Thank you, Mr. Chair. It's a pleasure to be here and to report on our progress.
I'm accompanied by two colleagues: Dr. Cecile Siewe, director general of the CanmetENERGY laboratory in Devon, Alberta; and Chris Evans, senior director in the petroleum resources branch at Natural Resources Canada.
We shared a copy of a short overview presentation, but I thought perhaps I could touch on it quickly to give you a bit of sense of what has happened since our last encounter on this topic.
With regard to the broad context and sheer importance of the oil and gas sector in the country, it is a major industry, a major driver of jobs, GDP, and exports. You have seen some of those data in the report itself, but it's worth reminding ourselves that it's 276,000 jobs around the country, so it affects a lot of people and their families. It accounts for some $100 billion in exports and 5.6% of GDP. Canada is a very large player in the global scene in the production and export of both oil and natural gas.
As we all know, the industry has faced some pretty challenging times in recent years, in particular thanks to the decline in commodity prices affecting world markets. Our industry and our people working in this industry surely felt it most directly.
Despite the short-term turmoil, the long-term future of the oil and gas industry remains quite strong, as shown in NEB reports, as well as assessments conducted by the International Energy Agency. Despite those challenging times, we've had our share of good news lately with some major project announcements, including the largest project in Canada's history, the LNG Canada project, a $40 billion project in British Columbia. This project will make Canada a prominent player in the LNG space, which as we know is a very important trend globally in energy markets, with our being the cleanest energy producer in the world. This will assist us in servicing our Asian clients, who are trying to move away from coal.
Another key project worth noting is in the offshore of Newfoundland and Labrador, the Hebron project, a $14 billion initiative. There are also major petrochemical projects in Alberta, which were announced in recent months. These are certainly encouraging signs.
We're coming back to the elements of the government's response to the report you produced. They are grouped around four main themes.
The first one was around intergovernmental collaboration and co-operation, the second focused on building public trust and transparency, the third was directed at engagement with indigenous people and resource development, and the fourth was on innovation in oil and gas.
I hope to cover some of this in my interim remarks, but because of time considerations, we may have to cover this during the Qs and As.
I'd like to note some of the major initiatives currently in play. There is Bill , which is currently in front of the Senate for deliberation. There is the work around the consultation for the Trans Mountain Pipeline, which is also ongoing. I should also note the sizable investment made by the government in clean technology innovation—some $3 billion has been invested to date, with some key investments in the oil and gas sector, which I will touch on.
Looking at the engagement with citizens was also a key element of our focus this past fall. Our department's Generation Energy Council is engaged with some 380,000 Canadians on what the future of energy should look like. In those discussions, four pathways have emerged. One of these was being a clean oil and gas producer, which remains central to our game plan.
To cut to the chase, the key takeaway from that consultation, which lasted several months, was the desire of our citizens to see us as competitive, to make sure that our oil and gas industry can thrive, and to sustain those jobs and wealth creation. However, it also looked at ways to improve our environmental performance in terms of both GHGs and also our impacts on water and land.
Those two themes were very present throughout our conversation, along with the theme of the innovation required to get to that desired objective.
The industry has gone through a rather challenging environment lately, and this past December the government announced a support package to help the workers and communities affected by the downturn in the price of oil and gas. The total package was worth $1.6 billion.
I want to perhaps touch on some of those key components, the first one being $1 billion in commercial financial support coming from Export Development Canada to support the working capital needs of companies as well as their export potential in new markets.
The second envelope was $500 million from the Business Development Bank to help commercial financing to diversify those markets.
The third component was around R and D, with a $50 million investment from the clean growth program at NRCan being set aside. The total value of those projects is $890 million.
The next component was from the strategic innovation fund from ISED, the innovation department. That's a $100 million envelope.
Lastly, there is access to the national trade corridors fund, with a total value of $750 million. A significant amount of commitments have been made in that regard.
To close, in terms of tax measures, in the fiscal updates in the past fall, as colleagues will know, Mr. Chair, there was a significant announcement with regard to accelerated capital cost allowance measures to boost the competitiveness of all industry sectors in the country. The total value of those measures was in the order of $5 billion in terms of foregone tax revenues. Obviously, the oil and gas sector, being such a major player in terms of domestic industry, was one of those that obviously benefited from it, especially in terms of expensing clean energy equipment investments.
That brings me to the innovation team, which I touched on earlier. Obviously I will not be comprehensive here, but again, through our conversations that will follow, we may be able to touch a bit more on that. The government has been working very closely with industry and provincial governments to look at ways to really help drive the industry forward in terms of the future, as the title of your study invites.
While the industry does a terrific job in looking at those incremental improvements, there's a collective sense that we need to look at leapfrogging in terms of environmental performance and cost reductions. This is where renewed efforts with extraction technologies, tailing ponds management, air emissions as well as carbon use have been widely seen as being critical.
I won't go into those in detail, but to give you a bit of a hint, in terms of extraction technologies, there are some promising leads there that we and the industry are pursuing with vigour, to look at both reducing the cost of production but also reducing emissions by the order of 40% to 50%. We have a number of projects in this area, which are very exciting indeed, that we are driving quite actively right now.
It's the same thing in the area of tailings. We hear a lot of concern among our citizens in terms of how we can cope with those and reduce the production of those tailing ponds. There's effort there. It's also looking at using some of those tailing ponds and making sure that we're able to extract the valuable hydrocarbon and heavy metals such as titanium to be able to make better use of it. It's very much in the spirit of a cyclical economy, being able to recycle some of those products.
We have a large-scale project currently under way, which was announced by the Province of Alberta with Titanium Corporation, to do precisely that.
These are, for us, very encouraging signs of what Canada is able to do. Of all sectors, the oil and gas sector in Canada has been known for decades to be extremely innovative and entrepreneurial. I have a lot of confidence that we'll be able to advance those projects successfully.
The the penultimate slide speaks a bit to how we went about doing it. As you know, the pan-Canadian framework was anchored around this notion of working collaboratively with provincial and territorial governments. We felt it was the right thing to do to pay special attention to how we went about doing business.
There I could point out perhaps three elements that were, in our eyes, quite meaningful. The first is the establishment of a clean growth hub, which is essentially a one-stop shop for people to interact with the federal family. Sometimes it's a bit difficult if you're a university researcher, a small firm out there, to figure out whom to talk to. Their wish was to have have a one-stop shop where they could interact with us. We heard that feedback, and we took it to heart and established this hub. It is is a grouping of 16 department and agencies physically co-located in an office here in downtown Ottawa. They are able to interact with clients and direct them, whether they need financing, access to market, regulatory changes or issues around procurement—whatever topic they may have.
In our one short year of operation, we've had more than 1,000 clients come our way to look for guidance and support, and it's a very popular feature of our ecosystem nowadays.
The second thing I would note is around the trusted partnership model. We have finite resources both federally and provincially to invest taxpayers' dollars, so we have to try to find ways to use those limited resources smartly. We reach out to provinces and say “How about we try to identify together what the most promising technologies are and look at having an integrated review process?”.
Instead of having researchers in universities go through separate processes both federally and provincially, we essentially recognize each other's process, saving an enormous amount of time for the researchers and innovators to access the federal or provincial funding, and also it speeds up the process considerably. We have eight or nine of those trusted partnership models across the country, which have proven to be quite successful.
The third and last thing I would note is that the government announced, in budget 2019, $100 million in funding for the Clean Resource Innovation Network, or CRIN for short. It brings together innovators in the oil and gas sector, mostly in western Canada, and the grouping has been active now for about a year. The federal government was happy to provide some support for that. They were actually in town just this past week, and it looks to be quite exciting in development.
To conclude, I'll talk about the national energy labs.
We have a network of four national labs located in several parts of the country, in Montreal, Ottawa, Hamilton, Ontario, and Alberta. They bring together more than 600 researchers, engineers and technicians in this field.
They cover a wide range of technologies: renewable energy, PV, geothermal, bioenergy, marine, energy efficiency, advanced materials. They look at artificial intelligence application in energy as well as fossil energy.
We have the privilege of having Dr. Cecile Siewe here, who is the lab DG from our CanmetENERGY-Devon facility, which is focusing precisely on oil and gas research. As we'll hear during the audience, there's a lot of work there around water research, extraction technologies, partial upgrading, oil spill recovery and a lot of those domains of expertise. Dr. Siewe is a highly renowned scientist in her own right but also the lead of that lab. I thought it could be of interest to the committee members to interact directly with her.
I'll pause here and turn the floor over to you.