Evaluation of the International Actions Theme of the Clean Air Agenda

This section outlines the management response to the evaluation recommendations. The Assistant Deputy Ministers (ADMs) of the International Affairs Branch at Environment Canada, the Global Issues Branch at the Department of Foreign Affairs and International Trade (DFAIT), the Energy Sector at Natural Resources Canada (NRCan), the Industry Sector at Industry Canada and the Associate Assistant Deputy Minister (AADM) of the Environmental Stewardship Branch at Environment Canada, accept the evaluation and all of its recommendations, and have provided a plan to implement the following management actions in response to the evaluation recommendations.

Recommendation 1: Environment Canada, in consultation with other participating departments, should review and implement options for enhancing coordination and management of program components to improve the strategic direction and effectiveness for the theme overall.

The ADM of International Affairs Branch at Environment Canada (EC) agrees with this recommendation.

Environment Canada will work with the Department of Foreign Affairs and International Trade (DFAIT), Natural Resources Canada (NRCan) and Industry Canada to review and implement options for enhancing coordination and management of program components to improve the strategic direction and effectiveness for the theme overall. Meetings of all International Actions Theme Program Director Generals will be held every four months to facilitate communication across departments at the management level, provide strategic direction, discuss interconnections between programs, provide a forum for thematic issues and to review level of achievement towards the International Actions Theme goals

Recommendation 2: Environment Canada should consider the costs and benefits of integrating PM Annex program activities with Clean Air Regulatory Agenda (CARA) activities.

The ADM of the International Affairs Branch and the AADM of the Environmental Stewardship Branch agree with this recommendation

Particulate Matter (PM) Annex activities are more closely aligned to the domestic objectives of the Clean Air Regulations Agenda (CARA) than to international climate change activities. Both the CARA and PM Annex programs' existing funding will expire March 31, 2011. Senior management has considered the efficiencies gained from single-point reporting instead of reporting to two funding programs as well as the strong alignment with CARA-related domestic goals and concluded that work related to the PM Annex would be more effective and efficient if included in the CARA program. Initial consideration for future funding of CARA is underway and includes the PM Annex. The PM Annex will begin to officially integrate into the CARA program this fiscal year, while continuing to report through the International Actions Program.

Recommendation 3: Environment Canada should improve the effectiveness of their engagement with provinces, territories and other domestic stakeholders for the PM Annex by considering the most appropriate formal mechanisms for consultation that will provide strategic direction for the future.

The AADM of Environmental Stewardship Branch agrees with this recommendation

The content of the PM Annex will be based on the respective domestic policies to address air pollution in Canada and the U.S.

Provinces and territories were consulted formally on Canada's proposed domestic approach in 2007 through the Environmental Planning and Protection Committee (EPPC) of the Canadian Council of Ministers of the Environment.

These consultations led to the formation of a multi-stakeholder process that included members of provincial and territorial governments, industry and environmental groups. A Canadian domestic approach to address air pollutants has been the subject of the work of this group over the last two years.

We will be working to further elaborate our approach (as will the U.S) and when both countries are in a position to engage in negotiations, an appropriate process for engagement, using existing modalities where possible, will be set up.

There is also provincial representation on the subcommittees set up under the Canada-US Air Quality Agreement that allows for direct participation in the process.

Recommendation 4: Environment Canada, Foreign Affairs and International Trade Canada, and Natural Resources Canada should develop an overarching strategic framework to guide the selection of voluntary contributions to international bodies and programs.

The ADMs of International Affairs Branch at Environment Canada (EC), Global Issues Branch at the Department of Foreign Affairs and International Trade (DFAIT) and Energy Sector of Natural Resources Canada (NRCan) agree with this recommendation

EC will, in close consultation with DFAIT and NRCan, work to create an overarching strategic framework to guide the selection of voluntary (non-assessed) contributions to international bodies and programs.

A strategic framework was developed to ensure that projects funded under the Asia Pacific Partnership program met defined objectives. The experience of developing an APP strategic framework will serve as a useful guide to development of the overarching framework.

The implementation of the framework will guide the allocation of contribution funds to recipients that will best contribute to achieving the program objectives.

The framework will be developed in this final funded year to ensure the balance of funds is distributed in the most effective manner.

Should a new program of international actions be funded beyond the current financial year that includes similar voluntary contributions, this framework could be used as the basis for managing the new funds.

Recommendation 5: Environment Canada, NRCan, DFAIT and Industry Canada should consider how program activities and outputs can be used to provide trade opportunities for the development, diffusion and deployment of clean technologies

The ADMs of International Affairs Branch at Environment Canada (EC), Global Issues Branch at the Department of Foreign Affairs and International Trade (DFAIT), Energy Sector of Natural Resources Canada (NRCan) and the Industry Sector at Industry Canada (IC) agree with this recommendation

The clean energy technology program has worked with Canadian private industry, many of which are Small and Medium Sized Enterprises (SMEs), on baseline-setting and research projects with some deployment of clean technology projects. SMEs account for 45% of gross domestic product (GDP), much of the economy's growth, 60% of all jobs in the economy, and 75% of net employment growth⁵². As we become aware, through the climate change negotiation sessions and other relevant international processes covered by the program, of emerging trade opportunities related to climate change, we agree that we need to increase SMEs awareness of these opportunities in order to increase deployment of clean technology.

The Departments will create a plan for better communication of clean technology trade opportunities to SMEs and will implement some activities prior to funding termination on March 31, 2011. The plan can be used as designed if the program is continued or as a foundation if the program is continued with changes.

In addition to ensuring information sharing with the Canadian SMEs, we can better inform the international community of Canada's developing clean technology products to increase trade opportunities. For example, participation in the APP has resulted in sharing of technology information and products among the APP countries thereby increasing world awareness of Canada's clean technology.

Established in 2009, and not included in the scope of this Evaluation, EC leads the Canada-U.S. Clean Energy Dialogue (CED), with support from NRCan and DFAIT. The CED aims to enhance bilateral collaboration in advancing clean energy technology solutions to reduce greenhouse gas emissions and address climate change. The focus areas of the CED include: expanding clean energy research and development; advancing the development and deployment of clean energy technologies, with a focus on carbon capture and storage; and building a more efficient electricity grid based on clean and renewable generation. EC, NRCan and DFAIT will continue to work together under the CED, and where appropriate, engage with other relevant departments, such as IC, to advance the development and deployment of clean energy technologies. A result of this program could be an increase in Canadian business trade opportunities in clean technologies, although this is not a specific goal of the program.

Beyond the International Actions Theme, NRCan leads a number of key partnerships with organizations such as the International Energy Agency, the Climate Technology Initiative and the Global Carbon Capture and Storage Institute (GCCSI), which contribute significantly to advancing private sector engagement and should be further leveraged in order to maximize support for Canadian business opportunities on clean technologies.

Also beyond the Theme, Industry Canada has been participating actively in the International Partnership for Hydrogen & Fuel Cell in the Economy (IPHE) and working with Canadian companies to build hydrogen and fuel cell industry worldwide. IC is also engaged in the Steel Committee of the Organization for Economic Cooperation and Development (OECD) and the North American Steel Trade Committee (NASTC). While neither the Steel Committee of the OECD nor the NASTC is a forum that is meant to deal with climate change issues, they are often raised by industry representatives and IC officers as being important. These issues will no doubt affect the sector's competitiveness going forward because of different environmental obligations for developed and developing countries.

Recommendation 6: Environment Canada, DFAIT, NRCan and Industry Canada should develop and implement mechanisms that will ensure the ongoing collection of meaningful and accurate performance measurement data.

The ADMs of International Affairs Branch at Environment Canada (EC), Global Issues Branch at the Department of Foreign Affairs and International Trade (DFAIT), Energy Sector of Natural Resources Canada (NRCan) and the Industry Sector at Industry Canada (IC) agree with this recommendation

As mentioned in the Evaluation Report, gathering meaningful performance measurement data for policy-related outcomes is extremely difficult and must be qualitative in nature rather then quantitative. We recognize that we need better measurement of outcomes for the policy-related components of the program and EC will, in close cooperation with DFAIT and NRCan, enhance the performance measurement framework to be more flexible regarding the policy-related components of the International Actions Theme and establish a method of tracking performance for use in decision making.

The APP and Methane to Markets components of the program provide an opportunity to track performance data against program goals (reductions in greenhouse gases, economic benefits for Canadians and accelerating development of clean technology). On project completion, the companies will be asked to report on the achievements of their projects against the three priorities.

⁵² Public Works and Government Services Canada, "Importance of SMEs", Available at http://www.tpsgc-pwgsc.gc.ca/app-acq/pme-sme/importance-eng.html.