Natural Resources Committee on May 16th, 2023

[The Chair, Liberal, John Aldag]

Welcome to meeting number 64 of the House of Commons Standing Committee on Natural Resources.

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

I have a point of order.

[The Chair, Liberal, John Aldag]

Pursuant to Standing Order 81(4), the committee is meeting to discuss the main estimates 2023.

Before we start, I will go to Mr. Angus, who has his hand up for a point of order.

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

I've been listening to the minister attempting to get his sound working. I understand. We often have problems with sound, but when we have a meeting now, we in the opposition expect that the minister will attend in person.

This is not during COVID. This is, to me, highly irregular. If we have any sound problems with him and we can't continue with him, then this whole meeting is put in jeopardy. I think it's just really questionable that the minister did not come here in person to be able to brief us.

[The Chair, Liberal, John Aldag]

Thank you for your point of order.

We extended the invitation to the minister. He was available virtually, which is still allowed by the House. This was the date he was available, so that we could get through mains and then report them back to the House.

We'll see. We'll do the best we can.

[Greg McLean, Conservative, Calgary Centre, AB]

On a point of order, Mr. Chair, I thought the House had suspended that for ministers and that they had to appear in person at these hearings.

[The Chair, Liberal, John Aldag]

No. That's not the information we've been given. We encourage the ministers to attend, but right now the minister is not in Ottawa. This is how we were able to plug him in and that is how the committees are operating at this time.

Continuing with this, we'll have our witnesses. We'll have the minister for the first hour. Because we have a late start, I believe the minister has one hour. Then we'll go into a second round with officials.

I'll check with the committee members now if we want to go beyond 5:30. If we're going to end at 5:30, we need a few minutes at the end to do the actual process for reporting the mains back. We'll probably stop testimony then at about a quarter past five, if that works. I do have an item at the end related to our travel submission for our fall travel that I'd like to also deal with because the deadline is Friday and we're not sitting on Friday.

That will be the order for the afternoon.

Now, I think everybody has been around the block enough times. We know the rules about addressing questions through the chair. For those online, use the “raise hand” function. You have to mute yourself and you can use the translation features.

To get the show on the road, Minister, we'll go to you for your five-minute opening statement. I'll signal you when the five minutes are up and then we'll get right into our rounds of questions.

Before we get into that, I'll welcome Mr. Doherty, Mr. McLean and Ms. Sidhu to our natural resources committee today.

Mr. Minister.

[Jonathan Wilkinson, Liberal, Minister of Natural Resources]

Thank you, Mr. Chair. Hello, everyone. Thank you for the opportunity to discuss the significant investments we are making within NRCan’s main estimates.

I’d like to acknowledge that I am joining you today from the traditional, ancestral and unceded territories of the Squamish, the Musqueam and the Tsleil-Waututh nations.

I look forward to speaking with you about how these estimates are supporting our efforts to build a prosperous and competitive low-carbon economy.

Before I do so, I want to just say that my thoughts are with all of the families and communities affected by the wildfires in Alberta and across western Canada. We are, of course, following the situation extremely closely and, as a government, we will continue to provide federal assistance wherever and however best we can.

Right now, global financial markets are demanding and rewarding low-carbon products. This is because, in recent years, governments like this one have been taking serious climate action to steer markets in that direction. And because, I believe, more and more people are acutely aware of the scientific reality and existential threat of climate change.

This is presenting a generational economic opportunity for those who act boldly to build the economy of tomorrow. We’re fortunate that Canada is well placed to seize this opportunity.

In Canada, there is a choice. We can double down on this trajectory, making a plan for the future that grows the economy and protects the planet for future generations, or we can bury our head in the sand, hoping for the best and letting the world pass us by. This government chooses the former, and we choose to play to Canada's strengths.

Canada's natural resources give us significant advantages in being able to provide the world with clean energy, while creating good jobs here at home. We have a highly trained workforce and are increasing the diversity and strength of our natural resource sectors.

Our economy supports innovation, and our government is promoting the inclusion of indigenous knowledge and expertise, as well as economic participation.

We have an abundance of critical minerals and hydrogen, which the world will be increasingly demanding, as Canada and the rest of the world develop more and more in the way of clean energy and clean technologies.

We offer an outstanding level of stability to investors and allies. Our banking, regulatory, political and legal systems are stable. We have trade agreements with many of the major economies in the world. We develop and meet high environmental, social and governance standards.

The proposed investments that you see here are the next steps in the agenda. They are focused on growing clean energy and clean technologies, which this government has been working on for years.

Having access to clean, affordable and reliable electricity is imperative when it comes to achieving our legislated target of making Canada net zero by 2050. That is why Canada is committed to having a net-zero grid by 2035.

To that end, you'll see there are two main items in these estimates that support the modernization of our electrical grid, namely, the smart renewables and electrification pathways program, as well as the electricity predevelopment program.

To many other countries, our grid is already enviably clean, but we are determined to do even more to protect our environment, while providing affordable, reliable and clean power to all Canadians. Building out the grid and increasing its percentage of clean energy, as well as transitioning to electric vehicles, will allow Canada's municipalities to reduce emissions from vehicles, waste and buildings.

Investments to reduce buildings’ emissions appear again in the estimates through the complementary measures to the 2030 Emissions Reduction Plan; our goals are clean air and a strong economy. These investments will help us continue to lower the emissions from homes, schools, hospitals, office buildings and industrial buildings, which is key to getting to net-zero by 2050.

Home energy evaluations and funding from the Canada greener homes grant for energy-efficient retrofits are also in the estimates, as are investments to recruit, train and mentor energy advisers to carry out the evaluations.

Continued support in this area will allow us to carry on our efforts to make our homes more resistant to the effects of climate change. And as global inflation continues to affect hard-working Canadians, these renovations will make their home heating bills more predictable and affordable.

I would also like to touch on our two-billion trees program in the estimates, which achieved 97% of its first-year target in terms of planting, and through which, in just the past six months, we have signed seven agreements in principle with seven provinces and territories. Six of those have signed specific planting commitments underneath the agreements in principle, and we're working with others to expand that collaboration.

We have negotiated multi-year agreements that will see 260 million more seedlings planted across Canada over the program's lifespan, and that's just the beginning. We'll soon be able to provide the total planting numbers for the second year of the program. We have surpassed our federal and urban land planting goals. We are confident we will reach the two-billion target in the next decade, with the provinces, territories, non-profit organizations, businesses, and indigenous governments and organizations.

As you can see, the investments we're proposing in the main estimates have a common goal, no matter the topic: greener homes, energy innovation, critical minerals, zero-emission vehicles, forestry or building out the grid. By making these strategic investments, we are supporting the capacity of Canadians to create new opportunities in the low-carbon economy. We are supporting indigenous participation in the natural resources sector and supporting indigenous leadership in a prosperous net-zero future. We're enabling a clean, reliable, secure and affordable supply of energy for everyone.

I certainly look forward to our conversation and to our questions and answers today.

With that, Mr. Chair, I'm happy to hand it back to you.

[The Chair, Liberal, John Aldag]

Thank you, Minister.

Before we go into our rounds of questions, I want to quickly welcome our officials.

In the room with us, we have Mollie Johnson, associate deputy minister; Shirley Carruthers, chief financial officer and assistant deputy minister, corporate management and services sector; and Jeff Labonté, assistant deputy minister, lands and minerals sector.

You have all been here before, so welcome back.

Joining us online are Angie Bruce, assistant deputy minister, Nòkwewashk; Drew Leyburne, assistant deputy minister, energy efficiency and technology sector; Monique Frison, director general, trade, economics and industry branch; Erin O'Brien, assistant deputy minister, fuels sector; Christina Paradiso, director general; and Anne Routhier, director general and head of performance measurement.

Thank you all for joining us.

With that, we will go right into the first round of questions.

Mrs. Stubbs, you have six minutes.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you, Mr. Chair.

Thank you, Minister, for your comments about the wildfires in Alberta and your government's action in that regard.

I had a quick question for you about Line 5. Today, Canada's Washington embassy expressed a concern about that potentially being shut down on Thursday. That would threaten, of course, 6,000 jobs in Sarnia, the fuel supply for Quebec and Ontario, and undermine North American energy security, which is more important now than ever. Of course, there are also the billions of dollars in government revenue that support government spending.

I would note that it took over two years until this government seemed to finally listen to Conservatives and invoke the 1977 pipelines treaty for this critical energy corridor, which the Prime Minister did say was non-negotiable.

I don't know if you could give us some insight into this, but if that's the case, why didn't the Prime Minister raise it directly with U.S. President Joe Biden when he was here in March?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Thank you for the question.

One thing I would say off the top is that I don't think there's much disagreement between the Conservative Party and the Liberal Party on the importance of Line 5 in terms of ensuring that it continues in operation and the need for us to be working collaboratively and pressuring the United States to ensure that it is doing what it needs to do. As you said, we did invoke the treaty. That was an important step. We worked very closely with the company, including up to the issuance of the statement last night.

We will continue to work very closely with the company to ensure that this critical piece of infrastructure remains open. I will tell you that I have raised it at every opportunity with Secretary Granholm who is the Secretary of Energy,. I know the Prime Minister has raised it on a number of occasions with the President.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you, Minister.

It does, of course, stand in stark contrast to the total lack of legal intervention and support of the proponent in the case of the Keystone XL pipeline. I guess, on Line 5, we are all going to have to wait for that court decision, when obviously the President's direct intervention on request of the Prime Minister would have been helpful.

Given your comments and your concerns, which I share, about the world passing Canada by and your comments about your goals and aggressive targets for electrification, I want to also ask you about critical minerals.

The Prime Minister is in South Korea now, where 80% of their critical minerals are supplied by China. Then he'll be in Japan, which also asked Canada both for critical minerals and for LNG.

He says he'll be talking about the supply chain integration to replace dependence on Beijing's critical minerals. Of course, in these estimates, you have $5 million “in support of critical minerals”, but, in fact, fewer than half of the mining applications since 2015 have actually made it through the duplicate of an uncertain process your government has created. Mines do take up to 25 years to produce in Canada.

The James Bay lithium project, which is the most recently approved one, took six years, was just approved this year with 271 conditions and won't produce lithium until 2024.

The truth is that the only mine in Canada that has produced lithium since 2019 does it only as a by-product of tantalum. It is 100% owned and operated by a Beijing state-owned company that ships all of it overseas.

Minister, lithium is on the top of your critical minerals list, but there's actually no Canadian ownership of producing Canadian lithium mines right now, which is a major critical mineral for EV batteries. Another one that's critical, phosphate, isn't even on your critical minerals list.

Right now, the truth is that Canada produces zero rare earth metals needed for EV batteries and for wind and solar production, yet in the last six months, your government has put in over $1.4 billion tax dollars to fix the permitting process that you broke, which seems to pay for round tables and meetings, but obviously no actual outcomes that make a difference for Canada or for the world.

Can you answer two very simple and direct questions for all Canadians here? On what date will you actually implement the streamlined and accelerated process that will fix the mess you made, and that your own government does claim to want?

Secondly, on what date will Canada actually produce and export all of the critical minerals on your list for Canadian self-sufficiency and to stop our allies' dependence on hostile regimes?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Thank you for the questions.

Certainly critical minerals are an enormous opportunity. As you said, the Prime Minister is speaking to people in South Korea. I was just at the G7 in Japan and certainly had many conversations with my counterparts—not just in Japan, but in Germany, France, the United Kingdom and elsewhere—all of whom are very interested in Canada's critical minerals.

We do need to ensure that we are making the assessment process and the permitting processes, at both the federal and provincial levels, more efficient without cutting corners from an environmental perspective [Inaudible—Editor]—

[Shannon Stubbs, Conservative, Lakeland, AB]

Yes, agreed.

So, on what date will that streamlined and accelerated process, maintaining those standards, be implemented?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

In the budget, what we said is that we would be coming forward with a plan on that before the end of the year, but there's already enormous work going on.

With respect to producing and exporting, there actually is a mine that is just in the process of opening up, a lithium mine in Quebec that will be producing, and it will be doing so later this year.

There is actually a rare earth mine in Canada. It's in the Northwest Territories. It is processed in Saskatoon.

We have a long way to go in terms of building capacity, but we actually do produce the top six that are on the critical minerals list.

[The Chair, Liberal, John Aldag]

With that, we are out of the six minutes.

We will now move to our next member, Ms. Lapointe.

You have six minutes.

Before you start, I'd like to remind members to only have one person speaking. When you ask a question, just like in the House, we'll give the minister time to respond. Only having one person on the microphone makes it a lot easier for the interpreters to do their jobs. Thank you.

Ms. Lapointe, you have six minutes.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

Thank you, Minister, for joining us at our committee today.

What are you doing to improve Canada's regulatory and permitting processes to get good mining projects built right here at home?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

That is an excellent question. It's an important question.

I should note that, under this government in 2021, Canada exported record levels of metals and minerals, and it's now about one-fifth of our total merchandise exports.

Certainly, we are doing an enormous amount of work to ensure that we actually are making as efficient as possible Canada's regulatory and permitting processes. We have an internal process, involving a number of different departments, that is working on different ways in which we can actually make this work more efficiently. We announced over $1 billion in the fall economic statement for the Canada Energy Regulator, the Canadian Nuclear Safety Commission and a number of other departments to increase the capacity so that we are able to actually process the number of applications coming before us.

There was another $1.3 billion in budget 2023 for several federal departments so that they can continue to improve the efficiency of assessments for major projects. We confirmed to the board of directors of the CER in February that they are to identify key priorities as they deliver on their mandate, including working towards more efficient regulatory regimes. We're also working with provinces and territories, which each have their own regulatory and permitting processes, to align those better with the federal process. I think you will see the initial product of some of that work later this or next week when we actually provide an update on the British Columbia regional table.

We've approved, now, four mining sector projects since January: the Marathon Palladium mine, the Valentine gold project, the James Bay lithium mine project and the Lynn Lake gold project. Certainly, this is a big, big effort, and it is an important effort. However, again, it cannot be done by cutting corners from an environmental perspective or by not discharging our obligation to indigenous peoples, which is what the Harper government did and thereby really, really gummed up the process.

[Viviane LaPointe, Liberal, Sudbury, ON]

How will the government ensure that the critical minerals industry will be developed in a sustainable and environmentally responsible manner?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

We have strong tools, such as the Impact Assessment Act, to restore the confidence of Canadians that environmental issues will be dealt with in a way that allows a good project to go forward.

Canada is already a safe and sustainable supplier of critical minerals. That's why we're seeing significant investment across our critical minerals supply chain, from Volkswagen, which is building a multi-generation electric vehicle battery plant, to the United States, which sees Canada as a reliable partner to strengthen North American leadership in clean technology. These companies are investing here because Canada is committed to extracting and sourcing critical minerals the right way, working with indigenous and local communities and protecting nature.

We apply rigorous environmental-society-governance standards with a strong human rights record, as well as a Canadian Critical Minerals Strategy that is consistent with Canada's ambitious nature protection goals. In fact, Canada played an important role in launching the Sustainable Critical Minerals Alliance, which I announced alongside representatives from Australia, France, Germany, Japan, the United Kingdom and the United States at COP15, the United Nations Conference on Biodiversity in Montreal.

The mines I mentioned in my previous responses all have strong environmental protections that make it clear to others that Canada is a good place to invest, and also a good place to buy.

[Viviane LaPointe, Liberal, Sudbury, ON]

My next question has a great significance for Sudbury and also for the other mining communities across northern Ontario.

What role will the government play in supporting the scaling up and the commercialization of criminal minerals, processing and batteries?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

It's a very important question. There is no energy transition without a significant scale-up in the exploration, extraction, processing, advanced manufacturing and then the recycling of critical minerals.

To this end, we have undertaken a whole range of measures in budget 2023, including the $1.5 billion critical minerals infrastructure fund to accelerate critical minerals production, $1.5 billion through the strategic innovation fund to support advanced manufacturing, processing and recycling, and of course the investment tax credit that was in the budget for clean technology manufacturing, which will be applicable to the extraction, processing or recycling of critical minerals. That is an extremely important thing that was very well received by the Mining Association of Canada and others.

It's also about putting some funding into research, development and demonstration. We announced just a month or so ago $14 million to support six projects under the critical minerals research, development and demonstration program, which will advance the commercial readiness of emerging process technologies to support the development of value chains for zero-emission vehicles.

Certainly there will be more coming. Finally, I would say the critical minerals centre of excellence will also support research for processing and battery precursors. It will help proponents engage the federal and provincial processes with respect to moving these projects forward expeditiously.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you, Minister.

[The Chair, Liberal, John Aldag]

We're pretty close to our time, so we'll wrap up there and go to Mr. Simard, who will have six minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you very much, Mr. Chair.

Minister, in your presentation, you alluded to the 2 Billion Trees Program, and you said that it had met 97% of its first-year goals. I have a feeling that there are some people who disagree with you, particularly the Commissioner of the Environment and Sustainable Development. He sent us a document in which he said that in his opinion, the achievement of your objectives under the 2 Billion Tree Program is unlikely. He says that in the best-case scenario, after two years, you will have reached 2.3% of your total 2-billion tree target, which is low when you consider that the program is scheduled to run for 10 years. Is there currently a real strategy to plant those 2 billion trees?