Natural Resources Committee on May 14th, 2019

[The Chair, Liberal, James Maloney]

We have about 15 minutes left. We've gone through two rounds. We could do another round. I propose maybe four minutes per party, if there's an appetite for that, or we could stop now. What's the will of the room?

[David Graham, Liberal, Laurentides—Labelle, QC]

Yes, I have a couple more.

[The Chair, Liberal, James Maloney]

Okay. Why don't we go Conservative, Liberal, NDP, finish? You can have the last word, Richard. How's that?

You have four minutes each.

[Ted Falk, Conservative, Provencher, MB]

Okay. Thank you, Mr. Chair.

So $1.6 billion. Can you elaborate a little bit more on where that money was and who got it?

[Frank Des Rosiers]

Sure. I could do it.

On the first tranche, that $1 billion for EDC, we were in touch with those colleagues earlier to take stock of how things are shaping up. Their latest assessment is that they expect to have something in the order of $500 million of that amount be committed by the end of this year—in the coming six to seven months. This money is there to provide for some of the working capital needs of companies that are looking to export, principally, and to find new markets.

The second one is the $500-million inflow from the Business Development Bank. This is geared toward providing some commercial financing, especially to small and medium-sized enterprises in the oil and gas sector. They've committed some $50.8 million in new commercial support thus far. They expect to provide an additional $150 million in support between now and the end of June, within a month or so. They expect to commit another $335 million of ongoing commercial support, so it looks like it's well on track.

[Ted Falk, Conservative, Provencher, MB]

What is the EDC doing with the $1 billion it has?

[Frank Des Rosiers]

I don't know if you want to add to this, Chris, but it's funding to support companies to invest in innovative technologies and for their working capital needs to export to new markets. That's essentially the gist of it.

Do you want to add anything more to that?

[Chris Evans]

No, I think that captures it. The numbers you gave accurately explain how the $500 million that they were planning out of the $1 billion for this year would be rolled out.

[Frank Des Rosiers]

And just to note—

[Ted Falk, Conservative, Provencher, MB]

I understand that, but what would that $500 million be used for? I understand it is for support, but what does that look like? What kind of companies are getting it? What are they using it for? Is it an outright grant? Is it a repayable loan?

[Chris Evans]

I can give you, if it would help, examples of the sorts of interventions the BDC has made. We have two nice illustrative examples that will really drive home in concrete terms how small Canadian companies have benefited from receiving that money.

[Frank Des Rosiers]

Just know that we cannot share commercially sensitive information, so we're using generic cases, albeit they are real. We cannot reveal a company's name.

[Chris Evans]

For example, one of the companies that received BDC financing was a drilling waste management client that had a challenge, because its primary bank was pulling back on financing options because of the challenges in the reduced oil and gas rig count in Canada and in light of the production curtailment in Alberta. BDC, recognizing the niche environment of waste reduction and its cost-effectiveness, elected to provide financing, which allowed the client to continue a diversification strategy and enhance its product offering, including hiring an environmental engineer to provide a more comprehensive suite of products.

A second example was a client that was facing challenges in the hauling industry due to the economic downturn, in this case in Alberta, again related to the need to adapt to some of the production cuts that can impact the hauling industry. BDC provided working capital as a loan that gave the client the opportunity and time to adjust its business structure to the changing market conditions, allowing it to diversify its services and provide hauling in different industries. This particular company decided to expand into a service called vacuum trucks, which allowed the company, through that loan, to maintain its liquid position and to be successful.

BDC has given out, as of April 30, 392 commercial loans totalling $97 million out of the $500 million envelope.

[The Chair, Liberal, James Maloney]

Thanks for that.

Mr. Graham.

[David Graham, Liberal, Laurentides—Labelle, QC]

Mr. Des Rosiers, if you wish to comment, please go ahead.

[Frank Des Rosiers]

I'll be very brief. The $500 million has been fully allocated and those projects have been announced in large part. Others will come in the coming weeks, but they involve a number of projects around the country.

As for the strategic innovation fund, the $100 million has been fully committed. Half of it has been announced for our petrochemical projects—two main projects in western Canada.

[David Graham, Liberal, Laurentides—Labelle, QC]

I would like to come back to this research we were talking about earlier.

We know how much plastic waste causes huge problems all over the world. It's found in enormous quantities in the oceans, in particular. Has research been conducted on the possibility of converting old plastics or plastic waste into usable fuel or gas?

[Frank Des Rosiers]

Effectively. The theme of plastics dominated the G7's work, both for the heads of state last June and during the meeting of Canada's Environment, Oceans and Energy Ministers in September.

The Government of Canada continued its efforts in this area in three departments: Environment and Climate Change, Natural Resources, and Fisheries and Oceans. We have challenged ourselves precisely to convert plastics into energy, whether it is thermal energy or liquid fuels. Various technologies are involved. We are very keen to develop this type of process, not only in our labs, but also with outside partners.

[David Graham, Liberal, Laurentides—Labelle, QC]

I'll come back to the report that the committee tabled in 2016, before I became a member of the committee. The government then presented its response to this report, in which it discussed collaboration with the United States, particularly in the area of research. Can you tell us about the results of this collaboration?

[Frank Des Rosiers]

This collaboration is generating a lot of interest, both among companies and governments. In particular, we are working with the USDOE national laboratories, the U.S. Department of Energy, to develop approaches that would work for our companies, which do business on both sides of the border. Our collaboration continues, as our American partners are also very keen to see their companies able to do business on both sides of the border.

[David Graham, Liberal, Laurentides—Labelle, QC]

Are there other countries we work with so closely or we collaborate well with?

[Frank Des Rosiers]

In this sector, I would say that our closest relationship is with the United States. However, we also collaborate with European and Asian colleagues. Several of them will be present at the meeting in Vancouver, where many of these discussions will continue.

Few people seem to be aware that Canada has a reputation as a major player in the clean energy sector. Indeed, many countries are offering to collaborate with us. However, we have chosen to focus mainly on the United States, Europe and Asia.

[David Graham, Liberal, Laurentides—Labelle, QC]

In the same report, the need to consult and further involve indigenous communities was also mentioned. In fact, as you know, our committee has been working on this specific subject for several months. Can you comment and tell us where these steps stand?

[Frank Des Rosiers]

What are you talking about in relation to indigenous people?

[David Graham, Liberal, Laurentides—Labelle, QC]

I am talking about consultations on any project, particularly pipeline projects, in which they are involved. In its response to the 2016 report, the government committed to increasing its collaboration with indigenous communities. I want to know where we are on this.