Natural Resources Committee on May 16th, 2023

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

First of all, let me just respond.

I hear you in terms of being here in person. The only thing I would say is that I have appeared before this committee now seven times since I was appointed and, certainly, I endeavour to be there in person as much as I possibly can.

With regard to critical minerals, I've said many times that it is a generational economic opportunity. It's not just the mining. It is about processing, it is about battery manufacturing, it is about electric vehicle manufacturing, it is about recycling, it is about the total value of [Inaudible—Editor]

[Greg McLean, Conservative, Calgary Centre, AB]

Minister, I asked a question about the size of the contribution to the Canadian economy.

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

—and we've seen a 20% increase just over the last year. We expect to see those kinds of increases going forward.

[Greg McLean, Conservative, Calgary Centre, AB]

Minister, can we get a number?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

We expect to see significant increases going forward.

[Greg McLean, Conservative, Calgary Centre, AB]

Last year, the mining industry alone put about $2.5 billion into the Canadian economy. The oil and gas industry put nearly $50 billion into the Canadian economy as far as investments go.

We are talking about a sector that, right now, is 1/25th the size of the oil and gas industry in Canada as far as this economic investment into Canada is concerned. In addition, $400 million of that was a gift from the federal government in the form of investment tax credits, which go to rich people. People in the top marginal tax bracket are the ones benefiting from this.

In that respect, we're really talking about—give or take—$2 billion of private sector activity into the economy. It's $2 billion versus $50 billion.

Do you see now why there's a bit of a disconnect in why you think this is going to replace Canada's biggest economic engine?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

I don't know where you got the idea that it's going to replace the oil and gas sector. I've never said that and I don't think any reasonable person would say that.

The oil and gas sector is going to continue to be important through the energy transition, and to the extent that the oil and gas sector is working to decarbonize the sector—which most of the participants in it actually agree with—it will continue to be an important part of the Canadian economy.

I'm not putting the mining sector against the oil and gas sector. There are enormous opportunities in the oil and gas sector if you think about hydrogen and hydrogen from gas using carbon capture, about very low carbon oil and the utilization of that in non-combustion applications.

They're both important.

[Greg McLean, Conservative, Calgary Centre, AB]

Yes. Thank you, Minister.

The issue I'm bringing up here is, of course, your insistence upon the critical minerals sector as if it is the only sector that requires sustenance going forward here. You're putting a lot of money into it. You're spending a lot of tax dollars on it. In the end, it is a minor contribution as far as energy in this country goes.

Critical minerals do not produce energy. They store energy and they're used for other high-tech operations, but we need energy in Canada to continue to sustain ourselves as a viable country going forward here where jobs are going to come.

Now your government has committed a lot of money towards these plants for electric vehicles. It's committed a lot of money through the chain along the way, and yet you can see that there's very little coming in the front door for the next 20 years as far as critical minerals go.

In another example, you've got the Ring of Fire in Ontario, which is going to take decades to develop, but you found out as well that will mean unearthing sphagnum, so effectively peat moss, which is going to emit 1.6 billion tonnes in the Ring of Fire alone of CO2 that's already trapped there.

Do you see the circularity of how you're actually not getting to a climate solution here?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

No. First of all, we've dedicated enormous resources to the energy sector as well, through the CCUS tax credit and the hydrogen tax credit, so I think you have to be careful about some of the things you say in terms of where the money is going.

I would also say that, with respect to projects, we are seeing an enormous uptick in the number of projects, and we will see much more coming through the front door. The Ring of Fire is one of the more challenging areas for exactly the reasons you mention, as well as some concerns on the part of a number of indigenous communities.

If you're going to develop the Ring of Fire, you have to do it in a manner that is not going to disturb the peat, because otherwise it doesn't make sense. You are correct about that, but that doesn't mean there are not ways to do it in a manner that addresses the environment and the legitimate concerns of the indigenous communities in the area.

[The Chair, Liberal, John Aldag]

Thank you.

We're out of time.

Our final questioner for five minutes for the minister will be with Mr. Sorbara. At that point, we'll be bidding adieu to the minister, but we'll keep our officials for 15 minutes, and then we'll get into the final part of the meeting.

Mr. Sorbara, it's over to you for five minutes.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Mr. Chair.

Welcome, Minister. I hope Vancouver is as lovely as always.

Last month, Minister, I had the privilege of being part of the historic announcement that Volkswagen will be constructing its first overseas electrical vehicle battery factory in St. Thomas, Ontario.

As chair of the Liberal auto caucus, I very much welcome this transformational partnership and investment, as it will not only strengthen the auto sector but also create literally tens of thousands of well-paying jobs across the country as we work towards a cleaner and greater economy.

Given that Canada has the raw materials and the skilled workforce and that this country believes in Canadians and its workforce, what is our government doing to make sure that we stay on track in delivering this clean technology? This is an investment that can keep up with North American demand for zero-emission vehicles for decades to come.

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

I know what a strong advocate you are for bringing the auto sector back to life in Canada after the sector dwindled during the Harper era. We are certainly proud of our collective success in bringing it back.

These investments are delivering thousands of good-paying jobs for Canadians while further establishing Canada as a leader in the clean technology race. These companies like Volkswagen are choosing to invest here because of our highly skilled and educated workforce, the access to clean power grids and abundant national resources, including critical minerals.

Your question is at the heart of why we developed a critical mineral strategy. We saw that the global economy would be increasingly dependent on critical minerals and metals for clean technologies. We are working to support increased extraction, processing and recycling of critical minerals, a key to supporting the electric vehicle supply chain through measures that include the clean technology manufacturing investment tax credit, which will support Canadian companies to help with investments in new machinery and equipment.

We will be allowing producers of lithium from brine to issue flow-through shares and to expand the eligibility of the critical minerals exploration tax credit to lithium-from-brine.

Just recently, as you know, we gave approval to two mines, the Marathon palladium project and the James Bay lithium mine project, which will each produce essential critical minerals needed for EV batteries, and each will deliver hundreds of good-paying jobs.

Before giving it back to you, I want to note that the Conservatives have been against these investments in Canadian businesses and Volkswagen's business investments in Canadians. They have no economic plan for a low-carbon future, and it is incredibly disappointing to hear that the Leader of the Opposition laugh when we talk about electric vehicles. They have not done the work necessary to understand what's at stake and what opportunities are in front of us.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Minister, for that answer.

It's great to see that the government is making key investments to our economy to strengthen the middle class.

Minister, this morning I had the pleasure of meeting with Electricity Canada, and later on this evening, in partnership with Electricity Canada, we'll be sponsoring the reception here on the Hill.

We know the electrical grid needs to be secure, clean and affordable for Canadians. We also know that, going forward, we need to increase the baseload of our electrical grid that will need to be there to handle the increased use of electrical vehicles and so forth.

I want to ask a question on the smart renewables and electrification pathways program, which I believe was in the budget. Specifically, how will that help communities and organizations acquire the knowledge and tools needed to develop renewable energy and grid modernization projects as we move forward to a fully clean electrical grid?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Thanks for the question.

I'm glad you noted Electricity Canada. I would just highlight the fact that Electricity Canada has put out a statement saying that budget 2023 was “transformative”. It will make electricity clean, but also affordable, which of course is very important.

The smart renewables and electrification pathways program, or what we call SREPP, is already helping communities across this country seize new economic opportunities while creating good jobs for those who live there. In fact, it is often indigenous communities that are leading these projects, like with the Awasis Solar energy farm in Saskatchewan with the Cowessess First Nation. It's supporting Summerside, P.E.I. to produce grid-resilient solar energy, which was vital in keeping the lights on when hurricane Fiona hit.

The program has made significant progress in developing renewables and launching grid modernization projects. In fact, just a few months ago in your own backyard, Minister Freeland announced support for the Oneida battery storage program with the Six Nations of the Grand River. That received $50 million from SREPP and will become one of the largest battery storage projects in the world. It will more than double the battery storage power that exists in Ontario.

Earlier this month, two proposed wind farms in Nova Scotia were approved through the environmental assessment. These projects were supported by the government with an investment of $125 million. These projects will supply Nova Scotia with 350 megawatts of clean power.

The SREPP is very important. It also supports capacity building. Certainly many indigenous communities have taken advantage of that. It's a very important program and yes, it was topped up in budget 2023.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Minister.

[The Chair, Liberal, John Aldag]

That's the end of our time.

Minister, I understand that this is when you need to make your departure, so feel free to sign off. We always appreciate you coming and joining us at the committee. You've been here, as you said, many times. It's always good to hear from you.

We'll ask the officials to stay. We have 15 minutes of questions—five for Mr. Patzer, five for Ms. Dabrusin, two and a half for Mr. Simard, and two and a half for Mr. Angus. Then we'll get into the final part of the meeting.

With that, Mr. Patzer, we'll go over to you for your five minutes.

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

Thank you very much, Chair, and thank you very much to the officials for being here.

There's a specific line item in both grants and contributions called “Grants in support of Clean Energy for Rural and Remote Communities”.

I wonder if you could just take a couple of seconds to maybe highlight a couple of projects. What specifically is the government targeting with those line items?

[Mollie Johnson, Associate Deputy Minister, Department of Natural Resources]

Thank you very much, Mr. Chair.

Those are programs that support rural, remote and indigenous communities in getting off diesel in their communities.

That program has been around for awhile. I'm going to forget the number off the top of my head. We have been successful in setting up clean energy projects that support that commitment of getting off diesel.

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

Thank you.

I'm just curious, too, if somebody has a definition for “rural”, quickly? What are you using for that definition? What does “rural” mean to the department when we talk about that?

[Mollie Johnson]

I'm sure that in our terms and conditions we have a definition of “rural”. I can ask one of my colleagues on the line to jump in or I can follow up with the committee, if that's helpful.

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

If there's a person on the line, sure. If somebody can answer that in about 10 seconds, that would be great.

[Mollie Johnson]

Christina, can I ask you to jump in on that?

[Christina Paradiso, Director General, Department of Natural Resources]

I'm sorry, I can't answer, but I'm happy to follow up.

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

That's good. I will take that. If you could follow up in writing, I would greatly appreciate that.

Thank you very much.

A problem that I have.... This is the main estimates and we had the same issue with the supplementary estimates. Granted, it's the minister and the Prime Minister who set objectives and different things like that here, but there's no funding allocated for the just transition.

I have a letter here—and I've received many of these letters— from people from Willow Bunch, Rockglen, Coronach and people who are working at the Westmoreland coal power station and the mine there. Their concern is that the region is losing $30 million in annual payroll with the phase-out.

COVID wiped out two years of government planning. Since COVID, we've had about two years and there's still nothing, so we've lost four years. Timelines aren't moving up.

From your viewpoints and perspectives—I recognize that you work within the department and you're not the ones setting the obvious objectives—as far as being the ones who are delivering a lot of the programs and things like that, why is the just transition not being prioritized when there's a hard and fast timeline and we've lost four years? Why is it not being prioritized?

[Mollie Johnson]

Thank you for the question, Mr. Chair.

With the letters, the challenges and what you are hearing, I'm very empathetic to the folks in your community.

This is on our radar and it's something we're considering a lot in terms of what the opportunities are. We know that it's not going to be possible to move jobs from one urban centre to a rural centre, but in looking at the opportunities in terms of clean technology, biomass and other projects, we are spending a lot of time considering what can be done and what the opportunities are.

We really do want to work, through the regional tables and through the opportunities we have, in partnership with folks in coal-affected or coal-based communities, so we can support that transformation.