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

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

That said, it is known, for example, that the pipeline is protected by the 1977 transit pipelines agreement between the United States and Canada. Correct me if I am wrong.

How do you rate the real chances of this line being shut down?

On the face of it, it seems very unlikely.

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

I am heartened by the fact that there was just a court decision rendered in Michigan that said to the state and to Enbridge that they have a month to find a mediator. That means the process is moving. It is ongoing. I would rather see this resolved yesterday, but I take that as a very hopeful sign that the court is very interested in the parties coming to an agreement of their own accord.

That is our preferred option: that this be done quickly and that it be done by the principals involved, which, again, are Enbridge and the State of Michigan. We're just preparing for any other outcome.

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

If I understood your presentation today correctly, there hasn't really been a study on potential job losses. Nor is it known if there are other sources of supply, although in the case of Quebec, it is thought that there are others and that Suncor and Valero would be able to find others. In addition, there is likely an agreement that makes a shut down highly unlikely. I confess that I am looking for the potential disaster.

I understand that this line is useful, although Michigan's arguments are not entirely without merit. We are obviously sensitive to the risks to waterways, and it is entirely legitimate to take this seriously.

Having said that, I must confess that I do not see how there is any danger in the specific case of Quebec, at this time.

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

Let me be very clear with the honourable member. While I'm not aware of a formal strategy, or a formal impact, that has been done—I'm just being very clear with you—since this most recent development with the State of Michigan, we have a very good handle on what the impact would be, because we know how important Line 5 is now, so we know what the lack of Line 5 would be.

That's why, first and foremost, the most important plan for us is to prevent that shutdown. That's what we're working on every day. It's a full-court press at the political and diplomatic levels. This is an existing and operating pipeline. It does not represent an increase in production. It delivers a much-needed product for the United States, and it has done so for 65 years. It's integral to their energy security, just as it is to ours.

Let me be very clear. The U.S. needs the product. They rely on it. Michigan relies on it to heat its homes. Sixty-five per cent of its propane needs are in the upper peninsula and 55% statewide—from Line 5. It's a lifeline for refineries in Toledo, Ohio, and also for the petrochemical industry in Quebec, for the two refineries that are directed by Line 5 and Line 9, which are in Lévis, just outside Montreal. It's also a lifeline, as I said, for refineries in Ohio and at least two in Toledo. Ohio's would have to close in the event of a shutdown, due to insufficient supply.

This is a product that will still head southbound, but without Line 5, that means it will be on rail, on truck and on ship, all of which are less reliable. With regard to oil by rail and the tragedy of Lac-Mégantic in 2013, it's far less safe.

[The Chair, Liberal, Raj Saini]

Thank you, Mr. Savard-Tremblay.

Mr. Blaikie, you have six minutes, please.

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

Thank you very much.

I think one of the important distinctions for New Democrats between the debate around Line 5 and debates that have been had and are ongoing around the Trans Ex pipeline and Keystone XL is that, first of all, Line 5 is an existing piece of infrastructure. It's not a new build, and it doesn't depend on increasing production per day and the rate of extraction in order to bring economic benefit to Canada.

The other piece, of course, is that Line 5 supports value-added jobs, so that it's not just a question of rip-and-ship or taking raw natural resources and shipping them somewhere else for the value-added work to be done.

Those are important things.

You mentioned in your opening statement how proud you are of the work you did advocating for Keystone XL, which is one of those projects that depends upon an increased rate of extraction in order to be viable.

I'm wondering if you, as the Minister of Natural Resources who is playing an important role in Canada's energy strategy, could share with the committee what Canada's current greenhouse gas emissions are and what they have to be in order for Canada to meet its commitments under the Paris accord by 2030.

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

First of all, I'm very glad the honourable member talked about the distinction that exists and what makes Line 5 very different, in that it is operational. In fact, with Secretary Granholm, it is something that I brought up with her. There is broad support along the political spectrum for this project, and I think that is something that she took to heart.

I understand where the honourable member is going, because to some people it does appear contradictory that we would be I think the most ambitious government in Canada's history on combatting climate change, yet I am very proud of the oil and gas industry and very proud of the people who work in it.

I've discussed this with several people, but I was discussing this with the Alberta building trades just this morning, and these are the people we will need in order to lower emissions. These are the people who managed to find a way to extract oil from sand and make us the fourth-biggest producer of oil and gas in the world. That takes an awful lot of ingenuity, determination and hard work.

I can tell you that I am probably living in one of the few provinces that is increasing flights. One flight was just added, I believe, between Deer Lake and Toronto. That is for all the workers who travel every single day and every week from my province to Alberta and Saskatchewan to do their shifts and to do their work in the oil and gas industry in those two provinces, as well as the oil and gas industry here.

Retaining those workers, keeping those workers, is absolutely my top priority, because they are the ones who will lower emissions and they are the ones who are going to revolutionize the energy sector in this country. They are ones who are going to help us lead the world, and they are the ones who are going to help us to lower emissions and to achieve our Paris targets.

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

I certainly agree with you, as a construction electrician myself and a proud member of the IBEW, that tradespeople are going to be the ones who help transition us to a lower carbon economy, but we're also going to need a government that is bearing in mind what our current emissions are and what our goals are.

Can you share with the committee what Canada's current greenhouse gas emissions are and where we need to be by 2030 in order to meet our Paris commitments?

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

It is going to be ambitious. First of all, we are heartened by the fact that the emissions intensity of the oil patch continues to decrease. We are heartened, I think, by the fact that the marketplace is moving significantly. This is something we saw at the beginning of last year pre-pandemic, when you had BlackRock, the biggest private asset manager in the world, divesting itself from the oil patch. That was a clear warning sign. Frankly, investors around the world are going to be investing in areas primarily in jurisdictions that take combatting climate change seriously, so we have to lower those emissions.

It's why carbon capture and sequestration is a strategy that I was discussing just yesterday with Minister Savage and Minister Nally in the Government of Alberta and is something that I continued with Secretary Granholm. I think that getting carbon capture and sequestration right is absolutely essential, not only for lowering emissions in the oil patch, frankly, but also for what I believe to be a burgeoning hydrogen industry in this country.

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

Of course, the Paris accord doesn't talk about emissions intensity. It talks about “emissions”.

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

That's very true.

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

Can you share with the committee what our current emissions are and what they need to be by 2030 in order for us to meet our obligations under the Paris accord?

I think Canadians who are concerned about climate change are concerned to know whether the person responsible for the government's planning for the energy sector has these issues foremost on his mind, whether there are actually targets that you're bearing in mind when you're talking about planning projects, and when you're going to be talking about presumably some kind of continental energy strategy with the United States, which I think is implicit in some of the remarks you made today at committee.

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

Well, it's implicit. It's also, I think, very good news for our companies, too, in order to make sure they have a level playing field in which to operate.

For the past four years, and even preceding that—

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

By how much do we need to reduce our emissions by 2030? I only have a few seconds left here, Mr. Minister. By how much do we have to reduce our emissions by 2030, and what are you doing to put Canada on a track to get there?

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

You're quite right to say that there's a big difference between the intensity of emissions and overall emissions. Lowering those overall emissions, again, to emphasize the fact that what we're talking about here is net zero.... That's why carbon capture and sequestration is vitally important. There will still be emissions that come from the oil patch and from other sectors of our economy, so we have to make sure that we look after those and that we sequester emissions where we can.

It's an emerging technology, but it is going to be absolutely fundamental to our climate plan. Again, our climate plan, which is the most ambitious we have ever seen, is one that was just announced in December. It requires all of our departments to work together, with the leadership of the Prime Minister, and work very closely with the provinces, which is something that I've worked very hard to do.

[The Chair, Liberal, Raj Saini]

Thank you, Mr. Blaikie.

We will now start round two.

Mr. Hoback, you have five minutes.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

Thank you, Minister, for being with us here this afternoon.

Minister, Line 5 is definitely of huge concern for me, coming from Saskatchewan, and it's nice to see that you're taking it seriously.

I have to say that Keystone is also something that's very dear to our hearts here in Saskatchewan. Our premier is very upset that we weren't more aggressive and more involved in defending Keystone. As for what we're doing now, it seems like we're doing nothing, yet we have a lot of allies in the U.S. who would like to see Keystone proceed.

Are you putting any efforts into working with those allies to see if we can revive and change the decision on Keystone?

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

I have another meeting coming up with a former colleague of yours, of course, James Rajotte, to find out exactly what the lay of the land is on a whole host of energy issues. Line 5 is absolutely top of mind.

As I said, Mr. Hoback, James, Minister Savage and I work very closely together. That's not to say.... I am greatly disappointed and personally disappointed in the Keystone XL decision made by the President. All of us put a lot of effort into it, as I said, particularly because of the changes that TC Energy had made.

Oil will be transported to the U.S. Oil will be transported in this country. Making sure that it is done safely and as responsibly as we can possibly do it is very important. I have not seen a pipeline that met the mark more than the Keystone XL project of 2020.

[Randy Hoback, Conservative, Prince Albert, SK]

So can—

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

There are certain lessons to be learned there, for sure. Line 5, for a whole host of reasons, is a different beast.

I'm sorry. Go ahead.

[Randy Hoback, Conservative, Prince Albert, SK]

Yes, it's the time; I'd like to talk to you for 30 minutes, if I could.

You made a comment about how improved our oil and gas sector is and how much more we're regulated and responsible with the environment. I think you'd agree with me on those comments. As you talk about the road map with the U.S., are you seeing the U.S. then changing their regulations on, for example, flaring? Will they match Canadian regulations on things like that? Will they match the processes that Canadian companies have to go through to build things like pipelines? Will that be consistent in the U.S. now as it is in Canada?

We know what happened here in Canada with our process. All we did was drive cash and investment into the U.S. Do you see that playing field levelling off? How do you see it levelling off?

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

They're intent on meeting their Paris targets and lowering emissions, and they're intent—

[Randy Hoback, Conservative, Prince Albert, SK]

Yes, but that's different. It comes back to the North American continent. I'm talking about creating a competitive platform for investment—

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

I understand your point, and that's the point I'm trying to make. The road to net zero goes right through oil and gas. The road to net zero goes right through oil- and gas-producing provinces like mine. There's no question about it.

Yes, they have to deal with these things. One would think, I'm sure—I'm not going to presume, but one would think—that they are going to go in exactly the same direction we are. I think it would just increase investment and interest in continuing to lower those emissions if these are comparable standards. I mean, that is exactly where we want to get.

[Randy Hoback, Conservative, Prince Albert, SK]

So then if we see the standards are consistent and we see the cost here in North America go up because of these new standards, are we going to do something to make sure other countries around the world would come up to those standards? What does that look like? I know there's been talk about a border adjustment type of tax on pollution. Do you see us doing that in harmonization with the U.S.? If that's the case, what does that mean for Ontario, Quebec and eastern Canada, which bring in so much oil outside of Canada?