Evidence of meeting #10 for Natural Resources in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was million.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

John Hannaford  Deputy Minister, Department of Natural Resources
Mollie Johnson  Assistant Deputy Minister, Low Carbon Energy Sector, Department of Natural Resources
Shirley Carruthers  Assistant Deputy Minister, Corporate Management and Services Sector, Chief Financial Officer, Department of Natural Resources
Beth MacNeil  Assistant Deputy Minister, Canadian Forest Service, Department of Natural Resources
Jeff Labonté  Assistant Deputy Minister, Lands and Minerals Sector, Department of Natural Resources

4:20 p.m.

Liberal

The Chair Liberal John Aldag

I call the meeting to order. Welcome to meeting number 10 of the House of Commons Standing Committee on Natural Resources.

The committee is meeting today to hear from the Minister of Natural Resources and officials in consideration of supplementary estimates (C), 2021-22. We are also going to be studying supplementary estimates (B), 2021-22, but only the subject matter. It's only supplementary estimates (C) that are under consideration for votes by this committee.

In the interest of time, I'm going to skip through all the usual opening comments. Online we have departmental officials who have all, hopefully, been part of the process before. I would just ask that you address your comments through the chair.

Interpretation services are available. You can use floor, English or French. For anyone online, you will control your own muting and unmuting. We ask anybody who is not speaking to be muted.

With that, I think we're ready to jump into it. We had a discussion before the meeting started. In order to save time again, we're going to pass on the minister giving his five-minute opening statement, so that we can go right into questions and answers and get through as many rounds as we can.

I will ask, though, that the opening statement we had be entered into the official record. That way, it will be part of the reporting for today. The opening statement has been distributed to all members by the clerk. With that on the official record, we will get right into questions and answers. We're going to do four rounds of six minutes. With the minister's schedule, we should be able to fit that in, and then we'll see where we're at.

First up is Mr. McLean.

We're going to start the clock. You have six minutes.

4:20 p.m.

Conservative

Greg McLean Conservative Calgary Centre, AB

Thank you very much, Mr. Chair.

Welcome, Minister and officials.

I'm going to start with a little leeway here, unless I have to reference something with this question.

Minister, I asked you a question in the House two days ago about oil that comes in from Russia to Canada at this point in time and the approximately $500 million per year that we are funding Russian oil, Russian oligarchs, the Russian economy and Russian war machine—

4:20 p.m.

Liberal

James Maloney Liberal Etobicoke—Lakeshore, ON

On a point of order, I hate to interrupt, but I'm not sure this has anything to do with the estimates necessarily.

4:20 p.m.

Conservative

Greg McLean Conservative Calgary Centre, AB

Okay. Let me reference, as I said I would, the—

4:20 p.m.

NDP

Charlie Angus NDP Timmins—James Bay, ON

On a point of order, the member has the right to ask the questions he wants. If it bothers the Liberals, that's their problem. They can counter in their questioning, but to interrupt the member when he's asking questions is not acceptable.

4:20 p.m.

Liberal

The Chair Liberal John Aldag

Generally I've allowed a fair bit of latitude in the questions, letting each person control the direction in which they want to take the questions. That said, we are here to study supplementary estimates (C) and (B), and if we can keep within—

4:20 p.m.

Conservative

Greg McLean Conservative Calgary Centre, AB

Mr. Chair, let me be relevant here.

We'll refer to the net-zero accelerator funds that are being allocated here, and we'll talk about the net-zero carbon emissions that would be provided with cleaner energy than we have coming from Russia at this point in time. Therefore, we can address the amount of oil that's coming from Russia to Canada.

I know you tried to correct me in the House and said that we haven't imported crude since 2019. I rose on a point of order today to make that correction. I was hoping to give you the opportunity to say that you actually meant that we're not going to import any Russian oil into Canada.

Minister, would that be case, first of all?

4:20 p.m.

North Vancouver B.C.

Liberal

Jonathan Wilkinson LiberalMinister of Natural Resources

What I said in the House was that we have not imported crude oil from Russia since 2019. That is true. Subsequent to that, we have banned the import of Russian oil.

We added to that the import of petroleum products that are derived, that are either partly or wholly refined, including things like lubricants and motor oils. We now have put in place, or are in the process of putting in place, a ban on those as well.

4:20 p.m.

Conservative

Greg McLean Conservative Calgary Centre, AB

Thank you, Minister. That's much appreciated.

The issue, of course, is that with the ascent of Russian oil production, large international companies have vacated Canada and sought opportunities elsewhere, including in places like Russia, because of a restrictive regulatory environment imposed by this government on Canadian resource development.

Do you see now the folly of the position of restricting responsibly developed, environmentally produced oil in Canada and what will fill that void on the world stage and the impact of the money flowing from that void being filled?

4:20 p.m.

Liberal

Jonathan Wilkinson Liberal North Vancouver, BC

I would take issue with the restrictive resource development. We've put in place a better environmental assessment process to ensure that good projects actually can proceed, but we are looking at environmental impacts in a manner that the previous system did not. There are many projects across this country in all kinds of natural resource areas that are moving either through that process or through provincial processes.

I'm sure you will have noted that, in Russia, most of the majors are pulling out of Russia. Shell, BP, Equinor and others are moving their assets out of Russia because of political instability, and there obviously will need to be conversations on a global basis. We started having them with the International Energy Agency ministers yesterday about how we address the concerns that Europe has.

4:20 p.m.

Conservative

Greg McLean Conservative Calgary Centre, AB

Thank you, Minister. That's a good answer. I just wonder why we didn't have the foresight to look at that prior to this event.

I recognize as well that Shell and BP are now pulling out of Russia, but they largely pulled out of Canada when your government was elected and developed more restrictive policies on resource development here. You look at the amount of investment that has flowed out of the Canadian resource development industry, and it is very illustrative of a restrictive policy, where they cannot see the outcome of the dollars they spend.

I'll let you comment on that before we go further.

4:20 p.m.

Liberal

Jonathan Wilkinson Liberal North Vancouver, BC

As you will expect, I don't agree with what you've said. In the current context, both industry and Canadians generally want to ensure that there is an appropriate thinking about resource development and economic opportunities but also about environmental impacts, and most particularly about climate change. If you ask the CEO of Shell or the CEO of BP, they would not agree with your characterization.

4:20 p.m.

Conservative

Greg McLean Conservative Calgary Centre, AB

I think they would actually, especially in Canada.

Let's analyze that as far as the amount of finance that's coming out of the resource. If we take depreciation out of the equation, we are net negative as far as our capital stock in Canada goes, and that's been a consistent downturn since your government has been in power. How do you address that and suggest that we're actually facilitating natural resource development in this country? It has been the backbone of our development in this country for a long time.

4:25 p.m.

Liberal

Jonathan Wilkinson Liberal North Vancouver, BC

Natural resources have been and will continue to be an important part of the Canadian economy. Of course, we are going through an energy transition and the nature of those resources is going to change over time. I will tell you that critical minerals are an enormous opportunity for this country going forward, and hydrogen is an enormous opportunity for this country going forward.

We also have to address carbon emissions and that is something that, unfortunately, the Conservative Party seems to not understand.

4:25 p.m.

Conservative

Greg McLean Conservative Calgary Centre, AB

Minister, thank you. Let me move towards carbon capture, utilization and sequestration.

As you know, in the last Parliament, I put forward a bill to get an investment tax credit for CCUS in Canada. I understand that the discussions are ongoing regarding whether we include enhanced oil recovery as part of the investment tax credit for carbon capture, utilization and sequestration. We are hearing many noises from your department that they are not going to include enhanced oil recovery. May I suggest to you that excluding enhanced oil recovery will make us uncompetitive with the 45Q regime that is just south of our border in the United States?

Having to pay for this as you get the investment tax credit, which is uneconomic, is words on paper only. The money is going to flow where the economic opportunity arises. We've already seen that over the last handful of years, when more and more direct capture technologies are being developed, projects are being implemented in the United States and not as much in Canada, where we have sunk a lot of money, both public and private, into the development of this technology.

Would you please assure this committee that you're not just dancing against the wind here, but you're actually going to implement an investment tax credit where we will get some economic benefit in Canada?

4:25 p.m.

Liberal

Jonathan Wilkinson Liberal North Vancouver, BC

As you well know, the investment tax credit is the purview of the Department of Finance. I would tell you that, globally, the International Energy Agency and other experts have said that it is an important component of a comprehensive approach to dealing with climate. It is not a climate plan, but it is an important component.

We intend to move forward. We have made investments in this space. The Department of Finance has been consulting on what that investment tax credit should look like, and we certainly see carbon capture and sequestration as being an important tool going forward.

4:25 p.m.

Liberal

The Chair Liberal John Aldag

With that, we're out of time on the first round of questions.

We're going to go to Ms. Lapointe now for six minutes.

4:25 p.m.

Liberal

Viviane LaPointe Liberal Sudbury, ON

Thank you for being here, Minister.

As you're aware, critical minerals and mining are a major sector in my riding of Sudbury, so I'm sure it won't come as a surprise to you that I would like to focus my line of questioning on the development of a critical mineral value chain. Last year's budget allocated funds to establish a critical mineral centre of excellence based in Sudbury. I can tell you that the innovation and research and development being done by this centre will be transformative to our future energy sector.

Minister, in terms of the additional funds being requested for the centre, what will this $10.32 million investment be used for?

March 2nd, 2022 / 4:25 p.m.

Liberal

Jonathan Wilkinson Liberal North Vancouver, BC

First of all, thank you for the question. I think the critical minerals space is an exciting one for Canada going forward. I want to thank the member for her work on this file and the discussions that we've had about this, and certainly for the continued advocacy on the part of her constituents.

In supplementary (B)s, we requested $10 million, as you noted, to advance our early work on the development of a critical mineral value chain. That initial investment supported the creation of the critical mineral centre of excellence and also targeted research and development relating to upstream critical minerals processing and battery precursors. The funding provided and the work being done in this sector represents an enormous economic opportunity not just for extraction and processing but also for downstream applications around batteries, electric vehicles and other things.

Certainly we see the centre of excellence playing an important supporting role in Canada's critical minerals strategy that is presently under development. I look forward to talking about that a little more as we move forward.

4:25 p.m.

Liberal

Viviane LaPointe Liberal Sudbury, ON

In developing Canada's critical minerals strategy, the enhanced environmental, social and governance standards seem to differentiate Canada's critical minerals development from other nations. Why is this policy important?

4:25 p.m.

Liberal

Jonathan Wilkinson Liberal North Vancouver, BC

It's important to ensure that we are responsibly developing our resources. We have to address GHG emissions. We have to address other impacts on our environment, and we have to look at the social issues in the process of developing these kinds of resources. As we were speaking about earlier, a number of the mines that are being developed in Canada are being developed as net-zero mines.

Canada has some of the highest environmental and labour standards in the world. Some of that is the result of the work of governments, but some of it is the work that has been done by the Mining Association of Canada, which has been thoughtful in this regard. Because of these standards, I think we have an important opportunity to play a very significant role in providing key materials that other nations are going to need, and certainly, from a geopolitical perspective, increasingly many of our partners and allies in this country and in this world are going to need.

4:30 p.m.

Liberal

Viviane LaPointe Liberal Sudbury, ON

Does the critical minerals strategy work that we're currently doing pertain to local value chains as well as global value chains?

4:30 p.m.

Liberal

Jonathan Wilkinson Liberal North Vancouver, BC

Yes, absolutely. I think they will support local economies and the value chains associated with them. Certainly in communities that are historical providers and developers of minerals, there are real opportunities for us as we look to how we develop further access to some of these critical minerals.

There are processing opportunities, which again will exist in a whole range of communities across this country. There is also, as I said, the downstream production of batteries, for example—which the governments of Quebec and Ontario are very interested in—in the manufacturing of electric vehicles, which certainly we and other countries in the world are very interested in. Absolutely, there are local value chains that extend to almost every province and territory in this country.

4:30 p.m.

Liberal

Viviane LaPointe Liberal Sudbury, ON

What type of policy development do you see as important to securing Canada's position in global value chains?

4:30 p.m.

Liberal

Jonathan Wilkinson Liberal North Vancouver, BC

One of the things in my mandate letter was the development and the launch of Canada's critical minerals strategy, which is really about looking end to end at how we ensure we are thoughtfully developing these. That involves engagement with communities, but it certainly very much involves engagement with indigenous peoples.

How do we ensure that we are doing this quickly? Can we incent the development in certain ways? How do we actually ensure that Canada captures the processing value, so we're not simply digging up minerals and sending them offshore? How do we ensure that we're building downstream so that we're securing the mandates with respect to things like battery production? How do we actually build this, from an international perspective, in a manner that responds to the geopolitical issues, where we have things like the processing of many critical minerals that are concentrated in one country in the world?

I think we are increasingly going to be looking to try to ensure we are moving that into areas where there is going to be security of supply.