Natural Resources Committee on Feb. 14th, 2022

[Seth Klein]

It's a very good point.

I see that my time is limited, but the TMX pipeline is very much a federal jurisdiction, and where we are approaching the $20-billion mark, that money would be much better spent somewhere else.

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

Finally, then, because it is federal jurisdiction to transport through interprovincial and offshore, we can then have a say on production, correct?

[Seth Klein]

I mean, that seems squarely in your jurisdiction.

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

Thank you.

[The Chair, Liberal, John Aldag]

We're going to go now to a couple of five-minute rounds, so they'll be a little faster than the opening ones.

Mr. Melillo, you're up first for five minutes.

[Eric Melillo, Conservative, Kenora, ON]

Thank you, Mr. Chair.

I want to thank all the witnesses for joining us today and providing great testimony so far.

I'd like to start with Mr. Klein.

I'm curious to get your thoughts on, first of all, whether you know if the government has had any consultations with indigenous communities that are involved in industry partnerships on how an emissions cap may affect their prosperity. I guess there's a second part to that: Do you believe the government has a duty to have those conversations and those consultations?

[Seth Klein]

Well, I don't know who've they've spoken to on that front, but as I alluded to at the top of my testimony, this government has passed a law to uphold the UN Declaration on the Rights of Indigenous Peoples. It sets a higher bar that requires not only consultation but consent.

In the case of these two pipelines I mentioned, one that is owned by the federal government and the other where the federal government has a clear stake, articles 10 and 36 of the UN declaration are clearly being violated. Article 10 says that “peoples will not be forcibly removed from their [own]...territories”.

Article 37 brings in that obligation to require consent. The titleholders of the Wet'suwet'en, with respect to the Coastal GasLink pipeline—and the Delgamuukw decision recognized that it was the hereditary chiefs who are the titleholders—have not given their consent. Here in my city, the Trans Mountain pipeline terminus is in the territories of Wet'suwet'en—

[Eric Melillo, Conservative, Kenora, ON]

Thank you. I'm sorry, I have limited time.

In your view, given that many indigenous communities have industry partnerships, have development in their communities on their land, would it be your view that the federal government is required to have the consent of indigenous communities in order to move forward with a cap on emissions?

[Seth Klein]

The caps should be applied within each province and within each firm where an indigenous community is the titleholder. Yes, absolutely, their consent is required.

Just to finish that thought, in the city where I live where, the Squamish and Tseil-Waututh are at the terminus of the TMX decision, their consent has not been provided.

[Eric Melillo, Conservative, Kenora, ON]

I appreciate that, thank you.

I have a little bit of time left. I think I'll go to Ms. Petrunic to pick up from where my colleague Ms. Rempel Garner left off.

I come from the riding of Kenora in northwestern Ontario with very small rural communities. Public transit is essentially non-existent, and it's likely going to stay that way, given our population. Further to that, a lot of people have big trucks and four-by-fours driving long distances in poor conditions. It doesn't seem that, at this point, alternatives are really available, or, at the very least, there isn't trust there for a number of people to look to greener alternatives.

This is a bit of a broad question, but, in your view, what does the government need to do to help support that transition so that northern and rural communities aren't left behind?

[Dr. Josipa Petrunic]

There are two answers to your question. One, very simply, of course, is the investment in on-demand mobility. That's for smaller communities and probably outside the jurisdiction of this particular committee. For those communities that don't have public transit, on-demand mobility with smaller vehicles is a [Technical difficulty—Editor]. It has not historically been recognized as transit, but [Technical difficulty—Editor] a 40-foot bus.

The second element is the more pained of the equation. I suppose [Technical difficulty--Editor] the member who said [Technical difficulty—Editor] The only way they're going to get people out of their cars and out of their trucks when they don't necessarily need them for all the needs that they think they do is when you price roads.

I don't know one politician in the country who is keen on road pricing, which means pricing kilometres and pricing metres when people get in their cars and drive, including in rural communities. Until we put a price point on that consumption, we don't get individuals, households and families or communities looking at alternative mobility, either shared or individual purchases, as viable options.

I know that it's a hard pill to swallow, the concept of [Technical difficulty—Editor] pricing and especially for Canadians. It's a hard price point to [Technical difficulty—Editor] but it is the pill that we have to swallow in the interests of greenhouse gas emissions reduction. That's a starting point.

[Eric Melillo, Conservative, Kenora, ON]

Thank you.

[The Chair, Liberal, John Aldag]

The five minutes go fast.

Now we have Ms. Lapointe for five minutes.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

My first question is to Mr. Severson-Baker.

In my other committee—I'm a member of the Standing Committee on Industry and Technology—we're currently studying critical minerals and clean energy. Both of these studies, here and at the other committee, really go hand in hand, and it's great to see the potential for Canada's future in clean energy.

Can you tell me your thoughts on the different scenarios between a cap on emissions only versus a cap on emissions and a simultaneous cap on production in the oil and gas sector? What would that look like in terms of the environmental impact coupled with the impact on jobs in the sector?

[Chris Severson-Baker]

We have not advocated for a cap on production; we've advocated for a cap on emissions. We think that would result in the future in a reduction in production because of changes in demand for the product globally.

I think one of the most important features of a cap-and-trade system or a carbon-pricing system that meets the level of a cap is that you have to be prepared to not protect the facilities that have a very high carbon cost, a very high cost of abatement, which is always what is done in these types of cap-and-trade type systems throughout the world. It weakens them, and it removes the effectiveness of them.

I think what we can expect to see is production not being replaced when production reaches the end of its economic life, but then, beyond 2030, the declining price of oil because the lower demand for oil would result in an actual reduction in production coming from our sector because we are very high cost, high carbon overall.

[Viviane LaPointe, Liberal, Sudbury, ON]

My next question is for Ms. Smith.

What type of balance is achieved when looking at mitigating technologies for greenhouse gas reductions, as well as developing new renewable and clean energy sources?

[Merran Smith]

Are you asking about balance in terms of where we should invest, where we should prioritize?

[Viviane LaPointe, Liberal, Sudbury, ON]

I mean where we should prioritize.

[Merran Smith]

I talked about the IEA future demand scenarios if countries move forward. My colleagues also mentioned the 136 countries, representing 90% of the world's GDP, that have committed to net-zero goals. Combined with the cost declines we see in renewables like solar and wind, as well as storage and hydrogen, which have been phenomenal over the past decade—80% to 90% reductions in solar, 40% in wind, and battery storage has gone down significantly, as well.... I think we could be suggesting that we're going to increase production in our oil and gas sector, but I don't think that the global demand is going to be there. That's not what the scenarios are telling us.

Because we have such great opportunities in these other energy sectors, including hydrogen, which could be used for export.... For example, the proposed LNG pipeline across British Columbia could be converted to export hydrogen. They are saying green hydrogen will be on cost parity by 2030 with other forms of hydrogen. Canada has a huge opportunity there.

You named the critical metals and minerals, which are part of the battery conversation. The battery is going to be the central part of the new energy system. Renewables have their intermittency. Batteries are now where the most money is to be made and where the most IP is. Canada is well positioned with our metals and minerals, our clean electricity, our skilled workforce and our auto sector. That should be where Canada is investing, and growing out that sector and the jobs to strengthen our economy.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

I don't believe I have enough time to ask another question, so I'll wait for another round.

[The Chair, Liberal, John Aldag]

That's great. Thank you.

Let's go to Monsieur Simard, who will have two minutes and 30 seconds.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

I have a quick question for Mr. Beugin.

Figures show that, during the pandemic, $30.9 billion in public funds has been directed to oil and gas in Canada. According to Oil Change International, Export Development Canada, or EDC, provides $14 billion a year solely for oil and gas. When you add up all the subsidies provided to the oil and gas sector through EDC and all other federal programming, the total for 2018 is $78 billion.

The new technologies—carbon capture and storage—are not yet widely used. Some engineers even argue that the technologies are not sufficiently developed. Massive amounts of money are needed simply to get by.

Without federal government support, how is it possible to ensure that the oil and gas sector produces less emissions? If the sector needed support before, it's going to need even more support after.

Allow me to draw an analogy. Subsidizing oil and gas to achieve environmental gains is like using a Lada to race in the Formula 1.

My question is very simple. Can a low-carbon oil and gas sector be viable?

[Dale Beugin]

Thank you, Mr. Simard.

We recently released new research and a new report exploring fossil fuel subsidies, and we found that there is a need to recalibrate the way governments—both federally and provincially—provide that support, whether through loans, spending or deferred investment. That spending needs to find a balance between investing in transition-consistent activities.

Governments need to be prudent about those market shifts—which Ms. Smith articulated are coming—and make sure that there is a return in terms of growth and economic activity, as well as emissions reductions from the public finance that governments use. There is a need to better calibrate how governments use their spending tools, absolutely. There's also a need to coordinate how they use spending tools with other policy instruments, such as carbon pricing or a cap on emissions in the sector.

[The Chair, Liberal, John Aldag]

We're out of time on that one.

We're going to go to Mr. Angus, for two and a half minutes.

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

Thank you.

One of the other reasons I wanted to be on this file is because I've lived through unjust transition where we lost the silver and iron economy in my region. We didn't just lose 1,000 jobs, we lost restaurants and grocery stores, and we saw family breakups. The transition was U-Hauls leaving in the middle of the night; I've seen that in the communities.

What concerns me is that we have so much potential right now in the west for the transition. We're looking at the energy sector that has lost 17% of its jobs, and we're expecting additional losses of 10%. Yet, in the clean energy sector, we're seeing growth. We're seeing huge geothermal potential in places like Jasper, and we have so much expertise.

Ms. Smith, can we talk about the potential and the transition of actually starting to invest in clean tech? What does it mean in actual economic terms for sustainability in communities, because if we don't put in these investments now, they're going to suffer from the real effects of an unjust transition?