Environment Committee on June 6th, 2024

[Mike Morrice, Green, Kitchener Centre, ON]

Thank you, Chair.

I want to start by recognizing that, last year, there were 185,000 square kilometres of wildfires across the country. That, along with flooding and all the rest of what we're experiencing in the climate crisis right now, is reflective of a 1.1°C rise in global average temperatures. We're on track for 3.2°C by the year 2100.

What I've heard from the executives who've joined us this morning is that there's no need for an emissions cap. There's no need for a windfall tax on their excess profits. There's no need for any regulation. They have it all covered when, as we heard from Mr. van Koeverden, their emissions are rising considerably on an absolute basis, as well as a per-barrel basis.

Mr. Kruger, my question is for you.

You personally made almost $37 million last year. Your company made $9 billion in profit in 2022. You've said, “I very much believe in making money. We are in the business to make money and as much of it as possible”. You've also said you're concerned that “We have a bit of a disproportionate emphasis on the longer-term energy transition”.

My question for you is not a rhetorical one. If you could leave a message like a time capsule recording for Canadians living in the year 2100, in the midst of climate catastrophe, what would you say to them?

[Rich Kruger]

First of all, I joined this company at a time when employees and contractors were getting hurt. The company was grossly underperforming. My mission was to ensure people are safe each and every day, and that we could perform up to the standards of our shareholders and, quite frankly, the province and the federal government. The premise behind a company being profitable so it can afford to invest, including in decarbonization.... I stand by my words. I believe everything I've said before. It's not one or the other. It's both. If you have an unprofitable sector, you can't invest in decarbonization.

We'll get the climate from whatever happens in the rest of the world. I think Canada can and should be part of that solution. I'm betting on Canadians and Canadian companies to do that.

My message for 2100 would be, “Bet on Canadians. Bet on Canada and put us to work to be part of the solution.”

[Mike Morrice, Green, Kitchener Centre, ON]

To be clear, the question was what you'd say to them in 2100 as they're in the midst of the climate catastrophe that your emissions are leading us toward. I'll also note that, when it comes to safety in the workplace, we had six workers from Suncor die since 2020.

Maybe I'll offer the question to Mr. Corson.

Mr. Corson, of course there are significant concerns about the practices of your company with respect to the Athabasca River, but I'll offer the same. If you were to make a comment to Canadians in 2100, what would you say to them in the midst of climate catastrophe?

[Brad Corson]

I would hope those citizens would be reflecting back on the prior 100 years and be proud of the actions industry took in collaboration with the federal government and the provincial government to decarbonize and—at the same time—to grow the economy and the standard of living for—

[Mike Morrice, Green, Kitchener Centre, ON]

Excellent. Thank you, Mr. Corson.

Let me ask you the question directly, in terms of the pride Canadians will feel in the year 2100. Do you support an excess profit tax on the profits of your company above a billion—say a 15% tax on profits above a billion? Do you support that, yes or no?

[Brad Corson]

No.

[Mike Morrice, Green, Kitchener Centre, ON]

Great.

Do you support an emissions cap?

[Brad Corson]

No.

[Mike Morrice, Green, Kitchener Centre, ON]

Do you support any additional regulatory measures by the Government of Canada at a time when your industry's emissions are going up, yes or no?

[Brad Corson]

We have sufficient regulatory framework in place to continue to drive—

[Mike Morrice, Green, Kitchener Centre, ON]

I think that's the time capsule right there. Let's put that in and leave it for Canadians in 2100.

I think what this demonstrates is that it's going to be up to parliamentarians around this table to come together to find some solutions, because we're hearing very clearly that the solutions are not going to come from the CEOs who appeared as witnesses this afternoon.

[Brad Corson]

I think you need to judge us by our actions. You'll see continued reductions in our emissions. That's what we're working towards every day.

[Mike Morrice, Green, Kitchener Centre, ON]

I'm judging you by the actions with respect to the Athabasca River. I think the police should be judging those actions.

[Brad Corson]

We've had no impact on the Athabasca River, to be very clear.

[Adam van Koeverden, Liberal, Milton, ON]

Wow.

[The Chair, Liberal, Francis Scarpaleggia]

Mr. Morrice, your speaking time is up.

[Mike Morrice, Green, Kitchener Centre, ON]

Thank you, colleagues.

Thank you, Chair.

[The Chair, Liberal, Francis Scarpaleggia]

We will now begin the final round of questions.

Mr. Kram, you have the floor for five minutes.

[Michael Kram, Conservative, Regina—Wascana, SK]

Thank you very much, Mr. Chair.

Thank you to the witnesses for being here today.

My question is for all of the witnesses. Whoever wants to jump in and answer can feel free to do so.

Part of the reason we are here today is to discuss the profitability of the oil and gas sector. I wonder if the witnesses can explain to the committee what has been happening to global demand for oil and gas over the last few years since the end of the pandemic and how global demand relates to the profitability of Canadian oil and gas companies.

[Jon McKenzie]

Demand for all hydrocarbons has been growing. Depending on who you believe, demand for oil this year will grow somewhere between 1.2 million and 2.2 million barrels. Demand for natural gas typically grows at about seven billion to eight billion cubic feet per year. That doesn't necessarily translate into profitability for Canadian oil and gas because the other requirement we have is egress to those markets. Without egress, our product typically gets landlocked and discounted.

With the start-up of the TMX pipeline, we've seen us getting much closer to global pricing for our oil. I'm hopeful that, with the start up of LNG Canada, we'll start to see improved gas pricing for producers there as well.

[Michael Kram, Conservative, Regina—Wascana, SK]

Over the last few years, China has continued to build hundreds of new coal-burning plants.

Could Canadian oil and gas companies contribute to a reduction in global emissions by increasing Canadian oil and gas exports to China and to other countries?

[Rich Kruger]

I believe so.

[Michael Kram, Conservative, Regina—Wascana, SK]

Mr. Kruger, can you elaborate on that a little?

Can you speak to the emissions that come from a typical Chinese coal-burning plant compared to the Canadian oil and gas sector?

[Rich Kruger]

If you look at the energy sources and at the seriatim of carbon intensity, coal would be at the higher end of that. Here in Canada, coke-fired boilers would be at the higher end of that.

As we go to fuel switching—to natural gas, in our case, or providing clean-burning natural gas to China that displaces the need to build coal-fired plants—you are reducing the intensity of the global energy grid. This is a global challenge, not a local or country-by-country challenge.

[Michael Kram, Conservative, Regina—Wascana, SK]

I recently met with management and the union of Evraz North America, which operates a steel mill just north of Regina. They've experienced quite a lot of layoffs recently. They would love the opportunity to build more pipelines for this country.

Why doesn't the private sector build more pipelines in this country?

That's for anyone who wants to jump in.