Natural Resources Committee on May 26th, 2026

[Pierre-Olivier Pineau]

I may add that not only is there a bigger pie, but there are also efficiency gains to be made. Basically, the pie gets bigger if we collaborate. That's the conclusion in one of my papers. It's an easy economic conclusion. Whenever you trade, you generate welfare through efficiencies. We need to document benefits. We need to better document the benefits of collaboration with different provinces. Yes, there will be losers, as Blake mentioned, but these losers could be compensated, because there is a bigger pie. There are ways to make everyone win in the new system.

[The Chair, Liberal, Terry Duguid]

Thank you to all.

As we say at every one of our meetings, we welcome briefs and papers.

Professor Pineau, if you want to table that paper, we'd appreciate it.

We're on now to Monsieur Simard for six minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

I will try to ask non-controversial questions so as not to escalate the dispute between Mr. Pineau and Mr. Mousseau, which I am already aware of. I will try to reconcile them today.

Mr. Mousseau, we have often had this discussion about the technological lag in Canada's electrification efforts.

It seems to me that there are two elements that are quite interesting, and perhaps this is where I will help you reconcile your views. We have the challenge of peak load management, and we have the challenge of energy efficiency. In the context of this technological lag, if you had to identify sectors on which the government should perhaps focus its efforts in the short or medium term, what might that look like?

My question is also directed to Mr. Pineau.

[Normand Mousseau]

Thank you.

In a report we published last October, titled “Changing Course”, which we can submit after the meeting, we identify sectors such as construction, where we can work on decarbonization using heat pumps, and the manufacturing industry, where we can use industrial heat pumps. There is expertise to be developed in Canada, and even globally. So, Canada could position itself in an interesting way.

As for transportation, there is passenger transportation, but there is also off-road transportation, for example. So, there are different sectors where Canada could be active and contribute to innovation in a context where we still need to incorporate current technologies.

[Pierre-Olivier Pineau]

I could simply say that, indeed, the building sector is extremely energy-intensive. We have much to gain from having more energy-efficient buildings, and that efficiency can come from heat pumps and geothermal energy. However, above all, the thermal envelopes of buildings must be improved.

We must strengthen building codes. We must also ensure that building owners are aware of their energy consumption and receive an energy rating for their buildings. Natural Resources Canada establishes building performance ratings, but this is not mandatory, which means that building owners are not even aware of their own consumption and are not incentivized to improve the performance of their buildings.

So, obviously, there are plenty of electric technologies that have a role to play, but the federal government could play a much bigger role in building energy ratings and in transportation systems. Yes, we need electric vehicles, but above all, we need to reduce the share of private vehicles and promote rail and public transit more, which are both cheaper and use far less energy. We need to be mindful of Canadians' wallets. However, these are sustainable modes of transportation that cost less than buying an electric or gas-powered SUV.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

I would like to ask for your insights, gentlemen, and return to the question my colleague Mr. Hogan asked you earlier regarding the idea of developing east-west corridors rather than north-south corridors.

Not long ago, I had a meeting with representatives from Electricity Canada, in which Hydro-Québec participated. We were told that in terms of costs and efficiency, we might need to set aside this idea of an east-west corridor since they are instead focusing on areas of interest that they have already defined.

I'm telling you this simply to understand what would be most efficient in the short and medium term. Since resources are not unlimited, shouldn't we, when it comes to investments in these new corridors, focus on sectors where there is greater growth potential before considering east-west interconnections? I'm just saying this. It's not a trick question. I want to understand your thinking on this, since there seems to be a discrepancy with Hydro-Québec's position.

[Normand Mousseau]

An interconnection running south or west—for example, from Quebec to Ontario—will still enhance the grid's flexibility. So, for me, it's not a matter of maintaining the north-south orientation. By going in an east-west direction, especially if we want to develop wind energy or intermittent renewable energy sources, we still have a greater diversity of winds. So, there are benefits for balancing the grid.

[Pierre-Olivier Pineau]

A few years ago, Natural Resources Canada funded studies in Alberta, British Columbia and the Atlantic provinces, which showed that interconnection projects would already be cost-effective. However, local and provincial stakeholders were unwilling to move forward. We know that Natural Resources Canada has long sought to promote an Atlantic loop that would benefit all Atlantic provinces. Unfortunately, they are having tremendous difficulty reaching an agreement. Yet there are real gains to be made, especially if we plan for more renewable energy, as is the case in Nova Scotia, which wants to build offshore wind farms off the coast of the island.

So, we absolutely need these east-west transmission lines. Obviously, we're not thinking of a line running from Nova Scotia all the way to British Columbia, but rather of regional east-west zones. That would necessarily be the case, since in Canada the provinces are all either east or west of one another.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Simard.

Mr. Martel, you have the floor for five minutes.

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

Thank you, Mr. Chair.

Mr. Mousseau, I would like to know how you assess the reliability of production forecasts for new wind farms in a context of increasing climate instability.

[Normand Mousseau]

This isn't my area of expertise, but organizations like Ouranos do assess climate effects to some extent.

As for wind farms, I don't see any major issues regarding their productivity. These farms are improving in terms of production; that is, their uptime is also improving thanks to advances in knowledge, blade design and other factors.

I would therefore say that, on the contrary, we are gaining a better understanding of the overall predictability of these facilities' production.

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

We're wondering a bit about how Quebec can guarantee its energy security. For example, changes in precipitation patterns limit the inflow of water into dam reservoirs. What are your thoughts on that?

[Normand Mousseau]

This isn't actually anything new. We know this happens roughly every 10 years, and we know that a year of drought is typically followed by a second year of drought. This is something we're familiar with.

However, models actually show that climate change will lead to increased precipitation levels in the north and in Quebec, on average. So, that doesn't mean it will be the case every year. Despite what we've seen over the past two or three years, when we run the models again and reanalyze the data, we can clearly see that the gains will be positive in terms of water supply.

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

That's interesting.

In Quebec, we know there's a strong focus on the electrification of transportation, of course, but that will significantly increase winter electricity demand. In your opinion, is there, currently, sufficient capacity to ensure energy security during peak consumption periods?

[Normand Mousseau]

We are working on peak consumption. We need to manage winter peak consumption more intelligently, and the technologies exist. This will primarily be achieved through technologies and demand-shifting approaches, but it is feasible. We are analyzing the costs, and it is entirely cost-effective today.

However, Hydro-Québec is planning significant investments that should generate approximately 50 terawatt-hours, which will be more than enough to meet the electrification needs of the vehicle fleet. This is what we're seeing in the rest of the world. We mustn't delude ourselves. This is the direction the rest of the world is moving in. These are the best technologies. We could turn a blind eye and say we should stick with the old technologies of the last century, but it's in our best interest to ensure we remain competitive and master today's technologies.

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

Given the rapid growth in demand, is it realistic to rely almost exclusively on hydropower and intermittent energy sources without maintaining dispatchable capacity such as natural gas, biomass and nuclear power?

[Normand Mousseau]

We must ensure we have a diversity of supply sources, even when it comes to electricity, and this diversity is multi-faceted. We have solar and wind power. We will also have biomass, as you mentioned. So there are ways to maintain a diversity of supply sources that will still have a low environmental impact. That is the direction we need to take.

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

Mr. Pineau, from an economic standpoint, what is the real risk that new clean energy projects will turn into financial black holes?

[Pierre-Olivier Pineau]

The risk is mainly related to pricing, since these are projects that cost between 12¢ and 13¢ per kilowatt-hour produced. However, buyers are not willing to pay that price. There is a risk in developing projects and raising prices for everyone without social acceptance.

Today, unfortunately, on Hydro-Québec's side—and it's the same in Ontario with nuclear power—they're promoting major projects but aren't clearly communicating how the bill will be distributed. Ontario subsidizes nuclear projects with federal assistance, among other sources. In Quebec, all consumers pay a higher average cost to finance these projects, but there is no clear price signal regarding the actual cost of this electricity and the actual bill. Having electricity is beneficial, but unfortunately, in terms of social acceptability, the costs of these projects need to be better communicated.

[The Chair, Liberal, Terry Duguid]

Thank you.

Next is Mr. St-Pierre for five minutes.

[Eric St-Pierre, Liberal, Honoré-Mercier, QC]

Mr. Chair, I thank the witnesses for being with us.

We currently have among us the three leading energy experts in Canada, as well as the two stars from Quebec.

Mr. Mousseau and Mr. Pineau, perhaps a decade ago, we worked together at the Trottier Energy Institute and at HEC. It is always a pleasure to see you virtually. My comments and questions will be for both of you.

Mr. Mousseau, in your introduction, you briefly mentioned the new technologies that Canada could use. Could you quickly give us a few examples of these new technologies?

[Normand Mousseau]

In fact, we have mastered new technologies, such as heat pumps for buildings. However, when it comes to large buildings and the manufacturing sector, we are still learning how to use this technology worldwide. If Canada were to deploy these technologies within a framework that fosters the emergence of new service industries, it could establish itself on the global stage, even in terms of expertise. Installing an industrial heat pump is no easy task. It requires a thorough understanding of heat flow and other factors. We have seen several examples of failures in recent years in Canada, where money had to be invested. In short, this is one of the technologies.

In the transport sector, we must not only focus on personal electric vehicles, but also target underdeveloped sectors globally. These are sectors where Canada can decarbonize whilst developing economic competitiveness.

[Eric St-Pierre, Liberal, Honoré-Mercier, QC]

Perfect.

There is a strong focus on technology today, but I am curious to hear about social concerns or governance challenges. I'm thinking of the political aspects in the provinces and the complexity of the OSI reference model.

Mr. Mousseau, could you tell us about the social concerns and governance challenges linked to the electrification strategy? Are there any lessons our government could learn to help us double our electricity production?

[Normand Mousseau]

One of the problems, as Mr. Pineau said, is the cost of electricity. In itself, the cost is rising. It remains low compared to the cost of oil, but the question is how we ensure that all citizens can benefit from it. If you had a large vehicle, converted it to electric power and electricity prices rose, you would still make significant savings. If you lived in town and didn't own a vehicle, the rise in electricity prices would be a net loss. I believe it is absolutely essential to consider those programs and how to redistribute these resources fairly.

Planners also need to understand that it is not possible to fine-tune electricity production and demand. We will need to produce more electricity than we need initially to facilitate this. Here too, there are tensions over who will pay for the supply during these periods.

[Eric St-Pierre, Liberal, Honoré-Mercier, QC]

Perfect.

Mr. Pineau, I liked your use of the English words

“energy obesity”. It made me think of the analogy that maybe we should go on an energy diet or do energy intermittent fasting.