Thank you, Mr. Chair, for inviting Environment and Climate Change Canada to your committee.
I am pleased to have this opportunity to discuss Environment and Climate Change Canada's response to Report 3 of the Spring 2022 Reports of the Commissioner of Environment and Sustainable Development.
Before I begin, I, too would like to acknowledge that this meeting is taking place on the traditional territory of the Algonquin Anishinabe peoples.
The department welcomes the commissioner's report on hydrogen's potential to reduce greenhouse gas emissions.
We agree with the recommendations addressed to the department. As our action plan shows, Environment and Climate Change Canada is acting upon them.
Let me highlight two primary points. First, I can provide some context regarding how Environment and Climate Change Canada approached its modelling work. Second, I would like to emphasize that despite differences that may exist between Environment and Climate Change Canada and NRCan's approaches, Environment and Climate Change Canada has the same overall assessment of the potential for hydrogen to play a role as a clean fuel and industrial feedstock that both helps the Canadian economy decarbonize and represents an important economic diversification opportunity for the Canadian economy.
On the modelling question, Environment and Climate Change Canada and Natural Resources Canada conducted complementary but quite different modelling exercises. The objectives, analytical approaches and scope differed. I will defer to Natural Resources Canada to speak to the analysis developed for their hydrogen strategy.
For our part, Environment and Climate Change Canada's modelling was about the overall impact of the full suite of measures in the December 2020 strengthened climate plan. It was not intended to provide a disaggregated impact of any specific set of measures or targeted activities, including measures related specifically to hydrogen. In addition, although our modelling included a proxy for the hydrogen strategy that was still under development at the time, that proxy on its own was not intended to estimate the full role hydrogen could play in reducing emissions.
Of course, since late 2020, the government has announced a number of initiatives to encourage the increased production and use of clean hydrogen. The 2030 emissions reduction plan, for example, which was released at the end of March of this year, references a number of hydrogen-related initiatives.
The clean fuel regulations, which were finalized in July 2022, will reduce emissions by requiring gasoline and diesel to become less polluting over time. They will also drive innovation in clean technology and will increase demand for low-carbon energy, including biofuels and hydrogen.
Natural Resources Canada's clean fuels fund will help producers by investing to de-risk the capital investment required to build new or expand existing clean fuel production facilities. This will help grow domestic production capacity for clean fuels, including clean hydrogen.
The Government of Canada is also supporting the production and use of clean hydrogen through the support of projects funded under the net-zero accelerator initiative.
Finally, I would highlight that in budget 2022, the government did commit to establishing an investment tax credit to support investments in such things as clean hydrogen production.
Working across the government with departments, particularly our partners at Natural Resources Canada, ISED and Finance Canada, Environment and Climate Change Canada will continue to build on and improve such initiatives as we move forward with the government's climate change agenda.
In closing, the department will consider the commissioner's observations as we move forward on the 2030 emissions reduction plan and all subsequent climate policies in the coming months and years.
Thank you very much.