Environment Committee on Oct. 18th, 2022

[The Chair, Liberal, Francis Scarpaleggia]

Good afternoon, colleagues. I call this meeting to order.

We're welcoming some new members today. On the Conservative side we have Mr. Kurek. Mr. Dreeshen is here in replacement, and then he's going to work on the natural resources committee. We have Mr. McLean with us, who has been here before, and Mr. Deltell, who is a member of the committee. He hasn't arrived yet, but he'll be with us as a permanent member of the committee.

Before we start with the witnesses today I would like to ask for unanimous consent to adopt the subcommittee report, which you've seen and which came out of the last meeting of the steering committee.

[Lloyd Longfield, Liberal, Guelph, ON]

It's a fine report.

[The Chair, Liberal, Francis Scarpaleggia]

That's adopted.

I thought you were going to raise some objection, Lloyd.

Today we're continuing with our very interesting clean tech study.

On the first panel we have, from the Canadian Nuclear Association, John Gorman, president and chief executive officer. From Clean Energy Canada we have Oliver James Sheldrick, program manager, clean economy. From the Institute for Hydrogen Research we have Professor Bruno Pollet. From Iron and Earth we have executive director, Luisa Da Silva.

Each panellist has three minutes to make opening statements. We'll start with Mr. Gorman, who is online.

You have three minutes. Unfortunately, I'm going to have to be pretty strict on the time. If I interrupt you, don't take it personally. It's just so we can land on time at the end. Thank you.

Mr. Gorman, go ahead.

[John Gorman, President and Chief Executive Officer, Canadian Nuclear Association]

Thank you.

Chair, members of the committee, thank you for the opportunity to speak with you today on behalf of the Canadian nuclear industry. Reaching Canada's 2050 net-zero target is going to require a paradigm shift in how we approach the production, distribution, and use of energy in Canada. There are no easy solutions to this problem, and the scale of the challenge is not widely understood or accepted.

What is clear, however, is that meeting this challenge will require the more rapid deployment of all available clean energy technologies, such as wind, water, solar, conventional and nuclear, as well as the dramatic scaling up of emerging technologies such as hydrogen, small modular reactors, marine renewables and long-term storage.

In recognition of the massive challenge and the need to deploy both existing and emerging clean technology at speed and scale, the national associations representing all the technologies I've referenced have formed formal alliances and are jointly working together on policy positions to inform strong decision-making by this government.

Nuclear power is increasingly being recognized as part of the solution in our collective climate challenge and domestic energy security needs. Canada has been a leader in the research of the nuclear industry at home and globally. We are delivering refurbishment of our existing nuclear fleet in Ontario ahead of time and under budget. Small modular reactor projects are being actively planned and executed in Ontario, Saskatchewan, and New Brunswick, and our uranium mining sector remains critical to the world's nuclear industry. However, there's much to be done to enable nuclear power to play the role that is required for Canada to meet its targets.

As this committee studies and considers the required policies to enhance Canada's clean energy sector, we recommend that Canada urgently require the development of a clear clean energy industrial strategy. The strategy should include all clean energy technologies, defined as technologies that do not emit greenhouse gases. As we outlined in our recent budget submission, nuclear technologies must explicitly and purposely be included in all efforts to address the climate crisis and energy security needs.

To enable Canada to meet its net-zero targets, we recommend the following specific actions to support the industry. We recommend the inclusion of nuclear and clean-tech tax credits programs, a clear and predictable process in the Impact Assessment Act to ensure timely deployment, support for uranium and CANDU nuclear technology exports to key countries such as Romania and South Korea, as well as support for the SMR initiatives in key markets such as Poland and Estonia. We recommend the recognition of uranium and other minerals that are used in the nuclear industry as critical to the clean energy economy in the clean mineral strategy; financial mechanisms to support the development and deployment of nuclear energy and technologies; modernizing and aligning regulations, codes and standards to facilitate technology development deployment and export; and recognition of the development of hydrogen through clean energy such as nuclear as preferable to greenhouse gas-emitting technologies.

Through implementation of these support measures, Canada will be putting nuclear on a level playing field with the other low-carbon clean technologies.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Mr. Gorman.

I'd like to remind all the witnesses who are online to make sure that the headset microphone is high enough for the interpreters to hear them properly.

I should also have mentioned that, pursuant to the routine motion adopted by the committee on this subject, all witnesses have completed their technical tests.

Mr. Sheldrick, you now have the floor for three minutes.

[Oliver James Sheldrick, Program Manager, Clean Economy, Clean Energy Canada]

Good afternoon, Mr. Chair and members of the committee. My name is Ollie Sheldrick, and I am the program manager for our clean economy work at Clean Energy Canada, a climate and clean energy think tank at Simon Fraser University. I am based in Toronto, Ontario.

I'll be speaking today on how Canada can position itself to innovate and invest in the clean technologies required to reach its net-zero goals, and in turn position itself as a global exporter of the materials and products that will fuel the global clean transition.

Modelling done by Clean Energy Canada has found that between 2030 and 2050, jobs in Canada’s clean energy sector are projected to grow by almost 50%. By 2030, Canada’s EV battery supply chain could support nearly 250,000 direct and indirect jobs and add $48 billion to the Canadian economy. Fully implementing green procurement policies, or “buy clean”, in Canada could unlock up to 14 million tonnes of direct and indirect emissions reductions and support a growing green building materials sector that could reach $50 billion by 2030.

However, Canada faces three challenges in order to achieve this: first, to support the existing clean-tech industry by scaling the market for current technologies; second, to invest in innovation to ready the next generation of solutions; and third, to ensure that Canada capitalizes on its competitive advantages.

In order to address the first challenge, Canada must increase its focus on driving market demand. The government can play its part here through clean procurement practices, or “buy clean”, as one of the largest customers for products such as construction materials—for example, buying over one-third of all of the steel in Canada every year. The government has a strong influence and can spur widespread adoption and increased demand for low-carbon products. Due to our low-emissions electricity grid, many Canadian-made products are already lower carbon than our international alternatives. The government is moving on this, but our ambition and pace must be increased.

For future clean technologies that will drive our near-zero economy, we must continue to invest in projects that demonstrate what's possible. The International Energy Agency has found that while we have the technology to get the emissions reductions by 2030, to get to our 2050 goals almost half those reductions need to come from technologies that are currently at the demonstration or prototype phase.

Canada has the potential to be a green-energy and green-technology superpower. We have one of the lowest-emissions grids in the world—it is 83% clean—along with abundant natural resources and critical minerals, vast freshwater reserves and geology for carbon sequestration, and a highly skilled workforce. These are the ingredients for cornerstone clean technologies such as green hydrogen, batteries and CCUS. We must harness these opportunities in the following ways: first, by building a market for low-carbon goods in Canada to support domestic producers and reduce emissions; second, by continuing to fund innovation, and third, by building up Canada's competitive advantage as the first choice for clean-tech development.

With these actions, Canada can seize the opportunity of the clean economy and meet our net-zero 2050 goals.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Professor Pollet, you now have the floor for three minutes.

[Prof. Bruno G. Pollet, Deputy Director and Director, Green Hydrogen Laboratory, Université du Québec à Trois-Rivières, Institute for Hydrogen Research]

Thank you for the opportunity to present and interact with you this afternoon.

I have been working in the hydrogen energy sector for more than 20 years, both in academia and in industry in the UK, Japan, South Africa, Norway and now Canada.

I strongly believe that hydrogen will contribute to the ambitious decarbonization goal of 100% by 2050. I would like to emphasize, though, that hydrogen is not a silver bullet for decarbonization in all sectors. It is part of a portfolio of several low-carbon energy technologies.

For now, the primary focus should be on targeting industries and sectors that are difficult to decarbonize—the so-called “no regret sectors”—especially the energy-emitting and carbon-emitting intensive industries and heavy-duty transport.

However, we are currently facing many challenges.

First, we must accelerate the deployment and capacity of low-carbon-intensity hydrogen technologies and renewable energy systems, and work internationally and with provinces and municipalities to accelerate the development of clean hydrogen codes and standards.

Second, we must engage with stakeholders, including indigenous communities, and quickly implement community-led clean energy projects.

Third, we need to innovate in low-cost and highly efficient hydrogen production technologies with better integration with renewable energy systems and better hydrogen storage and transport systems.

Fourth, we must focus on local strategic minerals and sustainable materials for clean energy for the heating, transport and industrial sectors, as well as innovations in recycling.

Fifth, we must implement policy and funding to support low-cost, clean hydrogen production in line with the U.S. Inflation Reduction Act. This would enable Canadian manufacturers and project developers to compete for investment, develop and retain human capital, and create jobs.

Sixth, we need to attract international experts and put in place a faster and much more efficient immigration process.

Seventh, we must also invest in extensive R and D programs and state-of-the-art R and D infrastructure to validate the technology and to generate innovation, IP and new industries. We must also invest in training programs to train the next generations of hydrogen and clean energy engineers, scientists, technologists and economists.

Canada is really blessed with vast territories, an abundance of water, minerals and natural resources, abundant renewable electricity generation and, of course, natural oil and gas. These are perfect ingredients for building a strong clean energy value chain and economy from mineral extraction to clean energy generation. However, Canada must act very rapidly to deploy commercially available clean energy technologies, accelerate the development and deployment of emerging technologies, and develop innovative solutions, while ensuring access to clean, affordable and modern energy services to all Canadians, including indigenous communities.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you very much, Professor Pollet.

We'll go now to Ms. Da Silva, executive director of Iron and Earth, for three minutes, please.

[Luisa Da Silva, Executive Director, Iron and Earth]

Thank you, esteemed committee members, for inviting Iron and Earth here today.

In 2021, 42% of Canada's greenhouse gases came from burning fossil fuels for transportation, agriculture, and building or water heating. In Canada's 2022 budget, the two big-ticket items are EVs and CCUS, with CCUS receiving almost four times more funding than clean-electricity initiatives.

Despite federal and provincial governments providing an estimated $5.8 billion for CCUS projects since 2000, CCUS captures only 0.05% of Canada's greenhouse gases. Canada's old energy systems are too centralized and not community focused. What Canada needs to do, instead, is simultaneously improve worker well-being and community resilience toward climate change through green housing initiatives, retrofits, community-distributed energy projects, and zero-emissions mobility.

Iron and Earth addresses these goals. Our programs have national reach, from traditional fossil fuel communities in Alberta to remote diesel-dependent communities in northern Labrador. Our programs are focused on community capacity and local, sustainable job creation, which empower workers to build and implement climate solutions.

The growth of a skills base to meet this challenge is critical, but it is a question of the distribution of these skills closer to the need and closer to home, and of them being available across the breadth of the nation. Currently, in spite of having the baseline skills and a desire to work in the net-zero economy, fossil fuel workers and indigenous communities lack opportunities to play a leading role in building the policy and infrastructure required to reach global climate targets.

The United States recently announced the Inflation Reduction Act, whereby, of the $158 billion going toward clean energy solutions, 48% goes toward home energy efficiencies and community resiliencies, whereas only 2.3% of that budget goes toward CCUS.

The solutions Canada needs in the energy transition exist here at home. I agree with my fellow speakers: We are rich in natural resources. We have solar, wind and geothermal. You name it, Canada has it. With a looming recession and Canadians worried about inflation and job stability, Canada should make investments that create projects across Canadian communities. Increasing local jobs and economies prevents a Canadian energy worker diaspora flying across the nation to work and builds resilience against the boom-bust cycles associated with the oil and gas export economy.

Canadians who have worked in the energy sector are mobile workers. Not only have we travelled across Canada for employment, but we have also used our highly sought-after skills internationally. Canada needs to create opportunities within its borders for these skilled energy workers to upskill to a clean economy, or it runs the very real risk of a clean energy skills drain, leaving the nation bereft of skilled workers and left behind in the energy transition.

Thank you.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you very much.

We started late, but we have to finish on time. Often, when we start late, we go a little over time, but this time we can't, apparently. I'm going to have to improvise a bit and change the allotted time for questions. We'll see how it goes. For the first round, we'll do five minutes instead of six, and we'll see where that leaves us.

We'll start with Monsieur Deltell.

Welcome to the committee, Mr. Deltell. You have five minutes.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Thank you very much, Mr. Chair.

Good afternoon, ladies and gentlemen.

I'm very happy to be here. Thank you for welcoming me to the committee.

To those of you who aren't here, welcome to your House of Commons.

I'd like to address two points, and I'll start with Mr. Gorman.

Mr. Gorman, you talked a lot about the nuclear industry.

By the way, there is an interesting report in La Presse, le 10 octobre, which talks about this file and the Quebec perspective. It is quite interesting.

You talked about the CANDU reactor. The technology for that reactor dates back to the 1970s, but it would seem that the entire global nuclear industry is more focused on small modular reactors, or SMRs.

I'd like your comments on that.

[John Gorman]

You're right. The CANDU technology—a Canadian technology—matured in the seventies and was exported to seven nations around the world. We continue to do refurbishment on those, and we have new build opportunities in places like Romania. What's important to know is that through the work we're doing around refurbishment and the continual work we do with conventional CANDU technology, there is constant improvement in the modernization and digitalization of those assets. The CANDU technology continues to evolve, and it's still world class.

You're correct that there's a lot of emphasis on small modular reactors, and Canada is a world leader. We have technologies being deployed now, as you know, in Ontario. The GE Hitachi model will be connected to the electricity grid by 2028, and we will see that same technology rolled out in Saskatchewan and Ontario, in multiple units, as well as a number of other advanced technologies coming out. Canada needs to maintain that nuclear leadership.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Thank you so much, Mr. Gorman.

What I understand from your testimony is that we can do both the SMR and the CANDU.

I have two questions for Prof. Pollet from the Université du Québec à Trois‑Rivières.

Good afternoon, Prof. Pollet.

You gave us a list of recommendations during your presentation. Thank you for that, and I'd like to acknowledge your thoroughness in that regard. In the fifth point of your opening remarks, you talk about the Inflation Reduction Act that was passed in the United States.

What concerns do you think Canadians should have about this legislation, which is much talked about when it comes to green energy?

[Prof. Bruno G. Pollet]

The United States is a pretty attractive place to invest. It offers a tax credit of up to $3 per kilogram of hydrogen. That makes the business model very attractive to them if they want to take on a big project or if they want to expand.

Some Canadian manufacturers who are interested in fuel cells and, of course, users say that they will really miss the boat if they don't have access to a financial mechanism, similar to the one adopted in the U.S. That's actually a big concern.

In addition, we could also lose labour rather than attract it to Canada. This is a very big issue in the hydrogen sector, where there is a real shortage of skilled workers. It's a big concern in this sector.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

In your last recommendation, you say that we need to act quickly and accelerate access to clean energy.

Can you give us some examples of what the government should and must do?

[Prof. Bruno G. Pollet]

Yes, I can certainly do that.

I'm thinking in particular of the implementation of a renewable energy system in very strategic provinces. If we really want to produce this green hydrogen, as we promised our German friends, we should really look at clean technologies and the capacity of wind turbines, solar farms, and so on.

The availability of hydroelectricity is also very important. Let's not forget that 85% of our electricity is very clean. We can really use that and build, implement this system—

[The Chair, Liberal, Francis Scarpaleggia]

Unfortunately, I have to interrupt you, Prof. Pollet.

Ms. Taylor Roy, you now have five minutes.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you, Mr. Chair.

Thank you to our witnesses for being here, and being here in person. Welcome to the new members of our committee.

This is a very diverse and interesting panel. I have so many questions I could ask, but I'd like to hear from all of you briefly on what you feel are the best ways of helping us move forward under a number of criteria.

One is proven technologies—technologies that we're quite sure will work and get us to where we need to go, that have the largest environmental impact in trying to meet our goals.

Also, I think it was you, Mr. Sheldrick, who talked about building a market for low-carbon goods. It's incorporating that, and our ability to export, because as we know we need to help build the private sector. The government cannot do all of this on its own. It cannot possibly fund this. We're all concerned with government expenditures.

Two additional things are leveraging private sector resources to do this, as well as ensuring that this is a fair and just transition. There are lots of goals we're trying to reach, and we're trying to reach them quickly.

You're all here with different perspectives. I'm wondering what your suggestion would be for one or two things that you believe meet those criteria—that it's proven, has a huge impact, is fair and just, can leverage private sector resources, and has a low-carbon market out there, or a market we can create.

Perhaps we can start with Ms. Da Silva, since she's in the room.

[Luisa Da Silva]

Absolutely. Thank you.

On proven technologies that are on the ground and would be able to be implemented right away, what come to mind are solar and wind. We have plenty of natural resources here in Canada. It would also benefit many of the communities that right now are completely diesel-dependent and have no other options. It's also part of reconciliation for indigenous communities being able to give them energy sovereignty.

This is something that the private sector is very much wanting to get involved in. The latest numbers I saw were 695,000 people working in clean energy. Those numbers are growing. In 2020 alone they grew by 5%. The demand is definitely there. The private sector is moving into that area to make investments, and where investments come, the jobs will follow. It is a lucrative industry to move into. I think those are the obvious examples.

In terms of the technologies we are still sorting out, we have a lot of promise in certain areas, like hydrogen, for example. It would, for example, help to save on electric vehicles, because people who live in high-rise buildings wouldn't be able to charge their electric vehicles, but if they have a hydrogen-powered car, they would be able to fill that up in the same amount of time as a fossil fuel vehicle.

We need to explore those technologies more, and we also need to get started with the ones that are already proven.

Thank you.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you very much.

Mr. Sheldrick.

[Oliver James Sheldrick]

Thank you.

On the point of government spending and creating markets, something like “buy clean”...although I understand your point about not being concerned about government spending.... A lot of this is our ability to leverage spending that is already happening in other spaces—spending on infrastructure, building bridges, building roads. We're going to be spending this money. If you bring in that “buy clean” element, which through a lot of analysis is adding only a 1% to 2% increase to the overall project costs, you could be buying significant volumes of cleaner steel and cleaner cement. Once you start building that market out and showing that there's a demand, a clear buyer, those products become more mainstream. Then the private sector comes in and starts buying those at greater volumes in and of itself, because it becomes the default in the market.

There's an opportunity for the government to leverage existing spending and to also leverage private industry to expand its own use of clean materials. As I mentioned, there's also a real clear benefit to Canada's producers. As we mentioned in multiple places, our cleaner grid means we're already among some of the lowest-carbon producers of lots of these materials anyway. There's a clear advantage there to supporting Canadian businesses.

On the point—

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

I'm sorry to interrupt, but my time is running out.

Mr. Pollet, can we go to you next?

[Prof. Bruno G. Pollet]

Yes, I completely agree with Mr. Sheldrick's comments on this point here. The most important thing, actually, is to create that market. We have customers out there who really want to produce the green products, but what they're always asking is where they can get access to this green hydrogen. This is really the bottom line here. Again, it's really to try to increase the capacity.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Prof. Pollet.

As you can hear, the bells are ringing.

I'd ask the committee's permission to continue until there are five minutes left before the vote.