Natural Resources Committee on Nov. 24th, 2025

[Adam Chambers, Conservative, Simcoe North, ON]

Do you have a view? If we're thinking about increasing conventional fossil fuels and making them available, presumably there would be a view of the government to say whether or not oil demand has peaked and there's an opportunity to meet that demand.

[The Chair, Liberal, Terry Duguid]

Give a quick answer, please.

[Adam Chambers, Conservative, Simcoe North, ON]

Does Natural Resources Canada have a view?

[Michael Vandergrift]

We understand that a variety of scenarios are possible.

[Adam Chambers, Conservative, Simcoe North, ON]

Okay. It's possible, then, that oil demand has not peaked. Is that your testimony?

[Michael Vandergrift]

People are putting out a variety of scenarios for what the future could look like.

[The Chair, Liberal, Terry Duguid]

Thank you both.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, Mr. Chair.

[The Chair, Liberal, Terry Duguid]

Thank you.

We're going to Mr. Guay for six minutes.

Go ahead, Mr. Guay.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

Thank you, Mr. Chair.

It's good to see all of you. Thank you for the work that you do.

Ms. Chan, this question is for you.

I've taken many meetings with different stakeholders in the mining sector, related to critical minerals, and in this committee, we had many witnesses come talk to us. They've told us that permitting is not the number one issue they have. They talked more about funding through different phases that may be less or more difficult, depending on the phase. They talked about the need for infrastructure, because many times, it's very remote. They also talked about the need for energy.

As they face these challenges, what kinds of services and assistance do we offer the proponents of these mining projects to help them either get their capital or meet their needs in infrastructure and energy?

[Isabella Chan, Senior Assistant Deputy Minister, Lands and Minerals Sector, Department of Natural Resources]

Thank you for the question.

I'll come to the issue of funding and the difficulty in raising capital these days. Some key challenges are that there is so much price volatility and that there are non-market practices. As the minister alluded to, this is why the Prime Minister announced a critical minerals production alliance under the G7 presidency of Canada to pool the demand side and bring our projects online.

There were already a number of projects announced under the G7 production alliance, including offtakes by Canada and a number of countries. This was done to address the price volatility issues head-on and to ensure that the project can come online.

When it comes to infrastructure, Canada is definitely blessed with many deposits, many reserves, all across the country, but many of them are in remote areas. This is why, under the critical minerals strategy, in 2022, we launched the critical minerals infrastructure fund, with a $1.5-billion investment. We have already announced over $300 million to build not only roads but also clean energy, including a transmission line.

A couple of projects have already been announced. One is the B.C. highway project to unlock the mining projects in the golden triangle. As well, there is the B.C.-Yukon grid, which will also support some of the mining projects in Yukon.

Together with the investments under the critical minerals infrastructure fund and the G7 presidency, we're hoping to support the mining industry.

Thank you.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

Thank you.

My next question is also for you, if you don't mind.

We just announced in budget 2025 that we are going to extend the list for the critical mineral exploration tax credit to bismuth, cesium, chromium, fluorspar, germanium, tin and tungsten to help increase the number of projects. Can you explain why, and then how this measure is going to help?

[Isabella Chan]

I'll start from this point. We already have the mineral exploration tax credit, which applies broadly at 15%. It's a 15% non-refundable tax credit on eligible exploration expenses. We also note that many critical minerals need additional support, as I noted in the point about price volatility and non-market practices.

This is why, under the strategy, we have also launched the critical mineral exploration tax credit, which is different from the mineral exploration tax credit. The critical mineral exploration tax credit is a 30% non-refundable tax credit for the list of critical minerals that you mentioned, Mr. Guay. It is harmonized in five provinces, when it comes to the provincial tax incentive, and it is to support exploration, to get it done and to get more critical mineral projects online.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

Thank you.

Mr. Hargrove, I believe this question might be for you.

In the budget, we have $500 million to be administered by NRCan to help the forestry sector diversify. We all know the challenges that this industry faces.

What kind of transformation do we plan to support with the $500 million over the next few years?

[Glenn Hargrove, Assistant Deputy Minister, Department of Natural Resources]

There is a range of programs that this funding will support. Largely speaking, it will support projects that invest in innovation and retooling of mills to move them up the value chain to better automate and provide the prefab and modular construction components that the minister spoke to earlier.

There's also funding for the research and development of new products and processes. There's funding for demonstration projects for the use of mass timber in those types of applications, again, that the minister spoke of. There's funding for increasing the participation of and economic opportunities for indigenous groups in forestry. There's also funding to support offshore market development and different types of international work in the forest sector space, as well as funding to improve our data and monitoring around the forest resource.

[The Chair, Liberal, Terry Duguid]

Thank you.

Mr. Simard, you have six minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Deputy Minister, earlier I asked the minister a question about the Pathways Plus project, which is also found in the budget. The minister talked a lot about a trip he took to Germany.

I, too, would like to talk about the trip I took with Mr. Wilkinson to Germany, where we visited the Siemens facilities. When we talked about carbon capture and storage strategies with the folks at Siemens, who I think are very reliable, they told us that that this was all very well and good, but that they did not believe that governments would ever seriously get involved in such a venture because the technological risk was too high.

If the government is investing money in strategies for capturing and storing such high volumes of carbon, then I assume you have scientific analyses showing that this is feasible. I assume that your decision-making process is based on the expertise of people who have shown that these strategies are feasible.

Once again, I am saying this because most of the experts that we talked to at committee as part of a study on this subject told us that it was unrealistic to apply these kinds of strategies to such high volumes of carbon. Perhaps you can reassure us.

[Michael Vandergrift]

Thank you for that important question.

Carbon capture and storage technology is important for Canada. Nine business projects are currently under way in the country. The department has invested a lot in research and development to advance these technologies. We are convinced that Pathways Plus is a good project that will help us to meet important targets in this area.

[Mario Simard, Bloc, Jonquière, QC]

I would simply like to know what expertise your decision-making process is based on. I assume that the department has analyses on this subject. It might be helpful to the committee if you shared the analyses that show that these projects are feasible and profitable.

Does this type of analysis exist?

[Jeff Labonté]

We could talk about the process that supports carbon capture and storage projects. Companies are the ones that decide to design and implement projects to reduce greenhouse gas emissions. We are not the ones who approve industry projects.

However, in our department, a lot of research is being done on these technologies and other carbon capture technologies in the context of carbon management, so there are other technologies. We have a $319-million innovation program that—

[Mario Simard, Bloc, Jonquière, QC]

Mr. Labonté, perhaps you will understand why I am raising my eyebrows. You just told me that companies are the ones that will show whether this works, so you are going to provide financial support to companies that have to prove to you that carbon capture and storage works. However, I see lines in the budget for carbon capture and storage. Maybe I am just being suspicious, but that does not seem right to me.

I looked into carbon-neutral aluminum for a company in my region, Rio Tinto, and I saw that the specifications they would be expected to meet are very demanding. I cannot believe that you do not have any information and that you are leaving this in the hands of companies when there is a line in the budget to say that the federal government is going to fund carbon capture and storage and that companies say it is feasible.

Experts have appeared before the committee and told us that this does not seem feasible for the volumes of carbon that we are talking about. I think this is rather astonishing.

[Michael Vandergrift]

There is a process in place for the tax credit. Companies have to submit a plan for their project and we have experts who assess those plans to determine whether a company and its project are ready and whether they are eligible for the tax credit.

[Mario Simard, Bloc, Jonquière, QC]

Do you know what this reminds me of? During the pandemic, the government set up the emissions reduction fund to support the oil and gas industry. A year and a half later, you came back here to committee to tell us that this did not actually reduce emissions but that you had increased production. Personally, my concern is that you will do the same thing with carbon capture and storage. You will come back in two or three years and say that you gave the oil industry a lot of money and that you did not actually capture any carbon but you increased production. That is rather pointless, don't you think?

[The Chair, Liberal, Terry Duguid]

Give a quick answer, please.

[Jeff Labonté]

This is a tax credit. We are not giving money directly to the companies, but some things are eligible for—