Industry Committee on May 4th, 2021

[The Chair, Liberal, Sherry Romanado]

I call this meeting to order.

Welcome to meeting number 36 of the House of Commons Standing Committee on Industry, Science and Technology. Today's meeting is taking place in a hybrid format, pursuant to the House order of January 25, 2021.

The proceedings will be made available via the House of Commons website. So that you are aware, the webcast will always show the person speaking rather than the entirety of the committee.

To ensure an orderly meeting, I would like to outline a few rules to follow:

Members and witnesses may speak in the official language of their choice. Interpretation services are available for this meeting. You have the choice at the bottom of your screen of floor, English or French. Please select your preference now.

As a reminder, all comments by members and witnesses should be addressed through the chair. Before speaking, please wait until I recognize you by name. When you are not speaking, your microphone should be on mute. Please do not talk over each other, as the interpreters will not be able to capture your comments.

As is my normal practice, I will hold up a yellow card for when you have 30 seconds left in your intervention. I will hold up a red card for when your time for questions has expired. Please keep your screen in gallery view so that you can see the cards when I hold them up. We have a tight schedule today, so I will intervene if you go over time.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on November 5, 2020, the House of Commons Standing Committee on Industry, Science and Technology is meeting today to continue its study on the green economic recovery from COVID-19.

I would like to welcome our witnesses.

We have from Canadians for Tax Fairness, D.T. Cochrane, economist; from Clean Energy Canada, Mr. Mark Zacharias, special adviser, and Mr. Felix Whitton, senior policy adviser; from Enerkem, Mr. Michel Chornet, executive vice-president, engineering, innovation and operations; from Whitecap Resources, Grant Fagerheim, president and chief executive officer; and from Wildlands League, Ms. Janet Sumner, executive director.

Each witness will present for five minutes, followed by rounds of questions. With that, we will start with Mr. Cochrane.

You have the floor for five minutes.

[Dr. D.T. Cochrane, Economist, Canadians for Tax Fairness]

Thank you for welcoming Canadians for Tax Fairness to speak on this topic.

The pandemic has taught us many lessons. Most importantly, it taught us that we are inextricably dependent on each other. Individualism is a myth.

Part of this lesson is that government is a vital institution for equitable social protection and coordination. Despite many government failures during the pandemic, no amount of market-driven, profit-seeking, private sector initiative can replace government's unique roles, especially its fiscal capabilities.

There is almost unanimous agreement that the federal government did the right thing stepping in with unprecedented levels of financial support. This spending served a dual purpose. Most importantly, it put money in the accounts of people who needed it, but it also kept the financial system from seizing up, which would have added a financial crisis on top of the health crisis.

Of course, deficit Chicken Littles are already proclaiming that the debt sky is falling. However, we just need to remember that federal deficits are non-federal surpluses. The debt is money the government spent and has not taxed back yet.

While we slowly move out of the pandemic economy, we must maintain financial supports. The recovery, like the pandemic, will be K-shaped. The government can make sure no one falls through the cracks.

Unfortunately, the pandemic is not the only crisis. We still have the climate crisis. The recovery is a chance for the federal government to take the pandemic's lessons and guide us toward a just and sustainable economy. It can use its unique fiscal capabilities to create greater certainty through decisive leadership. In the words of economist Mariana Mazzucato, we need a mission-oriented economy.

The economy of the future will not look like the economy of the past. There is growing support to wind down high-emission industries more quickly, even from workers in those industries. We should be helping workers transition with income supports, training and employment.

The government should invest in low-carbon care institutions. Budget 2021 showed that we can get creative on child care. Now, let's do the same with pharmacare, dental care, mental health care, elder care, ecological care. If these are priorities—and they should be—they need to be funded like priorities.

There is much work to be done in achieving a just transition. We have the necessary material, knowledge and labour resources, but we need the government to mobilize its financial resources. Stop trying to entice the private sector towards sustainability with tax incentives and cheap lending. If the government spends what is needed to transform existing industries and develop new ones, the private sector will follow.

Taxes have an essential role in creating a just, sustainable economy.

We commend the current government for the carbon tax, which reduces the carbon subsidy reaped by businesses in high-emission industries. However, we need to go further faster. We need a border adjustment so foreign emitters do not get preferential treatment. We need to support households and communities as they transition from dependence on artificially cheap fossil fuels which malformed our local economies.

The carbon subsidy has disproportionately benefited those at the top of our economic hierarchy. Taxes have a role to play there as well. The Biden administration is leaving behind the decades-long folly of trickle-down policies by increasing the U.S. corporate income tax rate, imposing a global minimum corporate tax rate, as well as a minimum tax on book income. Even the Conservative government in the U.K. plans to increase the corporate tax rate. We should follow their lead and then go further. End capital gains exemptions. Close loopholes. Shut down tax havens. Bring in a progressive wealth tax.

Money spent into the economy circulates, as expenditures become incomes become expenditures. However, we have a trickle-up economy. As the money circulates, portions are relentlessly siphoned off as interest and profit, which flow to asset owners. Because asset ownership is highly unequal, the rich get richer simply because they are already rich. They did not earn it. They do not need it. Worse, they use that money to gain political advantages and preferential rules.

Progressive tax measures reduce inequality and the illegitimate power of the wealthy. They also help to keep the money circulating. To build our just society, the government should spend money into the economy where it is useful and needed, and it should tax the money out from where it is not.

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, Mr. Cochrane.

We will now go to Clean Energy Canada.

You have the floor for five minutes.

[Mark Zacharias, Special Advisor, Clean Energy Canada]

Good afternoon, Madam Chair and members of the committee.

My name is Mark Zacharias and I am a special adviser to Clean Energy Canada. We are a climate and clean energy think tank at Simon Fraser University. I am based in Victoria, B.C.

I'll be speaking today on how to help Canadian industries position themselves to export to markets that are increasingly concerned about climate change. Canadian industries are already well positioned for success and with some additional actions they can be the foundation of Canada's economy for decades to come.

With a combined GDP of $46 trillion U.S., 127 nations have adopted or are considering net-zero goals, meaning carbon neutrality by 2050. This list includes not only Canada, but also our largest trading partners: the U.S., the EU and China. It's not just countries that are committing to net zero. With $9 trillion U.S. in assets, 30 of the world's largest investors have pledged to move to carbon-neutral portfolios by 2050 or sooner.

The move by our closest trading partners towards a lower carbon future is a huge economic opportunity for Canada. For example, the World Bank predicts that the production of certain metals and minerals used in clean technologies could increase by nearly 500% over the next three decades. The global shift towards a net-zero future is expected to trigger what has been called a green economy supercycle, during which many of the goods Canada produces could see massive increases in demand.

Canada is well positioned to prosper in a net-zero world. Our commodity exports are as vast and varied as the country itself: aluminum, steel, wood, fertilizer, cement and minerals, some of which are already the world's cleanest thanks to Canada's electricity grid that is 83% emissions free, plus an economy-wide carbon price.

However, Canada cannot be complacent if it wishes to be competitive in a global low-carbon economy. Our competitors are already planning ahead. For example, the United Kingdom recently announced its 10-point plan for a green industrial revolution, which sets out the approach the government will take to build back better, support green jobs and accelerate their path to net zero.

President Biden's proposed American jobs plan is similar to the U.K. plan and will invest in transitioning the U.S. to a clean electricity grid that will power clean industries, buildings and transportation.

There are a number of key takeaways from the U.S., the U.K. and how other nations are transforming their economies. First, recognize that your climate plan is your economic plan. Second, don't build back to what you have; build back to what you will need. Third, act now to attract and grow the industries that will prosper in a net-zero world.

Canada's recent climate plan and budget 2021 are an excellent start. However, Canada could take the following additional steps to grow our industries and the jobs they create.

The first would be a buy clean approach in which the federal government builds infrastructure with low-carbon materials and incentivizes other levels of government to do the same, thus increasing demand for competitively clean Canadian goods. The recent greening government announcement between the U.S. and Canada is a good first step.

Second, Canada must determine which products a net-zero world will need and which of these products Canada can be competitive in supplying. It must then pursue new industries that capitalize on Canada's low-carbon advantages. A good example is establishing a self-sufficient battery and critical minerals supply chain to establish and grow domestic battery and clean-technology manufacturing.

Third, Canada must invest in research, development and deployment of clean technologies to support industries with growth prospects in a net-zero world. Canada must ensure it gets a foothold in new industries where it can lead, such as clean hydrogen, battery manufacturing and carbon removal. It must also align tax structures and incentives while encouraging private investment in clean industry.

Last, Canada needs a “clean Canada” export brand that advertises Canadian products as environmentally superior.

To summarize, Canada has tremendous opportunities to export into a net-zero world. However, Canada must recognize that the climate signal and the market signal are rapidly becoming one and the same and plan accordingly.

Thank you for the invitation to speak today. I look forward to your questions.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We will now go to Monsieur Chornet.

You have the floor for five minutes.

[Michel Chornet, Executive Vice-President, Engineering, Innovation and Operations, Enerkem]

Thank you.

Good morning, Madam Chair, and ladies and gentlemen of the Standing Committee on Industry, Science and Technology.

Thank you for inviting me to appear before the committee.

My name is Michel Chornet, and I am Executive Vice-President, Engineering, Innovation and Operations, at Enerkem.

The theme of the economic recovery provides a unique opportunity for Canada's energy transition. First, I will say a few words about our company.

Enerkem was cofounded in 2000 by my father Esteban, an emeritus professor at the Université de Sherbrooke, and my brother Vincent. They developed and brought to commercial scale a revolutionary technology that is unique in the world. It produces advanced biofuels and renewable chemical products from biomass and nonrecyclable waste.

Our technology is a key link in a genuine circular economy. We therefore contribute to energy diversification and to the manufacture of everyday, low-carbon products. This is a sustainable alternative to burying or incinerating waste materials. While many see waste materials as garbage, we at Enerkem see them as a source of accessible, circular and inexpensive carbon.

Our headquarters are located in Montreal and we operate large-scale commercial demonstration facilities in Edmonton, Alberta, and two innovation centres at Westbury, Quebec and Edmonton, Alberta. We employee more than 250 people across Canada.

With our advanced recycling technology, we have succeeded in creating industrial partnerships in Canada and abroad, including with Suncor, NOVA Chemicals, Shell, Repsol, Proman and SUEZ.

Enerkem is founded on a business model that relies on innovation. We are developing a technology that required, and continues to require, a lot of research and development. To continue our development and to demonstrate that our technology was viable and, above all, commercially scalable, we had to secure private and public capital.

Through our plant in Edmonton, Enerkem has succeeded in demonstrating the flexibility, efficiency and maturity of our advanced recycling technology. The need to innovate never stops, however. Although the technology has reached commercial maturity, the competition is such that additional investments in innovation are required.

Canada has a unique opportunity to develop an advanced recycling model. This would keep the chemical and petrochemical industries competitive through major reductions in greenhouse gases and the creation of high-quality jobs. The Canadian model of advanced chemical recycling would be based on infrastructures already in place, such as low-carbon electricity, and on nonrecyclable waste, which is a major source of carbon.

Last December, we announced the construction of a biofuels plant in Varennes, on the Montreal's South Shore. Our group of strategic partners includes Shell, as the lead investor, Suncor, Proman and Hydro-Québec, which will supply renewable hydrogen and oxygen. We also have the support of the governments of Canada and Quebec. This C$875-million project is called Recyclage carbone Varennes.

The plant will produce a second-generation, low-carbon biofuel. It will reduce the annual production of greenhouse gases by about 170,000 tons of CO2 equivalent. In the world of waste management, Recyclage carbone Varennes' contribution will be considerable. Each year, the plant will convert more than 200,000 tons of nonrecyclable material into almost 125 million litres of biofuel. The economic impact in Quebec will be $85 million per year, not to mention 500 jobs during the construction of the plant and 100 jobs when it is operating.

The economic future looks promising. Currently, we are actually seeing a very rapid progression in the market for new-generation biofuels, because few technologies have reached maturity in making the transition.

Let's quickly look at Canada's situation in the world. In 2018, Canada was in 10th place among greenhouse gas emitters. In 2019, total gasoline sales in Canada reached 45 billion litres. Prime Minister Trudeau has committed to reducing greenhouse gas emissions by 40% to 45% by 2030. Canada has also committed to have a carbon-neutral economy by 2050.

To reach our targets, market conditions that are favourable to rolling out innovative solutions must be created.

A competitive market must be created in order to attract private investment and develop bioenergy projects. An investment tax credit could make it easier to finance companies.

Consistent support for the lifecycle of technological innovation must be assured, through the use of current programs.

The Clean Fuel Standard must be used to support Canadian innovation.

In closing, let me repeat what I said a little earlier. Canada must create favourable conditions to allow the development of innovating companies, as they will contribute directly to our economic recovery in the post-COVID-19 period.

Thank you for your attention.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, Mr. Chornet.

We will now turn to Mr. Fagerheim.

You have the floor for five minutes.

[Grant Fagerheim, President and Chief Executive Officer, Whitecap Resources Inc.]

Thank you, everyone.

My name is Grant Fagerheim. I am the president and CEO of Whitecap Resources. Our head office is in Calgary, Alberta. Our company produces approximately 110,000 BOE per day, comprised of light oil and natural gas, and employs approximately 700 employees and consultants in field operations in Manitoba, Saskatchewan, Alberta and British Columbia.

We understand the expectations of Canadians, along with worldwide investors, that decarbonization and reducing greenhouse gas emissions are essential and we feel confident that our energy industry is moving rapidly to meet the challenge.

I sit before you as the operator of the largest carbon sequestration project in the world, located in southeast Saskatchewan. To date, we have sequestered and stored 36 million tonnes of CO2 and continue to inject approximately two million tonnes per year of CO2.

Although there are many aspirational emission targets being brought forward, we have already safely achieved a net negative emitter status, which, for clarity, means that we sequester and store more CO2 than our scope 1 and scope 2 emissions from our ongoing operations.

As we advance, the Canadian oil and natural gas sector will play a vital role in energy transition that includes global and Canadian climate change expectations. Energy transition will take time and will require a significant amount of continued innovation and technological advancement. It will not be specifically focused in any specific region in our country.

All different forms of energy are required to address the global fight against climate change, including current energy sources along with the new, emerging opportunities. A practical and measured approach is required that will provide widespread job opportunities and economic distribution across our country.

In addition to emerging technologies, including hydrogen, lithium, biofuels and renewables that we participate in to decarbonize our electricity, transportation sectors and building materials, oil and gas will continue to be essentials for decades to come.

With carbon dioxide being treated as a main contributor to climate change, we need to ensure broad and immediate implementation of carbon capture, utilization and storage technology beyond our existing projects. This can happen right now. It is well understood and recognized that light oil and natural gas reservoirs are proven to be an effective means of reliable and permanent CO2 storage, and this practice plays a significant role in combatting climate change.

CCUS from all existing sources can be very positive for Canada, making a positive impact on the environment, employment opportunities, business investment and economic growth.

We will need to further consider not only air decarbonization, but also land and water use. What's important to note is that full-cycle, cradle-to-grave environmental footprint analysis for all types of energy materials will require increased scrutiny and due diligence, something we haven't been doing to date.

We require thoughtful dialogues that include respecting and advancing the great gift of resources our country is blessed with. Post-pandemic job creation opportunities will be dependent upon our energy, environmental and economic policies.

Canada has the opportunity to continue to lead in responsible development of its resources while decarbonizing energy. Not only does a focused expansion on carbon capture utilization and storage technology help with greenhouse gas emission reductions and increased job opportunities; it also importantly links into the energy future of hydrogen development that requires even higher levels of carbon capture and sequestration.

There are many wide-reaching technical, financial, logistical and practical challenges that face our country. We must ensure that Canadian businesses in all urban and rural areas, regardless of size, can attract investment, remain competitive and have a prosperous future while meeting Canada's international greenhouse gas reduction commitments. Setting measurable near-term and long-term objectives is critical to attaining the success we want.

In closing, I recommend that the federal government's carbon capture, utilization and storage federal tax credits be expanded to include all CCUS projects in the tax credit structure, not only to add value to Canadian based energy companies, but also to demonstrate to our fellow Canadians, using a proven existing technology, immediate greenhouse gas emission reductions.

Should this not be considered by our government, we risk further falling behind other countries, including our U.S. neighbour, in attracting investment and job opportunities and in advancing clean technologies.

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We will now go to Ms. Sumner.

You have the floor for five minutes.

[Janet Sumner, Executive Director, Wildlands League]

Good morning and thank you for the opportunity to speak with you about economic recovery from COVID-19.

My name is Janet Sumner. I'm the executive director for Wildlands League. Wildlands League is one of Canada's pre-eminent conservation organizations, collaborating with communities, governments, indigenous peoples, scientists and progressive industry to protect nature and find solutions that work.

We have been working in the public interest since 1968 imagining the future we need and the solutions to make it happen. Our vision is to protect at least half of Canada's land, fresh water and ocean to address both the climate crisis and the collapse of nature. In 1999, we helped usher in the single largest expansion of the Ontario parks system, adding 2.4 million hectares of protection. We are also known for connecting people to nature through such events as our annual Paddle the Rouge.

For the second year running, the World Economic Forum annual risk report named environmental problems in the top tier list of fears for the economy, specifically, climate change and biodiversity loss. A healthy economic recovery will depend on growing the economy but also reducing the economic risks due to climate change and biodiversity loss. A healthy natural world, therefore, is the very foundation for a healthy economic recovery.

For most Canadians, a healthy natural world requires taking action to rebuild and restore nature where we live. Scientists and health care providers are urging, and even prescribing, that Canadians get out into nature to maintain mental, emotional and physical health during this pandemic.

Whether young or old, new to the country or multigenerational, communities have expressed the need for more access to nature. We must therefore invest in creating more urban and near-urban protection; regenerating wetlands and restoring endangered species habitat; planting trees and rebuilding the natural infrastructure in our cities that is key to improving flood management and flood reduction; creating ecological corridors, such as Cootes to Escarpment EcoPark System, and ensuring there are more opportunities for communities to interact with nature, as on the Trans Canada Trail; and working with the agricultural, ranching and rural communities on restoration projects, such as the work that is done by ALUS in Alberta, Ontario and elsewhere.

In Scarborough, where I live, Rouge National Urban Park is close to home. Last fall, the superintendent for Rouge National Urban Park took my team on a walk, taking all COVID-19 safety precautions into account. We toured where they plan to restore the wetland and bring back the capacity of the Rouge to manage low- and high-water events.

By our own conservative estimates, this project will result in more than more 25 direct jobs per year. It will require engagement with nine first nations in partnership and with an urban design consulting firm to get the project design right; engagement in public consultation, with communications expertise; architectural renderings; Parks Canada staff to lead and do; Toronto and Region Conservation Authority staff; phragmites removal teams and expertise—the Rouge is choking in this invasive species—construction crews for the new boardwalk; mechanics to maintain equipment and machines; wildlife specialists; interpretation and education staff; manufacturers of decking and specialized material. All of that is in addition to the new wardens, beach patrol and 100 summer students for monitoring and invasive species control. There have been more than 100 projects with farmers working to address hydrology further upstream. In the last four years, more than 200 jobs have been created.

This is just one snapshot. Green Infrastructure Ontario estimated that 60,000 jobs could be created by investing in the building of natural infrastructure, and if we were to align systems and efforts, up to 140,000 jobs in Ontario could be a stretch target.

It is therefore the recommendation of Wildlands League that Canada invest in rebuilding the natural world where we live as part of a healthy economic recovery. It is time that we put nature at the heart of economic recovery.

I will conclude with one more example. Windsor, Ontario, is the flood capital of Canada. The risk to homes and municipal pocketbooks is exacerbated by climate change. It is also a biodiversity hotspot, with a high diversity of species and a high number of endangered species and little in the way of protection. There is less than 1% protected in southwestern Ontario, with pressure for more development.

Windsor is a perfect example of how rebuilding the natural world would benefit the quality of life, the economy and nature. If we were to build more natural infrastructure, doing so could manage water flows throughout the city, protect the Ojibway Shores complex as a national urban park and establish ecological corridors that stretch out to the surrounding rural areas and work with the farming community.

I'm going to skip to my last points.

This is not isolated in Ontario, because rebuilding nature where we live works in Saskatoon, Vancouver, Halifax, Montreal, Edmonton and Ottawa. If we can generate more than 100,000 jobs in Ontario by building with nature, we can do even more than that across Canada. Then think beyond that to the landscapes of regenerating seismic lines across B.C., Alberta, Saskatchewan, Newfoundland and the Northwest Territories.

Thank you very much for your time today.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We will now start our round of questions.

For our first six-minute round, the first spot will go to MP Dreeshen.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much, Madam Chair.

It has been interesting to listen to the witnesses this morning. I have heard various views. We looked at tax credits to make things work, and others were saying that the worst thing we could do is give tax credits because that would encourage bad behaviour.

I'll start with Mr. Fagerheim of Whitecap Resources.

I've seen the type of work that our oil and gas industry has done to become world leaders, and your work with carbon capture utilization and storage is amazing. Other projects in Alberta are doing the same, taking the equivalent of hundreds of thousands of cars off the roads. Of course, it's happening in Alberta, and it doesn't seem like anybody really cares about what is taking place there.

I'm concerned somewhat, because the way I look at it, we talk about all these great things we're going to do and that we are going to take all these minerals out of our landscape. Our last witness indicated we have to protect our landscape; therefore, we're not going to want to advance that in all areas. A couple of days ago we heard from indigenous leaders who were saying they need to have jobs and to be part of our natural resource development, and oil and gas is critical for them. We've heard from miners saying that any place else in the world you can get a project done in nine months, and it takes years and years here. We have Bill C-69, which ensures that is going to happen forever.

Where are we going to get all these minerals to create this electric vehicle battery development project when we have people who just don't want to see any development anywhere?

Mr. Fagerheim, I know the great work you've done. How do you convince others that our oil and gas industry is the best in the world and that it's better for us to be developing our great resources than giving it to somebody else to do?

[Grant Fagerheim]

I understand the frustration. We feel the very same frustration in getting recognition. This project in Canada, again the largest project in the world, has not been celebrated or brought forward onto the world stage. Outside Canada, we're recognized in all other parts of the world, as to the sequestration and storage we have. We have scientists continually coming in monthly from all over the world. We only do monthly tours.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Madam Chair, if the witness could lower his mike, it would make the interpreters' work easier.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, Mr. Lemire.

Mr. Fagerheim, could you lower your microphone a little? We're having difficulty with the translation. Thank you.

[Grant Fagerheim]

Yes. Can you hear this okay? I'll assume you can.

[The Chair, Liberal, Sherry Romanado]

That's perfect.

Go ahead, sir.

[Grant Fagerheim]

We are recognized around the world, other than in Canada, for what the Saskatchewan government working together with the Canadian government did. This project has been in existence since the year 2000. It's been running for 21 years, so it's been studied.

With regard to getting recognition, first of all, I think we have to be recognized within our own country for the work that is being done in the oil and gas sector, not just in Alberta, Saskatchewan, British Columbia and Manitoba, but also in Quebec and Ontario. We need the opportunity to understand that decarbonization and for the world to see how responsibly developed our products are. That has not been celebrated. We are continually challenged as to the makeup of the products that we do bring to market. I think it has to be. The only way we can succeed is by being recognized across all of our provinces. We talked about that. We're going to advance. We hear some of our presenters talk about how we're going to have to build vehicles. Those come from steel and from mining projects. We're building cars, machinery, ships, concrete and buildings. We're going to have to continue to advance on that.

These are all mined materials, and mining takes energy. We can lead in these things. Plastics, bottles, tubing, paint, makeup—all of these come from products that are below the surface of the earth.

What we're going to have to do is recognize that there is a responsibility that we take seriously in Canada. If there's no recognition and there's no demonstration of measurable outcomes, we're not going to have success.

When I talk about cradle to grave, we're talking about mined materials. When we're moving to renewables, those materials require huge amounts of energy, so we're going to have to understand that and recognize that this is an energy transition. It's not a start-and-stop exercise. We talk about hydrogen. We're involved in a couple of hydrogen projects ourselves.

The offtake of the CO2 is massive, as large as it is on anything else, on any other products. We're going to have to make sure that we understand and respect where we're at. This is where I talk about this energy transition taking an extended period of time and about being practical and logical and moving through efficiently as we move through time.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We will now go to MP Jowhari.

You have the floor for six minutes.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Madam Chair.

Thank you to all our witnesses for their testimony today. I'm going to start with Mr. Zacharias.

Mr. Zacharias, the report titled “The Next Frontier”, which was published by your organization in April 2021 and which you referred to in your opening remarks, says:

Canada is well-positioned to capitalize on what's been called the green economy's supercycle, during which sustainably produced energy and mineral prices soar.

Can you expand on what the green economy's supercycle means? Can you give us some background on the conclusion that you've come to? What were the key elements of it?

[Mark Zacharias]

Absolutely.

The green economy supercycle is basically those elements, those products, those goods that will be required to transition the world to low carbon and net zero. Canada has a very clean electricity grid at 83%, so we have the ability to basically produce and export products that are lower carbon than our competitors.

For example, we have the lowest-carbon aluminum in the world right now. Our steel, made from blast oxygen furnaces for that technology, is also the lowest carbon in the world. Our metallurgical coal that comes out of western Canada has half the greenhouse gas content and carbon footprint of that same coal coming out of Australia. The same goes for many of our forest products. Our pulp industry is the cleanest in the world right now from a GHG per tonne on various pulp products.

We have a huge opportunity, not only in terms of the cleanliness of the products, but also in terms of our markets. We have the U.S. adjacent to the south. We have the EU off to the east. We have Asia off to the west. We also produce a lot of the things that the world is going to need.

I'll give you an example right now around battery manufacturing and zero-emission vehicles. Canada has abundant sources of nickel, lithium, graphite, cobalt and copper. Those can be produced in Canada with low-carbon content. They can be used in Canada as well throughout the battery manufacturing cycle and then used in zero-emission vehicle manufacturing. You may be aware that the big three automakers all have agreements now with their unions and the various levels of government around producing zero-emission vehicles in Canada. It makes sense that we would back up that supply and value chain and start looking at not only the batteries that go into the vehicles but also the metals and minerals that go into them.

That's just an example of the green economy supercycle. I believe the term was coined by Bloomberg finance.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

In the same article, your organization talks about four additional recommendations. You touched on that in your opening remarks. The one in the article that piqued my curiosity was around Canada needing a rebrand: “We need to not only export low-carbon goods—but a new 'Clean Canada' brand to the world.”

Can you expand on that, please?

[Mark Zacharias]

Yes. Many of our markets, particularly in the EU, parts of Asia and now increasingly in the U.S., are really unaware of the low-carbon content and low-carbon footprint of Canadian products and services. Canada's largest export has been fossil fuels. It has been for quite some time and it probably will be for at least the next several years or decade. But there is a tremendous opportunity, and an export opportunity, for Canada to show not only our export markets but also Canadians themselves that we have a good story to tell. Our products can help the world transition to the Paris Agreement scenario.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

By the way, I found that article very, very interesting. As well, the comments and recommendations in the report entitled “Taking the Wheel” were very helpful, at least to me.

Under “A shifting global landscape”, you state, “Both the EU and U.S. policies, while differing in intent, have the same implications for Canada: our export industries need to be nimble and increasingly clean.”

I understand what nimble means, but can you talk about how they can become more nimble as well as increase their clean technology?