(Pursuant to the order adopted by the Senate on December 7, 2021, to receive a Minister of the Crown, the Honourable Jonathan Wilkinson, P.C., M.P., Minister of Natural Resources, appeared before honourable senators during Question Period.)

The Hon. the Speaker: Honourable senators, the time for Question Period has expired. I know you will wish to join me in thanking Minister Wilkinson for being with us today. Thank you, minister.

Hon. Jonathan Wilkinson, P.C., M.P., Minister of Natural Resources: Thank you for the question. To be very clear, I will answer in English.

[English]

I think it’s a very important question. Step back and look at, for example, the International Energy Agency’s 1.5-degree scenario. The world is not there yet; the commitments from all the countries are not there yet. However, assuming you achieve 1.5 degrees, over the course of the next number of decades you will still be using significant amounts of hydrocarbons. Even in 2015, with a 1.5-degree scenario, you will still be using some amount of hydrocarbons, but you won’t be combusting them. You will be using them for solvents, waxes, petrochemicals and hydrogen. In that scenario, you’re still using 25 million barrels of oil, a quarter of what we produce today, and about half the amount of natural gas that we use today.

In that scenario, you have to be able to produce them with virtually zero production emissions. There are combustion emissions and production emissions. Even if you eliminate all the combustion emissions because you’re using them in applications where you’re not combusting, you still have to produce them with zero or close to zero. That is where we are focused, namely, on driving emissions down in every natural gas and oil sector across the country — not only in Alberta and Saskatchewan but also in Newfoundland and Labrador — to the point where Canada is producing with virtually zero carbon emissions.

There is no forecast right now that says oil consumption will decline until somewhere between 2030 and 2035. At that point it will, as we deploy more vehicles. Of course Canada wants to extract value for its resources, but it wants to do it in a manner that is consistent with a net-zero world.

Hon. Jonathan Wilkinson, P.C., M.P., Minister of Natural Resources: Let me just start by thanking the honourable senators for having me here today. I acknowledge that this session is taking place on the ancestral and traditional territories of the Algonquin Anishinaabeg people.

Thank you, senator, for the question. I would actually challenge one of the things you said at the very beginning, in that most forecasts say we will gain far more jobs than we may lose through the process of the energy transition.

I would also say that many of the jobs that we will see in the future, such as in the production of hydrogen or biofuels, from a skill set perspective, do not look much different from the types of skills that are required in the existing energy sector within this country.

But we are working on the discussion around the just transition. That includes an economic plan for a future economy that will be prosperous and strong in the context of a lower‑carbon future. It is also about adjustment in cases where there is displacement of workers, like coal-fired power plant workers. That is certainly something we’re working on, and we intend to introduce legislation in the new year.

(Pursuant to the order adopted by the Senate on December 7, 2021, to receive a Minister of the Crown, the Honourable Jonathan Wilkinson, P.C., M.P., Minister of Natural Resources, appeared before honourable senators during Question Period.)

Hon. Jonathan Wilkinson, P.C., M.P., Minister of Natural Resources: Thank you for the question. I will answer in English to be clearer.

[English]

I certainly welcome Mr. DeMarco’s report, and there were many elements of it that I agreed with. What I would say is what Natural Resources Canada did was different from what Environment and Climate Change Canada did. Environment and Climate Change Canada developed a climate plan that was actually based on what hydrogen could do in terms of emissions reductions within the relevant time frame, and they looked really only at one application. Natural Resources Canada looked at what’s called a “full potential,” which is all of the applications for which hydrogen could be utilized — if you actually seized all of those opportunities, what is the full potential you could look at?

Often, businesses, as you will know, do a full potential to try to understand what may be possible. It doesn’t mean that’s what you choose to do in terms of the specific avenues you will go down. But I would say the full potential is useful in terms of trying to actually ensure that we understand where the biggest opportunities are from both an emissions reduction and an economic perspective.

I am very comfortable that the work we did and will do going forward is helping us to move that forward with respect to the hydrogen strategy. I used to run a hydrogen business. It’s an area I know reasonably well, and I do think hydrogen represents an enormous economic opportunity for Canada. It is also one of those things that we are going to need for applications that are very hard to use electricity in, for example, like heavy-duty trucking or even, in some cases, home heating.

So I welcome Mr. DeMarco’s report, but I do think it is important to understand they are slightly different in terms of the focus.

Hon. Jonathan Wilkinson, P.C., M.P., Minister of Natural Resources: Thank you.

I will speak generally and then speak to the Ring of Fire. More generally, we do have work to do to ensure our regulatory processes are able to move at the speed we need to in order for us to have access to the minerals that are required for the energy transition. We need to do that in a manner that is sensitive to the environment — not cutting corners on environmental sustainability — and in a matter that respects our duty to discharge and that respects the rights of Indigenous peoples.

We are working actively within the federal family to figure out ways to do that; there are a number of initiatives under way. We are working directly with most of the provinces and territories under the Regional Energy and Resource Tables to look at aligning those things.

The Ring of Fire, however, is a particularly complex area. Much of it is in peatlands, which are a huge carbon sink. The last thing we want to do when fighting climate change is to make climate change worse. Second, there are legitimate Indigenous concerns in the area that need to be heard and addressed.

There is a process going on in terms of assessing two roads, but those are largely independent of any project; they are for Indigenous communities. There is a regional assessment going on, which should help to enable specific project assessments going forward.

We do not yet have a specific project proposal. A lot of people think there is some project for the Ring of Fire. I know that Wyloo Metals, which holds the rights, is interested in moving forward, but we have not had any project enter the environmental assessment stage. There is the regional assessment going on.

At the end of the day, we are interested in finding pathways through which some portions of that region could be mined in a manner that is sensitive environmentally, but we have to address the environmental concern around the peat. We also have to address the legitimate issues the environmental communities have if we are going to find a pathway forward. That is the work that I am doing with every day.

Hon. Jonathan Wilkinson, P.C., M.P., Minister of Natural Resources: Thank you for the question, senator.

I am from Saskatchewan and used to work for the premier of Saskatchewan. I certainly understand the agriculture sector and some of the concerns that have been raised.

The price on pollution is an important component of fighting climate change, both in terms of reducing emissions and in terms of incentivizing innovation and the development of technologies that can be zero- or ultra-low-emitting. We have put in place a retail rebate, including in Saskatchewan, where 80% of families get more money back than they pay. We have also come forward with a rebate for farm families to try to address the issue you raised, which was not addressed previously, but there is a repayment at this point in time.

It is important for politicians in both chambers of Parliament to really understand that climate change is a threat. It is an existential threat to the future of the human race. It is something that terrifies our children, in terms of the future going forward. It is not a responsible position for any political party to take that simply averts our eyes from the climate crisis. We must have a thoughtful approach, and it should be on the part of all political parties. From our perspective, it shouldn’t be free to pollute anywhere in this country. Putting a price on pollution is an important component of having a credible climate plan that also accounts for economic realities.

Hon. Colin Deacon: Minister Wilkinson, thank you for being with us here in the Senate.

I’m interested in ways Natural Resources Canada might catalyze greater innovation and market diversification in the use of wood waste. You mentioned the topic earlier. As you know, there are a growing number of compelling use cases for wood waste, whether it be wood pellets, biochar — which sequesters carbon and improves soil health — or other innovative applications.

In Nova Scotia, we were overly reliant on a single use case for wood waste, and that was pulp. As a result, the closure of one pulp mill caused catastrophic consequences and economic hardship for thousands of rural families that were dependent on the sector — despite the high lumber prices of 2021.

What measures is your department considering — like regulatory reforms or incentives — to create innovative and more diverse market opportunities for value-added and climate‑friendly uses of wood waste?

Thank you.

The Hon. the Speaker: Honourable senators, we welcome today the Honourable Jonathan Wilkinson, P.C., M.P., Minister of Natural Resources, to ask questions relating to his ministerial responsibilities.

Pursuant to the order adopted by the Senate on December 7, 2021, senators do not need to stand. Questions are limited to one minute and responses to one and a half minutes. The reading clerk will stand 10 seconds before the expiry of these times. Question Period will last one hour.

Hon. Jonathan Wilkinson, P.C., M.P., Minister of Natural Resources: Thank you. That is a very important question.

People often focus on transportation, or oil and gas, or buildings — all of which are important in terms of reducing emissions and building an economy for the future — but they often don’t talk about the grid. The grid underpins the entire thing.

Having a robust grid that has an abundant supply of non‑emitting power is critical to phasing out coal and to eventually phasing out unabated natural gas, but it’s also critical to being able to reduce emissions from transportation. If you’re electrifying all the cars, you need more power. If you’re electrifying home heating, you need more power. It’s critical to the future of our economy.

Many battery manufacturers and, now, car manufacturers are locating in Canada because we have non-emitting power. At the end of the day, they want products that have almost zero embedded carbon. If you’re burning coal and you’re using electricity, you don’t have zero embedded carbon in your car. To grow the industrial base in this country — whether it’s hydrogen, biofuels, critical minerals or car manufacturing — we need a lot more. We will have to double or triple the amount of electricity generation in this country over the course of the coming number of decades.

The federal government needs to be part of that solution. From a financial perspective, I often say this is the railway of our century. It is fundamentally important. It is also important that we are working with provinces and territories, while respecting their jurisdiction, on ideas about how we can do this better and faster. That’s the role of the proposed national grid council — namely, to try to think about outside-the-box ideas on the regulatory regimes to enable us to move in a manner that will meet the needs of the energy transition and to help us look at best practices.