Industry Committee on Oct. 17th, 2022

[Bronwyn Eyre]

We don't accept per capita. We see that as a misleading intensity gauge. It's intensity that should be gauged, not per capita emissions. When you look at true emissions that Saskatchewan produces, based on that reckoning, it's 0.111%. It's very, very small, and within the global context it's minuscule.

I guess I would ask whether we are doing enough, for example, when in some of the areas that I've mentioned we have more or less flat emissions, by NRCan's own reckoning, such as in the oil and gas sector in Canada over the last two decades. How can you cap what is more or less flat?

We have to look at this in a global context because, as I said, if every oil- and gas-producing nation on the planet extracted the way we do here in Canada, global GHGs that are energy produced would instantly fall by 25%. We always look at it in a global context, but not really when we compare our record to those of global jurisdictions. The question becomes this: If Germany is ramping up coal and using natural gas, and Europe is desperate for it, why are we strangling what are now being described perhaps as transition fuels, if you're talking about LNG? Why are we doing that to ourselves if other countries are not?

[Han Dong, Liberal, Don Valley North, ON]

I don't mean to argue with you on this, but here we are talking about potential collaboration between the federal government and provincial government, and it sounds as though we have very different opinions on this. Using the same logic, I think it's even more difficult for us to convince Germany to work with us. We can't tell them what to do. I'm not saying that the federal government can tell the provincial government what to do, but at least we can work together and can sit down at the table. That's what this bill does; it's actually setting up the framework.

I looked at the emission levels within Canada, province by province. Take energy generation, for example. Every province has its uniqueness. Ontario's baseload is on nuclear, and they made some bold moves in 2009, I think, to eliminate 25% of coal generation. That was very painful. The government at that time took a huge political hit in the public for that.

My point is that to reach a certain level of reduction, the provincial government needs to make some drastic changes.

[Bronwyn Eyre]

But we have.

With respect, we've cut methane by 50%. You talked about nuclear; we are bringing out small modular reactors. We've been leaders in that. We were the leaders on that and we have no federal funding on nuclear or on our small modular reactor plan. Small modular reactors can really only come online in the late 2030s. In the meantime, if the clean electricity regulations come on tap, you're telling us—you're not sitting down with us; you're telling us—to stop fossil-fuel-generated power by 2035. That is literally impossible, according to SaskPower. We cannot bring on nuclear in time.

We're doing what we can. We cut methane by 50%. We are doing those things. We are simply not getting the credit we deserve for doing those things when we're then told to make it 65% or 70%. It has not been collaborative.

[Han Dong, Liberal, Don Valley North, ON]

I really appreciate this conversation, because now we are talking about the details, but do you feel that this bill actually sets the table so that we can come to the table and you can bring forward requests and say, “We need support on small modular nuclear” and we can talk about more support for the reduction of methane gas?

Right now there is a lack of that at the table, in my understanding, but do you feel that now the federal government ministers are obligated to come to this table and sit down with the three provinces and work out what they need and what we can do as the federal government to play a role as one of four, not as a top-down approach but at the same level? Do you feel that this bill does that?

[Bronwyn Eyre]

Well, it's a shame that the tone of the bill is so top-down. I guess I would say that there's nothing stopping ministers right now from sharing their methane data with us.

We don't need Bill C-235, surely, to work collaboratively with provinces on things of joint interest. As I say, the data isn't being provided on methane. I don't think we need Bill C-235 to mandate anything when that's just what honourable partners do.

[Han Dong, Liberal, Don Valley North, ON]

I enjoyed the conversation, Minister. My time is up. I just want to let you know you have quite a few fans in the committee room here. They're cheering you on.

[Voices]

Oh, oh!

[Han Dong, Liberal, Don Valley North, ON]

Thank you.

[The Chair, Liberal, Joël Lightbound]

I second that.

Mr. Lemire, you have the floor for two and a half minutes.

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

Thank you very much, Mr. Chair.

Ms. Eyre, when you were Minister of Energy and Resources in your government, you said that the costs associated with the green transition were a major obstacle. You were concerned about the costs in terms of lost jobs and lost revenue if the transition happened too quickly. You had indicated that there was a need for grassroots consultation.

In theory, Bill C‑235 takes a step in that direction. It aims to establish programs and projects that stimulate a green economy to take into account the local situation, in addition to engaging local businesses, governments and civil society organizations. I am referring here to section 3 of the bill.

Doesn't this bill help to address some of your concerns? Would it be an interesting step forward?

[Bronwyn Eyre]

In fact, I think it would help if Bill C‑235 referred to working together with respect to the laws and regulations that already exist.

Instead of starting fresh in Bill C-235 and saying that now, for these enumerated areas, from tree planting to the rest, we are going to mandate implementation—which sounds pretty top-down—but we're going to then consult on that mandated implementation, it seems to me that it would be more helpful, I think, to say.... There are dozens of top-down regulations, policy mandates and laws on the books, from the federal fuel standard to clean electricity regulations to holding on to our carbon tax money to the rest. It's almost difficult to keep track of all the federal programs on the books that are in that mandate to provinces.

I think it would be helpful, in light of all of these—from the federal fuel standard to the carbon tax to the methane—to say that we're going to share data, we're going to talk to communities, we're going to talk to ministers. We're going to lay all these things on the table, literally and figuratively, and we're going to figure out how we can actually work together in a real way and in an apples to apples way.

I bring up methane, for example, because it was “Reduce it by 75%. Thanks for doing 50%, but we raise you to 75%”. We provide our numbers, but where are your numbers?

It seems to me that we don't need a Bill C-235 to say that collaboration should start now around new areas, new infrastructure and new projects. I think it's really about stopping where we are, pausing and going back and talking through everything that has been imposed till now.

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

Madam Minister, in the interest of fairness, I feel compelled to interrupt you here. I thank you for speaking in French.

I share the view that the role of the federal government is not to take our money and impose its vision on us.

Thank you.

[Bronwyn Eyre]

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

Mr. Masse, the floor is yours.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

I'm just going to make one comment, because we've heard quite a bit of good comment here.

Just so you know, Minister, there is a Crown copyright issue that this country hasn't dealt with. I hear your concern with regard to sharing information. In fact, we still have Crown copyright preventing any public dissemination of information that we research and so forth. That dates back to 1909 in British law. In fact, it wasn't even addressed until 1911 here in Canada. We are the only Commonwealth nation to continue that, and it's different from the United States.

I'll conclude on that. I do have a private member's bill to adjust this. Mr. Lametti, as the minister and Attorney General, was at this committee, and he is excellent on this in terms of having a good background on it, and the committee did deal with it. That is the one thing I will suggest in the future for all government studies, data and information. Not having it sets us back economically and socially. I hear your concerns, because we are the only Commonwealth nation not to have dealt with this issue. We are different from the United States in providing information.

Thank you, Mr. Chair, and thank you, Minister.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

That's all the time we have for questions today.

I want to thank you, Madam Minister, for taking the time out of your busy schedule to come and speak to us at committee. It's much appreciated by all members.

With that, I'll suspend for a few minutes.

[The Chair, Liberal, Joël Lightbound]

Ladies and gentlemen, I would ask you to take your seats. It is already five minutes past noon, and we will begin this second hour without further delay.

I am pleased to welcome you to the Standing Committee on Industry and Technology.

We welcome the following witnesses: Mr. Gil McGowan, president of the Alberta Federation of Labour; Ms. Cathy Heron, president of Alberta Municipalities; and Mr. Bob Masterson, president and chief executive officer of the Chemistry Industry Association of Canada.

I thank you all for attending.

Mr. McGowan, you have the floor for five minutes.

[Gil McGowan, President, Alberta Federation of Labour]

Good afternoon.

My name is Gil McGowan. I'm the elected president of the Alberta Federation of Labour. The AFL is the largest worker advocacy group in Alberta, representing more than 170,000 unionized workers in both the public and private sectors, including thousands of people who work in oil and gas and in oil and gas-related construction.

I'm here to support Bill C-235 because it would provide an organized and constructive framework to get Prairie folks talking about the unfolding global energy transition—and, man, do we need to talk. As it stands right now, rational discussion on these issues is being deliberately blocked and shut down.

Instead of helping citizens of Alberta and Saskatchewan prepare themselves for a world that's changing fast, far too many conservative politicians from our region are using these issues to sow misinformation and whip up anger for their own political gain. They say that anyone who doesn't agree with them is trying to shut down our resource industries. They say that an effort to plan for the future that might look even a little different from our past is an attack on our way of life in the Prairies. They even suggest that you're not a real Albertan if you don't join them in defending and doubling down on the status quo.

Frankly, I call BS on all of it. I'm as Albertan as you can get. I grew up on a farm in rural Alberta. I went to school in Alberta. I raised my family in Alberta. I'm also proud of our oil and gas industry. It's the engine of our economy and has brought us unprecedented prosperity. Alberta workers, the folks I represent, built it and maintained it, and we are proud of that fact.

However, we also know that change is coming. We know that we can and should prepare and plan for it. We know that if we don't, we could be left behind. This is why I support this bill. We need platforms for all the diverse voices from the Prairies to be heard.

For the Conservative members around this committee table, please stop. Please stop pretending that you speak for all western Canadians. You don't. Stop trying to drown out other western voices. We deserve to be heard just as much as you. Stop trying to demonize us. We're just as much real westerners as you are.

To give you a sense of what could be brought to the table should this government create the framework for consultation contemplated by Bill C-235, I refer all of you to a report that the AFL released in Calgary last week. We call it “Skate to Where the Puck is Going”.

Our report is not an emission reduction strategy, a climate leadership plan or a green new deal. It's certainly not a plan to shut down our resource industries or end our western way of life. Instead, it's just the opposite. It lays out a bold and ambitious plan for the Alberta economy, a plan that would preserve existing jobs in oil and gas, create 200,000 new jobs both within the oil and gas sector and beyond it, and set us on a path for continued prosperity in a changing world.

Significantly, our plan for adapting the Alberta economy is similar to plans released by Alberta business groups like the Business Council of Alberta and Calgary Economic Development. These are the kinds of western voices that are currently being drowned out. They are also the kinds of voices that, for the sake of our future prosperity in western Canada, desperately need to be heard.

That's why we support this bill. Please provide a platform for the western voices who are currently being drowned out.

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. McGowan.

We'll turn now to Madam Heron from Alberta Municipalities. Madam Heron, the floor is yours.

[Cathy Heron, President, Alberta Municipalities]

Hello. My name is Cathy Heron and I am the president of Alberta Municipalities. I'm also the mayor of the city of St. Albert, which is just north of Edmonton. About 67,000 people live in my community, so at a federal level, we're considered a small community.

Alberta Municipalities is an association that represents Alberta's cities, towns, villages, summer villages and specialized municipalities. We represent the communities in which more than 85% of Albertans live. I'd really like to thank you for inviting me to present here today, although much like Mr. McGowan, I wish I were in Ottawa with you. Next time I will be, hopefully.

At the beginning of October, five municipal associations representing Canada's prairie provinces met in Edmonton to discuss issues of common interest. In attendance were Alberta Municipalities; the Rural Municipalities of Alberta; Saskatchewan Association of Rural Municipalities, SUMA, which is the urban association in Saskatchewan; and of course the Association of Manitoba Municipalities, which represents all municipalities in Manitoba.

During our discussions, we talked about issues that Bill C-235 addresses. I have to be very clear that I don't speak for the other associations, but I do think that the discussions we had will really help to improve this bill before it goes back to the House of Commons.

First, Mr. Chair, I would like to speak to subclause 3(1) of the bill, the “Development” section.

The language in this section speaks to the creation of a green economy in Canada's prairie provinces. This seems to suggest that prairie provinces do not currently have a green economy. However, during my meetings with the leaders of the prairie municipal associations, we discussed many green innovations in our respective provinces, including examples from agriculture, solar energy, oil and gas, and waste management sectors. The language in this bill would be more accurate if it referred to “strengthening” or “supporting” a green economy in the Prairies. We are very much already heading down this path, but it is agreed that further federal support is needed and would be more than welcomed. I don't believe any government anywhere has ever created an economy. That only happens with the full involvement of private industry. It is the government's role to create a business-friendly environment, and then businesses move the economy forward.

I'm going to move on to the “Consultation” subclause of this bill.

This subclause speaks to engaging provincial governments, indigenous communities and the private sector to help develop a green economy in the Prairies. Unfortunately, one of the major gaps in this subclause is that you've left out municipalities. I don't believe the Minister of Industry would succeed in the implementation of this framework without consultation with municipalities. Therefore, I ask that municipal governments be included in subclause 3(2) of this bill. I believe that was probably the intent. I've heard a lot of talk today about local, and that's exactly what we are—local government. Of course, you've invited me here today, so I do believe the intent is there, but it would be nice to have it included.

In subclause 3(3), the “Content” section, the bill speaks to prioritizing green projects and integrating more green energy into agriculture, forestry, manufacturing and tourism sectors. This section also speaks to the establishment of programs and projects that would stimulate a green economy and ensure that infrastructure projects incorporate climate change mitigation. These are all areas I was glad to see integrated into the bill.

Paragraphs 3(3)(a) and 3(3)(b), however, leave a lot to be desired. Paragraph 3(3)(a) is worded in a way that indicates that we don't have public transit in the prairie provinces. I can't speak for my counterparts in Saskatchewan or Manitoba, but I can assure you that Alberta has public transit. While we would benefit from more funding and support, it definitely does exist. We have 18 municipalities in Alberta operating their own local transit authorities. Approximately 3.1 million Albertans live in those 18 municipalities. Those 18 communities don't include the various not-for-profit and volunteer-operated transit systems in smaller communities, which help seniors or people living with disabilities continue to reside in their community.

I would encourage the committee, through the chair, to consider amending this language to acknowledge that we have transit in the Prairies and that the framework considered in the bill would work with municipalities to improve and strengthen municipal public transit.

We know that other models of public transit exist besides the ones that currently work in large centres. Those different models that exist in smaller communities need to be considered and funded. These include ride-sharing programs, not-for-profit models and on-demand solutions. The town of Okotoks in Alberta, for example, launched an on-demand transit system that has been so successful that it won the minister's award for transportation innovation. Okotoks is just south of Calgary, and I think their population is less than 30,000 people.

I'd also like to adjust paragraph 3(3)(b) of the bill since it fundamentally misrepresents the role the energy industry will play in the move to a net-zero economy. Instead of “retraining” people who currently work in the oil and gas industry, this section should speak to leveraging their expertise to implement an emission-reducing technology.

In my region, we have what is known as the Alberta Industrial Heartland group. This group has made a very strong business case for hydrogen's role in our future, and I'm talking about blue hydrogen from methane. This business case has been so strong that billions of dollars have been invested into the region so that we can be among the first to produce hydrogen at a commercial scale, because there is a worldwide demand for low-emission energy sources. Alberta is also piloting hydrogen into residential natural gas systems to lower the emissions from heating our homes.

These are just two examples of how the oil and gas industry is playing an integral role in moving Canada towards a net-zero or low-carbon economy.

I would like to thank the chair and the committee for their time today. Thank you for considering municipal perspectives as you work to improve this bill. Alberta Municipalities hopes there will be other opportunities to provide input, feedback and advice in the future.

[The Chair, Liberal, Joël Lightbound]

Thank you, Ms. Heron.

I now give the floor to Mr. Masterson for five minutes.

[Bob Masterson, President and Chief Executive Officer, Chemistry Industry Association of Canada]

Thank you, Mr. Chair and committee members. It's wonderful to be here in committee for the first time in three years. It's great to be back with you in person. Thank you for that.

I'll start by commending MP Carr for the bill and the study into the Prairie economy. Former Minister Carr well knows—as was discussed in the Generation Energy report he commissioned—that the opportunities for Canada to lead in the transformation of the global chemistry industry are real. There's a great opportunity for us. That report identified the opportunities to both substantially lower our emissions and provide the world with the low-carbon chemical products it needs.

Our sector is the third-largest manufacturing sector in the country. Economic activity is at about $65 billion, and 80% of that product is exported outside our borders. Again, if we can decarbonize our sector, we're decarbonizing a good chunk of the global chemistry industry.

The most important thing I'd like you to take away from today's discussion, though, is this: The sector is poised for additional and significant growth, especially in Alberta. At present, over a dozen chemistry projects have been proposed. Taken together, as Cathy mentioned, we have over $30 billion in proposed investments. Here's the thing: Each and every one of those is envisioned as net carbon zero, or low carbon, from initial operation. That includes Dow's proposal to build the world's first fully net-carbon-zero petrochemical facility in Fort Saskatchewan, Alberta.

Why is this activity taking place? It's broadly accepted that there's a five-part framework to decarbonize the chemistry sector: switching to lower-carbon feedstocks, which includes biomass; carbon capture and storage, which has already been discussed; hydrogen; electrification; and building circularity for our products. If we can get products back into the market from recovered and repurposed materials, that is new production that doesn't have to take place.

The wonderful news is that Canada, in the Prairies and Alberta in particular, is only one of two jurisdictions worldwide that provides the opportunity for all five of those decarbonization pathways to take place. That's one reason you're seeing all of this attention on investments in western Canada, right now.

I want to make sure you understand that there are two very real challenges.

First, these projects are “proposed”. Unfortunately, Cathy, the investments haven't been made yet. They've been proposed. That's largely based on the investment conditions established by successive provincial governments in Alberta. Therefore, there's significant work to be done to turn those into final investment decisions to build infrastructure.

I don't want to debate the particulars of this bill. What I want to do is draw attention to the work the federal government, through this committee's recommendations, could do to help, especially with paragraphs 3(3)(d) and 3(3)(e) in the proposed terms of reference for this bill.

Second, take a step back from those $30-billion projects in Alberta. The sector has $200 billion to $300 billion of built infrastructure today in Canada. If we want to decarbonize by 2050, we have to recapitalize every penny of that infrastructure over the next two decades.

If you take one clear message away, it's this: As I say all the time to Mr. Guilbeault and others, it's no longer about environment policy; it's about investment policy. You have an industry that is going to make these investments. It's committed to net zero. The only question is, where is it going to make those investments? We have the opportunity to do it here. I think you share our objective to make sure that it's done in order to provide economic prosperity for generations to come and make sure the world is getting low-carbon chemical products. It's a great opportunity.

If you proceed with the study and get to that point, let me tell you two key things you could focus on that would add value to this transition and the transformation of our industry in western Canada.

First, we need a much more competitive process to support carbon capture and storage opportunities. As mentioned, every one of those dozen projects I talked about—the $30 billion—envisions a role for carbon capture and storage. The Government of Canada has proposed, and is consulting on, a tax credit. It's now a moot point after the Biden Inflation Reduction Act, and there's a lot of work to do if we want to be serious about attracting that investment to Canada, and to western Canada in particular. I'd be happy to talk about some of those specifics during the questions.

Finally, we need to look at the broader investment climate. Study after study shows that foreign investment is slipping in Canada. That will impact our future prosperity. As I said, in our sector alone, we have to recapitalize $200 billion to $300 billion of existing infrastructure. Is that a big deal? Can we do that in 20 years? I'd say we could, probably. It sounds reasonable, but I'd say that over the last 20 years, we've recapitalized $10 billion. Fundamentally, what's going to change between what we've done in the last two decades and what we need to do in the next two decades? It's not environment policy. I'll say it again: It's the investment policy.

What this study can do, what this committee can do, is make the recommendations so that we can get serious about changing the investment environment and that the proposals currently on the table turn into final investment decisions promptly and build infrastructure and we're able to recapitalize the rest of the industry.

Again, I'd be happy to respond to some specifics during the questions.

Thank you again, Mr. Chair.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Masterson.

Thanks to all our witnesses.

We'll start the discussion right now. MP Mazier, you have six minutes.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Thank you, Mr. Chair.

Thank you to the witnesses for coming out here today.

Mr. Carr, the author of this bill, admitted that he had not consulted with the premiers of the provinces that this bill specifically impacts. We also heard at the last meeting that the municipalities in Saskatchewan had not been consulted on Bill C-235.

Mr. Carr also noted that this bill does not have the endorsement of any municipality. It does not have the endorsement of any provincial minister or premier and it does not have the endorsement of any first nation. He also noted that there are zero petitions of support from the public on this bill.

Mr. Masterson, how important is it to ensure that stakeholders directly impacted by legislation are consulted with, and do you see any potential risks with passing legislation that does not have the support of the people it directly impacts?

[Bob Masterson]

That's a good question.

You know what? I presume that when we get to actions, that's the proper time to consult. For a report on what could be done, what the current situation is and what needs to be done to advance the projects already proposed and supported by the Province of Alberta, I don't see any problem with that. Those processes have been through a lot of consultation.

The gaps are clear. I think the province agrees with what those are. If this committee and the government could take steps that would enhance the environment—the economic investment opportunities—who would be against that?