That's right.
Evidence of meeting #22 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 sands.
A recording is available from Parliament.
Evidence of meeting #22 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 sands.
A recording is available from Parliament.
9:50 a.m.
Vice-President, Montreal Refinery, Refining and Marketing, Suncor Energy Inc.
That's right.
9:50 a.m.
Conservative
Joan Crockatt Conservative Calgary Centre, AB
What do you expect will happen if you get these two pipelines through?
9:50 a.m.
Vice-President, Montreal Refinery, Refining and Marketing, Suncor Energy Inc.
What these pipelines have in common is they allow us to use the supply from the west. There is a difference in pricing between the western crude versus the Atlantic Baffin crude. Up until now we've been unable to access that differential, so we're at a disadvantage with our competition because it's a global market. Anybody in Montreal and the area can bring some finished product, but those products being made with a cheaper crude won't allow us to be on the same playing field. The fact that we'll now have access to the crude from the west will allow us to be competitive. This will make it possible for us to maintain these jobs for a long time, we hope.
9:50 a.m.
Conservative
Joan Crockatt Conservative Calgary Centre, AB
Can you tell me how you think that will actually impact people on the ground in Quebec, the average person, if this east-west pipeline goes through, if Line 9 is completed in its reversal?
9:50 a.m.
Vice-President, Montreal Refinery, Refining and Marketing, Suncor Energy Inc.
If we have access to that cheaper oil, it means again that the future will be brighter, and we'll be able to operate, and all these jobs that we're talking about, all the professionals and the consultants that we use, the engineering firms, the companies around us, will still be able to benefit from our activities.
9:50 a.m.
Conservative
Joan Crockatt Conservative Calgary Centre, AB
So you see a resurgence in the community. What do you envision will be the benefit of the pipeline?
9:50 a.m.
Vice-President, Montreal Refinery, Refining and Marketing, Suncor Energy Inc.
What I see is that we'll be able to actually maintain and preserve what we have. Also we might see this triggering some new investment in the future, not only for our refinery, but also for the other plants that are attached to us.
9:50 a.m.
Conservative
Joan Crockatt Conservative Calgary Centre, AB
Ms. Kennedy, I wonder if you could talk for a minute about the work that you have done with aboriginals. I think all of us are concerned and want to make sure that aboriginals have an opportunity in the job market. I understand that the energy industry has been a very big player in that. Could you tell us exactly what you're doing there, please?
9:50 a.m.
Vice-President, Government Relations, Business Services, Suncor Energy Inc.
Yes. I'll speak particularly to northeastern Alberta.
Since our operations started in 1967, we've taken a very proactive approach, we think, along with Syncrude. I have to give Syncrude credit on the leadership there. They were the first company in the region to look very seriously at including the aboriginal people in their economic benefits. We followed suit shortly thereafter, and think we've done some things very well in that region. Of our employees, 4% are aboriginal and they are in a variety of roles. That's very good, but needs to be better, of course.
We think it's important to have a targeted approach to hiring aboriginal people. To do that, some of our areas of success really rest with some of our previous use of the ASETS program, and currently programs like Women Building Futures and some collaboration with Keyano College, to ensure aboriginal people actually have the skills when they arrive. That's often a combination of life skills and employment skills, having a power engineering ticket or the pre-hiring for heavy equipment, as well as some of the life skills that need to go along with that. We're very active in that program, for sure.
I think, as a company, we're very interested in the new first nations education act, and what that might mean both for our company and for our region. We think that's a very important step in improving both the quality of the high school graduates and the number of them. We're very interested in that as a company.
Last, in terms of aboriginal business development, one of the things we've learned along the way is it is very important to listen to a community's priorities. That is how we've ended up with business incubators both in Fort McKay and near Calgary at Tsuu T'ina reserve. The communities wanted to be very entrepreneurial, so we actually support that. Whether or not those businesses actually end up doing business with us is a different question, but we support it anyway. We also have—
9:55 a.m.
Conservative
The Chair Conservative Leon Benoit
Excuse me. I'm going to have to cut your answer off there. You've given a lot of good information.
Thank you, Ms. Crockatt.
We go now to Mr. Trost.
9:55 a.m.
Conservative
Bradley Trost Conservative Saskatoon—Humboldt, SK
I'm going to start with Mr. Watkins.
Instead of giving you a positive scenario, I'm going to give you a horror scenario. What happens if a new national energy program comes back and as happened in the 1980s the western Canadian oil patch is wiped out? Extremist environmentalists take over, they get to....
What would that do to your industry? You said one-third has to deal with oil and gas, that resource. What would then happen to the steel plants in Ontario, Regina, and across the country?
9:55 a.m.
President, Canadian Steel Producers Association
I must admit I haven't actually done the scenario analysis on that one.
Seriously, the....
9:55 a.m.
Conservative
9:55 a.m.
President, Canadian Steel Producers Association
No, I understand, so, let me try to answer that in a couple of different ways.
The steel plants outside western Canada would be affected, because that is not the only part of their business but a growing part of their business. Why that also matters is that steel plants aren't infinitely scalable. If you took away that segment of demand and you were left with two-thirds of what you were already broadly supplying, it doesn't make it easy to do that. There would be an impact on overall enterprise—
9:55 a.m.
Conservative
Bradley Trost Conservative Saskatoon—Humboldt, SK
By losing one-third of your customers, we could end up losing more than one-third of the steel industry.
9:55 a.m.
President, Canadian Steel Producers Association
Potentially, but it would vary by producer. We have some producers very focused on other segments, but others who are almost exclusively focused on oil and gas.
9:55 a.m.
Conservative
Bradley Trost Conservative Saskatoon—Humboldt, SK
One of the unseen benefits of the oil and gas industry is it also makes it possible to have steel producers in Canada supplying other industries.
9:55 a.m.
President, Canadian Steel Producers Association
Certainly, because the steel business is one which has capital intent, so it's a volume-based business.
9:55 a.m.
Conservative
Bradley Trost Conservative Saskatoon—Humboldt, SK
Mr. Mallay, you were talking about the possibility of an upgrader in the Sarnia area. As the business people in your area are looking at this, are they working on the assumption that there will be some form of government subsidy for it or other government action that would make it possible, or are they looking at this strictly from a market-based perspective?
9:55 a.m.
General Manager, Sarnia-Lambton Economic Partnership
I think, ideally, it would be best if it could be done with a market-based approach. There has been some discussion of a government subsidy. What needs to happen is there has to be a private sector champion found, and someone has to put some significant money into doing a proper feasibility study.
Five years ago, I worked with Shell Canada in assembling 6,000 acres of land for a 250,000 barrel per day refinery. That project did not go ahead. I think if it had gone ahead, it would have been a profitable project for Shell, based on comments I've heard since. So, I think there is a significant opportunity. Only 100 kilometres from us is an oil refinery in Michigan, which just became operational at the end of 2013, that is taking western Canadian crude. We believe we can be more competitive than that in terms of the assets we have in our location, and the ability to take oil now.
9:55 a.m.
Conservative
Bradley Trost Conservative Saskatoon—Humboldt, SK
I'll go to Dr. Leach.
Using that as a basis, you were pointing out earlier about how more intensive processing doesn't exactly mean more economic benefits. It often could be more of a transfer of benefits from one source to another. But when you listen to Mr. Mallay's responses, there's possibly no government interference.
In situations like that, are those areas where more value-added could be put into the Canadian economy? It may not be a question of if value-added works, but where it works based on market determinants.
9:55 a.m.
Associate Professor, Author, Alberta School of Business, University of Alberta, As an Individual
I think absolutely we are all in favour of value-added. The key differentiation I make is between more value-added versus more processing. If you look across sectors of the Canadian economy, there was a study last week from the University of Calgary, a Trevor Tombe study, that highlighted where the value-added is in the sector. It's in extraction.
But your point is well taken. If there is an opportunity for a market-based non-subsidized refinery upgrader, etc., that isn't dependent on artificially discounted crude, then yes absolutely there is no reason to oppose that.
9:55 a.m.
Conservative
Bradley Trost Conservative Saskatoon—Humboldt, SK
So benefits are most widely and efficiently dispersed if the government does not involve itself in the industry.
10 a.m.
Associate Professor, Author, Alberta School of Business, University of Alberta, As an Individual
In the sense of involving themselves in incenting processing, I think I'd be careful to draw that line. Economists are really clear that there is a role for government to correct market failures, in particular environmental ones.
10 a.m.
Conservative
The Chair Conservative Leon Benoit
Thank you, Mr. Trost.
We go now to Ms. Moor,e for up to five minutes please.