Economic Relationship between Canada and the United States Committee on March 4th, 2021

[Jean-François Tremblay]

It's the same thing. I cannot speak for them. I don't know what they have done in terms of contingency plans. I don't know how far they have been on this. I know they know that if there's no pipeline, there will actually be consequences, from a supply chain perspective. They have been told, and they know that. What they have done for their own sake and what they do in terms of planning, I don't have any idea, to be honest.

[The Chair, Liberal, Raj Saini]

Thank you, Mr. Sarai.

Mr. Savard-Tremblay, you have two and a half minutes.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you.

We are currently discussing the oil or energy trade strategy with the United States. Tell me whether I'm talking to the right person or not, since you deal with different issues.

Hydrogen is an integral part of the strategy announced last December. The document states that clean hydrogen can be produced from fossil fuels. I must admit I was very surprised when I read this. Indeed, there are many sources to make hydrogen, so we are often forced to mention that it is green hydrogen when it comes to hydrogen that is truly from clean energy sources.

Don't you think that energy, money, funding, subsidies and development or industrial plans should be more about hydrogen made from truly clean sources that we could then sell to the U.S.?

[Jean-François Tremblay]

Our policy in this regard is to encourage the production of cleaner fuel. I'm talking about the decarbonization of fuel. It's not black and white, and you can't say that some are good and some are not. We judge them on the basis of carbon intensity.

We're lucky in Canada because we have the ability to do that. We have so many natural resources that we can make hydrogen in a variety of ways. We can actually make hydrogen from natural gas. We can combine that with carbon sequestration, and we can achieve virtually carbon-neutral emissions. So there are opportunities both for strictly green hydrogen produced, for example, by hydroelectricity, and for hydrogen produced by other energy sources. We are not closed to that.

Some will even say that we can make hydrogen that will reduce greenhouse gases by using biomass, for example. By calculating carbon sequestration, there may have been biomass. After that, we can use carbon sequestration for the production as such.

So we are not closed to the various ways of making hydrogen. Our goal is really to promote the production of increasingly green fuels.

It is not just Canada that is taking this position, many other countries are doing the same. That doesn't stop us from talking about green hydrogen, hydrogen that isn't green, or blue hydrogen, but we have to understand that our goal is much more about how far we can go in decarbonizing the fuel.

[The Chair, Liberal, Raj Saini]

Thank you, Mr. Savard-Tremblay.

Mr. Blaikie, go ahead for two and a half minutes, please.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much, Mr. Chair.

I don't think it's any secret that with respect to many large energy projects, often when things have gone poorly, it has been as a result of there not having been sufficient consultation with indigenous peoples.

There's an interest by indigenous peoples in the Line 5 pipeline as well. Part and parcel of having a good outcome there is consulting with indigenous communities.

What communities has the Department of Natural Resources consulted with in respect to Line 5?

[Jean-François Tremblay]

Glenn, do you want to answer this one, especially on Line 5?

[Glenn Hargrove]

Yes. I guess I would say I'm not aware of any direct engagement with indigenous communities on Line 5 to this point. I would just draw the distinction between engagement, which is very important, obviously, and the duty to consult. I think we're talking about engagement. To my knowledge there has not been direct engagement with indigenous communities on this issue to date.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Is there any plan for the department to engage with indigenous communities on this question?

[Glenn Hargrove]

I'm not aware of any plans at this point, but I think that is definitely something we should take under advisement.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

It seems to me that would be something to get under way sooner rather than later.

I don't have a lot of time remaining, but I do want to know this. A new administration, of course, brings new opportunities. One long-standing issue between Canada and the U.S., as yet unresolved, is the softwood lumber issue. I'm wondering what kinds of opportunities for resolution you think may exist, and what steps the government plans to take in order to try to get fair treatment for Canadian softwood lumber at the border.

[The Chair, Liberal, Raj Saini]

Could you give us an answer in 20 seconds or less, please?

[Jean-François Tremblay]

We're always open to negotiating an agreement with the U.S., but we need to make sure it wants to do the same. As long as it does not, we will continue, of course, to win in front of any processes that are created under the existing agreements. Our hope, of course, is that as soon as possible we can sit down with the U.S. and try to find an agreement for the long term, for sure.

In the meantime, our exports of softwood lumber are going well despite this, which is quite positive.

[The Chair, Liberal, Raj Saini]

Thank you, Mr. Blaikie.

Now we will go to Mr. Lewis for five minutes.

Go ahead, please.

[Chris Lewis, Conservative, Essex, ON]

Thank you very much, Mr. Chair.

Thank you so much to the witnesses.

I guess the first thing I would say is that I listened very intently to Minister O'Regan. We certainly appreciate the fact that he did come to our committee today. He spoke of the 140 million gallons of crude going through Line 5 daily. Then he spoke about 2,100 trucks and 800 railcars to bring such across. He said that the road to net zero goes straight through our borders. He went on to say that the supply chains will adjust themselves.

It really concerns me. In my fantastic riding of Essex we rely very heavily on our automotive industry, on our supply chain, as the minister spoke to, and on our manufacturing and those types of things. I really found it ironic when he said that the road to net zero goes through our borders. Well, the truth of the matter is, Mr. Chair, that it does go through our borders. When we can't move people across our borders, that's equally a major issue.

It just speaks specifically to Line 5. If we don't have petroleum coming across to Canada and going back to the States and servicing...then we don't have an auto industry; we've lost the manufacturing industry; and we're not putting food on the table.

I'm a really no-nonsense kind of guy. My question, specifically, is who do we need to contact in the U.S. to get this done once and for all? Is there a specific person? Is there a specific agency? What can we do? What can this committee do to create magic to really get this resolved? Without that, we are going to be losing. We've already lost, by the way, friends, many fantastic manufacturing jobs and businesses. People don't know where to go. We can move product but we cannot move people across the border. Who do we have to get to as fast as we possibly can to get that job done?

[Jean-François Tremblay]

First of all, the minister said that Line 5 was not negotiable. I think he fully understands and appreciates the importance of the oil crossing the border.

As to your question, the committee will come out with a report, which we will make sure is delivered, which, I hope, will demonstrate the importance of the relationship with the U.S. and the importance of Line 5. In those discussions, I hope, we will reiterate how important for Canadians and also for Americans the integration of our markets and our industries is. As you mentioned, for the auto sector, it's exactly the same thing. Our two countries are bigger and better when we are integrated. If you could convey those messages, that would be, to me, quite positive.

Our friends at GAC—and I know you're going to be meeting with officials from GAC and ministers later—are the ones who actually organize the diplomatic and advocacy work in the U.S. I would invite you to ask them those questions. They would probably be more competent than I am on this one.

[Chris Lewis, Conservative, Essex, ON]

Thank you. I appreciate that.

I guess, again, I've been in such a hurry-up mode because I'm literally spending hours and hours on the phone with my local manufacturers, people who have nowhere to turn. They don't even know if their businesses will survive tomorrow. So much depends specifically on Line 5, and so much depends on manufacturing. These are Canadians. These are parents of children who don't know if they can put food on the table.

Again, it's hurry-up mode. We have to get to the end of this. We have to figure out the border problems, and it's not going to fix itself. We have to come to a conclusion, such as, there are companies that are losing hundreds of millions of dollars locally—

[The Chair, Liberal, Raj Saini]

I'm sorry, Mr. Lewis; you have 30 seconds left.

[Chris Lewis, Conservative, Essex, ON]

—hand over fist, because we can't get people across the border to see their final product, which goes right back down to petroleum, which is automotive.

I guess, instead of a question, I would just say, please take my message to heart on this front. I'm trying desperately to not only save but create jobs for Canadians.

Thank you very much for your time, Mr. Chair. I appreciate it.

[The Chair, Liberal, Raj Saini]

Thank you, Mr. Lewis.

The final question goes to Madame Bendayan.

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you very much, Mr. Chair

I would also like to thank Deputy Minister Tremblay for his excellent answers.

I would like to clarify something. My colleague just asked who we should raise this issue with. He wants to know who is the person we need to convince. Yet it seems to me that our government's strategy is to talk to representatives of all levels of government. So there is not one person who has the answer; it is a comprehensive strategy.

Can you shed some light on this strategy and how our government is approaching these discussions?

[Jean-François Tremblay]

Of course. I know that you're meeting with the ambassador, who will be in an even better position to tell you this.

We've always been effective in our relationship with the Americans, because we've always worked together. When Canada's team works together, it works well with the Americans. We don't just approach the central or state governments. We also approach the unions and lobby groups.

As we heard earlier, many Americans and many people in Michigan see this as a zero-sum game. In other words, it benefits Canadians but not Americans. It's important to set the record straight. Of course, it's good to work together. However, people who have relationships with unions, lobby groups, journalists and opinion leaders in the United States still need to send a consistent message. That's why I said that this issue must be raised with the people at Global Affairs Canada.

We'll be effective if we remain consistent and if we present the Canadian arguments properly, in order to avoid situations where the benefits of the project are completely misunderstood.

[Rachel Bendayan, Liberal, Outremont, QC]

Exactly. Thank you.

People-to-people ties are becoming very important, as they were in the negotiation of the Canada-United States-Mexico Agreement.

I'll continue on the topic of electricity. As a Quebecker, I'm very proud of our hydroelectricity. I was wondering whether, from your perspective, we have new opportunities for our exports to the United States, in light of last week's discussions with President Biden and yesterday's talks with the minister's counterpart.

[Jean-François Tremblay]

Yes. Obviously, there are opportunities. Hydro-Québec is already very active, as you know, in New York, Maine and Massachusetts, I believe.

There are discussions and many possibilities for hydroelectricity, but also for all renewable energy, such as wind energy and any form of energy that can be added to the transmission line. Transmission lines are very well integrated between the United States and Canada. These are things to look at.

We're fortunate because our type of electricity produces very few greenhouse gas emissions. We can help some American states become greener. This is a great opportunity. This will also involve local challenges. People will be opposed to it, of course. However, there are processes and we must do things properly to achieve success.

[Rachel Bendayan, Liberal, Outremont, QC]

I'd like to ask one last question very quickly, Mr. Chair.

Mr. Tremblay, we were talking earlier about how we're in a capitalist country with markets. As an expert in this field, can you tell us a bit about investors' money right now? It seems that the money is keeping up with the ecological movement and transition.

Is that the case? Are today's investors looking for greener opportunities?