44th Parl. 1st Sess.
April 17, 2023 11:00AM
- Apr/17/23 5:16:30 p.m.
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Madam Speaker, since my colleague mentioned the environment a few times in his speech, I want to engage him on that issue.
Much like the Bloc Québécois, many groups recognize that the budget contains some positive measures for the environment. However, everyone sees eye to eye on criticizing the investments in carbon capture and storage, as this only offers a vague hope of a transition to a cleaner economy.
Why, on the one hand, are we investing in greener technologies while, on the other hand, we keep funding a technology that is not well developed and that itself generates greenhouse gases?
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- Apr/17/23 5:32:09 p.m.
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Madam Speaker, I would like to know what my colleague thinks about the federal and provincial areas of jurisdiction. There is a Québec Solidaire motion before the Quebec National Assembly that states that health care falls under Quebec's exclusive jurisdiction. Quebec is asking for unconditional financial compensation for dental care, and it wants that amount transferred so it can improve coverage for a program it already has.
I would like to know what the member for Rosemont—La Petite-Patrie thinks of that request for unconditional financial compensation.
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- Apr/17/23 5:48:37 p.m.
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Madam Speaker, I would like my colleague to clarify what I think I understood. Tax credits are harder to track than direct subsidies to oil companies, because there may not be an audit for five or 10 years. The information is being somewhat hidden. At the end of 2023, the government could say that it got rid of fossil fuel subsidies, when in fact they have simply been converted to tax credits.
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- Apr/17/23 5:49:49 p.m.
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Madam Speaker, as you listen to my speech, you will understand why my colleague from Terrebonne and I, and all our Bloc Québécois colleagues, are working together to denounce the tricks hidden in the budget.
Chapter 3 of the federal budget presented on March 28 includes a number of elements that I would have liked to address in my speech today. The measures for affordable energy, good jobs and a growing clean economy are indeed encouraging. There are investments, which unfortunately are in the form of tax credits, for clean electricity, retrofits, energy efficiency and geothermal energy. These are positive steps. There is good news in the budget at first glance.
I do, however, have concerns. Upon closer inspection, one might notice a deliberately and skilfully designed but reprehensible architecture, where, through the use of a single word, a very specific adjective, the entire industrial ecosystem of the hydrocarbon sector becomes part of the smorgasbord of public funds. That magic word in the budget is “clean”, which appears roughly 170 times in this chapter alone.
I will not go into the funds, the programs, how they are managed, what the funding is for, and the other specifics because there would be too much to say. I want to be clear that there is some good in the budget. Unfortunately, the problem is that these positive measures to help the environment and uphold our international commitments are overshadowed by the fact that the fossil fuel sector has undue access to public money. The government committed to eliminating fossil fuel subsidies by 2023. Once again, that will have to wait because, clearly, it will not keep its word. Subsidies will become tax credits so they can be hidden. The budget is mapped out until the 2027-28 fiscal year. Clearly, this will not happen by 2023.
I want to talk about hydrogen production, which my colleague also mentioned. There is the investment tax credit for clean energy. It sounds good, and it seems to me that it is not a bad idea. However, the truth is, Canada claims that hydrogen production from fossil sources, and from natural gas in particular, is clean. I am not making that up. There is, however, no credible international organization, scientist, or expert who would say that this is clean hydrogen.
I am not questioning the need to develop the hydrogen energy sector. We should develop it, but it must be done right. The lion's share of the money should be spent on creating a hydrogen production complex with a net-zero or very low greenhouse gas emissions life cycle. We are talking about the production of hydrogen through electrolysis. The government has announced that this tax credit is available for production projects that use electrolysis, but also for those that use natural gas. The funding is also conditional upon the associated emissions being reduced through carbon capture, utilization and storage technologies, known as CCUS.
The budget provides $5.5 billion over five years to fund this investment tax credit for what the government calls clean hydrogen. The first tax credit opens the door to another gift, another hidden subsidy for the oil and gas sector, the one for investments in carbon capture and storage, which, let us not forget, has been discredited by a host of experts around the world. My colleague talked about 400 signatories. The majority of these people have expertise in science and technology. They asked the Minister of Finance not to agree to funding this false solution, which is extremely expensive, energy intensive, ineffective and impossible to carry out in the short term when we are facing a climate emergency.
They even ignored a very clear report on the subject released by the International Institute for Sustainable Development earlier this year, so very recently. Should this industry, which is rolling in profits, unparalleled record profits, not be funding the rollout of this project itself? Many observers argue that it is high time that the federal government introduced the regulations that will require the sector to fund its own emissions reductions. That, however, is just wishful thinking, as they say.
Who made money in 2022? Canada's six largest oil companies made close to $38 billion in profits. According to media specializing in the energy sector, those companies intend to take a measly half percent, 0.5% of that amount, and invest it in clean technology. Some will say that $516 million over five years is the amount of the tax credits. That is not a lot. It is very little. The lobbyists will say the same thing. Pathways Alliance, where all or almost all of the companies are grouped together, is taking strong action so that governments are paying for as much of their capture projects as possible.
In reality, these producers are getting far more than this half a billion, because the investment tax credit and the clean hydrogen tax credit are interconnected. If these companies actually believe in their vaunted carbon capture and storage projects and their potential, then why do they not invest more in them themselves for the prosperity of their shareholders and their image as good corporate neighbours?
The budget implementation conditions merit our attention. I will summarize two important elements. The budget says, and I quote, “At this time, only dedicated geological storage and storage in concrete are proposed to be eligible uses.” We are therefore talking about carbon storage. The other features of the tax credit show that companies will be able to access these tax benefits even if the activities are not eligible.
By the time an audit is done to ensure that the tax credits actually involve eligible expenses, companies will have used this accounting scenario for five to 10 years to save money, as if they do not already have enough.
Add to this the following unacceptable exemption: “Corporations with projects that expect to have less than $20 million of eligible expenses over the life of the project would be exempt from [producing a climate risk disclosure report].” Simply divide that among projects under $20 million and there will be no more environmental risks.
The cost of solar power has dropped by 85% since 2010. The cost of onshore wind has dropped by 68%. Even the price of net-zero hydrogen has dropped slightly below that of hydrogen produced from natural gas. This was found in early 2022, a consequence of the conflict between Russia and Ukraine.
For the past 20 years or so, the CO2 capture, utilization, and storage, or CCUS, program has yielded largely inconclusive results. The industry claims that potential emissions reductions from the oil and gas sector only amount to 10%. We are talking about investing billions of dollars for only 10%.
Suncor estimates the capital and operating costs of its Cold Lake project at $14 billion. As for Cenovus, its project will cost $2.5 billion per year until 2050. Can my colleagues grasp what this means? If only we had other places where to put those billions.
This budget does not in any way signal that the government is preparing to end fossil fuel subsidies. It has disguised them. This budget does not give us the tools to meet the target we urgently need to reach.
Spending precious public funds on accelerating investments in energy efficiency, electrification and support for renewable energy is how the government should be using taxpayers' money.
A parliamentary committee studied nuclear waste governance in Canada and tabled its report in the House. We produced a supplementary report. Therefore, I cannot ignore the worrisome position taken by the federal government on the nuclear industry. Some say that the nuclear industry does not emit greenhouse gases. Others say that it is part of the solution. Who is looking into radioactive waste? Is nuclear energy clean? No one knows what to do with dangerous waste materials. Small modular reactors have not yet achieved technological readiness.
I will close by asking what Canada plans on doing with spent fuel. Does the government intend to sell it? I know, perhaps these are projects that will be carried out in the Arctic given that the moratorium will expire at the end of 2023.
Is there going to be oil exploration in the Arctic? I am asking the question. The criticism is not over.
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- Apr/17/23 6:00:27 p.m.
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Madam Speaker, that is a whole other topic, but we do know that herbicides and pesticides are bad for human health, so that is what we need to focus on. That is true for all pollution. It affects people's health. This has been proven and calculated. Its economic impact has even been measured. We need to do something about it. There are many avenues ahead of us, but we need to take them all at the same time because it is urgent.
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- Apr/17/23 6:01:54 p.m.
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Madam Speaker, absolutely, getting everyone around the table and being able to talk about innovation funds and so on is important.
However, I just came from a committee where we talked about what happened with Imperial Oil in Alberta. When company representatives are sitting around a table, it becomes clear that there are people who listen, people who do not listen at all and people who do not consult at all. We have to keep that in mind when considering what my colleague from Rosemont—La Petite-Patrie is putting forward.
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- Apr/17/23 6:03:12 p.m.
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Madam Speaker, at a Standing Committee on Environment and Sustainable Development meeting I attended before the two-week break, I asked the Minister of Environment and Climate Change why it was impossible to get out of this bottomless financial hole. He replied that I should ask the Minister of Finance.
I said I was asking the Minister of Environment because he is the one who knows what is going on, who reads the summary reports and who is responsible for ensuring that Canada meets its international commitments.
That is the response I got from the Minister of Environment.
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- Apr/17/23 6:04:26 p.m.
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Madam Speaker, I agree that we need to ask ourselves why the government is continuing to move forward with this. I just want to remind the House that 100 of the 149 global carbon capture and storage projects were cancelled and that, in the United States, despite significant industry and government investment in the technology, 80% of the proposed projects failed to become operational because of high costs, low technological readiness, the lack of a credible financial return, and dependence on government incentives.
Public money should go to known solutions. It should not go into the pockets of the oil and gas industry for futile projects they try to sell us on.
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