Natural Resources Committee on April 21st, 2026

[Chris Cooper]

If you go to some of the studies that you see from various companies, there's no disputing now that LNG is a growth sector. In round numbers, we're currently at about 400 million tonnes per annum. Growth of 30% in that through to the end of the decade and another 25% on that to the end of 2040 take you to around about 700 million tonnes, so that's a debate people are no longer having. There is a clear demand for LNG.

In terms of how that fits in as a transition fuel, we're all working out that the energy transition is not linear. I think we wish it was, but it's not. That's where LNG can play a part in being a good cousin, if you like, or a partner to solar and wind. When the sun doesn't shine and the wind doesn't blow, gas will always be there. I think that's what our international partners are seeing.

If you look at Canada's place in that, as I said, it has one of the most stringent regulatory regimes that exist around carbon. That could potentially be a benefit later, but it positions Canada among the lowest emitters. Carbon intensity is typically 0.14 to 0.4 in LNG. LNG Canada is at the bottom end of that, at 0.145. We are displacing coal and oil. LNG emits something like 20% to 30% less carbon than oil and something like 40% to 50% less carbon than coal. Your international trade partners see that, and that builds international trade, which then has broader spinoff benefits.

LNG is a fuel. It's an opportunity for Canada with the abundance of gas, but it's also an access pathway in the energy transition to help trading partners, which then leads to broader global trade. It enables significantly more for Canada than just a fuel.

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

That's very well said. I'm an MP from Nova Scotia. It's the only province in this country that is still reliant, to a significant degree, on coal as a fuel source, so your points are well taken on the advantages of LNG compared to coal.

I want to ask a question about a provision in the budget that was introduced last fall. It's about the capital cost allowance for LNG facilities, ranging from 10% to 50%, depending on the facility, the use and the carbon intensity of the LNG.

Mr. Cooper, could you give us your thoughts on the capital cost allowance and where we can continue to incentivize the right type of LNG opportunities in Canada?

[Chris Cooper]

This comes back to some of the first points that were made around the MPO, etc. It's really about just getting together and asking how these investors, internationally, look at these LNG investments. They are huge outlays of capital. They are a huge risk. These investors have choices elsewhere. There are plenty of places where you can build LNG. Qatar, Australia and the U.S. gulf coast are seen as safe havens. Let's call them that. They're established.

It's really about establishing the competitiveness and the risk profile, which then go into those investors' economic decks. Of course, the accelerated capital cost allowance is something that then plays into how they run their numbers and their internal rate of return, which is how they look at these investments.

Things like the accelerated capital cost allowance are some of the discussions we've had through the MPO, where the government can help create the right conditions for an investment climate. That is the kind of dialogue that has perhaps been missing in the past. We got some of that in phase one. We're not looking for special favours in phase two or in LNG in general. We're looking for mechanisms that enable competitiveness and affordability, and the accelerated capital cost allowance is a good example of that.

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

Mr. Cooper, I know you can't divulge anything about your final investment decision beyond what you mentioned earlier, but is it fair to say that the accelerated CCAs we were just talking about make things clearer, at least, from an FID decision-making process when you're dealing with a massive, complicated project like phase two—

[The Chair, Liberal, Terry Duguid]

Thank you, colleagues.

That was a very informative paneI. I think you'll agree that there were good exchanges.

Let me thank our witnesses on your behalf.

I think Monsieur Simard asked for a document. I believe you noted that. Any other information you want to share with the committee would be most welcome, so feel free to pass anything along, whether it's any points you might have missed or things you want to re-emphasize.

With that, colleagues, we are going to recess for five minutes and change up our panels.

[The Chair, Liberal, Terry Duguid]

I call the meeting back to order.

Colleagues, let me welcome our witnesses.

With us, we have Advanced Biofuels Canada, represented by Fred Ghatala, president. From the Canadian Renewable Energy Association, we have Imran Noorani. From FPInnovations, we have Stéphane Renou, president and chief executive officer. Mr. Ghatala is here virtually. I believe all of the other witnesses are here in person.

As a note about our virtual witness, as I said previously, he has undergone the mandatory witness onboarding test.

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

Please wait until I recognize you by name before speaking. As a reminder, 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 to questions.

Mr. Ghatala, we are going to start with you. You have the floor. Welcome.

[Fred Ghatala, President, Advanced Biofuels Canada]

Thank you.

Mr. Chair and members of the committee, my name is Fred Ghatala. I am the president of Advanced Biofuels Canada.

Our association is the national industry voice for producers, distributors and technology providers of low-carbon and sustainable fuel replacements for gasoline, diesel, marine and jet fuels. Our members operate over 45 billion litres of low-carbon fuel production capacity globally and are leading suppliers of renewable and low-carbon fuels in our domestic marketplace.

Please forgive me for making these remarks in English only.

Biofuels connect Canada. Rural ridings grow the crops and materials that are processed into the biofuels that are used in ridings of all political stripes and that enhance energy security, improve fuel affordability and reduce pollution.

Canada is endowed with significant resource gifts of oil and gas and critical minerals. We also have the agricultural and biomass feedstocks, infrastructure and expertise to lead in low-carbon liquid fuels. Biofuels directly integrate into the liquid petroleum fuels that we use and will increasingly export to our trading partners around the world as we seek to create $1 trillion in new trade and investment deals. This makes Canada uniquely positioned to be both a clean energy superpower and a traditional energy superpower.

At its full capacity, our clean fuel sector contributes $17.8 billion annually to the economy, and we have room to grow. The biofuels sector supports over 66,000 jobs across agricultural, rural, indigenous and industrial communities. Biofuels make up more than 7% of our diesel and 10% of our gasoline.

In today's complex and unstable world, there has never been a more important time to have a thriving biofuels sector. In fact, biofuels are essential in the current geopolitical context. Surging crude oil and fuel prices are impacting Canadian drivers and our economy. At the same time, concerns about the reliability and security of fuel supplies mean that availability, not just affordability, is increasingly at stake.

To the question of whether biofuels in our fuel supply are helping or hurting Canadians in the midst of this current environment, the results are clear: Biofuels are dampening both price increases and price volatility resulting from an unstable geopolitical situation.

Canada has already identified biofuels as a strategic industry. The opportunity in front of us is evident. With the right alignment, Canada can build a globally competitive low-carbon fuels industry, strengthen domestic energy and economic security, expand value-added markets for Canadian agriculture—especially Canadian canola—attract investment, anchor it here at home and become a reliable supplier of all forms of energy.

To conclude, biofuels are already a connecting thread across Canada. They must also connect our parliamentarians. As political risk is the leading cause of turbulence in our sector, what is needed and appreciated is clear alignment among all political parties to provide longer-term certainty. Having a durable and secure domestic market helps our members grow to increasingly export clean fuels to our trading partners. With your help, we can capture this opportunity. The world needs more Canadian energy.

On behalf of the board of directors and members of Advanced Biofuels Canada association, I thank you for the opportunity to appear before this committee. I look forward to the discussion.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Ghatala.

We will now hear from Mr. Noorani.

You have the floor for five minutes.

[Imran Noorani, Vice President of Policy, Canadian Renewable Energy Association]

Thank you, Mr. Chair.

Thank you to the members of the committee for the invitation to appear today.

My name is Imran Noorani. I'm the vice-president of policy at the Canadian Renewable Energy Association, CanREA. We appreciate the opportunity to contribute to the committee's study on Canadian energy exports, their role in the global energy system and the barriers facing Canada as we look to grow that role.

I'll start with who we are. CanREA is the national industry association representing wind, solar and storage energy across Canada. Our membership includes more than 300 organizations across the country—developers, utilities, indigenous partners, institutional investors, lenders, manufacturers and service providers—working together to build and finance the clean electricity infrastructure Canada needs to power its economy. We work very closely with provincial governments, system operators, indigenous communities and the federal government to ensure that clean electricity projects are bankable, financeable and actually built, not just announced.

I'll give a little bit of insight into what we do and the scale of the opportunity that we have for Canada in front of us.

Canada is entering what the financial markets are calling an electricity investment supercycle, and clean power is at the centre of it. Canada currently has about 25 gigawatts of wind, solar and storage in operation today, and we're looking at another 24 gigawatts already in active provincial procurement processes across the country. That's about 44 billion dollars' worth of investment.

By the mid-2030s, Canada will need up to 90 gigawatts of additional clean electricity capacity to meet the growing demand, and that represents an approximately $200-billion to $300-billion investment opportunity in wind, solar and storage alone for the next decade. It's part of a broader clean electricity opportunity that exceeds $300 billion to half a trillion dollars when you include transmission and other assets.

What makes Canada unique globally is how we're doing this. Canada has quietly built one of the most investable clean electricity frameworks in the world today. It's made up of two components. The first is the federal investment tax credit, which reduces capital costs through the tax base rather than the rate base, and then we also have long-term provincial power purchase agreements. These are typically 20 to 35 years, and they provide revenue certainty to lenders who need to finance these projects at scale. The combination of the federal tax credits paired with the provincial power purchase agreements is largely unmatched internationally, so we've created the exact environment that creates investment stability. It's already mobilizing tens of billions of dollars across the country today.

According to major financial institutions, clean electricity is now one of the fastest-growing infrastructure asset classes in the G7 countries, with an annual investment growth rate projected at about 15% to 18% per year for the next decade. That's comparable to, let's say, 4% to 6% in traditional energy, so it's something to pay attention to.

Just as importantly, Canada has an unrivalled set of global brands in this space. Canadian pension funds are now active here, and our financial institutions are leaders in renewable energy, not just in Canada but across the world as well. Canadian developers are now operating projects in every continent, and Canadian engineering, construction and service firms are exporting their expertise now, not just electrons. This is not just an export story; it's a story of both power and capability.

Let's talk about the role of clean electricity in energy exports. From a CanREA perspective, we really have three viewpoints as it pertains to this. Number one is that clean electricity can increasingly be treated as an exportable economic asset in and of itself through cross-border, provincial and cross-country sales and integrated North American grids, especially as neighbouring jurisdictions seek low-carbon power to meet their own climate and industrial goals.

Second, and more importantly, clean electricity is the enabling infrastructure. It's the backbone for Canada's broader energy and resource exports. Renewable energy is now consistently the lowest-cost form of new electricity in Canada. The cost advantage matters because it's affordable, reliable, clean power, and it enables all of the other sectors: critical minerals, energy-intensive manufacturing, clean fuels and hydrogen, data centres and advanced industries. In practical terms, Canadian clean power is really what allows Canada to export low-carbon barrels, low-carbon tonnes and low-carbon manufactured goods into increasingly carbon-constrained global markets.

Third and final on this topic is that clean electricity is central to Canada's competitiveness narrative. Global capital is actively looking for stable, predictable jurisdictions to deploy energy investment at scale. Canada is well positioned, but only if we maintain policy clarity and deliver certainty.

Finally, I'd like to talk about the opportunity to build a local domestic capability for Canada. I want to emphasize that at CanREA, we strongly support growing a domestic clean energy manufacturing base here. The opportunity is real, but it depends on sequencing. We don't get manufacturing without scale, and we don't get scale without investment certainty.

The priority in the near term must be on keeping capital flowing into the country, with projects built and procurement pipelines intact. This creates the stable market signals that manufacturers need to invest in Canadian facilities, workforces, supply chains and factory builds. Done right, Canada can grow manufacturing capacity without undermining the very investment pipeline that makes it possible.

Thank you.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Noorani.

Mr. Renou, you're up now for five minutes.

[Stéphane Renou, President and Chief Executive Officer, FPInnovations]

Thank you, Mr. Chair.

Good morning.

Thank you all for inviting me to participate in this study. My testimony will be in English, but I will be pleased to answer any questions you may have in the language of your choice.

You're probably wondering why a forest sector innovation company came to this committee today—I do sometimes—but we care about energy.

Let me give you some facts to illustrate this.

Look at all the residue coming from sawmills today. Using that residue to produce energy would be equivalent to 5% of the electricity produced in Canada. If you take the residue in forests and do the same—you generate electricity—you would generate another 5% of the total consumption in Canada. We have the potential there for 10% of our energy. On top of that, if we were to convert the TMP mills, which are not competitive in the market today, to kraft mills, we'd have the potential to go from using 1.3 terawatt hours per mill to generating 1.9 terawatt hours per mill. We could make that shift towards electricity across the system.

If we did that, it would increase our robustness as an industry. We could export more electricity. More importantly, we could stabilize the future of hundreds of forestry communities, which are in a difficult position today. They depend on it. To secure sawmills from an extinction like that of pulp mills, which is currently happening, energy is our path forward.

Let me first say a few words about FPInnovations.

We are a not-for-profit independent research and technology organization. We work across Canada with the mission of supporting the industry so it can be more competitive, diversify and transform. Our goal is not to promote our technology to make profits, to develop science to publish or even to promote each idea from the industry. We simply serve across industry and government by using the tools of science to make sense of technology in a world filled, now, with misinformation, pots of gold and leprechauns at the end of long rainbows.

I'll go back to the forestry industry now, after leprechauns. Wood residue is generated in many ways and forms across the value chain. That's the challenge—30% to 40% of a log is transformed into residue and we need to monetize that. It's important. Today, pulp mills play that role. They transform the chips—the residue—into fibre that creates value. If they disappear...and actually we have seen so many examples of that happening. What constantly happens is that when a pulp mill disappears, four sawmills disappear. We lose the production of pulp and lumber at the same time.

We have looked at many options for that residue. There are a bunch of ideas out there—anecdotal, funny, non-market with no money to be made, or interesting. Energy is probably the most interesting approach because it's the only one that can be developed at the scale at which we're producing lumber.

Energy can take multiple forms. I'm not getting into a debate about which is best. We could do pellets, electricity, biofuel or bio-oil. We could do multiple things. In the end, we need an option that is compatible with the regions, the transport, the electricity transport and the markets. Our fibre costs, though, put us at a disadvantage. If I were to generate jet fuel, would I do it from Canadian fibre or Brazilian fibre? The cost of Brazilian fibre is much lower. Thus, if I had to invest a billion dollars to put in a mill, I would put it in Brazil unless we change the game—unless we look at putting the forestry industry and energy together in order to save both at the same time. There's a joint venture there that we need to do.

Think about the markets. All the witnesses here will tell you the same story: Energy keeps rising, over and over. Our electricity demand keeps rising, and extremely fast. Energy efficiency improvements will not get us there. All the booming technologies, as you said—whether or not it be AI data centres—require more and more energy and electricity. If global warming happens—should you believe in it or not, and you should believe in it—we'll need more cooling. That cooling will be provided by electricity, mainly, so electricity is key.

Of course, there are plenty of policy, social and technical challenges to consider, but we need, and should get, all the electricity we can for the future. It's an economical development tool, but it's also a matter of national security. In front of us, we have a growing need for electricity and energy, and we have a forestry industry that can generate the equivalent of 5% to 10% of current electricity production in Canada. We should move. Renewable will grow. Biofuel will grow. Pushing forward, we need to fulfill that need for electrification.

Biomass offers a carbon-neutral energy source and can be a bridge while other sources come online. We will need nuclear energy some day. We will need other forms of energy. We need to bridge there, because by the time we get nuclear plants, we'll be in trouble.

Understanding where we can go and reducing policy are the challenges we face as Canadians.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Renou.

We're now going to go to questions and comments from members of Parliament.

Mr. Martel, go ahead for six minutes.

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

Thank you, Mr. Chair.

I thank the witnesses for being with us today.

Mr. Noorani, natural gas is often presented as a transitional energy.

Do you agree with that statement?

[Imran Noorani]

At CanREA, we take the view that there is a holistic landscape for all forms of energy. As Mr. Renou said, the demand far exceeds what we can currently produce. How we treat the electricity transition involves the entire mix. Natural gas is a part of that mix, as are other generation sources as well.

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

Do you see your sector as a substitute or as a complement to hydrocarbons?

[Imran Noorani]

We don't see our sector as a substitute for hydrocarbons. Again, it's part of the mix needed to get to the transition that we need. There are various generation sources, all with different carbon intensities and all contributing to an agenda of electrification. I think this is what's most important currently. We need to be thinking about electrification and economic development in tandem.

The question is one that can be answered with “all of the above”. We need all of the generation sources and in different carbon intensities as well.

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

You know that, when it comes to renewable energies, such as wind and solar power, there are challenges related to intermittency.

Do you have any strategies for energy storage during periods of high production or low consumption?

[Imran Noorani]

As it pertains to storage, we're seeing growth, so yes, renewable energy has faced the issue of intermittency. However, generally speaking, grids face the issue of reliability as well.

Again, different sources provide different reliability solutions. When you think about demand, the question leads one to conclude that there must be a balance to this, which is the role of the grids. There are different technology mixes with each grid, the supply mix, so to say. We're implementing a larger strategy on storage to look at the whole grid benefit that it can provide to offset intermittency issues and reliability issues that are common to all grids and that are caused by all generation sources.

The addition of the investment tax credit or the extension of the investment tax credit to energy storage technology is wonderful, because it's creating solutions for grids and it's creating a domestic manufacturing capability as well.

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

Thank you, Mr. Noorani.

Mr. Ghatala, in Canada, what is the actual availability of raw materials to support large-scale biofuel production?

[Fred Ghatala]

We are very blessed with agricultural and forestry feedstocks to support a domestic biofuel sector.

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

Biomass production requires fertilizers.

How important is access to a sovereign supply of phosphate fertilizers to ensuring your members' production?

[Fred Ghatala]

That is a very good question. Nitrogen fertilizer is essential to canola production. Modern agriculture requires inputs. Modern Canadian agriculture also builds soil organic carbon.

The Canadian biofuel supply chain is such a strong story in Canada for both domestic fuel availability and, of course, for exports. Being able to have that supply chain in place domestically—fertilized domestically for domestic markets—is part of what will give us a durable clean fuel supply chain.

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

To what extent does the biosourced product sector depend on the availability of nutrients, particularly phosphate, to ensure biomass production?

[Fred Ghatala]

That's a very good question. I do not know the exact trade flows north and south for phosphate. Our understanding is that, given our natural gas availability and given our oil and gas resources, we are in one of the stronger international positions when it comes to crop inputs for our own biofuel production and the feedstocks that support it.

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

What agricultural or forestry inputs are needed to support sustainable large-scale biomass production?

What role could phosphate fertilizers play in this production?