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.