Environment Committee on June 7th, 2022

[The Chair, Liberal, Francis Scarpaleggia]

I call the meeting to order.

I want to welcome back Ms. Pauzé, who is back from her trip. Mr. Simard did an excellent job of covering for you while you were gone.

I would also like to welcome Mr. Redekopp, who was on the committee in the 43rd Parliament. He'll be with us for an hour, this morning, filling in for Mr. Seeback.

Before we get started, I'd like to provide an update on the committee's nuclear waste governance report. We reviewed the first draft, and the changes are being made as we speak. We hope to be able to review the second draft Thursday evening.

We are spending the first hour on supplementary estimates (A) and the second hour on version two of the report. It would be good if we could get the report approved Thursday evening, because that would give us time to table it in the House before the summer break. In any case, we have agreement to submit the report through an established process. It is possible to table a report when the House is not sitting and thus start the 180‑day countdown to the government's response. That means that, if we are able to table it, even another way, the 180‑day window will begin well before the fall, and we will receive a response from the government sooner.

We may not get the second draft of the report until five o'clock tomorrow, Wednesday, afternoon. That would give us less than 24 hours for review, but it would just be the changes.

Today, we are pleased to begin a study on a very interesting topic proposed by the Conservatives, clean technologies in Canada. With us are officials from four departments, the Department of the Environment, the Department of Industry, the Department of Natural Resources, and the Department of Agriculture and Agri-Food.

Ms. Meltzer, I gather you are ready to give your three-minute opening statement. Can you hear me?

I don't think she's online yet. I know she was having some technical issues, so we'll go to the next witness.

I assume Mr. Noseworthy will be speaking for the Department of Industry.

Mr. Noseworthy, you have three minutes.

[Andrew Noseworthy, Assistant Deputy Minister, Clean Technology and Clean Growth Branch, Department of Industry]

Thank you very much.

My name is Andrew Noseworthy, and I am the assistant deputy minister responsible for clean technology and clean growth at Innovation, Science and Economic Development Canada, or ISED.

My colleague, Kendal Hembroff, is here with me and will speak in a few moments about ISED's work to support clean technologies. In the meantime, I would like to give you a bit of background information on clean tech that may aid in our discussion today.

Statistics Canada has estimated that Canada's clean-technology sector grew by about 15% between 2012 and 2020, outpacing the overall Canadian economy, which grew by about 11% over the same period.

StatsCan further estimates that clean technology contributed about $26.8 billion to Canadian GDP in 2020 and provided over 200,000 well-paying jobs, with employment in clean tech growing by over 25% between 2012 and 2020.

While we're seeing clean technology develop into commercialization really right across the nation and in all elements of our economy, there are major concentrations of clean-tech companies in Ontario, B.C., Quebec and Alberta, and the vast majority of Canadian clean-tech companies, in fact over 90%, are small and medium-sized enterprises.

Canada has strength in a broad range of clean-tech areas, including clean energy and energy efficiency; hydrogen and low-emission transportation; batteries, smart grids and storage; carbon capture, utilization and storage; water and waste water; and agri-tech, to name just a few.

Canadian clean-tech companies are contributing to the decarbonization of both the Canadian and the global economies, and the vast majority of Canadian clean-tech firms are focused on exports.

Canadian exports of clean tech totalled approximately $7.1 billion in 2020, and our exports are expected to continue to grow as the global path towards a net-zero future is charted.

Indeed, Canada is already recognized globally as a leader in clean tech. Canada has always had a strong presence on the Global Cleantech 100 list, which tracks high-performing and high-opportunity clean-tech companies, and the 2022 list included 13 Canadian companies.

Among them are CarbonCure, a Halifax-based manufacturer for carbon utilization technologies for concrete, and GHGsat, a Montreal-based provider of satellite-based remote sensing technology for detecting greenhouse gas emissions from industrial facilities. Those are just two. Notably, all of the Canadian companies on the global list received support from the Government of Canada at some point in their development.

In that context, with your permission, I will now turn to my colleague, Kendal Hembroff, who will speak about ISED's specific efforts in supporting clean-technology businesses.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

We have about 30 seconds or so, but there will be rounds of questioning and opportunities to intervene.

Go ahead, Ms. Hembroff.

[Kendal Hembroff, Director General, Clean Technology and Clean Growth Branch, Department of Industry]

Thank you.

Recognizing the potential of clean technology to advancing Canada’s environmental and economic goals, the Government of Canada has made significant investments in clean technology and clean growth, creating a robust ecosystem of programs and services that support Canadian clean technology entrepreneurs and adopters.

This includes providing funding and other support along the innovation continuum, through policy frameworks and initiatives that encourage investment in clean innovation, and targeted investments in research institutions, innovation centres and R and D networks.

As the department of innovation, science and economic development, many of these programs and services fall within our purview.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Ms. Hembroff.

You had your hand up, Mr. Mazier. Did you want to say something?

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Thank you, Chair.

The French and the English were at the same audio level. They weren't cancelling each other out.

I heard it, but if you can fix it for the next speaker, that would be great.

I'm on English.

[The Chair, Liberal, Francis Scarpaleggia]

Okay.

I believe Mr. Ngan is going to deliver the three-minute opening remarks on behalf of Ms. Melzer, who's experiencing some technical difficulties.

Mr. Ngan, go ahead, please.

[Vincent Ngan, Director General, Horizontal Policy, Engagement and Coordination, Climate Change Branch, Department of the Environment]

Thank you, Chair, for your introduction.

I would like to begin by acknowledging that I'm speaking to you today from the traditional and unceded territory of the Algonquin Anishinabe people here in Ottawa.

I'm happy to meet with members of the committee today to discuss the clean tech study and, more broadly, the role that clean tech and innovation will have in meeting Canada’s 2030 and 2050 climate objectives.

As you all know, the 2030 emissions reduction plan was introduced on March 29, 2022. The plan provides a credible road map to enable Canada to achieve 40% to 45% below 2005 levels by 2030 and reflects input from provinces and territories, indigenous peoples, the net-zero advisory body, stakeholders and interested Canadians.

The emissions reduction plan emphasizes the role that clean tech and climate innovation will play in Canada, achieving both its 2030 and 2050 climate change objectives, with an entire chapter dedicated to the topic.

Reaching net zero will require significant effort to accelerate both the development and the deployment of clean tech. There is increasing global recognition that such technological transitions must be accelerated through ambitious action if the world is to avoid dangerous climate impacts. Last year, at COP26, over 40 countries, representing more than 70% of global GDP, committed to accelerating clean-tech innovation and deployment in line with transforming major sectors of the economy. This represents both an opportunity to drive down emissions and a chance to generate clean growth, with global clean-technology activity projected to reach $3.6 trillion by 2030.

With a highly skilled and educated workforce, abundant access to the natural resources and energy sources critical for a net-zero future, and a thriving clean-tech industry, Canada already has the building blocks in place to seize this opportunity. However, deployment of commercially available clean tech must move faster, and innovation must also be accelerated as up to 50% of global GHG emissions reductions by 2050 will need to come from technologies that are still in the early stages of development. The future of Canada's clean -technology industry and climate commitments rests on scaling up the adoption of commercially available clean solutions and readying emerging climate innovations. The choices that Canada makes today will determine both its GHG emissions trajectory and its place in the global clean-tech market for decades to come.

Going forward, the 2030 emissions reduction plan signalled its intent to advance key measures to position the clean-tech industry for success, drive emissions reductions and spur net-zero innovation. To achieve this, the emissions reduction plan committed to strengthening federal coordination on clean tech and climate innovation through a whole-of-government clean-tech and climate innovation strategy. The strategy—

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Mr. Ngan.

We now have to go to the Department of Natural Resources.

As I said before to Mr. Noseworthy, there will be a very large opportunity for exchanges in rounds of questioning.

I assume it's Mr. Leyburne who will be delivering the three-minute opening remarks.

[Drew Leyburne, Assistant Deputy Minister, Energy Efficiency and Technology Sector, Department of Natural Resources]

Thank you for the invitation, Mr. Chair.

I am pleased to provide some information on the efforts Natural Resources Canada, or NRCan, is making to advance clean energies.

Given that I'm coming to you from NRCan, you won't be surprised to hear that my remarks centre on the role of clean tech as it relates to energy and natural resources.

As you have heard from the examples my colleagues just gave, energy supply and use make up the single largest component of the clean-tech sector. For this reason, NRCan is the co-lead of the Clean Growth Hub that was just described.

Similarly, we work closely with the net-zero accelerator, with SDTC and with other agencies, such as BDC and EDC, on getting clean energy technologies into the world.

I want to spend a few minutes talking about how NRCan supports other parts of the clean tech value chain.

Renewable energy sources like wind and solar are now the cheapest and fastest-growing sources of new electricity in Canada. Batteries are getting cheaper too. To take advantage of this, the government is investing $964 million in the smart renewables and electrification pathways program to support projects that provide essential grid services. Budget 2022 announced another $600 million to further accelerate action on these projects.

Canada has a massive clean-power advantage, making it easier for Canadians to electrify their homes, their businesses and their vehicles. In fact, since 2015, the federal government has invested more than $1 billion to make EVs more affordable and chargers more accessible.

We're also making major strides in cleaner fuels, such as hydrogen. The hydrogen strategy for Canada was launched in 2020 as a call to action, and now we're focused on delivery, including through the $1.5-billion clean fuels fund. This fund will support at least 10 new hydrogen production facilities, along with facilities for other clean fuels, like renewable diesel, sustainable aviation fuel and renewable natural gas.

If we're going to be successful, this needs to be the most important decade ever, not just for the mass deployment of existing clean energy technologies but also for clean energy research, development and demonstration.

As my colleague noted, the IEA thinks that about half of the emissions reductions needed to hit net zero by 2050 come from emerging technologies. In Canada this figure could be even higher. That's why we're managing a portfolio of energy RD and D, like NRCan's energy innovation program. It supports federal research as well as first-of-a-kind projects like the Borden mine, which is Canada's first all-electric mine.

Most recently, budget 2021 provided $390 million to advance carbon capture, utilization and storage technologies.

We're also investing billions of dollars in areas like critical minerals and bioenergy, which will provide many of the building blocks for the energy economy of the future.

Finally, I'll just mention that to better understand the scale of these opportunities, the clean-tech data strategy was launched in 2016. Led by NRCan, ISED and Statistics Canada, it measures the contribution of the clean-tech sector to Canada's economy in order to provide evidence-based policy advice.

NRCan believes these measures, in conjunction with the others you'll hear about today, provide an important platform to ensure that Canada continues to punch above its weight in the clean-tech space.

Thanks very much for your time.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Mr. Leyburne.

We'll go now to Mr. Valicenti, from the Department of Agriculture and Agri-Food.

Go ahead Mr. Valicenti. The floors is yours.

[Marco Valicenti, Director General, Innovation Programs Directorate, Department of Agriculture and Agri-Food]

Thank you, Mr. Chair.

I'd like to begin by acknowledging that I am speaking to you today from the traditional and unceded territory of the Algonquin Anishinabe people here in Ottawa.

On behalf of Agriculture and Agri-Food Canada, I am pleased to speak to you about how clean technologies are being utilized in Canada's agriculture and agri-food sector to reduce greenhouse gases and other negative impacts, and about technologies that help to contribute to global emission-reduction targets.

Producing food to feed the world is already a challenge. We see that in the current context. Doing that sustainably is an even greater one. Farmers are stewards of the land and are taking great strides to protect the environment, but at the same time we know there is still more work to do. Supporting the development and adoption of clean technology is an important part of ensuring that farmers have the right tools they need to increase production to support global food security.

The best way forward is to identify practices and technologies that farmers can use to reduce emissions while maintaining yields. The good news is that farmers are already investing in new practices and technologies to keep their land healthy, productive and resilient. That is why the government's budget 2022 commitment of over $1 billion in new funding to reduce GHG emissions in agriculture, including $330 million for the agriculture clean-technology program, is critical as we work towards net-zero emissions. This builds on previous commitments that triple investments in the agriculture clean-technology program, supporting the development and adoption of clean technologies in this sector.

Since its launch in 2021, the agriculture clean-technology program has been well received by the sector, and 110 projects, representing $33 million, have been announced. To date, the program has supported a wide range of projects, including investing in upgrading and modernizing grain dryers; fuel switching, such as replacing coal barn-heating systems with wood waste-heating systems; and purchasing biomass boilers, to name just a few.

I would say, in the context of future agriculture clean-tech programming, there really are four areas of focus: nitrogen-reduction technologies, methane-reduction technologies, low-carbon energy systems and emission-quantification technologies, i.e., soil sensing with regard to soil carbonization. These investments will yield significant GHG reductions without negatively impacting yields. Creating an enabling environment for the development, commercialization and validation of emerging innovations that will position the sector to meet 2050 climate targets will also be instrumental. This includes finding transformative solutions like nitrogen-fixing crops, alternatives to synthetic fertilizers and low-carbon biofuels.

In closing, continued investment in existing and emerging clean technologies will help equip Canada's agriculture sector with the right tools to protect our environment, to grow the economy and to continue to build vibrant communities across the country.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Mr. Valicenti.

We'll go to our rounds of questioning. We'll have one six-minute round followed by however many five-minute rounds we can fit into our block here.

We start with Mr. Dreeshen for six minutes.

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

Thank you very much, Mr. Chair, and thank you to all the witnesses. It's certainly great to be here and to be able to talk about something that is so significant to Canada and, as we think about it, to the world as well.

Our study is going to be looking at clean technologies that are being researched, manufactured and utilized here in Canada, and how Canadian innovation and expertise can be marketed around the world to reduce global emissions. That's the goal of the study.

If we go back into the Government of Canada's Clean Growth Hub's definition of clean technology, it's where we're reducing the environmental impacts of “resource management activities that result in the more efficient use of [our] natural resources” and the “use of goods that have been adapted to be significantly less energy or resource intensive than [is] the industry standard”, and that is to be encouraged.

That's really where I want to start, because, coming from Alberta, I have seen what our oil and gas industry has done; I have seen how it relates to the technology around the world, and we should be so proud of what we have. I remember that a few years ago a spokesman from the International Energy Agency said that the difference between the CO2 intensity of traditional oil and gas developed in Canada and that of western Canada's oil sands would be equivalent to one day's worth of emissions in China.

When we try to look at the relationship between our normal oil and gas and oil sands-related intensity, there's not that much difference, but it is something that is a flashpoint for so many people, and I think that's really critical. Not only that, but we have seen such reductions in intensity, and it's because of technology; it's because of the clean...the desire for companies to say, “We are part of the solution,” and I think that really becomes something that is critical. If you listen to Canadian energy workers who ply their trade around the world, there's no country that meets our standards.

Just circling back to the Clean Growth Hub's definition of clean tech, if our oil and gas industry is already the global leader and is committed to doing even more—and, by the way, it does this without a consumer carbon tax to make it happen—I think that's something we should be concentrating on in really making this commitment.

What I'd like to see come out of this report—and this is where the departments are going to come into play—is an analysis of the full environmental impact of every type of energy source that we are looking at in the future and that we have at present, from the first shovel we use to dig it up to the last shovel we use to safely cover it up. We need to talk about electrical power transmission lines and hydrocarbon pipelines, and from flooded valleys for hydro dams to abandoned oil wells and to procurement, through to mineral exploration in our own backyard and the importation of products from countries with little regard for the environment or human rights. We can make the intelligent decisions if we are prepared to measure it all.

As someone who is involved in agriculture as well, I think that perhaps some of the starkest reminders of this are right in front of us. Ukrainian farmland is being mined; grain storage facilities are being bombed, and electrical grid systems are being destroyed. Countries are reverting to reliable coal to keep their industries functioning; plans to shelve nuclear plants are being thrown out the window, and countries that have put all their eggs in the “just transition” basket are scrambling just to stay afloat.

I think that our Canadian environmental ingenuity is going to make a difference, but we also have to make sure that we play to our strengths as well. As this vast northern country where the majority of us live below the 50th parallel, we have to look at all of what is involved in the country in general.

What I would like to ask—and I appreciate having been given the time to set the stage for what I feel this report is all about—and talk about is agriculture. If we look at the RBC report describing “Six pathways to Net Zero” and its focus on agriculture, the authors estimate that it's going to take $2.5 billion annually of spending in the sector, with the key focus on helping farms store carbon.

We don't see a lot of money coming into this from budget 2022, and certainly not enough to tie into what the RBC report says, so my question is, what metrics were used and what criteria were employed to pick the technologies that were being funded? Also, could you please provide the results so far—the breakdown between administrative costs versus actual technology investment—within this program?

Before I give you the minute left that you might have to answer that question, I want to focus on the concept of our fertilizer reductions. Coming from where I do, where Olds College is a main factor in new technology, I really think that people should be paying a bit more attention to the realities of agriculture.

To the agriculture department, could you fill me in on some of the thoughts you have?

[The Chair, Liberal, Francis Scarpaleggia]

You have about 40 seconds, please.

[Marco Valicenti]

I would just mention that, in the context of budget 2022, we received $1 billion in environmental programming, and $330 million of that was in the clean-tech program, but also programming that looks at on-farm adoption. That's where we are looking at nitrogen reduction efficiency technologies in engagement with both manufacturing and processing. It's also with producers on the ground, through our on-farm climate action fund, as well as our living labs, where we're collaborating with producers to look at the best management practices in the context of...whether it's nitrogen fertilizer, or even methane reduction.

[The Chair, Liberal, Francis Scarpaleggia]

Perfect. Well done, Mr. Valicenti. In the 40 seconds you had, you packed a lot in.

Ms. Thompson, you have six minutes, please.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you, Mr. Chair, and welcome to the witnesses.

My first question centres around Impact Canada initiatives. I believe it's for the Department of Industry, but if there is someone else who wants to jump in, please do.

This initiative is a whole-of-government approach, led by the Privy Council Office. It uses a challenge approach to funding to encourage innovators to participate in solving collective challenges, and issues “prizes for whoever can first and most effectively find a solution to a defined problem, and/or mak[es] use of structured, open competitions to solicit proposals to fund the best ideas with the potential to solve thematic problems.”

The clean-technology stream announced in budget 2017 is one of the first program streams of this initiative. It was scheduled to conclude in March of 2021, but was extended into 2022, obviously, because of the impact of COVID.

My question is, to what extent did the clean-technology stream of the Impact Canada initiative further investment in and development of clean-tech enterprises in Canada?

[The Chair, Liberal, Francis Scarpaleggia]

Who is that question for?

[Drew Leyburne]

I'm happy to respond.

The Impact Canada clean-tech stream was a program managed out of NRCan. I'm happy to report that, as we come up to the end of that first cycle of programming, it's been a very successful program in attracting new entrants to some of our traditional grant and contribution programming that we wouldn't otherwise have seen.

That initiative was split into initially five, but eventually six initiatives: Women in Cleantech; The Sky's the Limit, which was looking at green aviation fuel; Power Forward, which was looking at power grid; Crush-It!, which was looking at comminution, which is the crushing of rocks in a very energy-intensive industry; the Indigenous Off-diesel Initiative, which supported 15 indigenous communities in transitioning to clean energy; and Charging the Future, which was a made-in-Canada battery innovation program.

As you noted, we are just at the end of that program cycle. However, the initial results have been really impressive in terms of the leveraging we've been able to get from private-sector investment. In fact, I believe it's today that the winner of the final challenge, Crush-It!, which is the rock-crushing challenge, will be announced at PDAC.

The first of the challenges was announced in December, and Margaret Atwood revealed the winner, who was a Women in Cleantech recipient. There were a few members of that cohort who started their companies expressly to apply for this challenge. We found that by having a prize as opposed to a traditional grant or contribution, we attracted a new kind of player, and that's part of what we wanted to do with this program.

[Joanne Thompson, Liberal, St. John's East, NL]

Are there other clean-tech challenges planned? We're coming to the end of that cycle. Is there anything else that you hope to bring forward?

[Drew Leyburne]

The Impact Canada program is very active across government right now, with multiple departments, including, I think, the ISED portfolio, the Space Agency and a few others. We are just in the midst of looking at what the next generation of programming related to that might look like, because the program did officially sunset as of April 1 this year.

[Joanne Thompson, Liberal, St. John's East, NL]

If I lean back to another question that is similar to this, the Clean Growth Hub takes a whole-of-government approach to clean technology.

It's obviously co-chaired through your department, with 15 other member entities. How does the federal government ensure effective collaboration between the members of the Clean Growth Hub, and how can this collaboration be improved?

[Andrew Noseworthy]

Perhaps I could take that on, on behalf of the departments participating in the hub.

The hub is an interesting organization. It includes 17 departments and agencies. We collaborate in a number of ways. Pre-COVID, its most practical feature was that the majority of the departments working with the hub were physically located in one location and worked collaboratively on key projects. Since COVID, it's been a bit challenging to keep that culture moving among departments, but we have found that, in dealing with clients, the level of interaction on a day-to-day basis has been strong and consistent, notwithstanding the fact that we had to move most of our discussions to virtual ones.

The reality is, when you come to the hub, you don't just meet one department. You meet all the departments that might have any relative bearing on the project or proposal you bring forward. We certainly see ourselves, within ISED and NRCan, as the coordinators for all of that work bringing relevant folks together. Essentially, the hub is a mechanism that works as a “no wrong door” approach for all clean-technology companies seeking to gain access to the federal system. Our assessment, based on client feedback, is that it's worked relatively well. Approximately 2,300 clients have been through the hub to date.

[Joanne Thompson, Liberal, St. John's East, NL]

How effective would you say this whole-of-government approach is in reducing administrative burdens on clean-tech companies seeking opportunities with the federal government?