Natural Resources Committee on Dec. 1st, 2022

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

I have spent an enormous amount of time with our European colleagues and in Europe. We have endeavoured to do everything we can to support them, including expanding oil and gas production this year by 300,000 barrels a day alongside our American friends doing likewise. We are on track to achieving that.

We certainly continue to look at the issue of exporting liquid natural gas to Germany from the east coast, but the economics are more challenging because of the distance. There are potentially ways to get around that, but the biggest barrier, as I said before, is the American regulatory system and the challenges there.

Canada has enormous opportunities to be a clean energy supplier to the world. That includes going through this transition of oil and gas and eventually hydrogen derived from oil and gas. We are very focused on that, but there is a fundamental underpinning there: To be relevant in the context of the transition that is going on, we need to be driving down emissions from the oil and gas sector. Just as with every other sector, this is in the economic interest of that sector, and if you talk to the Pathways Alliance folks, they would agree with that.

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

Of course, we have been. That's my point. We have been leading the globe for decades as far as environmental impact is concerned and have been making sure that we are the least impactful in the world.

You mentioned concerns about U.S. policy, but we just heard earlier—I think it was you who said this—about the dozens of LNG projects we see in the U.S. We have cancelled so many and they are able to get them going, so I don't quite see how this U.S. regulatory regime has been causing us these major issues.

The other thing is the United States Department of Defense's initiative to invest in Canada's critical minerals seems to be a bit of a head-scratcher on the sovereignty front. If this suggestion had materialized during the previous administration, perhaps it wouldn't have been quite as well received.

Do you really believe that is positive for us, or are they the only game in town after we scare away other investors?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Mr. Dreeshen, with due respect, just because you say something doesn't make it true. With respect to heavy oil, Canada is in about the middle of the pack in terms of carbon emissions. It has the opportunity to be the best in the world, but we need to actually work together to drive down carbon emissions, not just say that we're the best.

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

I appreciate that.

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

That's exactly what we're doing with the Pathways Alliance folks.

The critical minerals piece is an enormous economic opportunity. It is a generational economic opportunity for Canada. We need to ensure that we develop them. We are working with our trusted partners very much, including the United States. We welcome U.S. investment in Canada just as we welcome Australian and British investment, but at the end of the day, Canada needs to ensure that it is benefiting in a significant way. We are going to ensure that is the case.

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

I would like to speak to you about—

[The Chair, Liberal, John Aldag]

Mr. Dreeshen, we're out of time. That's the five minutes. It goes fast.

We'll now go to Mr. Sorbara for the final five minutes in this round.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Chair.

Welcome, Minister. If you are in beautiful North Vancouver, I'm not too sure if it's still snowing there, but I hope traffic has come back to normal.

Your testimony so far today has dealt with how Canada is uniquely positioned in the transition under way around the world in the global energy supply. In the last couple of days, we've seen the announcement that Qatar will be playing a strategic role in supplying LNG not only to Germany but to other countries. The German announcement is coming.

On that front, our relationship with Germany has been about hydrogen. I know you have spent a lot of time and a lot of resources on intellectually understanding hydrogen and how much of an opportunity it is for the Canadian economy.

I want to ask about the clean growth fund and other measures we have put in place. How can we as a country and as an economy benefit from our position in the production of hydrogen?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

I think hydrogen is one of our opportunities. Many parts of this country have an opportunity to benefit not only from hydrogen derived from renewables through electrolysis, but also from hydrogen derived from natural gas in an ultra-low-carbon way.

There are many applications right now whereby people are using gas effectively to produce hydrogen in industrial processes. As for going straight to hydrogen, a massive market exists today, but a whole range of applications around heavy-duty trucking and home heating, and a range of other things, are going to use hydrogen as we move into the future.

We are working very actively with the Europeans, on the one hand, with respect to the east coast. We are also working very actively with the Japanese, the South Koreans and others on the west coast, because many of these economies do not have the ability to produce hydrogen themselves and are going to be looking for a stable, reliable partner like Canada.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Obviously, I want to flag the great collaboration going on between you and Minister Champagne at Innovation Canada.

My second question refers to the recent announcement that General Motors and Vale have come to an agreement whereby the mine in the province of Quebec, which is run by Vale, will supply General Motors with nickel. Within the sphere of the transition that is going on—as an economist, I love to use the term “comparative advantage”—I believe Canada has a comparative advantage in a number of resource sectors, but particularly in the mineral sectors.

That was the first announcement indicating where we'll be going with this. How can we as a government effectively support the development of a mineral strategy that utilizes our comparative advantage and, within that framework, become the key supplier for many of the minerals that will be utilized in this transition?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

It's a great question, Mr. Sorbara, and given your background, it's one that you would understand very well.

In the past, people have accused Canada of being the hewers of wood and the drawers of water. We have to ensure we're a lot smarter about how we utilize these kinds of resources going forward. Critical minerals are absolutely key to the energy transition. You cannot have an energy transition without significantly more critical minerals of various types. Canada has those resources in abundance.

We need to be focused on how we extract them in an environmentally sustainable way and in partnership with indigenous communities, and on how we build the processing facilities, the battery plants and the electric vehicle plants that are so important in Ontario. That is absolutely the work that Minister Champagne and I have been focused on. As I said, within the next few days, I will be launching Canada's critical minerals strategy, which is a fundamental underpinning to this broader conversation.

In terms of the comparative advantage, you're exactly right that we can build on the existence of resources for a comparative advantage. However, this is also about the fact that Canada's grid is over 80% clean and emissions-free, so another reason for battery manufacturers and electric vehicle manufacturers to locate in Canada is to have products that produce almost zero carbon.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Minister. I'm wishing you a wonderful day.

Thank you, John.

[The Chair, Liberal, John Aldag]

We've reached the end of our time, so Minister, I'd like to thank you for your time today and for sharing your thoughts on the supplementary estimates (B). We'll let you continue on with your day.

We'll now move to our panel with the officials.

We have one tech check to do briefly, so I'm going to suspend for a minute while we do that. Then we'll come back to continue with the third round of questions.

We've suspended for about six minutes so far, and we need about 10 minutes at the end of the meeting to conclude the formal part of the votes for the supplementary estimates (B). I'm going to suggest that with the officials, we go until about 12:55, and then we'll go into the concluding part of the meeting. If we need to, we can go for a couple of minutes more.

Does that work?

Go ahead, Mr. Angus.

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

Given that some of us have to prepare for question period and our whips are going to be calling us out at one o'clock, can we dial that back?

[The Chair, Liberal, John Aldag]

If you want that, yes. I can end the questions somewhere between a quarter to and 10 to one.

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

That's fair play.

[The Chair, Liberal, John Aldag]

Let's suspend for a minute, get the last tech check done quickly and then move right back into questions with the officials.

We're suspended.

[The Chair, Liberal, John Aldag]

We're back in session.

First up with the officials, we have Mr. Dreeshen. You will have five minutes on the clock for your first round.

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

Thank you very much, Mr. Chair. To the officials, thank you for being here.

The first question I have is one that I asked the minister. It is about heavy oil and Venezuelan oil. I'm unsure whether the minister said I was inaccurate.

What are the measurements for Venezuelan heavy crude versus Canadian heavy crude? That's what I was talking about. Do you have those numbers?

[John Hannaford, Deputy Minister, Department of Natural Resources]

I'm sorry. I don't have those numbers handy, but we could provide that to you in writing.

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

Thank you. I know that I was chastised by the minister, but I wanted to make that particular point.

One of the concerns that I have is this. Of course, there's money that has been set aside for indigenous discussions and so on in the supplementaries. Sadly, one thing we see is that many of our investors, who are the indigenous people of Canada, are just hitting their stride as far as engagement in oil and gas is concerned. That's where their history is. In the last 20 or 30 years, there's been amazing work done in that area. Whether it's oil and gas or whether it's mining in the territories, there are some amazing businesspeople and they're looking at opportunities, but it seems as though it's only going to be an opportunity if they follow the path of this government. That, I think, is perhaps a bit of a concern.

My concern is about the stranded assets that we might be anticipating as billions of dollars get put into projects and then, all of a sudden, the rug gets pulled out from under them.

I'll speak to indigenous companies. What do you see as a backstop for some of these indigenous companies that find that, after all of the efforts they've put in, there is no longer a market because we have chosen to go in a different direction?

[John Hannaford]

Thanks, Mr. Chair.

We certainly see huge opportunities to advance economic reconciliation through natural resources. It's already a critical aspect of the economic lives of an awful lot of indigenous peoples across the country. For that reason, our policies are often framed with a view to indigenous reconciliation.

Take the example of critical minerals, which you mentioned. We are very mindful of the fact that economic opportunity for indigenous communities is one critical aspect of the development of these resources. That's entirely consistent with seeking to address these matters as strategic assets for the country and advancing policy goals through doing so.

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

Last week, I believe, we had Calvin Helin here, who is certainly a great advocate for his community. Basically, what he indicated was that they're tired of the eco-colonialism that is going on and different groups saying, “We know what is best for you. We're going to be there to help you. We're going to make sure you do it the right way, which is our way.” However, their expertise is saying, “Let's move forward. We know this is a global problem. We know this is a global concern. We are there with the skills to move it forward.”

There's always this other story that comes back to say, “Maybe we'll sell TMX to some indigenous group.” Unless you're going to sell it for $21 billion or whatever it happens to be when the final sum is there, there's going to be another group that says, “You just got through subsidizing this enterprise that has now bought TMX.” There's never an end, and that's the problem any time there is a government that decides it's going to get engaged in major projects like this. I'm concerned about what the future will be.

To go back to what I mentioned earlier to the minister, we see what is happening in Europe. We can always talk about how, yes, they would like to have some hydrogen and they would like to see us progress. The fact that we've cut ourselves off at the knees and we're not there to help them now...you can't undo that.

The Europeans' industry is falling apart. There are farmers who are being told, if they have three greenhouses, to pick which one they're going to keep. That's going to encourage a lot of difficult decisions—

[The Chair, Liberal, John Aldag]

I'm sorry, Mr. Dreeshen. We're out of time.

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

Thank you very much. I appreciate your time.