Natural Resources Committee on Dec. 11th, 2020

[The Vice-Chair, Conservative, Greg McLean]

Thank you, Minister. It's much appreciated.

We will suspend the meeting while we get the new speakers up, and commence in three minutes.

[The Vice-Chair, Conservative, Greg McLean]

For this round, again, we will start on the second round, the same way we started the last round. First of all, though, we'll have a statement from the deputy minister, if appropriate.

[Jean-François Tremblay]

I would go directly to the questions, if it's okay with you.

[The Vice-Chair, Conservative, Greg McLean]

Mr. Zimmer.

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

Thank you, Chair. I know our time is short. Just to be clear, Chair, we have, what, 24 minutes left in the committee?

[The Vice-Chair, Conservative, Greg McLean]

You have six minutes here, Mr. Zimmer.

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

Okay.

I had a question for the deputy minister. I asked the minister several questions about the clean fuel standard and the announcement this morning. We're getting an impression about what's going to happen to our resource sector in Canada, and it doesn't feel like a good one.

I'm up in northern B.C., in northern gas central, where we have some of the biggest gas plays in North America, if not the world. We've always held that if our natural gas makes its way around the world, we can actually reduce the current emissions that are out there, yet we have a current government that seems to just look at Canada and Canada's geographical footprint and seems to want to impede any kind of export of that clean fuel that we're trying to accomplish.

I know that a whole bunch of my constituents go to work every day in the cold and provide natural gas so that we stay warm in the winter. It seems that all this government understands is either to tax it more or to tax people's staying warm in the winter, because I guess for some reason this Liberal government thinks it's optional to stay warm in Canada, when it simply isn't.

Furthermore, on what I said before about shipping and our high standards, it's not only employment standards, but our exploration standards. To ship those around the world, I think is something that Canada needs to do more of, not less.

Let me just read a quote from the Financial Post article that I was quoting for the minister. This is on the clean fuel standard. Maybe you can explain and correct me if I'm wrong. The article says:

The standard will introduce a country-wide carbon credit trading scheme and include harsh per-tonne penalties. Going a step further, Canada will be the first jurisdiction in the world to extend its regulations to cover gaseous fuels, like propane or natural gas....

Maybe you can just explain—I hope I'm not right in this—that the good natural gas and natural resource jobs won't be impacted by this clean fuel standard.

[Jean-François Tremblay]

I would not announce the CFS and I would leave the Minister of Environment to do it when he chooses a time to do it, but to come back to your point on the clean fuel, you're right about the exports and the importance of the export of natural gas and also of energy for Canada. It's not just natural gas. It's oil. It's also other forms of energy, in which we have tremendous capacity and opportunities.

But the demand is changing. The world is looking at us and is looking at the natural gas, and they want to have the cleanest one, so the clean fuel standard is also an opportunity. If our industry doesn't transform, it's not going to get the market space that it wants to have. They won't get the market space that they had in the past and that they want to keep. We're going to need to transform the industry. I don't think you should take the fuel standard—

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

Maybe help me understand this, then, Deputy Minister. It's my understanding that our Canadian standards are amongst the best in the world in terms of production. I know it first-hand. I've just been out to some natural gas sites north of my hometown here in Fort St. John. There's not a drop of anything that gets spilled that isn't documented, and not much is spilled, I can tell you.

We have some of the best standards in the world. Why would we set ourselves on a trajectory where we penalize ourselves when the impact of that natural gas, if it lands in a territory across the ocean in a place that has higher pollution than we do in Canada...? Why would we in some way impede that? That's the thing that I just can't understand.

[Jean-François Tremblay]

There are two aspects to it. The first one is that if you want to reduce the emissions, you have to go where the emissions are, and we have to recognize that the energy sector is where a significant amount of the emissions are, so it's important for us to act there. The second—

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

In that calculation, then, do you look at the emissions where this product, the natural gas, is going to often go, which is to China to offset the use of thermal coal, etc.? Does that number get put into the equation?

[Jean-François Tremblay]

Going into that, that's an important one from the business perspective and from a Canadian perspective. Look at the NGTL. It's going to help, for example, some regions of the country to get out of coal. This is clearly strategically important to go there.

I wanted to come back to another element, which is, don't think of the clean fuel standard as the only measure. There is also $3 billion for decarbonization. We're going to have to work with the industry, which has already, as the minister has said, the big investors in clean tech, in trying to find ways to actually transform the energy and get it cleaner, and that will open markets. It's not just for gas. It's not just for oil. It would be for hydrogen and other sources of energy.

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

I have a simple question. Do you know what our products are used for? When our natural gas and propane, for example, get shipped to countries in Asia, do you know what they're actually used for?

[Jean-François Tremblay]

A lot of that is to replace coal, in many aspects. For example, China is 60% dependent on coal, so it's important they're getting.... The minister said it's practical and I think that's the point. If we want to get to net zero, we have to take full advantage of producing—

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

Do you know what else they're used for when they land? What products are they manufacturing?

[Jean-François Tremblay]

They could be used for the production of hydrogen in Canada, for example.

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

As an example, when natural gas and propane get brought out of the ground in my part of northern B.C., they get shipped to a port on the coast of British Columbia. Then they get sent to countries in Asia. Some of that product is turned into high-value plastics, not single-use plastics. It's the high-value plastics used in our iPhones and other things.

[The Vice-Chair, Conservative, Greg McLean]

Please be quick, Mr. Zimmer.

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

I'll finish with this. I would hope the overall calculation is considered the end value in terms of the reduction of carbon in the countries that our gas is being exported to. It really needs to be the number one factor when calculating some of these new standards, which are only set to—

[The Vice-Chair, Conservative, Greg McLean]

Thank you, Mr. Zimmer.

Is there a response to that from the deputy minister?

[Jean-François Tremblay]

The last point I would mention is that the fuel standard was developed in consultation with and by engaging with the industry. They actually raised some of the concerns, and we'll see how some of them could be addressed and how we are going to move on with this.

I would say that a lot of them didn't necessarily oppose the CFS. They raised concerns, but it's not necessarily a—

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

I highly doubt this industry supports—

[The Vice-Chair, Conservative, Greg McLean]

Mr. Zimmer, we're moving on to the next speaker.

Go ahead, Mr. Lefebvre.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

First, I'd like to thank all the witnesses who are with us, including the deputy minister and the assistant deputy minister.

I'd like to thank you for the incredible work you've done over the past year. It has been a tough year for everybody. We have made it through some extremely difficult times.

As you know, I represent Sudbury. So we're going to talk about mines, something that we haven't touched on very much.

I'd like to talk about mining. Nobody has asked any questions of the minister about this topic, so I will ask the ADM and the DM as to the potential of this sector. It's something near and dear to my heart.

Sudbury has a story I always mention about where we were 50 years ago with innovation. We wanted to build the largest super stack in the world so that pollution would go further. Next year we're bringing it down. We're bringing down the second-largest super stack in the world because of innovation, because of the community coming together and because of regulation. They have all worked together. We talk about oil sands and natural gas out west, but we've lived it in Sudbury, with the transition and the difficulty.

Mining is important, and we certainly know that critical minerals are key to decarbonizing our economy and electrifying our economy. I want to know two things.

I want to hear about the critical minerals plan that we are making with some of our partners.

Can you also very quickly address the geoscience program? We need to be able to access these minerals. We have tons of them in Canada, and geoscience plays a key role in that and the opportunity it represents.

Mr. Tremblay, would you like to start? After that, we will hear from Mr. Labonté.

The floor is yours.

[Jean-François Tremblay]

You'll notice there was some funding for geoscience in the main estimates and the supply.... It's very important. It's by doing geoscience that we find the minerals, identify them and support the industry.

I will turn to Jeff, who I'm sure wants to say more. He's been waiting for a while.

Go ahead, Jeff.