Good morning, everyone. I call this meeting to order.
Welcome to meeting number 41 of the House of Commons Standing Committee on Natural Resources.
Pursuant to Standing Order 108(2), the committee is meeting to hear from witnesses for its study of federal assistance for various natural resource industries. Today’s meeting is taking place in a hybrid format, pursuant to the House order of June 23, 2022.
For everyone participating today, neither screenshots nor photos of any sort are allowed now that we're in session.
For the benefit of witnesses and members, please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike, and please mute it when you're not speaking. There is interpretation available. You have the choice of the floor, English or French. That's on the bottom of your screen, for those participating remotely. For those in the room, you can.... Everybody in the room knows the drill.
All comments should be addressed through the chair.
For anyone wanting to join in the conversation, feel free to use the “raise hand” function. When we get into the questions and answers, I leave it very much to the member who has the floor to guide where they're directing their questions. I'm sure many of you have participated at committee before, but it goes pretty quickly, so the members may sometimes have to jump in and ask you to wrap up, so that they can move on to their next round of questioning.
All witnesses have completed the required connection tests.
Before we get started, I will point out that I use a handy card system. When you see the yellow card, there is 30 seconds left in the allotted time. The red card means that time's up. Wrap up your thoughts, but don't stop mid-sentence.
With that, we have seven participating organizations today. Thank you all for being here with us.
We'll have the Atlantic Canada Opportunities Agency go first with a five-minute opening statement, followed by Canada Economic Development for Quebec Regions, the Canadian Northern Economic Development Agency, or CanNor, the Federal Economic Development Agency for Northern Ontario, the Federal Economic Development Agency for Southern Ontario, Prairies Economic Development Canada and, lastly, the Canada Energy Regulator. At that point, we will be moving to our rounds of questions.
I have been asked by members to conclude as close to one o'clock as possible. I have a bit of committee business—administrative tasks—relating to this study that I'd like to deal with, so I'll keep an eye on when we stop the questions and move to that. We should be able to get through close to two rounds of questions this morning.
With that, if we're ready to go, I will turn it over to the Atlantic Canada Opportunities Agency for their opening five-minute statement.
As you take the floor for each of your organizations, if you would like to introduce yourself and then go into your statements, that would be appreciated.
ACOA, the floor is yours. When you start speaking, I will start the clock for your five minutes.
Good morning, Mr. Chair and committee members.
Thank you for the invitation to appear today. My name is Chuck Maillet. I am the vice-president for the Atlantic Canada Opportunities Agency, or ACOA, for Nova Scotia's operations. I'm joined by my colleague David Boland, director general of regional operations for the Newfoundland and Labrador office.
I am joining you today from Halifax, the unceded territory of the Mi’kmaq people.
Mr. Chair, in Atlantic Canada, natural resources industries are important employers and contributors to the economy. As key economic drivers in many communities, small and large, across the region, these industries are a priority for ACOA.
The agency works to create opportunities for economic growth in the region by helping businesses become more competitive, innovative and productive, and by working with diverse communities to develop and diversify local economies, and by championing the strengths of Atlantic Canada.
Through its suite of programs and initiatives, the Atlantic Canada Opportunities Agency is well placed to work with businesses, industry associations and government agencies at all levels to help our region's natural resource industry remain stable, innovative and competitive, and to improve its resilience to the effects of extreme weather.
As such, agency employees in more than 30 communities, from our major cities to resource-dependent villages, work closely with community representatives, provincial governments, indigenous organizations and other economic stakeholders to identify priorities and opportunities to maximize the potential of our region's natural resources in a strategic and sustainable manner.
In addition, our presence on the ground allows us to provide effective and targeted advice and support that helps businesses in the natural resources industry grow, diversify and offer new or value-added products and services, and adopt or adapt new technologies to become more innovative, productive and competitive. We also help businesses access supply chains and start or expand exporting their products to domestic and international markets.
I can give you some examples. In the oil and gas sector, we’ve assisted the industry associations econext and Energy NL to conduct a project titled “net zero pathways”, which will provide detailed pathways for Canada’s offshore oil and gas industry to achieve net-zero GHG emissions targets in offshore oil and gas production by 2050 while maintaining economic development and industry growth.
In addition, we have supported Enaimco management in St. John’s, Newfoundland and Labrador, to commercialize its digital twinning services for subsea infrastructure monitoring, which will significantly reduce greenhouse gas emissions, operating costs and risk for operators.
In the forestry sector, we supported Lewis Mouldings in Weymouth, Nova Scotia, to automate its operations to process waste wood into new products.
In the mining sector, we've partnered with Tacora Resources in Wabush, Newfoundland and Labrador, in the development of a new innovative process to separate manganese from iron ore, resulting in a higher-grade iron concentrate.
Additionally, ACOA supports research aimed at sustaining and growing the region's natural resources industries, with over 20 projects supported to date.
ACOA’s efforts are focused on assisting SMEs, and complement the work of other federal departments and agencies like Natural Resources Canada. We do share a goal of supporting the competitiveness of Canada’s natural resources industries, and in our particular case Atlantic Canada’s, by helping small and medium enterprises to diversify products, markets and processes.
ACOA will continue to work with natural resources industries’ players, especially small and medium enterprises, all levels of government and community leaders to ensure that Atlantic Canada’s natural resources industries can take advantage of emerging opportunities and continue to thrive, create jobs and help grow the economy.
This concludes my remarks. Thank you for your time. I will be pleased to answer any questions you may have.
I'd also like to thank the members of the committee.
My name is Marie-Claude Petit, vice-president of Operations at Canada Economic Development for Quebec Regions. From Montreal I'd like to thank the first nations who have used and occupied this land for millennia for welcoming us to their traditional territory.
I'm pleased to be here today to talk to you about our agency's activities in Quebec. Canada Economic Development for Quebec Regions, or CED, is the key federal player when it comes to the economic development of the regions and SMEs.
To begin, I'd like to point out to the committee that CED, like other regional development agencies in Canada, isn't sectoral. We don't have a mandate to intervene in one industry or another.
Rather, our mandate is to foster conditions for economic growth in the regions we serve. We are interested in the natural resources sector because it is a solid driver of growth in some regions. Our intervention priorities address such cross-cutting economic issues as the competitiveness of SMEs, market access issues, the necessary transition to net zero and support for devitalized communities.
Canada Economic Development supports SMEs, and the organizations that assist them, in the development, marketing and adoption of technologies. We also support the development of community assets, including tourism and the promotion of foreign investment.
In all areas of activity, we pay particular attention to projects led indigenous people or that could benefit their communities.
Just as they are all across Canada, natural resources are an asset for Quebec and an economic driver in several of our regions.
When they are related to businesses or economic players in this sector, our investments aim, among other things, to lead Quebec's regions beyond resource extraction, in order to protect them from the cyclical and structural challenges associated with it.
That's why our interventions don't directly affect natural resources development, but rather support secondary and tertiary processing activities, when they are promising projects for their region.
We also promote the creation of innovation ecosystems, such as those that are deployed in the college centres for the transfer of technology, or CCTTs.
For several years now, we've been supporting Nergica, a CCTT affiliated with the Cégep de la Gaspésie et des Îles that works in the wind and solar energy sector.
In Saguenay—Lac‑Saint‑Jean, we invested in a project with Agrinova, another CCTT created by Collège d'Alma, to set up a centre to process forestry waste, in addition to acting as a business accelerator.
By focusing on these promising sectors and leveraging the competitive regional advantages, Canada Economic Development is contributing to the economic vitality of the regions and helping them obtain exposure, both within Quebec and beyond its borders.
We also play a key role in terms of integration and networking, which allows us to bring the right partners together for a given project.
This type of collaboration allows us to deliver on large-scale projects for our regions.
We also rely on cross-sectoral co‑operation and, of course, on collaboration with the Quebec government, a partner we have a special relationship with.
CED's approach is nimble, agile and focused on our community. We prioritize projects that generate long-term economic benefits.
Canada Economic Development will continue to support Quebec businesses and regions to foster a greener, more resilient economy for everyone.
Thank you. I will be pleased to answer any questions you may have.
Thank you, Chair and members.
My name is Margaret Buist. I am the vice-president of policy, communications and northern projects at the Canadian Northern Economic Development Agency, or CanNor. I will be providing my opening remarks in both English and French.
Like other regional development agencies, CanNor is responsible for promoting economic development within a distinct region of this country. In our case, the region is the three territories.
Our fundamental responsibility is to support the conditions for a sustainable, diversified and innovative economy in collaboration with northerners and indigenous peoples, businesses, organizations, other federal departments and other levels of government.
The natural resources sector remains a cornerstone of the northern economy, primarily driven by the mining industry, which is the largest private sector contributor to the territories' economies, accounting for approximately 23% of the GDP in 2020 and likely to reach over 28% by 2024.
Much of Canada's mineral potential lies in the territories, including critical minerals that are essential to Canada's economic security and its transition to a low-carbon economy.
While the region north of 60 presents 40% of Canada's land mass, more than 75% of the region's known mineral deposits remain undeveloped due to a significant infrastructure deficit and high operational costs, amongst other factors.
The gross domestic product of all the territories is expected to grow over the next few years. This growth will be largely driven by the mining sector, particularly in Yukon and Nunavut. However, the Northwest Territories is facing headwinds due to lower mineral exploration investment activity and the planned closure of diamond mines.
CanNor is guided by its pan-territorial growth strategy, which is aligned with the Government of Canada's Arctic and northern policy framework. Much of the agency's funding is centred on foundational investments intended to attract economic development, including in the natural resources sectors. CanNor has invested over $38 million for 72 projects since 2015 in energy, forestry, minerals and geoscience sectors.
For example, CanNor invested $1.26 million in the Nechalacho project in the Northwest Territories to fund innovative ore-sorting technology that makes the process more environmentally friendly. This is the first rare earth mine in production in Canada and one of the first to have an indigenous company responsible for mining on its traditional territory.
CanNor also invests in preconstruction readiness of foundational infrastructure projects that, when built, will improve the competitive position of resource development projects. For example, there's $1.28 million to advance planning for the road that will connect the Slave Geological Province in the Northwest Territories to the Kitikmeot Inuit region of Nunavut. There's more than $875,000 toward an all-season Mackenzie Valley Highway. There's $1.6 million to support the Kivalliq hydro-fibre link between Nunavut and Manitoba. There's also $480,000 to support the planning of the proposed Taltson hydroelectricity expansion project.
The renewable energy sector is expanding in the territories to reduce their dependence on diesel. Over the past three years, CanNor has invested more than $16 million in energy projects. I'll give you a few examples.
There's CanNor's $4.6-million investment in the Old Crow solar project to support the Vuntut Gwitchin in equipping their community members with the knowledge and experience to manage operations, and $1.2 million to the Qulliq Energy Corporation in Nunavut to study geothermal potential.
Other resource sectors are smaller in the north, although they are important for economic diversification. For instance, we're helping a small indigenous women-led business called Yukon Timber, a local Whitehorse firewood supplier, expand its services.
CanNor will continue to work with territorial governments, indigenous partners and industry to advance resource development projects in the north that support sustainable economic development.
I'm happy to address any questions you may have.
It is my privilege to appear before the committee today.
I would start by acknowledging that I'm joining you from Sudbury, which is located on land within the Robinson Huron Treaty territory.
I'm here in my capacity as executive director of program delivery for the Federal Economic Development Agency for Northern Ontario, also known as FedNor.
FedNor serves a dual role, both as pathfinder and funding partner, connecting the region's businesses and stakeholders to opportunities, and investing in key initiatives that lead to job creation and economic growth in our great region. In northern Ontario, this includes support for projects in key sectors that are the focus of the committee today.
The mining sector, in particular, is a key driver of northern Ontario's economy, and the region is widely recognized as Canada's centre for mining excellence. In addition to many operating mines located across the region, northern Ontario is also home to a substantial supply and service subsector that serves mines across the country and exports its products around the globe.
To support the continued growth of the mining sector, FedNor is focused on key activities including promoting the adoption and commercialization of new technologies, fostering linkages between businesses and institutions and improving trade and export performance. Since 2015, FedNor has invested more than $28 million toward 48 mining projects that have leveraged a further $106.5 million.
For the past eight years, FedNor has funded a pavilion that now showcases more than 100 mining-related businesses at the Prospectors & Developers Association of Canada—PDAC—convention. There, exhibitors have used the opportunity to form strategic alliances, strike business deals and increase exports. They have recommended some $85 million in direct economic benefits for the region.
To further support mining innovation and to reinforce links in the mining ecosystem, FedNor also works with public sector organizations, such as colleges, universities and innovation centres, with a mandate to support the mining industry or SMEs in the mining supply chain. This past summer, FedNor invested $2 million in two key battery electric vehicle projects in Greater Sudbury.
Northern Ontario's wealth of mineral deposits positions the region as a key player in the global supply chain for electric vehicle batteries and clean energy. As such, FedNor's focus on mining also includes emerging opportunities around critical minerals. As we move forward in developing the mining ecosystem, FedNor's focus is to support projects that move beyond simple extraction and into value-added production. Our goal is to maximize the benefits for northern Ontario communities, while ensuring that we do so correctly by working closely with many indigenous communities and rural communities in our region.
Speaking of which, northern Ontario is, of course, home to the Ring of Fire. This is a region in the Far North that contains concentrations of chromite and nickel worth up to $60 billion. There's enough to be mined for decades. The Ring of Fire falls within the traditional territories of several remote first nations communities and has the potential to benefit these communities, if done right, and help grow the economy at both the provincial and national levels.
FedNor has supported a variety of initiatives in these rural and remote communities to build the capacity they need in order to take advantage of the economic opportunities coming forward.
Now that I've touched on mining, I wanted to quickly touch on the forestry industry in the region.
Northern Ontario accounts for more than 75% of the province's productive woodlands, and is home to 70% of the province's mills, accounting for more than 35,000 jobs. But while the forestry sector is an important contributor to the region's economy, it faces a number of challenges. Some of these include the high costs of transportation, energy and labour, and the difficulty companies have in recruiting and retaining skilled labour.
To help address these challenges, FedNor has supported 33 projects in the forestry sector since 2015, representing an investment of more than $12.7 million. In response, northern Ontario mills have been upgrading and diversifying their operations to develop value-added products. Just last month, FedNor invested $1.7 million to support the expansion of a value-added sawmill operation in a First Nation near Thunder Bay, who is now diversifying its product line and increasing production.
In conclusion, as you can see, natural resources are vital to the economic success of northern Ontario. FedNor will continue to play a key role in supporting economic development opportunities in these sectors of growth.
We would be pleased to answer any questions.
Thank you very much, Mr. Chair.
Good morning, committee members and federal colleagues.
Thank you for the invitation to appear today. My name is Linda Cousineau. I'm the vice-president of business innovation and community development for the Federal Economic Development Agency for Southern Ontario, or FedDev Ontario for short. I'm joined virtually today by my colleague Steve Masson, who is the director general for strategic policy.
Before I begin, I would like to acknowledge that I am speaking to you from Waterloo on the traditional territory of the Neutral, Anishinabe and Haudenosaunee peoples. Waterloo is situated on the Haldimand Tract, land promised to Six Nations, which includes six miles on each side of the Grand River.
I'm pleased to be here to discuss the committee's examination of federal assistance to natural resource industries. FedDev Ontario was created in 2009 with an initial five-year mandate to provide critical stimulus support in southern Ontario in response to the 2008-09 economic downturn.
In 2019 the agency was made permanent, and its mandate since that time has evolved. It is now an important partner that delivers funding programs to help growing businesses innovate and scale. It also supports the development of regional ecosystems and the diversification and economic development of communities across southern Ontario.
This past September, was assigned responsibility for the agency with a mandate to promote job creation and drive clean and inclusive economic growth across southern Ontario. Our region accounts for more than a third of Canada's overall GDP and employment. Its economy has a major impact on prosperity across Canada. Its 289 distinct and diverse communities include a mix of large urban centres such as Toronto and Ottawa, mid-sized cities like Windsor and Kitchener-Waterloo, and smaller rural communities from Hawkesbury to Sombra.
The region is a service economy and manufacturing hub. It is home to such globally integrated sectors as manufacturing, life science and agri-food. Emerging areas, such as artificial intelligence, electric vehicles and clean energy technologies, also have a footprint.
The region's economy is increasingly innovation-driven. Our resource sector is becoming part of that story. Our petrochemical sector is transforming to seize new clean-fuel opportunities. The region's energy sector is at the forefront of nuclear innovation with spinoff technologies, such as small modular nuclear reactors, having the potential to drive significant carbon reductions.
Finally, increased access to critical mineral resources is expected to directly benefit southern Ontario's growth, given that they are key inputs to the battery manufacturing cluster that is emerging in the region.
Like other regional development agencies, FedDev Ontario delivers programs tailored to regional growth opportunities, challenges and the government's economic priorities. Since 2015 the agency has invested over $2.2 billion in over 3,000 projects across the region. These investments helped create or maintain over 180,000 jobs, and are leveraging over $3.1 billion in additional investment in the region. They are helping build a more vibrant, diverse and inclusive economy and create future-looking jobs in communities across southern Ontario.
In response to the government’s clean growth priority, the agency is investing in companies that are commercializing clean technologies. These investments have potential to drive carbon emission reductions and green outcomes in major resource projects.
While FedDev Ontario does not have dedicated programming for the resource sector, we recognize that there are parts of the region where the sector and its downstream activities are critical economic drivers. Southwestern Ontario contributes to Canada’s efforts in developing clean fuels.
For example, Sarnia and the surrounding area was a key petro-chemical hub for decades and a key node in the region’s energy infrastructure. In recent years, support from FedDev Ontario, such as our investment in Bioindustrial Innovation Canada (BIC) has contributed to transforming the area into a national leader when it comes to sustainable chemistry and clean fuels. This, among other investments in innovative and growing companies that are commercializing clean technologies, can support sustainable growth for the province’s natural resource sector.
Thank you again for the opportunity to be here today. I look forward to hearing from my colleagues and answering any questions committee members have about the resource sector in southern Ontario and FedDev Ontario’s investments in growth and innovation.
Good morning, Chair and honourable members.
My name is Abdul Jalil and I am the assistant deputy minister for the PrairiesCan Saskatchewan region. I'm joined by my colleague Joanne Pawluk, director general of business innovation and community development.
I'm pleased to be speaking with you from Regina on Treaty Four territory, the traditional land of the Cree, Ojibwe, Saulteaux, Dakota, Nakota and Lakota peoples, and the homeland of the Métis Nation.
PrairiesCan is the federal department that supports economic growth in Alberta, Saskatchewan and Manitoba. We provide targeted investments, advocate for the Prairies' interests and collaborate with stakeholders across the prairie provinces. Our programs and services are sector-neutral. They help businesses, not-for-profits and communities grow stronger.
Since November 2015, we have invested more than $1.5 billion to diversify and grow the western Canadian economy, support innovation and stimulate the Canadian economy with pandemic support programs.
While our programs are not sector-driven, we have identified an estimated PrairiesCan investment of roughly $50 million for more than 90 projects closely linked to the natural resource sector and several tens of millions of dollars in indirect support since 2015. From oil and gas to hydro, and from potash to minerals and uranium, the natural resources sector supports quality jobs and helps communities prosper.
I'm pleased to share a few examples of these projects. We recently invested $7.5 million to establish two new rare earth element processing facilities in Saskatchewan. They are the first in Canada, and one of them will be the first of its kind in North America. These facilities mark the creation of a new value-added natural resource industry in Canada and a significant step toward establishing a secure domestic rare earth supply chain.
Earlier this year, PrairiesCan also announced more than $2.1 million to support the Energy Transition Centre. Based in the heart of downtown Calgary, this centre provides a space where Canada's largest energy companies can collaborate with clean energy start-ups, innovators and investors.
We invested $75,000 in the International Minerals Innovation Institute to undertake Saskatchewan's first ever alternative energy systems innovation challenge. This challenge connects mining companies and local businesses to support the accelerated application, scale-up and adoption of clean technology in the mining sector.
We are also making strategic investments in the growing hydrogen sector and have committed more than $6 million in support of hydrogen projects to date. Our investment has enabled the launch of the Edmonton Region Hydrogen HUB, an alliance of government, indigenous, academic and economic development leaders. This is Canada's first hydrogen hub, and it serves as the blueprint for other hydrogen nodes across the country.
In addition, carbon capture, utilization and storage technologies will play a vital role in enabling Canada to meet its net-zero commitments. That's why we invested more than $1.5 million for carbonNEXT, a Canadian commercialization hub for carbon capture, utilization, storage and monitoring technologies.
We make investments to support inclusive economic development as well. For example, we invested $150,000 to support the mineral-rich communities of Northern Saskatchewan in the Athabasca basin. This funding supported training and employment opportunities for residents, including indigenous participants, when they were affected by the slowdown of uranium mining. The Athabasca basin is now identified as one of Canada's critical mineral-rich regions.
The team at PrairiesCan has deep roots on the Prairies. We are engaging communities and collaborating with diverse interests to support sustainable economic development in the natural sector. Our intent is a strong economy that works for everyone.
I would be pleased to answer your questions.
Thank you, Mr. Chair and honourable members.
My name is Jean-Denis Charlebois, and I am chief economist at the Canada Energy Regulator. I am joined by my colleague Jess Dunford, director of major projects oversight at the CER.
I want to acknowledge to you today that I am speaking to you from Montreal, the traditional territory of the Kanien'kehá:ka, or the Mohawk, a place that has long served as a site of meeting and exchange amongst nations.
Thank you for the opportunity to appear before you today to speak about our work at the Canada Energy Regulator, or CER, and how it relates to your study of federal assistance to various natural resources sectors, including the energy sector.
I would also like to thank the committee for your flexibility as several members of our senior management team are at home recovering from illness.
I am going to speak to you today about the CER, our mandate, how energy infrastructure projects under the CER’s jurisdiction are assessed, and provide some context about the CER’s role as it pertains to the Trans Mountain Expansion Project, or TMX.
At the CER, we work to keep energy moving in Canada while enforcing some of the strictest safety and environmental standards in the world. In everything we do, safety and environmental oversight are always at the forefront. It is the reason we exist.
The CER is a cost-recovered organization, which means that the cost of virtually all of our activities is recovered by the Government of Canada from the industry we regulate, in accordance with our cost recovery regulations.
It's very important to point out that the CER does not develop or set government policy, nor is the CER involved, in any way, in federal programs designed to provide assistance to the natural resources sector. We are the regulator. Questions on these matters are best directed to my colleagues on the panel today, as well as previous panels that you've seen this week from Natural Resources Canada, for example.
The commission of the CER is a court of record responsible for making independent adjudicative decisions and recommendations on pipeline, power line and offshore renewable energy projects under federal jurisdiction. Our commission assesses project applications to make a determination or a recommendation as to whether the project is in the public interest.
As a regulator, we oversee the safe construction, operation, decommissioning and abandonment of energy infrastructure.
In addition to our adjudicative role, the CER provides oversight throughout the life cycle of pipelines and power lines under federal jurisdiction. Our standards are among the highest in the world, and we conduct inspections and company audits to ensure compliance with all regulatory requirements during construction and ongoing operations. We also partner with indigenous peoples in undertaking our life cycle oversight.
Alongside our regulatory functions, the CER plays a vital role in providing timely and relevant energy information and analysis to support the energy conversation in Canada. For example, we model, based on different assumptions, how possible energy futures might unfold for Canadians over the long term under various scenarios in our energy future series. The next iteration of the CER's “Energy Futures” report will include scenarios where Canada meets net-zero emission by 2050, and will be published next spring.
Since the TMX project was approved by the Governor in Council, the CER has been actively involved in monitoring the construction of the project and ensuring compliance with regulatory requirements. Once the project's construction phase has been completed, the CER will continue to provide life cycle oversight to ensure that it is operated in accordance with our world-leading environmental and safety standards.
Additionally, I would like to note that the then NEB back in 2018 had no role in the government's decision to purchase the Trans Mountain pipeline. The NEB did not provide any advice, nor was it consulted by the government prior to the purchase.
Thank you for giving me the opportunity to speak with you today about the work of the Canada Energy Regulator, and more specifically, about our role relating to the Trans Mountain Expansion Project.
I look forward to your questions.
Thank you so much for those opening comments.
I want to say that I understand there are some members of the Canada Energy Regulator who have fallen sick. We are hoping that they are on their way to a speedy and full recovery. Please pass along those wishes to your team.
Before we get started, I wanted to welcome Mr. Hoback, Mr. May and Mr. Miao as guests to our committee today.
With that, we're going to get right into our rounds. We'll see how far we can get. The first round is of six minutes each.
First up, I have Mr. Falk. It's over to you for six minutes, when you're ready.
I can't speak for all of us, but I know that the clerk has asked the deputies to institute hybrid work models for public servants in the federal public service. All of us are working on hybrid work models, which means that we spend some time in the office and some time in home offices.
I would say that we also spend a lot of time in communities. We spend time at mining conferences. It was just Mining Day on the Hill. We are back and forth, doing whatever works most effectively and efficiently for all of us, given the types of jobs that we do.
On the speed of service, I can tell you that this group was at the forefront of providing economic relief at the commencement of the pandemic in 2020 and 2021. My colleagues here on the screen and I worked 60, 70 or 80 days straight in 2020, getting economic development relief funding out the door.
This is a group that can work from anywhere, and we often do. We are in various locations today.
I was particularly interested in what the source was. I think Ms. Buist has provided that. Thank you very much.
I appreciate all of the work that our federal civil servants do, and how you contribute to our local communities and the economy. I think it's vitally important, and I thank you for it.
Ms. Buist, as you responded, I'd like to ask you a few questions on your testimony.
You used the word “invest” a lot, as well as “foundational investments”. My question would be whether these investments mean that, as a department and an agency, you also take an equity position in some of the companies that you invest in.
I'll be directing my questions to FedNor.
Good morning, Ms. Perreault. It's a pleasure to see you here today.
Before I ask my question, I want to share an observation. I had the opportunity to attend the PDAC convention this year, and I spent a lot of my time in the northern Ontario mining showcase. I talked to a lot of exhibitors, and a lot of them said that they would not be able to participate in PDAC if it weren't for FedNor's showcase pavilion and their subsidy of the exhibitor fees. I'm thinking of some of those small businesses, entrepreneurs and organizations like Collège Boréal that all expressed their appreciation for that, so I want to acknowledge that very important work. It's also the largest pavilion at PDAC, which in and of itself attracts 10,000 delegates, so it's quite an accomplishment.
At this committee, we often hear about the importance of capitalizing on the economic opportunities that are presented from the energy transition, and one of these opportunities is the development of critical minerals.
Can you tell us how FedNor has supported the sustainable development of this sector and its downstream uses?
This then means that the government made a decision to buy $7.4 billion in infrastructure without asking for further input.
When I look at what has been done in the past, I see that Kinder Morgan was accountable to the Canada Energy Regulator as to how the expansion was going to be done. However, the government never asked the CER for information on the profitability of the project.
Presently, I feel that it is the state that is taking all the losses related to the purchase of the pipeline, while the big oil and gas gluttons will be able to use this infrastructure and reap only profits.
At the Canada Energy Regulator, were there ever any questions asked in connection with the purchase of the pipeline?
You're telling me that the government bought a $7.4 billion pipeline, that the pipeline costs $21.4 billion today, and that the government made this decision, which, let's face it, was very questionable economically, and you had no knowledge of what kind of information they relied on.
The Canada Energy Regulator does not know what kind of information the government had. This is what I understand. However, one thing bothers me.
I was looking at a document wherein Kinder Morgan told you in 2013 that if they were involved in the pipeline expansion, the operating costs should not be higher than the toll.
The Canada Energy Regulator said in 2019 that it would not be appropriate to raise the toll on the big oil gluttons, even though the operating costs have exploded. You said we should stick to 22 % of current overrun costs.
For me, this is a strange decision. It means that it is the state that bears all the risks and it is the state that pays for an infrastructure for the oil gluttons, who, for their part, have absolutely nothing to bear.
Do you have any documentation to support this decision?
We have approved many projects involving the forestry industry over the past year. Since 2015, we have already supported more than $72 million in forest industry projects. There are different criteria to consider when we approve such projects.
In the past year, we have made a significant investment in Uniboard Canada in Val-d'Or. I was at the plant yesterday to see some of the work that will be undertaken. This is a major modernization of this facility, which creates a lot of jobs in the Val-d'Or region.
Investments continue to be made according to criteria and priorities that are established. We are also examining, in different regions, the possibility of developing projects that will allow the use, for example, of forestry residues.
I hope that answers your question.
Okay, that's interesting, because Mr. Guilbeault said that with his green plan they were using the Canada Energy Regulator modelling. I find it dramatically at odds with what the International Energy Agency is saying. They say that the only way we're going to keep to 1.5°C—the red line from catastrophe—is to decrease from 100 million barrels a day to 24 million barrels a day in 2050. Yet, what we see is that Canada carries on as if it's business as usual, and I find that concerning.
One of the ways that we get to this major increase that you predicted, the extra million barrels a day coming up into the 2030s, of course, is the TMX pipeline.
I'd like to turn my comments to that.
The tolls for the shipping of the TMX pipeline were originally assessed when the value of the pipeline was $1 billion. Kinder Morgan walked...when the costs were $5.4 billion, because they couldn't pass those tolls on to the companies that were shipping.
Will you confirm that the CER has limited the cost overruns to $7.4 billion of the cost of the pipeline? That would be transferred to shippers, but any overrun costs are not going to be transferred to the shippers.
Maybe I could jump in there.
During that time, we continued to develop our coal programs, both the Canada coal transition initiative and the Canada coal transition initiative on the infrastructure side. We continued to work with our communities, and we were delivering the programs, so I wouldn't say for us, in the delivery of those programs, there was two-year hiatus.
On the Natural Resources Canada side, they were looking at broader just transition initiatives, but, in terms of the program delivery to those coal communities, there was no pause throughout COVID, and we continued to work.
I'm particularly interested in zero-emission vehicles, so I think I'll be asking a lot of my questions around that today, particularly because I see great synergies across our country when I see that a company like New Flyer, based in Manitoba, has a contract with my home city of Toronto to provide over 500 electric hybrid buses, which is an amazing way to support jobs in one city and, at the same, to also help in the transition in another city.
I noticed at the same time as I was looking into that bit of information that just recently there was an announcement—and this would be for the Prairies—of an investment in Manitoba for a vehicle technology centre to support the transition to zero-emission heavy vehicles.
I was wondering if I could get a little bit more information about that project. What is the hope as to what that would generate?
I know that all companies in the forestry sector that do primary processing, even if they have a project that involves secondary processing, cannot receive assistance from Canada Economic Development. They are immediately referred to Global Affairs Canada, whose decisions are all negative.
For example, in my region, there is a social integration enterprise that makes pallets and posts. It asked for help from Canada Economic Development. Its clients are not in the United States, but in Canada. However, it cannot receive assistance from Canada Economic Development because it is immediately denied by Global Affairs Canada.
This is therefore a serious problem for the development of remote communities, which often rely on the forest industry and whose small sawmills cannot receive assistance from Canada Economic Development because their applications are systematically denied.
Are you aware of this situation?
I'd like to thank all our economic development agency representatives for the extraordinary work you did during COVID. You were a lifeline. We met with FedNor continually, the Venture Centre group in Timmins, and those projects kept our communities afloat, so I want to thank you for that.
Ms. Perreault, I want to ask you about FedNor. We fought a long and hard battle to get FedNor to be a stand-alone agency. What is your budget now that you have this status? I see year in and year out that it's $31 million, $35 million, sometimes $38 million. Where are you now in terms of the grid that you have been working with in the past?
I pretty much live with the Prospectors & Developers Association of Canada when it comes—and I pretty much live in the northern Ontario booth. I think there are a few extraordinary things that should be put on the record.
Number one, given that we have investors from around the globe, northern Ontario's footprint at that exhibition is much bigger than the EU's, and much bigger than anything from the United States and much bigger than anywhere else around the globe.
Northern Ontario is, to me, a major attraction, yet the businesses there tend to be small businesses, small SMEs, individual companies and first nations. How important is it? Do you have the funding you need to make sure that we can put all those northern Ontario businesses on display for the world at the Prospectors and Developers?
Thanks, Mr. Chair. I appreciate it.
Thank you to all the witnesses who have participated and appeared here today. We appreciate your time very much.
I have an initial question, which I suspect, quite reasonably, will probably have to be reported back in writing before the deadline for written submissions of this study. I'm wondering if each of the agencies can provide to this committee, for the timeline of the last three years, estimates or information on the economic impact of each of the investments, of all kinds, that have been made. Perhaps you can give a sense of how many jobs were created in each of those investments—
I can take that question.
As I mentioned in my opening statement, we work with several partners to develop projects. Some projects have fewer partners; in others we are a very small player. Sometimes we can be 5% or even less of the project. We work with the private sector, other agencies and other levels of government to be able to support projects. Also, as you mentioned, some sectors are more at risk, so we put in place different mitigation measures to protect the funds that we invest in those elements.
There were questions earlier about the last.... I was checking, and just in the last years, CED has invested over $250 million every year in regular programming, plus other investments with new initiatives. We had a zero.... Last year, before, it was a bit over $2 million, so those are good investments.
Thank you to all the witnesses today for coming and providing your thoughts and presentations.
I wanted to make a general comment to the development agencies. I've dealt with FedDev, as I refer to it. It's the Federal Economic Development Agency for Southern Ontario. They have invested in a number of projects in my riding, as well as in the region of southern Ontario and the GTA, where the investments have been critical for the projects to be undertaken, for catalysts for jobs, for innovation and for the creation of good economic standards of living for our residents, so I wish to say thank you.
My first question is for the Canada Energy Regulator. Thank you for your appearance. As an economist myself, I was interested in hearing, just out of curiosity....
When you are building your investments or cases, you're obviously taking an impartial look at each project. How do the sensitivities change over time?
When you're doing a base case, are you also doing sensitivity on your base case to see where the outcomes are?
Reading the organizational structure of the CER....
For full disclosure, in a past life, I met with individuals from the NEB when I served in the global financial markets covering Canadian dollar debt issuers, many of which are customers or clients of the Canada Energy Regulator.
In terms of the consultation and the role of the indigenous advisory committee to the CER, can you provide some information on that, because indigenous consultation in this country is obviously very important? It's a nation-to-nation relationship, so any colour there would be great.
We're out of time on that round.
Colleagues, we have 20 minutes left. The next round should take 15 minutes, with five, five, two-and-a-half, and two-and-a-half minute questions. I do have an item that I circulated. I think everybody should have seen it. There are four quick items we can package into one motion. We could either do that right now, put it away, and get back to the final 15 minutes of questions, or carry through and leave five minutes to the end. Is there any preference on how we do that?
An hon. member: Finish the questions.
The Chair: We'll finish the questions. Okay, we'll then continue by going back to the Conservatives. Who do you have for your first five minutes?
Okay, Mr. Hoback, it's over to you for five minutes.
Thanks, Chair. I just have a few questions, so I'll maybe take two or three minutes; then we can speed things up, if that's okay with you.
I'm just going to go back to the same round when I was finishing off my statement. We had a comment about New Flyer buses, out of Winnipeg, going to Toronto. It's nice to hear those stories. That's a good story.
There's a disappointing part to it. I had a great meeting with Unifor this morning. It's amazing how they want to get rid of gatekeepers. They were talking to us about how gatekeepers are holding things up, like affordable housing and in things like that. One comment they made in regard to the facility in Winnipeg was that of those buses going to Toronto, 60% of them are made in the U.S. Because of U.S. regulations that forced New Flyer to move part of their manufacturing out of Winnipeg and into the U.S. to meet the U.S. requirements, 60% of those buses are still being made in the U.S.
I do compliment Toronto for doing that. Regina bought buses from China—that's ridiculous. I do think we should have more Canadian content in the products that are shipped and made here in Canada and bought here in Canada, just like other countries do around the world.
I'll go to my witnesses here. I'm just curious how you are working in regard to Canadian content when you're looking at, for example, electric vehicles and the supply chain for electric vehicles. How are you looking at the scenarios? Are you asking if there is enough Canadian content in the research and in the componentry going into these electric vehicles? Does that come into your formula as you look at that supply chain?
That would probably be a question for the southern Ontario agency.
Is there nothing on Canadian content, then, in regard to how you go to assess projects on whether they should be funded or not?
I could jump in on behalf of FedDev Ontario.
I'd say it's not so much on the assessment side. Through the indirect investments we make in the ecosystem, or eventually directly to a company as well, a lot of our investment portfolio is very much aimed at positioning southern Ontario-based suppliers to compete and thrive in these global value chains.
One investment we did make last year, in partnership with the APMA, was around the Project Arrow, which was building the first made-in-Canada concept vehicle for EVs. It involved over 40 parts suppliers at the outset, and it's 95% Canadian-sourced.
At the ACOA, we work very closely with ecosystem partners, ecosystem players, in terms of helping to lay the groundwork, helping start-up companies and helping build innovation. That's where we use our non-profit or our non-repayable tools. Then, when the company gets to the point where it has a minimum viable product, some market traction, we will follow up with our investments in terms of repayable loans to help them grow.
We use that with a key approach to also try to leverage other funders so that we can manage the risk in terms of borrowing. We do that across all sectors. I know we're talking specifically about natural resources today, but for us, that's about an average of 1,300 projects a year. About 1,000 are business focused. About 300 are focused on the ecosystem areas.
We have metrics that we measure in terms of what the impact is on those, in terms of the sales growth of co-assisted firms compared to non-co-assisted firms and also the survival rate. We're seeing very significant numbers: a survival rate of about 73% for start-ups versus 33% for ones that aren't assisted by the ACOA.
Thank you for the question.
In terms of critical minerals, that is certainly an area of focus for our mining sector in Newfoundland and Labrador, with a particular focus in Labrador. We've seen companies such as Vale and some of the agreements they have in place with Tesla and other international players that are making news.
From an ACOA perspective, we deal with the supply chain, so we work with companies like Search Minerals, who are looking to set up a rare earth minerals operation. We work with them to see how we can ensure that they do so in a very sustainable way, mitigating and limiting their emissions as they try to bring their product to market.
Before I ask my question, I would like to say that I am happy to learn from my colleague Mr. Hoback that Richard Martel is now an aluminum enthusiast. In our region, he is the only elected official who has refused to take part in the aluminum issue table for three years. I therefore reiterate the invitation to him: if he wants to talk about aluminum, he could join us and all the elected officials of Saguenay-Lac-Saint-Jean.
Mr. Charlebois, in the report entitled “Canada's Energy Future 2020—Energy Supply and Demand Projections to 2050,” the Canada Energy Regulator indicates that we must anticipate an intensification of measures to fight climate change, which implies a reduction in demand for fossil fuels.
I would like to know if the regulator has ever done any estimates or studies to see if, over time, the “optimal” use of the Trans Mountain pipeline can be measured. Do we have any idea? Will this infrastructure be good for fifteen or twenty years? Has the Canada Energy Regulator ever done this type of study?
Just finally.... I was in Germany for the last week, meeting with officials, and their move on clean energy is extraordinary, so much so that the International Energy Agency says that the world will hit peak oil in 2025 not 2030. However, whenever I look at the Canada Energy Regulator's scenarios, again, I see a million barrels a day, an increase in 2050; we're still, basically, where we're at now.
Given what's happening around the world, are you not leaving Canadians at risk of having a whole bunch of stranded assets if we continue with these scenarios of growth and increased production when the rest of the world is moving in the opposite direction?
Great. That takes us to the end of the time we have available for questions today.
I would like to thank all of the officials who have joined us today from the various regional economic development agencies, as well as the Canada Energy Regulator. We appreciate your time.
If you want to log off, please do. I'm going to ask the members to stay for a minute.
There's been discussion on this. I have four quick administrative items we need to deal with that I'm hoping to do. I know people need to be gone as close to one o'clock as possible, so I'm going to be bold and put forward a package motion. I'll ask somebody to put it forward and then we can vote on it.
We've had discussion and there's agreement to bundle them. Is that right?
Some hon. members: Agreed.
The Chair: The first part of the motion we need to adopt is the study budget of $10,475, which was circulated last week. That's the first part.
The second is to adopt the subcommittee report from November 1 related to this study. That, in brief, reads:
That, for the study of federal assistance for various natural resources industries, witnesses be invited to appear as per the amended work plan distributed to the committee, and that members be kept informed of any required substitutions to the proposed panels based on the availability of the witnesses.
The third piece is that we grant Mr. James Maloney access to the digital binder, since he will be replacing Ms. Jones while she's away for her medical treatments.
The fourth piece of it is that the deadline for receiving written briefs for this study be set for next Friday, November 25. I will say that it's subject to us having the two meetings next week. If there are any disruptions to those meetings, we will carry the written submissions through to December 2.
Go ahead, Mario.