Industry Committee on May 4th, 2021

[Grant Fagerheim]

Thanks, Mr. Poilievre.

I do appreciate what Elon Musk is attempting to do. It's a fairly draconian statement to talk about shutting down civilization without oil and gas. The comment we should be taking from that is that civilization is extremely linked to hydrocarbon products. We're talking about oil and gas into the future. It's our livelihoods, whether it's hospitals, any chemical production or anything that we do at this particular time in everyday society. The clothes we wear and all the textiles all rely on hydrocarbon products.

We agree. On the medical science side, on hospitals closing and the amount of materials that are used, it's petroleum products. This is where I come back to. We need a measured approach into the future, which relies on science and technology, like carbon capture, utilization and storage. We're going to transition for an extended period of time. This is not a start-and-stop exercise. It should be respected and rewarded.

Just to close off on that, what isn't talked about much is the hydrogen development side that everyone is so excited about. Hydrogen development needs carbon capture as well. There is going to be a transition phase that we should be advancing through very practically, logically and sequentially.

[Pierre Poilievre, Conservative, Carleton, ON]

Right.

According to the International Energy Agency the world will be consuming 100 million barrels of oil per day 20 years from now in 2040. Even with the most draconian governmental policies to restrain the use of hydrocarbons, there will be at least 60 million barrels a day of worldwide petroleum consumption.

The question is, where do we want that to be produced and how? Do we want it to be produced by the Saudis, Venezuelans, Algerians and others and then imported to Canada, which is the policy of this government? Do we want it done by our own Canadian industry, as exemplified by your company that employs 700 people and empowers first nations communities and actually reduces greenhouse gases? Do we want hostile, foreign, polluting nations to make our energy for us? Which option should Canadians pick?

[The Chair, Liberal, Sherry Romanado]

Answer very quickly as you're out of time.

[Grant Fagerheim]

I would say get back to the respect that the Canadian energy space has. It should be recognized, celebrated and brought forward. We're known worldwide. Not just Whitecap, but the energy sector in Canada is understood to have the most responsibly developed hydrocarbon products anywhere in the world.

[Pierre Poilievre, Conservative, Carleton, ON]

Absolutely.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We will now go to MP Ehsassi.

You have the floor for five minutes.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you, Madam Chair.

Thank you to all the witnesses. I found today's testimonies to be very helpful.

I will start off with Mr. Zacharias.

Mr. Zacharias, as you know, the study before us is about green recovery in the context of what the government can do to ensure that we come out of this stronger. You talked about Canadian innovation. You talked about it in the context of our clean electricity grid, but also in terms of products such as aluminum, steel and forest products.

On this rebranding that you speak of—you're essentially saying the world needs more Canada—where have we dropped the ball? How could we do a better job promoting Canadian exports in these specific fields?

[Mark Zacharias]

Well, there are many parts to that answer. I think, first and foremost, is our federal missions and trade missions abroad should be basically promoting the fact that Canada's largest exports are currently fossil fuels and auto parts, but we can do much more. We should have educational awareness of all of our outreach in terms of working with other countries and other companies and what our opportunities might be. I think that's one of the first parts in terms of a Canadian export brand.

The second one is very few nations know that we do have carbon content standards and the ability to produce goods and services that are much lower than many of our competitors. British Columbia, in the last two years, has actually done benchmarking, showing that, yes, the commodities that B.C. exports are lower in carbon than almost all of its competitors. That needs to get pushed out again to the global market, so that when companies like BMW are looking for lower- or zero-carbon aluminum, they'll look at Canada for sourcing that, and when companies are looking at copper for global EV manufacturing, they'll look at Canada. We are big producers in this, and we can do a good job.

Also, too, it really is about rethinking around our export markets. For many years—post the 2008-09 recession—much of Canada looked at Asian markets to grow our market share there. We also now have the U.S. looking at border carbon readjustments and also looking at the U.S. buy clean. The export brand is not just an aspirational thing that we would like to do, but it's something we're going to have to do to demonstrate the carbon content of our products in order to be able to trade with new nations.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you very much for that.

Perhaps I can take it to another issue which is, again, with respect to the need to reposition. You spoke of some of the announcements we've been hearing over the course of the past year with respect to electric vehicles, from the top three auto manufacturers that have worked with their unions. Are we doing a good job of making sure we are focused on that particular sector and taking advantage of all those opportunities out there?

[Mark Zacharias]

I think we are. I think Canada, particularly since the Biden administration has come into power, has had a particular focus on the automotive industry. It is such a large part of Canada's economy, and it's part of our economic and cultural history. Also, too, I think Canada has been doing a good job on their ability to seamlessly integrate, as we have been doing, into the U.S. market under the U.S. buy America policies. I think where Canada could do a little bit more is by backing up value chain and supply chain to look at what components and metals and materials are going to be going into these vehicles. Where do they come from? How do we try to ensure that they actually come from Canada?

There's another part of this, too, around the buy clean aspect. If we can actually have the Canadian federal government, through things like infrastructure projects, use low-carbon materials such as steel and aluminum that are actually produced in Canada, and if we can scale up production of these, that production can then go into things like vehicle manufacturing.

We have an opportunity here to connect a whole bunch of dots. I think there is some growing realization and recognition just over the last couple of months, and particularly in budget 2021, that shows that thinking is happening.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you for that.

In terms of backing up our value chains, are we well positioned in so far as battery manufacturing is concerned in this country?

[Mark Zacharias]

I don't have much time left. We are in early days and we are playing catch-up to Asia, Europe and the U.S. We have work to do.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We'll now start our third round of questions.

Our first round will go to MP Baldinelli.

You have the floor for five minutes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair. Thank you to all the witnesses for being with us today.

I'm going to follow up on the comments of my two colleagues, Mr. Ehsassi and Mr. Jowhari.

Mr. Zacharias, I too printed off the report, “The Next Frontier”, and was examining it. I was really struck by the comments. I enjoyed listening to the comments that this opportunity, as we move to net zero by 2050, provides a huge economic opportunity for Canada, and on the notion that a climate plan is also an economic plan. I agree with your comments on that.

In your report in the section that talks about the advantages, you identify the three: our clean energy, our clean tech and our carbon capture technologies in our supply chain. I want to talk about two of them.

I come from a community that has two hydro-generating facilities. We produce in Niagara, with Beck I and Beck II, the Sir Adam Beck stations, 2,200 megawatts of hydroelectric clean power that's put into the grid.

We talk about the grid and the notion of hydroelectricity and the 83% emissions-free, and so on, but it's an aging grid that's in place. I'm wondering if you've done any studies about what is required, from an investment perspective, to update our grid, to take advantage of the growth that's going to be required in the future.

[Mark Zacharias]

That's a great question.

About 60% of Canada's electricity is produced by hydro right now. As you note, that grid is aging. However, there are new technologies coming behind that, which will be able to produce power at much lower rates and store it in ways we can't even imagine today.

It was inconceivable even five or 10 years ago that we would have renewables—solar and wind—below about 5¢ per kilowatt hour. Just over the last couple of weeks, Saudi Arabia has bid out a new solar array at 1.04¢ per kilowatt hour. That's for the production of the renewables, and it's plummeted in cost. Canada, I believe, has had 9% growth in wind. I'd have to check on that.

Also, on the other side of the equation, is how to store renewable energy. Right now there are companies in Canada, like Hydrostor out of Ontario, that are building very large grid-scale storage facilities in California, such that costs of storing electricity produced from renewables are going to be plummeting. This, combined with Canada's existing nuclear plus hydroelectric, puts us in a very, very good position. If we are going to produce things, for example, like clean hydrogen from electrolysis, we're going to have to scale up our generation across Canada.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

That's great. Thank you.

Also, as part of that, one aspect of our our clean energy advantage that you talked about was that it can also support indigenous self-determination. I was wondering if you could expand on that a bit.

[Mark Zacharias]

Yes. There is an organization called Indigenous Clean Energy that looks at building partnerships with indigenous nations as well as with rural and remote communities. The recent federal budget, budget 2021, had, I believe, $35 million for indigenous clean energy generation, so there is an opportunity there, particularly as renewable grids require large areas, for either wind or solar. Those can be located on a lot of indigenous lands in indigenous territories, ideally with their full consent and partnership.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Excellent.

Last of all, we talk about the third advantage in our supply chains. When you were talking to my colleague, you spoke about connecting the dots and about how we not only have the ability to produce those raw materials but also to actually create the materials to create the end product. I think you identified that we spend more than $7 billion annually on imported steel and aluminum materials that are typically higher carbon than are our domestic options. Could you quickly expand on that and on how we could turn that into another advantage for us?

[Mark Zacharias]

Absolutely.

In B.C. the Pattullo Bridge replacement will be using steel that's going to be sourced from Asia. That steel could have come from Ontario steel plants. They produce the same type of steel that will be necessary. What would have been required in that case would be some federal policies around finding the lowest-carbon sources of steel, and if those sources of steel come from Canada, which ideally they would, that steel would be used in Canadian construction and we would scale up our industries.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you so much.

I saw the card from the chair, so thank you for your time today.

[The Chair, Liberal, Sherry Romanado]

Thank you.

With that, we will go to MP Jaczek.

You have the floor for five minutes.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Thank you very much, Madam Chair.

Thank you to all the witnesses for their very interesting testimony today.

My first question is for Ms. Sumner.

I'm so pleased that you've had the opportunity to talk about the Rouge National Urban Park. As you're well aware, a very large part of the park is in my riding north of Steeles Avenue. You've talked about the opportunity for economic development within the park, adjacent to the park. You may well be aware that the City of Markham has great plans, potentially, for a gateway to the park.

I'm wondering if you could expand a little bit on the opportunities north of Steeles in the Rouge park and whether you think our government should be investing more within the park to allow for those economic opportunities, jobs for youth, etc. Just give us a picture of what you can see as the potential.

[Janet Sumner]

Thank you very much for the question.

You're quite right. I am very familiar with the park, having worked on the creation of it, and with many of the interests around the park, including some of the farmers who are currently overlapping with the park and are just adjacent to it.

The farming community has been a great asset to improving the ecological integrity. A really key point in developing the park was to actually have the buy-in of the farmers to see themselves having a role. I see increased and further roles for the farming and agricultural community, so that they can be engaged in improving the ecological integrity of the park.

Quite frankly, we've only just begun. It's early and it's in its development. It's been perhaps four years now, maybe three, that the park has been fully operational.

I know the park superintendent has prioritized various areas where there has been development. I suspect we will be moving further north with anything from signage to interpretation; a visitor centre, which will be a very important piece; programs, like restoration and building better hydrology for the park, a very key element; and reintroduction of species.

What we're seeing now is an investment in science. The partnership with the Toronto Zoo and the University of Toronto, along with various science and reintroduction programs and ecological restoration projects will be going forward. We will only see more of those and not fewer.

When I recently spoke to the park superintendent to get an idea of just how many trees could be planted in the park, for example, my understanding was that the Rouge National Urban Park could accommodate up to 500,000 more trees over an 18-month period.

The catch on this is that the supply chain for trees is limited, so making investments in growers who could supply Rouge National Urban Park with the right trees to the right places would start to generate jobs and volunteer opportunities, quite frankly, as well.

This park, which is within an hour's reach of seven million Canadians, is the perfect place to be investing. It is also about improving water retention in management levels for this area, which benefits everybody. I live within 10 minutes of Rouge National Urban Park, admittedly, in the south, but it actually was the area that survived the ice storm in 2013 the best, because of the native species and the tree canopy we have there.

I suspect we will only see more jobs emerging from the regeneration of nature in this area.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Thank you so much. I totally agree with you. Believe me, there will be plenty of volunteers available to plant those trees.

My next question is for Mr. Zacharias.

Mr. Zacharias, you heard from Mr. Fagerheim about the opportunity for carbon capture sequestration. Has Clean Energy Canada had the opportunity to look at this technology, and to give an assessment in any way of its utility and its place?