Natural Resources Committee on Feb. 28th, 2022

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

Thank you. It's a great honour, always, to sit at this table.

I sometimes feel as though I'm living in a world of disconnect, because this is a conversation that I think would have been great in 2004, 2006, 2008, and we would have all trusted that things were going to get done.

Yet, I read the IPCC report today. It is painting a picture of a catastrophe unfolding in real time. It completely goes after the big emitters, countries, failing to do their job. It talks about “an atlas of human suffering & damning indictment of failed climate leadership”. And yet, I see, well, you know, we'll just carry on and things will work.

Mr. Marshall, I'd like to ask you, based on what you're seeing from the IPCC and based on Canada's record, do we have any chance of meeting our international targets at the rate we're going?

[Dale Marshall]

We're going to need stronger policies to do that. As I've said, the blind spot or the sore thumb for Canada for the longest time has been our oil and gas industry. Unless we put into place the kinds of policies that are needed to address those emissions in a real way, we're not going to reach our targets.

Let's remember that the target we have in place is the weakest in the G7. By every measure, Canada's climate record is the worst in the G7. We have the weakest target. Our emissions have gone up the most.

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

I'm going to jump in there—

[Dale Marshall]

Yes, please.

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

—because the environment commissioner accused this government of being an outlier, of being the worst in the G7. Minister Wilkinson said it was a difference of opinion. I think that's one heck of a difference of opinion.

I asked Minister Guilbeault about the IPCC report today, because I have actually never heard the Liberals talk about the caps since the Prime Minister announced them at COP26, patted himself on the back and went home. Minister Guilbeault said today that carbon pricing wasn't enough.

Mr. Marshall, do you believe that carbon pricing is enough to bring down the rapidly growing emissions that we see predicted for the oil sands sector?

[Dale Marshall]

No. We need an additional measure that is going to ensure the certainty of the emission reductions. That's a hard cap that's enforceable and that has sanctions for those companies that go beyond their cap. That can be put into place through the Canadian Environmental Protection Act. It's been done in the past with sulphur dioxide, for example, for acid rain.

In order to have the certainty for reductions of emissions from the fastest growing source of carbon pollution, we need a real measure that is going to address directly the carbon emissions by putting on a hard cap.

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

I think this is really interesting, because I come from northern Ontario, where our lakes were being destroyed by acid rain. They brought in clear caps. Now our lakes have come back.

We're told all the time, and we've heard it today, that the market will figure this out. You know, you put a price on carbon, and emissions are going to go down. Yet Canada's energy regulator has factored in the price of carbon, and they are expecting an increase of at least a million barrels a day. The Canadian Association of Petroleum Producers know what the upcoming price on carbon is going to be and they are talking about major increases. What they are talking about is major increases for export because they know those are not going to be counted in terms of emissions.

If industry and our regulator are planning an increase of a million barrels a day, helped obviously by the $21-billion TMX pipeline to export that, do we have any credible sense that this government's cap in any way will reduce emissions?

[Dale Marshall]

That's the thing. The carbon price, which was an increase, was announced several years ago. Yet, when you look at the Rystad cube data, oil and gas companies are planning on increasing their production and emissions by 30% between now and 2030.

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

They've factored in the carbon price and it is still extremely profitable for them to do that.

I want to ask you, though, about this issue of intensity targets. I remember with the Harper government it was intensity targets all the time. It's sort of like we're being told, “Don't worry. If we deal with intensity targets, we're going to lower emissions.” It's kind of like telling people, “Listen, if you're a teenager and you smoke light cigarettes, you're not going to get cancer.” We haven't actually ever seen the emissions go down. The emissions have gone up consistently over the last 20 years.

How important do you think it is to put the full nature of the emissions in?

The emissions from oil and gas export are more than all the emissions put together in all the sectors. If we counted those in, would we have a much clearer picture of Canada's massive carbon imprint on the planet at this time of crisis?

[Dale Marshall]

That's why we have to address the full scope of emissions: scope 1, scope 2 and scope 3. The downstream emissions should be included in this cap and be addressed through policy that is in federal jurisdiction.

Dr. Leach—

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

I'm running out of time here and I want to ask you very quickly about the cap.

What should it begin at? Should we allow for an increase of 30%? Should we be at 2019 levels? How should we bring that down to meet what we're telling the world we'll meet by 2030? What would that cap have to include as a hard cap to actually get us there?

[Dale Marshall]

Our proposal is that the cap starts at 2019 levels but decreases to a level in 2030 that's 60% below 2005. That's Canada's fair share. That gets us to 64 megatonnes. That is a significant decrease, but as I laid out in my comments, there are a number of ways that the federal government, within its jurisdiction, can ensure that cap is met.

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

Thank you.

[The Chair, Liberal, John Aldag]

Thanks. I appreciate everybody moving this along.

We're now going to Mr. Maguire, who will have five minutes for his round of questions.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Thank you, Mr. Chair. I would certainly like to follow up and thank all of our online visitors and witnesses today for their presentations.

Thanks to Mr. Tarvydas for his presentation from TC Energy Corporation.

The goal is to try to bring down the greenhouse gas emissions. You want to be a premier source of carbon-free energy for North America in particular, which helps the world, in the industrial natural gas and oil sectors. The investments in technology are one way to do that.

I want to ask you a question about what's happening on the ground today. There have been lots of changes in the last few days, and numerous people are calling on governments around the world, not just here in Canada, to stop purchasing Russian energy.

It's clear that if countries cut them off, Canada couldn't immediately meet that energy demand in places like western Europe. It is relevant. It's not just looking after ourselves; it's looking after our allies as well. While it's too early to determine the worldwide long-term energy implications due to Putin's unprovoked war, I'd like to ask what advice you have to the government on building that uncertainty into this emissions cap regulation process.

[Robert Tarvydas]

Mr. Chair, the question of energy security, and potentially reliability, is one that requires long-term investments. One of the asks we would have of this committee and this government, as you're considering developing policy instruments related to emissions caps, is to take a long-term view to provide industry with as much certainty as possible, because the very long lead time for some of these investments—capital costs for some of these investments—is very high.

Obviously, as you stated, you can't create LNG terminals overnight. You can't build pipelines overnight. These things take many years to put in place. However, as the world considers the role of energy security and energy reliability as we go forward, even in the context of the global climate crisis, I think it is important that this government consider the importance of providing policy stability and certainty as it considers these regulations.

There's another component of that too, if I may add, which is the consideration of how these policies interplay with each other. Our recommendation is that any policy that's put in place is consistent with the Paris Agreement and with existing policies that are already in place. It would be, I think, quite helpful to see a comprehensive study of all the climate policies already in place in Canada at the federal and provincial level to actually see how they currently interact with each other.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Thank you. That's interesting.

The other side is that if Russian energy was removed completely from world markets, does Canada have the distribution and production means to help fill that gap in order to cut off the Putin regime from those dollars right now? Bill C-69 comes to mind, but there are other areas. I'd be most interested in your thoughts in regard to what our distribution production systems would look like if Russian energy was completely cut off.

[Robert Tarvydas]

For clarity, honourable member, are you talking about just within the Canadian domestic context or whether Canada could play a broader international role?

[Larry Maguire, Conservative, Brandon—Souris, MB]

Well, could Canada play a broader role because of what was cut off from the rest of the world? I meant the Russian exports and their production as would need to be done here. What would Canada's role be and where are we at in regard to the distribution production that we have presently?

[Robert Tarvydas]

Canada does have substantial resources of both oil and gas, so to the extent that there was a requirement for Canada or other nations to step in to fill the gap that was left by an isolated Russia, I think Canada would have the resource space to do so.

In terms of the infrastructure to get those resources to market, obviously probably at the margin there is some capacity to increase production of both oil and gas—less on the oil side—and it would require some additional investment, I think, in infrastructure to make that happen.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Yes, even in the short term for the needs that we may see.

We've talked about this system being an energy—

[The Chair, Liberal, John Aldag]

Your time is up.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Could I ask just a quick one, Mr. Chair? Thank you.

I'll go right to this one: What role do you think nuclear energy could have in Canada's getting to net zero?

[Robert Tarvydas]

Well, as the member may be aware, TC Energy is actually an investor in the Bruce nuclear power plant. We are a substantial investor there, so we do believe that nuclear power can contribute to energy security and to a low-carbon future.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Thank you.