Environment Committee on Oct. 6th, 2025

[Dave Sawyer]

It's a good question.

I think of targets as a North Star to guide the policy focus and to guide action. Most provinces have not met their targets. Because of its caps in place, Quebec is looking like it's tracking towards its target. For me, the question is really whether we have the policy architecture in place to tune emissions to get there, and repealing policy does not get you there. Every tonne avoided is a tonne of avoided damages now and in the future.

[Eric St-Pierre, Liberal, Honoré-Mercier, QC]

Thank you.

Mr. Kabbara, in your latest report, “Building the Future Economy”, from September, you've identified key opportunities such as electric vehicles, critical minerals, clean power, modular housing and defence.

Could some of these priority opportunities get us on track towards meeting our 2030 targets and/or getting to net zero by 2050?

[Moe Kabbara]

Ultimately, they can definitely help us get to our net zero by 2050 target in terms of reinforcing the types of products that would reduce emissions.

In terms of the 2030 target, I would agree with Dave's assessment, that it's going to be pretty much impossible to meet at this point. It's still rolling in the right direction, relatively speaking, in terms of building the future system, and I believe that those actions will result in that.

[Eric St-Pierre, Liberal, Honoré-Mercier, QC]

Perfect.

I'll move on to Dr. Exner-Pirot.

How nice to meet you again. I think I was introducing you at the Banff Forum about a year ago. It's so nice to see you again, virtually.

Imperial Oil, which last year increased its dividend by 20%, announced last week the layoff of 900 or 1,000 jobs in Calgary. You were cited on September 30 in a CBC article where you spoke about global trends in the oil and gas sector. You said, “This is obviously extremely painful for Calgary and extremely painful for Canada, but this is part of a much broader…series of layoffs”.

Can you explain what you meant by “a broader series of layoffs”?

[Dr. Heather Exner-Pirot]

Yes. Imperial, in particular, is 70% owned by ExxonMobil, which obviously is a huge American oil company. They announced a couple of thousand layoffs around the world. We are seeing this not just in the Canadian oil patch; you're seeing it with BP, Chevron and ConocoPhillips. There are layoffs in the oil and gas sector, because prices are very low and it's an extremely competitive environment. The reason prices are very low is that OPEC has been flooding the market, probably in cahoots with the Trump administration, to keep inflation down. Everyone is trying to cut the fat and survive in this market, and if you can, grow market share if you're a low-cost producer, as the Canadian oil sands are now.

The Imperial cuts, in particular, were just a reflection of those global structures and what ExxonMobil is doing with its own business. The opportunity is to grow the economy in other ways, even as particular companies try to slim down.

[Eric St-Pierre, Liberal, Honoré-Mercier, QC]

Thank you.

As we know, EV sales are growing exponentially. In 2024 about 20% of new cars sold worldwide were electric. The IEA, the International Energy Agency, says that about 25% of new car sales this year will be electric and they're projecting 40% of new car sales to be electric by 2030.

If global layoffs in the oil and gas sector are happening, does this have to do with the gluts of supply or reduced demand for oil, and what impact would this have in Canada?

[Dr. Heather Exner-Pirot]

It's a good question.

Actually, we've never seen higher global demand for oil than we're seeing today. It's really about Saudi production and using up all their spare capacity to push prices down and gain market share. I don't think EV sales are growing exponentially—maybe incrementally. If you take out Chinese numbers and do American, North American or European numbers, obviously, the situation is a lot more grim for EVs. You don't have to take my word for it. This is what the EV makers and the Canadian car manufacturers are saying themselves. That is, the EV mandate that we have is not helping them, it is making them less competitive, there is no market for it, and soon it's going to hit the dealerships.

I'll stop there.

[The Chair, Liberal, Angelo Iacono]

Thank you.

Mr. Bonin, you have the floor for two and a half minutes.

[Patrick Bonin, Bloc, Repentigny, QC]

Thank you, Mr. Chair.

Mr. Sawyer, you've presented us with an inventory of emissions. You also said that there's been no reduction in oil and gas emissions intensity over the last few years.

Is that true?

[Dave Sawyer]

Yes, since 2017, the oil sands emissions intensity has flattened. There have been massive changes from 2005, but really in the last five years it has flatlined.

As production increases, you're getting a larger jump in emissions.

[Patrick Bonin, Bloc, Repentigny, QC]

The Prime Minister mentioned green oil. Do you know what he's talking about?

Do you think it's possible right now to get green oil from oil sands?

[Dave Sawyer]

All oil and gas and, as Moe indicated, all emissions should really be controlled or at least see some sort of price signal or have some sort of regulation that balances affordability and competitiveness and sends a signal to manage carbon in the long term. That's the long-term signal: climate damages, competitiveness on the global stage, border carbon adjustments—all these things.

We need signals to change behaviour so we all change our technology, and when a new piece of equipment comes up or a new car comes up, we flip out into something else.

[Patrick Bonin, Bloc, Repentigny, QC]

Mr. Kabbara, in terms of economic leadership, is Canada well positioned to make the energy transition, as compared with others, like Europe or China?

[Moe Kabbara]

Yes, and this is why we've been very vocal on this. We believe that Canada has a tremendous opportunity in the current moment. We are one of the only countries in the world that has access to essentially all of the critical minerals required for key elements of products that are going to be required in the future. We also have the know-how and the skills to convert those critical minerals and materials into value-added products. We have access to clean and abundant electricity that we can also grow. We have access to world-class labour and talent.

I believe we're very well positioned if we, as I mentioned earlier, pick a few areas of priorities and focus on them.

[Patrick Bonin, Bloc, Repentigny, QC]

Could Canada be more competitive, for example by reducing emissions in the oil and gas sector and investing in the energy transition, research, innovation and green industries?

[Moe Kabbara]

This is why I'm emphasizing that there's a lot of conversation around that 30% of the pie. We're not really focused on that particularly, which is not to say it's not important, but there's still 70% that we need to focus on. In terms of those investments, whether it's building EVs here or batteries here that can lead to a reduction in transportation emissions, that's something we're focused on.

[The Chair, Liberal, Angelo Iacono]

Thank you very much.

Ms. Anstey, the floor is yours for five minutes.

[Carol Anstey, Conservative, Long Range Mountains, NL]

Thank you.

It's nice to see you, Dr. Exner-Pirot.

While we're talking about emissions, I wanted to ask a couple of questions about this pivot that we've seen into green hydrogen. The German chancellor visited in 2022. He was actually in my riding in Newfoundland and Labrador, and he sought LNG but was told there was no business case for leaning into this pivot.

I'm curious where these current hydrogen projects stand and how Canada's decision to prioritize green hydrogen over LNG affects our credibility as a reliable energy partner.

[Dr. Heather Exner-Pirot]

It's a good question.

It was obviously infamous. The German chancellor and vice-chancellor came in the middle of their own energy crisis as they were building their own LNG import terminals and trying to find an alternative to the Russian supply but also to some of their Middle Eastern providers. They wanted some redundancy in supply and to not be all dependent on the United States either. Of course, Canada has the resources of an energy superpower but was not able to offer anything to our German colleagues at that time, so there wasn't much of a business case, and we promised instead green hydrogen.

Actually, that green hydrogen was supposed to be delivered in 2025. The MOU or commitment to Chancellor Scholz said that we'd be delivering in 2025. Obviously, we're nowhere near production. The bottom has fallen out of that market. There are no buyers in Germany. In fact, there are cheaper sources they could buy green hydrogen from in and around Europe, so we haven't seen that. This goes to the heart of where we should be putting our efforts and where we should be positioning our communities to thrive in the future. We have to think about doing things that have real investment and real capital instead of focusing on hopes of some technologies coming out in the future.

[Carol Anstey, Conservative, Long Range Mountains, NL]

Further to that, what risks come to our energy sector from over-prioritizing a technology that may not yet be market-ready?

[Dr. Heather Exner-Pirot]

Part of it was the outlay of Canadian taxpayer dollars into something that didn't get a return on investment. Part of it is also the opportunity cost, though. I think people need to appreciate, when you're putting all of your human, financial and political capital into untested technologies, that it means that you're not focusing on building economies, businesses, farms and entrepreneurs on the other side of the ledger that might have a bit more sustainability.

Of course, Newfoundland has tremendous oil and gas reserves. That should be a bigger boon for the province than it is, but obviously the emissions cap has hampered Newfoundland maybe the most, because we already have production in Alberta, Saskatchewan and B.C., so it's really growing the new production and investing in new fields that is the most unattractive with the emissions cap. That means that the new developments, the new fields in Newfoundland and Atlantic offshore, are the last ones that will get funding in this environment.

[Carol Anstey, Conservative, Long Range Mountains, NL]

Thank you.

In that vein of governments picking, the pivot to green hydrogen and now Bill C-5, as you've talked about, giving the government the ability to pick winners and losers under this legislation, how might this deter other projects from moving forward or growing in investment in that sort of environment?

[Dr. Heather Exner-Pirot]

The main thing is that all of the things that Bill C-5 will allow, a handful of projects to get away from the some of the bad legislation and regulatory framework, still exist for everybody else. Everyone is still operating with those bad regulatory frameworks that hamper investment. That's one thing. They still have the same system that we've had to deal with for 10 years, which hasn't produced good results.

Then you also have competition. If a particular copper mine, uranium mine or project gets picked by the Major Projects Office, what about their competitor, who is seeking the same capital from the same sources but isn't on this fast-track list? It doesn't seem to be very fair for anybody.

Again, the strategy should not be choosing five or 10 that the government thinks will be successful. The government should be setting a framework, an environmental landscape, that attracts dozens—hundreds, even—of projects to want to come to Canada and put their money into our economy.

[Carol Anstey, Conservative, Long Range Mountains, NL]

You specifically mentioned our oil and gas offshore sector in Newfoundland and Labrador. What I hear, of course, is that once the Bay du Nord project is up and running, that will squeeze out any future investment. Could you just briefly speak to that?

[The Chair, Liberal, Angelo Iacono]

I'm sorry about that. The time is up. You'll maybe be able to provide that response to another question.

Thank you.

Next is Mr. Fanjoy for five minutes.