Natural Resources Committee on March 21st, 2023

[The Chair, Liberal, John Aldag]

Good afternoon, everyone. I call this meeting to order.

Welcome to meeting number 57 of the House of Commons Standing Committee on Natural Resources. The committee is meeting today to hear from the Minister of Natural Resources and officials.

Pursuant to Standing Order 108(2), we're meeting to consider the subject matter of the supplementary estimates (C), 2022-23, including vote 1c under Canadian Energy Regulator, vote 1c under Canadian Nuclear Safety Commission and votes 1c, 5c and 10c under Department of Natural Resources.

Today’s meeting is taking place in a hybrid format, pursuant to the House order of June 23, 2022. I'd like to remind all participants that taking screenshots or photos is not permitted now that we're in session. Today’s proceedings will be televised and made available via the House of Commons website.

I'd like to make a few comments for the benefit of the witnesses and members prior to getting started.

Please wait until I recognize you by name. I think everybody here has been before committee before, so we know the drill. Interpretation is available. For those on Zoom, you have the choice of floor, French or English. Comments should be addressed through the chair. If you want to speak, use the “raise hand” function if you're appearing virtually. You'll have to unmute and mute yourselves as needed. For those in the room, our staff will look after your microphones, so don't worry about that.

In accordance with our routine motion, I'm informing the committee that all witnesses have completed the required connection tests in advance of the meeting.

Before we get started, for clarity, I just want to let everybody know that today we have the estimates. On Friday, our regularly scheduled time has been cancelled because of President Biden's visit. Next Tuesday, the committee has been cancelled because of the budget. Our next meeting will be a week from Friday. The plan on that day is to continue with the report, working through recommendations that we've been working on. That is what we have to look forward to. We'll send out a further notice for upcoming committee business after the two weeks we will have at home.

Appearing today, we have the Honourable Jonathan Wilkinson, Minister of Natural Resources. From the Department of Natural Resources, appearing in person, we welcome back John Hannaford, deputy minister, and Shirley Carruthers, chief financial officer and assistant deputy minister, corporate management and services sector. We also welcome Jeff Labonté, assistant deputy minister, lands and minerals sector.

Appearing virtually, we have Angie Bruce, assistant deputy minister, Nòkwewashk; Frank Des Rosiers, assistant deputy minister, strategic policy and innovation sector; Glenn Hargrove, assistant deputy minister, Canadian forest service; Drew Leyburne, assistant deputy minister, energy efficiency and technology sector; Erin O’Brien, assistant deputy minister, fuels sector; Debbie Scharf, assistant deputy minister; and Ranjana Sharma, chief scientist.

We have a full roster of officials here to help. I think the minister has just under an hour now—with the late start—to be here. We're going to go with five-minute opening statements, followed by questions in rounds.

Now, Mr. Angus, you have a point of order.

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

Yes, and I don't want to take any time away from hearing the minister speak. I'm very glad he's back, because he feels like an old friend to us some days and some days not less than a friend. We'll find that out, but hat's a side issue.

I wanted to put my committee colleagues on notice. I have brought forward a motion on this company, Paper Excellence. Given the reports coming out on them in the media and the lack of scrutiny and understanding of exactly who this company is, I think this is something this committee wants to study. I want to put my colleagues on notice that the motion is ready. I'm ready to debate it at any time, but not today.

[The Chair, Liberal, John Aldag]

Thank you, Mr. Angus.

We have distributed that to the committee, so everybody should have it.

With that, I'll turn it over to the minister, who will have five minutes for an opening statement. Then we'll get into our rounds of questioning. I think we'll be able to continue right on with the panellists when the minister needs to leave. We'll do a quick thank you as he exits, and then we'll continue with the officials.

Minister, welcome. It's over to you for your opening statement.

[Jonathan Wilkinson, Liberal, Minister of Natural Resources]

Thank you very much, Mr. Chair.

Hello, everyone. Thank you for the invitation to discuss the supplementary estimates (C).

I would like to acknowledge that we are gathered here on the official unceded lands of the Algonquin Anishinabe peoples.

I look forward to highlighting the investments we are seeking to make through the supplementary estimates and to discussing with you our investments to help Canadians seize key growth opportunities on the path to a low-carbon economy.

Canada can choose to be a leader in this global economic shift, or it can choose to sit back, take it slow and hope for the best, which is a much riskier choice.

We can either move forward with a robust plan for the future, or we can simply hope for the best.

The first path accepts that climate change is, indeed, a reality, one that we can and must address. It involves a thoughtful strategy in which the economy changes and grows stronger and more resilient, and in which the environment is better protected. The second path starts with shrugging off the damage that climate change has already caused: dramatic floods in our towns and cities, wildfires in our forests, dried-up rivers and melting glaciers.

We choose the first path, which will enable us to ensure a sustainable world while seizing economic opportunities offered through the transition to a low-carbon future. The investments sought in today's supplementary estimates contribute to this first path, which is towards a plan for the future.

These include over $12 million towards greening Canada's buildings through important actions such as building retrofits in neighbourhoods and industrial facilities, and towards accelerating improved energy codes; over $4 million for climate resiliency, building on our new national adaptation strategy; and a half a million dollars for the British Columbia old growth nature fund.

The supplementary estimates are also important for meeting the commitments made in the United Nations Declaration on the Rights of Indigenous Peoples. For example, an additional $600,000 is required to continue the implementation of the declaration, including the development of the action plan.

As I mentioned, Canada is, in my view, well positioned to take advantage of the opportunities presented by the worldwide transformation towards a lower-carbon future. The Government of Canada has, for seven years, been working on strategies, investing and improving regulations to help Canada become the clean energy and technology supplier of choice in a net-zero world.

Successful strategies leverage comparative advantages. Make no mistake. Canada has a lot going for it to help us win on a global scale. We have well-educated and highly trained people; a lot of the natural resources that are increasingly in demand, including, very much, critical minerals and hydrogen; strong and innovative energy and clean technology expertise; banking; regulatory, political and legal systems that are stable; trade agreements with major economies around the world; and world-leading ESG standards.

Finally, because each province and territory has a unique mix of natural resources, the opportunities for transitioning to clean energy will differ across the country.

Through the regional energy and resource tables we have established with nine provinces and territories, we are working with the provinces and territories to unlock these opportunities on a regional and sectoral basis. My hope is to have all 13 up and running within the next few months. These opportunities include critical minerals, hydrogen, carbon capture, electric vehicles, renewables, biofuels and small modular reactors.

Overall, this government's approach represents a thoughtful, science-based and exciting plan for the future. It is far from those who ignore the scientific reality of climate change and simply hope for the best. Employing what I would call a “head in the sand” approach would lead us to environmental devastation while inviting economic stagnation that would make our industries uncompetitive and damage our economic potential. That path is unacceptable, and that is why our plan is a clear-eyed strategy to seize low-carbon economic opportunities.

We are talking about an economy that will work for all Canadians, including the thousands of energy workers whose skills and work ethic will contribute to our success.

Overall, a clear-eyed and thoughtful plan for the future is about a national effort to pass on an environment and an economy that will help our children and their children flourish for decades to come. This effort is represented very much in NRCan programming and in these supplementary (C)s.

I welcome any questions you may have.

Thank you very much for inviting me to be here with you today.

[The Chair, Liberal, John Aldag]

Thank you, Minister.

For those who are participating, watch for the yellow card, which is the flag for 30 seconds left. The red card means that your time is up. I'm going to try to keep us close to the allotted time so that we can get through as many rounds as possible with both the minister and the officials.

I would also like to mention that, because of the cycle and how estimates work, we've actually missed the deadline. The last day to report back to the House was, I think, last Friday, so today is for information purposes. We are unable to report back to the House, and we can't decrease any of the estimates. I just want everybody to be aware of that. I have the official wording coming, if anybody wants that. We'll get that by the end of the day.

The first round of questions are going to be six minutes each. First up I have Ms. Stubbs.

When you're ready, the floor is yours.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thanks, Chair.

Thanks, Minister, for being here, and thanks to your officials for giving their time to us today too.

Minister, I have a question for you about the $12.8 million allotted in these estimates “to implement the Impact Assessment Act”. I think it's helpful for Canadians to know the context, which is, of course, that your government froze project assessments as far back as 2016, delayed and then implemented interim measures and applied some arbitrary standards to certain proposals that weren't applied to others. Then, of course, it took three years until Bill C-69 was imposed, despite the near-universal opposition from nine out of 10 premiers, indigenous communities and entrepreneurs, municipalities and private sector proponents that warned that it would be a barrier to development.

Of course, the first major decision wasn't made under the new assessment until a year and a half ago. It's very obvious, despite the periodic positive words, that the actual outcomes of your regulatory changes to the policy framework are killing billions of dollars of investment projects and jobs, and driving them into other competitive jurisdictions.

The consequences and the costs to Canadians are real. For example, your government has had 18 LNG export terminals proposed in the time that you've been in office, and only three of those have been approved. Of course, zero have been built, while the U.S. has built seven and permitted 20 more in the exact same time frame. Germany permitted and got a terminal up and running and built in 194 days.

You talk passionately about a critical mineral strategy, but your own documents show that critical mineral mines won't be operating or producing in Canada for 25 years. There is the same challenge with your aspirations around electrification.

I just wondered if you could speak specifically about what that $12.8 million will do. What are your specific outcomes for implementing the act that you have imposed?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

In these supplementary estimates (C), there isn't $12.8 million for IAAC. The Impact Assessment Agency of Canada actually falls under the purview of the Minister of the Environment and Climate Change, but I would make a number of comments.

Certainly, additional funding for IAAC is intended to ensure that projects, when they come into the IAAC process, are able to proceed forward very quickly.

On the comment about 18 LNG projects, most of those actually arose during Stephen Harper's time in office, and all of them were reviewed under CEAA, 2012, which was the process that Stephen Harper changed, which created enormous opposition on the part of many communities and, particularly, indigenous folks.

We actually worked to fix that by bringing into place the Impact Assessment Act to ensure that projects can move forward. You will have seen, just a couple of weeks ago, that we announced the first LNG project that has gone through the new process that was actually approved—

[Shannon Stubbs, Conservative, Lakeland, AB]

I'm sorry, Minister. You've just stated a bunch of things that are not accurate.

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

—as well as two new critical minerals mines that were actually approved in the last few weeks.

[Shannon Stubbs, Conservative, Lakeland, AB]

You've just said a number of things that aren't true, and the time is limited.

[The Chair, Liberal, John Aldag]

I'm just going to stop the clock for a second.

As we go through today, it's really important for the sake of our interpreters that we only have one conversation going. I will try to moderate that.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thanks, Chair. I think the time is mine, so I'll just proceed.

[The Chair, Liberal, John Aldag]

I've stopped the clock. I'm not going into your time.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you, Chair.

[The Chair, Liberal, John Aldag]

I would just say that, when we ask a question, it's fair to give time, but when you're ready to move on, let the witness know and we'll go back.

It makes it a lot easier if we're not talking over each other, so I ask everybody to respect that.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thanks.

Can you tell us where we're at timewise?

[The Chair, Liberal, John Aldag]

You have two minutes and 48 seconds left on the clock.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you.

The $12-million allotment is about improving the regulatory system. It says that clearly in the estimates.

What exact outcomes are you looking for? What are you looking to achieve in what timeline?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Certainly I think what we're looking to achieve is something that I think everybody around this table would be looking to achieve. It is that the systems and processes you put into place are as efficient as they possibly can be, that good projects can move ahead to approval and that we can identify problems early in the process such that we can actually address them.

[Shannon Stubbs, Conservative, Lakeland, AB]

The problem is that it is exactly your system that has caused billions of dollars' worth of projects to be abandoned. The private sector proponents say very clearly that it is because of regulatory uncertainty and red tape, which are inextricable factors in their business case decisions.

This is in conflict, of course, with the Deputy Prime Minister's comments on accelerating project approvals and her aspirations around “friend-shoring” and providing the crucial resources in energy that Canada can to the world—all while we ought to be pursuing our own energy self-sufficiency and security.

Do you actually have measures and timelines around what you're looking for in terms of this apparent acceleration of project assessments and approvals?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Absolutely. First, I would say that the new system looks to be working far more effectively than CEAA, 2012, did. You just saw the approval of the first LNG project that went through it and two critical minerals mines in the last two months.

Certainly, we're all interested in finding ways to ensure that we are doing things as efficiently as possible. The Deputy Prime Minister and I talk about this all the time. We have initiated a cross-government review to look at accelerating the work we are doing. We have initiated the regional energy and resource tables to look at aligning permitting and regulatory processes with each of the provinces, which each have their own process.

[Shannon Stubbs, Conservative, Lakeland, AB]

After eight years of foreign investment collapsing in resource development in Canada, driving projects and jobs away from our country, failing to capitalize on LNG opportunities for energy security and self-sufficiency for Canadians, and the reality that your critical minerals strategy doesn't match up with what's possible in the timeline that you have set with the aspirations you say you want to pursue, what...?

For everything that you've just talked about and that you say you're looking for related to these dollars, what's the timeline?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

With due respect, I think if you went and talked to the Mining Association of Canada, for example, they would tell you that the work that's under way on the critical minerals strategy is exactly what they have been calling for.

I think if you asked many of the folks in the oil and gas space, they would talk to you about regulatory certainty, which is exactly what the Impact Assessment Act is intended to do and the work we are doing to ensure that it is implemented effectively is intended to do.

[Shannon Stubbs, Conservative, Lakeland, AB]

You have no timeline on your expectations for these dollars.

[The Chair, Liberal, John Aldag]

You're out of time on that one. I need to move to my next questioner.