Natural Resources Committee on May 6th, 2024

[The Chair, Liberal, George Chahal]

I call this meeting to order.

Welcome to meeting number 97 of the House of Commons Standing Committee on Natural Resources.

Pursuant to Standing Order 81(4) and the motion adopted on Monday, April 15, 2024, the committee is commencing consideration of the main estimates of 2024-25 referred to the committee on Thursday, February 29, 2024.

Since today's meeting is taking place in a hybrid format, I would like to make a few comments for the benefit of all.

Before we begin, I would like to remind all members and other meeting participants in the room of the following important preventive measures.

To prevent disruptive and potentially harmful audio feedback incidents that can cause injuries, all in-person participants are reminded to keep their earpieces away from microphones at all times.

As indicated in the communiqué from the Speaker to all members on Monday, April 29, the following measures have been taken to help prevent audio feed incidents.

All earpieces have been replaced by a model that greatly reduces the probability of audio feedback. The new earpieces are black in colour, whereas the former earpieces were grey. Please use only an approved black earpiece. By default, all unused earpieces will be unplugged at the start of the meeting. When you're not using your earpiece, please place it face down on the middle of the sticker that you will find on the table for this purpose, as indicated.

Please consult the cards on the table for guidelines to prevent audio feedback incidents. The room layout has been adjusted to increase the distance between microphones and to reduce the chance of feedback from an ambient earpiece. These measures are in place so that we can conduct our business without interruption and protect the health and safety of all participants, including the interpreters.

Thank you all for your co-operation.

For those on Zoom, please wait until I recognize you by name before speaking.

I remind you that all comments should be addressed through the chair. Additionally, taking screenshots or photos of your screen is not permitted.

For the main estimates of 2024-25, I would now like to welcome the witnesses who are with us today for the first hour.

Appearing is the Honourable Jonathan Wilkinson, Minister of Energy and Natural Resources.

We have several senior officials from the Department of Natural Resources. We have Michael Vandergrift, deputy minister; Francis Brisson, assistant deputy minister and chief financial officer; and other senior officials.

We have the minister for an hour.

Before we begin, I'll be using these two cards. This is the 30-second warning, and the red card means the time is up.

Minister Wilkinson, the floor is yours for five minutes.

[Jonathan Wilkinson, Liberal, Minister of Energy and Natural Resources]

Thank you, Mr. Chair.

I would like to acknowledge that we gather on the traditional unceded territory of the Algonquin Anishinabe people.

Honourable colleagues, I am pleased to be here today to discuss the main estimates.

We talk a lot about climate change these days—for obvious reasons. Climate change is altering our world’s natural environment in a myriad of harmful ways. We saw this across Canada this year after the worst wildfire season in our history.

Beyond its increasingly severe impact on our economy and our environment, climate change is also rapidly transforming the global economy and global finance in ways that are creating enormous economic opportunity for those who approach the transition to a low-carbon future in a thoughtful, determined and focused manner.

In order to seize the extraordinary opportunities created by the shift to a net-zero economy, we must, however, accept the scientific reality of climate change and ensure that this informs and shapes Canada's economic strategy.

The strategy this government has developed includes seizing key economic opportunity in accelerating sectors, including critical minerals in the EV supply chain, hydrogen, biofuels, nuclear technology and carbon management. It includes having a thoughtful approach to ensuring the competitiveness of Canada's oil and gas sector in what will eventually be a declining global market for these products. It includes building affordable, reliable and clean electricity networks that will give Canada a major competitive advantage. It involves furthering economic reconciliation with indigenous peoples.

This plan is well under way. In just the last three years, more than $50 billion has been announced in almost 100 clean growth projects across this country. Such projects include Honda's $15-billion investment in Ontario; Dow's approximately $10-billion net-zero petrochemical facility in Alberta; Everwind's and World Energy's planned hydrogen facilities in Atlantic Canada; Rio Tinto's critical mineral production facility in Sorel-Tracy, Quebec; and E-One Moli's $1-billion battery facility in Maple Ridge, British Columbia.

This focus on building a clean economy for the future was reflected in the recent budget. Budget 2024 delivered significant clean economy investments, including the EV supply chain tax credit, new measures for biofuels to the biofuel sector and $800 million to stand up the Canada greener homes affordability program.

Budget 2024 also delivered a $5-billion indigenous loan guarantee program, which will ensure that indigenous communities will derive long-term benefits from key energy and resource projects.

The main estimates also reflect a focus on creating jobs and economic opportunity in every province and territory in Canada.

In the estimates, my department is seeking an increase in authorities from nearly $5.1 billion to approximately $5.55 billion.

Key increases from last year's main estimates include the oil-to-heat pump affordability program, the deep retrofit accelerator, critical minerals development and the implementation of Canada's national adaptation strategy, including wildfire resiliency.

The estimates include investments that are part of the government’s plan to create sustainable jobs for Canadians.

Having a comprehensive plan to address climate change and to seize the economic opportunities that will be enabled through the energy transition is critically important environmentally and economically, but I would say that a recognition of the importance of such a plan is not shared by all leaders at the federal level.

Mr. Poilievre in particular is fond of using the slogan “technology, not taxes” as a description of a plan, but this is just a tag line. It is not a strategy. It is not a plan.

He opposes investment tax credits, including for hydrogen, electricity, carbon management and manufacturing. He opposes the strategic innovation fund. He opposes the Canada Infrastructure Bank. He opposes the Canada growth fund. He opposes the clean fuels regulations and he opposes carbon pricing.

As a former clean tech CEO, I can say very confidently that while technology is clearly important, technology on its own will not drive billions of dollars in new investments, nor will it bring new opportunities to countless communities. Technologies on their own will not allow us to successfully address the challenge of climate change. To do this, we must put into place the conditions that will enable technology development, enable demonstration and ultimately enable commercial deployment. Unfortunately, Mr. Poilievre's plan is to simply let the planet burn, to eliminate jobs and to impair Canadian competitiveness as the rest of the world moves to a low-carbon future. That, ladies and gentlemen, is not responsible leadership.

With that, I look forward to hearing your questions.

[The Chair, Liberal, George Chahal]

Thank you, Minister Wilkinson, for your opening remarks.

We will now proceed to our first round of questioning for six minutes.

I will begin with Ms. Stubbs. Ms. Stubbs, the floor is yours.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you, Chair.

Thanks, Minister, for being here today, and thanks to all of your officials who are present and who will be taking questions after your appearance.

While the radical extremist environment minister quoted an anti-energy activist group called Environmental Defence in the House of Commons about emissions reductions in Canada, I'm going to focus on your government's federal national inventory report on emissions and ask you some questions about whether or not the carbon tax is worth the cost, since it has not reduced Canada's emissions to date.

The fact is that Canada has missed every single one of your government's emissions reductions targets, despite your increase of the carbon tax every year since you've implemented it. Canadians know that emissions have increased in each one of those years, except for during 2020, when governments locked Canadians down and the economy was severely damaged by those restrictions.

In 2021, you said that 2019 would be the last year of emissions increases in Canada, but just last week, your federal government's national inventory reported that Canada's emissions in 2022 were up from 698 million tonnes in 2021 and 686 million tonnes in 2020. During 2022, they were at 708 million tonnes. Will you just simply admit that your carbon tax is not worth the cost and that it's failed to reduce Canada's emissions?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

I would say a few things to that.

I know that folks on the Conservative side of the House often talk about missing targets, but the only target this government has ever had was the 30% below 2005 levels, which we inherited from Prime Minister Harper. That's a 2030 target. We have made it more ambitious, so it's 40% to 45%, and there's a middle milestone that we implemented in the act that went through Parliament, a 2026 number, and we are fully on track to meet that. We are on track to meet the targets that we have established.

In terms of the national inventory report, what it shows is that Canada has reduced emissions by 8% versus the 2005 level. We are on track to achieve the targets for 2030, so we are making good progress on the way there.

It also shows that 24 of those 79 or 78 of the megatonnes in 2030 come from the carbon price. Almost one-third of the reductions come from the carbon price.

[Shannon Stubbs, Conservative, Lakeland, AB]

Minister, you can forgive Canadians for not being compelled by your comparison to a number in 2005. You've been in government for nine years, so let's just talk about what your claims have been, what your policies are and what the outcomes have been.

What your policy has been is to spike the carbon tax by 25% on April 1, despite eight premiers asking you not to and despite more Canadians being unable to feed themselves, house themselves, and heat and cool themselves when needed.

Your response has been your Liberal senators holding up the Conservatives' Bill C-234, which would provide carbon tax exemptions on farmers and farm fuels at exactly a time when Canadian farmers are struggling to produce food and Canadians can't afford to eat.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

I have a point of order, Mr. Chair.

[The Chair, Liberal, George Chahal]

Mrs. Stubbs, can you pause that thought right there? We have a point of order from Ms. Dabrusin.

Ms. Dabrusin, go ahead on your point of order.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

I appreciate everything the member opposite, Mrs. Stubbs, is raising, except that we're speaking with the Minister of Energy and Natural Resources about natural resources, and she's definitely focusing more on what the Minister of Environment might be there for.

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

I have a point of order.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

I'm just wondering if she will be switching to talk about energy and natural resources and the main estimates.

[The Chair, Liberal, George Chahal]

We have another point of order, Ms. Dabrusin, on your point of order.

Go ahead, Mr. Patzer.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

All that this committee has talked about for the last number of years is anything that has to do with the environment, not anything to do with developing natural resources.

Given the hyperpartisan speech that was given by the minister to kick things off here, my colleague is definitely well within her rights to say what she is saying as a member.

[The Chair, Liberal, George Chahal]

I have several points of order.

I have Mr. Angus on a point of order, so I'll go to you next.

I have asked colleagues not to use the point of order for debate. You can use your intervention for debate.

I will go to you, Mr. Angus, on a point of order.

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

It's on the same point of order. I think that opposition members need to be able to ask questions of the minister. They shouldn't have government members running interference and trying to break up the flow of the questions. If the questions are fair, if they're not abusive, it's the right of the MP to ask what questions they want of the minister.

[The Chair, Liberal, George Chahal]

Thank you. I think I've exhausted the points of order.

Colleagues, as to the original point of order, please ask the minister your questions and try to keep it relevant to the conversation today on the main estimates and the questions that the minister can answer that are related to his portfolio.

Thank you for your point of order, Ms. Dabrusin, and other colleagues who have provided points of order as well.

I'm going to go back to you, Mrs. Stubbs. We did stop your time. We will begin from where we paused. The floor is yours.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you, Mr. Chair. Thank you, colleagues.

Certainly when the government uses revenue from Canadians from the carbon tax in the budget and Canadians can't actually see the direct line between the cash grab that the government takes through the carbon tax and the innovation or technology or new sources of energy.... In fact, the outcome of this government is anti-resource development, anti-energy, and holding Canada back from being able to provide the products and the technologies needed for our own self-sufficiency and for allies around the world.

Questions about the carbon tax and its revenue and whether or not it's worth the cost are certainly relevant, so thanks, Mr. Chair, and thank you for the interventions from the other opposition.

Minister, the reality is that the carbon tax is at $80 per tonne right now. Your plan is to hike it to $170 per tonne by 2030, in less than six years. It's really important for Canadians to know that this is your plan, given the affordability crisis that Canadians face right now due to your inflationary spending that has also hiked interest rates, along with all of the taxes and added costs that you are putting on resource developers, on farmers and on all kinds of industrial development. These dampen the economy and also increase the price of everything for every Canadian, just as the carbon tax was designed to do.

Your plan is to double the carbon tax in less than six years. Will that stop the forest fires and wildfires that you mentioned at the beginning of your remarks? How high does it have to go?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Let me start with the comment you made at the beginning, which was about using 2005. The base year that the Paris Agreement uses is 2005, so every country around the world uses it, but we have seen significant reductions since 2015 as well.

In terms of the carbon price—and we've had this discussion in the House of Commons many times—eight out of 10 families actually get more money back. It works directly inverse to income, so people who live on the most modest incomes get the most money back. This is something that more than 300 economists have weighed in on, including Trevor Toombs from the University of Calgary and Brett Dolter from the University of Regina.

It is an affordability mechanism, but it is also effective in addressing the climate crisis. In 2030, we'll be at about half of the emissions reductions, so will it address the impacts of climate change? Yes, over time, it will, just as deploying electric vehicles, deploying carbon capture and sequestration and improving energy efficiency will all have an impact on reducing the impacts of climate change.

[The Chair, Liberal, George Chahal]

Thank you, Ms. Stubbs. Time is up. Thank you, Minister Wilkinson.

We'll now go to Mr. Aldag for the next six minutes.

[John Aldag, Liberal, Cloverdale—Langley City, BC]

Minister, thank you for being here and thank you for having your officials here. I see lots of familiar faces, and it's always good to see your group here to speak with us.

Minister, as a British Columbia member of Parliament yourself, you know that you and I and our province are very concerned about forest fires. My first question is going to be along those lines.

We know that last year, communities across British Columbia were evacuated as we witnessed devastating wildfires, not just in the interior and the north, but even into the Lower Mainland, places where we've not historically seen them, such as on Vancouver Island. It was the worst and most costly wildfire season on record. Canada did a lot to ensure British Columbians were safe then, as did Canada's brave first responders and firefighters.

However, we're looking at another horrible fire season to come. Every indication is that we're on track to have a lot more of our forests burn in the coming summer. Could you take a moment to talk to us about the work that you've done to prepare for this upcoming wildfire season and the work that you've done to support firefighters, those brave men and women who risk their lives to save the resources and habitats that are so important for biodiversity in our province?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Thank you, Mr. Aldag.

Yes, forest fires were a terrible issue last year. Unfortunately, these are the kinds of things that we are going to see with increased frequency because of the impacts of climate change. Certainly the prospects look very challenging in many parts of the country this summer.

The Government of Canada certainly acted last year. We have made significant investments in equipment for the provinces and territories to purchase additional firefighting equipment. There's over $250 million that was actually flowing through there. We set aside significant funds to train additional wildland firefighters, a lot of those in indigenous communities, which obviously are often very much at risk. They live in areas that often are prone to forest fires.

We also started a pilot project with the International Association of Fire Fighters, which was really about how you help to get municipal firefighters to help in that interface between community and forest. Many of those exist in British Columbia as well as in other provinces in this country. Certainly in my riding of North Vancouver, we're right up against the forest in the mountains. We provided some money to help them train their firefighters on how to do that. We just augmented that a couple of weeks ago with additional funds.

Certainly we are working very much with the provinces and territories, both directly on these funding arrangements but also through what's called CIFFC, which basically coordinates the resources across provinces so that if Nova Scotia doesn't have a bad firefighting year, they can help deploy people and equipment to Alberta or British Columbia if those places have a bad year.

Certainly there's a lot of work going on there, not just with NRCan but also with the Minister of Emergency Preparedness, Minister Sajjan.

[John Aldag, Liberal, Cloverdale—Langley City, BC]

Great. Thank you for that response and the update.

I think it will bring some relief to British Columbians to know that we are working with the provincial government, other organizations, first nations and others to prepare for this upcoming fire season.

Staying with the British Columbia theme, I'd also like to talk about a recent announcement and investment in Maple Ridge. This was the E-One Moli investment. It's out in the Fraser Valley, which is a couple of ridings away from mine. It's a very important investment to help bring good jobs to our part of the Lower Mainland.

I'd welcome comments that you could share about your work in supporting and growing the economy of British Columbia through investments such as this. Could you also speak to how the Government of Canada continues to attract these kind of investments, not only to British Columbia, but to Canada?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Yes. I said in the opening that having a thoughtful and ultimately successful plan for the economy means actually agreeing on and accepting the reality of climate change and building an economic plan that accommodates that and thinks about the opportunities that are going to be created in the context of a move towards a low-carbon future.

Canada has perhaps the most comprehensive climate plan that exists anywhere in the world. We certainly have been working to have beside it the economic plan that looks to seize those opportunities moving forward. One of those that I mentioned was the E-One Moli plant, which is a billion-dollar battery investment in Maple Ridge, B.C. This is going to create significant numbers of jobs and economic opportunity in B.C.

It's also the Air Products hydrogen facility in Alberta. It's the BHP Jansen potash mine in Saskatchewan. It's a whole range of battery and electric vehicle announcements in Ontario and Quebec. It's the hydrogen work that's happening in Nova Scotia and in Newfoundland and Labrador, and there's the enormous growth in renewable energy, particularly wind, in Nova Scotia and New Brunswick. We are seeing a whole range of activities moving forward and catalyzing economic growth, and that is happening in every province and territory in this country.

[John Aldag, Liberal, Cloverdale—Langley City, BC]

Thank you.

It looks like I have about a minute left, so I'll try to get to the point.

We've heard, both in this committee and in the House, the Conservative rhymes and slogans that are really a demonstration of their rejection of climate science and their opposition to renewable energy. We experienced that first-hand here at this committee. We saw the attempts to block offshore wind in Canada and block workers from getting a seat at the table, yet the global energy transition is well under way. It is going to move ahead whether Canada is on board or not.

If you could, take the last bit of time we have to elaborate on the indicators that show that this is happening, and what Canada should do about it.

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

It is happening all over the world. The International Energy Agency tracks this very well and talks about the fact that it is actually not a question of if it's happening, but how quickly it's happening.

In 2020, one in 25 vehicles sold globally was a zero-emission vehicle. Last year, it was one in five. That's enormous progress.

We are seeing the share of fossil fuels in electricity generation fall dramatically, and it will continue to fall dramatically by 2030. Almost half of the world's electricity supply will come from renewables. It will be 80% by 2030, and 80% of all new electricity capacity between now and 2030 will be from renewables. In the U.S., 50% of new car registrations will be electric. Heat pumps are actually overtaking fossil fuel boilers.

We are seeing all kinds of progress happening. The best examples we're seeing, to be honest with you, are in Europe, Japan, South Korea and the United States.

However, China has been very strategic, and we need to be thoughtful about how we respond to this. China is now the number one or two manufacturer of electric vehicles, the number one developer of renewable energy technologies and the number one deployer. It controls much of the critical minerals and critical mineral processing capacity around the world. That is very strategic, because it has made an enormous bet on the energy transition.

This is happening everywhere around the world, and Canada needs to be part of that conversation.