Finance Committee on Dec. 7th, 2020

[Suzanne Benoît]

The problem has in fact worsened since the crisis began. In some cases, it can take three, four, five or six months to obtain a permit. It's already not easy given the situation. As I said earlier, we export 80% of what we produce. We're operating at 50%, and we're still exporting our products around the world, but things unfortunately aren't moving fast enough at the Department of International Trade. We've approached the government several times, and we've been told that mechanisms are being put in place to expedite the process, but things aren't moving fast enough, and we're missing opportunities.

We've consulted the Aerospace Industries Association of Canada, and it has also noticed the same problem, which is nationwide. The government needs to be more responsive so it can issue those permits and facilitate the process for Canadian businesses that want to export.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you very much.

Thank you, Mr. Brooks and Ms. Levin, for your presence here tonight.

You have been talking about the importance of making that shift to clean energy. We know that the American market for clean energy production is exploding.

We will be hearing tomorrow from the Parliamentary Budget Officer about his revised and increased cost estimates of the Trans Mountain pipeline that the government seems intent on building with taxpayers' money. Is your suggestion that instead of blowing $18 billion or $20 billion on the Trans Mountain pipeline, we really put in place similar investments that will create far more jobs in clean energy?

My second question for you is, what is the cost of climate change? What is the cost of not acting? Certain observers have indicated that it's already a $5-billion charge to the Canadian economy.

[Keith Brooks]

The answer to your first question is, yes, we'd like to see no more investment in oil and gas. Certainly, we think the Trans Mountain Pipeline is a bad investment. The government should do what it can to get out of that as soon as it can, and direct that money toward green energy, which will create a lot more jobs. Renewable energy, building retrofits, the kinds of things people are talking about are better job creators. They're more labour intensive and less capital intensive. Per million dollar investment, clean energy would create a lot more jobs than fossil fuels would, for sure.

You'll have to remind me what the second part of your question was.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

The second part was about the explosion of clean energy markets in the United States and the importance of our making investments so that we will have the grid system to actually supply the U.S. with clean energy.

There is also the cost of climate change to the Canadian economy and the cost of not acting.

[Keith Brooks]

Everybody who studies the cost of climate change finds that not acting is much more costly than acting, by a large margin. One recent example is from the Canadian Institute for Climate Choices, which found that the impacts of climate change amount to a 5% drag on GDP.

The same analysts looked at the expense of Ontario's cap-and-trade program back in the day, and they saw that it would cause a bit of a drag on the economy, but only by 1.5%. This is just a percentage of growth, slowing down the growth of the economy by a bit. The cost of putting a cap-and-trade system is one-third of the cost of ignoring climate change. That is one example.

[Julia Levin]

I would like to jump in on that.

One of the recommendations we made through the Green Budget Coalition is that in the next budget, and in all budgets, we do a cost comparison. What are the costs of inaction? For example, the health-related costs of burning fossil fuels in Canada are $50 billion. There was a report that just came out earlier this week about weather-related costs. They would quickly add up. That analysis should be done, and could be included in the budget.

On the first part of your question, TMX is a very significant subsidy. Unfortunately, it's one of many. There are many subsidies for us to eliminate as part of our commitments to the G20 and G7. We've made almost no progress on that. Our peer review with Argentina is stalled. We've seen very little progress from either the ECCC or Finance Canada.

A report that came out last week from the Canada Energy Regulator, the energy future report, shows that even with less ambitious policies than the government has already committed to, there is no need for either TMX or KXL. That really goes to show that these choices are not the right choices for Canada's economy and Canadians across the country.

[The Chair, Liberal, Wayne Easter]

I'm sorry, Mr. Julian, but we're going to have to end it there as we are over time.

For a five-minute round, we have Mr. Viersen, followed by Ms. Dzerowicz, who is splitting her time with Mr. McLeod.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Thank you, Mr. Chair, and thanks to our witnesses for being here tonight.

Mr. Brooks, the government recently introduced Bill C-12, its net-zero plan. Do you have any thoughts on Bill C-12?

[Keith Brooks]

We're glad to see the government moving forward with accountability measures. This is something that we and a number of other environmental organizations have been asking for for a long time.

That said, we do have some issues with this particular bill. In particular, we don't see a 2025 target, which we think is really important. We know that we need to take action sooner rather than later, and our concern is that this bill might be holding future governments to account rather than the current government.

Some of the other issues have to deal with the actual accountability mechanisms. Is the expert body appointed by the government going to have the power to actually force the government to take any action? Would it be kind of making recommendations that can be ignored? We'd like to see the bill strengthened, but in general, we're happy to see the direction toward greater accountability.

This is very important, and this is the way that many other countries are going about managing climate change. We're following the lead of Britain, for example, but others as well. One of the benefits of this kind of a body is that it puts the power in the hands of experts to make recommendations about what policies should be taken. It takes it away from the political nature of the issue, which unfortunately is what climate change is subjected to.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Mr. Masterson, I've been able to tour the big petrochemical plant being built at Redwater, Alberta, which will be making polypropylene. I toured it with Alberta's Industrial Heartland Association. It's an amazing facility with amazing projects. That facility seems to be coming on stream this spring, if I'm not wrong, and I was told that Canada could put another petrochemical plant like that on line every year for the next 20 years and not keep up with the demand for polypropylene.

Is that correct? Do you see other areas in the country that have opportunities similar to Alberta's in that respect?

[Bob Masterson]

Broadly, that's correct, and it fits in with the message I gave earlier. This is a growth industry. We have to remember where these chemicals go: they go into 95% of all finished products. If you can touch it, taste it, feel it or see it, it has chemistry in it.

As the economy grows, as there more people in Asia aspire to enter have a middle-class lifestyle there, and worldwide too, more demand for more sustainable [Technical difficulty--Editor] water, clean energy, and safe, nutritious, abundant food, that means more and more chemistry. Canada, and your location in Alberta, is especially well positioned to contribute to that. It has incredibly low-carbon, abundant low-cost resources. We can make our chemistries with a fraction of the greenhouse gas of other locations.

The plant you reference in Redwater, the Inter Pipeline that will produce polypropylene, will be the lowest, or amongst the lowest emitters of greenhouse gases anywhere on the planet.

There are enormous opportunities to do the job right. We can do it in Canada. For every one of those plants we don't build here, the marginal tonne of supply of these chemicals is going to come from coal to chemicals pathways in Asia. Therefore, if we care about global climate—and we all do and we all should—we have to look carefully at where these chemistries are going to come from.

In Canada, as with Ms. Benoît's industry, we're an $80-billion a year industry and 80% of everything we produce is exported. Thus, we have a great contribution to make to lower carbon chemistries all around the world.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Are there any other areas of the country that have similar opportunities as Alberta does in this regard?

[Bob Masterson]

In the chemistry industry, you either locate your facilities close to the resource, and in that case, it's Alberta, or close to market. We have maybe less of a vibrant culture, but a historical culture in southwestern Ontario that is seeing some reinvestment. It could certainly do more. It's very close to key U.S. markets. As well, we have quite a vibrant industry in Quebec—in Montreal and in the Trois-Rivières area. There's lots of opportunity.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Which countries would be our big competitors in that regard?

[Bob Masterson]

If you look at the petrochemical sector, Canada is just in the top 10, but you have to go by scale. We're certainly not China. We're not the United States. We're not the Middle East. Then you're into, how do we outperform countries such as Singapore? How do we outperform countries such as the Netherlands, Belgium and those countries? With our population and resources, we should be able to.

Any country in the world that had access to Canada's natural gas resources, natural gas liquids to make chemistries, any other country than Canada, would be the world leader in chemistries. There's no question about it.

[The Chair, Liberal, Wayne Easter]

We will have to end it there.

Ms. Dzerowicz and Mr. McLeod, you'll have to split about four and a half minutes.

Ms. Dzerowicz.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

I'll start by thanking all four presenters for their excellent presentations. Unfortunately, in two minutes and 25 seconds, I can only ask two questions. I'm going to direct them to Environmental Defence.

I agree with all four of the recommendations you've made today. I want to ask you more specific questions about two of them.

The first one is about the fossil fuels and the elimination of the fossil fuel subsidies. In my riding of Davenport, this is a number one ask for them. Every day they ask about this.

When I talk about this to our government, they say two things: one, that over 60% of the energy in the north is fuelled by diesel; and two, that a lot of the indirect subsidies for fossil fuels are to fund new technologies to actually reduce carbon emissions as oil is being produced.

How do you respond to that? I am trying to eliminate them, but this is what I'm being told.

[Julia Levin]

That's a response, the first response on the dependence of remote indigenous communities. Certainly that is not the first subsidy that needs to go, but the reality is that the vast majority of federal level subsidies are for production. They are not for consumption. It's often used as a smokescreen. That's why we need a road map to hitting that commitment, because we have to start with the billions that are going to the production side.

Sorry. Can you quickly remind me what the second part is?

[Julie Dzerowicz, Liberal, Davenport, ON]

The second part is just the indirect subsidies that are going to fuel new technologies that are actually trying to decarbonize oil production.

[Julia Levin]

Right. One example of that is the $750 million that was just given, the methane emissions reduction fund. We are seeing more and more subsidies, especially during COVID, trying to achieve environmental outcomes. The question then becomes, could these be achieved by other means?

Eliminating methane leaks is actually incredibly cheap. It's one of the cheapest ways that companies can reduce their emissions. Those exact same outcomes could have been easily achieved through regulations. Therefore, is that the best use of $750 million? Could some of that instead have gone to independent monitoring, because we know that industry is consistently under-reporting emissions?

Those are the kinds of questions that we should be asking, and when we form that road map we should really be planning out what subsidies have to go first. Those are the ones that go towards expansion and continued production, and then when we get there, talk about the other subsidies, because every time we give billions to the oil and gas sector, that is money that we can't direct towards other outcomes and certainly towards just transition outcomes.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much.

[The Chair, Liberal, Wayne Easter]

Okay. We will have to go to Mr. McLeod.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Mr. Chair, and to the witnesses.

My question is for Environmental Defence Canada, Keith Brooks and Julia.

You had some very good recommendations. I'm from the Northwest Territories and represent it here. Historically, we would have been in the dead of winter right now. The Mackenzie River is still flowing, pretty much free of ice, and last night it rained, which is totally not what we're used to up here, and it causes all kinds of problems.

Your third recommendation deals with investing in solutions that will create jobs and stimulate Canada's economy. I want to know if you would consider an expansion government support for the indigenous guardians stewardship and indigenous protected conservation areas to be an important step towards meeting that recommendation.

[Keith Brooks]

I think that absolutely could be an important step towards meeting the recommendation. We know that nature-based climate solutions are a part of the solution set we need. We know that we have great allies in indigenous communities and great partnerships and conservation projects, as you described. I think that is one of the main ways the government should go about creating more protected areas and putting in place those nature-based climate solutions.

[Michael McLeod, Liberal, Northwest Territories, NT]

My second question is around the blue recovery that you talked about. I was very excited to hear that, because we are downstream from many of the projects that are in Alberta and B.C. and have huge concerns because we're quite impacted by anything that goes on in the south.

We seem to have very little in terms of protection, and we've talked to the Minister of Environment about having a water agency that would include all of us. What do you think of that idea?