Thank you very much, Mr. Chair.
Good evening, ladies and gentlemen.
Thank you for the invitation to comment on Bill C-38.
Thanks very much for inviting me to appear at this subcommittee and to discuss the implications of Bill C-38 on responsible resource development in Canada. I represent Canadian Manufacturers and Exporters, as well as the Canadian Manufacturing Coalition, a group of about 50 associations that represent all sectors of manufacturing and industrial development in the country. The members of our associations jointly employ over 2.5 million Canadians.
I believe we're at a critical juncture in our economy. The global economy is presenting Canada with many challenges, but also with a historic opportunity to take full advantage of the immense potential of our natural resource wealth. Across Canada, over 500 major projects are under way or are being planned for over the next 10 years, representing half a trillion dollars of new investments in our energy and mining industries and related infrastructure.
These private sector investments will give a very badly needed short-term boost to our economy and to jobs. In the long run, they represent a significant part of our industrial infrastructure, offering long-term employment and export growth. However, they also offer something that is much more significant. Canada's real long-term opportunity is to develop a world-class manufacturing technology and services supply chain for these natural resource projects that will create high-paying, value-adding jobs on the basis of expertise that can be exported globally.
There's been a lot said recently about the impacts of resource development on Canadian manufacturers, and particularly about Dutch disease, the negative impact that a strong dollar has had on Canadian manufacturing—a strong dollar presumably driven as a result of resource development. There's no doubt that over the past decade Canadian manufacturers have faced significant challenges to their profitability and therefore to maintaining employment, to investing in new products and new processes, and to staying ahead in global competition. They face those problems as a result of the challenges of a rapidly appreciating Canadian dollar, the recession, increased competition from low-cost producing countries, uncompetitive regulatory regimes, the decline in the U.S. market, rising protectionism in key export markets, and continued escalation of labour shortages.
Canadian manufacturers are suffering from some of the symptoms of the Dutch disease, but I think this diagnosis is wrong, and I'm afraid that policy treatment based on faulty diagnosis will have damaging impacts on manufacturing and on the economy as a whole.
First of all, the strength of the dollar is a reflection of the weakness of the U.S. economy, which has had a far more damaging impact on Canadian manufacturers than currency appreciation. You can always improve productivity to offset a higher dollar. It's hard to replace 30% of your customer demand, which disappeared in a matter of six months at the end of 2008.
Despite the challenges faced by manufacturers over the past decade, I want to say that manufacturing is far from disappearing. Today, it's an innovative industry, it's flexible, it's driven by customer demand, and it's global, in terms of markets but also in terms of investment. Manufacturing represents about 10% of our total employment, about 14% of our GDP, and about 60% of all of the private sector research done in the country. In fact, today, manufacturers are creating more jobs in the services sector of the economy than ever before, in high-paying services jobs in logistics, in research and development, in technology, in engineering, in design, in financial services, and in business services, for example.
Today, Canada's manufacturers are developing new products for new markets, and many have found new customers as suppliers of the new energy, mining, and infrastructure projects across the country. These projects offer Canadian manufacturers, companies like Berg Chilling, Promation, and Aberfoyle heat treating, run by Harry Hall out in Aberfoyle, new business opportunities in new sectors of the domestic market. They've led to the development of new products and processes. They've provided them with new opportunities to sell, not only within Canada but in new markets around the world.
Rather than seeing natural resource development as a curse, we should recognize the opportunities these projects present to Canadians, do our best to facilitate their development, and ensure that we can leverage them to build new industrial, technology, and services capacity.
We support Bill C-38 because we believe that Canada needs to maximize our economic opportunities while maintaining the right balance between environmental protection and economic growth. We believe the approach proposed in this bill will continue to support responsible environmental protection and oversight, while greatly speeding up approval processes.
The development of our natural resources is a capital-intensive enterprise requiring high levels of investment years before a project begins its commercial activity phase. Today's approach to environmental reviews has created an uncoordinated, duplicative, cumbersome, and uncertain process for both domestic and foreign companies. This process is acting as a direct barrier to foreign investment in natural resources, and it's limiting our members' ability to capitalize on new supply chain opportunities. We believe a better approach is a “one project, one review” process with a clearly defined time period.
Our members have provided some current examples of the problems of duplication and unnecessary delays in the environmental process, whether it's Areva Resources Canada, which has had a 19-month delay in starting new environmental assessments for operating and constructing a uranium mine and mining facilities in northern Saskatchewan, with investments of over $400 million and up to 200 construction jobs; or the Rabaska partnership, for instance, that's proposing to construct and operate a liquefied natural gas terminal near Beaumont and Lévis, in Quebec.
These projects all create significant on-site construction jobs, as well as directly sustaining and creating hundreds of jobs in the manufacturing services and technology sector, and jobs in metal fabricating, jobs in concrete, jobs in environmental technologies, jobs in processing technologies, and in services, finance, engineering, and design. They support job creation across the economy.
While our oil and mines will be here for decades, the investment opportunities in this sector always prove to be very cyclical and sometimes unstable. We have to remind ourselves that Canada is not the only player in the global resource market and that many countries are competing for investment capital. This capital will flow where the environment for investment is the most beneficial. With a potential of over $500 billion in major projects being developed in Canada over the next decade, we need to ensure that Canada welcomes this much needed capital in order for us to develop these resources to allow our businesses to take advantage of this tremendous unprecedented economic opportunity.
While we all agree that the protection of the environment must be addressed through reliable environmental assessments, we believe that efficient regulatory processes can go hand in hand with high-quality environmental reviews and effective regulatory enforcement.
The approach for environmental approvals proposed in Bill C-38 represents, in our view, a responsible and modern approach to regulatory management and oversight.
Thank you very much.