Natural Resources Committee on March 21st, 2023

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

I think the whole plan for sustainable jobs is important to paint a picture about what the opportunities—and I think there are huge opportunities—of the economy are going to look like, but also to support individuals and communities, including coal-dependent communities, which I know are important to you.

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

Yes, absolutely.

I was reading through some of the language used in the report that was put out by the government. It talks about moving people to jobs. Now we know that jobs don't just naturally come to rural Saskatchewan of all places. It's difficult to create a lot of jobs in those areas. I'm just wondering how you're actually going to go about making sure that these communities are able to retain the people by keeping jobs right there, and that it's not “here's a new opportunity for you to move” from Coronach or Rockglen to Saskatoon, Regina, Calgary or wherever. These people, they don't want to move. They want to stay where they are. They love their communities. They love their small towns. They love the way of life that they have in rural Saskatchewan.

That's the fundamental concern that people are talking to me about, whether it's people who are on the lobbying side or people who are working in these industries. It's some of the spinoffs from this. It's the people who run the grocery stores. It's the people who have the local coffee shops. It's people who are working in health care in the region. How do we prevent the centralization of all of these industries into other communities, basically wiping these communities off the map? That's what they're concerned about.

If you have more clarity for these people right now, I'd appreciate your putting that on the record.

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Sure.

Look, I agree with you. This can't just be about creating jobs and moving people to urban centres. We actually have to be thoughtful about how we engage and look at economic development opportunities that apply just as much to rural areas. I think the positive thing is that many of the opportunities of the future are actually opportunities that can leverage the activity that goes on in rural areas already.

If you think about biofuels, for example, Federated Co-op is looking at building a big biodiesel facility. That actually leverages canola and the agricultural sector. If you think about critical minerals, most of those are actually going to happen in rural areas, especially in the northern part of Saskatchewan, and that is something that can create great jobs and economic opportunities. It's the same thing with value-added forestry. Look at what they're doing in Meadow Lake with clean tech in terms of how they actually are managing some of the waste residue.

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

With due respect, though, Federated Co-op is based in Regina. They're not based Coronach, three hours—

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Canola is grown in rural areas. Isn't that right?

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

It sure is, but it doesn't mean that 300 jobs in Coronach can be replaced unless Federated Co-op is going to build that refinery in Coronach. They already have the facility in Regina. That's the discrepancy we're seeing and that we're concerned with.

Yes, it's great that there's more opportunity down the road for our producers, but they're already growing those crops. That's not a brand new concept to them. These are things they've been doing for years.

How do we make sure these people don't lose their jobs and lose their communities and their way of life?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Yes, and that's why a big chunk of the money was actually flowing into discussions around the coal-dependent communities, because it is important we actually phase out coal. Coal is the biggest cause of climate change around the world. It was for regional economic development.

I met with the mayor of Coronach a few months ago. I know that they're very keen on this coal gasification opportunity, which they think could be a pathway to doing different things in the community. We've been engaging them on that and we're looking for opportunities like that in other coal-dependent communities.

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

The next part of it all is that the Auditor General said that you guys have already basically failed with the implementation of your plan. There are 14 objectives. Only about four of them have been implemented. You guys also lost and wrote off two years because of COVID. Everybody just sat on their hands for two years and did nothing, yet you're not bumping up the two-year timeline for those communities.

When you have the independent auditor already saying that you guys have failed, how are you going to make up for that lost time? How are you going to make up those gaps? There's been a ton of money already spent to accomplish nothing, so how are you going to make that up?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

I wouldn't say it accomplished nothing. I don't think the folks from the rural economic development agency around Coronach would say nothing.

I do think that continuing work needs to be done, particularly in Saskatchewan. In Alberta, they have the same coal phase-out timeline, and they're actually going to be off coal this year. Saskatchewan will take all the way until 2030.

There is going to be a need for a continuing conversation about how we actually ensure that those workers are dealt with fairly and that we are actually finding economic opportunities for the communities. I don't disagree with you.

[The Chair, Liberal, John Aldag]

We're out of time on that one.

I'll just let our guests who are online know that we have five minutes left. There is one more round of questions, so get ready with your camera buttons and we'll invite you to join us online in just a minute.

To conclude this round with the minister, I have Mr. Blois for five minutes.

The floor is yours.

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

Thank you, Mr. Chair.

Thank you, Minister, for your leadership. We actually spoke yesterday in the lobby and talked about how expansive your portfolio is. There could almost be three different ministers for all the work that you are doing on what is a really important portfolio to Canada.

Forestry is a big industry in Kings—Hants. We've had testimony about the importance of wood as it relates to mass timber. I know in your home province and in other places in the country there are some mass timber facilities that are playing in. There's a company in Nova Scotia called Mass Timber Company. It has two of the largest saw mill owners in the province, which happen to be located in Kings—Hants. They're looking to try to get a project off. IFIT has been a really important program to drive some of these innovations in forestry. I believe it's oversubscribed. It's been a very popular program.

Could you tell those folks at home who might be listening if that is the mechanism we would be encouraging this type of company to apply for? Is that something that NRCan continues to want to commit to in the days ahead?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Thanks for the question.

I certainly understand the importance of the forest sector in your riding and for your constituents. Certainly, I'm aware of the Mass Timber Company and the work that they have been doing.

I'm actually quite interested in the kind of work that they are doing. If you look at where Canada sits on the dollars per cubic metre that we extract, we don't actually look that great relative to many of our international peers. There are some structural reasons for that, but we need to think about how we can do better. How do we actually move up the value chain and create more value from the same amount of wood that we're taking out of the forests?

Mass timber is an interesting opportunity in that regard for your province and certainly for other provinces as well. We used IFIT with the Mass Timber Company in a number of different areas. Our funding for forestry sunsets this year, and we're looking for a renewal of funding in the upcoming budget. Of course, we're one of many.

Certainly the focus for us going forward would be exactly on tools like IFIT and other things that are looking at value-added products.

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

Offshore in Atlantic Canada, we talk about the opportunities, whether it's hydrogen.... Traditionally, of course, the offshore in Atlantic Canada was around oil and gas. There's not as much exploration work happening right now, but those bodies—the offshore petroleum boards—can be really important agencies to drive the regulatory certainty that we talked about.

Can you give this committee any sense of an update on the timeline of the work that might be happening with Nova Scotia to have that regulatory certainty in place?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

It applies both to Nova Scotia and Newfoundland and Labrador. The offshore boards are going to be effectively renamed as the energy boards. We have undertaken to introduce legislation into Parliament to actually change the accord acts. Justice has almost finished drafting the amendments, so we're on track to introduce the legislation this spring. Once the federal legislation is in place, the provinces then need to enact mirror legislation because there's no paramountcy there.

We foresee all of that being in place such that the first call for bids for offshore wind development could be launched in early 2025.

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

That's great.

I want to talk about regulatory reform because of the conversation around the IRA. Government investing in these programs is an important piece, but so too is the certainty.

Minister, you've talked about how we can expedite existing work without compromising values. Can you speak to what some of your priorities might be, as a minister, for trying to create that efficiency, I'll say, in terms of permitting, whether it be critical minerals or otherwise?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Yes. We brought forward the Impact Assessment Act to ensure good projects can actually move ahead expeditiously and to ensure issues are flagged early in the process. Of course, the way in which you implement is just as important as the framework legislation. We are not interested in cutting corners from an environmental perspective. We are not interested in cutting corners in terms of the consultations that we need to have with indigenous communities.

There is a whole range of things that we can do and are doing to try to ensure that we are as efficient as we possibly can be. That goes from things like making sure that proponents are ready to enter, to the process. We often find that mining companies come in and six months into it they figure out that they don't actually have the data, and they have to go back and collect it for two years. It means properly resourcing the agencies so that they're not waiting and projects aren't sitting there for a year or two before you ever start. It means trying to do activities concurrently rather than consecutively.

We have an internal cross-government process going right now to try to ensure that we are finding ways to make the process more efficient, and then we started the regional energy and resource tables, which are about engaging each of the provinces and territories—because in the area of natural resources, every one of them has their own process that is different—to try to find ways to optimize and align the regulatory and permitting process so that we can all go faster.

This is really important, because if you think about critical minerals, for example, if we're going to hit our climate targets in 2035, we have to find ways to be more effective and more efficient without cutting environmental corners and without forgetting about our obligations to discharge our constitutional obligations to indigenous communities.

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

Mr. Chair, I'm probably out of time, but with permission—

[The Chair, Liberal, John Aldag]

Yes. That takes us to the end of our time.

I want to thank everybody for their discipline with the time, including the minister.

I think, Minister, that this is the end of the time you have available for us.

I would invite all of the other online guests to put their cameras on, which we need for translation purposes.

We're at five minutes to five. Normally we would end at 5:30. We do have the resources available until 5:50, which is two hours from when we started. I'll see how far we get. The first round is going to be 25 minutes, and the next round would be 25 minutes. I'll check and see where we want to go after the first 25 minutes. We can keep going, or if we want to end at 5:30, we can do that. Are we ready with our officials?

Minister, thank you so much for joining us. It's always a pleasure. It's great to explore a round of topics related to the estimates and other items related to your portfolio. Thank you.

If we're ready to move right into the next round with Deputy Minister Hannaford and his team, we'll do that.

First up for five minutes, I have Mr. Dreeshen.

If you're ready to go, the floor is yours.

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

Thank you very much, Mr. Chair.

Of course, it's the beauty of the fact that the Prime Minister's mandate letters, whether they be for the environment or natural resources, are basically identical. This is not so good for the resource sector, but it's certainly good for well-rehearsed common government responses and messaging.

I have a couple of concerns.

When the minister was here, he spoke about UNDRIP and dealing with first nations and indigenous investors. My biggest concern is the fact that, with the actions of this government, we are looking at stranded assets from many investors, but it's certainly going to happen with our indigenous partners as well. I mentioned that quite frankly it looks as though we are somewhat “eco-colonialists” here, as if we know just what is best for them. Any of the things and the activities they have certainly make it a concern.

That's where it ties in with Trans Mountain, because much of the talk has been around perhaps getting indigenous leadership and purchases there. The minister was pretty adamant that there will be enough money to get so that the Canadian government won't be on the hook for this, but I don't quite share the same optimism that he has there. When it comes to how that is going to look in the books, there are two things I want to know.

First of all, will it be considered a government loss if we cannot get what we said was $30.8 billion today, but two years from now might be $45 billion? Is that going to be a government loss? Are we going to hear stories like how if there is this loss, then it has to be a subsidy to oil and gas because the government is dealing with that?

What do you see in the future as far as a project like Trans Mountain goes and how is it going to be managed?

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

Thank you, Mr. Chair.

The Trans Mountain extension is forecast now to be completed by the end of this calendar year. We've discussed the estimated cost at this stage. As the minister stressed, the advice we've received from financial advisers suggests both that the current financing options are viable and that the asset will continue to be a viable asset. That's the basis on which we are proceeding.

I think more detailed questions might be better placed to our friends in the Department of Finance, but I'd also—

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

That's fine, because I think that's where the minister had gone as well.

I guess one of the other things is that we were talking about critical minerals. We know that critical minerals are needed to build EVs and batteries. We also know that Canada has little or no EV-ready critical minerals supply. There was a big push to try to get to electric vehicles in the next five to 10 years, but we know that we're not going to get that out of Canada. We can talk about how great it's going to be and so on, but.... I was with the mining folks earlier in the month as well. There's a lot of excitement there, but they know that it isn't going to happen.

The other thing is this. Can we make sure that, when we're talking about critical minerals and we're talking about the environment, we're also taking a look at what the processing is going to be like, what the environmental impact is going to be there and how much energy is going to be needed? You talk about having our heads in the sand. We're going to need all the energy we can get to make sure that our critical minerals strategy is going to work. Maybe instead of saying that we have to shut this down as we try to build the other up, we have to keep it all going like the rest of the world is doing.

I would like to know, if that planning is done, if we can ensure that we see what the actual energy costs will be in order to make sure that this happens. What efficiency measures or what other metrics can you share with the committee when it comes to that process?

[John Hannaford]

Thanks very much, Mr. Chair.

First of all, the EV mandate, the sales mandate that will apply in Canada, would be sales of EVs by 2035. That's the horizon with respect to the vehicle side.

The critical minerals strategy that we announced in December is intended to be a full-spectrum strategy. It is to apply to not only the extraction but also the processing and the various applications of these minerals. That is very much front and centre in the way that we frame the strategy, not only because of the domestic opportunities that exist with respect to critical minerals in Canada, which you mentioned and the minister mentioned, but also because of some of the geopolitical aspects of this, which create a particular opportunity for Canada as we work closely with allies.

This is one of the critical areas of conversations we have with some of our closest friends, including through the G7.

[The Chair, Liberal, John Aldag]

We're out of time.

Next up I have Ms. Dabrusin.

The floor is yours for five minutes.

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

Thank you.

I want to ask some questions about nuclear. It's an issue that has a lot of conversation around it. Being from Ontario, I've seen the importance of nuclear as we transition from coal-fired electricity. I always like to say that it's one of the greatest successes that we went from having an average of 55 smog days a year to zero. It's great, because I'm a runner and I always really appreciate the clean skies that we have.

I saw that there's funding here for the Canadian Nuclear Safety Commission within the supplementary estimates (C). It got me thinking about the small modular reactor strategy and what we're doing with small modular reactors. Can you tell me a little bit more about that?

[John Hannaford]

Yes. We're lucky in Canada to be blessed with a very clean grid generally. Nuclear plays an important role currently with respect to that in a number of jurisdictions, including, importantly, Ontario.

The importance of small modular reactors is something that we have highlighted through the strategy you mentioned. We have a table that has been established to coordinate between jurisdictions and industry and other players the further refinement of positions around deployments of SMRs. Canada's a world leader at this stage, with the investments that have been made in the Darlington facility to create a 300-megawatt grid-attached SMR. We are at the forefront of deployment of the technology. That will provide a bit of a proof point as to where other jurisdictions may be able to apply the technology both inside and outside of Canada.

There is a tension to the work we are doing. In the international conversations we have, this comes up frequently. It's certainly an area of importance with some of our closest allies, including our friends south of the border. I would say that this is an area, generally in nuclear, where Canada has both a deep history as a tier one country in the development of the CANDU reactor and the full supply chain that exists there. By virtue of Cameco and other players, we have both the supply of uranium and the technologies that apply that. It is an area where we do see a particular Canadian niche that is of importance.