Thank you so much.
Good morning, Chair Duguid, honourable members and fellow panellists. We greatly appreciate the opportunity to appear today.
The Canadian Fuels Association has been the voice of Canada's transportation fuel sector for over 30 years. Our members account for virtually all petroleum products refined in Canada. We also make nearly 80% of all the biofuels produced in Canada, including ethanol and bio-based diesel, and we're just starting to make sustainable aviation fuel. Our fuels are essential to every sector of our economy and support Canadians' way of life.
I would like to thank the committee for undertaking this important study.
Let me start by saying that a year ago, energy security was a background issue. Now, it is the issue. The situation in the Middle East has reinforced the hard reality that energy security can no longer be treated as a secondary consideration.
First, I would like to focus on the good news for Canada: As a net exporter of conventional refined petroleum fuel products, this country is in a relatively strong position from a supply perspective compared to many other countries. In a fragmented and volatile world, secure and reliable supply is a definite strategic advantage.
In recent weeks, multiple countries have approached our sector to discuss potential new secure and reliable supply agreements. This speaks volumes about how Canada is seen as a trusted energy producer and partner.
However, the latest events have also demonstrated potential vulnerabilities. Just to name a few, a recent infrastructure decision has made us reliant on imports for jet fuel in British Columbia, and of course, we always have the potential closure of Enbridge's Line 5 looming in the background, which is a key pipeline for Ontario and Quebec's refined products.
This also reinforces the importance of maintaining a strong, resilient and national refining sector as Canada's energy systems evolve. Canada's experience illustrates an important lesson: Where we have domestic production capacity, we have reliance; where we rely on imports, we are exposed to decisions made elsewhere.
Here's the other side of the coin. As domestic demand for low-carbon fuels rapidly grows to meet compliance with low-carbon fuel standards provincially and also the clean fuel regulations, so is our reliance on imports growing to meet that demand. At this juncture, we need to decide whether we will produce these fuels ourselves or increasingly rely on others to do it for us.
Today, about 60% of Canada's renewable diesel and ethanol supply comes from imports, mostly from the United States, and the United States recently boosted its renewable fuel mandates, which is already increasing competition for available product. These decisions are completely outside of our control, and they can directly impact our ability to access the biofuels we need.
In a more protectionist global economy, importing compliance is not the same as building energy security. Canada's conventional fuel sector demonstrates what energy security looks like: We produce the fuels we need, we maintain the infrastructure to deliver them, and we have the resilience to respond during periods of disruption. We should strive to do the same for low-carbon fuels.
The challenge is in creating a policy environment that stimulates growth in domestic production alongside the growing demand. Energy security is not just about having access to energy; it's about having access to energy produced by a system that we control.
We have recommended practical, targeted and achievable measures to that end: Maintain strong demand signals for low-carbon fuels; ensure regulations encourage domestic production as well as demand; and simplify compliance and remove barriers that discourage investment. If we align our policies with these objectives, Canada can build a more resilient low-carbon fuel sector, reduce reliance on imports and strengthen Canada's energy security.
Canada has already demonstrated what energy security looks like when it comes to conventional fuels. We should aim for the same outcome with low‑carbon fuels.
Thank you for your attention. I look forward to answering your questions.
Thank you. I look forward to answering your questions.