Evidence of meeting #18 for Natural Resources in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was construction.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Christopher Smillie  Senior Advisor, Government Relations and Public Affairs, Building and Construction Trades Department, AFL-CIO
Peter Boag  President and Chief Executive Officer, Canadian Fuels Association
Roland LeFort  President, Local 707A, Unifor
Trevor Harrison  Professor and Director, Parkland Institute, University of Lethbridge, As an Individual

10:20 a.m.

Conservative

The Chair Conservative Leon Benoit

I'm sorry, Mr. Trost, but your time is up.

We go now to Mr. Julian for up to five minutes, followed by Mr. Calkins.

Go ahead, Mr. Julian.

10:20 a.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

Thank you very much.

Coming back to a comment you made, Mr. Harrison, about the leaking out, the preponderance of foreign-owned companies working in the oil sands, I certainly saw this first-hand in Calgary when the government rubber-stamped the CNOOC takeover of Nexen. There was a lot of concern expressed by Calgarians. I went to that community three or four times and met with people in the oil and gas sector and, of course, outside the sector in organizations that had benefited from Nexen's support. This takeover that was rubber-stamped I think provides a compelling narrative that references your concern around the leaking out.

The Alberta Federation of Labour also testified, even though it's a provincial jurisdiction, about the low level of royalties that Alberta currently receives for its resource: less than even a third world country such as Angola. We also had testimony earlier this week about the lack of a sovereign wealth fund. Countries such as Norway have built up a very robust ongoing support so that the sustainability that Mr. LeFort referred to.... Because they've built up over time a robust sovereign wealth fund, the sustainability of the country, the long-term prosperity, is guaranteed.

Can you comment on the leaking out, on the fact that there's a series of largely federal government decisions that have been profoundly irresponsible and mean that Albertans and Canadians as a whole don't benefit to the same extent we could if we had wise policies in place that would allow us to stop the leaking out and ensure that the benefits of the resources are actually shared by Albertans and Canadians?

10:25 a.m.

Professor and Director, Parkland Institute, University of Lethbridge, As an Individual

Trevor Harrison

Yes, certainly.

In its entire history, one of the things that Canada has tried to do is position itself as an independent country, but that's very difficult on the North American continent, obviously. There's always been a concern here: are we just simply a kind of branch plant, particularly of the United States? So I think that for a lot of people, one of the concerns in terms of oil and gas.... As I said, 71% of our companies in Canada are foreign-owned and mainly American-based, so that provides a huge amount of political and economic control over what kind of economy we're actually going to have, as well as political effects.

You mentioned the Norway fund. The Norway fund actually started based on the Alberta heritage fund model, which Peter Lougheed had come up with, but started 20 years after Lougheed began the one in Alberta. As a comparison, the current Alberta heritage fund has I think about $14 billion in it. It has been static for years. At the last count I saw, I think Norway's sovereign fund had about $770 billion. Because they have control over it, they put the money into an investment fund, but they invest outside the country. One of the effects of that is that they're able to actually control inflation. As I said before, one thing that eats away at the real wages of people in Alberta is the fact that inflation is constantly there.

This all comes down to political control and using a resource to develop your society and your country in the way that at you want to do it. There is no doubt that oil, which was the most important commodity in some sense in the 20th century, is going to continue to be very important in the 21st, perhaps rivalled only by water, but we are going to be seeing changes here. There are real pressures in terms of innovations and technological changes.

Some people are even talking about a post-carbon future. If that is going to be the case, what we need to do is think of how to actually get, from the current resource, the capacity for Albertans and for Canadians as a whole to move ourselves responsibly into the future, and to use this incredible resource we have in a way that will be sustainable for generations to come and not just simply hop on the train right now because it's a great ride.

10:25 a.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

Thank you.

Mr. LeFort, I'd like to ask you the same question. You raised concern around the pace of development, but also how this current federal government structures resource development so that Canadians get a far lower percentage return, both in terms of value-added jobs—you've spoken of that—and also in terms of government revenues.

Why does Canada fare so poorly compared to other countries worldwide?

10:25 a.m.

Conservative

The Chair Conservative Leon Benoit

Unfortunately, Mr. LeFort, you won't have time for an answer. Mr. Julian's time is up.

We go now to Mr. Calkins, followed by Mr. Leef.

March 6th, 2014 / 10:25 a.m.

Conservative

Blaine Calkins Conservative Wetaskiwin, AB

Thank you, Chair. I'm going to try to get my questions out before the stampede of Albertans leaving for Angola happens.

I just want to talk a bit more to Mr. Smillie. We talked about the education aspect of things, and I noticed you referenced places like NAIT and SAIT in Alberta. I used to be a faculty member at Red Deer College. I taught computing systems technology there for a number of years. The entire program component of Red Deer College from when I started in 2000 has completely changed. The trades component of Red Deer College has been absolutely booming. It can't get enough instructors, because the instructors have to come out of the trades themselves in order to teach, so that's an ongoing issue they've had there. So many resources at that college have been repurposed to make changes in their delivery system, and they still can't keep up.

Albertans still can't keep up with the demand for skilled workers. I'm grateful for the 80,000 or so people from across Canada who come to Alberta and are now coming to Saskatchewan and so on. I'm hopeful that Atlantic Canada does have the opportunity to utilize its resources. It's only going to make things even more competitive across Canada, and it's only going to improve conditions for workers, and so on.

But I want to talk about this education thing. In one of my communities, named Breton, where people actually work in the oil field and live where the oil is extracted, a group of concerned people—even the members of the school board, local teachers, and so on—are trying to use the flexibility within the Alberta curriculum to prepare people leaving high school to go right into the oil and gas sector because they know that's where the future lies for them.

Could you elaborate on what your organization might do insofar as partnering with these colleges and technical institutes, whether it's the Alberta teachers or whatever the case might be, dealing with the provincial government to focus the curriculum and prep people for this?

10:30 a.m.

Senior Advisor, Government Relations and Public Affairs, Building and Construction Trades Department, AFL-CIO

Christopher Smillie

We work in partnership with the community colleges and the technical institutes across Canada. We sort of take turns offering the curriculum. Sometimes they don't offer third-year welding and so we would deliver that curriculum at that time, or if industry is really demanding it, we will deliver it. I like your example from Breton where they're talking to high school students. I spoke to a group of students not that long ago here in Ottawa from the Ottawa tech school. It has gone from enrolment of, I think it was 3,000, down to under 500, over the course of its evolution. So the training institutes and the colleges are important, but we need to get to the kids before that. We need to do what your folks in your riding are doing, talk to the high school students.

In Oakville where I grew up, there wasn't even shop class in my high school. So provincial governments need to understand—and I would argue particularly Ontario, being the country's largest province in terms of population—and need to refocus on looking at technical training at the high school level and streaming people to move them through.

Next week, Minister Kenney is going—I hope I'm not releasing secrets—to Germany and the U.K. to start to study some of the apprenticeship systems overseas, and we've been invited to go along, to look at what they're doing in Germany and to look to bring that model back to Canada.

So we need to talk to them earlier and we need to talk to them more often.

10:30 a.m.

Conservative

Blaine Calkins Conservative Wetaskiwin, AB

Perfect. Are you aware of any studies about the cost of actually training somebody?

Let's face it: a tradesperson gets on-the-job training coupled with the apprenticeship steps that go in there. There are costs for the taxpayer of producing a plumber and so on, because we have a very generous publicly funded post-secondary education system in Canada, and those graduates get remuneration. Based on the investment in those particular people versus people who might get a university degree or something like that and what their remuneration is, are you aware of any information along that line?

10:30 a.m.

Senior Advisor, Government Relations and Public Affairs, Building and Construction Trades Department, AFL-CIO

Christopher Smillie

Frankly, if someone is in an apprenticeship program, the government isn't putting any money into that training. It's all privately done by that individual. They're going and paying for their technical training, or the building trades are paying for their technical training, or industry is paying for that.

I'm not aware of studies that have looked at return on investment, but all construction training is basically borne by the private sector. There is hardly any government funding at all in terms of training a workforce. We'd like to let you know that we'd like to change that. We'd like to move to a system that has more of a shared cost. I'm sure some of Mr. Boag's members would agree. At the end of the day—

10:30 a.m.

Conservative

Blaine Calkins Conservative Wetaskiwin, AB

The instructors at Red Deer College are going to say they're paid by the college, right?

10:30 a.m.

Conservative

The Chair Conservative Leon Benoit

Mr. Calkins, time is up.

10:30 a.m.

Senior Advisor, Government Relations and Public Affairs, Building and Construction Trades Department, AFL-CIO

Christopher Smillie

Yes, that's fair.

10:30 a.m.

Conservative

The Chair Conservative Leon Benoit

Your time is up. Thank you.

We go now to Mr. Leef for up to five minutes.

10:30 a.m.

Conservative

Ryan Leef Conservative Yukon, YT

Thank you, Mr. Chair.

Welcome to the committee, Mr. Smillie. I'm repeating that again.

I'm going to build on something Mr. Calkins was asking a little while ago in terms of training. We've made some investments in the Red Seal program to elevate the status to being equivalent to the university or college-based recognition programs. We're seeing that across the north. I'm from the Yukon. Yukon College is doing a lot of work around the Centre for Northern Innovation in Mining. A lot of the workers there are realizing that there are opportunities in Fort McMurray and in Northern British Columbia. I know it's been said that when you're flying in a plane now, you're likely sitting beside someone in the trades going to find work. We certainly see that in the Yukon.

We've touched on it a bit, but how adaptable is the workforce in terms of getting that training at those colleges and then being able to deploy that across a wide spectrum of jobs? How important is that to an economy that can, not necessarily boom or bust as we've heard it described, but certainly fluctuate at times, in which there are highs and lows. Sometimes those are seasonal highs and lows or monthly highs and lows and not necessarily decades of highs and lows. Could you maybe touch on a little bit of that?

10:35 a.m.

Senior Advisor, Government Relations and Public Affairs, Building and Construction Trades Department, AFL-CIO

Christopher Smillie

Sure.

There is a credentialling issue across Canada in construction generally. As you said, we have the Red Seal program. It works. You write your provincial ticket. You have your Ontario ticket. You can challenge the Red Seal, and then you can take that Red Seal and go anywhere in Canada and work.

We promote more trades being put into the Red Seal program to encourage better labour mobility. To answer your question, the workforce in construction is not a “sit at home and wait for the work” workforce. If a member can't get a job where he is in Moncton, he or she has access to our organization across Canada where there might be an opportunity somewhere else. Getting there is a separate issue. Usually it's up to the individual to travel to where that work is. That's a barrier to mobility in our view. We're trying to work on that. Generally, our folks aren't “stay at home” folks. They get on a plane and go to work or they get in the truck or the car and they drive from Hamilton up to the Bruce nuclear facility and they go do their work.

With regard to credentialling, we're ahead of other industries in construction. We've had the Red Seal for 50 years. We're not fighting about credentialling generally. We're actually doing an experience review right now with HRSDC on the Agreement on Internal Trade, specifically on the labour mobility file. We haven't had one issue or one problem with that agreement or with the chapter 7 issues. Those are beyond the scope of this committee.

I would say we are the most mobile workforce there is. The one challenge we do have is the financial constraints of the person who's on employment insurance in New Brunswick who can't afford a plane ticket to get to where the work is if their employer isn't paying for it or if Peter's members, Suncor or the other big companies, aren't paying for that plane ticket.

Financial barriers aside, the workforce is completely mobile always for temporary jobs, and their families always stay home.

10:35 a.m.

Conservative

Ryan Leef Conservative Yukon, YT

It would be interesting to receive information on the value of that mobility in terms of what we could do. There's probably a saying right across Canada similar to what we say in the Yukon: Yukon people for Yukon jobs. Invariably, that expression exists in Atlantic Canada as well as in other regions. There is also some value to mobility.

Could you just touch on that dichotomy of wanting to keep people local, keep them at their homes, and keep them working? Could you also touch on that cross-country benefit of having a mobile workforce and what other industries indirectly benefit from a mobile workforce in our nation?

10:35 a.m.

Senior Advisor, Government Relations and Public Affairs, Building and Construction Trades Department, AFL-CIO

Christopher Smillie

We have pitched for a labour mobility tax credit, a few times. A grant from EI, or a tax break on expenses that people lay out to go to where the work is, was decided in the House of Commons not too long ago. It was Chris Charlton's bill, which was defeated. That was a bit disappointing, in terms of an opportunity to address labour mobility in a way that helps people on their taxes. We're hopeful that Minister Flaherty and the folks at finance will see the value in that. It perhaps wasn't the right pitch, but we're hopeful that the finance department and the government will see that there is value in incenting people to go to where the work is.

We have to do something. At the end of the day, if folks aren't on employment insurance and they're working, then Canada benefits. We need a formalized system to help people move to where the work is if the folks can't afford it, and if Peter's members aren't paying to fly them there.

10:40 a.m.

Conservative

The Chair Conservative Leon Benoit

Thank you.

Thank you, Mr. Leef.

Ms. Duncan, as you see, we've lost the two witnesses who were with us by video conference.

Do you want to go ahead and ask questions of the two witnesses who are here?

10:40 a.m.

NDP

Linda Duncan NDP Edmonton Strathcona, AB

Absolutely. I have some questions for Mr. Boag.

10:40 a.m.

Conservative

The Chair Conservative Leon Benoit

Please go ahead, Ms. Duncan, for up to five minutes.

10:40 a.m.

NDP

Linda Duncan NDP Edmonton Strathcona, AB

Thanks.

I did have questions for the other witnesses, so it's disappointing.

Mr. Boag, I appreciate your testimony.

Several questioners back raised the issue about the access to the feedstock and so forth. I guess it's just common sense that the more you can keep costs down.... For example, in Alberta they allege that coal-fired power is cheap, although we pay a lot for it, because the coal is right beside the plant. Obviously it has been an advantage in Alberta for the chemical processing and refining because they have easy access to the feedstock.

There is another issue when you do the full cost accounting and look at the risk benefit, not even cost benefit. It's the same with transport of hazardous waste. When you are dealing with, for example, building upgraders and refineries, you are going to reduce the risk if there's less transport in the pipelines because you are reducing the risk of pipeline leaks and so forth.

Would it not make sense, since we have the feedstock in Alberta, B.C., and Saskatchewan, to be having some kind of incentive or requirement? For example, the federal government has the power in export. When they are evaluating public benefit or public interest, surely a factor should be that you're going to create jobs here in Canada. Also, it's going to be more cost effective if you develop that refining.

Now I'm not taking away from what's going on in Atlantic Canada, or even Ontario or Quebec. But does it not make economic sense? Because the feedstock is so close at hand and you have the manpower, I don't see these arguments that it's too expensive. They're already investing $100 billion in getting the raw product out.

10:40 a.m.

President and Chief Executive Officer, Canadian Fuels Association

Peter Boag

Mr. Regan asked a similar question on the factors that influence cost, and ultimately profitability and viability of a refinery.

Certainly proximity and access to feedstock is one, but it's not the other. We talked a bit about it. It used to be that close to market was the most important part. It's one of those many factors, but the factors are complex. You run into issues like crude feedstock—the type, access to it, how close they are, the energy requirements, and the access to energy. We talked about the issue of natural gas in Atlantic Canada and the disadvantage, at least to one refinery, of no access to natural gas, which has an impact on their cost. Then you get into all the issues around plant complexity, plant efficiency, plant size, various logistics in transportation issues, and, of course, then there's the regulatory environment.

It's a complex set of variables. I wish it was that simple—

10:40 a.m.

NDP

Linda Duncan NDP Edmonton Strathcona, AB

I wasn't saying it was simple.

10:40 a.m.

President and Chief Executive Officer, Canadian Fuels Association

Peter Boag

—but it's not.

Certainly the Edmonton area refineries enjoy the benefit of a relatively easy access to crude. They also enjoy the benefit of a fairly strong and growing market. In fact, it's the one area of the country where our refineries are consistently operating at or above capacity—

10:40 a.m.

NDP

Linda Duncan NDP Edmonton Strathcona, AB

And there's the petrochemical industry.