Public Accounts Committee on Dec. 2nd, 2022

[Greg McLean, Conservative, Calgary Centre, AB]

Tax credits don't reduce emissions.

Let me read the paragraph we're talking about. It's paragraph 3.27. I'm sure you know it:

The transformative scenario developed by Natural Resources Canada projected that hydrogen could represent up to 15% of the emission reductions needed to meet the 2030 target. In contrast to this, we found that one of Natural Resources Canada’s incremental demand reports projected that in 2030, hydrogen will contribute only 0.5% of the 2030 target and 5.5% of the 2040 target. The department did not find this estimation compelling and chose to use more aspirational numbers in the Hydrogen Strategy for Canada modelling.

This is a choice you made. It isn't something that was based on any reality. It was, “We need a result. We need to put some numbers here that actually show we're going to do something.” That defies the reality that exists in your department.

I'll take comment on that, but it seems to be a huge stretch how you arrived at these numbers, Mr. Hannaford.

[John Hannaford]

Mr. Chair, as I said, the intention here was to introduce a call to action. That included ambitious potential actions that could be taken to advance the use and production of hydrogen.

I would take one step back too. When we talk about the transportation of hydrogen, infrastructure is part of that, but the applications become part of it too. We think about the use of heavy vehicles as applications of fuel cells. That is a localized use, which is obviously intended for movement, but that's not the use of a—

[Greg McLean, Conservative, Calgary Centre, AB]

Mr. Hannaford, thank you. I have fleeting time.

How much time do I have, Mr. Chair?

[The Chair, Conservative, John Williamson]

You have a minute and a half.

[Greg McLean, Conservative, Calgary Centre, AB]

Mr. Hannaford, or one of your officials, are you familiar with Enerdata, an international energy data collecting firm? Enerdata shows that Canada's energy as a percentage of our GDP has gone down over the last 30 years from 26%—that's 26% input for each unit of GDP—to 17%. We're still the fifth highest in the world. We know that. We live in a northern climate, but we've made significant progress in terms of the amount of energy we consume.

If we produce green hydrogen, that ratio is going to reverse. The number one way we can address global warming is to keep that efficiency ratio going down.

Would you agree with that?

[John Hannaford]

I'm sorry, Mr. Chair. I'm not familiar with the report.

What I would say is that in order for us to achieve our overall climate objectives, we're going to have to think through a number of different technologies, and hydrogen is one of them.

[Greg McLean, Conservative, Calgary Centre, AB]

Even though at this point in time it is power- or energy-negative...?

[John Hannaford]

As I said, Mr. Chair, the—

[Greg McLean, Conservative, Calgary Centre, AB]

What I'm saying is that you're saying, “Okay, it doesn't matter how much greenhouse gas we produce between now and 2030. It matters what might happen in 2060.” So, it's short-term pain, environmentally, for potential gain way down the road.

[John Hannaford]

Well, I'm not saying that we would be increasing our carbon footprint as a result—

[Greg McLean, Conservative, Calgary Centre, AB]

Well, I am. The production of all this equipment—

[The Chair, Conservative, John Williamson]

That is the time.

Ms. Yip, you have the floor for five minutes.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

It's great to see so many witnesses here in person. Thank you.

My question is for Ms. Hogan.

Environmental groups say that the carbon capture, utilization and storage tax credit is yet another subsidy. Why are you putting that in place?

[Christine Hogan]

I would say that, similar to some of the earlier comments that have been made, it's going to take a whole suite of measures to achieve what are some very ambitious climate goals in Canada.

I think my colleague from Natural Resources Canada spoke very well about the potential role of things like carbon capture, utilization and storage and other technologies. It is one important piece, and the government's decision to put in a tax credit is in recognition of that.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Mr. Hannaford, with respect to CCUS, do you feel that it's on target to reach net zero by 2050?

[John Hannaford]

I'm sorry. Do you mean with respect to carbon capture and storage?

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Yes.

[John Hannaford]

I think carbon capture and storage has the potential of making a real contribution.

As I mentioned earlier, we are already seeing the application of the technology, and it continues to evolve. As parts of industry look to reduce their carbon footprint—the Pathways group out of the oil sands has enunciated a vision of being net-zero—that will be a significant application of carbon capture and storage to meet our overall objectives over time.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Thank you.

Ms. Hogan, what is the status of the commitment to convene an expert-led process to provide advice on the modelling regime? I know you touched on experts, but I'd like to know a little bit more as to what these experts will be doing.

[Christine Hogan]

As I mentioned, that is something that is referenced in our action plan. It is something that we spoke to in the emissions reduction plan.

The work is under way. I can tell you that the independent expert has completed an initial scoping exercise with Environment and Climate Change Canada staff and internal and external modelling experts. This exercise will inform how we move forward and—

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

I'm sorry. What do you mean by “scoping”?

[Christine Hogan]

They're looking at what the specific terms of reference might be for the next steps, how broad the expert process should be and how we might want to proceed with the engagement of experts, internal and external, by government.

I think the important thing for members to be aware of is that we do intend to incorporate the advice that comes out of this expert process in time for the 2023 ERP, the emissions reduction plan progress report that is required under the Net-Zero Emissions Accountability Act.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Thank you.

Mr. Hannaford, what is the role of hydrogen in addressing Europe's energy crisis? I know that you mentioned just a little bit, but I'd like to hear more.

This is what happens when you're at the end; you want to hear more of just little points.

[John Hannaford]

Mr. Chair, as I mentioned, the geopolitics have certainly changed in Europe, obviously, as a result of the aggression of Russia in Ukraine, and that has really brought to the fore the geopolitics of energy.

Our partners are looking to Canada to continue to be a significant energy supplier and are looking at various means by which that could take place. We've talked very briefly about the arrangements that we have in place with such key partners as Germany. Just to expand on that a bit, we had the degree of interest of having the chancellor visit Canada in order to reinforce the relationship in a number of ways, and hydrogen was a very significant part of that conversation. We've seen that one of the outcomes of that was an MOU that was signed with the German government.

We also have ongoing conversations with the European Union generally and with other members of the European Union around energy. Hydrogen for the Europeans is an avenue that they are actively pursuing. That's in terms of the application of the technologies but also looking at sources, and Canada has real potential with respect to that as a possible reliable exporter in a world where the geopolitics are complicated.

[The Chair, Conservative, John Williamson]

Thank you very much. That is the time.

We're turning to Mr. McLean again.

You have the floor for five minutes, sir.