Economic Relationship between Canada and the United States Committee on March 16th, 2021

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

Okay. It's unclear what the impact of the change in administration will be.

[Vern Yu]

That's correct.

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

Thank you very much.

I am wondering about the extent to which Enbridge thinks it may ultimately have to rely on the “Agreement between the Government Of Canada and the Government of the United States...Concerning Transit Pipelines”. I don't think we've talked a lot about that so far today. I'm wondering to what extent that is part of the strategy, whether you think that will come into play or is likely to be resolved before getting to that level, and whether you think it's something Canada should invoke if this is not resolved in some other fashion.

[Vern Yu]

We believe the pipeline transit treaty is a very strong lever for the Canadian federal government and the country of Canada. We think that a lever should be used, as appropriate, if we're not able to come up with a reasonable diplomatic solution to keep the pipeline running, since the infrastructure is obviously very critical to Canada. That's a tool in the tool kit, and we'll have to make an assessment regarding the appropriate time to use that tool.

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

Thank you very much.

That's all for me, Mr. Chair.

[The Chair, Liberal, Raj Saini]

Thank you, Mr. Blaikie.

We will now go to Ms. Alleslev for five minutes.

Go ahead, please.

[Leona Alleslev, Conservative, Aurora—Oak Ridges—Richmond Hill, ON]

Thanks to our witness for an incredibly enlightening presentation.

A lot has been said, so I'm hoping that we can just bring it back to.... We've talked a lot about leverage. What exactly is Canada's leverage? From the discourse we've been having, it feels as though the majority of our future depends on the U.S. making a decision that is in the best interests of Canada and as though there's not much that Canada can do other than to beg, plead, make it clear, etc.

Do I have that right? What is Canada's leverage?

[Vern Yu]

The U.S. and Canada are each other's largest trading partners, and trade between the U.S. and Canada is critical to both of our economies. Energy is a significant component of that bilateral trade between Canada and the U.S. This particular pipeline serves markets in both Canada and the U.S.

[Leona Alleslev, Conservative, Aurora—Oak Ridges—Richmond Hill, ON]

Does it do so equally?

[Vern Yu]

It does, approximately, yes, so it's critically important to both countries to ensure that the pipeline continue to operate safely and reliably and that we build this private tunnel as quickly as we possibly can to ensure that energy security for the future. We don't want to create an energy crisis in Michigan, Ohio, Indiana, Pennsylvania, Ontario and Quebec just as we're getting through the economic crisis that COVID has created. This is just as important to Americans as it is to Canadians.

[Leona Alleslev, Conservative, Aurora—Oak Ridges—Richmond Hill, ON]

It doesn't appear to be to the Governor of Michigan, and clearly, I would think, she is not acting alone. You mentioned that this has been an issue for many years and that you've placed a focus on Michigan.

If it's been an issue for many years, how did we arrive at this point? What can we do differently now to defuse this and have it stop being an issue when, again, it's beyond our control?

[Vern Yu]

The answer is the Great Lakes tunnel. We worked for many years with the previous governor of Michigan to enact legislation to allow us to build the tunnel to replace the current Straits of Mackinac crossing. That is an economic boost to the state of Michigan, and it ensures energy security for the state of Michigan.

I know Governor Whitmer is a supporter of the tunnel, so I think it's about getting the tunnel built as quickly as possible and removing this small environmental risk that she seems focused on.

[Leona Alleslev, Conservative, Aurora—Oak Ridges—Richmond Hill, ON]

If I may ask, though, as a Canadian looking to have energy security and perhaps prevent any kind of future vulnerability from an energy security perspective, how would you argue that still having dependency on a line that is outside of our country is actually in the longer-term best interests of Canada, after we've watched how not looking after vaccines and other things ourselves in a crisis has had a detrimental impact on Canadians?

[Vern Yu]

Unfortunately, in Canada pipelines are a challenge, and building a brand new pipeline across Canada would be as big a challenge as keeping this existing pipeline operating. In fact, it might actually be an even bigger challenge to get unanimity from Canadians to do that. We've seen multiple occasions where as a country we can't get behind building pipelines, so it's important to keep the existing ones up and running.

[Leona Alleslev, Conservative, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you for giving us some very important information on this very important topic.

[The Chair, Liberal, Raj Saini]

The last person we have is Mr. Sarai, please, for five minutes.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Thank you, Chair.

I first want to thank the witness, Mr. Yu.

You've done a great job of meticulously explaining this issue in detail and, especially for my colleague Mr. Housefather's questions, almost to a legal degree on what you're facing down south.

What I want to know is, have you been getting full assistance from the federal government, especially on the embassy side, on anything you need from them? That would be my first question for you.

Second, how are you getting U.S. consumer groups or U.S. industry groups to support you on this? Obviously, you're a conduit—literally—to a lot of industries, whether it's natural gas, oil, heating or utilities. How supportive are they in your case in giving you some political backing, so that the people of Michigan and other surrounding areas know the consequences of their governor's actions?

[Vern Yu]

Let me start with Canada. I've spoken to Ambassador Hillman. I've spoken to Minister O'Regan. I spoke to Minister Garneau. I believe that our CEO, Mr. Monaco, has spoken to Minister Freeland as well.

We've spoken to many people in the Canadian federal government. Everyone has told us that they are seized of this issue and that they will put all the effort they can into this file and make it well known to the U.S. federal government that this is a very important bilateral trade issue. It's important for us and this committee to continue to provide support so that the federal government continues to do what it does.

I've spoken to Premier Ford and Premier Legault directly about this particular pipeline. They are both very supportive of the actions that we're undertaking today and promise to continue to provide feedback to the federal government that this is a very important Canadian issue.

On the U.S. side, we have a very broad coalition of support within the state of Michigan and outside the state of Michigan. The Michigan Chamber of Commerce is a hundred per cent behind us. The Detroit Regional Chamber is a hundred per cent behind us. The constituents of the upper peninsula of the state of Michigan, who rely a hundred per cent on Line 5 for the propane to heat the homes up there, are very much in our support.

The state legislature, the state senate, in Michigan is very supportive of Line 5 and the tunnel. In fact, at the end of last year, there was a vote in the House where three-quarters of the legislature were in support of the tunnel, and where many Democrats crossed the floor to support the tunnel. We are very actively continuing to work with people in the state of Michigan to ensure that there's as strong a support as we can have for the pipeline and the tunnel.

The state of Ohio is very critically interested, as Line 5 is critical to the numerous refineries that operate in that state, and the issues facing the state of Ohio are as great as the issues facing Ontario and Quebec. The Governor of Ohio and the attorney general of Ohio have indicated very strong support for both Line 5 and the tunnel.

We continue to build our coalitions. We continue to lobby the governor that this is a very important issue for Michiganders and all of the Great Lakes states and provinces.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Have you been able to do a greenhouse gas emission analysis on how much more greenhouse gases, GHG emissions, would be out there as a result of this pipeline shutting down, with those hundreds of railcars a day that would have to go and the thousands of trucks that would have to carry this? What would be the resulting increase in cost, with ultimately the consumer paying extra?

As you know, for consumers, especially in those states, fuel costs are quite high compared with where I am here in British Columbia, where we have mild summers and mild winters. In those areas, you have stronger winters and stronger summers, so energy costs are year-round. Has there been any work done in that regard? I think if Michiganders and others around the area find out how much it will cost them and how the area will be more polluted by the actions of the governor, they may force the governor to reconsider.

[The Chair, Liberal, Raj Saini]

Please give a short answer, Mr. Yu. We're running out of time.

[Vern Yu]

I don't have the exact greenhouse gas numbers in front of me, but it's something we can follow up on. We've estimated that the cost of propane for Michiganders will go up by 38¢ a gallon without the pipeline. That is very significant.

[The Chair, Liberal, Raj Saini]

Thank you, Mr. Sarai.

Thank you, Mr. Yu. On behalf of the committee, I can tell you that you've really illuminated what we really wanted to know. You broke it down in a way that was digestible and that was really easy to follow.

I want to thank you sincerely on behalf of the committee for taking the time to come here and for educating us on what I think is a complex issue. As you can see from the feeling, or the virtual feeling, around the table, we are all in support, and we're all going to work together.

Thank you again for coming.

[Vern Yu]

Thank you to the committee. We appreciate your support.

[The Chair, Liberal, Raj Saini]

We'll suspend for a few moments while we bring in the other panel.

[The Chair, Liberal, Raj Saini]

Welcome, members, to the second hour of our study on Line 5.

We're so happy to have testifying today, from the Canadian Chamber of Commerce, Mr. Mark Agnew, vice-president of policy and international, and Mr. Aaron Henry, senior director of natural resources and sustainability. From the Canadian American Business Council, we have Maryscott Greenwood, chief executive officer.

We will start off with opening comments from the Canadian Chamber of Commerce.

You have five minutes, please.