Natural Resources Committee on May 18th, 2022

[Greg McLean, Conservative, Calgary Centre, AB]

I have about half a minute left here, Minister. I have a question for you.

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Canada actually has the most detailed reduction plan in the world.

[Greg McLean, Conservative, Calgary Centre, AB]

You haven't hit a target yet.

[The Chair, Liberal, John Aldag]

Talk one at a time, please.

Mr. McLean, I'll go to you to finish off here.

[Greg McLean, Conservative, Calgary Centre, AB]

Minister, the final question I have is that you're finally on board with getting some trees planted in Canada. A commitment your government made three years ago was to plant two billion trees. You're planning to plant the first 30 million trees this year. I tell you, I've watched your plan step out two more years to plant two billion, but you're not going to meet that target, either. You and I both know it.

What's taking so long? Why are you so bad at making plans and meeting the objectives of those plans you announced to the Canadian public?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

I've never understood why these kinds of discussions have to be so confrontational.

You know as well as anybody that growing seedlings takes two or three years. The 30 million trees that we will have planted this year were the product of going out and finding excess trees. We have been planting those seedlings through the various agencies that exist. We've been very public that the numbers are going to ramp up over the next number of years. We're very comfortable that we're on track to get to two billion trees.

[The Chair, Liberal, John Aldag]

With that, we're out of time for our first one.

We're going to go now to Mr. Chahal for his first six minutes.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you for appearing before the committee today, Minister, and for answering questions.

In my home riding of Calgary Skyview, a common question constituents ask is about home retrofitting and the home energy evaluation grants that the government offers. We know that home retrofits are an effective way to conserve energy. They provide immense benefits and are important in our fight against climate change.

The government has introduced various retrofitting programs in the past that have helped households make their homes environmentally friendly. Can you talk about the government's policies and strategy going forward to make sure that households have sufficient resources available to them to retrofit their homes?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Thank you very much for the question.

As you know very well, retrofitting homes is one of the fastest and most inexpensive ways to reduce greenhouse gas emissions, to save homeowners money on their energy bills, to create good jobs in communities and support growth of Canada's green supply chain. The government has invested in the Canada greener homes grant program, which will provide Canadians grants of up to $5,000 for energy efficiency retrofits. Additionally, the government will be further supporting Canadians by providing access to interest-free loans through CMHC.

Budget 2022 also made a number of investments to accelerate the pace of deep retrofits in Canada, putting a focus on low-income affordable housing. An example is the $200 million that we are allocating to the deep retrofit accelerator. We are also developing a green building strategy that will include code reform and a number of other things to ensure that we are moving forward on a path to net zero.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you for the answer, Minister.

I come from Alberta. The province's economy is highly dependent on emission-heavy industries, including the oil and gas industry and the mining industry. CCUS technology offers a practical and effective solution to curb emissions in these industries. It will be an important tool in our fight against climate change, and it is important that the government invests in it.

What specific steps is the government taking to promote the use of the technology, especially in the oil and gas industry? What role do you think CCUS will play during the energy transition?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Certainly, clean technology and innovation through CCUS, biofuels, hydrogen and a range of other things are going to play increasingly important roles in reducing emissions as we move through this 30-year transition towards a net-zero future.

While a technology like CCUS is not a climate plan in and of itself, it is an important tool that can and should be used to help us reach our emissions reduction targets. That is something that the IPCC agrees with. In fact, in its April statement it said, “The deployment of CDR to counterbalance hard-to-abate residual emissions is unavoidable if net zero CO2 or GHG emissions are to be achieved.”

To promote innovation, NRCan funds programs like the energy innovation program and the emissions reduction fund that supported CCUS projects, many of which were located in Alberta. Also of note in the budget 2022 investments is the CCUS tax credit that supports the implementation of CCUS projects more generally.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you.

I'm glad you mentioned hydrogen. The Canadian hydrogen convention was held in Edmonton. The convention demonstrated the ability and potential of hydrogen as an alternative fuel that can replace conventional energy sources. It offers many benefits and would be an important driver of the energy transition.

Considering these factors, what is the government currently doing to attract investments in hydrogen? What more can be done to make sure that Canada does not miss out on the immense opportunities offered by hydrogen?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Hydrogen certainly represents an important opportunity for Canada and certainly for regional economies across this country. The Edmonton conference was very exciting because there were thousands of people there engaged in this conversation about the commercialization of hydrogen.

Hydrogen is an energy carrier that can be used as a non-emitting fuel in a whole range of applications, such as transportation fuel, electricity generation, heating and a range of industrial uses. Over the past three years, NRCan has been engaging with stakeholder groups, provincial and territorial governments and indigenous partners on a hydrogen strategy that will set us on a path to meet our climate change goals. It will position Canada as a world leader in the use and the export of clean hydrogen.

We have been working through the clean fuels fund, the Canada Infrastructure Bank and many others. It is certainly a critical part of the regional economic discussions we are having right now.

[George Chahal, Liberal, Calgary Skyview, AB]

Minister, Alberta and the Prairies are home to many important, critical mineral operations. With the demand for these minerals increasing exponentially because of the transformation, many of these minerals are essential for the manufacturing of clean technologies, including electric batteries. Canada can use its advantage and expertise in mining to aid the energy transition.

Minister, what steps is the government taking to ensure that we leverage our competitive advantage and expand the mining of the critical minerals that are in high demand right now?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

You've very rightly pointed out the enormous generational economic opportunity that is represented by critical minerals. The global economy is becoming increasingly dependent on critical minerals and metals for clean technologies, including electric batteries in electric vehicles as well as defence and security-rated applications. There is no energy transition without the much-expanded production of critical minerals.

We made investments in 2021 in creating the critical minerals centre of excellence and to support targeted research and development in processing and battery precursors. We ramped that up in budget 2022 with a proposed $3.8 billion over eight years to support Canada's critical minerals strategy. This will increase business activity for critical minerals in Canada, enabling new green and transformative mining and processing technologies to enhance Canada's innovative capacity. We are focused on an end-to-end strategy from mines through mobility and recycling.

I certainly would note again that, through these regional economic tables, we are engaging with many provinces and territories that have an interest in this file.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you.

[The Chair, Liberal, John Aldag]

Go ahead, Mr. Simard. You have six minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Thank you for being here, Minister.

Not a single day goes by when I do not receive emails or messages on social media from constituents about the price of gas, which is above two dollars a litre.

I have a very simple question for you.

We all know the refining margins, and we can talk about that a bit later. Do you think it's obscene, then, that the government is supporting multi-billion-dollar oil and gas companies as middle-class people watch their hard-earned money go right into the pockets of those multi-billion-dollar companies?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Thank you, Mr. Simard.

It is, of course, very important for the government to be concerned about the factors that impact affordability. As you know, however, the price of oil is set by the global market and has risen because of Russia's invasion of Ukraine and the subsequent war.

[Mario Simard, Bloc, Jonquière, QC]

Forgive me, but I don't have a lot of time. I understand all that, but here's what I want to ask you about.

I see here, in the main estimates, that $384 million is being requested for the emissions reduction fund, which has been very problematic. Just think of what the commissioner of the environment and sustainable development had to say about it. This is $384 million for big oil companies.

Éric Pineault, a professor and economist at the Institute of Environmental Sciences, told the committee that the program may have been appropriate in 2021, during the crisis, when oil was trading at $64 a barrel. Today, however, oil is trading at double that, in the neighbourhood of $128 a barrel.

I want to talk about refining margins, Minister. In 2008, the refining margin was 9.4¢. Today, it's 48.2¢. What that means is that oil companies are lining their pockets at the expense of the middle class.

Do you understand why people in the middle class would be upset when they see that you are handing over $384 million to the oil companies just so they can reduce their emissions?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Thank you, Mr. Simard.

Yes, the emissions reduction fund was a very important program during the COVID‑19 pandemic, and we made changes to the program to ensure that it focuses on eliminating emissions that are generated in addition—

[Mario Simard, Bloc, Jonquière, QC]

I understand the purpose of the program.

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

—to what is required under the regulations.

[Mario Simard, Bloc, Jonquière, QC]

I understand all that. What I am telling you is that multi-billion-dollar oil companies don't need public funds to do what they should be doing, in other words, reducing their emissions.

I'm going to give you a third chance.

In the budget, $2.6 billion has been earmarked for carbon capture. I see that you are going to put $384 million towards the emissions reduction fund. Among the companies that will benefit are Suncor, which reported $2.95 billion in net earnings last quarter; Imperial oil, whose profits hit a 30‑year high of $1.17 billion; TC Energy, which turned a profit of $1.1 billion; and Chevron, which managed to quadruple profits last quarter.

You are going to hand over an obscene amount of public funds to those companies, when the middle-class is being bled dry, when truckers, taxi drivers and farmers are being bled dry. It is unlikely that any of them will be able to take vacations this summer as they watch their profits disappear. Meanwhile, you are giving public money to multi-billion-dollar companies.

Can you see how that's obscene?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Thank you again, Mr. Simard.

As I've said a few times, it is important for the Government of Canada, just as it is for the Quebec government, to work with all high-emitting sectors to reduce their emissions.

We are working with the aluminum sector in Quebec, the steel sector in Ontario, and the oil and gas sector in Alberta to make sure we reach our greenhouse gas reduction targets and fight climate change.