Good afternoon, everybody. Thank you for joining us. Our apologies for the last-minute room change. Apparently there are some technical difficulties upstairs which necessitated the move, but we're all here now. It all worked out thanks to our clerk and everybody else who made the change work out so quickly.
This afternoon, pursuant to Standing Order 81(4), we're considering the main estimates for 2019-20: vote 1 under Atomic Energy of Canada Limited; vote 1 under Canadian Nuclear Safety Commission; votes 1, 5, 10, 15, 20, 25, 30, 35 and 40 under Department of Natural Resources; votes 1 and 5 under National Energy Board; and, vote 1 under Northern Pipeline Agency. These were referred to the committee on Thursday, April 11, 2019.
Minister, I want to start by thanking you for taking the time to join us today. We all know how incredibly busy you are. We're always grateful to you for making time in your schedule to be here with us. I'd like to also welcome your colleagues who are joining us as well.
You all know the process, so I don't need to give any explanation. I will turn the floor over to you. Following that, we will be going to a period of questions and answers.
Minister, the floor is yours. Thank you.
Good afternoon, everyone.
It's great to be here again to talk about what important investments our government has made in forestry, mining and the energy sector since October 2015, and how we can continue to invest in the future of Canada's natural resource sectors. This is a critically important time for our resource sectors and, more importantly, for Canadian workers.
As we all know, the world's energy needs are changing. Countries are increasingly looking to import sustainably sourced products. There is a growing consensus on the need to take immediate and sustained action on climate change. Some may choose to ignore these changes, keep their heads in the sand and hope for the best, but that is not the Canadian way. We are innovators.
Let's not forget that it was Canadians who first discovered how to get oil out of the oil sands. It was Canadians who created the first all-electric, battery-powered gold mine. It was Canadians who first built the largest North American passive house.
So how do we prepare for the future while also responding to the needs of today?
It starts with listening. In 2015, Canadians made it clear that protecting the environment and growing the economy could no longer be treated by the government as opposing goals.
Through Generation Energy, over 380,000 workers and leaders from renewable energy and clean tech, from oil and gas, from municipalities, indigenous leaders and Canadians helped build the idea of what our energy future could look like and how we can get there. We listened, and we have taken action to deliver for middle-class Canadians and those working hard to join the middle class.
We have done this by attracting new investment, extending the mineral exploration tax credit for five years, which is the first ever multi-year extension, and unveiling a plan that will position Canada as the world's undisputed mining leader. It is creating tens of thousands of jobs by supplying the minerals that will drive the clean growth economy.
We are reimagining the forest sector so our vast forests continue to play an essential role in our economy, not just here in Canada but around the world.
Through our investment of over $1 billion in energy efficiency, we are helping Canadians save money on their energy bills while fighting climate change.
We are building our energy future with a clear focus on expanding our renewable sources of energy, gaining access to global markets and making our traditional resources, such as oil and gas, more sustainable than ever.
Continuing this work and building on our progress to date is the big picture behind our main estimates. It mirrors a lot of what you have studied in your work as a parliamentary committee and the valuable recommendations you have provided to our government. I want to thank you for your work on behalf of Canadians.
The funding contained in this year's main estimates would support our department as we address the challenges in front of us, but also the opportunities ahead. This funding includes: advancing the use of new, clean technologies in the resource sector; helping remote, northern indigenous communities reduce their reliance on diesel; combatting the spruce budworm outbreak through early intervention; and extending our support to the many communities impacted by the unjustified tariffs on softwood lumber.
It will also give us the funds needed to implement key pillars of budget 2019. This includes new investments to encourage more Canadians to buy zero-emission vehicles; engage indigenous communities in major resource projects; improve our energy data, a key study from your committee; and enhance our ability to prepare for and respond to disasters that increasingly require federal action.
As I noted at the beginning of my remarks, this is a pivotal moment in our country's history and it is not without its challenges, whether they are building pipeline capacity in the west, fending off protectionist measures to our south or changes across our economy in all regions of our country.
Canada's unemployment rate may be at a 40-year low, but we need to be mindful of Canadians who are anxious about their future. ln my home province of Alberta, we have seen ongoing challenges for many workers because of fluctuating commodity prices. Our government sees all of these challenges, and we are taking them head-on.
That is why we announced a $1.6-billion action plan to support workers and enhance competitiveness in our oil and gas sector. That is why our government is providing up to $2 billion to respond to the U.S. tariffs that are threatening Canadian workers in our steel and aluminum sectors. lt is why we built on the $867 million through our softwood lumber action plan with continued support to the forest sector in budget 2019.
lt is why we are providing $150 million to ensure a just transition for workers and communities affected by the phasing out of coal-powered electricity. lt is why we are improving the way we make decisions on major projects, so that all Canadians have trust in their reviews, ensuring that we can advance nation-building projects that will grow our economy without putting our health, environment or communities in harm's way.
It is also why we have been doing the hard work necessary to follow the path set out in the Federal Court of Appeal's decision on the proposed Trans Mountain pipeline expansion. While that decision was a disappointment to many, it provided clear guidance on how the process could move forward in the right way, in a specific and focused way.
Some argue we should ignore that guidance, disregard the court and respond with lengthy appeals designed to avoid our obligations to the environment and to indigenous peoples. Our government took the responsible and more efficient path. We directed the National Energy Board to conduct a review of marine shipping and committed to getting phase three consultations right.
That important work is well under way. The NEB report was delivered on time on February 22. ln parallel, our consultation teams have been hard at work on phase three consultations. These teams, nearly double their original size, have been engaging in meaningful, two-way dialogue to discuss and understand priorities of indigenous communities and to offer responsive accommodations where appropriate. I have also personally met with many indigenous communities to help build a relationship based on trust.
Our work to date has put us in the strong position we are in today to deliver this process for all Canadians. Our work on TMX, our historic investments in solar, wind, geothermal and other forms of energy and our commitment to innovation and the development of new technologies are laying the foundation for a strong Canada both for today and for tomorrow.
Mr. Chair, our government sees our resource industries playing a key role in driving Canada's clean growth economy. We value the expertise and experience at Natural Resources and the drive of all Canadians to help make it happen.
These main estimates are a down payment on Canada's future, a future that our children will inherit with pride and build upon with confidence, a future that will continue to create well-paying, middle-class jobs for Canadians and future generations.
With that, I would be happy to take your questions.
Thank you for having us here.
Thank you, Minister, for being here today.
I'm just going to start with some follow-up questions. The last time you were here, I gave you three suggestions that you might want to consider in the budget. Having now seen the budget, I just wanted to follow up with those.
One is about home retrofits. We all know that energy efficiency is one of the best ways to reduce our greenhouse gas footprints in Canada. We had a very successful program here started by the Conservative government in the previous parliaments, the eco-energy retrofit program. Its last iteration had $400 million in the 2011 budget. Unfortunately it was cancelled and hasn't been brought up again by this Liberal government. First, it seemed that retrofits were kicked over to the provinces in the pan-Canadian framework, and in this budget, there's an item for $300 million that is being put down under the municipalities through the FCM.
I'm rather confused and concerned that the federal government hasn't taken it upon itself to actually do this itself. This is leadership that I think Canadians expect from the federal government. With something as serious as climate action, we really need to do things quickly and boldly. It seems that this is just another example of putting things down onto the municipalities.
I'm confused. For one thing, in the book here, it says in one place that this is to be spent in the 2018-19 fiscal year. In another place it says it's to be spent in the 2019-20 year. That's not what I'm concerned about here. It's just one more confusion.
I guess now that this money has been transferred, I assume to FCM, how long will they have to spend this? Is this a one-year pot, like the $400-million pot that the Conservatives put up? Will municipalities have to sign on individually? I don't live in a municipality. How do I access this program? If we had done it nationally, those questions would not have to be asked.
I'm thinking about my riding. It's mainly tiny communities of 500 people, 1,000 people. These are not communities that have the resources, the people resources, the administration resources, to manage these programs on their own. Why are you putting it on them or the FCM rather than doing it through the federal government?
I'll move on now because I have a few more questions.
The last time I asked, I was looking for ways the federal government could support the forest industry. As you know, it's having hard times. We still have softwood lumber tariffs hanging over it. There are mills in my riding that are closing for periods of time this spring to save money because they've been hit as lumber prices have fallen.
The last time you were here, I suggested that the federal government could put up bold funding to help these communities and this industry and also keep them protected. We've had two years of forest fires in British Columbia alone that cost $1 billion a year just to fight the fires, and perhaps $10 billion in costs to deal with the aftermath.
The forest experts I've talked to suggest that we should be spending $1 billion each year in British Columbia to mitigate those actions. I see small, various programs to help the forest industry in this budget, but I don't see anything significant that will go after the safety of communities in forest environments. With most of the communities in British Columbia, for instance, and many communities across Canada, where the federal government could provide funding that would help the provinces and municipalities thin the forests in the interface areas, it would provide fibre for local mills, provide work and keep people safe.
I met with a community group in my riding a couple of weeks ago. They're one of Canada's top fire safe communities. They are desperate for any government help they can find. Right now, they get $500 a year. If they got $1,000 a year, they'd be happy. They're just a tiny community. I'm wondering why I don't see anything in this budget that is a significant help in terms of fire smarting these forest communities.
The Filmon report suggested an amount for British Columbia, an amount that has not even.... Only 15% has been sent. We're talking about billions of dollars here.
I'm wondering if there's any hope for the future that this federal government will step up and make some really meaningful contribution in this regard.
We are working on several fronts, the first of which is the competitiveness of the sector. Together with all provinces and territories, we have developed a forest bioeconomy framework, which will allow us to diversify forest products and add to their value. The framework is actually the first item on the agenda for the Canadian Council of Forest Ministers meeting, which starts this evening.
Second, we are making huge investments in innovation. The most recent budget devoted the major sum of $100 million to the area. The money comes from strategic investment funds for promising projects, such as biofuels and high value-added wood products.
Third, we are making substantial investments in market diversification so that Canadian wood can be used overseas. Major projects are underway in China, including Tianjin, where we are demonstrating ways to include wood in construction and how that contributes to our efforts to fight climate change.
Fourth, as the mentioned, the government is providing significant assistance to the softwood lumber industry. His plan was not only to help the workers and the companies targeted by the countervailing duties, but also to encourage market and product diversification. The plan has worked very well. Also today, the minister will chair a working group, made up of all ministers with responsibility for forests, that is monitoring the health of our forestry sector and ensuring that measures are in place to assist local communities, workers and the industry.
Thank you for the question.
Increasing sales of zero-emission vehicles is a major objective for the government. As you mentioned, a new incentive program is designed to encourage consumers to choose those vehicles. Transport Canada, not Natural Resources Canada, is responsible for the program. However, we have to make sure that the cars can be driven and recharged. So we have to make sure that the infrastructures are in place.
We are already working to establish a network of more than 1,000 charging stations across Canada. In some cases, these will be electric charging stations and in others the stations will work on hydrogen or natural gas. In the most recent budget, we received funds to add 20,000 charging stations. This time, they will be installed near where Canadians live. In other words, stations will be in their homes, and near where they work and play, even in the parking lots they use. For us, therefore, this is a major investment.
In addition, we are continuing to work very hard for the stations to be more effective. If I may, I will give the floor to Frank Des Rosiers, our assistant deputy minister responsible for everything related to clean technologies in our department. He works specifically with certain technologies in order to ensure that Canadians who own vehicles of that kind are able to drive them.
Thank you, Mr. Chair.
Perhaps to add to the deputy's remark, this is actually one of those areas that is important for Canada. We've seen all those cars on the road. They account for roughly a quarter of our GHG emissions in the country. Making a dent in this actually matters a great deal.
We have not only an opportunity to deploy existing technology, but also to develop new ones. We have a number of innovators in the country. I'm thinking about AddÉnergie, for instance, based in Shawinigan, Quebec. They are in the process of developing, thanks to our support and the support of the provincial government as well, new infrastructure, for instance, to have a solution for those residing in condos and multi-residential units. Right now there aren't a lot of solutions being offered in the marketplace, and we're looking for those kinds of solutions.
Another angle that we've been exploring is what the impact is of having thousands, tens of thousands, hundreds of thousands of vehicles on the grid. Picture if you are running a utility and a sizable electrical grid, and you suddenly have this large amount of demand out there. How do you manage this? What's the cybersecurity consideration around having such a large amount of new demand in the marketplace?
These are the kinds of solutions and issues we've been striving to resolve.
Thank you, Chair, and thank you to all of you for being here.
I'm going to start with a question that I meant to ask the minister, but I ran out of time because I rambled on too much, I guess.
A few weeks ago, I was here in this room, or a room very like it, listening to the commissioner on the environment and sustainability give her final report of her tenure here. In that report she said, “For decades, successive federal governments have failed to reach their targets for reducing greenhouse gas emissions, and the government is not ready to adapt to a changing climate. This must change.”
Part of the report that she was presenting at that meeting was about fossil fuel subsidies. I don't have the quote right in front of me, but one of the breakout headlines of that report was to the effect that this government, after four years, couldn't even define what an inefficient fossil fuel subsidy was, yet it went on in the next breath to say that we don't have any.
I remember being in Argentina with the former minister when the big topic at the G20 meeting was about whether this government would commit to removing all subsidies for fossil fuels and instead put in significant incentives for renewable energy.
I'm just wondering if Mr. Khosla or somebody could....
Yes, I'm happy to. That is a great question.
As you know, we have already had previous experience with this. In 2016-17, we received about $180 million to administer the first stage. We're into the second stage now. Through that, we've actually deployed 532 fast chargers around the country. We have about 1,000 that need to go to that, and then the second stage, as the deputy mentioned, is more residential, municipal and local.
As a result of that, we know what's out there in terms of technology. We know the kinds of firms that are out there. It's a competitive process that we enter into to do all of this. We will continue to do that, but we've gained a very good understanding of what some of the best firms are within the industry and continue to pursue that.
I would say that's pretty good for the Government of Canada to roll out with that many charging stations so quickly. I'm sorry to toot our own horn, but I'm really proud of the fact that we're moving so quickly in this space.
In the main estimates there is funding to AECL to be used as support to nuclear R and D and waste management in Canada.
Having worked in nuclear myself for almost 10 years, I have deep respect for Canada's nuclear talents and our nuclear legacy. Our CANDU R and D has been at the leading edge, for sure, of the peaceful application of nuclear technology in the world. We have nuclear reactors generating electricity to meet the needs of Canadians in Ontario, in New Brunswick and formerly in Quebec.
Right now, the reactor in Quebec has been closed, and the Pickering station will be decommissioned quickly. The chance that they'll have a new build with the CANDU design in the foreseeable future is very low, if I am correct. There is a strong probability that our Canadian nuclear capacity in the future will be significantly impacted.
I use one example. The United Kingdom's experience shows how, in a very similar situation, it lost its ability to design and supply reactors and is now dependent only on importing the design and the equipment.
I wonder what your vision is for the future of nuclear research and the nuclear industry in Canada. Do you see it moving in a positive direction or not?
Yes, there are a lot of questions embedded within that primary question of whether there is a future for nuclear.
I could spend a bit of time, but we're very cognizant, as the deputy said, of the fact that Canada is a tier one nuclear nation, and that is really important for the country of Canada.
We're also mindful of the CANDU technology that we have developed here, homegrown, just as we are with every other form of energy that we've developed here. We have been working very hard around the world internationally with the vendors to try to find whether there is uptake in various other countries.
We know that China is growing massively in this area, as is India. We continue to do that. We partner with some other countries, for example, to try to find other markets in Argentina and so on and so forth.
That is a quick answer on CANDU.
The $1.2 billion in the labs is exactly right. That is a huge investment for this government to make sure that the R and D is protected, that the IP is protected and that we're moving forward. I can say lots more on that. I won't at this moment, recognizing the time.
I would say that in terms of SMRs, if you want to talk about the future, really we're seeing a lot of activity in this space right now, and it is in some ways not surprising but in many ways refreshing to see that the world is coming to Canada for a potential play on SMRs, small modular reactors.
That primarily could help the north, we think. We're looking at that. We did a road map, a year-long exercise. We consulted Canadians, and in that road map we found that Canada is one of the best places to do it. We have one project before the regulator, the CNSC, that is going through right now. We have nine proposals.
New York came calling the other day. We went to New York to talk to Bloomberg because they're interested in investing, so I would encourage this committee to continue to look at that element.
The last thing I would say—and there is lots more, as I said—is let's not forget that we have uranium supplies here, too. When it comes to a one-stop shop for nuclear, we have some good things to say, but waste and cost are big issues and we have to get our heads around them in this country, and so does the world. We're working hard toward that end as well.
I hope that's a helpful answer.
Okay. I anticipated that.
ATOMIC ENERGY OF CANADA LIMITED
Vote 1—Payments to the corporation for operating and capital expenditures..........$1,197,282,026
(Vote 1 agreed to on division)
CANADIAN NUCLEAR SAFETY COMMISSION
Vote 1—Program expenditures..........$39,136,248
(Vote 1 agreed to on division)
DEPARTMENT OF NATURAL RESOURCES
Vote 1—Operating expenditures..........$563,825,825
Vote 5—Capital expenditures..........$13,996,000
Vote 10—Grants and contributions..........$471,008,564
Vote 15—Encouraging Canadians to Use Zero Emission Vehicles..........$10,034,967
Vote 20—Engaging Indigenous Communities in Major Resource Projects..........$12,801,946
Vote 25—Ensuring Better Disaster Management Preparation and Response..........$11,090,650
Vote 30—Improving Canadian Energy Information..........$1,674,737
Vote 35—Protecting Canada's Critical Infrastructure from Cyber Threats..........$808,900
Vote 40—Strong Arctic and Northern Communities..........$6,225,524
(Votes 1, 5, 10, 15, 20, 25, 30, 35 and 40 agreed to on division)
Vote 1—Program expenditures..........$82,536,499
Vote 5—Canadian Energy Regulator Transition Costs..........$3,670,000
(Votes 1 and 5 agreed to on division)
Vote 1—Program expenditures..........$1,055,000
(Vote 1 agreed to on division)
The Chair: Shall I report vote 1 under Atomic Energy of Canada Limited, vote 1 under Canadian Nuclear Safety Commission, votes 1, 5, 10, 15, 20, 25, 30, 35 and 40 under Natural Resources, votes 1 and 5 under National Energy Board and vote 1 under Northern Pipeline Agency to the House?
Some hon. members: Agreed.
The Chair: That is all of our business for today.
Thursday we have the delegation of German parliamentarians coming in. We have no formal meeting, but we're meeting with them in conjunction with the trade committee. I understand that most of you have already agreed to attend. Let's hope everybody can make it. We don't have the room assignment yet.