Foreign Affairs Committee on Nov. 20th, 2023

[Dr. Sylvain Charlebois]

Thank you very much for the question.

I assume it's a rhetorical question, because I think we all know the answer to that question. Obviously, Canadian farmers paid for that.

I believe it was unjust. I believe that money is still owed to our farmers. Penalizing farmers is certainly something we shouldn't be accepting in this country. Unfortunately, they don't have any way to get that money back unless the government helps them.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you.

When you were testifying last month at the standing ag committee, you made the following statement: “When the issue of world food security comes up, Canada is unfortunately barely part of the discussion, and that's something that has to change.”

In your testimony, you stated—and I agree with you—that Canada is a global ag tech leader. We have massive amounts of export potash. We should be exporting all sorts of nitrogen fertilizer. The only macro element we're a bit short on is phosphorous.

Why are we not on the world stage for food security? I could expand this to energy security, but let's start with food security.

[Dr. Sylvain Charlebois]

Again, that's a good question.

I would say Canada is a strong innovator, but we innovate for ourselves mainly. We don't tend to think globally and we're obviously undermined by other forces around the world. We are prisoners of our own geography. We're just north of the U.S., so there's lots of noise south of us. That's why we need to be proactive and deliberate in the way we support different nations around the world, starting with Ukraine.

There is an opportunity here for Canada to play a leadership role. So far, to be honest, some of the measures have not been clear. The intent here has not been clear, and I do believe that many companies in Canada can actually play a role.

When it comes to fertilizers in particular, I do think that we need to question our strategy for exports in general. I have some reservations in terms of the Canpotex model itself. Perhaps we could do more. Instead of supply-managed production in order to keep prices higher, in 2023 going into 2024, we need a different approach.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

I heard the third call in your testimony, which was for increased infrastructure investments in Canada, both for domestic and, obviously, for our world export needs.

Give me more specifics. Our rail infrastructure heading to the east coast is limited. It's hauling crude oil as opposed to potash, which I used on my farm. I wish I could have used less Belarusian over the years and more from Saskatchewan.

Is that one example?

[Dr. Sylvain Charlebois]

It is one example.

I would say there are several issues with our food supply chain. The first and most important issue is the fact that it's not considered to be an essential service across the country. That needs to be done. We need to protect the integrity of our food supply chain.

When it comes to infrastructure, Canada is not a leader. When you travel around the world, often Canada is seen as a problem.

Let's start with ports. There was a report recently ranking 348 ports around the world. The three main ports in Canada—Halifax, Montreal and Vancouver—ranked in the lower tier. Vancouver ranked 347th out of 348 ports. Just on that, we need to recognize that more investments are required.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you, Mr. Chair.

[The Chair, Liberal, Ali Ehsassi]

Thank you, MP Epp.

We now go to MP Zuberi.

You have four minutes.

[Sameer Zuberi, Liberal, Pierrefonds—Dollard, QC]

Thank you, Mr. Chair.

Thank you to all the witnesses for being here.

I'd like to start off with Mr. Kennedy.

You made some remarks around global security, defence security and Canada's investments. Do you have any opinions about our protection of the north and how we can enhance it? What does that mean for Canada's peace and security? What sort of investments do you think would be important to have around defence of the north?

[Trevor Kennedy]

Thank you for the question.

Rather than focusing on what assets we need to provide security for ourselves and for our allies.... We do hear loud and clear when travelling the world and meeting with out counterparts how important Canada is. The Arctic is certainly of great interest to our partners, whether that be the United States or our partners in Europe or in the north Pacific. This is Canada's backyard. We should have capacity to be an important actor in that part of the world in supporting our allies.

We do think it's important at this time, especially as many of our peers and allies increase defence spending and make more serious commitments for the long term, that Canada do the same to provide support for our naval and air force capacity.

[Sameer Zuberi, Liberal, Pierrefonds—Dollard, QC]

I'm assuming you would agree that this would enhance Canada's stature on the international stage, along with promoting peace, security and diplomacy.

[Trevor Kennedy]

Absolutely. In fact, just recently we witnessed around the world.... There are instances at times when new groupings are formed, and sometimes Canada is not necessarily involved from the outset. It's not always tied to security and defence, but that's one area where Canada can step up so we can make ourselves more helpful to our partners. I think that will lead to more invitations for Canada to play a leading role in new institutions as they're formed.

[Sameer Zuberi, Liberal, Pierrefonds—Dollard, QC]

Thank you.

In your view, Mr. Mousseau, what will happen to demand for natural gas and oil in the future? Currently, demand is high, but could the world's energy needs drop in the future?

[Normand Mousseau]

Thank you for your question.

It depends. Wealthy countries have committed to reducing their greenhouse gas emissions in order to reach net-zero by 2050. In light of that, oil and gas production can't continue at today's levels. It's impossible. We won't be able to achieve our climate targets that way.

We are already seeing transformative changes around the world, and as a result, demand is softening in some cases. Production still hasn't peaked, but various trends show that global demand could drop within the next decade or so.

[Sameer Zuberi, Liberal, Pierrefonds—Dollard, QC]

You can have the next 30 seconds to elaborate.

[Normand Mousseau]

I would say Canada is a bit late to the renewable LNG market.

Today, we are rushing to make investments, get projects going again and build LNG terminals we didn't build a few years ago, but it's not going to work because of the 2050 emission reduction targets. We'll have terminals in place, but they'll be operating for 15 to 20 years at most. That investment will be difficult to recoup.

[The Chair, Liberal, Ali Ehsassi]

Thank you, MP Zuberi.

We now go to MP Bergeron. You have four minutes.

[Stéphane Bergeron, Bloc, Montarville, QC]

Thank you, Mr. Chair.

Thank you to the witnesses for being here today. My questions are for Mr. Mousseau.

Mr. Mousseau, two of your conclusions really intrigued me. One you just talked about when you were answering Mr. Zuberi's question. The other was about the importance of positioning ourselves in a rapidly growing market.

First of all, we have to recognize that, yes, oil and gas is already an industry of the past. No doubt, that partly explains why you said it was too late. It's important to quickly embrace the transition and position ourselves in the energy sector of the future.

When you talk about producing decarbonized mobile energy, what exactly do you mean?

[Normand Mousseau]

We can produce decarbonized electricity, but the problem is how difficult it is to export that electricity. It has to be exported in liquid or gas form, such as hydrogen or ammonia. Otherwise, it has to be used to manufacture products such as aluminum and other energy-intensive goods. Manufacturing them here is a way to export our decarbonized energy. That's what I was referring to.

[Stéphane Bergeron, Bloc, Montarville, QC]

I see.

Does the current technology allow for the production of decarbonized mobile energy, or is that precisely what you are encouraging us to explore? In other words, we should consider investing in these technologies so we can carve out a place for ourselves in the sector going forward.

[Normand Mousseau]

Considerable investment is still needed to develop the technology and establish business models for those energies. At the moment, whether those business models are going to work is rather uncertain because they have a lot of holes. The revenue generated for the producing country won't be as significant, that's for sure. The profit margins aren't comparable to those in the oil and gas sector, where costs are relatively low in relation to prices in the global marketplace.

There's a lot of assessment work to be done to figure out the right approach and the technology needed, as well as to build the infrastructure. For instance, nothing equivalent to an LNG carrier exists to transport hydrogen by sea. As far as those markets are concerned, we are already seeing a considerable need to develop the intelligence and business models. At that point, Canada could play a role in doing some of the work.

[Stéphane Bergeron, Bloc, Montarville, QC]

Putting that technology in place is expensive, of course, but with a growing number of countries buying the technology, it could cause the cost to come down over time.

[Normand Mousseau]

Actually, that's not a sure thing.

The hydrogen fuel cell sector, for instance, plateaued about ten years ago now. It hasn't been possible to achieve any major advancements. The same goes for hydrogen production by electrolysis, which is really struggling.

However, we could turn to what is called blue hydrogen. Fossil fuels could be converted into hydrogen, and the carbon dioxide could be stored on site. Massive investments in that sector are being made out west.

That may be another promising avenue, but a lot of development and investment is still needed. Every month we waste is another month our competitors have to surpass us.

[Stéphane Bergeron, Bloc, Montarville, QC]

Thank you.

[The Chair, Liberal, Ali Ehsassi]

Thank you.

Now we go to MP McPherson.

You have four minutes.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you very much, Mr. Chair.

Thank you very much for the testimony from all of our witnesses today.

I am struggling, though. My thought process here on what we're hearing from the testimony is that if we had put in place infrastructure, we would be able to provide Canadian energy to markets that require it, but we didn't. My understanding is that this is not something that we should have invested in over the last eight years but in the last 15 or 20 years. Both Conservative and Liberal administrations were not able to get the infrastructure in place that we would have required to be in a position where we could provide this Canadian energy.

Add to that the idea that we are hearing from our partners abroad. Last year at this time, I met with Chancellor Scholz, the head chancellor of Germany. They spoke about wanting our energy, but not wanting it in the long term: wanting it in a very short window of time. We just heard testimony from Ms. Ackermann, who spoke about how Ukrainians really do clearly want to rebuild in a sustainable green fashion.

Help me understand how this isn't a bit of a unicorn study, where we say, “Wouldn't it be great if we had done things differently? We didn't, but we should study why we should have.” I'm struggling to find out what this is all about because, frankly, the situation we're in right now is that we need to transition. We need to for climate change. We need to because those people, those industries and those countries we're working with want us to. Not having a port that will take five or 10 years to build is bad, but the fact of the matter is that it's not going to be required the same way in five or 10 years. I don't understand the business case of that, I guess. I'm struggling with it.

Absolutely, I think it would be fantastic if we could replace Russian natural gas right now. I just don't understand what we're talking about here, I guess.

Mr. Kennedy, I'm going to ask you to see if you can clarify this for me.