Environment Committee on Oct. 23rd, 2025

[The Chair, Liberal, Angelo Iacono]

I call the meeting back to order.

The committee is resuming its study on the effectiveness, potential improvements and capability of Canada's 2030 emissions reduction plan.

This afternoon, the committee is meeting with the following witnesses.

From the Government of Alberta, we have Premier Danielle Smith joining us by video conference. Welcome.

From Net Zero Industry, we have Christopher Bataille, principal investigator. From New Economy Canada, we have Merran Smith, president, joining us by video conference.

Witnesses, you'll see me lift this sign when your time is almost up. You'll have a minute left. Once I lift this sign, your time is up and we will stop so that we can go to the next speaker.

Each witness has five minutes for their opening remarks.

We will start with Premier Danielle Smith. You have up to five minutes. Thank you.

[The Honourable Danielle Smith, Premier of Alberta, Government of Alberta]

Thank you so much, Chair Iacono and members of the committee, for inviting me to address your Standing Committee on Environment and Sustainable Development today.

I am pleased to be here to provide the committee with specific details and an update on Alberta's “Emissions Reduction and Energy Development Plan”. Plenty has changed since my government drafted this plan and released it in 2023, and I think it's important to outline how we are adapting to the new global geopolitical realities, energy security, affordability concerns and economic challenges facing all Canadians today.

Alberta's emissions reduction and energy development plan was designed to be pragmatic and achievable and to ensure that Albertans have access to affordable and reliable energy, whether it be for commercial businesses or for individuals. Our plan is geared to a 2050 carbon-neutral economy.

Alberta is a global leader in emissions reductions and has made major progress on several fronts. We were the first province to adopt a carbon price in 2007 and what we call our TIER program, which is an industrial program that is renowned for supporting innovation and research in emissions reduction in many sectors, including oil and gas. Alberta achieved methane targets based on 2014 to 2023 levels three years ahead of requirements, and industry continues to make investments to lower our methane emissions. It is not known to many that Alberta also phased out coal-fired electricity in 2024, well ahead of schedule.

Alberta's oil sands have reduced emissions per barrel by 25% since 2013, and we have kept our overall emissions flat while increasing production. This has been achieved by reducing our natural gas use and enhancing steam-to-oil ratios and new solvent-assisted extraction. All of these are lowering the overall intensity per barrel.

As Canada's energy leader, we are on a path to double oil production and ensure that Canada can attract capital back to Canada, significantly enhance GDP, reduce our dependence on the United States and create hundreds of thousands of jobs while diversifying our trade markets globally.

Alberta's endowment of natural resources is greater than that of many of the G7 countries, even if you combine some of them. We just finished a review of the province's resources, and our reserves now amount to 1.8 trillion barrels of oil, of which 167 billion are recoverable with today's technology. We also have 1.36 quadrillion cubic feet of gas, of which 144 trillion cubic feet are recoverable with today's technology.

Canada and Alberta can be a global energy superpower. We can unleash massive new investment in data centres, infrastructure and petrochemical development. Oil and gas can deliver tens or even hundreds of billions of dollars in royalties and taxes, and thousands of good-paying jobs that support wealth generation across all provinces. We're advancing our ambitions with a new oil pipeline and the necessary emissions reduction from our oil sands producers that lead the Pathways initiative.

There is one problem. We need to decouple and eliminate a host of bad laws introduced by the Trudeau government over the past 10 years. The most egregious of those investment killers include the oil and gas emissions cap, the unconstitutional Bill C-69, which we call the no new pipelines bill; Bill C-48, the oil tanker ban; and the clean electricity regulations, which penalize Alberta's power sector, will drive up energy prices for Canadians and make natural gas a disadvantaged feed stock.

These regulations and draft policies have resulted in economic stagnation and one of the single greatest acts of self-harm in Canada's economic history. As a result of these policies—and there are more than the ones I listed—in the last 120 days, Canadian-based companies have announced more than $20 billion in capital investment in the United States.

Canada can be a global energy powerhouse. We can provide our people and the world with reliable energy and eliminate energy poverty for billions of people. We can act, and we must act, to enable investments in every major resource sector and deliver revenues and economic activity in support of this great country.

Canadians have been clear in recent polling. They endorse a new pipeline to export our oil to Asia. We need the federal government to do the right thing and eliminate these bad laws.

Although I'm pleased that we've seen progress with the pause of the gas car ban and the removal of the consumer carbon tax, there is still much more to do. Our country's economic viability is hanging in the balance, given the forthcoming changes in manufacturing and steel and aluminum and a very difficult CUSMA renegotiation. We must unleash our energy strengths as a country, and Alberta stands ready if Ottawa works with us to do the right thing.

Thank you. I look forward to answering your questions.

[The Chair, Liberal, Angelo Iacono]

Thank you, Premier Smith.

Now the floor is for Mr. Christopher Bataille, for five minutes.

[Christopher Bataille, Principal Investigator, Net Zero Industry]

Thank you very much, Chair.

This is going to run in a slightly different direction.

Canada’s GHG inventory provides a clear historical record of the size and direction of our sectoral emissions. While our population and economy have been growing, power production emissions have fallen steadily, building and transport emissions have been roughly flat, and non-oil and gas industry emissions are falling slowly, while emissions from the oil and gas sector have, over the course of my career, grown enough to offset almost all of the reductions in other sectors. This pattern has been consistent for the last 30 years or so.

In short, we are going too slow but in the right direction in most sectors, and very quickly in the wrong direction in oil and gas. These dynamics mean we will almost certainly not hit our 2030 targets, and will probably not hit our 2050 Paris Agreement goals without significant changes. Our existing policies are simply too weak or missing in some sectors. How do we address this in a politically realistic way?

To start, in most cases for household, institutional, transport and light industrial emissions, we have options to cleanly electrify the sector, often with some organizational and infrastructure changes. Usually, this means higher upfront costs and lower costs over time, if we make enough clean electricity cost-effectively, with overall savings. Electric vehicles, building efficiency, heat pumps and electric appliances are all examples.

Because households often make decisions on the basis of factors other than cost, we have seen that carbon pricing has not proved highly effective in that sector. We may be better off regulating these sectors based on performance, for example, with tradable overcompliance credits for supplying firms, and providing early, limited and falling subsidies to support early demand and supply.

However, heavy industry and large businesses are not easily regulated. Every industrial sector process is different, and almost every industrial facility is tailored to local circumstances. There is no one-size-fits-all answer, and there are usually lots of low-cost but complicated options and a few high-cost but simpler ones. Industries are usually, to some extent, exposed to trade and global policy developments as well, as we have seen in the last year or so.

Business also tracks all revenues and costs very closely, which means carbon pricing works well in this sector, with tweaks to protect competitiveness, such as Canada’s output-based pricing system or border carbon adjustments. These policies must be carefully calibrated, or the policies' effectiveness can collapse. These dynamics are well understood but require a competent oversight agency and clear expectations of stringency by all parties.

Some industries do not yet have solutions. This is where most of my research lies. They need help and to co-operate with others to develop clean technologies. Even once available, these technologies may cost more than their dirty equivalents, and while the final cost to the consumer may be small, the cost may be very high for firms.

Domestic and global governments and firms need to work together to create lead markets for these products, with clean government procurement and flexible lead market regulations.

Missing our 2030 targets is bad but recoverable. What will cost us dearly is if we never get to net zero at all, because the global temperature will keep rising until we do. The raw truth is that all investment must be low, net zero or negative emitting as soon as possible. The good news is that Canada is well equipped to gain from the global shift to a net-zero society built around the use of clean electricity and minimal unabated fossil fuels. Canada’s needs are different, but why shouldn’t the world’s best cold-weather electric vehicles, buildings, heat pumps and clean power generation equipment of all kinds be designed, tested and built here? This would be very consistent with our industrial history.

Global mitigation brings not just costs but export opportunities. We can build wind in Labrador and use it to turn our high-quality iron ore into clean iron that can be exported at three times or more the value we export it for today while reducing the cost of decarbonization for our own steel sector.

There are also opportunities for Alberta and Saskatchewan as producers of low-GHG chemicals and fuels if they prepare now, for example with tight fugitive controls, clean electrification and targeted CCUS.

In summary, Canada and its provinces are at a crossroads between being an eventual rust belt petrostate with deep regional tensions and transforming into a competitive, wealthy and equitable electrostate. Specific policy recommendations include the following: maintain the clean electricity regulations provinces need to formally add climate goals to the laws enabling utility mandates and municipal planning and zoning; maintain the zero-emissions vehicle standard and industrial carbon pricing, even if the schedules need to shift while holding net zero in sight; support provinces in mandating flexible net-zero building standards for all building projects, starting with hybrid heat pump cooling and heating as a benchmark; and rationalize funding and create programs for industrial transformation supported by green procurement, using reverse auction contracts for difference to minimize costs.

Thank you.

[The Chair, Liberal, Angelo Iacono]

Thank you, Mr. Bataille. It's on the dot. Thank you very much.

Now we'll move forward to Ms. Merran Smith for five minutes.

Thank you.

[Merran Smith, President, New Economy Canada]

Thanks.

I'm Merran Smith, president of New Economy Canada, an initiative uniting more than 60 businesses across mining, construction, cement, steel, clean energy and technology sectors, along with labour and indigenous parties, who are all committed to accelerating investment and creating jobs in Canada's clean economy future.

I'm also a fellow at SFU, a former board member of B.C.'s Crown utility, BC Hydro, and—relevant to today's testimony—I'm currently appointed by the B.C. government to conduct an independent review of their climate plan, CleanBC.

I'm happy to talk in the Q and A about our findings, about what's working, not working and what needs updating, as B.C.'s plan started in 2018, with policies similar to the federal ERP, such as the methane regs, industrial pricing, oil and gas cap, EV mandate and others.

I want to begin by situating Canada's ERP plan in the global economic context, recognizing Canada's urgent need to diversify our trading relationships.

First, global investment in clean energy is soaring and costs are plummeting. Last year, $3 trillion—yes, trillion—went into renewables, nuclear, grids, storage and electrification. That's double what went into fossil fuels. Since 2010, the costs of solar power, lithium batteries and other storage products have dropped by about 90%. Clean energy is now the smart economic choice and the smart energy security choice. That's important, as the world's looking for more security.

This growth is having side benefits for Canada, as we have an abundance of the critical minerals these technologies require.

Second, our trading partners and competitors are already reaping the rewards of this transition. South Korea's clean energy exports are up 35% since 2020, and the EU's renewable energy sector already employs over 1.8 million people and clean energy investments reached about $390 billion USD in 2025. These countries are pairing their climate policy with industrial strategy and it's paying off.

The U.S., moving in the opposite direction, is the real outlier.

Canada's ten largest trading partners, outside the U.S., all have enshrined policy preferences for low-carbon products. The U.K. and the EU have already begun to enact border tariffs on high-carbon goods.

Only growing the low-carbon economy can offer real stability, long-term jobs and value in this new paradigm.

But, to become the investment destination of choice, governments must create the conditions to support Canada's innovators and implementers, and send strong signals to international investors and customers that there's no better time to build in Canada and buy Canadian.

Which brings me to Canada's 2030 emissions reduction plan.... It's typically talked about as environmental policy, but it's also economic policy. I'll give you four examples.

Pricing industrial pollution—that sends a market signal to industry to invest in those technologies that will cut their emissions. It also sends a market signal to innovators to develop those technologies. The end result is cleaner products—that's what the world's looking for—and clean technologies we can sell to the world.

Similarly, the EV availability standard sends the same message, not just to auto makers, but also to battery producers, mining and processing companies and EV charging companies, driving investment, innovation and growth across the whole supply chain.

The clean fuel regulations do it too, spurring investment in Canadian biofuels and other clean fuel productions, and we could do a lot more in this area.

Finally, the ERP's focus on clean electricity is critical. As we diversify trade and build Canada's new economy, clean electricity, battery storage and an interconnected grid will be the foundation of our industrial growth, building off our relatively clean existing grid already.

In closing, the ERP and its policies are working, not just to drive down emissions, but to spur innovation and investment by companies, so that they can compete and win in this low-carbon economy. Maintaining that policy certainty and durability are key to securing and sustaining investment in Canada's economy.

While there's room for some modifications, calibrations and, at times, flexibility, Canada needs to continue with the ERP, and importantly, to create clearer connections between the ERP and industrial policy, to accelerate both emission reductions and economic growth. This is what will build a strong Canada, with long-term, well-paying jobs across the nation.

[The Chair, Liberal, Angelo Iacono]

Thank you, Mrs. Smith.

Now we will start with the Conservative Party, for six minutes.

Mr. Bexte.

[David Bexte, Conservative, Bow River, AB]

Thank you, Chair, and thank you to the witnesses and Premier Smith for joining us here today. It's a great pleasure.

There's a lot to unpack with the preambles. I'd like to start, Premier Smith, with a geopolitical view.

We've seen key allies around the world repeatedly ask for Canadian energy. More recently, Taiwan has been asking for help with their circumstance, and even India has said recently that Canada is not a reliable supplier yet.

Given this context, what level of interest or commitment do you see from around the Pacific Rim and other parts of the world? Will you push the federal government to stand with these democratic partners and support Canadian energy exports to them?

[Danielle Smith]

I see a very high level of interest. In fact, as the intergovernmental affairs minister and international affairs minister, I meet regularly with ambassadors, and virtually every person I have met with has asked, “How can we get more reliable energy from Canada?”

Right now, we do export through the Trans Mountain pipeline. When that began, everybody thought most of that product would go to the United States. Instead, the majority of it is now going to Asia.

In addition, the way we get our product to Europe is that it goes all the way down to the gulf coast, where it gets loaded on a tanker and sent to places like Poland and beyond. We should probably be trying to do more of our sales directly if we want to open new markets. We think there's capacity for another million-barrel-a-day pipeline going to the west coast and maybe another one going to Churchill or James Bay, and we'd also like to see Quebec develop its substantial natural gas resources to be able to wean itself off American supply and support our partners in Europe as well.

[David Bexte, Conservative, Bow River, AB]

Thank you, Premier.

You mentioned a pipeline to the west coast, and that's quite topical right now.

If this pipeline project ultimately is not approved, what do you think the first-order and second-order economic impacts will be on Canada? What will be the cascading effect on the Alberta economy locally and on Canada as a whole?

[Danielle Smith]

I can quantify it, because we did have three pipelines that were in various stages of development and got cancelled because of regulatory uncertainty or a political point of view: the northern gateway pipeline, the Keystone XL pipeline and the energy east pipeline.

If all of those had been constructed, we would be generating 2.5 million barrels a day in additional production. At today's prices, that would be 55 billion dollars' worth of GDP. Governments take about 40% of that. The provincial and federal levels of government split it about equally, so there would be anywhere from $10 billion to $15 billion a year in additional tax revenue for the federal government and about the same for Alberta.

That's what we have foregone because of the policies of the last 10 years. We don't want to see any of that future production foregone, and that gives you some idea of what would be possible if we were to grow our production and exports by 2.5 million barrels a day.

[David Bexte, Conservative, Bow River, AB]

Premier Smith, B.C.'s premier, David Eby, is staunchly opposing the pipeline and supporting the tanker ban. What steps are you taking to engage meaningfully with him and with Ottawa to find a path forward? Are you optimistic that there is a political solution, or do you anticipate a legal challenge again?

[Danielle Smith]

I was pleased to see that one of the NDP leadership candidates is also opposed to the continued tanker ban. I think that's where we have to get to; we should be able to, regardless of political stripe, support each other in developing our projects. I can tell you that I do. When I travel internationally, I talk about Quebec's aluminum business, I talk about the auto business in Ontario and its ability to produce steel, and I talk about LNG exports from British Columbia. We have critical minerals in every part of this country, including the north. There is not a single project that has been proposed that I have expressed an opposition to, and I hope that politicians and premiers of all stripes would take the same view.

When I look at the project that would have had the most impact on developing new markets, it was the northern gateway project. Maybe there's a need for us to consider a different route. My indigenous relations minister, Rajan Sawhney, this week was at a meeting of B.C. chiefs in Kitimat, and we've begun the consultation on the ground.

We have already, in the past five years, developed something called the Alberta Indigenous Opportunities Corporation, which has underwritten $750 million in loan guarantees so that indigenous bands can take an equity stake in a variety of projects, including natural gas power plants and pipelines. We know the system works; it's going to generate 1.3 billion dollars' worth of revenue for those bands directly over the course of their lifetime, and we would like to see the same kind of arrangement with Alberta and British Columbia bands.

[David Bexte, Conservative, Bow River, AB]

Thank you, Premier. We're running short on time. Do you believe Bill C-48 runs counter to Canada's commitments to reconciliation and indigenous self-determination? Chief Councillor Harold Leighton has indicated that it infringes on their rights.

[Danielle Smith]

I agree. One of the points that the National Coalition of Chiefs, Dale Swampy, and the Indian Resource Council, Stephen Buffalo—who also chairs our AIOC—made to me is that the United Nations Declaration on the Rights of Indigenous Peoples gives the right to say yes as well. I think we've seen that exercised to great effect with LNG projects all up and down the west coast, and we would like to enable more of that.

[David Bexte, Conservative, Bow River, AB]

Very quickly, do you have any more comments on how the world sees Alberta and Canada?

[Danielle Smith]

Well, one thing I would say is just to challenge the testimony you had earlier. In fact, we're looking at a world where we might have to have 123 million barrels a day of production. We're going to need 18 trillion dollars' worth of investment in oil and gas infrastructure to meet that future demand.

[The Chair, Liberal, Angelo Iacono]

Thank you, Premier Smith.

Now, for six minutes, we have Mr. Fanjoy.

[Bruce Fanjoy, Liberal, Carleton, ON]

Thank you, witnesses, for joining us today. I'd like to direct this to all three of you. We occasionally or sometimes frequently hear about the cost of investments required to transition to a clean and renewable grid, as though that should be a barrier to moving forward with ambition.

I'd like to give you each an opportunity to speak to the cost of inaction. What would be the impact on the Canadian economy, Canadian residents, of unmitigated and rising temperatures?

Merran Smith, I'll let you go first. Thank you.

[Merran Smith]

Thank you, and thanks to all of you for holding this hearing and inviting me to present today.

On the cost of inaction, I want to actually start not with the trillions of dollars of costs because of wildfires, flooding, drought, etc. Living here in B.C. we've seen the costs of that, and it includes lives as well. In that heat dome in British Columbia, over 600 people perished during that event, and that was just one event. We've had billions of dollars of destruction through wildfires and homes destroyed, etc.

On the cost to citizens, one is the cost of insurance. That's a real cost that we've seen. I don't have the stats on hand, but perhaps somebody does, and I can follow up with the committee about just what we are seeing already in terms of the household costs.

I would say more importantly the costs of inaction are putting Canada's economy at risk. The world is, as I've identified, moving to a lower-carbon economy in which people are both continuing with climate policies and putting in place border carbon adjustments. There will be costs to Canadian goods if we are not following through on that, and secondly, there are the costs of what the world will be buying. I mentioned that South Korea, which is one of the places we're identifying as a target for our LNG exports, may well be purchasing LNG, but they are also developing their clean energy and clean technology sector.

A decade ago, when we started these conversations, it was really ideas around where we thought things would go. Now the costs have dropped—hear me—90%, and then 90% again, not just for things like solar and wind but also for battery technology, storage technology. That helps address the intermittency of renewables and actually creates grid stability.

What we risk is our economic future.

[Bruce Fanjoy, Liberal, Carleton, ON]

Thank you, Ms. Smith. I want to give Mr. Bataille an opportunity to answer next.

[Christopher Bataille]

There's obviously a global cost to rising temperatures, shared with everyone globally. We're not going to address those without action by everyone, but I'd like to build on Merran's point.

The world is learning. It's moving more to an electrified future, where probably 80% to 90% of our economy is going to be directly electrified, likely powered by clean electricity. There will be 10% to 20% at the back end that's going to require other technologies. If we do not participate in the movement to that 80% to 90%.... That's where future exports are. That's where future productivity is. We have a productivity crisis in Canada. Our wages are stagnating. Part of it is because we're not learning. We're not moving forward with new investment and learning how to do new things in our way. One of the ways to jump-start productivity in this country is to invest in electrotech and the clean electrified future.

[Bruce Fanjoy, Liberal, Carleton, ON]

Thank you.

Premier Smith, I want to give you an opportunity on particularly how it would relate to the future economy of Alberta if we do not take action to address this changing world.

[Danielle Smith]

Well, no one's talking about not taking action. I think what we're talking about is whether a 2030 target is realistic or a 2050 target is realistic. Our plan is centred around a 2050 target, which is what we signed on to internationally and what most of the nations of the world have signed on to—except for China, which has said 2060, and I believe India, which has said 2070.

I can tell you the cost. We almost had an experience of that in January 2024. It was at five o'clock at night, when the sun went down, and there was no solar. It was -30°C. We had to turn down the wind turbines, because they have mechanical failure after -30°C. We had to do an emergency call-out to our people to turn off their lights while they were doing dinner and homework with their kids at night to avoid having our power grid fail.

When the power grid failed in Texas, 1,000 people died. I think that's one thing we have to keep in mind about reliability.

[Bruce Fanjoy, Liberal, Carleton, ON]

Thank you, Premier Smith.

I wanted to take a moment to ask about the electricity market in Alberta. According to the Pembina Institute, the moratorium on renewable energy projects has resulted in half of proposed renewable energy projects being cancelled or stalled. How do you defend this loss of investment in Alberta?