Public Accounts Committee on Dec. 2nd, 2022

[Martin Dompierre]

May I ask Mr. Le Goff to respond to that question?

[Kelly McCauley, Conservative, Edmonton West, AB]

Yes, please.

[Philippe Le Goff]

In the strategy—and the Department of Natural Resources can talk about it—there is an estimate of the economic impact that hydrogen will have in terms of jobs and GDP.

[Kelly McCauley, Conservative, Edmonton West, AB]

Jerry DeMarco commented.... I'm taking this out of a news briefing, which says that, due to the high cost of hydrogen, he is expressing “doubts about whether hydrogen can play any sort of meaningful role” because of the lack of infrastructure, pipelines and the costs.

Do you agree with that? Do you believe that the two departments with us today accept that comment from Mr. DeMarco?

[Martin Dompierre]

I agree with Mr. DeMarco's conclusion that he stated. I would ask the department if they agree with what Mr. DeMarco said.

[Kelly McCauley, Conservative, Edmonton West, AB]

Right.

I think that's my time, and we'll get back to them in time.

[The Chair, Conservative, John Williamson]

It is your time.

One thing, Mr. McCauley, that you or one of your colleagues should come back to is that Mr. Le Goff said, on the question of departmental spending, that the departments would be better placed to answer that. They haven't answered that, and I think somebody needs to put that question to them. I don't think it's appropriate to just say “provide the information” until we know if it can be provided, just to be fair to the departments that we're not expecting something from them if they're either not sure exactly what's being requested or they're not able to provide it.

I leave that for you to come back to in another round.

Turning now to Mr. Dong, I am very pleased to see you. For a second I thought you were not going to make it here today.

[Han Dong, Liberal, Don Valley North, ON]

No, I'm here.

[The Chair, Conservative, John Williamson]

It's over to you for six minutes.

[Han Dong, Liberal, Don Valley North, ON]

Thank you very much, Chair.

I want to thank all of the department officials and the officials from the AG's office for coming today.

My question is for NRCan. Very quickly, can you give us an overview of the state of the technology in terms of its application? You mentioned in your opening remarks that there were significant investments already in place from both the public sector and the private sector.

Please, tell us a bit about that.

[John Hannaford]

Mr. Chair, the production of hydrogen is something that's been part of our industrial mix for a long time. We have been producing hydrogen in a variety of different ways through different technologies. What has changed recently is the degree of demand as some of the new technologies have come on board to create hydrogen both through electrolysis, which is through the conversion of water into hydrogen, and through the reform of natural gas, which essentially uses very high heat to separate out the hydrogen from the carbon in methane. Those two processes, combined with carbon capture and storage, can lead to quite substantial supplies of very low-carbon fuel, which can be applied in a number of different ways.

Canada has been a leader with respect to the development of such technologies as hydrogen cells, which can convert that hydrogen into electricity and can be used as a source of power in automobiles, in heavy- and medium-weight vehicles and in other applications, such as steel production.

The application of that hydrogen technology is being advanced through a variety of different means around the world. There is an increasing demand for hydrogen as a clean fuel that we are seeing in a number of different ways. I mentioned in my opening statement the arrangement that we have reached with Germany. We have also been in conversations with other key partners, such as Korea, Japan and the United States, about the application of hydrogen as a clean fuel.

I would say, as I also mentioned in my opening statement, that this is something relevant across the country. As we think about the regional tables, and as we are trying to study and identify with each province and territory areas where we have a strategic advantage that we can use to move toward a cleaner carbon future, hydrogen—

[Han Dong, Liberal, Don Valley North, ON]

I have very limited time. I want to get a couple of questions in.

You used the word “demand” twice. Can we say that the technology is mature enough, or is very close to the stage of vast commercialization, to replace fossil fuels? Is it mature enough to even have the potential to be an environmentally friendly way to produce electricity? Can we say that?

[John Hannaford]

It is increasing. The technology is advancing and demand is increasing. Such things as the crisis in Europe are advancing this even more quickly.

[Han Dong, Liberal, Don Valley North, ON]

As the technology grows, does it pose any risk to the sufficiency of energy supply in Canada along the way?

[John Hannaford]

Again, there are a couple of pathways to hydrogen. Actually, there are several. The two principal ones present different sorts of challenges. If you're using electricity through electrolysis—separating water—then you need a sufficient energy supply in order for that to happen. Similarly, in the conversion of natural gas, you need to think about how energy is supplied in order to create the heat that would generate the separation of the molecules.

Those are things that then become relevant as we think about some of the challenges of electrification and some of the technologies that are available there.

[Han Dong, Liberal, Don Valley North, ON]

Did NRCan overestimate the emissions reduction potential of hydrogen? I want to give you a chance to answer this question.

[John Hannaford]

Mr. Chair, we were engaged in a very specific exercise, which was to identify the full potential of hydrogen at a point in time. That exercise arrived at the figures that we've been discussing. That was intended as a call to action. It was not intended as an analysis, other than of the full potential of the technology.

We continue to refine this. We have a series of committees that we have stood up that aim to draw from the wisdom of the private sector and other forms of experts—and with the provinces and territories—to make sure that we better understand this technology as it evolves and its potential. That will result in an update report next year, which will give our most recent picture of what the potential of the technology is.

[Han Dong, Liberal, Don Valley North, ON]

In your opening remarks, you named a few international players investing heavily in hydrogen technology.

What's the risk of not doing anything with this technology, or not enhancing and incentivizing private investment in that technology in Canada?

[John Hannaford]

The risk is being left behind. As you mentioned, there is substantial investment that is happening internationally. We have strategic potential here. Any sorts of decisions with respect to this take time in order to come to fruition.

[Han Dong, Liberal, Don Valley North, ON]

What do you mean by “left behind”? Is it like a job loss or—

[The Chair, Conservative, John Williamson]

That is time, I'm afraid. You'll have to come back to that.

Mr. Trudel, you now have the floor for six minutes.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

Thank you, Mr. Chair.

I would like to thank the witnesses for being here with us. The issue at hand is very important. A few days ago, we talked about the housing crisis and today, we are talking about the climate crisis, and how hydrogen fits into this. The stakes are high.

Things aren't going well in Canada in terms of the fight against climate change. Indeed, Canada is the only G7 country whose emissions have increased since 2015, that is to say since the Liberals came to power. Emissions have gone up since the Paris Agreement was put into place. We can't ignore this.

We hear the grand speeches of the Liberal ministers in the House of Commons, who talk about being “green” and supporting a green transition. However, this has not translated into any concrete results at the end of the day.

Canada has never met the targets of the agreements and major international covenants that it has signed. Not a single target. In the last budget, reduction targets were set at 40 or 45%, but we don't know if they will be met. Canada is second amongst G20 countries in terms of fossil fuel subsidies. That is telling. Canada is the worst G20 country when it comes to the average emissions per citizen. We can't pretend things are going well.

Mr. Hannaford, what is going wrong? We are here to talk about green hydrogen. Green hydrogen is all well and good, but it is not a miracle solution.

Why is Canada trailing behind and why can't it reduce its greenhouse gas emissions, despite the big promises and passionate speeches and despite its commitment to international covenants and Conferences of the Parties?

[John Hannaford]

We are taking very substantial steps to address the emissions, which are just an aspect of our economy and society. The emissions reduction plan that was released in the spring is among the most ambitious and most detailed internationally to both understand the challenges that we face and provide pathways as to how we will be pursuing those challenges.

Hydrogen can play a role in this, because hydrogen is a clean fuel. As we think about the investments we're making through the mechanisms I mentioned earlier, we have an opportunity to make inroads for Canada not only to meet its own objectives but also to provide a clean fuel internationally and continue our role as an energy supplier.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

Setting aside the measures linked to hydrogen, what key measures would give us hope for a reduction in greenhouse gas emissions over the next few years?

[John Hannaford]

There are a number of measures that have been announced, both in conjunction with the emissions reduction plan and through successive budgets, which are intended to foster innovation in this area. We've mentioned the investment tax credit that's been put in place with respect to the carbon capture and storage technologies. We've talked about investment tax credits that are also available for clean energy and hydrogen.

These are all incentives towards substantial reductions in our emissions over time. We are also taking other measures, which my colleagues at Environment will be better placed to discuss, on the regulatory side to change very significantly the way we do business and to meet the overall objectives that we have been setting.