Industry Committee on May 27th, 2021

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you very much.

You also mentioned earlier that every decision by government should take climate into account. I agree. If we aim for net-zero emissions by 2050, then obviously we need to start taking steps right now.

I'm wondering if you can comment on whether or not budget 2021 is a good start and is going to help us get to at least 40% to 45% reduction by 2030, and eventually net zero by 2050.

[Mark Carney]

First, I think the ethos that you just referenced is, in my reading of the budget, at the heart of the budget. There are consistent and comprehensive assessments of the impact of all policies on climate change, including on ensuring a just transition, and of the ramifications of some of these adjustments for Canadians and Canadian regions so that appropriate support is provided.

Second, I think an important innovation, which formally you're more familiar with than I am, is from outside of the budget per se, in a separate bill. I think it's Bill C-12, by my memory. It puts in place a net-zero advisory body that provides, as I recommended in my opening remarks, a framework so that we don't just know where we're going, but where we stand today. In other words, it looks at the adequacy of policies that have been put in place, both actual and prospective, identifying any gaps between those policies and the targets. As you well know, and members will be familiar with, the 40% to 45% target is new, so in my judgment additional policies will be required, which underscores how important this committee's work on these issues is.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

I'm wondering if you can comment a little more on taking climate into account in every decision. We have a gender-based analysis, which is technically supposed to look at every policy and program through a gender-based lens.

Can you explain explicitly, so that we can use this in our recommendations, what this would look like from a climate perspective?

[Mark Carney]

Let me take one step back. I'll be quick. First, the core of the work on the financial side is ensuring that there is the information and markets to take climate change into account, whether you're a bank, pension fund or life insurance company.

Second, the gender-based approach.... I was an official in the Department of Finance when the first version of that came about. That sort of comprehensive item-by-item assessment of the impact ultimately on GHG emissions is entirely appropriate.

As a last point, it's not just mitigation; it's adaptation and resilience. Those aspects of climate change are essential.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you so much.

[The Chair, Liberal, Sherry Romanado]

Mr. Lemire, we now go to you for two and a half minutes.

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

Thank you, Madam Chair.

My question is for Mr. Giroux. First, thank you for being here.

I'd like to hear more about your vision for hydrogen growth in an ideal world.

How can hydrogen be incorporated into the transportation sector? Can hydrogen be helpful?

Focus, if you would, on battery charging.

[François Giroux]

Thank you for your question.

The most important step in hydrogen development is building a distribution system. Hydrogen is often stored as a gas and can even be stored as a liquid, in pressurized tanks, a bit like propane. Hydrogen is similar but requires containers more suitable to its physical properties.

The first thing I would recommend is establishing incentives to support the implementation of the distribution system along highways, for transportation, car travel and so forth. The fuel would then be available to the industry, from production to distribution. That's the first thing that has to happen.

According to an interactive map of European countries, in the next two years, Spain and France alone will have 60 to 80 hydrogen refuelling stations along highways. In 2030, those two countries are expected to have 300 refuelling stations. The maps are available. Hydrogen development is well under way.

Distribution and accessibility are the key to success, in order to avoid the failures of natural gas and propane, which could have helped reduce greenhouse gas emissions at the time. Let's not make the same mistake.

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

I gather, then, that we are a few years late.

I want to talk alternative fuels, because hydrogen is not all green.

Can hydrogen be an effective alternative fuel for Quebec and Canada?

If so, what would that look like?

[François Giroux]

In response to your first question, the answer is, yes, hydrogen is effective. Quebec, for instance, can produce clean hydrogen thanks to its hydroelectric capacity. The gas can be produced via electrolysis. Two days ago, Spain announced that it will be producing hydrogen using solar panels. Quebec is ready and the time has come, Mr. Lemire.

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

Thank you, Mr. Giroux.

[The Chair, Liberal, Sherry Romanado]

Thank you.

Our next round of questions goes to MP Masse.

You have the floor for two and a half minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

Mr. Carney, I'll turn the floor over to you to answer this and I won't interrupt. I'm not trying to pick on anything and I didn't want to get into definitions, so I'm going to turn my time over to this.

I just want to get an idea of where this is at now. You have said before, “To be clear, more expensive liquidity is a price well worth paying for making the core of the system more robust. Removing public subsidies is absolutely necessary for real markets to exist.”

That's what you said. That was five years ago, so to be fair I think a lot of things have changed. Is that the same kind of philosophy you stand by for affordable housing or government investments and so forth and how much we pay for those?

I'll turn the rest of my time over to you. There won't be any back and forth.

[Mark Carney]

That's much appreciated. Thank you.

Five years ago.... I believe that refers to providing liquidity to financial institutions—to large banks—and liquidity insurance being provided by central banks. One of the things we've tried to do, Mr. Masse, including in Canada, but internationally as well, has been to treat banks more like everybody else in the market. Whether you own a small shop, a small farm or large farm, a small business or large business, if you make mistakes, you fail and you bear the consequences.

The reality in the financial crisis was that banks didn't bear the consequences. They were supported with extraordinary liquidity and other mechanisms. We looked to change that so-called “too big to fail” approach. The consequence of that is adjusting the liquidity. Liquidity is provided into financial institutions, including banks, so that they themselves self-insure more. In other words, they keep more liquidity—more buffers for a rainy day—as all of us try to do as individuals on our own basis or as businesses.

The cost of that applies for the financial system. Over time, that means a lower cost to the financial system and very much to Canadian taxpayers because it means that the state doesn't have to come in and bail out the institution because it hasn't put aside funds for a rainy day.

That is a financial issue. I wouldn't take that from the financial sector and port it over to the other parts of the economy.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

I think that's my time, Madam Chair.

[The Chair, Liberal, Sherry Romanado]

Thank you, MP Masse.

We'll now go to MP Poilievre.

You have the floor for five minutes.

[Pierre Poilievre, Conservative, Carleton, ON]

Thank you very much.

Mr. Carney, can you tell me the countries from which your company sources the polysilicon that goes into its solar panels?

[Mark Carney]

Off the top of my head, I can't.

I can tell you that a number of the solar arrays, or the main components of solar arrays, would come from China, which is the largest producer in the world of solar arrays.

[Pierre Poilievre, Conservative, Carleton, ON]

Yes, that is true. In fact, half of the polysilicon, which is the main raw material used to make solar wafers, is produced in highly secretive coal-powered factories in the Xinjiang region. It's the same place the communist regime is carrying out a genocide against the Muslim minority.

I'm going to quote Reuters here:

Some U.S. lawmakers have voiced gorwing [sic] concern that the industry is dependent upon products, specifically the raw material polysilicon, linked to work camps in China’s Xinjiang region. The U.S. State Department has made a determination that Chinese officials are perpetrating genocide there, and imports of cotton and tomato products from the region were banned this year.

Will you make the commitment on behalf of Brookfield that you will not source any materials from the Xinjiang region?

[Mark Carney]

I'll make the commitment that we will not source materials that have the supply chain that you described.

[Pierre Poilievre, Conservative, Carleton, ON]

Does that mean you will not source any materials for your solar panels from the Xinjiang region?

[Mark Carney]

Well, I think one has to look at the.... I don't have with me today the exact source, the exact companies and the specifics, so, if I may, I'm not going to take the reference from a media report and apply it as fact.

However, certainly ethical sourcing are important to us at Brookfield.

[Pierre Poilievre, Conservative, Carleton, ON]

That's a nice talking point, but you would think you would know one way or the other, off the the top of your head, whether your materials, given that you are responsible for environment, social and governance for this massive half-trillion dollar enterprise, were coming from a place known for slavery, genocide and coal-fired electricity.

[Mark Carney]

What I'm saying, Mr. Poilievre, is that I do not believe that that is the case.

[Pierre Poilievre, Conservative, Carleton, ON]

But you haven't verified it.