Evidence of meeting #39 for Natural Resources in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was alberta.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Gil McGowan  President, Alberta Federation of Labour
  • Mimi Fortier  Director General, Northern Oil and Gas, Department of Indian Affairs and Northern Development
  • Michel Chenier  Director, Policy and Research, Northern Oil and Gas Branch, Department of Indian Affairs and Northern Development

9:20 a.m.

Conservative

The Chair Leon Benoit

Mr. Calkins, you're out of time.

9:20 a.m.

Conservative

Blaine Calkins Wetaskiwin, AB

Mr. Chairman, he hasn't answered my question. My question was about royalties.

9:20 a.m.

President, Alberta Federation of Labour

Gil McGowan

I'm happy to answer the question, Mr. Chairman.

9:20 a.m.

Conservative

The Chair Leon Benoit

You can try to tie it in later.

Thank you, Mr. McGowan.

I'll go to Mr. Julian for up to seven minutes.

9:20 a.m.

NDP

Peter Julian Burnaby—New Westminster, BC

Thank you very much, Mr. Chair.

Thanks to all our witnesses, and particular thanks to Mr. McGowan for coming in, because I know it was 6:30 Alberta time when you actually came to provide testimony to us. We appreciate you being here and we appreciate the clarity of what you've been telling us.

I know, because I'm often in Alberta, that the issue of temporary foreign workers is increasingly one Albertans are concerned about. These workers are not subject to the same rights that Canadians are. They're not allowed to bring their families or establish that kind of contribution to Canada they would like to make. They're brought in and then they're shipped right out, kind of like the rip it and ship it you're talking about for raw resources.

Can you give us an indication as to what extent it is a growing problem? Do you have numbers? The government seems reluctant to release the real numbers of temporary foreign workers working in the oil and gas industry in Alberta.

9:20 a.m.

President, Alberta Federation of Labour

Gil McGowan

The latest numbers we have are from the federal government. They only release numbers on an annual basis at the end of the year, so keep in mind that the numbers are a little bit old. As it stands right now, there are about 65,000 temporary foreign workers in the province. The majority of them are working in low-level service jobs for very low wages. They're the most easily exploited group of workers.

There are about 20,000 working in the oil sands and in construction. Those numbers are set to rise. In fact, just a couple of days ago I was talking to a project manager for a big construction firm, and he was saying that right now his company alone has about 2,200 temporary foreign workers working in the skilled trades.

As a result of the accelerated process for LMO approvals that was just introduced by the federal government about a week and a half ago, this guy is in the process of filling out paperwork for a dramatic increase in the number of skilled trades they're bringing in under the program. Just in his division of his construction company he envisions the number of temporary foreign workers jumping from about 2,200 to between 3,500 and 4,000 in the next year. That's for just one company. So we're on the cusp of what I think is a dramatic jump in the number of temporary foreign workers in Alberta, in general, but especially in the skilled trades.

From our perspective, that's what the new announcements on the temporary foreign worker program are all about. They're about paving the way for employers in the oil sands and related construction companies to get access to more temporary foreign workers, and very significantly also at a cheaper rate, because they say they can pay them as much as 15% less than the going rate for Canadian workers.

9:20 a.m.

NDP

Peter Julian Burnaby—New Westminster, BC

Thank you very much, Mr. McGowan.

I would like to move on. I certainly know that the views you've expressed are shared by a lot of Albertans. I was knocking on doors in a number of sectors in the Edmonton region, and the issues of the loss of jobs because we're not adding value to the production of our resources and the loss in royalties came up repeatedly.

On value-added production, I'd like to ask you how many jobs will be lost between the present percentage of bitumen that's upgraded in Alberta compared to what the anticipated level will be—the number of lost jobs you see there.

Secondly, let's compare Alberta to a place like Norway, with a social democratic government and the same level of production over the same amount of time. I understand the Alberta heritage fund has $17 billion. The Norwegians put away $583 billion over that same period. I'm wondering what you think the Conservative government in Alberta did with the missing $566 billion. They weren't able to save it up in the responsible way that most Albertans certainly would like to see.

Those are my two questions: the loss of jobs, and what happened in Alberta, if other countries like Norway have been able to solidly establish a firm financial foundation for the future.

9:25 a.m.

Conservative

The Chair Leon Benoit

Go ahead, Mr. McGowan.

9:25 a.m.

President, Alberta Federation of Labour

Gil McGowan

The loss of potential jobs in upgrading and refining is truly staggering. We've hired economists to make estimates and projections, and just in the case of the proposed Keystone XL pipeline, which would take raw bitumen from the oil sands directly to refineries on the American gulf coast, we've estimated if that same volume of bitumen were instead upgraded and refined in Alberta, it would create between 30,000 and 50,000 direct and indirect jobs.

To look at it another way, I think it's useful to look at some of the value-added projects we have in Alberta already to see how many jobs they create. The one that comes most quickly to mind in my case is Suncor, which is unionized from top to bottom, and their members are members of our federation. Suncor in Fort McMurray alone employs about 5,000 people; about 3,000 of those people work directly in the upgrader. So if you build a mine without an upgrader or if you build in situ projects that are for export only, then you're missing out on 3,000 high-paying, family-sustaining, community-sustaining jobs, in the case of Suncor.

So when we talk about increasing the amount of bitumen going down pipelines to the U.S. and China, we're talking about whole communities, and it's not just the people who work directly in the refineries and upgraders. Each of those facilities, because they're major industrial projects, generate literally thousands of jobs in maintenance and construction every year, and thousands of spinoff jobs for suppliers and contractors that support those facilities. If you don't have the facilities, you don't have the operations jobs, you don't have the maintenance jobs, and you don't have the spinoffs. So the economic loss to Alberta and to Canada is staggering.

On the subject of royalties, I know people like Mr. Calkins like to dismiss arguments and like to suggest that the only reason that companies are investing in Alberta and in the oil sands is that we're giving away the resource. The reality is that these oil companies are coming to Alberta because they can make money. They're coming to Alberta because the price of oil is high and because the reserves are drying up all around the world and Alberta is one of the few areas in the world where there are reserves that can be developed in a profitable way. So whether we charge a small royalty, a medium-size royalty, even a large royalty, these companies would come, because we have what they want. We have what the world wants, and our government is simply giving it away without even trying to bargain.

One of the points I want to underline, as I'm not sure I made it clear in my presentation—

9:25 a.m.

Conservative

The Chair Leon Benoit

Thank you, Mr. McGowan. Time is up.

Mr. McGuinty, up to seven minutes, please.

May 10th, 2012 / 9:25 a.m.

Liberal

David McGuinty Ottawa South, ON

Thank you, Mr. Chair.

Thank you very much for being here, Monsieur Chenier, Madame Fortier, and Mr. McGowan.

I don't think a lot of the rhetoric going on on all sides is particularly helpful for Canadians who are trying to find out the best way to proceed.

Madame Fortier, in the report the board released last December entitled “Review of Offshore Drilling in the Canadian Arctic”, which you cited it in your brief, I assume from that report there's been a take-up of a number of the issues that are reflected in the 17 research projects under way with BREA, the Beaufort regional environmental assessment, including the recurring issues on environmental assessments, and you go on to talk about cumulative effects and oil spill preparedness.

There's a general consensus that the Conservative government rushed through a certain number of these licences several years ago. At the time, I asked a lot of probative questions about the state of technology in terms of boom systems, containment systems, for example, in the event of a potential spill in the Beaufort.

Does the technology exist now to contain a spill in the Beaufort, given the volatility of those waters? Can you point to an existing technology for Canadians to have some sense of being able to deal with an accident there?

9:30 a.m.

Conservative

The Chair Leon Benoit

Go ahead, Ms. Fortier.

9:30 a.m.

Director General, Northern Oil and Gas, Department of Indian Affairs and Northern Development

Mimi Fortier

I'll try to answer that question, but on a very high-level basis, because clearly a regulatory oversight body could give you better clarity in terms of that. Under BREA, for instance, it's the National Energy Board officer who is leading and chairing the working group looking at oil spill and emergency response.

A great deal of research on ice-infested waters and ice-covered waters has gone on over decades. You can look to many reports. The most recent report I saw only yesterday, and I haven't read it through. There's a joint industry program, and the American Petroleum Institute has laid out all of the research and studies and investigations that have gone on over the years.

Ultimately, I think you'll see that the NEB is going to require that response plans have a contingency of various types of techniques to deal with a spill, because there are going to be variables that change daily. You're going to have to look at being able to switch among in situ burning, dispersants, skimming, and recovery in those sorts of conditions. In some instances, many experts will say that ice containment actually facilitates recovery because it captures the spilled oil.

It's not a “one size fits all”. There are a variety of techniques. Obviously, in some situations it is more challenging than it is in the open seas, but clearly all of those techniques that you would use, for instance, in the Gulf of Mexico you would also use in the north, in the Beaufort, for instance.

9:30 a.m.

Liberal

David McGuinty Ottawa South, ON

Do you have anything you can send to this committee to summarize or to give some definitive evidence, given that, as you say, there are a myriad of responses, depending on the conditions of the day, the conditions of the spill. We're talking here about belugas. We're talking here about polar bear habitat. We're talking about some of the last remaining pristine coastlines in the world. Do you have a summary you can send us? We don't need to get into the details, but is there an evidentiary summary you can provide to this committee to tell us that Canadians should be satisfied that there is enough technology?

9:30 a.m.

Conservative

The Chair Leon Benoit

Mr. Chenier, go ahead.