Evidence of meeting #40 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 finance.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Daniel Dufour  Director General, Innovation Branch, Department of Natural Resources
Shannon Glenn  Assistant Vice-President, Government Relations, Business Development Bank of Canada
Elizabeth Wademan  Chief Executive Officer, Canada Development Investment Corporation
Samuel Millar  Associate Assistant Deputy Minister, Economic Development Branch, Department of Finance
Jesse Fleming  Director General, Programs Directorate, Department of the Environment
Todd Winterhalt  Senior Vice-President, Marketing, Communications and Corporate Strategy Officer, Export Development Canada
Miodrag Jovanovic  Assistant Deputy Minister, Tax Policy Branch, Department of Finance
Marie-Josée Lambert  Acting Director General, Crown Investment and Asset Management, Department of Finance

5:25 p.m.

Conservative

Jeremy Patzer Conservative Cypress Hills—Grasslands, SK

Thank you very much, Mr. Chair.

Thanks, everyone, for being here.

To the Department of Finance, can you confirm the amount of total tax revenue from the oil and gas sector to the federal government in 2021?

5:25 p.m.

Assistant Deputy Minister, Tax Policy Branch, Department of Finance

Miodrag Jovanovic

I will have to get back to you on this. I don't have the number with me.

5:25 p.m.

Conservative

Jeremy Patzer Conservative Cypress Hills—Grasslands, SK

Maybe, then, you could add the five years prior to that as well. I just want the total revenue to the federal government. I would greatly appreciate that.

Can you tell us what effect the tax revenue from the oil and gas sector had on the federal budget and deficit over the last year? Do you know?

5:25 p.m.

Assistant Deputy Minister, Tax Policy Branch, Department of Finance

Miodrag Jovanovic

I'm sorry. I don't have a direct answer to that. Are you asking for...?

5:25 p.m.

Conservative

Jeremy Patzer Conservative Cypress Hills—Grasslands, SK

We're looking at how much revenue came in.

When you consider what the budget projections were, and then we see how much revenue came in from the oil and gas sector, what impact did that have on the projected deficits the government is running?

5:25 p.m.

Assistant Deputy Minister, Tax Policy Branch, Department of Finance

Miodrag Jovanovic

That's a question I would have to defer to my colleagues in the fiscal policy branch. They are not on this call, so I can take this with me and see what can be provided to the committee.

5:25 p.m.

Conservative

Jeremy Patzer Conservative Cypress Hills—Grasslands, SK

Okay. If you could get us a report on those numbers, that would be fantastic.

I have another quick question for you since you're a tax policy guy.

I've previously asked the finance department for the specific amount of tax that's collected on the carbon tax. Do you have a number for how much GST is collected on the carbon tax?

5:25 p.m.

Assistant Deputy Minister, Tax Policy Branch, Department of Finance

Miodrag Jovanovic

We don't have that number. The way the carbon tax works, along with the GST, is there's no separate tracking of the amount. Often it's buried in the final price, and GST will be charged on the final price of the product, so there's no accounting that allows us to even calculate that amount.

The other thing is that it's not clear what that amount would represent, because people would have spent that money elsewhere on goods and services on which GST would very likely have been charged anyway, so the differential is not clear either. That's why we don't have that number.

5:30 p.m.

Conservative

Jeremy Patzer Conservative Cypress Hills—Grasslands, SK

Okay. It is an individual line item when people are paying their energy bills and paying their power bills. They are individual lines, so I think it wouldn't be that hard to track, honestly, but maybe on your end it's not part of the program.

Anyway, thank you very much. I will move on.

I have a question for BDC. We were talking about environmental social governance. I'm curious about that. Do you look at the life-cycle emissions of a project before you finance it, rather than just...? For example, people say that wind and solar are these amazing green energy sources, but when you look at the life cycle, do you look at what the total footprint is, from the construction to the tear-down of these projects?

5:30 p.m.

Assistant Vice-President, Government Relations, Business Development Bank of Canada

Shannon Glenn

The financial support we provide is aimed at improving the internal operations within each company. It can include funding for long-term initiatives to reduce emissions, invest in production equipment, lower diesel usage, minimize and remediate land disturbances, increase the use of recycled water and so on. These are all examples.

Producers are increasingly directing capital to these various projects intended to improve their operating efficiency and lower greenhouse gases. Those are inherently life-cycle considerations for their products.

5:30 p.m.

Conservative

Jeremy Patzer Conservative Cypress Hills—Grasslands, SK

Right. I'm just curious about that, because several yards and tonnages of concrete go into every wind turbine tower. The amount of steel that goes into them is massive. We know that concrete is one of the largest GHG emitters in the world. I was just curious to know whether you guys bothered to put that into your analysis. I guess not.

My last question is for Natural Resources.

There was a two-year delay in developing the just transition policy because of COVID, yet we're not seeing the timelines moved by two years for all of these towns, for all of these communities and for these sectors that are going to be obliterated by the just transition, especially in the coal industry. I'm just wondering how you can justify a two-year delay without actually giving a two-year reprieve to these communities.

5:30 p.m.

Liberal

The Chair Liberal John Aldag

We're at the end of the five minutes, but I'll give you a bit of time to answer briefly. Then we'll move on to the next questioner.

5:30 p.m.

Director General, Innovation Branch, Department of Natural Resources

Daniel Dufour

I'll just say that some measures have been announced around the just transition in terms of creating more sustainable jobs in a low-carbon economy. There are measures around the emissions reduction plan, some funding through budget 2021 and the recent creation, through the fall economic statement, of a sustainable jobs secretariat. I think they will look at some of the issues that have been mentioned, so I'm not entirely sure I'm able to answer that question.

5:30 p.m.

Liberal

The Chair Liberal John Aldag

Thank you. We'll leave it at that.

I want to briefly welcome Ms. Gallant to our committee.

We will now go to Mr. Chahal for his five minutes of questioning.

5:30 p.m.

Liberal

George Chahal Liberal Calgary Skyview, AB

Thank you, Chair.

Thank you to all the witnesses for joining us today.

I was excited to see the fall economic statement and I've been reading through it. I was pleasantly pleased with the whole document, but one section really caught my eye. When I think about my home province of Alberta, my city of Calgary and my constituency of Calgary Skyview, and when I think about workers and the opportunity for better wages for workers and sustainable jobs, I've never seen included, in my one year of time in office, an investment tax credit. On page 30, there's an investment tax credit for clean technologies and an investment tax credit for clean hydrogen.

I'm wondering if the member from the Department of Finance can talk about the inclusion of incentivizing companies through certain labour conditions. They will be eligible for an increased tax credit if they provide increased wages and ensure apprenticeship or training opportunities, increasing wages for workers and providing sustainable jobs.

5:35 p.m.

Assistant Deputy Minister, Tax Policy Branch, Department of Finance

Miodrag Jovanovic

You're right that there are two investment tax credits, and the labour conditions would apply to both.

Maybe I can take the investment tax credit for clean technologies as a starting point. The investment tax credit is being proposed at a 30% rate. In order to obtain that 30% rate, the taxpayer would have to demonstrate that it meets these requirements. As you mentioned, that would be about ensuring that workers are paid the prevailing wages. There would also be conditions around ensuring that a portion of hours worked are being performed by apprentices. That's one approach used in the United States. We will be consulting on that.

The final conditions will be spelled out in the budget, but as for now, as mentioned in the fall economic statement, these conditions are around these two criteria.

5:35 p.m.

Liberal

George Chahal Liberal Calgary Skyview, AB

Has that been done before in Canada?

5:35 p.m.

Assistant Deputy Minister, Tax Policy Branch, Department of Finance

Miodrag Jovanovic

My understanding is that in Canada the concept of prevailing wages is being used in the context of the foreign worker program to make sure that when employers hire foreign workers, it's not done in a way that undercuts Canadian wages. It's a concept being used there.

I do not believe it has been used in another context, and I do not believe that the labour requirement around apprentices is used either.

5:35 p.m.

Liberal

George Chahal Liberal Calgary Skyview, AB

I think it's a great initiative. Thank you. I commend you and your department for your work in supporting workers and better wages for workers, particularly in my region, which is going through an energy transition. We have seen the launch of the energy transition centre recently.

Mr. Chair, I would like to provide the rest of my time to my colleague Ms. Lapointe.

5:35 p.m.

Liberal

The Chair Liberal John Aldag

You have one minute.

5:35 p.m.

Liberal

Viviane LaPointe Liberal Sudbury, ON

Thank you.

This is a quick question for Natural Resources.

We know that Natural Resources Canada's green mining innovation has a goal of helping Canada's mining sector towards decarbonization. I would like to hear how the ministry is realizing that goal.

5:35 p.m.

Director General, Innovation Branch, Department of Natural Resources

Daniel Dufour

With respect to the green mining innovation, the work that's happening is really about working closely, as I mentioned earlier, with provincial and territorial governments, industry, academia, non-governmental organizations and any other interested stakeholders on ways we can improve the mineral sector around its environmental performance and create green tech opportunities. It's an effort that means sitting down with these groups and coming together with a joint project that can be launched.

A key partner in this work is the organization I mentioned before, the Canada Mining Innovation Council. It's looking at some of the innovations we need to see implemented in the mining sector to have better environmental performance. You're thinking of projects to address how we go about enhancing mine productivity, managing and minimizing water and mine waste in the mining cycle and improving energy efficiency in the mines. All of these initiatives go a certain distance in helping decarbonize the industry.

5:35 p.m.

Liberal

The Chair Liberal John Aldag

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

We'll go to Mr. Simard for the next two and a half minutes.

For any of our panellists taking questions, keep in mind that there's a very tight amount of time for our next two questioners.

Mr. Simard, we'll go over to you for two and a half minutes.

5:35 p.m.

Bloc

Mario Simard Bloc Jonquière, QC

Thank you.

Mr. Winterhalt, earlier, I heard you say that Export and Development Canada would no longer fund the oil and gas sector as of January.

I'll read a sentence from the Minister Guilbault's campaign: “The signal we are sending is very clear: the Canadian state will no longer support the production of oil and gas starting in 2023. Whether it be through direct or indirect mechanisms, or tax shelters [...]”

Does that mean your organization will no longer support the oil and gas sector directly, indirectly or through tax shelters, starting in January? Please answer me with a simple yes or no.

5:40 p.m.

Senior Vice-President, Marketing, Communications and Corporate Strategy Officer, Export Development Canada

Todd Winterhalt

EDC will continue to support the oil and gas sector, but we will stop directly financing international fossil fuel projects, as agreed to in the COP26 statement.