Thank you very much. Maybe the fact that I'm from New Brunswick will balance the presentation.
Mr. Chairman, ladies and gentlemen members of the committee, I want to thank you for your invitation to speak to you today.
President Obama's arrival in the White House marks a change in the dynamic of energy and environmental relations between Canada and the United States. The coming months will constitute an opportunity that the Canadian government must seize to influence major development trends in public policy on the links between energy and the environment at the North American continental level, so as to ensure that the interests of Canadians are represented and considered.
With your permission, I'll continue my presentation in English. However, I will be pleased to answer your questions in the official language of your choice.
Because of the absence of the requisite transportation infrastructure, the United States offers the only viable export markets for Canadian energy production, a situation that will prevail for many years to come. Access to U.S. markets is critically important for Canada's energy industry.
As you know, the energy independence and energy self-sufficiency rhetoric heard during the recent U.S. presidential election is nothing new. It is an old theme of U.S. energy policy, one that dates back at least to the middle of the previous century. However, it is as illusory now as it was then. The cost of energy self-sufficiency is so high as to make it an unachievable objective for the United States in the foreseeable future.
Since Canada is the most important provider of imported energy to the United States, the situation of mutual dependence thus exists between our two countries. Canadian energy producers need access to U.S. markets, and U.S. consumers need import flows from Canada to enhance the reliability of supply patterns and help keep energy-related costs relatively low.
In this context it would be unwise for the Government of Canada to use energy exports as bargaining chips in policy discussions with the United States. Simply stated, in the absence of viable alternative markets, the costs to Canada of curtailed U.S. energy exports are so high as to make the threats of policy-induced reductions in export flows not credible.
A much more promising approach would be to leverage this mutual dependence to position Canada as a secure source of energy supply for the United States and thus to highlight the possibility of mutually beneficial policy action. The key goal of such an exercise would be to aim for something that is consistent, at least with the spirit, if not the actual letter, of the North American Free Trade Agreement, namely to have Canadian energy production treated no differently from U.S.-based production from a U.S. policy perspective.
And we can go much further. Canada and the United States can act to develop a joint approach to managing the relationship between energy and the environment and thus address one of the greatest policy challenges facing us today. Granted, the development of new technologies aimed at reducing the environmental effects of energy production and use is an important objective, but it must be set in the context of a broader approach to policy, one that leads energy producers and consumers on both sides of the border to make energy-related choices that are more respectful of the environment. This is where a joint Canada-U.S. approach to policy can be quite attractive.
As you know, a key concern of Canadians in the policy debate surrounding climate change has been the possible deleterious effects on Canadian competitiveness that could result from a more aggressive policy approach being adopted in Canada than in the United States, by far our largest trading partner. The development of a joint Canada-U.S. policy approach obviates most, if not all, of this concern. A common policy approach would most likely result in effects on the cost structures of goods and services production that would be quite similar in both countries. Canadian producers would thus not face a policy-induced competitive disadvantage vis-à-vis their U.S. counterparts.
Where Canada and the United States would adopt a joint approach to climate policy, it would also be easier to ensure that all Canadian and U.S. sources of greenhouse gas emissions, including those related to energy production, are treated consistently and similarly in both countries. There would thus be no need to single out specific types of energy production, such as that from Alberta's oil sands, for special treatment. Such a policy approach could be designed to explicitly link the environmental consequences and the treatment extended to different energy sources and to do so in a manner that would be consistent and predictable from a policy perspective.
The time for the Government of Canada to act is now. Efforts need to be made, before U.S. policy directions are firmly established, to ensure that it is possible for the overall policy approach and the design of the specific instruments of implementation to be respectful of Canadian interests.
President Obama has recently signaled his interest in an approach to managing the relationship between energy and the environment that brings together all three NAFTA partners. Canada should be responsive to these stated U.S. interests, despite the challenges created by the fact that the agreement's energy provisions do not apply to Mexico. Despite these differences, Canada and Mexico may still have common interests since both countries produce a lot of heavy crude oil and export much of it to the United States. A common policy approach to managing the environmental consequences of energy production and use that would result in continued non-discriminatory access to U.S. markets could be quite appealing to both Canada and Mexico.
The Government of Canada needs to seize this opportunity to help shape the future of energy policy and of energy environment policy in North America. Now is not the time to threaten non-credible actions, nor is it the time to let others adopt policy approaches that could be damaging to Canadian interests without seeking to influence their decisions. Canadians from coast to coast to coast will best be served by a government that is engaged in the development of energy policy and energy environment policy jointly with our largest trading partner.
Thank you for listening to me so closely.