Evidence of meeting #134 for Natural Resources in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was million.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Cheri Crosby  Assistant Deputy Minister and Chief Financial Officer, Corporate Management and Services Sector, Department of Natural Resources
Christyne Tremblay  Deputy Minister, Department of Natural Resources
Frank Des Rosiers  Assistant Deputy Minister, Innovation and Energy Technology Sector, Department of Natural Resources
Jeff Labonté  Assistant Deputy Minister, Major Projects Management Office, Department of Natural Resources
Beth MacNeil  Assistant Deputy Minister, Canadian Forest Service, Department of Natural Resources
Jay Khosla  Assistant Deputy Minister, Energy Sector, Department of Natural Resources
Clerk of the Committee  Ms. Jubilee Jackson

3:35 p.m.

Liberal

The Chair Liberal James Maloney

Good afternoon, everybody. Thank you for joining us. Our apologies for the last-minute room change. Apparently there are some technical difficulties upstairs which necessitated the move, but we're all here now. It all worked out thanks to our clerk and everybody else who made the change work out so quickly.

This afternoon, pursuant to Standing Order 81(4), we're considering the main estimates for 2019-20: vote 1 under Atomic Energy of Canada Limited; vote 1 under Canadian Nuclear Safety Commission; votes 1, 5, 10, 15, 20, 25, 30, 35 and 40 under Department of Natural Resources; votes 1 and 5 under National Energy Board; and, vote 1 under Northern Pipeline Agency. These were referred to the committee on Thursday, April 11, 2019.

Minister, I want to start by thanking you for taking the time to join us today. We all know how incredibly busy you are. We're always grateful to you for making time in your schedule to be here with us. I'd like to also welcome your colleagues who are joining us as well.

You all know the process, so I don't need to give any explanation. I will turn the floor over to you. Following that, we will be going to a period of questions and answers.

Minister, the floor is yours. Thank you.

3:35 p.m.

Edmonton Mill Woods Alberta

Liberal

Amarjeet Sohi LiberalMinister of Natural Resources

Thank you, Mr. Chair.

Good afternoon, everyone.

It's great to be here again to talk about what important investments our government has made in forestry, mining and the energy sector since October 2015, and how we can continue to invest in the future of Canada's natural resource sectors. This is a critically important time for our resource sectors and, more importantly, for Canadian workers.

As we all know, the world's energy needs are changing. Countries are increasingly looking to import sustainably sourced products. There is a growing consensus on the need to take immediate and sustained action on climate change. Some may choose to ignore these changes, keep their heads in the sand and hope for the best, but that is not the Canadian way. We are innovators.

Let's not forget that it was Canadians who first discovered how to get oil out of the oil sands. It was Canadians who created the first all-electric, battery-powered gold mine. It was Canadians who first built the largest North American passive house.

So how do we prepare for the future while also responding to the needs of today?

It starts with listening. In 2015, Canadians made it clear that protecting the environment and growing the economy could no longer be treated by the government as opposing goals.

Through Generation Energy, over 380,000 workers and leaders from renewable energy and clean tech, from oil and gas, from municipalities, indigenous leaders and Canadians helped build the idea of what our energy future could look like and how we can get there. We listened, and we have taken action to deliver for middle-class Canadians and those working hard to join the middle class.

We have done this by attracting new investment, extending the mineral exploration tax credit for five years, which is the first ever multi-year extension, and unveiling a plan that will position Canada as the world's undisputed mining leader. It is creating tens of thousands of jobs by supplying the minerals that will drive the clean growth economy.

We are reimagining the forest sector so our vast forests continue to play an essential role in our economy, not just here in Canada but around the world.

Through our investment of over $1 billion in energy efficiency, we are helping Canadians save money on their energy bills while fighting climate change.

We are building our energy future with a clear focus on expanding our renewable sources of energy, gaining access to global markets and making our traditional resources, such as oil and gas, more sustainable than ever.

Continuing this work and building on our progress to date is the big picture behind our main estimates. It mirrors a lot of what you have studied in your work as a parliamentary committee and the valuable recommendations you have provided to our government. I want to thank you for your work on behalf of Canadians.

The funding contained in this year's main estimates would support our department as we address the challenges in front of us, but also the opportunities ahead. This funding includes: advancing the use of new, clean technologies in the resource sector; helping remote, northern indigenous communities reduce their reliance on diesel; combatting the spruce budworm outbreak through early intervention; and extending our support to the many communities impacted by the unjustified tariffs on softwood lumber.

It will also give us the funds needed to implement key pillars of budget 2019. This includes new investments to encourage more Canadians to buy zero-emission vehicles; engage indigenous communities in major resource projects; improve our energy data, a key study from your committee; and enhance our ability to prepare for and respond to disasters that increasingly require federal action.

As I noted at the beginning of my remarks, this is a pivotal moment in our country's history and it is not without its challenges, whether they are building pipeline capacity in the west, fending off protectionist measures to our south or changes across our economy in all regions of our country.

Canada's unemployment rate may be at a 40-year low, but we need to be mindful of Canadians who are anxious about their future. ln my home province of Alberta, we have seen ongoing challenges for many workers because of fluctuating commodity prices. Our government sees all of these challenges, and we are taking them head-on.

That is why we announced a $1.6-billion action plan to support workers and enhance competitiveness in our oil and gas sector. That is why our government is providing up to $2 billion to respond to the U.S. tariffs that are threatening Canadian workers in our steel and aluminum sectors. lt is why we built on the $867 million through our softwood lumber action plan with continued support to the forest sector in budget 2019.

lt is why we are providing $150 million to ensure a just transition for workers and communities affected by the phasing out of coal-powered electricity. lt is why we are improving the way we make decisions on major projects, so that all Canadians have trust in their reviews, ensuring that we can advance nation-building projects that will grow our economy without putting our health, environment or communities in harm's way.

It is also why we have been doing the hard work necessary to follow the path set out in the Federal Court of Appeal's decision on the proposed Trans Mountain pipeline expansion. While that decision was a disappointment to many, it provided clear guidance on how the process could move forward in the right way, in a specific and focused way.

Some argue we should ignore that guidance, disregard the court and respond with lengthy appeals designed to avoid our obligations to the environment and to indigenous peoples. Our government took the responsible and more efficient path. We directed the National Energy Board to conduct a review of marine shipping and committed to getting phase three consultations right.

That important work is well under way. The NEB report was delivered on time on February 22. ln parallel, our consultation teams have been hard at work on phase three consultations. These teams, nearly double their original size, have been engaging in meaningful, two-way dialogue to discuss and understand priorities of indigenous communities and to offer responsive accommodations where appropriate. I have also personally met with many indigenous communities to help build a relationship based on trust.

Our work to date has put us in the strong position we are in today to deliver this process for all Canadians. Our work on TMX, our historic investments in solar, wind, geothermal and other forms of energy and our commitment to innovation and the development of new technologies are laying the foundation for a strong Canada both for today and for tomorrow.

Mr. Chair, our government sees our resource industries playing a key role in driving Canada's clean growth economy. We value the expertise and experience at Natural Resources and the drive of all Canadians to help make it happen.

These main estimates are a down payment on Canada's future, a future that our children will inherit with pride and build upon with confidence, a future that will continue to create well-paying, middle-class jobs for Canadians and future generations.

With that, I would be happy to take your questions.

Thank you for having us here.

3:45 p.m.

Liberal

The Chair Liberal James Maloney

Minister, thank you for your remarks.

The honourable Kent Hehr is going to start us off.

3:45 p.m.

Liberal

Kent Hehr Liberal Calgary Centre, AB

Thank you very much, Mr. Chair.

Minister, thank you so much for coming. You have explained how Albertans figured out the oil sands. It was 1975 when Premier Peter Lougheed, Premier Bill Davis and our Liberal government invested in the modern oil sands. In 1997 it was Premier Klein and then prime minister Chrétien investing in the oil sands and expanding them once again.

You rightfully point out the purchase and the going ahead with Trans Mountain pipeline in the right way, but in my riding of Calgary Centre there are many oil companies and in fact energy workers from whom I continue to hear questions about the industry's competitiveness. They are concerned about a potential layering effect from the various environmental regulations and how they might make our oil and gas industry less competitive. We want to ensure that Canada is the supplier of choice for oil and gas around the world. How do we make sure that we are protecting our environment and yet ensuring that we remain competitive globally?

3:45 p.m.

Liberal

Amarjeet Sohi Liberal Edmonton Mill Woods, AB

Through you, Mr. Chair, I thank the member so much for that question.

As you know, we were in Calgary last week announcing funding support for a very promising new technology that is investing in testing a prototype for geothermal. When you talk to companies like that, they know that if they are successful in commercializing that technology, it can create 40,000 jobs in western Canada, mainly for people who are currently working in the oil sector, people who are drilling and doing that work. We're investing in new technology and investing in our traditional oil and gas sector to make it more clean and green, with the provisions of the accelerated capital allowance announced in last Year's fall economic statement as well as the $100 million allocated in budget 2019 to foster collaboration and innovation amongst the oil and gas sector.

I can give you a number of examples that make our energy sector competitive. We will continue to keep an eye on it so that we remain competitive. We want to make sure our oil and gas sector, our renewable sector, remains a source of well-paying middle-class jobs for Canadians for decades to come. We will continue to make sure our support is there.

3:50 p.m.

Liberal

Kent Hehr Liberal Calgary Centre, AB

It's my understanding that the Trans Mountain pipeline consultations and review are continuing. I saw the announcement that there will be a further extension in consultations. I'm wondering if you can give us an update on where we are in this process.

3:50 p.m.

Liberal

Amarjeet Sohi Liberal Edmonton Mill Woods, AB

We have eight teams consisting of 60 individuals, professionals who have been engaging in meaningful two-way dialogue with indigenous communities over the last number of months. During that consultation, indigenous communities requested an extension to the timelines. In order to accommodate that reasonable request, we extended the timeline by three weeks. This week we sent out a draft copy of the Crown's consultation and accommodation report to all the communities who engaged with us. Now they're able to comment on that draft report. We want to make sure they have enough time to actually read it and go through it and analyze it and give us good input.

Our goal is to make a decision on this project by June 18. The way things are going, I think we're in a good position to achieve that.

3:50 p.m.

Liberal

Kent Hehr Liberal Calgary Centre, AB

Market access is the key, Minister. I think with moving forward on Trans Mountain the right way, obviously with Enbridge Line 3 and hopefully with Keystone XL, are you confident that this will be enough to allow us to have our supply from Alberta oil taken care of in the short and medium terms?

3:50 p.m.

Liberal

Amarjeet Sohi Liberal Edmonton Mill Woods, AB

Well, we all know—members of this committee have raised this issue a number of times—and Albertans, people in the energy sector and workers in that sector understand that the lack of pipeline capacity is costing our economy jobs. It is costing potential growth in the sector. That's why from day one when we got into office we focused on expanding that pipeline capacity.

We are the government that gave approval to the Nova gas pipeline, which is built in Alberta. We are the government that gave approval to Enbridge Line 3, and the construction of that project in Canada is almost complete. We are working with the U.S. government in alleviating some of the challenges that are being faced in that country. I was in Houston meeting with Secretary Perry to advocate building of the Keystone XL pipeline.

We will continue to work with the private sector to advance their shared goal of moving forward on that project, and taking the right approach to get the process right on the Trans Mountain pipeline expansion project is a strong commitment. We are the government that invested $4.5 billion when that project could have possibly fallen apart because of the uncertainty that existed at that time.

3:55 p.m.

Liberal

Kent Hehr Liberal Calgary Centre, AB

In your conversations with oil companies, I know that Suncor, Synova, CNRL and companies like that were very supportive of putting a price on pollution. They understood that climate change is real and we need to be part of that solution.

Is that still your conversation with oil executives? Do they understand the need to move forward in this way?

3:55 p.m.

Liberal

Amarjeet Sohi Liberal Edmonton Mill Woods, AB

In the conversations we have with our energy sector partners, they absolutely understand that choosing between the economy and the environment is a false choice and that we can do both. We can protect our environment and we can continue to grow our economy in a way which at the same time makes sure that indigenous communities are partners, that they are able to participate in the process, and at the same time also participate in the economic opportunities that these projects provide.

3:55 p.m.

Liberal

The Chair Liberal James Maloney

Minister, I have to ask you to wrap it up, please. Thank you.

Mr. Schmale, I understand you're going to go first, but you're splitting your time with Ms. Stubbs. Is that right?

April 30th, 2019 / 3:55 p.m.

Conservative

Jamie Schmale Conservative Haliburton—Kawartha Lakes—Brock, ON

That's correct.

3:55 p.m.

Liberal

The Chair Liberal James Maloney

Okay.

3:55 p.m.

Conservative

Jamie Schmale Conservative Haliburton—Kawartha Lakes—Brock, ON

Thank you, Minister, for being here. I appreciate your testimony. I have a lot of questions to get through, as you can imagine, so I'm going to try to keep them brief. Maybe you can be equally tight with your answers, and we'll try to get through as many as possible.

The first is with regard to TMX. The Federal Court of Appeal said, “The concerns of the Indigenous applicants, communicated to Canada, are specific and focussed. This means that the dialogue Canada must engage in can also be...brief and efficient...”.

Between October and February, the National Energy Board conducted extensive consultations with indigenous communities, including hearing oral testimony in multiple cities in both Alberta and British Columbia. The courts never questioned the consultation process of the NEB.

You say June 18 is your goal. What assurances can Canadians have, given that so far, every deadline set has been missed?

3:55 p.m.

Liberal

Amarjeet Sohi Liberal Edmonton Mill Woods, AB

First of all, through you, Mr. Chair, there were two issues the Federal Court identified in the ruling of August 30, 2018. One was the issue of not conducting the review of marine safety related to marine tanker traffic. That was the process which the NEB had undertaken, and they have made a decision and a recommendation to approve this project.

The other issue is the indigenous consultation that my department has been undertaking. We have been clear from day one that our goal is to get the process right, so we never set a deadline on the conclusion of those consultations. We've always said that we will make a decision when we feel that we have adequately discharged our constitutional obligation for meaningful consultation with the indigenous communities. Now we feel with the work that has been done that our goal is to make that decision by June 18.

3:55 p.m.

Conservative

Jamie Schmale Conservative Haliburton—Kawartha Lakes—Brock, ON

Minister, thank you.

By pushing off the decision date to June 18.... The Prime Minister confirmed to Premier Kenney on April 18 that, quote, he just needed two more weeks to complete consultations with indigenous communities. Obviously, it's been longer than two weeks. Can you confirm that shovels will be in the ground this summer?

3:55 p.m.

Liberal

Amarjeet Sohi Liberal Edmonton Mill Woods, AB

We extended the consultation process by three weeks at the request of the indigenous communities. I think it is a reasonable request coming from our partners who we are engaging. Cabinet would have to make a decision on this project, and I cannot predetermine the decision of cabinet. Once that decision is made, the next part of the process will unfold.

3:55 p.m.

Conservative

Jamie Schmale Conservative Haliburton—Kawartha Lakes—Brock, ON

Okay. I have more, but I have to cede my time to Ms. Stubbs.

Thank you, Minister.

3:55 p.m.

Conservative

Shannon Stubbs Conservative Lakeland, AB

Minister, I think what's concerning is the judge in the court ruling specifically said that the renewed consultations with indigenous communities can be brief and efficient. Instead of that happening, you were threatening very recently that you will not meet the June 18 deadline for the final cabinet decision. That's why we're asking these questions.

The National Energy Board, even with the expanded scope of course, has said twice that the project is in the national interests, with two exhaustive, independent, scientific assessments of the expansion.

You said last year that not building Trans Mountain is not an option. The Prime Minister said 11 months ago that we're going to get that pipeline built. Your predecessor said you were buying the pipeline to get the expansion built right away. The finance minister said you were doing that to build it immediately. Your Liberal cabinet had already approved the pipeline previously.

Given what I'm sure is our shared value of the evidence-based, science-based, expert-based and independent regulator's recommendation, can you commit that the cabinet will approve the TMX on June 18 and indicate when shovels will be in the ground?

4 p.m.

Liberal

Amarjeet Sohi Liberal Edmonton Mill Woods, AB

I think it is important to understand that, when we undertook the analysis of the court ruling, we also engaged former Supreme Court justice Iacobucci to give us the advice to ensure that we are properly understanding the direction of the court, but also whatever decision is made in the future, that the process can withstand the challenges of the commitments that we have made under the constitutional obligations the Crown has to indigenous communities.

My goal is to ensure that the process is properly followed, that we do not cut corners on that process.

4 p.m.

Conservative

Shannon Stubbs Conservative Lakeland, AB

Thank you, Minister. You confirm that the cabinet will approve the TMX again. That's fine.

On a different topic, last week you publicly threatened to include in situ oil sands projects under Bill C-69's project lists, in a political response to the election in Alberta. Of course, I'm sure you know and feel just as strongly as I do, as an Albertan, that oil extraction and upstream resource development is provincial jurisdiction, and of course a threat is only a threat if there's a negative consequence.

Now that you've finally admitted what industry, economists, first nations, premiers and other groups have been saying for a year, that Bill C-69 is meant to harm oil and gas development, will you commit to repealing Bill C-69 before it's too late and ensure that in situ oil sands projects will not face federal review?

4 p.m.

Liberal

Amarjeet Sohi Liberal Edmonton Mill Woods, AB

Through you, Mr. Chair, when the draft discussion paper was launched regarding what goes on the project list, it was mentioned in the draft discussion that in situ projects will be exempt from Bill C-69 federal review as long as there is a cap on emissions in the jurisdiction where they are being proposed. We have been clear, as part of the pan-Canadian framework on climate change and clean growth, we want to ensure that our oil and gas sector continues to grow in a sustainable way and that they're able to continue to innovate. We will continue to support them investing in new clean technologies. The sector can continue to grow, and at the same time we want to make sure that emissions are controlled as well.

4 p.m.

Conservative

Shannon Stubbs Conservative Lakeland, AB

You will risk provincial jurisdiction being intervened and in situ oil sands development in Alberta potentially being exposed to a federal review.

4 p.m.

Liberal

Amarjeet Sohi Liberal Edmonton Mill Woods, AB

We look forward to—