Natural Resources Committee on April 16th, 2026

[Peter Tertzakian]

Yes.

[The Chair, Liberal, Terry Duguid]

It is excellent and you have a good partner, whose name I can't remember right now.

[Peter Tertzakian]

It's Jackie Forrest.

[The Chair, Liberal, Terry Duguid]

You and Jackie Forrest give a nice snapshot of what's going on in the energy sector, and I highly recommend it.

Colleagues, with that, we are going to break for our next panel. Again, I thank the witnesses on your behalf.

Thank you very much.

[The Chair, Liberal, Terry Duguid]

We're back in session, colleagues. Welcome back. We'll resume the meeting.

I would like to welcome our witnesses for this panel.

From the Canadian Hydrogen Association, we have David Billedeau, president and chief executive officer. From Hydro-Québec, we have Serge Abergel, chief operating officer, Hydro-Québec Energy Services (U.S.) Inc., and David Laureti, adviser, government affairs.

All witnesses appearing virtually have conducted a mandatory witness onboarding test.

My apologies for the delay, colleagues. We did have a bit of a challenge with one of our headsets, but we're ready to go now.

Let me make a few comments for the benefit of the new witnesses.

Please wait until I recognize you by name before speaking. I remind you that all comments should be addressed through the chair. You will each have five minutes for your opening remarks, after which we will open the floor for questions and comments.

Mr. Billedeau, we're going to start with you. You have the floor for five minutes.

[David Billedeau, President and Chief Executive Officer, Canadian Hydrogen Association]

Mr. Chair and members of the committee, thank you for the opportunity to appear today.

As noted, my name is David Billedeau. I'm the president and CEO of the Canadian Hydrogen Association, which is the national industry association representing the full hydrogen value chain here in Canada. Our members span producers, technology developers, infrastructure providers, post-secondary institutions and end-users. Our focus is straightforward: building a competitive, investable hydrogen sector in Canada.

To start, let me calibrate expectations. Hydrogen is not yet a mature commodity market globally, but it is an emerging one. Demand is forming rapidly, and timing is critical. Countries that align production, infrastructure and policy with real buyers now will capture these markets, and importantly, these opportunities will not wait.

I think two markets matter most today: Europe, and Germany in particular; and the Asia-Pacific region, namely Japan and Korea.

In Europe, demand is being actively built for hydrogen. Germany's H2Global mechanism is securing a long-term, low-carbon fuel supply through a contracts-for-difference system backed by over 200 million euros in state aid for hydrogen imports from Canada.

Meanwhile, in the Asia-Pacific region, Japan is preparing to operate a 40,000-cubic-metre liquefied hydrogen tanker by 2030, reflecting import demand at scale. Korea, meanwhile, has expressed interest in building hydrogen corridors here in Canada, linking hydrogen production with refuelling, mobility infrastructure and transport via ammonia.

For Canada, this creates a genuine export opportunity, but only if we produce at scale competitively. To be clear, we don't face a shortage of hydrogen project proposals. We're facing a shortage of projects reaching final investment decision. That comes down to economics and policy design.

The clean hydrogen investment tax credit, or CHITC, is central to addressing this. The issue is not whether the credit exists, but whether it's truly workable for real projects. We believe that targeted refinements to the CHITC would unlock private capital and accelerate hydrogen development. I'll be happy to provide the committee with a copy of our full technical CHITC recommendations after the discussion, but done right, optimizing the CHITC could help unlock over $35 billion in private capital by the early 2030s, all within the existing CHITC funding envelope.

I also want to be clear that Canada's hydrogen sector is already operating in global markets. Canadian hydrogen and fuel cell technologies are currently being exported to nearly 50 countries worldwide. For both Canadian hydrogen and technology exports, I believe we have a very strong foundation, but success in scaling now depends on coordination and focus. To fully seize Canada's export opportunity here, I would highlight three recommendations for consideration.

First, as I mentioned, optimize the CHITC to ensure production can scale across regions and project types.

Second, continue to invest in targeted export promotion programs, like CanExport, PacifiCan and Export Development Canada, which are vital for enabling Canadian hydrogen innovators to access foreign markets.

Finally, enhance federal and provincial coordination on export and distribution infrastructure for hydrogen and its derivatives. The opportunity to lead in low-carbon fuel exports is real but time-sensitive. Buyers and investors are making decisions now.

In closing, I think Canada has the fundamentals, the technology and the talent to compete in the emerging global hydrogen market, but what we need is clarity, coordination and commitment to turn that potential into projects and exports.

Thank you. I look forward to the discussion.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Billedeau.

Now we are going to Mr. Abergel. You have the floor for five minutes.

[Serge Abergel, Chief Operating Officer, Hydro-Québec Energy Services (U.S.) Inc., Hydro-Québec]

Thank you, Mr. Chair.

Members of the committee, Mr. Chair, thank you for having us today.

Hydro-Québec is a government-owned corporation belonging to the Government of Quebec. It generates, transmits and distributes electricity from renewable sources.

I am the chief operating officer of Hydro-Québec Energy Services U.S., the entity responsible for transactions with neighbouring markets in the United States.

Hydro‑Québec is a source of pride for us. It's the largest producer of renewable energy in North America. Its network consists of 62 hydroelectric power plants and has a capacity of 37,000 megawatts.

Hydroelectric power is renewable and flexible. Thanks to the large reservoirs in which we store water and, of course, energy, we can provide baseload power, very quickly scale production up or down to follow market trends, and store energy in the form of water over months, seasons and even years to ensure that energy is available when needed.

This unique product puts Quebec in a unique position that enables us to seize business opportunities around us. This is due first and foremost to our hydroelectric resources, but also to the privileged geographic location we occupy in relation to the markets surrounding us.

Hydro‑Québec operates interconnections and transmission lines that cross the border into the United States, more specifically to New York State and New England, but also to Ontario and New Brunswick. These interconnections have a combined capacity of approximately 8,500 megawatts.

More specifically, we've been exporting our electricity to New York State for over 100 years, and to New England for over 30 years. Until very recently, we had 104,000 megawatts of interconnection capacity to the two U.S. markets I just mentioned, namely New York and New England. This capacity will increase significantly thanks to the two new transmission line projects currently under construction. In fact, one has just been completed: the line to Massachusetts and New England. Deliveries began last January. The other line, to New York, is in the final stages of construction.

In terms of volume, we have exported on average about 15 terawatt-hours per year over the past five years, which represents approximately $6 billion in cumulative revenue, or just over $1 billion in revenue per year.

There is a distinction to be made regarding the type of sales we've had in the past. We have had a lot of sales on short-term markets. As for upcoming contracts—especially the two major contracts I will elaborate on a bit more—sales will be conducted through long-term agreements. Customers around us have basically shown a great deal of interest in securing firm agreements with Hydro‑Québec to guarantee a constant supply to their market and, of course, price stability. In return, those customers were willing to agree to a higher price to receive these guarantees.

In New York, the line I mentioned is the Champlain Hudson Power Express project. It's a 1,250-megawatt line that, by next June, will account for 20% of New York City's energy. In terms of emissions, it's as if every other car in New York City had been removed.

In Massachusetts, we have the New England Clean Energy Connect project, or NECEC. This project has been in operation since January and accounts for 20% of Massachusetts' energy.

In both cases, we're talking about enough energy to power approximately 1 million homes through each of these projects.

For Quebec and neighbouring markets, the benefits are clear. Quebec's renewable energy exports generate significant revenue. In the case of the two new contracts I just mentioned, we're talking about revenue of $50 billion over 25 years.

The exports are shifting these markets away from fossil fuels. As I mentioned, in New York, that is equivalent to reducing the number of cars by 50%. It's not just about reducing polluting emissions from local power generation, which is often based on oil; it's also about reducing the pollutants that drift down into the city and cause health problems for local residents, especially in disadvantaged neighbourhoods.

Interconnected markets, such as those we have with our neighbours, improve our resilience in the event of major incidents. We remember the ice storm in particular, when Quebec imported a lot of energy, which made it possible to keep the lights on in southern Quebec.

In closing, it is important to emphasize a critical point: In order to maintain the benefits I just mentioned, it is very important that the sector remain tariff-free. We've heard a lot about the tariff threat from our American neighbours. We all benefit from those markets, which are currently open, and it's crucial to maintain this status. It's precisely this openness of markets, from which we all benefit, that enables us to preserve this flexibility and energy security.

That concludes my opening remarks.

Thank you.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Abergel.

We will now proceed to the question rounds.

We're going to start with Mr. Martel.

You have the floor for six minutes.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Chair.

Mr. Abergel, thank you for joining us today.

What you said is interesting. We know that the Americans have imposed tariffs on aluminum and steel. I think electricity is safe for now.

Given that you export to New York and Massachusetts, what would happen if tariffs were imposed on your sector?

[Serge Abergel]

Thank you for the question, Mr. Martel. This is an issue we have spent a great deal of time thinking about and speculating on to try to better understand the consequences of potential tariffs on our electricity sales, as well as on our imports—in the opposite direction, if we import electricity at certain times, of course.

What's important to clarify right now is that, fortunately, there are no tariffs on electricity at the moment. Electricity has never been subject to tariffs, and there are good reasons for that.

First, electricity is not a tangible good. It doesn't cross a border crossing like a good that could simply be intercepted and on which tariffs could be imposed. So, if tariffs were to be imposed, the Americans would have to set up an entire tracking infrastructure, which would be extremely complex. It would certainly take more than a year to set up, measure and track that.

Second, the absence of tariffs obviously allows for this flexibility between markets. So energy can flow, often from north to south, but also from south to north, when market opportunities are attractive. We see attractive market opportunities particularly in the context of the rise of intermittent energy sources in the northeast, here. Wind energy and solar energy create extremely low prices at certain times. Obviously, when they're not available, prices are extremely high. That creates import opportunities, but conversely, it also creates export opportunities at high prices. The discrepancy between the two is very attractive and a win-win for everyone. When we export, we inevitably add supply to the market, which reduces prices for Americans.

If all of that were subject to tariffs, according to our calculations and projections, there would be an increase in wholesale prices in the New England and New York markets of up to roughly 30% during peak periods, since we are a major player in those markets. In terms of costs, the impact would be significant during those hours when energy demand is very high.

The other barrier worth mentioning concerns reliability. When you start imposing tariffs, 25% barriers or other measures of this kind, it means that energy can flow less freely. In such a scenario, we can imagine emergency situations, such as ice storms, where neighbouring communities need to be supplied with energy. There would be this administrative burden, these additional barriers, and these extra costs that would then be passed on to consumers. This could create significant reliability issues in some emergency situations.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Regarding surpluses, I know that at one point, for a long time, we had good capacity and surpluses. We were happy to have surpluses because that gave us some flexibility. Today, we are quite limited when it comes to surpluses.

What does not having that cushion mean to you? I wouldn't say we're in a tight spot, but we no longer have much flexibility.

[Serge Abergel]

Regarding surpluses, it is important to specify that the contracts we signed were based on electricity production from existing power plants in Quebec. We have been very cautious then in everything we have done, by keeping a close eye on firm commitments. I am referring to firm commitments in Quebec—that is, demand and load in Quebec—and firm commitments in the markets we have now in New York and Massachusetts. Therefore, our existing resources allow us to meet our firm commitments both in Quebec and in the markets.

It's important to note, however, when discussing the future and the need to keep pace with anticipated demand growth, that it will take new facilities, investments and meeting this future demand when it arises and materializes.

Right now, we see that demand is growing, and we are in the process of rolling out our action plan, which spans a period extending through 2035. We will gradually invest nearly $200 billion in new energy production infrastructure, which will be in place in time to meet this growth in demand.

Until we are able to deploy these new resources, we have the flexibility to withdraw from short-term markets. In terms of exports, short-term markets involve transactions that are not tied to contracts. On the hourly market or the so-called day-ahead market, we bid on transactions. It is based on our surplus. Should we have less flexibility, we are able to withdraw from these markets to focus more on our firm commitments.

Thus, the strategy is extremely cautious, to ensure that we can meet our obligations at all times, both those in Quebec and those related to our contracts.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

I have only 30 seconds left. I have another series of interesting questions to put, but I will ask them later, rather than start now. I will then cede the floor to my colleagues.

[The Chair, Liberal, Terry Duguid]

Thank you.

Mr. Guay for six minutes.

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

Thank you, Mr. Chair.

I would like to thank the witnesses for taking the time to join us.

I’ll pick up where Mr. Martel left off.

I spend a lot of time with mining developers, among others, in Quebec. One question comes up all the time: Do you have an allocated block of electricity?

I understand what you’re saying about current demand and the capacity to meet Quebec’s needs. However, the country has very ambitious goals. When I speak with the Quebec government, I see that Quebec also has ambitious goals. We want to be able to develop our markets and process our resources, and thus have more mining projects, for example, and electric vehicles. As you said, I think we’re talking about a demand of 60 terawatts by 2035. However, as far as I know, our water reservoirs have dropped.

We need to encourage development. However, isn’t there a risk of a mismatch between the demand growth and what Hydro-Québec will be able to do to meet it?

What specific actions then could we take to achieve efficiency gains? You mentioned the short-term market, but in my view, there are other ideas Hydro-Québec is working on. I would like to know what reliable sources might be available.

[Serge Abergel]

I can start by going into more detail about the action plan to try to give a clearer picture of the overall situation. I could then come back to the energy blocks and the allocation process, which is governed by a Quebec government mechanism.

As for the action plan, I mentioned some $200 billion in investments by 2035. It includes a series of different initiatives that were simultaneously launched a few years ago.

On the one hand, we need to increase electricity production. That is essential. At the same time, we also need to diversify it.

A tremendous amount of work has been done on wind energy. Our goal is to deploy more than 10,000 megawatts of new wind resources during this period, so it’s very ambitious. We are currently deploying approximately 5,000 megawatts of the 10,000 megawatts to be deployed by 2035. So there is concrete progress on this front. Just recently, we announced the first construction projects for the Seigneurie de Beaupré wind farms. We’re talking about 1,200 megawatts of capacity, with 400 megawatts in the first phase set to come online in 2028. So the tangible benefits of this new wind power generation are on the way.

Obviously, this is perfectly compatible with our hydroelectric reservoirs, because reservoirs act as batteries. We generate more wind energy, use it for local power, and store water in the reservoirs. This ties back to the water issue you mentioned earlier. It helps us in that regard.

At the same time, we’re also doing a lot of work to refurbish our hydroelectric plants to give us even more capacity in that area. In existing plants where we’re replacing turbine-generator units that are worn out and have reached the end of their approximately 50-year lifespan, we’re installing more efficient and better-designed units thanks to technology. This will result in efficiency gains of over 10%. So, we’re producing more energy, or we’re producing the same amount of energy with less water, depending on how you look at it. Again, these gains will allow us to meet future demand. This is being phased in annually with our suppliers. We are truly on a very steady and predictable trajectory, because this is an area in which we have a great deal of experience.

Incidentally, I won’t go into detail on every aspect of the action plan, because we could spend a lot of time on it, but I think it’s important to mention our energy efficiency efforts. What can we do to reduce the load on our end? Obviously, these are immediate gains, and they are the most affordable gains for customers. On this front, we have a target of 22 terawatt-hours of energy efficiency gains across a wide range of areas. For example, you’ve surely heard about all the home automation systems we’re deploying for customers. Today, customers can have us install a smart thermostat and several devices in their homes that will allow them to adjust their energy consumption when it will have very little impact on their quality of life. This represents savings of 22 terawatt-hours. In the United States, that would be the equivalent of 2.2 million homes—or the equivalent of the two contracts.

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

Mr. Abergel, I want to make sure I use my speaking time to the fullest, and there is another question I wanted to ask you.

In the federal government's 2025 budget, eligibility for the clean energy investment tax credit has been extended to Crown corporations. What does this mean for Hydro-Québec? What will this allow Hydro-Québec to do?

[Serge Abergel]

I prefer not to speculate on the answer. I haven't necessarily examined this issue as part of my work. However, we could do a follow-up later.

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

You could ask your head of financial services to give you the answer.

[Serge Abergel]

My colleague here is able to respond.

[David Laureti, Advisor, Government Affairs, Hydro-Québec]

Our eligibility for the clean electricity investment tax credit had long been a request from the industry. Hydro-Québec was pleased to see this included in the latest budget. Since the passage of the budget implementation bill, or Bill C‑15, we can now take advantage of this tax credit.

Mr. Abergel mentioned $200 billion in investments. Since this is a tax credit of up to 15% of expenses, you can imagine the positive impact this will have on project costs, in particular. From Hydro-Québec’s perspective, ultimately, our entire customer base will benefit. By lowering project costs, we will be able to carry out projects at a lower cost, and, ultimately, this will be reflected on both residential and industrial rates.

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

Thank you very much.

Mr. Chair, do I have time for one last brief question?

[The Chair, Liberal, Terry Duguid]

No.

Mr. Simard for six minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you very much, Mr. Chair.

I would like to thank the witnesses for joining us.

Mr. Abergel, I would like to follow up on what you said about rates at the end of your opening remarks. It is easy to understand that it's not in the Americans’ interest to impose tariffs on hydroelectricity since, ultimately, they would be the ones to suffer.

We also know that there are people who have viewed hydroelectricity as a means of putting pressure on the United States. In that scenario, the cost would be disproportionate for Quebec, since we would, in a sense, be the bargaining chip in negotiations. Despite certain statements made by Mr. Ford in Ontario, I do not believe it is in the government’s interest to do this, but it is worth reiterating that it would be a very bad idea to go down that path. I think this is a concern that everyone in the House of Commons shares regarding the trade dispute. I do not believe that hydroelectricity should be used as a bargaining chip.

Earlier, you said that the $200 billion in investments applied to projects Hydro-Québec was currently undertaking, particularly in the wind energy sector, to expand the energy mix.

I would like to know what investments have been made and will be made in the line you have to Massachusetts and in the line to New York, which is currently under construction. I want to know what these infrastructure investments entail. Furthermore, have you received any form of support from the federal government for this infrastructure?