Natural Resources Committee on Feb. 12th, 2026

[Braedon Clark, Liberal, Sackville—Bedford—Preston, NS]

Thank you, Mr. Chair.

Minister, you touched on this a little in some of your previous answers. I believe you said that up to 16 departments could potentially be touching on a major LNG project. In your view, the MPO and “one project, one review”, which you just cited.... I know the government has signed agreements with about half the provinces so far, with more to come, simplifying that process.

If you could, give us your view on how significant that is from a government standpoint and, in many ways and more importantly, from a proponent standpoint, as they're making investment decisions running into the tens of billions of dollars in some cases.

[Tim Hodgson, Liberal, Markham—Thornhill, ON]

“One project, one review” is incredibly impactful and powerful. What it says is that we're not going to ask the proponent to face two sets of regulatory gates when there is an equivalency between the two. What the federal government has said is that where there is equivalency between federal regulations and provincial regulations, the federal government will stand back when we have a “one project, one review” agreement and we've worked through it and concluded that there is equivalency.

What does that mean in real life? Back in the late fall of last year, the Ksi Lisims project—the one I referred to earlier, which will be the second-largest private investment in the history of this country—was approved by the Province of British Columbia, I believe at four o'clock Pacific time on a Monday. The federal approval came in at 4:30 the same day. When you are a proponent on a project of tens of billions of dollars, that's worth hundreds of millions of dollars in saved duplication, extended timelines, incremental cost of construction, saved interest on construction and the sheer pain of getting something done. It has been incredibly impactful.

B.C. is the farthest advanced. We saw the same thing on the Red Chris mine, and I think we're going to see it on some other things coming down the pike.

As you correctly pointed out, we made it a priority in our One Canadian Economy Act to try to bring down barriers between the federal government and the provincial governments. This is one of the most impactful ways we can do that.

[Braedon Clark, Liberal, Sackville—Bedford—Preston, NS]

I agree completely.

About 10 years ago, Minister, I worked for the natural resources minister in Nova Scotia. At that time, there was a proposal through Goldboro LNG to export LNG to Germany. One of the issues I was dealing with at the time was mismatching regulations on the provincial side. I saw that a decade ago. To see what we're doing now—that you can have a 30-minute window between provincial and federal approvals—is a quantum leap, to be honest. I appreciate that answer.

Here's the last thing, in the time I have—a little over a minute. As you said in a previous answer, LNG is a tremendous bridge or transition fuel between where we've been and where we're going. How can LNG, in particular, help Canada become an energy superpower and become net zero by 2050, which is something we talk about quite a bit?

[Tim Hodgson, Liberal, Markham—Thornhill, ON]

There are two ways. There's domestically and there's internationally.

How much time do I have? I have to calibrate.

[The Chair, Liberal, Terry Duguid]

You have 37 seconds.

[Tim Hodgson, Liberal, Markham—Thornhill, ON]

Okay. This is way too complicated.

The reality is that we'll need to spend $1 trillion between now and 2050 to grow our grids. We'll have to do that with a whole bunch of different technologies. We're going to do it with renewables, we're going to do it with nuclear, we're going to do it with hydro where we have the opportunity to do it with hydro, and we will do it with abated natural gas wherever possible. In that context, it will help us get to where we need to go.

The Prime Minister has said we are not going to get to net zero by denying people economic lives; we're going to get to net zero by growing our economy and by using new technologies like CCUS—both pre-combustion and post-combustion—as well as all the other renewable technologies and green hydrogen.

If we have more time, we can talk about what we saw in China and India and what they're doing today. There is absolutely a place for natural gas in that stack of generating options.

[The Chair, Liberal, Terry Duguid]

That brings your time to an end, Mr. Clark, and this panel to an end.

I want to thank the Minister on your behalf. It was a spirited exchange—Minister, I think you'll agree—with good questions by members. I tried my best to keep us on the topic of LNG, and I think we got there in the end.

Thanks to the department for coming to see us. You didn't get a big workout, but I'm sure we'll have you back.

Colleagues, we're going to take a short break while we change panels.

[The Chair, Liberal, Terry Duguid]

Colleagues, we are back in session. Welcome back. We'll resume the meeting.

We have before us, from the Canada Energy Regulator, Ms. Tracy Sletto, chief executive officer, who is accompanied by Jonathan Timlin, vice-president, system operations, and Darren Christie, chief economist. Welcome, everyone.

From the Department of Natural Resources, Erin O'Brien joins us again. She is the assistant deputy minister, fuels sector.

Folks, I think you know the routine. Ms. Sletto, you will have five minutes for your opening remarks, after which we will open the floor to questions.

By the way, colleagues, just before we start, we did give the minister a full hour and we'll give these folks a full hour.

Ms. Sletto, please proceed for five minutes.

[Tracy Sletto, Chief Executive Officer, Canadian Energy Regulator]

Thank you very much.

Good afternoon, members of Parliament. Thank you for inviting the Canada Energy Regulator, or CER for short, to appear as part of your study of Bill C-15, and specifically the proposed change to the Canadian Energy Regulator Act that's included in division 41 of part 5.

My name is Tracy Sletto, and I'm the CEO at the CER. I'm joined today by Darren Christie, our chief economist, as the chair pointed out, and John Timlin, our vice-president of system operations.

In my opening remarks, I thought I'd briefly describe the CER's mandate and discuss how we regulate natural gas exports. I will also touch on how the proposed change to our act, which would increase the maximum duration of export licences for liquefied natural gas from 40 to 50 years, could impact our regulatory responsibilities.

Before going further, I would like to acknowledge that I am on the unceded, ancestral and traditional territory of the Algonquin Anishinabe nation, which has lived on and cared for the land now known as Ottawa since time immemorial.

The CER's mandate is clear. We regulate energy infrastructure—specifically international and interprovincial pipelines, international power lines, and offshore energy projects and power lines—in a way that prevents harm and ensures the safe, reliable, competitive and environmentally sustainable delivery of energy to Canada and the world.

The CER is also responsible for advising and reporting on energy matters. One way we do this is through our energy futures series, where we explore how possible energy futures might unfold for Canadians over the long term. In addition to the energy futures reports, the CER develops provincial-territorial energy profiles, produces market snapshots that highlight key trends in Canada's energy sector, and publishes oil and gas production statistics.

The CER's mandate also includes the regulation of hydrocarbon and electricity exports from Canada. Our role in regulating these exports, including for natural gas, is set under part 7 of the Canadian Energy Regulator Act.

For the exportation of natural gas, the commission of the CER currently has authority to issue licences for up to 40 years, subject to approval by the Minister of Energy and Natural Resources, and to issue short-term export orders for up to two years.

The maximum term for natural gas export licences was extended from 25 years to 40 years in 2015 through amendments to the National Energy Board Act. This change was carried forward under the CER Act in 2019.

When assessing applications for long-term natural gas export licences, the commission of the CER applies a surplus test that is set out in section 345 of the CER Act. This test establishes that the proposed exports must not exceed the amount of natural gas expected to be available after meeting the “reasonably foreseeable” needs of Canadians, taking into consideration the “trends in the discovery of...gas in Canada.”

Applicants for natural gas export licences must provide supply and demand projections and demonstrate that exports will not compromise Canada's domestic energy requirements. The commission of the CER reviews these applications through a written process, including a public comment period, and must decide within 180 days, followed by a ministerial decision.

Currently, there are 24 valid export licences linked to LNG projects, with 18 of them for 25-year terms and six for 40-year terms. Companies apply for export licences in advance of construction and operation, so even though there are 24 valid licences, only one is currently in use: the 40-year export licence for LNG Canada, a natural gas liquefaction facility and marine terminal for exporting LNG in Kitimat, B.C.

Other than the licence for LNG Canada, all of Canada’s natural gas currently being exported is under what are called export orders rather than export licences. These orders are generally for a maximum of two years, and given their technical and administrative nature, they typically receive CER commission approval within two working days after being submitted through our online application system. The CER receives approximately 100 new applications for these orders every year.

In terms of impacts for our regulatory responsibilities, this potential change to our act would only apply to export licences for LNG and not to the other exports we regulate, such as oil or electricity.

The change proposed in Bill C-15 would not automatically extend the term for existing export licences. Companies with existing licences would have the option to reapply to the CER to receive a 50-year licence. This is similar to when the maximum term for natural gas licences was increased from 25 to 40 years.

In closing, I want to thank you for giving me the opportunity to speak with you today about the work of the CER. My colleagues and I very much look forward to your questions.

[The Chair, Liberal, Terry Duguid]

Thank you so much for that testimony.

We are now going to colleagues for questions.

I'm going to start with you, Mr. Gunn, for six minutes.

[Aaron Gunn, Conservative, North Island—Powell River, BC]

Thank you, Mr. Chair, for having me here.

As I'm sure you all know, in Powell River, in the riding that I represent, two hydroelectric dams were built over 100 years ago to provide power to the local pulp mill and create thousands of good-paying jobs. Just over 10 years ago, that mill fell into financial trouble and was forced to sell the dams as a distressed asset to Bermuda-based Brookfield Renewable, a company that has since applied to the Canada Energy Regulator—to you—for an unprecedented 30-year export permit to send this electricity directly to the United States, with almost no benefits to the people who live in Powell River, my province of British Columbia or our country. It is doing this at a time, I might add, of aggressive and totally unjustified U.S. trade action against us.

On December 18, the Canada Energy Regulator made a recommendation to the Minister of Energy and Natural Resources to reject this electricity export permit request from Brookfield, operating under PREI, or Powell River Energy Inc., and to instead proceed with a full licensing process, which would allow for further inquiry, public hearings and any other conditions that the commission sees fit.

First of all, I'd like to applaud that decision you made. I'm hoping you can confirm whether the minister has accepted that recommendation and whether a full licensing process is now in place.

[Tracy Sletto]

Thank you very much for that question. I will turn this over to Mr. Christie, our chief economist, as he's more familiar with the specifics of this case.

As you described it in terms of the time frame and the application that came to the commission, I'd concur that the time frame makes sense.

Darren, is there anything you would like to add?

[Darren Christie, Chief Economist, Canadian Energy Regulator]

I'll just add that December 18 was the decision date. To my knowledge, there's not yet been a decision taken by the Governor in Council, which is what the recommendation is with regard to. I don't have any update on that.

[Aaron Gunn, Conservative, North Island—Powell River, BC]

It's been almost two months now. Do you have any idea what's taking the minister so long to accept your recommendation?

[John-Paul Danko, Liberal, Hamilton West—Ancaster—Dundas, ON]

I have a point of order, Chair.

What does this line of questioning have to do with the budget implementation act? If the member has specific questions, perhaps he could take them off-line and not waste everybody's frigging time.

[Aaron Gunn, Conservative, North Island—Powell River, BC]

Excuse me, Chair. We're talking about LNG exports in British Columbia.

[The Chair, Liberal, Terry Duguid]

Hang on. I have the chair.

Thank you, Mr. Danko.

Again, relevance has been a bit of an issue today, Mr. Gunn, so if you could steer your questions toward the matter at hand, I would appreciate it.

[Aaron Gunn, Conservative, North Island—Powell River, BC]

Just to be clear, for the member's benefit, electricity in British Columbia is used to electrify LNG export terminals, so it's very relevant.

[The Chair, Liberal, Terry Duguid]

Okay. You've at least made a tenuous link. I appreciate it.

Thank you, Mr. Danko.

Thank you, Mr. Gunn. You may proceed.

[Aaron Gunn, Conservative, North Island—Powell River, BC]

Going back to my question, do you know what would be taking the minister so long to accept your recommendation? What options would he be considering that are available to him? Is it about simply axing the deal, or is it about ignoring your recommendation and allowing the permit?

[Darren Christie]

I don't have any insight as to what has been occurring since the recommendation from the commission of the CER was made by the letter you referenced.

My understanding of the options available, as laid out in the CER Act, is that either the commission's recommendation is accepted and there will be a further process, as you described, or the direction could be made to the commission to issue what the company asked for.

[Aaron Gunn, Conservative, North Island—Powell River, BC]

Do you know or could you speculate on what considerations might be holding up this decision? I can appreciate what this uncertainty can do for the local economy in Powell River.

[Corey Hogan, Liberal, Calgary Confederation, AB]

Chair, I have a point of order.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Hogan.

Mr. Gunn, this does not relate to LNG and the matter before us. I will pass it on to the next speaker.

[Shannon Stubbs, Conservative, Lakeland, AB]

I have a point of order, Chair.