Natural Resources Committee on March 24th, 2026

[Jonathan Rowe, Conservative, Terra Nova—The Peninsulas, NL]

There would be no way to survive without those tax credits, so we need the government to keep doing those to get that industry going.

[Brendan O'Connell]

That's correct.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Rowe.

Thank you, Mr. O'Connell. You can amplify that in a future question.

We will now go to Mr. Danko for five minutes.

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

Thank you, Chair.

My first question is for Professor Doran.

I think she gave some really interesting testimony talking about the breakdown, or perhaps the intentional destruction, of international law. She talked about this axis of North American extreme right governments and the Monroe doctrine as it's interpreted by President Trump.

I want to give her the opportunity to expand on some of the risks she mentioned of Canada expanding trade with these far right extremist governments in terms of our energy exports. Especially in the context of agreements that can't be trusted and governments that can't be trusted, why would we want to do business with those countries?

[Marie-Christine Doran]

Thank you so much for the question.

I'll answer in French, simply because I mainly teach in French.

There are major risks. Actually, they're related to the fact that a number of countries have abolished the agencies that supervise contracts and ultimately should be reliable in court when it comes to ensure legal checks and balances.

That's the case in El Salvador. The Biden administration sanctioned El Salvador for corruption. Of course, that changed significantly when the Trump administration made it their number one ally. However, the situation hasn't changed: judicial checks and balances and all the oversight agencies on corruption have been abolished in Ecuador, El Salvador and Bolivia.

Some Canadian business people say they won't do business in Cuba, for example, because there are no legal guarantees protecting their investments, but it's the same situation in those countries. It may even be worse, and the Canadian population is poorly informed on this.

Things are moving extremely quickly. In just two years, legislation has been completely changed, as have the agencies responsible for verifying contracts to ensure that everything is done and that we have access to justice if necessary. This is really an unprecedented situation. That's why I think it's wiser to continue working with allies who adopt even stronger regulation. That's the case of Mexico who's working extremely hard at all levels, particularly with the implementation of contracts related to mining companies, for example, or exports of natural resources, in this case clean energy.

So there's really quite a major contrast and, in some ways, it's dangerous. That's the problem with the Canada-Ecuador free trade agreement, for example. We have major concerns, because oversight agencies no longer exist in this country. They were abolished in just two years with a misguided understanding that judicial checks and balances and oversight agencies are disturbing things and preventing citizens from immediately following the president's will to bring safety and economic well-being. It's a very populist narrative, and it's dangerous for our investments.

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

Thank you very much.

I really appreciate your expertise in that area.

I'm going to switch topics to hydrogen. That's something that's of real interest in Hamilton with the steel industry, with the potential for data centres and green energy.

This is for the representatives from Hydrogen Canada.

You touched on the importance of Canadian regulation, in particular carbon pricing, to the business model that is enabling hydrogen to expand as an export market. I want to give you an opportunity to expand on that. Also, what further action could we take on the investment tax credits and reducing transportation costs?

[Brendan O'Connell]

First of all, we produce hydrogen and then convert it to ammonia. We would produce about 200,000 tonnes of hydrogen and convert that to ammonia. Out of that would come about 1.5 million tonnes of CO2.

Our plan was to capture more than 96% and sequester it, so we would be capturing and sequestering, plus or minus, 1.5 million tonnes. That would generate offsets in Alberta, and the revenue generated from those offsets was material to our model. It was north of $100 million a year, so it was critical to the overall success.

We're one of the very few countries—I think the only country in the world—that has a carbon levy system where you can recognize those revenues. Anyone looking for blue hydrogen or blue ammonia would require you to sequester those, so it was material to our business.

The only country I can think of is the U.S., where they have 45Q, which provides $85 per tonne of CO2 sequestered, and that was who we were competing with originally.

On the tax credits, we were relying on the hydrogen investment tax credits for the first two-thirds of our plant. We actually worked very hard to get the lowest carbon intensity, but the current tax credits don't recognize low-carbon methane. Enercan, or whoever wrote the legislation, decided that they wouldn't accept the differentiated natural gas, which is something that Canada is marketing its gas on right now. LNG is the lowest carbon intensity in the world, yet if we take that low-carbon gas and make ammonia, the government doesn't recognize the low carbon intensity. That's where the tax credits kind of give and take, so we'd like to see modifications to that.

[The Chair, Liberal, Terry Duguid]

Thank you. I gave you some extra time there, Mr. O'Connell, and perhaps we can compact that with a future questioner.

We're going to Monsieur Simard.

You have the floor for five minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Mr. O'Connell, I completely understand your answer. You're making it clear you still need that tax credit and carbon pricing.

We've had this discussion many times in committee. To his great misfortune, former minister of natural resources, Mr. Wilkinson, asked me to join him in Berlin where I spoke to representatives of the Siemens company about blue hydrogen production technologies using carbon capture strategies. I was surprised when they said they didn't believe in this model because the technological costs were too high to make it an attractive energy source. I'm just telling you about that discussion, because it surprised me.

If I understand correctly, you just said that to operate your plant — knowing two thirds of your share of funding comes from tax credits —, we have to keep carbon pricing, and I completely agree with that. Given Siemens' position regarding very high technological costs, do you really think there's a market for blue or green hydrogen in the short term?

[Brendan O'Connell]

Yes, we believe there's a market. There's a mandated market in Korea. The Koreans were ready to sign deals. We have been dealing with the two largest power companies in Korea for the last two and a half years, and they were ready to sign deals as long as we were competitive with any other facility in the world. Our advantage is our cost-effective natural gas. Our gas is cheaper than any gas anywhere on the planet, any major basin. We're one or two dollars less than the U.S. gulf coast, and we're five or six dollars less than Australia, the Middle East and any other competing region. Yes, we can be competitive.

If you're producing blue ammonia, you have to capture the CO2 and sequester it. We can do that very cost-effectively in Canada. It's fairly cheap for us because of the way our regulatory environment works. Technologically, it all works. Our big challenge was the fact that these facilities are designed to be built at tidewater. We were looking to build it in Alberta, so we had the rail challenge. What hurt us was the fact that we were inland, because that's where our petrochemical industry is based. The carbon levy and the technology were not risks as far as we were concerned. The carbon levy was a huge benefit to us, and it makes us competitive with the U.S. in terms of the Inflation Reduction Act. Our challenge was the rail. To us, it could be a very competitive industry.

[The Chair, Liberal, Terry Duguid]

Thank you.

We'll move on to our two final questioners, Mr. Tochor and Mr. Hogan.

We're going to give you four minutes each.

[Corey Tochor, Conservative, Saskatoon—University, SK]

I'll go back to how we stack up on nuclear with some of our allies around the world. How do we stack up on regulatory timelines compared to the States?

[George Christidis]

I assume that's for me, Mr. Chair.

If you take a look at the changes that the executive orders have made in the United States, the changes through their national regulator, they're substantially looking at accelerating reduction in terms of the regulatory requirements to proceed. That's not to say the U.S. model is the model that we would aspire to. What we're pointing to is this significant trend internationally in the U.S., the U.K. and France.

Every country has its own system, right? I need to be cautious, because each country does have its own system. We have a very strong federal and provincial environment in terms of energy policy overall, but there's definitely a trend line that other jurisdictions are moving to accelerate their regulatory processes to meet their energy needs, climate and security while, in Canada, we're not quite there yet. We're actually going the other way, as I pointed out in my statement.

[Corey Tochor, Conservative, Saskatoon—University, SK]

We're going the other way. Is that in the layering on of regulations?

[George Christidis]

As I pointed out, in the last 10 years there's been an increase of about 80% to some of these regulatory requirements for the CNSC, for example.

[Corey Tochor, Conservative, Saskatoon—University, SK]

Did it chill the market a little for investment in Canada when the Liberals classified nuclear stock as a sin stock, similar to tobacco and other substances?

[George Christidis]

I'm very happy to tell you, Chair and committee, that it is no longer the case, and that we have a robust change in the definition of green energy bonds, which includes nuclear. It was a very exciting moment in time for the industry that we were included in the definitions. That has helped investment.

[Corey Tochor, Conservative, Saskatoon—University, SK]

I just toured McMaster University. It has a great facility that's working on radiopharma and some of the breakthroughs. Similar to how you described it, as an 80% worsening of regulations that the Liberals enacted in the last 10 years, on radiopharma there's also a thickening of the regulations and a lack of support for that industry.

Can you highlight radiopharma and medical isotopes, what they mean to our country and, hopefully, the industry?

[George Christidis]

In terms of nuclear medicine, and isotopes in particular, it is a fantastic story. You may have recently seen an announcement made by Bruce Power and the SON indigenous community, about $250 million to develop more isotope capacity. Canada is a leader in that space and actually is catching attention internationally. It's one of those export areas that is also seeing a growth in our respective industry, along with small modular reactors and the large reactor discussion as well. It's quite robust.

[Corey Tochor, Conservative, Saskatoon—University, SK]

Speaking of small modular reactors, you talked about the Canadian supply chain. What has the more complete Canadian supply chain, the CANDU reactor or the SMRs that are being built in Darlington?

[George Christidis]

The Canadian supply chain right now is CANDU. It has a CANDU tradition, but that CANDU supply chain is supporting, of course, the activity, that is, OPG's SMR project in Ontario.

[Corey Tochor, Conservative, Saskatoon—University, SK]

Where would that uranium come from? For the SMRs that the Liberals are planning, where would that be refined?

[George Christidis]

I can't speak in terms of government policy per se—

[Corey Tochor, Conservative, Saskatoon—University, SK]

It wouldn't be in Canada, though. Is that not right? The refinement is not going to be done in Canada.

[George Christidis]

—but the uranium is mined in Saskatchewan. They have a very important facility at Port Hope, in terms of the processes.