Anyway, I have an official piece here, and then we'll get right into it, if everybody's willing.
The committee meeting today is to hear from the Minister of Natural Resources and officials. We have nine officials joining us remotely, so thank you to each of the departmental representatives who are here with us.
Pursuant to Standing Order 81(4), we're considering the main estimates 2022-23, vote 1 under Atomic Energy of Canada Limited; vote 1 under Canadian Energy Regulator; vote 1 under Canadian Nuclear Safety Commission; votes 1, 5 and 10 under Department of Natural Resources; and vote 1 under Northern Pipeline Agency.
We are all well aware of committee proceedings and processes, so I'm going to skip through all that stuff. If you're at the table, you can take your mask off. If you're not, please wear it unless actively eating or drinking. Direct your comments through the chair.
We're going to try to get through a couple of rounds. The minister has a hard departure time of six p.m. The officials have said they can stay beyond that if necessary.
Members, we have three hours from the time we started but not beyond nine o'clock. The plan is to go through the main estimates. There's a motion after that we need to discuss about reporting the main estimates back to the House. The intent, then, is to go in camera to, hopefully, get as far into or even finish the emissions reduction fund this evening. That's the lay of the land.
With that, Minister, if you're ready to go, I will turn the clock over to you. You have five minutes for your opening statement. Then we'll get into the first round of four questions of six minutes each, and we'll see where we are at that point.
I'll turn it over to you, Minister. I look forward to your opening comments.
I am pleased to join you to discuss the main estimates. I am joining you from the traditional, ancestral and unceded territories of the Squamish, the Musqueam and the Tsleil-Waututh first nations.
As folks here will know very well, the effects of the brutal Russian invasion of Ukraine extend well beyond Europe. The invasion has had a destabilizing impact on global energy markets. Europe has asked us for help. In response, Canada has been working to stabilize energy markets and to develop long-term solutions with our allies. In fact, I will be in Berlin for the G7 environment, climate and energy ministers' meeting next week as part of that ongoing engagement.
Likewise, when I addressed the U.S. Senate Committee on Energy and Natural Resources yesterday, I spoke about the need to enhance continental energy security while building future-facing value chains, including those for critical minerals and hydrogen. Like our European allies, many of our partners south of the border are looking to us to supply stable and clean electricity and clean fuel solutions as we look to address energy security and climate change issues concurrently.
Acting to secure our energy supply while addressing the climate crisis is an example of how we are walking and chewing gum at the same time.
Going forward, energy security is increasingly tied to clean energy. Autocrats will not be able to destabilize our energy markets when we are supplied by clean fuels, renewables and effective storage. As the President of the European Commission Ursula von der Leyen stated earlier this month, it is our switch to renewables and hydrogen that will make us truly independent. We have to accelerate the green transition.
I would also like to underline the role of hydrocarbons as we move forward. Certainly we must remember that this is a transition that will take place over time. Second, we must ensure that we appropriately consider how we can play a constructive role regarding the displacement of Russian oil and gas in the short to medium term. Finally, we need to recognize that in a net-zero 2050 world, the world will still be using about one-quarter of current oil production and about one-half of current gas production in non-combustion applications—like lubricants, waxes, etc. This means that countries and projects that can produce oil and gas with virtually zero production emissions will be the last producers standing, underlining once again the importance of emissions reduction.
It is in this context that we are asking Parliament to review and approve total budgetary authorities of just over $3.6 billion. This is an increase of $1.37 billion, or 61%, from last year’s main estimates.
The key items contained in this request will help unlock Canada’s tremendous capacity to innovate, and build towards sustainable and long-term prosperity as we move towards a net-zero future.
Whether it is critical minerals, forestry, nuclear investment, renewable energy, energy efficiency, home retrofits, grid modernization, zero-emission vehicle infrastructure or carbon removal technology, you will see in the investments contained in these main estimates a common thread.
By supporting Canadians' tremendous capacity to innovate and seize opportunities, we are acting to ensure a prosperous energy transition that will deliver sustainable jobs, the advancement of indigenous reconciliation and increased economic opportunities across sectors and regions.
The opportunities from a sectoral perspective will come from new products that enable a low-carbon future—such as electric cars, battery technology, critical minerals, hydrogen and other clean technologies—and new uses for old products, as we are seeing with the bitumen beyond combustion program in Alberta.
This includes our existing reliable hydroelectricity from provinces like Quebec. It also includes our growing critical minerals industry—which is vital to the global shift towards electrification and clean energy.
At the same time, innovations in Canadian hydrogen technology are being spurred by our investments: for example, the potential in Newfoundland and Labrador to enhance energy security by exporting clean hydrogen to Europe and down the U.S. eastern seaboard.
Together, we are delivering for Canadians by fighting climate change, revitalizing ecosystems and building a prosperous future with abundant clean and secure energy.
As I mentioned at the outset, these priorities are intertwined. Taking well-considered and decisive action now can drive Canadian energy security, clean growth and prosperity for decades to come. That understanding guides our government's investments in Canadians' future.
I would be happy to elaborate on these pieces, and I look forward to your questions.
Thank you very much for the opportunity to be with you today.
Certainly, I have always been engaged on this file. We have been working very hard to ensure that we are developing a clean and prosperous future for Canadians that includes abundant and secure energy sources.
We've certainly been working very hard with the Americans—our American friends—on that over the course of the past number of months. In fact, I was in Washington last week to meet with the Department of Energy, with Secretary Granholm and with officials at the White House, on exactly that.
Certainly, we're working in the short term around oil and gas, but we're also working on issues around hydrogen and critical minerals, etc., going forward.
Let's get back to some of the other issues here. The shutdown of Enbridge Line 5—540,000 barrels per day of critical energy supply for the continent—would exacerbate North America's energy supply chains and raise the cost of energy in both our countries.
In October of last year, your government finally got serious on Canada's initiatives and ex-minister invoked the terms of the transit pipeline treaty, making Canada's position crystal clear. Now, the same interest groups behind that lawsuit are introducing similar lawfare activities through other legal channels.
Minister, these are interest groups that your government has played pussyfoot with for far too long. How long will it take in the legal action for you to make Canada's position crystal clear again?
Thank you very much for the question.
As you know very well, retrofitting homes is one of the fastest and most inexpensive ways to reduce greenhouse gas emissions, to save homeowners money on their energy bills, to create good jobs in communities and support growth of Canada's green supply chain. The government has invested in the Canada greener homes grant program, which will provide Canadians grants of up to $5,000 for energy efficiency retrofits. Additionally, the government will be further supporting Canadians by providing access to interest-free loans through CMHC.
Budget 2022 also made a number of investments to accelerate the pace of deep retrofits in Canada, putting a focus on low-income affordable housing. An example is the $200 million that we are allocating to the deep retrofit accelerator. We are also developing a green building strategy that will include code reform and a number of other things to ensure that we are moving forward on a path to net zero.
Thank you for being here, Minister.
Not a single day goes by when I do not receive emails or messages on social media from constituents about the price of gas, which is above two dollars a litre.
I have a very simple question for you.
We all know the refining margins, and we can talk about that a bit later. Do you think it's obscene, then, that the government is supporting multi-billion-dollar oil and gas companies as middle-class people watch their hard-earned money go right into the pockets of those multi-billion-dollar companies?
Forgive me, but I don't have a lot of time. I understand all that, but here's what I want to ask you about.
I see here, in the main estimates, that $384 million is being requested for the emissions reduction fund, which has been very problematic. Just think of what the commissioner of the environment and sustainable development had to say about it. This is $384 million for big oil companies.
Éric Pineault, a professor and economist at the Institute of Environmental Sciences, told the committee that the program may have been appropriate in 2021, during the crisis, when oil was trading at $64 a barrel. Today, however, oil is trading at double that, in the neighbourhood of $128 a barrel.
I want to talk about refining margins, Minister. In 2008, the refining margin was 9.4¢. Today, it's 48.2¢. What that means is that oil companies are lining their pockets at the expense of the middle class.
Do you understand why people in the middle class would be upset when they see that you are handing over $384 million to the oil companies just so they can reduce their emissions?
I understand all that. What I am telling you is that multi-billion-dollar oil companies don't need public funds to do what they should be doing, in other words, reducing their emissions.
I'm going to give you a third chance.
In the budget, $2.6 billion has been earmarked for carbon capture. I see that you are going to put $384 million towards the emissions reduction fund. Among the companies that will benefit are Suncor, which reported $2.95 billion in net earnings last quarter; Imperial oil, whose profits hit a 30‑year high of $1.17 billion; TC Energy, which turned a profit of $1.1 billion; and Chevron, which managed to quadruple profits last quarter.
You are going to hand over an obscene amount of public funds to those companies, when the middle-class is being bled dry, when truckers, taxi drivers and farmers are being bled dry. It is unlikely that any of them will be able to take vacations this summer as they watch their profits disappear. Meanwhile, you are giving public money to multi-billion-dollar companies.
Can you see how that's obscene?
I like you a lot, Mr. Wilkinson, but that's not an answer.
It's completely obscene. You brought up aluminum, but the money going to support carbon-neutral aluminum is but a speck of dust compared with what goes to the oil and gas sector.
The very same week that I was getting calls from people telling me that they had to cancel their vacation plans because it was costing them an exorbitant amount in gas just to get to work and back, I found out that a $10‑billion loan guarantee had been approved to support a pipeline and that $2.6 billion had been invested in carbon capture. Both of those investments are solely in support of the oil and gas sector. In these supplementary estimates, $384 million is being allocated. If you add all that up and tell regular folks about it, why, it's enough to send them into apoplectic shock.
Shouldn't there be something preventing multi-billion-dollar oil and gas companies from taking a cut of public funds when everyone has to sacrifice and make an effort, and everyone is being hit hard by high gas prices?
Aren't you thinking about ways to end the financial support that goes to these greedy companies hungry for public money?
It's a pleasure to have you back, Minister. You're always welcome at our committee. We've had many discussions, you and I, about the need to get this right. That's why I asked to be on this committee. Getting it wrong, to me, is not an option.
Professor Kevin Anderson, who prepared the Tyndall Centre report on the climate crisis, testified at our committee. He stated that “for a 50% chance” of meeting the 1.5°C, Canada along with other wealthy oil and gas producers must cut production by “74% by 2030”—that's seven years from now—“with complete phase-out by 2034.”
Based on your conversations with your staff in your department, would you say he's right or is he exaggerating?
That would be good, but I was reading the budget, and I really don't see a sense of urgency at all. I see a lot of aspirational talk.
There's going to be a new tax credit, and they quote that the Department of Finance will be engaging “with experts to establish” this. On “Expanding the Low Carbon Economy”, it says, “Greater collaboration on climate action between all orders of government”. On “Building Capacity to Support Green Procurement”, it says that Public Services and Procurement Canada “will develop new tools, guidelines and targets”. I mean, this would be a great budget in 2004—2006 was in the Harper years, and they weren't interested in the climate—or budget 2015 or budget 2019.
It's either a code red for humanity or it's business as usual. Why am I seeing aspirational language? I'm not seeing, “Yes, this is a code red and there's a rapidly closing window.” I don't hear a sense of a rapidly closing window from you. I see lots of, “Yes, we're going to have consultations, we're going to meet experts, we're going to talk with people, and we're going to get to this better future.”
Why is it not telling us exactly where those investments are, how soon and what we're going to do to meet this? Either it's an emergency, or it's not true.
No offence, but when Liberals talk consultations, that tells me this is getting booted down the road. I'm seeing a code red for humanity.
The one thing I do see that you guys moved with urgency on was when CAPP, the Canadian Association of Petroleum Producers, said it wanted serious investments in carbon capture. I know you guys are telling me how great this is, but this is completely unproven. Four hundred environmentalists and scientists warned against it. In the budget, it's the number one item. It's $7.1 billion. It's there. Everything else is aspirational. You responded when the oil sector said, give us carbon capture and we'll do our job, but the other elements are still aspirational.
When are we going to see that $7.1 billion in hard so that we can say to energy workers and their families that there is a new economy coming, and here it is?
I have a quick one here, then. I'll try to get a couple in.
You voted against the Conservative opposition day motion, Mr. Minister, to undertake measures to get Canadian natural gas to be exported to Europe to displace Russian gas. Last week it was reported that your department approached Pieridae to get the proposed Goldboro LNG terminal built in Nova Scotia. The story even quoted the CEO of Pieridae, saying, the federal government might be offering, “regulatory and financial support.”
While I applaud this new enthusiasm to get LNG projects built, I still don't understand why you voted against our opposition day motion with this outcome. Is your new position to offer regulatory and financial support to get LNG projects built, given that you have three areas that he said were hurdles that remain? They are first nations reconciliation; new engineering, procurement, construction and commissioning; and achieving needed upgrades to existing pipelines, which is what we were asking for in the first place. Can you just answer that?
Thank you. I have one more quick one here.
On the night your government approved Bay du Nord, to cushion the blow to those who wanted the project scrapped, your government announced you'll be introducing even more regulations, which have yet to be fleshed out.
Now that the Alberta Court of Appeal has ruled that Bill is unconstitutional, how could you possibly move forward with further regulations, without having any certainty before the Supreme Court weighs in?
Will you commit today to not introduce any new regulations until the Supreme Court rules on whether Bill is unconstitutional?
For the officials, we're hoping to be able to keep you for 15 minutes, for a five-minute question, a five-minute question, and then two two-and-a-half-minute questions.
Mr. Hannaford, I know you have eight of your team with you. Instead of taking up time to introduce everybody, I think we have a list of who is here. If you want to direct the questions to any of your team, please feel free to do that.
Thank you to all of the officials for waiting with us today as we got through votes and a late start and a bit of a late end. We appreciate it.
Right now we're going to go to our first five minutes. Mr. Maguire is going to take that.
With that, Mr. Maguire, the clock is yours.
Thanks to all of the members from the department who are staying.
Mr. Hannaford, I want to thank the officials from the Canadian Nuclear Safety Commission for meeting with me yesterday. They were courteous and very knowledgeable, but I was troubled to find out that the letter I sent to you, which included the U.S. director of national intelligence's preliminary assessment on UAP, including the legislation and a list of the UAP sightings near Canadian nuclear facilities, was not shared with the director general who is in charge of the security of safeguards.
Why didn't you share that information with your officials?
Thank you very much, Mr. Chair.
I should say at the outset that obviously nuclear safety is one of the critical aspects of the work of CNSC and of my department and is something that we do take very seriously. Following on your question at our last appearance, we did receive your letter, and I do apologize. We're still tracking down precisely what happened, but the information was not provided to CNSC, as you say.
I've now had several conversations, though, with my colleagues within the department and with the president of CNSC. I can assure you that this is something that both organizations are fully apprised of. As you note in your letter, this is a matter of importance.
Thank you very much for the question.
Certainly critical minerals are of enormous strategic importance. That's been recognized in the budget, where $3.8 billion has been assigned to address our critical minerals strategy. That is a further tranche over and above earlier funding that was reflected in the main estimates, which will allow for the creation of a centre of excellence for critical minerals. The centre of excellence will be the centrepiece in establishing and elaborating our strategy with respect to such minerals.
As the honourable member says, what will be critical here is focusing our efforts where we can in order to support Canadian supply chains and the supply chains of our allies and work very closely with those allies, with private sector and with indigenous communities to ensure that the development of these resources is done in a responsible way and in a way that allows for indigenous reconciliation and self-determination. That's why part of the funding includes our indigenous partnerships program and funding for the indigenous partnerships office.
We also need to be working very closely with allies and with industry groups as this policy evolves.
I have a brief question for Mr. Hannaford.
Earlier, the minister gave us the definition of an inefficient fossil fuel subsidy—a definition we had never gotten previously. In his response to me, he said that they covered all subsidies that boost oil and gas production and exports. I was very glad to finally have a definition.
Mr. Hannaford, does that mean the emissions reduction fund and, similarly, the $2.5 billion for carbon capture are subsidies that do not boost or accelerate exports or production?
For the purposes of the department, can they be described as subsidies that do not boost exports or production?
Forgive me, but I'm going to try to make myself clearer. That's a problem of mine; sometimes I don't make myself clear.
When the committee was studying the emissions reduction fund, we were told repeatedly that production should not be capped; rather, emissions should be. Accordingly, if the emissions reduction fund is not putting a cap on production, it is boosting it.
Would you agree with me that, in reducing the sector's emissions, the fund can boost production?
It is possible to produce more oil and gas with fewer emissions.
For the members, the question I have is whether I have unanimous consent to vote on the main estimates in one motion.
Is everybody good with that?
Some hon. members: Agreed.
The Chair: We'll begin the votes.
Shall vote 1 under Atomic Energy of Canada Limited, vote 1 under Canadian Energy Regulator, vote 1 under Canadian Nuclear Safety Commission, votes 1, 5 and 10 under Department of Natural Resources, and vote 1 under Northern Pipeline Agency, less the amounts voted in the interim supply, carry?
ATOMIC ENERGY OF CANADA LIMITED
Vote 1—Payments to the corporation for operating and capital expenditures..........$1,174,652,615
(Vote 1 agreed to on division)
CANADIAN ENERGY REGULATOR
Vote 1—Program expenditures..........$90,160,129
(Vote 1 agreed to on division)
CANADIAN NUCLEAR SAFETY COMMISSION
Vote 1—Program expenditures..........$40,818,583
(Vote 1 agreed to on division)
DEPARTMENT OF NATURAL RESOURCES
Vote 1—Operating expenditures..........$722,418,907
Vote 5—Capital expenditures..........$36,640,886
Vote 10—Grants and contributions..........$2,245,355,494
(Votes 1, 5 and 10 agreed to on division)
Vote 1—Program expenditures..........$540,000
(Vote 1 agreed to on division)
Shall I report the main estimates 2022-23, less the amounts voted in the interim supply, to the House?
Some hon. members: Agreed.
The Chair: Thank you.
Folks, with that, we're going to now suspend. The idea is that we will go in camera. The hope is to spend a brief amount of time. We have until after eight o'clock, but I would like to get into the recommendations for the emissions reduction fund. We have two left in the main report, three from Mr. Angus and two from Mr. Simard. We have a brief draft conclusion and three charts that I'm hoping we can get to.
With that, we'll suspend to give us just a couple of minutes to bring our analysts back in.
[Proceedings continue in camera]