Thank you for the invitation to appear before you today.
Although Canada has begun to bend the curve on emissions, we know we're not achieving the pace and the scale needed to hit our current targets, which are themselves insufficient and which do not represent Canada's global fair share of efforts.
One of the main reasons for this lack of progress is pressure from oil and gas executives. While other sectors, especially electricity, have been able to reduce their pollution levels, oil and gas emissions keep rising. In fact, the sector now represents nearly a third of our domestic emissions, despite making up only 3% of Canada's GDP, 0.7% of jobs and 0.7% of national revenue.
These executives spend a considerable amount of time and energy attacking climate progress. In 2023, the industry lobbyists registered 1,255 meetings with the federal government, averaging out to five times per work day, and that's only what's in the federal lobby registry. That's why new rules to cap carbon dioxide and methane emissions from the oil and gas industry are so crucial.
However, the current design of the proposed draft regulations will not drive the necessary emissions cuts. Essentially, the rules only ask companies to do what they've publicly said they can. Although it's essential to have that backstop because industry has never lived up to any of its voluntary commitments, we know that deeper cuts are necessary.
The government's emission reduction plan indicated that in order to reach Canada's target, emissions from the oil and gas industry would need to fall to 42% below 2019 levels. The proposed regulations, when you discount the compliance flexibility and the loopholes, would only drive down emissions by less than 30%, and far less if the assumed emission reductions between now and 2026 don't materialize. In fact, ECCC estimates only a 13.4-megatonne reduction from these rules, from a sector producing over 200 megatonnes yearly, so stronger rules are needed, and more importantly, they must be implemented urgently.
We know that tackling the climate crisis requires replacing fossil fuels with renewable energy. Though this is no small task, the good news is that renewable energy trumps fossil fuels on every level: price, reliability, ease of deployment and job growth opportunities. Renewable energy with battery storage is now a cheaper way to produce electricity than fossil fuels. That's why global renewable energy installations grew by 50% around the world last year alone.
Despite these advantages, Canada is falling behind the rest of the G20 in terms of deploying renewable energy and batteries. That's why the proposed clean electricity regulations are crucial, but the final rules must actually displace fossil gas from the grid.
The clean electricity regulations will provide system operators, power producers and investors with the certainty that Canada wants in on when it comes to the clean energy transformation. In addition to these regulations, the federal government has a role to play in facilitating the build-out of a clean energy grid by investing in transmission infrastructure.
In addition to electrification, an expanded focus on energy efficiency is required. The federal government has a role to play in making our lives, our homes and our industries more energy efficient. Energy retrofits have the additional benefits of lowering household bills and of making our homes more comfortable.
The science is clear. Existing levels of oil and gas production will lead us to a catastrophic future. This is the reason that at COP28 last year, all of the world's countries agreed to transition away from coal, oil and gas. At the very minimum, governments must stop facilitating the expansion of the industry. For the Government of Canada, that includes finally ending the provision of subsidies and public financing to oil and gas companies. Though Canada has taken some steps on this, the action to date has not translated into significantly lower levels of financial support, which surpassed $18 billion last year.
The government is currently developing new rules to address public financing from Crown corporations, but there is concern that these might be too full of loopholes to actually turn off the taps. We also must ensure that we are being vigilant against the dangerous distractions that will do nothing to reduce emissions but will make it easier for oil and gas production to expand, especially carbon capture in the oil and gas sector, and blue hydrogen.
As a climate advocate, obviously my focus is on tackling the climate crisis, but transitioning off of fossil fuels is just as much about affordability. Climate solutions like electrified public transit, heat pumps and energy retrofits mean cheaper bills for Canadians. They have saved Canadian families thousands of dollars. Of course, government funding is a necessary enabler for families to access those savings. It's also about ensuring Canada's competitiveness.
When we hear arguments on the need to be the country that sells the last barrel of oil, that's like arguing to be the last Blockbuster to rent videos. Why are we so resistant to building an economy that can thrive in the future?
Regardless of what we do in Canada, demand for oil and gas is going to peak before 2030 and decline significantly thereafter—