Economic Relationship between Canada and the United States Committee on March 4th, 2021

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

Mr. Hoback, I know that Minister Ng will be appearing in front of you. I'd probably best leave those questions to her to answer. But we are heading in the same direction. There is a tremendous amount of opportunity. A lot of our companies have had, I think it's fair to say, a very difficult time as we've increased our standards in order to make them more competitive for a day that we knew would come. The rest of the world is increasing their standards in order to lower emissions. Now that the Americans are on board, I think you're going to see a big switch in the market.

The market is drawn towards stability and security and certainty. Where we can provide those things, I think by working together with the Americans, that's what we want to do. We want to draw more investment into lowering emissions. We'll need private capital in order to be able to do that. In other areas where we may be able to generate energy without necessarily increasing emissions, like in renewables, which I know is a particular passion of Secretary Granholm, that requires investment. You want to create investor certainty.

[Randy Hoback, Conservative, Prince Albert, SK]

Okay. Now, in the—

[The Chair, Liberal, Raj Saini]

Mr. Hoback, thank you. Time's up.

[Randy Hoback, Conservative, Prince Albert, SK]

I tried to squeeze in the half-hour.

[The Chair, Liberal, Raj Saini]

The next question goes to Mrs. Romanado.

You have five minutes, please.

[Sherry Romanado, Liberal, Longueuil—Charles-LeMoyne, QC]

Thank you very much, Mr. Chair.

Welcome, Minister. It's a pleasure to see you again.

I just have to say that I agree that the Canada-U.S. relationship is like no other. Of course, I'd be remiss if I didn't highlight the people of Gander and how they hosted thousands of stranded passengers after 9/11. I think that clearly demonstrates that relationship. I have to bring that up, of course.

I want to follow up on some of my colleagues' questions. There was an article in La Presse, back on February 13, titled

“The pipeline that Quebec forgot.”

They talk a lot about Line 5. It's almost as if Quebeckers don't realize the importance of Line 5...and that in 2015 the reversal with Line 9B to get crude to Quebec refineries. In the article, the journalist mentions that in the event Line 5 were to close down:

“And if it is decommissioned, Quebec will resume purchasing its supplies from abroad.”

He also goes on to say the following:

“In Montreal, Suncor should reactivate the old oil pipeline from Maine. Trucks and trains could do the rest of the work.”

You alluded a little bit to this—the impact of the closure of Line 5. Is it possible that we will end up having to import oil from other countries rather than getting it from Alberta and Saskatchewan because of that closure? We want to rely on our own oil and gas industry. Is is also possible that we will have a lot more oil and gas being transported by rail? You mentioned Lac-Mégantic, which is still very much in Quebec's footprint, in our minds and our hearts.

Could you perhaps elaborate on whether it is, in fact, a possibility that the closure of Line 5 will have a major impact not only in terms of the safety of transport of oil but also in terms of where we get our oil?

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

There are contingency plans that are created, but it is very important for me to say that I am very confident in the continued operation of Line 5. The continued operation of Line 5 is non-negotiable.

If you look at what the impact could be were it not operational, which is why the stakes are high, I would make the argument that product would get to market, but it is how it would get to market.... It would be by truck, with a jammed-up Highway 401. It would be by rail and possibly by ship as well. It would get to market. It would not be anywhere nearly as safe as Line 5 has proven to be over many decades. That has stood the test of time.

It's also important to mention, too, that Enbridge is looking at significant investments of around $100 million in order to make sure that, at the Straits of Mackinac, the pipeline is deeper beneath the lake-bed and is encased in concrete, to make sure that nothing happens in the Great Lakes.

It has been proven over the course of time by the U.S. Government's transportation department. It has an agency that looks after these things—hazardous materials and shipments. It has rendered it safe. Everybody has rendered it safe, and the permitting for the improvement to Line 5 continues. That permitting is by the State of Michigan.

I am very hopeful...more than that. I shouldn't say “hopeful”. Hope has nothing to do with it. I am confident that the state and Enbridge are going to come to an agreement. I feel even more confident with the recent court decision to make sure that they have a mediator and that the mediator is chosen within the month.

[The Chair, Liberal, Raj Saini]

Ms. Romanado, you have 20 seconds.

[Sherry Romanado, Liberal, Longueuil—Charles-LeMoyne, QC]

Very quickly, I know that you won't negotiate in public and I don't expect you to, but I know that you've been having those conversations with your counterpart, as you've mentioned, the secretary of state for energy.

I'm looking at the time, and unfortunately you're not going to be able to answer, but please continue having those talks. We hope you're very successful in mitigating this.

[The Chair, Liberal, Raj Saini]

Thank you, Ms. Romanado.

Mr. Savard-Tremblay, you have two and a half minutes.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you, Mr. Chair.

Mr. O'Regan told us that he would speak quickly with Joe Biden's energy representative, as soon as she was in place, to urge her to support maintaining Enbridge's Line 5. I would like to know if that has been done. If so, what was the approach? If not, what will it be?

What is the government's strategy for Michigan representatives?

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

Yes, I did. I spoke with her yesterday morning in the first international call she made, which is in keeping with what all of the President's cabinet ministers have been doing, and which is a refreshing change.

I should mention that I had a very good relationship with her predecessor, Dan Brouillette, through some fairly turbulent times last year. I checked just a few moments ago, and Brent oil is sitting at $66 right now, and Western Canadian Select is at $52. It was at negative $35 this time 11 months ago. Through some troublesome times last year, turbulent times for our energy sectors, he was a very steady hand at the wheel and had a clear understanding of how integrated our markets are.

To Secretary Granholm's credit, as the governor of Michigan, she also had a very clear eye on how integrated our markets are, and not just in energy, pipelines, hydro power, propane and Line 5. I should also mention that she was a very steady hand at the wheel during the recession of 2008-09, which, you will recall, hit our automotive sectors on both sides of the border quite dramatically. She was the governor of Michigan at the time and is keenly aware of how many times an auto part crosses our border—and a car, as it's built—and of the importance of making sure that we get our border strategy correct. It is within that frame of mind that she views Line 5, and therefore I am very confident that she wants a constructive relationship.

[The Chair, Liberal, Raj Saini]

Monsieur Tremblay, you have 30 seconds.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

If I understand correctly, the dialogue is now well under way.

We know that the citizens of Michigan have a very real environmental concern. Do you think the governor's fears are completely unfounded?

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

No, I do not. This is a safe pipeline. It has always been a safe pipeline. The owner is taking further measures to make sure that it has continued safe operation. It has served hundreds of thousands of people very well—millions of people, I should say—not only in Canada but also in the United States.

[The Chair, Liberal, Raj Saini]

Thank you, Monsieur Savard-Tremblay.

Mr. Blaikie, you have two and a half minutes.

Go ahead, please.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much.

Canada's refining capacity has decreased drastically over the last 20 or 30 years. It seems to me, at a time when we need to be looking at reducing our carbon emissions, that rather than emphasizing the rip-and-ship model, we should be looking at how we create more employment and more value out of the oil and gas we do extract.

Keystone XL is not a model for that. The Trans Mountain pipeline expansion is not a model for that. What is your government's strategy for ensuring that more of the value-added work in the oil and gas industry happens in Canada rather than continuing the trend of taking more out of the ground and sending it elsewhere to be refined and upgraded?

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

There are two very important things that came out of last year. One is our clean fuels strategy. It is very interesting—our refineries within Canada are going to have to retool in order to meet that standard, and the Americans are already on it. There are American refiners that are already retooling their processes in order to produce products that meet the new Canadian clean fuels standard.

That's the thing about the Americans: They can—

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

So how does that create more jobs in Canada? How does that create more value-added jobs in the oil and gas sector in Canada?

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

Well, watch this space, because I think we're very keen to make sure we provide domestic supply within our own country as we meet the new clean fuels standard.

The other point I was going to make was on hydrogen.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

We know that you've invested in the rip-and-ship model by buying the Trans Ex pipeline and committing to expanding it. What investments have you made in value-added work in Canada?

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

We have $1.5 billion dedicated towards clean fuels and hydrogen.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Does that mean having new refining and upgrading capacity in Canada?

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

Well, it could very well, yes. That's exactly what we're looking at for hydrogen.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

It could, but you don't know. There's no plan on the books for that.