Natural Resources Committee on Oct. 18th, 2023

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

First of all, I'd like to deeply apologize to our witnesses who came here with good faith about a very serious issue regarding our future.

I'd also like to apologize to anybody out there who thinks that the Parliament of Canada would use the horrific kidnapping of hostages in Israel in order to promote the sale of oil and gas. I've seen a lot of reprehensible exploitation in my many years in Parliament, but I think that's probably one of the most lowdown ugly things that I've witnessed. When I see this attempt to use the horrific crimes that have been committed as a reason to promote oil and gas, I'm just ashamed to sit here, so I move to adjourn this debate.

[The Chair, Liberal, George Chahal]

It's not a debatable motion, so it goes right to a vote, Mr. Angus.

On adjourning the debate, can we get a recorded division?

(Motion agreed to: yeas 7; nays 4)

Thank you, colleagues. We'll now go back to Mr. Sorbara for your rounds of questioning.

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

On a point of order, since that cut into our time, given that the Conservatives ignored the understanding, do we have to cut down our time so that everyone gets a chance to ask questions?

[The Chair, Liberal, George Chahal]

That's up to you, colleagues. We can finish a full round each if we focus on doing that, if that's fine with everybody. We'll have five minutes each and wrap it up.

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

Thank you, Chair.

Welcome, witnesses, both virtually and here in person. I just want to say that it's great to be on this committee and to be looking at this study.

I want to go to Energy Storage Canada and Mr. Rangooni.

Justin, you and I have spoken about energy storage and the importance of traditionally.... You know, you had the pillars of generation, transmission and distribution. Now you have this fourth pillar, what I would call distribution in the energy business or the energy sector.

In budget 2023, we introduced a 30% investment tax credit, an ITC. I wonder if you could provide an update on, first of all, some of the great innovation that is occurring within the energy storage sector here in Ontario and in Canada, of course. Also, how important is it that the ITC be put in place for energy storage and the growth thereof?

[Justin Rangooni]

The ITC is significant, as I mentioned in my opening remarks, to keep pace with what's happening in the United States. That has led to incredible growth in the energy storage sector, and finalizing the legislation on the ITC will be of utmost importance, especially as these provinces across the country are starting to really invest in energy storage.

Again, Ontario has the largest energy storage procurement in Canadian history. Alberta has over 100 megawatts energized. Nova Scotia, Saskatchewan and British Columbia all have energy storage projects. Again, short-duration batteries will need certainty on the ITC. Let's get that legislation passed, because it's such a big piece that's going to keep us, the Canadian market, in competition with the U.S. market.

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

Mr. Rangooni, the other thing I keep thinking about is the need for the growth of clean electricity. We know that about 84% of the electrical grid in Canada is currently non-GHG-emitting, but at the same time, what's even more important, or as important, is that the baseload capacity for electrical generation here in Canada is going to need to grow. One of those components is going to be energy storage, because we have to meet changes in supply and demand. Are energy storage innovations going to be able to be a large component of that?

[Justin Rangooni]

Definitely, and thank you for the question.

What we're seeing right now with short-term duration lithium batteries is that they're being used now to optimize what you already have on the grid to keep the lights on reliably and for affordability reasons. As you're going into the future, into the 2030s, if you're looking at how you're going to decarbonize the entire grid and really reduce reliance on peaking fossil fuels, you're going to start to look at what we call long-duration energy storage technologies, which are something key that this committee can look at.

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

Thank you.

I want to go to Ms. Vera-Perez.

I just returned from a trip in Europe. I was in Germany, and we met with some of the folks there. Hydrogen is a big focus for the German government and the German sector.

Can you speak to where we are in Canada with hydrogen, globally? What do we need to improve on and where are our strengths? I think there are different types of hydrogen—green, blue and so forth. Some colour on that would be great.

[Ivette Vera-Perez]

Thank you for the question. Feel free to guide me.

I was in Germany in March as part of a Canadian delegation. There's a strong desire from the EU—not only Germany and Belgium, but other countries—to secure hydrogen from Canada. Canadian hydrogen can be very competitive. I can move on to talk about what we would need to make it more competitive. Geographically, we are very well located, even compared to the Gulf of Mexico.

In terms of where we're at, many projects in the Atlantic provinces are moving along. Many projects in Alberta are moving along, so those are the two major colours, if you will.

I prefer to speak about carbon intensity, because there are many colours now—

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

Ms. Vera-Perez, I want to thank you. I do believe we are out of time, so I will definitely follow up via email with some further questions. Thank you.

[The Chair, Liberal, George Chahal]

Thank you.

Mr. Simard from the Bloc Québécois, you have five minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

Ms. Vera‑Perez, we saw each other in March, in Berlin.

At first glance, I did not think very critically about hydrogen. However, after some discussions, I get the impression that our ability to export hydrogen is not as high as we think, especially for the Germans. My understanding from the discussions we had in Berlin is that the Germans are mainly looking for green hydrogen.

As I recall, the people at Siemens believed that the technological risk of producing blue hydrogen was far too high to think that, in the near future, we would be able to produce large volumes of it. According to the people I spoke with at Siemens, the financial risk and the technological risk were too high to produce large volumes of blue hydrogen and export it.

This leads me to believe that the whole hydrogen strategy is rather for domestic consumption and not for export.

Do you agree with me? Can you give us some specifics on hydrogen development and commercialization outside Canada?

[Ivette Vera-Perez]

Thank you for the question.

It was a pleasure to meet you in person in Germany.

Both uses are quite important to the Canadian economy, in fact. Anchor projects at home are really important to develop the ecosystem and to develop the experiences and the learnings from those projects. There is always that technical aspect. It creates domestic jobs and it also helps helps de-risk any export commitments. The domestic market and the export market can coexist.

Large volumes of hydrogen have already been shipped from Australia. Hydrogen is currently being shipped as ammonia. The logistics of moving ammonia are well known; it's not a new process. Other carriers are also being explored, like liquid organic hydrogen, methanol and others. I think Canada is well positioned to develop large volumes of hydrogen for export. When you start production, you increase your capacity in a staggered manner; you don't just turn on the taps and have maximum capacity.

Absolutely, the domestic market is very important. The development of the transitional industrial processes and transitioning fleet, etc., including the projects in the Atlantic provinces, are things we are looking at as well.

[Mario Simard, Bloc, Jonquière, QC]

Thank you very much, Ms. Vera‑Perez.

I have a quick question for Mr. Woynillowicz.

If I understood your remarks correctly, you feel that Canada is providing more money in the energy transition to support the oil and gas sector than clean energy. At least, that is what I see when an attempt is made to reduce the carbon intensity of oil.

I'll give you an example. By 2035, just under $83 billion will be invested to support the oil and gas industry in reducing its carbon footprint.

In your opinion, are the efforts Canada is devoting to clean energies, such as wind, solar and others, currently sufficient?

[Dan Woynillowicz]

No. To the contrary, my point was in fact that we do need to emphasize the focus on opportunities in clean energy and to spend much less time and put much less attention, focus and resources towards trying to clean up a sector that has limited growth potential. In fact, it's likely to peak and go into a period of decline. That brings with it the risk of stranded assets and having put money into things that are no longer economically viable.

On the contrary, we need to really emphasize looking at the opportunities for Canada in competing in the clean energy economy and focus our policy-making and public resources on those opportunities.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

[The Chair, Liberal, George Chahal]

We'll now go to Mr. Angus for the final five minutes.

Mr. Angus, the floor is yours.

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

Thank you.

To all of our witnesses, I wish we had time to hear from all of you. There are such important points of view being brought forward.

Mr. Wayland, I come from a hardrock mining town. When we lost every single silver mining job and we lost every iron ore job, they gave us a Manpower centre. They told us they were going to retrain all of our workers. That was a way of telling us they were turning out the lights, and they did. Our community never recovered. We lost 4,000 jobs in Elliot Lake. They made lots of promises.

What was different then was that they said there was no future for our hardrock miners, our trained employees. It seems to be that this is a different kind of world we're dealing with. It's not just that we can be moving from something; it's that we need to move to something. How important is it that we get our act together very quickly now so that the trained workers we have and the trained workers you represent are able to make the most of this transition that is happening right now?

[Matt Wayland]

Thank you for the question.

That is what we face. I've spoken to my members across the country in the oil and gas sector and the coal sector. They're concerned about that exact example.

I come from a manufacturing town in the auto sector. Everything has left. The intention is to make sure these workers aren't going to a Manpower centre or going from well-paid jobs to data entry jobs. We want to make sure they have well-paid jobs to go to and that there actually is a good job to go to. If there are training requirements or they need upskilling, we want to make sure that those skills are transferable and make sure that there's a new place to go.

One of my comments was around the energy communities. It's about making sure we can put bonuses in those areas to attract businesses—such as, from your example, a mining town—and incentivize businesses to set up there so that they're going to have well-paid jobs. It's about ensuring that the community doesn't shut down and become a ghost town, and that families who support the community can actually support it. You have a tax base there from both the mines and the workers. You want to maintain that.

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

I want to ask about that. In his very first week in office, President Biden signed an executive order to create a working group to address transition, particularly in the energy communities that were being affected. That working group is there. It's been there since the beginning. They have been way out front on this.

We're now talking about nine million direct jobs in the United States, as they're sucking all of the jobs investment out of Alberta. Danielle Smith said she didn't want them. There are 890,000 jobs in Texas.

How important is it that we be able to compete with the prevailing wage and apprenticeships and make sure that we have the incentives on the table to be able to hold our own as that investment money goes stateside?

[Matt Wayland]

That is the question. We need to act now.

The blueprint has been laid. The investment dollars are going to go where the work is, where the tax credits are and where there's a skilled workforce. Those are attractions for businesses.

We have a skilled workforce up here. Canadians right across the country want to go to work. They want the training that's required. Those apprenticeship opportunities are going to be key, not only to the prevailing wage but also if we want a future workforce. We're facing a skilled trade shortage in various parts of the country now, depending on the trade, and it's only going to get worse if we don't have apprenticeship requirements in these jobs.

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

I want to ask about that. IBEW 424 does amazing work in training and in bringing in people and young indigenous people. Certainly I've had the great honour of being there where they've been training people up in the building trades.

We get lobbied all the time by all kinds of third parties who say, “Hey, give us the money and we'll train your workers.” Can you tell us whether your workers are ready? When we're talking about upscaling, who's best able to make sure those workers are moving into new sectors fully equipped and ready to go?

[Matt Wayland]

I can tell you that in the building trades—I'll speak specifically about the IBEW, our organization—when we consider our completion rate, which is from the time a person starts their apprenticeship to the time they actually become licenced, we're in the 95th percentile. However, when you look at provincial studies across the country, you see that the percentage rates, only for hours during their apprenticeship on the job and hours in the classroom, are less than 50%.

Our system works. We have employers who rely on our system because they tell us what they need for training and we deliver it.

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

Thank you.