Finance Committee on Oct. 18th, 2012

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Brison.

Mr. Van Kesteren, please.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Mr. Chair, and thank you all for coming here. It's good to see some of you back again, and some new faces as well. I'm going to go to Mr. Egan.

It's amazing, Tim, since you first came, in the first years, how much the attention has shifted to natural gas, and how natural gas has gained such prominence. I remember when I was first elected we talked about peak oil, and we talked about the supply of natural gas as being from 20 to 40 years; today all the estimates are around 100. I think there are even some who suggest we may have up to 200 years of natural gas. I remember the price for a gigajoule of gas being well over $10 when I was first elected, and today it's down to about $3, which is extraordinary.

The biggest factor in energy for natural gas is delivery, if I'm correct. We have such great reserves in northeast B.C., and along that corridor the access to market is becoming so very important. I think I should mention that the proximity of a lot of shale gas reserves in the U.S are closer to the eastern part, especially to Ontario, and we need to find.... I wonder if you could tell us just how important it is for us to get that pipeline to the west coast, to be able to deliver natural gas to the far east, where in Japan, China, and countries like Korea there's such a demand for gas. Tell us where that window is, how closed that window is, and how much time we have.

[Timothy Egan]

As I mentioned, we just came off a three-day conference with the International Gas Union, and we had a series of discussions about this. When people talk about 100 years of gas, the estimate is based on approximately 700 TCF, trillion cubic feet, and we produce about six a year in Canada. We consume about three and we export about three, and the export is to the United States.

On a go forward basis, given how shale development has advanced so quickly in the United States, the opportunity of that export market is drying up. There is an enormous alternative opportunity, which is the Asian market, which you've highlighted.

Yesterday I asked some industry colleagues what they thought the window of opportunity was to get to that market, and the rough estimate is five to ten years, because there's natural gas all over the world. It is extraordinary the quantities of it. North America is ahead on the shale gas development track, but that resource exists around the world. Other countries are moving quickly to try to develop it and try to lock down markets, so the sooner we do so, the better the opportunity for us.

Moreover, within the North American context—you highlighted the trade flows—the reality that's emerging is that it's an integrated gas market, and has been for over 20 years. The opportunity is there for eastern markets to more profitably, more affordably, get gas from eastern U.S. supply and for western markets to more sensibly move their product to offshore markets like Asia.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Again, too, there's the advantage we have in the industry over Europe, where I think they're paying $6 a gigajoule or something. They pay about twice as much.

I'm wondering about the opportunity.... I know I spoke to some people in the gas industry about this. We have some remote communities, especially in northern Ontario, northern B.C., and Alberta. What are the chances that maybe we'll see the day where there could be a combined effort by the gas pipelines, the gas companies, and the federal government to get some energy, some of that gas, up there rather than trying to truck all this diesel, which is a huge expense? Has that ever been discussed? Has that ever been talked about?

[The Chair, Conservative, James Rajotte]

A brief response, Mr. Egan.

[Timothy Egan]

The short answer is, yes, it has, and utilities would be happy to work with the federal government on a project-by-project basis. They're limited in what they can do on their own because there's a formula with each regulator that authorizes what they can and can't spend. But they can always be partnering with third parties in the interest of advancing broader objectives.

With regard to remote communities, I think there's a real opportunity, perhaps through pipelines, or in the alternative, by trucking either LNG or CNG, which is much more affordable than diesel and burns cleaner. I would note that the federal government pays a significant bill to underwrite the energy costs of many northern communities now. This is not necessarily a new expenditure, but potentially a savings that delivers an environmental and economic benefit. I think it's a broad win.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Van Kesteren.

Ms. Nash, please.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you.

Hello to all the witnesses. Thank you for being here.

I want to first correct the record. I think my colleague misspoke. It's never been part of our platform to advocate for a carbon tax. But I do have a number of people in my riding who come to me to say they want the government to take action on the issue of climate change. That is a pressing need that, sadly, is being ignored by the government.

I also want to raise the issue of the tax credit. Mr. Bobocel, just for your interest, the NDP has advocated for a tax credit for small and medium businesses. My riding is home to many, many small businesses, and we certainly have long advocated for a tax cut and also a tax credit for hiring new employees. It's something we've long advocated.

One of the dangers with an omnibus budget bill such as the government has introduced is that many things get bound together, and if you don't support some things, you end up having to vote against some things that you do support. I wanted to clarify that so you're clear. We do support small business, and this is a measure we've been advocating.

I want to ask a question to Mr. Carr. One of the areas where Canada is doing very badly is in the area of innovation. We're down near the bottom of the OECD in terms of innovation. It affects our productivity and competitiveness. In your response to our questions about the pre-budget process, you talked about innovation and the role of the humanities and social sciences in fostering innovation by taking a collaborative approach with other disciplines.

I'd like to ask you to elaborate on this a bit, because I think we're all searching for ideas to help make our economy more productive and more innovative.

[Dr. Graham Carr]

Thank you for the question.

I think what we're fundamentally talking about is a view of innovation that sees innovation as a component of many different activities coming together at once. While we may frequently think of the outcome of innovation as a technology change, in fact, for a technology change to be successful, there needs to be analyses about how workers develop that technology and how technology will be used effectively. Therefore, for technology changes or innovation changes to be significant, you need that broad-based multidisciplinary and intersectoral approach to understanding change.

I could give one example, which might hearken back the question that Mr. Brison asked. At my university—Concordia University, in Montreal—we recently partnered with Dawson College, a community college, a CEGEP, in Quebec, in a provincially funded program, to create an incubator for games research. This provides junior college students with an opportunity to get some familiarity with the complexity of games research, whether that's engineering and technical research into games, research into the kinds of social narratives that are important to use in games, or research into how users use games.

The beauty of that incubation program is that some of those students will go directly into industry—industries like Ubisoft, in Montreal, for example. Others will transition into undergraduate programs, hopefully at our university, where they'll have a further opportunity to study games that are funded, in part, by a research group that received Social Science and Humanities Research Council funding—the IMMERSe grant that I mentioned. That is an industry partnership grant out of the University of Waterloo, involving organizations like Inovatech, in the Kitchener-Waterloo area, and multiple researchers across the spectrum of disciplines in Canada. That, it seems to me, is a real gateway to true innovation.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you.

We need to help people in their thinking process. I think that's what the humanities and social sciences do.

I just have time for a very quick question to Mr. Rogers. Do we provide enough support for the not-for-profit and co-op sectors in Canada and for our credit unions?

[Gary Rogers]

That's a pretty broad question. Of course, I am representing credit unions and not necessarily the broader co-op sector. We can always do with more. We appreciate that there are supports in place. There are sympathetic government officials who assist us all the time when we have issues. There is always room for more support. We are an alternative way of carrying on business that sometimes doesn't get the recognition it otherwise, we think, deserves. That was part of the reason I emphasized the size and the extent of what we do today.

[The Chair, Conservative, James Rajotte]

Thank you.

We will go to Mr. Jean, please.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thank you, Mr. Chair. Thank you, witnesses, for joining us today.

Mr. Hnatiuk, I was asked by Shelly Glover, who, of course, is from your area, to ask you a question. She is familiar with what you are doing with low-income individuals, vulnerable youth, and aboriginal youth in Winnipeg. In particular, she asked how you use this model in other areas to facilitate the use of underutilized assets or new assets, from a federal government perspective, to encourage more people from those groups to participate.

Mr. Hnatiuk, I am going to move on to somebody else, but if you could think about that, I'm going to give you the last minute of time. Do you mind if I do that?

[Jeff Hnatiuk]

I can do that.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Great.

Mr. Bobocel, I read your brief. I have to say, I have seen you testify before, and I have always enjoyed your testimony.

I was kind of surprised to see that there was no mention of workforce mobility as one of the major challenges for small businesses. Of course, you represent just about all of them in Edmonton. Was that left out as a matter of course, or do you think it was just better to focus on these things that are obviously very important?

[Robin Bobocel]

Certainly, workforce is probably the most driving issue in Alberta. At the Edmonton Chamber of Commerce, we are guided by five strategic priorities. Developing our workforce is one of those five. We don't rank them, but that's one of the five. We are certainly active on the file in our effort to advocate to all levels of government the urgency of finding solutions to the workforce challenges we face in Edmonton, Alberta, and indeed across the country. However, for our purposes at this pre-budget consultation, we felt that these three recommendations were perhaps broadest, and arguably more effective, for small businesses across the country. That's why we attacked them.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

I thought that was why.

Just briefly, are you familiar with the mobility file, in general terms?

[Robin Bobocel]

I can speak to it in general terms.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Is there a belief that to tie it to the EI file would be the most effective means of encouraging mobility, by way of either tax breaks or incentives to move, temporarily or full-time?

You know that I am from Fort McMurray.

[Robin Bobocel]

Sure.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

We have 30,000 people from Newfoundland alone who go there every two weeks, for instance. Would you suggest that this is one of those methodologies by which to encourage people to move?

[Robin Bobocel]

We don't have a specific policy on that issue. However, we have supported the government's efforts in the past to do that, yes.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

I notice that on the second question you say, “It appears there was general agreement that taxes are a cost to business which is passed on to individual consumers and thus everyone benefits when there are less costs to pass on.” Do you agree with that statement?

[Robin Bobocel]

Yes.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Okay. The NDP, on page 4 of their platform, had a carbon tax that was going to tax corporations or tax consumers somewhere around $221 billion. Hypothetically, who would ultimately pay that?