Economic Relationship between Canada and the United States Committee on March 18th, 2021

[The Chair, Liberal, Raj Saini]

Welcome, members, to the fifth meeting of the Special Committee on the Economic Relationship between Canada and the United States. Pursuant to the motion adopted by the House on February 16, 2021, the special committee is meeting to discuss the economic relationship between Canada and the United States. Given the timelines adopted in the House motion, we remain focused on Line 5 today.

We extend a very warm welcome to our witnesses.

It appears that we have one group here already, LiUNA, and we have a really warm welcome for Joseph Mancinelli, international vice-president of LiUNA, and Jason McMichael, government and community relations director at LiUNA Local 1089.

I cede the floor to LiUNA for five minutes of opening remarks. Again, we extend a warm welcome to both of you.

[Joseph Mancinelli, International Vice-President, Central and Eastern Canada Regional Manager, Laborers' International Union of North America (LiUNA)]

Thank you, Mr. Chairman and committee members.

I am Joseph Mancinelli, international vice-president of LiUNA, which is the Laborers' International Union of North America. We are headquartered in Washington, D.C., where we represent 500,000 workers, primarily in the construction industry, 140,000 of which are here in Canada, headquartered here in Ontario. I am also vice-president of Canada's Building Trades Unions and vice-president of the Canadian Labour Congress.

I would like to start off by thanking you for the opportunity to present our position on two issues that will impact the economies and jobs in both our countries, the United States and Canada: the proposed closure of Enbridge's Line 5 in Michigan and the “Made in America” campaign of the U.S.

We at LiUNA care deeply about the environment. Our members and their families understand the importance of taking care of our planet. However, we also understand the importance of strong employment and a strong economy.

I wrote Michigan's Governor Whitmer to say that Enbridge's Line 5 is a crucial part of the ability of Canada and the United States to manufacture, to grow food and to build the economies of our communities and our countries. Shutting down Line 5 would have a devastating effect on a number of sectors and would destroy the jobs of millions of workers. At a time when we are coming out of a pandemic, hopefully, economic growth and stimulus are paramount.

The city of Sarnia, opposite Port Huron, Michigan, has several refineries, 72,000 citizens who rely on Line 5, and 24,000 jobs that directly and indirectly rely on the flow of natural gas and petroleum. In fact, I have with me here today Jason McMichael, one of LiUNA's government relations specialists, who is also the president of the Sarnia and District Labour Council.

In Michigan, LiUNA's 13,000 members would be affected, together with 50,000 other Michigan jobs. The loss of jobs will be felt right across the provinces of Ontario, Quebec and Alberta, as well as the states of Michigan, Ohio, Wisconsin and Pennsylvania. However, the consequences won't be restricted to the states and provinces that are directly affected. The negative impact would be nationwide in both countries.

The agricultural sector in Ontario, for example, represents 38,000 farm businesses that produce food and rely on natural gas. The $89.5-billion cosmetics industry that uses petroleum for their products would see 700,000 jobs affected. The sporting goods industry is a multi-billion dollar industry that produces products like hockey and football equipment, etc. and relies on petroleum for their products.

The pharmaceutical industry would be affected, and, of course, so would the automobile industry, which uses petroleum by-products like plastic in their cars. For example, electric vehicles are manufactured with 50% petroleum products to keep their weight down. Thousands of jobs in the automotive industry are also at stake.

The $3.2-billion electronics industry in Ontario, which also relies on the by-products of petroleum, would also be affected. The medical supplies industry, with their 317,000 workers, would be affected. The list goes on and on.

There are those who desperately want to transition into products that do not use petroleum. We may get there one day, but today is not that day. Shutting down Line 5 in May of this year—only a few months away—and pretending that we can continue shipping petroleum by truck or rail is a far worse environmental solution. In Sarnia, for example, it would take 2,000 tank trucks per day to replace the pipeline. There is presently a shortage of trucking in North America. Imagine the gridlock on our roads and at the border.

How can rail be an alternative, when rail has spilled more in derailments than any pipeline? The tragic events of Lac-Mégantic, where 47 people died, should deter this alternative to transporting petroleum and natural gas. The new proposed pipeline would be built a hundred feet below the lake-bed. The pipes will flow through a concrete tunnel, with numerous safety features in place to protect the pipeline from any possible ruptures.

Our concern is also that the U.S. is in contravention of the 1977 bilateral treaty with Canada.

Our other concern is that the U.S. “Made in America” campaign will also affect the ability of companies in Canada to trade with and export to the United States. In fact, this protectionist action also has the potential to hurt U.S. companies that rely on Canadian raw materials and by-products.

Millions of workers and their families are trusting that the right decisions are being made to protect jobs that continue to make our economy strong.

Thank you, Mr. Chair and committee.

[The Chair, Liberal, Raj Saini]

Thank you, Mr. Mancinelli.

We also have joining us today, from Canada's Building Trades Unions, Sean Strickland, executive director.

We wish you a warm welcome, Sean. Thank you for taking the time to join our committee.

We'll give you the floor for five minutes for any opening comments you have.

[Sean Strickland, Executive Director, Canada's Building Trades Unions]

Thank you very much, Mr. Chair. It's great to see everyone this afternoon. I apologize for the late start. I had technical difficulties, as is the way as we deal with some of these issues through the pandemic. I applaud each and every one of you for having these meetings and forming this committee.

I represent Canada's Building Trades Unions, part of North America's Building Trades Unions. We represent 14 international construction unions with offices in Washington, D.C. and Ottawa. Combined membership of our two organizations is three million unionized construction workers across the U.S. and Canada, including 600,000 members in Canada.

Canada-U.S. trade relations and energy policy have a direct effect on our workers on both sides of the border. The potential closure of Line 5 has the full attention of our leadership in the United States and in Canada, and it is being raised at the highest levels of elected and government officials. Discussions are also taking place to dissuade potential implementation of buy America policies to be recast as buy North America to the greater benefit of both of our countries.

We encourage, in the strongest terms possible, the Canadian government and all elected officials to do everything in their power to prevent the closure of Line 5, and, if the closure becomes a reality, to invoke the 1977 transit pipelines treaty.

You are familiar with the cataclysmic effects such a closure would cause—potential loss of 25,000 jobs and increased prices for gas, propane, and petrochemical products used in manufacturing.

The closure would not end our demand for petrochemical products and fuel but would result in the industry workarounds that you heard about previously from Mr. Mancinelli, which would require upwards of 2,000 trucks a day or 800 railcars and increase the number of barges carrying oil on the Great Lakes.

The environmental impacts of closing the pipeline would be greater than those of continuing to safely operate the pipeline until the new Great Lakes tunnel for the pipeline is built. We must do everything in our power to keep Line 5 operational and fight like hell if the courts allow for the easement to be cancelled.

However, at the same time our unions are progressive enough to realize that the greening of the economy is inevitable and necessary, but we need to be smart about it. We need to operationalize the recently agreed-to U.S.-Canada road map, elevate the discussion, and create a bilateral U.S.-Canada energy policy that addresses our cross-border energy needs and secures the energy future of both the U.S. and Canada. This transition is not turnkey, and it needs to address the thousands and millions of American and Canadian jobs affected.

CBTU recommends that the government establish a task force to examine the future of energy jobs. This task force would focus on developing a bilateral energy policy with the United States; coordinating the new technologies to power our energy future, such as carbon capture and storage, renewable methane technology, small modular reactors, and hydrogen; greening our infrastructure; and, for our members, supporting workers through the transition. This task force would communicate and work in conjunction with the newly formed U.S. Office of Energy Jobs.

To support workers, we recommend higher labour standards and collective bargaining for renewable jobs, like wind and solar projects; a skilled trades workforce mobility tax deduction; the adoption of private member's bill C-275, which would create fairness for workers and support worker mobility; a dedicated visa program that allows skilled trades workers to travel more easily between Canada and the U.S.; and of course government support for retraining energy workers.

Line 5 is crucial to our economy and is an issue we will continue to advocate for. Line 5 needs to be part of a long-term vision that focuses on building the energy future of the United States and Canada so we will not be faced with the same hurdles—fighting to save projects or pipelines—time and time again.

We need a bilateral energy policy to secure both our nations' energy futures and a transition for workers at the same time.

Thank you very much, Mr. Chair.

[The Chair, Liberal, Raj Saini]

Thank you very much, Mr. Strickland. It's great to have you finally join us, even with technical difficulties.

We'll move straight to questions right now. We'll go to Mr. Strahl for six minutes, please.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Thank you, Mr. Chair.

It's good to see the witnesses again. We've met several times but never in person. Someday we'll get back to that.

I first of all wanted to thank Mr. McMichael for working with our colleague Marilyn Gladu, the member of Parliament for Sarnia, to raise awareness, start an email campaign and fight for those jobs that are at risk in Sarnia. Ms. Gladu spoke highly of your efforts together, and we're all working together to fight for the right thing here, which is to keep Line 5 operational.

You talked about a bilateral energy task force and energy security for our two countries. Obviously, both LiUNA and Canada's Building Trades had some strong words when another project that involved the energy needs of both the U.S. and Canada was cancelled. I want to read a statement from Terry O'Sullivan, the general president of LiUNA, who said:

The Biden Administration's decision to cancel the Keystone XL pipeline permit on day one of his presidency is both insulting and disappointing to the thousands of hard-working LIUNA members who will lose good-paying, middle class family-supporting jobs. By blocking this 100 percent union project, and pandering to environmental extremists, a thousand union jobs will immediately vanish and 10,000 additional jobs will be foregone....

...In an agreement with North America's Building Trades Unions, the project owner, TC Energy, had committed $1.7 billion to operate the pipeline with renewable energy and achieve net-zero emissions within two years—all using union workers. Their commitment amounted to the equivalent of taking 650,000 cars off the road, one of the largest renewable energy investments ever.

We support the President's campaign to “build back better.” But for union members affected by this decision, there are no renewable energy jobs that come even close to replacing the wages and benefits the Keystone XL project would have provided. Killing good union jobs on day one with nothing to replace them, is not building back better. Hopefully, the Biden Administration will not continue to allow environmental extremists to control our country's energy agenda at the expense of union construction workers being forced to the unemployment lines.

That is perhaps the strongest statement I heard regarding the Keystone XL cancellation.

When we heard from the Minister of Natural Resources, he kind of said these were two completely different things. However, they are doing, in my view, the exact same kind of outreach. They are trying the same plan to ensure that Line 5 stays open as they tried to get the Keystone XL permits to continue. They failed on Keystone XL, though, and have, in my view, kind of thrown up their hands at that one.

From a union perspective, obviously.... I'll go to Joseph here. What do you see as the government's role in ensuring that Line 5 continues to operate? Is there anything more the government should be doing?

To me, this is a President and a Prime Minister discussion. Anything else below that is kind of missing the point. From a union perspective, how do you see the efforts that have been made by our government, both on Keystone and now to protect these good-paying union jobs for Line 5?

[Joseph Mancinelli]

I think the problem with both projects is that there are a number of folks out there who don't understand the demand for petroleum and natural gas and what they're used for. They make an assumption that you can shut down these pipelines, and future pipelines, because there is no demand, we're transitioning to a green economy and we're already there.

I think the fact remains—and the logic behind this or maybe the illogic behind shutting down these pipelines—that we're not there. We are decades away from transitioning to a green economy. To shut down a line like [Technical difficulty—Editor], which has been operating for 67 years, is absolutely ludicrous, especially when the demand for that line to deliver products to [Technical difficulty—Editor] the agricultural industry and a whole bunch of other industries. It defies logic to do that right now, and to do it two months from now.

I presented in front of the Michigan Senate committee on energy only a day or two ago, with MPP Bailey from Ontario and Rocco Rossi from the Ontario Chamber of Commerce. It was obvious that a lot of folks just don't know the demand for petroleum and natural gas. They make this assumption that these pipelines can just be shut down with no consequences, but the consequences are big.

Let's take Keystone XL, for example. Keystone XL had the potential to supply North America, the United States and Canada, with enough petroleum to satisfy the needs here at home without having to reach out to Venezuela or to Saudi Arabia for their oil. Cancelling the Keystone XL pipeline didn't diminish the demand for petroleum. The demand is still there. That's the illogical part of all this. In fact, we're still going to get the tankers coming into the Atlantic region. Irving Oil will still be refining oil from Venezuela and a bunch of other countries, including Saudi Arabia.

I don't understand why we're taking those kinds of approaches, instead of using our own natural resources in a safe way. I'm not advocating that we do it any other way. Our members don't advocate doing it any other way. Pipelines are the best way to deliver it. By shutting—

[The Chair, Liberal, Raj Saini]

Mr. Mancinelli, I'm sorry. I have to go to the next questioner. I'm sorry about that. I didn't mean to cut you off. I apologize.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Let him finish.

[Joseph Mancinelli]

No, that's fine.

[The Chair, Liberal, Raj Saini]

Well, he's over time.

The next six minutes go to Mr. McKay, please.

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

MP McKay, you're on mute.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Most people consider that to be a good thing.

I appreciate the commentary by Mr. Mancinelli and Mr. Strickland. Particularly, as I sat here for the last four meetings, I felt like I was in some sort of echo chamber. The arguments against shutting this thing down are so compelling that you actually start to search for another explanation, which is beyond the testimony we've heard today.

I've listened to Governor Whitmer being interviewed on various television channels, and I thought she was a very intelligent person. She certainly stood down all the crazy Trumpies. She was at one point talked about as part of the ticket for the Biden presidency.

The economic arguments don't make any sense. The environmental arguments don't make any sense. She has offended Canada. She has offended her fellow state governors. I'm assuming she has some difficulties in her own legislature. I don't quite get this entire process. I don't understand it.

I'll direct this question to Mr. Mancinelli. You were in the legislature yesterday. Surely the people who are really pro-environment don't really believe that shutting down this pipeline actually is an environmentally sensible thing to do, or are we living in a different atmosphere?

I think the committee would be grateful if we could get some sort of reasonable explanation as to the thinking of the governor.

[Joseph Mancinelli]

I'm not so sure I can answer that, Mr. McKay, because there really is no reasonable explanation. I haven't been able to find one.

At the legislature the other day, the Michigan Senate energy committee, some of the environmental folks who asked questions about it obviously don't realize the dramatic impact this would have on jobs and the environment and a whole bunch of sectors in the economy. I don't think they realize it. Then you have another sector of the environmental group who, quite frankly, don't want oil to be taken out of the ground—completely. They really don't care about pipelines or trucking or rail or shipping. They just don't want to see things used by petroleum.

The fact of the matter is that there's a lot of ignorance out there about what these products are used for. Natural gas, of course, all of our farmers use. Propane is the only form of heating for all those greenhouses we have right across the country. There are 6,000 products that you and I and all of us use daily. Shampoo, toothpaste, cosmetics, lipstick, our shoes and everything else are all made out of petroleum, let alone products—

[John McKay, Liberal, Scarborough—Guildwood, ON]

You're preaching to the choir here.

[Joseph Mancinelli]

Yes.

[John McKay, Liberal, Scarborough—Guildwood, ON]

What I don't get is how reasonably well-informed...or how any information to legislators or the governor could be so blatantly ignored. Reasonable arguments are blatantly ignored. There are people on this call from various parties who are very pro-environment, but this particular decision is not an environmentally favourable decision.

Are we just into an unfathomable well of ignorance on the part of the Michigan legislature and those who are purporting to close this pipeline down?

[Joseph Mancinelli]

I think both ideology and ignorance are driving this agenda. I think folks don't know the issues well enough and don't know the impact. There's the ideology of, “You know what? I don't care what the impact of shutting down a line will do. I just think petroleum is a bad thing, so I'm in favour of shutting it down.”

I think that's what's at play here. It defies logic. It really does. I know you're trying to use a logical approach to why this is happening. I don't think logic has anything to do with it, quite frankly.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Strickland, what are your thoughts?

[Sean Strickland]

I wouldn't hazard a comment on the state of mind of the Governor of Michigan. You're right in terms of adding up all the scenarios and the potential environmental consequences of closing Line 5. Obviously, it's a political dynamic at play in Michigan. We will have to wait and see how that political dynamic plays itself out within the courts. That's why, on behalf of Canada's Building Trades Unions and North America’s Building Trades Unions, we are doing everything we can through advocacy and lobbying to make sure that Line 5 continues operating and that, if the court decision goes against Line 5, we invoke the treaty. We're positioning ourselves for whatever result comes out of the court case.

Going back to Mr. Strahl's question, our strategy is well informed by Keystone. We do not want a repeat of Keystone. It's a different analysis. Keystone was a new pipeline and this is a long-existing pipeline. But we're not sitting idly by while the Governor of Michigan does what she feels is in the best interest of her political future in the state of Michigan.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Thank you.

[The Chair, Liberal, Raj Saini]

Thank you, Mr. McKay.

We'll now go to Mr. Savard-Tremblay.

You have six minutes.

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

Thank you, Mr. Chair.

I'd like to acknowledge my colleagues and thank our witnesses for their time today. I have a question for Mr. Mancinelli of the Laborers' International Union of North America.

We can imagine that the trade unions are in favour of an energy transition, but they are also the defenders of their own members. In this case, you obviously don't want to see job losses. That's understandable, and we applaud your fight in that regard. However, there's something I struggle to understand in this story, and that's the fact that this isn't a debate of opinions. If the Governor of Michigan says one thing and Enbridge claims to have its own studies, then someone is obviously right, objectively speaking. It's not a matter of opinion.

Earlier, you said that the Governor of Michigan's excuses were totally unfounded.

Have any third-party studies been done on this?

[Joseph Mancinelli]

I am not aware of any third party investigation or stats that can stand up against what Governor Whitmer has done or what we're saying, either way.

Look, I think that history speaks for itself and the demand for the products speaks for itself. I don't know how you can shut down an existing pipeline that has been around for 67 years when the demand for the product it's delivering is so high.

The only conclusion you can come to is that it has been a political decision, a knee-jerk reaction to the Keystone XL pipeline being shut down only hours before she made the announcement to shut down Line 5. So it's a political decision where she, I think.... I can't read her mind, but in my opinion she tried to ride on the coattails of President Biden's announcement to shut down Keystone XL, and shut down Line 5.

They are distinctly two different things. One is a pipeline that's under construction, and the other one is a line that has been delivering product for several decades.

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

I understand that you can't read Governor Whitmer's mind, but you suggest that there was probably a desire to exploit President Biden's announcement regarding Keystone XL. What is Michigan's interest in doing this, given that Michigan itself stands to lose jobs?