadian Museum of History $4,912,000

Canadian Museum for Human Rights $3,900,000

Canadian Museum of Immigration at Pier 21 $1,435,000

Canadian Museum of Nature $8,000,000

National Gallery of Canada $6,200,000

National Museum of Science and Technology $7,603,000

National Battlefields Commission $2,000,000

On June 30, 2021, the Minister of Canadian Heritage announced an emergency investment of $34.1 million for the six national museums and the National Battlefields Commission to help offset the impact of the COVID-19 pandemic. This funding will allow these organizations to stay afloat through the 2021–2022 fiscal year.

National Arts Centre (NAC) (COVID-19) (Budget 2021) 

Funding of $19,200,000 to address financial pressures caused by COVID-19 in 2021–22 and to support the recovery of the performing arts sector over two years.

Telefilm Canada 

Funding of $20,000,000 to modernize Telefilm’s current suite of programs.

Funding of $16,000,000 for the Recovery Funds for the Heritage, Arts, Culture and Sport Sectors. This funding will stabilize the Canadian cinema ecosystem and promote Canadian Cinema.

Funding of $5,000,000 for the Reopening Funds to help film festivals recover and enhance their online and in-person activities.

Library and Archives Canada

Funding of $1,917,933 (including statutory) to implement Canada’s contribution to the National Action Plan: the Federal Pathway – Canada’s Response to Missing and Murdered Indigenous Women and Girls National Inquiry’s Final Report “Reclaiming Power and Place”.

Budget 2021 Recovery and Reopening Initiatives for the Arts, Cultural, Heritage and Sport Sectors

Issue

• In early 2020, the arts, cultural, heritage and sport sectors were among the first to suffer from the economic shutdowns and, with some variation among subsectors, will be among the last to recover. Many organizations and business models in these sectors continue to struggle for viability because of unique underlying economic pressures and a typically precarious workforce.
• Since the beginning of the pandemic, the federal government has made substantial commitments in terms of emergency support and reinvestment in the arts, cultural, heritage and sport sectors. Key relief packages administered by the Department of Canadian Heritage, such as the Emergency Support Fund, Recovery Fund and Reopening Fund, have been some of the main support mechanisms for organizations in these sectors during the pandemic.

Response

• The Government continues to support organizations and workers in the arts, cultural, heritage and sport sectors through many initiatives announced in Budget 2021, including the $300 million Recovery Fund and the $200 million Reopening Fund.
• The Government is making daily progress to implement both the $300 million Recovery Fund and $200 million Reopening Fund as well as many other related support measures for the arts, culture, heritage and sport sectors. Program launches, application assessment, and funding delivery continue to roll out on an ongoing basis.
• The Recovery Fund for Arts, Culture, Heritage and Sport Sectors is providing $300 million over two years to provide relief to arts, culture and sport organizations that are still struggling with operational viability due to the pandemic, and to provide organizations and Canadians working in these sectors with the financial means to help build organizational resilience and pursue business innovation and transformation. This will also contribute to advancing equity, diversity and inclusion in these sectors as well as greening activities.
• The Reopening Fund is providing $200 million over two years through existing programs to support Canada’s festivals, cultural events, outdoor theatre performances, heritage celebrations, local museums, amateur sport events, and more. It supports organizations and projects that deliver in-person experiences and events that draw visitors to our communities and will complement tourism-related initiatives to be delivered by federal Regional Development Agencies.

Background

$300 million Recovery Fund and $200 million Reopening Fund

• The Recovery Fund for Arts, Culture, Heritage and Sport Sectors will leverage existing programming to provide $300 million over two years to organizations that are still struggling due to the pandemic. It will support recovery for these sectors by providing organizations and individuals with the financial means to help build organizational resilience and pursue business innovation and transformation. This will also contribute to advancing equity, diversity, and inclusion in these sectors, as well as greening activities.
• The Reopening Fund will inject $200 million over two years through existing programs to help Canada’s local festivals, community cultural events, outdoor theatre performances, heritage celebrations, local museums, amateur sport events and more. It will support organizations and projects that deliver in-person experiences or events that draw visitors to our communities.

Other recovery initiatives announced in Budget 2021

Budget 2021 announced $1.6 billion in funding to Canadian Heritage and $346 million in funding to Canadian Heritage Portfolio organizations. In total, that is $1.9 billion in new supports to the culture, heritage, sport and official languages sectors. The initiatives announced in Budget 2021 include the following:

• Support the Performing Arts Festivals and Community-based Cultural Events, Celebrations and Commemorations: $119.6 million
• Telefilm – Short-Term Compensation Fund: up to $100 million
• Emergency investment for the six national museums and the National Battlefields Commission, and additional funding: $66 million 
• Cultural Infrastructure – Canada Cultural Spaces Fund:  $15 million
• National Film Board: $5 million
• CBC/Radio-Canada: $21 million
• National Arts Centre – Financial Pressures: $17.2 million

Media in the Digital Age

Issue

Online platforms are increasingly central to how Canadians communicate with each other and the world around them. But left unchecked, they can weaken our democracy, social cohesion and the economic health of our creative and news sectors.

Response

• Our Government is committed to putting in place a more equitable regulatory framework to govern online platforms in Canada. Our expectation is that they contribute to Canadian public policy objectives, such as:
• supporting Canadian music and stories;
• doing more to support Canadian news and journalism; and
• providing a safe and inclusive online environment for all Canadians.
• We have and will continue to consult Canadians, experts and key stakeholders on how best to tackle these complex issues to ensure proper oversight of online platforms while also upholding fundamental rights, including freedom of expression. The Government looks forward to working with all Parliamentarians to advance this important work.

Background

In the previous mandate, Canadian Heritage advanced a number of priorities relating to online platforms: 1) Bill C-10, an Act to amend the Broadcasting Act; 2) news media remuneration; 3) online harms.

Broadcasting: On November 3, 2020, the Minister of Canadian Heritage tabled Bill C-10, An Act to Amend the Broadcasting Act. The Bill was intended to be a key instrument in supporting Canada’s creative industries and in ensuring that Canadian music and stories be available and accessible. Bill C-10 would have clarified that online broadcasting services fall under the Act and would have ensured that the CRTC has the proper tools to put in place a modern and flexible regulatory framework for broadcasting. These tools include making rules, gathering information, and assigning penalties for non-compliance. On June 22, the House of Commons adopted Bill C-10, which was later referred to a Senate committee for further study. On August 15, 2021, the Government requested the dissolution of parliament for an election and as such, Bill C-10 died on the order paper.

News media remuneration: Beginning in April 2021, PCH initiated a phased engagement strategy with a variety of stakeholders in the sector, first seeking input on two possible approaches. Stakeholder opinion on the way forward was divided. News Media Canada, which represents the interests of over 830 newspapers, generally supported an arbitration approach while some unions, smaller digital first news organizations, and organizations representing equity seeking communities typically showed more support for mandatory contributions. In phase 2, Canadian Heritage published a What We Heard Report on key policy considerations regarding fair revenue sharing between digital platforms and news media and sought additional comments from the public and interested stakeholders. Phase 3 consists of roundtables with Indigenous publishers and is currently underway.

Moreover, Google and Facebook have reached commercial agreements to fund certain Canadian news media organizations directly and are building partnerships with a number of news organizations. However, contributions are made on a voluntary basis, and in the absence of regulatory oversight.

Online harms: The Government held a public consultation that closed on September 25, 2021, on its proposed approach to address harmful content online. The approach outlined what entities would be subject to the new rules; what types of harmful content would be regulated; the new rules and obligations for regulated entities; and the creation of two new regulatory bodies and an Advisory Board to administer and oversee the new framework and enforce its rules and obligations. Notably, the approach also included a requirement on platforms to remove illegal content, specifically hate speech, incitement to violence, terrorist content, exploitation of children, and the non-consensual sharing of intimidate images, within twenty-four hours. Officials are currently analyzing the submissions to the consultation. News articles and some submissions made publicly available by stakeholders were highly critical of the proposal.

Support for Indigenous Languages

Issue

The Government acknowledges that no Indigenous languages are considered safe in Canada, and three quarters of Indigenous languages in Canada are endangered. The Government has committed to fully implementing the Indigenous Languages Act to preserve, promote and revitalize Indigenous languages in Canada, with long-term predictable and sufficient funding to support the implementation of the Act.

Response

• The Government recognizes that Indigenous languages are foundational to the culture, identity and belonging of Indigenous peoples in Canada. That is why we are committed to supporting the efforts of Indigenous peoples to reclaim, revitalize, maintain and strengthen their distinct languages and cultures.
• Budget 2021 provided $275 million over five years, in addition to existing funding, towards the revitalization of Indigenous languages and cultures. This funding will support various initiatives such as language immersion programming, language and culture camps, mentor-apprentice programs and the development of resources and documentation.
• Combined with 2019 funding, this investment has allowed Canadian Heritage to provide over $60 million in funding for over 170 projects in support of Indigenous languages and cultures in 2021-22.
• Funding provided through Budget 2021 also supports the implementation of a Tripartite Agreement launched this year with the Government of Nunavut and Nunavut Tunngavik Incorporated to increase access to Inuktut in the Nunavut education system, and the ongoing implementation of a language agreement with the Nisga’a Nation in British-Columbia.
• Canadian Heritage continues to work collaboratively with Indigenous partners to fully implement the Indigenous Languages Act. This includes developing approaches to support the provision of adequate, sustainable and long-term funding for the ongoing implementation of the Act.

Background

On June 21, 2019, the Indigenous Languages Act (the Act) received Royal Assent, with the overall purpose of supporting the efforts of Indigenous peoples to reclaim, revitalize, maintain and strengthen Indigenous languages. The Act responds to Calls to Action 13, 14 and 15 of the Truth and Reconciliation Commission of Canada, contributes to the implementation of the United Nations Declaration on the Rights of Indigenous Peoples as it relates to Indigenous languages and as well as to the Federal Pathway to Address Missing and Murdered Indigenous Women, Girls and 2SLGBTQQIA+ People.

Budget 2021 provided $275 million over five years, beginning in 2021-22, and $2 million ongoing, to further support the implementation of the Act. This funding includes:

• Stream 1: $176.4 million in Grants and Contributions (vote 5) and $3.6 million in Operating Funds (vote 1) to support salary and operating expenditures over three years, starting in 2021-22, in support of the Indigenous Languages and Cultures Program (ILCP);
• Stream 2: $86.8 million in vote 5 and $2.1 million in vote 1 over three years, starting in 2021-22, for agreements under the Act; and
• Stream 3: $2 million ongoing, in vote 5 starting in 2023-24, for engagement with National Indigenous Organizations on the ongoing implementation of the Act.

These investments are in addition to the Budget 2019 Indigenous languages investment of $333.7 million over five years, and $115.7 million ongoing. 

The Supplementary Estimates (B) exercise is to access Budget 2021 funding for fiscal year 2021-2022 includes: 

• $28.8M in vote 5 and $1.8 million in vote 1 for the ILCP Stream 1; and 
• $4M in vote 5 and $0.7 million in vote 1 for two existing agreements under Stream 2.

The ILCP is comprised of several funding components. The Supplementary Estimates B Stream 1 funding will support the Indigenous Languages Component, which provides project funding for community‑driven activities to support Indigenous languages (combined with Budget 2019 is $73.8 million in 2021-22). Other components include Territorial Language Accords ($12.1 million per year), the Northern Aboriginal Broadcasting ($7.9 million per year), the Office of the Commissioner of Indigenous Languages ($20.5 million in 2021-22), and National Indigenous Peoples Day, Indspire, scholarships and youth initiatives.

Budget 2021 Stream 2 funding supports Sections 8 and 9 of the Act, which allow for agreements with Indigenous governments and organizations, provinces and territories to support Indigenous languages programs and services, coordinate efforts to efficiently and effectively support Indigenous languages or meet the purposes of the Act. PCH is currently piloting two agreements: a Tripartite Agreement in Nunavut ($42M over 5 years) and an agreement with the Nisga’a Lisims Government ($6M over 6 years). Supplementary Estimates B Stream 2 funding will support the implementation of these two agreements in 2021-22.  Further agreements are being negotiated and are expected to be concluded in 2022-23. 

Tourism

2021-22 Supplementary Estimates B – Minister Boissonnault (Tourism)

Question

Why is Destination Canada requesting $25 million in funding through Supplementary Estimates (B)?

Response

• The tourism sector’s resilience has been remarkable. The government continues to promote health and safety and inspire confidence in the return to travel and tourism, and economic growth more broadly. 
• Recognizing the importance of the tourism sector to Canada’s economic recovery, Budget 2021 provided $100M over three years to Destination Canada to increase its marketing campaigns and further encourage people to explore this incredible country and all it has to offer. 
• A total of $25M is being requested by Destination Canada through these Estimates, for marketing campaigns to help Canadians and other visitors discover and explore the country.
• This incremental funding will allow Destination Canada to scale up its efforts to attract visitors from the United States and other key international markets in a heavily competitive international tourism marketplace.
• As part of its efforts to encourage domestic tourism, Destination Canada will also continue to market Canada to Canadians, highlighting the experiences that can be found close to home.
• Destination Canada will also work with destination marketing organizations to attract domestic business events, conferences and meetings.
• To help sustain a healthy supply of tourism products, Destination Canada will work with Regional Development Agencies to attract investment and enable the development of tourism destinations. 
• Through Destination Canada, the Government of Canada is proud to support the small- and medium-sized businesses of the tourism sector, and the important role these businesses play in creating jobs for the people of Canada.

Background

• Destination Canada (DC) is the Crown Corporation responsible for marketing Canada as a premier tourism destination.  
• Destination Canada also provides intelligence, tools and resources that help the Canadian tourism industry reach domestic and international markets.
• Through its North Star 22 partnership with provincial, territorial and destination marketing organizations, Destination Canada markets Canada as a premiere tourism destination in the United States, Mexico, United Kingdom, France, Germany, Australia, China, and Japan, and also markets Canada as a destination for business events, meetings and conferences. 
• Budget 2021 reaffirmed the government’s commitment to supporting the tourism sector recovery from the unprecedented impacts of COVID-19. 
• The Budget proposed an additional $100M over three years ($25M in 2021-22; $60M in 2022-23; and $15M in 2023-24) for Destination Canada to promote Canadian tourism in to the following target markets: (i) domestic; (ii) international (including US); and (iii) business events, and to scale-up marketing campaigns that will responsibly encourage safe travel.
• This supplemental marketing funding comes at a precarious time for the Canadian tourism sector, as it has been significantly impacted by the COVID-19 pandemic. Moreover as global tourism re-emerges, there will be intense competition from other countries to attract tourists.
• The new funding will enhance existing domestic and international tourism marketing campaigns that will coincide with the gradual reopening of the tourism sector.

Canada Tourism Recovery Strategy

Issue

What is the Government of Canada’s overall strategy for the recovery of the Canadian tourism sector?

Response

• Over the past 18 months, the tourism sector’s resilience has been remarkable.  With returning visitors, the government will continue to promote health and safety, and build trust and inspire confidence in the tourism sector. This is enabled by vaccinations, re-opening of businesses, the end of restrictions on non-essential travel, and the opening up of air travel.
• Some $15.4 billion in government supports have helped tourism businesses through the pandemic and the sector is starting to welcome back visitors. 
• The Government is committed to working with partners, provinces and territories and stakeholders to help the sector’s recovery and foster sustainable, inclusive and equitable economic growth in every region of the country.
• A broader strategy that includes supports through the Tourism Relief Fund will further help the sector’s recovery and foster sustainable and equitable economic growth in every region of the country. The government will continue to work closely with industry partners to build on regional strengths and to chart a new path to long-term sustainable growth. 
• The tourism sector has been heavily impacted by COVID-19. Revenues declined almost 50% (49.2 per cent from $104.4 billion to $53.4 billion) for 2020, and jobs directly attributable to tourism decreased 41 per cent in the same period (from 692,000 to 409,000). Projections for summer 2021 revenues are approximately half of summer 2019 revenues
• Budget 2021 provided support to protect jobs and help businesses recover and grow with the extension of pandemic support measures, including the wage subsidy. These measures were recently extended, enabling support to continue for the hardest hit businesses throughout the winter and into the spring.
• To help restore Canadians’ confidence in the safety of air travel and support the recovery of Canada’s hard-hit air and tourism sectors, the government invested in COVID-19 sanitization and testing infrastructure at airports, and in the development of advanced technologies to facilitate touchless and secure air travel.

Background

To encourage the tourism sector’s recovery, the government introduced targeted measures in Budget 2021, totalling $1 billion over three years, including:

• A $500 million Tourism Relief Fund to help businesses with a $15M portion for national tourism priorities.
• $200 million to support Canada’s major festivals and events.
• $200 million to support local festivals and events.
• $100 million to Destination Canada for marketing campaigns to promote Canadian travel destinations.

On October 21^st, the Government announced an extension of targeted measures for the tourism sector. Available at least until May 2022, these new measures include:

• The Tourism and Hospitality Recovery Program, which would provide support through the wage and rent subsidy programs, to hotels, tour operators, travel agencies, and restaurants, with a subsidy rate of up to 75 per cent.
• The Hardest-Hit Business Recovery Program, which would provide support through the wage and rent subsidy programs to support other businesses that have faced deep losses, with a subsidy rate of up to 50 per cent.
• The Local Lockdown Program, which would provide support through the wage and rent subsidy programs to organizations that face temporary new local lockdowns.
• The Canada Recovery Hiring Program will also be extended to May 7, 2022, for eligible employers with current revenue losses above 10 per cent, with an increase in the subsidy rate to 50 per cent.
• Tourism businesses can also apply to the Canada Digital Adoption Program to adopt new digital technologies. Eligible businesses will receive micro-grants and access to zero-interest financing to help offset the costs of going digital.