- Member of Parliament
- Member of Parliament
- Liberal
- Beaches—East York
- Ontario
- Voting Attendance: 64%
- Expenses Last Quarter: $123,505.63
- Government Page
- Mar/19/24 4:48:17 p.m.
- Watch
Mr. Speaker, in my last two budget submissions, I spoke to excess profit taxes. We have seen them on banks and insurance companies. We have seen them from U.K. Conservatives on oil and gas. It is absolutely a conversation we should have in the House. U.K. Conservatives were, I think at one point, models for Conservatives here until they lost their way, but if U.K. Conservatives have put this in place, then there is no reason we cannot have that debate and put it in place here as well.
92 words
- Hear!
- Rabble!
- add
- star_border
- share
- May/17/22 1:34:11 p.m.
- Watch
Madam Speaker, I would say that there will be a role for oil and gas. I noted that by 2050, that role will be for non-combustion purposes principally. Certainly we are going to see a steady decline over the coming decades in the production and use of oil and gas, especially for combustion purposes.
I suppose my answer is simply to say that I do not have the same challenges with our country as a producer as I would with a regime like Russia, for example. We are rightly prohibiting Russian oil and gas for good reason, but we also need to transition very quickly. We need to support that transition and make sure that we support our workers and our society in a future that is ultimately going to be net zero by 2050.
136 words
- Hear!
- Rabble!
- add
- star_border
- share
- May/17/22 1:21:21 p.m.
- Watch
Madam Speaker, I want to begin by saying that I appreciate the spirit of the motion and, for the most part, I also agree with it in substance. There is one particular point of contention that I will get to, but first I will start with where I agree.
The motion notes that oil and gas companies are making record profits at the same time as Canadians are paying more than ever for gas at the pumps. We have seen Suncor's profits more than triple in a year. Canadian Natural Resources more than doubled its year-over-year first-quarter numbers, and Imperial Oil saw its best first quarter in 30 years. It goes on and on. The shortage of global crude oil, driven by the Russian invasion of Ukraine, has led to significant new profit for these companies.
In answer, the motion highlights the need to speed up our transition to clean energy and also to help Canadians struggling with the high cost of living. It seems reasonable enough, and there are many specific ways to accomplish these general goals. We could see additional financial support for clean energy infrastructure and additional support for skills training for the jobs we will increasingly rely upon. There are many ways to support Canadians in need, and I would highlight the need to deliver on the Canada disability benefit as one example. To pay for some of this, including skills training and clean energy infrastructure, I would have supported a call for a windfall tax on oil and gas profits.
As the environment minister has rightly said recently, for example, these companies are making record profits and they should be investing some of them into ensuring that they have a future. Instead, the motion calls for the government to stop using Canadian taxpayers' money to subsidize and finance the oil and gas sector and to reinvest that money in the transition and in supporting struggling Canadians. Again, in general this is certainly worthy of support.
The motion rightly calls out the public financing provided through Crown corporations such as Export Development Canada. Let us pause for a moment to delve into the work of the International Institute for Sustainable Development. It has acknowledged that federal financing via subsidies amounts to about $2 billion a year, but there is a very large sum that is contributed via public financing. In a recent scorecard ranking G20 levels of support provided to fossil fuels, Canada ranked last among OECD countries by providing the highest amount of support. The IISD estimate is that Canada provides an average of $13.2 billion in support for oil and gas every year via EDC, representing over 12% of the financing committed by that institution. About 30% of that financing goes toward domestic operations of Canadian oil and gas companies. That obviously needs to change.
EDC, in its Canada account, has financed the government's acquisition and construction of TMX, which should also change and, frankly, should not have happened the way it has. It is impossible to see how TMX is economically feasible at this point, with the total project cost ballooning to well over $20 billion. Even back in December 2020, the PBO briefed parliamentarians and noted that the Trans Mountain expansion would not be profitable if we took additional climate action. Subsequently, there has been a lot of additional climate action, including much greater stringency around our carbon pricing. There is no clear explanation as to how the project is a worthwhile financial investment in a world that reduces emissions consistent with net-zero. It is past time we put a stop to public financing and, unfortunately, recently again, we have seen an additional $10-billion loan that is an effective subsidy in the form of protection against credit risk. If Canada expended the same sum toward renewable energy that we have and will expend on TMX, we would all be better off, including workers who will inevitably be affected by the global transition.
Despite my frustration with public financing, including of TMX, it is impossible to ignore the progress we have made since 2015. When this government took office in 2015, projected 2030 emissions were 815 megatons. Fast forward to the first-ever emissions-reduction plan and, if all of the policies hold and if a future government does not roll them back, those projected 2030 emissions have moved from 815 megatons to 443 megatons. There is still more work to be done, including phasing out fossil fuel subsidies and addressing public financing.
In our most recent platform, and in the mandate letters of the ministers, Canadians will see that we have committed to accelerate our G20 commitment to eliminate fossil fuel subsidies from 2025 to 2023, and we have also committed to develop a plan to phase out public financing. It is not soon enough, but important nonetheless, to phase out public financing of the fossil fuel sector, including from Crown corporations, consistent with our commitment to reach net-zero emissions by 2050. We have also committed to a more stringent cap that I would say we take more seriously on oil and gas sector emissions.
Where I part ways with the motion's sponsor is with respect to carbon capture utilization and storage. The motion casts the CCUS investment tax credit as a problematic fossil fuel subsidy by calling for the government to exclude oil and gas companies from the $2.6-billion budget allocation: a budget allocation that is over five years. The CCUS investment tax credit is not universally supported. There are some legitimate criticisms to consider and take seriously.
At the same time, there are many thoughtful experts who support encouraging investment in this space. The Canadian version of the policy has rightly excluded enhanced oil recovery, such that eligible projects cannot be used to squeeze more oil out of the ground. According to the Grantham Institute, CCUS could be an essential technology for tackling climate change. The recent IPCC report includes a specific section on the emerging technology. The committee on climate change in the U.K., a model for our net-zero advisory body in a serious way, has called it “a vital technology essential to reducing greenhouse gas emissions across the economy”.
Carbon capture may not be a cure-all for the global climate challenge, but it has a major role to play in decarbonizing heavy industry. In Canada, where industrial emissions make up over a third of total emissions, it can play an even greater role than in other countries.
Those are not my words. Those are the words of a research associate at the Oxford Institute for Energy Studies.
The International Energy Agency, in its net-zero report of last year, notes that CCUS can facilitate the transition to net-zero C02 emissions:
by tackling emissions from existing assets, providing a way to address emissions from some of the most challenging sectors; providing a cost-effective pathway to scale up low-carbon hydrogen production rapidly; and allowing for CO2 removal from the atmosphere...
This is again from the report:
Government R and D spending needs to be increased and reprioritized. Critical areas such as electrification, hydrogen, bioenergy and carbon capture, utilization and storage (CCUS) today receive only around one‐third of the level of public R and D funding of the more established low‐carbon electricity generation and energy efficiency technologies.
In that same report, in its 1.5° scenario, the IEA estimates that the world will still use about 25 million barrels per day, or a quarter of current usage. However, these are not for combustion purposes, but for non-combustion applications such as petrochemicals, lubricants, solvents, waxes, etc. The IEA forecasted the demand for natural gas in 2050 would be half of what it is today, again for non-combustion.
Yes, unquestionably, we need to reduce fossil fuel use. Unquestionably, we need to remove public financing from the fossil fuel sector, especially as it relates to combustion, but we also need to ensure that the extraction and production of oil and gas, to the extent that it is going to continue, is net-zero. It will continue even up to 2050.
I want to dismiss objections here. Many experts, led by Canada research chair and University of Victoria professor Christina Hoicka, said:
Deploying CCUS at any climate-relevant scale, carried out within the short time frame we have to avert climate catastrophe without posing substantial risks to communities on the front lines of the buildout, is a pipe dream...
Perhaps they will be proven right. It may be that the technology ultimately fails, and that the $2.6 billion in public financing over the next five years goes with it. My own view is that we need to take every moon shot that we can, given the scale of the crisis. We are doing so much, and this is another arrow in our quiver.
While the policy is designed for clues, and enhanced oil recovery ensures that companies invest a significant amount of their own capital and will require anyone who claims the policy to complete a climate-related financial disclosure report, I can also appreciate the frustration when federal funds are encouraging investment from companies that are currently flush with cash, even if the investment is for a worthwhile end. For me, the objection that lands most seriously is that a CCUS-specific tax credit pushes companies to invest in that particular technology over others that may well be more deserving of support and it may distort investment decisions away from other decisions that make more sense, whether company-specific, sector-specific or economy-wide.
I think there are challenges we want to take seriously, but when it comes to federal support for tackling climate change, we have the carbon pricing regime, our effort to phase out coal-fired electricity, our efforts to reduce methane emissions, including increasingly stringent policies to do so and, finally, our effort in the most recent platform and in mandate letters to cap oil and gas sector emissions. We have our investments: historic investments in public transit, and on and on. There is so much that we are doing and so much more, of course, that we need to do, but emphasizing and battling around the CCUS is, I think, misplaced. Absolutely, we should address public financing. We should do some more seriously and criticism is warranted there, but let us not fight about the CCUS investment tax credit, which is encouraging investment in a space that sorely needs that investment.
To close, I would just say that if the motion were amended to remove that specific element, it would be worthy of my support.
1793 words
All Topics
- Hear!
- Rabble!
- add
- star_border
- share
- menumenu
- notificationsnotifications
- home
- mailmail
- searchsearch
