Natural Resources Committee on April 26th, 2021

[The Chair, Liberal, James Maloney]

You have about 15 seconds left, and you're on mute.

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

Well, I'll unmute myself just to say thank you.

[The Chair, Liberal, James Maloney]

There you go. Perfect. Thanks, Mr. Cannings.

Mr. McLean is next.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, Mr. Chair. I'm going to go back to Mr. Jurgutis at Agriculture and Agri-Food Canada.

Mr. Jurgutis, I think you created a bit of confusion today in suggesting that we're going to have a biofuels industry created from Canadian-source biofuels material, and yet we're not going to have to break any more land for agriculture in the process. We're all realists here. We know that you don't get something for nothing.

In reducing one input to an energy source, you're going to have to create a different energy source. We all know that. I guess what I'm asking now—and I hope that you were there eleven years ago and can answer us—is this: Exactly what were the projections for the biofuels industry in Canada to produce its own biofuels at that point in time?

[Steven Jurgutis]

Thanks for the question.

We wouldn't have been in this position or working on these types of issues 11 years ago, and I don't have on hand comparisons in terms of projections from a number of years ago versus what they might be now. However, it might be helpful for you to know that industry in Canada has itself been looking at this, and the view, particularly from canola growers, is that canola grown in Canada can meet this increased demand.

Canada produces about 20 million tonnes of canola each year and aims to grow production to 26 million tonnes by 2025. Even at the full 5% of renewable content for biofuel and diesel, that will require 3.2 million tonnes of seed and reduce greenhouse gas emissions as well.

The other thing to point out, as mentioned before, is that we are not just looking at those traditional sources, such as canola, corn or wheat, but increasingly at the secondary-use products that traditionally would have been waste. We are looking to expand further into those areas where we can see potential for larger growth as well.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, Mr. Jurgutis.

It is safe to say that if we're going to continue to be a passenger on the U.S.'s political corn industry, providing all kinds of biofuels as Canadian input at this point in time, we're not going to replace 1.4 billion tonnes per year of biofuels.

[Steven Jurgutis]

There is an amount of exchange that goes on between Canada and the U.S. in terms of inputs into biofuels, as there is with other countries as well. There is potential for that to shift as we're able to increase our capacity in Canada.

[Greg McLean, Conservative, Calgary Centre, AB]

Okay. Thank you. I'm going to shift now to Mr. Moffet.

Mr. Moffet, I know that some significant modelling has gone into the clean fuel standard on how much it will actually reduce CO2 emissions over its intended lifespan of, let's say, 10 years. Are you willing to share that modelling with other government departments or even with this committee?

[John Moffet]

Well, yes, when we published the draft regulations, we published a regulatory impact analysis statement. That included a detailed summary of the modelling that we undertook at that time.

[Greg McLean, Conservative, Calgary Centre, AB]

It was a detailed summary of the modelling, but what I'm asking for is the actual modelling.

I worked in the finance industry before coming here, and we know that every financial model is obsolete from the time it hits the ground, because events unfold that change everything from the moment things start to happen. The main thing we want to look at in the model on the clean fuel standard is exactly what the assumptions are. Those haven't really been explained to anyone yet, including other government departments.

Can you explain why, please?

[John Moffet]

Actually, they have been explained. They are explained in considerable detail in the RIAS, the regulatory impact analysis statement, and I'm happy to answer any questions that you have about the assumptions.

[Greg McLean, Conservative, Calgary Centre, AB]

Yes, I know, they're explained in detail, but can you release the financial model, please, so that we can look at the numbers that are actually going to be reduced?

[John Moffet]

I don't know what you mean by “release the model”. Sorry.

[Greg McLean, Conservative, Calgary Centre, AB]

Well, the model will have to show that we actually do have some CO2 reductions. We are looking at CO2 reductions, and they are all premised on some assumptions that will have to be made. We're hoping they will be better than the assumptions that have been made on the number of biofuels that have been produced in Canada over the last 10 years, but we need to look at this to ensure we are actually accomplishing something with all the changes we are undertaking.

[John Moffet]

The model itself is a CGE model, but the results of the modelling that we undertook are—

[Greg McLean, Conservative, Calgary Centre, AB]

Sorry; what is a CGE model?

[John Moffet]

It's a computable general equilibrium model. It's detailed computer software.

The results of the modelling done for the CFS are provided in detail in the RIAS. We are happy to share the RIAS. After you have read it, maybe we can come back and answer any questions that you have.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Moffet. Thank you, Mr. McLean.

We'll go over to Ms. Jones.

[Yvonne Jones, Liberal, Labrador, NL]

Thank you, Mr. Chair.

I'd like to thank all of our guests this morning for an interesting discussion. I want to thank you for all the work that you did before you got to this committee around energy innovation and our climate plan around clean fuels in Canada, renewable fuels. I think it's really changing our direction and where we're going. It's this kind of work that will really provoke new opportunities, new initiatives in Canada. You've given us some great blueprints to work with based on the idealism that has been generated.

There has been a lot of very broad discussion this morning. I think where I'd like to go is really with Natural Resources Canada to talk a little bit about some of the investments that the government has made under the electric vehicle and alternative fuel infrastructure deployment initiative. Maybe you could walk us through what some of those investments are under that program and speak to how it's benefiting Canadians, and also what the plans are to broaden those services as we go forward.

[Mollie Johnson]

Maybe I'll take a crack at that, and if others want to jump in, I'll turn it over to them.

On zero-emission vehicles, we know that the government has set some pretty clear targets: 10% of light-duty vehicle sales by 2025, 30% by 2030 and 100% by 2040. Our role at Natural Resources Canada is to provide that enabling infrastructure. That's where we get involved. We administer a number of programs in our clean fuels branch that support the rollout of ZEV infrastructure across the country. There is $150 million in the strengthened climate plan to support that as well.

At this point, there are currently about 13,000 publicly available EV chargers in Canada, but thousands are being added every year. The approach that the government has taken is to build out that infrastructure so that Canadians have access to it where they work, live and play. Doing that provides opportunities for Canadians to continue to take advantage of purchase incentives and tax writeoffs. It's so that the infrastructure is there and is reliable for people to use. We look forward to having more requests for proposals in the near future so that communities can continue to roll out their infrastructure.

I'll just note that there are hydrogen pieces there as well, so clean fuels are part of the mix.

[Yvonne Jones, Liberal, Labrador, NL]

Did anyone else want to respond to that question? No? Okay.

I have another question. I'd like to ask about the path to net-zero emissions. Over the last little while, we've heard a lot about the government's plans to reduce greenhouse gas emissions. I know we've talked about this a bit this morning, but in order to do this, obviously we have to have co-operation from all the provinces and territories in Canada. How is that moving forward? Do we have that buy-in from the provinces and territories? Are we seeing willingness by all the stakeholders across Canada to move forward with these initiatives and with the plans that have been outlined?

[Mollie Johnson]

Maybe I could start in the clean fuels and some of our electricity space.

In Natural Resources Canada, under our minister, we have the EMMC, which is the energy, mines and minerals conference, I think. I'm the worst bureaucrat, because I forget my acronyms, but it's the architecture we have for working with provinces and territories. Under that, we have a table to work on hydrogen, as I think I referred to a little earlier. It's one of those areas where there's a tremendous amount of opportunity for jurisdictions to come together to see what the art of the possible is. Depending on where you live, the opportunity is a little bit different, but there are pathways to support decarbonization.

Electrification is another opportunity. The government recently announced $964 million for a smart renewables program with storage and power, called SREPs, and this is another one that I've gotten wrong. It's again an area where provinces and territories are working with the federal government to bring more clean power onto the grid.

Together, those two mechanisms—more clean fuels, more clean power—are going to help industry become more competitive and help households have more access to clean fuels and clean power. I would say those are areas where we are seeing a lot of partnership, and in the EV space as well.

[The Chair, Liberal, James Maloney]

Thank you, Ms. Johnson and Ms. Jones.

That completes this round. We only have about three minutes left, so I don't know that we have time to start another round. Absent any strenuous objections, I suggest we adjourn the meeting today.

At this point I will say thank you to all of our witnesses. This was the first day of our new study, and as almost all of our members indicated today, it was a very good start. We're very grateful to all of you for providing so much valuable information. Thank you very much.

On that note, I will see everybody later in the week.

The meeting is adjourned.