RNNR Committee Meeting
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Standing Committee on Natural Resources
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EVIDENCE
Thursday, December 1, 2022
[Recorded by Electronic Apparatus]
[English]
Good morning, everyone. I call this meeting to order.
Welcome to meeting number 45 of the House of Commons Standing Committee on Natural Resources. The committee is meeting today to hear from the Minister of Natural Resources and officials.
Pursuant to Standing Order 81(5), we are considering supplementary estimates (B), 2022-23, including vote 1b under Atomic Energy of Canada Limited, vote 1b under the Canadian Energy Regulator, vote 1b under the Canadian Nuclear Safety Commission and votes 1b, 5b and 10b under the Department of Natural Resources.
Today's meeting is taking place in a hybrid format. Now that we've started, screenshots and photos are not permitted.
For those joining online, when we get to officials and the minister, you'll need to unmute your mike when speaking. When you're not speaking, please mute it. If you want to raise your hand, please use the “raise hand” function. Interpretation is available, with floor, French or English as your choices. Finally, please address your comments through the chair.
Those are the formalities we needed to get through.
Just so that everybody knows, we have officials either in the room or online. Only one official has not yet done the technology check. We'll be keeping an eye open for when they join. We'll get to that when we switch out after the minister.
For the first hour, we have with us the Honourable Jonathan Wilkinson, Minister of Natural Resources.
Good morning, Minister. We'll give you the floor for a five-minute opening statement.
As always, I'll use my handy flash card system. Yellow means you have 30 seconds left. Red means your time is up, but don't stop mid-sentence.
When you're ready, Minister, I'll turn it over to you. I'll start the clock for your five-minute opening statement.
Thank you, John.
[Translation]
Hello, everyone.
I am very pleased to be joining you today. I appreciate your invitation to talk about the investments this government is making to build a prosperous and clean future for the next generation, and to answer questions about the $315.9 million in expenditure requests contained in supplementary estimates (B), including $239.6 million for new funding or initiatives.
[English]
I am joining you today from the traditional, ancestral and unceded territories of the Squamish, Musqueam and Tsleil-Waututh nations.
[Translation]
Let me begin today by saying that I believe Canada is uniquely positioned to take advantage of the key growth areas that will be driven by the international transition to a clean future.
[English]
Around the world, financial markets are increasingly pricing climate risk into investment decisions. Smart money is flowing away from assets that are not compatible with a transition to a net-zero world and toward opportunities that are.
Just as any successful business must be capable of interpreting and reacting to changes in the business environment, countries must also be capable of thoughtful response and action if they are to sustain and enhance their level of prosperity. It is in this context that Canada can choose to be a leader in the global economic shift, or we can let it happen to us, with all the attendant consequences of being a late mover.
As the world moves toward a lower-carbon economy, a key question on which we must collectively focus is how to build on Canada's comparative advantages in a manner that will create jobs, economic opportunity and prosperity. My job, as I see it, is to work with folks across this country to determine how best to utilize the abundance of resources, technology and expertise that exist in this country, and pursue opportunities that will drive significant job creation and economic growth.
[Translation]
To remain competitive internationally, and to drive long-term economic growth, we need to think about economic opportunities at both sectoral and regional levels.
[English]
Opportunities from a sectoral perspective will come from new products that enable a low-carbon future, such as critical minerals, hydrogen, electric cars and buses, battery technology, renewable energy, low-carbon building products, small modular reactors and other clean technologies.
Regionally, each province has a relatively unique mix of its own natural resources. The economic opportunities available to them, and therefore the approaches to a clean energy transition, will be different across the country.
What we need is a plan based on comparative advantage, one that aligns the efforts and resources of all levels of government, as well as the private sector, and a plan that also respects the rights and interests of indigenous people. Such a plan must be thoughtful, collaborative and ambitious. It must create wealth and good jobs in every region of this country, while ensuring we achieve our ambitious and necessary climate goals.
I am working with the provinces and territories, as well as businesses and labour and indigenous partners, to establish regional energy and resource tables across the country, and to establish such a plan for each region of the country. Tables have now been set up with British Columbia, Newfoundland and Labrador, Manitoba, the Yukon, Northwest Territories, Prince Edward Island, Nova Scotia, New Brunswick and Ontario. I look forward to soon establishing tables with Quebec, Saskatchewan, Nunavut and Alberta.
We are currently investing in the areas we know will be a part of Canada's clean energy future. Through the fall economic statement, we announced significant investments in our clean technology industries. Through investment tax credits in hydrogen and other clean technologies, we are maintaining competitiveness in the face of increasing global competition.
We also announced the creation of a sustainable jobs training centre to bring together employers, workers and institutions to help level up over 15,000 workers with the needed skills for building a prosperous low-carbon economy. This is in addition to investments to help create over 20,000 more union-based apprenticeships.
We are also investing directly in households. Recently, we announced new support for those who currently rely on home heating oil. The $250-million oil to heat pump affordability grant can often be stacked with the greener homes grant for up to $10,000 in direct support per family to transition away from heating oil and towards efficient, affordable and sustainable heat pumps. Heat pumps are a measure that reduce emissions and home heating bills, while doubling as a climate adaptation solution by providing air conditioning in increasingly hot summer months.
I could go on, but my time is almost up. I will conclude by saying that the measures included in the supplementary estimates (B) build on and enable many of these important initiatives. I welcome the opportunity to further discuss how my department is working across government to make life more affordable for Canadian families while fighting climate change, and building a truly sustainable economy that works for everyone.
Thank you very much for inviting me to join you today. I look forward to our conversation.
Thank you, Minister. It's always a pleasure to have you here.
In our first round of questions, you'll have six minutes each.
First up is Mrs. Stubbs.
Thanks, Chair.
Thank you, Minister, for being here, and thanks to your officials for being present at committee.
Since you just mentioned the heat pump announcement in the fall economic statement, I noticed there's almost $1.2 million in these estimates for the greener homes grant and the loan programs, which you referenced.
Are any of those dollars for the recently announced heat pump program?
It is not included, but you can stack the new grants with the greener homes grants. You can take the $5,000 and stack it with $5,000 to do a broader renovation if you choose to do that.
That would confirm, then, that it was a very recent and potentially back-of-the-napkin plan, and it makes sense why it won't be announced until the spring. It won't help any Canadians who are having trouble figuring out how to pay their heating bills, buy groceries and pay their mortgages.
There seem to be some major problems in the program, such as the concern that insurance companies might not cover it. Also, the overall cost to install a new system is between $10,000 and $20,000, and the sources will still require a backup.
Thanks for confirming that the program wasn't actually in previous estimates.
No, thanks. I'm good with the statement.
I'd like to ask you about TMX. There's a line item in the estimates of about $6.5 million for funding for the Trans Mountain expansion project.
Given that the Deputy Prime Minister promised in February 2022 that no more tax dollars would go into TMX, could you explain what that dollar amount is in the estimates?
Sure.
I'm happy to have officials speak to it more fulsomely, but it relates to discharging our obligations to indigenous peoples with respect to accommodations along the pipeline. Specifically, it's the delivery of three of eight accommodation measures, which are the terrestrial studies initiative, the aquatic habitat restoration fund and the terrestrial cumulative effects initiative.
[Translation]
Mr. Chair, the sound quality for the minister is not great, and it is making things difficult for interpretation right now.
[English]
Mrs. Stubbs, I've stopped the clock. We'll do a quick test and check on the audio quality because we want everybody to be able to follow along.
On a point of order, there's no product placement, please, Minister. We don't want to see that you're supporting one coffee shop over another.
Some hon. members: Oh, oh!
Mr. Charlie Angus: It's because of my time on the ethics committee.
Okay, I'm listening in on the French channel and we are getting interpretation, but that's me.
Minister, if you could you say a sentence, we'll see if it's coming through.
Sure. I am always happy to come before this committee, and I look forward to the various questions in the conversation we will have today.
Is that enough?
I've been asked if we can suspend for just a minute while we try to sort out this technical issue.
Folks, we're going to suspend for a minute and we'll be back in session as soon as we can get this technical issue figured out.
I'll get us back in session. We're not suspended anymore.
We'll turn it back to you, Mrs. Stubbs. You have three minutes and 10 seconds left in your time.
Minister, respond slowly to let us all process the wisdom you are imparting and we'll get through this session.
Thanks, Chair. I was just trying to figure out where I left off.
Minister, I'm wondering if you could give a timeline or an update for Canadians on the progress of getting TMX into private sector ownership.
I can certainly say a couple of things.
It is, as you know, run by an organization that reports to the Minister of Finance, not to me. Certainly, the progress on the construction continues to make good progress. The intention of the government, as we have said, is to transact to the private sector as we move towards project completion.
The concern is that TMX was supposed to be operating in 2019. Of course, your government had frozen the application, extended the timeline and redone indigenous consultation. The court ruled your indigenous consultation was insufficient, which is a challenge that is not unique to your government, certainly. It's one that other governments have faced before.
You gave the green light and the private sector proponent was still willing to spend hundreds of millions of dollars to try to get it built. Your government failed to provide the legal and political certainty that was required for them to go ahead and do that, so you bought it. We're currently three years behind what would have been the private sector timeline for operations.
Given your comments about dollars and investments flowing away from projects that your government has targeted to phase out and minimize, do you think that's the problem? Has the government made TMX an asset that no one wants to buy?
I don't think that at all. That's not at all true. Certainly, the indigenous consultation piece was important. Actually, the courts have helped to clarify, I think, the bar that needs to be set and achieved for projects moving forward. That will be of use to all future governments in that context.
We would all like to see the project come to fruition. As you know, the government bought the project due to the political uncertainty that was created in particular because of the position taken by the Government of British Columbia. We stepped up to ensure that this important piece of infrastructure is done. It is somewhat delayed, in part because of things like COVID and the floods that happened in British Columbia, but as you know, when we bought it, the CEO who ran it was doing so when it was a private entity, and it will be concluded soon—
I'm sorry, Minister, but I just got shown a yellow card. It's easier to have this rapport in person. I'm sorry to cut you off.
I have a quick question about LNG. Of course, in the estimates there's no mention whatsoever of LNG. Germany, of course, came to Canada as their first choice for LNG. The Deputy Prime Minister has said that projects like LNG and other energy projects for our allies should be accelerated, but the Prime Minister has said that providing energy security to our allies means an aggressive phase-out of oil and gas. Those are contradictory messages. The U.S. has managed to construct seven LNG facilities in the time that Canada has lost 25 opportunities. Germany permitted and constructed their import facility in 194 days.
I know you've mentioned working groups—
—for exporting LNG to Europe. Is there a cost for that in the estimates, or can that be anticipated in the future?
Minister, perhaps you can respond briefly. We are at the end of the time, but I'll give you a chance to respond to that.
I'll add an equivalent amount of time to each of the other parties' allotment in this round.
We have been working with the Germans in particular in looking at the opportunity to find something that fits within their window. They want to see product in Europe within three years or they're really not interested, in part because they are aggressively moving towards hydrogen, which is something that Canada is very interested in supplying to Germany. We are working with project proponents. I can tell you that the biggest barrier has nothing to do with Canada. It is actually regulatory uncertainty in the United States.
Those conversations continue.
Thank you. That's the end of that round.
We'll go now to Ms. Lapointe.
Ms. Lapointe, to keep it fair here, we'll give you seven and a half minutes.
Thank you, Chair.
Minister, we're very pleased to see you here today.
Critical minerals and mining are not only major contributors to Canada's economy. They are also vitally important to the people of Sudbury. I'm sure it won't come as any surprise to you that I will focus my questions today on the development of critical minerals.
Minister, in this year's supplementary estimates, we can see that funding for the development of Canada's critical minerals value chain is supporting the critical minerals centre of excellence. Can you please explain how this centre will support the Canadian mining sector?
Sure. Thank you for the question.
Let me begin by thanking you for all the work you do on this file and your continued advocacy for your constituents. I know that it's very important in your riding.
The critical minerals centre of excellence at Natural Resources Canada leads the development and coordination of Canada's policies and programs on critical minerals, in collaboration with industry, provinces, territories, indigenous and non-governmental organizations, and international partners. The centre aims to advance critical mineral resources and value chains that are essential to the energy transition. This organization plays an important role in supporting the development of our strategy, which, as some of you will recall, we've been working on for a period of time and will be announcing very shortly.
One recommendation to establish this centre came out of this committee's report on critical minerals in June 2021. The centre will help prospective investors, mining operations and others who are part of the critical minerals value chain, such as clean tech, zero-emission vehicle facilities and electric battery manufacturers. Similar to the regional energy and resource tables that I noted earlier, the centre aims to navigate various regulatory environments to advance the use of Canada's critical minerals and to create a greener future for future generations.
[Translation]
[English]
Please slow down, Minister. I was listening in on the French interpretation. Slow it down or take a pause between sentences.
I've stopped the clock, Ms. Lapointe. When we get going, you'll have four minutes.
Minister, if you are ready to continue, just go slowly, and we'll get through this.
[Translation]
Minister, in your 2021 mandate letter, you were asked to work on a Canadian critical minerals strategy.
Can you please give the committee an update on where you are with the strategy?
You will no doubt remember that the 2022 budget provided up to $3.8 billion for the development of our strategy. Over the past year, I have been working with the Minister of Innovation, Science and Economic Development in order to develop the first Canadian critical minerals strategy. I'm happy to state that Canada's critical minerals strategy will be officially announced in a few days.
The world is moving towards a cleaner future, and Canada needs to be able to meet the needs of a green and digital economy. Our strategy will improve the resilience of the critical minerals supply chain and position Canada as a world leader in sustainable production of these minerals and innovative technologies which are required for the energy transition.
This strategy is also the result of widespread consultation with industry and stakeholders, and it will create thousands of good jobs, help our economy grow and make Canada a key player in the global industry of critical minerals, which is booming right now. Canada is and will always be a dependable, safe and sustainable supplier of critical minerals which are increasingly in demand in the world.
[English]
Thank you, Minister.
We know that the world wants Canada's critical minerals, but we also know that those alone are not going to secure our success and that we must have some investment in value chains as well.
Minister, does the critical minerals strategy work apply to local value chains as well as global value chains?
Yes, it absolutely does. I would say at the higher level in terms of global value chains and national value chains, this represents a generational economic opportunity for Canada all the way from extractions and mineral processing to battery manufacturing and electrical vehicle manufacturing. Certainly, this activity will support local economies and value chains very much, including in Sudbury. They will essentially be an important piece for local processing, product manufacturers and suppliers in the industry.
We see this as an enormous opportunity for rural communities and smaller communities that are located in resource-producing areas, and see significant opportunities for areas like Windsor and Oakville that build cars.
[Translation]
Minister, critical minerals are essential to the development of clean technology, such as electronic vehicles and their batteries.
What role do critical minerals play in order to enable us to seize the opportunities created by the energy transition in the global fight against climate change?
Thank you for your question.
A good chunk of our work at the Department of Natural Resources is aimed at ensuring that our resources are mined in a sustainable fashion and that we have a sustainable and solid value chain [Technical difficulty—Editor] our strategy will guarantee this.
Developing our mining sector is a generational economic opportunity for Canada, from mining...
[English]
Minister, could you wait a second? The Internet was breaking up, so we're going to give it a second.
Okay, we'll get you to continue now.
[Translation]
Developing our mining sector is a generational economic opportunity for Canada, from mining right through to processing. Critical minerals are a crucial part of our economic development.
We are lucky to find most of the minerals that are used to produce batteries in our country. We are pledging to continue to work with industry, the provinces and territories as well as indigenous communities to support the development of the battery sector in Canada. My colleague, Minister Champagne, has made a series of announcements over the past few months about the battery sector, in order to show the world that Canada not only has the capacity to mine critical minerals, but also to process them into final products.
[English]
Thank you, Ms. Lapointe and Mr. Chair.
I have one question, Minister, to clarify something Mrs. Stubbs said.
On the issue of TMX, we had a witness here on Tuesday of this week whose evidence was quite clear that without the government purchasing TMX, the project would not have gone ahead. It is a project of significant national importance.
Mrs. Stubbs asked whether the conditions were right to make it an asset available for purchase. The question should properly be framed like this: TMX would not have been available at all for purchase if it weren't for the government getting involved in buying it and making sure the project went ahead. Would you agree with that?
I would entirely agree with that. This project would not have existed had the government not made the decision—which was not one we took lightly—to purchase the asset to ensure that Canada would be getting full value for its resources going forward.
Thank you.
We'll now move to Mr. Simard, who will have seven and a half minutes. We will try to keep it at that.
[Translation]
Thank you, Mr. Chair.
Minister, I would like to go back to the question that my colleague, Ms. Stubbs, asked about Trans Mountain.
When I read the May 2022 statement made by the Minister of Finance, I understood that there would be no more government funding for Trans Mountain.
Earlier, you told my colleague that the $6 million will be redirected towards indigenous communities. To my mind, social acceptability and mitigation measures in response to legitimate complaints from indigenous communities are part of the risk.
If the department indicates in a statement that associated risks are mitigated and that no more government funding will be offered, then I don't understand what is going on with the $6 million. Can you please explain this?
Yes. As I said, the funds provided in the supplementary estimates (B), 2022‑2023 are there to honour the government's commitment towards reconciliation with indigenous groups following Crown consultations on the project.
The government must undertake Crown consultations for all projects, not only those in which it invests. This is something that is perfectly normal.
When we launch a project as huge as Trans Mountain, it goes without saying that we have to come to an understanding with the communities that are impacted. You could say that this is part of the risk involved.
GNL Québec comes to mind. If that company had gone through with its project, it would have been the one to compensate people impacted by its project, not the government. I don't understand why, in the case of Trans Mountain, the government is the one that has to compensate indigenous communities. It doesn't make any sense to me.
Do you at least agree with me in saying that this is once again a case of using government funds to bring the Trans Mountain project to fruition?
As I said, it is perfectly normal for the government to undertake initiatives with indigenous groups to further reconciliation. That is not the same things as paying out compensation.
Minister, I'm not against that. I am not saying that we shouldn't pursue reconciliation with indigenous peoples. I am saying that I believe that $6 million in government funds are being used to shore up the Trans Mountain project.
I believe that the Minister of Finance's statement did not take into account all of the factors surrounding the government funds that were invested in the project. That is what I'm saying. I'm not talking about reconciliation. I'm simply saying that once again taxpayer dollars are being used for Trans Mountain.
Mr. Simard, as I said previously, this is perfectly normal, just like when we had conversations and made investments to protect the caribou impacted by your region's forestry sectors. It is exactly the same thing.
I don't quite agree with you, but let's move on to something else.
Do you agree with Mr. Guilbeault, who said that there will be no more government money for the oil and gas sector as of 2023?
As stated in my mandate letter, we are committed to eliminating inefficient subsidies for fossil fuels by 2023.
The government is saying that it will eliminate inefficient subsidies for fossil fuels but neglects to define “inefficient”. How interesting.
We heard Mr. Winterhalt from Export Development Canada at a previous meeting. I asked him a question about a very interesting statement made by Mr. Guilbeault during the last election campaign. He said that there would be no more direct or indirect subsidies and no more tax breaks for the oil and gas sector as of 2023.
Mr. Winterhalt's answer surprised me. He said that in 2023, there would still be some indirect subsidies as well as tax breaks for the oil and gas sector. Is Mr. Winterhalt's answer in line with your promise? Is it in line with the government's commitment?
As I said, we are committed to eliminating inefficient subsidies for fossil fuels in 2022 and setting up a plan to progressively eliminate subsidies for the fossil fuels sector, as well as any support given by federal Crown corporations.
However, any investments made to reduce greenhouse gas emissions in the oil, steel and forestry sectors are not inefficient subsidies. We have promised to eliminate subsidies that increase oil and gas production or exploration.
Was Mr. Guilbeault being a bit too ambitious or was he mistaken when he stated that in 2023, there would be no more subsidies? From what I understand, it's obvious that there will still be fossil fuel subsidies in 2023. We can quibble about what constitutes an inefficient subsidy, but in the meantime, the government continues to provide financial support to the fossil fuel sector.
A week ago, a stakeholder told us that the government has provided direct support to the oil and gas sector in 2020, 2021 and 2022 to the tune of $18 billion per year. That's not inconsequential. I can't believe that's $18 billion worth of inefficient subsidies. I get the impression that the concept of inefficient subsidies is a tool that allows the government to continue to provide financial support to the oil and gas sector.
I don't know how your work is coming along, but when will you be able to give us a definition of an inefficient subsidy?
We have a clear definition. Almost all the inefficient subsidies that exist in Canada come from the provinces and territories. That said, and as Mr. Guilbeault stated, we have promised to eliminate inefficient subsidies. We completely agree on this.
[English]
I'm sorry, but we're out of time.
Just so you know, Minister, we are having a slight issue. Apparently we're going see if we can swap out your headset. We'll turn it over to the technical team for a minute to to try to sort out the connectivity and quality issues.
We're suspended now and we'll be back in a minute.
We'll resume. We're back in session now.
We'll go to Mr. Angus, who will have seven and a half minutes.
Thank you, Mr. Chair.
It's always a pleasure, Minister Wilkinson, to have you come back to our committee.
There was a lot of disappointment coming out of COP27. Many of the environmental representatives who were there came out saying that they believe the 1.5°C threshold is now on life support.
Would that be the position of your government?
No, it would not be the position of our government. I think there has been enormous progress made over the course of the past few years.
This COP was largely an implementation COP, so I don't think there was huge expectation of ratcheting up a lot of the targets, but I think there was a huge move in Glasgow, and we expect that to continue going forward.
On November 11, your colleague Minister Guilbeault stated that if every country did its part, heating would be limited to between 1.7°C and 2.4°C.
Was Mr. Guilbeault talking off on his own? The 1.7°C or 1.8°C represents an irreversible impact to the planet. Why did he make that statement?
Well, I think he's speaking to the state of play.
At Glasgow, you saw the number come down, from between 2.8°C and 3°C to somewhere around 2.5°C or a bit below. At this COP, you saw a movement from 2.1°C to 2°C. That's not 1.5°C, but it's still some modest progress. Of course, we all have to be looking to raise our level of ambition as we move forward.
The concern for people is that modest progress isn't good enough right now given the fact that if we go past 1.5°C, we are seeing potentially.... Well, we're already starting to see catastrophic impacts on communities and the planet.
I want to switch to a report produced by the Global Carbon Project. It found that Canada was the only country in the G7 where methane and nitrous oxide emissions have risen.
Have you compared what your department has done with what the Europeans are saying, which is that our methane emissions have gone up rather than down?
Well, I would say a couple of things.
There are various sources of methane emissions in the economy. We've signed on to the global methane pledge alongside a range of different countries that have a target for reducing methane across the economy.
The primary focus for Canada has been on reducing methane from the oil and gas sector as the first step. Obviously agriculture is more difficult, but we have made enormous progress. Basically, both Alberta and Saskatchewan have achieved their 2025 targets already, but we need to continue to do more. Municipalities have to cap their landfills. We need to find different solutions for agriculture, and we need to continue to push them because methane is critically important.
Methane is a planet killer. We've put out $675 million, yet we're the only country in the G7 where methane continues to rise. I would say that's a serious failure on the part of the government.
I would also—
Actually, it's not in the oil and gas sector, because we have seen significant reductions there. Of course, methane monitoring is getting better, and we are finding that methane across the world is actually a bigger challenge than many people thought, because—
We're not getting better at reducing it, because it keeps going up.
I'd like to switch tack.
The European Commission's emissions database for global atmospheric research said that the one hope for keeping to 1.5°C is the fact that 24 countries saw significant economic growth between 2012 and 2021 and still cut their emissions. However, Canada was not among them. This past year, emissions went up again after the dip during the pandemic.
How are we going to drop emissions 40% to 45% by 2030 if they are going back up again?
Well, emissions have gone down for two years in a row as the economy grew, but we need to continue to follow the plan that has been laid out.
Canada has perhaps the most detailed climate plan that exists in the world, and it shows how we hit the 2030 target and how we put ourselves on a track to net zero by 2050. We need to continue to implement it. It's not good enough to say that you have a nice target. You have to actually implement it and have a strategy as to how you're going to do it.
I absolutely agree with you. Our problem is that we've missed every single target we've promised.
We are the only country in the G7 that continues to miss. Emissions grew 3% last year after the COVID drop. That is very concerning. Our environment commissioner, Jerry DeMarco, says that we are now the outlier in the G7, so it's not enough—I agree with you—to have nice targets. We have to meet them.
I want to switch tack in my final two minutes.
I was in Germany recently meeting with various officials about their energy crisis. They sent a very clear message to us. They said that if Canada can't supply LNG within two years, they're not interested in signing long-term contracts. They are interested in whether or not Canada has the potential to supply Germany's manufacturing sector with hydrogen.
Has your department looked into Canada's ability to supply hydrogen to Germany in the next two to three years?
The answer is yes.
On the east coast, there is enormous work going on associated with building out wind, both onshore and offshore, for the purpose of producing hydrogen and shipping it to Germany. There's also significant work going on in western Canada with respect to the production of hydrogen from natural gas. There was a big investment in their products just a couple of weeks ago in one of the largest hydrogen facilities that has been built.
We have an agreement with Germany through which we're looking to start shipping hydrogen from the east coast by 2025. I totally agree with you. Germany is looking to accelerate the transition, and Canada wants to be part of that.
That's interesting, because they say the push in Europe is so strong now, according to the International Energy Agency, that we're going to hit peak oil in 2025, not 2030. The push to switch to hydrogen, largely through the German economy, changes everything.
Would you think it reasonable for Canada to reassess its modelling? The Canada Energy Regulator has said that we're going to continue to increase massive exports of oil over the next 10 to 15 years, but the International Energy Agency says we'll hit peak oil quicker and there will start to be a major switchover to other energy sources, particularly hydrogen.
I certainly agree they are looking to accelerate the shift towards hydrogen, although as someone who used to be in the hydrogen business, I don't think it's as simple as flipping a switch. It will be a transition that happens over time.
The Canada Energy Regulator was asked by me to do a scenario for 1.5°C. I asked them to work closely with the International Energy Agency, because that is the international body with the expertise in energy issues. You will see that coming forward over the course of the coming year.
Thank you.
In my final seconds, I'll note the issue of the round tables. We're hearing from labour that in a just transition, they want to be at the tables. They don't want to be at a separate table.
Is the government committed to a tripartite approach to make sure labour is sitting at each of the regional round tables and is in a position to make decisions, not just be consulted?
These tables are not federal. They are federal-provincial mechanisms to engage conversations about economic opportunity going forward and about the electricity grid and how to ensure we have a grid that can support the electrification of many things.
There will be differences among provinces and territories reflecting different provincial perspectives. One thing the federal government is insisting on is appropriate engagement with indigenous peoples and with labour and industry.
We need to stop there.
We'll now go into the second round. It will be two five-minute slots, two 2.5-minute slots and two five-minute slots. We'll finish at that point.
I'll ask people to stay within the allotted times for this round.
First up, for five minutes, we have Mr. Patzer.
Thank you very much, Mr. Chair.
Thank you for coming, Minister.
I'm going to start with a quick question. Can you let me know what definition of “rural” you use?
I think Statistics Canada is probably in a better position than me to answer, but there are obviously large urban centres and smaller cities, including many in your province, such as Yorkton and Melville. Then there are rural areas that are primarily agriculture-based.
If you want a specific definition, I think it's probably better to go to Statistics Canada.
I'm just trying to gauge whether you understand the impact of rural communities and what they mean to the national economy.
I'm looking at this through the lens of a just transition, Minister. I think there's about $4.8 million in the supplementaries towards a just transition. It goes through the development agencies. I'm wondering what your department's plan is to administer the just transition.
Let me start by saying that I have some appreciation for the rural economy. I grew up in the same province you did and worked for the Premier of Saskatchewan, so I spent a lot of time in rural Saskatchewan and rural western Canada.
The just transition is an important piece. I met with the mayor and a number of folks from Coronach just a couple of weeks ago to talk about the issue around coal-fired power plants. It is extremely important that we not leave communities behind as we move through this energy transition, but the opportunities for all of us, whether urban or rural, will be enormous if we're smart and thoughtful and if we seize them.
Did you read the environment commissioner's report on the just transition and how it's going so far?
One thing that stood out to me was the portion that alluded to two years of nothing being done on the file because of COVID. I like to think the department can walk and chew gum at the same time, so I'm wondering about that.
These communities are not getting those two years added on the back end of the timeline. What's going to be done to make up for the two years that were lost?
I think you're talking primarily at this stage about coal-dependent communities. I actually did a round table with labour folks when I was in Regina just a few weeks ago. Certainly I agree with you. There's a lot of concern there.
Monies were set aside for a whole range of issues, including economic development. Those will continue through the next year or so.
I think a conversation needs to be had about how we're going to address this, because many of those coal-fired facilities and the coal mines don't shut down until 2030. I'm not in disagreement with you that a conversation needs to be had.
As an aside, the carbon tax might force some of these places to shut down a lot more quickly because the costs of running them are going rampant.
The commissioner also concluded that “in the absence of a federal approach for a just transition”, the agencies did not adequately design programs or benefits to support the transition.
Just quickly, what's the new plan? Is there a concrete plan now or are you working on one? I'm kind of wondering where that's at.
We are working on one very actively right now. We hope to bring forward what we call the sustainable jobs action plan or the just transition action plan sometime early in the new year.
Okay. I look forward to seeing that.
Your mandate letter says you're going to create economic opportunities for all of these communities. You alluded to Coronach. There's also Rockglen and Willow Bunch. They have economic modelling for what they want to do for their communities. There's been a lot of stonewalling in trying to get the funding out so they can get their new modelling physically going. There have been a lot of studies and consultations, but not a lot of actual work to give them the opportunity to start building this model.
Is this legislation going to allow these communities to get certainty so they can start as soon as possible?
We're going to bring forward an updated plan early next year. Funding has flowed to many of those communities through PrairiesCan, which is the regional agency.
Some of them—like Coronach, which is very interested in coal gasification technology—are looking for engagement with the federal government, and my department is talking with them. However, the last time I was in Regina, I was told that they believe they've now found private sector sources of capital to move that forward.
We are engaged in that conversation. We're open to and interested in all economic opportunities that will—
Thank you, Mr. Chair.
Thank you, Minister, for joining us today.
Minister, to ensure that we achieve our goal of net zero, we must invest in and accelerate the decarbonization of major industries while investing in clean technologies.
[Translation]
[English]
Mr. Chahal, can you slow down the pace of your questions so that our staff can keep up?
We'll go back to you.
Alberta, my home province, is leading in both clean tech and renewable energy investments. I was happy to hear about your $800-million announcement last month for 60 projects under the clean fuels fund.
That being said, I would like to talk about the net-zero accelerator program. In this year's supplementary estimates, we see a transfer from NRCan to ISED for this program. Can you speak to the importance of this program in our fight against climate change?
Thank you very much for the question and thank you for the work you do each and every day in the beautiful province of Alberta.
Through the net-zero accelerator initiative and with the additional funding announced in budget 2021, we're investing $8 billion to accelerate the decarbonization of large emitting sectors. We're focusing on the transition to cleaner technologies across the piece. People often think this is primarily focused on the oil and gas sector. It is one area, but another area is steel manufacturing, where we have been working to implement electric arc furnaces.
We know this program is crucial to Canada's efforts to get to net zero and, through our global leadership, meet our ambitious GHG reduction targets. We announced $300 million just recently for the Air Products hydrogen facility in Edmonton. We also recently announced $27 million for E3 Lithium, which is a really interesting company extracting lithium from brines.
NRCan is the lead federal department on energy and natural resources. We play an essential role in the implementation of the net-zero accelerator.
The fight against climate change requires an all-hands-on-deck approach. The net-zero accelerator is a really clear example of how different departments can work together to help us achieve our goals.
Thank you for that.
The development of hydrogen, especially green hydrogen, will be crucial, not only to reduce our emissions at home but also to position Canada as a world leader in clean energy production.
Minister, how are you ensuring the development of the sector and how can Alberta be a leader in the hydrogen sector?
I noticed that you said the word “green”. I really don't like the colours green, blue, purple or turquoise. I think we should be talking about carbon intensity, because carbon emissions are driving climate change.
In that context, I think Alberta has enormous opportunities with respect to hydrogen. It is the centre of renewable energy development in this country and has by far the fastest growth in renewable energy. That can be used to produce electricity, which can be used to produce hydrogen.
There are also pathways through which you can use natural gas resources. Alberta has an abundance to produce ultra-low-carbon hydrogen, assuming that you address upstream methane emissions and that you capture carbon through the production process.
We have developed a hydrogen strategy. We are focused very much on driving forward with hydrogen as a major opportunity for many parts of this country. We have MOUs with Germany, the European Union and the Netherlands. It certainly is an area of critical focus, and I would say it's an enormous area of opportunity for Alberta.
Minister, as an Alberta MP, my job is to ensure that workers from Alberta can thrive in the economy of tomorrow. In a recent poll by CBC News on The Road Ahead, it was revealed that 59% of respondents said they thought transitioning away from oil and gas would benefit Alberta's economy in the long run.
How are we ensuring that today's energy workers have the tools they need for the economy of tomorrow?
First and foremost, we have to start by understanding the huge opportunities that exist, whether they are in hydrogen, biofuels, carbon capture and sequestration, the development of small modular reactors or the development of critical minerals and associated processing. They will often use the very same skills that people in the energy sector have today. A biofuels refinery or a hydrogen production plant doesn't look a lot different from a typical refinery. We also have to ensure that we are providing the appropriate supports on a go-forward basis to ensure that if people need to make a transition with respect to skills, we are there to support and help them do that.
There are two pieces to this. There are the regional economic tables, where we're working with the provinces and territories to really seize those opportunities. We're also developing the just transition or sustainable jobs approach so that we are absolutely committed to ensuring that communities and workers are part of the success of driving towards a low-carbon future.
[Translation]
Thank you, Mr. Chair.
Forgive me for dwelling on this, Minister, but just a little while ago when you answered one of my questions, you made it sound as if a definition of what constitutes an inefficient subsidy exists. And yet on November 16, the deputy minister testified before our committee and repeated what she said to the Standing Committee on Environment and Sustainable Development in May, i.e., that no definition would be forthcoming until 2023.
Do you indeed have a definition of what constitutes an inefficient subsidy, or did the deputy minister get it wrong?
I said that certain things were clear. Incentives that increase fossil fuel production and export are fossil fuel subsidies, but...
That's fine, I get it.
In a report tabled by the Standing Committee on Environment and Sustainable Development, there is a table that says that the usual way of treating the industry is not a subsidy.
I wonder what the usual way of treating the gas and oil industry is. Do you know?
I wasn't a member of that committee, but I can tell you that we have already eliminated nine tax incentives for the sector. We have promised to eliminate inefficient subsidies by 2023.
I understand.
You talked about small reactors. According to an article I read recently, the oil and gas sector is calling for small reactors to replace the use of gas in their processes.
About $1.6 million from the Natural Sciences and Engineering Research Council of Canada is for small reactors. Do you see this as a form of subsidy to the oil and gas sector, given that this is one of the sector's demands?
[English]
Mario, we're out of time.
Answer briefly, please, Minister, and then we'll move to our next questions.
[Translation]
Some companies are working on the technological development of small modular reactors. This technology has a lot of applications, and not just for the oil sector. It's an interesting source of electricity for provinces and territories that don't have hydroelectricity.
[English]
Joe Biden's Inflation Reduction Act—the American IRA, not the Irish IRA—has been called a game-changer, and we've heard that it has really shaken up forestry, indigenous development, mining and energy in Canada.
One of the key elements that Biden stated after he first went to COP was that he was going to build a new economy based on “good-paying union jobs”. We've never heard that language from the Prime Minister in his commitments.
In the fall economic statement, we heard there will be labour standards that the government is tying to tax credits. How important is it, do you think, that Canada makes sure we match what's in the IRA and makes sure that we have a commitment to good-paying union jobs as a way of building a new clean energy economy?
I think it's very important that we move forward in the direction you're talking about, Mr. Angus.
You saw certainly more than a nod in that direction in the fall economic statement. We've said that more will need to be done to respond to the Inflation Reduction Act, which I think everybody should welcome. It took six years for the Americans to get to the point where they were making moves with respect to addressing the climate issue. We're very happy they've done it, but we do need to respond in some areas where they have gone beyond, from a tax perspective, what we have done.
I think as we bring forward the sustainable jobs action plan, the kind of language you're talking about will be very important.
I certainly think it is extraordinary. This is the first time in well over a generation that we've seen a government in the United States lead with a clear vision.
What we heard in our meetings with Alberta Federation of Labour, the IBEW, the operating engineers, UNIFOR in western Canada, the steelworkers, the boilermakers and certainly UNIFOR in the auto plants is that we need an industrial jobs strategy that is going to drive the clean energy economy. Would you agree that this is where we need to go at the federal level in Canada?
Not only do I agree with you, Mr. Angus, but we're actually endeavouring to put that into place.
At the end of the day, any strategy relies on comparative advantages, and Canada has a number of those. That means you need a critical minerals strategy, you need a hydrogen strategy, you need a biofuel strategy and you need a strategy with respect to things like small modular reactors. Collectively, those are the key underpinnings of a broader industrial strategy.
Part of that is national and part of that is regional. The regional tables are essentially about developing place-based economic strategies to ensure that Alberta succeeds and Nova Scotia succeeds, almost certainly in different areas.
Thank you very much.
Mr. Chair, you and I attended OSCE meetings in the U.K. this summer, where food security, energy security and Russia's invasion of Ukraine were uppermost in the minds of the parliamentarians who were there.
Mr. Minister, although European politicians might have disagreed on the solutions, certainly the urgency was never questioned. To that end, my question relates to Canada's ability to engage globally in the quest to get ethically produced hydrocarbons to countries that are desperately seeking our natural resources.
It does seem as though we have more or less said that we won't worry about oil and gas, but we will take a push on some of the new technologies. Of course, since we've handcuffed ourselves, I don't think we have much of a choice.
There's also that nagging question of whether the Prime Minister and your ministry now recognize the business case for LNG to Europe and Asia. I know that was one thing that had been stated. There was no push-back from your government when the Biden administration arbitrarily cancelled Keystone XL, but now, of course, U.S. refineries are being filled with Venezuelan crude.
I'm trying to find out where you think Canada fits into this. I've read your mandate letter. I was on the environment committee before this, and I don't really see much difference between the mandate letter for environment and the mandate letter for natural resources. Perhaps I'll have to go to the industry mandate letter to see whether or not there's something that speaks to the actual strengths we have in the country.
Could you comment on where you feel we are at this point in time and how we're going to become the global player that we so proudly have been for decades?
I have spent an enormous amount of time with our European colleagues and in Europe. We have endeavoured to do everything we can to support them, including expanding oil and gas production this year by 300,000 barrels a day alongside our American friends doing likewise. We are on track to achieving that.
We certainly continue to look at the issue of exporting liquid natural gas to Germany from the east coast, but the economics are more challenging because of the distance. There are potentially ways to get around that, but the biggest barrier, as I said before, is the American regulatory system and the challenges there.
Canada has enormous opportunities to be a clean energy supplier to the world. That includes going through this transition of oil and gas and eventually hydrogen derived from oil and gas. We are very focused on that, but there is a fundamental underpinning there: To be relevant in the context of the transition that is going on, we need to be driving down emissions from the oil and gas sector. Just as with every other sector, this is in the economic interest of that sector, and if you talk to the Pathways Alliance folks, they would agree with that.
Of course, we have been. That's my point. We have been leading the globe for decades as far as environmental impact is concerned and have been making sure that we are the least impactful in the world.
You mentioned concerns about U.S. policy, but we just heard earlier—I think it was you who said this—about the dozens of LNG projects we see in the U.S. We have cancelled so many and they are able to get them going, so I don't quite see how this U.S. regulatory regime has been causing us these major issues.
The other thing is the United States Department of Defense's initiative to invest in Canada's critical minerals seems to be a bit of a head-scratcher on the sovereignty front. If this suggestion had materialized during the previous administration, perhaps it wouldn't have been quite as well received.
Do you really believe that is positive for us, or are they the only game in town after we scare away other investors?
Mr. Dreeshen, with due respect, just because you say something doesn't make it true. With respect to heavy oil, Canada is in about the middle of the pack in terms of carbon emissions. It has the opportunity to be the best in the world, but we need to actually work together to drive down carbon emissions, not just say that we're the best.
That's exactly what we're doing with the Pathways Alliance folks.
The critical minerals piece is an enormous economic opportunity. It is a generational economic opportunity for Canada. We need to ensure that we develop them. We are working with our trusted partners very much, including the United States. We welcome U.S. investment in Canada just as we welcome Australian and British investment, but at the end of the day, Canada needs to ensure that it is benefiting in a significant way. We are going to ensure that is the case.
Mr. Dreeshen, we're out of time. That's the five minutes. It goes fast.
We'll now go to Mr. Sorbara for the final five minutes in this round.
Thank you, Chair.
Welcome, Minister. If you are in beautiful North Vancouver, I'm not too sure if it's still snowing there, but I hope traffic has come back to normal.
Your testimony so far today has dealt with how Canada is uniquely positioned in the transition under way around the world in the global energy supply. In the last couple of days, we've seen the announcement that Qatar will be playing a strategic role in supplying LNG not only to Germany but to other countries. The German announcement is coming.
On that front, our relationship with Germany has been about hydrogen. I know you have spent a lot of time and a lot of resources on intellectually understanding hydrogen and how much of an opportunity it is for the Canadian economy.
I want to ask about the clean growth fund and other measures we have put in place. How can we as a country and as an economy benefit from our position in the production of hydrogen?
I think hydrogen is one of our opportunities. Many parts of this country have an opportunity to benefit not only from hydrogen derived from renewables through electrolysis, but also from hydrogen derived from natural gas in an ultra-low-carbon way.
There are many applications right now whereby people are using gas effectively to produce hydrogen in industrial processes. As for going straight to hydrogen, a massive market exists today, but a whole range of applications around heavy-duty trucking and home heating, and a range of other things, are going to use hydrogen as we move into the future.
We are working very actively with the Europeans, on the one hand, with respect to the east coast. We are also working very actively with the Japanese, the South Koreans and others on the west coast, because many of these economies do not have the ability to produce hydrogen themselves and are going to be looking for a stable, reliable partner like Canada.
Obviously, I want to flag the great collaboration going on between you and Minister Champagne at Innovation Canada.
My second question refers to the recent announcement that General Motors and Vale have come to an agreement whereby the mine in the province of Quebec, which is run by Vale, will supply General Motors with nickel. Within the sphere of the transition that is going on—as an economist, I love to use the term “comparative advantage”—I believe Canada has a comparative advantage in a number of resource sectors, but particularly in the mineral sectors.
That was the first announcement indicating where we'll be going with this. How can we as a government effectively support the development of a mineral strategy that utilizes our comparative advantage and, within that framework, become the key supplier for many of the minerals that will be utilized in this transition?
It's a great question, Mr. Sorbara, and given your background, it's one that you would understand very well.
In the past, people have accused Canada of being the hewers of wood and the drawers of water. We have to ensure we're a lot smarter about how we utilize these kinds of resources going forward. Critical minerals are absolutely key to the energy transition. You cannot have an energy transition without significantly more critical minerals of various types. Canada has those resources in abundance.
We need to be focused on how we extract them in an environmentally sustainable way and in partnership with indigenous communities, and on how we build the processing facilities, the battery plants and the electric vehicle plants that are so important in Ontario. That is absolutely the work that Minister Champagne and I have been focused on. As I said, within the next few days, I will be launching Canada's critical minerals strategy, which is a fundamental underpinning to this broader conversation.
In terms of the comparative advantage, you're exactly right that we can build on the existence of resources for a comparative advantage. However, this is also about the fact that Canada's grid is over 80% clean and emissions-free, so another reason for battery manufacturers and electric vehicle manufacturers to locate in Canada is to have products that produce almost zero carbon.
We've reached the end of our time, so Minister, I'd like to thank you for your time today and for sharing your thoughts on the supplementary estimates (B). We'll let you continue on with your day.
We'll now move to our panel with the officials.
We have one tech check to do briefly, so I'm going to suspend for a minute while we do that. Then we'll come back to continue with the third round of questions.
We've suspended for about six minutes so far, and we need about 10 minutes at the end of the meeting to conclude the formal part of the votes for the supplementary estimates (B). I'm going to suggest that with the officials, we go until about 12:55, and then we'll go into the concluding part of the meeting. If we need to, we can go for a couple of minutes more.
Does that work?
Go ahead, Mr. Angus.
Given that some of us have to prepare for question period and our whips are going to be calling us out at one o'clock, can we dial that back?
Let's suspend for a minute, get the last tech check done quickly and then move right back into questions with the officials.
We're suspended.
We're back in session.
First up with the officials, we have Mr. Dreeshen. You will have five minutes on the clock for your first round.
Thank you very much, Mr. Chair. To the officials, thank you for being here.
The first question I have is one that I asked the minister. It is about heavy oil and Venezuelan oil. I'm unsure whether the minister said I was inaccurate.
What are the measurements for Venezuelan heavy crude versus Canadian heavy crude? That's what I was talking about. Do you have those numbers?
Thank you. I know that I was chastised by the minister, but I wanted to make that particular point.
One of the concerns that I have is this. Of course, there's money that has been set aside for indigenous discussions and so on in the supplementaries. Sadly, one thing we see is that many of our investors, who are the indigenous people of Canada, are just hitting their stride as far as engagement in oil and gas is concerned. That's where their history is. In the last 20 or 30 years, there's been amazing work done in that area. Whether it's oil and gas or whether it's mining in the territories, there are some amazing businesspeople and they're looking at opportunities, but it seems as though it's only going to be an opportunity if they follow the path of this government. That, I think, is perhaps a bit of a concern.
My concern is about the stranded assets that we might be anticipating as billions of dollars get put into projects and then, all of a sudden, the rug gets pulled out from under them.
I'll speak to indigenous companies. What do you see as a backstop for some of these indigenous companies that find that, after all of the efforts they've put in, there is no longer a market because we have chosen to go in a different direction?
Thanks, Mr. Chair.
We certainly see huge opportunities to advance economic reconciliation through natural resources. It's already a critical aspect of the economic lives of an awful lot of indigenous peoples across the country. For that reason, our policies are often framed with a view to indigenous reconciliation.
Take the example of critical minerals, which you mentioned. We are very mindful of the fact that economic opportunity for indigenous communities is one critical aspect of the development of these resources. That's entirely consistent with seeking to address these matters as strategic assets for the country and advancing policy goals through doing so.
Last week, I believe, we had Calvin Helin here, who is certainly a great advocate for his community. Basically, what he indicated was that they're tired of the eco-colonialism that is going on and different groups saying, “We know what is best for you. We're going to be there to help you. We're going to make sure you do it the right way, which is our way.” However, their expertise is saying, “Let's move forward. We know this is a global problem. We know this is a global concern. We are there with the skills to move it forward.”
There's always this other story that comes back to say, “Maybe we'll sell TMX to some indigenous group.” Unless you're going to sell it for $21 billion or whatever it happens to be when the final sum is there, there's going to be another group that says, “You just got through subsidizing this enterprise that has now bought TMX.” There's never an end, and that's the problem any time there is a government that decides it's going to get engaged in major projects like this. I'm concerned about what the future will be.
To go back to what I mentioned earlier to the minister, we see what is happening in Europe. We can always talk about how, yes, they would like to have some hydrogen and they would like to see us progress. The fact that we've cut ourselves off at the knees and we're not there to help them now...you can't undo that.
The Europeans' industry is falling apart. There are farmers who are being told, if they have three greenhouses, to pick which one they're going to keep. That's going to encourage a lot of difficult decisions—
I apologize. I should have introduced our officials who are with us.
Briefly, before we go into the next round of questions, we have with us in person, from Natural Resources Canada, Deputy Minister John Hannaford; Mollie Johnson, associate deputy minister; and Shirley Carruthers, chief financial officer and assistant deputy minister of the corporate management and services sector. Welcome.
Online today, we have Erin O'Brien, assistant deputy minister of the fuels sector; Debbie Scharf, assistant deputy minister of the energy systems sector; Jeff Labonté, assistant deputy minister of the lands and minerals sector; Glenn Hargrove, assistant deputy minister of the Canadian forest service; Drew Leyburne, assistant deputy minister of the energy efficiency and technology sector; Frank Des Rosiers, assistant deputy minister of the strategic policy and innovation sector; and, finally, Angie Bruce, assistant deputy minister of Nòkwewashk.
That is our panel today.
We're going to go now to Mr. Maloney, who will have five minutes for his questions.
Thank you, Chair.
Thank you to all the witnesses for being here.
I'm going to focus my questions on nuclear energy for the most part, but I'm going to start with the estimates, which, of course, are the reason we're here.
There are two components to the supplementary estimates (B) dealing with that. Area one is the $450,000 to Atomic Energy of Canada Limited, and then there's a transfer of $4.9 million to the Canadian Nuclear Safety Commission.
Can you just give us a brief overview of where this money is going to go and what organizations are going to benefit from it, for starters?
Thanks, Mr. Chair.
To take a step back, nuclear is very likely to be a pretty critical aspect of our energy mix as we are looking at an increase of demands on our electrical grid, perhaps two to three times the current demands by 2050. The government has taken a series of steps to support the development of this technology.
You mentioned the support to the CNSC. That is in part to reinforce the centrality of the commission as a world-class regulatory body. One of the great assets we have right now is recognized expertise with respect to not only the technology, but also the regulatory environment, which is critical, obviously, to the safety and operation of these facilities.
The government has also, though, taken steps to announce support for, principally, small modular reactor technologies in the last period of time. The Canada Infrastructure Bank is supporting the development of the Darlington site, where some $900 million has been put toward a 300-megawatt demonstration operation of SMR technology. There's also support that's being provided more generally to CNSC. There was a $50-million announcement with respect to the support of our regulatory regime, which will go to CNSC in order to develop some of the regulatory tools that will be necessary to ensure the safe operation of the technology. In addition, we've been investing through the strategic innovation fund to support specific applications.
Thank you.
My next question was going to be on the steps taken to support the small modular reactors. I'll move on from that, then.
It is a critical part of our clean energy strategy going forward. Everybody recognizes that. As much as we disagree on this committee and elsewhere, there are areas where there isn't a lot of space among the parties. I think this is one of them.
My question is this: Given the importance of this—and it's recognized by the federal government and most, if not all, of the provinces—where does Canada stand on the small modular reactor stage compared to other countries around the world?
The investment we just made in the Darlington plant does put us in a leadership role internationally. There are a number of different international players who are focusing on this technology as one with real potential, but we have real assets strategically with respect to nuclear generally and with respect to this technology development.
I mentioned the strategic innovation fund, where we've made specific investments in some of the technologies that show real promise. There, again, those can contribute not only to the support of our electrical grids, but also to some of our remote communities, providing the possibility for them to move to cleaner, low-emitting energy.
Okay, great. Thank you.
We heard the minister say, “Canada has enormous opportunities to be the clean energy supplier to the world”, and this is obviously one of those areas.
I'm going to move on to another aspect of nuclear energy, and that's in the health field.
In my riding, I have an organization called Kinectrics, which is in partnership with Bruce Power and a French company working on medical isotopes. It's done through the CANDU nuclear process. I went down and visited Bruce Power this summer. It's a private sector initiative, but it needs a little nudge and support from the governments, and I think the federal government has stepped up on that.
Maybe you can use that as an example, but can you give us other examples where the federal government has helped the private sector push that ball down the field?
I'm sorry, but to be clear, is this specifically with respect to isotopes or with respect to nuclear technology in general?
Canada has had a significant role with respect to the provisions of isotopes internationally. Through a variety of different operations, we have provided isotopes into the global demand.
I will maybe turn to my colleague, Debbie Scharf, just on any specifics she wishes to flag with respect to isotopes.
The deputy is right. We have been a key player in this field in the past. Right now we work internationally with other partners to maintain the supply chain for the types of isotopes we need in Canada for use in cancer treatment, sterilizing medical devices, diagnostic procedures, the treatment of food and consumer products. The lead for maintaining that supply chain in Canada is the Department of Health, or Health Canada, at the federal level, making sure that the isotope supply is available to all who need it for all of those applications.
The Canadian Nuclear Safety Commission, the CNSC, does play a role in licensing, as part of their regulatory functions, for the types of reactors that could produce isotopes if it was something Canada wanted to do again.
You are absolutely right. ISED does have, through its strategic innovation fund, the ability to fund R and D and commercialization, which could include a variety of different areas, including nuclear innovations.
Those are some of the things—
I'm going to have to jump in. We're out of time on this one.
Ms. Scharf, thank you for those comments.
We're going to go now to Monsieur Simard, who will have two and a half minutes for his questions.
[Translation]
Thank you, Mr. Chair.
Mr. Hannaford, I don't know if you know this, but it's very difficult for the forestry sector to receive assistance from the federal government. The only economic arm is Canada Economic Development, and it cannot support forestry companies that are engaged in primary or secondary processing. Their requests are automatically transferred to Global Affairs Canada, which systematically refuses them because of trade disputes with the United States.
The forestry industry's only lever is the famous investments in forest industry transformation program, which is underfunded, according to all the stakeholders I consulted. Many people even tell us that they don't apply to this program because they know it will be rejected.
Do you have any data on the number of applications that are made under this program, the number that are accepted and the number that are refused?
[English]
Thank you, Mr. Chair.
I don't have the data on the number of programs here, but we are able to get back to you on that.
[Translation]
To your knowledge, is it more than three quarters of the applications that will not be completed due to lack of funding?
That's the figure I heard. I was told that more than three quarters of the applications submitted aren't funded because the program is underfunded. Are you aware of that? I'm asking you to answer as much as you know.
[English]
Certainly. Thanks, Deputy.
Mr. Chair, I don't have the exact numbers for what we might term oversubscription of the program. It certainly is a very popular and productive program. We do receive more applications than we can fund.
[Translation]
Thank you.
There is $11 million in the budget to combat the spruce budworm. I remember that in previous budgets, this money was mainly for New Brunswick.
Do you have any idea of the current breakdown of that amount? In other words, do you know how the $11 million will be allocated?
[English]
We're out of time, but if you have a brief response, we can take that before we move to our next question.
[Translation]
Do you know what the breakdown of this $11 million is?
In past years, most of the money went to New Brunswick.
[English]
It's very clear, with the United States going into high gear in terms of a clean-tech economy, that it puts a lot of pressure on Canada. We have to have, at every level, a real, coherent strategy and collaboration. At the federal level, NRCan has to deal internationally, but then you have to deal with all the different provinces and their various political focuses.
I want to focus on that, because this morning in the news, one of the top stories was about the launch of a Calgary clean-tech program, and they said that the only thing people were talking about in Calgary at this clean-tech launch was the uncertainty caused by Danielle Smith and her sovereignty act and that it was threatening to scare business out of Alberta.
Deborah Yedlin, who's president of the Calgary Chamber of Commerce, said there was no shred of evidence that this act will lead to economic growth. She said, “We see this as potentially introducing a very significant element of risk and uncertainty for businesses in Alberta.”
I certainly don't want to have you comment on the political machinations of Premier Smith, but I would ask you how important it is for the federal government working with the various provinces, if we're going to try to supply clean tech and compete with the Americans, that we do this in a framework of a shared goal, shared values and a shared vision?
I would say that that's very much the intention of the regional table approach that the minister described in his comments. It's significantly because of the scale of the challenge that we are facing. In order for us to meet the challenges of the climate crisis, the challenges that are posed by some of our geopolitical realities, concerted effort between the federal government and the provinces is very important, and we have a real opportunity right now.
Okay. I want to stay on that, then. I guess my concern about the regional tables is that I heard from the minister that these are provincial set-ups. In Calgary, when labour was at the table, they were only talking to labour. They were not talking to everyone else. We need to make sure that these tables include indigenous and labour in a big way, and not just have Danielle Smith decide who gets to sit at the table and who doesn't. That would not help anybody. I think we could all agree on that. It would probably be a really bad outcome.
How do we insist that there are some clear strings attached to make sure that labour, indigenous, clean tech and innovators are at the tables at the regional levels?
I think the minister said that these are federal and provincial tables. They will vary from province to province, but the intention is to draw on the breadth of the communities that are at issue and the jurisdictions that are at issue. That will absolutely include labour and absolutely include indigenous communities, the private sector and other experts.
Thank you, Mr. Chair.
Thank you to the officials.
Thank you, Mr. Hannaford, Ms. Johnson and Ms. Carruthers, for being here in person today. I think that's important. I think we need to move back to in-person meetings. I just want to get that on the record and show my appreciation for your effort.
I want to start off by asking you about a $4.5-million expense in the estimates for the reallocation of some additions to real estate. Can you explain what that would be for?
The adjustment that we made was actually to help us to prepare for the future of work. We did make some acquisitions just in terms of cleaning up—for example, some additional air conditioners and whatnot in some of our facilities where that was broken, in particular in some of our laboratories.
Very good. It's actually very exciting to hear that. I thought perhaps it was for some geothermal installations in some of our federal buildings, but not quite. Okay.
Turning to the TMX project, I have a few questions. Initially, the project was bought from Kinder Morgan for $4.5 billion, with a projected expansion cost of $3 billion. That project has increased now to $21 billion. That's a 500% increase in construction costs.
I have a very intimate knowledge of the construction industry, especially the heavy construction industry. The costs have not gone up 500%. Can you help me understand where that additional cost is coming in?
I'll turn to my colleague in a minute, but first I'll say a couple of things with respect to TMX.
The progress with respect to the construction of TMX obviously was affected by the COVID pandemic and by some of the other conditions that occurred in B.C., in particular during the last period of time. Floods and fires also had an effect on the construction pace. But the construction has continued. We're at around 70% completion right now. The projection is that this will be completed by Q3 of the next year, so this has proceeded.
I'll maybe turn to Angie Bruce to see if she wishes to add anything.
No, Deputy, I think that describes it exactly.
The only thing I might add is that it also includes the extreme weather events. The flooding and the wildfires that took place in B.C. did impact the construction as well.
I appreciate that answer, but there was a 500% increase. It's very significant to move from a $3-billion anticipated project cost to $16 billion. Yes, there was some adverse weather. I understand that. There was the carbon tax. I understand that. Fuel is expensive now. It has probably increased by 10% to 15% over the cost they had anticipated. But that's not 500%. Somewhere there's a lot of money that's gone missing.
Mr. Chair, I would just say that this has been a very significant piece of construction. This is a very large installation that's occurred. It's happened over a period of time. The work continues. It's come up against some challenges by virtue of the challenges that we have all faced in the world. But the work does continue. We're 72% complete.
I appreciate that, but could I ask you to provide the committee with a breakdown of the budget in terms of the anticipated cost initially and where that changed?
Good. I appreciate that.
I have another question. We've heard quite a bit here about missed opportunities and how the Americans have really ramped up a lot of their natural resource development and projects and have taken advantage of markets that are out there today, which may not be there in the future. We know that we've missed some critical LNG projects and we've actually been probably a little bit too late to the show to make a difference there.
My question is, what is your department doing to assist natural resource development projects in getting to market in a quick way so that they can take advantage of market opportunities?
Mr. Chair, we're very mindful of the challenges of energy security internationally. Certainly the last year has brought home how significant these challenges can be, including for some of our closest allies.
Within the next three years, it's projected that LNG Canada will be online, and that's 14 megatonnes per annum that would be available to the global market off our west coast and—
Also, though, as an immediate matter, we did work with the provinces and with industry to increase the production that would happen this year, with a view to trying to address the challenges of energy security. This is an ongoing dialogue and it is something we're very mindful of.
Thank you, Mr. Chair.
I want to follow up on some of the different questions we had about methane a bit earlier today.
I was excited that just about a month ago one of our Canadian satellite companies, which is tracking methane leaks from space using satellite technology, was able to participate through COP27 in highlighting methane leaks around the world. They found some from coal plants, for example, but they also found one from a waste treatment plant in Terrebonne, back in November. It's a company called GHGSat. They're based in Montreal. I think they show how some of the cutting-edge technologies that we're developing here in Canada are helping to track down methane, and from different sources than people might normally think of as sources of methane.
When I was looking through the supplementary estimates (B), I saw that there was funding for Canadian data-receiving infrastructure for the space-based earth observation network. I was just wondering if maybe, thinking about that piece of funding, you can highlight some of the Canadian technologies that we're helping to support and develop on methane emissions.
Earth observation is actually one area where NRCan and Canada are truly world leaders. We apply it to a range of domains, whether it's floods, forest fires, movement of icebergs or emergency responses. Methane emission is also one of those domains where we do operate.
The satellite imagery that we collect using a satellite from RADARSAT doesn't tend to specialize in methane emissions, and that's why we rely on third party providers like GHGSat, who are using their own satellite system. They have launched actually quite a few of them over the past year. We're using this data, along with other datasets from other U.S. and European providers, to track any such emissions.
Thank you. I appreciate that. It has given me a little bit of background on that piece.
I am going to shift to someone else, so I think you're off the hot seat for the parts about satellites.
I want to talk a little bit about green construction and what we are doing to advance innovations on that. Just about a couple of meetings ago we had someone come to speak about the role of forestry in green buildings, and about tall timber construction and its role in green buildings.
I won't direct my question to anyone specifically. You will have to let me know who the right person is.
Could I get a bit more about what we're doing to build innovation in green buildings?
This is an area that NRCan has been very active on in recent years, working with partners around the federal family, the National Research Council and others.
As you know, there are a number of different materials that we consider when we talk about green buildings. One is engineered wood products, and obviously NRCan has a deep interest in that. My colleague Glenn Hargrove could probably speak to that.
We do know that the embedded carbon in the materials we build these buildings with is a crucial part of getting to net zero. It's not just the heating systems, the appliances and the other things that consume energy; it's also the carbon that's baked into the way we build and dispose of buildings over time.
We have work happening in the CanmetENERGY labs to look at building envelopes and materials and how they can be reduced. We also recently announced that we would be working on a low-carbon building materials innovation hub, working across the federal family to push this science even further.
Great.
I don't know whether Mr. Hargrove has anything to add specifically about the tall timber and forestry piece.
Thank you. I'd be happy to.
You'll also notice that there's the green construction through wood program, which was originally announced in budget 2017 under the pan-Canadian framework on climate change. This program aims at reducing the carbon footprint of construction in Canada and increasing the use of wood in non-traditional construction applications.
To date, that program is committed to supporting 16 demonstration projects. These include things like high-rise buildings and low-rise non-residential buildings, timber bridges, and those sorts of non-traditional uses. An example would be the 10-storey Limberlost Place, a tall wood building at George Brown College. There are three mass timber buildings on the campus of the Canadian Nuclear Laboratories, which will be the first nuclear campus to use wood as a structural building material.
These sorts of initiatives really help to increase the use of wood in these non-traditional applications and thereby also reduce the embodied carbon in buildings, as Drew alluded to.
I'm going to have to jump in here. We're out of time.
I would like to thank all of the officials for joining us, both in person and online today.
Before we let you go, I do have one question for the members.
We are going to be voting momentarily on the supplementary estimates (B). Some items were asked for from officials during the course of the meeting today. Because we'll be voting, the information would be for information only. The question is, do you still want our clerk to follow up with the items that were requested to be sent back and circulated?
Okay, we'll follow up with officials for the items that were requested.
If you could get that information back to us as quickly as you can, that would be helpful. Ideally, we'd like to have it back before we break for Christmas. Getting it translated and circulated would be really helpful.
Thank you to all of you for being here and for joining us today. If you'd like to leave the in-person meeting or drop off from online, you're more than welcome to do that.
For the members, we'll now have a vote on the estimates.
ATOMIC ENERGY OF CANADA LIMITED
Vote 1b—Payments to the corporation for operating and capital expenditures..........$151,471,268
(Vote 1b agreed to on division)
CANADIAN ENERGY REGULATOR
Vote 1b—Program expenditures..........$2,924,280
(Vote 1b agreed to on division)
CANADIAN NUCLEAR SAFETY COMMISSION
Vote 1b—Program expenditures..........$5,696,447
(Vote 1b agreed to on division)
DEPARTMENT OF NATURAL RESOURCES
Vote 1b—Operating expenditures..........$45,989,393
Vote 5b—Capital expenditures..........$5,001,000
Vote 10b—Grants and contributions..........$253,402,069
(Votes 1b, 5b and 10b agreed to on division)
The Chair: Shall I report the votes on the supplementary estimates (B), 2022-23 to the House?
Some hon. members: Agreed.
The Chair: Okay, we're good.
With that, folks, we've concluded today's study of supplementary estimates (B), 2022-23.
Right now, we're scheduled to have our next meeting on December 6, to start reviewing the draft report for the study of creating a fair and equitable Canadian energy transformation, if it can be distributed with sufficient time for members to review beforehand. I'll be looking to see if we have it tomorrow or if we can get it out first thing on Monday. If it's beyond noon on Monday, then we'll likely have to cancel the Tuesday meeting. We'll see how quickly we can get it to you. Watch for the notice of meeting that we'll get out at some point on Monday and watch for the draft report.
I look forward to seeing everybody. Have a safe weekend.
With that, the meeting is adjourned.
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