Natural Resources Committee on Feb. 2nd, 2022

[George Chahal, Liberal, Calgary Skyview, AB]

Minister, we have heard a lot about the importance of reaching our emissions targets. I've had the opportunity to review material from various initiatives, and it's clear that our government's plan has us on the right track.

My constituents in Calgary Skyview continue to remind me how important our commitment of reaching net zero by 2050 is to them. I represent a very young riding with constituents who are deeply concerned about the world they're leaving behind for their children.

Could you explain how this program will help us reach our net-zero goals?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Of course, climate change is an existential threat and it is something that we must address, but we have to address it in thoughtful ways, in ways that will actually promote economic prosperity for all regions of this country.

Our government has put in place a climate plan that is perhaps one of the most comprehensive that exist in the world—comprehensive and detailed. It has elements that relate to all sectors, but certainly the oil and gas sector, which is the largest single source of emissions in Canada. That includes putting a price on carbon pollution, strengthening our existing methane regulations, clean fuel regulations, and putting a cap on emissions from the oil and gas sector, but also includes making strategic investments in the oil and gas sector to help companies adopt clean technologies and invest in infrastructure necessary to eliminate emissions.

This program is exactly on that track, which is focusing on ensuring we are driving and working and partnering with the sector to ensure that we are actually making the emissions reductions possible in a manner that will enhance competitiveness.

[The Chair, Liberal, John Aldag]

Thank you. We're out of time on that round.

In my opening comments, I meant to welcome Mr. Morrice, here at the table, and Mrs. Goodridge, who is substituting again today. Good to see you both.

Our next six minutes go to Monsieur Simard.

[Mario Simard, Bloc, Jonquière, QC]

Thank you very much, Mr. Chair.

Thank you for being here, Mr. Minister. I know that you are sensitive to environmental issues, which is quite the asset for the Department of Natural Resources. I welcome that and am very optimistic about it.

I was listening to your presentation earlier and something set me thinking. I would like to hear what you have to say about it. You said that the next intake of the Emissions Reduction Fund will be suited to today's economic outlook and environmental goals, not those of two years ago. I find that interesting, because Professor Pierre-Olivier Pineau, who dropped by to see us on Monday, told us that the Emissions Reduction Fund came at a time when oil prices were very low, which was bad for Alberta's economy, but now, oil prices are much higher and the industry is making a profit. He said that he did not see why it would need this financial support.

Even the name, Emissions Reduction Fund, is a little overblown. As my colleague from Calgary Skyview showed us at the last meeting, the objective of the fund was to support the oil industry when it was going through a bad time during the COVID‑19 crisis. If you are looking for evidence of that, look no further than the Commissioner's report, according to which, two thirds of the projects, 27 projects out of 40, took the support to mean funding to increase the level of production.

With that knowledge, and especially since you stated that we have to concentrate on today's economic outlook and environmental goals, not on those of two years ago, do you believe that the department should drop the third phase of intake for the Emissions Reduction Fund?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Thank you for your question.

First, I would like to let the clerk know that the volume on the interpretation channel is lower than the speaker's volume, so it is difficult to understand. I can understand French, but, for others, it might be difficult.

Mr. Simard, your comment is certainly helpful. We have made changes to the third phase because, exactly as you say, the economic situation in the sector is much improved. We are now tackling the emissions that exceed the limits set in the regulations, so that we can speed up the work of reducing greenhouse gas emissions and can ensure that we meet the target of a 40% to 45% reduction by 2030.

Can you remind me about your second question?

[Mario Simard, Bloc, Jonquière, QC]

Let me summarize it for you this way.

On Monday, I finished the meeting by asking all the witnesses, Professor Pineau, Julia Levin, Dale Marshall and Tom L. Green, whether they agreed that it should be dropped. After all, it's a huge amount of money. The total in the program is $750 million.

In simple terms, should we not just drop your third and final intake phase, and set this program to one side?

I do not believe that the oil and gas sector needs more government support.

Given the reaction of some experts in the area, shouldn't you just drop this program?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

We are in the third phase now and we have made no decisions about the future. However, I do want to say that we are investing in almost all sectors of the economy in order to speed up their efforts to reduce greenhouse gas emissions. For example, in the aluminum sector in Quebec, we have made major investments in order to speed up their efforts. As for the oil and gas sector, it is important to reduce its greenhouse gas emissions, as is the case for every sector of the economy.

[Mario Simard, Bloc, Jonquière, QC]

I want to be gracious, but you opened the door for me.

I feel that the most underfunded sector, yet the one with the most potential to fight climate change, is forestry. However, it receives the smallest amount in federal government investment. It represents $20 billion per year to the economy of Quebec, but it receives scarcely 0.3% of federal government support, of which, moreover, 75% comes in the form of loans.

Comparing the forestry sector, with its great potential to reduce greenhouse gases, with the oil sector is like comparing David to Goliath. There is no basis for comparison. So, if you were to tell me today that you are ready to redistribute that money to a sector like forestry, I would commend that a great deal and I would not trouble you again until the end of this mandate. I know that such will not be the case, but I feel that it would be ill advised—as the experts we have heard from have told us, moreover—to continue the third intake phase that is now open.

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

We have had a number of conversations about the forestry sector, and I agree with you that it is very important for the economy of Canada and Quebec.

The emissions reduction fund was created with a specific objective for a specific sector. However, the forestry industry also has assistance programs available, like the forest innovation program, that currently has federal funding to the tune of almost $100 million over three years. There are also a number of other programs.

The forestry sector is certainly very important, and we know that is also a way to reduce emissions. That's why we have established a program to plant two billion trees in the next 10 years.

[The Chair, Liberal, John Aldag]

Can I jump in there? We've gone a bit over on that round.

Thank you, Minister, for the response to the question.

We're going to jump now to Mr. Angus for his six minutes.

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

Thank you, Mr. Chair.

Thank you so much, Minister, for joining us in the study on the methane review.

I'd like to focus this issue on the fundamental question of trust. We're dealing with a climate catastrophe that's unfolding. The Prime Minister has made really powerful statements internationally, so when we have a fund to deal with something that's a planet killer like methane, we expect results. I have to say I was really shocked when I read the environment commissioner's report that your department wasn't bothering to check whether or not emissions actually happened. They gave $134 million out the door and they weren't checking whether the fundamental issue of methane reduction actually took place.

That's pretty irresponsible, don't you think?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Mr. Angus, I don't think that's actually what anybody said.

Every project is measured. In fact, part of the project is implementing measurement technologies to ensure that you are tracking emissions reductions. That's why we can actually say that from the first two tranches, we will achieve reductions in the range of 4.7 megatonnes, which is the equivalent of taking a million cars off the road.

I do not agree with your characterization.

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

I hope you've taken a million cars off the road, Minister, but the fact is that most of the reductions that you can claim come from regulations. That's in the report. You don't have the ability to tell us what actually happened, because you don't know.

DeMarco said that when he started the audit, he hoped to get a firm number as to what level of reduction was coming out of the Emissions Reduction Fund, because it was supposed to be an emissions reduction fund.

“I was very disappointed to see that Natural Resources Canada isn’t doing the necessary tracking....”

Then he questioned whether there are any actual net emission reductions at all.

If you were going to give $134 million to big oil, why don't you just say it was an economic development fund? Why did you claim to the Canadian people that you were concerned about methane?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

The program, as I indicated earlier, was designed initially as a COVID response measure to ensure that we were maintaining jobs in the sector at a time of low energy prices, and to ensure that companies continued to reduce emissions in line with the regulations, and beyond, at a time when they would not be spending money on methane reductions, given the financial situation they found themselves in.

In that context, the program succeeded. It ensured that companies continued to focus on methane reduction. I will tell you that some of those reductions were in [Technical difficulty—Editor]. Some of them were more. Of the projects, 97% focused on eliminating venting and flaring. The current regulations do not require the elimination of venting and flaring; therefore, most of the projects went well beyond the 2025 requirements.

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

It must be so hard, Minister, to have an environment commissioner—

[The Chair, Liberal, John Aldag]

I'm sorry, Mr. Angus. I'm going to stop the clock.

We've had a slight issue with the interpretation. I would ask the minister to adjust his mike. Thank you.

Mr. Angus, you're good to carry on.

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

Thank you.

I'm really pleased to hear you talk about job retention and the economic development issues, but when the department set up this fund, job retention was not part of the assessment criteria. So again, if you want to give $134 million to big oil, then just say it. Why not say that this is a subsidy? When the environment commissioner asked your officials for an explanation, they said their priority was the economic needs of the oil companies. That's pretty straightforward.

Why not just come here and say, “Listen, it was COVID and our Liberal member for Calgary needed to have jobs protected, so we wanted to hire people in the oil sector”? Why didn't you just say that? Why did you come here and claim you were actually reducing methane, when you don't have any proof that you did that, because you weren't tracking it? That's what the environment commissioner told us. He said you were not looking at these issues.

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Mr. Angus, with all due respect, that's just not true. It is being tracked. It's tracked in every project. I'm happy to have officials walk you through exactly how that methodology works. We use the methodology put out by the World Resources Institute. It is used by the International Energy Agency, as well as organizations around the world.

We have been able to show—

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

I'm sorry, Minister—

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

—4.7 megatonnes in reduction, as well as—

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

—but I don't have much time left.

You were claiming this, when the environment commissioner was saying that you weren't. He said what really worried him was the attitude of your officials. He said they didn't understand the concept of having baseline emissions data. Don't you think that's really important? I guess it would be pretty convenient to be able to pull a million cars off the road fictitiously if you don't have baseline emissions data.

He said that the response from your officials concerned him. He said he was disappointed by your department, and that the attitude of your officials “doesn't bode well”.

I think you should come here and say, “We're sorry; we screwed up. We're going to fix it, because the planet needs it.” That's what trust is. To [Inaudible—Editor] is not credible.

[James Maloney, Liberal, Etobicoke—Lakeshore, ON]

I have a point of order, Mr. Chair.

We're not here to conduct a character assassination or explore opinions of other people's perceptions of how other people acted. We're here to explore data, to explore the report, and to talk to the minister about the program.

With all due respect, we should focus on that.

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

My time has been interrupted by the Liberals.

[The Chair, Liberal, John Aldag]

I stopped the clock.

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

Thank you for doing that.

I'm referring to what the environment commissioner said. If the Liberals want to interfere and try to stop me from doing my job.... My job as a member is to ask the minister. I know you've given him a good breathing space, but the question that's being asked is what the environment commissioner raised. The environment commissioner raised serious concerns that the attitudes of your department officials—this is on your watch—don't bode well for future projects.

How do you explain that?