Natural Resources Committee on Sept. 20th, 2023

[The Chair, Liberal, John Aldag]

Good afternoon, everyone. I call this meeting to order.

Welcome to meeting number 72 of the House of Commons Standing Committee on Natural Resources. Today, we're meeting to resume our study of Canada's clean energy plans in the context of North American energy transformation. We'll then proceed to sit in camera for a brief committee business discussion near the end of the meeting.

I'd like to welcome all of our guests.

For Monsieur Mousseau, who is here in person, and for all of our guests online, welcome.

As a bit of a quick run-through, for everybody who has done their sound checks, hopefully the technology holds and we'll be good. We are missing one witness who had confirmed. Obviously, that sound check has not happened. We are trying to track down the witness. We'll go through the opening comments from everybody else. If the missing witness appears, we may have to suspend for a minute to do the sound check. Then we'll resume, get those opening statements done and go into our rounds of questions and answers. If we can't track down that witness, we'll just continue with those of you who are able to successfully join us.

I have a couple of quick things for anybody who is new to testifying at committee. Please wait until I recognize you by name before speaking, and please address any comments through the chair, although I'm pretty relaxed about that so you can have a bit of leeway with talking to the members. For those participating by video conference, click on the microphone icon to activate your mike, and please mute yourself when not speaking. For those in the room, we have people who control the microphones, but we can't do that remotely.

Interpretation for those on Zoom is available. If you haven't been taken through it, at the bottom of your screen there is a choice of floor, English or French. You can choose to hear whichever language is being spoken or the translation by choosing either English or French. Your earpiece will pick up the desired channel.

Now that we're in session, screenshots and photos are not allowed.

In accordance with our routine motion, I am informing the committee that all remote participants have completed the required connection tests in advance of the meeting.

Thank you, each of you, for doing that.

Now, to welcome the guests, as I've said, we have in the room with us Normand Mousseau, physics professor, Université de Montréal, and scientific director, Institut de l'énergie Trottier, Polytechnique Montréal. We also have, from AGvisorPRO Inc., Robert Saik, professional agrologist. From the Alberta Federation of Labour, we have Gil McGowan, president. From Arianne Phosphate Inc., Raphael Gaudreault, chief operating officer; and from the World Resources Institute, Daniel Lashof, director for the United States. We are hoping to pull in, from BioSphere Recovery Technologies Inc., Zsombor Burany, chief executive officer.

That's our panel for today.

Each of you will be given five minutes for opening statements. Then we'll get into the rounds of questions and answers.

I'll try to use a yellow card as a visual cue when you are down to 30 seconds left on the clock. When I give you the red card, the time is up. Don't stop mid-sentence, but wind up your thoughts. We will move on to the next person, because the time allotment we have goes pretty quickly.

With that, I'll go with the order of my sheet. We'll start in the room with Monsieur Mousseau.

I'll turn the floor over to you for your five-minute opening statement. The floor is yours.

[Prof. Normand Mousseau, Physics Professor, Université de Montréal and Scientific director, Institut de l’énergie Trottier, Polytechnique Montréal, As an Individual]

Thank you, Mr. Chair.

Honourable members, thank you for inviting me to participate in the work of the Standing Committee on Natural Resources. There's more information about me and the Institut de l'énergie Trottier in the brief I sent you. Our work is about the energy transition and how to support governments in achieving climate goals.

The United States' 2022 Inflation Reduction Act put pressure on the Canadian government, and the government tried to respond in the latest budget. In addition to that response, Canada is moving forward with its own climate agenda. A few weeks ago, the government tabled regulations to reduce greenhouse gas emissions associated with electricity generation by 2035. We're also expecting another set of regulations to cap fossil fuel industry emissions.

We need a made-in-Canada approach. We can't just copy the Americans. For one thing, Canada doesn't have the same political and economic structures as its neighbour. For another, the size of the Canadian economy means that we can't throw as much cash at the problem as the United States. That's why we have to focus on our strengths so we can advance Canada's decarbonization agenda and meet those climate targets.

I think the federal government needs to do much more than just give huge grants to foreign investors who bring their know-how and intellectual property. It also has to support Canadian sectors active in developing technology, integrative knowledge and exportable approaches, because the energy transition also has to provide the financial capacity to get the job done.

That's why we need strategic capacity-building approaches to developing scalable decarbonization solutions, not just pilot projects. There are too many pilot projects. We need an integrated approach.

Many sectors are still rudimentary, even at the ideas stage. I'll go over some of them. The first, of course, is a robust building decarbonization policy. That is key. Canada is a cold country, and building decarbonization means getting rid of natural gas while ramping up electrification and other heavy technologies, which require integrative know-how to avoid blowing electrical grids and manage peak consumption.

Since Canada is a cold country, we could develop technology integration and peak management know-how along with other related elements. That know-how would be exportable to the northern United States and other cold countries. We need to tackle that. Canada's diverse energy resources mean we can develop a portfolio of useful solutions that could transfer to certain industries.

We also have to deal with a major auto sector reorganization in which vehicle electrification will result in job losses. We need to use people's know-how to move forward and adopt policies to reskill those workers or transfer them to sectors of crucial importance to Canada, one of which is building infrastructure, in my opinion. I am not an expert in this area, but the energy transition will require massive investments in infrastructure, be it electricity, public transit or other infrastructure. However, Canada is not particularly productive in terms of infrastructure. I think we need to see a focused effort; we need a robust strategy to reduce infrastructure costs and speed up infrastructure deployment. Some of this could be achieved through prefabrication, such as in building and road infrastructure. By developing an infrastructure-related manufacturing industry, we can support the auto sector.

Regarding electricity, we need to dramatically increase production in Canada, but that comes with huge costs, so we also need to develop strategies to improve productivity as we deploy that infrastructure.

There are many other potential sectors that could be used, but for decarbonization, we must move away from traditional approaches or sectors of electricity production to move in the direction of energy demand. In that direction, there are many areas where Canada could position itself ahead of its partners, while speeding up the energy transition.

Thank you.

[The Chair, Liberal, John Aldag]

Thank you. There will be time for more discussion following the presentations.

I always apologize for having to make people finish partway through their comments.

We're now going to go to Robert Saik.

I understand, Mr. Saik, that you have to leave at 6 p.m., so we'll get your opening statement. For any of our panel members who have questions for Mr. Saik, please be aware that at six o'clock he is going to drop off.

We do have our last panellist, who is joining us now. For those who are here, we are ready to hear your opening statements. Then we'll suspend briefly to do the quality check. We'll then proceed, after those opening statements, to questions.

Mr. Saik, over to you. You have the floor for five minutes.

[Robert Saik, Professional Agrologist, AGvisorPRO Inc.]

Good afternoon.

Clean and green—my background is agriculture and agronomy. I built a very large consulting business and one of the first carbon credit trading companies in North America.

In Canada, as of last year, we had about 27 million acres of wheat, and we had 22 million acres of canola. When you look at canola, being about 40% oil with a 90% extraction rate, we could convert each tonne of canola oil into 360 litres of biodiesel. For every tonne of CPS wheat that we grow, which is a specific kind of wheat that is generated or grown for the ethanol industry, we could extract about 425 litres of ethanol. When you put this in the context of the opportunity for Canada to grow additional crops—and I know there's always a trade-off between growing crops for food and growing crops as fuel—Canada has a great potential to increase our production of crops to meet this new biofuel market.

Our average wheat yield last year was 51 bushels per acre, and our average canola yield was about 40 bushels per acre, which is about one tonne per acre.

There is a lot of opportunity for us as Canadians to grow more crops that can feed into the biofuel industry. However, we must temper the countervailing policies, such as a perceived reduction of nitrous oxide emissions. That is fine to achieve, but if you achieved it through the absolute reduction of fertilizer, you would catastrophically hamstring our ability as farmers to meet biofuel. Also, the difference in an absolute 30% reduction in fertilizer to meet the nitrous oxide target would mean 0.000028 of 1% to the global greenhouse gas economy

The opportunity that we have in agriculture is to increase that production and increase those yields, carving off part of our production into the biofuel economy. The excess could also be used in biomass—for example, oat hulls. The hulls that remain from oats can be used to burn very cleanly in biomass digester furnaces.

The idea that Canada could be clean and green is really important. We have some of the lowest environmental impact quotients when it comes to how much input we're using to produce our crops, and we have some of the highest no-till or zero-till farming on planet Earth, which makes us some of the best conservation farmers on the planet.

To be clean and green, let's use agriculture as part of the solution to meet this new challenge we're facing.

[The Chair, Liberal, John Aldag]

Thank you.

You have time left on the clock. That's excellent. Thank you for that.

We will now go to Mr. McGowan.

If you're ready, there's five minutes on the clock for you. The floor is yours.

[Gil McGowan, President, Alberta Federation of Labour]

Thanks.

Almost exactly one year ago, a coalition of Alberta unions representing thousands of Alberta workers in oil and gas, construction, manufacturing and industrial maintenance released a blueprint for our provincial economy entitled “Skate to Where the Puck is Going”. The impetus for both our coalition and the report was the daunting realization that change is coming to our provincial economy whether we like it or not.

As worker leaders and worker advocates, we decided that it's better to prepare for change than to get run over by it. More specifically, we decided that it's better to prepare to seize the many opportunities associated with the rapidly accelerating global energy transition than to bury our heads in the sand and be left behind as the rest of the world moves forward.

Our report outlined opportunities in areas like hydrogen, critical minerals, electricity, housing, transportation, building retrofits, agribusiness and renewable energy, but also offered suggestions about how to secure a future for our oil and gas sector in a decarbonizing world, specifically by helping the sector pivot towards producing feedstocks for materials as opposed to feedstocks for fuels.

Perhaps most important, we concluded that denial is not a plan and that delay is not in the best interests of the working people we represent. That's why we are very pleased that this committee is taking a close look at the Biden administration's Inflation Reduction Act.

In our coalition report, we argue that the only way we in Alberta can keep up with the scale, scope and pace of the unfolding global energy transition is for our federal and provincial governments to embrace the notion of government-led industrial policy in the public interest. We said that we need to pivot our economy toward opportunities in the lower-carbon economy. We said that we couldn't wait for the market to do it itself. We said that we needed to follow the lessons of former Alberta premier Peter Lougheed, who used government-led industrial policy to create whole new industries and decades of prosperity when he saw in the 1970s that we were running out of conventional oil and gas.

We said that our governments at both the provincial and the federal levels have to put their money where their mouths are, because industrial policy only works when it is impressively funded. Perhaps most important, we said that workers need to be at the table when decisions about industrial policy are being made and that strings need to be attached to industrial policy funding to make sure that money actually flows to Canadian workers, Canadian businesses and Canadian communities.

With their Inflation Reduction Act, the Biden administration has done all of these things for the American economy and for American workers. The act has now been in place for more than a year and by every possible measure it has been an unequivocal success. The IRA has created hundreds of thousands of jobs. It has unleashed hundreds of billions of dollars in investment, and it's setting up the American economy for success in a rapidly changing world.

The question for Canadian policy-makers is not whether we should follow suit—of course we should. The real question is how we can up the ante and do even better.

The good news from our perspective is that the federal government has gotten the memo. In their last budget, they committed over $80 billion to IRA-style incentives. They have also seen the wisdom of giving workers a seat at the table and tying IRA-style strings to the funding to make sure that Canadian workers and Canadian communities benefit from the investments.

The bad news from our perspective is that Conservative politicians, both in Alberta and in Ottawa, have at least implicitly rejected the logic of the IRA and are ignoring or dismissing its obvious successes. How else can you explain the UCP Alberta government's decision to impose a moratorium on investments in renewable energy projects, a moratorium that is jeopardizing $33 billion in investments and 22,000 jobs? How else can you explain the reluctance of federal Conservatives to even discuss the IRA, let alone acknowledge its obvious accomplishments?

I'm here on behalf of Alberta workers today to say this needs to stop. In the IRA, we have a policy model that works. We need our elected representatives to stop putting politics ahead of the public interest.

Thank you very much. I look forward to the discussion.

[The Chair, Liberal, John Aldag]

Thank you very much for those opening comments.

I will go now to Monsieur Gaudreault, who will have five minutes.

The floor is yours when you're ready to start.

[Raphaël Gaudreault, Chief Operating Officer, Arianne Phosphate Inc.]

Thank you very much.

Arianne Phosphate is a Chicoutimi‑based mining company that is developing a phosphate production project in Saguenay—Lac‑Saint‑Jean. Our company owns the Lac à Paul phosphate deposit, which is a fully permitted, construction-ready project located 200 kilometres north of the city of Saguenay. This asset is one of the world's largest undeveloped deposits, capable of producing environmentally friendly phosphate concentrate. Because of its high purity and low contaminant content, Arianne phosphate can be used to produce fertilizers, and has specialized applications including in food, animal feed, and the production of lithium-iron-phosphate batteries.

We plan to build an open-pit mine, an ore processing plant, and a deep-water port, in addition to upgrading 240 kilometres of logging road for the annual shipment of our three million tons of phosphate concentrate. At full production, the company will require approximately 375 employees.

Phosphorus is a key element in agriculture, as it cannot be substituted, making it indispensable to crop growing. It benefits root development and provides increased resistance to drought. Recent disruptions in the global supply chain, resulting from export quotas imposed by China and Russia, have been amplified by the situation in Ukraine. As a result, selling prices have risen considerably. Most importing countries had to revise their supply strategy, highlighting the weakness of the chain.

Canada has not been a phosphate-producing country since 2013, following the closure of the Agrium mine, now called Nutrien, in Kapuskasing. We are therefore 100% reliant on imports, mainly from the United States, which itself is a net importing country. As a result, the performance of the economy in the Prairies depends on our ability to source a product overseas—a product that we could in fact be exporting.

Arianne Phosphate's potential customers are located all over the world. However, the geographic location of our company and our access to the St. Lawrence Seaway give us a competitive advantage in serving markets in western Europe, the east coast and gulf regions of the United States, as well as Canada. These markets are particularly attractive, given that they are import markets for phosphate products that are showing steady growth in their use in traditional fertilizer applications. However, demand projections for technological applications such as battery manufacturing exceed current production capacity by far.

In that sense, the committee's current study is very important for the Canadian phosphate industry and for Arianne. It's an opportunity for Canada to set itself apart with a product of the future that meets two global needs: the use of fertilizers to improve food productivity, and the development of a lithium-iron-phosphate battery manufacturing industry as part of the global energy transition.

Although phosphorus is an abundant element on Earth, its geographical distribution makes it highly vulnerable in terms of security of supply, with most of the world's reserves concentrated in North Africa and China. It should also be noted that, in terms of quality, the concentrates produced in these countries are far inferior to those found in Canada. Our phosphate is igneous, not sedimentary, which means that the concentrate is much more pure and, in practice, free of heavy metals and radioactive elements. This is very important for the fertilizer industry, but even more so for battery manufacturing. In fact, only a limited portion of the world's phosphate reserves can be used to produce a phosphoric acid that meets the technical specifications of battery manufacturers.

Currently, virtually all the world's LFP cathode capacity is based in China. The phosphate used to produce those cathodes is also sourced domestically, as China is self-sufficient in phosphate. The implication of this is that, if LFP cathodes continue to be produced predominantly in China over the long term, the raw materials that are used in their production will continue to be sourced domestically as well. To be successful, western carmakers will need to reduce their dependence on materials from China and locally source raw materials and inputs, particularly PPA, purified phosphoric acid.

Canada has a role to play in solidifying its strategic advantage in phosphorus. It is disappointing to see that this element of the future is not currently part of the Canadian critical minerals strategy.

The government is also relying heavily on mining exploration, but few mining projects are underway in the country. There are various reasons for this, including the lengthy time periods required and strict regulations, not to mention the lack of support for mining infrastructure development.

Thank you for listening.

[The Chair, Liberal, John Aldag]

Thank you for those opening comments.

We'll go now to Mr. Lashof.

Thank you for joining us. Whenever you're ready, the floor is yours. You'll have five minutes for your opening statement.

[Dr. Daniel Lashof, Director, United States, World Resources Institute]

Thank you, Chair and members of the committee. It's an honour to participate in your important work.

The devastating impacts of climate change seen in Canada, the United States and around the world in the last year underscore the critical need to meet the Paris Agreement goal of limiting global warming to no more than 1.5°C. However, it's clear from the global stocktake recently released by the climate convention that countries must substantially increase their ambition and accelerate their transition to a clean energy economy to meet the Paris goals.

North America must contribute by cutting emissions 50% from peak levels by 2030 and reaching net-zero emissions by mid-century, and it should do so in a way that leaves no one behind by charting a just transition for workers and communities.

There are five pillars of this transformation that many studies recognize as essential. First is to increase the efficiency of energy use. Second is to electrify as many end uses as possible, including road transport and low- to medium-temperature heat. Third is to achieve a 100% clean electricity system. Fourth is to decarbonize remaining fuels with hydrogen and selected use of biomass wastes such as residuals from agriculture but, in my view, not crops. Fifth is to implement natural and technological carbon removal to compensate for remaining emissions.

In the United States, the Inflation Reduction Act combined with the Bipartisan Infrastructure Law and the CHIPS and Science Act create powerful incentives to make progress on each of these pillars. Here are just a few of the key provisions.

For pillar one, the IRA includes tax credits for residential energy efficiency upgrades and a greenhouse gas reduction fund targeting projects in disadvantaged communities. For pillar two, the IRA includes consumer tax credits for electric vehicles and heat pumps. For pillar three, the IRA includes a choice of production or investment tax credits for wind, solar and other new zero-carbon electricity sources as well as a production tax credit designed to keep as much existing nuclear power online as possible. For pillar four, the Bipartisan Infrastructure Law includes investments in hydrogen hubs, and the IRA includes a performance-based production tax credit for clean hydrogen and enhancements to the tax credit for carbon capture and sequestration. Finally, for pillar five, the Bipartisan Infrastructure Law includes investments in direct air capture hubs, and the IRA includes enhancements to the tax credit for direct air capture.

The IRA is designed to promote a just transition by requiring prevailing wages for most projects to be eligible for the full tax credit and through provisions designed to promote a manufacturing renaissance in North America on clean energy technologies.

Early indications are that these policies are having a tremendous impact. As Mr. McGowan said, it's a tremendous success. Research by the Rhodium Group and MIT found that over $200 billion of investment occurred in the last 12 months, an increase of 165% over the level of investment just five years ago. While it has been widely reported that the IRA will invest $369 billion in federal resources over 10 years, that was a preliminary estimate that assumed little acceleration of the clean energy transition. A more recent estimate by Goldman Sachs suggests that the IRA will invest over $1 trillion of federal resources and that most of those investments will be matched by at least two dollars in private investment for each dollar of federal investment, for a total of over $3 trillion.

Nonetheless additional policies will still be needed for the U.S. to meet its climate goals. A study released by Princeton University this summer found that current policies in the U.S., including those of the IRA, will likely reduce emissions to about four billion tonnes in 2030, or to about 40% below their peak levels in 2005. While that represents tremendous progress, it still leaves an emissions gap of about 800 million tonnes that will need to be closed with additional policies, such as regulations to cut carbon emissions from power plants, motor vehicles and large industrial facilities.

Supply chain bottlenecks and siting and permitting challenges will also have to be overcome to deploy clean energy technologies at the speed and scale needed to meet the U.S. emissions reduction targets.

Overall recent legislation in the United States has initiated a race to the top in clean energy technology. This is a race we all win if everyone joins in.

Thank you very much.

[The Chair, Liberal, John Aldag]

Thank you.

Colleagues, we're going to suspend briefly so we can do the sound check with Zsombor Burany from BioSphere Recovery Technologies. As soon as that's done, we'll resume, hear that opening statement and get into our rounds of questions and answers.

We're suspended.

Okay, Mr. Burany, you've seen how it goes. I'll turn the floor over to you. You'll have five minutes. Then we'll get into our questions and answers.

The floor is yours.

[Zsombor Burany, Chief Executive Officer, BioSphere Recovery Technologies Inc.]

Thank you very much. I'm encouraged by what I hear so far in the panel.

Honourable members, my name is Zsombor Burany, and I am coming to you as a patriotic Canadian who has been forced to accept funding from sources based in the U.S. and Europe for several very large projects. I want to talk a little about these projects. This addresses the root cause of what I think everybody here is facing.

These projects are all tied into energy natural resources and the reduction or the removal of carbon and other toxic pollutants. Each is in the range of $2 billion plus. Although they were all 100% Canadian in origin, over the past two years they have become or are in the process of becoming 100% foreign-owned.

The first one is a toxic waste processing enterprise that recycles mining tailings and purifies toxic water. It's a corporation called GROW Holdings. The second is a very large-scale battery recycling facility—lithium and a bunch of other rare earth elements. The third one is an enormous biomass capture enterprise that will be removing hundreds of millions of tonnes of carbon and microplastics from the environment.

These were all emerging Canadian resource and energy-based companies that have been unable to gather domestic support to scale their operations. Here is just a little bit about each one.

The toxic waste business developed cutting-edge waste treatment and cost-effective metals recovery and recycling technologies for the mining industry. Our researchers, led by Dr. Mishra, who is a leading materials expert, in partnership with Worcester Polytechnic Institute, Leuven university in Brussels and the University of Alberta, have over the past 15 years developed four unique patents that process toxic tailings and polluted water into usable materials and drinking water.

Why is this important? Because GROW is the only company on the planet today that can turn the toxic water produced at the tar sands at scale into potable water. In fact, the process allows the water to be perpetually reused instead of having fresh water always flowing in and spent water flowing out into the waterways. It's a huge win for the environment and energy production.

Through a related patented process, GROW can also convert toxic red mud produced by aluminum mines into usable safe materials like pig iron. There are billions of tonnes of toxic red mud around the world that need to be treated. Toxic red mud just sits in settling ponds. We Canadians are the first to figure out how to safely process and eliminate all of those harsh chemicals, at a substantial profit. Unfortunately, growth funding was only available out of the U.S., so GROW is no longer Canadian. The technology was invented by Canadians. The proofs of concept, pilot projects, peer review and patents were all led by Canadians. I'm proud of the achievement and very saddened by the outcome.

The battery business is Li-Cycle. Please look them up. There is a wonderful two-minute video that explains the development that's taking place. It will be the largest battery recycling facility in the world and is under construction currently in Rochester. In fact, they have plans for three more identical facilities for the U.S. and Europe. Let's look at where the funding came from.

To fund their $2-billion project, Canada provided zero dollars. South Korea—and I don't even know why they're in this mix—provided $172 million U.S. The U.S. government directly put in $400 million, and then the U.S. bond market raised another $1.5 billion. The founders are Canadians and most live in the GTA. They are in the process of relocating to the U.S. and already have 300 employees there.

Finally, the biocarbon project is completely funded through Europe and U.S. The technology was developed in Canada and the founders are all Canadian, but all of the benefit will go to the U.S. and private investors—the same story as the previous two.

There is no shortage of good ideas and capable people in Canada. As a nation, we continue to generate brilliant, leading solutions, so finding the answers is rarely the problem. We just can't get the big dollars to build out the big ideas. We desperately need very large-scale loans at very low interest rates to build out these initiatives.

None of the examples I gave required that the founders invest millions of their own money or have huge investors coming in. They were looked after. They received a little bit of capital in the beginning and then very large funding at low or zero interest, with repayment holidays for five years. It would cost the government almost nothing to do this, and the benefits are enormous. Every one of the founders of these businesses I mentioned earlier would have loved to build their businesses in Canada and expand to foreign markets, but they have been literally forced to uproot their families and go to where the money is.

You want to—

[The Chair, Liberal, John Aldag]

I'm sorry, but I'm going to jump in and ask you to conclude. We're at the end of the five minutes and a little bit over. If you could just take a couple of seconds to finish up, then we'll get into our rounds of questions.

Thank you.

[Zsombor Burany]

Yes. Thank you.

I'm at the end. All I'm saying is that we need these investments to be able to let the businesses grow. It's a non-partisan benefit to everybody.

Thank you.

[The Chair, Liberal, John Aldag]

Great. Thank you.

Before we get started, I just want to welcome Mr. May and Mr. Gaheer to our committee today.

For our rounds of questions, first up I have Mr. Patzer, who will have six minutes on the clock.

Mr. Patzer, it's over to you.

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

Thank you very much, Mr. Chair.

Thanks to all of our witnesses for being here today.

Mr. Mousseau, I just want to ask you quickly.... You were talking about how the grid capacity would have to increase. I'm wondering if you have a number for the committee of by how much our grid capacity would have to increase in order to electrify the grid.

[Normand Mousseau]

In the evaluation, we did some modelling. Canada needs to produce twice as much electricity. We also have to strengthen the transmission and distribution network because, if we want to electrify home heating and cars, we need more powerful networks that are closer to customers, not just in terms of production.

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

Okay.

We know that the federal government is moving towards a net-zero electricity grid by 2035, which gives us only less than 12 years. Do you think it's possible to accomplish that in as short a period of time as 12 years?

[Normand Mousseau]

Yes, it is possible, but we have to make the investments now and plan things properly.

The Institut de l'énergie Trottier conducted a study last year in eastern Canada, from Newfoundland to Ontario. None of the utility companies have the investment plans to meet those targets. They can't even meet the anticipated demand on the ground from Canadians who want to go electric and contribute to Canada's decarbonization.

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

Okay.

I've seen some research and some studies done that would indicate that we need another 119 Site C hydro dams like the one that's being built in B.C. in order to double our grid capacity or else a large number of CANDU nuclear reactors. Part of the reason I'm asking this is that, if we look at our regulatory timelines to get projects approved and then built, it seems like that 12-year window might be a little bit narrow here. Would you agree?

[Prof. Normand Mousseau]

One of things is that we know where we are going. We just haven't made the investment. It will be tight, and maybe it will not be reached exactly, but if we don't have this regulation, it will not happen. If you go abroad—if you look in the U.K. and if you look in the U.S.—the massive calls that are being made today to upgrade the production are way above what we are talking about in Canada. Canada is just lagging. The U.K. had a 15-gigawatt call for a project a few weeks ago. It did not meet everything because the prices have been going up on offshore wind, but it is making the call, the bid for tender, and it is moving ahead. The U.S. is doing the same thing.

Canada, by just closing its eyes and saying it will not happen, is losing opportunities.

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

I saw the other day that Ørsted, which is one of the global leaders in offshore wind, said that U.S. projects no longer make financial sense. I'm just curious. We're seeing some of the big players saying that there are problems with trying to do that. Even if we look at the onshore side, we see that there have been wind farms in Saskatchewan and Alberta for so long that they're now decommissioning them and taking them down because they've already exceeded their lifetimes. I mean, we've already been investing in renewables out in the Prairies here.

When I look at the demand that's going to be needed to double the grid, I just don't see the timeline as being able to be met. Are you concerned that more big players in the wind industry, for example, are going to...? Are you concerned that they're going to back out if they look at the rising costs?

[Prof. Normand Mousseau]

What's happened in the U.S. is that prices were going down for many years, and now everybody is calling and trying to build. There's a lot of demand, and it's hard to respond to the demand due to the supply chain. Clearly, the longer we wait, the more we are the tail of this supply chain and the more we will pay, unless we have a clear strategy, and that's what I'm talking about here. We need a real strategy in Canada to make sure we can provide this transformation.

Let me tell you that in Quebec today, Hydro-Québec is obliged to say no to consumers who want to decarbonize because it doesn't have the capacity. We're dreaming if we say, “Well, it will not happen.” People on the ground—the citizens, the industry—want to decarbonize, and they're knocking at the doors of utilities who all say, “We have not made the plans to invest.”

The problem will be the pressure from the bottom, under politicians, under governments, who will say, “We have not planned. Where were you?” The issue is that if we don't move, there will be problems coming up from the citizens, and we already see those on the ground. We're not dreaming or making up something that is being pushed by a few academics here.

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

Thank you for that.

Mr. Lashof, you made a quick comment about being interested in residuals but not in crops. I'm just wondering. Is that residuals from biofuels, or are you just saying that we shouldn't be getting biofuels from crops—period? I'm just looking for some clarity on that comment.

[Dr. Daniel Lashof]

Yes. Thank you for the question.

I think there are large resources that are left over when crops are used for food—things like corn stover and wheat straw—that should be looked at as feedstock for biofuels, but there's a finite amount of land in the world and we really need farmers to, first and foremost, feed people. As we're approaching 10 billion people, I think we'll need all of our prime crops for people, and we should look to other biomass resources, including forestry waste such as from forest fuel-reduction programs. That's another source we should be looking to.