Natural Resources Committee on Dec. 1st, 2022

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

Okay. I want to stay on that, then. I guess my concern about the regional tables is that I heard from the minister that these are provincial set-ups. In Calgary, when labour was at the table, they were only talking to labour. They were not talking to everyone else. We need to make sure that these tables include indigenous and labour in a big way, and not just have Danielle Smith decide who gets to sit at the table and who doesn't. That would not help anybody. I think we could all agree on that. It would probably be a really bad outcome.

How do we insist that there are some clear strings attached to make sure that labour, indigenous, clean tech and innovators are at the tables at the regional levels?

[The Chair, Liberal, John Aldag]

We're out of time here, but we'll take a brief response.

[John Hannaford]

I think the minister said that these are federal and provincial tables. They will vary from province to province, but the intention is to draw on the breadth of the communities that are at issue and the jurisdictions that are at issue. That will absolutely include labour and absolutely include indigenous communities, the private sector and other experts.

[The Chair, Liberal, John Aldag]

Thank you.

Mr. Falk, you have five minutes for your questions.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair.

Thank you to the officials.

Thank you, Mr. Hannaford, Ms. Johnson and Ms. Carruthers, for being here in person today. I think that's important. I think we need to move back to in-person meetings. I just want to get that on the record and show my appreciation for your effort.

I want to start off by asking you about a $4.5-million expense in the estimates for the reallocation of some additions to real estate. Can you explain what that would be for?

[John Hannaford]

I will turn to my CFO.

[Shirley Carruthers, Chief Financial Officer and Assistant Deputy Minister, Corporate Management and Services Sector, Department of Natural Resources]

Thank you for the question.

The adjustment that we made was actually to help us to prepare for the future of work. We did make some acquisitions just in terms of cleaning up—for example, some additional air conditioners and whatnot in some of our facilities where that was broken, in particular in some of our laboratories.

[Ted Falk, Conservative, Provencher, MB]

Very good. It's actually very exciting to hear that. I thought perhaps it was for some geothermal installations in some of our federal buildings, but not quite. Okay.

Turning to the TMX project, I have a few questions. Initially, the project was bought from Kinder Morgan for $4.5 billion, with a projected expansion cost of $3 billion. That project has increased now to $21 billion. That's a 500% increase in construction costs.

I have a very intimate knowledge of the construction industry, especially the heavy construction industry. The costs have not gone up 500%. Can you help me understand where that additional cost is coming in?

[John Hannaford]

I'll turn to my colleague in a minute, but first I'll say a couple of things with respect to TMX.

The progress with respect to the construction of TMX obviously was affected by the COVID pandemic and by some of the other conditions that occurred in B.C., in particular during the last period of time. Floods and fires also had an effect on the construction pace. But the construction has continued. We're at around 70% completion right now. The projection is that this will be completed by Q3 of the next year, so this has proceeded.

I'll maybe turn to Angie Bruce to see if she wishes to add anything.

[Angie Bruce, Assistant Deputy Minister, Nòkwewashk, Department of Natural Resources]

No, Deputy, I think that describes it exactly.

The only thing I might add is that it also includes the extreme weather events. The flooding and the wildfires that took place in B.C. did impact the construction as well.

[Ted Falk, Conservative, Provencher, MB]

I appreciate that answer, but there was a 500% increase. It's very significant to move from a $3-billion anticipated project cost to $16 billion. Yes, there was some adverse weather. I understand that. There was the carbon tax. I understand that. Fuel is expensive now. It has probably increased by 10% to 15% over the cost they had anticipated. But that's not 500%. Somewhere there's a lot of money that's gone missing.

[John Hannaford]

I'm sorry. Is there a question?

[Ted Falk, Conservative, Provencher, MB]

Where is the money? That would be the question.

[John Hannaford]

Mr. Chair, I would just say that this has been a very significant piece of construction. This is a very large installation that's occurred. It's happened over a period of time. The work continues. It's come up against some challenges by virtue of the challenges that we have all faced in the world. But the work does continue. We're 72% complete.

[Ted Falk, Conservative, Provencher, MB]

I appreciate that, but could I ask you to provide the committee with a breakdown of the budget in terms of the anticipated cost initially and where that changed?

[John Hannaford]

Yes.

[Ted Falk, Conservative, Provencher, MB]

Good. I appreciate that.

I have another question. We've heard quite a bit here about missed opportunities and how the Americans have really ramped up a lot of their natural resource development and projects and have taken advantage of markets that are out there today, which may not be there in the future. We know that we've missed some critical LNG projects and we've actually been probably a little bit too late to the show to make a difference there.

My question is, what is your department doing to assist natural resource development projects in getting to market in a quick way so that they can take advantage of market opportunities?

[John Hannaford]

Mr. Chair, we're very mindful of the challenges of energy security internationally. Certainly the last year has brought home how significant these challenges can be, including for some of our closest allies.

Within the next three years, it's projected that LNG Canada will be online, and that's 14 megatonnes per annum that would be available to the global market off our west coast and—

[The Chair, Liberal, John Aldag]

If you want to finish your thought, you can do that, and then we'll move to the final questioner.

[John Hannaford]

Also, though, as an immediate matter, we did work with the provinces and with industry to increase the production that would happen this year, with a view to trying to address the challenges of energy security. This is an ongoing dialogue and it is something we're very mindful of.

[Ted Falk, Conservative, Provencher, MB]

Thank you.

[The Chair, Liberal, John Aldag]

Thank you.

For the final five minutes, we have Ms. Dabrusin, who will take the floor.

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

Thank you, Mr. Chair.

I want to follow up on some of the different questions we had about methane a bit earlier today.

I was excited that just about a month ago one of our Canadian satellite companies, which is tracking methane leaks from space using satellite technology, was able to participate through COP27 in highlighting methane leaks around the world. They found some from coal plants, for example, but they also found one from a waste treatment plant in Terrebonne, back in November. It's a company called GHGSat. They're based in Montreal. I think they show how some of the cutting-edge technologies that we're developing here in Canada are helping to track down methane, and from different sources than people might normally think of as sources of methane.

When I was looking through the supplementary estimates (B), I saw that there was funding for Canadian data-receiving infrastructure for the space-based earth observation network. I was just wondering if maybe, thinking about that piece of funding, you can highlight some of the Canadian technologies that we're helping to support and develop on methane emissions.

[John Hannaford]

I'll maybe refer that to my colleague.

I believe this would be Frank.

[Frank Des Rosiers, Assistant Deputy Minister, Strategic Policy and Innovation Sector, Department of Natural Resources]

Thank you, Deputy.

Earth observation is actually one area where NRCan and Canada are truly world leaders. We apply it to a range of domains, whether it's floods, forest fires, movement of icebergs or emergency responses. Methane emission is also one of those domains where we do operate.

The satellite imagery that we collect using a satellite from RADARSAT doesn't tend to specialize in methane emissions, and that's why we rely on third party providers like GHGSat, who are using their own satellite system. They have launched actually quite a few of them over the past year. We're using this data, along with other datasets from other U.S. and European providers, to track any such emissions.