Natural Resources Committee on Nov. 15th, 2022

[Todd Winterhalt]

Perhaps I'll start by saying that we agree EDC does not provide subsidies. Our definition really derives from the World Trade Organization and the OECD in terms of how we operate on commercial principles.

We would say, as the first point, that we do not provide subsidies. Where we do see an opportunity to continue to aid Canadian companies in the transition to a lower-carbon future is through providing support to our clean-tech exporters as they seek to help reduce GHG levels with their counterparts, either domestically in Canada or internationally. We see ourselves working to mitigate and minimize the carbon footprint of companies across the sector.

[Mario Simard, Bloc, Jonquière, QC]

I have one last question for the representatives of the Department of Finance.

I have often heard the Deputy Prime Minister say that profits flowing from investment into the pipeline would serve to fund clean energy. However, as we know, the pipeline is generating nothing but deficits.

How can we reinvest these deficits into clean energy?

[Marie-Josée Lambert, Acting Director General, Crown Investment and Asset Management, Department of Finance]

Thank you for your question.

Acquisition of the Trans Mountain pipeline was a commercial transaction between the federal government and Kinder Morgan. It reflected the fair market value of the pipeline, confirmed in 2019 by the Office of the Parliamentary Budget Officer's asset valuation.

The Trans Mountain pipeline was operating and will continue to operate on a commercial basis. In February, the government announced it would not spend any more public money on the project—

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

[Marie-Josée Lambert]

Thank you.

[The Chair, Liberal, John Aldag]

Thank you. We're out of time.

We'll now go to Mr. Angus, who will have six minutes for his round of questions.

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

Thank you so much.

Thanks, everyone, for coming. This is a lot of information. I wish we had hours to go through it.

I would like to start off with Mr. Winterhalt.

At COP26 Canada signed the Glasgow statement. It was a landmark commitment to stop providing public financing for fossil fuel projects abroad and to prioritize support for clean energy by the end of 2022. However, Canada remains the largest international financier of fossil fuels in the world—more than China, more than the United States and more than the U.K., France, Germany and Italy combined. The EDC is the main driver of this financing.

How are we going to respect the Glasgow statement through your work of continuing to provide financial support to the oil sector?

[Todd Winterhalt]

As we move towards a zero target for January of next year in terms of EDC's ability to provide additional financing to international fossil fuel companies, I believe we will be fully aligned with the government's view with respect to the language in the COP26 statement. I would also add that a lion's share of the remaining support for our domestic oil and gas industry is to aid in the transition to a lower-carbon economy and make sure that we are linking EDC support of clean technologies as a way to do that.

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

When I look at the report that recently came out from Oil Change International, I see that what's been given to oil and gas compared to clean tech seems hugely disproportionate.

When you talk of clean tech, are you talking about investments in the oil and gas sector to reduce the amount of carbon or are you talking about new, separate clean energy development projects?

[Todd Winterhalt]

From EDC's perspective, it would include both. For example, there's investment in renewable energy, wind, hydro and solar, as well as products, services and technologies that will reduce greenhouse gas emissions in any sector. It could also include oil and gas and other natural resources, such as mining, for example.

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

Could you provide us a breakdown of what is going to wind and geothermal as compared to money that's going to what I would think are very profitable oil companies to reduce their carbon footprint? That would be very helpful.

The Oil Change International report has different numbers from yours. They are saying that Canada was providing on average about $11.3 billion to $13 billion annually in government-backed support for international fossil fuel projects and for Canadian expansion. What they are showing from Export Development Canada in 2022 is a figure of $15.4 billion, and a lot of that is the $10-billion backstop for TMX. Would that be an accurate number?

[Todd Winterhalt]

I'll defer on the specifics with respect to the pipeline, which is the purview of the Department of Finance in this case. However, certainly the $5.5 billion is getting closer to our actual numbers. Again, last year—

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

I'm sorry, but I have to interrupt here because I'm running out of time.

That $5 billion is accurate, but are you going to confirm whether EDC was involved in the $10-billion loan that I asked you about?

[Todd Winterhalt]

I can for sure say that it was $4.3 billion last year, to be very specific, which is considerably down from where we were five years ago.

With respect to the Trans Mountain pipeline, I think my colleagues at the Department of Finance would probably be better positioned to answer that question.

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

All I'm asking about is EDC. Did you supply $10 billion for TMX? It's a simple question. That's what the reports say.

[Todd Winterhalt]

We act as an agent of Canada for all purposes with respect to the Canada Account, so that file is fully run by the Department of Finance.

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

Okay.

[Marie-Josée Lambert]

I'll take that. In—

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

I'm sorry, but I'm just finishing off. My time is running out.

I'd say, then, that the $15.4 billion was a pretty accurate number.

I find it really hard to believe that suddenly all the money taps are going to turn off and we're going to meet our international commitments when I'm looking at a $15-billion spending spree this year to backstop oil and gas. This is not in line with what the Prime Minister has promised the international community. I am concerned about that.

I want to change topics in the few minutes I have left.

We had the Canadian Association of Petroleum Producers come before us, and they said their vision for dealing with the climate crisis was to increase Canadian oil and gas exports. You hired Dave Collyer, the former president of CAPP, to your board. I believe he's on the environmental, social and governance advisory council.

Would you say that the views of CAPP and EDC are in line in terms of their vision that we need to vastly increase the export of Canadian oil and gas as a response to the climate crisis?

[Todd Winterhalt]

I think we value Mr. Collyer's perspective as part of a broad perspective from a variety of industry, civil society, government and private industry groups on our ESG advisory council. It is one voice among a number at the table.

To be very clear, EDC will no longer support international direct fossil fuel financing, as targeted in the COP26 statement, by January 1. We're on track to being there.

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

However, you are still subsidizing oil and gas to be able to market it as having lower carbon emissions than it has, so you are still giving money to oil and gas.

I'm interested in this because CAPP seems to think their solution to the climate crisis is vastly increasing exports. They're on your ESG advisory board. However, I also understand that this has to do with providing financing and connecting Canadian companies to international markets.

Is EDC very much in line with the CAPP vision of increasing oil and gas as a way of dealing with the climate crisis?

[The Chair, Liberal, John Aldag]

Answer briefly, please, because we're approaching the end of the time here.

[Todd Winterhalt]

EDC's mandate is to serve all Canadian companies, regardless of sector. We do that very much in line with the government's instruction with respect to its COP26 commitments. We see a real opportunity to assist Canadian companies in the oil and gas sector to transition to a lower-carbon future as they go forward.

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

Thank you.

[The Chair, Liberal, John Aldag]

Colleagues, we're just coming up on 5:30. The next round will take us 15 minutes. I think we have a substitute coming in, so that will give two five-minute and two two-and-a-half-minute rounds. Let's do that and see where it takes us.

Let's move right into the next five-minute round.

Mr. Patzer, you're up first.