Natural Resources Committee on Feb. 3rd, 2026

[The Vice-Chair, Conservative, Shannon Stubbs]

I call this meeting to order.

Thank you, colleagues. It's nice to see you all here today. I'm looking forward to this productive meeting we'll have on Canada's energy sector.

As we begin this meeting, I'd like to acknowledge that we are meeting on the unceded territory of the Algonquin Anishinabe nation.

Welcome to meeting number 21 of the House of Commons Standing Committee on Natural Resources.

Before we begin, I'll just review the guidelines, as we usually do. I ask all in-person participants to read the guidelines written on the updated cards on the table. These measures are in place to help prevent audio feedback incidents—of which I have been an offender over the years—and to protect the health and safety of all participants, including the interpreters, for whom I always speak too quickly. You will also notice a QR code on the card, which links to a short awareness video if you need it.

Today's meeting, as you all know, is taking place in a hybrid format, so I would just like to remind participants of the following points. Before speaking, just wait until I recognize you. For those participating by video conference, click on the microphone icon to activate your mic, and please mute yourself when you are not speaking. For those on Zoom, at the bottom of your screen you can select the appropriate channel for interpretation: floor, English or French. For those in the room, you can use the earpiece and select the desired channel. For members participating in person or via Zoom, please raise your hand if you wish to speak. The committee clerks and I—by which I mean, really, the committee clerks—will do the best we can to maintain a consolidated speaking order. I remind you that all comments should be addressed through the chair.

Pursuant to Standing Order 108(2) and the motion adopted on Thursday, September 18, 2025, the committee shall commence its study of the management of Canadian energy exports.

I am very pleased to welcome our witnesses: Normand Mousseau, a professor at the Université de Montréal; and Pierre-Olivier Pineau, a professor and chair in energy sector management at HEC Montréal.

All witnesses appearing virtually have conducted a mandatory witness onboarding test—thank you to the team who did that.

You will each have five minutes for your opening remarks, after which we will open the floor for questions.

Let's begin, colleagues.

Mr. Mousseau, you have the floor.

[Normand Mousseau, Professor, Université de Montréal, As an Individual]

Thank you, Madam Chair.

Ladies and gentlemen, thank you for inviting me to appear before the committee.

In 2024, Canada exported approximately 4.5 million barrels of oil a day, 8.8 billion cubic feet of natural gas and 36 terawatt-hours of electricity, the vast majority to the U.S. These exports came from many independent producers, most of them owned by foreign interests. Canada ranks among the world's largest energy exporters. However, because of its ownership and production structure as well as its markets, which are dominated by a single customer, Canada's influence on global and regional energy prices is marginal, even with the recent development of the Trans Mountain pipeline and the LNG Canada methane terminal, two significant pieces of infrastructure. This means that Canada is simply a major energy producer and exporter, not an energy superpower on the world stage.

Despite recent announcements, Canada's position on the world stage when it comes to energy is unlikely to change. To understand why, we need to look at the main energy exports. First is electricity. While some provinces were able to take advantage of their low electricity production prices to export significant amounts to the U.S., new electricity supplies in Canada have no significant competitive advantage compared to the U.S. The reason is that the technologies used largely come from abroad, whether it's for nuclear energy, wind turbines, photovoltaic solar energy or battery storage. This means Canada pays the same price for its new production infrastructure as the rest of the world.

Some electricity producers might benefit from favourable conditions, but otherwise, we can't expect electricity to become a huge export product. I think the same can be said about potential exports of green hydrogen, for which there's still no convincing business model. Even worse, Canada was once at the cutting edge of electricity generation and use; that's no longer the case. It is now completely out of step when it comes to renewable energy production and storage technologies, as well as the electrotechnology that is transforming the planet today.

On the natural gas side, production in the U.S. is expected to remain strong over the next few years, making any significant increase in exports to the U.S. unlikely. That said, there might be some opportunities with the growing number of methane terminals in the U.S., which could open themselves up a bit to the natural gas market, and especially put upward pressure on the price of natural gas.

LNG Canada phase 1 has an export capacity of about 14 tonnes per year, which represents about 10% of natural gas production in Canada's western basin. Once operational, it could also lead to an increase in production and in price.

However, even with the west coast projects, Canada should remain a second-tier player in natural gas, well behind the U.S., Australia and Qatar. Without any real ability to influence global prices, Canada is not a superpower in that regard either. While it is expected that global production capacity could exceed demand, we could also see a decline in the value of natural gas in Canada.

On the oil side, although Canada is a major exporter, its markets are not very diversified, which explains the price difference of $16 U.S., for example, between Western Canada Select and West Texas Intermediate.

This is unlikely to change anytime soon. In spite of the new Trans Mountain pipeline, which has a production capacity of nearly 900,000 barrels a day, only 270,000 barrels were shipped to Asian markets in the first 9 months of 2025. Despite the promises, which we are talking about a lot today, it is hard to see how we could increase the number of private pipeline projects, because Trans Mountain is already unable to bill its actual oil transportation cost. The company is barely recovering its operating costs, and there is no hope of amortizing construction costs, which are significant.

Underlying these findings is also the issue of shifting demand, as the rest of the world outside North America accelerates the adoption of electric technologies in transportation, construction and industry by relying on wind power, solar photovoltaic energy and batteries. These transformations are already reducing historic growth in fossil fuel demand globally and could very soon lead to a net reduction in that demand, which would significantly affect the value of Canadian investments in fossil fuel production and transportation infrastructure.

In summary, despite significant energy production, Canada is not an energy superpower.

As mentioned, things are not expected to change in the next few years. On the contrary, I would say that without a real policy for the adoption, mastery and development of modern technology based on renewable energy and electricity, Canada risks becoming less and less important and relevant on the world stage in the energy sector.

Thank you.

[The Vice-Chair, Conservative, Shannon Stubbs]

Thank you to the witness.

Just so colleagues are aware, I'll mention that we went an extra 17 seconds over, but I think it was well worth it. I hope that all colleagues support that decision on my part to let the witness finish.

I appreciate that, Mr. Mousseau.

Mr. Pineau, you have five minutes.

[Pierre-Olivier Pineau, Professor, Chair in Energy Sector Management, HEC Montréal, As an Individual]

Thank you very much. It's a pleasure to be here and to speak in front of this committee.

Normand set the stage for many points that could be shared, but I'll reiterate the fact that Canada is a very large energy producer, especially in oil. When you look at the energy exports across Canada in 2024, you see that 25% of all of our exports were energy products, largely dominated by crude oil, with 19% of our exports being crude oil exports.

What is interesting is not only the 2024 picture and the current picture but also the evolution over the years. We have a diverse portfolio of energy products that we export. Normand mentioned electricity, oil and natural gas, but we should also realize that we export a large amount of coal. Actually, coal is more important in our exports than electricity. We also export uranium products—nuclear fuel—which is, overall, not that significant. However, we are still a major uranium producer, and we do export a significant amount.

I'll go over the last 20 or 30 years of exports to show that in the 1980s and 1990s, Canadian exports were not that dependent on energy exports. Around 10% of our exports were based on energy products. From 2000 to 2010, the rise of the oil sands production and the rise in prices, both for natural gas and for crude oil, made hydrocarbon exports more significant in our energy exports. Then, in 2008, when the financial crisis hit, oil prices dropped, which resulted in significant losses in terms of revenues for oil exporters. After 2008, natural gas was not a major source of export revenues anymore, because of the shale gas revolution in the U.S. Natural gas prices have never really recovered from the growth of shale gas. From 2000 to 2010, natural gas and oil were almost equivalent in terms of export revenues, but natural gas revenues have dropped and have never recovered in terms of importance in our energy exports.

Oil prices did recover until 2014, but then again, with the growth of shale gas in the U.S., the global prices for oil decreased. Oil export revenues for Canadian exports dropped again because of this very significant drop in prices. The prices recovered, but in 2020, the COVID pandemic hit prices again, and oil revenues from exports dropped again. They've recovered again; however, since 2022, prices have been declining because of the world's overproduction of oil.

We are in a situation in Canada where, due to the growth of oil production across Canada, prices are fluctuating hugely. The economy of Alberta, the largest oil-producing province in Canada, is very much being put at risk because of its vulnerability to oil prices. Three times in the last 20 years, oil prices have significantly dropped, hurting Alberta's economy because of its dependence on oil.

As Normand said, we are not a significant energy superpower, despite our extremely large production, because our market is split across different provinces with a lot of players and is dependent on the U.S.

What are the barriers to Canadian energy exports? The first one is the low world prices and higher production costs of Canadian oil. These low prices don't provide a prospect for a huge increase in the future.

The second barrier is the limited growth in demand for oil, with diesel and gasoline demand already declining in China. When China and Europe have a declining diesel and gasoline demand, then we should be worried about the future prospect of our markets for oil.

[The Vice-Chair, Conservative, Shannon Stubbs]

We're just a bit over your time. I desperately want you to finish the recommendations. Could you wrap up very quickly? Then we'll move to questions, and I'm confident you'll get the option to expand on your recommendations.

[Pierre-Olivier Pineau]

My recommendation is really to move on from oil export orientation to developing our economy on energy productivity, reducing our consumption to make the country more productive, and developing sustainable markets in products other than just hydrocarbon products.

[The Vice-Chair, Conservative, Shannon Stubbs]

Thank you, Monsieur Pineau.

Thank you to both the witnesses.

[Mario Simard, Bloc, Jonquière, QC]

Madam Chair, I have a point of order.

I love my interpreter friends. They're fantastic. I just want to tell them that when we say “shale gas”, it's “gaz de schiste” in French. It's not Shell, the company.

For the benefit of my francophone friends, I will also say that we had an issue with the word “pellet” for “granule”, and we have the same issue for oil.

I apologize for the interruption.

[The Vice-Chair, Conservative, Shannon Stubbs]

Indeed, they're both distinct resources.

Thank you, Monsieur Simard.

We'll go to our first round of questions, and we will start with Monsieur Malette.

[Gaétan Malette, Conservative, Kapuskasing—Timmins—Mushkegowuk, ON]

Thank you.

My first question is for Professor Mousseau, from the Université de Montréal.

Thank you for joining us, Mr. Mousseau.

You have often stressed the importance of further developing biomass as an energy source in the Canadian market.

Can you explain the critical role biomass plays in the Canadian market?

More specifically, how could we develop the biomass industry to increase our energy independence?

[Normand Mousseau]

Thank you for the question.

Biomass varies a lot across Canada. In the Prairies, for example, biomass is primarily used for the production of ethanol and biodiesel. On the coasts, both in British Columbia and in Quebec and the Maritimes, companies produce pellets for export. Logs and forestry waste, among other things, are also used in the pulp and paper industry. Companies burn the bark to make energy.

There is no structure, except for biofuels. There's no real overall vision in Canada to properly assess how to develop this biomass in a more interesting way. The Institut de l'énergie Trottier recently published a report, in co‑operation with Roberta Dagher, highlighting the challenges that come from lack of information, lack of coordination and lack of strategy in our use of biomass.

In terms of overall energy consumption, biomass is marginal. In Canada, it represents maybe 5% to 7% of energy consumption. However, biomass could be very interesting if the federal government had a real strategy and a real policy to allow for the right biomass to be used in the right place.

I would say that, in general, vehicle biofuels are not the best or most interesting way to use this energy biomass. Maybe in specific cases, but not in general.

[Gaétan Malette, Conservative, Kapuskasing—Timmins—Mushkegowuk, ON]

What are the success stories? Who are the champions of using boreal forests, like ours?

[Normand Mousseau]

There are countries in northern Europe, for example, that apply extremely sophisticated waste and forest management processes. Biomass is used extensively for industrial applications. So they're trying to increase the value of these residual products.

[Gaétan Malette, Conservative, Kapuskasing—Timmins—Mushkegowuk, ON]

Okay.

Would you say that the current regulations are holding back the deployment of biomass in Canada?

[Normand Mousseau]

It's not so much the regulations as the lack of consistency. Pellets, for example, are essentially exported from Canada. It's a bit ridiculous that we have to ship our pellets to Austria because we haven't managed to create markets for them. We're not advocating using this resource to replace petroleum products like fuel oil in the regions. You can use biomass in the electrification process, for example, to increase resilience in heating.

Canada doesn't have a structuring vision for the use of biomass. I've been going to conventions for 10 years or 15 years, and I feel like we've been treading water all this time.

[Gaétan Malette, Conservative, Kapuskasing—Timmins—Mushkegowuk, ON]

All right. Thank you.

This may be a repeat but, to get more clarification, which international models should Canada study to accelerate the development of biomass? What distinguishes these countries from others around the world?

[Normand Mousseau]

We see that Europe—northern Europe, in particular, with the same climate—does have a much better view of how to structure the use of biomass for industry for a heat district, for example. In Canada, there's no real policy, so the actors are more or less trying to fight and survive by themselves without any vision and without any strategy that would allow planning, investments and modernization of this industry.

[Gaétan Malette, Conservative, Kapuskasing—Timmins—Mushkegowuk, ON]

What would be the main reasons...? You say that in the last 20 years Canada has been declassified as a leader in energy. What are the main causes of that and what should be done to rectify that?

[Normand Mousseau]

If you look at electricity, we are missing the revolution. We are not there. We were there 30 years ago in new technologies. Now, if you look at nuclear, we'll import the nuclear industry. If you look at electricity, we are not there. In oil and gas, the main issue is that we have one client and our production is very scattered. There are a lot of players in the production, so it's not possible to have the impact we see in other countries that have a nationalized gas and oil industry where they can control import and export and play on prices much more, for example.

[Gaétan Malette, Conservative, Kapuskasing—Timmins—Mushkegowuk, ON]

When you discuss the transportation of oil on the Trans Mountain, is it the same issue when oil goes through the pipeline to the United States?

[Normand Mousseau]

No, because those are older pipelines, so the costs have already been amortized, and they're included in the cost of transport. For Trans Mountain, if you look at the prices, essentially we're subsidizing at the level of $7 a barrel at the moment, because that would be only the interest on the debt, without including any additional revenue or profit for the company.

[Gaétan Malette, Conservative, Kapuskasing—Timmins—Mushkegowuk, ON]

Thank you, Mr. Mousseau.

[Normand Mousseau]

Thank you.

[The Vice-Chair, Conservative, Shannon Stubbs]

You have 13 seconds in case you want to wrap up, Monsieur Malette.

[Gaétan Malette, Conservative, Kapuskasing—Timmins—Mushkegowuk, ON]

I'm done. Thank you, Madam Chair.