Finance Committee on May 18th, 2017

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you.

Ms. Arte, your conversation with Mr. Fergus raised some questions for me. It wasn't directly as part of your earlier testimony, but you raised issues about students finding jobs and opportunities in certain sectors. It is interesting, because when we did pre-budget consultations, a constant theme was the lack of access of information or the workforce information was in silos.

With the help of a group like yours, the Federation of Students, perhaps students could put pressure on universities to better understand workforce numbers. You raised the issue of teachers in Ontario. I was graduating from high school at a time when everybody went into teachers college, but that was because there was a shortage, and the result was that more people went into that stream than were probably needed. In the GTA we're going to have a shortage of skilled labour.

How do we ensure that institutions, in government and post-secondary education, are giving students the information they need to plan properly, depending on the field they want to go into?

[Bilan Arte]

I think that there are a number of different tensions there. The number one thing you point out is that a lot of young people today are finding themselves in a very competitive job market, a job market that provides a lot of precarious options for them as young people and as new graduates. For a lot of post-secondary institutions today, there are actually quite a few problematic private partnerships that are taking on the role of guiding our institutions in the options being provided to students. Students working on different research projects on campus, for example, often partner with private industry, the private sector. Those are often precarious situations of employment for young people. These situations, however, push them into specific types of fields, because of those public-private partnerships.

I think there is a huge role for the federal government to play when addressing the underfunding of the post-secondary education sector. The government can help by ensuring that our public institutions are actually accountable to the public. In Ontario, the institutions that govern, financially speaking, the direction of the universities and colleges are almost overrun by representatives from the private sector. A lot of that is reflective of the fact that most of the funding for our post-secondary institutions is now based either on tuition fees or on the private sector. Public funding is under 50% in the province of Ontario.

This is a very worrying trend. I think the number one intervention the federal government can make is to ensure that public funding remains the main funder for our post-secondary sector. This would create an opportunity for our post-secondary sector to be truly responsible to the public.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you.

[The Chair, Liberal, Wayne Easter]

Mr. Aboultaif.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you very much for coming before the committee today. I have a question for Mr. Brakel and Ms. Aquin.

I can't establish a reality check of the status quo, the economic situation we have from declining investment, high taxes, high payroll taxes, a carbon tax, and other policies that turn off investment that might otherwise come our way. Today there is a huge decline in investment, from $81 billion to $31 billion, in the oil sector alone.

There's a ban on tankers on the west coast, while they're allowed with the Saudi oil and other oils in the Atlantic provinces, and in the chair's riding. In respect of LNG, what's happening south of the border? The picture as we see it is very concerning from a business perspective and an economic perspective. In going forward, it seems that we're doing the wrong thing at the wrong time.

Could you elaborate on that? From the point of view of our policies, our approach, our economy, and the surrounding situation, it seems that this government is doing the wrong thing at the wrong time.

I would like to hear from Mr. Brakel and Ms. Aquin.

[Hendrik Brakel]

Thank you very much for your question.

I think that's absolutely critical. The defining variable of our economic well-being will be our ability to export and sell into the global economy. Our domestic economy has been weakening. Canadians continue to borrow and spend, and that has sustained our GDP growth, but when we see our exports basically flat for two years in a row and declining business investment for basically two years, what we want to do is create a more dynamic and exciting business climate to attract more foreign direct investment.

One of the things that we hear from multinational companies is that the Canadian groups will have to pitch to their headquarters and say, “This is why you have to allocate an additional billion dollars to Canada.” Then the next is the group from Mexico, and the next is the group from Europe. It is a very competitive dynamic. That's why we really want to focus on the costs of doing business in Canada. We want to make sure that we're competitive.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Ms. Aquin.

[Elizabeth Aquin]

Thank you for the question.

From the oil and natural gas industry's perspective it seems that we haven't had a proper national dialogue on the direction in which we want to go in this country. As I have said, and as Mr. Liepert has said, this has been the economic engine of the country for many years. It has been a huge portion of our GDP, a huge contributor to jobs, to our standard of living, and to well-being in the country. Because of the discussion around climate change, I think oil and gas development appears to be discouraged and therefore, capital investment is being pushed away.

As I mentioned, we develop our resources responsibly compared to the rest of the world. We care so much about the environment that it doesn't make sense for us not to produce our resources and sell them while the world needs them. Our biggest customer—95% of our resources go to the U.S.—has become our biggest competitor, so it is taking less and less of our product all the time. We are selling it to them at at discount, and we are buying it back from them in eastern Canada at full price. It doesn't make sense for Canadians. We are losing jobs, royalties, and many economic benefits because of this.

Our industry does a great job of technology and innovation. As I mentioned, we are leaders in that. The Canadian oil field services sector is renowned around the world for its technology, innovation, and expertise. I think it's a shame if we discourage that and not take advantage of it.

Our members are pursuing clean tech. They are incorporating renewables into their service offerings, even within the oil and gas industry. If carbon is the problem, then I think we should address the carbon issue and try to lower that rather than throw out the baby with the bathwater, because by taking advantage of our natural resources, we can benefit. We can take those revenues and use them to develop technologies to reduce emissions and move to renewables.

At this point, I think we agree that we need all sources of energy to meet growing global demand. We aren't saying that this is the only one. What we are saying is that while we need it we should develop it because we do it so well. I think you will find that many of the exploration and production companies and the transmission companies, the pipeline companies, are already investing in renewables, such as wind and solar, and so forth. If we discourage investment, we are just hindering their ability to pursue those goals. I think it benefits us all to remain competitive. I see that we are eroding our competitiveness by certain actions that we're taking.

[The Chair, Liberal, Wayne Easter]

We will have to cut it there. We are beyond time.

Can you explain why the Canadian oil discount price exists? There's a discount price in Canada. Can you explain that?

Also, what difference would the energy east pipeline make? I come from eastern Canada. That's where your 800,000 barrels come in from foreign sources. How would that improve investment in the oil and gas sector?

[Elizabeth Aquin]

The discount is because we only have one customer. We are selling to the U.S. The U.S. can ship their products offshore and can get world market prices for it.

If we had energy east.... In fact, maybe I shouldn't say this, but I think Keystone is just perpetuating the discount. It's still going to go to the same customer. However, it does achieve de-bottlenecking of our products. There will be a point in the next few years where we won't have the means to get our product to market unless we rely more and more on rail, and we know that is not the safest route.

In terms of energy east, it's because right now we are buying back that product from the U.S., from Venezuela, from Saudi Arabia, from world markets. In fact, not only are we paying full price for it there, but by doing that, we are creating more emissions because of the transportation of those fuels from other countries, on tankers and so forth, and displacing Canadian jobs. Again, if we had energy east, we would be able to sell to Europe and countries there.

On the west coast, the moratorium isn't helping, because that would give us access to more of the Asian markets. Each access would present different markets and allow us to get world prices so that we're not totally dependent on the U.S.

[The Chair, Liberal, Wayne Easter]

With that, you are the last group of witnesses, and we certainly want to thank you for your appearance.

Before we adjourn, as chair and on behalf of all members, I want to thank all those who assisted the committee in getting to this point. We have three more divisions with public servants to finish, and amendments have to be in by May 25 at five o'clock.

I especially want to thank the Library of Parliament analysts for providing us with a 65-page briefing document on a 300-page budget implementation bill. It's certainly not omnibus. We know that.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

It was.

[The Chair, Liberal, Wayne Easter]

I also want to thank the clerk and the assistant clerk for the difficult chore of scheduling witnesses, rescheduling witnesses, and rescheduling us. We thank the translators in the booth as well, who sometimes had a hard time keeping up with some witnesses, Ms. Arte.

[Voices]

Oh, oh!

[The Chair, Liberal, Wayne Easter]

Thanks to the committee members for their endurance. We will meet again on the 29th.

The meeting is adjourned.