Environment Committee on May 3rd, 2022

[The Chair, Liberal, Francis Scarpaleggia]

He's trying.

[Laurel Collins, NDP, Victoria, BC]

I'm hoping that you'll—

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

You spoke specifically about the incentive for carbon capture and storage. I'm exactly answering your question—

[Laurel Collins, NDP, Victoria, BC]

My question is about the CEO and president of EDC.

[The Chair, Liberal, Francis Scarpaleggia]

Unfortunately, we're out of time on this round.

We'll go to Mr. Dreeshen for five minutes, please.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much, Mr. Chair.

Minister, thank you for being here today to discuss your departmental spending priorities and the program effectiveness.

In listening to the last two speakers, I don't share many of the positions they take, but I will talk about how this government has made a commitment to provide $5.3 billion in international climate financing by 2026, in which the plan is to help other nations transition to sustainable “low-carbon, climate-resistant, nature-positive, and inclusive” development. These are a number of the terms that we read.

Your department has asked for $26 million in grants and contributions this year. Are these programs still priorities for the recipient countries or are they looking for real energy solutions, such as our clean LNG or responsibly produced hydrocarbons, which means a yearning for the true Canadian leadership we have, and has anyone asked them what it is that they need?

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

Thank you for the question. I have ongoing conversations with counterparts from different countries. In fact, I will be visiting some of them in the coming weeks.

Let me assure you—or perhaps reassure you—that climate change remains a very high priority for developing countries, as it does really for the rest of the world, and finding solutions to decarbonize their economy either through technology or nature-based solutions remains a very high priority for the recipient countries.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much.

I would probably expand into that in my next comments, because I understand what's being advocated for by the “dark green” environmentalist world, but in the real world, particularly in those countries where energy security is so important and so urgent, people are clamouring for clean natural gas. They are rethinking their previous nuclear objections. They are recognizing their electrical grid limitations. They're hoping that countries like ours, with a reputation of using our wealth, our expertise and our innovation, will be there to help them through these tumultuous times.

Can you tell the more than two billion people in this world who use dung for their energy and those countries that are forced to rely on conflict oil that Canada will use every bit of its energy know-how to bring all of our resources to their shores, or are we simply going to go down this path that seems to have been set up by this government in the eco-activist approach that seems to be used?

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

Thank you for the question.

I would like to quote to you the president of the European Commission, who said this recently. She was talking about about Europe's dependency on Russian oil and gas:

...in the long run, it is our switch to renewables and hydrogen that will make us truly independent. We have to accelerate the green transition. Because every kilowatt-hour of electricity Europe generates from solar, wind, hydropower or biomass reduces our dependency on Russian gas and other energy sources—

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you for the quote. I've read the quote too. Thank you very much.

Of course, I have also been involved—

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

It's not just the Canadian government that believes it is important to transition to a low-carbon economy—

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

You are right. There are governments in the world that believe that too. However, as someone who has been involved with the OSCE, I have talked to all of these countries in the world that are looking at the issues taking place right now. They are not as single-minded and single-focused as we seem to be.

I just wanted to mention this. All energy sources leave an environmental footprint, even the 25% of the world's citizens who actually use dung for energy. You don't flood massive tracts of land for electricity for an eternity for hydro power without consequences. You don't build massive windmills without using hydrocarbons. You don't build solar panels without dealing with toxic substances, You don't mine or drill oil wells without disturbances. Plus, you need energy to build out each one of these.

I believe that when we discuss any energy source development, its transportation and use, its recycling and/or its disposal, or its effect on the living things that surround it, we have to analyze the entire upstream and downstream effects, from the first shovel digging it up to the last shovel covering it up. Only then can we talk about the consequences of these technologies of EVs, hydrogen, hybrid ICEs or full battery production, repurposing or recycling.

Only then will Canadians be able to make educated decisions about the energy options that are faced by this nation. If we take the political science out of this equation and focus specifically on the true metrics of these choices, then we will have accomplished something.

Will your government ensure in the future that all types of energy sources will be subject to the same rigorous assessment as this government has demanded with Canada's oil and hydrocarbon industry?

[The Chair, Liberal, Francis Scarpaleggia]

Unfortunately, Minister, you're going to have to weave that answer into a response to another member.

Mr. Duguid is next.

[Terry Duguid, Liberal, Winnipeg South, MB]

Thank you, Mr. Chair. I want to thank the minister for being with us today.

Minister, you referenced in your opening remarks the $2.5 million in grants and more than $291 million in contributions in support of the low carbon economy fund. I'm aware that in Manitoba, this has been very beneficial in funding green trucking initiatives and partnerships with the province. I'm wondering if you could amplify for us how an expanded low carbon economy fund will help us get to our 2030 targets.

You and Minister Wilkinson wrote an article recently on using every tool in the tool box, whether that's supporting our auto sector or CCUS. Maybe you could offer a comment in response to some of the earlier questions you've received.

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

Thank you very much, Mr. Duguid.

You are right. The low carbon economy fund, or LCEF, supports projects that help to reduce Canada's greenhouse gas emissions, generate green growth, build resilient communities and create good jobs for Canadians. These projects are critical as Canada continues to build a sustainable net-zero emissions economy towards 2050.

The fund is an important part of the pan-Canadian framework on clean growth and climate change as well as Canada's strengthened climate plan, which is a healthy environment and a healthy economy.

The LCEF has two envelopes. The first one is the low carbon economy leadership fund, which provides money to provinces and territories that have adopted the framework, so that they can identify emission reduction projects to receive funding.

The second one is the low carbon economy challenge, which provides money to a wide range of recipients, including provinces, territories, businesses, municipalities, and indigenous communities and organizations. Successful applicants will leverage ingenuity across the country to reduce emissions and generate clean growth in support of the framework of Canada's strengthened climate plan.

Thank you for letting me come back to some of the comments that were made. No later than yesterday I was talking to Germany's vice-chancellor, Minister Habeck, who said in no uncertain terms that despite the challenges that Germany is facing right now, they are steadfast in their intention to continue fighting climate change and to move—and even accelerate—Germany's transition to a low-carbon economy.

That's exactly the type of partnership they are looking to Canada for. In fact, the chancellor and vice-chancellor will be in Canada next summer to talk about some of these opportunities in the coming months and years.

[Terry Duguid, Liberal, Winnipeg South, MB]

Thank you, Minister.

I'll direct my next question to officials, Mr. Chair. Probably Ms. Geller will respond.

The minister briefly referenced water in his remarks. I wonder if Ms. Geller could again amplify his remarks regarding some of the investments being made through the 2022 budget.

I'll call to her attention that this committee will be undertaking a freshwater study. How can we build upon the good work that is highlighted in the 2022 budget?

[Hilary Geller, Assistant Deputy Minister, Strategic Policy Branch, Department of the Environment]

Yes, budget 2022 did extend, for an additional year, funding for the federal freshwater action plan, which is the flagship initiative that Environment Canada works with in the Great Lakes, Lake Winnipeg, the St. Lawrence River, the Fraser River, the Mackenzie River and the Saint John River. The goal, of course, is to protect and restore fresh water in Canada.

The government has a commitment to increase that funding. We are continuing to work to support the government in its decision-making on exactly what that would look like.

There was also funding provided for the Canada water agency. There is a transition office that has been set up. It is working extremely diligently to provide options to the government on what form and function that agency would ultimately take. It has been using the funding for the last little while to engage in extensive consultations with the provinces and territories, indigenous colleagues, and Canadians writ large, to support the government in making its ultimate decisions.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you. Unfortunately, your five minutes are over, Mr. Duguid.

I will now give the floor to Mr. Simard for two and a half minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you very much.

Mr. Guilbeault, I have a small question on what is meant by an efficient or inefficient subsidy in the oil and gas industry.

Can you define what that represents?

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

As you know, the efficiency or inefficiency of certain fossil fuel subsidies stems from an agreement between the members of the G20 in 2009, an agreement that has since evolved somewhat. Work is therefore being done within the G20 to define that issue.

Apart from the issue of the efficiency or inefficiency of subsidies, we can agree that our government's commitment is to eliminate all subsidies that increase fossil fuel production, whether oil, gas or coal.

That said, I do in fact draw a line and, on that, I think I disagree with some members of the committee: funding the decarbonization of a sector of the economy, regardless of the sector, is not a fossil fuel subsidy, certainly not within the meaning of the agreement entered into by the G20 countries in 2009—

[Mario Simard, Bloc, Jonquière, QC]

Oh, but wait. I can tell you that, on the Standing Committee on Natural Resources, we studied carbon capture strategies, and most oil producers, when asked if they were able to reduce their production, said no.

To give you just one indication, the two largest carbon capture projects in Alberta represent $2.5 billion, and 57% of that money is from the government, either the Government of Alberta or the federal government. That means the government is subsidizing the oil industry so it can produce low-carbon oil and increase production. Whenever people were asked to limit their production, they refused. However, the government's direction is to limit emissions. It contradicts what you just said.

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

No, not at all. From an atmospheric standpoint, what counts is emissions, and the cap on greenhouse gas emissions that we are going to put in place—the consultation document will be published in the coming weeks—will clearly define how emissions will be reduced, regardless of what happens with production, whether it increases, decreases or remains stable.

As I explained earlier to the honourable member Ms. Collins, we made it impossible for businesses to use the tax credit for carbon capture and storage to increase oil production. The purpose of the tax credit is to reduce greenhouse gas emissions and to decarbonize the industry, just like we are helping decarbonize the aluminum industry, which you are very familiar with, or the steel and cement industries.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Ms. Collins, you have the floor.

[Laurel Collins, NDP, Victoria, BC]

Thank you, Mr. Chair.

I would like to go back to my question for a simple yes or no. Does it concern you that the EDC president and CEO claimed that she's unaware of any well-established international definitions of a subsidy?

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

I have not seen this quote by the CEO of EDC, but I would be happy to follow up with you after this meeting, after I have seen and read this quote.