Natural Resources Committee on June 21st, 2021

[Dr. Ross R. McKitrick]

What I said was that if you're going to use carbon pricing, you should let the pricing mechanism do the work of picking the most cost-effective strategy. If you put a carbon price in place and then you also add in a lot of regulations where you then try to direct industry over and above the carbon price, you're undermining the economics of the carbon pricing system.

[Bryan May, Liberal, Cambridge, ON]

Thank you, sir.

I'll go quickly to Mr. Masselot, because I know my time is limited.

We just had an announcement this morning of $1.5 billion from the minister with regard to a hydrogen strategy. Do you believe that's going to increase the probability of advancement in that technology?

[Bertrand Masselot]

I think it will to a large extent. When we are looking at other countries.... Let's take Europe, where there are nine billion euros in Germany and seven billion euros in France, just to give you a couple of examples.

It's important because it's a question, as well, of maturity of technologies. When you're looking at all technologies, there are these, let's say, gaps you need to close. One way to do it very clearly is through the help of government, through subsidies, to bring technologies at par.

[Bryan May, Liberal, Cambridge, ON]

Thank you very much, sir.

I think that's my time.

[The Chair, Liberal, James Maloney]

It is. Thank you, Mr. May.

Members, it's 12:27. The agenda says we're stopping at 12:30. We just finished a round.

I propose we go a little bit longer. We're going into another five-minute round.

What I propose to do, absent any objection, is give one member from each party one question, which will take us probably to about 12:35 or 12:40.

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

That sounds good.

[The Chair, Liberal, James Maloney]

Okay, thanks, Mr. Zimmer.

Mr. Patzer, it would be your turn.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you very much.

I'll just figure out what direction I want to go here with one question.

[The Chair, Liberal, James Maloney]

It's a lot of pressure. I apologize.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

No, it's good. I appreciate the opportunity to still be able to engage with the witnesses.

The direction I'm going to go is back to the cost.

Mr. McKitrick, you elaborated a little bit on the six dollars for every dollar of benefit, but you also said $440 per person, per year just on the clean fuel standard alone that this government is implementing.

We had a witness last week who said that, because you have one policy that's disproportionately impacting rural and remote Canadians, seniors living on a fixed income and single mothers, you should also have an offsetting policy in a different area of government to help make up the difference or make up the gap.

Are those some of the problems you've talked about with policy when you have to have multiple policies to offset other bad policies? Is that what you were alluding to there?

[Dr. Ross R. McKitrick]

That particular number referred to the total macroeconomic cost of the clean fuel standard. To understand that, I'd refer you to the discussion earlier about whether the feedstock would be available for the expansion of biodiesel.

If you're going to get more feedstock, you have to take it out of the food supply or somehow find a way of expanding the production of the feedstock. Those second order costs really add up and affect people, especially if you're raising both the price of energy and the price of food. Those costs disproportionately fall on low-income households.

You can then propose band-aid solutions, but they are never quite adequate. Look at what Ontario's doing trying to transfer the cost now of the renewable energy contracts onto the taxpayer. The C.D. Howe Institute has estimated that we're now spending more for those subsidies than we spent on our entire long-term care budget in Ontario. Band-aid solutions down the road still don't get away from the fact that there are costs, and they have to be paid by someone.

[The Chair, Liberal, James Maloney]

Thanks, Mr. Patzer.

Mr. Lefebvre, we'll go over to you for a question.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

I think this may be my last question in a committee as a parliamentarian, so I certainly want to thank all of you, my colleagues from all sides of the aisle, and certainly you, Mr. Chair, and the great team. To the analysts, it's been an amazing run. Your team of analysts has been amazing, as well as the people who take care of the committees.

It was a great pleasure and privilege to work with you.

I'll direct my last question to Mr. Thomson and Mr. Lewis.

I want to talk about the job opportunities here. Certainly, as we're looking at biofuels and as we're looking at this transition, we've heard from many witnesses—a lot of scientists, anyway—that it needs to happen and that a lot of companies and a lot of businesses are going down that path.

I want to hear very quickly about the economic opportunities and the job opportunities in this sector. How do you see it, Mr. Thomson and then Mr. Lewis?

[Ian Thomson]

Thank you, sir, and thank you for your long years of public service. I hope you enjoy your “retirement”.

We will provide to the committee—in fact, we might have already done it in our briefing notes—the data that we have done. On our website you'll find an analysis from late last year, which is the source that I used to quote my sources.

I can give you an example. In British Columbia, we've had a low-carbon fuel standard since mid-2013. In the last 12 to 18 months, we've had about $500 million to $700 million of investments into the energy space here from companies in the forestry sector, refiners and others. Those are very directly tied to the British Columbia low-carbon fuel standard, which now has sent this very effective signal to the industry to build out.

We're very clear in British Columbia. We've seen it, and our studies indicate a similar kind of effect in Canada.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Lefebvre.

[Paul Lefebvre, Liberal, Sudbury, ON]

Mr. Chair, I had asked Mr. Lewis for an answer. I asked both of them.

[The Chair, Liberal, James Maloney]

Oh, sorry. That's right.

[Paul Lefebvre, Liberal, Sudbury, ON]

Mr. Lewis.

[Scott Lewis]

We are just finishing an economic analysis for the plant that we're doing, an expansion conversion plant of an existing refinery down in Long Beach. We were amazed. From this project, where our investment is over a billion dollars, ourselves, it was generating over $18 billion of add-on economic activity with the number of jobs. It's a four-year project to build. We employ currently over 150 people there who would not have their jobs had it been left as a petroleum refinery, because it was no longer viable in that form. Yet, with the environmental concerns as a result of the fact that it was a refinery for 100 years, it would have effectively been scorched earth, so to be able to rejuvenate that is amazing. Its place within the community is huge. This is down in the U.S., where the average value of a job there is over $85,000 in U.S. dollars. This is real, but it's in the U.S., and these are high-paying jobs in the sector.

I don't have the specific numbers for Canada right now, but I can say that they are exceptional in the project we're doing in the States. We expect that you will see similar values, numbers and scope up here in Canada with the right policies in place to stimulate the investments.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you.

[The Chair, Liberal, James Maloney]

Mr. Simard.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

I have two quick questions for Mr. Masselot.

First, for your project at Bécancour, did you have any federal government support?

Then, in terms of the issues of hydrogen and of the federal government strategy, what should be established in the short and medium terms, in your opinion?

[Bertrand Masselot]

On your first point, about our own investment, the support we received was provincial, as I said. This was both for the price per megawatt and in terms of the much appreciated efforts of Quebec's Department of Finance.

Then, the important thing for us today, as we have said, is not only to provide assistance and support, but also to generate demand. It seems to me that this is how, with policies that are both credible and proactive, we can generate uses for hydrogen in population basins and in quite large industries at the same time. This is specifically the case with transportation, as long as the demand is sufficiently great so that we are no longer in demonstration mode. We are past that.

We know that the technologies exist and that they work. So now we have to take quite a broad view and make sure that the whole hydrogen chain is progressively rolled out. It can be used all over the country, not only for transportation, but also to decarbonize anything industrial.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

[The Chair, Liberal, James Maloney]

Thank you.

The last question goes to Mr. Cannings.