Thank you, Chair.
First of all, it's good to be on this committee on a permanent basis, and I welcome working with all of you very closely.
One of the reasons I personally requested to switch from the committee that I was on to join this committee was the study that is ongoing, or it was ongoing until, I believe, Thursday. As I understand it, we were talking about the amendment, and the amendment talks about the urgency of the proposed study by MP Angus. It is my understanding also that, in general, there was an agreement that the disagreement right now is over the timing.
I was somewhat surprised to hear from colleagues who intervened to say that we're not dealing with an urgent issue or an urgent study. I was taken aback by that and it's why, as I said, when I started looking into the need for the generation of clean electricity and where the directions of Canada and the world were going, I personally felt a sense of urgency to come up with a proposal for a study. I tried to find a member of this committee who would table it. I was informed that there is a study, so here I am.
Let's talk about the source of urgency, because I think the fact that we want to look at that study after this study is done is already agreed on, so why is it urgent? Why should we continue with the study that we're doing?
If you look at the the new report from the Public Policy Forum, what we heard was that we need to double and, in some cases, triple the amount of green energy produced for us to be able to meet our 2035 and 2050 targets over the next 25 years. The timeline is already given, and these 25 years are basically equivalent to what has happened in the past century, so we need to expedite the generation, the transmission, the distribution, the storage and the many other elements around that, which I will touch on shortly.
Is there a sense of urgency? Absolutely. We have a very short runway. How long is that runway? It's 25 years.
How much is it going to cost? I believe I heard from the officials that we're talking trillions. It's going to cost a lot, and most estimates are in the trillions. If you look at trillions, if it's a trillion dollars. Just to put it into perspective for Canadians, if it's going to cost us a trillion dollars, just $1 trillion, that translates into about $40 billion a year. That $40 billion has to come from the federal government, the provincial governments and a lot of organizations or companies that are into generation and, from an investment point of view, in transmission, building more lines and enhancing the capacity of the distributors.
Now, if it's $2 trillion, it's going to be about $80 billion a year. Just to give Canadians a sense of what that number is, Canada's annual GDP is about $2.1 trillion. What we are asking for and what we understand we need to invest over the next 25 years in a very urgent way is the equivalent of the GDP of Canada for one year. The nominal GDP is around $2.3 trillion.
Therefore, we need to invest, in very short order, nearly the one-year GDP of Canada over 25 years. What does that entail? We need to do, as Mr. Greenspon said, two major things, and he called them major challenges ahead: massively expanding how much power we make and making it all clean.
How do we massively expand how much power we make? Where do we generate the power?
When you look at the whole extended supply chain of energy, as I call it, when it comes to generation, we have to massively expand. Not only do we have to build on the existing capacity, refurbish some of them, and introduce and expand, but we also need to explore new areas. For example, everybody is now talking about nuclear. SMRs for generation are now being considered by some other countries. There's wind.
On Ontario, I'll quote this:
Five years ago, the Ontario Tory government spent nearly $300 million to end hundreds of renewable electricity projects the previous Liberal government had launched. Premier Doug Ford said the power wasn't needed and that wind power was destroying the province's energy system.
It's a funny thing. It goes on:
Last week...Ontario Energy Minister Todd Smith outlined a power plan that includes billions in new nuclear projects as well as a return to wind and solar projects the government once called a waste of money.
What we see is that, even in generation, provinces that cancelled many of those projects are now trying to be the leaders. When you look at generation from nuclear to hydro to wind to solar—now we are exploring geothermal and areas that haven't been tapped into like magnetic and hydrogen—these are all sources of generation we need to invest in or where we need to massively expand our capacity.
With that expansion of capacity and generating two to three times more electricity, naturally we need two key infrastructure elements. One of them is transmission lines. The other one is huge storage capacity—industrial-sized storage capacity.
When you look at the transmission and at storage capacity, for us to be able to build that infrastructure and enhance the existing structure, we need to start now. Actually, we should have started many years ago. We need to start now, hence the sense of urgency.
Look at distribution. I talked about Alectra, which is a distribution company in my neck of the woods, in Richmond Hill and in York region. For them to be able to meet the target of 2030 to 2040, they need hundreds of millions of dollars in investment. It's not going to come from the ratepayers. It's going to come from foreign investment. It's going to come from relaxing some of the regulations, which we need to study as part of this study.
Actually, it comes from the consumption. As you can see, with the introduction of some of the government programs around greening, heat pumps, energy-efficient projects, as well as electric cars, not only is the amount of consumption going up, but also the infrastructure that's needed to support it. A lot of households are going to find they need to upgrade their electrical system to be able to handle that.
When you look at this whole spectrum, we need to generate and invest to the tune of $80 billion a year to make sure that we can double or triple the energy that's generated from all those sources, through to transmission, distribution, consumption and storage. Now you look at it and ask what other elements we need to look at. Is it just as simple as coming in and saying that we'll build five more nuclear plants and three more SMRs?
No. We also need to look at elements such as energy modelling. We look at different jurisdictions. If there's any company out there that's working on energy modelling, come and talk to me because I'm very much interested.
Look at the energy modelling and you'll see that we have 13 provinces and territories and we have indigenous areas. They have different characteristics. If there is a company that's looking at those capabilities and asking what kind of energy modelling they need to do to find that balance to use, expedite and accelerate the needed generation and transmission, I would really like to invite you to come to this committee.
We need to talk about the management of the electricity and how efficiently we are managing it. We need to talk about how we optimize the energy. If there is any company—and I worked with one of them; it's called Edgecom—that's leading on looking at all the sources of energy and trying to optimize based on the cost and the timing and the sources of all of this energy, we need to talk about that. Aside from generation, we also need to look at how we are going to ensure that we optimize the use of energy. We have to talk to consumers and understand how they can change some of their behaviours. We need to talk about integration and look at different sources of clean electricity and how they can be integrated. We need to talk about exchanges.
One of the areas that Alectra is seriously looking at is almost an exchange market where you look at it and you say, “Okay, all these sources of energy are generating, but what is the best way for us to be able to exchange it so we can keep that rate for consumers down?”
If you look at the current administration in the U.S. and the investment they did with ERA, what they are doing to make sure they can generate enough electricity to be able to run their plants is humongous, and we are behind. Edward Greenspon said, “We need to move very quickly, and probably with a different approach, you know, no hurdles, no timeouts.” We need to move now, hence the sense of urgency.
Now you come in and you say, “Okay, you talked about the supply chain and, let's say, the model, and you're talking about the energy model, but is that all?” No, that's not all. We need to look at the social and environmental policies both domestically and internationally. If we are going to produce products that use electricity—and nowadays almost everything uses electricity—and we are a trading country, when we look at the international trade that we have to do, part of our free trade agreements is that the products being produced need to be produced on green electricity or renewable electricity. We need to think about it now.
We need to look at incentives. There is no way the Government of Canada is going to be able to invest $80 billion every year. Let me give you an example. If it was $1 trillion, it would be an investment of $40 billion a year. The Government of Canada's 2024 budget for defence is $44.2 billion. The health care transfer we did to the provinces this year was $55 billion. This is an enormous amount of investment that needs to be done. The Government of Canada has the reconvening and convening power to be able to bring all these players in, but we need to also look at the incentives. When you look at the ITCs around clean energy, etc., we need to have experts coming here and telling us what programs and what incentives we need to ensure that key players are going to come to Canada and invest. There is no way that $80 billion could come from the federal government.
Look at what Honda did with a $15-billion investment in four plants. Why did they make that decision? It was because we have the capability.
It was interesting: I was sitting in the OGGO committee this morning, and they were talking about foreign investment, why foreign investment is coming to Canada and what we need to consider. Aside from the fact that we provide a safe environment and we have the green philosophy, it also looks at the talent we have and the direction the government is taking. When you look at these incentives and you look at the amount of international investment that's needed, we need to build incentives around that and we need to provide that environment. That sense of urgency cannot wait. Look at the amount of research and development that we need to do.