Natural Resources Committee on Feb. 1st, 2024

[Abigail Lixfeld]

Thank you very much for the question.

Everything is managed by the regulator. It is the regulator that launches a call for bids.

Developers that are interested in building a renewable energy project would participate in the call for bids project. That call for bids would outline the details of the intended project, and they would go through an authorization process. All of that is managed specifically by the regulator.

[Mario Simard, Bloc, Jonquière, QC]

In the call for bids process, if the developer has to put together a financial package, will all the clean energy tax credits be included? Will the clean hydrogen tax credits be included in the call for bids, or will a second evaluation be done so they can access the tax credits? I don't know whether it's Finance Canada or your department, Natural Resources Canada, that handles that.

[Abigail Lixfeld]

Thank you for the question.

The tax credits apply to expenses that are incurred. It's a relationship between the developer and Revenue Canada, ostensibly. The details of how those tax credits will apply and the types of expenditures will enable a developer or a bidder in a process to evaluate their bid to determine whether it's a cash bid, for example, or to estimate their project costs. They will be able to calculate the potential value of those tax credits in designing their bid, but it is not part of the evaluation that the regulator would do in assessing the bid.

[Mario Simard, Bloc, Jonquière, QC]

I understand that it would not be the regulator's responsibility.

If I understand correctly, these tax credits are capped, which suggest there is competition for clean hydrogen production and clean energy generation projects. There are some outside of Newfoundland and Labrador, but they aren't necessarily offshore wind projects. I'm already seeing wind projects popping up in my region. Since we know this comes at considerable cost, how can we guarantee that developers wishing to produce offshore wind energy have access to the associated incentives? There are no guarantees.

[Abigail Lixfeld]

Thank you for the question.

I think that highlights how important it is to quickly find ways

to enable the development of offshore renewables in order to ensure that those early project developers will have the opportunity to benefit from all the available incentives and measures that are in place.

[Mario Simard, Bloc, Jonquière, QC]

I'm not sure if there is such a thing, but will guidelines be given to Finance Canada or Natural Resources Canada?

I'll give you an example. In my opinion, the cost of a hydrogen production project with carbon capture strategies would be much higher than that of a hydrogen production project directly powered by hydroelectricity. The carbon footprint would also be higher for a blue hydrogen project.

Will the minister take these factors into consideration when it allocates financial support, or will it be on a first-come, first-served basis? Basically, what I want to know is whether there's already a plan in your department or in Finance Canada to allocate this money to the most promising projects.

[Abigail Lixfeld]

Unfortunately, that's not my portfolio, so I'm not really familiar with how those tools were designed. You'd have to ask Finance Canada. Thank you for the question, though.

[Mario Simard, Bloc, Jonquière, QC]

Okay. I don't want to put you on the spot. If you were elected, I would have been happy to do so.

That may not be in your wheelhouse, but determining what types of technology qualify for clean electricity or clean hydrogen projects is in your wheelhouse, is it not?

[Abigail Lixfeld]

In a way, yes.

[Mario Simard, Bloc, Jonquière, QC]

Does the department already have information on the types of technology that qualify for clean electricity or clean hydrogen projects? If so, could you provide them to the committee?

[Abigail Lixfeld]

I will check with my colleagues to see what exists and what we can provide to you.

[Mario Simard, Bloc, Jonquière, QC]

Thank you very much.

[The Chair, Liberal, George Chahal]

Thank you.

We'll now go to Mr. Angus for six minutes.

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

Thank you very much, Mr. Chair.

My Conservative colleagues seem to believe that a bill that would create jobs has scared away investment and shut down the oil and gas potential of Atlantic Canada just by announcing it.

Ms. Lixfeld, there hasn't been any oil and gas production off the coast of Nova Scotia, has there, since BP walked away from their projects.

[Annette Tobin]

I'll field that one.

That's right. There is no current gas production or oil production in Nova Scotia offshore. Sable was the last project there. That was decommissioned in 2019.

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

Two elections ago, big oil walked away from Nova Scotia and decided there wasn't a future for them, but there was the one project off Sable Island, the $1.5-million bid from Inseptio Ltd., that came under intense public opposition. It was just rejected last December. Is that correct?

[Annette Tobin]

That's right.

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

Ms. Graham, were you involved in any of the reviews of the decision to stop the Sable Island proposal from going ahead? We know there was a lot of concern about the.... My colleagues refer to it as “antidevelopment zone”, but Sable Island is famous around the world for its fragile nature. A lot of people in Nova Scotia care about it.

Were any of you involved in the public response to this bid by oil?

[Abigail Lixfeld]

I was not personally, no.

[Annette Tobin]

That is a fundamental decision under the accord acts. Both ministers approve or reject. In that instance, both ministers rejected. I'd be hazarding a guess in terms of what consultation there was or whom they spoke to in arriving at that decision, but it was ministerial.

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

I'm not trying to have you give us your own hypothetical on this.

What we know is that the oil proposal, the $1.5-million bid, was deeply opposed by people across Nova Scotia because of the fragility of that land, and that the decision to kill the proposal was made by a provincial Conservative government working with the federal Liberal government. That's how the accord works. They work together.

Is that correct?

[Annette Tobin]

That's right. It was a joint decision.

In instances where there is disagreement, there is a provincial veto for that.

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

Could you repeat that? Is there a provincial veto when they disagree?

[Annette Tobin]

Yes, there is under the accord acts.

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

It was a Conservative premier who shut down the last oil project that could have gotten off the ground, because of the opposition. If the federal government had tried to do that and the province was against it, there is a provincial veto. That's something my Conservative colleagues don't want to talk about—the power of the provincial veto. They shut down oil and gas exploration. There is no oil and gas exploration.

However, there is now a potential to create a new clean energy market. My Conservative colleagues want to shut that down because they want to have a federal veto for the Conservative leader over the people of Nova Scotia. That wouldn't be in keeping with the accord, as it stands—