Natural Resources Committee on May 2nd, 2022

[The Chair, Liberal, John Aldag]

I call the meeting to order.

Good afternoon, everyone. To our witnesses who are joining us today, I apologize for the late start. We had votes, and votes control our lives here.

I will go through a couple of quick opening comments.

Welcome to meeting 19 of the House of Commons Standing Committee on Natural Resources. Pursuant to Standing Order 108(2), the committee is continuing its study of creating a fair and equitable Canadian energy transformation. Today is our fourth meeting with witnesses on this study.

We're going to hear from witnesses until about 4:30. I'm going to try to get us through the first full round of questions, which is about 24 minutes, plus opening statements. We will see where that takes us. Then the plan is to go in camera for the last part of the meeting to continue on a report we have been working on. It definitely won't be at 4:30, but we will still plan on going in camera at some point this afternoon.

We're in a hybrid format. Now that we're in session, screenshots and taking photos are not allowed.

We are asking anyone attending in person to wear a mask if you're moving about the room.

For the witnesses and members, I will recognize you before you speak. For those participating by video conference, click on the microphone icon to activate your mike and then mute yourself when you're not speaking.

Interpretation is available in English, French or floor. We ask people to speak in a conversational tone, and not too fast, so that our interpreters can keep up with the conversation. All comments should be addressed through the chair. If you want to speak in the room, raise your hand. If you're online, you can use the “raise hand” function.

In accordance with the routine motion, all the witnesses have completed the required connection tests in advance of the meeting. Thank you for doing that.

I would now like to welcome our witnesses to our study of creating a fair and equitable Canadian energy transformation.

Online, we have two guests. As an individual, we have Éric Pineault, professor and economist, Institute of Environmental Sciences, Université du Québec à Montréal. From the Centre for Strategic and International Studies, we have Sandeep Pai, senior research lead, global just transition network.

In person, we have two guests. It's great to see people in our committee room once again. From the Canadian Centre for Policy Alternatives, we have Hadrian Mertins-Kirkwood, senior researcher. From the International Institute for Sustainable Development, we have Nichole Dusyk, senior policy adviser.

If I got anybody's name wrong, please excuse me. You can correct us when you get the floor to speak.

We're going to jump right in now to our five-minute opening statements.

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

I'm sorry; I have a point of order.

[The Chair, Liberal, John Aldag]

Go ahead, Mr. Angus.

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

I just want to clarify something with you, Chair. I won't take very much time.

I know that my Conservative colleagues said this study needed to be focused on workers and I believe my Liberal colleagues agreed. We lost about an hour for hearing from labour last week. I have been in contact with the Canadian Labour Congress. They have asked to speak. They were on our witness list, but they were told they could make a written submission.

I don't really think it sends a very good message if we are not having the biggest workers' organization in the country, which has done a lot of work, here to speak to our committee.

I have two questions. First, will the Canadian Labour Congress be invited to participate? Second, if you can't put them on, does that mean that you have a witness list finalized? We haven't seen that finalized witness list, and I would like to know who else is not on that list.

[The Chair, Liberal, John Aldag]

I will be working with our clerk and analysts after the meeting today. We have a revised list of proposed panellists for the duration of this meeting. I had a chance to go over it over the weekend. I just need to get some points clarified, and then we will be circulating that.

Our interest is to hear from as many organizations as possible, including the Canadian Labour Congress. I can't say yes or no to that, but I hear your point. I will commit to getting a proposed list out to everybody as quickly as possible so that you know where we stand.

If you're okay with it, we will move right into questions.

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

Thank you.

[The Chair, Liberal, John Aldag]

We will start with our online guests first. When we have a stable connection, it's always good to jump into it.

Monsieur Pineault, if you're good to go, I will turn the floor over to you.

I also have a quick card system. When there are 30 seconds left, I will give you the yellow card. When the time is up, it's a red card. Don't stop mid-sentence, but wind up your thoughts. Then we will move on.

Monsieur Pineault, you are ready to go.

[Éric Pineault, Professor, Economist, Institute of Environmental Sciences, Université du Québec à Montréal, As an Individual]

Thank you very much.

I'm going to be intervening in French, but I can take questions in English during the discussion. It's either way.

I'm going to talk a bit about my professional activities. I'm speaking to you today as an environmental science economist and an academic expert in this field.

For several years, my work has focused on oil sands, and more recently on liquefied natural gas, LNG. I've also worked a lot with the Front commun pour la transition énergétique, the FCTE, in its efforts to create a roadmap for Quebec's transition to carbon neutrality. This association brought all the major union organizations together to work on a carbon neutrality project, including the Confédération des syndicats nationaux, the CSN, the Fédération des travailleurs et travailleuses du Québec, the FTQ, and the Centrale des syndicats démocratiques, the CSD, in addition to environmental movements, community groups and citizens groups.

I worked with the FCTE for two years on drafting a Quebec transition plan that factors in the various transition-related problems, as understood by the International Labour Office, the ILO. So I'm very familiar with what this committee is discussing at the moment.

I'd like to briefly address two points: the definition of a just transition and the current economic context for the transition. I'll begin with the first. Instead of going into the details, I'd like to simply draw your attention to the report published a few weeks ago by the Intergovernmental Panel on Climate Change, the IPCC. The report addresses climate change mitigation, and from among the various possible transition scenarios, it identifies one based on reduced energy demand. This strikes me as the only scenario that is compatible with a sound understanding of the just transition concept, and that takes all of the criteria in the definition of climate justice into account.

I would suggest that you read chapter 5 of the IPCC report, which is about reducing energy demand. The authors offer solutions and a vision of the transition that strike me as compatible with the concept.

I would now like to say a few words about the current economic context for the transition. I believe that the key issue for a just energy transition is the hydrocarbons sector—oil and gas.

Should the transition merely offset the expansion of oil sands and its emissions in some way, or should there rather be a just transition plan that requires the transformation of the Canadian economy to reduce its dependence on hydrocarbon extraction, combined with worker and community interventions for those who are economically dependent on this sector, to help them reduce their dependence on it?

I'd like to briefly present a few figures. Since 2005, production in the oil sands sector, production has grown by a factor of 2.5 to 3.4, depending on the criteria used. Emissions matched this level of increase, and there has not been any reduction in emissions for this sector. The only emissions reductions were on the product development side. Investment in the oil sands sector has been dropping since 2015. The number of jobs has been declining since 2014, basically because of huge productivity gains. It is no longer being described as a dynamic sector that creates jobs. It is now a sector where employment has been dropping. The sector's tax contributions have also been declining. Currently, the revenue increases produced by the rising price per barrel have been translating in the industry into higher dividends rather than increased wages.

It is therefore important to take this sector in hand to plan its transition. My fear is that efforts made to develop a transition plan that does not seriously examine the sector would be undermined by the need to overcompensate for the increased greenhouse gases in the oil sands sector.

I have a final factor to add with respect to economic conditions. As we envisage the transition today, in 2022, we need to give due regard to the fact that our economy does not need job creation. In our economy, there is a shortage of labour from coast to coast. We are fighting over quality workers. In particular, we're fighting over workers from the construction sector and the manufacturing sector. Workers in the gas, oil sands and traditional oil extraction sectors will be and are now needed in other sectors of the Canadian economy. The challenge is not to create jobs. The challenge is to help those communities that depend too heavily on the oil sector. Qualified workers need to be retrained to work in other sectors where they are urgently needed.

I would be happy to answer any questions you may have about any of the aspects I've just raised.

Thank you.

[The Chair, Liberal, John Aldag]

Thank you for your comments.

Dr. Pai, we'll turn it over to you for five minutes. The clock has started.

[Dr. Sandeep Pai, Senior Research Lead, Global Just Transition Network, Center for Strategic and International Studies]

Thank you so much for this opportunity, Mr. Chair. It's truly an honour to be here.

My name is Sandeep Pai. I work as a senior researcher with the Global Just Transition Network in Washington, D.C. I've been researching, writing about, and working on just transition issues for many years now, and I recently earned my Ph.D. on this topic from the University of British Columbia.

I want to acknowledge that energy transformations are already under way in the world. These transformations, we need to acknowledge, will destroy many jobs in traditional sectors, such as oil, gas, coal and automotive, but the green economy will also create millions of jobs in various sectors, ranging from solar to energy efficiency.

While industrial transitions have happened in the past, the scale and speed of the current transition will be nothing like we've seen before. I say this with respect to my research, which looks at multiple countries around the world, including Canada. This scale and speed will transform lives across communities in Canada. Although a large number of Canadians will no doubt benefit from this transition, make no mistake: Without adequate planning, many provinces, communities and workers might be left behind.

Given the enormous scale of this transition, I want to bring forth, before this committee, four key considerations.

First, I think it's important to acknowledge that just transition is not just a worker issue: It's an issue that impacts communities.

We always make the mistake of thinking about this as a worker issue, which is central, but not the only thing. Any large existing industry, such as oil, automotive or coal, typically creates a local ecosystem of socio-economic dependency that spans local jobs, local and regional revenues, and the social and community development spending these companies do. Therefore, my first point is that to understand how to do a just transition, it's very important to commission detailed studies of impacted sectors and communities to understand in turn the ecosystem, the dependencies and the regional vulnerabilities.

Second, one of the issues with just transition is trust. Globally—including, to some degree, Canada—we have never done good just transitions. Workers have always felt they have been left behind. My second recommendation is that Canada pilot some just transition interventions, as it has done with respect to the coal sector. However, it should pilot some interventions focusing on a few energy communities to show that just transition is not a theoretical idea and that it can be done in real life. It's very important; otherwise, communities will feel that this is just another fancy word.

Third, for any just transition, social dialogue is very important. The first step in even starting the social dialogue is conducting a stakeholder analysis to understand which stakeholders and communities will be impacted. This would include identifying under-represented stakeholders. In many jurisdictions, it has often happened that certain industrial or other groups dominate the discourse on just transition. You can see that happening in the U.S., in South Africa and even in the EU. To not make that mistake, it's important to identify who the under-represented stakeholders are and how we can engage with them throughout the process.

My final recommendation is this: A long-term, whole-of-government approach or intervention is required for doing just transition. Planning and implementing are part of a multi-level process that will require coordination among ministries, governments and various departments locally, provincially and nationally. Canada should consider creating an inter-ministerial committee that involves the federal government and members from key energy-producing provinces. Such a committee should facilitate ongoing social dialogue and enable fair and equitable Canadian transformations.

Thank you so much. I'm happy to take questions.

[The Chair, Liberal, John Aldag]

That's perfect. Thanks so much.

We'll now jump to our room and Ms. Dusyk.

Are you ready to go?

[Dr. Nichole Dusyk, Senior Policy Advisor, International Institute for Sustainable Development]

Yes, I am.

[The Chair, Liberal, John Aldag]

Okay. I'll turn it over to you. The clock is starting.

[Dr. Nichole Dusyk]

Thank you.

Thank you for inviting me to testify this afternoon. My name is Nicole Dusyk. I'm a senior policy adviser with the International Institute for Sustainable Development.

IISD has extensive experience in researching and advocating for just transitions, both in Canada and abroad. Our most recent report was published just a few months ago. It's called “Making Good Green Jobs the Law: How Canada can build on international best practice to advance just transition for all”. This report and the research that underpins it inform my testimony today.

Like previous speakers, I want to begin by highlighting that Canada has been through difficult labour transitions before. Whether that's the boom and bust in the oil patch or whether it's the collapse of the cod fishery, we do have experience and we understand what is at stake and how important it is to proactively plan and ensure that supports are in place for workers and for communities.

We are on the precipice of another major labour transition. The cost of renewables and battery technologies is dropping. As countries implement ZEV mandates and other climate policies, global demand for oil and gas will drop. We know this. We know the energy transition is under way. We also know that additional climate policy is necessary in order to accelerate that transition.

Ultimately, climate policy and climate action will have net economic, social and environmental benefits for Canadians, but we also know that it will disproportionately impact specific communities and specific workers, so it's very important that we plan proactively and start addressing that and thinking about that right now.

With this in mind, I wanted to thank the committee for undertaking this study. This is important work, and I look forward to what I hope are robust recommendations in terms of how we can ensure that no Canadians are left behind on the inevitable energy transition.

I'd like to make four general recommendations.

First, for a just transition, getting the process right is essential. Good outcomes for Canadian workers will emerge from good, inclusive processes. More specifically, processes should be grounded in what the International Labour Organization calls “social dialogue” and a tripartite process that brings together workers, employers and governments, including indigenous governments, to jointly develop and implement solutions.

We recommend that in Canada, just transition processes be based on a tripartite-plus process. That brings together the core actors, the three core actors or core parties. The “plus” is also inclusive and includes engagement with other stakeholders, such as communities and civil society organizations.

My second recommendation is that planning should include a broad and just transition strategy, of which legislation is just one part. Complementary measures will also be needed, including green industrial policy, labour market planning and strengthening of social protection.

Third, it is important to name the transition for what it is: It is a transition away from a fossil-fuel-based economy towards a clean energy economy. To understand the scope and the impacts and to implement effective programs and supports, we do need to understand and be clear about which industries have declining job prospects and which industries will drive future job growth.

To this end, it is imperative that the government move forward with its commitment to develop energy scenarios that are based upon a world where global warming is limited to 1.5°C. These kinds of scenarios will be really important for developing a shared understanding of our end goal—where we're going—and also will provide needed analysis that can help with the planning.

Finally, just transition funding should be proactive. It should be flexible, nationally coordinated and supportive of local decision-making. It also needs to be high enough to address the immense challenge that is ahead. Funding processes must uphold indigenous rights and authority, and they should be articulated through the tripartite-plus process, wherein all affected parties work together to set funding priorities and establish funding needs. Substantial public funding will be required, but at the same time, the federal government must ensure that financing for a low-carbon transition includes the private sector.

It also must ensure that corporate accountability is maintained and upholds the “polluter pays” principle, and at the same time minimizes public financial liability.

In conclusion, we also have some specific recommendations for just transition legislation in terms of what should be included within that legislation. I will leave that for the question-and-answer period, if any members are interested.

Thank you.

[The Chair, Liberal, John Aldag]

Thank you so much.

We'll now jump to Mr. Mertins-Kirkwood for his five minutes.

[Hadrian Mertins-Kirkwood, Senior Researcher, Canadian Centre for Policy Alternatives]

Thank you, Mr. Chair. Thank you to the committee for the invitation to speak with you about this important study.

My research at the Canadian Centre for Policy Alternatives for the past five years has focused specifically on the issue of a just transition. I am pleased to have the opportunity to share some lessons from that work with this committee.

The most important point off the top—and you've already heard this today—is that the transition to a low-carbon economy is already under way. This is not a future or theoretical problem; the world is moving away from fossil fuels whether we like it or not. The choice for Canada is between, on the one hand, a just and managed transition—

[Mario Simard, Bloc, Jonquière, QC]

We have lost the interpretation, Mr. Chair.

[The Chair, Liberal, John Aldag]

We'll just wait until the interpretation catches up or comes on.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

[The Chair, Liberal, John Aldag]

We're good to go.

Please continue.

[Hadrian Mertins-Kirkwood]

Our choice is between, on the one hand, a just and managed transition to a lower-carbon economy or, alternatively, an unplanned collapse reminiscent of so many previous resource busts. The status quo, especially when it comes to oil and gas production, is simply not tenable in the long term.

How do we achieve this transition? Well, there are four key pieces to focus on.

First, when we talk about the energy transition, we need to stop talking about emissions reductions in the abstract and be clear about the end goal. To meet our domestic and international climate commitments by 2050—and I will be less diplomatic than my colleagues here—there can be no fossil fuel industry in Canada. Full stop.

The question is, what are we doing now that sets us up for that future? To date, the Government of Canada has focused a lot on scaling up the clean economy, and that's good, but it has hesitated to map out a plan for the fossil fuel industry. In contrast, with the coal transition, the government set a deadline of 2030. That clear timeline was essential, not only for environmental reasons but also because it gave affected workers, their communities and the industry certainty about the future. It allowed them to plan. We can’t plan for 2050 if we don’t have a clear sense of what that future looks like.

The second key piece is that when we talk about the energy transition, we need to recognize that there are actually two transitions happening here. There's the transition out of fossil fuels, which disproportionately impacts those workers and communities who depend on it, and then there's the transition into a cleaner economy that takes place in every community across the country.

It’s a myth that our fossil fuel workforce will transition into our clean economy workforce. Many coal, oil and natural gas workers today are going to do their jobs until retirement or else transition into jobs outside of the energy industry. In contrast, most people working in green jobs in 10 years will never have worked in the fossil fuel sector. We need very different sets of policies to support these two categories of transition, which affect different kinds of workers in different parts of the country.

The third key piece, to borrow a phrase from my colleague Seth Klein, is that Canada needs to “Spend what it takes to win.” Transitioning the economy off of a $100-billion-a-year export industry while at the same time trying to decarbonize every other sector will, of course, be extremely expensive. The recent federal budget estimated that to achieve net-zero emissions, we need to be spending an extra $100 billion to $125 billion a year to achieve net zero in Canada.

Although it's not the federal government's responsibility on its own to make up that gap, the government does need to be spending a lot more to accelerate this transition, especially with investments that are targeted at the communities and regions that currently depend on oil and gas. They need alternatives.

The fourth and final point is that for a truly equitable transition, we need to look beyond—

[The Chair, Liberal, John Aldag]

I'm sorry to interrupt. I've just noticed that it appears the bells have started. Once the bells start—I assume these are 30-minute bells—we need agreement from the committee for the committee to continue.

Do people want to go back to the House to vote, and do you need 10 minutes to get back?

Go ahead, Mr. Angus.

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

Do 30-minute bells give us an opportunity to finish this and at least a truncated round? Then we can—

[The Chair, Liberal, John Aldag]

There's a minute and a half left on the opening statements, and then we'll have 24 minutes. We can always come back.

I've been told that because of the late start, we have the resources, with our interpreters in the room until 5:55. We're confirming whether we can go beyond that because of this vote. We'll see when we finish, but we'll finish off and then jump into the first round of questions.

If people think 10 minutes is enough time to get to the House, I'll let you know when that is happening. I apologize.

We'll go back to you, sir.

[Hadrian Mertins-Kirkwood]

No problem.

The fourth and final point is that for a truly equitable transition, we need to look beyond directly affected workers and consider the impacts of transition on everyone in their communities. In Alberta, for example, we have a coal transition. We've provided income support, retraining money, relocation money and other benefits to coal workers, which those workers deserve. However, contractors in those facilities, part-time workers and other people indirectly dependent on that industry don't receive the same kind of support.

Providing broad support is important from an equity perspective, because while the people who work in the energy industry today are disproportionately high-income white males who were born in Canada, the people who depend indirectly on that industry—who, for example, make lunch for energy workers and also lose their jobs when a project closes down—are more likely to be low-income women, racialized workers and immigrants. Just transition policies that are too narrow can make inequality worse and further marginalize historically excluded groups.

The lesson is not that energy workers don't deserve support in this transition. Of course, they absolutely do. The lesson is that we need to think bigger and more comprehensively about how entire communities transition to ensure that the costs of this inevitable shift to a clean economy are shared fairly and that the benefits are shared equitably with everyone.

That's equally as important on the phase-out side as it is on the training side, where we need to do a much better job of diversifying the professions, like the skilled trades that are poised for growth in the coming decades.

I'll stop there.

Thank you again for the invitation. I welcome any questions from the committee.