Natural Resources Committee on May 14th, 2021

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

It's a very fascinating discussion. The difference between the witnesses we have is really interesting. We have the hydrogen side and then we have the renewable natural gas side.

I want to play a bit of the devil's advocate here. I'll ask Mr. Kirby and Mr. Egan and then I'll smile for my comment.

I'll ask the real tough question. Where do we go from here? We're hearing from hydrogen that they want to get to net zero by 2050 and that's the only way. We hear from the renewable fuels and certainly biofuels that they are a solution, that we need to continue down this road and it's an advantage for Canada that we have it.

Canada is an energy superpower. We are. I've heard from many around the world. They're looking at us as we develop this technology. We heard from Ms. Quan as to what's going on on the SME side.

Again, the panel we have here is really interesting when we're looking at the future and, as a government, asking what the benefits are. We need to reduce greenhouse gas emissions, as we heard from our colleagues, but what are the costs of doing this? How is this going to affect everyday Canadians at the same time?

Mr. Kirby, I'd like to hear from you. I'll ask you the tough question. What is the role of renewable natural gas? What is the role of hydrogen as we move to 2030 targets and as we move to 2050 targets?

Mr. Egan, I will ask you the same question.

[Mark Kirby]

I will phrase it by saying that 75% of our energy today is derived from fossil fuels without any carbon management. It is a huge challenge to start moving that to clean alternatives. We need them all. We need renewable natural gas. We need hydrogen. We need clean power. If you look at the studies that say how much it is going to take of each of those, there are going to be debates about whether it's going to be this much for that one or that much for that one. We're going to need them all. You don't get to pick. Sorry. We need to get them all in place and we need to find support mechanisms that allow us to build out all of these clean fuel alternatives if we have a hope of getting ourselves to our targets for 2030 and for 2050.

I'm not going to say that you need renewable natural gas or hydrogen. You need them both. You need clean power. You need batteries. You need fuel cells. I would say the challenge for us is that we do need to be able to find ways to move them all forward. Yes, they should be technology neutral. Yes, they should support each other. On the other hand, we need to make sure they are all advanced, so there needs to be some targeted research on renewable natural gas. There needs to be some targeted research on hydrogen if we're going to have a hope of getting to where we all want to get to.

[Paul Lefebvre, Liberal, Sudbury, ON]

Awesome. Thank you.

That's kind of the comment we keep hearing at this committee on this study. It's to not pick a winner, but let the markets play a role as we advance with the technology and support all technologies. Again, Canada is a world leader in this.

Mr. Egan, I'd like to hear your comments on my question. I saw you chuckle, when I asked my question.

[Timothy Egan]

I thought it was going to be easier for me to answer the question than for Mr. Kirby because he's in the hydrogen industry, but he made the point that I would make. In some instances you're going to use RNG and in some instances you're going to use hydrogen.

I'd also note, further to some of the earlier questions I had, in some instances you're going to push carbon capture technologies.

The fact is that we have three energy delivery systems. We have a liquid energy delivery system, a gaseous energy delivery system and an electron energy delivery system. There are three big ones. We want to find technologies on each that will deliver on the targets you've set. Put in place the conditions that allow markets to compete and different technologies to come to the fore. Let's all be surprised by what we find out.

If you pick a winner, I don't think it's going to be a winner at the end of the day.

[Paul Lefebvre, Liberal, Sudbury, ON]

Exactly.

Mr. Goyette, I would really like to hear your comments on the question I asked the previous witness.

[Normand Goyette]

As was previously stated, we are in an energy transition. Just because we produce more or less doesn't mean that the transition is going to happen by waving a magic wand. We are in a global energy transition. Canada is in an excellent position to make that transition.

I think investments have to be made across the board. We are not going to get there if we don't put in all the effort that's needed. Infrastructure is one of the key elements and there are others, like the workforce and everything that was said earlier.

Of course, I feel that even if you mass-produce in one part of Canada right now, you're not offsetting fossil fuels. That's going to happen over a long period of time. So we are complementary.

[Paul Lefebvre, Liberal, Sudbury, ON]

Excellent.

Mr. Chair—

[The Chair, Liberal, James Maloney]

Thank you, Mr. Lefebvre.

[Paul Lefebvre, Liberal, Sudbury, ON]

That's what I thought.

[The Chair, Liberal, James Maloney]

You're right on time. I appreciate it.

Next is Mr. Simard for two and a half minutes, and then we'll finish with Mr. Cannings.

[Mario Simard, Bloc, Jonquière, QC]

Thank you very much, Mr. Chair.

Earlier, Ms. Green told us that Canada was only tapping into 13% of available resources to produce biogas, which is a very low percentage.

Ms. Green, you also said that if we increased our volume fivefold from today forward, we could create 20,000 more jobs.

About two weeks ago, we had a discussion with Frédéric Verlez, senior vice-president at Evolugen. He told us that renewable natural gas was missing from the clean fuel standard. Would adding natural gas to the clean fuel standard be a good solution to bring up that low percentage of 13%?

My question is for Ms. Green.

[Jennifer Green]

You're quite right that the clean fuel standard regulation took a shift away from a dedicated target specifically for decarbonizing gaseous fuels. That being said, there are still mechanisms within the clean fuel standard that allow biogas and renewable natural gas to play a role, by producing low-carbon fuels and by providing fuels for the switching of other fuels, such as diesel or CNG to RNG.

There are mechanisms remaining within the clean fuel regulation, although they're dampened considering what the signal would have been had there been a designated target and obligation for the gaseous stream itself. That's why in my remarks I mentioned where there has been significant uptake. Where we're seeing the greatest advancement for RNG is in the provinces that have specifically provided targets, such as B.C. and Quebec.

[Mario Simard, Bloc, Jonquière, QC]

You and Mr. Egan talked about the legislative and regulatory framework being critical. From a regulatory perspective, what do you feel could be done in the near term to encourage the use of renewable natural gas?

Mr. Egan can add something if he wishes.

[The Chair, Liberal, James Maloney]

You have time for one very brief answer.

[Jennifer Green]

Measures with the clean fuel fund are going to be significant. From a regulatory perspective, I think we'll be looking at the provincial domain and, in a federal context, looking at how we can target mandate opportunities for RNG across the country.

[The Chair, Liberal, James Maloney]

Thank you, Ms. Green and Mr. Simard.

Mr. Cannings, we'll go over to you to finish the questions for today.

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

Thank you.

I'm going to go back to Ms. Quan.

Ms. Quan, you mentioned that the 50% matching requirement for some funding is “very dilutive” and noted the impact that has on small growing companies that are forced to come up with it. This is not just about the difficulty in finding those investments, but about what it does to these small companies in a Canadian context.

I'm wondering if you could expand on that, because there was a pretty quick drive-by there.

[Grace Quan]

Thank you, Mr. Cannings, for giving me the last word.

From my perspective as a female CEO, a visible minority and one of the few CEOs in hydrogen and clean tech, I would say that raising money is our number one challenge. When investors know you're getting matching grant contributions, it encourages predatory behaviour. I've seen that myself. I had to refuse funding. I also see that with my colleague companies that have been bought out.

Greenlight Innovation does test equipment for hydrogen and is a leader in the world, but it's no longer Canadian. You see that with many of the hydrogen companies that are leaders. They're slowly being eased out. Also, where is the headquarters going to be? It will be wherever the investor is.

Yes, we can support our Canadian hydrogen people, but if we want to keep them in Canada, we have to rethink our grants and contributions programming. Otherwise, it will continue to slide into erosion and brain drain, which is what you're seeing.

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

Thanks.

I'll leave it there, Mr. Chair.

[The Chair, Liberal, James Maloney]

Perfect. Thank you, Mr. Cannings.

Thank you to all the committee members.

Thank you especially to all of our witnesses. We're very grateful that you took the time to join us today and to share so much valuable information. I think everybody pointed out that we don't have enough time but we do very much appreciate it, and let me just reiterate that. Thank you. We appreciate your being here.

You can now go and start the weekend a bit early—earlier, depending on where you are. For those of you in B.C., you can start it really early. Enjoy.

To the members, thanks. That was really efficient. We started the meeting early and we stayed on time—I think it might be the first time ever that I can say this—with all the witnesses and almost all the questions. I appreciate it.

We have some quick committee business before we wrap up. I hope it will be quick. I shouldn't have said that; I probably jinxed myself.

I'll turn the floor over to Mr. Serré.

[Marc Serré, Liberal, Nickel Belt, ON]

Thank you, Mr. Chair.

Members, I think you have all received the motion of May 12 to look at the supplementary estimates and the main estimates and to have the minister here.

I think our next meeting, Mr. Chair, is Friday, May 28, because of the constituency week and the long weekend. Our next meeting will be with the minister.

I wasn't part of the last time we invited the minister to the estimates, but I know there were some issues. I'm trying to see whether we could come up with a compromise here and save some time. Obviously, the minister has agreed. He has made himself available to the committee numerous times. I think he's made himself available to the three critics on numerous occasions.

The compromise I'm suggesting right now would be to save a bit of time. Normally, the minister comes for one hour. As a compromise, if we could combine the supplementary estimates (A) and main estimates together on May 28, would it be the will of the honourable members of the committee to have him in for an hour and a half?

In the spirit of co-operation, I'm just throwing that out to my colleagues to see if it's a possibility. We could focus with the minister for an hour and a half and have the officials for the last 30 minutes on May 28. I'm just throwing it on the floor to get some feedback from everyone to see if that's an acceptable compromise.

Thank you.

[The Chair, Liberal, James Maloney]

Thanks, Mr. Serré.

Please raise your hand if you wish to speak. I see that Mr. McLean has his hand up.

I might first add a qualifier. To my understanding, the supplementary estimates have not yet been tabled in the House. This proposal becomes moot if they don't get tabled the week after next when we return. As Mr. Serré pointed out, next week is a constituency week, and the Monday that we'd be coming back is a holiday. Our first meeting is actually two weeks from today, and that's when the minister is scheduled to come. So unless they get tabled on Tuesday, Wednesday or Thursday of that week, this discussion is sort of moot.

Mr. McLean, you're first.

[Greg McLean, Conservative, Calgary Centre, AB]

Yes, it's an excellent compromise. I thank the parliamentary secretary for making such a compromise. We don't get enough time with the minister. With his busy schedule, I think having two hours with him at one meeting would be very productive for all of us. I thank the parliamentary secretary for making the minister available for us at that point.

Mr. Chair, can you make sure that it is a full two hours and that we're not stymied by any motions in the committee? If we can just carve out the entire two hours for the minister, that would be really appreciated.

[The Chair, Liberal, James Maloney]

I understood Mr. Serré to suggest that the minister would come for an hour and a half and that the officials would be here for the full two hours.

[Greg McLean, Conservative, Calgary Centre, AB]

I'm sorry. I thought we were looking at two hours as opposed to an hour and a half.

Mr. Serré, why is it an hour and a half?