Natural Resources Committee on Sept. 16th, 2024

[Julia Levin]

Thank you for that question.

The entire life-cycle emissions from that many barrels of oil, if they're all combusted, is 84 million tonnes each year. Again, that is an enormous amount of emissions. It's more than the yearly emissions of Quebec from one project. Those are the emissions from the oil that's exported when it's burned.

However, the upstream emissions from producing that, from the expanded oil production, will also be significant. I don't have the exact numbers here, but certainly, if Canada's emissions cap is to have rigour, there is no room for expanded production.

We know that the technologies that companies are often toting, including direct air capture and carbon capture and storage, are proven to be ineffective. It's expensive failure after expensive failure. They're dangerous for communities. There was a leak of an injection well in the United States, in the first permanent storage injection well, just last week, which threatened drinking water. That is the reality of carbon-capture projects.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

[The Chair, Liberal, George Chahal]

Thank you, Mr. Angus.

Thank you to our witnesses today for attending.

Colleagues, we'll now suspend for a few minutes as we set up our next panel.

We're suspended.

[The Chair, Liberal, George Chahal]

I call this meeting back to order.

We are resuming meeting number 103 of the House of Commons Standing Committee on Natural Resources. Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, June 6, 2024, the committee is commencing its study of the Trans Mountain pipeline expansion.

I would now like to welcome our witnesses for the second hour. From the Canada Energy Regulator, we have Tracy Sletto, chief executive officer; Geneviève Carr, executive vice-president, transparency and strategic engagement; and Chris Loewen, executive vice-president, regulatory.

Welcome. You have five minutes for your opening statement.

[Tracy Sletto, Chief Executive Officer, Canada Energy Regulator]

Thank you very much.

Good morning. My name is Tracy Sletto, and I am the president and CEO of the Canada Energy Regulator, the CER.

I am joined by Genevieve Carr, a doctor of biology and executive vice-president of transparency and strategic engagement, as well as Chris Loewen, executive vice-president of regulatory.

I want to begin by acknowledging that I am on the unceded ancestral and traditional territory of the Algonquin Anishinabe nation, who have lived on and cared for the land now known as Ottawa since time immemorial.

Thank you for the opportunity to speak to you about the CER's work as part of your study on the Trans Mountain expansion project.

I will provide a brief overview of the CER's mandate, how we assess energy infrastructure projects like TMX, the project's current regulatory status and our continued role alongside the indigenous advisory and monitoring committee.

The CER's mandate is clear: Regulate energy infrastructure in a way that prevents harm and ensures the safe, reliable, competitive and environmentally sustainable delivery of energy to Canada and the world. We oversee approximately 71,000 kilometres of federally regulated pipelines and 1,500 kilometres of power lines.

We play an important economic role with respect to pipeline duties and tariffs, as well as energy exports.

The CER also has a mandate to provide energy information. So we provide data and analysis that informs energy-related decision-making and dialogue in Canada. Our suite of energy futures reports explores various scenarios that Canadians could face in the long term in a net-zero world.

When the commission of the CER makes a recommendation as to whether a certificate for a pipeline should be issued by the Governor in Council, it must consider several factors: safety, economic, environmental and social. This was true in the case of TMX.

TMX is a particularly large and complex project, and the CER strived at all times to ensure that it demonstrated a commitment to strong, responsive and inclusive regulatory practices and processes. The Governor in Council approved the project in June 2019, subject to 156 legally binding conditions in addition to the regulatory requirements that apply to all companies regulated by the CER. Since then, we have been focused on ensuring that the project was constructed safely and verifying company compliance with regulatory requirements.

The commission of the CER issued the final authorization for TMX to operate on April 30, 2024. This enabled the company to begin transporting product in the new line from its Edmonton terminal to its Westridge marine terminal.

Our role does not stop now that the construction has been completed. Because we will act as a regulator throughout the life cycle of the facility, we will continue to ensure that the company complies with the conditions, the regulations, the codes and the standards that are set.

The CER is also an economic regulator that oversees pipeline tolls. Tolls are the fees a pipeline company charges its customers to ship products such as oil on its pipeline. A company can only charge tolls that have been filed with the CER.

The commission approved preliminary interim tolls for the expanded Trans Mountain pipeline system in November 2023. The next step for the commission is the final interim tolls hearing, which will continue throughout 2024 into 2025 and include a detailed cost review of the project.

I would like to take this opportunity to highlight another key element of regulatory oversight for the Trans Mountain project. When the Government of Canada approved the project in 2016, it also committed to establishing an indigenous advisory and monitoring committee for the project.

The IAMC includes indigenous representatives selected from among the 129 communities impacted by the project. Alongside the CER and five other federal government departments, the IAMC developed innovative approaches to indigenous monitoring, project notification, the protection of sites of indigenous significance, and the new emergency management processes and protocols. Several of these improvements have since been incorporated into CER practices and regulatory requirements that apply to all companies. The CER will continue working with the IAMC throughout the pipeline's life cycle.

Looking forward, the CER is committed to continual improvement as a national energy regulator, with an eye to building and maintaining trust and confidence in its work, advancing reconciliation, implementing the United Nations Declaration on the Rights of Indigenous Peoples, enhancing Canada's global competitiveness through leadership in regulatory innovation and best practices, and preparing for the energy future.

I want to thank you again for the opportunity to speak to you about our work at the Canada Energy Regulator and our role with respect to the Trans Mountain project.

I look forward to your questions.

Thank you.

[The Chair, Liberal, George Chahal]

Thank you for your opening statements.

As a reminder, I use these cards. This is a 30-second warning. Red means that time is up, but I'll try not to interrupt you mid-sentence as we proceed. Thank you.

We'll now go to Mrs. Stubbs for six minutes.

Go ahead, Mrs. Stubbs.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thanks, Mr. Chair.

Thank you to our witnesses for being here today.

Just in general, would you agree with the economic reality that natural resource development and oil and gas as the single leading private sector investor in the Canadian economy underpin affordability and the economy in every single community in this country?

[Tracy Sletto]

I can certainly speak to.... Our role is one of a safety and an economic—

[Shannon Stubbs, Conservative, Lakeland, AB]

As the head of the Canada Energy Regulator, do you agree that natural resources—and oil and gas in particular—underpin the Canadian economy?

[Tracy Sletto]

I think our role, in terms of our regulatory mandate role—

[Shannon Stubbs, Conservative, Lakeland, AB]

Okay. All facts and stats show, of course, that it's the driving factor behind economic development in Canada and closing the gap between the wealthy and the poor. As a representative of many indigenous communities and people who rely on responsible resource development, I will say that it is the leading factor in indigenous employment and pursuit of economic opportunities.

I just have some general questions.

How many people work at the Canada Energy Regulator?

[Tracy Sletto]

We have approximately 600 staff.

[Shannon Stubbs, Conservative, Lakeland, AB]

That's great. Thank you.

Since 2015, how many projects have you recommended for approval or denial?

[Tracy Sletto]

How many projects since 2015?

[Shannon Stubbs, Conservative, Lakeland, AB]

Yes.

[Tracy Sletto]

I don't have that number at my fingertips at the moment, but we certainly can endeavour to get that back to you.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you. We will follow up on that request.

There are currently 53 projects stuck in some way in federal review. Ms. Sletto, you were vice-president for five years at the Canada Energy Regulator—thank you for your service—and you have been the CEO since December 2023. Of course, the Canada Energy Regulator is fundamental and critical to every single Canadian, given the scope of its work.

There are 53 projects stuck in approval on which there have been no decisions. Six hundred people work for the Canada Energy Regulator, as you have just confirmed. What's happened is a $5-trillion net outflow of investment from Canada into the United States every single year since 2015 and since the changes—and because of this government. It's a direct reversal. It's related to natural resources projects' being abandoned or killed in Canada because the private sector can't see its way through the regulatory process and doesn't have a government that will back it on the back end. I mean, TMX was originally approved in 2016, and the court decision was that the Liberals failed in their indigenous consultation on TMX. Therefore, I'm glad to hear that you have the indigenous advisory group.

I guess I'm just asking if you think that sounds like a rate of success for the performance of the regulator.

[Tracy Sletto]

Thank you for the questions and the observations. I certainly would observe that the 600 people who work at the Canada Energy Regulator are dedicated to their job of regulatory oversight. There are several decisions that would be undertaken in the context of that work.

[Shannon Stubbs, Conservative, Lakeland, AB]

That's right, and I'm asking you, as the head of the organization, if you would consider 600 people working for, I would argue, the most important regulatory body in this country for our community, for our country and for the affordable lives of all Canadians.... After nine years, the costs have skyrocketed because of the inflationary spending and the policy agenda that drive up the costs of energy and essentials for every single Canadian, particularly those in rural and remote areas. I just have a hard time rationalizing how, if you were to report to somebody as the boss of the organization, it could be conceived that 53 projects that are stuck in nowhere land with 600 people is productive.

[Tracy Sletto]

When we look at the role of our regulator and the role of the work of the 600 people at the CER, I think we see that there are actually several aspects to our mandate, including an adjudicative mandate and the role of the commission in its decision-making processes.

[Shannon Stubbs, Conservative, Lakeland, AB]

Okay, that's great, and on that note, I have some questions. When you first denied the pipeline variance for the proponent, what changed to make you later approve it since that was one of the delays that drove up costs?

Second, you made 16 recommendations on TMX that fell outside of the scope of the CER's regulatory mandate. Your organization said that itself. We have a body of 600 people with 53 projects on hold in the most important sector of the Canadian economy. Those 600 people can't get through the processes, but somehow you made 16 recommendations on TMX that added to the delay and were outside of the regulatory scope. That's an additional question.

My other question is this: Since the Supreme Court indicted this government's failures on Bill C-69—which, by the way, the Conservative opposition warned of for every single issue the Supreme Court ruled on, and then the government just stuck some of its tweaking legislation into its budget implementation bill—how has that impacted your work at the Canada Energy Regulator, the clear vacuum for your regulatory parameters since the Supreme Court of Canada decision?

What kind of guidance or insight has the government given you about your organization's scope and mandate as a result of its legislative changes to its mistakes in Bill C-69, which the Supreme Court of Canada and all 10 provincial and territorial leaders have indicted and which is the cornerstone of regulatory assessment for the most important sector in the Canadian economy for affordable lives for all Canadians in every community?

[Tracy Sletto]

Thank you for those questions. There were several there.

I wonder if I might just be able to clarify and confirm with you how you'd like me to address them. I heard a question around the reconsideration, a question specifically around those recommendations that were outside of the CER's mandate and then one around Bill C-69. Would that be the three?

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you, and because we're all stuck in the constraints of this ridiculous time, I do want to tell you to please follow up with anything and all additional information afterwards if we run out the clock.

[The Chair, Liberal, George Chahal]

We have run out the clock. Thank you, Mrs. Stubbs.

We'll now go to Mr. Schiefke for six minutes.

[Peter Schiefke, Liberal, Vaudreuil—Soulanges, QC]

Thank you, Mr. Chair.

Thank you for being here and for taking the time to answer our questions.

My line of questioning is going to revolve around what's important for my community of Vaudreuil—Soulanges. There are others in this room who will speak to the economic benefits, particularly for Alberta and British Columbia, from the construction of the pipeline or the expansion. There will be those who will speak to indigenous partnerships and the share of the roughly $30 billion that was provided to indigenous communities and the indigenous-led businesses that have benefited from it.

My line of questioning is more so around the environment and the protection of the environment, as well as security.

I'll start off with the environment. We know that, if you're going to transport oil, the most efficient way to do it is by pipeline as opposed to rail. The stats show it's two times safer, which I'll get to in a second, but also, over long distances, much more efficient. Therefore, we're going to see some significant savings there with regard to GHG emissions.

In addition to that, all of the emissions that are projected to be created by this pipeline are going to be and have already been captured in Canada's climate plan, so these aren't a kind of external.... These are already factored in. That's the good news, and I've shared that with my constituents.

The question I have for you is this: Above and beyond the fact that we're doing it in the most environmentally sustainable way in terms of GHGs and the fact that it's already factored into Canada's emissions target and plan, what other key tools have been put in place to ensure this protects the environment in the best way possible?