Natural Resources Committee on March 22nd, 2021

[The Chair, Liberal, James Maloney]

I'm going to have to stop you soon, Mr. Minister, if you can wrap up, please.

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

That's fine, Mr. Chair. I can get to it later.

[The Chair, Liberal, James Maloney]

Great. Thank you. I have a feeling that subject will come up again.

Mr. Simard, over to you.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

I would like to start by thanking Mr. Lefebvre, who may be leaving us.

I have enjoyed working with you, Mr. Lefebvre.

Mr. O'Regan, thank you for being here.

There is something that always leaves me speechless and amazed, and that is the enormous amount of capital that you are willing to invest in the oil business. Earlier, I heard you say, in response to a question, that we should invest in renewable energy and technologies. Well, the document I have in front of me does anything but that.

When I look at the emissions reduction fund, I see that it is $560 million that is going to support polluters. They are trying to reduce the carbon footprint of the most environmentally damaging industry; I don't understand the logic behind that.

We know that the forest is a carbon sink. We need to find innovative solutions from bioproducts. Yet funding for the forestry sector is a pittance, in the budget. In contrast, you are willing to invest $560 million in a program to reduce greenhouse gas emissions from the oil and gas sector.

There is a simple principle when it comes to the environment, and that is that the polluter pays. In this document, I feel more like we are following the polluter paid principle. It's a 5-1 ratio: you invest about $573 million in the oil and gas industry, while you invest barely $100 million in the most promising industry, which is forestry.

I don't know how you can explain that.

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

Thank you, Mr. Simard.

The Minister of Environment and Climate Change and I are singularly focused on lowering emissions wherever and whenever we find them. I can see your point, but the fact of the matter is that the oil and gas sector is such an important, vital and predominant part of our country's economy that we cannot simply walk away from it. There is no avoiding the oil and gas sector in this country. We are the fourth-biggest producer of oil and natural gas in the world. We have to work with industry to lower emissions. We simply have to.

However, we are committed to phasing out inefficient subsidies by 2025. We said we would do it and we're on track to do it. With a new U.S. administration, there's even more alignment on this. In fact, they are following our lead on banning fossil fuel subsidies.

We've already eliminated eight tax breaks for the fossil fuel sector. We are working with Argentina on a peer review of fossil fuel subsidies, and this will help us determine what we need to do to meet our commitment next. Our government will keep working with Canadian industry to cut emissions across the economy in a practical and affordable way.

The feds committed $3.16 billion towards partnerships over the next 10 years, working with industry to reduce emissions because it's part of the energy mix for the foreseeable future.

I am not one to ignore a massive problem. It is a massive problem. I'm one to work with what is there, with the reality of the situation. The reality of the situation is that climate change is real and we are the fourth-biggest producer of oil and gas in the world.

[Mario Simard, Bloc, Jonquière, QC]

I understand you well. You say it's a predominant part of the Canadian economy, but where is this going to go?

Maybe you know that the Bureau d'audiences publiques sur l'environnement, BAPE, in Quebec, will release its report on the LNG Quebec project this week. If this report disapproves of the LNG Quebec project, I am afraid that you will still support it, against the will of Quebec, since you have emphasized that the oil and gas sector is a predominant element of the Canadian economy. In the last few days, I even heard you say that liquefied natural gas was a transitional energy.

Mr. O'Regan, can you commit today to not supporting this project if the BAPE response is negative?

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

Mr. Simard, you're referring to Énergie Saguenay and the Gazoduq projects. They are currently undergoing a federal assessment by the Impact Assessment Agency, which will do a fair and thorough job based on science, based on evidence and based on indigenous traditional knowledge. Once we have all the necessary information and analysis, we'll make a decision on the projects then. It would be premature for me to say anything other than to acknowledge that there are some cases where LNG may prove to be a bridge fuel in allowing us to lower emissions now.

I said in Berlin, at a conference I attended last Tuesday with John Kerry, the climate envoy to the President, that there are.... People talk about the perfect getting in the way of the good. I want the perfect and I want the good. I want it all. I want every project, and I will look at anything that will lower emissions now, in the medium term and in the long term.

I will look at everything, and I will analyze every one of those projects with, as I said, that threefold mission: lower emissions, with net zero by 2050; an economy that continues to prosper and create jobs; and a future that leaves no one behind—no province, no region, not energy workers.

[The Chair, Liberal, James Maloney]

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

We go over to you, Mr. Cannings.

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

Thank you, Minister, for being with us again today.

When you were last here, just before Christmas, we talked about energy retrofits. The chair was right that this subject would come up again. I just want to go back to it. I was then thanking your government for actually looking at retrofits and bringing back that home retrofit program, which was so successful before.

I mentioned that Efficiency Canada, the body that studies this and lives it, says that spending has to be 10 times what it is. They came out with a recent analysis on one of the specific areas in which it can and has to be much more bold, and that's in the area of energy poverty. Twenty per cent of Canadians live in households where their energy costs are 6% or more of their income. These programs are not accessible to lower-income homeowners. Efficiency Canada says these people cannot be reasonably expected to pay for the upfront costs required to access later rebates, or take on additional debts to do so. That means 20% of Canadian households won't be able to access these programs, and these are the people who need it the most. These houses are often the older, less efficient ones that need retrofitting the most.

They have put forward what they call a “transformative” goal to retrofit all homes experiencing energy poverty by 2030. That would, as I say, cost a lot more money than you're projecting to spend. They said we should be spending on that part of the program at least what we're spending through your program on commercial and residential retrofits for higher-income families.

I'm wondering if you can pledge today to do that.

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

Listen, I think what we have in the beginning, Mr. Cannings, is an ambitious program—seven years and $2.6 billion, as you know, announced in the FES. That's available to homeowners retroactive to December 1 of last year. We've asked people to hang on to their receipts. I think that will help a lot more Canadians make their homes more energy efficient. It's a means for homeowners to take real action to fight climate change and create good jobs in their communities. That's a really important point. The jobs will be created in their communities. Efforts are already under way to get the initiative up and running quickly and to roll out the funding for energy assessments and retrofit grants.

To your point, could we expand on it? Absolutely. But we're off to a running start. We're laying the foundation. We're building a national web portal where homeowners can get informed. They can coordinate with local retrofit programs. They can submit a claim and secure reimbursement. It will all be part of the launch coming up. The funding will see as many as 700,000 Canadians benefit from grants of up to $5,000 for retrofits, supported by EnerGuide energy assessments.

We're also investing to recruit and train up to 2,000 new EnerGuide energy advisers to conduct energy assessments. Those will be new middle-class jobs, targeted to reflect Canada's diverse workforce as well. We also announced further spending in that area, making homes more energy efficient by providing access to low-cost loans.

I think you and I speak to the same people on this. There is an incredible amount of energy and enthusiasm. We want to be very ambitious. We are laying the foundation. Could it grow further? Absolutely.

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

I'll switch now and turn to the inefficient subsidies you mentioned in your last answer. You pledged to get rid of the inefficient subsidies. However, when we had the environment commissioner before us a couple of years ago at this committee, she basically said that she couldn't find out if you were getting rid of inefficient subsidies because your government hadn't yet defined “inefficient subsidy”. I'm wondering if you have defined yet what that is.

You also mentioned the bilateral program with Argentina to audit those subsidies. I was in Argentina when that was announced with former minister Carr in 2018. I'm wondering what the timeline is on that. That was three years ago.

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

That's a good and specific question, and I'm going to put my associate deputy minister, Shawn Tupper, on the spot.

Shawn, if you are there, perhaps you could shine some light on the timeline on Argentina and the peer review of fossil fuel subsidies.

[Shawn Tupper, Associate Deputy Minister, Department of Natural Resources]

It's been a slightly slower project than we had originally anticipated because, not surprisingly, COVID has prevented some of the advancement of our work, but it is indeed a priority for us. We are working with the Department of Finance in this regard to make sure we are able to advance this file as quickly as possible.

I don't have a specific date in terms of when that work will be completed, but we'd be pleased to come back to the committee with that information.

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

I'll repeat the first part of the question. Can you define what an inefficient subsidy is?

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

Shawn, I'll ask you about that.

[Shawn Tupper]

For the government the desire is to move away from subsidies that are just direct supports to the industry. Where the government has gone in terms of its priority is indeed to look at working with industry and working with the provinces and territories, so that when funding is put into question, it is focused on cleaning up the industry. It is about producing the cleanest LNG and it is about reducing the greenhouse gas intensity of a barrel of oil as it's produced. Those are the kinds of investments the government is looking for.

It is about changing how we transform the energy sector and moving away from traditional forms of subsidy and support to those that reflect what government projects will look like in terms of the energy transformation and our future energy mix.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Tupper.

Thank you, Minister.

Mr. Cannings, thank you.

We're now moving into the five-minute round. We'll start with Mr. Zimmer, who, I believe, is also in the room.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Thank you, Mr. Chair.

Thank you, Minister, for being here today.

Previously I questioned Minister Ng about a softwood lumber agreement and whether that had been a conversation between the Prime Minister, Minister Ng and the Biden administration. She evaded the question. Clearly it hadn't been discussed.

What are you actually doing to fight for our forest industry?

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

We have $2 million in funding right now: $1.5 million, I think, in the supplementary estimates (C) and then another half a million in existing funding with another $2 million in 2021 in the main estimates. That allows us to provide economic analysis and industry intelligence and to provide expert advice to GAC as they sit at the negotiating table with the U.S. administration.

The ultimate objective is to eliminate U.S. duties on Canadian softwood lumber and to achieve a long-term, managed trade agreement. In December 2020 we had the first administrative review of softwood lumber duties, about lowering the duty rates—

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Excuse me, Minister, but my time is very short. It's only five minutes.

I respect that you're bringing up the softwood lumber agreement in your discussions, but I want to see a minister who is pounding his fist on the table fighting for our forest sector, and fighting for our LNG, natural gas and fossil fuel sectors in Canada, and I'm not seeing that.

I read a BBC article that talked about President Biden's side. The White House statement about the call between the Prime Minister and the President read, “The president acknowledged Prime Minister Trudeau's disappointment regarding the decision to rescind the permit”, but “reaffirmed his commitment to maintain an active bilateral dialogue and to further deepen co-operation with Canada.”

That doesn't sound like a Prime Minister who's pounding the table fighting for our natural resources sector in Canada. I just don't see it. Then we saw the announcement about Chevron pulling out. They should be one of the golden eggs in our natural resources sector in Canada, and we're not seeing a fist pounding on the table to fight for that industry. It has the potential to lower emissions around the globe, Minister, as hopefully you know.

If you're so voracious about reducing carbon outputs, you'd think you'd be defending that LNG sector around the world and pounding your fist on the table defending us. I come from an area in northern B.C. where the workers actually do the work to find the natural gas, produce it and get it to market.

How are you fighting for our sector? How are you fighting for Canadians in the natural gas sector in our nation?

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

I am not pounding on tables. I am working closely with unions and prospective investors to get this done. That is ultimately how I think people should gauge the results. Some may look at this and say we're failing, but I do not believe that. Things are getting constructed and investment is coming in.

It is difficult when we send mixed signals. That is very difficult. We have to be very clear about what we want, which is to confront the real problem of climate change by lowering emissions. We must also ensure that when we do that, our economy continues to prosper, people continue to have good jobs, and no regions—namely Alberta, Saskatchewan and my province, which are the traditional oil- and gas-producing provinces—are left behind in that. We will never achieve our goals by leaving Canadians behind. I have been utterly adamant about that from this room in St. John's, where I speak to people all over the country and all over the world. I'm very clear about where we stand.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Frankly, though, Chevron has decided to cease work. I'll read part of their statement. “At this time, it is Chevron’s intent to cease Chevron-funded further feasibility work for the proposed Kitimat LNG Project.”

Minister, if you're not pounding your fist on the table.... Something is not working. We had how many LNG projects along the coastline of British Columbia that could have lowered global emissions? This could be a great story for Canada, and thankfully LNG Canada is still on track. I know about the project. It's going relatively well, and hopefully we can get gas to the markets in Asia, where it's much needed, to offset some of the higher-polluting fuels and energy. However, Minister, if Chevron is deciding to cease further sustainability studies for such a good project, something is wrong and you might need to start pounding your fist on the table. I would ask, on behalf of all....

You didn't mention British Columbia in your statement. You talked about Saskatchewan, Alberta and your home province. B.C. has a huge natural resource sector. It's very significant to our provincial bottom line and allows people to put meals on their tables and roofs over their heads. We're asking you to fight for our industry.

[The Chair, Liberal, James Maloney]

Mr. Zimmer, I'd like you to stop now and allow him some time to answer the question, or I'm going to have to start pounding my fist on the table.

Minister, can you answer briefly?

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

Mr. Zimmer, you're absolutely right. I did not leave B.C. out on purpose. With our $1.7 billion for orphan and inactive wells, B.C. is very much a part of this.

When I say pound my fist on the table, you may not see me do it in the real sense, but in the metaphorical sense I am absolutely banging my fist on the table. I told the forestry industry this very clearly in my first week as minister. It was looking for a champion and it has one in me.

[The Chair, Liberal, James Maloney]

Thank you, Minister and Mr. Zimmer.

Mr. May, we'll go over to you for five minutes.