Thank you.
It's indeed my pleasure to present to the committee on behalf of the Fort McMurray Chamber of Commerce. We'd certainly like to welcome committee members to the most robust regional economy in the world, one that is driving profound economic change, not only for this region but for Canada.
The total reserves of the Athabasca oil sands have been estimated at more than 170 billion barrels, which accounts for Canada's global ranking that is second only to Saudi Arabia. For a period this year, oil was priced at more than $70 per barrel. It seems to have stabilized around the $60-a-barrel mark. Most oil sands developers say that they are able to produce oil profitably at $30 per barrel.
In contrast to much of the Middle East, Canada offers the rest of the world a stable government and economy. Continental energy security is becoming among the most discussed public policy issues, and the Wood Buffalo region has in the past year been visited by the energy secretary of the United States as well as several federally and state-elected legislators from the U.S. Foreign investment from other nations is also on the rise, and particular interest has been demonstrated by the Far East; many nations there are looking for an equity position in the oil sands.
Although the regional municipality has expressed concerns about its ability to support ongoing oil sands development without an immediate injection of infrastructure funding, all indications are that development of this resource will proceed unabated for the next several years. Analysts have predicted investment of $125 billion over the next decade. To put it a little more accurately, the figures are more likely $10 billion to $12 billion on an annual basis.
What is happening here in our backyard has an impact on the whole of the country, and it is with that impact in mind that the chamber makes its presentation to the committee today.
We are concerned about three primary areas within the jurisdiction of the federal government: fiscal policy, including employment insurance and taxation; infrastructure; and labour supports, including immigration and post-secondary education.
Among the challenges for all employers in the Wood Buffalo region is finding qualified, committed employees in one of Canada's most competitive labour markets. We believe the current EI system is subject to abuses and serves as a disincentive to work. The surplus within the system seems to be used to subsidize government spending in other areas as well, which would effectively be a misappropriation of public funds.
The employment insurance program was originally created to provide insurance against unintended unemployment. If the administration of EI is refocused on that original intention, it will result in changes that benefit citizens and employers alike. It will enable the government to reduce EI premiums further and eventually enable employers and employees to have matching contributions.
We refer this committee to a more specific recommendation of the Canadian Chamber of Commerce on employment insurance. When Canadians are working, we need to ensure their prospects in Canada are competitive with those offered abroad. Recent changes in the American economy, including the rise in the Canadian dollar, have reduced the incentives that drove skilled Canadians to the U.S., the so-called “brain drain”.
However, Canadian personal income taxes are still not competitive with American taxes. We recommend changing tax policy to improve the benefits to a shrinking middle class, without failing to recognize our obligation to lower-income Canadians. We also suggest that the federal government make it more attractive to potential employees to move to the northern reaches of the country by increasing the northern living allowance to offset the higher costs of living there.
Municipalities across Canada have approached the federal government with concerns over their ability to fund municipality infrastructure, essential to the delivery of services to citizens. The new Canadian government has honoured the commitments of its predecessor and has also enhanced funding to support transportation and public transit initiatives. Here in Wood Buffalo, that included the August 29 announcement of federal funding of up to $150 million to support the twinning of Highway 63. The chamber applauds the federal government's contributions to road construction.
However, Wood Buffalo is the least typical municipality in Canada. Canada's energy security, not to mention substantial international trade, depend on our municipality, and our infrastructure requirements are more extensive than simply twinning an important highway. The 2006 census pegged Wood Buffalo's population at 79,000. That is an increase of 9% since 2005, not including the shadow population; people in this group number between 7,000 and 12,000 and reside in work camps, but they make significant use of municipal services. This is not sustainable, given the funding limitations of the municipality.
Several years ago a tripartite working group was announced for the region that, as we understand it, was supposed to investigate our unique requirements and determine opportunities for joint funding of critical initiatives, such as waste water treatment. This group has yet to make any significant announcements.
The chamber strongly encourages the federal government to acknowledge that regional economies of national significance, Wood Buffalo's and others, must receive greater federal support.
We ask the federal government to show leadership with respect to the tripartite working group and to renew its commitment to the special infrastructure requirements of the region. We also recommend careful investigation of public-private partnerships, or “P3s”, especially as practised in Europe, to see how Canada can learn to expedite the construction of necessary infrastructure without compromising public interests.
It's a bit of a joke up here that Canada's second largest Newfoundland city is Fort McMurray. Alberta offers many young men and women from Canada's Atlantic region, which has suffered economic declines in nearly every sector, new opportunities to make a good living and raise a family. It isn't only for the oil sands industry that finding skilled employees is a challenge; employers in the service, retail, and hospitality sectors are challenged to recruit and retain good employees.
One of the proposed solutions is to increase the number of foreign workers admitted to Canada to work in Alberta's oil sands.