Evidence of meeting #51 for Environment and Sustainable Development in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was projects.
A recording is available from Parliament.
Liberal
Wade Grant Liberal Vancouver Quadra, BC
Thank you.
Ms. O'Reilly, based on international experience—I think you talked about international experience earlier—what are the most significant technical, financial and regulatory barriers preventing CCUS projects from being deployed at commercial scale in Canada?
Chief Operating Officer, International CCS Knowledge Centre
They're policy stability and certainty, which came up in the previous set of witnesses' responses.
When there's uncertainty in whether there's going to be value for emissions reduction going forward, it makes it incredibly challenging to make the scale of investment that's needed for carbon capture to move forward.
Liberal
Wade Grant Liberal Vancouver Quadra, BC
With respect to the tax credits I was talking about, Mr. Rainville, how effective are existing federal tax credits and other financial incentives at attracting private investment for CCUS, and what changes would improve their effectiveness?
Vice-President, Central Canada, Clean Prosperity
The number one complaint about the ITC regime generally has been the speed of access for a lot of proponents. There were a lot of delays, effectively, in terms of getting them off the ground, and that's what a lot of project proponents—for CCUS and others—were concerned about. Most of that has been remedied, and the ITCs are effectively in operation these days.
The big questions are the policy questions around whether the carbon pricing regime is going.... The benchmark, the backstop and all of these pieces are still to be settled in the next few months, and that's what a lot of projects are still waiting to hear about, frankly: what the carbon pricing regime coming out of the Alberta MOU is going to look like for the rest of the country.
Liberal
Wade Grant Liberal Vancouver Quadra, BC
I'll go back to you, Ms. O'Reilly.
What lessons can Canada learn from large-scale carbon capture projects about construction costs, operating performance, capture rates and the reliability of projected emissions and reductions?
Chief Operating Officer, International CCS Knowledge Centre
Do you mean from international projects?
I will say Canada has the third most operating projects in the world. We find that a lot can be learned, internationally, from Canadian projects.
The other two countries that are operating at a higher rate than Canada are the U.S. and the U.K. The U.S.'s projects are primarily around ethanol production and going to enhanced oil recovery. Sure, we could improve our ethanol capture within Canada. We are now adding an enhanced oil recovery to the ITCs. That is a lesson that we've moved forward with already.
Public confidence and investor confidence in the emissions reductions over the long term are really what's preventing Canada from having a lot more projects moving forward now.
Liberal
Wade Grant Liberal Vancouver Quadra, BC
I know I have more than four seconds, Madam Chair, but I'll cede the rest of my time.
Liberal
The Chair Liberal Shannon Miedema
Thank you, Mr. Grant.
Mr. Bonin, you have the floor for six minutes.
Bloc
Patrick Bonin Bloc Repentigny, QC
Madam Chair, I would be pleased to take my colleague's speaking time, if I may.
Ms. Levin, you talked about numbers. The Pathways project, which is meant to capture and sequester carbon, could potentially cost $30 billion. Obviously, half of it would be provided in the form of tax credits, so $15 billion would come from the federal government. Can you confirm that figure for us?
Also, I think you mentioned an additional $1 million per year for operating costs. Does this match the figures you have for the cost of the project?
Associate Director, National Climate, Environmental Defence Canada
There have been different estimates for the cost of Pathways. Originally, the companies said it was around $16.5 billion, but in testimonies and submissions to the House of Commons in recent years, they've said it's up to $30 billion. That is just the capital cost. These companies have never provided a breakdown, either publicly or in terms of their negotiations with the government, on what's actually included. There's the pipeline, which is an incredibly expensive part of it, but there are also several carbon capture facilities. It's an incredibly complicated project.
On the operating costs, which previous governments had refused to cover, it depends on the cost of the clean fuel credits. At current costs, that would be $500 million a year in operating costs. That's every year for 20 or 30 years. It'll likely be closer to $1 billion because of where those credits will be in a decade. One billion dollars each year plus the $30 billion equals around $60 billion for this project if it operates for 30 years.
Bloc
Patrick Bonin Bloc Repentigny, QC
Would you be able to provide us, perhaps in writing, with the calculations you just did? We would appreciate it.
Bloc
Patrick Bonin Bloc Repentigny, QC
Regarding this money, it is also important to keep in mind that there is a $43‑billion pipeline that will be paid for using public funds.
In your opinion, would this carbon capture project be sufficient to eliminate the additional emissions from the new Pacific Link pipeline, if it is implemented?
Associate Director, National Climate, Environmental Defence Canada
Absolutely not. The increased production that would be needed to fill a brand new, one-million-barrel pipeline is equivalent to 30 million tonnes per year. This project's best case—the companies' best case—is six million tonnes by 2035. None of these projects has ever hit its target rate.
That's to compensate now for increased production. When this project was initially brought forward by these companies five years ago to avoid regulations such as the emissions cap, it was to counter existing emissions, not future expanded emissions. This project is trying to clean the ocean with a thimble when it comes to the sector's emissions.
Bloc
Patrick Bonin Bloc Repentigny, QC
I think the IPCC compared ways to reduce emissions and combat climate change in terms of their cost and effectiveness.
How do these carbon capture and sequestration projects compare with other solutions for reducing greenhouse gases?
Associate Director, National Climate, Environmental Defence Canada
The IPCC has been quite clear—and I can send this over to the committee afterwards—that CCS is the least effective and most expensive mitigation option.
When we talk about CCS in oil and gas, which is mostly how we talk about CCS, these projects are stranded assets. This is an industry that we need to be moving away from. Equipping them with technology for 30 years is not a decarbonization decision.
In steel and cement—in which we don't see any CCS projects to date, despite decades of efforts—CCS would be a much more expensive mitigation option than, for example, using green hydrogen and electric arc furnaces in steel.
Bloc
Patrick Bonin Bloc Repentigny, QC
I want to come back to these infamous high costs.
Why are oil and gas companies not paying? Why is the government paying? Why is public funding needed to carry out these projects? Why are we going to give oil and gas companies billions of dollars yet again?
Associate Director, National Climate, Environmental Defence Canada
Oil and gas companies have been doing CCS for decades as an oil production strategy to get more out of their existing reservoirs. In the last 10 years, they've realized that they can position it as a climate strategy in order to get government money. That's what's happening now. These companies are well equipped to cover these costs themselves. If we had regulations that forced them to be responsible for their own pollution levels, they'd have to put their own money into this project. They don't actually want this project to happen. They're just using it as cover to avoid regulations and to greenwash more production. This year, in just one quarter, the profits of four of the five companies were $13.5 billion. They don't need Canadian handouts.
Bloc
Patrick Bonin Bloc Repentigny, QC
Do you think it's possible that, at the beginning of pipeline construction, the companies say they're going to implement carbon capture and sequestration, so they invest in it a little, but that, ultimately, once the pipeline is built, they completely drop the project's so-called green rationale and they do not implement carbon capture and sequestration?
Liberal
Associate Director, National Climate, Environmental Defence Canada
We've already seen that delinking happening with the timelines. The pipeline is on a much quicker timeline than the CCS project. We've also seen in the MOU the shrinking of the emissions reductions promised through this project. Certainly, that is why I continue to say that this is a greenwashing project.
Liberal
The Chair Liberal Shannon Miedema
Thank you very much.
Thank you, Mr. Bonin.
We'll now go to Mr. McLean for five minutes, please.
October 22nd, 2026 / 5:15 p.m.
Conservative
Greg McLean Conservative Calgary Centre, AB
Thank you.
I'm going to stick with Ms. Levin.
It's very interesting testimony. Thank you.
Ms. Levin, on November 4, 2025, the government introduced a budget in the House of Commons indicating that there would be no tax credits for enhanced oil recovery. Then, 23 days later, it signed a memorandum of understanding with the Government of Alberta—Alberta is where I live—saying that they were going to have a tax credit for enhanced oil recovery. In less than 23 days, and less than 10 days after passing that budget, the Government of Canada—the Prime Minister—completely reneged on that promise. Tell me how you feel about that as far as trust in government goes.
Associate Director, National Climate, Environmental Defence Canada
The reversal was of a long-standing approach to the CCUS ITC: that it would not be used for enhanced oil recovery. That was the promise made when this tax credit was first made. The reversal was also a violation of the government's existing policies. I think Canadians have a right to feel betrayed because this government is now subsidizing increased oil production.
Conservative
Greg McLean Conservative Calgary Centre, AB
Thank you.
As for the other green expenditures that the government's committed to, both in that budget and in the spring economic update, do you see it speaking out of two sides of its mouth in moving forward with oil and gas exploration, and making it more expensive at the same time, while it continues to fund green organizations around the world?