Natural Resources Committee on Sept. 27th, 2023

[Rachel Doran]

There are some provisions in the IRA that are beneficial to Canadian minerals. It is clear that the U.S. designed that policy to seek out friendly suppliers of critical minerals for its supply chains. However, there are some other components of the IRA that really do benefit a “buy American” provision. I think we've seen the Canadian government lean in with customized supports through strategic investments, such as those in gigafactories.

Again, I think we should continue to think about how to anchor some of that upstream investment potential, where there may be less direct competition with the United States because we have our own minerals and may have both some competitive advantage and proximity to resource extraction, and ensure that we're taking best advantage of those upstream opportunities.

I absolutely echo all the statements made by my colleague.

[Viviane LaPointe, Liberal, Sudbury, ON]

You mentioned four things that Canada should focus on. Of those four things, which one do you believe is the greatest threat to us, either because we're behind on it or because we don't have enough focus or resources on it? Which of those four would you consider?

[Rachel Doran]

Canada's in a tough position because it is so close to such a big economic player. As a small, open economy, thinking strategically and thinking quickly are equally important. That's making sure there's good policy and thought around how to secure the right investments to get the best advantage for Canada.

The kinds of permitting forms and the necessity to finalize the investment environment here in Canada as quickly possible shouldn't be underestimated either.

[Viviane LaPointe, Liberal, Sudbury, ON]

Would another witness like to respond to that question as well?

[Greg Moffatt]

I would say again that certainty, predictability and transparency are key to investment decisions. There's a lot of activity going on. Sometimes it's okay to be a first mover, and we should be thinking about that in that context.

[The Chair, Liberal, George Chahal]

Thank you, Ms. Lapointe.

We will now move to Mr. Simard from the Bloc for the next round of questions.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair. Congratulations on your election.

Mr. Moffatt, I'm going to ask you to bear with me because the questions I'm going to ask you may seem trivial at first, but since we're going to be writing a report following this study, we'll need to be clear and very precise.

I would ask all of you to indicate whether you agree that decarbonizing the economy is essential. You can nod your head; it might save me some time.

I see you agree.

Mr. Moffatt, do you agree as well?

[Greg Moffatt]

I would say that is absolutely an ambition within industry, for sure.

[Mario Simard, Bloc, Jonquière, QC]

It's an ambition. Good.

I'm also going to ask you to indicate whether you agree that in order to achieve an energy transition, there needs to be carbon pricing.

Do you all agree that we need carbon pricing?

[Rachel Doran]

Economists have found that a carbon price is the most efficient way in a market economy to achieve emissions reductions in terms of price.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

You'll see where I'm going with this.

I think it was Ms. Dovgal who mentioned earlier that polarization and politicization were among the major problems. If I understood you correctly, you all said that if we want to be competitive, we need predictability and a coherent discourse.

There is one problem, and that's attracting investors. So if we want to attract investors, we have to have a coherent, predictable narrative that at the very least recognizes that we're aiming for a low-carbon economy. I don't think I'm wrong. You've confirmed that, and that's what I wanted to hear.

A party that defends the opposite would be doing something that looks like polarization and politicization. I'm the one saying this; I'm not putting words in your mouth.

Would you agree with me on that?

[Margareta Dovgal]

I think that with the translation, I potentially missed the double negative there.

I want to say to your point about carbon and carbon pricing that, as my colleague said, it is an effective mechanism. Economists support it across the board, but the important thing is how we implement it and the competitiveness with which we do it. If we use mechanisms like border carbon adjustments, we can ensure that our path forward is a positive one.

It's not a matter of eliminating specific feedstocks, which I think needs to be remembered; it's the emissions that matter, and emissions know no borders. They don't know boundaries. We need to work—

[Mario Simard, Bloc, Jonquière, QC]

I agree with you, Ms. Dovgal. The devil is often in the details.

To use your words, if we want more clarity, certainty and support from the federal government, we have to recognize the problem.

A party or people who don't recognize the problem of a high-carbon economy would, in my opinion—and this is what I want to hear from you—be a brake to foreign investment in clean energy.

Am I right to say that?

[Margareta Dovgal]

There are intractable problems here. We have to work to fight climate change; we also have an imperative to ensure that Canadians' quality of life is maintained. There's no simple solution.

I think demonizing someone who's not taking the perfect approach on one aspect of the problem is not the way we're going to get to solutions, so rather than saying that everyone has to be on the same page, the federal government—whichever party is in government—has a responsibility to build that consensus by outlining a vision for the country and then working collaboratively towards it with everything clearly defined. Where does it see the role of resource industries within that equation? Where does it see the value of effective industrial and climate policy?

We need to be outcome-oriented, rather than squabbling over the details first.

[Mario Simard, Bloc, Jonquière, QC]

You're a diplomat, Ms. Dovgal. You'd be good at politics.

I just want to point out that if we want to attract foreign investment in clean energy, we have to make it clear that we believe in clean energy, right? That's what I'm trying to get all of you to say.

Ms. Doran, would you like to add anything?

[Rachel Doran]

I would give the example of the United Kingdom, which has recently had some changes in climate policy, and I think the business community in the United Kingdom was one of the first to say, as I think we've heard from business colleagues at the table here, that one of the key pieces is creating a certainty in the investment climate that's not policy dependent. It's really just ensuring that there is a predictability in the energy transition and the investment climate.

[Mario Simard, Bloc, Jonquière, QC]

That's right. I think we're saying the same thing, more or less.

What would create uncertainty in the investment climate, in my view, would be to know that a governing party could slash all financial support programs for the renewable energy sector.

It would create uncertainty, wouldn't it? There would be no continuity.

[Margareta Dovgal]

Policy continuity is important, and it's a challenge to democratically elected governments to respond to the needs of the electorate. Affordability pressures are hitting really hard, so you're right that this is a risk. That's why any government advancing energy transition and climate action needs to do so in a way that cannot be easily reversed, because it gains the ill will of the populace.

If that's prioritized, then policies will be resilient. They will last for a long time and create that investment certainty that we need.

[Mario Simard, Bloc, Jonquière, QC]

Thank you very much.

[The Chair, Liberal, George Chahal]

Thank you, Monsieur Simard.

We will now move to Mr. Angus with the NDP for six minutes.

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

Thank you, and congratulations, Chair, on your appointment.

I sometimes have to put my foot in and say that Ms. Lapointe is not the only person representing “base metal Canada”. Her neighbouring riding has many mines in operation. I just want to say that we'll take any of your workers to get our new projects off the ground.

I hear this line that it takes 10 years to get a mine off the ground because of regulatory issues. I've never met anybody in mining who took less than 10 years to put a mine in, spending billions, because it is an enormous investment.

Mr. Moffatt, I want to ask you this. Volkswagen has put $7 billion into the battery plant at St. Thomas to build batteries for a market that hasn't been fully established yet. It's not up and running in a way that I'd like to see. They have to have a supply chain, which is an issue as well. We know that we have an advantage in Canada over Europe, which would love to have these battery plants, but they don't have the supply chain. Is the Chemical Industry Association ready? Are they in discussion with the battery plant manufacturers? Are we set to provide the supply chain necessary to get these battery plants into operation and make this market happen? A $7-billion gamble is a huge undertaking.

[Greg Moffatt]

Thanks very much for the question.

I always like to say that critical minerals are just rocks without chemistry to refine those rocks.

[A voice]

We would say the opposite, but go ahead.

[Greg Moffatt]

I'm not trying to create controversy, but what I would say from an association perspective is this: Are we involved? No. Are our members active? Absolutely. There are some great initiatives taking place in the Bécancour region. A number of battery-related chemical projects are being proposed there, and again I think that speaks to the programs and policies that are in place in Quebec to attract those investments. This is about the value chain and about providing the critical minerals, and there will be chemistry facilities involved as the supply chain for those projects.

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

Ms. Doran, it's hard to keep up. My numbers keep going out of date very quickly on how fast this transition has happened since the IRA. Mr. Meadowcroft mentioned the International Energy Agency, which seems to be just gaga about how fast this is happening.

I want to ask you what that means for the consumer, because you know what we hear from the Conservatives all the time about the carbon tax is that people can't heat their homes and people can't drive.

In this transition, what offer is on the table for affordability?