Good afternoon, Mr. Chair and members of the committee.
Thank you for the opportunity to take part in this study.
I'd like to begin by acknowledging that the land I'm on today is the traditional unceded territory of the Algonquin Anishinabe people.
Mr. Chair, I'd also like to mention that with me today virtually is Dave Schick, who is our vice-president for western Canada, innovation and regulatory affairs.
Our members provide 95% of Canada's gasoline, diesel, marine and aviation fuels, or over 100 billion litres of liquid transportation fuels per year. They also make over 25% of the biofuels that we use in Canada.
Two years ago we released “Driving to 2050”, which spoke to the contribution our sector could make to Canada's climate goals. We believe all transportation energy alternatives will be needed to achieve net zero, and low-carbon fuels have the potential to cut transportation emissions in half by 2050.
Maximizing this pathway is also the key to maintaining energy reliability, security and affordability as we continue the diverse bioenergy mix. Also, our members are at the forefront of innovating large-scale biofuel projects, leveraging existing energy infrastructure and creating economic benefits through the fuel value chain, from agriculture and forestry feedstock, from suppliers to retail.
Increasing domestic production of biofuels will also reduce our reliance on imports, but we have a long way to go. Canada is already a net importer of biofuels, and policies such as the clean fuel regulations will increase this trend. Why is that?
It is because the North American fuel market is integrated, so Canada competes with the U.S. for investment. In the U.S., long-standing programs have built a robust biofuels industry, and the recent Inflation Reduction Act doubled down with new measures, including a production tax credit.
Comparable Canadian incentives are needed now to level the playing field for capital investment. That's why we're recommending a new 10-year low-carbon fuel production tax credit for budget 2023. Like the Quebec credit, it would be tied to carbon intensity, with the highest reductions receiving a 34¢-per-litre credit, equivalent to the U.S. production tax credit of $1 per gallon, and it would apply to all low-carbon fuels produced in Canada.
Government can also play a role in attracting investments through fostering a stable, predictable regulatory environment; promoting alignment of federal and provincial policies; and having paced regulations and timely permitting.
In closing, there's a tremendous opportunity for low-carbon liquid fuels to be produced right here in Canada to the benefit of our environment, our economy and our energy security. We urge the committee to support our proposals.
Thank you, Mr. Chair.