Natural Resources Committee on Feb. 9th, 2022

[Susannah Pierce]

These are good people who have worked tirelessly to provide affordable and reliable energy, whom we often take for granted. We must continue to keep these workers available and to adapt to a lower-carbon energy economy where different skill sets are required.

If we do this right, we will find that we create the right investment conditions that contribute to growth, carbon reductions and, equally important, advance economic reconciliation with indigenous people in Canada. On this latter point of indigenous reconciliation, I know how important it is to build true, trusted and lasting partnerships within indigenous communities. The energy transition can provide, like my friend, elected chief councillor Crystal Smith of the Haisla, would say, a share and a say.

In closing, the oil and gas sector must continue to show leadership and reduce emissions while providing affordable energy across our economy. We are ready to help the government design the pathways and look forward to continued collaboration.

[The Chair, Liberal, John Aldag]

Thank you.

[Mario Simard, Bloc, Jonquière, QC]

Mr. Chair, I'd like to point out that it would make things easier for the interpreters if the witnesses would agree to provide a paper copy of their remarks.

I would also like to see better adherence to time limits, because I think the last witness took a long time. That could be awkward for Mr. Angus and myself because we may have less time to ask questions.

[The Chair, Liberal, John Aldag]

I gave an extra minute and a half just because of the technical issues at the beginning, but I get your point, and I'll work with the team to see if we can get the opening statements to our interpreters in advance.

We're going into the rounds, the interactions, and try to get as far as we can through the first full round, which takes 74 minutes. I don't think we'll make it through the full rotation. We'll get as far as we can so we can aim to wind up as close to 5:30 as possible.

For the panellists, I give a fair amount of latitude to the member who is asking the questions. They will direct the questions to whomever they like. If you have something you'd like to say, you can raise your hand, but it is up to the member to recognize you. They will very much guide the direction their questions will take.

With that as a preamble or context, I'm going to turn it over to Ms. Goodridge for her first six minutes of questioning.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

Thank you so much, Mr. Chair. I am very proud to be the member of Parliament for the riding of Fort McMurray—Cold Lake, an area where indigenous communities have been partners in prosperity for decades.

In 2019 alone, oil sands companies did nearly $2.4 billion in procurement in indigenous-owned businesses. I think that's critically important to highlight. Perhaps I'll first direct this question to Mr. McMillan. What impact would you expect the emissions cap to have on indigenous businesses in the oil sands, or more generally in the oil sector?

[Tim McMillan]

That's a great question. I think that understanding how it would work, how it would be implemented, where it would be set, all of those things would be crucially important before we would be able to understand that in detail. I would note that a few of the other panellists noted the UNDRIP legislation and the reconciliation and involvement of indigenous communities in the oil and gas sector. I think it would also be worthy of this committee to contemplate whether this legislation include indigenous production, as there are substantial indigenous resources across Canada and production today. I think a lot of those questions really should be contemplated early on in this process.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

Thank you, Mr. McMillan.

Actually that was the next question I was going to go to. Does the federal government even have the authority to impose an emissions cap that would affect production on first nations land? I was just wondering about that, and maybe I'll open it up to all the panellists for any thoughts on that.

[The Chair, Liberal, John Aldag]

If anyone wants to jump in, feel free.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

Perhaps Mr. Goodman could.

[Tristan Goodman]

I can certainly jump in. I appreciate the opportunity.

To be honest, I'm not sure. A number of us legal-type people could examine that, but I would encourage the federal government to consider their legal authority under the Constitution and their duty to consult, as well as any provincially associated division of powers.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

If you could provide the committee with any legal work that you're aware of in writing, that would be spectacular.

To go a bit further into this, do you think that this cap will change future opportunities for indigenous economic development?

Again, that's to Mr. Goodman.

[Tristan Goodman]

A lot of the questions on the cap, and that was my point at the beginning of my opening statement.... The oil sands have a cap, as many know. The reality is that there was a consultation process to move forward on that. That's now being expanded into a broader set. It has yet to be determined exactly what this will entail.

At this point in time, it's very difficult to answer that question without seeing exactly where we're going. We'll need to know what the drivers of this cap are, how the cap fits into existing policy, exactly what the cap is, and what principles it would be based on. That's when you can get into the details of answering your question.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

Thank you. I really appreciate that.

Do you think that capping the energy sector by using a sector-by-sector approach would be a more efficient model?

[Tristan Goodman]

There are multiple different ways you can go about doing this. You can go sector by sector, by geographical location or you could download the provincial jurisdictions. You have many different options, and there are many different caps across this country on different sectors, which are all done quite differently.

Again, it may be one of the options available. I guess I would go back up. If you work through what the main issue is that we're missing in the existing policy framework—which is a very credible and legitimate question—and then move into what the design principles would be, you'll be able to get in to those other components as you move through that.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

I have very few minutes left in this round of questioning.

I was just wondering, Mr. McMillan, if you support having a sector-by-sector approach to emissions.

[Tim McMillan]

We want to enable Canadians and all Canadian sectors to do their part globally. The capacity for Canadian oil and gas, be it gas, oil or offshore, to displace higher-emission coal or higher-emission oil and gas from other places around the world should not be impeded with a cap. We should link it to global demand and encourage Canada to play a larger role, not a smaller one.

Those are the frames I would put on it, as opposed to trying to break our industry and other industries into smaller sectors.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

Fantastic.

Really quickly, what do you think, Mr. Scholz?

[Mark A. Scholz]

That's a great question. I would echo what Mr. Goodman and Mr. McMillan have expressed.

One of the things I want to point out is that whatever framework gets decided on, jobs, job creation and the potential elimination of jobs should be taken into consideration. I represent companies that ultimately work for oil and gas producers, and we are the ones who are ultimately creating most of the variable jobs all across the country on drilling rigs and service rigs, and in directional drilling rig companies.

Therefore, in the context of whatever framework and principles we look at, we have to include consideration of the impact on employment as a prominent focal point for the discussion.

[The Chair, Liberal, John Aldag]

Thank you.

That's that the end of that first round of questions.

Ms. Jones, it's over to you now for your six minutes.

[Yvonne Jones, Liberal, Labrador, NL]

Thank you very much, Mr. Chair.

I would like to welcome all of our panellists and thank you for your excellent presentations today.

I'm a member of Parliament from Newfoundland and Labrador. My riding is in Labrador, and I come to you from the lands of the Inuit and the Inuit people of our community.

My first question today is for Mr. McMillan. First of all, I loved how you stated in your presentation that your group is committed to world-leading performance in reducing emissions. That's the goal and the standard that we all want to set in Canada, and it's great to hear it coming from some of the people whom we know are going to be necessary to lead this process.

In your opinion, and that of the members whom you represent, what is the most effective way you can see the federal government implementing this cap on the oil and gas sector emissions?

[Tim McMillan]

Great question. I think if we look at the example of Canada, as has been repeated in other places, one of the other panellists noted that our electricity sector has been one of the largest reducers of greenhouse gases. In Canada that is because we shut down our coal industry and we replaced it largely with natural gas. Certainly we put in more wind and solar. In Canada I think wind and solar are about 3% and 5% of our production, but the massive reduction came from the phasing out coal and putting in gas.

The same is true in the United States, where it's their biggest reduction. The same is true in Europe. As we look at the biggest reduction we can make globally, it is in Asia and in India. Therefore, I would like to see any new legislation targeting Canada playing a large global role. I think it would have to be recognized in a piece of legislation like you're contemplating here, that this is about global reductions. We can pat ourselves on the back in Canada for a Canadian reduction that, ironically, has a negative impact globally, and that would be bad for all of us.

[Yvonne Jones, Liberal, Labrador, NL]

Good, thank you, and I love your perspective on that.

Unfortunately, we don't have time for a lot of questions, so I'll have to move as quickly as I can.

I'm going to come to you, Mr. Goodman. I love your six principles, and I love it when you talk about not just the six principles for reducing emissions in the industry, but also the fact that the existing climate change policies we have in place in Canada are working. Coming from someone so close to the industry, that does account for a great deal, in my opinion.

I'd like to ask you if you could speak to the ways the federal and provincial governments should be working together. As you know, there are certain provinces in Canada that will be impacted tremendously by anything that we do to cap emissions. How can we work together to create stability and certainty for the industry, especially for those in the particular provinces that will be impacted as we work to introduce this cap and bring forward the legislation?

[Tristan Goodman]

Thank you very much, MP Jones.

I think there are really two items there that are critical. There has been tremendously good work between the federal government and the provinces—in every single jurisdiction actually. That has resulted in some improvements, enhancements and movement forward that I think both federal and provincial governments can take credit for. Changes to methane requirements and seeing that emission trend move down is constructive and positive.

Looking at some of the movement from investment into the clean-tech sector, which are linked, what you're seeing a lot of the time now is oil and gas companies evolving and often changing into energy companies. There's going to be a consistent mix as we move forward.

When I speak about predictability for investment, what investors do, when there are trillions of dollars—far more money than in the federal, provincial or the entire Canadian economy—is that they will move into these areas. What they must be able to do is to have understandable policies. When they run their metrics, they must be able to see that these policies actually work, and that will then drive investments. When I talk about predictability and certainty, it's about the reality of those policies. They have to move forward on this critical issue, but they often have to be seen by investors to be able to work within the numbers they operate in.

Thank you.

[Yvonne Jones, Liberal, Labrador, NL]

Mr. Chair, do I have time for one more question?

[The Chair, Liberal, John Aldag]

You have 40 seconds.