Good afternoon, everyone. I call this meeting to order.
Welcome to meeting number 57 of the House of Commons Standing Committee on Natural Resources. The committee is meeting today to hear from the Minister of Natural Resources and officials.
Pursuant to Standing Order 108(2), we're meeting to consider the subject matter of the supplementary estimates (C), 2022-23, including vote 1c under Canadian Energy Regulator, vote 1c under Canadian Nuclear Safety Commission and votes 1c, 5c and 10c under Department of Natural Resources.
Today’s meeting is taking place in a hybrid format, pursuant to the House order of June 23, 2022. I'd like to remind all participants that taking screenshots or photos is not permitted now that we're in session. Today’s proceedings will be televised and made available via the House of Commons website.
I'd like to make a few comments for the benefit of the witnesses and members prior to getting started.
Please wait until I recognize you by name. I think everybody here has been before committee before, so we know the drill. Interpretation is available. For those on Zoom, you have the choice of floor, French or English. Comments should be addressed through the chair. If you want to speak, use the “raise hand” function if you're appearing virtually. You'll have to unmute and mute yourselves as needed. For those in the room, our staff will look after your microphones, so don't worry about that.
In accordance with our routine motion, I'm informing the committee that all witnesses have completed the required connection tests in advance of the meeting.
Before we get started, for clarity, I just want to let everybody know that today we have the estimates. On Friday, our regularly scheduled time has been cancelled because of President Biden's visit. Next Tuesday, the committee has been cancelled because of the budget. Our next meeting will be a week from Friday. The plan on that day is to continue with the report, working through recommendations that we've been working on. That is what we have to look forward to. We'll send out a further notice for upcoming committee business after the two weeks we will have at home.
Appearing today, we have the Honourable Jonathan Wilkinson, Minister of Natural Resources. From the Department of Natural Resources, appearing in person, we welcome back John Hannaford, deputy minister, and Shirley Carruthers, chief financial officer and assistant deputy minister, corporate management and services sector. We also welcome Jeff Labonté, assistant deputy minister, lands and minerals sector.
Appearing virtually, we have Angie Bruce, assistant deputy minister, Nòkwewashk; Frank Des Rosiers, assistant deputy minister, strategic policy and innovation sector; Glenn Hargrove, assistant deputy minister, Canadian forest service; Drew Leyburne, assistant deputy minister, energy efficiency and technology sector; Erin O’Brien, assistant deputy minister, fuels sector; Debbie Scharf, assistant deputy minister; and Ranjana Sharma, chief scientist.
We have a full roster of officials here to help. I think the minister has just under an hour now—with the late start—to be here. We're going to go with five-minute opening statements, followed by questions in rounds.
Now, Mr. Angus, you have a point of order.
We have distributed that to the committee, so everybody should have it.
With that, I'll turn it over to the minister, who will have five minutes for an opening statement. Then we'll get into our rounds of questioning. I think we'll be able to continue right on with the panellists when the minister needs to leave. We'll do a quick thank you as he exits, and then we'll continue with the officials.
Minister, welcome. It's over to you for your opening statement.
Thank you very much, Mr. Chair.
Hello, everyone. Thank you for the invitation to discuss the supplementary estimates (C).
I would like to acknowledge that we are gathered here on the official unceded lands of the Algonquin Anishinabe peoples.
I look forward to highlighting the investments we are seeking to make through the supplementary estimates and to discussing with you our investments to help Canadians seize key growth opportunities on the path to a low-carbon economy.
Canada can choose to be a leader in this global economic shift, or it can choose to sit back, take it slow and hope for the best, which is a much riskier choice.
We can either move forward with a robust plan for the future, or we can simply hope for the best.
The first path accepts that climate change is, indeed, a reality, one that we can and must address. It involves a thoughtful strategy in which the economy changes and grows stronger and more resilient, and in which the environment is better protected. The second path starts with shrugging off the damage that climate change has already caused: dramatic floods in our towns and cities, wildfires in our forests, dried-up rivers and melting glaciers.
We choose the first path, which will enable us to ensure a sustainable world while seizing economic opportunities offered through the transition to a low-carbon future. The investments sought in today's supplementary estimates contribute to this first path, which is towards a plan for the future.
These include over $12 million towards greening Canada's buildings through important actions such as building retrofits in neighbourhoods and industrial facilities, and towards accelerating improved energy codes; over $4 million for climate resiliency, building on our new national adaptation strategy; and a half a million dollars for the British Columbia old growth nature fund.
The supplementary estimates are also important for meeting the commitments made in the United Nations Declaration on the Rights of Indigenous Peoples. For example, an additional $600,000 is required to continue the implementation of the declaration, including the development of the action plan.
As I mentioned, Canada is, in my view, well positioned to take advantage of the opportunities presented by the worldwide transformation towards a lower-carbon future. The Government of Canada has, for seven years, been working on strategies, investing and improving regulations to help Canada become the clean energy and technology supplier of choice in a net-zero world.
Successful strategies leverage comparative advantages. Make no mistake. Canada has a lot going for it to help us win on a global scale. We have well-educated and highly trained people; a lot of the natural resources that are increasingly in demand, including, very much, critical minerals and hydrogen; strong and innovative energy and clean technology expertise; banking; regulatory, political and legal systems that are stable; trade agreements with major economies around the world; and world-leading ESG standards.
Finally, because each province and territory has a unique mix of natural resources, the opportunities for transitioning to clean energy will differ across the country.
Through the regional energy and resource tables we have established with nine provinces and territories, we are working with the provinces and territories to unlock these opportunities on a regional and sectoral basis. My hope is to have all 13 up and running within the next few months. These opportunities include critical minerals, hydrogen, carbon capture, electric vehicles, renewables, biofuels and small modular reactors.
Overall, this government's approach represents a thoughtful, science-based and exciting plan for the future. It is far from those who ignore the scientific reality of climate change and simply hope for the best. Employing what I would call a “head in the sand” approach would lead us to environmental devastation while inviting economic stagnation that would make our industries uncompetitive and damage our economic potential. That path is unacceptable, and that is why our plan is a clear-eyed strategy to seize low-carbon economic opportunities.
We are talking about an economy that will work for all Canadians, including the thousands of energy workers whose skills and work ethic will contribute to our success.
Overall, a clear-eyed and thoughtful plan for the future is about a national effort to pass on an environment and an economy that will help our children and their children flourish for decades to come. This effort is represented very much in NRCan programming and in these supplementary (C)s.
I welcome any questions you may have.
Thank you very much for inviting me to be here with you today.
For those who are participating, watch for the yellow card, which is the flag for 30 seconds left. The red card means that your time is up. I'm going to try to keep us close to the allotted time so that we can get through as many rounds as possible with both the minister and the officials.
I would also like to mention that, because of the cycle and how estimates work, we've actually missed the deadline. The last day to report back to the House was, I think, last Friday, so today is for information purposes. We are unable to report back to the House, and we can't decrease any of the estimates. I just want everybody to be aware of that. I have the official wording coming, if anybody wants that. We'll get that by the end of the day.
The first round of questions are going to be six minutes each. First up I have Ms. Stubbs.
When you're ready, the floor is yours.
Thanks, Minister, for being here, and thanks to your officials for giving their time to us today too.
Minister, I have a question for you about the $12.8 million allotted in these estimates “to implement the Impact Assessment Act”. I think it's helpful for Canadians to know the context, which is, of course, that your government froze project assessments as far back as 2016, delayed and then implemented interim measures and applied some arbitrary standards to certain proposals that weren't applied to others. Then, of course, it took three years until Bill was imposed, despite the near-universal opposition from nine out of 10 premiers, indigenous communities and entrepreneurs, municipalities and private sector proponents that warned that it would be a barrier to development.
Of course, the first major decision wasn't made under the new assessment until a year and a half ago. It's very obvious, despite the periodic positive words, that the actual outcomes of your regulatory changes to the policy framework are killing billions of dollars of investment projects and jobs, and driving them into other competitive jurisdictions.
The consequences and the costs to Canadians are real. For example, your government has had 18 LNG export terminals proposed in the time that you've been in office, and only three of those have been approved. Of course, zero have been built, while the U.S. has built seven and permitted 20 more in the exact same time frame. Germany permitted and got a terminal up and running and built in 194 days.
You talk passionately about a critical mineral strategy, but your own documents show that critical mineral mines won't be operating or producing in Canada for 25 years. There is the same challenge with your aspirations around electrification.
I just wondered if you could speak specifically about what that $12.8 million will do. What are your specific outcomes for implementing the act that you have imposed?
In these supplementary estimates (C), there isn't $12.8 million for IAAC. The Impact Assessment Agency of Canada actually falls under the purview of the Minister of the Environment and Climate Change, but I would make a number of comments.
Certainly, additional funding for IAAC is intended to ensure that projects, when they come into the IAAC process, are able to proceed forward very quickly.
On the comment about 18 LNG projects, most of those actually arose during Stephen Harper's time in office, and all of them were reviewed under CEAA, 2012, which was the process that Stephen Harper changed, which created enormous opposition on the part of many communities and, particularly, indigenous folks.
We actually worked to fix that by bringing into place the Impact Assessment Act to ensure that projects can move forward. You will have seen, just a couple of weeks ago, that we announced the first LNG project that has gone through the new process that was actually approved—
Welcome, Minister, to the natural resources committee once again.
Getting right to it, Minister, our government is implementing several programs targeted at reducing emissions from Canada's building and industrial sectors, such as the Canada green buildings strategy, the codes acceleration fund and the deep retrofit accelerator initiative. How will these programs support the reduction of emissions in the building and industrial sectors, while ensuring job and prosperity sustainability for businesses in the city of Vaughan, the area I live in and represent, and across Canada?
Thank you for the question.
Certainly, addressing energy efficiency is critically important. It is actually the low-hanging fruit in terms of ensuring that we are being as effective as possible. It reduces the amount of additional generation capacity that we have to build.
These energy efficiency programs will ensure that we are reducing emissions from our buildings sector, all while helping Canadians save money on their energy bills. For example, the codes acceleration fund will support provinces, territories and stakeholders to adopt and implement the highest performance of the national model energy code, ensuring that we build things more efficiently right from the start. The deep retrofit accelerator, for its part, will aim to break down barriers and make it easier to undertake deep retrofits on existing units to make them more affordable.
These are the kinds of programs that help and support good jobs in communities like Vaughan. In fact, they can help support companies like JELD-WEN, a window and door manufacturer that I commended last summer for being among the winners of the 2022 Energy Star awards.
I must say that it was really great to be in Sudbury with you and again at PDAC, where Sudbury has, perhaps, the best of the receptions.
As I've said many times at this committee, Canada is very well placed to become the supplier of choice for technology and clean energy and a reliable supplier of critical minerals.
As the world moves towards a lower-carbon economy, smart money is flowing away from assets that are not compatible with the transition to a net-zero world and towards opportunities that are. There are significant opportunities for Canada in this regard, if you think about biofuels, hydrogen, CCUS, the decarbonization of the oil and gas sector, SMRs, renewables and a range of clean technologies, but perhaps the most significant economic opportunity lies in the area of critical minerals. That is from the exploration, extraction, processing and refining to advanced manufacturing, including batteries, to the recycling of critical minerals.
Our strategy goes along that value chain. It is aimed at developing the entire value chain, including examples such as the rare earth processing facility in Saskatoon, Saskatchewan. Our strategy is, by definition, an economic plan, as the sustainable development of the critical minerals supply chain will attract investments and create good-paying jobs in every province and territory in this country, very much including processing like Electra Battery Materials.
Welcome, Minister. It's always a pleasure to have you here.
Since I'm a good student, I listened to what you said in your presentation. You mentioned that we should not stick our head in the sand and that we need a clear-headed strategy.
I agree with you and hope that we will remain in agreement throughout my intervention.
In fact, not sticking your head in the sand means realizing that, unfortunately, in certain economies which have a low carbon footprint, some industrial sectors might have to be left behind. There is a concept I like a lot that can give us some perspective on that, namely the fair transition.
Indeed, Canada is a signatory to the Conference of the Parties, or COP. Canada signed on to the Just Transition Declaration.
My question is pretty basic. Do you agree with the idea of a just transition?
I will try to be more specific.
In my view, in the fight against climate change that we are waging, we need clear principles and frameworks. The just transition is a principle.
By signing on to the Just Transition Declaration, Canada committed itself to a lower carbon economy and to retraining workers so they can find employment in new economic sectors.
Is the just transition principle applied in your own department?
Do you apply guidelines in line with those of the declaration that Canada has signed on to?
There you go. That's what I was getting at, Minister.
I find it strange that you've changed your tone. Unless I'm mistaken, the last time you appeared before the committee, it was in May in the course of our study on the just transition. You concluded your statement by saying: “By working together, we can ensure a just transition by creating sustainable jobs in every region of the country.”
You referred to the concept of a just transition, but, strangely, you seem to have changed your tone since the Premier of Alberta, Danielle Smith, sent a letter to the asking him to stop talking about the just transition and to speak more about sustainable jobs.
Personally, that bothers me a bit, since I feel there's a lack of courage when you don't want to refer to the idea of a just transition. If you don't have the courage to use that expression, I'm not sure you'll have the courage to extricate yourself from a high-carbon economy.
Do you agree with my reasoning?
I understand, Minister, but words and their meanings are important.
In my opinion, the fact that you are trying to get around the Just Transition Declaration sends a very bad signal. For now, I will give you the benefit of the doubt, but I'm not sure you're on the right track.
Before I finish, I would like to ask you one more question.
The cost overruns of the Trans Mountain pipeline expansion are shocking to many people. I liked what the said last February, namely that no additional taxpayers' money would go towards the Trans Mountain project.
When I look at the supplementary estimates, I see that an amount of $811,000 is earmarked for strengthening the protection of the environment and to address concerns raised by indigenous people with regard to the expansion of the Trans Mountain pipeline.
We are talking about taxpayers' money. Taxpayers will be on the hook once more for the Trans Mountain pipeline.
Thank you, Minister.
There's so much to talk about. We have Joe Biden coming. We're going to be talking about the IRA and Canadian investments.
I would like to start off, because of this reporting, on Paper Excellence. This is a company that now controls 22 million hectares of Canadian forest, it's been said, which is an area larger than Nova Scotia.
What concerns me is that they control Resolute, Domtar and Northern Pulp. Their ownership says they're Canadian-based, but what we've been trying to track is...it goes through a whole series of shell companies set up in the Netherlands, Malaysia, the Malaysian offshore jurisdiction of Labuan, and two shell companies in the Virgin Islands. All of them are tied back to Indonesia and the Sinar Mas group.
Do we have any certainty whether this company is a Canadian company? Who are they?
As you know, all investments, no matter their value, are subject to review under the Investment Canada Act. Paper Excellence's acquisition of Resolute was subject to the national security review provisions under the Investment Canada Act, and Canada's lead security agencies were consulted on the transaction.
Recognizing the need to ensure this investment continues to be in Canada's best interests, as part of the review process the investor had provided meaningful commitments to Canada, which include ensuring strong levels of investment, facilities in Quebec, maintaining existing patents, maintaining Canadian participation on Resolute's board and senior management team, and adhering to Canadian employment and environmental laws.
Thank you, Minister, for coming to committee.
Last time I was able to ask the officials about TMX, and I want to continue with that a little bit.
For the benefit of folks watching these committee proceedings, I'd just like to give a little bit of background. In 2018, the Liberal government denied the Trans Mountain pipeline expansion. Then they turned around and bought it for $4.5 billion, with the understanding and the comment that to complete this Trans Mountain pipeline expansion would be an additional $7.4 billion.
At the time, there was great concern that they had overpaid for this project. In fact, former Green Party leader said that the decision to buy the Trans Mountain pipeline will go down in history as one of Canada's greatest epic economical boondoggles.
I did a little research as far as Kinder is concerned just to show that they actually did overpay. Kinder Morgan in that year recaptured all the depreciation and amortization on that project, plus they had to book a $596-million capital gain. In fact, it was so lucrative that Elizabeth May said that Kinder Morgan will be “laughing all the way to the bank”.
I just want to share that the base compensation for Kinder Morgan executives is $400,000, but between 2018 and 2019 the vice-president and chief financial officer received $3.2 million, the chief strategy officer received $7.2 million, the president received $8.8 million, the vice-president of natural gas received $11.9 million and the president of terminals got $9.7 million. The CEO got only $16.9 million between wages and bonuses.
We know the Liberals didn't do a good job of buying it. We know from our last meeting, which was only three months ago, that this project was at $21.4 billion, so it had tripled in price. Today, three months later, we're being told it's $31 billion.
Minister, can you tell this committee when you found out that this project was going to be $31 billion?
I have just a couple of things. First, I should say that the government bought this project because it would not have proceeded otherwise, and it is an important part of the infrastructure in Canada. We certainly don't intend to own it over the long term.
The evaluation that was established at the time was established by investment banks. I am not sure if you're an investment banker, but investment banks actually established the fair value for the pipeline, not the Government of Canada.
The costs have gone up, yes. That is very unfortunate. We've seen costs go up for major projects across the board, but we have had two major investment banks actually establish that we will be able to sell it in the range of what it has cost us to date.
Minister, on November 9 last, I published a letter in the Journal de Montréal on the sale of Resolute Forest Products to Asian Pulp and Paper. I don't know if you've read it, but I invite you to do so. It's very well written.
We brought this matter to the attention of the government a while ago. On January 31, several unions and I met with your colleague Mr. Champagne to raise some of our concerns with him.
As for you, did you only find out recently about the sale or were you already aware that Resolute Forest Products had already been sold a while ago?
I'll tell you what people in the business see as being the main problem.
The former owner of Resolute Forest Products, Fairfax, did not invest a lot in Resolute's facilities. By the way, these people own a quarter of Quebec's forests. Some people thought Asian Pulp and Paper would save jobs and the business, even if that seemed implausible. However, the main problem is that forestry companies, such as Resolute Forest Products, get nothing at all from the federal government. The Investments in Forest Industry Transformation program, or IFIT, is chronically underfunded. That's what people in the business say: if you're a small forestry producer, don't even think about getting funding from Canada Economic Development for the Quebec Regions. Your application will be rejected outright because you will be redirected to Global Affairs Canada.
Isn't the basic problem with the sale of Resolute Forest Products the lack of financial support from the federal government?
Joe Biden is coming to town. He's a friend, an ally and also a major competitor. He's not going to give us any advantage unless we take advantage.
I say that because Canadian companies in critical minerals and Canadian companies in clean energy are going up against multiple state-backed foreign entities that are investing heavily: Australia, Japan and even the U.S. Department of State.
Given the stakes we're facing, is this government looking at taking an equity stake in critical mineral projects? If so, how would that work?
I was reading through some of the language used in the report that was put out by the government. It talks about moving people to jobs. Now we know that jobs don't just naturally come to rural Saskatchewan of all places. It's difficult to create a lot of jobs in those areas. I'm just wondering how you're actually going to go about making sure that these communities are able to retain the people by keeping jobs right there, and that it's not “here's a new opportunity for you to move” from Coronach or Rockglen to Saskatoon, Regina, Calgary or wherever. These people, they don't want to move. They want to stay where they are. They love their communities. They love their small towns. They love the way of life that they have in rural Saskatchewan.
That's the fundamental concern that people are talking to me about, whether it's people who are on the lobbying side or people who are working in these industries. It's some of the spinoffs from this. It's the people who run the grocery stores. It's the people who have the local coffee shops. It's people who are working in health care in the region. How do we prevent the centralization of all of these industries into other communities, basically wiping these communities off the map? That's what they're concerned about.
If you have more clarity for these people right now, I'd appreciate your putting that on the record.
Look, I agree with you. This can't just be about creating jobs and moving people to urban centres. We actually have to be thoughtful about how we engage and look at economic development opportunities that apply just as much to rural areas. I think the positive thing is that many of the opportunities of the future are actually opportunities that can leverage the activity that goes on in rural areas already.
If you think about biofuels, for example, Federated Co-op is looking at building a big biodiesel facility. That actually leverages canola and the agricultural sector. If you think about critical minerals, most of those are actually going to happen in rural areas, especially in the northern part of Saskatchewan, and that is something that can create great jobs and economic opportunities. It's the same thing with value-added forestry. Look at what they're doing in Meadow Lake with clean tech in terms of how they actually are managing some of the waste residue.
Thank you, Minister, for your leadership. We actually spoke yesterday in the lobby and talked about how expansive your portfolio is. There could almost be three different ministers for all the work that you are doing on what is a really important portfolio to Canada.
Forestry is a big industry in Kings—Hants. We've had testimony about the importance of wood as it relates to mass timber. I know in your home province and in other places in the country there are some mass timber facilities that are playing in. There's a company in Nova Scotia called Mass Timber Company. It has two of the largest saw mill owners in the province, which happen to be located in Kings—Hants. They're looking to try to get a project off. IFIT has been a really important program to drive some of these innovations in forestry. I believe it's oversubscribed. It's been a very popular program.
Could you tell those folks at home who might be listening if that is the mechanism we would be encouraging this type of company to apply for? Is that something that NRCan continues to want to commit to in the days ahead?
Thanks for the question.
I certainly understand the importance of the forest sector in your riding and for your constituents. Certainly, I'm aware of the Mass Timber Company and the work that they have been doing.
I'm actually quite interested in the kind of work that they are doing. If you look at where Canada sits on the dollars per cubic metre that we extract, we don't actually look that great relative to many of our international peers. There are some structural reasons for that, but we need to think about how we can do better. How do we actually move up the value chain and create more value from the same amount of wood that we're taking out of the forests?
Mass timber is an interesting opportunity in that regard for your province and certainly for other provinces as well. We used IFIT with the Mass Timber Company in a number of different areas. Our funding for forestry sunsets this year, and we're looking for a renewal of funding in the upcoming budget. Of course, we're one of many.
Certainly the focus for us going forward would be exactly on tools like IFIT and other things that are looking at value-added products.
I want to talk about regulatory reform because of the conversation around the IRA. Government investing in these programs is an important piece, but so too is the certainty.
Minister, you've talked about how we can expedite existing work without compromising values. Can you speak to what some of your priorities might be, as a minister, for trying to create that efficiency, I'll say, in terms of permitting, whether it be critical minerals or otherwise?
Yes. We brought forward the Impact Assessment Act to ensure good projects can actually move ahead expeditiously and to ensure issues are flagged early in the process. Of course, the way in which you implement is just as important as the framework legislation. We are not interested in cutting corners from an environmental perspective. We are not interested in cutting corners in terms of the consultations that we need to have with indigenous communities.
There is a whole range of things that we can do and are doing to try to ensure that we are as efficient as we possibly can be. That goes from things like making sure that proponents are ready to enter, to the process. We often find that mining companies come in and six months into it they figure out that they don't actually have the data, and they have to go back and collect it for two years. It means properly resourcing the agencies so that they're not waiting and projects aren't sitting there for a year or two before you ever start. It means trying to do activities concurrently rather than consecutively.
We have an internal cross-government process going right now to try to ensure that we are finding ways to make the process more efficient, and then we started the regional energy and resource tables, which are about engaging each of the provinces and territories—because in the area of natural resources, every one of them has their own process that is different—to try to find ways to optimize and align the regulatory and permitting process so that we can all go faster.
This is really important, because if you think about critical minerals, for example, if we're going to hit our climate targets in 2035, we have to find ways to be more effective and more efficient without cutting environmental corners and without forgetting about our obligations to discharge our constitutional obligations to indigenous communities.
Yes. That takes us to the end of our time.
I want to thank everybody for their discipline with the time, including the minister.
I think, Minister, that this is the end of the time you have available for us.
I would invite all of the other online guests to put their cameras on, which we need for translation purposes.
We're at five minutes to five. Normally we would end at 5:30. We do have the resources available until 5:50, which is two hours from when we started. I'll see how far we get. The first round is going to be 25 minutes, and the next round would be 25 minutes. I'll check and see where we want to go after the first 25 minutes. We can keep going, or if we want to end at 5:30, we can do that. Are we ready with our officials?
Minister, thank you so much for joining us. It's always a pleasure. It's great to explore a round of topics related to the estimates and other items related to your portfolio. Thank you.
If we're ready to move right into the next round with Deputy Minister Hannaford and his team, we'll do that.
First up for five minutes, I have Mr. Dreeshen.
If you're ready to go, the floor is yours.
Thank you very much, Mr. Chair.
Of course, it's the beauty of the fact that the 's mandate letters, whether they be for the environment or natural resources, are basically identical. This is not so good for the resource sector, but it's certainly good for well-rehearsed common government responses and messaging.
I have a couple of concerns.
When the minister was here, he spoke about UNDRIP and dealing with first nations and indigenous investors. My biggest concern is the fact that, with the actions of this government, we are looking at stranded assets from many investors, but it's certainly going to happen with our indigenous partners as well. I mentioned that quite frankly it looks as though we are somewhat “eco-colonialists” here, as if we know just what is best for them. Any of the things and the activities they have certainly make it a concern.
That's where it ties in with Trans Mountain, because much of the talk has been around perhaps getting indigenous leadership and purchases there. The minister was pretty adamant that there will be enough money to get so that the Canadian government won't be on the hook for this, but I don't quite share the same optimism that he has there. When it comes to how that is going to look in the books, there are two things I want to know.
First of all, will it be considered a government loss if we cannot get what we said was $30.8 billion today, but two years from now might be $45 billion? Is that going to be a government loss? Are we going to hear stories like how if there is this loss, then it has to be a subsidy to oil and gas because the government is dealing with that?
What do you see in the future as far as a project like Trans Mountain goes and how is it going to be managed?
That's fine, because I think that's where the minister had gone as well.
I guess one of the other things is that we were talking about critical minerals. We know that critical minerals are needed to build EVs and batteries. We also know that Canada has little or no EV-ready critical minerals supply. There was a big push to try to get to electric vehicles in the next five to 10 years, but we know that we're not going to get that out of Canada. We can talk about how great it's going to be and so on, but.... I was with the mining folks earlier in the month as well. There's a lot of excitement there, but they know that it isn't going to happen.
The other thing is this. Can we make sure that, when we're talking about critical minerals and we're talking about the environment, we're also taking a look at what the processing is going to be like, what the environmental impact is going to be there and how much energy is going to be needed? You talk about having our heads in the sand. We're going to need all the energy we can get to make sure that our critical minerals strategy is going to work. Maybe instead of saying that we have to shut this down as we try to build the other up, we have to keep it all going like the rest of the world is doing.
I would like to know, if that planning is done, if we can ensure that we see what the actual energy costs will be in order to make sure that this happens. What efficiency measures or what other metrics can you share with the committee when it comes to that process?
Thanks very much, Mr. Chair.
First of all, the EV mandate, the sales mandate that will apply in Canada, would be sales of EVs by 2035. That's the horizon with respect to the vehicle side.
The critical minerals strategy that we announced in December is intended to be a full-spectrum strategy. It is to apply to not only the extraction but also the processing and the various applications of these minerals. That is very much front and centre in the way that we frame the strategy, not only because of the domestic opportunities that exist with respect to critical minerals in Canada, which you mentioned and the minister mentioned, but also because of some of the geopolitical aspects of this, which create a particular opportunity for Canada as we work closely with allies.
This is one of the critical areas of conversations we have with some of our closest friends, including through the G7.
Yes. We're lucky in Canada to be blessed with a very clean grid generally. Nuclear plays an important role currently with respect to that in a number of jurisdictions, including, importantly, Ontario.
The importance of small modular reactors is something that we have highlighted through the strategy you mentioned. We have a table that has been established to coordinate between jurisdictions and industry and other players the further refinement of positions around deployments of SMRs. Canada's a world leader at this stage, with the investments that have been made in the Darlington facility to create a 300-megawatt grid-attached SMR. We are at the forefront of deployment of the technology. That will provide a bit of a proof point as to where other jurisdictions may be able to apply the technology both inside and outside of Canada.
There is a tension to the work we are doing. In the international conversations we have, this comes up frequently. It's certainly an area of importance with some of our closest allies, including our friends south of the border. I would say that this is an area, generally in nuclear, where Canada has both a deep history as a tier one country in the development of the CANDU reactor and the full supply chain that exists there. By virtue of Cameco and other players, we have both the supply of uranium and the technologies that apply that. It is an area where we do see a particular Canadian niche that is of importance.
Thank you very much, Mr. Chair.
Perhaps someone can answer a question I asked the minister a little earlier.
In my view, there is a principle which applies to every project, and that's social acceptability. I'm thinking in particular of a project in my riding, in my region, where GNL Québec had to pay for trying to convince the public that any repercussions on people would not be significant. To address those concerns, GNL itself had to pay for the various costs associated with that.
I always remember what the Deputy Prime Minister said, namely that there would be no additional spending of taxpayers' money on the Trans Mountain pipeline expansion. So I have a hard time understanding why you are asking for $811,000 in the supplementary estimates. That's taxpayers' money, isn't it?
I understand. Let's just say that, for regular people, public money is still being spent on the Trans Mountain pipeline.
I don't know if you're aware, but many Canadians are having problems with your Canada Greener Homes Grant. Apparently, there are delays of six months or longer, follow-ups for francophones written in English only, and it's impossible to reach an official at the program. I've personally never heard as many complaints from my colleagues—they know I sit on this committee—regarding any other program.
Even worse, someone from Lévis had to sue Natural Resources Canada because they got their money one year late.
Is this type of mismanagement par for the course at the Canada Greener Homes Grant?
Mining is a rough business. I keep hearing on the radio how we're going to move up our timelines from 15 to 10 years. There are very few mines that get up faster than that, because these are complex ore bodies that have to be identified. Money has to be raised.
There was a very interesting cobalt mine they were looking at in my backyard, just up the road from me in the town of Cobalt where I live—and it stopped. I met one of the geologists, and I asked why they had stopped. It was because once pot became legal all of the investment money went to cannabis shops, and that was it for the cobalt production. That's the market.
What role can the Canadian government play in terms of equity stake? How would that work? Are you talking about giving junior mining companies funding tax credits? What are we going to get in return? What is an equity stake if we're talking about critical minerals?
The critical minerals strategy was underpinned by a $3.8-billion funding announcement, which was in part around exploration, in part around infrastructure and in part around research and development. Those funds are in the process of being unlocked right now. We are looking at the full value chain, as I mentioned earlier, with respect to these minerals, not only because of the availability of the minerals themselves but also the importance then of their application in the value chain.
I would say that the piece around the speed at which we can look at the assessment process and the regulatory process generally are things that, as the minister mentioned, have a couple of facets. One of them is work that's being done internally in the government right now to look at how we can be building efficiencies. That's being led by our colleagues at the Impact Assessment Agency.
The other piece is the regional tables process. The intention there is that, for those areas that we've identified as priorities, how can we be as focused and as efficient as we can be within the parameters of the rules we've established?
Thank you very much to the officials for sticking around. I really appreciate that.
There was one question I wanted to follow up on. It goes back to a report from the Auditor General's office. It was in regard to the just transition task force, where 10 commitments were made and only four of them were met. The four that were met were actually met through the regional development agencies, not even by the department.
One in particular...because the just transition is going to be all about workers but also about communities. I found it very telling that one of the recommendations at the end said this:
The Atlantic Canada Opportunities Agency and Prairies Economic Development Canada delivered coal‑transition programs but could not demonstrate that all of the projects they funded supported a just transition for the affected communities.
Again, you guys are going to be the ones who are going to be working extensively on this, hopefully for the next seven years, and hopefully you've been working on it for many years prior to now as well. How do we make sure that we're focusing on communities when the Auditor General is telling us that, so far, we've missed the boat?
That's great. Critical minerals are important. That's a whole separate issue and story because in Coronach and Rockglen, critical minerals aren't necessarily where there's going to be the development there. What are you guys actively doing to identify what the next drivers of the economy are going to be? We're looking for specifics. You've already had a couple of years to build up into this, even with the two years lost to COVID.
How are you going to identify the sectors that are going to be driving the future of the economy for Coronach, Rockglen, Willow Bunch, Bengough and all these communities? It's easy to talk about Estevan and Weyburn. They're bigger communities and they have a few other things going on.
For towns of 400 or 500 people, when you remove the main driver of the economy outside of agriculture, which can't pick up the jobs that are going to be lost in these other sectors, how are you going to make sure you identify only the sectors that will work in those communities specifically? Those are the communities that are being transitioned.
I'm going to give a minute or two to Mr. Blois once I finish up.
To the various individuals, both virtually and here, you have very important roles in terms of executing and planning, to a certain extent, the policy with regard to our economy in a critical sector.
We've seen over the last 12 to 24 months how geopolitical circumstances have changed things in terms of the importance of energy security and energy affordability, and the importance of robust supply chains, especially in critical areas. We've seen how we need to delink certain supply chains and ensure that they are—I once used the word “funded”—supplied by countries like Canada, which have democratic values, democratic institutions and believe in human rights.
In terms of our critical minerals strategy, without getting into the politics, I believe one large step is ensuring that Canada has a role to play within the supply chain and the strategic sectors.
With regard to everything we've put together, how is that shaping up or framing, in your mind, in terms of getting these minerals out of the ground, getting the permits and getting those critical minerals to various sectors, including the automotive electric vehicle sector?
The government has identified a multi-faceted strategy. It was released last December. It really does transcend the scope of critical minerals and their application.
As you say, the geopolitics of this are not incidental. This is one of the reasons we are at a moment for Canada. It's because the circumstances in the world have taught us that supply chains can be vulnerable and that, in the absence of reliable partnerships, countries can be in very difficult situations. We have a number of partners that are interested in ensuring we are part of their supply chains because we are seen as reliable and we are seen as having resources that are important.
At the same time, as the policy makes very clear, there's a significant industrial component to all of this. It's not simply about extracting the resource and shipping it elsewhere. It is about applying it through processing streams and also thinking about the application of those minerals in things like batteries and advanced manufacturing.
Some of the recent investment announcements are of real significance as a proof point with respect to the demand that there is out there for Canada and the opportunity we have to make sure the strategy turns into the well-paying jobs and the regional opportunities that it should.
Thank you, Mr. Sorbara.
Mr. Hannaford, I was in front of a group of young people today talking civics. It was a civics class. I said to them that the most important question in the country right now is how we double our electricity in the next generation in the next 15 to 20 years. Some other folks may disagree with that assertion. There are always a bunch of priorities.
As it relates to our economic competitiveness, we look at Volkswagen and at different groups that are coming, and we talk about that transition to a low-carbon economy. It's all premised on electricity. I've recently seen Premier Legault going to St. John's. We see some of the analytics from different provinces getting to the upper echelon of their electricity capacity. That's traditionally been the domain of the provinces. That's historically how that has come.
Can you speak to this committee about Natural Resources Canada's approach—and whether or not that might be changing—of trying to work collaboratively with the provinces to make sure, on the national front, that we're going to have the electricity needed to drive that transition to a low-carbon economy?
Thank you. That takes us to the end of our third round.
I just wanted to point out the way the supply periods work. The wording I was looking for at the beginning of the meeting was that as Wednesday, March 22, will be the final allotted day in the current supply period, pursuant to Standing Order 81(5) all the votes in the supplementary estimates (C), 2022-23, were deemed reported to the House at the ordinary hour of daily adjournment, Friday, March 10, 2023. It's one of those things, because we never know when the end of the supply period is going to be. When we set this meeting, we didn't know when that was going to be. As I said, we can't report back.
That being said, I should check with officials. We originally extended the invitation to be from 3:30 to 5:30. Because of the votes and the 10 minutes to get here, we have resources until 10 minutes to six, but I don't know if anybody has commitments that they need to leave for. We'll see if Mr. Hannaford has left on his own. I'm assuming that he can perhaps stay if the screen goes blank for the rest of his online officials.
I would also turn the question to my colleagues in the room. If we go into a next round, it would be at least 15 minutes, and the full fourth round would be 25 minutes. We can stop now or we can do an abbreviated fourth round or a full fourth round. We'd have time for that.
What's the will of the committee?
Go ahead, Mr. Angus.
Thank you. We'll send you the information.
In the supplementary estimates, the Department of Natural Resources is transferring $2,200,000 to Parks Canada for the two billion trees program we've heard so much about.
As you know, you can't plant trees just anywhere; you need to have a plan.
Do you want to replant forests or farmland, or do you want to put up wind barriers? There are countless ways to plant two billion trees.
Does the department have a real plan for planting those two billion trees? Does it know where it wants to plant them? Does it know in what type of soil it wants to plant them? Does it know what types of trees will be planted?
I'm the chair of the agriculture committee, so I'm someone who often has conversations in the agriculture committee with stakeholders in that context. More and more, there's a dynamic between ECCC and the policies there and agriculture.
Perhaps I can direct this to Ms. O'Brien, who I think is in the fuels sector. I had a conversation with Irving Oil about the clean fuel regs and some of the dynamics that are at play.
Ms. O'Brien, Irving Oil raised some concerns about their refinery in Saint John and the relation to the clean fuel standard. Can you talk about that dynamic and what relationship you guys share between the two agencies, given that there's both a lens on natural resources and a lens on environment?
That can be for Mr. Hannaford, if I'm getting it wrong.
Okay. I appreciate the fact that it is on the radar of NRCan.
I have about a minute left, Mr. Chair, and the last minute is around wood pellets.
Agriculture and forestry would be the big elements in Kings—Hants. I can appreciate that raising perfectly healthy forests to make wood pellets is not smart public policy, but some of the offsets of the lumbering process really feed into what I think is a competitive life-cycle analysis.
Maybe this is for you, Mr. Hannaford, or for you, Mr. Hargrove. What can NRCan do to strengthen the wood pellet sector, particularly as we look at energy sources in Europe from Atlantic Canada?
That's the end of our time.
I would like to thank Deputy Minister Hannaford and all of the officials. I could go through and name each of you and your departments once again. I'd probably get some names wrong and it would also extend our meeting by another five minutes, but please accept a general thank you with great gratitude to each of you for being here. We really appreciate your being available and, to those who were asked questions, your answering them.
With that, colleagues, we will be back on March 31 for a review of our draft report's recommendations.
Thanks. Have a great evening. The meeting is adjourned.