Natural Resources Committee on Nov. 15th, 2022

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you. We sure would appreciate that for the purposes of this study.

Now, what I'd like to get a sense of, according to the North American Industry Classification System, is the comparative value of taxes paid per year against the value of tax deductions and credits per year. What I'm hoping is that somebody from Finance or Natural Resources will be able to provide that for oil and gas extraction and support activities, agriculture, forestry, fishing, hunting, the manufacturing sector, the real estate sector, the construction sector and the finance and insurance sector.

I don't know if it's possible to outline that right now for the committee, but I hope that can also be provided in a written submission.

[Miodrag Jovanovic]

Maybe I can take this, Mr. Chair.

It is probably possible for us to have an assessment of the tax paid by these subsectors.

Your question about the relationship between.... I think you mentioned the total tax deduction compared with what they paid. I don't think we can really do that. There are limitations to being able to do that. The tax system is based on self-assessment.

Corporations do report their net taxable income. They also report some fields that are required to reconcile book income to taxable income, for instance, but they're not obligated to report all items and, in their financial statements, if you will, what led to taxable income. There are some limitations there.

[The Chair, Liberal, John Aldag]

We're out of time.

[Miodrag Jovanovic]

Also, I'm not sure how to interpret this.

[The Chair, Liberal, John Aldag]

Unfortunately, we're out of time. We may get back to another round and Mrs. Stubbs could clarify, or we could send the clarification to you through the clerk to see if you are able to provide any information.

Thanks.

We'll move now to Ms. Dabrusin, who will have six minutes.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Thank you.

I'd like to begin by asking Natural Resources a question. One of the things I find really interesting is the piece about electrification. So much of the work we do when we're talking about zero-emission vehicles and other types of things is to move to a cleaner electrical grid as we reduce emissions.

We're pretty lucky in Canada. I believe that we have a very clean grid already, at about 83% non-emitting, but there's more work to do. I'm curious about how we're working to get to the point of cleaning up the remaining 17%.

Natural Resources has the smart renewables and electrification pathways program. I was hoping I could get more details about that program.

[Daniel Dufour]

Thank you for the good question.

With respect to electrification, there is certainly, as the member mentioned, more that needs to be done for the electrification of the entire grid. I think one way we're trying to get through this, as I mentioned in my introductory remarks, is with the launch of these regional energy and resource tables, whereby we sit down with our provincial and territorial counterparts and agree on the most critical pillars on which we want action in order to really achieve our goals for 2030 and 2050 in terms of GHG reduction.

Across the board, electricity is certainly coming up as a way to go about increasing power generation, so it is definitely an issue that we take very much to heart at NRCan. We're looking at it actively right now, in part through these tables that will result in action plans.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

I'm sorry, but I'm just going to jump in, because I don't have much time.

I really appreciate that, and I'm happy to hear about it being an important part of the regional energy and resource tables.

I believe you mentioned a smart renewables and electrification pathways program. I was wondering if you could tell me a bit more about the types of projects that are being funded by that program.

[Daniel Dufour]

Absolutely, and we'd be happy to provide you with a list of projects that are being funded through that program.

Basically, the program is about advancing smart renewable energy and grid modernization projects to enable the future of the clean grid, so it's very key, to your point, in terms of electrification. The funding was initially about $964 million over four years, which was announced back in 2020. In budget 2022, this program was recapitalized with an additional $600 million over seven years, to 2029.

In terms of project solicitation, a very large number of applications were received in the first place, so now we're proceeding with the continuous intake process. The program at this point—because it has been solicited so much—is not accepting new applications.

I just wanted to provide a bit more detail on it, and I would be happy to follow up in written form with some of the projects.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

I don't know if you'd be able to answer this today, but if you can't, I would still like to know. Has one province received more project support through that program than any other province?

[Daniel Dufour]

I'm not in a position to answer that today, but we will follow up with that information.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Thank you.

I'm going to share my time with Madame Lapointe.

[The Chair, Liberal, John Aldag]

You have two minutes.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

My question is for the Department of Natural Resources.

The world wants critical minerals, and more specifically the world wants Canada's critical minerals. I'm curious to know what investments Natural Resources has made to develop the technologies and processes for sustainable mining.

[Daniel Dufour]

We certainly recognize the important role of the mining industry in driving our country's economic prosperity, while also ensuring environmental stewardship and protection. We have a strong and very robust regulatory system for mining through environmental impacts, but we recognize that investments in innovation are certainly very key.

One mechanism through which we seek to really support sustainable mining is NRCan's green mining innovation, which is specifically looking at improving the mineral sector's environmental performance and at creating green technology opportunities. This is done in partnership with provincial and territorial governments, industry, academia and government organizations such as the Canada Mining Innovation Council. That's a great way by which we try to foster innovation in that space.

With respect to the question on investments, there are programs. I can mention the challenge programs that were launched under the Impact Canada initiative back in 2017, with $75 million over six clean-tech challenges. One of them was on mining—the “Crush It!” challenge. About $5 million was also awarded under that initiative to the Canada Mining Innovation Council.

There has definitely been some investment and definitely a strong push from the department. We'd be happy to follow up with the committee to provide further details on this. Can we actually delineate specifically the level of funding that has been allocated towards sustainable mining? There is certainly some data that can be provided there.

[The Chair, Liberal, John Aldag]

That's great. Thank you.

We'll now go to Monsieur Simard.

Mr. Simard, you have six minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Mr. Winterhalt, in your presentation, you mentioned different sectors of activity that you helped. I think you gave 2016 as a reference year for the mining sector.

Could you give us a breakdown of the assistance that Export and Development Canada provided to different natural resources sectors since 2016? I'm talking about the forestry, gas, oil and electricity sectors.

[Todd Winterhalt]

I will try to give a quick summary today, and I'll provide the clerk with some additional information dating back to 2016 as requested. I can state today that, for example, in the forestry sector, we currently service—

[Mario Simard, Bloc, Jonquière, QC]

Excuse me for interrupting you, but I have very little time. Could you provide us a document from your organization to relay that information?

[Todd Winterhalt]

You certainly can.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

Mr. Winterhalt, I often hear that support for Canada's oil and gas sector can reach $14 billion a year, and that you are one of the most significant contributors in this sector. I noted it while reading reports from Oil Change International.

I fully understand what you said earlier. Export and Development Canada does not provide subsidies and makes no payments to this sector. However, let's say that your organization helps it out.

In your opinion, is this $14 billion representative of the support that your organization offers to the oil and gas sector? Is it in that ballpark?

[Todd Winterhalt]

As of 2021, that number would not be accurate, from our perspective. In 2021, EDC provided approximately $4.3 billion in support to domestic and international companies in the oil and gas sector. It's interesting to note that was also the first year that our support to clean tech actually eclipsed the amount of support provided to oil and gas. That number has come down from approximately $12 billion about five years ago to roughly $4.3 billion in 2021.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

I was recently reading in Le Devoir that, in the first quarter of 2022, your organization provided $1.366 billion in assistance to the oil sector. Furthermore, I think you provided that number. If that is the case, in a sense, it surpasses all the assistance provided in 2021.

I would like you to tell me if this financial support, this current financial picture, is compatible with the government's commitment to eliminate fossil fuel subsidies by 2023. From my point of view, 2023 is tomorrow morning.

[Todd Winterhalt]

We would say that it is compatible with the government's intent as described under the COP26 agreements. As I mentioned earlier in my introductory comments, EDC will achieve zero new direct international financing support for oil and gas by January 1. That is on target. We have reduced the current amount from $2.7 billion in 2018 to $395 million this year. We can confirm that there will be no new direct international support for oil and gas from EDC effective January 1.

[Mario Simard, Bloc, Jonquière, QC]

I'd like a little clarification.

You know that the government committed to ending inefficient subsidies. I'm not saying that Export and Development Canada grants subsidies, because I know we're not going to agree on that.

Nonetheless, is your organization thinking about the notion of inefficient support? Does your organization have a definition of inefficient support for the oil and gas sector?