Thank you, Mr. Chair.
Good morning. My name is Alex Templeton. I’m a partner at the Atlantic Canadian law firm McInnes Cooper, where I maintain a litigation and regulatory practice serving clients in a variety of industry sectors, including offshore oil, renewable energy, aquaculture, traditional harvest fisheries and public administration. I’m not here on behalf of any of my clients today. Rather, I’m appearing in my volunteer capacity as the chairperson of the board of directors of Econext.
Econext is a not-for-profit association comprising over 200 member businesses collectively focused on accelerating clean growth in Newfoundland and Labrador, which is to say environmentally sustainable economic development in our province. To give you a sense of the breadth, scope and impact of our activities, I’d like to share some specific examples of the work we’ve been undertaking.
We recently concluded work with six municipalities in the province to help benchmark their environmental performance and develop climate action plans that would see them reach net zero by 2050 through the lens of economic growth and development. In partnership with Energy NL, we’re in the midst of our net-zero project, which is particularly focused on providing an analysis of technologies and policies that will enable the reduction of greenhouse gas emissions from our offshore oil and gas sector.
Through our clean energy initiative, we’re helping to understand the workforce development requirements of our rapidly emerging renewables and clean fuel industries, while hoping to identify and prioritize supportive research, development and innovation. In September, we held a three-day ideathon that saw undergraduate students at Memorial University competing for the top prize by coming up with the best idea to solve the electricity supply and demand challenges that our province faces.
We’ve been doing this type of work in Newfoundland and Labrador for the past 30 years. To that end, we’re appreciative of the opportunity to appear before the House of Commons Standing Committee on Finance and to inform your deliberations on the 2024 federal budget.
First, we want to reiterate the importance of the tax credits that were introduced in the 2023 budget. Specifically, I'm referring to the clean electricity ITC, the clean technology manufacturing TC, the clean hydrogen ITC and the adjustments made to the clean technology ITC. These will be highly impactful for Newfoundland and Labrador.
What’s unfolding in this province at this moment in time is perhaps not well understood across Canada. The fact is that Newfoundland and Labrador is on the cusp of becoming a significant contributor to the energy transition on a global scale. A number of factors are coming together that position the province effectively to provide the world with the clean energy it needs to combat climate change.
Our onshore and offshore wind resources are among the strongest in the world. We have significant Crown land and fresh water available and accessible. We’re the closest point in North America to Europe. We're located on major shipping routes, and we have established, industrial deep-sea ports with available capacity. We have an abundance of hydroelectricity—developed and undeveloped, including the largest undeveloped asset in North America, called Gull Island—with an electricity grid that is currently 92% renewable. The list goes on.
While all of these factors individually are not necessarily unique, the fact that they exist in one geographical area at this time makes Newfoundland and Labrador a compelling location for large-scale clean energy investment. The projects being pursued in this province would be among the largest clean energy and clean fuel projects in the world, and would fundamentally change our province’s economy. The tax credits introduced in 2023 are, therefore, vital supports for these projects, which are in a global race to confirm financing and secure equipment and supply chains. We’re therefore highly supportive of their swift implementation, and would highly encourage budget 2024 to consider how they can be further supported and leveraged.
The second area that we’d like to draw attention to is the electricity sector. Based on our analysis and insights, it’s becoming clear that the evolution of Newfoundland and Labrador’s electricity grid is going to be of paramount importance with respect to both the province’s ability to achieve net-zero GHGs by the year 2050 and its prospects for economic growth and diversification. Decarbonization in our province, whether by the provision of clean energy to heavy industrial operations like those we see in our mining industry or through the electrification of transportation, is all predicated on the expansion of our electricity system. It’s believed that we’ll need twice as much electricity generation as we have available today by the year 2050 in order to achieve net zero. These projections are based on the current state of activity within the province.
As I mentioned earlier, the prospects of significant clean energy expansion in Newfoundland and Labrador are great. Whether it's the production of hydrogen or other renewable fuels, the extraction of the critical minerals that are needed for batteries and other clean technologies, or the manufacturing of new low-carbon products like green steel, industrial activity in our province is primed for growth.
With that comes population growth, more transportation, more buildings that need to be heated and so on. This is why it's so important to our 200 member businesses. The simple fact is that the rising tide lifts all boats, and this also equates to business opportunities. However, these opportunities are not likely to come to fruition without an electricity grid that can handle these increasing demands. Electricity access can either be an investment-attraction asset or a liability that inhibits progress. Therefore, we'd support federal investment in budget 2024 to directly finance the evolution of Newfoundland and Labrador's electricity grid. Both our path to net zero and our economic growth prospects depend on it.
There are a number of areas where climate action and economic growth are highly linked in Newfoundland and Labrador: supporting our emerging clean energy and hydrogen industry; providing clean electricity to our large mining operations; growing our electricity grid; and advancing the application of carbon capture, utilization and storage technologies. In practice, there are a small number of very targeted investments that could be made that would be highly impactful from both environmental and economic perspectives.
Therefore, my final point would be that we encourage that major investments into climate action by the federal government be done by direct engagement with stakeholders in Newfoundland and Labrador. The regional energy and resource tables created by Natural Resources Canada are a good example of the effectiveness of this approach, and—