Evidence of meeting #19 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 companies.
A recording is available from Parliament.
10:15 a.m.
Conservative
10:15 a.m.
Chair of the Board of Directors, Enterprise Saint John
I have just a quick one on the natural gas. More and more we're hearing from our industrial partners that we need cheap natural gas to be competitive. The bottlenecks that exist today in the distribution system in the States have driven costs to astronomical levels this year. Having our own natural gas available for our industries is necessary to remain competitive. Industry tells us that time and time again.
10:15 a.m.
Conservative
The Chair Conservative Leon Benoit
Thank you.
Thank you, Mrs. Block.
We go now to Ms. Moore for up to five minutes. Go ahead, please.
10:20 a.m.
NDP
Christine Moore NDP Abitibi—Témiscamingue, QC
Thank you.
Mr. Norton, a project suddenly getting the go-ahead could mean a significant increase in the number of jobs available, so much so that local workers might not be able to fill them all. As the mayor, how would you be able to accommodate a major influx of people from other provinces as well as immigrants? In fact, depending on how many jobs were created, there might not be enough workers in the entire country to meet the demand.
These people usually come from a different background and have different needs. In most cases, the worker can speak the language, but not necessarily their spouse or family. How would you deal with that kind of situation?
Ms. Duncan would like to ask another question. I'll turn the floor over to her after we hear from you.
10:20 a.m.
Mayor, City of Saint John
Thank you, Mr. Chairman.
Another excellent challenge we would love to face is that kind of increase. What you're talking about is an opportunity for us to start planning for that right now. For example, the west-east pipeline is expected to be in production in 2018, so we have between now and 2018 to have that planning phase. We can work with all levels of government so that if we have a huge expansion of our existing refinery, for example, we can plan how that is going to work out.
I mentioned the unemployment rate. There is already a significant gap between the unemployment rate in New Brunswick, in Atlantic Canada generally, and in the rest of the country. There are many thousands more unemployed per capita in New Brunswick than there are any place in the rest of Canada, and it's always been that way. It's just historically how it's been, in part, I suppose because we haven't had those same opportunities. We know the workforce is there. We know the bodies are there. The training is vital, and we would certainly welcome the opportunity to pull back some of the folks from western Canada.
We know that New Brunswickers will come home. Even if they're not getting paid quite the same amount, they'll come back to New Brunswick, and we'll leave it to the Alberta-based places to make sure that maybe they have to hire some more.
In terms of the immigration side, Saint John, in particular, is a very welcoming place for immigrants. We have a number of immigrant resettlement programs and English as a second language programs. We have a university that participates in that, and our YMCA does that. So it's the kind of community that is already welcoming. We have a significant Korean population and Chinese population. We have folks from all over the globe calling Saint John home, and we'd welcome more immediately.
10:20 a.m.
Conservative
10:20 a.m.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
I'm not sure who would like to answer this, maybe Mr. Teed or Ms. Pike. The reason why the bitumen is being shipped, we're told by the producers of the bitumen, is because it's not affordable to upgrade. So can you tell us how it is that they're going to be financing the upgrading in New Brunswick?
10:20 a.m.
Chair of the Board of Directors, Enterprise Saint John
That's a good question for Ms. Pike.
10:20 a.m.
Chief Executive Officer, Maritimes Energy Association
Not quite because we're the supply chain in.... But basically the refinery, as I understand it—and maybe Mr. Teed or the mayor can talk about this more with the Irving oil refinery—will be able to add some additives in order to process that. But again, as has been mentioned, the ability also to have that crude oil in Saint John arriving there and then the potential for other industries will provide for us opportunities sitting as Saint John is right on...it has one of the best ports. In western Canada they don't have the capacity and the refinery and neither do they have the access to the large port. It makes a lot of other things affordable.
10:20 a.m.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
To clarify quickly, I'm talking about upgrading not refining. What's being shipped is raw bitumen, which has to be upgraded and then refined. So my question is who is going to be financing the upgrading before the refining?
10:20 a.m.
Chief Executive Officer, Maritimes Energy Association
It's my understanding that is being built into the plan by Irving Oil.
10:25 a.m.
Conservative
The Chair Conservative Leon Benoit
Thank you, Ms. Duncan.
We'll go now to Ms. Crockatt for up to five minutes followed by Mr. Trost.
10:25 a.m.
Conservative
Joan Crockatt Conservative Calgary Centre, AB
If I might be allowed just to address the question that was asked by my honourable colleague across, bitumen is an upgraded product. It is already upgraded at the source in what some people call a refinery and others call an upgrader. But that is essentially what you have. They have refineries that are already there ready to go. It's not economical to build new ones. It is economical to add on to existing ones. My understanding is, as well, that there's a very large area of land that's available already for expansion.
Maybe you could just talk to that briefly, Mr. Norton.
10:25 a.m.
Mayor, City of Saint John
Thank you.
Our new municipal plan just allocated a significant portion of east Saint John as a super heavy industry area and it's specifically zoned to accommodate significant expansion of existing refinery capacity. We know, also, that the economics of building on to that are significantly more favourable in Atlantic Canada where we can bring large components in for the upgrader or cokers or expansion to the refinery by sea water versus overland to inland provinces like Alberta. In addition, there's already some capacity to deal with raw bitumen from the oil sands in Saint John presently.
10:25 a.m.
Conservative
Joan Crockatt Conservative Calgary Centre, AB
I'm going to go to Mr. Patterson because I think we've focused largely on New Brunswick and I appreciate that there are lots of things happening there.
But I would love to hear you, Mr. Patterson.
Did you grow up in Newfoundland?
10:25 a.m.
President and Chief Executive Officer, Virtual Marine Technology Inc.
Thank you. It's a strange question. No, I'm a Saskatchewan boy. I grew up in Moose Jaw and I moved to Newfoundland after high school.
10:25 a.m.
President and Chief Executive Officer, Virtual Marine Technology Inc.
So I'm from Newfoundland and Saskatchewan pre- and post-boom
10:25 a.m.
Conservative
Joan Crockatt Conservative Calgary Centre, AB
So you've seen Newfoundland pre-boom and afterwards. Can you tell us about why you moved to Newfoundland, because this is a reverse story, I think, to New Brunswick? Why did you move to Newfoundland and what have you seen as a direct result of the development of the oil and gas sector in Newfoundland in terms of the impact on people there?
10:25 a.m.
President and Chief Executive Officer, Virtual Marine Technology Inc.
Basically, I left home right after high school to join the Coast Guard, so that's why I came out east. Basically I stayed because I stayed with the marine industry.
I was here in the early 1990s when the fisheries collapsed and I think what I saw was the lowest point in any part of Canada I've ever been to as far as the mood of the people is concerned. A lot of people had to retrain. They had to move into different industries. A lot of them had to get on airplanes and leave. The price of houses, all that stuff, went right down through the floor. There were potholes in the streets, everything you could think of. The mood in Newfoundland was very dark.
I think if you fast-forward to early 2000s when Hibernia came on stream.... It came on stream before that, but just as Husky SeaRose came on stream, what you saw was a real sense of optimism come into Newfoundland. I think we saw people start to migrate back to the province, especially people with oil and gas expertise. I think with the investments coming through the Atlantic accord in high tech—when we had nothing we had to develop an entrepreneurial spirit—basically the R and D investments added fuel to that burnt little ember and I think what you're seeing now is that Newfoundlanders are very export-focused, very entrepreneurial in spirit, and very much of the sense that this is an opportunity that we can't let pass by and we have to move ahead with.
10:25 a.m.
Conservative
Joan Crockatt Conservative Calgary Centre, AB
Maybe you can just develop that further because you've moved into a high-tech sector. I was captivated by your comment. I think it was that there's been.... Maybe you can tell me what the statistic is. How much investment has there been in the high-tech sector in Newfoundland as a result of oil and gas, the spinoff of that industry?
10:25 a.m.
President and Chief Executive Officer, Virtual Marine Technology Inc.
The number that the oil companies report up to 2011 was $205 million. That was their direct investment. Just to give you an idea, in 2011 it was $70 million in that particular year, so their investment is ramping up. It's based on the production and price of oil. On that investment, there has been significant co-investments by both federal and provincial funding sources, ACOA's AIF being an example. I would say that has almost reached $1 billion of investment in high-tech R and D over roughly a 10-year period.
You can imagine what impact that has in the development of micro-companies that are very locally focused to regional players. Some of us have now broken into the export markets, and when we do so, we more than triple our revenues. So that's the flywheel that we see. We prove ourselves locally, and we work for some of the hardest customers on earth. Exxon Mobil is not an easy customer to deal with, but if we can satisfy their needs, we can meet the needs of anyone, anywhere.