Thank you, Mr. Chair, for the chance to come here from Vancouver to speak to the committee.
Since 2014, the Resource Works Society, a not-for-profit based in Vancouver, has been conducting public interest advocacy. I am a former journalist and was national editor and business editor of the Vancouver Sun. I worked through the Canadian Press with The Globe and Mail and the Toronto Star to streamline business processes in those companies, and I continue my work in this domain. It's a privilege to be here.
The Canadian government really has only so many levers at its disposal to be able to affect what companies do. There are very good reasons to use incentives, which some might call subsidies, in order to exert public policy. We sometimes hear the belief that a dollar deployed in one area equals a dollar withheld from another. We hear this in subsidies all the time. That's simply not how things work.
Let me give you a little example from British Columbia, where $80 billion in upstream natural gas investment was triggered by two billion dollars' worth of subsidies in the form of deep-well royalty credits. Great social and climate benefit was created by bringing this lower-emission fuel to market because of those subsidies. I would challenge anyone to show me a more productive return on subsidy dollars from any sector that is supported in any way by subsidies. That's a pretty good ratio.
Nevertheless, the industry, I feel, has faced an onslaught of opposition on the grounds that the credits were handouts, representing the one-way flow of public funds to private interests for no public benefit, which is really the exact opposite of the truth. When you listen carefully to what corporate Canada is asking for—I'm not here to advocate for them; I'm observing this—they quite reasonably would prefer a hand-up in a highly competitive world and not a handout. You don't see that.
In 2022, more decision-makers around the world are realizing that the simplistic conceptions of energy systems can no longer be indulged if we want to be serious about climate change. I have three examples of this.
In July, the European Union passed the Complementary Climate Delegated Act, recognizing that natural gas power plants are climate friendly. That's their definition. I'm not making it up.
President Biden’s Inflation Reduction Act was passed in August. It's deploying billions of dollars of subsidies to achieve green goals via the private sector. How are they doing this? They're doing it through an enhanced carbon capture tax credit. They're spurring other climate-friendly technologies, such as hydrogen, advanced nuclear reactors, sustainable aviation fuel and many other things. I know the act here in Canada has been applauded by some because it relies on subsidies and has been criticized by others because it relies on subsidies. There you go.
In Egypt last weekend, the final text of COP27 recognized the place of low-emissions energy in climate action. Until now, COP language has been narrowly focused on promoting renewables, which are an important part of the solution but not the complete solution to energy transition. This shift, urged by the International Energy Agency and approved by almost 200 nations, is light on detail at this point and has attracted some criticism. Nevertheless, it's a clear sign of growing awareness that the world cannot wish its way to decarbonization goals by focusing solely on a very narrow band of sources.
Taken together, these three developments signal to me a positive trend for climate pragmatism.
To conclude, I would say that subsidies have their use. They should be seen in perspective. They're not about consumer fuel giveaways. The Ministry of Finance will tell us that we've already flushed out inefficient fossil fuel subsidies, so there's that. Let's recognize that it's market forces—the pursuit of profit—that will be the greatest force of change. That's certainly the Biden dogma.
Numerous factors affect how governments should decide climate and industrial policy via efficient markets. They have many levers at their disposal—emissions reduction, worker earnings growth as a goal, investment conditions, indigenous reconciliation, skills and employment, regional development, energy security, market access, energy reliability and affordability, and availability of alternatives, with the critical minerals and energy metals that are needed, which we can produce in this country for mass electrification. These are all considerations. It's not just subsidies in this very narrow discussion. You really need to broaden it.
A huge increase in low-emissions energy will be needed if the world is to hit climate targets. The fossil fuels versus renewables narrative is increasingly proving to be a difficult and impeding factor in this.
At this time, there's no evidence that a better path exists, if you are serious about climate goals, than to pursue what I've laid out.