Natural Resources Committee on March 21st, 2023

[John Hannaford]

I will absolutely follow up on the details with the person you're referring to if you can give me their....

Thank you.

[The Chair, Liberal, John Aldag]

Now we're going to Mr. Falk, who will have five minutes.

[Ted Falk, Conservative, Provencher, MB]

I thought you were going to completely reverse the order and put me at the end, but that's fine.

Thank you, Mr. Hannaford and officials, for attending. You heard my previous questions to the minister. It was very similar to what you had three months ago except the numbers are different.

I guess my first question is whether three months ago you really did not realize that there was going to be a $10-billion increase in the project.

[John Hannaford]

These are cost estimates. The cost estimates have increased over time, and, as the minister said, those include issues of inflation and supply chain issues. They include some of the terrain that's been operated on and some extreme weather events. Those add up to an increase in the cost estimate at this stage.

[Ted Falk, Conservative, Provencher, MB]

That sounds nice and everything, but the reality is that three months ago the budget had increased by $8.8 billion to $21.4 billion. Did we not know that three months later there was another $10 billion coming?

Your department was very kind to provide this committee with a cost breakdown for the previous increases. Could they do that again for this last $10 billion?

[John Hannaford]

We'll certainly follow up with the Department of Finance and see what is possible to provide.

[Ted Falk, Conservative, Provencher, MB]

Ten billion dollars is just a lot of money to me. I'm surprised there aren't more alarm bells going off everywhere when we've incurred a $10-billion unexpected expense. I know the government is saying, “Don't worry—we'll have a buyer for it.” They've made promises before, and I'm not convinced that there will be a buyer. As our previous members here have said, there needs to be an economic viability plan before this.

Further to the minister's comments, I have been involved in banking for 30 years. I do have a good understanding of what valuations are and what income-tested proposals would include. It's not as though I speak from a position of being uninformed.

I have another question. In my province of Manitoba, there's a silica sand project being proposed to extract some of the minerals needed for electric vehicle batteries. Is that something your department would be aware of and involved in?

[John Hannaford]

I'll turn to my colleague Mr. Labonté.

[Ted Falk, Conservative, Provencher, MB]

I can tell you there's currently an application with the Manitoba Clean Environment Commission. Does the federal government also get involved in that process?

[Jeff Labonté, Assistant Deputy Minister, Lands and Minerals Sector, Department of Natural Resources]

Which process do you mean?

[Ted Falk, Conservative, Provencher, MB]

It's the approval process.

[Jeff Labonté]

It depends on the nature of the project.

It's not specific to the one you're referring to, but certainly having dialogue with the Manitoba government on projects and activities around critical minerals and collaborating is something we're doing. It's something we started through the regional tables. Manitoba has identified some areas of specific interest. If you have any information on that project or the specifics of that one, I'd be happy to follow up if that's of interest.

[Ted Falk, Conservative, Provencher, MB]

I'll split my time with Mr. Patzer.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

One issue that sometimes comes up when we talk about just transition stuff is the number of unionized to non-unionized workers in the energy sector. We hear a lot of talk around well-paid unionized jobs and protecting unionized jobs. The reality is that in a lot of these industries only one-tenth of the jobs are actually in the sector or are maybe in a spinoff of the sector.

What are you guys doing to engage and promote the other 90% of the workforce that aren't in unionized jobs and that are going to be directly impacted by this sustainable job transition?

[John Hannaford]

To date, very broad-based consultations have gone into the development of the plan with respect to next steps.

I'll maybe turn to my colleague Ms. Scharf to talk a little bit about some of the future steps.

[Debbie Scharf, Assistant Deputy Minister, Energy Systems Sector, Department of Natural Resources]

Thank you.

What I can say is that consultations took place over two years leading into the sustainable jobs plan that was released. We received submissions from over 30,000 Canadians as well as 17 detailed submissions from different groups.

Quite a lot of work went into hearing from not only unionized workers but all Canadians around what was important to them. We've taken that into consideration in terms of how we're looking at our path forward.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Do you guys have a comparative analysis of the unionized versus non-unionized jobs that are going to be affected by this? Do you have the raw numbers?

[John Hannaford]

At this stage, as I said, we are still working up with the provinces and broader stakeholder groups what the next stages are here. I'm not sure that we have specific numbers, although it's possible that ESDC will have more specific numbers than we do.

I'll turn it back to Ms. Scharf.

[Debbie Scharf]

I can't say a whole lot more than what Deputy Hannaford shared.

What I can say, though, is that we're having some discussions with provinces and territories around how we accelerate the economic opportunities moving forward in those regions. We are also talking about what that means for job creation, what types of skills are going to be required and what types of workers we think will be required to support those industries to help them form the types of policies and actions we have to take going forward.

[The Chair, Liberal, John Aldag]

That's great. Thank you.

For our last five minutes, I'm going to go to Mr. Blois.

Mr. Blois, the floor is yours.

[Kody Blois, Liberal, Kings—Hants, NS]

Thank you, Mr. Chair.

Mr. Hannaford, we talked about the energy boards in Atlantic Canada as being a vehicle for regulatory certainty. The minister talked about the hope that this spring there could be legislation tabled. Obviously the timeline is also dependent on the provincial government in Nova Scotia. Then there was also talk of a potential date for when bids could actually start being accepted. I think the minister mentioned 2025.

What's that timeline from when the legislation is passed? Is there some upscaling that has to happen in terms of those agencies?

This is a really critical race. How do we make sure we can approve projects as quickly as possible in that global race?

[John Hannaford]

Yes, we're certainly very mindful of that. I've mentioned the word “opportunities”, and I think we do see that there are enormous opportunities in all parts of the country. On the east coast, we're seeing enormous interest in hydrogen production, for instance, onshore right now, but the offshore certainly presents some opportunities as well. That's something we're very mindful of.

I'll turn back to my friend Ms. Scharf on some of the more detailed points.

[Kody Blois, Liberal, Kings—Hants, NS]

Ms. Scharf, I don't have a whole lot of time, but even just 20 or 30 seconds on what that looks like in that gap between the legislation passing and being able to approve bids...?

[Debbie Scharf]

I think the idea is to bring the modernized legislation in place as well as the corollary regulations that will allow the regime to be in place and, at the same time, to ensure that the boards themselves are growing in their capacity to be able to manage the work they're going to have to do going forward with the new offshore renewables regime.

[Kody Blois, Liberal, Kings—Hants, NS]

What about the Atlantic loop?

We talk about a decarbonized future, and Mr. Patzer is talking about Saskatchewan, but 30% to 40% of Nova Scotia's electricity grid is still carbon-based. This government has a goal of being off coal-fired and coal-based generation by 2030. I appreciate that there is an existing equivalency agreement that had been for 2040.

What's NRCan's role in that dynamic between what would be Intergovernmental Affairs, Finance and working with the different utilities? Just briefly, could you give me a sense of how that's going?