Government Operations Committee on March 28th, 2024

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

I'm not saying Alberta; I'm saying Canada, because I believe that article 6 would apply on a national basis. Is that correct?

[Danielle Smith]

There is actually the ability under section 2 of article 6 for a subnational government to negotiate those kinds of partnerships.

I can tell you how South Korea and Japan and India are looking at it. Since they do have a large coal fleet, they're looking at dual combustion. If we can apply either hydrogen or ammonia so it can be combusted at the same time, that will reduce the overall emissions profile. If there's a way for us to export those products and to then get joint credit, whether it's fifty-fifty or whether they take 80% and we take 20%, we think that's good for the planet. We think that would be the way for us to make the largest reduction in emissions globally.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

My question still stands: Should our exports of dirty products also be accounted for in the same way that our exports of clean products are?

[Danielle Smith]

It's a global market, and it's a global problem. We have to reduce global emissions. The way I look at it is that if we can live up to the spirit of what we signed on to in COP28, which recognizes natural gas as a vitally important transition fuel, then we'll be able to reduce the overall global emissions profile.

I can tell you what countries like South Korea and Japan and others tell us. If they can't get those long-term supplies of things like LNG or ammonia, they're going to bring more unabated coal on stream, which will actually increase overall emissions.

In the spirit of looking at this as a global problem and understanding that there are interim measures that need to be taken, it seems to me that those are the kinds of things that we should be partnering on with our friends and allies.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

You mentioned COP28 and the Paris Agreement.

Do you support Canada's remaining in the Paris Agreement?

[Danielle Smith]

Yes.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

The Paris Agreement is focused predominantly on reducing domestic emissions. You mentioned article 6, but at this point article 6 hasn't been used to provide credits for the export of energy products from our country. The largest part of the Paris Agreement is reducing domestic emissions. On that challenge, we have a plan, put forward by the government, that you take issue with. Have you tabled an alternative proposal, as the Prime Minister has suggested, that would contribute to meeting the requirements of the Paris Agreement?

[The Chair, Conservative, Kelly McCauley]

We have time for only a very brief answer. I apologize, Premier.

[Danielle Smith]

Yes. My very first conversation with the Prime Minister was to tell him we were aligning with the 2050 target, as our allies were, and that I would produce an emissions-reduction and energy-development plan, which I did last April. We've been working on a number of tables with respect to how we will work on achieving some of those interim steps.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Mrs. Goodridge, you have five minutes, please.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

Thank you, Mr. Chair.

Thank you, Premier, for taking time here today to stand up for Albertans.

We've seen now the countries of Germany, Japan and, most recently, Greece come asking the Prime Minister about LNG. Unfortunately, his answer every single time seems to be that there's no business case. I don't think he's correct.

Can you give a bit of a snapshot as to what LNG would mean for our province?

[Danielle Smith]

I can tell you what it would mean for our country, what it would mean for our partner, British Columbia, as well, and what it would mean for our first nations, which are increasingly developing LNG export facilities. We've been very supportive of our indigenous communities being able to develop resources, take an equity stake, and be able to generate income.

For instance, we have a $3-billion Alberta Indigenous Opportunities Corporation. I see that British Columbia has also established a $1-billion loan guarantee to allow nations to buy equity stakes in a variety of different projects. For instance, there's the 900-megawatt Cascade power plant, which is indigenous owned. We have pipeline networks that are indigenous owned. I'm very much looking forward to seeing the impact that will have. It's going to deliver 1.2 billion dollars' worth of revenue to our nations in Alberta. I would encourage every province, as well as the national government, to do the same.

The value of natural gas right now is very low. It's $1.72 per gigajoule, as I was mentioning, but it becomes the base fuel for so many products that can be used in the transition.

LNG and ammonia are the most stable ways to transport the hydrogen molecule, so being able to do both of those opens up new markets as well as reducing emissions. We developed our Alberta petrochemicals incentive program, whereby we give a 12% rebate for anyone who uses natural gas as a feedstock fuel. It's part of the reason that the Dow chemical company and Air Products have located in our industrial heartland.

I should also mention that when we did a survey of our pore space, we found that we have the best pore space in the world for carbon capture, utilization and storage, second only to Russia. That is part of the reason—because we have an at-scale project that was done by Shell Quest and an at-scale project for the Alberta Carbon Trunk Line—we're immediately able to capture those CO2 emissions. The pore space we have, I'm told by my officials, is so large that it could theoretically capture all of the emissions already produced by man so far.

We are our very keen to make sure that natural gas, in the spirit of COP28, remains a transition fuel, so that we can not only help ourselves, our indigenous partners and the Canadian economy but also help our international partners.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

Thank you for that, Premier.

Speaking of natural gas, we did see this winter a carve-out for Atlantic Canadians on their home heating, but not for natural gas, which is how most of us here in Alberta heat our homes.

Do you think that's fair?

[Danielle Smith]

It's not fair at all.

In fact, when you look at December, January, February and March, when we have the greatest need for natural gas.... I notice that there are members on the committee from Ontario. Ontario also relies on natural gas, principally for home heating. Most people would have been able to enjoy a break this winter, because natural gas is trading so low. However, when you layer on a carbon tax that is twice the amount that people are paying for their base fuel—and it's itemized on our home heating bills—we see it; we feel it. Since we know that home heating oil is about 1.25 times more intensive on CO2 emissions, seeing that anyone who is using home heating oil, with a higher emissions profile, is able to get a three-year break while we're suffering through the -35° winters that we often have is.... It's absolutely not fair.

I think that it is the obligation of members of Parliament to ensure that fairness in the application of federal policy applies to all products, in all regions, for all types of uses, and that's not happening.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

It's truly unfortunate how asymmetrical the approach from the federal government has been on so many of these issues.

The solution that the Prime Minister and his eco-activist minister brought forward was heat pumps.

As you know, I'm in Fort McMurray. Heat pumps don't work super well at -50°. In fact, they don't really work at -20°.

Do you think that heat pumps are a good solution for northern Alberta winters?

[Danielle Smith]

They may work in some jurisdictions, but I can tell you that in Alberta, my understanding is that our insurance companies will not insure a home that has only a heat pump. It needs to have a secondary backup, because, as you described, in most places in the province it will routinely get below -30°. If pipes freeze, that causes a major insurance wreck. They're just not practical in the extremely cold climate that we have in Alberta.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

Thank you so much for your strong advocacy.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Mr. Kusmierczyk, go ahead.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you, Mr. Chair.

Thank you so much, Premier, for being here with us today and having this important conversation. Affordability is absolutely at the centre of everything that the federal government is doing, and I appreciate that you are part of that work.

I wanted to set the record straight right off the bat. The oil to heat pump affordability program is not just available to communities in the Atlantic provinces. That is a program that is available across Canada from coast to coast to coast, across all communities. As you rightly pointed out, Premier, home heating oil is often the most expensive but also the most polluting type of oil. Again, our federal government has extended that program to all communities across Canada, including in Alberta, and including in my home province of Ontario.

Premier, I also wanted to highlight the fact that, again, I appreciate how the chair has unilaterally called these meetings and invited you and others to testify here, because it is such an important meeting, but I just wanted to highlight the fact that it is interesting to me that out of the permanent Conservative members of this OGGO committee, none have shown up, other than the chair, to ask questions of the Premier of Alberta and the Premier of Saskatchewan, even though three of those permanent members are from Alberta and Saskatchewan. I wanted to highlight the irony of that as well, and it is unfortunate. Nonetheless, those who are here are really keen on talking about affordability and about climate change, which are top priorities for this government.

Premier, I am very concerned about the fact that you're here to talk about and raise your concerns about the carbon pricing, which will add 3¢ per litre on gas on April 1, yet, at the same time, on April 1, Premier, you are raising the gas tax in your home province to 13¢, increasing it by 4¢.

I understand that you were at an axe the tax rally yesterday, I believe, with the Leader of the Opposition. Can you clarify for me whether you were protesting? Was it a rally to axe your tax on the gas tax, which is adding 4¢ to a litre? If you can just clarify that for me, whether you were at a rally to axe the tax that you are increasing in your province by 4¢....

[Danielle Smith]

Sure. I'm happy to answer that.

I should let you know that there are 12,000 Albertans who have home heating oil, of our nearly five million population, so I think just by those numbers you can see that your program does not apply equally across the country. I would say as well that, as I mentioned, we have had $7 billion of forgone revenues, because we've been trying to compensate for the inflation crisis at the federal level. In fact, we—

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Premier, I'm sorry. My time is limited here, but are you speaking out against your government's 4¢ increase on the gas tax on April 1? I'm just curious. Will the government listen to your concerns?

[Danielle Smith]

Well, the federal government charges 35¢ in gasoline taxes. We charge 13¢. Our 13¢ goes to build roads. If your environment minister would let you build roads, maybe some of yours would go to build roads as well.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

We do: thousands of them every year. We do.

[Danielle Smith]

Well, he certainly doesn't seem to want to anymore, and the 17¢, as we know, will not go to build roads.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Premier, I appreciate your not wanting to answer my question on that very sensitive issue of your raising the gas tax by 4¢ in your province, especially in a period right now where there's really an affordability crisis, but I am very worried about the fact, Premier, that last year you had 2.2 million hectares of land burned in Alberta, and you had 299 days of smoke days in the city of Edmonton—both records, absolute records. Can you tell us whether climate change caused these wildfires and these smoke days, yes or no?