Environment Committee on March 29th, 2022

[Monique Pauzé, Bloc, Repentigny, QC]

Canada's greenhouse gas emissions increased between 2015 and 2019, while Japan, Italy, Germany, France and the United Kingdom reduced theirs. We know that, compared to all those countries, Canada has the highest fossil fuel subsidies. Is there a correlation between the two?

[Dr. Joy Aeree Kim]

I cannot speak based on any study that shows the correlation. I would say that if you look at the indices across countries, for instance, we see that many countries included removing fossil fuel subsidies as part of their action points to meet their climate change goals and commitments.

I can only speak based on that information. The countries made a strong commitment on the—

[Monique Pauzé, Bloc, Repentigny, QC]

Ms. Kim, I'm sorry to interrupt you, but I don't have a lot of time. You provided part of the answer, thank you.

[Dr. Joy Aeree Kim]

Sure.

[Monique Pauzé, Bloc, Repentigny, QC]

My final question is for Mr. Brunnen.

The Global CCS Institute has released a report indicating that, of the 29 carbon capture facilities in the world, eight receive government subsidies. Of those eight facilities, four are in Canada.

I am tying that in with the fact that you have paid out billions of dollars to your shareholders. You received a huge wave of government assistance funnelled through the pandemic. The massive lockdowns in March 2020 had barely been announced and already you had a document prepared to claim more assistance.

How can you justify continuing to take public funds, given all the work that has to be done for the environment, the future of society and generations to come?

[The Chair, Liberal, Francis Scarpaleggia]

Unfortunately, there won't be time to answer the question unless someone else brings up the question for you to answer.

We'll go to Ms. Collins, please.

[Laurel Collins, NDP, Victoria, BC]

Thank you, Mr. Chair.

Ms. Tucker, it's been mentioned that the U.K. and Italy have recently concluded that no fossil fuel subsidies are efficient. What can we learn from these countries?

[Bronwen Tucker]

Yes, this one's actually very recent, but I think the really important example is that Italy in the last few weeks, in response to the current invasion of Ukraine by Russia, has introduced a windfall tax on oil and gas. I think that's a really important measure, given how oil companies are giving record-breaking profits directly to shareholders at a time when we're in a global crisis and have urgent transition needs. But on the studies done by the U.K. and Italy specifically, this is about really looking at where we need to be going with our energy system. We need to be seeing a phase-out of oil and gas and it needs to be one that's just in terms of impacts, and actually orderly.

If we fail to act, what happens is that workers will be hurt more because we're expecting to see more and more volatility in oil and gas, and so—

[Laurel Collins, NDP, Victoria, BC]

Just because I have a very short time, very quickly, why is it important for countries to use standardized reporting metrics?

[Bronwen Tucker]

We know it's a global crisis—

[The Chair, Liberal, Francis Scarpaleggia]

Thirty seconds, please.

[Bronwen Tucker]

—and so being able to compare impacts and actually have emissions reductions work across borders as we trade goods and have that harmony is really important, not to just see unintended consequences of a spillover or extra production abroad.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Mr. Lewis.

[Chris Lewis, Conservative, Essex, ON]

Thank you, Mr. Chair, and I would like to go back to the really good question by the member from the Bloc Québécois. Perhaps I would cede my time to allow her to ask her question, sir.

[The Chair, Liberal, Francis Scarpaleggia]

So, Mr. Brunnen, this is your opportunity to respond, I think.

[Ben Brunnen]

Chair, thank you.

First let's look at the term “subsidy”. There are no production subsidies for our industry, but in terms of investment in emissions-reducing technologies, that's a necessary requirement to move the technology forward in a commercial way that will generate the investment. What we see is a joint collaborative investment with industry and government to achieve the governmental and societal objectives of reducing emissions.

That's the founding rationale for it, and in the absence of joint government investment, the private sector simply doesn't have the means to make those levels of investments. And it's also a function of the dynamics with global energy demand, which will continue to increase in the future. There has been substantial under-investment in the last couple of years, which has created the crisis we see today.

From a public policy perspective, we need to think long term, very similar to what we saw with the federal government's emissions reduction plan today, where there are incremental measures to focus on achieving reductions over time. This is one mechanism to do that, to share the investment in a way that's competitive and comparable with other jurisdictions.

[Chris Lewis, Conservative, Essex, ON]

Thank you, Mr. Brunnen.

[Ben Brunnen]

Canada is by no means a leader in CCUS and we need to be comparable with other jurisdictions. Thank you.

[Chris Lewis, Conservative, Essex, ON]

Thank you, Mr. Brunnen, sir.

Mr. Chair, how much time do I have left, please, sir?

[The Chair, Liberal, Francis Scarpaleggia]

You have about two minutes, Mr. Lewis.

[Chris Lewis, Conservative, Essex, ON]

Excellent. I just have one more question then in the interests of time.

Again, I'll go back to Mr. Brunnen, the witness.

Some countries, such as the United States, have recently taken steps to reduce their reliance on oil, gas and coal produced in Russia and to find alternative sources. Could Canada's efforts to reduce fossil fuel subsidies interfere with our ability to respond in this situation?

[Ben Brunnen]

Potentially it could, depending on how they approach it. If we look at this in a way where we're treating the oil and gas industry from a tax perspective like any other industry in terms of how it's taxed and financed, then that's neutral. That should enable the industry to compete on a level playing field with any other jurisdiction.

If we look at it in terms of the scope of global emissions that can be displaced as a result of the responsibly produced energy, as well as the emissions reduction increment that we bring to the table, combined with the security of supply, that's where we can see that Canada should have an advantage. It's not an advantage necessarily that we're looking for government to support. It's merely one where we're looking to recognize the role that we can play on the international stage to help displace foreign sources and alleviate the energy crisis that we see globally.

[Shannon Joseph]

Perhaps I could add one more point. During the pandemic, oil demand dropped to 95 million barrels a day. It's back at 100 million barrels a day, and aviation is not fully back online. It's going to go up when it does.

All of this is very connected to people's standard of living, to global supply chains, and to the tractors that run every farm in the world. If there is no substitute—I appreciate Ms. Tucker's comments—that is going to replace all of that, when you cut off supply....

When you talk about stopping lending, you're talking about preventing businesses from providing a product that people need to operate the things that people need.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

[Chris Lewis, Conservative, Essex, ON]

Thank you, Mr. Chair.