Natural Resources Committee on Sept. 25th, 2024

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

Ms. Joseph, I missed something.

I think you talked about the challenges in Quebec during peak periods. I don't know if you know this, but these periods are equivalent to less than seven days a year. On those seven days, we have to scramble to find solutions.

However, the reason why the Quebec government has gone from an energy surplus to an energy deficit—aside from its sales agreements with the United States—is mainly because most large companies are looking to come to Quebec to benefit from clean energy.

I am telling you this because, in my opinion, it is a clear sign that the industrialization underway is based on clean energy. If an economy like Canada's doesn't make that shift, it won't be attractive to large companies. I'm talking about companies in the battery sector and the aluminum sector.

The fact that Quebec aluminum smelters can rely on clean energy sources makes them the envy of the entire world.

Today, there is so much demand for Quebec's energy blocks that we have to make agonizing choices to allocate them. To me, that's pretty clear proof that in the western industrial world there is a demand for clean energy sources rather than oil and gas.

Do you agree with my thinking?

[Shannon Joseph]

Yes.

My comment is this: If the Quebec government runs out of power and has to reject applications from companies that are short of energy for projects requiring 21,000 megawatts, according to a report I have seen, we have to wonder how we are going to create the energy that provinces across Canada need, how much it will cost and how it will be delivered to businesses.

[Mario Simard, Bloc, Jonquière, QC]

Okay.

Our reasoning is similar, but as a report will be coming out on this, I just want to bring to your attention that the majority of western countries are looking to reduce their carbon footprint. If Canada does not build on a strategy to wean itself off gas and oil, it is safe to say that, within 20 years or so, our industry, and even our small and medium-sized businesses, will no longer be competitive.

Do you agree with that?

[Shannon Joseph]

No, I don't agree with that.

Let us look at what is happening in the western world. Germany has seen a major increase in its renewable energy production. However, it has also seen a decrease in its industrial productivity two years in a row, because its industries have moved to the United States. They don't have the same power grid—

[Mario Simard, Bloc, Jonquière, QC]

I don't agree with you. Companies are leaving because the majority of them are looking for places where they can find clean energy for industrial manufacturing. We are seeing American companies, such as BASF, offshoring to Canada because they want their heavy industrial processes to be run on clean energy.

Germany's major problem is that it is not able to provide clean energy in the short term.

Having gone on a mission with the Minister of Energy and Natural Resources and met a lot of people, I can assure you that many companies are looking for clean energy for their major energy projects and are willing to offshore their production to do so. That's the root of the problem.

If Canada focuses its industry solely on oil and gas, we will soon find ourselves in the same position. Large companies will prefer to do business with countries that have gone through the energy transition and that are able to produce goods and services with a low carbon footprint.

Do you agree with what I just said?

[Shannon Joseph]

Personally, I think that, as a lot of data shows, many countries have lost industrial investment to the United States because it provides incentives. It's true that companies want to do well environmentally by making good energy choices, but they also want to make money.

For reasons it would be interesting to know, some companies have chosen the United States. We have to pay attention to that when we make investments in Canada. What is being done to ensure that we are competitive?

[Mario Simard, Bloc, Jonquière, QC]

Why are these companies asking for energy blocks from Quebec and not asking to set up in Alberta, where low-cost energy would be abundant and available?

Why are these companies not making that choice? Is it because they feel that using a carbon-intensive energy source is going to harm them?

[Shannon Joseph]

I agree with you, they want to do that, but they also want to make money, so they don't base their choice solely on that.

[Mario Simard, Bloc, Jonquière, QC]

Okay. Thank you.

[The Chair, Liberal, George Chahal]

Thank you.

We'll now proceed to Mr. Angus for six minutes.

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

Thank you very much.

Last month, one of the largest lobby groups for the electricity industry, Electricity Canada, started running advertising and was warning about catastrophic conditions if we fix up our electricity regulations and push to get to cleaner energy. It was predicting brownouts and disasters, and God, my friend Earl is talking about the dangers of big sun.

Mr. Thomas, you accused them of a misinformation campaign. That's pretty bold language. You said:

It’s disappointing to see an industry association like Electricity Canada employ such misleading rhetoric because some of its fossil fuel–powered members are delaying the transition to clean energy.

What do you mean by that?

[Stephen Thomas]

It is. It's disappointing to see an industry association show up in that way in a conversation about where things are headed in Canada on our electricity future. It's more confusing for me, because Electricity Canada, as an entity, has so many members that are already entirely clean electricity providers or have committed themselves to produce clean electricity by 2035 or another date. If I were those members of that association, I would be embarrassed.

When it comes to the kind of misinformation or inflammatory language we see in its ad campaign, it's more along that language of blackouts, brownouts and cost. We just don't know what numbers it's using to make those claims.

When it comes to the clean electricity regulations and the research we've been a part of, we see that as we move to a cleaner electricity system, we move to a cheaper electricity system. The cost of energy on the whole for households goes down as we electrify and as we move to clean electricity too.

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

Thank you.

One of the things that really shocked me.... Ontario used to be a hydro superpower. Of course, Kathleen Wynne helped to sell it off and Doug Ford nailed it into the ground. Ontario is now complaining that if we bring in clean electricity regulations, it'll be a catastrophe for it, and it needs until 2050 to meet this. That seems to be staggeringly lazy, given what I'm seeing all over the world. We've seen a huge revolution in clean tech in Texas and California and all over Europe, yet Ontario is saying, “Don't give us any rules that make us actually improve.”

Why is it that we have such dismal standards? Do you think it's realistic to say to an energy superpower like Ontario, “Don't bother cleaning up until 2050”?

[Stephen Thomas]

At the David Suzuki Foundation, our research tells us and informs our view that moving to clean electricity is good for the places that do that work. That's true for Ontario. That's true everywhere in Canada.

It's true that different provinces have different levels of work to do. We have different starting points, and I think that, too, is where the federal government can help the provinces on their varying pathways to this clean electricity target and this clean electricity future.

It was great and encouraging for us to see the federal government and the Government of Nova Scotia reach a common understanding on the clean electricity regulations. That, too, is a province that depends an awful lot on coal and sees the value in cleaning up its electricity system. In Ontario and elsewhere, we see the value.

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

Thank you.

We could do better. Certainly, if the Liberal government ever got its investment tax credits out of whatever department they're hiding in, we would see a huge revolution. We haven't seen anything yet.

Mr. Pivnick, I want to ask you a question. You don't often get to see an economic revolution happening in front of your face, but within the last year, we've seen staggering increases in EV battery storage capacity and solar capacity. We've seen countries go from zero to 100 in staggering times. Again, jurisdictions like California are now going many days just on clean energy. In Texas, where they have fewer people who believe in climate change than in the Conservative caucus, they are doing that.

How do you see the potential for Canada? Are we going to sit on the sidelines while the rest of the world and Europe move ahead? What is the potential here in Canada?

[Evan Pivnick]

I think that's entirely up to the choices that governments, both provincial and certainly federal, make around the level of ambition we put on this. We keep talking about costs with net zero. There's no question that doubling our grid in 25 years to achieve net zero has a cost associated with it. However, it also should be viewed as an opportunity for Canada to choose to be competitive in a world that's trying to achieve net zero.

When you look across the world, you will see nearly 150 countries, covering 90% of global CO2 emissions, that have lined up and just achieved that target as well. They're accelerating, so the choice for Canada is this: Do we want to be part of that? Do we want to try to secure the investments from that? We've seen some of those coming and landing with some of the choices that we've made in the battery supply chain. There are incredible opportunities right across the country. Alberta has to have one of the best opportunities of all jurisdictions to be a player in this.

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

I mean, we were born on third base when it comes to energy potential, and now we're saying, “Oh, it's going to be too hard to get to 2050. Oh, my God, give us a break”, while the rest of the world, which doesn't have nearly what we have, is going there. What does that say? I mean, we started out with an 85% clean grid. Getting that other 15% shouldn't be that difficult. Can we do it?

[Evan Pivnick]

I absolutely think we can. The Canada electricity advisory council made it clear that we have to tackle two challenges at the same time. The first is the decarbonization of the remaining 15%, as you said. The second is to double, and the choices we make in the investments and how we look to do that are the other part of that equation.

[The Chair, Liberal, George Chahal]

Thank you.

Colleagues, we'll move to our next round. I'm hoping to get through the first four by the time we get to the end of our allotted time for today's meeting.

We'll go to Mr. Falk for five minutes.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair.

Thank you to all the witnesses for their presentations.

Ms. Joseph, I'll start with you. It was mentioned earlier that the cost of wind and solar is 5¢ to 10¢, and that gas is 10¢ to 15¢. Is that per kilowatt or per kilowatt hour? What would that be?

[Shannon Joseph]

I was impressed by the numbers some of the colleagues spoke to. What I think is important is that, a lot of the time, those numbers don't include the full cost of transmission for energy, which is going to be very distributed, and they don't include the cost of storage or the cost of dispatchable power.

We spoke earlier about those utilities and why they are saying all these mean things. Today, a lot of the renewables in Alberta are backed up by dispatchable gas plants. They sit idle, and when they come on, it's a premium cost. I don't know that there are batteries much cheaper than that. However, the point is that I don't know that this is cheap, and we shouldn't discuss it as if it's cheap. There are a lot of things to build, and there are a lot of things that don't exist yet.

[Ted Falk, Conservative, Provencher, MB]

What is the cheapest form of energy to produce?

[Shannon Joseph]

Right now, the cheapest electricity is natural gas, or maybe it's hydro. I don't want to get into, necessarily, the competition. I think different energy sources are affordable in different applications, and we have to use what's best to achieve all of our goals, including our environmental goals.

In Quebec, it might be very cheap to do hydro, and in other places, but every new thing you build has to be paid for, and we have to build a lot of new things.

[Ted Falk, Conservative, Provencher, MB]

From a capital cost perspective, there's a lot of infrastructure that's needed if we're going to keep up with the demand that we're looking at. For a capital cost investment, which is the cheapest form of energy to produce—just the capital cost, not operational?

[Shannon Joseph]

I don't have that number, and I don't want to speculate on it. I think it matters where you are.