Discussion · Private Members' Business
Christine Normandin Bloc Québécois
“I want the House to send this bill to committee. Giving companies a tax credit to capture and reuse waste heat is a good idea. But the bill has flaws. It might leave out projects that use the heat directly, it could let companies double up on credits, and rich oil and gas companies might not need the money. We need a committee to study these problems and fix them.”
“Madam Speaker, it is a pleasure to rise to speak to Bill C-269. My colleague from Côte-Nord—Kawawachikamach—Nitassinan previously indicated where the Bloc Québécois stands on this bill. As she already said, although it is clear that the bill does need some improvement and some clarification, the idea behind it is fundamentally good, especially in a context where the goal is to reduce our carbon footprint as much as possible and produce increasingly cleaner energy. The bill’s sponsor, the member for Calgary Centre, actually talked about that in his speech. Given that this is what we are striving for, studying Bill C‑269 would be worthwhile, so it should be referred to committee. Although the bill is not perfect, we do believe that it can at least be improved. We think it makes sense to work on it, and we hope to hear from experts and witnesses who will be able to shed further light on its substance. The Bloc Québécois agrees in principle with the bill. We will vote in favour of it at second reading. Unfortunately, we have already heard the Liberals say that, although they agree with the rationale behind the technology and its use, they believe the bill is far too broad. They are concerned it may overlap with other tax credits. They believe it is not sufficiently cohesive. It is a bit of a shame that this is the reason they are refusing to refer the bill to committee, where any imperfections and kinks it may contain could be worked out. The bill is sponsored by the Conservative member for Calgary Centre, who mentioned that it was drafted with the help of Kanin Energy and Janice Tran, who certainly has a stake in seeing the bill passed, since the company provides consulting services and develops projects in the field of heat recovery and energy efficiency. While there is certainly an economic interest, it also appears that experts supported the drafting of the bill. We support this initiative in part because Quebec already has measures in place to promote heat recovery and reuse. For example, Hydro-Québec offers financial assistance programs to help businesses adopt heat recovery technologies in their buildings. According to reports, in some cases, up to 85% of the heat that is usually lost can be recovered through the use of appropriate technologies. There are several forms of heat recovery, including water-loop systems and recovery of heat from chillers. We know that chillers are widely used in the growing number of data centres that are being built. Heat can be recovered using plate heat exchangers, cassette heat exchangers or heat wheels. There are numerous technologies available. A number of heat recovery projects have already been developed in Quebec. Take, for example, Les Fraises de l’île d’Orléans, a farm that captures and uses waste heat from the QScale data centre in Lévis. I mentioned data centres earlier. In the Eastern Townships, the Humano District project has a data processing centre directly on site so that it can use the waste heat to heat its buildings, preventing the emission of nearly 400 tonnes of CO2 equivalent per year. In this case, two companies with similar needs and outputs teamed up. There is also the Zibi development, which is located not far from here, right next to the Kruger plant. We know that, in the winter, Kruger meets the heating needs of the people living in the Zibi development. The waste heat is used for residential heating. There are a lot of agricultural projects across Quebec, particularly greenhouses. Serres Toundra in Saint‑Félicien, the Demers greenhouses in Drummondville and Serres Sagami in Saguenay all use waste heat to heat their facilities. There are a lot of projects out there, but that brings me to my first question: Would this type of project, where the heat is used for purposes other than the generation of energy, be covered by Bill C-269? Clause 10 of Bill C-269 defines “qualifying heat recovery equipment” as: ...equipment acquired by a taxable Canadian corporation after December 31, 2025 — other than equipment whose primary function is the generation of energy — used all or substantially all to recover heat produced by industrial processes and to convert it in order to generate energy... The “convert it in order to generate energy” part is important because, as I understand it, a project that directly uses the heat produced would not be eligible. This raises another question. December 31, 2025, is the date from which projects would begin to be eligible. This measure is intended to encourage businesses to purchase equipment that converts heat. However, when a deduction is granted retroactively, is it really an incentive? That is the question. After all, tax credits represent money that the government is forgoing. We want to ensure that this is an effective measure that incentivizes businesses to make the switch, rather than simply covering expenses that have already been incurred. However, the issue raised by the Liberals regarding the targeted nature of the measure is also interesting. Does this measure duplicate other existing tax credits? I would like to float an idea I had. Could a business that purchases heat recovery equipment combine this measure with other existing tax credits and potentially see its bill reduced by more than 30%, or even 50%, 60%, 70% or 80%? Perhaps their purchase could turn out to be practically free if the tax credits are combined incorrectly. Are all projects equal? That is an important question. If the goal is to replace the electricity generated by a nuclear or thermal power plant, then that seems worthwhile. However, if a company is allowed to generate its own electricity to replace the power produced by hydroelectricity, the environmental benefit is not the same. Is there a clear statement of what this tax credit is intended to achieve? After reading the bill, I do not believe there is. There is no system for comparing the environmental benefit of these measures, and we have to expect that not all projects will be equal. In addition, as we know, oil and gas companies are already receiving numerous subsidies and tax credits while posting record profits. Is the tax credit primarily aimed at them? It is a valid question. They are making far less effort than businesses in other sectors to offset their greenhouse gas emissions, yet they would once again receive a tax credit most of them do not financially need. Would this not create an imbalance among the businesses that could qualify for the tax credit, both in terms of effectiveness and in terms of the need to financially support businesses in transitioning to cleaner, more environmentally friendly energy sources? We hope to get answers and clarification on all these questions at committee. That is why we support passing the bill at second reading so it can be referred to a committee for further study. Witnesses will then be able to provide their views, particularly on the importance of ensuring that such measures serve as genuine incentives and target the right businesses and outcomes, so that the revenue forgone by the government translates into meaningful environmental benefits. I would add to that another aspect that goes a bit beyond the bill but is still worth considering. We know that direct subsidies are generally easier to trace. Usually, any direct subsidy that a business receives has to be proactively disclosed. When the government grants a business a subsidy, that information is public. However, the same does not apply to tax credits, which are generally included in a business’ tax return, which is confidential. This makes it difficult to determine, after the fact, who received the equivalent of what amount and which types of businesses these measures reached. That is true of all tax credits, including this one. That is one more reservation I would add to the list I just mentioned.”
Madam Speaker, it is a pleasure to rise to speak to Bill C-269. My colleague from Côte-Nord—Kawawachikamach—Nitassinan previously indicated where the Bloc Québécois stands on this bill. As she already said, although it is clear that the bill does need some improvement and some clarification, the idea behind it is fundamentally good, especially in a context where the goal is to reduce our carbon footprint as much as possible and produce increasingly cleaner energy. The bill’s sponsor, the member for Calgary Centre, actually talked about that in his speech. Given that this is what we are striving for, studying Bill C‑269 would be worthwhile, so it should be referred to committee. Although the bill is not perfect, we do believe that it can at least be improved. We think it makes sense to work on it, and we hope to hear from experts and witnesses who will be able to shed further light on its substance. The Bloc Québécois agrees in principle with the bill. We will vote in favour of it at second reading. Unfortunately, we have already heard the Liberals say that, although they agree with the rationale behind the technology and its use, they believe the bill is far too broad. They are concerned it may overlap with other tax credits. They believe it is not sufficiently cohesive. It is a bit of a shame that this is the reason they are refusing to refer the bill to committee, where any imperfections and kinks it may contain could be worked out. The bill is sponsored by the Conservative member for Calgary Centre, who mentioned that it was drafted with the help of Kanin Energy and Janice Tran, who certainly has a stake in seeing the bill passed, since the company provides consulting services and develops projects in the field of heat recovery and energy efficiency. While there is certainly an economic interest, it also appears that experts supported the drafting of the bill. We support this initiative in part because Quebec already has measures in place to promote heat recovery and reuse. For example, Hydro-Québec offers financial assistance programs to help businesses adopt heat recovery technologies in their buildings. According to reports, in some cases, up to 85% of the heat that is usually lost can be recovered through the use of appropriate technologies. There are several forms of heat recovery, including water-loop systems and recovery of heat from chillers. We know that chillers are widely used in the growing number of data centres that are being built. Heat can be recovered using plate heat exchangers, cassette heat exchangers or heat wheels. There are numerous technologies available. A number of heat recovery projects have already been developed in Quebec. Take, for example, Les Fraises de l’île d’Orléans, a farm that captures and uses waste heat from the QScale data centre in Lévis. I mentioned data centres earlier. In the Eastern Townships, the Humano District project has a data processing centre directly on site so that it can use the waste heat to heat its buildings, preventing the emission of nearly 400 tonnes of CO2 equivalent per year. In this case, two companies with similar needs and outputs teamed up. There is also the Zibi development, which is located not far from here, right next to the Kruger plant. We know that, in the winter, Kruger meets the heating needs of the people living in the Zibi development. The waste heat is used for residential heating. There are a lot of agricultural projects across Quebec, particularly greenhouses. Serres Toundra in Saint‑Félicien, the Demers greenhouses in Drummondville and Serres Sagami in Saguenay all use waste heat to heat their facilities. There are a lot of projects out there, but that brings me to my first question: Would this type of project, where the heat is used for purposes other than the generation of energy, be covered by Bill C-269? Clause 10 of Bill C-269 defines “qualifying heat recovery equipment” as: ...equipment acquired by a taxable Canadian corporation after December 31, 2025 — other than equipment whose primary function is the generation of energy — used all or substantially all to recover heat produced by industrial processes and to convert it in order to generate energy... The “convert it in order to generate energy” part is important because, as I understand it, a project that directly uses the heat produced would not be eligible. This raises another question. December 31, 2025, is the date from which projects would begin to be eligible. This measure is intended to encourage businesses to purchase equipment that converts heat. However, when a deduction is granted retroactively, is it really an incentive? That is the question. After all, tax credits represent money that the government is forgoing. We want to ensure that this is an effective measure that incentivizes businesses to make the switch, rather than simply covering expenses that have already been incurred. However, the issue raised by the Liberals regarding the targeted nature of the measure is also interesting. Does this measure duplicate other existing tax credits? I would like to float an idea I had. Could a business that purchases heat recovery equipment combine this measure with other existing tax credits and potentially see its bill reduced by more than 30%, or even 50%, 60%, 70% or 80%? Perhaps their purchase could turn out to be practically free if the tax credits are combined incorrectly. Are all projects equal? That is an important question. If the goal is to replace the electricity generated by a nuclear or thermal power plant, then that seems worthwhile. However, if a company is allowed to generate its own electricity to replace the power produced by hydroelectricity, the environmental benefit is not the same. Is there a clear statement of what this tax credit is intended to achieve? After reading the bill, I do not believe there is. There is no system for comparing the environmental benefit of these measures, and we have to expect that not all projects will be equal. In addition, as we know, oil and gas companies are already receiving numerous subsidies and tax credits while posting record profits. Is the tax credit primarily aimed at them? It is a valid question. They are making far less effort than businesses in other sectors to offset their greenhouse gas emissions, yet they would once again receive a tax credit most of them do not financially need. Would this not create an imbalance among the businesses that could qualify for the tax credit, both in terms of effectiveness and in terms of the need to financially support businesses in transitioning to cleaner, more environmentally friendly energy sources? We hope to get answers and clarification on all these questions at committee. That is why we support passing the bill at second reading so it can be referred to a committee for further study. Witnesses will then be able to provide their views, particularly on the importance of ensuring that such measures serve as genuine incentives and target the right businesses and outcomes, so that the revenue forgone by the government translates into meaningful environmental benefits. I would add to that another aspect that goes a bit beyond the bill but is still worth considering. We know that direct subsidies are generally easier to trace. Usually, any direct subsidy that a business receives has to be proactively disclosed. When the government grants a business a subsidy, that information is public. However, the same does not apply to tax credits, which are generally included in a business’ tax return, which is confidential. This makes it difficult to determine, after the fact, who received the equivalent of what amount and which types of businesses these measures reached. That is true of all tax credits, including this one. That is one more reservation I would add to the list I just mentioned.