Evidence of meeting #40 for Natural Resources in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was quebec.
A recording is available from Parliament.
Director, Buildings, Pembina Institute
The jobs are local and tend to be well-paying and difficult to move in terms of their location.
Liberal
The Chair Liberal Terry Duguid
Thanks to you both.
Mr. Simard, you have the floor for two and a half minutes.
Bloc
Mario Simard Bloc Jonquière, QC
Thank you, Mr. Chair.
Mr. Lockhart, in your opening remarks, you spoke of the potential for job creation in the electrification sector.
At the beginning of this study, our committee met with Normand Mousseau from the Institut de l'énergie Trottier. He spoke to us about the value chain that should be tied to electrification. He emphasized the fact that Canada hasn't focused enough on developing this value chain.
A heat pump purchased today, despite bearing the logo of a Canadian company, was probably made in China. The same applies to storage strategies.
Do you have any data or information on activity sectors that would be worth prioritizing and developing, both in terms of building efficiency and on a broader scale?
Director, Buildings, Pembina Institute
I'll point to demand-side management in terms of job creation and the potential value chain in manufacturing.
Demand-side management is primarily made up of energy efficiency and load management programs—so smart controls—but then also distributed energy resources. Those distributed energy resources do take parts from other countries—and from other parts of our country as well—and some of those parts are distributed into an energy resource system. With a product that's challenging to be cost-competitive on, like solar panels, we can combine those foreign-made solar panels with domestic batteries or components of domestic batteries that are made here. It's really about the innovative technologies that we have an opportunity to create an export market for, as well as the controls and the different equipment needed to regulate the flow of energy between them. Therefore, either we can export our services or our expertise, or we can add value to the unique equipment that we see.
Conservative
Gaétan Malette Conservative Kapuskasing—Timmins—Mushkegowuk, ON
Mr. Chair, I will be ceding my time to Madam Gazan.
Liberal
The Chair Liberal Terry Duguid
Ms. Gazan, welcome to the committee. It's nice to see a fellow Winnipegger.
NDP
Leah Gazan NDP Winnipeg Centre, MB
Thank you. It's so nice to be a guest at committee. I have to admit that I'm a bit of a committee nerd, and I miss sitting on committee, so I'm in my glory today.
For my question, the federal government has included provisions that would allow natural gas to play a large part in the electrification strategy, which will move us away from our net-zero target. We know, in fact, that the gas lobby has met with the federal government over 1,000 times in 2025. Can Canada meet its 2050 net-zero targets with the inclusion of natural gas in the clean electricity strategy?
Director, Buildings, Pembina Institute
Again, it would be a challenge for me to say definitively, without the information on hand. I would point out that, as mentioned earlier, in how we shift—how we use fuels today to how we use fuels in the future and really focusing on shifting high-emission fuels to the highest value, whether that might be high-temperature industrial processes or similar—we're looking at how we can shape the energy basket so that we have a resilient and affordable system for businesses and homes, but we also continue to ensure we have a strong and well-functioning economy.
NDP
Leah Gazan NDP Winnipeg Centre, MB
The permanent peoples' tribunal this week concluded that Canada's ongoing policies amount to genocide against indigenous people. The judge explicitly stated that a primary driver of these composite acts is to covet, value and seize indigenous lands, territories and resources. It's important to note that the tribunal's preliminary statement highlighted that resource exploitation and corporate extraction projects are often undertaken without the free, prior and informed consent of indigenous people, and that has led to significant environmental damage and violations of indigenous sovereignty.
This week, the Liberal government is set to unveil its AI strategy without, by the way, the free, prior and informed consent of impacted indigenous nations. I've heard from many constituents and national organizations that have a concern about how these data centres will have an impact on our energy supply.
My question is, how can the federal government protect indigenous communities with neighbouring data centres to ensure that indigenous people have access to energy over profit-seeking mega-tech companies?
Director, Buildings, Pembina Institute
In where we see those opportunities, I guess a good example would be remote communities, and reducing diesel dependence through the greater use of renewables provides a good template or model for how we might move forward. That's really working through indigenous-led partnership equity but then indigenous-led projects as well. In doing so, we see it as a community-led and community-based activity and with input as would be expected. How that relates to AI or other technologies would be a challenge for me to respond to.
NDP
Leah Gazan NDP Winnipeg Centre, MB
Thank you very much.
We've heard the Liberal government talk a lot about input and partnership. We haven't heard the Liberal government talk about obtaining free, prior and informed consent about resource extraction projects, the right to self-determination and section 35 rights. How is the work of the Liberal government, even in looking at an electricity grid, compromised by failing to meet its constitutional obligations?
Director, Buildings, Pembina Institute
You mentioned that much of the challenge has been associated with resource extraction. In our work, which admittedly has guardrails to the different areas that we explore, we see an opportunity to focus those indigenous-led projects on projects that contribute to the community that might not depend on resource extraction.
Liberal
Liberal
John-Paul Danko Liberal Hamilton West—Ancaster—Dundas, ON
Thank you, Chair.
I'm going back to the theme of AI and AI data centres.
You mentioned in your opening statement that Canada is going to an electrified economy, that we need to double the Canadian energy grid in both generation and distribution and that, as Canada transitions to this electric economy, there will be significant opportunities in industry, transportation and buildings.
We're talking about energy sovereignty, and part of that energy sovereignty is also our industrial or economic sovereignty. If we consider that Canada is releasing our sovereign AI compute strategy and that AI systems are, and will continue to be, an integral part of Canada's economy—there are significant electricity needs for data centres for that AI compute capacity in Canada—what might be the best practices for the energy needs of data centres? How can we make sure that Canada does transition to the cleanest, most effective energy in the world for the sovereignty of our economy?
Director, Buildings, Pembina Institute
I think that might push the boundaries of my knowledge area. I can say that we are, as an organization—and I'm sure other organizations in our work are doing similar things—looking at exactly how that AI data centre rollout occurs and looking at the costs and benefits of those systems, but then we also look at how energy efficiency can help manage the additional load, and we find opportunities for waste heat to contribute back to the system as one more component of our energy mix.
Liberal
John-Paul Danko Liberal Hamilton West—Ancaster—Dundas, ON
We've heard, from a number of witnesses, that the transition to that electric economy is accelerating, and we need to be at the forefront of that. For these three segments—transportation, buildings and industry—we've talked about buildings. Maybe we can dig in a bit more to transportation.
Canada is embracing EVs, making new investments in building public transportation and enabling electrified fleets. What opportunities do you see in transportation, particularly, to accelerate that transition to the electric economy?
Director, Buildings, Pembina Institute
As you mentioned, Canada is embracing EVs and electrified transport as the basis of that opportunity. The next step in that would be where the connection is made. We need a broad distribution network to support the development of that sector and the related supply chain opportunities.
Then, look further at the connection to the grid. Is it within buildings, and are we providing cost-effective solutions for Canadians? I'd point out that the building codes in various provinces do not require things like EV-ready charging, which is basically the conduit that would support future EV charging. At the time of construction, the cost is quite low, but it quickly scales to a significant cost to be added later.
Liberal
John-Paul Danko Liberal Hamilton West—Ancaster—Dundas, ON
Thank you. That's an interesting issue.
When I was at the City of Hamilton, we were attempting to put in requirements for EV-ready construction. There was quite a bit of resistance, mainly from the utilities, surprisingly enough, on the basis that they weren't sure they would be able to supply the amount of energy required.
On that note, we have the Canadian energy plan, which has just come out. What do you see that could be accelerated in that plan to make sure that Canada will be at the forefront and will be able to supply the amount of energy that's going to be needed in the future?
Director, Buildings, Pembina Institute
The largest sources of opportunity I see in all three of these sectors are demand-side management, distributed energy resources and the combination with efficient buildings. What we've noted over the last few years is that utilities are letting go of some of that resistance and really embracing demand-side management, largely through requirements through their provincial utility commissions, which are pointing at demand-side management as being one of the solutions for an expanded and cost-effective grid.
Liberal
The Chair Liberal Terry Duguid
Thanks to you both.
Colleagues, that brings our first panel to an end.
May I thank Mr. Lockhart on your behalf?
Mr. Lockhart, you've had a lot of attention from us for the full hour. We normally have more than one witness, so thank you for your testimony. As we always say, we welcome more information, a brief, if you want to convey that to the committee.
With that, colleagues, I am going to suspend. We'll get the other witnesses online shortly. We'll take a five- to seven-minute break.
Liberal
The Chair Liberal Terry Duguid
Colleagues, we will reconvene.
The trip to Scandinavia was obviously a good one. Our three members have nicknames for each other, so that's nice to hear.
Let me welcome new members to the committee. Mr. Strauss, Mr. Au and Mr. Baber, it's good to see you all. Some of you will get a chance at the microphone shortly.
Let me welcome our two witnesses this hour.
From Association québécoise de la production d'énergie renouvelable, we have Mr. Luis Calzado, chief executive officer. From Idea Contrôle, we have Martin Tremblay, business development manager.
All virtual witnesses have conducted a mandatory witness on-boarding test.
I'll make a few comments for the benefit of our witnesses. Committee members may ask questions in either English or French. If you need interpretation, please take a moment now to prepare your earpiece and select the listening channel you need in advance in order to take full advantage of the time allocated for questions and answers. I will remind you that all comments should be addressed through the chair.
You will each have five minutes for your opening remarks, after which we'll open the floor to questions and comments.
Mr. Calzado, we'll start with you, and Mr. Tremblay will be next.
Mr. Calzado, you have the floor.
Luis Calzado Chief Executive Officer, Association québécoise de la production d'énergie renouvelable
Thank you, Mr. Chair.
Mr. Chair and members of the House of Commons Standing Committee on Natural Resources, thank you for meeting with me today.
My name is Luis Calzado. I'm the president and chief executive officer of the Association québécoise de la production d'énergie renouvelable, or AQPER.
AQPER represents players in the wind and solar energy sectors, as well as other industrial partners in the energy ecosystem. Our role is to mobilize the sector's expertise and to make a concrete contribution to the energy transition, to decarbonization and to the energy security economy of Quebec and Canada.
In Quebec, despite electricity being almost entirely renewable, fossil fuels still account for 50% of consumption. This highlights the need for electrification. Hydro‑Québec forecasts a 35% growth in demand by 2035 and a 50% increase by 2050. We also depend on the external market. As a result of hydrocarbon imports, Quebec runs a large trade deficit in the energy sector to the tune of $3.5 billion, despite electricity exports to the United States. Investing in renewable energies means investing in an economically strong Canada.
Canada's renewable energy potential remains largely untapped. The wind power sector is a case in point. Despite its excellent deposits, the country generates less than other G7 countries. By way of comparison, high‑potential regions in the United States, such as the Midwest and Texas, generate around ten times more electricity than Canada.
The renewable energy sector has benefits. Renewable energies provide decisive benefits in a rapidly changing environment. First, their deployment period is relatively short. Projects can be delivered in five or six years. Second, their costs are competitive. Since 2010, the cost of wind power has fallen by 40% and the cost of solar power has dropped by 90%. A further 30% to 50% decrease is expected by 2035.
Moreover, renewable energies deliver considerable economic and industrial benefits. We estimate that the economic activity generated by the industrial use of a single terawatt of electrical energy made possible by wind, solar and hydro generation could contribute over $250 million a year to Quebec's real gross domestic product, or GDP. This equates to the annual output of around 75 wind turbines. The 11,000 megawatts of wind power expected in Quebec by 2035 amount to $35 billion in investments, $18 billion in added value, over 112,000 full‑time jobs, $2.6 billion in tax revenue for Quebec and almost $1 billion for the Government of Canada.
With global demand continuing to grow, particularly in wind and solar power, Canada and Quebec have an opportunity to build a strong industrial cluster. For the energy transition and electrification to succeed across the country, public authorities must play a leading role in tackling certain structuring challenges.
The first challenge concerns the capacity of the transmission and distribution grid. The speed of development of renewable energies depends directly on the capacity of the grids to integrate them. Major investments are urgently needed in Quebec and across Canada. Hydro‑Québec's decision to invest $10 billion to strengthen its transmission grid by adding substations and high‑voltage lines on three key areas is certainly a step in the right direction. Producers need predictability when it comes to the development of the grid so that they can plan and optimize the development of new projects.
The second challenge is regulatory. The length and complexity of approval processes make it extremely difficult to achieve electrification and decarbonization objectives. We're calling on all levels of government to speed up the approval process and to optimize the regulations applicable to the renewable energy project.
The third challenge concerns the need for a sufficiently skilled workforce. Without this capacity and coordination, we'll face delays, higher costs and missed economic opportunities.
In conclusion, the guidelines put forward in the national electricity strategy are a step in the right direction. They will help address a number of the challenges just outlined. In particular, we believe that it's vital to continue supporting investments in electricity generation, transmission and distribution in order to increase the country's energy supply. We also welcome the desire to speed up and simplify the authorization process, a key factor in the timely completion of projects.
Predictable public policies and a stable regulatory framework will play an equally important role in attracting the private investment needed to develop energy infrastructure. Lastly, efforts to train and mobilize the skilled workforce must remain a priority in order to support the required development.
I would like to wrap up my remarks by saying that investing in electricity means investing in the Canadian economy. It's an economically rational choice, and not just an environmental obligation.
Thank you for your attention. I look forward to answering your questions.