44th Parl. 1st Sess.
May 17, 2022 10:00AM
- May/17/22 10:58:30 a.m.
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Madam Speaker, I will be sharing my time with the member for Winnipeg South.
Climate change and the environment are very important to me and my community. It guides the work that I do in this place, and that is because the threat is not theoretical. It is real. It is happening right now. Right across our country last summer we saw floods and wildfires. These events destroyed people's homes and their livelihoods. We need to take strong action as we face this reality.
Today, I will focus on eliminating fossil fuel subsidies, which we have committed to do by 2023, but I would like to begin by talking about the heavy lifting that we must do and that we are doing right now to fight climate change.
One of the most impactful and earliest steps we took was to put a price on carbon pollution. It encourages businesses and individuals to make choices that result in fewer emissions.
It is a strong market mechanism, and all of the funds that are collected through the price on carbon pollution are returned to the province where it is collected. None of it stays with the federal government. I want to be clear about that because sometimes I feel like that is lost in our conversations. It is described sometimes as a tax, but that was clearly put to bed by the Supreme Court of Canada. It is not, and none of the funds stay here with the federal government. It is all returned to individuals and the provinces from where they were taken.
I will give some good news. We have finally begun to flatten the curve on emissions. The first year when we saw the curve beginning to flatten was 2019. There was a decoupling. The economy grew, but emissions did not grow at the same pace, and in 2020, our emissions dropped. Much of that was due to the pandemic and the fact that we reduced travel. There is no doubt about that, but part of that drop was also due to the fact that we have cleaned up our electrical grid
As part of that, we are well on our way to removing coal-fired electricity from our electrical grid, which would reduce air pollution and emissions. We are investing in nature-based solutions, such as planting two billion trees and working to protect our lands and waters. We have put into law that we must achieve net zero in our country by 2050. We released the emissions reduction plan under the law for net zero by 2050, which sets projections for all sectors of our economy to reduce emissions and includes mechanisms to reduce combustion of fossil fuels, such as moving to 100% of all new vehicle sales being zero emissions by 2050.
Today's motion focuses on the narrower issue of fossil fuel subsidies and the work we are doing toward our G20 commitment to eliminate fossil fuel subsidies. The commitment began in 2009, when Canada joined other members of the G20 in agreeing to phase out and rationalize over the medium term inefficient fossil fuel subsidies while providing targeted support for the poorest. The leaders' statement from that G20 said, “This reform will not apply to our support for clean energy, renewables, and technologies that dramatically reduce greenhouse gas emissions.”
Previously, we had committed to meet the goal by 2025, and over the last year we have accelerated that timeline to be completed by 2023. So far, the government has rationalized or phased out the following nine tax measures that had provided preferential tax treatment to the fossil fuel sector: the phase-out of the accelerated capital cost allowance for oil sands, which was was announced in budget 2007 and completed in 2015; the reduction in the deduction rates for intangible capital expenses in oil sands projects to align with rates in conventional oil and gas sector, which was announced in budget 2011 and completed in 2016; the phase-out of the Atlantic investment tax credit for investments in the oil and gas and mining sectors, which was announced in budget 2012 and completed in 2017; the reduction in the deduction rate for preproduction intangible mine development expenses to align with rate for the oil and gas sector, which was announced in budget 2013 and completed in 2018; the phase-out of the accelerated capital cost allowance for mining, which was announced in budget 2013 and completed in 2021; allowing the accelerated capital cost allowance for liquefied natural gas facilities to expire as scheduled in 2025, which was announced in budget 2016; rationalize the tax treatment of expenses for successful oil and gas exploratory drilling, which was announced in budget 2017 and completed in 2021; a phase-out tax preference that allows small oil and gas companies to reclassify certain development expenses as more favourably treated exploration expenses, which was announced in 2017 and completed in 2019; and the phase-out of flow-through shares for oil, gas and coal activities, which was proposed in budget 2022 and will be completed in 2023.
As part of the process to eliminate fossil fuel subsidies, G20 countries have been pairing among themselves for a transparent review of their work. In 2018, Canada committed to undergoing a peer review process with Argentina. We are the fourth pair of countries within the G20 to undertake that process, and it is ongoing.
The previous six countries to do a peer review have generally considered fossil fuel subsidies based on the World Trade Organization's definition of “subsidy”, which is government spending, tax or non-tax, that provides a benefit. Further, countries have tailored that definition to subsidies aimed at the fossil fuel sector by focusing on those that directly or indirectly lead to increases in the production or consumption of fossil fuels.
To complete our own work to eliminate fossil fuel subsidies, Environment and Climate Change Canada in 2018 conducted an extensive review of non-tax measures. This was complemented by a consultation that ran from March to June 2019 on the government's draft framework to review measures outside the tax system. This feedback is taken into account in the work being done by Finance Canada and Environment and Climate Change Canada.
It is reasonable to expect that the question of what type of spending is aligned with a transition to net zero will change over time. In other words, government spending in support of the transition to a net-zero, reliable, affordable energy system could look different in 2023 from how it will look in the future. I will provide an example. Support for diesel use in northern and remote communities may need to continue in the short term to ensure the provision of essential energy services. However, in the longer term, as the government continues to invest in ways of moving these communities off diesel, these types of supports may no longer be considered aligned with government objectives once viable replacement options are put in place.
Before my time is up, I would like to address the motion's reference to carbon capture and storage. At a time when we need every tool at our disposal to reduce emissions, this is not the moment to remove support for carbon capture and storage. The IPCC has recognized that it plays a role in reducing emissions, as does the International Energy Agency. It is one part of what needs to be done to reduce our country's emissions and reach net zero.
Recently, at the environment committee, Professor Normand Mousseau shared the following testimony in response to a question from the member for Victoria.
He stated:
We absolutely have to implement all reduction measures, but we're also going to have to invest in capture and storage. I'm not talking about utilization, I mean storage. Otherwise, we won't be able to achieve net zero.
We believe it is important to focus on how programs can support climate targets, international commitments, long-term prosperity and job creation in the face of a global energy transition. It is global. This is happening all around the world. Canada is on a journey to a net-zero future, one that will be anchored by a clean, affordable and reliable energy system. It is important to ensure that government spending and investment are well aligned with that journey. That is the work that we are doing and are committed to completing.
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- May/17/22 11:12:48 a.m.
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Madam Speaker, the motion by the hon. member for Victoria is not only timely and important, but very reassuring.
As I read the member's motion, I found much common ground across the aisle, including a shared recognition that energy security is ultimately about climate action. How so? The International Energy Agency, or the IEA, defines “energy security” as the uninterrupted availability of energy sources at an affordable price. As the motion implies, if we want to secure an uninterrupted and stable energy supply, we have to accelerate the switch to lower-emitting energy sources, and we have to do so in ways that are affordable to Canadians. Otherwise, we risk exacerbating existing equity issues and losing some of the political will that has accumulated to drive climate action.
Therefore, we are clearly on the same page with the member opposite when she talks about the need to invest in renewable sources of energy and support both energy security and affordability. In fact, that is a central focus of the 2030 emissions reduction plan that our government released at the end of March. It is a comprehensive mix of new investments, subsidies and incentives that build on the more than $100 billion we have already committed to climate action since coming to office in 2015.
The plan also includes hard caps on emissions from every economic sector, as well as stronger environmental regulations and new sales mandates for electric vehicles, all of them aimed, ultimately, at making Canada a net-zero nation by 2050.
Put another way, our 2030 emissions reduction plan is about protecting the environment in ways that actually unlock new economic opportunities. It is about cutting pollution and creating good jobs. Where needed, it is about providing training, skills, development and other support to workers and communities, so that clean growth works for everyone in every sector of our economy and every region of our country.
Investing in renewable sources of energy is a key part of our plan. There is simply no way to reach our climate targets while ensuring our economy remains strong and globally competitive without a sustainable, low-carbon energy sector. Frankly, renewables have been part of our climate action plan since we sent our first delegation to COP 2015, which was just weeks after we formed government in 2015.
Our level of commitment to investing in renewable sources of energy has only grown from there. Just last year, we launched our $1.5-billion clean fuels fund to support the next generation of fuel production. With this new fund, we are supporting feasibility and front-end engineering and design studies, helping to establish biomass supply chains, creating new markets for waste from forestry and agriculture, and developing essential codes and standards, ensuring that new technologies can enter the market reliably. Best of all, we expect to create more than 35,000 direct and indirect jobs through this fund and leverage an additional $3.5 billion in other public and private investments over the next five years, all while helping to reduce our emissions by up to 12 megatonnes.
Budget 2022 further builds on that and is highlighted by a world-leading $15-billion Canada growth fund and an expansion and extension of the low-carbon economy fund, with a further $2.2 billion. Other measures specifically advance our capacity to produce renewable energy. Electricity is a case in point. We have committed to a net-zero electricity system by 2035, and our new federal budget includes further investments to get us there. They include $250 million over four years to support pre-development activities of clean electricity projects of national significance, such as interprovincial electricity transmission projects and small modular reactors. These projects build on what our government is already doing to advance similar work on the Atlantic loop and prairie link projects.
There are also $600 million over seven years for the smart renewables and electrification pathways program to support additional renewable electricity and grid modernization projects, $2.4 million in 2022-23 to establish a pan-Canadian grid council, which would provide external advice in support of national and regional electricity planning, and $25 million to establish regional strategic initiatives to work with provinces, territories and relevant stakeholders to develop net-zero energy plans.
As we invest in renewables, we are also helping Canadians to use less energy, such as with the Canada greener homes grant that was launched in May of last year. It offers grants of up to $5,000 to help Canadians finance resiliency and energy efficient retrofits in their homes. The program has proved to be very popular, with over 150,000 homeowners applying through the national portal and another 50,000 coming in through our co-delivery partners of Quebec and Nova Scotia.
Of course, carbon capture, use and storage also figure prominently in our emissions reduction plan and our 2022 budget. Carbon capture technologies have also been a part of Canada's plan since the turn of the century, when an international team of scientists descended on an oil field in Saskatchewan to study the feasibility of injecting carbon dioxide into a geologic formation. Almost two decades later, carbon capture has emerged from the laboratory as a commercially viable option, but the sheer scale of these projects demands continued collaboration to reduce costs, which means that we cannot afford to be excluding potential partners as we try to achieve an economy of scale with the technology. That is where I part ways with the member opposite and her motion. We need all hands on deck to fight climate change. With our abundance of natural resources and skilled labour, Canada is well positioned to lead global growth in CCUS as it supports our investments in renewables.
The oil and gas industry, which contributes 26% of Canada's overall emissions but also directly employs over 70,000 people, should not and will not be excluded. That said, it is our intention that the tax credit cannot be used for enhanced oil recovery. Simply put, the tax credit would be an effective way to further mobilize substantial private capital towards clean technologies in energy, driving down costs and encouraging widespread market adoption.
When it comes to climate change, I think colleagues will agree that there is no magic bullet. We need to use every tool in the tool box, and we need every partner we can get to help us achieve our goals. We have the ambition, the know-how and the plan to build a bright, healthy future for everyone.
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- May/17/22 12:54:08 p.m.
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Madam Speaker, I am pleased to rise to debate our NDP motion to call on the Liberal government once again to end subsidies to its buddies in big oil. The best time to do this was years ago. The second best time to do it is today.
Time is running out, yet the Liberals continue to hold on to the strange idea that we are just another couple of billion dollars to big oil away from solving the climate crisis. It is wrong, and they know it is wrong, but they continue to maintain this fallacy and hope no one will notice that they are doing the opposite of what they are saying.
They may say they care about reversing catastrophic climate change, but they do not get to say they care while propping up the same companies that are wrecking our environment with our tax dollars to fund their bonuses. They do not get to say they care when Cenovus recently announced its best first-quarter profit ever, raking in almost a billion more than it did one year ago, or Imperial Oil tripling its 2021 earnings, or Suncor quadrupling its. These companies are not self-made. They are doing it with the government's help and with our tax dollars.
Meanwhile, it is workers, indigenous peoples, young people and northerners who are paying the price in every way while the government sits back. These are the people who are getting ripped off at the pump and may no longer be able to even afford to drive to their jobs, or are struggling to pay rent or pay for groceries, people who are consistently left behind by a government that likes to cosplay as the plucky hero saving the environment.
It is not heroic to give billions to big oil. It is not brave. It is not challenging the status quo. It is the status quo, and it is going to get our planet destroyed.
It is funny. The government regularly talks about listening to science, but it rarely does so when it comes to climate change. The IPCC has been clear on the need to end oil subsidies, yet the government pretends that this is not the case. The IPCC has said that countries like Canada need to increase investments in renewables by at least a factor of three to meet our climate goals, yet the government still has not done this.
It goes without saying that I would never accuse members of the government of misleading the House or even Canadians while in the chamber, but it does beg the question, what would we call a government that says it is tackling climate change by giving billions to big oil? What do we call a government that presents itself as an environmental champion on the international stage and to the public while consistently missing every target it has ever set? I will leave that question to Canadians.
The facts are clear. Canada has the worst record in the G20, handing out 14 times more financing to the oil and gas sector than to renewables. It is no surprise that big oil has always had the ear of the government, which I guess is easy to do when the government has had 6,800 recorded meetings with big oil. It has worked, having successfully lobbied the Liberals for a $2.6-billion tax credit for unproven carbon capture technologies that allow them to justify increased production and higher emissions.
In total, the government gave $8.6 billion last year to oil companies already raking in record profits. It is always the same with the government: help for those at the top and nice words for everyone else.
Those words have been nice. In 2019, we heard about the just transition act. The government failed to deliver, and the environment commissioner recently had to call it out over its lack of a plan to support workers and communities through the transition to a low-carbon economy.
At COP26 in November, we heard nice words again from the government, to phase out public financing of the fossil fuel sector. We heard nice words in the mandate letters for the Deputy Prime Minister and Minister of Finance, the Minister of the Environment and Climate Change and the Minister of Natural Resources. Every single one had nice words about phasing out public subsidies for big oil, but recent testimony from Finance and ECCC officials at the environment committee showed that it is not much more than nice words.
Let us be clear. Nice words do not help people afford their basic needs. Nice words will not stop the climate catastrophe.
My home is here in northern Manitoba, where long drives between communities are a daily reality of life. People here in Thompson regularly drive eight hours to our capital, Winnipeg, to pick up supplies and things they need. For many surrounding communities, Thompson is where many people come in for health care, to access other services, to pick up groceries and to shop for necessities. This morning, the cost of gas here in Thompson was $1.85; in Cross Lake, $1.89; in Lynn Lake, $2; in Churchill, $2.56.
How are people expected to have money left over for anything else when gassing up costs this much? Where do these people turn? Who is standing up for them?
A better way does exist. It is not too late for the government to reverse course from the path toward climate disaster it has put us on. It starts with ending subsidies to big oil and reinvesting that money toward both renewable energy and help for Canadians struggling with the cost of living. This is what our motion calls for today.
There is no reason the Liberals cannot start by eliminating tax credits for oil and gas exploration and development immediately. This would bring in almost $10 billion in the next four years. We ought to include profitable oil and gas companies in the Canada recovery dividend to tax their excess profits and redistribute that money to help Canadians struggling to get by. We must suspend the GST on residential energy bills, double the GST tax credit and increase the Canada child benefit for all recipients now.
I urge this House to support our motion, but there is so much we need to be doing. We must go further. We must do more.
My other question is, why have we not activated all the tools at our disposal, like our Crown corporations, and used public ownership in the fight against climate change? Why have we not made the types of investments necessary to support communities in need to fight back?
Indigenous peoples and northerners are already paying the price for climate change. How many catastrophic floods or fires before we take it seriously? How many evacuated communities, destroyed homes and livelihoods gone before we finally do what we need to do to save people, communities and our planet?
It seems that every year somewhere in the country there are record temperatures, floods or forest fires. Every evacuation, every destroyed community is a proverbial canary in the coal mine of climate change. Communities are crying out as they are being destroyed by our indifference. The worst part is that as long as we continue to give billions of dollars to big oil, we are subsidizing our own destruction. Every climate disaster, flood or fire is on our hands. We are doing this.
Today we are witnessing here in our part of the country the devastating flooding in Peguis First Nation, a community to which the current government and governments before it promised they would fund flood mitigation efforts, a promise unmet. Now, Peguis is dealing with the catastrophic impacts: a total evacuation of the community of over 1,870 members, and more than 700 homes impacted. We are talking about a community that has flooded five times in the last 16 years. It knows how to deal with floods, but it is getting worse.
The feds and the province may show up with sandbags, but when it comes to long-term support, the federal government has been nowhere to be seen. When asked about this by the CBC, the federal government refused to commit to long-term supports, leaving communities like Peguis in the lurch. Why? Imagine if there was a place for communities like Peguis to turn to in order to get the funding they need for the infrastructure they know they need that would help with climate change adaptation and mitigation efforts.
My bill, Bill C-245, an act to amend the Canada Infrastructure Bank Act, is motivated by the communities in my riding and across the country that have nowhere to turn to get the support they need to survive climate change. This is about standing with communities. It is ultimately about saving lives.
If this House is truly serious about supporting indigenous and northern communities, if we are truly serious about taking on catastrophic climate change, I invite all members to stand with communities like the ones I represent by supporting this bill when the time comes. For too long, this House, the government, has shown its loyalty to those at the top, those who need the least amount of help.
It is time this House, the government, stood with everyone else. It is time the government stopped being part of the problem and started being part of the solution. It is not too late, but soon it will be. Let us get to work now.
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- May/17/22 1:09:41 p.m.
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Madam Speaker, I will be splitting my time today with my hon. colleague from Beaches—East York.
I would like to thank our hon. colleague from Victoria for this opportunity to discuss Canada's climate plan. It is a plan that, as Canadians, we should be very proud of.
I will say at the outset that we as Liberals share the member's objective: a clean and just energy transition that does everything possible to shield our planet from the climate change threat. However, her motion's wording illustrates where we differ, and I will be speaking about that today.
As the member opposite knows, our government is committed to achieving a 40% to 45% emissions reduction by 2030 and reaching net-zero emissions by 2050. We have also promised to phase out inefficient fossil fuel subsidies. This is our first area of disagreement, because we do not consider inefficient subsidies to be any of the measures we are using to cut emissions.
This brings me to our second difference of opinion. Unlike her party, the NDP, we support the development of carbon capture, use and storage technology. This technology involves the removal or capture of carbon from industrial processes or even directly from our atmosphere in order to make our planet livable.
However, first, I will put my comments in proper context, because carbon capture is just one tool among many in our climate plan's broad tool box to cut emissions across Canada's economy.
Our plan starts with putting a price on pollution. It also includes using regulatory investment and tax measures to incent the transition to cleaner options, like electric vehicles. The bottom line is that we are looking at all options, because despite wishful thinking in some quarters, there is no single, magical solution that will appear to resolve this existential challenge. Even clean energy sources such as wind and solar, while crucial, are not enough to get us to net zero. That is why we are encouraging all tools, including carbon capture technologies, which will be especially important for major pollution sources like the oil sands or chemical industries.
Carbon capture technologies have been developing through most of the century, but they remain expensive and are only used on a relatively small scale. I will cite some promising examples in Canada shortly. However, first I want to make the point that our government is far from alone in supporting this innovation.
Let us consider the latest report from the United Nations Intergovernmental Panel on Climate Change, the one that came with a stark warning from the UN Secretary-General that without urgent action now, the planet is on a “fast track to...disaster”. The IPCC made clear that carbon capture technology is particularly important, and not just to get the planet closer to net zero. It also noted that even if the world reaches our net-zero 2050 objective, direct removal from the atmosphere may be needed to limit global warming.
I will cite a comment from The Guardian newspaper by Robert Gross, director of the United Kingdom's Energy Research Centre. He said, “We will need not just net zero but to start to remove CO2 from the air. We cannot do one instead of the other, but we have reached the point where it is likely that humanity will need to do both to avoid dangerous climate change.” This illustrates how important it is for us to invest in carbon capture technology.
The IPPC's position is echoed by other respected organizations. Just consider the Paris-based International Energy Agency. Its net-zero road map would require carbon capture to account for roughly 15% of global emission reductions.
Another respected global voice on climate is the International Renewable Energy Agency. It has stated that even a very aggressive ramping up of renewables will not be sufficient. That is why it considers carbon capture essential.
Finally, I will point out the Canadian Climate Institute. It also views carbon capture and removal as playing a potentially significant role in our net-zero pathway.
This is why carbon capture is a part of our recently published 2030 emissions reduction plan. It is a blueprint that outlines the technology's economy-wide applications in its sector-by-sector path for Canada to reach our targets. The fact is, we believe that carbon capture can help tackle emissions from the toughest-to-abate but crucial sectors of Canada's economy, such as oil and gas and heavy industry. More importantly, it also opens the door to low-carbon pathways, such as hydrogen, green concrete and low-emissions power.
Carbon capture also presents a multi-billion dollar market opportunity. In hydrogen alone, I note that Germany's ambassador recently described Canada as a potential hydrogen superpower. Carbon capture will play a key role in helping us produce clean hydrogen.
As I indicated earlier, this is not just about potential. Canada has long been an innovation leader. In fact, Canada is already home to leading carbon capture companies, five of which made the 2022 Global Cleantech 100 list of innovative global clean-tech firms.
We have to push harder, and that is why Canada is implementing measures that will help drive the carbon capture market here even further. Budget 2021, for instance, included $319 million to support research, development and demonstrations of carbon capture, use and storage technologies. Budget 2022 includes a proposed new investment tax credit for companies that invest in these projects. The credit is a key part of our government's broader plan to work with industry toward the goal of decarbonization. This plan was designed after consultations with the public, stakeholders and the provinces and territories. It is intended to drive the growth of Canadian carbon capture, use and storage technologies in industries from steel and plastics to fuels and hydrogen.
In addition, our government has been engaging with key partners and stakeholders to develop a comprehensive carbon capture strategy for Canada. We plan to release this strategy in the coming months.
I indicated earlier that I would cite some real-world examples, and in doing so I will note that our government has worked arm in arm with the Alberta government and the private sector to make inroads in this area.
One is the Alberta carbon trunk line capture and storage project, the world's largest of its kind. The Government of Canada is supporting the project with $30 million through the clean energy fund, as well as $33 million from the ecoENERGY technology initiative.
Another success story is Shell Canada's Quest project. Since 2015, this project, which received early funding from Natural Resources Canada, has been reducing emissions at Shell's Scotford upgrader by 1.1 megatonnes per year. Quest remains one of the most successful carbon capture projects in the world.
I would also draw members' attention to our $8-billion net-zero accelerator fund. It contributed $25 million to support Svante, a B.C. company developing carbon capture technology for industrial applications like cement and blue hydrogen.
Canada's petroleum industry is one of the most innovative in the world. It found a way to extract oil from sand in northern Alberta and to tap wealth under the ocean floor in the treacherous North Atlantic. I believe carbon capture holds similar potential for world-class innovation, allowing Canada's economy to thrive by helping us deliver cleaner energy while driving toward our net-zero target.
That is why I believe we need to continue to work on developing carbon capture, use and storage technologies in Canada, and it is why I am proud of the plan the government has to support this important innovation to get us to the net-zero 2050 plan.
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