Natural Resources Committee on Dec. 1st, 2022

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you, Mr. Chair.

Thank you, Minister, for joining us today.

Minister, to ensure that we achieve our goal of net zero, we must invest in and accelerate the decarbonization of major industries while investing in clean technologies.

[Mario Simard, Bloc, Jonquière, QC]

Mr. Chair, we are still having some problems with interpretation.

[The Chair, Liberal, John Aldag]

Mr. Chahal, can you slow down the pace of your questions so that our staff can keep up?

We'll go back to you.

[George Chahal, Liberal, Calgary Skyview, AB]

Alberta, my home province, is leading in both clean tech and renewable energy investments. I was happy to hear about your $800-million announcement last month for 60 projects under the clean fuels fund.

That being said, I would like to talk about the net-zero accelerator program. In this year's supplementary estimates, we see a transfer from NRCan to ISED for this program. Can you speak to the importance of this program in our fight against climate change?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Thank you very much for the question and thank you for the work you do each and every day in the beautiful province of Alberta.

Through the net-zero accelerator initiative and with the additional funding announced in budget 2021, we're investing $8 billion to accelerate the decarbonization of large emitting sectors. We're focusing on the transition to cleaner technologies across the piece. People often think this is primarily focused on the oil and gas sector. It is one area, but another area is steel manufacturing, where we have been working to implement electric arc furnaces.

We know this program is crucial to Canada's efforts to get to net zero and, through our global leadership, meet our ambitious GHG reduction targets. We announced $300 million just recently for the Air Products hydrogen facility in Edmonton. We also recently announced $27 million for E3 Lithium, which is a really interesting company extracting lithium from brines.

NRCan is the lead federal department on energy and natural resources. We play an essential role in the implementation of the net-zero accelerator.

The fight against climate change requires an all-hands-on-deck approach. The net-zero accelerator is a really clear example of how different departments can work together to help us achieve our goals.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you for that.

The development of hydrogen, especially green hydrogen, will be crucial, not only to reduce our emissions at home but also to position Canada as a world leader in clean energy production.

Minister, how are you ensuring the development of the sector and how can Alberta be a leader in the hydrogen sector?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

I noticed that you said the word “green”. I really don't like the colours green, blue, purple or turquoise. I think we should be talking about carbon intensity, because carbon emissions are driving climate change.

In that context, I think Alberta has enormous opportunities with respect to hydrogen. It is the centre of renewable energy development in this country and has by far the fastest growth in renewable energy. That can be used to produce electricity, which can be used to produce hydrogen.

There are also pathways through which you can use natural gas resources. Alberta has an abundance to produce ultra-low-carbon hydrogen, assuming that you address upstream methane emissions and that you capture carbon through the production process.

We have developed a hydrogen strategy. We are focused very much on driving forward with hydrogen as a major opportunity for many parts of this country. We have MOUs with Germany, the European Union and the Netherlands. It certainly is an area of critical focus, and I would say it's an enormous area of opportunity for Alberta.

[George Chahal, Liberal, Calgary Skyview, AB]

Minister, as an Alberta MP, my job is to ensure that workers from Alberta can thrive in the economy of tomorrow. In a recent poll by CBC News on The Road Ahead, it was revealed that 59% of respondents said they thought transitioning away from oil and gas would benefit Alberta's economy in the long run.

How are we ensuring that today's energy workers have the tools they need for the economy of tomorrow?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

First and foremost, we have to start by understanding the huge opportunities that exist, whether they are in hydrogen, biofuels, carbon capture and sequestration, the development of small modular reactors or the development of critical minerals and associated processing. They will often use the very same skills that people in the energy sector have today. A biofuels refinery or a hydrogen production plant doesn't look a lot different from a typical refinery. We also have to ensure that we are providing the appropriate supports on a go-forward basis to ensure that if people need to make a transition with respect to skills, we are there to support and help them do that.

There are two pieces to this. There are the regional economic tables, where we're working with the provinces and territories to really seize those opportunities. We're also developing the just transition or sustainable jobs approach so that we are absolutely committed to ensuring that communities and workers are part of the success of driving towards a low-carbon future.

[The Chair, Liberal, John Aldag]

With that, we're out of time.

We're going to Mr. Simard now for two and a half minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Forgive me for dwelling on this, Minister, but just a little while ago when you answered one of my questions, you made it sound as if a definition of what constitutes an inefficient subsidy exists. And yet on November 16, the deputy minister testified before our committee and repeated what she said to the Standing Committee on Environment and Sustainable Development in May, i.e., that no definition would be forthcoming until 2023.

Do you indeed have a definition of what constitutes an inefficient subsidy, or did the deputy minister get it wrong?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

I said that certain things were clear. Incentives that increase fossil fuel production and export are fossil fuel subsidies, but...

[Mario Simard, Bloc, Jonquière, QC]

That's fine, I get it.

In a report tabled by the Standing Committee on Environment and Sustainable Development, there is a table that says that the usual way of treating the industry is not a subsidy.

I wonder what the usual way of treating the gas and oil industry is. Do you know?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

I wasn't a member of that committee, but I can tell you that we have already eliminated nine tax incentives for the sector. We have promised to eliminate inefficient subsidies by 2023.

[Mario Simard, Bloc, Jonquière, QC]

I understand.

You talked about small reactors. According to an article I read recently, the oil and gas sector is calling for small reactors to replace the use of gas in their processes.

About $1.6 million from the Natural Sciences and Engineering Research Council of Canada is for small reactors. Do you see this as a form of subsidy to the oil and gas sector, given that this is one of the sector's demands?

[The Chair, Liberal, John Aldag]

Mario, we're out of time.

Answer briefly, please, Minister, and then we'll move to our next questions.

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Some companies are working on the technological development of small modular reactors. This technology has a lot of applications, and not just for the oil sector. It's an interesting source of electricity for provinces and territories that don't have hydroelectricity.

[The Chair, Liberal, John Aldag]

Thank you.

Now we'll go to Mr. Angus for two and a half minutes.

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

Joe Biden's Inflation Reduction Act—the American IRA, not the Irish IRA—has been called a game-changer, and we've heard that it has really shaken up forestry, indigenous development, mining and energy in Canada.

One of the key elements that Biden stated after he first went to COP was that he was going to build a new economy based on “good-paying union jobs”. We've never heard that language from the Prime Minister in his commitments.

In the fall economic statement, we heard there will be labour standards that the government is tying to tax credits. How important is it, do you think, that Canada makes sure we match what's in the IRA and makes sure that we have a commitment to good-paying union jobs as a way of building a new clean energy economy?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

I think it's very important that we move forward in the direction you're talking about, Mr. Angus.

You saw certainly more than a nod in that direction in the fall economic statement. We've said that more will need to be done to respond to the Inflation Reduction Act, which I think everybody should welcome. It took six years for the Americans to get to the point where they were making moves with respect to addressing the climate issue. We're very happy they've done it, but we do need to respond in some areas where they have gone beyond, from a tax perspective, what we have done.

I think as we bring forward the sustainable jobs action plan, the kind of language you're talking about will be very important.

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

I certainly think it is extraordinary. This is the first time in well over a generation that we've seen a government in the United States lead with a clear vision.

What we heard in our meetings with Alberta Federation of Labour, the IBEW, the operating engineers, UNIFOR in western Canada, the steelworkers, the boilermakers and certainly UNIFOR in the auto plants is that we need an industrial jobs strategy that is going to drive the clean energy economy. Would you agree that this is where we need to go at the federal level in Canada?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Not only do I agree with you, Mr. Angus, but we're actually endeavouring to put that into place.

At the end of the day, any strategy relies on comparative advantages, and Canada has a number of those. That means you need a critical minerals strategy, you need a hydrogen strategy, you need a biofuel strategy and you need a strategy with respect to things like small modular reactors. Collectively, those are the key underpinnings of a broader industrial strategy.

Part of that is national and part of that is regional. The regional tables are essentially about developing place-based economic strategies to ensure that Alberta succeeds and Nova Scotia succeeds, almost certainly in different areas.

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

Thank you.

[The Chair, Liberal, John Aldag]

Thank you. We're out of time.

We'll go now to Mr. Dreeshen for five minutes.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much.

Mr. Chair, you and I attended OSCE meetings in the U.K. this summer, where food security, energy security and Russia's invasion of Ukraine were uppermost in the minds of the parliamentarians who were there.

Mr. Minister, although European politicians might have disagreed on the solutions, certainly the urgency was never questioned. To that end, my question relates to Canada's ability to engage globally in the quest to get ethically produced hydrocarbons to countries that are desperately seeking our natural resources.

It does seem as though we have more or less said that we won't worry about oil and gas, but we will take a push on some of the new technologies. Of course, since we've handcuffed ourselves, I don't think we have much of a choice.

There's also that nagging question of whether the Prime Minister and your ministry now recognize the business case for LNG to Europe and Asia. I know that was one thing that had been stated. There was no push-back from your government when the Biden administration arbitrarily cancelled Keystone XL, but now, of course, U.S. refineries are being filled with Venezuelan crude.

I'm trying to find out where you think Canada fits into this. I've read your mandate letter. I was on the environment committee before this, and I don't really see much difference between the mandate letter for environment and the mandate letter for natural resources. Perhaps I'll have to go to the industry mandate letter to see whether or not there's something that speaks to the actual strengths we have in the country.

Could you comment on where you feel we are at this point in time and how we're going to become the global player that we so proudly have been for decades?