Finance Committee on Oct. 24th, 2012

[Mark Scholz]

That would be in eastern Canada?

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Yes.

[Mark Scholz]

We do absolutely; in some cases we're paying the Brent price.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Exactly. In fact, we sell our 21.3 million barrels a day at a discount to the United States—actually at a discount between 30% and 40%.

[Mark Scholz]

It's a huge revenue loss for industry and government.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

In fact the revenue loss is about $41 million per day. Would that be about right?

[Mark Scholz]

Well, I'll agree with your calculation in the premise of the statistic that you're showing, but—

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

In fact, yes, it's pretty amazing that we buy oil in eastern Canada for full price and we sell oil to the United States for a 20% to 40% discount.

Do you know why that is?

[Mark Scholz]

I think it's because we have an obvious lack of infrastructure that could supply the various markets in Canada.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

And the Northern Gateway pipeline would solve a big part of that problem, wouldn't it?

[Mark Scholz]

Well, the Northern Gateway pipeline would allow us to get international pricing for our commodities, and that certainly is going to be beneficial to all Canadians.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

So all of a sudden we have $41 million a day more income across this country. That's per day.

You're nodding your head in agreement.

[Mark Scholz]

That's income that we can put into different social programs and other things that run our country.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

And build a lot of schools and hospitals.

[Mark Scholz]

Absolutely.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

In fact, our oil production is going to double over the next 15 years, so we're not just talking about $41 million a day; we're talking about $100 million a day, if we don't do something, because right now they're discounting it 20% to 40%, but when we're doing double the amount of production, they're going to discount it even more, aren't they, because they're in control of the price?

[Mark Scholz]

In particular, if the United States becomes energy sufficient and secure, it certainly is going to be a huge problem for Canadian crude producers.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

If we build this pipeline, we're going to see some real revenue increase, and $18 billion was paid to governments last year in taxes alone by the oil industry.

[Mark Scholz]

At the end of the day, I think diversifying and getting multiple customers for your product just makes sense.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Jean.

I'm going to take the next round as the chair.

I have a quick question, following up on Ms. McLeod's, for Mr. Dayler.

Do you have a view as an organization or as an individual about what per cent generally the student should pay and what per cent generally the general taxpayer should pay? Do you have advice for us on that?

[Zachary Dayler]

I think it's going to vary depending on whom you talk to.

[The Chair, Conservative, James Rajotte]

But do you have a suggestive optimum, such as between...?

[Zachary Dayler]

As much as can be funded should be funded for students, to get them through.

[The Chair, Conservative, James Rajotte]

That is, funded by the general taxpayer? Okay.

I want to follow up on the money and corporations issue. It's a very lively political discussion around this topic, which Mr. Chisholm was raising.

Ms. Amsden, I'm not going to take up my time here today, but if there's anything further on that by way of analysis from your association—or from Ms. Walmsley as well—we'd certainly appreciate it as a committee.

It's a real pleasure to see Precision Drilling in the room. They have a big facility in Nisku, in my area, and it's nice to see the connection between the oil and gas sector and then all the resulting economic spinoff.

I want to follow up briefly on the gas issue. I was at one of Precision's rigs in northeastern B.C. a couple of years ago. Given the reality of gas prices being so low, what kinds of incentives could you do, mainly on the upstream side, to encourage more drilling until that price rises substantially?

On the downstream side, I take your point, and I think Mr. Jean is absolutely right that you could do incentives for vehicle conversion and so on. But what could we do on the upstream side to incent more drilling?

[Mark Scholz]

Those types of questions are the reason why I brought Doug.

Do you want to address that?