I would like to call this meeting to order.
This is meeting 17 of the standing committee. We're here today to discuss the main estimates and supplementary estimates (C).
I'd like to welcome the minister and thank him for taking the time to join us.
Before we jump into things, there's something else I would like to say. It's fitting that the minister is here today. As I'm sure all of us in this call have seen over this last week, our colleague, Mr. Lefebvre, has decided he will not be seeking re-election, whenever that date happens. It's probably two or three years from now, but nonetheless, he has made that decision now. It also means he is no longer serving as parliamentary secretary to this minister and to this committee.
I just want to take this opportunity to thank him and to express my appreciation, and to express appreciation on behalf of not only everybody on this committee but also everybody else who has worked with him. I've been working with him since 2015, and it's been a pleasure. I am very grateful for everything he's done.
On that note, Minister, again, thank you very much. I'm very grateful, as are all the members, that you are generously providing us with your time today. That goes for your departmental officials as well, whom we'll have for the second hour.
Rather than consume any more time in this first hour, when time is so precious, I will spare us all my usual speech on the rules. Everybody here knows them very well.
Minister, I will now give the floor to you.
Hi everyone. I'm joining you from the island of Newfoundland—the ancestral homeland of the Mi'kmaq and Beothuk peoples.
It's a little over three months since I last appeared before this committee. The future looks brighter today. Analysts predict a buoyant year for most commodities. And vaccine roll-outs are accelerating. We are getting out of this together.
Workers in our natural resources sector are leading Canada's economic recovery, with four consecutive months of growth in mining, oil and gas, including 6.1% growth last quarter. Oil prices are rising sharply. Crude oil exports are at pre-pandemic volumes. Lumber is at prices never seen before—the highest they've ever been, at $1,035.
The future must not leave any energy worker or any energy-producing province—like mine—behind. It must have indigenous peoples as full participants and partners in the development of Canada's natural resources, including the critical minerals that are vital to a low emissions future. Canada is well positioned with our strengthened climate plan, with 64 new initiatives and $15 billion for everything from renewable energy and smart grids to retrofits, EVs and hydrogen. Canada's proud energy workers will help us get there, thanks to their ingenuity, their expertise in complex engineering, and their huge clean-tech investments.
Of course, there are challenges. First, we remain unhappy with President Biden's decision to revoke Keystone XL's permit. We made that clear during our recent Canada-U.S. summit, directly and clearly. Second, we are working tirelessly on Line 5. I'll say to this committee what I said to the Canada-U.S. special committee: The operation of Line 5 is non-negotiable. People will not be left in the cold.
However, the relationship with our biggest client—the United States—is far greater than any one project or one piece of energy infrastructure.
You will not find any two energy sectors—or economies, for that matter—as highly integrated as ours, with shared supply chains, 70 pipelines and nearly three dozen transmission lines crossing the border. Our American partners understand this simple fact: The U.S. needs Canada. They need our oil and gas. They need our critical minerals. For that reason, the President and the agreed to a road map that recognizes the need to protect our highly integrated supply chains and energy infrastructure.
President Biden wants to work with our to revive our economies, end this pandemic, and build back better as we lead the world in confronting the climate crisis. Canada is ahead of the curve in this regard, with measures such as pollution pricing, phasing out coal-fired electricity generation by 2030, and reducing reliance on diesel in remote indigenous communities.
Programs reflected in the main and supplementary estimates we're discussing today will help us get there.
The main estimates provide $2.2 billion in this fiscal year. That's an increase of $859 million. A big chunk of that—just under $570 million—goes to the emissions reduction fund. This is part of our COVID response plan, which included $750 million over seven years to reduce onshore and offshore methane emissions.
Another $84 million for this year and $309 million for 2021-22 will fund the home energy retrofit initiative, part of our $2.6-billion seven-year pledge to help homeowners lower monthly heating bills while doing their part to save the planet—saving money and lowering emissions.
We are also creating jobs in the forest industry as we deploy nature-based climate solutions, such as planting two billion trees over the next 10 years and protecting our forests from insect infestations and fires.
$83 million is earmarked in the 2020-21 budget to fund forestry programs to support innovation and the development of new products and processes, especially in the emerging bioeconomy, to increase market opportunities here and abroad, and to encourage the participation of indigenous communities and businesses in this sector.
Finally, I'll draw your attention to the $22 million in 2021-22 to fund programs aimed at tapping northern Canada's mining potential, especially in the area of critical minerals.
Mr. Chair, I'm optimistic. We have set a clear path to a low-emissions future, and actions like the ones I've outlined today will help us double down on our common mission: net-zero emissions by 2050, a national economy that continues to create good jobs, and a low-emissions future that leaves no one behind. I know that's a lot. It's ambitious, but we're Canada and that's what we do.
Thank you. I am ready to answer your questions.
That's correct. Thank you, Mr. Chair.
Thank you, Minister, for coming today and answering questions on the estimates.
I noticed in your testimony last week before the Canada-U.S. relations committee that you were speaking at length about issues facing the energy industry in the country, and where we are failing and continue to fail in advancing key infrastructure. Let me ask a pertinent question, because you referred to it in your speech. It was about saving the planet and lowering emissions.
I'll refer back to your speech and the testimony you gave last week, in which you noted that Canada is a capitalist country. You said, “We drive investment. We provide the parameters and the certainty in order to drive investment. It will be the marketplace that makes sure this is a sustainable change to a lower emission future.”
Last week, Chevron Canada decided that its investment in Kitimat LNG, on which it has spent $3 billion over the past seven years, cannot find a bidder. That project alone would reduce carbon emissions around the world by about 40 megatonnes per year—almost 5% of Canada's emissions alone. The company is withdrawing because it does not see an actual future in Canada in which it has transparency on outcome.
When a company like Chevron, in defiance of what you said at the committee last week, is actually saying it doesn't see a pathway here and nobody else can take its piece off, how can you actually move towards saving the planet by getting these emissions-reducing projects built?
Let's go over those. Minister, I'm glad you raised those, because TMX was approved before your government came into power. You had to reapprove it because you broke it. You broke it; you bought it. Okay. Seven thousand jobs were actually being undertaken with the previous proponent of that project, which was a private-sector proponent who left Canada. Your government had to pay them to leave Canada because you were going to face a NAFTA challenge. Therefore, I challenge that you actually have those jobs. I challenge that there's actually investment coming into this country. It's government investment as opposed to private-sector investment, which is negative at this point in time.
In the case of Keystone XL, that's billions of dollars and thousands of jobs that have left Canada. As for Teck Frontier, again, Minister, I don't know how that failed, but your cabinet didn't seem to cross the line. I need you to start advocating more for this.
My colleagues and I will do anything to help you, Minister. This is a minority government. We'd like you to get these projects over the line to build jobs in Canada and bring investment to Canada. Tell us how we can help you get these projects over the line with your cabinet colleagues, who don't seem to see things the same way you do when you speak.
I would not agree with that. My cabinet colleagues and I are as one, as we should be. We are very clear that what we want to do, what we need to do and what the marketplace is demanding that we do is find ways to lower emissions.
I have to contest your analysis on TMX. You guys, when you were in government, could not get it built. One of the things we have been able to do is to embrace jurisprudence and, I would say, the world as it is and not as we wish it to be. It's a world in which climate change is a reality, a world in which the courts time and time again have said, about TMX, “You are not building it the right way, and we're vetoing it at every step.”
If you want to provide the market with certainty, you embrace the world as it is, because people deal with facts, and the fact was that the courts time and time again were saying we were not doing it the right way. Goodness knows, we tried on a couple of occasions and finally landed in the right place by making sure that we sat down with respect with indigenous governments, first nations, Métis and Inuit, in order to make sure good projects get built. They get built only if we do that in a good way.
Thank you, Minister, for coming to join our committee again today to look at the estimates.
Minister, the International Energy Agency's “Oil 2021” report notes that the pandemic has caused a dramatic downward shift in expectations for oil demand over the next six years, and that the downturn has been so sharp in advanced economies with traditionally high vehicle ownership and oil use per capita that it is not expected to return to pre-crisis levels. This is also coming from an agency that has been very conservative and has greatly underestimated the rate at which the energy transformation is taking place.
Minister, what will the new normal look like for the Canadian energy sector, and what is our government doing to prepare for it?
I spend an awful lot of time with the International Energy Agency's executive director, Fatih Birol, and sit on a special commission that he and I helped set up, the global commission on a people-centred recovery. It basically comes down to something I've said before at this committee is a priority of mine: inclusion—the inclusion of energy-producing provinces like mine here in Newfoundland and Labrador, and of the workers who work in the oil industry here in this province, as well as in Alberta and Saskatchewan.
The pandemic has fundamentally changed things. There are shifts happening here in Canada, around the world and in the markets that point to very clear signs. The normal of the past won't be the normal of the future. Lowering emissions, low-emitting energy—that's the ball game. The IEA, in its “Oil 2021” outlook, forecasts a dramatic downward shift in expectations for oil demand over the next six years. Oil production capacity will slow. Today, we're seeing investment in expansion plans being scaled back around the world.
One of the few areas where demand will grow will be Asia, which is great news for our investment in TMX. Oil will continue to be part of the mix, but it will be a declining part of the mix. The world is moving in a new direction. Not leaving any energy worker behind means that Canada has to be at the forefront of that effort in investing in new technologies, in the fuels of the future and in carbon capture, hydrogen, biofuels, SMRs and renewables. Like the late Walter Gretzky said, you “skate to where the puck is going”.
That's how we double down on our common mission. That's how we get to net-zero emissions by 2050. That's how we keep growing the economy and keep a prosperous economy creating good jobs and a low-emissions future that leaves no one behind. I emphasize that last point emphatically.
To touch on one of the topics you brought up, there have been several important developments with respect to hydrogen since you last appeared at our committee. We announced our hydrogen strategy. We signed a deal with Germany recently on clean energy. We announced $1.5 billion for the low-carbon and zero-emissions fuel fund. That's just to name a few.
I know that locally, in my riding, Carbon Engineering received a large NSERC grant to study water electrolysis, and a company from my riding is pursuing an offshore wind project—a large one that would produce hydrogen through this means as well.
Minister, given the investments happening around the world in this space, are we prepared to compete internationally and take advantage of the assets, geography and talent that we have in this country?
That's the essential bit, to be honest with you. I come from a province where we have one of the greatest migrations internally in this country. At a time when flights are decreasing, we are actually increasing the number of flights and putting back into place direct flights to Toronto—mainly from Deer Lake—because of the number of workers we have in rural Newfoundland in particular who are flying back and forth every day of every week to work in Alberta and Saskatchewan, sometimes B.C., as rotational workers in the energy industry, but who are making sure they come back here because they want to raise their families in Newfoundland.
It is a lot of going back and forth, and we lose some of these workers. We don't just lose them within Canada; I can take that, obviously, but it's around the world. We're losing really high-calibre, international-grade talent in our energy industry. We can't have that. We have to make sure, where we can, that the government steps in to make sure we bridge it until the marketplace takes over in a meaningful way, and it will, in areas like hydrogen.
The hydrogen strategy for Canada lays the foundation for a huge opportunity and to build back better from the COVID-19 pandemic. It relies on Canadian expertise throughout the entire value chain to build new hydrogen supply, distribution and end uses. Those in turn will support a low-carbon energy ecosystem with benefits that could begin right now, strengthening our economic competitiveness to grow export potential, attract investment, create good, sustainable jobs across the country, and drive down emissions in sectors like resource extraction and processing in freight, transportation, power generation and manufacturing. There are also big opportunities in the production of steel and cement, where electrification may not be the best choice.
Low-carbon, zero-emission hydrogen has the potential to reduce our annual greenhouse gas emissions by up to 45 million metric tons a year in 2030. That's a huge potential.
I would like to start by thanking Mr. Lefebvre, who may be leaving us.
I have enjoyed working with you, Mr. Lefebvre.
Mr. O'Regan, thank you for being here.
There is something that always leaves me speechless and amazed, and that is the enormous amount of capital that you are willing to invest in the oil business. Earlier, I heard you say, in response to a question, that we should invest in renewable energy and technologies. Well, the document I have in front of me does anything but that.
When I look at the emissions reduction fund, I see that it is $560 million that is going to support polluters. They are trying to reduce the carbon footprint of the most environmentally damaging industry; I don't understand the logic behind that.
We know that the forest is a carbon sink. We need to find innovative solutions from bioproducts. Yet funding for the forestry sector is a pittance, in the budget. In contrast, you are willing to invest $560 million in a program to reduce greenhouse gas emissions from the oil and gas sector.
There is a simple principle when it comes to the environment, and that is that the polluter pays. In this document, I feel more like we are following the polluter paid principle. It's a 5-1 ratio: you invest about $573 million in the oil and gas industry, while you invest barely $100 million in the most promising industry, which is forestry.
I don't know how you can explain that.
The and I are singularly focused on lowering emissions wherever and whenever we find them. I can see your point, but the fact of the matter is that the oil and gas sector is such an important, vital and predominant part of our country's economy that we cannot simply walk away from it. There is no avoiding the oil and gas sector in this country. We are the fourth-biggest producer of oil and natural gas in the world. We have to work with industry to lower emissions. We simply have to.
However, we are committed to phasing out inefficient subsidies by 2025. We said we would do it and we're on track to do it. With a new U.S. administration, there's even more alignment on this. In fact, they are following our lead on banning fossil fuel subsidies.
We've already eliminated eight tax breaks for the fossil fuel sector. We are working with Argentina on a peer review of fossil fuel subsidies, and this will help us determine what we need to do to meet our commitment next. Our government will keep working with Canadian industry to cut emissions across the economy in a practical and affordable way.
The feds committed $3.16 billion towards partnerships over the next 10 years, working with industry to reduce emissions because it's part of the energy mix for the foreseeable future.
I am not one to ignore a massive problem. It is a massive problem. I'm one to work with what is there, with the reality of the situation. The reality of the situation is that climate change is real and we are the fourth-biggest producer of oil and gas in the world.
I understand you well. You say it's a predominant part of the Canadian economy, but where is this going to go?
Maybe you know that the Bureau d'audiences publiques sur l'environnement, BAPE, in Quebec, will release its report on the LNG Quebec project this week. If this report disapproves of the LNG Quebec project, I am afraid that you will still support it, against the will of Quebec, since you have emphasized that the oil and gas sector is a predominant element of the Canadian economy. In the last few days, I even heard you say that liquefied natural gas was a transitional energy.
Mr. O'Regan, can you commit today to not supporting this project if the BAPE response is negative?
Mr. Simard, you're referring to Énergie Saguenay and the Gazoduq projects. They are currently undergoing a federal assessment by the Impact Assessment Agency, which will do a fair and thorough job based on science, based on evidence and based on indigenous traditional knowledge. Once we have all the necessary information and analysis, we'll make a decision on the projects then. It would be premature for me to say anything other than to acknowledge that there are some cases where LNG may prove to be a bridge fuel in allowing us to lower emissions now.
I said in Berlin, at a conference I attended last Tuesday with John Kerry, the climate envoy to the President, that there are.... People talk about the perfect getting in the way of the good. I want the perfect and I want the good. I want it all. I want every project, and I will look at anything that will lower emissions now, in the medium term and in the long term.
I will look at everything, and I will analyze every one of those projects with, as I said, that threefold mission: lower emissions, with net zero by 2050; an economy that continues to prosper and create jobs; and a future that leaves no one behind—no province, no region, not energy workers.
Thank you, Minister, for being with us again today.
When you were last here, just before Christmas, we talked about energy retrofits. The chair was right that this subject would come up again. I just want to go back to it. I was then thanking your government for actually looking at retrofits and bringing back that home retrofit program, which was so successful before.
I mentioned that Efficiency Canada, the body that studies this and lives it, says that spending has to be 10 times what it is. They came out with a recent analysis on one of the specific areas in which it can and has to be much more bold, and that's in the area of energy poverty. Twenty per cent of Canadians live in households where their energy costs are 6% or more of their income. These programs are not accessible to lower-income homeowners. Efficiency Canada says these people cannot be reasonably expected to pay for the upfront costs required to access later rebates, or take on additional debts to do so. That means 20% of Canadian households won't be able to access these programs, and these are the people who need it the most. These houses are often the older, less efficient ones that need retrofitting the most.
They have put forward what they call a “transformative” goal to retrofit all homes experiencing energy poverty by 2030. That would, as I say, cost a lot more money than you're projecting to spend. They said we should be spending on that part of the program at least what we're spending through your program on commercial and residential retrofits for higher-income families.
I'm wondering if you can pledge today to do that.
Listen, I think what we have in the beginning, Mr. Cannings, is an ambitious program—seven years and $2.6 billion, as you know, announced in the FES. That's available to homeowners retroactive to December 1 of last year. We've asked people to hang on to their receipts. I think that will help a lot more Canadians make their homes more energy efficient. It's a means for homeowners to take real action to fight climate change and create good jobs in their communities. That's a really important point. The jobs will be created in their communities. Efforts are already under way to get the initiative up and running quickly and to roll out the funding for energy assessments and retrofit grants.
To your point, could we expand on it? Absolutely. But we're off to a running start. We're laying the foundation. We're building a national web portal where homeowners can get informed. They can coordinate with local retrofit programs. They can submit a claim and secure reimbursement. It will all be part of the launch coming up. The funding will see as many as 700,000 Canadians benefit from grants of up to $5,000 for retrofits, supported by EnerGuide energy assessments.
We're also investing to recruit and train up to 2,000 new EnerGuide energy advisers to conduct energy assessments. Those will be new middle-class jobs, targeted to reflect Canada's diverse workforce as well. We also announced further spending in that area, making homes more energy efficient by providing access to low-cost loans.
I think you and I speak to the same people on this. There is an incredible amount of energy and enthusiasm. We want to be very ambitious. We are laying the foundation. Could it grow further? Absolutely.
Excuse me, Minister, but my time is very short. It's only five minutes.
I respect that you're bringing up the softwood lumber agreement in your discussions, but I want to see a minister who is pounding his fist on the table fighting for our forest sector, and fighting for our LNG, natural gas and fossil fuel sectors in Canada, and I'm not seeing that.
I read a BBC article that talked about President Biden's side. The White House statement about the call between the and the President read, “The president acknowledged Prime Minister Trudeau's disappointment regarding the decision to rescind the permit”, but “reaffirmed his commitment to maintain an active bilateral dialogue and to further deepen co-operation with Canada.”
That doesn't sound like a who's pounding the table fighting for our natural resources sector in Canada. I just don't see it. Then we saw the announcement about Chevron pulling out. They should be one of the golden eggs in our natural resources sector in Canada, and we're not seeing a fist pounding on the table to fight for that industry. It has the potential to lower emissions around the globe, Minister, as hopefully you know.
If you're so voracious about reducing carbon outputs, you'd think you'd be defending that LNG sector around the world and pounding your fist on the table defending us. I come from an area in northern B.C. where the workers actually do the work to find the natural gas, produce it and get it to market.
How are you fighting for our sector? How are you fighting for Canadians in the natural gas sector in our nation?
Frankly, though, Chevron has decided to cease work. I'll read part of their statement. “At this time, it is Chevron’s intent to cease Chevron-funded further feasibility work for the proposed Kitimat LNG Project.”
Minister, if you're not pounding your fist on the table.... Something is not working. We had how many LNG projects along the coastline of British Columbia that could have lowered global emissions? This could be a great story for Canada, and thankfully LNG Canada is still on track. I know about the project. It's going relatively well, and hopefully we can get gas to the markets in Asia, where it's much needed, to offset some of the higher-polluting fuels and energy. However, Minister, if Chevron is deciding to cease further sustainability studies for such a good project, something is wrong and you might need to start pounding your fist on the table. I would ask, on behalf of all....
You didn't mention British Columbia in your statement. You talked about Saskatchewan, Alberta and your home province. B.C. has a huge natural resource sector. It's very significant to our provincial bottom line and allows people to put meals on their tables and roofs over their heads. We're asking you to fight for our industry.
Thank you, Minister, for appearing before us here today. I, for one, encourage you to continue the approach you have been taking. Standing on a soapbox and screaming bloody murder or pounding fists on tables may make for good talking points and good politics, but it isn't necessarily outcome focused. What we really need to do is keep our eye on the prize and focus on getting the job done. I encourage you to keep doing what you're doing.
My questions today, Minister, will probably not be of any surprise to you. I get to represent a riding that is heavily invested in the nuclear industry. Cambridge has companies like BWXT and ATS, and I was very pleased to see our friend and colleague Wayne Long announce over $50 million in funding from the Government of Canada to develop spent fuel recycling technology and a molten salt reactor in Saint John, New Brunswick.
Can you inform this committee about how the recycling of spent fuel is key to the nuclear energy sector and the potential around small modular reactors?
I will do that, Mr. May, but first let me contest you on one point you made, that standing on a soapbox and thumping your chest makes for good politics. It doesn't even make for good politics. You don't achieve anything. If it did achieve something, then 10 years of it under the Harper government would have gotten a pipeline to tidewater. It didn't.
We are managing right now to build one with TMX. We built Line 3 on our side, and NGTL, which will allow TransAlta to close its coal properties and operate on natural gas. These are huge and seminal projects that we are getting built.
On nuclear and SMRs, there's great potential. Our investment is $50 million to Moltex. We announced that last week. That demonstrates what we think of that promise, supporting SMR research and technology development in New Brunswick and supporting workers and technology that can produce non-emitting energy and reduce the storage of waste. It's a stable salt reactor. It produces emissions-free energy through a process of recycling existing used nuclear fuel to produce energy. It is a system that is the first of its kind and shows Canada's leadership, I think, as a tier one nuclear nation.
A point I've been making is that when you're tier one and the world is looking to you in terms of regulations as world-leading, you don't want to surrender that advantage. We have a plan to advance a safe and responsible development of the deployment of SMRs, and that's only through partnership with provinces, territories, indigenous peoples, labour and industry. A number of provinces, obviously, not just New Brunswick but also Ontario, Alberta and Saskatchewan, have already professed their support. Again, it's all about lowering emissions. If SMRs can help us do that, we are going to look long and hard at them.
We know there are strong feelings on nuclear energy, especially the question of waste. The health and safety of Canadians and the environment when it comes to nuclear are of critical importance. My department launched an engagement process to modernize Canada's radioactive waste policy. We've been engaging, and I personally have, with a lot of Canadians who have very strong opinions on this. These include indigenous peoples, waste producers and others. The determination going through those consultations is to get it right.
Thank you very much, Mr. Chair.
Mr. O'Regan, in response to a question earlier, you said that you had met with people in the forest industry and wanted to be a champion for the forest industry. I like that wording, but that's going to have to be translated into action.
I see that the budget provides $39.3 million for the investments in forest industry transformation program. This is nonsense, given that we know that the shift to the bioeconomy requires technologies that are very expensive. I have the impression that you are not sending a serious signal to the people in the forest industry.
In fact, I want to point something out to you, Mr. O'Regan. You should know that the majority of forest industry stakeholders do not have access to Canada Economic Development for Quebec Regions programs. If they want to have access, they have to apply to Global Affairs Canada, given the dispute we have with the United States. Yet, it is very rare that they are eligible, so much so that no one applies anymore.
So the only sources of funding that the forest industry players have is what's in front of us today. To me, that's grossly inadequate, when I compare that to the amount of money that you're willing to invest in the emissions reduction fund.
I know you said oil was a predominant component, but isn't there work to be done to adjust the resources that are given to the oil sector compared to the resources that are given to the forestry sector?
It's important, I would say, not to take for granted our commitment to two billion trees. I have said time and again that there's no path to net zero that doesn't involve our forests. I don't need to tell you, but it's worth reminding ourselves that we have forest ecosystems that support the well-being of Canadians and also absorb carbon pollution. They lower emissions.
We're finalizing a solution for planting those trees. We're working with ECCC and we're working with Agriculture and Agri-Food Canada on an initiative of huge scale. It is very ambitious, what we're doing in forests. It requires strong partnerships right across Canada to succeed.
We have worked and will continue to work with provincial and territorial governments, indigenous peoples, industry and non-governmental stakeholders to make sure we realize this commitment. We are committed to using nature-based solutions to fight climate change, including two billion trees over the next 10 years to clean our air, clean our water and make our communities greener. There's also forest innovation, expanding market opportunities and indigenous investments. We are putting a lot of money into this because it's very clear—to your point—that it will work.
Going back to the energy retrofits in buildings, I'll pick up from where Mr. Weiler was some time ago in talking about the need for training for people to do all this work.
In my riding, in my hometown of Penticton, we have Okanagan College, which has a sustainable building program that I think is considered the best in the country. I'm wondering if you can expand on what your government is planning to do to support those programs so that we have the technicians and the builders who know the best ways of doing these retrofits to achieve the best efficiency, and so that we are doing this as efficiently as possible.
Mr. Cannings, I would say, “Watch this space.” We are hoping to announce something very soon on training. You're absolutely right. It's essential. We do not yet have the auditors in this country that we'll need for the ambitious targets we are setting for ourselves, so we need, in very short order, to increase the number of auditors that are available in this country.
One thing I will say about our new program—which, as I said, will be unveiled shortly—is that it's one of the few government programs I've seen that really enables people with phones. You can take a picture of your receipt. You can FaceTime with your auditor. You can walk around your house and allow them to inspect by FaceTime. Now, at some point, an actual physical audit will take place, but this will allow us to save a lot of time. In the meantime, you're still creating jobs in local communities. You need people in the communities who can first-hand assess these things, but there are a couple of steps along the way in which we can use technology. We can use people's phones.
The proof will be in the pudding, as you know, but we hope to have answers to that question very soon. We are keenly aware that we need to have the people who are able to conduct the audits and assessments.
Thanks for being here today, Minister.
I want to start by making sure we all understand something you said recently about our relationship with the U.S. I'm just quoting you from your last appearance before the Canada-U.S. committee: “There is more alignment...now than there ever has been before, not only in terms of the goals of the Government of Canada but also in terms of the goals of the governments of Alberta and Saskatchewan too.”
I'm just curious. Do you really believe what you just said there? If so, I'm just wondering why. The American administration on day one came out swinging and attacking the main industry of two of our provinces, not to mention the court challenge by the provinces of Alberta and Saskatchewan on the constitutionality of your government's carbon tax.
Forgive me if I don't believe you. Are you sure you really, truly believe that?
Yes. I absolutely do, and I'll tell you why. The provinces of Alberta and Saskatchewan believe in the reality of climate change. They understand that it is the way in which investors are moving, and that if we don't get ahead of it, we will lose out.
They also have a clear understanding of the fact that whether we like it or not, Canada's number one export, which is crude oil, goes to one customer, and that's the Americans, and they have a new administration and a new way of doing things.
I'm a big believer in the marketplace, and in most instances the customer is right. If the customer isn't right, then you have to make sure, regardless, that you please the customer. Our oil is utterly dependent on an American market.
I don't call it capitulation. I call it making sure we have a thriving oil and gas industry in this country that continues to lower emissions. It needs a customer; that's the reality.
I'm in the business of dealing with reality, like the reality of climate change and the reality of a marketplace that is able, with the right incentives, to manage it and to meet the marks it needs to meet.
I can tell you that the governments of Alberta and Saskatchewan have come an awfully long way in making sure we meet those market realities, because the market has changed, and it is changing in an accelerated fashion. If we want to continue to draw investment into our energy sector in this country, we have to deal with that.
We do not bury our heads in the sand and yet physically find a way to still beat our chests. That is not how you draw investment into this country. It is dealing with reality, and climate change is a reality.
Yes, and to be very clear, I'm quite attuned to this because I come from an energy-producing province, and in fact I've been working on the energy file since some 25 years ago anyway, when we were dealing with the generic royalty regime for our offshore here.
Energy and associated projects come under provincial jurisdiction. That was the very clear and firm lesson that I learned from Minister Savage upon my first meeting with her, two days after I was sworn in. You have to work with provinces in order to make sure this occurs.
The reason we chose orphan and inactive wells was to make sure that the workers who we knew were immediately displaced by demand destruction.... As you know, talk about a year ago and you'll recall when the cost of a barrel of oil went to negative $35. I have an app on my phone called “Oil Price Watch”, and I couldn't believe what I was seeing. I think anybody else who is involved in the industry and cares about it remembers that day very well.
Our first concern right away was workers: first, because you need to make sure you look after them, and second, because this isn't a charitable endeavour, as I keep saying. These are some of the most experienced people in the country, with the highest level of expertise. We can't afford to lose them as we change tracks and lower emissions.
My challenge to workers in my province and in Alberta, Saskatchewan and B.C.—to Mr. Zimmer's point—is always the same. Within a generation, we figured out how to take oil out of sand to become the fourth-biggest producer of oil and gas in the world. That is a phenomenal feat. We need that same ingenuity and level of expertise to take on our new challenge, which is to lower emissions to ensure that the energy sector of this country continues to thrive. Otherwise, investments will pour out. This requires government having to work with unions. It requires government having to work with provincial governments. It requires government having to work with the oil and gas industry in order to make sure we lower emissions wherever and whenever we can find them.
The orphan and inactive wells program is one that we could see was working in British Columbia, in Alberta and, in a more modest fashion, in Saskatchewan. The thinking was something like this: Why create some new federal program, when you have provincial programs that are up and running and we could fund that capacity on the ground, fund increased capacity and fund more projects?
We did the same here—out here it would be offshore—in finding comparable projects, again respecting the jurisdiction of the province and coming together with a package of some $400 million to lower emissions and to train up workers so they continue to lower emissions. Ultimately, that's the goal.
That is how we build.... That is the new challenge to an energy sector that has faced challenges before and workers who have faced challenges before and have been up to the task, by in a generation becoming the fourth-biggest producer of oil and gas in the world. We can lead the world now in lower emissions in our energy sector. There's no question.
Thank you for that, Minister.
Minister, here's my last question for you. Our friends in the Conservative Party had a policy convention this past weekend, at which their party membership voted against saying that climate change is real. They voted against saying that the Conservative Party is willing to act on climate change.
Minister, you know, I know and Canadians know that this is wrong. For the benefit of our Conservative friends, though, why are they wrong and what is your department doing to address climate change?
I would point to critical minerals as a pretty significant success in terms of our dialogue and engagement with our American counterparts. We moved very quickly with the former administration to establish a working group. We've been able to identify areas of common interest. We've begun to work with industry. We've done work between our labs in terms of identifying areas of success. I would say that's a really great example.
Nuclear would be another area in which we've established a table with our American colleagues and are advancing work with respect to uranium and small modular reactors on the regulatory front. That has been quite significant for us, because it is a component of what keeps Canada at the forefront of the small modular reactor file, just as an example.
Regulation at large is another area in which, with the alignment of our regulation and the work we've been doing with our American friends as we look at over 100 pieces of infrastructure across electricity and oil and gas infrastructure, we've really benefited Canada by finding that alignment and looking at the North American footprint.
Those would be elements where we have a really successful relationship with our American colleagues, particularly on the government front.
Hello, Mr. Chair, and good afternoon, committee. I've had the best IT people working on my system, but unfortunately my video is still not working.
I want to welcome the officials who are before the committee today and to thank them for the work they do on behalf of all Canadians in promoting the energy and mining sectors in Canada.
Obviously, I live in Labrador, so I'm next door to some huge rare earth findings and a relatively new mineral development. My questions today will be somewhat geared around that in terms of what we're doing to help incentivize the industry itself and what we're doing to help those companies innovate around rare earths in Canada.
From many of the discussions I've heard, there are very few experimental labs to do the kind of testing they need to do. It's very expensive, as is the extraction technology. I'm wondering if the officials could bring me up to speed on what the future direction is around this particular commodity and where we're going in supporting these companies.
The Canadian minerals and metals plan is the foundational piece that provides us with guidance, and the importance of that is that it was done in partnership with the provinces and territories. We've been trying to build a consensus in terms of approach.
As you can imagine, many of the elements of the regulatory framework and the oversight of the sector lie under the jurisdiction of the provinces and territories. Through the partnership that we've been able to establish, we've been able to look at regulatory issues. We're looking at where government programming at the provincial, territorial and federal levels can come together to incent different kinds of investments.
On the rare earth elements side of things, we have been using the CANMET laboratories on the mining side to look at extraction technology and to help industry advance its ability to better extract more efficiently and to reduce costs for those extractions. We've been able to make contributions there.
Industry relies on a lot of the work we're doing on the geoscience side in terms of its ability to make sound investment decisions.
There is a whole lot of work that we do across the board, for Canada. We have the very fortunate situation in which, theoretically, we can look at 100% value chains in Canada. We have the minerals in the ground; we have world-class, world-leading mining companies that can extract that material from the ground; and we have the manufacturing and the capacity to turn that into high-value goods that go into wind turbines, photovoltaics, batteries and small modular reactors.
It is really for us now, working with industry and the governments of other jurisdictions, to make sure that Canada continues in its world-leading role on the mining side.
If I have time I'd also like to ask a quick question with regard to the clean growth agenda that's been launched by the department and by the Government of Canada.
As you know, I represent northern regions in Canada where we're not just seeing many communities that are highly dependent upon diesel generation, but a lot of mining companies as well. If we're really going to cut emissions, we need to be able to reduce that reliance on diesel and other fossil fuels, both in the communities and across the industry.
Can you speak today about which incentive programs are out there to make this happen, and what we're doing with mining companies right now, in partnership with them, to encourage them to become less reliant on diesel generation in northern regions of Canada?
Good morning, everybody.
The strengthened climate plan included a number of measures, 64 of them. We have spoken specifically about the off-diesel programming that came in under budget 2017. These main estimates include about $60 million so that we can continue to do off-diesel programming. That's helping communities get on to cleaner electricity sources—cleaner power sources.
There is an additional $300 million in funding in the strengthened climate plan, and we'll be looking to move forward on that.
That's just part of the funding that we'll be looking at moving forward. It complements clean fuels and electricity work, but it's specifically focused on our indigenous community. There is capacity building in there as well.
Mr. Chair, I'm mindful I don't have too much time, so I'll stop there.
Mr. Tupper, something surprised me earlier. You said that you had a lot of success stories with softwood lumber and that there would be administrative reassessments. Right now we are in a bubble where prices are very high, but we know that bubble will not last long.
For my part, I hear a different story from people in the business. First, I'm hearing that the cash access program doesn't meet the requirements of the various stakeholders. You almost have to be technically bankrupt to have access to it. Second, even forestry producers who have clients only in Canada are not entitled to request financial support from Canada Economic Development for Quebec Regions. They must apply to Global Affairs Canada and their applications are consistently denied.
What I hear from people in the community on the forestry issue is that the department is often absent. That's the impression most of them have.
Can you update us on that?
Across the board, if you're talking about the kinds of supports we offer as a department to the industry, again, I would make reference to the forest innovation program, the expanding market opportunities program and investing in forest innovation. These are all elements of things that the department offers and that industry is able to take advantage of. It is true that as the market is fairly good for components of the forest sector and prices are very high, it's counterintuitive in terms of the kind of programming government might offer by way of financial support, because in fact the sector right now is doing fairly well.
On the fact that programming exists at the Department of Global Affairs, we take very much a whole-of-government approach to these things. We work very closely with Global Affairs in making sure they have a good understanding of our industry and the sector, and that the decisions they are making through their programming are consistent with the market realities. In terms of the international component, an example of where Global Affairs led the charge for us and where we succeeded was in the reduction of the tariffs from 20% to 8%.
Again, those are elements where we rely on other partners within the federal family—in this instance, Global Affairs—to make sure we are defending the interests of our forest sector.
I'd like to bring up a topic that the minister mentioned in the previous hour in response to a question about SMRs and nuclear energy. He mentioned the molten salt reactor project in New Brunswick, where the federal government is giving $50 million to a British firm to develop an SMR that extracts plutonium from the used uranium fuel at the Point Lepreau reactor. This is somewhat Orwellianly called “recycling”, even though it's extracting only 1% of the nuclear fuel. It extracts plutonium and leaves a large, liquid and highly radioactive waste stream that's very difficult to deal with. Pierre Elliott Trudeau banned the extraction of plutonium from used uranium fuels because of this danger, and also because plutonium is used in nuclear weapons.
Canada has been advocating for a fissile materials cut-off treaty, yet here we are creating more fissile materials. What sort of plan does the government have for dealing with these materials? These are far more dangerous than the materials we are already having trouble finding a home for in the nuclear waste management space. I'm wondering what the government is planning to do and why it is even considering extracting plutonium from these materials.
Thank you. I will ask the officials a question here about the revenues and expenses associated with the department going forward.
With regard to revenues, of course, we're looking at the natural resource industry, and primarily the main economic driver in the natural resource industry is the oil and gas industry. In round numbers over the last 20 years we've had about $25 billion to $30 billion per year go as economic rent from the oil and gas sector to governments. That amount, $25 billion, is a net number, and it doesn't include linear rents to municipalities or excise taxes paid on the consumption of the resources.
If you look at increasing your budget the way you have—and it's almost double over the last two years—at what point in time do you take a look at the actual revenue? I assume that is going down, because of the pricing of the resource and our constraints on the resource, and your expenses continue to go up. Can you square that for me, please?
Maybe I'll say just a couple of things. We can follow up with numbers after the meeting, but what I would like to share with you is that when we look at the climate plan and at programs like this, part of them is the emissions reduction and part of them is the economic activity and the jobs that are going to be coming and that are required to advance and to stimulate the economy. There's the economic development; there is the jobs element, and then there's the emissions reduction. We know that each of these elements will be required to tackle the 17% of emissions that come from our building stock in Canada.
To your question about the greenhouse gases from homes, that's what we're trying to tackle there. On the emissions reduction fund piece that is also funded in here, we were looking at providing improved or better access to capital for those companies so they could tackle their methane emissions during a period of COVID, during which they were facing specific issues. Each of them has specific outcomes that we're trying to achieve through that period.
There aren't numbers that we're targeting with respect to emissions reduction, but at the end of the day, when we try to pull all of these measures apart, they might not be one to one because all of them are required to enable the transition we're moving forward with.
First, I would like to thank all the public servants who are with us today.
Second, thank you very much for working with me. I have enjoyed my experience as a parliamentary secretary very much.
It was an amazing experience to work with all of you and see the professionalism that we have at NRCan. I've had the opportunity to travel the world and talk about Canada. Talented people like we have here are what makes our country so great, because of the stability and the expertise you bring.
Once again, thank you very much.
I have a few questions. Maybe I'll start off with the importance of having a credible plan to reduce greenhouse gas emissions. How important is that to the economy?
I know, Mr. Tupper, you've been dialoguing with a lot of other officials from across the country, as well as industry. As we know, ESG is certainly top of mind. We're seeing it more and more. In your view, why is it so important to have a credible reduction plan when it comes to lowering our carbon emissions?
Maybe there are two parts to this. I will do it in as efficient a way as possible.
The first part was that the courts have been regularly telling the regulatory agencies, the government and decision-makers that meaningful two-way engagement is necessary for indigenous issues to be adequately and sufficiently covered under section 35 of the Constitution.
In the TMX project, that was the redo in which the government put forward the plan and, through the course of well over nine and a half months, worked through meaningful engagement of the 128 indigenous groups potentially impacted by the Trans Mountain expansion project.
In the CEAA 2012 context, the government brought in, a number of years ago, the Impact Assessment Act. In the Impact Assessment Act, the beginning of the process has for early planning. That early planning involves significant engagement with indigenous communities up front and through the process, as the proponent is adequately developing the regulatory filings.
The government engages with indigenous communities to provide the capacity. The indigenous communities are involved with the proponents, working closely at understanding the projects and the potential impacts, so that by the time the project moves its way into the assessment phase, the level of understanding and awareness of the issues and the engagement is well advanced.
In the regulatory example, the Canada Energy Regulator, in this case, has already developed a relationship. It is already aware of the issues and has the information base in front of it, and the indigenous communities have been part of the process well before the detailed examination of the project's regulatory proposals is in place.
That continues through the regulatory process, so that indigenous communities are part of the regulatory process and are able to be heard. The Crown side of the equation begins its consultations and further advances the meaningful two-way dialogue so that any issues that come up can be accommodated, or they can be developed in a mitigative fashion through the particular recommendations that might be made by that regulator.
It's a much more comprehensive approach to how indigenous engagement occurs, which is what industry seeks in terms of trying to identify the certainty and to know that through the process...that the conclusion of the process will provide as much clarity and certainty as they have with respect to the project they've submitted.
On a point of order, Mr. Chair, I don't agree with Mr. May that this is something we move in camera. The witnesses can leave, of course, but committee business is still happening as committee business.
Mr. Chair, it's been an unusual year and the minister has had an unusual year. He wasn't here for some of the other supplementary estimates, so I think this gives him the opportunity to come before the committee one more time. He should take advantage of that opportunity.
This is Parliament and we still need to function as if we are Parliament. Insofar as this, to my understanding, requires consent from this committee to have the two combined, I don't think we received it.
That's what I'm waiting on right now.
Mr. McLean, in response to that, we are proceeding as Parliament, not “as if” it is Parliament. We're actually doing that.
The minister has always been very generous with his time. He's been willing to make himself available at any time requested and on occasions when he hasn't been requested. It has been an unusual year. Nobody will disagree with that either.
When the minister was not able to come, we all know it was for personal reasons. They were family matters. Nobody—and I include you, Mr. Patzer, and all of your colleagues in this—holds any ill will toward the minister for that, but the circumstances were such as they were. Regardless, he has always been willing to come.
We can deal with this in camera. I'm happy to have a discussion about it. I will listen to Mr. Patzer's point of order, and then I'm going to suspend while we go in camera.
I just want to bring to your attention, having gone back through the Hansard of our last meeting, that when you addressed us all at the end of the meeting you said “to discuss estimates”. You did not clearly say main estimates. You just said estimates. You left it vague, so we did not have the clarity that we were going to be discussing the main estimates.
The motion we unanimously voted on as a committee, every member, was for the supplementary estimates. That was why I asked for a vote on it, to make sure we were voting on just the supplementary estimates. Last time, again, you did not specify main. You said only estimates, and the Hansard indicates as much.