The Budget
Date: 2023_04_17
Chamber: HOUSE OF COMMONS
Ms. Monique Pauze: as you listen to my speech, you will understand why my colleague from Terrebonne and I, and all our Bloc Quebecois 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.