Natural Resources Committee on March 22nd, 2021

[The Chair, Liberal, James Maloney]

Mr. Simard, unfortunately, I have to stop you there. That was all your time.

Mr. Cannings, you have two and a half minutes.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

I'd like to bring up a topic that the minister mentioned in the previous hour in response to a question about SMRs and nuclear energy. He mentioned the molten salt reactor project in New Brunswick, where the federal government is giving $50 million to a British firm to develop an SMR that extracts plutonium from the used uranium fuel at the Point Lepreau reactor. This is somewhat Orwellianly called “recycling”, even though it's extracting only 1% of the nuclear fuel. It extracts plutonium and leaves a large, liquid and highly radioactive waste stream that's very difficult to deal with. Pierre Elliott Trudeau banned the extraction of plutonium from used uranium fuels because of this danger, and also because plutonium is used in nuclear weapons.

Canada has been advocating for a fissile materials cut-off treaty, yet here we are creating more fissile materials. What sort of plan does the government have for dealing with these materials? These are far more dangerous than the materials we are already having trouble finding a home for in the nuclear waste management space. I'm wondering what the government is planning to do and why it is even considering extracting plutonium from these materials.

[Shawn Tupper]

Partly, in the space of small modular reactors, we are looking at new technologies. These aren't traditional technologies. Understanding and allowing them to test out and demonstrate how they might work and how they might contribute to our energy mix is critical. We have been working to find those technologies that we think have the opportunity to compete in a global market space for SMRs.

As you may be aware, we have launched a policy review of our nuclear waste. It is a 20-year-old policy framework, so we are looking to modernize that. We have been engaged for some time now, working with civil society and indigenous communities, to address questions in terms of our way forward. That has included moving beyond our traditional questions in terms of looking at spent CANDU fuel, but we also want to make sure the new policy framework allows us to anticipate what those demands may be for different kinds of fuels that small modular reactors may use. We've involved our nuclear regulator on that front, and of course the Nuclear Waste Management Organization.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Cannings.

Mr. McLean, you have five minutes.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, Mr. Chair.

Before I start, I'd like to move a motion, please. It's been forwarded to the clerk. I move that the committee invite the Minister of Natural Resources to appear for the main estimates 2021-22 for a minimum of two hours, at the earliest convenience but no later than May 14, 2021.

I'll submit that. The clerk has it, but only just recently. We'd like to talk to the minister more about it.

[The Chair, Liberal, James Maloney]

Okay. I haven't seen the motion. This is something you submitted today, I take it.

[Greg McLean, Conservative, Calgary Centre, AB]

I did, just a minute ago.

[The Chair, Liberal, James Maloney]

All right. Okay.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you. I will ask the officials a question here about the revenues and expenses associated with the department going forward.

With regard to revenues, of course, we're looking at the natural resource industry, and primarily the main economic driver in the natural resource industry is the oil and gas industry. In round numbers over the last 20 years we've had about $25 billion to $30 billion per year go as economic rent from the oil and gas sector to governments. That amount, $25 billion, is a net number, and it doesn't include linear rents to municipalities or excise taxes paid on the consumption of the resources.

If you look at increasing your budget the way you have—and it's almost double over the last two years—at what point in time do you take a look at the actual revenue? I assume that is going down, because of the pricing of the resource and our constraints on the resource, and your expenses continue to go up. Can you square that for me, please?

[Shawn Tupper]

Right now that's a very difficult question to answer, just because of the disruption we've seen in the sector across the board, not just in the petroleum sector but also in mining and forestry.

I think, though, that we are seeing recovery. Those rents and revenues will increase. These are things we pay attention to and monitor, and we will continue to do so. In the post-COVID world, as we see a return to a more normalized economic performance, that would probably be the point at which we could look at those kinds of questions.

[Greg McLean, Conservative, Calgary Centre, AB]

Do you see the revenues doubling as your budget has doubled, or is this the way that the government and each of its departments are going to continue to operate, with huge deficit positions going forward?

[Shawn Tupper]

I frankly think that's a question the government will have to answer, in terms of how it wants to allocate its resources. Certainly, in the current environment, I think the government has been making what it considers to be the necessary investments to preserve the sector and make sure that companies retain the liquidity that they need to survive through COVID and—

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, but let me say that the investments we're talking about here have nothing to do with the survival of the sector. I'm looking at $77 million plus another $9 million in the supplementary estimates (C) that are for home retrofits.

Can you tell me how many greenhouse gas emission reductions are going to be accomplished with $77 million? Also, are you looking at that as a net number, as the CO2 that's produced in the actual construction of the material for the home retrofits? Where are you getting your numbers from, please?

[Shawn Tupper]

Mollie, I am going to turn to you as the lead on that program.

[Mollie Johnson]

Maybe I'll say just a couple of things. We can follow up with numbers after the meeting, but what I would like to share with you is that when we look at the climate plan and at programs like this, part of them is the emissions reduction and part of them is the economic activity and the jobs that are going to be coming and that are required to advance and to stimulate the economy. There's the economic development; there is the jobs element, and then there's the emissions reduction. We know that each of these elements will be required to tackle the 17% of emissions that come from our building stock in Canada.

To your question about the greenhouse gases from homes, that's what we're trying to tackle there. On the emissions reduction fund piece that is also funded in here, we were looking at providing improved or better access to capital for those companies so they could tackle their methane emissions during a period of COVID, during which they were facing specific issues. Each of them has specific outcomes that we're trying to achieve through that period.

There aren't numbers that we're targeting with respect to emissions reduction, but at the end of the day, when we try to pull all of these measures apart, they might not be one to one because all of them are required to enable the transition we're moving forward with.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you. I notice also that the Canadian Energy Regulator increases its budget by a third year over year, and it seems to overlap with the Canadian Centre for Energy Information, run by your department.

At what point in time are we throwing money at the same problems through different departments?

[Shawn Tupper]

We pay a lot of attention to making sure we aren't duplicating that spending and trying to make sure the investments made by the regulator versus the investments made by the department are aligned, complement one another and indeed aren't duplicating each other.

We actually do those reviews as proposals come forward and as the increases come forward. Those are the challenges we get from the centre, from the Department of Finance, on which they want that assurance, and I think we can say quite clearly, sir, that the increases aren't duplicating the kinds of investments we've been making with respect to energy data and energy information.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Tupper, and thank you, Mr. McLean.

The last person to ask questions today will be Mr. Lefebvre.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

First, I would like to thank all the public servants who are with us today.

Second, thank you very much for working with me. I have enjoyed my experience as a parliamentary secretary very much.

It was an amazing experience to work with all of you and see the professionalism that we have at NRCan. I've had the opportunity to travel the world and talk about Canada. Talented people like we have here are what makes our country so great, because of the stability and the expertise you bring.

Once again, thank you very much.

I have a few questions. Maybe I'll start off with the importance of having a credible plan to reduce greenhouse gas emissions. How important is that to the economy?

I know, Mr. Tupper, you've been dialoguing with a lot of other officials from across the country, as well as industry. As we know, ESG is certainly top of mind. We're seeing it more and more. In your view, why is it so important to have a credible reduction plan when it comes to lowering our carbon emissions?

[Shawn Tupper]

With regard to the advice we provided to the government, we have been working hard to ensure that they see that dynamic in terms of what the energy transition is doing and what's happening in the global marketplace. The demand on us, when I've led trade delegations on LNG and forestry and whatnot to Asia and Europe, has been, “What are you doing to make sure,” as you referenced on ESG, “that you've got the right combination of environmental, social and governance frameworks that surround the sector?”

The sector makes up almost 20% of our GDP. It's about 17% in terms of 2019 numbers. It makes up 48% of our trade balance overall, with the vast majority of that going to the United States. Those are significant numbers, and that is why the department has been able to ensure that it is part of a climate solution and that we are actually bringing solutions to the table. We're not a sector that needs to have things done to us, but investing in carbon capture, clean energy technologies and technologies that help us reduce the greenhouse gas intensities of the production of a barrel of oil will keep Canada competitive and allow us to continue to sell our product globally.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you. I fully agree with that.

The importance of having a properly funded regulator is clear. I heard Mr. McLean talking about just increasing the funding of a regulator by one-third. We take seriously the importance that having a solid regulator signals to the marketplace. If it's well funded, it does its job properly. What does a properly funded, well-working regulator do to the markets?

[Shawn Tupper]

It creates certainty. It creates transparency. It allows investors to know that they are going to be investing in an industry that is well governed and that they can rely on.

I think that in terms of where our regulator is going—that's CER—and frankly across the board for Canadian regulators, the growth of engagement, the way we are engaging with indigenous communities and the kinds of consultations we're doing publicly are all things that are expanding budgets and ensuring that we are addressing the social dimensions of the impacts in communities of these kinds of investments.

[Paul Lefebvre, Liberal, Sudbury, ON]

That's important. I like that with respect to indigenous communities and engagement. I would like to finish with that question. Maybe Mr. Labonté wants to jump in here on the importance of properly engaging communities.

Maybe you can share with us your view as to the difference between CEAA 2012 and the impact assessment when it comes to indigenous engagement, as well as why it's important, certainly from a court's point of view, but also just for doing the right thing by engaging with indigenous communities when it comes to resource development.

[Shawn Tupper]

Jeff, why don't you jump in? You were at the coalface of that work.

[Greg McLean, Conservative, Calgary Centre, AB]

I have a point of order, Mr. Chair. I'm sorry to interrupt.

Today we're voting on the supplementary estimates (C). Is that correct?