Madam Speaker, some months ago, back in the spring, I asked the government about carbon capture, utilization and storage and its position on this. Sixteen months ago I introduced a bill into the House of Commons that was proposing a carbon capture, utilization and storage system for Canada that matched what happens in the U.S. Our trade partner in CUSMA actually has a 45Q regime that incents carbon capture, utilization and storage.
Finally, after much consultation, the government decided to move forward on this incentive to decarbonize Canada's economy by including it in its annual federal budget last spring. Here we are, six months later, and where are we on carbon capture, utilization and storage in this country? We are in the same place, really.
In July, the government proposed its latest words on moving these measures forward. I say “words” because the proposal includes new, novel and undefined measures such as a knowledge-sharing agreement requirement, which is undefined and yet incurring penalties of up to $2 million per occurrence if not obeyed. It is a document written without seriousness.
The government has repeatedly shown its lack of gravitas in its approach to this technology and its development, which the rest of the world has addressed more quickly, recognizing, as the International Energy Agency does, that the world's path to a decarbonized economy and decarbonized future is not possible without carbon capture, utilization and storage. It is a Canadian shame.
Canada was, until recently, the country where the technology had advanced most quickly. Industry had spent billions advancing the technology. Governments, provincial and federal, had contributed significant amounts to this advance. What changed? What took away Canadian technology leadership in carbon capture, utilization and storage development? It was tax incentives by our two main environment competitors, which are the United States and Norway, both of which produce a significant amount of hydrocarbon.
Since the U.S. instituted its 45Q regime to incent CCUS technology development, our Canadian corporate leaders have moved their developments to opportunities in the United States. Carbon Engineering, the world leader in direct air capture, now works primarily south of our border. The world does not stand still or even stall the way the current government does.
The 45Q regime in the U.S. has recently been updated in the U.S. Inflation Reduction Act so that tax incentives further encourage technological advances and decarbonization. That is the goal. The current government is still ragging the puck.
One key difference in structure between the design in the rest of the world and the approach the government is proposing is the inclusion of enhanced oil recovery. Here is what the government is missing in this ideological, wrong-headed, prejudicial approach to CCUS: Enhanced oil recovery produces hydrocarbons with a full life-cycle carbon footprint lower than newly drilled wells. There is an internal mental block holding the government back from decarbonizing our energy in Canada. It cannot continue to pretend it is even concerned about decarbonization.
I call on the government to stop sitting on its hands and to move forward with a revised, effective and accountable CCUS incentive mechanism.