Natural Resources Committee on May 26th, 2026

[André Bernier]

I won't provide a specific answer for each project. I believe the decision to launch projects that provide additional electricity addresses challenges and offers opportunities for economic growth. However, I find it somewhat difficult to comment on any given project. We play a rather peripheral role with respect to individual projects.

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

I understand what you're saying, but the electrification strategy talks about interconnection between provinces. Perhaps you could talk about that and the benefits of interconnection.

Furthermore, the strategy also promises that, ultimately, Canadian consumers could potentially benefit from savings. So, how do we get there?

[André Bernier]

Currently, provincial systems are not completely isolated, but the level of integration is very limited. However, integration provides benefits in terms of managing variable energy resources, such as wind and solar power. Having a larger region for managing these resources is more efficient. Each province has its advantages and drawbacks. For example, in British Columbia, wind potential is slightly lower than in Alberta. Interconnection can thus benefit consumers in each province.

Integration does not necessarily have to occur under all circumstances. However, since the current level of integration is very limited, our view is that increased interconnection would be beneficial.

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

Mr. Leyburne, perhaps you can direct the next question to whoever can best answer it. It's about “one project, one review”. We hear this theme again and again. How does it work? How do we negotiate that with the provinces? How do we get to the benefits of that quickly?

[The Chair, Liberal, Terry Duguid]

Please give a quick answer. There are just 20 seconds left.

[Drew Leyburne]

The shortest answer is that there were some significant measures put forward a few weeks ago through the “Getting Major Projects Built in Canada” discussion paper, which touched on some of the various ways we can modernize our regulatory system and streamline some processes.

[The Chair, Liberal, Terry Duguid]

Thank you.

Mr. Simard, you have six minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

I am pleased to undertake this study, but I do not share Mr. Guay's enthusiasm.

We are talking about doubling Canada's electricity production. I read Professor Mousseau's paper. When you put the figures into perspective, you quickly realize that Canada is truly lagging behind. In fact, if we look at the energy mix, electricity accounts for 17%. In Quebec, it's 40%. In China, it's currently around 32%. That means that if, by 2050, Canada doubles that 17%, it will reach 34%. China has already achieved 32%, and it is the world's largest economy.

So, we need to put things into perspective. I understand the goal, and it is highly commendable, but I don't think it's all that ambitious. We could use that as a starting point for this discussion. Personally, I'm concerned because I'm hearing more and more about how electrification technologies are being widely deployed in China. So the Chinese, for their part, are building the value chain and infrastructure.

I don't know whether your strategy specifically includes that. How will we achieve a value chain that is truly Canadian and Quebec-based with regard to the issue of electrification? The network is important, but so are value chains. I would like to hear your thoughts on this.

[Drew Leyburne]

I'm happy to start, and maybe André can jump in.

Yes, you are correct that electricity has been a relatively stable contributor to the overall energy mix in Canada. We are approximately at the OECD average for electrification of our economy, which means we're not an outlier on either end of that equation. As part of the doubling we talked about, we see electricity taking an ever-increasing role in the overall energy mix.

I would say as well that what we have, and what China and most OECD members don't have, is an abundant fuel resource. This explains part of the reason a country like China might be more tempted to move into electricity, where they can be less dependent on imported fuel resources.

[Mario Simard, Bloc, Jonquière, QC]

One of the major concerns, which seems quite glaring to me, is the fact that Quebec has already developed its own power grid. Quebec paid to develop its power grid without any support from the federal government. So, we already have infrastructure. Furthermore, Quebec is probably the province with the most ambitious action plan. Hydro-Québec's plan is for $200 billion by 2035. To me, 2035 is right around the corner.

How will we achieve a fair strategy?

I get the impression that Ontario's needs, given the cost of nuclear power, will be much greater than what you might be able to offer in support to Quebec—which already has its own infrastructure and investment plan. So, in rolling out your strategy, will you take into account the specific needs of each province and of Quebec to ensure a fair distribution of the funds that will be allocated? At first glance, I get the impression that this strategy is being implemented to allow other provinces to catch up. That strikes me as fundamentally unfair.

[Drew Leyburne]

My starting response would be that the purpose of the strategy, as André and others have said, is to work closely with the provinces and territories.

Most of the tool kit that we currently have available to support the transition towards greater electrification is pan-Canadian. For example, the investment tax credits are applicable regardless of which province or territory the activity is taking place in, and they provide significant benefit to the province or territory that's using them.

We have our SREPs—$4.5 billion—where expenditures are being made in every province across Canada. Making sure that we have an electricity strategy that reflects the unique differences of every province, territory and region means that we won't use the tools symmetrically or in a cookie-cutter way across every jurisdiction. However, I am confident that we have a tool kit that does support every province, including Quebec.

[Mario Simard, Bloc, Jonquière, QC]

As I recall, there has been a recurring request from Hydro-Québec for less than ten years. I believe that only interprovincial infrastructure is eligible for certain tax credits. Hydro-Québec has requested that intra-provincial infrastructure also be eligible for this type of tax credit.

Will this part of the strategy be changed?

[André Bernier]

Thank you for the question.

As stated in the strategy, the federal government intends to introduce support for these intra-provincial transmission lines. The details have not been finalized, but that is the intention.

[Mario Simard, Bloc, Jonquière, QC]

You see, Mr. Guay, I’m not always acting in bad faith.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Simard.

Colleagues, that completes our first round of questioning. We'll go on to our second round, but before we do, I welcome Mr. Rowe back. He seems to be a permanent fixture, and we're happy about that. I also welcome Mr. Gunn and Mr. Watchorn, two members sitting in for other members today.

With that, Mr. Rowe, you have five minutes.

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

Thank you for having me here today. I'm looking for a lot of answers. Perhaps Mr. Leyburne could help me out. He's the assistant deputy minister of energy systems.

I'm wondering what the plan is here. I mean, energy demand is exploding in Canada. We have the resources. It seems to me that all we need is the access to markets, whether interprovincial or international, and then to build these facilities.

Does the government have a plan for funding the construction of the generation? I guess it's a yes-or-no question. Is there a plan right now to fund these generation plants in Canada?

[Drew Leyburne]

It's not yes or no, but I would say the federal government will be involved in much of the development. Ultimately, it will be provinces, territories, the utilities and private finance that produce the vast majority of expenditure to get the systems involved.

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

There are very limited loans and grants to Crown corporations, or even private industry, to jump-start the generation facilities to meet this energy demand.

[Drew Leyburne]

No, we have a pretty extensive tool kit. We're talking about trillions of dollars. The federal government will not be producing trillions of dollars for that investment, but we have tens of billions of dollars in support already in play. The investment tax credits for clean electricity are worth tens of billions of dollars alone.

I mentioned the $4.5-billion program we have at NRCan for renewable energy, SREPs. We have the Canada Infrastructure Bank and the Canada Growth Fund. We're talking about dozens of billions of dollars that have been put towards modernizing energy.

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

It's good to see that you're putting in that investment, because it's very needed. Developing our resources has always been a struggle for Newfoundland and Labrador because we need someone to write the cheque. That's very good.

The other issue we have in Canada is interprovincial trade barriers. Some provinces put up big trade barriers against other provinces trying to push it through. The new Liberal government talks big about reducing those interprovincial trade barriers in order to get to international markets.

Is this part of the government's plan? Are we planning to use that money—those loans and grants—to eliminate interprovincial trade barriers, or are we just going to hand out money without those conditions attached to the cheque?

[Drew Leyburne]

The federal government will do everything it can to support greater energy trade, if we're specifically talking about energy.

On electricity, that comes through supporting interties, which we've said are a major focus. One of the early focuses of the investment tax credits was on giving additional support to interties among provinces. We have multiple examples of the federal government recently and traditionally funding those interties. The most recent, probably, is the New Brunswick-Nova Scotia intertie. The government contributed funding earlier this year.

Mike, I don't know whether you want to talk a bit about interprovincial trade for other products, such as fuel products and refined products.

[Michael Rau, Director General, Policy and Planning Branch, Fuels Sector, Department of Natural Resources]

There's really not much in terms of interprovincial trade barriers in the refined product space, at this point. Flow is pretty freely done among provinces and territories, so I don't think there's a big issue on that particular front.

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

Wow. I think people in Newfoundland would be very surprised to hear that, because we've been struggling to get our electricity through other provinces for a very long time. There are some big barriers there, whether or not they're physical, so there's definitely some work we have to do. It's disappointing to hear that we're not attaching conditions to those cheques for grants and loans in order to make sure we can build a Canada that's united under one flag. We would like to work together to create the energy superpower we all dream about being, in order to encourage geopolitical leverage against our friends down south. This is something Conservatives have been very strong on, and it's something Newfoundlanders and Labradorians are also very passionate about. As Canadians, we're very passionate about this, and it's an avenue we could definitely work on.

With this plan we have, what's going on? I'm concerned about how much money we're giving to different projects. Right now, there's an MOU being signed between Newfoundland and Labrador and another province, but I don't see the federal government sitting down at that table. Perhaps it's happening. Maybe conversations are happening behind the scenes.

Are you guys telling both provinces, “Look, this is what our plan is. This is what we're going to contribute, and this is what we're going to do”, or is the federal government going to wait until after the MOU is signed and the deal is done before it comes in and says, “This is what we're going to do”? Does everyone know what's happening before the deal comes out?

[The Chair, Liberal, Terry Duguid]

We have time for a short answer.

[Drew Leyburne]

Are you referring to a specific MOU?