Finance Committee on Nov. 3rd, 2011

[Travis Toews]

I think that's an excellent question.

As we enter into, and we are in fact involved in, some very critical trade negotiations right now, part of those negotiations relate to technical barriers to trade that exist. We can use the EU as an example, as they currently don't accept the carcass wash programs, food safety interventions we have in this country that are critical to maintaining consumer confidence and food safety.

Research in those areas is critical to establishing baseline measures around food safety. Secondly, that research is essential in order to advocate our methodology to other countries that may put up roadblocks, non-tariff trade roadblocks, to our product.

[Mark Adler, Conservative, York Centre, ON]

Okay, thank you.

Mr. Collyer, I find what you do fascinating, for the whole industry and how important it is for Canada and all the spin-off jobs it creates for our economy.

I want to talk to you about the Keystone Pipeline. How important is that for your industry?

[David Collyer]

The very short answer is that it is important for our industry. Access to markets is fundamental to growing oil and gas production, and access to the U.S. market is a key part of that. It's not the only option, but it is the preferred option.

Obviously the market has spoken. We believe that if you look at the merits of the case, there is a very, very strong case for approval of that project, and we are optimistic that it will go forward. If it doesn't, we'll look at other options; the market will be creative about developing other options.

But the short answer to your question is that it's a very important project for Canada's oil and gas industry, specifically the oil sands industry.

[Mark Adler, Conservative, York Centre, ON]

Okay, and that would help with job creation—not that you need it in Alberta—and all of the economic spin-offs that would occur as a result of construction of the pipeline?

[David Collyer]

Yes, absolutely, in both Canada and the U.S., and I would emphasize that job creation is not just about jobs in Alberta, it's about jobs throughout Canada.

[Mark Adler, Conservative, York Centre, ON]

Right across Canada, that's right.

[David Collyer]

Absolutely.

[Mark Adler, Conservative, York Centre, ON]

So I would suspect that my friends across the floor would support the Keystone Pipeline.

We have an overabundance of natural gas, and our Minister of Natural Resources recently said those words. I know it was interesting to the industry that he focused in the speech on that.

I'm interested in the difference between the U.S. shale gas and ours. Can you explain the difference, please?

[David Collyer]

From a technical standpoint, there really is no fundamental difference.

[The Chair, Conservative, James Rajotte]

Thirty seconds.

[David Collyer]

There's a lot of similarity between the shale gas opportunity in the U.S. and in Canada. The issue we've got is competitiveness in Canada. I highlighted the fact that there are some differences in tax treatment. That's an issue from our perspective, and we're asking that the committee address it.

Second, we've got a competitive issue in terms of distance to markets. The solution to that is to try to grow the Canadian market, the use of natural gas in transportation, more use of natural gas in power generation, and the export market from the west coast. A lot of our proposal is about making sure we sustain the help of the industry in the near term while we develop those alternative market opportunities. And keep in mind that natural gas is, we believe, a very important part of getting to a lower-carbon energy future in Canada.

[The Chair, Conservative, James Rajotte]

Okay, thank you.

Thank you, Mr. Adler.

Monsieur Mai.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

I'll share my time with Monsieur Giguère.

Very quickly, the Cement Association of Canada totally agrees with investing in infrastructure. It's an investment, it's not spending. My riding is Brossard—La Prairie, where the Champlain Bridge comes in, so I'm sure you appreciate my position.

For CANARIE Inc., since we've been talking about investing in infrastructure, I know the investment we make has ripple effects and it helps the economy. Can you explain very quickly how you can help?

[Jim Roche]

There are three ways we have a direct impact on the Canadian economy. One is through the investments that are made in CANARIE. We buy services and products in Canada. The second is the spin-off effects of the benefits of the research we support in the CANARIE network. We talked earlier about the commercialization of research. CANARIE is a fundamental tool in the commmercialization of that research. The third way we can directly support the Canadian economy is by helping Canadian companies be more competitive internationally, both by having better research and better access to that research, as well as by providing them with competitive advantage by leveraging the network itself.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Thank you very much.

I'll share my time with Mr. Giguère.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Thank you very much, Mr. Chair. My question is for the Canadian Association of Petroleum Producers.

For a few years now, we've seen that the oil industry is exporting oil and importing gasoline. The closing of the Shell refinery in Montreal confirms this trend. From now on, Quebeckers are going to get their refined gas from New York.

As an economic model, only Iran does that. I don't think that the Iranian model is particularly efficient.

Could you explain to me how we can build an industrial economy by exporting our raw materials completely unprocessed and importing processed materials at great cost?

[David Collyer]

The short answer to that question is that I think there are many other countries that have the same economic model we do, and that's frankly a reliance on the market forces to make the best decision about the optimization and allocation of resources. We export where it makes economic sense to do so. We import where it makes economic sense to do so. Where the economics or the market justifies investment in Canada, upgrading for example, we do an awful lot of it. But the market is driving those choices, and it's driving the lowest cost to the consumer.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

You've put your finger on the sore spot. It's actually the market that decides.

Nevertheless, Canadian consumers pay the price. It's probably in their interest for their consumption to bring them a return in economic terms. In the case of Montreal, the loss of 500 jobs in a refinery didn't help bring prices down, but rather enabled a company to maximize its profits in its New York refinery.

The market is not the free market, but rather the market you decide it is. It's not the Canadian market according to its benefits for Canada; it's benefits rather according to your international investments.

Canada may be entitled...

[The Chair, Conservative, James Rajotte]

Mr. Giguère, unfortunately there's another vote.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Could you explain to us...

[The Chair, Conservative, James Rajotte]

I need unanimous consent from the committee to continue once the bells start. We do have a second panel, which is supposed to start at 11:30. I just need guidance from the committee.

Mr. Julian.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

I think we'd all agree to extend. The problem is we can't extend past 1 p.m. I would suggest we move to the next panel presentation so they can get their presentations in and we'll at least have half an hour for questions for them.

[The Chair, Conservative, James Rajotte]

Okay.

Ms. Glover.

[Shelly Glover, Conservative, Saint Boniface, MB]

So far we're still five minutes short of time. We'd like to finish the round if we could because I have to clarify some things. The next panel is coming, and it's unfortunate we have this, but I have important questions to clarify some of the things Mr. Julian said that were inaccurate and misleading.

[The Chair, Conservative, James Rajotte]

Okay.

I need unanimous of all the members to carry on the committee, and I have two views as to what should happen. So I don't have unanimous consent then?