Evidence of meeting #167 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was energy.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Sergio Marchi  President and Chief Executive Officer, Canadian Electricity Association
Timothy Egan  President and Chief Executive Officer, Canadian Gas Association
Paul Lansbergen  President, Fisheries Council of Canada
Angella MacEwen  Senior Economist, National Services, Canadian Union of Public Employees
Howie West  Work Reorganization Officer, National Programs Section, Public Service Alliance of Canada
Kim Rudd  Northumberland—Peterborough South, Lib.
Blake Richards  Banff—Airdrie, CPC
Peter Fragiskatos  London North Centre, Lib.
Dave Van Kesteren  Chatham-Kent—Leamington, CPC
Shannon Joseph  Vice-President, Government Relations, Canadian Association of Petroleum Producers
Ben Brunnen  Vice-President, Oil Sands, Canadian Association of Petroleum Producers
Fraser Reilly-King  Research and Policy Manager, Canadian Council for International Co-operation
Joel Neuheimer  Vice-President, International Trade and Transportation, Forest Products Association of Canada
Yves Savoie  Chief Executive Officer, Heart and Stroke Foundation of Canada
Scott Vaughan  President and Chief Executive Officer, International Institute for Sustainable Development
Serge Buy  Chief Executive Officer, National Association of Career Colleges

10:05 a.m.

Chatham-Kent—Leamington, CPC

10:05 a.m.

Liberal

The Chair Liberal Wayne Easter

Thank you, Dave and all.

Mr. McLeod.

10:05 a.m.

Liberal

Michael McLeod Liberal Northwest Territories, NT

Thank you, Mr. Chair.

I'll be quick. Dave asked a couple of the questions that I was going to ask.

I represent the Northwest Territories, so I'm quite concerned about the issue of natural gas. Some of our communities are running dry: Inuvik and Norman Wells. They've been bringing in fuel from B.C., which is quite expensive. Our government has provided some money to do a feasibility study in the Inuvik area. The Inuvialuit there want to look at developing their own reserves and are looking at compressed natural gas.

Should these studies prove successful, how would your recommendations assist in making their potential project a reality?

10:05 a.m.

President and Chief Executive Officer, Canadian Gas Association

Timothy Egan

A fund for rural and remote expansion would assist with the core infrastructure costs for communities like those in your riding. Straight up, that's the way we could assist.

You mentioned the system in Inuvik. As you know, it's Canada's most northerly distribution utility. When local supply was drying up, the arrangement was made for the trucking of liquid natural gas from the Lower Mainland in British Columbia. That was a more cost-effective alternative than any of the other fuel options, which speaks to the value proposition.

To your point, to give you more long-term fuel security, I think there needs to be federal support for infrastructure, as there always has been in the north, but it needs to be focused on the natural gas opportunity.

10:05 a.m.

Liberal

Michael McLeod Liberal Northwest Territories, NT

It's ironic that in the community of Inuvik and most of the Mackenzie Valley there are natural gas wells all over the place, yet we're trucking in natural gas from B.C. at a very high cost. I'm hoping there's going to be a solution there. They're looking at solar and wind, but we're in darkness half the year.

To the Fisheries Council, I wanted to touch base on the freshwater marketing board and that whole initiative and the challenges they're going through. For a while, I think maybe only one or two board members were left. I think the people from my riding, the Northwest Territories, were one of the people who still participated in that whole initiative. Perhaps you could tell me where that's at.

I'm really curious about whether your organization is working on anything to increase the number of indigenous fishers in the industry. I look at Great Slave Lake, where I'm from. We have licences allocated, but they're not taken up. We have indigenous communities all around the lake that can't take part because they don't have the harbours, the community docks or the processing facilities. We're bringing in people from the south to fish in our lakes, and our people stay unemployed. Are you familiar with that whole scenario? Is this the case in other places? How can we fix it?

I had lots to ask.

10:05 a.m.

President, Fisheries Council of Canada

Paul Lansbergen

On your first question on the Freshwater Fish Marketing Corporation, the government just announced within the last week a process to look at options for how to position that corporation in the best way going forward. A number of people were appointed to an advisory panel. We'll see what the outcome of that is. Hopefully it will be a very good, fruitful exercise that will position the corporation for a much better future.

Indigenous participation in the sector varies across the country. In B.C., about one-third of the sector already has indigenous participation. In the north, in Nunavut, where we have members, it's 100% wholly owned by indigenous communities, economic development corporations that purposely pay dividends to the communities. In Atlantic Canada and elsewhere, you have various types of business relationships between the companies and indigenous communities, whether supply or otherwise.

One of the big issues I think we would all agree on is how to build the capacity for indigenous communities to be more meaningful participants in the sector. Part of the programs I mentioned is the Pacific integrated commercial fisheries initiative. There's also one in Atlantic Canada. The government has announced a new one for northern Canada. These programs have shifted away from buying licences to providing funding, resources and training to the indigenous communities to build their capacity to operate fisheries on their own. A lot of that needs to continue, but giving them the access to licensing is the harder nut to crack, I think, in the whole issue.

10:10 a.m.

Liberal

The Chair Liberal Wayne Easter

Thank you all.

Witnesses, what would be the key point you would make in terms of increasing Canada's competitiveness without causing the federal government to increase its deficit or spend more money?

You hear lots of talk about capital cost allowances, investment tax credits and so on, in the United States, making us less competitive, among other things. What could we do that would make us more competitive as a nation, improve our economy, and not cost us money? If I listened to all the witnesses we hear before this committee, we could spend millions, but what can we do to be more competitive without spending money?

Please just give one or two points. We'll start with Tim, and then Sergio.

10:10 a.m.

President and Chief Executive Officer, Canadian Gas Association

Timothy Egan

Mr. Chairman, I would reduce the regulatory burden.

10:10 a.m.

President and Chief Executive Officer, Canadian Electricity Association

Sergio Marchi

Yes, I was going to say, lighten the load.

To an earlier question, I didn't say that we advocated deletion. First of all, we're amalgamating all the regulatory initiatives impacting our industry from among 14 governments, and it's proving to be quite the job.

Second, Tim was right in mentioning a number of bills and instruments to which we have offered amendments. We're not saying, don't do Bill C-68. What we're saying on the fisheries bill, for example, is, don't impose the killing of one fish rather than an entire school of fish to be the new threshold.

Regulatory lightening is certainly one. Second is increasing our productivity in measure to the gap that's always been there with the United States, as a way to manage and bridge that gap.

10:10 a.m.

Liberal

The Chair Liberal Wayne Easter

I've been around for a while. I've seen the previous government of my party and the government of the guys over here on the left do regulatory reform, but why does it not get done? I hear all the time of regulations. Why can't we do something between municipal, federal and provincial governments to get rid of some of the regulations? Why hasn't it happened? Are there any views?

Go ahead, Angella.

10:10 a.m.

Senior Economist, National Services, Canadian Union of Public Employees

Angella MacEwen

Regulations often serve a purpose, so it's not costless to get rid of regulations. First of all, it takes a great deal of time and energy to look down and ask, “What was the purpose of this regulation? How do we serve this purpose but allow the investment in business that we need?”

For example, methane regulations are very important because methane is much worse for the environment than carbon. Perhaps there was a reason why we couldn't recover fishing nets in the past, but maybe we haven't kept up with the changing technologies or how things happen. I think there are two reasons here, and there is also, obviously, getting the layers of government to work together. What stick does the federal government have to get the other levels of government to co-operate?

I would say that amending regulations is not costless. It takes a lot of time and energy, public sector manpower, and consultations on our part as well, to come to the table and tell you what you need to change. That takes a lot of resources on our part. That's one reason why that hasn't happened.

10:15 a.m.

Liberal

The Chair Liberal Wayne Easter

I know we—

10:15 a.m.

President and Chief Executive Officer, Canadian Gas Association

Timothy Egan

Mr. Chairman, it takes political will, too.

10:15 a.m.

Liberal

The Chair Liberal Wayne Easter

Yes, that's true.

I know we have to go to the next panel, but I will tell you this on your point, Angella. As an MP dealing with constituent concerns, do you know what my question always is? Why is there no damn common sense in this system? Common sense doesn't exist in this town. It really doesn't.

I don't want to get into a debate. We're going to have to cut it there.

Sergio?

10:15 a.m.

President and Chief Executive Officer, Canadian Electricity Association

Sergio Marchi

Could I just have 10 seconds on political will?

10:15 a.m.

Liberal

The Chair Liberal Wayne Easter

Yes.

10:15 a.m.

President and Chief Executive Officer, Canadian Electricity Association

Sergio Marchi

I was in public life. The federal government taxes, spends, legislates and regulates. I would suggest, with due respect—and I was guilty—that I did a lot of reflecting on the first three, and very little on the last. It's not exactly the sexiest thing for elected representatives. That's number one.

Number two, political will among the levels of government is really required. For example, the ministers of energy, federally and provincially, meet every year. This past year they met in August, up north. We have requested that they do an examination of what the left and the right hands are doing, but they haven't done that. Until you get to that stage, you can't deal with it intelligently. There really needs to be political will, but also political co-operation.

10:15 a.m.

Liberal

The Chair Liberal Wayne Easter

I know Paul wants in, but I am going to have to cut it there.

10:15 a.m.

President, Fisheries Council of Canada

Paul Lansbergen

I just need 10 seconds and a real 10 seconds.

10:15 a.m.

Liberal

The Chair Liberal Wayne Easter

We need a shorter 10 seconds than Sergio.

10:15 a.m.

President, Fisheries Council of Canada

Paul Lansbergen

Yes, it's a real 10 seconds.

Right now, there's the regulatory modernization for a number of key sectors, including agri-food. I will share our submission on that and I urge you to make it a key part of the report to make sure that there is political will to follow that through, so that the centre of government gives enough resources to make it happen.

Thank you.

10:15 a.m.

Liberal

The Chair Liberal Wayne Easter

Thank you. Thank you all for your submissions and for answering our questions.

We'll suspend for a couple of minutes, while the next panel comes forward.

10:20 a.m.

Liberal

The Chair Liberal Wayne Easter

If you're ready to roll, we shall reconvene on pre-budget consultations in advance of the 2019 budget.

First of all, I want to thank each of you for coming today and also especially thank those who presented submissions to us, prior to the August 15 deadline. They are quite valuable to us, so we can get through them and think of some questions, etc.

We will start with the Canadian Association of Petroleum Producers, if you're ready in that corner.

We have Ms. Joseph, who is the Vice-President of Government Relations and Mr. Brunnen, who is the Vice-President for the oil sands, fiscal and economic policy.

Welcome and thank you for coming. The floor is yours.

10:20 a.m.

Shannon Joseph Vice-President, Government Relations, Canadian Association of Petroleum Producers

Good morning, Mr. Chair and members of the committee. Thank you for inviting us today.

The Canadian Association of Petroleum Producers represents the upstream oil and natural gas industry in Canada. Our association has more than 80 members, whose production activities are located in British Columbia, Alberta, Saskatchewan, Nova Scotia, and Newfoundland and Labrador. We are here today to talk about a major opportunity for Canada. According to the International Energy Agency, a part of the OECD, global energy demand is on the rise. People around the world will need more energy in all its forms, in order to improve their standard of living. The agency also predicts that the increase will be like adding another country the size of China to our planet by 2040. Oil and natural gas will supply more than half of this demand in 2040.

Canada has oil and natural gas resources of superior quality; we are a leader in environmental matters; we are committed to social inclusion, and we have one of the most robust regulatory regimes in the world. For those reasons, we believe that Canada can and should become the global supplier of choice to meet the increasing demand for energy in the future.

Why is this a good thing for Canada?

Today, our industry employs over 500,000 Canadians. It contributes more than $109 billion to the GDP. It provides, on average, $12 billion per year to the government, and it will do more. In terms of inclusion, indigenous people represent 6% of our industry’s labour force, while the national average is 4%. In 2016, oil sands companies purchased $3.3 billion in goods and services from almost 400 companies owned by indigenous individuals or communities.

We have invested more than $1.4 billion in hundreds of green technologies, in order to lower greenhouse gas emissions from our activities at the same time as we increase production. These technologies will also result in reducing not only the impact of our industry but also the impact of other sectors in Canada and around the world. We are a vital part of clean technology solutions in Canada. However, for Canada to be able to seize this opportunity, it is essential that the federal government take measures to address Canada’s lack of competitiveness in relation to other countries.

I will now make way for my colleague Mr. Brunnen, so that he can explain what we mean by that.

10:25 a.m.

Ben Brunnen Vice-President, Oil Sands, Canadian Association of Petroleum Producers

For a number of reasons, Canada's oil and gas industry has experienced reduced investment and investor confidence over the past several years. In particular, U.S. tax and regulatory reforms are drawing investment south of the border. Regulatory uncertainty towards achieving greater market access is challenging investor confidence in Canada, and a number of government policy and regulatory initiatives are being considered that have the potential to further hinder industry competitiveness and job creation.

The results have been dramatic. Global upstream oil and gas investment is expected to increase by $56 billion, or 6%, in 2018. The U.S. alone will see an increase of about 15%. In contrast, Canadian oil and gas investment is expected to decrease from $45 billion down to $43 billion. For oil sands, investment is expected to decrease for the fourth consecutive year. This is a far cry from the situation in 2014 when industry investment topped $80 billion.

We recommend that the federal government address these challenges by, first, allowing 100% immediate deductibility of tangible capital investment in a manner consistent with the recent U.S. tax reforms; second, introducing emissions-intensive, trade-exposed protection of approximately 80% coverage of aggregate cost related to climate policy; third, working with industry to jointly examine innovative approaches to financing for small and medium-sized firms in the industry; fourth, expressly acknowledging Canada's oil and gas sector as not subsidized, by confirming that remaining oil and gas tax measures are part of the benchmark system as stated by the Department of Finance in the 2017 Auditor General's report; and finally, building upon the federal government's Generation Energy council report by adopting a vision for Canadian upstream oil and gas as the supplier of choice in meeting global energy demand.

Thank you for this opportunity to present today, and we look forward to your questions.