Natural Resources Committee on Sept. 25th, 2023

[Viviane LaPointe, Liberal, Sudbury, ON]

You also mentioned that the Inflation Reduction Act's simplicity is what drives its power. I want to ask you what that looks like for Canada. What is it in the IRA that you think Canada should replicate in its policy?

[Dale Friesen]

It's a great question.

As our smart tax people tell me, the systems between the two countries aren't the same, so of course they'll never look exactly the same.

I think it's the simplicity. Say, for instance, if you look at the investment tax credit, you see that there are more sticks attached, whereas the IRA has a lot of carrots. It's the same for labour. If you have an ITC for a carbon capture and sequestration project currently and you are unable to attract enough workers of the Red Seal technicians and apprentices to your project, then you actually get significant deductions on your investment tax credit value. We all know what a huge labour shortage we're seeing, and the fact is that many of these workers are transferable. They can go down to the States and work on those projects.

To make the ITC conditional on so many things that are out of your control—like the labour supply—makes it difficult to compete, whereas in the States with the IRA, you know that if you've designed your project to fit the parameters, it's going to be eligible. Also, if you achieve better labour targets than are set as the minimum, then you get bonuses rather than penalties. It's a carrot-and-stick approach.

Part of it is simplicity. Some of the simplicity could even be added incentives rather than takeaways, because for a board to approve a project that is going to, say, build a CCUS project for a large natural gas plant to provide clean energy to Albertans, they can't control the labour supply. If they're not able to achieve the right number of Red Seal technicians and the right number of apprentices, they can actually be at risk of losing a huge percentage because of something completely out of their control. They really don't know what they can count on.

Giving certainty can be just in the way that you design these extra features of the ITC. I would simplify. For instance, for labour, you could simply say to make it a best effort. That would take away the risk to the corporation in saying that of course this is the goal and the desire, but if they make best efforts to achieve it, then they'll know they will get the full ITC. Currently, that's not the case.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

Chair, I'm going to cede my time to my colleague MP Sorbara.

[The Chair, Liberal, John Aldag]

There's one minute left, so let's go.

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

Thank you, Viviane.

Thank you to my colleague. That was very kind of her.

For the gentleman from ATCO, obviously we all await the enabling legislation for the five ITCs. It was a great response, and there were great policy measures that we put forth.

On your six pillars, you talk about capitalizing on global opportunities. I wanted to hear from you about how ATCO has positioned itself and is capitalizing on the energy transition that is taking place.

[Dale Friesen]

Thank you, honourable member.

ATCO has invested heavily in the energy transition. We are deeply committed to renewables. We have a goal to have a thousand megawatts in operation by 2030. We're about 32% along the way of that goal and are very excited to continue to build more. We've purchased a pipeline of 1.5 gigawatts of renewables.

We've also invested heavily in clean hydrogen projects, both here and in Australia. In Australia, we're already providing clean hydrogen from renewable sources to 2,700 homes for blending, for decarbonizing residential heat. We're looking at projects like the large-scale hydrogen in Alberta that can decarbonize industry, heating for both residences and commercial, power production and transportation.

We're all in. We also believe that comes with supporting our indigenous partners, and we have a commitment to increase the amount of benefit that our indigenous partners receive from these projects so that they too can build further capacity.

[The Chair, Liberal, John Aldag]

Thank you.

We're going to end there. For the first two questions, that was about a minute over, so for Mr. Simard and Mr. Angus, I'll give you an extra minute on the clock. That will possibly take us to the end of this round of questions. Then we need to move in camera, and that will take some time.

Mr. Simard, you have two and a half minutes, plus or minus a minute.

[Mario Simard, Bloc, Jonquière, QC]

You're generous, Mr. Chair.

Mr. Friesen, you just said that you have renewable energy projects totalling 1.5 megawatts. These are projects that are already under way. Do they involve wind energy or solar energy?

[Dale Friesen]

Thank you, honourable member.

It's 1,500 megawatts, so 1.5 gigawatts, and of that we have a large solar project right now, Forty Mile, which is about 220 megawatts. In total, we have about 320 megawatts and we have an additional roughly 1,100 megawatts that we are seeking to build. It is predominately wind, mostly in Alberta, and there is also some solar.

[Mario Simard, Bloc, Jonquière, QC]

What is your objective for the next few years?

[Dale Friesen]

Our stated target in our sustainability report is 1,000 megawatts of operational solar by 2030. We hope to better that. That's our stated goal and we hope to do better.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

You mentioned in your testimony that we need to accelerate indigenous ownership. What does the government have to do in the short term to achieve that?

[Dale Friesen]

That's a great question. We think there are a few things. The Alberta Indigenous Opportunities Corporation—I think Ontario has a similar one—is a great organization to enable and to help fund these projects. The extra funding from NRCan has also been very helpful for some of the projects we've been doing recently, such as our large urban solar projects here in Calgary. The Canada Infrastructure Bank has also played a key role in some of the projects. Enabling those and continuing those are things that can make a difference.

[Mario Simard, Bloc, Jonquière, QC]

I want to ask Mr. Buffalo the same question.

Mr. Buffalo, you also mentioned in your remarks that we need to improve opportunities for indigenous people when it comes to energy.

What do you think can be done in the short term to achieve that?

[Stephen Buffalo]

In the short term, I think we've seen some positive strides with the Alberta Indigenous Opportunities Corporation, of which I'm the chair. It brings revenues to the nations. For the four projects we've funded, the nations will see a total of $31 million collectively, and that's money they've never had. I always reference the struggles of being under the Indian Act and fighting how constrictive that has been.

Being at the table as an equity owner means that now we have a say. Now it's something we can work on together with industry, but moving forward, basically it's an Alberta government guarantee. You still require financing. You still have to make sure that the project is viable and has positive returns. For some of the projects I've seen in some of the applications, there's a definite need for government subsidy to allow these things and to ensure that we are trying to find clean energy for our communities and for the province as a whole. We have to continue to find ways to do that. The AIOC gives a little bit of capacity grant money to get the governance in place, but it really opens up opportunity for equity ownership and to see revenues to help fund our communities.

[The Chair, Liberal, John Aldag]

Thank you.

Mr. Angus, you have two and a half minutes with a little bit of leeway on your clock.

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

Thank you, Mr. Chair.

I would like to follow up on my colleague's question, Mr. Buffalo.

In my region certainly partnerships with indigenous groups in hydro and in exploration are really vital. How many projects are your members involved in for hydro, geothermal, solar or wind? Do you have those numbers?

[Stephen Buffalo]

I wouldn't have those numbers, but obviously in oil and gas we're seeing that transition to get to renewables and alternatives. I guess that's why I'm here. There's a lot of interest in SMRs, but a lot of it takes working with governments.

The problem right now is that we're seeing a lack of consultation with these members. It might go through the AFN, but the AFN doesn't speak to everybody. Getting the messages down to grassroots communities is often difficult.

We're all for a cleaner planet, of course. We know that, but we're also for finding prosperity. Some things I advocate for, when we're doing these things, are better consultation with members and opportunities to be equity owners in some of these projects, because jobs just won't do it anymore. It has to be different. As long as there's an Indian Act and as long as we continue to see our leaders suppressed by bureaucrats, it will be tough.

Having these alternatives and these opportunities is very key, as long as first nation communities and Métis settlements have the opportunity to say yes or no. That's what I advocate for, and I think that's the approach the federal government should take.

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

It's certainly important. In my work the AFN has not been involved in negotiations. It's really done at the community or tribal council level.

If I heard you correctly, you mentioned that oil and gas should still be part of these incentives. I think it would blow out our climate objectives if we did that.

From your filings under Canada's Extractive Sector Transparency Measures Act, I notice that you are receiving funding from CNRL, which is one of the biggest oil sands producers. Has your organization been regularly getting money from oil sands operations?

[Stephen Buffalo]

No. That was because we were doing training. We went through a transition there. Our funding has been cut, so we obviously have to find alternatives. One objective of one of our divisions is to help train and build capacity in communities.

We did site reclamation training with funding we did receive from Canadian Natural Resources Limited. They know they're one of the big producers here. They're very active in the oil and gas sector in Alberta, so keeping them accountable to help train our people to reclaim our land, I think, is very important—

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

I'm sorry, but my time is running out. Is that a one-off project, or is that annual funding?

[Stephen Buffalo]

That was a one-off project. If we get to do more site reclamation work, they'll definitely put the rigging back on, and they'll pay for all the training we can do.

[The Chair, Liberal, John Aldag]

I have had a request to finish off the official second round, which would be five minutes to the Conservatives and five minutes to the Liberals.

We go next to Mr. Dreeshen, who has five minutes on the clock.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

The first question I would like to ask is for Mr. Friesen. I've often talked about our analyzing the actual environmental impacts from any type of project, from the first shovel we use to dig it up to the last shovel we use to cover it up. I'd like to ask you, just how much does ATCO set aside for decommissioning wind and solar facilities when they've outlived their usefulness?

[Dale Friesen]

I don't have that exact answer. I know there are set-asides, which vary by region, but I don't want to mislead. What we can do is take that away and get back to you.

In terms of the power plants we used to have—the converted fossil plants or coal-to-gas conversion plants we sold to Heartland Generation—the law required that a large set-aside be maintained for the reclamation of those projects.