:
I call this meeting to order.
Welcome to meeting number 78 of the House of Commons Standing Committee on Natural Resources. Today we meet to resume our study of Canada's clean energy plans in the context of North American energy transformation.
Since today's meeting is taking place in a hybrid format, I would like to make a few comments for the benefit of members and witnesses.
Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike. Please mute yourself when you are not speaking. For interpretation, for those on Zoom, you have the choice at the bottom of your screen of either floor, English or French. For those in the room, you can use the earpiece and select the desired channel.
Just as a reminder, all comments should be addressed through the chair. Additionally, taking screenshots or photos of your screen is not permitted.
In accordance with our routine motion, I am informing the committee that all remote participants have completed the required connection tests in advance of the meeting.
You'll notice that I am using these two cards. Yellow is a 30-second warning; red means your time is up. It's like a stop sign. Be conscious of that. However, I'll try not to interrupt you in mid-sentence so that you can finish off your last thought.
I would now like to welcome the witnesses who are with us this afternoon.
From the Canadian Chamber of Commerce, we have Mr. Matthew Holmes, senior vice-president of policy and government relations; and Bryan Detchou, senior director of natural resources, environment and sustainability.
From the Canadian Climate Institute, we have Jonathan Arnold, research director of clean growth, by video conference.
From the Canadian Labour Congress, we have Bea Bruske, the president, and Alex Callahan, national director of health, safety and environment, by video conference.
From the Macdonald-Laurier Institute, we have Dr. Heather Exner-Pirot, senior fellow and director of natural resources, energy and environment, also by video conference.
From the Net-Zero Advisory Body, we have Dan Wicklum, co-chair, by video conference.
Finally, from Unifor Québec, we have Daniel Cloutier, Quebec director, by video conference.
Welcome to the committee. Thank you for taking the time to appear today.
We will begin with the Canadian Chamber of Commerce. You have up to five minutes for an opening statement.
Mr. Holmes, you have the floor.
:
Thank you, Mr. Chair and honourable members. It's a pleasure to join you today for this discussion.
My colleague and I are here on behalf of the Canadian Chamber of Commerce to speak to the steps necessary for Canada to meet the challenges and opportunities presented by the broader North American energy transformation. Getting the clean energy transition right is important to our members. We represent not only the sectors and businesses most involved in this transformation but also the communities across this country that they support.
The Canadian Chamber of Commerce represents 200,000 Canadian businesses through more than 400 local, provincial and territorial chambers of commerce and boards of trade and over 120 trade associations. We represent members of all sizes of business, in every sector of the economy, across all regions of the country.
First, let me emphasize that the Canadian Chamber and our members recognize the paramount importance of addressing climate change and meeting our net-zero goals. Canadian businesses of all sizes, from coast to coast to coast, are committed to playing their part in the collective effort to combat climate change.
With that said, our remarks will focus on what Canadian businesses need from the federal government to help Canada achieve its economic and environmental ambitions and position our nation as a leader in the global transition economy. Candidly, what businesses need can be summarized in four words—ambition, clarity, predictability and efficacy.
I will now share the time with my colleague, Bryan Detchou.
:
Canada is not lacking in ambition. We acknowledge and appreciate the government's firm resolve to conduct global initiatives to combat climate change. However, while Canada may be exceedingly ambitious, only action moves things forward.
Unfortunately, Canada has acquired the reputation of being a country that can't carry through with major undertakings. We have to acknowledge that the only way to achieve our common carbon neutrality objectives is in partnership with the private sector. The global transition to carbon neutral energy consumption is well under way. Canada's capacity to be competitive and to succeed requires adaptability, speed and efficient coordination by governments and industry. Canadian companies will have trouble effecting this transition unless they acquire the necessary infrastructures, regulatory frameworks and funding programs in time.
[English]
Right now, Canada's lack of clarity, predictability and efficacy in its approach to environmental policies represents the foremost challenge in achieving the nation's net-zero commitments. These issues impede the ability of businesses to make informed decisions, plan for the long term and allocate resources effectively. They also discourage the foreign direct investment and innovation that our economy needs.
The urgency of 2030 and 2050 net-zero targets requires that the federal government prioritize the following: removing barriers that compromise competitiveness, delay project approvals and place redundant and overly onerous reporting requirements on businesses; reducing permitting timelines to speed up the pace of investment and development of major projects; accelerating the implementation of incentives for clean technology deployment and adoption in Canada through investment tax credits, strategic finance and targeted programming; incentivizing partnerships with indigenous communities that advance decarbonization projects and support economic reconciliation; establishing a modernized, efficient regulatory framework that responds to the needs of industry and respects the jurisdictions of both the federal government and the provinces; and acknowledging regional differences, as geographic, economic and demographic diversity necessitates different policies, practices and investments.
Lastly, I understand the committee continues to examine the competitive challenges the United States Inflation Reduction Act poses for Canada in attracting investment for the domestic net-zero economy. While Canada cannot directly rival the U.S. in terms of financial resources, direct financial support, investment and incentives nonetheless remain an indispensable part of the policy mix. What Canada must also strive for is to turn its regulatory framework and operational efficiency into a competitive strength that will allow us to spearhead the North American energy transformation.
[Translation]
Making these adjustments may restore the confidence Canadian businesses need to make long-term investment decisions, create innovative carbon neutrality technologies and attract the investments the country needs, thereby speeding up its path towards achieving our carbon neutrality ambitions.
Thank you for your attention.
:
Thank you for the opportunity to meet with this committee today.
My remarks focus on four policy insights from the Canadian Climate Institute's research. They focus on policy solutions that can keep Canada's economy competitive and resilient as the world shifts to a net-zero future.
The first insight is that the global shift to a low-carbon economy is accelerating and will fundamentally reshape Canada's competitiveness. Over 70 countries have now committed to net zero by mid-century. That covers over 90% of global GDP, 80% of global oil demand and 75% of global natural gas demand.
In financial markets, international investors, managing over $61 trillion in assets, have committed to net zero. At the same time, demand for keystone technologies, such as solar panels, heat pumps, wind turbines and batteries, is growing rapidly as their prices continue to fall.
These trends have flipped the script for Canada's long-term competitiveness. Moving too slowly is now a greater competitive risk than moving too quickly.
The second insight is that Canada can compete in this global low-carbon economy without replicating the U.S. Inflation Reduction Act. The IRA is perhaps the most concrete example of how the global transition is accelerating, directly affecting international investment choices and competitiveness. However, its scale and magnitude make it impractical for Canada to emulate. Canada's advantage is a portfolio of policy tools, including targeted investment tax credits as well as regulatory and pricing policies. In particular, carbon pricing improves the economics of low-carbon projects and is a powerful draw for investment. Carbon pricing is also cost-effective, with low fiscal costs.
However, businesses and investors need certainty that the carbon price will continue to rise over time and that carbon credits will continue to have market value. Carbon contracts for differences can provide this certainty, making it imperative that the federal government implement this proposed policy.
Governments can also give businesses and investors more certainty by backing the creation of a climate investment taxonomy, which provides a common language around risks that come with the global energy transition. Canada is one of the few G20 countries that do not already have a taxonomy. The framework proposed by the Sustainable Finance Action Council and the Canadian Climate Institute could make Canada a leader in this field.
The third insight is that clean electricity is a huge asset for Canada in the competition for global capital. The availability of clean, affordable electricity is now affecting company decisions about where projects get built. Canada already has a clear head start, with over 80% of its electricity produced with zero emissions today.
However, Canada's electricity systems must keep pace with demand that could double or triple by 2050. The scale of that challenge requires unprecedented policy action. Moving ahead with the federal government's clean electricity standard is critical to creating bigger, cleaner and smarter electricity systems, and the proposed $25 billion in federal investment tax credits can help accelerate private sector investment toward this goal. The federal government can also play a more active role in mobilizing provincial and territorial policy to ensure that Canadian clean electricity remains the backbone of a competitive net-zero economy.
The good news is that the total energy costs for Canadians could actually decrease by 12% in the transition, as more people use more efficient technologies like heat pumps and electric vehicles.
The fourth and final insight is that Canada's oil and gas sector faces unique challenges in the global energy transition but that public policy can play an important role in reducing these risks.
The long-term decline in global demand for fossil fuels creates a dual challenge for Canada. First, the sector must reduce its emissions to stay competitive in a market that will put a premium on low-carbon barrels. Canadian oil and gas producers are some of the most carbon-intensive in the world, and the sector has the fastest-growing emissions in the country. Addressing this challenge will require large-scale investments from oil and gas companies to meet their own climate commitments.
The second part of this challenges pulls in the opposite direction, as declining global demand will undermine this sector's long-term economic viability. These global shifts will increase risks to Canadian workers, communities and governments.
With the right policy package, however, the federal government can support both the short-term and medium-term competitiveness in the oil and gas sector.
Capping oil and gas emissions can help guarantee that sectoral emissions decrease over time. Moving ahead with stronger methane regulations can deliver an estimated one-third of the emissions under a federal cap and and can do so cost-effectively.
The proposed investment tax credits for technologies like carbon capture and storage, as well as moving ahead with things like carbon contracts for differences, can help de-risk low-carbon projects.
Finally, a government-backed climate investment taxonomy can help to scale private investments.
Thank you for the opportunity to discuss this important issue. I look forward to questions.
Good morning to committee members. It's my honour and my pleasure to be here with you this morning.
The Canadian Labour Congress advocates on behalf of workers all across Canada. We know the world is changing, and for Canada and Canadian workers to be global winners, we know that unions need to act and workers need to act.
This committee is looking explicitly at the impacts of President Biden's Inflation Reduction Act and what that means for Canada. President Biden has made no secret of the fact that his plan is pro-environment, pro-union and pro-worker. This summer, President Biden celebrated the anniversary of the IRA's passage. His statement mentioned union jobs the same number of times he mentioned the word “climate”.
If Canada is serious about responding to the IRA and studying how Canada creates good union jobs, the first thing we need to do is start speaking the language and talking about good union-specific jobs. Words matter, and we think we need to use those words. Biden is sending a very clear message to workers; Canada isn't sending that message, but we can.
Putting that message into action will mean Canada must create and protect good, safe, well-paid, unionized low-carbon and no-emission jobs in energy and beyond. That means supporting low-carbon industries like critical minerals, low-carbon manufacturing, low-carbon supply chains and so forth. It means taking steps to ensure jobs that are created are good jobs. It will also mean decarbonizing good work and protecting work that is already low-carbon work.
It's good to see that some work of this nature is starting to ensure that investments in decarbonizing are creating good jobs. The labour conditions in Canada's clean economy investment tax credit ensure that workers are paid prevailing wages when companies get government help in investing in hydrogen, clean electricity, clean manufacturing and carbon capture. This is a good start, although the amount of the credit attached to labour conditions should be higher to ensure that labour conditions are actually met.
This committee must recognize it is not a foregone conclusion that low-carbon jobs will be good jobs. For example, until recently, the province of Alberta had some of the most rapid renewable energy growth in the country. While some key jobs, such as crane operators installing wind turbines, are good, safe, unionized jobs, the Alberta government allowed non-qualified workers to work on major solar panels. Once light hits a panel, it's like a generator has been switched on, but instead of ensuring that this work is done safely by qualified, trained electrical workers, it's being done by people with a few weeks of training. This is not good for workers, nor is it good for the public.
Some basic ways to ensure that investing in a low-carbon economy creates good jobs would include ensuring that work is done by qualified workers; using community benefit agreements to set hiring, training, wage and other labour standards; and addressing long-standing labour issues like list availability and penalties for unfair labour practices.
At the same time, Canada must protect good low-carbon jobs. Canada has a strong manufacturing economy that has made important investments in decarbonizing. Those good jobs have to be supported to realize everyone's investments, so whether it's ensuring clean Canadian steel can compete around the world, investing in decarbonizing industries across Canada or ensuring industries like chemical or automotive industries are going to reduce emissions, the best way to have good union jobs is to keep workers in their jobs, within their collective agreements, in their pension plans and have the work be decarbonized around them.
Canada must also apply a regional lens to this work. A worker with a good job is a foundation for their community. The IRA's energy community bonuses attach tax credits when jobs are created in communities that are historically tied to coal. The CLC is working on recommendations for how Canada can support the diversification of the economies of communities tied to high-emissions industries so communities can continue to thrive and to grow.
Whether Canada is protecting and decarbonizing work or supporting the creation of new jobs, it is very clear to us that workers will need the skills to take advantage of these changes. They need to go from the skills they have today to the skills that are going to be needed in a net-zero economy. For some workers, that means retraining, because they're entering new fields. For others, it might mean upskilling because their industry or their jobs are changing. In either case, workers have to be able to access accredited, recognized training that prepares them for that real job. That means investing in accredited, not-for-profit institutions like our world-leading union training centres or our public college systems.
Finally, workers have to be at the table. As the economy changes, the work people do will change. Workers are the experts both in what they do, how they do it and what they need.
We are pleased to see that the sustainable jobs act is being debated. Canada's unions have been vocal in calling for strong labour representation in the sustainable jobs partnership council. We are also supportive of all measures that ensure that workers are at the table discussing and bargaining for changes with their employers, and with governments when appropriate.
:
Good morning, Mr. Chair and committee members. Thank you for the opportunity to speak to you today.
I'll focus my remarks on three areas: critical minerals, investment tax credits and nuclear energy.
There is widespread consensus in the resource sector that we are not competitive enough in attracting investment in this country and that Canada's businesses, workers and economy have suffered as a result. While we enjoy a tremendous natural resource endowment, our regulatory and policy environment is inefficient and cannot support the investment and activity required to meet our net-zero goals.
According to NRCan's major projects inventory, the value of projects planned or under construction in Canada since 2015 has fallen by 31%, from $711 billion to $520 billion. This does not account for inflation either.
Critical minerals are the foundation for a transition from an energy system based on fossil fuels to one based on renewables and electrification. The International Energy Association has suggested that we need six times more critical mineral production by 2040 to meet our net-zero goals. For some minerals, like lithium, graphite, cobalt and nickel, it's more than 20 times as much. EVs and electricity networks make up the bulk of this demand.
We are nowhere near increasing mining production enough, globally or domestically, to meet net-zero goals. In fact, in 2022, world mining production was less than it was in 2019.
Far from rapidly increasing mineral production, we have plateaued. Global mining capital expenditures are about two-thirds of their peak, which was in the last commodities boom in 2012. Global mining finance, debt and equity is about one-third of the peak, which was in 2013. The reasons for this include a decline in ore grades, high costs of capital, volatile commodity prices, growing regulatory burdens, supply chain pressures and an aging workforce.
Similarly, in Canada, despite strong rhetorical support, critical minerals production is actually declining, not growing. Natural Resources Canada released its annual mining projection results in mid-April, confirming that we produced less copper, cobalt, nickel, zinc, uranium and platinum-group metals in 2022 than we did in 2019.
Canada has tremendous geological potential, but we are not realizing it. Most of our allies are net mineral importers, not exporters. They are depending on us to be a reliable and growing source of minerals, and we are not stepping up.
Next are investment tax credits. ITCs are the most important tool of the Inflation Reduction Act for stimulating investment and growth. To compete, the Canadian federal government has committed to developing ITCs for clean technologies in its last three budgets, but as of today, none are in force. While draft legislation has been published for CCUS and clean technologies, the ITCs for hydrogen, clean manufacturing and clean electricity remain conceptual. These are of limited use to firms or investors considering projects in Canada.
Delays in finalizing the terms and conditions of each ITC through law effectively freeze capital and diminish Canada's ability to achieve its emissions reduction targets. There is also a perception in the business community that Canada's ITCs are overly complex and inconsistent with the objective of using tax policy to attract higher levels of investment. Clawback provisions, different phase-out schedules, narrow and confusing eligibility criteria, knowledge-sharing requirements and high-level auditing risk are just some of the provisions discouraging investment.
Not all is lost. The nuclear sector in Canada shows what's possible when Liberals, Conservatives, the provinces and the federal government have common goals, as well as a regulator that actually supports rather than frustrates development. Canada is emerging as a global leader in the development of advanced reactors as well as in continuing to commercially develop its iconic CANDU technology. We are leveraging our incredible uranium reserves and nuclear expertise not only to decarbonize domestically and help advance the energy security of our allies in eastern Europe and elsewhere, but also to build a globally competitive supply chain around nuclear engineering, advanced manufacturing and services.
Although the Impact Assessment Agency, the IAA, has the regeneracy and regulatory burden, the Canadian Nuclear Safety Commission itself is world class and actually provides a competitive advantage to our nuclear industry as it develops new reactor models. With that example in mind, there is much more to be done to achieve our clean energy plans. Working Canadians and industry share a goal of a strong economy and a healthy environment, but we will not have either unless our policy and regulatory environment improves.
Thank you for your time.
Thank you to the committee for the invite.
I want to acknowledge that I'm coming to you from the Treaty 7 region in southern Alberta. This has also been a gathering place for Métis and indigenous peoples other than Treaty 7 signatories.
I'm coming to you as the chair of the Net-Zero Advisory Body. We were created in 2021 under the Canadian Net-Zero Emissions Accountability Act. We provide the with independent advice on interim emission reduction targets, leading up to 2050. We give advice on the most likely pathways that will make sure Canada is a competitive net-zero emissions jurisdiction by 2050, and we also deal with any matter referred to us by the minister. We're a group of 13 members from all regions of Canada, with diverse and established expertise in a range of fields.
I have two main points.
The first one I'm not going to belabour, because everyone who has already spoken to you has made this point up front, and it is that emissions reduction and climate change are no longer just about emissions reduction and climate change: Emissions reduction is now a competitiveness issue. Every major economy on the planet is retooling itself to make sure they can reduce their emissions. They now understand that with this remarkable change in our economy, they have to position themselves to win economically in the future, and if they don't, they will lose. This is the fundamental change that has happened in the last few years. Emissions reduction is now about competitiveness.
The second major point is that there's actually more certainty than uncertainty when it comes to the technologies and approaches that we need in order to get to net zero. For 30 years we've been trying to reduce emissions, and we have many options to do that. We can keep our similar systems; we just have to make them more efficient to reduce emissions.
However, if the objective now is to get to zero emissions under a net-zero definition, rather than just reduce emissions, there are actually many fewer pathways and fewer technologies and technology configurations that can truly be a net-zero society. In some regards, although it's not easier, it is simpler, because the technologies are actually more limited in number. There's more certainty than uncertainty.
Where does this leave Canada? To be clear, the Government of Canada has done much. We've had billions deployed and still have billions in various funds. Budget 2023 introduced many investment tax credits, but we're chasing a moving target. Our major trading partners and our competitors are moving extremely quickly and extremely deliberately to make businesses in their economies able to compete and win in what is a fundamental retooling of the global economy tracking toward net zero.
What would it take for Canada to be more deliberate and to bring together all of the pieces we have into a more coherent strategy?
Number one, we think we need to do a more deliberate analysis of what Canada's unique competitive advantages are. To date, most of our programs and policies have been more of a blanket approach, but we're not going to compete economically in terms of the amount of money the investors spend with larger economies. We need to be more deliberate and targeted. We need to start with that analysis.
We need an approach that aligns the supports and policies with those inherent advantages. The Transition Accelerator and Clean Prosperity have just completed—to the extent possible—an apples-to-apples comparison of U.S. competitiveness versus the Canadian competitive environment in terms of supports, incentives, regulations and policies across a range of technologies that will absolutely be required in a net-zero world: different types of hydrogen, electric vehicle batteries and sustainable aviation fuel. In some cases, we stack up well. In other cases, we don't stack up well at all. Aligning our supports with these Canadian advantages is something that the Net-Zero Advisory Body feels very strongly about.
On aligning the demand side in a confederation that is sometimes difficult to navigate, in some cases we see municipalities taking a very strong leadership role and some provinces taking a very strong leadership role. The federal government also clearly has a foundational role in driving the economy to net zero, but doing better in aligning interests and approaches across three levels of government, along with indigenous interests, although difficult, really seems to be something that we need to put more thought into and make more progress on.
Another thing that we feel very strongly about is having plans that are implementable. For example, if we have a hydrogen strategy for Canada, we feel very strongly that we have to have competitiveness goals embedded in the strategy to understand, for example, how much hydrogen we need to use in Canada, at what price and at what carbon intensity and by when, if we're actually going to track a deliberate pathway to net zero.
It's only with this concept of quantitative competitiveness goals that we can assess whether or not we're making sufficient progress on the economy's key sectors that we need to get to net zero, or whether or not we need to retool or adjust our approach in order to make sufficient progress—
:
Good morning. Thank you for giving us the opportunity to present our point of view on the topic of this study.
Unifor members are active in every economic sector, including aerospace, education, fisheries and food, in addition to a number of industry sectors that are facing very rapid transformations in terms of decarbonization and biodiversity protection efforts. From natural resources to manufacturing, every sector is affected. Whether we are talking about vehicle and bus manufacturing, aluminum, energy, aerospace, forestry, and a host of other fields, our members are leading the way.
Major transformations are under way. While these create historic opportunities, they also raise crucial issues for the future of workers. Will the same number of workers be needed for the production of electric vehicles, which have far fewer parts than today's vehicles? With the transformation of aluminum manufacturing technology, will the same number of workers be needed when anodes need replacing only every 30 months rather than 30 days? Will the cost of decarbonization initiatives be taken into consideration for our industries when they have to compete with products from countries that are less environmentally conscious? Will some border procedures be adjusted? Will the new green low-carbon economy result in good, well-paying jobs for workers, and enable them to exercise their right of association?
Unifor firmly supports the transition to clean energy. It is nevertheless very vigilant about the risk that this transformation might become a pretext for doing away with good union jobs. We shouldn't have to choose between the creation of vulnerable new jobs in a “green” economy on the one hand, and the decent retirement provisions, health and safety benefits and years of skills we have all fought so hard to acquire.
The fact is that the transition is not being deployed everywhere in the same way or at the same speed. That's why support mechanisms have to be flexible and adapted to the circumstances.
Unifor believes in a comprehensive approach tied to compensatory and transformative measures. Although support measures may be compensatory and designed to protect things like income security or facilitating requalification, we think that in most instances, support measures will be needed to assist with the transformation of existing activities and jobs and to help workplaces make the transition to decarbonization.
This requires an enormous effort that is going to increase over the coming decades. To meet the challenge, we need a broad and coherent industrial strategy. We need intelligent investment and targeted support measures for workers in key sectors. We have seen how the U.S. Inflation Reduction Act was a game changer in that country and everywhere else. According to estimates by the Climate Power non-governmental organization and others, approximately 300 clean energy projects in more than 40 American states led to the creation of no less than 170,000 jobs. That's impressive.
Canada is not being left behind. In the most recent federal budget, nearly $80 billion has been allocated to similar incentives. From Volkswagen to Northvolt, we can see that some efforts have yielded results. Nevertheless, we believe that these substantial investments of public funds need to have conditions attached.
Last January, during the consultation on clean energy and hydrogen credits, Unifor gave some concrete illustrations of the methods we advocate. One example was the introduction of a salary floor, a requirement for a 10% to 15% percentage of apprentices to offset the labour shortage and ensure the transfer of skills, the need to provide credits for activities other than those linked to the construction of new projects, such as production, in addition to ensuring the neutrality of recipient companies during unionization activities.
To conclude, I wish to underscore just how grateful we are for the language used by the federal government in its last budget. I am speaking more specifically here about the explicit reference to the role of unions as stakeholders in sustainable job initiatives.
Unifor believes that a fair transition must be planned, fuelled by social dialogue, and in particular that it should involve unions. Through the creation of the Sustainable Jobs Partnership Council, Bill gives us an opportunity to walk the talk. To succeed, however, the current wording needs specifically to require that one-third of the seats on the council be for union organizations. It's not too late to get things right and to improve the bill.
Thank you for your attention. I'm available to answer any questions you may have.
Ms. Bruske, because I have limited time, I'm wondering if you could make sure, after the committee meeting, to table with the committee the sources and the material and all the information you were talking about in your comments around Alberta.
As Conservatives we've been clear that we want to cut red tape, cut timelines and make Canada competitive, efficient, predictable and certain, and particularly we would like the private sector to make those investments and create all those jobs. To that end, my questions will be directed to private sector proponents.
To the representatives of the Chamber of Commerce and Macdonald-Laurier Institute, you both commented in different ways about the importance of clarity, certainty and predictability.
Could you, at the outset, explain the importance of those factors when it comes to regulatory timelines and business rules in private sector proponents' consideration of what makes a business case for a long-term major multi-million- or multi-billion-dollar investment?
We'll go first to the Chamber of Commerce and then to the MLI.
:
Thank you for the question.
As I mentioned in my opening statement, we see Canada's carbon pricing system as an advantage in responding to the U.S. Inflation Reduction Act. It is one of the most—if not the most—economically efficient ways to go about regulating or pricing emissions, and it does so with a relatively low fiscal cost.
The next big step that Canada needs to take is implementing carbon contracts for differences, which can essentially give businesses and investors some assurance that the price on carbon will rise according to its existing schedule so that it becomes, essentially, bankable. That's often a term we hear with the production tax credits in the U.S.—that these are “bankable”. Well, putting a price on carbon and wrapping carbon contracts for difference around that makes that bankable, just as the investment tax credits are bankable.
In terms of affordability, obviously a revenue-neutral carbon tax is a critical plank to ensure that. Ensuring the ways in which those revenues are returned to households is especially important, in terms of making the whole system more progressive for the lowest-income Canadians.
There are multiple ways to do that. In many cases, the Canadian government is already taking that approach. I think there are a lot of opportunities to leverage instruments such as carbon contracts for difference, as well as investment tax credits. Then, on the private sector side, implementing a climate investment taxonomy can give businesses and investors more certainty to invest in a clean economy.
This is a fascinating discussion, because I see right across the political spectrum the need for certainty and the need to move beyond aspirational.
These incredible tax credits, where are they? We need to get them happening now, particularly because our biggest competitor has moved so far ahead so quickly.
Ms. Bruske, I'm going to start with you, because you represent people whose jobs are on the line.
In the very first week of his administration, Biden signed an executive order to create a committee to start looking at energy-dependent areas and how they would be part of a transition. This was the focus from the get-go. He went to COP26 and he said they were going to create good-paying union jobs. This sent a real message that this was going to be about an economic transformation.
How important is it that we move quickly, clearly, with an all-of-government approach so that workers are not left behind?
With that, Chair, I am going to move the motion that I put on notice:
That, in light of multiple news outlets reporting that Qatar is housing the leadership of Hamas; and given the fact that Qatar is now the preferred choice to supply liquefied natural gas (LNG) to our G7 allies in Germany, France, and Japan; and given the fact that Qatar and Shell plc have signed a supply deal for the Netherlands, the committee recognize that there is not only a business case for Canadian LNG but a moral case as well; and that this committee report to the House its recommendation that the Liberal Government champion the export of Canadian LNG.
This is important because there was a CBC article that came out the other day highlighting this. We raised it here in committee last week. I raised it on the floor of the House of Commons in question period, and it was dismissed as being a conspiracy theory by the . The CBC article says:
On October 7, as Hamas gunmen rampaged across southern Israel, a group of middle-aged men in a luxury suite in Doha, Qatar gathered in front of a camera.
Hamas leaders...recorded themselves showing surprise about the attacks from the news on a large-screen television, and then kneeling to give thanks...[for what had happened there.]
On the one hand, they're trying to talk out of both sides of their mouth, but it doesn't change the point that Qatar is supplying the world with LNG while also housing the leadership team of Hamas.
I think it's important to show that we take this issue very seriously because this is an energy security issue, and Canada has the opportunity to play a role here. We have heard over and over that Canada has the capacity to be the global supplier for LNG, but the government has left multiple countries in the dark on this.
In fact, we had the German Chancellor come over to Canada asking for LNG, and that's the famous quote we got when the said that there was not a business case for it, despite the fact that Germany came specifically saying that Canada would be the best and most preferred option for LNG around the world.
After that, we had Japan come, and Japan was also asking for Canadian LNG. The once again declined that as well. Now we start to see how the world market is shaping up.
There are five countries, because this morning, Italy was another one to join the mix and sign a 27-year agreement with Qatar to supply their LNG. As of this morning, you have Italy. Over the weekend I think the Netherlands also signed a big agreement as well. The three that I just listed there are Japan, France—that was the fifth one that I didn't mention—and Germany.
Multiple countries came to Canada offering the business case for it. They were told that there was, in fact, not a business case, but now we're up to five countries around the world that have signed 27-year agreements with Qatar to supply them.
When you look at the future of it here, QatarEnergy will contribute 40% of all new LNG to the market by 2029. This is the same Qatar that.... I have an executive summary from a human rights report here. I'm going to read this:
Significant human rights issues included credible reports of: serious restrictions on free expression, including the existence of criminal libel laws; substantial interference with the freedom of peaceful assembly and freedom of association, including overly restrictive laws on the organization, funding, or operation of nongovernmental organizations and civil society organizations; restrictions on migrant workers’ freedom of movement, access to justice, and vulnerability to abuses, including forced labor; inability of citizens to change their government peacefully in free and fair elections; serious and unreasonable restrictions on political participation, including a complete prohibition on political parties; lack of investigation and accountability for gender-based violence; existence of laws criminalizing consensual same-sex sexual conduct; and prohibitions on independent trade unions.
Mr. Charlie Angus: [Inaudible—Editor]
Mr. Jeremy Patzer: That's pretty damning right there, I would suggest, and I have the floor right now, Mr. Angus, so you can just wait.
There's another good report here that talks about—I hope I'll say this right—the Nepalese, people from the country of Nepal. I probably got that wrong.
It reads:
This summer Nepalese workers died at a rate of almost one a day in Qatar, many of them young men who had sudden heart attacks. The investigation found evidence to suggest that thousands of Nepalese, who make up the single largest group of labourers in Qatar, face exploitation and abuses that amount to modern-day slavery, as defined by the International Labour Organisation
That was from the buildup to the World Cup. There are multiple reports of abuses of human rights in that country in the buildup to it. There were many people who died in the buildup to that event, but as we look at who's providing energy for the world, it's going to be Qatar. Qatar is providing the LNG for the world, for Europe, for Asia. We have heard that LNG would be the preferred product to be able to get countries off coal. That would have a very substantive effect on reducing greenhouse gas emissions around the world, which I think is what the goal is overall, right?
Mrs. Shannon Stubbs: It's supposed to be.
Mr. Jeremy Patzer: It's supposed to be.
Right here we're talking about what Canada can do. Let's remember that Canada produces only 1.6% of global emissions, but Canadian LNG could help bring global emissions down. We hear so often that it's a global issue, that climate change knows no borders. We have the product and the solution that could be helping the world right here in our country, and we are told there is no business case.
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Yes, there were 18 LNG proposals—
Mrs. Shannon Stubbs: —and not a single one is built or operating.
Mr. Jeremy Patzer: Not a single one has been built or is operating. There's one that might in a few years be able to put out some LNG, but there were 18 proposed, and not one of them is operational right now—
Mrs. Shannon Stubbs: Unbelievable.
Mr. Jeremy Patzer: —after eight years.
I think it's important to note we could have been in a position to be able to do this if it would have been prioritized, but it definitely wasn't.
That's why I think this motion is important. It's a way for us to signal that the natural resources committee actually does care about resource development and that we do support what the private sector can do and should be doing in this country. I think we have a golden opportunity to send a signal here together as a committee that Canada does support LNG and that there is a case for it, and the House of Commons would recognize that. I think our committee should be taking this motion seriously and be looking to pass that along.
I touched on a few very important points, such as human rights, such as the moral case that Canadian energy can and should play around the world, but also there's the business case as well. We like to talk a lot about the social programs we have here in the country. One of the best ways to fund them is through development of our natural resource sector. We definitely know the benefits the oil and gas sector has provided to this country in terms of taxation and royalties so that people are able to have these valued social programs, both on a big scale and a small scale.
On a small scale, for example, an energy company, an oil and gas company, was sponsoring an event at one of the local curling clubs so that kids could have their curling fees paid so they could enjoy and learn a new sport. That's coming from an oil and gas company. It's just a small token item, but it's an important one. If we look at our community rinks, our community buildings, our schools, our hospitals, our long-term care centres, we see that some of the major funding partners are oil and gas companies.
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Oh no, I have lots of things here that I can keep going with. I've actually had the floor all along, in fact.
It's nice to have multiple colleagues with me around the table, though. It sure is nice. I respect all of the things my colleagues have to say and I appreciate the input that I get, but let's get back to the business case. I think that's of utmost importance. That was supposedly the biggest thing that was going to prevent Canada from being the LNG provider around the world.
As recently as May, Canada said it was in talks with two companies to possibly accelerate LNG projects there that could ship gas to Europe within a few years.
We've heard multiple people, though, talking about some of the timeline issues. We've heard that throughout this study as well. I mean, the business case is right there. There are some good numbers. I was talking about the million tonnes per annum that are going to be provided by Qatar. There's a lot going on.
I'm just trying to get the right numbers for everybody. It's right here.
...QatarEnergy's efforts to address energy security and transition towards renewables. “In Qatar, we are increasing production to 126 million tons per annum, and we have another 16–18 MPTA out of the US next year. We are doing it in the most responsible way as far as emissions are concerned with [carbon dioxide] CO₂ sequestration”.
There's a business case being made elsewhere around the world for two very important things that we have in Saskatchewan and Alberta. That would be carbon capture as well. They're talking about using that over in Qatar. They're using it in the United States. That's part of the IRA as well.
We're looking at emissions reduction, the business case and good jobs. That's what we're looking at here.
I would appreciate the committee's support for this motion. There's clearly a moral case for this around the world.
I've laid out some of the human rights issues with Qatar. I think it would resonate with my friend Mr. Angus that people in Qatar are not allowed to be part of a union. We talked about that. “Prohibitions on independent trade unions” is the exact term from the report. We're talking about good union jobs, but also human rights workers who are being forced in there from other countries as well.
Canada has a great workforce. We have the highest standards for human rights around the world. We have a fairly robust regulatory environment, but we've heard about the pancaking of regulations too. It would be nice to be able to unpack some of that.
We have a business case. Let's get the business case. Let's get the business rolling. Then we can fix some of the regulatory issues that have come up, as we've seen with Bill being ruled largely unconstitutional as well. I think we're going to get a chance, hopefully, to address that in the near future. I think that will play a part in Canada being able to be a global LNG supplier.
There is a proposal now for a new plant in northern B.C. Tourmaline, I think, is the name of the company. They're looking to have an LNG export facility off the coast of B.C. just south of Alaska. Of course, that would be the opportunity to supply Asia with LNG.
When we look at where Japan is located—one of our allies—we see that we're the closest route to Japan. We also have the strategic advantage of our winters being a natural advantage in making LNG because of the temperatures we have. That's a strategic advantage that Qatar does not have in making the production of LNG more economic. Again, that goes to the business case that exists for LNG here in Canada.
I think I've made my point clear. I hope that I can count on my colleagues across this committee to support this motion. It sends a message that Canada has all of the things the world needs when it comes to energy production, and also human rights.
The business case exists, so I think we should get this done. Yes, there is a moral case and there's a business case. Let's do this.
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I think everybody is clear.
Just to make sure that everybody is clear once and for all, Monsieur Simard has asked to be heard by committee members. We will be voting to allow Monsieur Simard to be heard. If you'll—
Mrs. Shannon Stubbs: Hopefully, your colleagues are picking up what you're putting down, Chair, which you coordinated with the NDP.
The Chair: Excuse me, colleagues.
As the chair—let me finish—the vote is that Monsieur Simard wants to be heard next. If you vote “yes”, and the majority of committee decides, Monsieur Simard will be next to be heard.
We'll proceed to a roll call vote.
(Motion negatived: nays 8; yeas 2)
Mrs. Shannon Stubbs: Your coalition partners didn't pick up the hint, but you guys tried. Stay anti-energy, stay—
The Chair: Colleagues, next on the speaking order—
Mr. Charlie Angus: Shannon, grow up sometime, do you think?
Mrs. Shannon Stubbs: Thanks for telling me to grow up, Charlie.
The Chair: —we'll go to Mr. Dreeshen.
Once again, colleagues, I'll ask everybody to allow our committee members to speak when it's their turn and to not speak over each other. It does get difficult for the interpreters when we are speaking over each other.
Mr. Dreeshen, the floor is yours.
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Thank you very much, Mr. Chair, and thank you to the committee members for allowing me this opportunity to speak to this motion.
One of the key things I want to mention is what is happening in Europe and the reasons that the decision by the Canadian government to not put its full force behind our liquid natural gas resources is so critical.
A summer ago, I was in Birmingham, England, with the OSCE, the Organization for Security and Co-operation in Europe. We had an opportunity to speak with political people from all over Europe, Canada and the United States. What that organization does.... We spoke about food security, energy security, and certainly, in that case, what was taking place in Ukraine.
We know what the political leadership always says we're doing, which is that we want to make sure we're going as green as fast as we possibly can. We want to hit net zero. We're going to do all of those sorts of things. The only problem is that this isn't the reality on the ground. That was made completely obvious.
One of the motions that Canada put forth was on transition. It suggested that we make changes so that oil and gas development in Canada is minimized. I felt that was going completely in the wrong direction and against some of the people who have spoken here today. They're talking about whether or not we are producing our hydrocarbons in an environmentally friendly way, and of course it's obvious that we are. We know that as far as oil and gas is concerned, we are at 6% or 8%, I believe, lower emissions per unit of energy now than we were a number of years ago. We know that as far as methane is concerned, there have been massive improvements and that we are leading in the world. I think that's a critical part of it.
That becomes one of the issues we need to keep in mind. Yes, political leadership has already bought in. They have their signatures at the bottom of certain environmental agreements, so they are going to continue, as we do, to suggest it's the only way to go. However, that's not how business sees it.
Here's one of the situations that occurred. Because Germany can't get the supply of gas it needs from Russia, it is looking at different ways of getting energy. It is ramping up—
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The point is that I'll probably be interrupted; nevertheless, as far as the comment that Mr. Angus just made is concerned, to everyone here, there are lots of times when drive-by smears are presented by Mr. Angus that have to do with our energy and with different things that are done. Now knowing the precedent that you simply stand up on a point of order to say that a member is being unreasonable, I suppose that if that's what we need to do every time a comment like that is made, then we could do that.
That isn't the way that I am. I want to talk about the issues that are here, but to be interrupted.... I really care about the members, and I'm so happy that we were able to get the witness testimony here so that we have a chance.... We can talk to them and we have talked to them and we can get them to give commentary to the clerk to expand upon some of those things. Yes, it makes it more complicated for us, because we don't get a chance to ask questions; nevertheless, it is important that we have heard their testimony, and we have been respectful in all ways when it comes to that. I'm pleased with that.
To get back to where I was when discussing the Germans and the reality on the ground, when they were talking about how they were going to have to get back into coal production because they could not get the natural gas coming from Russia, and when the other countries as well were talking about changes that were necessary because they could not get the natural gas that they were getting before, we had a chance to be there. No, we wouldn't be able to get there in the next few years, but at least we could have made that effort and we could have given some certainty to them that Canada, which has the best oil and gas production record in the world, would be there. That is something that they appreciated.
I've seen this in the last number of years, and of course the discussion here is if a carbon tax is the best way to do.... We've heard from some of our witnesses. The U.S. isn't in that. We're making comparisons, and we're trying to ask if Canada has an opportunity to sell around the world.
We've heard testimony about how Biden, in his first week, decided that he wanted to push environmental issues. The first environmental thing that he did was cancel Keystone XL. Cancelling Keystone XL meant that instead of being able to take our heavy oil down into either Chicago or to the gulf coast so that we could produce the diesel that comes from that heavy oil and make sure that market was strong, we now find that they're going to Venezuela.
These are the kinds of things that happen when you have short-sighted environmental goals. That is the issue that we really have here: those short-sighted environmental goals.
We are losing opportunities. All of these countries have come to us and said, “We want your product, but we want to see that you're on side with industry”, and all we ever say is, “No, that's not really necessary.” I'm just dealing with some of the things we've looked at even today, such as the idea that clean electricity is going to be our greatest asset.
I live in central Alberta. It's freezing up right now. There were 15 centimetres of snow this morning. It will be -15°C or -20°C in the next couple of days, so freeze-up is there.
When we ask our local vehicle dealerships how their electrical vehicle sales are going, they laugh. They say, “That is not what we can do here. This is absolutely crazy”. I can go through a myriad of issues they have had because we can't produce the natural resources that we require. We've had testimony this morning about critical minerals and about how we will need six times more than what we're producing by 2040, and 20 times more lithium and that sort of thing, yet we still stand up and say, “We will make sure that we will have our electric vehicles and we will have this grid.”
Exactly how are we going to get that grid, unless we do as we have done, sadly, for too many years, and that is to bring in the products that are built in countries that don't care about the environment and buy them. Either that is the situation we have, or the new ones that are going to be mined are going to be mined in places outside of Canada, because as was mentioned here, it takes 16 years for a mine to become operational, if we're lucky. No matter that we have these great goals; how are we ever going to do that? That becomes part of the energy mix that the world wants. It wants us to be able to produce energy, and people are so short-sighted that they indicate, “Oh well, we can just get rid of oil and gas”, as if that's going to happen in the rest of the world.
Well, what are the other products? Just go through the whole list of products because of hydrocarbons and the relationships that exist. It is so short-sighted to simply say, “Oh, but we believe because our government put its signature on the bottom of this declaration that we must continue and follow through.” Is no one paying any attention to the relationships that exist?
I've said it before and I'll say it again. We had the discussion when the folks from ATCO were here. I asked, “How much money has been put aside for the reclamation for your solar panels and your windmills that you have in operation right now?” Within six miles of my home, there are 53 windmills that have been there probably 15 to 20 years. Eventually they will have to be reclaimed, or things will have to happen to them. They get built by hydrocarbons. That's how they get built.
People say, “We will have windmills, but we want to get rid of hydrocarbons.” It is illogical for people to say that, but they continue to say it. They continue to get applause around here, because that's the new way of the world.
The same thing happened with the arguments that looked at other renewables. In Alberta we have quarter sections of land, pieces that are half a mile by half a mile, and for dozens of them at a time people are saying, “Well, let's put solar panels on these things.” Does anyone understand what is required for that? You need to have a steel grid structure in order to have erect these things. You then have to have some way of transferring the power from every one of those solar panels into a main grid, and then move it into the main collection area. Does it not take energy to make that happen?
Usually what happens is that some proponent builds it and then sells it to somebody else. This why the farmers' advocate in Alberta was telling a group of farmers, “You be very careful about anything you sign with these companies”, because it is not like oil and gas. If there's an oil well or whatever, or some system in there, we have a system whereby we can regulate it and we know what is going to happen. We don't have that assurance when it comes to the renewables, which is the reason.... Of course, Albertans were slammed by that as well, because now they want a moratorium on renewables in Alberta. Isn't that awful? No, it's responsible. It's responsible to take a look at exactly what is taking place in the system, and unless you've got ways of assuring landowners that it is being done right, then the other argument is all politics. It is all those types of things.
The other aspect is the relationship of the energy return on the energy involved to produce something. I have been saying for a long time that we have to measure everything from the first shovel we use to dig it up to the last shovel we use to cover it up. If you take solar, if you take windmills, if you take oil and gas, and if you were brave enough to talk about that for the areas that we flooded so that we got hydroelectric power.... There is no one brave enough to talk about the effects of dams, and so on.
If you were to take all of that together and then ask what is best in this community and what is best in another community, I think you'd start to recognize how significant our environment is, but also how diverse. It takes six hours to fly from one end of this country to the other, through six different time zones, and yet people within 100 miles of the 49th parallel and below think they understand how our country works and make decisions on it. That is very frustrating.
Then we talk about the relationships with our indigenous people. Well, I'm sure they would love to have.... They might be lower-paying jobs, but I'm sure they would love to have these good union jobs. They've got great jobs right now in oil and gas, and they've got massive billions of dollars in investment, and this is where their strengths are. That's where they lie, but here we have built in an eco-colonialism that is saying, “We know best. Don't worry, folks. We here in Ottawa, and those of us who hug the 49th here, know exactly how best you should manage your lives.”
These are the issues that I believe we have to make sure we bring out so that people know exactly what is taking place. When we talk about our liquefied natural gas—