Foreign Affairs Committee on Nov. 20th, 2023

[The Chair, Liberal, Ali Ehsassi]

I'd like to call the meeting to order.

Welcome to meeting number 83 of the House of Commons Standing Committee on Foreign Affairs and International Development. Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders; therefore, members are attending in person in the room, as well as remotely using the Zoom application.

I'd like to make a few comments for the benefit of the members and our witnesses.

Before speaking, please wait until I recognize you by name. For those participating by video conference, click on the microphone icon to activate your mike, and mute yourself when you are not speaking. You may speak in the official language of your choice.

Although this room is equipped with a powerful audio system, feedback events can occur. These can be extremely harmful to the interpreters and can cause serious injuries. The most common cause of sound feedback, as I like to remind everyone, is an earpiece worn too close to a microphone.

With regard to a speaking list, the committee clerk and I will do our best to maintain a consolidated order of speaking for all members, whether they are participating virtually or in person.

In accordance with the committee's routine motion concerning connection tests for witnesses, I am informing the committee that all witnesses appearing virtually have completed the required connection tests in advance of the meeting.

Pursuant to Standing Order 108(2) and the motions adopted by the committee on Monday, January 31, 2022, and Tuesday, May 30, 2023, the committee resumes its study of the situation at the Russia-Ukraine border and implications for peace and security.

I'd now like to welcome our witnesses. We have Professor Jennifer Clapp from the University of Waterloo. She previously appeared before us, but we, regrettably, had connectivity problems. We also have Professor Wood from Western University. It's good to see you in person, Professor. Again, our apologies for the connectivity problems two weeks ago.

In addition to that, we have Mr. Jacob Irving, who is here in person. Mr. Irving is the president and chief executive officer of the Energy Council of Canada. Last, but certainly not least, we're also grateful to have, from the International Institute for Sustainable Development, Ms. Anna Ackermann, a policy analyst with the green reconstruction of Ukraine program.

We will start with the two witnesses who are here in person. Each of you will be provided with five minutes for your opening remarks. Then we will go to the members for questions.

If you see me holding this up, that means you are out of time and we ask that you wrap things up within 15 to 20 seconds. That applies not only to your opening remarks but also to the questions that the members will put to you.

All of that having been said, we will start off with Professor Wood.

The floor is yours. You have five minutes, sir.

[Dr. Geoffrey Wood, Professor, Western University, As an Individual]

Thank you very much. It's obviously a great joy to be here. I have to say that security here, I'll tell you, is much tighter than at the British House of Commons.

I've published both on long energy transitions and, in the past, on war. I'm happy to talk about either.

In terms of long energy transitions, a key point is that the global energy mix is changing. That is a long and very destabilizing process. That is the way it is.

Now, there are a couple of points that are quite salient. Actual estimates of oil and gas reserves vary hugely. Industry estimations tend to be very optimistic. That's a very simple point. The other thing is that, increasingly, oil and gas in the world are unconventional sources. The key thing about that is there has been tremendous expansion of it that was predicated on cheap money. As we know from the U.S. case, now that money is more expensive, unconventional oil and gas is not growing as fast as it was.

I'm going to tell you a quick story before I move on to the subject of war. My mother-in-law from England came to visit us a couple of weeks ago, and she was describing how growing up in rural England in the 1940s and early 1950s they had no electricity and no running water and still largely had horses in the fields. That was true for the rest of the world. The world has changed tremendously in a generation, and for some people in cities maybe two or three generations. Those sorts of big changes, history alerts us, come at costs, and we're only becoming aware of those costs these days.

I'll turn to the subject of war.

Commentators love quoting Clausewitz, and Clausewitz has wonderful one-liners, like “fog of war” and “War is...a continuation of politics”. Clausewitz said lots of uncomfortable things, which people like to gloss over. The first thing is that war is a very unpleasant business. Clausewitz was writing in the early 19th century, when there was a general view that you did not involve civilians in war, to a large extent. That was done by professionals. Nowadays, that seems acceptable.

The other point, as Clausewitz argued, is that defensive is much stronger than offensive. That favoured the Ukrainians in the opening stage of the war. Regrettably, it obviously favours the Russian side these days. There's a further point that is really worth considering. The recent case of Armenia and Nagorno-Karabakh alerts us to the fact that, for countries that are reliant on great power help from the outside, if that great power help is speedily removed, the consequences can be very unpredictable, and we all know the potential radical change of U.S. support after the next election. That sounds very pessimistic.

People love to use the analogy of the Finnish Winter War to describe Ukraine. There are key differences. The Finns were very successful in keeping their casualties down; that's the first point. The second thing is that perhaps the bargaining position of Ukraine over the last few weeks has diminished. In my previous deposition, I made the point that maybe it's a stalemate, and obviously since then a lot of commentators have talked about a stalemate. People in the U.S. military are talking about how a stalemate would be a good outcome, so there's a certain degree of unpredictability.

Optimism.... Under very bleak circumstances, Finland, in 1945, managed to secure peace with Russia. It was a very bitter pill but, nonetheless, it did preserve national independence.

These are very challenging times. Where does this leave Canada? A question is, “What happened to Armenia's other allies when Russia pulled the plug on it?” It's a very good question.

I think I've used about four minutes, Mr. Chair, and I won't exhaust your patience any further.

[The Chair, Liberal, Ali Ehsassi]

Thank you, Professor Wood.

We will now go to Mr. Irving.

Mr. Irving, you also have five minutes for your opening remarks.

[Jacob Irving, President and Chief Executive Officer, Energy Council of Canada]

Good morning, everyone.

Thank you very much for the invitation, Mr. Chair and members of the committee.

I will confess I'm a bit of a late entrant to this committee. In my organization, the Energy Council of Canada, I often like to say we are an inch deep and a mile wide. We speak generally to Canadian energy, so I'm able to answer some fairly general questions about the state of energy in Canada, but on more specific ones, particularly ones pertaining to the war in Ukraine, I might disappoint you a little. I just want to let you know that off the top, but I will endeavour to do my best to answer any questions you have.

I would be glad to answer the committee members' questions in French.

Maybe I'll start by telling you a little bit about the Energy Council of Canada. We are a non-partisan, not-for-profit, technology-neutral promoter of Canadian energy leadership at home and abroad. We were founded by Natural Resources Canada back in 1984. They're our founding member and remain a member with us to this day. The rest of our membership is made up of energy industry players from across the spectrum and from the different sectors, including petroleum and electricity as well.

What I wanted to talk to you about today is our relatively new program, which we call the North American and international outreach program, or NAIO. It is essentially pulling together all of the different energy players from across Canada, developing a high-level, general, neutral and positive story about Canada's energy resources and abilities, and then communicating it to the rest of the world in a concerted fashion. Really, what this has been about is enlisting Canada's energy industry to communicate Canada's energy industry externally like never before. The way I would put it is that when it comes to communicating Canadian energy outside of our own borders, in many ways we rely on our ministers, federal and provincial, to do it for us. We're all used to the natural resources minister championing Canadian energy and the various energy and mines ministers from across the country doing it, as well. This is terrific; it is good and it should continue. In fact, I would like to see more of it. I'm biased in that way.

Our national industry associations do some of this work, as well. You're familiar with them. They are members with us. They're partners with us, organizations like the Canadian Association of Petroleum Producers, Electricity Canada, the Canadian Nuclear Association and the Canadian Gas Association. They are all aligned with us. They do some of this work, as well, but often within their own sectors and within their own spheres. You're probably used to the Canadian Association of Petroleum Producers going to CERAWeek once a year in Houston and making the Canadian energy argument there, or Electricity Canada having their board meeting once a year in Washington and doing that, as well.

These are all excellent efforts to try to promote Canadian energy outside our borders, but it's useful to remember that their primary mandate as industry organizations in Canada is the development of Canadian energy within Canada. Their primary mandate is not the communication of Canadian energy outside of our borders. This is what the Energy Council of Canada has attempted to take on through its North American and international outreach program.

To be honest with you, it's really only been in action for about a year. We built this program during the pandemic, which was actually a good opportunity to work on this and pull everyone together to create common messaging, but we only started delivering it this past year in person. There was no travel up until this year, really.

We've been successful and we work with Global Affairs Canada and the trade commissioners around the world. They find opportunities for us to deliver this new concerted message—I call it a positive neutral message—that communicates our energy story. This past year, we were in Jamaica, South Africa and Vietnam, and I recently participated in an event in Boston.

The whole idea behind this, if I can put it simply.... My perception is that, during my lifetime, our strategy about Canadian energy has been deceptively simple. It has basically been that we'll make as much energy as the Americans can take, and they'll take as much as we can make, and there's no need to advertise. That has been great for both of our countries. It has built stability and strength on both sides of our border, but in 2023, it's no longer the case. The United States is not a dependent customer. They are a competitor with us. It's now up to us to communicate our value proposition, both in the United States to secure, maintain and grow our markets there, and also in new places elsewhere.

That's a bit of an idea of where we fit into the picture. We would really enjoy getting involved in the conversation more.

Thank you.

[The Chair, Liberal, Ali Ehsassi]

Thank you very much, Mr. Irving.

We will now go to Professor Clapp, who is joining us virtually.

Professor Clapp, you have five minutes for your opening remarks.

[Jennifer Clapp, Professor, University of Waterloo, As an Individual]

Thank you, Mr. Chair.

Thank you to the committee for the opportunity to speak today.

Previous speakers spoke about energy markets. I will be speaking about food security.

I'd like to make three points in relation to the global food security consequences of the Russian invasion of Ukraine. These comments are based on my own research as an academic, as well as in my role as a member of several international expert panels on food security.

The first point I'd like to make is that world food security has been profoundly affected by the decline of Ukrainian grain on the world market. Russia's illegal invasion of Ukraine caused significant turmoil in global grain markets, resulting in a major price spike in 2022 that was sparked by concerns about global grain supplies—especially because, at the time, Russia and Ukraine together accounted for around one-quarter of the world's wheat export market and around one-fifth of the world's maize market.

As a result of this market turmoil, food import bills rose sharply around the world, especially in the months following the invasion, and these price increases hit the food import-dependent developing countries the hardest. These are especially countries in sub-Saharan Africa and the Middle East. Many of these countries relied on imports of grain from Russia and Ukraine to meet their food security needs.

The result of this turmoil and price increase was a dramatic increase in global hunger. After a decade in which we saw hunger generally falling around the world, the situation reversed after 2019. The pandemic was certainly a significant reason for the increase in hunger, but so was the war in Ukraine. The UN estimates that, globally, around 122 million more people faced hunger in 2022 than in 2019, and that around 20 million to 30 million of the people facing hunger today—a total of around 800 million people—are facing hunger because of the war in Ukraine.

Global grain markets today have largely adjusted to the initial shock, and the prices of wheat and other grains have since receded from their high levels of 2022, but they still remain elevated and, given high levels of debt and rising interest rates, the global hunger situation remains highly precarious.

The second point I'd like to make is that the Black Sea grain deal has been important, but its end has not led to further market turmoil, at least not on the same scale that we saw before. The brokering of the Black Sea grain initiative in July 2022 eased some of the market fears by allowing the safe export of some of Ukraine's grain via Black Sea shipping routes. This deal is widely seen to have contributed to a decline in grain prices between mid-2022 and mid-2023. Some of that grain, but not all, went to the poorest countries in need. In July of this year, Russia pulled out of the Black Sea grain deal. Wheat prices briefly rose but have since come down again, although the world wheat market remains tight.

Ukraine is now exporting much of its grain via the Danube River, and it has established its own humanitarian corridor through the Black Sea. Ukraine has pursued these alternate routes of export because its overland shipments, which occurred in the immediate aftermath of the invasion, flooded the markets of its neighbours—Poland, Hungary, Slovakia, Romania and Bulgaria—which prompted those countries to ban the import of Ukrainian grain because it was depressing prices in their markets. Throughout this market turmoil, Russia has doubled its global grain exports since 2022. Russia is now the largest wheat exporter in the world, and it has captured some of the markets that Ukraine had previously supplied.

The third point I'd like to make is that Canada can play an important role in this context by supporting developing countries that depend on food imports for their food security. Canada's humanitarian assistance and exports of wheat to world markets have been important in helping food import-dependent countries to access the food they need in the short run, but Canada can also do more to support food deficit developing countries to sustainably increase their own food production, which is vital for long-run food security in those countries. It's especially important to support small-scale producers, who are important providers of food in those contexts.

Support for food production in developing countries is important because global grain markets today are highly concentrated, which makes the trading system very vulnerable to shocks, as we saw in the case of Ukraine. Just five exporters—Russia, the EU, Canada, Australia and the U.S.—account for over 70% of the world wheat trade, and maize markets are similarly concentrated. If a shock affects one or more of these exporters, there are huge food security consequences for the poorest countries via higher prices. For these countries, encouraging them to rely on concentrated markets introduces risks, especially in an age of accelerating climate change and geopolitical conflicts that make shocks and disruptions to markets more likely.

As such, Canada can play an important role in supporting greater market diversity, including by helping the most vulnerable food deficit countries to sustainably increase their domestic food production, which would better enable them to weather disruptions to global grain markets caused by shocks.

Thank you very much. I look forward to the discussion.

[The Chair, Liberal, Ali Ehsassi]

Thank you very much, Professor Clapp.

We now go to our final witness for the first panel.

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

[Anna Ackermann, Policy Analyst, Green Reconstruction of Ukraine, International Institute for Sustainable Development]

Hello, Mr. Chair and members of the committee. Thank you for inviting me to today's hearing and for all of the support Canada has given the people of Ukraine.

I represent the International Institute for Sustainable Development, working from Geneva, where since last year I have led work on a sustainable recovery of Ukraine. I also represent Ukraine’s largest environmental NGO, the Center for Environmental Initiatives Ecoaction, as a board member and one of the founding members. I’m a Ukrainian myself, with a background in energy and environmental policy, and it’s these two topics of energy and environment that I would like to touch upon in my short statement today.

A few days ago, Dmytro Kuleba, Minister of Foreign Affairs of Ukraine, said that we are preparing for the worst winter in our history. Ukraine is a big country, and protecting the highly centralized energy system and all the power plants from Russia’s terrorist attacks is a complicated task, especially without sufficient air defence. This is a matter of our survival.

There is another mid-term perspective we should also be looking at: ways to transform the Ukrainian energy system into a more decentralized and more resilient one to avoid big future disruptions. Recently, 50 Ukrainian municipal leaders signed a letter to the U.S. government requesting support for communities in Ukraine, especially in the form of renewable energy technologies.

Indeed, we see through our work that many Ukrainian cities consider solar panels, storage systems, and heat pumps as effective solutions to improve local energy security. The first pilot projects of this kind, mostly implemented with the support of NGOs and international partners, started appearing around the country in autumn last year. Communities are, of course, giving priority to modernizing the energy systems that are supporting critical infrastructure, such as hospitals, water supply systems, schools and so on. However, the financial mechanisms available to implement such projects are limited for the moment, and this is where some Canadian support would be most valuable.

This transformation of the energy system, which is also embedded in the new energy strategy of Ukraine by 2050, goes beyond decentralized energy production. It’s also a way to decarbonize the economy, create new jobs and support local production of green technologies and materials, which are required for the energy transition not only in Ukraine but also worldwide.

Since 2017, together with colleagues from Ecoaction, we have been working with coal-mining communities in the Donetsk region, in eastern Ukraine, on their just transition away from coal. Most of them were keen to see their economies diversified and transformed into more sustainable ones. The city of Vuhledar, with enough coal to last for decades, provided impressive leadership in these debates. Vuhledar now lies in ruins, completely destroyed by Russia, with its coal mines flooded, just like many neglected mines in Ukrainian territories controlled by Russia since 2014. Flooding of coal mines leads to grave consequences, including soil and water pollution.

The Ukrainian government estimates the overall cost to the environment from the war to be more than $70 billion Canadian, and this is only since February 24 of last year. The scale of the damage is enormous, and substantial resources are of course needed to analyze, monitor, and remediate the pollution and to deal with many other types of damage to the environment. Ukraine will need significant support with this throughout the years to come.

Finally, the Kakhovka Dam destruction in June 2023 became one of the most consequential events in terms of the scale of its impact on people and the environment. The destruction resulted in flooded cities, hundreds of thousands of people with limited access to fresh water, mines and pollution washed into the sea, and an increased risk to the Zaporizhzhia nuclear power plant, occupied by Russia. This is an ecocide. The area where the Kakhovka reservoir used to be is now becoming a huge young forest. This is incredible. Researchers are calling for a careful examination of options that are needed for reconstruction of the dam to make sure that we don’t repeat mistakes of the past and do build back better.

Ukrainians want to build back better. They want to rebuild, and they started rebuilding as soon as the first cities and regions were liberated at the end of last year. We want to build a more sustainable future. Since Canada is already planning to assist Ukrainian communities in making an inclusive recovery, attention should also be given to ways Ukraine could transition to a green economy. Only a strong and prosperous Ukraine could provide security for its people and Europe.

I thank you for your attention, and I will be glad to answer any questions.

[The Chair, Liberal, Ali Ehsassi]

Thank you very much, Ms. Ackermann. Your timing was perfect.

We now go to the members for their questions.

We will first go to MP Hoback for six minutes.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

Chair, I think this room makes a difference. We actually could hear her and have all of the witnesses. It's really nice to see.

I want to thank all of the witnesses for being here on a Monday morning on this important topic, for sure.

Maybe I'll start with you, Mr. Irving. When you talk about Canada and promoting Canadian energy abroad, you're talking about nuclear, oil and gas, LNG. You're probably talking about hydrogen, I assume, too, somewhere down the road. How do they fit together as we see groups and countries transition from conventional fossil fuels into more renewables? How could Canada be part of that chain through the whole process? Are we part of that chain through the whole process now?

As I've said, we don't really ship any LNG. The U.S. ships it all now. We're not taking up the slack in lots of those areas.

[Jacob Irving]

I appreciate the question, because our mission, as the Energy Council of Canada.... As I said, we're technology-neutral and positive in our communication. Essentially, it almost sounds simplistic, but what we're trying to do is demonstrate to the rest of the world that when it comes to energy, Canada does it all. That is fairly remarkable for a country of our population—maybe not necessarily our geographic size, but our population. When you think of every single facet of energy, Canada is involved in every single one—from geothermal to tidal and all of the different sources you mentioned—and we actually have strong leadership stakes in many of them.

In hydro power, for example, Canada is the world's second-largest generator of hydro power, just behind China.

[Randy Hoback, Conservative, Prince Albert, SK]

How do we rank internationally, then, as we look at the conventional fuels? Again, moving up the chain, Europe had to go to some countries like Qatar to get LNG, and Algeria and Nigeria for oil and gas. What would that look like if it had come from Canada versus those countries? How would our global environmental footprint look in that scenario?

[Jacob Irving]

Well, one interesting thing about Canadian LNG is actually the marriage of our different energy technologies. When you think about LNG leaving our coasts—east or west—one of the largest parts of the footprint is in the liquefaction of the natural gas. When you actually have to turn it into a liquid, put it on a ship and send it, there's a lot of power and energy required. It just so happens that both of our extreme coasts are predominantly using hydro power. What that means is that we would be using non-emitting electricity to make our LNG, which means that our LNG is, and would be, the least emitting in the world.

[Randy Hoback, Conservative, Prince Albert, SK]

Let's go back to the well cycle—going right to the production where it's coming out of the ground—and look at methane emissions and things like that. How would that compare to Qatar or other countries where Europe is now forced to get their LNG from, because Canada wouldn't offer it to them?

[Jacob Irving]

I don't have the comparative analysis on it, but I can speak a little bit to our progress in that.

In Canada, when it comes to methane reductions, we've seen that our distribution system emissions have fallen over 20% since 2000, while volumes of production have grown. That's a lot of stats and facts, but I think the message out of it is that, even as we've grown natural gas production in Canada, we have reduced our emissions. What does that say? To me, it says that Canada should be trusted to produce more of this with less emissions, because we have a track record of doing so.

The typical difficulty that Canada faces is that the world wants to see absolute emissions reductions from everybody—from Canada and from any other country. In Canada, we have a great history in reductions per barrel, per molecule, but we're being asked to deliver more, and that risks raising the—

[Randy Hoback, Conservative, Prince Albert, SK]

I guess I'm just trying to compare it to the international scene.

I look at our industry—the duty to consult, the whole process that we go through. How does that compare to a country like Qatar? How does that compare to even the U.S., for example?

[Jacob Irving]

Well, we don't try to take on the business of comparing ourselves to other countries, but we do try to—

[Randy Hoback, Conservative, Prince Albert, SK]

Well, we do have to sell our ESG. We do have to sell what we are.

[Jacob Irving]

Exactly, we do try to communicate who we are, to your point. One of our key messages, and this is interesting from the industry side, is that a lot of the time we do talk about the way Canada makes energy as being important. I often like to say that Canada is a responsible energy producer because it's a responsive energy producer. We do it within the context of one of the world's oldest and most sophisticated democracies. That should count for something nowadays.

[Randy Hoback, Conservative, Prince Albert, SK]

That would explain why Europe came here first. That would explain why Europe came to Canada first, looking for relief from Russian oil and gas. It makes sense because if you look at how we actually conduct business, how we work through the whole supply chain, and if you look into the future with our nuclear technology and hydrogen, wouldn't you see that we would be a natural partner? If we would be, why aren't we?

[Jacob Irving]

There are a lot of great potential synergies there.

I would mention that the reason I am actually here in Ottawa this week is that I'm attending a conference tomorrow called “The Three Seas Initiative: An Opportunity for Canada”, which is put on by the Government of Poland, the embassy of Poland. It's doing it with the Macdonald–Laurier Institute. It's going to be on at 10:30 tomorrow morning at the National Arts Centre—

[Randy Hoback, Conservative, Prince Albert, SK]

I only have five minutes—

[Jacob Irving]

Oh, I'm sorry.

However, this is precisely the point that they make back toward Canada: that the marriage of our values should—

[Randy Hoback, Conservative, Prince Albert, SK]

That's what kind of puzzles me, because if you tell the EU that we can't—

[The Chair, Liberal, Ali Ehsassi]

Mr. Hoback, I'm afraid your six minutes are up.