National Round Table on the Environment and the Economy
Annual Report 2001-2002

The Year in Review: Program Updates

Economic Instruments and Green Budget Reform

The goal of this program has been to advance the use of market-based approaches for environmental improvement in Canada. It is focused on two key components:

1. Greening the Budget

The Economic Instruments and Greening the Budget Committee has continued its work on the use of economic instruments to improve the environment. Central to this program is the annual Greening the Budget process, held to develop recommendations for consideration by the Finance Minister in the ensuing year's budget.

In developing this advice, the Round Table strives to achieve a consensus among stakeholders around sustainable development initiatives acceptable to all parties.

Building on the priorities and themes contained in last year's submission, the Greening the Budget Submission 2001 included recommendations that reflected current NRTEE program areas, including contaminated sites redevelopment and efforts to promote a more integrated policy development process for sustainable development, through the ecological fiscal reform initiative.

Stakeholder meetings were held to examine proposed measures and streamline the recommendations into five key measures that were ultimately presented to the Minister of Finance and the House of Commons Standing Committee on Finance. Specifically, the 2001 Greening the Budget Submission called for federal action in five key areas:

• Encouraging sustainable opportunities for northern Aboriginal communities;
  Remediation of contaminated sites in Canada;

• Preserving Canada's natural heritage;

• Exploring the linkages between the environment and human health;

• Building capacity for ecological fiscal reform.

In December, the Minister of Finance asked the NRTEE to develop a National Brownfield Redevelopment Strategy in his 2001 Budget speech.

2. Ecological Fiscal Reform

The Economic Instruments Committee, through the Ecological Fiscal Reform (EFR) program, is exploring potential strategies to redirect both government taxation and expenditure programs to create an integrated set of incentives supporting the shift to sustainable development.

The goal of the program is to gain insight into the key challenges and opportunities related to EFR, deduce guiding principles to apply to a broader range of sustainable development issues, and to begin the development of recommendations on implementing EFR in Canada.

A series of case studies was undertaken to illustrate how EFR might be successfully applied. The case studies included: EFR and agricultural landscapes - to examine how to design economic incentives to help farmers across Canada conserve rather than cultivate ecologically sensitive lands; cleaner transportation - on how to develop a set of economic instruments to complement regulations associated with the Government of Canada's Clean Air Action Plan; and chemical substances of concern - to examine how EFR instruments could encourage better life-cycle management of certain chemical substances relating to the Canadian Environmental Protection Act.

At a meeting in October, the Expert Advisory Group concluded that there is a role for EFR in Canada and that it can offer many benefits. To improve visibility and gain support for the work completed, the case studies became the basis of the EFR Phase 1 report entitled Toward a Canadian Agenda for Ecological Fiscal Reform: First Steps. The report highlights the work carried out on two of the three case studies, namely agricultural landscapes and cleaner transportation, as examples of experimentation that are helping define the scope of opportunities and barriers to EFR. This report was published in March.

Ultimately, the program will provide decision makers with a critical examination of key issues concerning the implementation of ecological fiscal reform measures. Examples of such important issues are revenue neutrality, international competitiveness and jurisdictional competence in implementing an integrated, market-based approach to sustainable development in Canada.

3. Measuring Eco-efficiency

Eco-efficiency is a practical approach that businesses are adopting in setting and achieving their environmental performance objectives. Measuring these goals in a standardized manner will allow useful dialogue and permit easy comparison between divisions, companies and business sectors.

Under its Measuring Eco-efficiency program, the NRTEE has proceeded with the testing of material and energy eco-efficiency indicators. A pilot project, Measuring Eco-efficiency in Business: Developing a Core Set of Eco-efficiency Indicators, was carried out during 1997 and 1998.

With support from Environment Canada, the program was expanded to involve the active participation of 12 companies* from the manufacturing sector in Canada. These companies tested the value of the energy and material intensity indicators to their businesses. They refined the definitions, decision rules and complementary indicators and developed a workbook that all companies can use to calculate indicators in a consistent, transparent, credible and standardized manner. The final report and workbook were released in June.

A series of cross-country workshops to teach company technical representatives how to use the tools of eco-efficiency, including the workbook, have been planned for the spring and fall of 2002.

* The participating companies were: Tetra Pak Ltd., Husky Injection Molding Systems Ltd., General Motors of Canada, St. Lawrence Cement, Dupont Canada Inc., Alcan Aluminium Limited, BASF Canada Inc., Nexfor Inc. (a Nordbord subsidiary), Dofasco Inc., TransAlta Utilities Corporation, Atomic Energy of Canada Limited and Nestlé Canada Inc.

4. LEAD Canada

LEAD (Leadership for Environment and Development) Canada is a two-year training program that seeks to ensure that future decision makers understand the challenges of sustainable development and are equipped to meet them.

Twelve LEAD programs around the world each choose up to 15 promising mid-career professionals to take part in the program each year. Participants (called Associates) are exposed to a number of substantive issues related to sustainable development and gain skills in a variety of areas including conflict resolution, stakeholder dialogue processes, change management, cross-cultural communication and public presentation. At the same time, Associates undertake a self-directed course of study that is designed to complement their professional activities.

In September, Cohort 8 attended its final international training session and graduation in Moscow. The session explored the theme Disintegration or Integration: The Sustainability of Societies in Transition. The session included three case studies with site visits to the Republic of Moldova, the Republic of Armenia, and the Republic of Kalmykia.

Due to a significant decrease in funding, budgetary constraints and a re-evaluation of opportunities and priorities for the future, the National Round Table ended its relationship with LEAD International as the host institute for the Canadian program in December. LEAD Canada Inc. is now a stand-alone non-governmental organization. The new non-governmental organization is directed by a committed group of Canadian LEAD Associates and Fellows.

5. Aboriginal Communities and Non-renewable Resource Development

In 1998, the NRTEE launched a program to explore the relationship between Aboriginal communities and non-renewable resource development from the perspective of sustainability. The NRTEE identified economic vitality, environmental integrity, social and cultural well-being, equity and control over natural resources as key indicators of sustainability for Aboriginal communities.

The goal of the Aboriginal Communities and Non-renewable Resource Development program was to determine measures that must be taken to ensure that non-renewable resource development in Canada's North over the next 10-25 years supports economically viable, self-sufficient and socially healthy Aboriginal communities without compromising the ecological integrity of the environment.

The final report, entitled Aboriginal Communities and Non-renewable Resource Development - State of the Debate, was released in Yellowknife, NT in June. A forum was held immediately after the release to provide decision makers with advice on ways to improve capacity building in Aboriginal communities. Over 80 key representatives from the federal, territorial and Aboriginal governments, industry, educational institutions and others attended.

6. Environment and Sustainable Development Indicators Initiative

The goal of the NRTEE's three-year Environment and Sustainable Development Indicators (ESDI) Initiative is to generate a national set of indicators that will integrate environmental considerations into economic decision making. It is intended that these will be used by governments, business, and civil society.

The initiative originates from the NRTEE's Greening the Budget 2000 recommendations and came to fruition through funding in the 2000 federal budget.

The ESDI Initiative entered its second phase of the three-phase program. The objective of this phase was to define specific indicators. To facilitate this, cluster groups of experts were convened to provide advice to the Steering Committee to help identify and select national indicators. The emphasis of the cluster groups' work was to develop indicators that are ready for use in the short term. Six cluster groups were convened to address the following issues: human capital; non-renewable resources; land and soils; renewable resources; air quality and atmospheric conditions; and water resources.

At a breakfast event hosted by the NRTEE in May, the Finance Minister expressed support for the direction being taken in the ESDI Initiative. His speech, entitled "Measuring Progress Towards a More Sustainable Economy", emphasized the need for the development of new environmental indicators to promote sustainable decisions in the future. Over 600 people from the financial and other sectors attended the event in Toronto, ON. As well, the NRTEE held a panel discussion at Globe 2002 in March in Vancouver, BC. Over 250 people attended the session on the progress of the ESDI Initiative and the potential indicators being examined. The draft indicators will be presented at a one-day conference in Ottawa on June 19, 2002.

7. Conservation of Natural Heritage

Canada's natural riches are unparalleled in the world, creating both an opportunity and responsibility for it to act as a global steward. Canadians expect our parks and special conservation areas to protect our natural heritage. Core protected areas are only one element of a broader plan needed to do the job.

With over a century of experience with parks and other protected areas, we are learning that these are insufficient to maintain our natural ecosystems and wildlife species.

The goal of the Conservation of Natural Heritage program is to encourage Canadians at all levels to undertake stewardship of the land and waters, addressing not just public but also private lands; and to shape and support new tools that will help Canadians to better conserve, restore and maintain the long-term health of ecosystems.

Establishing a national [1] network of protected areas [2] nested within a larger, sustainably managed (working) landscape is needed. This landscape-level approach to conservation includes exploring connectivity between core reserves as an important new goal. It is based on the knowledge that protected areas, while fundamental to any conservation strategy, are not adequate in and of themselves to conserve biodiversity over time.

The task force met in May, July, August and January to review the key issues, barriers, and bridges to successful nature conservation. Included in this review was an examination of potential economic instruments that could complement and encourage conservation in Canada. In November, the NRTEE, in partnership with the Manitoba Round Table for Sustainable Development, hosted a nature conference in Winnipeg, MB entitled Conservation that Works! This unprecedented conference, attended by over 600 participants, examined barriers facing industry, agricultural producers, and Aboriginal and resource communities and explored innovative approaches and tools created by the private sector, governments, First Nations, and conservation groups.

1. National refers to initiatives by all levels of government.

2. Recognizing that there are many different kinds of protected areas, from permanently protected parks to conservation easements, etc.
   

8. Urban Sustainability

The world is experiencing unprecedented urbanization and Canada is no exception: whereas 90 per cent of Canadians lived in rural regions in 1900, more than 80 per cent live in urban centres in 2001.

With this in mind, it is becoming increasingly evident that cities are major drivers of economic activity and, as such, a nation's competitive advantage is directly related to the performance of its cities.

The goal of the Urban Sustainability program is to catalyze momentum toward alternative or more coherent strategies, based upon sustainable development principles, that aim to improve the quality of life in and competitiveness of Canada's cities or urban regions. The objectives of the program fall within two tracks: EFR in support of urban sustainability - which will examine innovative fiscal measures for all three levels of Canadian government to support urban sustainability; and indicators of environmental quality - which might be used to publish a report on the state of Canadian cities.

The NRTEE sponsored a Town Hall on Building a Sustainable Community at the Ottawa 2020 Smart Growth Summit in June. Presentations were made to the Prime Minister's Caucus Task Force on Urban Issues and at the Policy Research Initiative's Bringing Communities Together conference in December. The NRTEE task force met in January and March to review the program plan and determine areas for preliminary research. In February, the National Round Table sponsored and made a presentation at the Cities & Transportation: Choices & Consequences conference held in Vancouver by the International Centre for Sustainable Cities.

9. National Brownfield Redevelopment Strategy

In response to a mandate announced by the Finance Minister in his December 2001 budget, the National Round Table has launched a brownfield redevelopment strategy program.

In his budget speech, the Minister declared: "Across Canada, as in most countries, contaminated land lies unused and unproductive. Such sites, known as brownfields, may have the potential for rejuvenation, bringing both health and economic benefits to local communities. Therefore, responding to the Government, the NRTEE has agreed to develop a National Brownfield Redevelopment Strategy in order to ensure that Canada is a global leader in remediation."

The goal of the National Brownfield Redevelopment Strategy program is to develop a national strategy that incorporates federal, provincial and municipal measures that will facilitate the redevelopment of brownfields in Canada. The strategy will produce a series of measures designed to alleviate what are generally considered to be the key barriers to brownfield redevelopment, including: legal uncertainty surrounding environmental liability; lack of financing and funding; and perception problems and lack of stakeholder awareness. The National Brownfield Redevelopment Strategy will be released in November.

10. Domestic Emissions Trading

At the request of the Prime Minister of Canada, the NRTEE undertook an initiative to broaden awareness and understanding of the concept of greenhouse gas emissions trading among key opinion leaders.

Working in partnership with the Canadian Chamber of Commerce, Pollution Probe and the Centre patronal de l'environnement du Québec, this project laid the groundwork for national discussions on the role emissions trading may play within Canada's response to climate change under the Kyoto Protocol. Its objective was to raise awareness and basic literacy on domestic emissions trading among those who were not yet well versed in this area.

The main components of this project were a new set of background materials on domestic emissions trading and a series of information seminars that occurred in January in Halifax, Calgary, Montreal, Toronto and Vancouver, and in Ottawa in March. At each event, local, national and international experts in emissions trading shared their insights and expertise on the basic workings of emissions trading and discussed progress to date domestically and internationally.

The seminars were designed to broaden basic understanding of emissions trading among industry groups and others who would potentially play a role should emissions trading be adopted as part of Canada's climate change response. The timing was key, as the federal government had stated its intention to hold national consultations on Canada's climate change strategy in the late spring of 2002, in advance of a decision on ratification of the Kyoto Protocol to the United Nations Framework Convention on Climate Change.

By the end of the series, approximately 1,200 people had attended the seminars, representing more than 15 sectors of the business community, as well as environmental organizations and municipal and provincial levels of government.

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