Several trends influence Natural Resources Canada’s (NRCan’s) work to support the continued prosperity of Canada's natural resource sectors. Notable trends include: changing global demand for natural resources, increasing competition in global markets, and the increasing frequency and severity of climate change impacts resulting in such circumstances as the growing threats to our forests from wildfire and pests.
Firstly, the emergence of large and growing export markets for natural resources, such as China and India, is increasing the overall demand for natural resources and putting positive pressure on commodity prices. Together with demand from the U.S., which continues to be generally strong despite the current uncertain trade environment and specific measures on our softwood lumber exports, this upward trend in demand gives Canada opportunities for increasing our exports and driving further economic growth and job creation. This is particularly true for the energy sector, where Canada continues to reinforce its status as a global energy leader, with global demand for energy resources poised to grow even further.Footnote 1
Secondly, as Canada's natural resource industries work to gain their share of the growing global market, they face an increasingly competitive landscape marked by cyclical downturns in pricing, changing supply and demand patterns in the U.S. and beyond, and regulatory changes and new policy approaches to climate change and carbon pricing. In response, NRCan continued to work with international partners to promote investment in Canada’s natural resource sectors and collaborated with Canadian industry to research, develop and test innovative approaches, diversify products and services, and leverage expertise and clean technologies to ensure we stay competitive. In addition, the Department worked to ensure the right structures were in place – including resource management systems, environmental and regulatory regimes, and accessible public geoscience and forest science – to support Canada’s competitive advantage in the natural resource sectors.
Thirdly, increasing competition in natural resource markets worldwide is accompanied by a greater emphasis on sustainability and environmental stewardship among international governments and consumers. With its eyes on the low carbon future, in 2018-19, NRCan continued to take steps to ensure Canada continues to have sustainable, clean, and competitive natural resource sectors. Through its scientific research and partnerships, the Department continued to support innovation in the development of clean technologies. Budgets 2017 and 2018 presented expanded opportunities for the Department to support the development and use of clean technology. The Department implemented a number of new initiatives that support clean technology development and improve environmental performance of our natural resource sectors. For example, through Green Mining Innovation, NRCan is working with a diverse group of stakeholders to look at the entire mining life cycle to create green technologies and to improve the environmental performance of the mining sector.
Also in support of the transition to a low carbon economy, NRCan continued to support reducing the carbon footprint of conventional energy sources. For example, in close collaboration with Environment and Climate Change Canada, provinces and territories, and in consultation with Indigenous Peoples, the Department helped advance the Pan-Canadian Framework on Clean Growth and Climate Change (PCF), intended to help meet our emissions reduction targets, grow the economy, and build resilience to a changing climate. The Clean Energy for Rural and Remote Communities (CERRC) Program was also launched under the PCF with the aim of reducing the reliance of rural and remote communities on diesel and other fossil fuels for heat and power. In addition, the Department engaged Canadians in a national dialogue called Generation Energy and created the Generation Energy Council to accelerate Canada’s transition to a reliable, affordable, low-carbon economy.
Under the PCF, the Green Construction through Wood (GCWood) Program was also launched, which aims to increase the use of wood as a green building material in infrastructure projects, which will help Canada achieve its target GHG emissions reductions.
Lastly, climate change is affecting the sustainability and competitiveness of our natural resource sectors, including contributing to the increased threat of wildfires and destructive pests that can have devastating effects on Canada’s forest sectors. Through its risk management and adaptation programs, NRCan continued to help manage climate-related threats and emergencies and build more resilient natural resource sectors. Finally, NRCan supported other departments in the evaluation of projects and deployment of their programs such as the Low Carbon Economy Fund (ECCC), the Strategic Innovation Fund (ISED), and the Strategic Partnerships Initiative (ISC).
Key risks
The following table outlines the Department’s key risks identified in the 2018–19 Departmental Plan. While these risks do not lend themselves to being fully addressed in the short term, as highlighted below, the Department made progress in responding to these risks.
1. Clean technology and innovation
Risk
Risk response strategy and effectiveness
Link to the department’s Core Responsibilities
Link to mandate letter commitments and any government wide or departmental priorities (as applicable)
If Canada fails to apply innovative approaches to energy, mining and forestry sector challenges, it may impact the competitivenes, growth and environmental performance of Canada’s natural resources and clean technology sectors
In 2018-19, NRCan’s risk responses and results included:
Continuing to fund programs to advance research and development and the deployment of clean technology in Canada’s natural resource sectors. This includes improving energy efficiency and reducing the environmental impacts of energy production and use while increasing productivity and competitiveness. NRCan is supporting clean technology companies through several major programs including the $155M Clean Growth Program, and the $75M Impact Canada Clean Technology Challenges.
Developing strategic partnerships to support innovation in natural resource sectors through programs such as the Clean Growth Program, which supports research, development and demonstrations of clean technologies in the energy, mining and forestry sectors. This first-of-its kind program requires financial or in-kind support from the provinces and territories and encourages new partnerships between natural resources companies, clean technology producers, and end-users to bring these technologies to the stage of commercial readiness. This approach helps to coordinate efforts and focus clean technology investments in areas that will most effectively help Canada meet its climate change goals, create economic opportunities, and increase companies’ competitiveness in the natural resources sectors.
Leading the Impact Canada Initiative Cleantech Challenges to explore new programming approaches such as prize-based challenges and pay-for-results to advance transformative and breakthrough clean technologies. In 2018-19, NRCan launched five challenges including: Women in Cleantech, the Sky’s the Limit (sustainable bio jet fuel), the Power Forward (smart grids and energy storage), the Crush It (mining), and the Generating New Opportunities: Indigenous Off-Diesel Initiative. The program used a unique co-creation model working closely with stakeholders to identify challenge areas and to open up the problem-solving process to a broader range of innovators that may bring fresh perspectives and ideas.
Leading Canada’s participation in global initiatives/fora such as Mission Innovation which aims to accelerate global clean energy innovation at a global scale. In 2018-19, NRCan chaired the Mission Innovation Steering Committee in support of Canada hosting over 25 countries at the Clean Energy Ministerial and Mission Innovation Ministerial in May 2019. NRCan is also making other notable contributions including co-leading Mission Innovation’s Sustainable Biofuels and the Clean Energy Materials Innovation Challenges.
Supporting the transition to a low carbon, low pollution, and resource efficient economy by co-leading the Clean Growth Hub, with ISED, and collaborating with 14 other departments, to help clean technology proponents navigate federal system of supports. To-date, the Hub has provided services to over 900 clients in the first 14 months.
Accelerating clean technology research and development through projects under the Energy Innovation Program (EIP). In 2018-19 EIP funded 54 external grants and contributions projects to help advance research, development and demonstration in the areas of renewable energy, smart grids, buildings, as well as improving the environmental performance of oil and gas production.
Moving Canada towards global leadership in the use of forest bio-mass, under the implementation phase of the Forest Bioeconomy Framework for Canada. In 2018-19, the measures under Forest Innovation Program included:
Supporting Bioeconomy through targeted investments in low-carbon processes and the commercialization of new fibre-based innovation and technologies.
Leveraging science and partnerships to build a Canadian forest biomass and fibre supply baseline to support clean fuel standards and enable successful bio-product marketing.
Through the Investments in Forest Industry Transformation Program (IFIT), supporting the forest sector and the communities that depend on it to bring about first-in-kind innovation and transformation that has:
Diversified markets with new, higher value products (new biomaterials, advanced building products and construction materials); and,
Increased competitiveness and economic sustainability (creating jobs and new revenue streams for companies and diversifying product portfolios).
Beyond the development and commercialization of innovation, demonstration is a key tool to encourage the application of innovation. GCWood and Expanding Market Opportunities (EMO) support demonstration projects for wood buildings to encourage their large scale deployment domestically and abroad in China.
Innovative and Sustainable Natural Resources Development
Globally Competitive Natural Resource Sectors
Link to Minister’s mandate letter: Make strategic investments in our clean technology sector
Link to Government priorities: Jobs and Innovation
Environment and Climate Change
2. Climate change mitigation and adaptation
Risk
Risk response strategy and effectiveness
Link to the department’s Core Responsibilities
Link to mandate letter commitments and any government wide or departmental priorities (as appropriate)
If natural resource sectors and communities do not develop in a way that supports Canada’s transition to a low carbon economy and if the adoption of adequate adaptation and mitigation measures does not take place, Canada’s climate change commitment to reduce GHG emissions by 30 percent may not be met, the competiveness of our natural resource sectors may be undermined and communities may become more vulnerable to the impacts of climate change
Climate Change Mitigation
In 2018-19, NRCan’s risk responses and results included:
Continuing to pursue international collaboration with key partners and leading Canada’s participation in global initiatives/fora. For example, In June 2018, NRCan co-chaired the G20 Energy Transitions Ministerial and announced participation with Argentina in the G20’s Inefficient Fossil Fuel Subsidies Peer Review process. NRCan also hosted the G7 Energy Ministerial in Halifax, September 2018, where discussions centered on working together to build the energy systems of tomorrow. Support was secured for numerous outcomes, including initiatives on modernizing power systems and electrical grids, and supporting clean and resilient energy systems in Small Island Developing States. In 2018-19, NRCan chaired the Mission Innovation Steering Committee in support of Canada hosting the 10th Clean Energy Ministerial and 4th Mission Innovation Ministerial in May 2019. In its role as host, Canada introduced new elements including a focus on a just and inclusive transition, women, youth and Indigenous Peoples. The event attracted over 2,500 delegates, stakeholders and industry representatives from 25 countries.
Funding projects for innovative clean energy technologies, under the Energy Innovation Program (EIP) and the Green Infrastructure demonstration programs that, if proven, will reduce GHG emissions across key sectors (electricity, built environment, transportation and industry). In 2018-19:
EIP funded 54 external clean energy innovation grants and contributions working in priority areas such as renewable energy, smart grid and storage systems, methane and VOC emission reduction; carbon capture, use and storage, and improving industrial efficiency.
66 Green Infrastructure demonstration projects were selected in areas such as: Energy Efficient Buildings (13), Smart Grid Demonstrations (13), Electric Vehicle Infrastructure Demonstrations (28), and Clean Energy for Rural and Remote Communities (12).
The Electric Vehicle and Alternative Fuel Infrastructure Deployment (EVAFID) Initiative has to date resulted in the opening of 134 EV fast chargers, four natural gas stations, and two hydrogen stations. Projects are in place to support 526 EV fast chargers, 12 natural gas and 6 hydrogen stations, and by 2024, when the program ends, it will have resulted in a coast-to-coast network of 1,000 EV fast chargers, 22 natural gas stations along freight routes, and 15 hydrogen chargers in metro areas.
Working with provincial and territorial governments (specifically BC and Quebec) to improve understanding of forest carbon and specific mitigation strategies. NRCan also provided advice on forest sector projects submitted for funding under the Low Carbon Economy Fund, which informed decisions on funding.
Working with provinces and territories to increase energy efficiency by improving how buildings are designed, renovated, constructed and managed. In 2018-2019, this included releasing 2018-2019 Action Plans under Canada’s Buildings Strategy and a market transformation roadmap for energy-using equipment, as well as launching an online platform for home energy labelling and disclosure for provinces, territories, municipalities and other partners to share home energy use ratings.
NRCan also developed three amendments to Canada’sEnergy Efficiency Regulations covering 38 product categories which will provide benefits to Canadians through energy cost savings and improved environmental outcomes.
Funding 53 renewable energy projects under CERRC of which 51 are located in Indigenous communities. These projects support local capacity development to operate and integrate renewable energy into existing energy systems, reducing environmental impacts of fossil fuel use, building capacity towards clean energy, and increasing direct and indirect social benefits, including clean job creation and increased energy autonomy.
Continued collaboration with provincial and territorial energy ministers under the provincial/territorial-led Canadian Energy Strategy. The strategy promoted energy efficiency, developed new energy technology and innovations, identified priority energy infrastructure, and advanced international energy collaboration. These initiatives complement the Pan-Canadian Framework on Clean Growth and Climate Change, helping Canada meet its emissions reduction target and grow the economy. In June 2018, the Generation Energy Council Report was released, outlining a vision, pathways and advice on a prosperous and low-carbon future. The government will build on the work of Generation Energy, to engage provinces and territories in accelerating clean growth strategies, and enhancing the energy sector’s competitiveness.
Working with provincial and territorial energy ministers through the Energy and Mines Ministers’ Conference (EMMC) to advance key energy priorities and promote clean growth. Key priorities include collaboration on clean energy goals with a focus on clean power to support electrification, building more efficient energy systems, supporting innovation to promote clean technology, strengthening energy information sharing to inform decision-making and collaborating on cyber security for critical energy infrastructure. EMMC work has additionally emphasized promoting Canada’s energy advantages to support trade and investment in Canada’s energy sector and engaged on cyber security to ensure a safe and reliable energy system. Collaboration and joint action in these areas contributes to the progress towards a lower carbon energy future.
Natural Resource Science and Risk Mitigation
Innovative and Sustainable Natural Resources Development
Link to Minister’s mandate letter: Develop a Canadian energy strategy with provinces and territories
Link to Government priorities: Environment and Climate Change
Safety and Security
Climate Change Adaptation:
In 2018-19, NRCan’s risk responses and results included:
Hosting two meetings of the plenary body that explored various topics including sustainable finance and enhancing adaptation capacity. NRCan is the secretariat for Canada’s Climate Change Adaptation Platform.
Holding the pilot Climate Change Adaptation Leaders Forum on Finance and Investment in January 2019. The Forum convened 37 senior executives from across the finance and investment community, including three Deputy Ministers and the Deputy Governor of the Bank of Canada, to discuss the role of the private sector in growing a climate-resilient economy and optimizing the opportunities for increasing competitive advantages.
Continuing to lead Canada in Changing Climate: Advancing our Knowledge for Action, the national assessment of how and why Canada’s climate is changing; the impacts of these changes on our communities, environment, and economy; and how we are adapting. In 2018-19, NRCan advanced the drafting and reviewing of all reports in the series, and managed production of the first report: “Canada’s Changing Climate Report”, which was led by Environment and Climate Change Canada.
A working group under the leadership of experts from the Assembly of First Nations and Inuit Tapiriit Kanatami, has drafted provisional guidance on the inclusion of Indigenous knowledge in Canada in a Changing Climate, the national knowledge assessment.
A Collaborative Research Agenda for Enhancing Forest Climate Change Adaptation and Mitigation in Canada was written with a focus on collaboration, integration, and addressing knowledge gaps
Under the Climate Change Adaptation Program, launched in August 2017, continuing to provide guidance to support adaptation in the mining and Canadian electricity sectors and expand the use of natural infrastructure in coastal management. The program currently has 38 cost-shared projects underway.
Under the Building Regional Adaptation Capacity and Expertise (BRACE) Program, supporting regions in developing the expertise and capacity to adapt to climate change impacts.18 contribution agreements have been established so far.
Working with provinces, industry and academia across Canada on the national research initiative “Silv@21”, a 10-year initiative to develop silvicultural solutions for 21st Century challenges linked to climate change, to maintain healthy and productive forests that supply wood fibre to meet growing demand.
Natural Resource Science and Risk Mitigation
Innovative and Sustainable Natural Resources Development
Link to Minister’s mandate letter: Develop a Canadian energy strategy with provinces and territories
Link to Government priorities: Environment and Climate Change
Safety and Security
3. Public confidence
Risk
Risk response strategy and effectiveness
Link to the department’s Core Responsibilities
Link to mandate letter commitments and any government wide or departmental priorities (as applicable)
If the public does not have confidence in the federal decision making processes it could impede the advancement of project development and the realization of Canada’s economic and environmental goals
In 2018-19, NRCan’s risk responses and results included:
Strengthening engagement with Indigenous communities on energy infrastructure development through the Clean Energy for Rural and Remote Communities (CERRC) Program and the Impact Canada Indigenous Off-Diesel Initiative. In the first intake, 53 renewable energy and capacity building projects were selected to support reduced reliance on diesel fuel, 40 were from Indigenous proponents, and 28 will be led by the communities themselves. Funding for these projects are part of the Government’s commitment to creating good middle-class jobs and building a clean growth economy in partnership with Indigenous communities, all while helping Canada reach its climate change goals. The Indigenous Off-Diesel Initiative, co-developed with Indigenous Clean Energy Social Enterprise (ICE SE) and the Pembina Institute and in consultation with Indigenous stakeholders, was launched in February 2019. The initiative helps remote indigenous communities transition off diesel by supporting the development of ambitious community-led clean energy plans.
Supporting the government effort in the creation of the Canadian Energy Regulator (CER) to replace the National Energy Board. The new CER will be built on modern effective governance, more inclusive engagement, greater Indigenous participation, stronger safety and environmental protection, and more timely project decisions that enhance certainty for industry. On June 21, 2019, the Bill received Royal Assent and came into force on August 28, 2019.
As we modernize and digitize our energy systems there continues to be a need to increase the safety and security of critical energy infrastructure, particularly in the face of new and emerging cyber threats. The 2018 National Cyber Security Strategy, implemented a suite of initiatives, including: consolidation of federal cyber security operations into a new Canadian Centre for Cyber Security; establishment of a National Cybercrime Coordination Unit; programs to enhance public awareness, skills development, and cyber certification; and, the exploration of legislative options to encourage strong cyber security practices. NRCan will continue to advance initiatives related to protecting critical energy infrastructure (e.g., electric grids, nuclear power plants, pipelines, banks, telecommunication systems) from threats due to accidents, natural hazards, espionage and sabotage as the federal lead for the Energy and Utilities sector.
Through Generation Energy, Canadians outlined a vision for a prosperous and inclusive low-carbon energy future built on affordable, clean, secure, and resilient energy production, distribution, and consumption systems. The Government will build on the Generation Energy Council report, engage provinces and territories to accelerate clean growth strategies and enhance the energy sector’s competitiveness.
Engaging with Indigenous communities to address issues and priorities related to energy infrastructure development through the interdepartmental Strategic Partnerships Initiative – West Coast Energy contribution program, and the Indigenous Advisory and Monitoring Committees(IAMCs) and Economic Pathways Partnership pilot for the Trans Mountain Expansion (TMX) and Line 3 Replacement projects. The initiatives operate outside of regulatory processes and enable ongoing relationship building to understand and address the concerns of Indigenous communities. The IAMCs have also provided advice to government with respect to energy infrastructure development
For projects being assessed during the review of environmental assessment processes, continuing to implement the interim principles which specify that:
decisions will be based on science, traditional knowledge of Indigenous peoples and other relevant evidence;
the views of the public and affected communities will be sought and considered; and,
Indigenous Peoples will be meaningfully consulted, and where appropriate, impacts on their rights and interests will be accommodated.
For example, as Crown Consultation lead, NRCan expanded Crown consultations for the Manitoba-Minnesota Transmission Line and Trans-Mountain Pipeline Expansion projects and provided Indigenous groups with additional funding to support their participation in these consultations. Both processes also involved online questionnaires for Canadians to share their views.
Funding to advance research and accessible science, thus contributing new knowledge and long-term data to inform decision-making regarding Canada’s natural resources. This includes new funding committed in Budget 2018 to support open data and science to better understand and address cumulative effects associated with resource development. The Government of Canada has committed funds in Budget 2019 to create a modern and independent energy information system through establishment of the Canadian Centre for Energy Information.
Innovative and Sustainable Natural Resources Development
Globally Competitive Natural Resource Sectors
Link to Minister’s mandate letter: Develop a Canadian energy strategy with provinces and territories
