Natural Resources Committee on March 25th, 2014

[Céline Bak]

I think it's a terrific question. Thank you very much, Mr. Trost.

The reason why technology companies flow back and forth between different industries is that their investments in R and D are so significant that often they need to be leveraged across value propositions in many different industries. Technology companies in general should be paid as a function of the value they create, and that's what their shareholders expect. I'll give you a couple of examples to support your point.

Hydrogenics is a company that has worked in the hydrogen sector for many years. They provide technology that is often associated with large-scale energy storage in the electricity sector. But you should know that they've recently signed an agreement with Enbridge, and that the Ontario government has recently included storage within natural gas pipelines in its long-term energy plan. Hydrogenics and Enbridge are going to work together to convert natural gas into hydrogen to store in natural gas pipelines so that when peak demand occurs, we can use natural gas, or we can convert that back into natural gas and make that available into the system.

Another example would be Pure Technologies, an Alberta-based company that has for many years worked in water infrastructure. Their technology has enabled hundreds of customers to understand defects within large water pipes. They've now built a new technology to test any possible weaknesses in oil and gas pipelines, so they've moved from perhaps a less hostile environment to a much more hostile pressurized environment, which is oil and gas pipelines. There are many examples of this.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

So it would be safe to say that sometimes in the economy of industry we see the effects of the oil and gas industry, but we don't always recognize them because of the interlinking of the technology and engineering companies that goes back and forth. What may be recorded as something else may be an indirect effect of the oil and gas technology spreading out.

[Céline Bak]

Yes, and I would say and vice versa. The two examples I gave you a moment ago began in other industries and flowed into the oil and gas industry. Obviously Mr. Patterson's company began in the oil and gas industry and has flowed into other industries, so both relationships exist.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

A quick question to the gentlemen from Saint John, whoever wants to take this one.

Energy east pipeline is one of the major things you're emphasizing today. If there are one or two recommendations you could make from your perspective to speed this along—because I get the impression sooner is better as far as you're concerned—what would be the one or two quick recommendations you would make?

[William Teed]

Quickly from my perspective, I think the timetable change that was made under which the National Energy Board has to operate was a huge factor in making the process react much more quickly in getting a response. From the industry all we're hearing are good things with respect to that change.

As to what else is needed, it's beyond my scope to answer. It seems to be moving along at a very good pace, and it seems to be on schedule.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Mayor Norton.

[Mel Norton]

I would echo those comments that the more streamlined the regulatory process the better. We have to have a good regulatory process.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Trost.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

You cut me off seven seconds early, Mr. Chair.

[The Chair, Conservative, Leon Benoit]

Now we have used that seven seconds, haven't we?

Mr. Calkins, go ahead, please.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thanks, Mr. Chair. I know you will be more generous with me.

I want to introduce myself. I'm Blaine Calkins. I'm a member of Parliament from rural Alberta. I represent great, hard-working people there, many of whom work in the oil and gas sector in Alberta. I just want to say thank you as an Albertan for the fact that a large number of Canadians—and rightfully so—come from across Canada to work in Alberta or in Saskatchewan. But I understand full well, Mr. Norton and Mr. Teed, that it would be nice to be able to live where you work.

For the last eight years I have been commuting back and forth to Ottawa, and I understand how that happens, but part of that commute is getting on a flight usually on Thursday nights here in Ottawa—or maybe Toronto, if I happen to be connecting—where I hear from people. I know from their accents they are either francophones, they are Acadians, or they are people from Atlantic Canada getting on the airplane, and they are wearing Firebag jackets or they are wearing Albian jackets. They are wearing whatever they happen to be wearing because of the projects they are working on.

They are wearing those jackets because they are proud of the work they are doing, and they come to where the work actually is, and I have no qualms. I'm going to tell you as an Albertan that I have absolutely no qualms. I am a big proponent of east and west energy corridors in our country, far more so than I am of north and south energy corridors.

I just want to let you know where my head's at on this, and I want to thank both of you for coming here today.

My question for you two gentlemen or anybody who wants to take this question is this. Given the varying changes in employment across the country right now, what further potential is there in your regions, the regions you are operating business in, for further growth? I mean we're bringing people in. We're net importers of workers. If you are able-bodied in Alberta, you can have a job. The most common sign in my riding is “Help Wanted”. I guess my question for you, from a labour force perspective is, how much room for growth is there in overall training in your particular areas?

My question for Ms. Bak is one dealing with intellectual property. We don't deal a lot and we don't talk a lot about intellectual property. It's very complicated and very technical, but I believe the key to a successful society and a successful industry is having the right intellectual property in place to spur innovation, growth, and so on.

You talk about how a lot of these companies trade, how they value, and what they sell. For a lot of companies it's not just the products they sell, it's the actual intellectual property that's the most valuable part of their company.

I wonder if you would talk about investments in intellectual property, the energy sector's investments in intellectual property and its advancements in technology. Would you talk about that side of the industry a little bit?

I'll leave it at that.

I think that will use up all my time, Mr. Chair.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Calkins.

Ms. Bak, maybe you could go ahead and give a short response to Mr. Calkins' question about intellectual property. Then we'll go the Mayor and Mr. Teed, and anyone else who would like to answer, if there is time, of course.

Go ahead, please, Ms. Bak.

[Céline Bak]

There are two things.

Obviously, COSIA is a very important setting for the sharing of intellectual property regarding the oil sands. You are familiar with COSIA.

It's also important to note that smaller companies invest between 8% and 9% of what they spend on R and D to protect their IP. Of the billion dollars a year that is spent to do R and D, between $60 million and $100 million is to protect it. The number of patents for these companies, on average, is about six—that is, jurisdictions for patent protection. That gives you an idea.

I'll turn it over to you.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Bak.

We only have about a minute left in Mr. Calkins' time, so make very brief answers, please.

Mayor, do you want to start?

[Mel Norton]

Thank you, Mr. Chairman.

The simple answer to the question, from a Saint John perspective and especially from a New Brunswick perspective, is that our unemployment rate in New Brunswick—and in Saint John specifically and across Atlantic Canada—is constantly much higher than that in the rest of Canada. The labour force is there, but we have to have the opportunities. Right now, the opportunities in Alberta are pulling some of that labour force, but our unemployment rate is still well above the national average.

[The Chair, Conservative, Leon Benoit]

Thank you.

Mr. Teed, do you have a further response?

[William Teed]

I'm fine.

[The Chair, Conservative, Leon Benoit]

Mr. Patterson or Ms. Pike, does either of you want to add a short answer to Mr. Calkins' question?

Ms. Pike.

[Barbara Pike]

I think it was answered by the mayor. We have a lot of people here who are looking for work. It would be much better if they worked at home. On the other hand, there is a history in Atlantic Canada, particularly generations ago and centuries ago, of going off to the fishery and being away from home for a long period of time. It would be much better if they worked here, but....

[The Chair, Conservative, Leon Benoit]

Thank you.

Mr. Calkins' time is finished.

We go now to Ms. Moore for up to five minutes.

Go ahead, please.

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

Thank you.

Mr. Norton, you are a mayor, and for that reason, I'd like to ask you some questions.

When a natural resources sector is growing quickly, it can put pressure on cities. That's what happened in my region during the mining boom.

How does a city adapt? Demand for housing can exceed supply. Infrastructure also has to satisfy the increased demand. It's quite possible that existing resources can't be adapted to a fast-growing population, and that population increase can give rise to social problems. Housing prices can skyrocket, a situation that hurts families. Workers are brought in, but unfortunately, they can't bring their families with them. So they travel back and forth between where they work and where they are from, all because they cannot find or buy a place where they can live with their families.

As a mayor, how do you adapt to deal with that kind of reality?

[Mel Norton]

Thank you for the question.

Pardon me for not being able to respond completely en français. I would do disservice to your question if I tried to do that.

You are certainly touching on an important point. There are social, environmental, and economic impacts to any rapid expansion of industry or of job creation. That is a reality.

It's a problem we would welcome in Saint John, and New Brunswick would certainly welcome that kind of challenge. Right now, we see in Saint John the willingness, and we've always had this willingness, to embrace big development. The social licence is there. We don't see big development and quality of life as mutually exclusive.

If you were to visit Saint John, you would see that the homes are literally a stone's throw from the refinery. The fact that there may be challenges in the initial phase of having large development could probably be met with the existing housing stock, for example. We have the largest vacancy rate for rental accommodation of any community in Atlantic Canada. The same goes for commercial space. The vacancy rate for commercial space is the largest found in any place in the Maritimes.

So the opportunity is there. We have the geographical space. We know from the unemployment rates that the people are there. We also have the physical space to accommodate it.

Certainly, there would need to be attention from all levels of government working together for the necessary educational programs and the necessary training to accommodate an increase in the workforce of the kind we'd like to see. That is something we need to be doing right now, rather than when these projects happen down the road.

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

Just for our information, what is the average price of a family home in Saint John right now?

[Mel Norton]

I apologize; I don't have the exact average home price. But I can tell you that you can easily buy an average family home, a three-bedroom home, in Saint John for $200,000 or less.

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

Do you anticipate that prices will rise quickly? For example, just 10 years ago, in some parts of my riding, municipal property assessments of single-family homes were $50,000. Since then, the value has tripled, if not quadrupled. And now, all of a sudden, families can no longer afford to buy a home.

Do you expect a rapid increase in the number of jobs to cause a surge in housing prices, a situation that would hurt families?