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Section 4 – NRTEE – DPR – 2003-2004

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Section 4: Context

Raison d'être

Economic growth and prosperity are of central importance to Canadians. However, economic activity is placing increasing pressure on the health of the Canadian and global environments.

There is an ongoing need to confront this challenge by channelling rigorous research, stakeholder views and the resulting new knowledge into policy making.

The NRTEE responds to this need by identifying and promoting ways to encourage economic prosperity for all Canadians, while preserving the environment for current and future generations.

Overview

The NRTEE was established by legislation in 1994 as a publicly funded, independent agency to explain and promote principles and practices of sustainable development. The agency interprets this broad mandate through a strategic focus on issues at the intersection of the environment and the economy.

The agency reports to the Prime Minister and consists of a membership of distinguished Canadians supported by a secretariat in Ottawa. Members represent a broad range of sectors including business, labour, academia, environmental organizations and Aboriginal peoples, as well as diverse regions across the country. (See Annex 1 for a list of members.)

The secretariat, headed by an Executive Director, provides program management, analytical, communications and administrative services to the NRTEE members and their task forces. (See Annex 2 for an organization chart.) General information about the NRTEE and its membership can be found on the agency's website (www.nrt-trn.ca).

“Governments have to create structures that will allow them to think and act across disciplines. A promising experiment is the National Round Table on the Environment and the Economy. The Round Table brings together representatives from government, industry, Native Canadians, academic and non-governmental organisations. It brings home the point that environmental health and economic growth are all part of the same picture.” -Roy Romanow, 2003

 

Sustainability in Canada: Baseline data and the need to protect and enhance our natural capital

In the 12 years since the 1992 Rio Summit on Environment and Development, sustainable development and environmental protection have become established, mainstream issues and core values for Canadians—civil society, business and government at all levels. Canada has signed or ratified at least 45 multilateral environmental conventions and agreements and is signatory to numerous agendas for action (e.g., Agenda 21, the Habitat Agenda, the World Summit on Sustainable Development [WSSD] Plan of Implementation, and the Kyoto Protocol), as well as international economic arrangements and trade treaties. Our commitment is also demonstrated by recent federal legislation, including the Canadian Environmental Protection Act, the Species at Risk Act and the Canadian Environmental Assessment Act. Despite these first steps, our understanding of the environment's role in maintaining our quality of life is limited, while the integration of environmental with economic and social concerns remains an enormous practical and intellectual challenge.

This challenge is addressed to some extent by the emerging concept of “natural capital,” which provides a new way of seeing the links between the environment and the economy. Natural capital is a particularly important component of national wealth. It supports economic activity by providing not only the raw materials and land on which we live and work, but also the many ecological services that support life, including the cleansing of fouled air and water, and the provision of productive soil.

In 2003-04, the federal government received the NRTEE's report on the Environment and Sustainable Development Indicators Initiative, which set out a small suite of national-level indicators that take account of those assets that are necessary to sustain a healthy economy, society and environment for Canadians. In response, the government promised to begin using the indicators in its decision making and announced $15 million in the federal budget to build on this body of work. The use of national indicators is not the solution to managing our natural capital responsibly, but it is an excellent beginning.

Like produced capital, natural capital can be degraded, for example, through modification of land areas and excessive waste loadings. It can be very difficult, and in some cases impossible, to replace lost natural capital—it is harder to create new wetlands than it is to build a new factory. It is possible, however, to rejuvenate, enhance or even avoid the deterioration of many types of natural capital through environmentally sustainable practices.

Canada is the steward of a substantial portion of the world's natural capital, with responsibility for 20 percent of the world's wilderness, 24 percent of its wetlands, 7 per cent of its renewable fresh water, 10 percent of its forests and the longest coastline in the world. The NRTEE plays an important role by advising the government on the use of fiscal and other policy instruments to protect and enhance these vital assets. Other recent statistics further illustrate a clear need for the NRTEE to continue raising awareness of natural capital and the importance of integrating the environment and the economy in decision making:

• Air quality—the NRTEE's Air Quality Trend Indicator rose slightly between 1986 and 2000, suggesting that air quality has declined over this period and that efforts to reduce pollution have not reduced the degree of ozone exposure experienced by most Canadians.
• Water quality—the NRTEE's Freshwater Quality Indicator, which includes data from all water quality indices across Canada, showed that 21 percent of all monitored water bodies exhibit marginal or poor water quality.
• Climate change—greenhouse gases (GHGs) are contributing to the current global climate change. The NRTEE's Greenhouse Gas Emissions Indicator, which measures Canada's share of anthropogenic emissions of GHGs, found that Canadians contributed about 726 megatonnes of CO2 equivalent of GHGs into the atmosphere in 2000. This figure represents about 2 percent of total global GHG emissions.
• Biodiversity—the number of endangered species in Canada rose from 178 in 1988 to 415 in 2002.
• Nature—the NRTEE's report Securing Canada's Natural Capital outlined direct and indirect threats to nature. Direct threats—from urban sprawl to the northward expansion of forestry, mining, and oil and gas development—could transform Canada's landscapes and seascapes at an unprecedented pace over the next 10 years. Indirect threats, such as pollution and climate change, significantly damage Canada's ecosystems.
• Urban sustainability—the NRTEE's report Environmental Quality in Canadian Cities outlined how key indicators relating to car use, transit ridership and urbanization patterns show negative trends. These indicators underscore the need to make substantial improvements to urban environmental quality by addressing the central and related issues of urban form, transportation and energy use.

 

The NRTEE's contribution to Canada's Performance

 

With regard to the environment, the agency supports the federal government's role in “promoting the advancement and sharing of knowledge on environmental issues…allow(ing) Canadians to make informed decisions.” More specifically, our activities contribute to three key outcomes identified by the government. Our recent work on urban sustainability and brownfield remediation should help achieve the outcome of protecting the environment from pollution and restoring it once contaminated. Our current efforts in the energy arena support the outcome of minimizing the risks attendant on climate change. And our work on conservation contributes to the outcome that Canada adopt a sustainable approach in its use of natural resources and ecosystems.

The chapter entitled “Economic Opportunities and Innovation in Canada” describes the government's role as “enhancing the well-being of Canadians, through higher living standards and a better quality of life.” The NRTEE contributes to the government's outcomes related to achieving “strong regional and urban infrastructures and economic growth,” a “secure and fair marketplace” and an “innovative and knowledge-based economy.”

 

During 2003–04, the NRTEE contributed to several national priorities.

"Building on the recommendations of the National Round Table on the Environment and the Economy, this budget will invest $15 million over the next two years to develop and report better environmental indicators on clean air, clean water and greenhouse gas emissions" - Budget Plan 2004

In February 2004, the Speech from the Throne announced that the government would begin incorporating the NRTEE's Environment and Sustainable Development Indicators into its decision making. This intention was restated in the following March budget. Linkages can be made between the indicators and the priorities expressed in the same section of the Speech from the Throne related to the government's plans to intensify its commitment to clean air and clean water and to respect Canada's commitment to the Kyoto accord.

Concern about climate change and air pollution is also one of the motivators behind the NRTEE's Energy and Climate Change Initiative. In August 2003, the Prime Minister asked the NRTEE to “study and inform Canadians on the potential for future emissions reductions.”

He later specified that this work should enrich future energy and climate change strategies and help enhance competitiveness. Through its program, the NRTEE hopes to initiate a discussion that will start to address some of the major energy-related challenges that Canadians will face during the next 30 to 50 years. These include climate change, volatile energy costs, the continental context of Canada's energy policy and the security of the energy supply.

On other fronts, the NRTEE's major cross-country tour to promote new approaches to urban sustainability and brownfield redevelopment supported the emerging federal “urban agenda.” Our ongoing Ecological Fiscal Reform program sought to improve understanding of how fiscal policy can be used more broadly to help achieve environmental policy objectives. And our new Boreal Forest program will assist with the conservation of Canada's natural capital for future generations. More information on our work in these and other areas is available on the NRTEE's website (www.nrt-trn.ca).

 

Factors influencing our performance

The NRTEE's success depends largely on its ability to influence the government's approach to important sustainable development issues. Decision makers must perceive the value of our advice and have sufficient confidence in its reliability to take action. For this reason, the NRTEE must carefully manage any risk that threatens the relevance, neutrality or credibility of the analysis and recommendations it provides.

To ensure that its work is relevant to decisions makers, the agency conducts an extensive scoping process prior to beginning a new program, which will proceed only if there is stakeholder appetite for movement on the issue. The agency's arm's-length status is fundamental to its neutrality, as is its management culture, which understands this area of risk very well and seeks to ensure that neutrality and balance are preserved in all stages of the NRTEE's process and reporting. Finally, the credibility of the NRTEE's advice is grounded in stakeholder contributions to ensure that information is both valid and representative of all views. Evaluations suggest that the agency is managing these risks successfully.

However, the NRTEE's success hinges on more than ensuring the quality of its advice. Another significant challenge lies in the general lack of understanding of the close links between the environment and the economy and their effects on sustainable development. This lack of understanding is associated with the low priority accorded to sustainable development issues. To the extent that it can, the NRTEE counters this challenge through a communications effort that focuses on raising the awareness of decision makers and opinion leaders. Given the scale of the problem, and tough competition for decision makers' attention and funds, this will be an ongoing and fundamental barrier to progress.

 

In 2003–04, the NRTEE spent $4.9 million (94 percent) of its appropriation from Parliament. This appropriation represents less than 0.003 percent of the government's total spending. The appropriation for 2003–04 is slightly less than in previous years as a result of the agency's contribution of 2 percent of its operating budget ($93,000) to the 2003 Budget Implementation: $1 Billion Reallocation Target.

The NRTEE's total expenses for the year were $5.2 million—$0.3 million greater than the parliamentary appropriations used during the year. This $0.3 million represents the cost of services ($342,584) provided by other government departments at no charge to the NRTEE.

Salaries and professional services accounted for $3.5 million (70 percent) of total expenses in 2003–04, which is comparable to the $4.0 million (70 percent) of total expenses in the year before. As in previous years, to obtain technical knowledge and effectively accommodate fluctuating program demands, the agency continued to supplement staff resources with specialized professional services, primarily for research, analysis and communications.

Annex 3 contains financial information, including audited financial statements.