:
I call the meeting to order.
[Translation]
Good morning, colleagues.
I'd like to thank our witnesses for joining us today.
[English]
Today's meeting is number 11 of the Standing Committee on Environment and Sustainable Development. It is taking place in a hybrid format and is in public.
We have witness testimony for the full two hours.
For those in person, please follow the health and safety guidelines for using earpieces, as written on the cards on the table.
[Translation]
The committee is resuming its study on the effectiveness, potential improvements and capability of Canada's 2030 emissions reduction plan.
[English]
This morning we are meeting with the following witnesses.
As an individual, we have Madame Catherine Potvin, emeritus professor at McGill University, who will be with us by video conference. Good morning, Ms. Potvin.
From the Assembly of First Nations, we have Wendell LaBobe, regional chief, Prince Edward Island, and Graeme Reed, strategic adviser, environment, lands and water. Welcome.
From Oceans North, we have Amy Nugent, associate director, marine climate action, who is with us by video conference.
[Translation]
Each witness has five minutes for their opening remarks.
[English]
For witnesses, when you see this yellow card, understand that there is one minute left for your opening remarks or one minute left for your response to questions. When I turn it over, that means the time is up and you'll have to stop talking shortly.
[Translation]
Ms. Potvin, you have the floor for five minutes.
:
Good morning, and thank you very much for inviting me to appear.
I will focus on two topics today. Let's start with forests, since that's my own research topic.
Globally, we can say and we know quite well that forests capture about a third of the world's carbon emissions. Forests are therefore a great help in the fight against climate change. However, scientists are very concerned about what's called the tipping point—the moment when forests become unable to cope with climate change and start emitting carbon dioxide instead of capturing it.
That leads me to remind members of what happened quite recently in Canada. In 2023, forest fires in Quebec contributed to producing more carbon dioxide than all human activities combined. Forests have thus become an enemy in the fight against climate change rather than an ally. No one will forget the 2024 wildfires, when the town of Jasper, a symbol of our country, burned down to a large extent. This year, in 2025, the forest fires were so intense in the Prairies and in British Columbia that, even in Quebec—and in the Maritimes, I believe—we could barely breathe for several weeks. We're not talking about just a few days.
The situation we find ourselves in this year is no longer the same as it was 10 years ago, in 2015, when Canada signed the Paris Agreement. We are in an extremely perilous situation, and all scientists agree that climate action must be accelerated. Unfortunately, when we look at Canada's emissions trends, we realize that we've reached a plateau: We're not reducing emissions, even though the 2030 plan was very well designed.
Together with a group of colleagues from across Canada, we launched an initiative called Dialogues for a Green Canada, which was formed before the Paris climate conference to suggest potential solutions. We would like to highlight six measures that could help Canada meet its targets—perhaps not by 2030, but at least get us back on track. We believe our proposals reflect the mindset of Canadians and the concerns they've expressed across the country.
In the context of major infrastructure projects, there is an urgent need to facilitate electric interconnection between provinces. Some Canadian provinces produce low-carbon electricity, while others do not. The latter could therefore benefit from exporting electricity from east to west or west to east. It's very important. That electricity could be powered by improved renewable energy production. I would like to point out that Alberta is the province with the greatest solar energy potential in Canada, making it an extremely attractive option. The same holds true for wind energy in the Maritimes.
Canada should also shoulder its responsibilities for rail transportation. We know very well that rail transportation is by far the most efficient mode of transportation for reducing greenhouse gas production and that it falls under federal jurisdiction. Rail interswitching is therefore desirable.
Canadians are currently deeply concerned about the cost of living. We believe Canada should support the changes people are making by helping them live in more energy-efficient homes and drive low-carbon cars. Such support would be achieved through regulation and financial incentives.
Canada must also consider international competition, because it is losing ground on that front. Indigenous leadership should be recognized, because most of the renewable energy initiatives come from our first nations. Investments in national security can also contribute to renewable energy initiatives. Finally, we cannot avoid thinking about justice and equity at this time, because it is Canada's poor who are suffering from the impacts of climate change and are unable to cope with them.
Thank you.
:
Mr. Chair and honourable members of the committee, thank you so much for the invitation to appear before you today.
My name is Amy Nugent. As you said, I am here representing Oceans North. We are a Canadian charitable organization that supports marine climate action and marine conservation in partnership with indigenous and coastal communities.
With the longest coastline in the world, an exclusive economic zone of six million square kilometres and the Great Lakes-St. Lawrence sea system linking the Atlantic Ocean to North America's industrial heartland, Canada's prosperity has always been tied to the sea. It's only natural to build upon that strength as we consider climate competitiveness today.
The communities Oceans North works with and in are also some of the most immediately impacted by climate change. From changing migration patterns for sea mammals and harvesting patterns for hunters to the 133 small craft harbours that sustained damage from hurricane Fiona in 2022, coastal and indigenous communities are at the face of exposure to climate change, as well as the loss of livelihoods that it threatens.
As I am sure the committee has heard over the last weeks, the emissions reduction plan was very far from perfect, but sector-specific pathways are essential for reducing emissions and supporting the long-term economic security and prosperity of Canada, including our coastal communities.
That said, the ERP contained few specific actions to support energy transition in the marine sector. It did, however, commit to developing a national marine climate action plan. It has yet to happen, so there is an opportunity now for members of this committee to call for actions and investment to support Canada's marine industries to commercialize and scale up zero-emission energy, fuels and technologies.
First, globally, ports increasingly are recognized as critical economic and energy infrastructure. The Government of Canada's projects of national interest list rightly highlights the need for port investments that expand the port of Montreal at Contrecoeur and address offshore wind in Nova Scotia and northern port development at Grays Bay in the western Arctic.
Let's be clear. This moment demands a lot more than expanding capacity only or supporting fossil fuel exports. The next round of nation-building investments must align port modernization with the clean energy transition.
Modern electrified ports are multipliers. They connect offshore wind to the grid, enable energy storage, connect rail and road transport, facilitate electrified cargo handling and support supply chains for zero-emission marine fuels. By designing ports as hubs for clean energy and fuels, we can maximize the value of federal infrastructure spending and create lasting economic opportunities.
Globally, our competitors are moving fast. China, the EU and India are electrifying ports to capture cleaner trade. The Global Maritime Forum projects that demand for hydrogen-derived shipping fuels like e-methanol and e-ammonia will exceed 500 million tonnes by 2040—a $1-trillion market and a large-scale job creator. If Canada does not act, our ports risk becoming destinations for the most polluting ships, and we will lose associated innovation opportunities in emerging clean fuel supply chains.
At a smaller scale, we have an immense and immediate opportunity to electrify fleets of ferries and workboats across the country. Electric vessels save money on fuel and maintenance, albeit today they are more expensive up front. They are quieter for workers. They also virtually eliminate air pollution for local communities, thereby improving human health significantly. These boats—fishing boats, tugs, tour boats, and pilot and Coast Guard vessels—can be designed, built, maintained and operated locally, supporting local economies.
Canada is well positioned for this opportunity today. We have abundant wind and solar resources, as my colleague just outlined. We have skilled workers and world-class ports. By embedding electrification, marine clean tech and zero-emission fuel infrastructure into our climate actions, Canada will both reduce emissions and support economic growth.
Thanks so much. I, of course, welcome your questions.
:
Good morning. My name is Wendell LaBobe. I'm the P.E.I. regional chief of the Assembly of First Nations.
I'd like to acknowledge that we are here on the unceded, unsurrendered territory of the Algonquin nation. Thank you to the committee for the invitation to appear here today.
The AFN works on the basis of direction from the first nations in assembly, which has provided clear direction that urgent, transformative and rights-based climate action cannot be sidelined during efforts to advance economic security and competitiveness.
It is a shame that first nations voices cannot be here to contribute to this important study. The committee must hear directly from first nations rights holders, which includes extending the study.
To prepare for this appearance, we developed a technical submission outlining eight recommendations. In the interest of time, I'd like to speak to three broad themes capturing our recommendations: one, taking urgent, transformative action in line with our AFN national climate strategy; two, upholding free, prior and informed consent and the minimum standards of the United Nations Declaration on the Rights of Indigenous Peoples; and three, shifting to a new transformational approach rooted in mutual reciprocity between people and the land.
First, with regard to urgent and transformative climate action, in 2023, the first nations in assembly reaffirmed their declaration of a first nations climate emergency and endorsed the AFN national climate strategy. The AFN national climate strategy calls on the government to work with first nations to implement self-determined climate priorities, identifying seven priority areas and the concept of a first nations climate lens.
With the current focus on economic security and competitiveness, the government is at risk of backsliding on its climate commitments and on its commitments to reconciliation. This is a serous concern, given the state of climate emergency we are currently facing and Canada's history of making and then missing emissions reduction targets.
The year 2024 was the warmest on record, and it was the first calendar year that the average global temperature exceeded by 1.5°C its pre-industrial level. The government's new climate competitiveness strategy is being developed behind closed doors to focus on outcomes, not objectives, and technological solutions. This not only represents a shift away from the existing targets, but also neglects the long-standing call from first nations that climate policy must be done in direct partnership with first nations rights and title holders.
Second, because of free, prior and informed consent and the minimum standards of the United Nations Declaration on the Rights of Indigenous Peoples, the government has an obligation to work directly and in full partnership with first nations rights and title holders to implement first nations' climate priorities, including the development of emissions reduction plans. This is enshrined by our rights protected in section 35 of the Constitution.
Despite the intentions, direct engagement with first nations did not occur in the development of the Canadian Net-Zero Emissions Accountability Act, the 2030 emissions reduction plan and the setting of the updated 2035 emissions reduction target. This concerning trend continues as the next iteration of federal climate policy and climate competitiveness strategy advances while first nations sit on the sidelines.
Crown governments cannot make decisions in the national interest without first nations directly at the table. Such an approach is incompatible with the UN Declaration on the Rights of Indigenous Peoples and the Canadian Net-Zero Emissions Accountability Act, which clearly state that Canada must consult and co-operate with first nations to obtain their free, prior and informed consent.
Finally, we have the third theme: a transformational approach that includes first nations knowledge systems.
Over the last eight years, AFN has been working with first nations to develop the concept of a first nations climate lens. This concept has clear applicability to net-zero conversations, more specifically to emissions reduction plans, in three ways. First, net zero must not be interpreted as the end goal but be conceptualized as the process leading to a just, equitable and resilient future for our future generations founded on first nations' right to self-determination. Second, it challenges the mitigation dichotomy rampant in climate discussions by focusing on the complex and multi-dimensional nature of first nations climate solutions. Third, it shifts our focus towards the interrelationship between the three Cs—colonialism, capitalism and carbon—centring on an approach rooted in relationships that value the nexus of people, land and our mutual reciprocity. From this perspective, it's not just a global shift and movement away from the status quo but rather a revitalization of our value systems, value systems that connect to the land and nature laws that govern our interactions with all creation.
Canada is at a crossroads. The magnitude of the climate crisis requires a transformational shift in the approach that Canada and the world take to address the climate crisis. Instead of doubling down on the approach of climate competitiveness that invests in the same technological and market-based system that created this problem to begin with, we must see great potential for this committee to apply a first nations climate lens to the implementation of Canada's 2030 emissions reduction plan and all of Canada's climate policy going forward.
In closing, first nations' solutions could reframe the conversation and lead to transformative—
:
My first question goes to Mr. LaBobe.
I read your document that you submitted to the environment committee. Thank you for that. It's very well written and very clear.
Prior to white contact, first nations did not have hospitals, highways, schools, medicine, phones, computers or even money, for that matter, so I'm quite interested to hear what the Assembly of First Nations means by saying that we have to return to the land. Can you expand on what that actually means?
:
First of all, the plan was very broad, covering construction, industry, transport and the oil and gas sector. The price on carbon was of course the centrepiece though. So the first thing Canada's new government did was eliminate the price on carbon.
That decision was clearly highly problematic, in two ways. I know that people across the country disliked this regulation, but carbon pricing was a way for the government to generate revenue that it could in turn have invested in low-carbon alternatives.
So the federal government made things much harder for itself by eliminating that source of revenue. There are two levers: regulation and investment. Regulation is not very popular, but it is more acceptable when paired with investment. For example, the public is more receptive to measures to eliminate the sale of combustion vehicles if there is also an incentive covering the price difference between those vehicles and electric vehicles.
Finally, the government is hurting us and itself by eliminating the revenue generated by carbon pricing. This directly contradicts the fundamental principle of user pay. We know where the problem lies. It has been identified and well explained; moreover, everyone understands it. So it cannot be resolved unless something is done about it. I think that is a great weakness right now. We have also heard talk about carbon pricing for heavy industry and I hope that promising approach will be part of the government's solution.
Thank you, witnesses, for joining us today.
Mr. LaBobe, I'd like to direct my first question to you this morning.
My Conservative colleague said something in his questions about the position of the Assembly of First Nations. He accused it of “walking away” from the 21st century. I thought that was a very interesting characterization since most of us in Parliament are trying to bring the Conservative Party into the 21st century.
I'd like to give you an opportunity to clarify the indigenous perspective on addressing climate change.
:
In Canada, nature-based solutions are more efficient in the agricultural sector. I think it would be incredibly politically tempting...so thank you for this question. It seems as though climate policy often concentrates on urban set-ups. That's mostly because most people live in cities. It leaves the rural areas feeling vastly abandoned, not concerned with and even negatively impacted.
If we think about farming, a transition to no-till agriculture, for example, which provides a large store of carbon in agricultural soil, could be supported by the federal government through training and incentives. Usually farms have a lot of buildings. There could be solar panels on these buildings so that farms could produce their own energy and maybe even sell energy to the grid, which would be beneficial. I actually come from a farming family. My daughter has a farm. She's a horticulturist, so it's a topic I really like.
People who have cattle could use manure and biodigestion to produce methane and then produce natural gas, which is renewable and could be used for heavy machinery. There are really exciting examples, in particular in Manitoba, of farmers who are embracing the transition and moving forward. I think it's a topic of interest. It's not a big sector of emissions for Canada, with more or less 9% of greenhouse gases, which is maybe why it has not reached the forefront, but between the carbon we could put in the soil and the rest of the modernization of farming, I think it's a really good avenue.
In Canada, unfortunately, I think the forest sector is now so stressed that we should aim at protecting it rather than considering it a solution. We want to try to limit the climate warming up and drying so that our forests can still help us. I don't think we can invest in that as a natural climate solution.
The core of our national climate strategy is very much to identify the values and behaviours driving the system of short-term thinking and how we then move those values and behaviours into a system that has a relationship and reciprocity with the land.
In our submission, we talk about how we avoid thinking about net zero as an end point and rather as a process to a just, equitable and resilient future. That future for first nations is about the ability to continue to exercise their relationship with their lands, waters, air and territory to ensure they can fulfill their obligations and pass those obligations on to future generations.
The absence of taking up that longer-term thinking and being able to see longer term is going to continue to prevent first nations from exercising those abilities.
The committee is continuing its study of the effectiveness, potential improvements and capability of Canada's 2030 emissions reduction plan.
This afternoon, we are meeting with the following witnesses: Sophia Mathur, as an individual.
[English]
From the Oil and Gas Corporation of Newfoundland and Labrador, we have Mr. Jim Keating, chief executive officer, by video conference.
From the Resource Works Society, we have Margareta Dovgal, managing director.
[Translation]
Each of the witnesses will have five minutes for their opening remarks.
[English]
I will be putting up this sign indicating that you have one minute left in your remarks. I will turn it over when your time is up. This will also occur during the question period.
We will start with Ms. Sophia Mathur.
:
Thank you so much for having me as a witness.
Thank you, Bruce Fanjoy, for inviting me.
Hello. My name is Sophia Mathur. I am 18 years old, a climate activist and a first-year university student at the University of Ottawa. Funnily enough, I have a math mid-term right after this.
When I was seven years old, I started lobbying for climate action, not in the way that adults around me did with thick briefing binders and a long list of evidence—that was their role—but in a way a child can, by sitting and listening. By showing up and by being present, it felt as though I was reminding everyone in the room that the decisions being made were shaping my future, because they were.
When you're seven, climate action isn't just policy; it's a promise, a promise that the world I grow up in will be safe, beautiful and alive. I've carried that belief with me ever since. While the devastation of climate change is real and frightening, with fires, floods and smoke-filled summers, I don't want my generation's story to be one of despair. I want it to be one of accountability and courage.
Over the years, I've met politicians and experts who have dedicated their lives to this fight. I've always admired that. It takes resilience to turn research into policy and policy into measurable change.
Now that I've started university and I'm beginning to study economics with a minor in public policy, I'm continuing to understand just how complex this world is, and I am nowhere near an expert. Efficiency, cost and timelines aren't just numbers; they represent people's lives, yet through my climate activism, I've also learned that this complexity can't be an excuse for inaction, because while climate policy takes time, climate change does not wait.
I ask myself, how long will climate policy be too hard to advertise in political campaigns? How long will this global crisis be rewritten as partisan? Do voters know that the cost of this discussion is the deadly impacts of climate change?
I brought with me today a book given to me by Citizens' Climate Lobby that summarizes the evidence from climate change experts on Canadian emissions strategies. The message from scientists and economists is consistent: Make polluters pay.
Fossil fuel companies, many of which make billions in profit each year, must bear responsibility for the pollution they create. One of the key findings is clear: Carbon capture and storage is costly, is largely inefficient as an emissions reductions tool and will continue to keep money in the pockets of these polluters.
Today, I want to offer not a critique but a reminder that young people like me, the people you represent, are watching, learning and hoping. We trust that our leaders will listen to the evidence, respect the experts and keep their promises, because for me, this isn't just about emissions targets; it's about integrity. It's about what it means to make a promise to the next generation and to keep it.
I may only be 18, and I have much to learn, but I know one thing for certain. Real leadership isn't measured by how many promises are made. It's measured by how many are kept.
Thank you.
:
Offshore oil and gas indeed should be central to Canada's energy future, as we cannot be an energy superpower without it. With over 85% of new discoveries by volume occurring in offshore fields worldwide, declining onshore output is being steadily replaced by global offshore growth.
Newfoundland and Labrador is indeed a global offshore player: 100% of Canada's offshore oil production is sold internationally, which means 90% of a barrel's emissions occur outside of Canada. The province reinvests oil and gas profits into renewable energy, and it does so directly. Over $1.1 billion from Crown corporation ownership in offshore oil and gas projects has been directly invested in our provincial hydro power portfolio. It is indeed the most elegant of energy transition strategies.
To enable this, we created an exploration strategy, investing over $160 million in geoscience and identifying hundreds of prospects, 20 of which have the potential for over a billion barrels of oil or six trillion cubic feet of natural gas each. What's at stake here is not only our known reserves of 10 billion barrels currently in production, but also an estimated 50 billion barrels of oil. For context, Hibernia's two-billion-barrel oil field has already contributed $15 billion to the provincial treasury and another $4 billion to the federal government.
Exploration wells cost about $100 million to drill and have only a 25% chance of success. Despite the costs and the risk of failure, between 2015 and 2020, over 14 companies bid $4.2 billion to explore in Canada's offshore. Seven submitted plans to drill dozens of wells. This momentum has come to a crashing halt. First it was due to the pandemic, and now it's due to the proposed emissions cap. Canada is undermining a strategic resource, leaving international investors confused and concerned.
There were no exploration wells drilled offshore for the first time in nearly 25 years, and there are no wells planned for next year. The last two licence rounds saw no bids, which is unprecedented. With a licence round closing just next week, I fear the same result.
Of the 14 exploration companies we had in 2020, only three remain. Those exiting have forfeited over $430 million in bid securities to the offshore regulator, and that figure is growing. Companies simply believe they will be unable to develop a discovered resource.
This is not the local effect of a global trend. Global exploration is trending upwards. This year, 80 high-impact wells were drilled, an 8% increase from the previous year, and 15 discoveries were made across 12 countries.
Spending is rising and expected to grow again in 2026. Newfoundland and Labrador and Canada are missing out. The proposed emissions cap regulations are often cited by investors as the reason they've decided to explore elsewhere. The economic damage is already happening.
With our provincial trade association, Energy NL, we engaged Wood Mackenzie consultants to assess the impact of the proposed emissions regulations. Their modelling shows that to meet post-exemption targets, operators may need to defer start-ups or scale down projects, weakening project economic viability. What's most concerning is that the modelling suggests the emissions cap could force curtailment of existing offshore production. Forecasts show emissions exceeding the cap by 12% in 2030 and remaining above limits through 2035, leaving absolutely no room for new developments.
Should our Bay du Nord project eventually start up after a three-year delay, it is expected to emit less than 10 kilograms of CO2 per barrel, which is half the global average. When the oil-climate index was first established in 2016, our Hibernia field ranked 12th lowest among 75 global oil and gas fields in terms of emissions. Why would we eliminate the possibility of low-emission projects that can displace higher-emitting projects elsewhere?
Our offshore projects have already implemented emissions reduction measures. The SeaRose FPSO and the Hibernia and Hebron platforms have already reduced emissions by almost 29% to 50%. The Terra Nova FPSO has undergone asset life extension upgrades that will lead to further reductions.
While the federal government aims to balance fiscal support with strong regulation, we urge abandoning the emissions cap framework. Instead, focus on practical policies and fiscal tools that enable the meaningful decarbonization of Canada's oil and gas sector.
Thank you.
:
Thank you so much, Mr. Chair.
Leveraging our true potential as an energy superpower for the well-being of Canadians and maintaining the 2030 emissions reduction plan are fundamentally irreconcilable. We cannot have a growth agenda premised on our most productive sector if that sector is also saddled with targets only achievable through costly carbon credits or production decline.
A new mandate from Canadians to respond to the economic necessity of this moment forces a necessary reconsideration of this framework. The resulting policies must therefore also reflect that will and be grounded in reality.
The 2030 plan is ill-suited to our current economic imperative because it relies on unsound models with questionable assumptions that are treated as facts. These models create self-reinforcing outcomes. They rely on prescribed technologies neither proven at commercial scale nor widely available.
Let's look at the specific policies that flow from the plan.
First, let's be clear about the source of the bias. The 2030 plan itself is built on absolute emissions targets. This framework is biased against energy production and allocates all emissions liability solely to the producing jurisdiction, ignoring the consumption of those goods elsewhere.
The oil and gas emissions cap is a flawed expression of that bias. It's an attempt to create a cap-and-trade system for one industry in only four provinces, creating an illiquid market that cannot function well. Moreover, the government's model uses a 2019 baseline that assumed 5% production growth, but by the time the model was released, Statistics Canada data already showed we were 9% above that production baseline. Current Canadian production is almost 20% higher than in 2019, mostly driven by B.C.
Second, the proposed methane regulations are being sold as an easy win. The head of the IEA at COP famously said to just tighten the pipe, but that's a view that involves considerable costs to realize. These regulations, especially measured against the national inventory, are designed to be punitive. They overly impact the natural gas space, which they are designed to do, and that's precisely why Canada's golden opportunity for natural gas production and LNG exports is imperilled by this. This is an industry that we're just starting to build.
Third, the clean fuel standard is a policy intended to reduce the carbon intensity of liquid fuels by blending, by using other reduction options in supply chain and production and by buying credits. In practice, this forces Canada to import biofuels from the U.S., undermining our own energy security for a policy that is little more than a hidden and unnecessary tax.
Fourth, the EV mandate is the definition of a government forcing a technology. A market-based tool like corporate average fuel economy, or CAFE, standards, by contrast, allows for a variety of options to meet a goal. This mandate simply forces an expensive product that most Canadians cannot afford.
Fifth, the clean electricity standard is a clear case of federal overreach into provincial jurisdiction. The models supporting it assume an impossible build-out and an operating environment that does not exist and is unlikely to develop. It also ignores the physics of provincial grids, many of which may not be able to handle a much higher level of intermittent power without risking cascading outages, as we've seen happen in Germany and Spain.
Sixth, the output-based pricing system, or OBPS, is another flawed hybrid, sitting between a tax and a cap-and-trade system. Its performance-based measures are tied to the decline in the sector they are targeting. It is a system designed not to foster innovation but to manage our most productive industries into non-existence.
Finally, this all comes back to carbon credits. They become a convenient illusion of progress rather than a genuine solution. While marketed as a way to offset emissions, most credits fail basic integrity tests. All of Canada's modelling assumes the ability to buy international credits to meet emissions reduction goals. This market, such as under IETA, lacks a double-entry bookkeeping requirement. There is no system to prevent double counting or to prove a single emission was ever reduced.
These self-imposed hits to our competitiveness are absurd precisely because we are already leaders. There's nothing lax about our regulatory system; we've been regulating for decades. Our natural gas sector is a perfect example. According to CAPP, since 2000, emissions from the natural gas sector have fallen by 20% while production has grown by 15%.
On top of this, there's red tape. Our regulatory system is so broken that this government has brought in fast-tracking legislation that deploys political will to sidestep the mess it is ultimately responsible for—a mess that creates significant competitiveness challenges on top of all the policies I have described.
This brings us back to the core problem with the 2030 plan. Where emissions reductions cannot be achieved because the technologies don't exist or aren't economically viable, this framework passes along to industry the cost of carbon credits, a backstop measure that leads to nominal outcomes at best. Where that's still not enough, Canadians are saddled with only one actual outcome: deindustrialization as industry cuts investments and, in turn, production.
That's the real cost. The plan systematically undermines our competitive advantage as an incredibly resource- and energy-rich nation, capable of responsibly serving the world's needs.
We are probably dominated by the western Canadian view of it as a production cap, and I agree that it is essentially a production cap, but from my perspective, I see it as something more severe: It's an investment cap.
We rely upon investors who can freely go anywhere else in the world. We compete with 40 other jurisdictions for exploration dollars, and what's happened in our offshore after a significant amount of investment on behalf of the province is quite shocking.
The provincial government has put up $19 million to incentivize explorers to come here. The explorers are simply unable to see a pathway to development. This is really troubling, because we have one government at odds with another government about trying to achieve a common objective.
I see it as an investment limiter. It's fully blocked any new growth opportunities, and I don't foresee any resurgence in investment in our offshore until the emissions cap is replaced and we have the signals that the Bay du Nord project is moving forward.
:
There's not a chance, really.
I've been to several summits and conferences around the world. While I used to be warmly greeted by people wanting to know about where our next prospects were and about our next resource assessments and licensing rounds, the conversation has turned to asking about when that thing is going to disappear, because we're the only country that, at least in my circles, has any such cap.
I don't think it's at all possible.
When you look at where all the investment dollars are going to meet the world's global energy needs, where else are you going to find the four million to five million barrels a year we need unless it's in the offshore? We have one of the biggest coastlines in the world and one of the best energy endowments; we just have no access to them.
:
Exploration doesn't increase emissions. It might be counterintuitive. It basically meets demand.
When you look at the fact that 90% to 95% of emissions are post-offshore extraction, it begs the question of why we wouldn't do more of it. Studies have shown, if we look at our frontier and the scale of the types of developments you see around the world in Suriname, Guyana, Mozambique and Namibia, that when these fields come on, they displace 30 to 40 kilograms per barrel a day emissions-wise with 10 to 15.... Without exploration, we're just going to allow those legacy fields, which are a higher cost to maintain and are more problematic for reducing emissions, to proliferate. Actually, it has happened in other jurisdictions that quite frankly are not so concerned.
From my perspective, for us to target our upstream, our productive area, instead of the consumption area is counterintuitive, and it's not really good policy.
Thank you to all of the witnesses. I'm sorry I can't be there in person.
What a stark contrast of testimony we've heard in this hour, going from young Ms. Mathur to adults who are gainfully employed in a particular sector.
The study we are working on right now is about our ability to achieve our 2030 reductions and, if we're not achieving them, how to do this better. These conversations seem to be counterintuitive.
I'd like to give some room for Ms. Mathur to share some reflections based on what she's heard. I commend her for her testimony, her bravery and all the great work she's doing.
Ms. Mathur, it's over to you.
:
Thank you so much for that. I really appreciate it.
As I said, I think conversations about these policies are important, yet it feels like the trade-off of these conversations is the action we are not taking. I've been going to these meetings since I was seven, and it almost feels like they've had the exact same message of protecting certain industries, but we can't do that at this point. Climate change is going to impact my future. Prices are going to get higher regardless of what policy we have or if we have climate change and cannot fix these issues.
Obviously, I'm not coming here as an expert or someone who can give you a quantitative analysis of everything that's going on, but I wanted to be present as a youth so that the discussions you're having are happening in front of the exact future generation that is going to feel the impact of the time spent on these conversations.
Thank you for the question.
:
Thank you very much for that.
The role of government is to serve the public. We are public servants. We work towards what we believe is in the best interests of everyone, not just a particular few.
In listening to testimony, I was thinking about the tragedy of the commons. That's exactly what happens when we don't focus on the big picture. We're talking about potential economic losses and opportunity in a particular sector, but we're not talking about all the loss we're experiencing in Canada and around the world from the effects of rapidly accelerating climate change, with wildfires, hurricanes, etc. There are huge economic losses. The conversation that it's economy over the environment, or vice versa, is absolutely false. They go hand in hand, because there is no economy without an environment.
Ms. Mathur, I understand that you attended COP27 in Sharm El-Sheikh, Egypt, as did I. I wondered if you wanted to share your experiences and reflections there, and maybe reflect on why you think it's important for Canada to keep going and accelerate action.
:
First and foremost, most oil and gas companies operating around the world do believe in carbon pricing, as long as it's done in a fair and even way and we don't disproportionately disaffect ourselves in the search for capital. I think that sends the appropriate price signal from the ground up. That's number one.
Number two, I think it's inside the regulations themselves. We have a world-class set of regulators here who know these facilities and these fields at the asset level. They can stand and look at the framework of regulation that's been in place for effectively 30 years and is constantly evolving, even with the complexity that's required, and look at offshore fields and make sure we get the best of them. We look at their uptime. We look at their power demands, because the electricity on a platform is maybe 60% to 70% of the carbon emissions. We look to do things more efficiently. We look to modernize. These are constant and incremental things that are already in place and are already consistent with not just global best practice but Canadian best practice.
I think carbon pricing as a whole is something the industry is generally in support of, but maybe it's about the specific actions of the regulator and the give-and-take of how we execute these projects on a technical level. They have revealed, as I mentioned, a 50% reduction in emissions in the span of seven or eight years for our offshore fields.
:
I appreciate the excitement. Thank you, Mr. Chair.
I'd like to direct my questions to you, Ms. Dovgal.
We'll start with youth employment. I think it's vital that this country finally, once again, sees a boom. We have a productivity crisis. The outcome of that for young people.... I don't know your age, but you're young enough to answer this question. We saw 17.5% of young people go back to school this fall after not getting a summer job. The productivity crisis is caused by the impending production cap, and I appreciate my colleague from Newfoundland highlighting it as an investment cap.
Could you talk a little about the ideology of governments not being connected to the reality of what people are facing on the ground?
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Yes. I can put that in other words as well. Economic realism is in the interests of Canadians; economic fantasy is not.
I'm 29 years old, to your point. When I was going to university, I had far better opportunities to pursue politics, get into exciting areas of research and become a real policy wonk in the field that I'm in right now because I was driven by the understanding that the climate is changing and that's a thing we need to deal with. However, I learned a lot about economics. I learned about the energy realism needed in this conversation.
To your point about productivity, Canada has an essential challenge before it right now. Do we want to be the ones to kneecap our industry in an uncertain time globally, or do we want to be the ones to ensure we have the money to invest in adaptation and create opportunities for Canadians, whether public or private? The current framework we're looking at is not going to achieve those things. It's going to make us poorer and less equipped to handle and deliver benefits for Canadians.
Ms. Mathur, I want to acknowledge your courage, not just today but in all of your actions as a young person. It's not lost on me that you may well be the youngest person ever to attend this committee as a witness, so welcome.
Conservatives in Parliament routinely oppose market-based solutions to addressing this challenge and non-market-based solutions. Their solution always seems to be another barrel of oil, and I don't think that's a practical solution at all.
What's your message to them as someone who will live with the consequences of not addressing this moment in history?
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The province has been endowed with a tremendous hydroelectric resource. We're exporting five to almost six times the amount of clean hydroelectricity we consume. We are in discussions at an MOU stage with our friends in Quebec to add more to that. If we were an energy superpower, on a per capita basis we would be the fifth- or sixth-greatest energy producer, when you combine the hydroelectric endowment and the oil and gas endowment. That's if we were our own country. I have been keenly aware of that ever since I studied this back in 2005, 2006 and 2007 with our energy plan.
I think, though, the transition is to make sure that while this complex energy system goes through machinations and conversions.... Right now, we see a phase where all new energy coming to the fore, mostly renewable, is being taken up by new demand. It's a sticky hydrocarbon percentage, but inevitably it will decline. I just want to make sure that Canada's oil and gas—and particularly Newfoundland and Labrador's oil and gas—meets that need, because I believe it's going to be produced in the best way possible, by the most ingenious and capable people and with the best attention to safety and the environment. It's a mission, and that's going to happen over a generation or three.
I have a daughter who's 18. She's doing engineering, and she sees this complexity. That's her choice. She's also going to join the oil and gas business.
:
I really appreciate the way you framed it because both of the questions within that—around the merits of models and what you do with those models—tie into each other.
I alluded to this earlier. Essentially, you want your models and your policy frameworks to reflect system dynamics in the real world as much as possible. The more untethered they are from what's actually happening in the real world, the farther you will fall away from the outcomes you want across the board.
If the outcomes in question are emissions reductions and you're only focused on emissions reductions and are assuming there will be technologies deployed that aren’t actually ready for market deployment at scale, your alternative is decarbonization through deindustrialization. The cost of that is massive.
You are right that picking winners and losers is not a way to do this, because it neglects the way the markets work and how responsible governments can be part of creating solutions that are in line with market economics.
:
What we are seeing right now is not an energy transition. We are seeing an energy addition, because what the world is doing is adding energy.
Renewables and hydroelectric are part of the solutions, and the numbers are kind of consistent. In British Columbia and Canada, about 17% of our total energy use comes from renewables. This number, I believe, is identical to the one internationally. If you're trying to change the whole system, it's like the composition of, let's say, a swimming pool. If you're just putting little cups of water into it, you're not going to see the results that are being described and are baked into the earlier assumptions.
The costs are not just numbers on a spreadsheet; they are things people feel and experience, and they are experienced differently. At the household level, demand for energy is inelastic, so people get hit harder and harder. At our economy's industrial level, we see a hit that affects productivity, as your colleague mentioned earlier.
Mr. Keating, I just wanted a couple of final comments, because this is really important. I always think it's important, when we're having these conversations, to bring them right back to what Canadians and the people of Newfoundland and Labrador feel on the ground.
We have an out-migration issue in our province. A lot of our talented young people end up going away to other provinces in search of good-paying jobs. Can you speak to this with respect to average salaries, for example? If the emissions cap goes forward and this sector is stifled, what will that mean for the next generation of young people?
:
That's a great question. I think carbon pricing as a general principle.... This is speaking for myself. We don't have a defined view because we're a platform. We're a think tank. We're an organization that has a lot of different perspectives that we're trying to bring into the public conversation.
Speaking for myself, as someone who's been in this space for about a decade now from when I was a student, we know that carbon pricing can work, but it has to be balanced with trade-offs. If you're only targeting the industrial side of it because politically you've found that consumers are not happy, which is what the Liberal government found in the last election and precipitated some changes before that election, and you're throwing all of the emissions reductions only onto industry, then you're chipping away at the underlying economic base that allows us to have the money in our economy to pay all our bills.
That needs to be balanced carefully. There are lots of tools to employ, but they have to be implemented in a cohesive way. There needs to be a clear alignment between your economic objectives and your climate and environmental policy objectives.
Mr. Keating, I have about a minute left.
The OilCo strategic plan from 2023 to 2025 says, “OilCo, along with government and industry stakeholders and partners, is actively taking steps towards achieving Canada’s and Newfoundland and Labrador's commitment to...net zero”. First, can you provide a copy of that report to this committee?
On page 13, it says, “OilCo is helping to lead the oil and gas industry and the province in achieving net zero...in the offshore sector.” Can you provide some precise examples or solutions that OilCo is using to get to net zero?
I'll also reference a goal to get to achievements in clean energy by December 31, 2025. Can you provide solutions that OilCo has worked on in the last two years?
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Yes, I can. I can supply those documents.
Specifically, and by way of an example—because there are many and we don't have much time—we supported the inventory of CCUS opportunities through our geoscience work. We had independent consultants look at how we can inject not only provincial but also national and international sources of carbon into our reservoirs.
We've undertaken studies to look at the electrification of the offshore, even with hydro power or offshore wind. We've looked at artificial intelligence to see how it can make things more efficient, more cost-effective and, by extension, lower-emitting.
The list goes on in terms of the things we support through our research bodies and through our participation in joint venture studies.
I'd like to thank all the witnesses for their testimony today. It's been a real pleasure.
I would also like to thank members for a great session.
I'm happy to hear that Mr. Leslie is young again, or still young.
Voices: Oh, oh!
The Chair: I hope members opposite can consult with Mr. Leslie on what he is doing.
Witnesses, you are all excused.
[Translation]
The committee is scheduled to meet next on November 3. We will be starting a new study on electric vehicles and hearing testimony from senior officials for one hour. The committee will then meet in camera for the second hour.
Have a great weekend and Happy Halloween. Enjoy.
[English]
Many thanks to all members.
The meeting is adjourned.