Natural Resources committee  Thank you, Mr. Chairman. Let me extend my sympathies and condolences as well in respect to Mr. Brown. I grew up in Leeds-Grenville, so had a chance to meet Mr. Brown, and I know the riding well. The riding loses a great representative. Thank you for the opportunity to appear before you today.

Natural Resources committee  Thank you, Mr. Chairman. Mr. Chairman, and members of the committee, I'd be happy to come forward on another occasion also should that be preferable for the sake of oral testimony and questions. Thank you for the opportunity to provide remarks today related to your study on the future of Canada's oil and gas, mining and nuclear sectors.

Finance committee  That's exactly right. In the first instance, it's fairness, as my colleague indicated, with other fuel manufacturing sectors within the country. But ultimately, then, it's a competitive issue. I mean, what is happening on the back of affordable natural gas in the United States?

Finance committee  Yes. It puts money in the hands of the residential consumers, it frees up capital for commercial operations to increase employment, and it attracts investment when industry is looking at where to place its next plant. We're going to place our next plant where input costs are lower.

Finance committee  But that's an investment that won't otherwise occur.

Finance committee  It's the reason you do it. So a $42-million tax, in our estimate, for our projects would generate a billion dollars in revenue—

Finance committee  —which would generate HST revenue amongst other sources of revenue which would more than offset, which is where we come, I'm assuming, in the numbers on the upstream side as well.

Finance committee  I guess the question is, are they budget asks or not? Certainly, on ACCA, we have a specific ask. It's very specific. In terms of the reallocation of infrastructure money, that's not a new money ask, that's a reallocation ask. We do have a specific ask around transportation that I haven't spoken about today in terms of potential federal support to offset the differential in cost of natural gas for heavy-duty vehicles.

Finance committee  I work for the gas industry. We're interested in selling natural gas. We're interested in maintaining a relationship with our customers that includes using that gas as efficiently and effectively as possible. That means we're looking at all kinds of new technology applications for reduced use on a per capita basis, for renewable natural gas, for partnering with renewable technologies, and other things.

Finance committee  You're obviously having to balance a variety of public policy objectives when you're looking at the allocation of infrastructure money. One of those objectives is the return to the taxpayer. In the case of communities where it is currently not economic under the economic formula that a regulator sets for utilities to extend natural gas infrastructure to those communities, that's where the federal government can see merit in stepping in.

Finance committee  I wanted to respond to that because our numbers are different, but the formula would apply. We were looking at the differential for the investment for small LNG facilities. The tax loss is in the order....You're right, you are forgoing charging a tax to a potential taxpayer.

Finance committee  Just to add, I'd say that in principle we do agree that the labour issues are not the same in the downstream side of the oil and gas sector as they are in the upstream side. We are not a significant employer in our own right. The economic benefit we deliver on employment is through delivering affordable energy to others who can then hire.

Finance committee  Again our focus is on smaller LNG facilities, those that would be operated by utilities similar to the peak shaving plants that are in operation today. I can leave it to my colleague from CAPP to talk about their facilities. Our proposal is to change the rate to make it consistent with that for other manufactured goods sectors, the argument being that in effect LNG is a manufactured good.

Finance committee  You do it carefully, and it can be done. In the case of Nova Scotia, Heritage Gas is doing it. They have a franchise agreement in place in the province and they're working on that right now. There are all kinds of specific examples whereby, in the case that the economic formula that is used by any regulator does not work, it is possible to engage other partners in government—federal, provincial, or municipal—or industrial consumers to assist in the effort to build out that system.

Finance committee  Red Lake mayor Phil Vinet said in 2012, “Thanks to FedNor's support, this project is a win-win situation. We're seeing cost savings for local businesses, new jobs being created, plus new opportunities for businesses throughout the region.” The mayor also noted that natural gas could reduce the cost of living for residents and help reduce energy costs for about 180 businesses.