Evidence of meeting #23 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 going.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Francesco Sorbara  Vaughan—Woodbridge, Lib.
John Hannaford  Deputy Minister, Department of Natural Resources
Frank Des Rosiers  Assistant Deputy Minister, Department of Natural Resources
Sébastien Labelle  Director General, Clean Fuels Branch, Department of Natural Resources

5:15 p.m.

Liberal

The Chair Liberal John Aldag

I call the meeting to order.

Welcome to meeting number of 23 of the House of Commons Standing Committee on Natural Resources.

5:15 p.m.

Conservative

Greg McLean Conservative Calgary Centre, AB

I have a point of order, Mr. Chair.

Where is the minister? I thought ministers were supposed to be here in person when they're called. Isn't that the protocol?

5:15 p.m.

Liberal

The Chair Liberal John Aldag

It is not that I'm aware of. I think they can appear. We have the minister with us until six o'clock.

5:15 p.m.

Conservative

Greg McLean Conservative Calgary Centre, AB

Okay.

May 18th, 2022 / 5:15 p.m.

Liberal

The Chair Liberal John Aldag

Anyway, I have an official piece here, and then we'll get right into it, if everybody's willing.

The committee meeting today is to hear from the Minister of Natural Resources and officials. We have nine officials joining us remotely, so thank you to each of the departmental representatives who are here with us.

Pursuant to Standing Order 81(4), we're considering the main estimates 2022-23, vote 1 under Atomic Energy of Canada Limited; vote 1 under Canadian Energy Regulator; vote 1 under Canadian Nuclear Safety Commission; votes 1, 5 and 10 under Department of Natural Resources; and vote 1 under Northern Pipeline Agency.

We are all well aware of committee proceedings and processes, so I'm going to skip through all that stuff. If you're at the table, you can take your mask off. If you're not, please wear it unless actively eating or drinking. Direct your comments through the chair.

We're going to try to get through a couple of rounds. The minister has a hard departure time of six p.m. The officials have said they can stay beyond that if necessary.

Members, we have three hours from the time we started but not beyond nine o'clock. The plan is to go through the main estimates. There's a motion after that we need to discuss about reporting the main estimates back to the House. The intent, then, is to go in camera to, hopefully, get as far into or even finish the emissions reduction fund this evening. That's the lay of the land.

With that, Minister, if you're ready to go, I will turn the clock over to you. You have five minutes for your opening statement. Then we'll get into the first round of four questions of six minutes each, and we'll see where we are at that point.

I'll turn it over to you, Minister. I look forward to your opening comments.

5:15 p.m.

North Vancouver B.C.

Liberal

Jonathan Wilkinson LiberalMinister of Natural Resources

Thank you very much.

I am pleased to join you to discuss the main estimates. I am joining you from the traditional, ancestral and unceded territories of the Squamish, the Musqueam and the Tsleil-Waututh first nations.

As folks here will know very well, the effects of the brutal Russian invasion of Ukraine extend well beyond Europe. The invasion has had a destabilizing impact on global energy markets. Europe has asked us for help. In response, Canada has been working to stabilize energy markets and to develop long-term solutions with our allies. In fact, I will be in Berlin for the G7 environment, climate and energy ministers' meeting next week as part of that ongoing engagement.

Likewise, when I addressed the U.S. Senate Committee on Energy and Natural Resources yesterday, I spoke about the need to enhance continental energy security while building future-facing value chains, including those for critical minerals and hydrogen. Like our European allies, many of our partners south of the border are looking to us to supply stable and clean electricity and clean fuel solutions as we look to address energy security and climate change issues concurrently.

Acting to secure our energy supply while addressing the climate crisis is an example of how we are walking and chewing gum at the same time.

Going forward, energy security is increasingly tied to clean energy. Autocrats will not be able to destabilize our energy markets when we are supplied by clean fuels, renewables and effective storage. As the President of the European Commission Ursula von der Leyen stated earlier this month, it is our switch to renewables and hydrogen that will make us truly independent. We have to accelerate the green transition.

I would also like to underline the role of hydrocarbons as we move forward. Certainly we must remember that this is a transition that will take place over time. Second, we must ensure that we appropriately consider how we can play a constructive role regarding the displacement of Russian oil and gas in the short to medium term. Finally, we need to recognize that in a net-zero 2050 world, the world will still be using about one-quarter of current oil production and about one-half of current gas production in non-combustion applications—like lubricants, waxes, etc. This means that countries and projects that can produce oil and gas with virtually zero production emissions will be the last producers standing, underlining once again the importance of emissions reduction.

It is in this context that we are asking Parliament to review and approve total budgetary authorities of just over $3.6 billion. This is an increase of $1.37 billion, or 61%, from last year’s main estimates.

The key items contained in this request will help unlock Canada’s tremendous capacity to innovate, and build towards sustainable and long-term prosperity as we move towards a net-zero future.

Whether it is critical minerals, forestry, nuclear investment, renewable energy, energy efficiency, home retrofits, grid modernization, zero-emission vehicle infrastructure or carbon removal technology, you will see in the investments contained in these main estimates a common thread.

By supporting Canadians' tremendous capacity to innovate and seize opportunities, we are acting to ensure a prosperous energy transition that will deliver sustainable jobs, the advancement of indigenous reconciliation and increased economic opportunities across sectors and regions.

The opportunities from a sectoral perspective will come from new products that enable a low-carbon future—such as electric cars, battery technology, critical minerals, hydrogen and other clean technologies—and new uses for old products, as we are seeing with the bitumen beyond combustion program in Alberta.

This includes our existing reliable hydroelectricity from provinces like Quebec. It also includes our growing critical minerals industry—which is vital to the global shift towards electrification and clean energy.

At the same time, innovations in Canadian hydrogen technology are being spurred by our investments: for example, the potential in Newfoundland and Labrador to enhance energy security by exporting clean hydrogen to Europe and down the U.S. eastern seaboard.

Together, we are delivering for Canadians by fighting climate change, revitalizing ecosystems and building a prosperous future with abundant clean and secure energy.

As I mentioned at the outset, these priorities are intertwined. Taking well-considered and decisive action now can drive Canadian energy security, clean growth and prosperity for decades to come. That understanding guides our government's investments in Canadians' future.

I would be happy to elaborate on these pieces, and I look forward to your questions.

Thank you very much for the opportunity to be with you today.

5:20 p.m.

Liberal

The Chair Liberal John Aldag

Thank you very much. That's right on the five minutes.

For the six minutes, if we keep it tight, we'll be able to get through all four rounds with the minister, and then we'll do one round with the officials, which should be 15 minutes, and we'll see where we are at that point.

Mr. McLean, you're up first, with six minutes.

5:20 p.m.

Conservative

Greg McLean Conservative Calgary Centre, AB

Thank you, Mr. Chair.

Minister, first of all, thank you for being here.

I notice that you've become more engaged on this file since the Russian invasion of Ukraine and understand a little more clearly the importance of energy security, but let me say, is it more clear to you now that America's energy demands are better served by a reliable security partner with world-leading, transparent environmental production?

5:25 p.m.

Liberal

Jonathan Wilkinson Liberal North Vancouver, BC

Thank you, Mr. McLean.

Certainly, I have always been engaged on this file. We have been working very hard to ensure that we are developing a clean and prosperous future for Canadians that includes abundant and secure energy sources.

We've certainly been working very hard with the Americans—our American friends—on that over the course of the past number of months. In fact, I was in Washington last week to meet with the Department of Energy, with Secretary Granholm and with officials at the White House, on exactly that.

Certainly, we're working in the short term around oil and gas, but we're also working on issues around hydrogen and critical minerals, etc., going forward.

5:25 p.m.

Conservative

Greg McLean Conservative Calgary Centre, AB

Thank you.

Let's get back to some of the other issues here. The shutdown of Enbridge Line 5—540,000 barrels per day of critical energy supply for the continent—would exacerbate North America's energy supply chains and raise the cost of energy in both our countries.

In October of last year, your government finally got serious on Canada's initiatives and ex-minister Garneau invoked the terms of the transit pipeline treaty, making Canada's position crystal clear. Now, the same interest groups behind that lawsuit are introducing similar lawfare activities through other legal channels.

Minister, these are interest groups that your government has played pussyfoot with for far too long. How long will it take in the legal action for you to make Canada's position crystal clear again?

5:25 p.m.

Liberal

Jonathan Wilkinson Liberal North Vancouver, BC

I would say our position is very much crystal clear.

We've filed an amicus brief in the Michigan statement. We've invoked the treaty. We have a process going on with the Department of State to try to find a resolution. I raised this at the White House. I raised it with the Secretary of Energy, and I raised it yesterday with the U.S. Senate Committee on Energy and Natural Resources. I don't think we can be any more clear.

On this one, I actually think that you and I agree.

5:25 p.m.

Conservative

Greg McLean Conservative Calgary Centre, AB

We do agree that we should be crystal clear on it.

I want you to make sure that the United States understands that this transgression, this legal action, will also invoke the transit pipeline treaty between our two nations so that it is dealt with very seriously by the United States government, not by any state government. Is that correct?

5:25 p.m.

Liberal

Jonathan Wilkinson Liberal North Vancouver, BC

I think the United States understands how crystal clear we are. As I say, I raised it when I was in the White House, and I will tell you that I talk very frequently with the CEO of the proponent, of the pipeline company, and ensure that we are working in lockstep.

5:25 p.m.

Conservative

Greg McLean Conservative Calgary Centre, AB

Three weeks ago, the commissioner of the environment delivered five reports to Parliament that were damning for your government. Your so-called “just transition” is nothing but words, and you're spending billions of dollars to accomplish virtually nothing.

Comparable to the collapse of the northern cod fishery in the 1990s or the coal phase-out, when Canadian workers were all but abandoned, is it realistic to say that your government confuses spending money with obtaining results for Canadians?

5:25 p.m.

Liberal

Jonathan Wilkinson Liberal North Vancouver, BC

Not at all. In fact, there's a lot of work going on for the just transition.

First of all, for the coal phase-out, there was about $185 million committed to that. As you will know, most of those plants are not phasing out until 2030, so there's lots of time to ensure we're doing the appropriate work.

We launched consultations on just transition legislation. We're launching regional economic tables to build on regional strengths in terms of what those opportunities in a low-carbon future are going to be; i.e., what are you going to transition to? That is exactly what is ongoing. It's absolutely on track.

5:25 p.m.

Conservative

Greg McLean Conservative Calgary Centre, AB

That's not at all what the environment commissioner said. He went further in analyzing the role of hydrogen in Canada's GHG emissions program. He said that Environment Canada and National Reverenue Canada—your department—differ on the reductions associated with hydrogen's advancement: 15 megatonnes versus 45 megatonnes. That's a factor of three, we'll say.

He said, “the assumptions in the federal hydrogen strategy are overly optimistic and compromise the credibility of the expected emission reductions.”

Is it safe to say, as we've seen in your government's ability to meet targets to date, that your numbers are just guesses?

5:25 p.m.

Liberal

Jonathan Wilkinson Liberal North Vancouver, BC

No, it's not. In fact, I would say to you that the numbers Environment Canada had were focused on one application. They were a conservative estimate about what could be accomplished. That was incorporated into the emissions reduction plan.

The Natural Resources Canada figures were what's called the full potential. You, as a businessperson, would understand what the full potential is. You look at everything that could possibly go right and what the absolute most is that you could do. That is essentially setting an orientation.

We certainly didn't include that in the emissions reduction plan. It's exactly the way a private business would run its business.

5:25 p.m.

Conservative

Greg McLean Conservative Calgary Centre, AB

It's actually not.

He went on—

5:25 p.m.

Liberal

Jonathan Wilkinson Liberal North Vancouver, BC

Actually, it is.

5:25 p.m.

Conservative

Greg McLean Conservative Calgary Centre, AB

—to say, “Canada has consistently failed to meet its climate targets despite numerous plans and commitments.”

This is something your government has failed at repeatedly, as far as hitting targets are concerned. Setting targets is one thing, but hitting targets is a result, Minister, that your government has not delivered at this point in time.

5:30 p.m.

Liberal

Jonathan Wilkinson Liberal North Vancouver, BC

That's not true, Mr. McLean.

The target we are aspiring toward, the 2030 target—

5:30 p.m.

Conservative

Greg McLean Conservative Calgary Centre, AB

That is true and I think you know it.

5:30 p.m.

Liberal

Jonathan Wilkinson Liberal North Vancouver, BC

I'm not sure if—

5:30 p.m.

Conservative

Greg McLean Conservative Calgary Centre, AB

It's my turn to ask questions here, Minister. Can I ask a final question?

5:30 p.m.

Liberal

Jonathan Wilkinson Liberal North Vancouver, BC

It has not reached 2030—