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View Greg McLean Profile
CPC (AB)
Welcome to meeting number nine of the House of Commons Standing Committee on Natural Resources.
Today we are meeting to discuss the subject matter of main estimates and supplementary estimates, 2020-21.
To ensure an orderly meeting, I would like to outline a few rules to follow.
Members and witnesses may speak in the official language of their choice. Interpretation services are available for this meeting. You have the choice, at the bottom of your screen, of floor, English or French. Before speaking, please wait until I recognize you by name.
If you are on the video conference, please click on the microphone icon to unmute yourself. Those in this room, your microphone will be controlled, as normal, by the proceedings and verification officer.
A reminder that all comments, by members and witnesses, should be addressed through the chair. When you are not speaking, your mike should be on mute.
With regard to a speaking list, the committee clerk and I will do our best to maintain the consolidated order of speakers, whether they are participating virtually or in person.
I would now like to welcome our witnesses, including Minister O'Regan, who will have five minutes for his opening statement before we move to questions and answers.
Welcome, Minister. On behalf of the whole committee, please accept our condolences for your recent loss.
Thank you for being here today.
View Seamus O'Regan Profile
Lib. (NL)
Thank you, Mr. Chair.
I'm getting an echo when I'm speaking. I don't know if you can do anything about that.
View Seamus O'Regan Profile
Lib. (NL)
Thank you, Mr. Chair.
Thank you all for your kindness and understanding regarding my cancellation, I think, three weeks ago.
I am joining you from the Island of Newfoundland, which is the ancestral homeland of the Mi'kmaq and Beothuk.
I know my time here is short and I want to touch on two very important things right off the top.
First, I want to state very clearly that the best thing we can do for all of our natural resource industries is to wear a mask, wash our hands and physically distance when possible. Hope is coming; vaccines are coming, but we have to be vigilant until then.
Second, I want to send a very clear message to every worker, family and business that is relying on the Keystone XL project that our support for this project has been and continues to be unwavering. On their very first call, the Prime Minister discussed Keystone with President-elect Biden. That is the very definition, I would argue, of a priority.
I would add that one of the strongest arguments we can make for Keystone is our record on tackling climate change. Today, my colleague the Minister of Environment announced a historic part of this fight, with 64 new measures and $15 billion in investments to protect our environment, make life more affordable and make our communities more livable. That includes almost a billion dollars for renewable energy and smart grids to enable the clean grid of the future; $2 billion in repayable financing for commercial and large-scale building retrofits; $1.5 billion in a low-emissions fund for hydrogen and renewable natural gas; $3 billion for expediting decarbonization projects for large emitters; incentives for EVs, and a further $300 million to support off-diesel initiatives. This builds on the work that we're already doing.
Canada has a price on pollution. We are phasing out coal-generated electricity and we are legislating accountability for our goal of net-zero emissions by 2050. We are making significant investments to reduce carbon and methane emissions, and build our capacity for renewables. We are investing in new opportunities and innovation such as hydrogen, carbon capture and small modular reactors.
This is the same vision we laid out in the Speech from the Throne this fall and that we have continued to implement with our fall economic statement last month, including another $2.6 billion over seven years for retrofits and jobs to make our homes more energy efficient, and a further $150 million to build more charging stations for electric vehicles.
This is the same vision we laid out in our Speech from the Throne this fall.
We are using natural solutions to fight climate change, with....
Sorry, but I guess in all the technical confusion I have to find my notes. Here we are.
View Seamus O'Regan Profile
Lib. (NL)
Yes, okay.
We are using natural solutions to fight climate change, with $3.2 billion to plant an additional two billion trees over the next 10 years. This is in addition to the $30 million that we sought in the estimates to support COVID-19 safety measures in the forestry sector, a further $22 million this year to combat mountain pine beetle infestations and $12 million to fight the spruce budworm in Quebec. Our forestry sector is a crucial part of our economy and our fight against climate change.
All of this is taking place while we support our resource sectors, and most importantly our workers, in the midst of a global pandemic. We put in place a 75% wage subsidy to protect vulnerable jobs. We announced further support with increased flow-through share flexibility for junior exploration companies. We announced $1.7 billion to clean up inactive and abandoned wells and close to $400 million to upgrade and repair facilities for our offshore in Newfoundland and Labrador.
From the beginning, workers have been at the heart of everything we've done. They will continue to be at the heart of everything we do. Our resource sector is the foundation of Canada's recovery and our net-zero future, and together we have to lay the foundation for its success.
I look forward to the committee's questions.
View Jeremy Patzer Profile
CPC (SK)
Thank you very much, Mr. Chair.
Thank you, Minister, for joining us here today. We're glad to see you at committee for the first time. For the sake of struggling Canadians who are looking for help, I hope you'll stay for as long as it takes to give us some answers, which you committed to doing, so thank you for that.
You offered people public health advice, which they're already getting from chief medical officers. I appreciate that, but what they really need from you is to hear a lot more about a serious full-scale plan to save their jobs and meet their needs by supporting Canada's energy sector.
In your comments, you said one phone call between the Prime Minister and President-elect Biden was the definition of a priority. It's been over a month since the Prime Minister made one call about Keystone XL. Is that the last time you took any action to save the project?
View Seamus O'Regan Profile
Lib. (NL)
No. Alberta's energy minister Sonya Savage; James Rajotte, who's the Alberta envoy in Washington, D.C.; and I have been discussing weekly how we'll make the case for Keystone, how we'll make the case for Canada's energy sector in Washington and how we'll position Canada with an incoming administration that looks to be the most sweeping environmentalist administration the United States has ever seen. It is crucially important to our energy sector that we get this right.
On Tuesday, Mr. Rajotte and I appeared together at a summit that was held by the Canadian embassy in Washington. It had a lot of what we consider to be influencers in perhaps a future administration, but also influential people right now in Washington.
We appeared to make the case for Canada's energy. We made the case that Alberta, Saskatchewan and Newfoundland and Labrador, our oil-producing provinces, are the tops in the world at ESG; that we are lowering emissions considerably; that we have put a price on pollution; and that we should be the preferred partner and supplier of oil and natural gas to the United States. We have taken a team Canada approach in much the same way as we did with NAFTA. We are doing it together.
View Jeremy Patzer Profile
CPC (SK)
Thank you very much, Minister.
Part of your team Canada approach, I'm hoping, then, would be to ensure that Keystone XL gets built. First nations groups are reaching out. I'm sure you're well aware of the Natural Law Energy group, which is five different first nations, one of which is in my riding. They have an equity stake now in Keystone XL, so it's extremely important to them. For the sake of them, I really hope you will do everything in your power to ensure that this project is completed.
I want to move along here. Do you know how many jobs have been lost in the Canadian energy sector in the last five years?
View Seamus O'Regan Profile
Lib. (NL)
It's been considerable. I would say that one of the things we did, particularly with the $1.7 billion we put forward on orphan and inactive wells, was to make sure we considerably lessened the number of people we would lose. It's not simply about looking after workers, who, as I have said, are our first priority; the other extremely important part, as I have said, is that natural resources and our natural resource sector will be pivotal, central, to the recovery of this country. We can't afford to lose talented people. We can't afford to lose experienced people in the field or in the corporate offices of our energy companies in Calgary or Edmonton or St. John's. We don't want to lose these people. Keeping people in place is vitally important.
That was a huge priority for us with both the wage subsidy and the $1.7 billion we put forward on orphan and inactive wells.
View Jeremy Patzer Profile
CPC (SK)
I'm sure you're aware, then, that Evraz in Regina just laid off 600 workers because there is no work. There is no demand for Canadian steel. We've seen LNG projects being prioritized with Chinese steel, not Canadian steel. That's a huge problem.
As I look line by line at the supplementary numbers here, I'm wondering if there is any funding through your department to help combat misinformation campaigns and campaigns against Canadian resource industries.
View Seamus O'Regan Profile
Lib. (NL)
We have taken an initiative with the Alberta government to make sure we are prominent in Washington, D.C., right now. I'll be honest; that's the audience that concerns me the most. I want to make sure our story gets told, and gets told well. I can tell you, and Mr. Rajotte and I think Minister Savage would say the same, that the Canadian embassy in Washington and Ambassador Hillman are completely engaged on this. They understand the importance of it and have been working Washington, together with Mr. Rajotte, considerably. They have been working together hand in glove.
We have been making sure that our story is being told by the people who will make decisions on Capitol Hill and in an incoming administration that has clearly made the environment and combatting climate change a priority. I read a lot into the fact that John Kerry, former presidential candidate, is now—
View Jeremy Patzer Profile
CPC (SK)
Really quickly, Minister, on the $159 million for responsible and renewable resource development, you briefly mention carbon capturing in your notes. I'm just wondering how much of a priority carbon capture and storage is and how much of that $159 million will go toward technologies like carbon capture, which globally need to be part of the solution when reducing emissions.
View Seamus O'Regan Profile
Lib. (NL)
There's no question that carbon capture will figure very prominently. When I speak with Minister Savage, it's at the top of the list. We see an incredible amount of potential.
At the end of the day, the most important thing is lowering emissions. Regardless of the industry or where you are in the country, it is about lowering emissions. Carbon capture allows us the opportunity to make sure those emissions are offset. The important thing, when we talk about net zero, is the word “net”. It means “net” zero emissions. That means carbon capture can play a part in capturing those emissions.
We think there's an incredible opportunity there for it. We also think there's an incredible opportunity for carbon capture with hydrogen.
View Bryan May Profile
Lib. (ON)
View Bryan May Profile
2020-12-11 13:40
Thank you, Mr. Chair.
Thank you, Minister, for being with us today and for your continued patience. It wouldn't be 2020 if the technical gremlins didn't beat us up right until the bitter end.
Before I ask my question, I want to thank all the technical folks in the room for fixing this as quickly as they did.
View Bryan May Profile
Lib. (ON)
View Bryan May Profile
2020-12-11 13:40
Just quickly, because I am sharing my time with MP Sidhu, we know that the decarbonization of industrial processes is a key component in getting Canada to meet its net-zero target. Decarbonization can also present a major economic opportunity with the ability to deploy innovative technologies and non-conventional methods to continue to produce the energy and products we need but in a lower-emitting fashion.
Minister, can you share with us some of the work NRCan is doing in this space? Are there any particular projects that you are excited about?
View Seamus O'Regan Profile
Lib. (NL)
We're working hard to make sure our traditional industries are more sustainable than ever. We need to make sure that we're adopting new technologies and new methods to help get us there, like carbon capture. We announced $3 billion for a net-zero accelerator fund to scale up clean technologies, and that's building off other investments we've made.
There was $750 million towards a methane reduction fund. There is incredible potential for new technologies like small modular reactors, SMRs. Canada's a tier-one nation for nuclear with a sector that contributes $17 billion to the economy every year. It employs 76,000 Canadians. I think SMRs could hold incredible potential to help us with electrifying more remote industrial areas that are not connected to the grid and lowering their emissions. We're working with over 100 partners from right across the country to develop our action plan on SMRs and to really seize this opportunity globally. I'm impatient to be releasing that. It will be very soon. It will emphasize that Canada is seizing this SMR opportunity and that it is very well positioned to develop this technology globally.
View Bryan May Profile
Lib. (ON)
View Bryan May Profile
2020-12-11 13:42
Thank you, Minister. I know that there are companies in my riding like BWXT and ATS that will be very pleased to hear that answer.
I'll share the rest of my time with MP Sidhu, Mr. Chair.
View Maninder Sidhu Profile
Lib. (ON)
Thank you.
Thank you to the minister for being here. Thank you to the technical staff for sorting that out before this meeting ends. I wish everyone happy holidays.
I want to turn to the way we get ourselves around, cars or more forward-looking electric vehicles. Advocating for cleaner transport solutions and infrastructure for the residents of Brampton is important, not only for me, but for my children and future generations. I know the federal government is working hard to provide Canadians with more options and cleaner choices for their transportation needs.
The transportation sector accounts for one quarter of Canada's greenhouse gases, which is why it's important for Canada to set ambitious targets. It's just as important that we continue to invest in EV charging station infrastructure. Here in the Region of Peel, the federal government is investing in 43 new electric vehicle charging stations, and many of my constituents in Brampton East are very excited to use these chargers.
I see in the mains that there are two EV programs, the electric vehicle and alternative fuel infrastructure program and the zero emissions vehicle infrastructure program.
Minister, how will these programs help make charging infrastructure more accessible for Canadians?
View Seamus O'Regan Profile
Lib. (NL)
The fall economic statement pledged $150 million for expanding that network coast to coast, and that's building on more than $300 million that's been committed to create that network of fast chargers for electric vehicles as well as street charging, charging in the Parliament buildings, retail businesses and in other workplaces.
Over 380 fast chargers are already open to the public. There are many more under construction. I think this network is essential for Canada to achieve its targets of zero-emission vehicles. I think 100% of all vehicle sales by 2040.... That's what we're aiming for, and our government is making zero-emission vehicles more affordable by providing incentives for Canadians to purchase the vehicles and a tax allowance when these vehicles are purchased for business use. We're seeing them used now in the mining industry. This is how we get to net zero by 2050.
View Maninder Sidhu Profile
Lib. (ON)
Minister, thank you for that answer. It's very important. We want to make sure that Canadians have that option should they choose to invest in an EV. Across the country we want to make sure that communities are connected.
Minister, I know a lot of these programs are in partnership with the cities, municipalities or regional conservation authorities such as it is here in Peel. How's the uptake with our regional partners or at the municipal level?
View Seamus O'Regan Profile
Lib. (NL)
At the municipal level and at the provincial level we've seen a great deal of enthusiasm. I don't think that's a surprise to you. I think most MPs of all stripes in the House of Commons have commented to me that these are things that are very popular with their constituents.
I think that we have some way to go, because we've got to get the word out on range anxiety primarily. This is a big country. For a lot of us in our constituencies, communities are far apart, and the idea of running out of juice is an anxiety for Canadians. We have to give them the assurance that's not going to happen. Fast chargers are a great way to do it, because people, if they're on the road and they've got a long trip, don't want to spend an hour to two hours of it sitting by a charger. Fast chargers are essential too in terms of time. These ways we get buy-in from people to buy EVs.
View Mario Simard Profile
BQ (QC)
View Mario Simard Profile
2020-12-11 13:46
Thank you, Mr. Chair.
I'd like to take a moment, Mr. O'Regan, to offer my condolences on your father's passing.
What amazes me about your presentation is your attempt to marry two concepts that don't go together. On the one hand, you talk about clean technologies and carbon reduction, and on the other, you say that economic recovery will come through natural resources. The most important part of your speech was specifically about hydrocarbons.
I don't know if you are aware of this, but for the past few weeks, we have been studying the potential of the forest industry as likely the most promising natural resource sector to combat climate change.
I will give you a very simple example. I got some numbers, and I chose a four-year reference period. From 2017 to 2020, Canada will have invested $24 billion to support the oil and gas sector. Of that $24 billion, $17 billion went to buying a pipeline.
If I look at the forest industry over the same period, Canada will have invested $952 million. When I break down that $952 million, I see that 75% of that is loans. In my opinion, that means no effort is being made to support the forest industry. Thanks to a number of witnesses, we've seen all the potential of the bioindustry and the use of biomass. I see no plans along those lines. I see no intentions along those lines in the government's recovery plan.
Can you reassure me? I'd like to know where you stand on support for the forest industry.
View Seamus O'Regan Profile
Lib. (NL)
Okay.
Quebec's forest sector stakeholders will receive significant support this week. They will receive $12 million to combat spruce budworm infestations in Quebec. We recently launched a call for proposals under the investments in forest industry transformation program, or IFIT, and as a result, we received 70 submissions from across Canada representing more than $2.3 billion in potential investments.
Since 2015, the IFIT program has funded 15 different innovative projects throughout the Quebec industry: for example, the Uniboard particleboard plant in Val-d'Or received $4.9 million to install a new dryer and improve the production line; we have supported the Resolute Forest Products plant; and we want to invest in producing biomaterials from diversified sources and in manufacturing cellulose filaments—
View Mario Simard Profile
BQ (QC)
View Mario Simard Profile
2020-12-11 13:50
Yes.
I've gone through all of that, Mr. O'Regan. I have all those items in front of me. What bothers me is that it's a drop in the bucket. The investments you're making to support the forest industry are a drop in the bucket compared to what you're doing for the oil industry. Clearly, you have a double standard. The transition that the forest industry went through with the decline of the pulp and paper business is what I believe the oil and gas industry is going through right now.
Unfortunately, when that transition was taking place, the federal government offered no support. I don't understand your persistence, if you are being serious. I think of Bill C-12 that you tabled, on transparency and accountability and achieving carbon neutrality. I don't know why you're so focused on supporting the oil industry when the forest industry could lead you in another direction.
Worse, I hear rumours that you will probably have a grey hydrogen strategy. Making one tonne of hydrogen from hydrocarbons is like sending 10 tonnes of carbon dioxide into the atmosphere. You can do the same thing using biomass and electrical energy without producing as much greenhouse gas.
I don't understand this strategy. Obviously, you can't marry the two. Either you're not serious about your environmental commitments or you have an idyllic vision of what the oil and gas industry can do.
View Seamus O'Regan Profile
Lib. (NL)
Mario, for technical reasons and because you asked a very straightforward question, I want to give you a straightforward answer. So pardon my English on this.
I think I have an extraordinarily realistic view. I pride myself on that, actually. I think the people who grow up on a rock in the middle of the Atlantic, or grow up as I have in the north, in Labrador, have no choice but to have a very realistic view of the world.
We are the fourth-biggest producer of oil in the world. We are the fourth-biggest producer of natural gas in the world. We have found a way to figure out how to get oil out of sand. That is a remarkable thing. What I have said time and again is that we need that same ingenuity, which has made us the fourth-biggest producer of oil in the world, to lower our emissions. That has now become a crucial thing. Not only [Technical difficulty—Editor] during the pandemic, but also because we have an incoming administration in the United States that is also the number one customer of our number one export. It is changing its priorities. It is changing the [Technical difficulty—Editor] of what we produce and how we produce it. This is essential stuff.
Having said that, Natural Resources is a big department. That is not to take away anything from our forestry sector. I don't disagree with any of your points, frankly, on how important forestry will be in our recovery, how important it will be in a net-zero economy. I am proud of the expertise within my department that has demonstrated time and again, in working with provinces, some incredibly innovative things that we can be doing with provinces on forestry, with the companies on forestry, and increasingly with indigenous peoples on forestry.
It is not a zero-sum game. I cannot take away from the importance of oil and gas as well.
View Richard Cannings Profile
NDP (BC)
Thank you again, Minister, for being here with us today, I assume from Newfoundland, the home of my ancestors. It's good to see you on the Rock.
I'm going to start again with the oil and gas sector. We just had the Canada Energy Regulator, CER, put out a report a couple of weeks ago on “Canada's Energy Future 2020”. The authors included what they call the “evolving scenario”, which is assuming some action towards the fight against climate change. That evolving scenario wasn't going to get us to net zero. At least there was a recognition by the CER that that's the kind of thing we're going to be doing.
Under that scenario, they showed the difference between our ability to...the pipeline supply we had, the pipeline volume and what we would be exporting. What is showed was that we have three expansion pipelines in various stages of building right now. We've been talking about Keystone XL; there's Trans Mountain expansion and there's Line 3 expansion. All these pipelines exist right now, but they're going to be greatly enlarged to take expanded production from the oil sands.
What this scenario from the CER report showed was that we will only need one of those expanded pipelines to handle the expanded production from the oil sands. In fact, if we wanted to get to net zero, we might not need any of them.
I'm just wondering what the department has projected would be in those pipelines. Are we going to have three pipelines with only one-third capacity being used? Are we going to have one that's being used and the other two won't be needed?
I'm just wondering what your plans are for that future, because that's where we're headed. It seems like I keep getting very conflicting statements from this government about the importance of fighting climate change and the doubling down on the fossil fuel industry.
View Seamus O'Regan Profile
Lib. (NL)
I would say, Mr. Cannings, it's not so much a doubling down on the fossil fuel industry as an appreciation of its importance and also the importance of lowering emissions. This is not only because lowering emissions is the right and proper thing to do, but also because it will put us at a significant competitive advantage.
On pipelines, particularly in the PBO report, there are a lot of factors that go into determining whether a pipeline is necessary: contractual support, shipper choice, the nature of markets that will receive the products that we deliver by the pipeline. The PBO report notes that the profitability depends on a lot of factors such as whether or not there's a delay.
Ian Anderson of TMX has confirmed that the project is on time and it's on budget. He said that just recently. Even as Canada continues to tackle that more aggressive climate action, the world is not going to stop using oil overnight. I know that from the many international energy agency meetings that I attend.
View Richard Cannings Profile
NDP (BC)
I'll just jump in here and say that I agree that the world is not going to stop using oil. It's just not going to need any more oil, according to this report from the Canada Energy Regulator, which has not historically been biased against the oil and gas industry—quite the opposite.
In a world where we see Total writing down $8 billion of investments in the oil sands, Imperial writing down $1 billion and other countries around the world.... This flight of investment from the oil and gas sector is not limited to Canada. It's happening all over the world. It's happening in the United States. It's happening because people are looking at that future.
Again, yes, we'll be using oil—and I have great respect for the industry and for the people who work in it—but what oil will be in those pipelines? Right now, they're full, but all the projections show very little expansion happening in the next 30 years. In fact, the evolving scenario shows a drop of need over the next 30 years.
View Seamus O'Regan Profile
Lib. (NL)
First of all, Mr. Cannings, I would say that there are a lot of reports, and many of them are conflicting. This is an incredible time of flux, I would argue, for the energy market all over the world.
It is never a bad thing—and I'm thinking particularly of TMX—to make sure that we diversify our customer base. With most of our energy exports going to the United States, particularly for Alberta and Saskatchewan, we need to open up more international markets. For TMX, 13 shippers have made approximately 15- to 20-year commitments, accounting for about 80% of the capacity on the expanded TMX, so the demand is there. It has been contracted out. TMX is meant to get our oil to markets, and in exchange, we get a higher price for the same resource.
We intend, as we have said, to sell it back to the private sector and to put those funds towards a green future. What we're witnessing right now is an energy sector in a tremendous state of flux. Therefore, we have to be very nimble in order to look after our workers and our economy while at the same time showing that we can lead on lowering emissions. I know, at first blush, that it seems like these are very contradictory things, and I would make the argument—and I'm sure I'll make it again during this committee—that they are not. It is essential that we get that balance right.
View Rachael Harder Profile
CPC (AB)
Minister, thank you for taking the time to be with us here today.
Minister, I'm just wondering if being a construction worker is a good middle-class job.
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