Evidence of meeting #26 for Foreign Affairs and International Development in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was venezuelan.
A recording is available from Parliament.
Conservative
Ziad Aboultaif Conservative Edmonton Manning, AB
Being from Calgary and Edmonton, we know how important the oil and gas industry is to the economy of Canada and to the supply for the world.
You mentioned in your opening remarks that we should speed up additional pipelines to the west coast. Can you elaborate on that further, please?
Director of Energy and Natural Resources Policy, School of Public Policy, University of Calgary, As an Individual
There are a complex set of factors around the decision for the west coast pipeline. I do agree that it should have some form of carbon pricing linked and it should have indigenous support.
The market case for the pipeline is quite strong at the moment, both on the supply side, in terms of disruptions from other traditional heavy oil suppliers like Venezuela and Mexico, and on the demand side, specifically with the construction of these complex refineries in China and India that can process our heavy oil.
In my view, those two factors together, along with the uncertainties in the relationship with the U.S., support more access to the west coast.
Conservative
Ziad Aboultaif Conservative Edmonton Manning, AB
In Alberta and in Canada, we produce the most ethical oil in the world. Could you please compare the oil produced in Venezuela with the oil produced in Alberta? I think that will be beneficial too.
Director of Energy and Natural Resources Policy, School of Public Policy, University of Calgary, As an Individual
From a technical perspective, both are what we call extra-heavy oil, meaning that the density is very low. There's also a lot of sulphur in the oil, so it requires some additional processing. Refiners like those types of barrels because they tend to be cheaper than the light sweet oils that constitute the major benchmarks for the oil market. A lot of refinery capacity was first built in the U.S. and then in Asia to process those types of barrels.
Technically, they're very similar below ground. Above ground, of course, Canada is a much more stable environment. Our companies are doing a great job of developing the resource here. We're slowly lowering the greenhouse gas intensity of emissions. We're slowly developing indigenous partnerships, whereas obviously, as we've been discussing, there's still a lot of uncertainty about the political climate in Venezuela and the capacity of the industry to get back to where it was 20 years ago.
Conservative
Ziad Aboultaif Conservative Edmonton Manning, AB
I have a final question.
We heard that some of the oil going to China was as low as $20 a barrel. Do we have any background on that?
Director of Energy and Natural Resources Policy, School of Public Policy, University of Calgary, As an Individual
Yes, that really reflected two things.
First, China made some very large loans to the Venezuelans 15 years ago or so, and the loans were being repaid with oil at a heavy discount. That was further exacerbated by U.S. sanctions that limited competition for China. It took away the ability of most U.S. refiners and most European refiners to buy that oil. That gave China a lot of leverage with Venezuela and led to those very favourable prices.
Liberal
The Chair Liberal Ahmed Hussen
Thank you very much.
Next we go to Rob Oliphant.
You have five minutes.
Liberal
Rob Oliphant Liberal Don Valley West, ON
Thanks to all our witnesses for sharing wisdom and thoughts with us today.
I want to get into some of the politics of this period of transition.
I think there has been pretty much a consensus among our like-minded partners that the presidential elections of 2024 were illegitimate. We have agreed with that with the non-recognition of the Maduro presidency. The 2025 parliamentary elections were a bit more complicated, because the opposition barely participated, with the ruling party coalition gaining some 84% of the parliament.
Now we have the long-time vice-president acting as President. Her brother is the president of the National Assembly. This week, we saw a law passed at the National Assembly with respect to mining, opening it up to private interests. This was totally unheard of in the previous regime.
I'm trying to understand how the leopard changes its spots for the benefit of the Venezuelan people. I'm trying to understand how this period of transition is not going to be simply an ability for outsiders to gain access to critical minerals, gold and other assets that should belong to the Venezuelan people. I'm just trying to understand the nature of this transitional government and whether there is the potential for abuse and for the Venezuelan people to not actually receive any advantage.
I would like Ms. Dickinson and Mr. Di Martino to comment on that.
Deputy Director, Latin America, International Crisis Group
Daniel, do you want to start?
Fellow, Manhattan Institute, As an Individual
I would be happy to.
The greatest risk is that they might legalize investment from foreign companies, but then they probably won't come. Mining and oil extraction are long-run investments. Right now, all these companies only have a guarantee that their assets won't be expropriated. Criminal groups will target them as long as the Trump administration is in power, because nobody credibly believes that a future administration will use force against the Venezuelan regime like they did on January 3. That is the only thing incentivizing this transition.
This is important to understand. This is not happening because the regime wants private investment. This is happening because the regime fears the U.S. government. The U.S. government asked them to open up for private investment, so they're doing it. Private investors need to make a choice: “Am I going to recover my investments or not?” If you believe that there will be a democratic transition, then yes, you will recover your investment. However, if you believe that this transition will lengthen beyond the Trump administration, over three years, then there is a high risk that you won't recover your investment.
The investment would be very good for the Venezuelan people, not even because of the tax revenues, but because of local hiring. In fact, the latest news that came out in The Wall Street Journal or in Reuters was that they couldn't find enough oil engineers in Venezuela because all the oil engineers left the country. Which American or Canadian oil engineer [Technical difficulty—Editor].
Deputy Director, Latin America, International Crisis Group
I'll go ahead while we wait for him to join again.
A critical point here is that the transition that has happened has been an economic opening and very explicitly has not been a political opening. I think that is the model the Trump administration has put forward as the immediate-term ideal, allowing private enterprise and trade to be reactivated precisely and directly without this political change.
It's been interesting to watch how the Chavista regime has reacted to this operation and to the pressure from the United States. They've explained it internally in a few ways. The first one is the explanation that they are essentially negotiating with a kidnapper at gunpoint. There is this idea that they are under so much pressure that the changes they are making are not by their own volition, but rather are about survival. The other explanation internally, within the regime, has essentially been that times have changed, and they need to take advantage of the situation. They could do better economically by switching sides and working with the United States.
There are various levels of transition. Obviously, the first one is economic. It's not nothing, particularly if prices stabilize and if families can access basic resources in a way that they have not been able to in many years. We're talking about the price of rice and goods so that families will no longer be engaging in coping mechanisms such as eating fewer times a day.
Then there's another level of transition, which is civic freedom—for example, allowing protests, political speech or journalists. The types of protests we've seen with families outside of prison facilities asking for the release of political prisoners are a slow and gradual step towards civic freedom.
The final one would be political freedoms. We're still very clearly far from that, I think, not only because Caracas is not interested in a political transition, but also because the U.S. has not asked for it in an explicit way. I think U.S. pressure will calibrate the speed at which this transition happens.
Fellow, Manhattan Institute, As an Individual
My apologies. I had some technical issues, but I'm back.
Liberal
The Chair Liberal Ahmed Hussen
That's not problem. We'll come back to you.
I'm now giving an opportunity to Monsieur Brunelle-Duceppe.
You have two and a half minutes.
Bloc
Alexis Brunelle-Duceppe Bloc Lac-Saint-Jean, QC
[Member spoke in Spanish, interpreted as follows:]
Pleased to meet you, Mr. Di Martino. Welcome to the committee. I will be speaking French.
[Translation]
We talked about Ms. Machado. For the benefit of the committee, I'd like to know whether you think that Leopoldo López will also be part of the political life people are hoping for or the transition to a democratic state.
Fellow, Manhattan Institute, As an Individual
It's his choice. In a free country, I think he should be allowed. I personally prefer, obviously, Ms. Machado. I think he prefers her too, and he defers to her, actually, but of course he should be free.
Bloc
Alexis Brunelle-Duceppe Bloc Lac-Saint-Jean, QC
That's perfect. Thank you very much.
Ms. Halvorsen, in your opening remarks, you talked about the contribution certain countries make to your organization.
We live in a strange world, I would say. Some would say it's a new world order.
A number of countries—the United States, first and foremost—are significantly reducing their budget for international development aid and support for organizations like yours. We saw it with USAID, the United States Agency for International Development, but we're also seeing a number of European countries moving in the same direction. Canada also followed this trend in the most recent budget, with cutbacks of up to $2.5 billion. Japan has all but eliminated that type of funding.
Are you concerned about this turn of events in terms of the wealthier nations' contribution? Norway, which maintains aid equivalent to 1% of its GDP, is really the exception that confirms the rule. Are you concerned about the direction these countries are moving in right now and what impact it could have on the current crisis in Venezuela?
Acting Representative in Venezuela, United Nations High Commissioner for Refugees
Thank you very much. It's a difficult question to answer quickly.
We, of course, have been forced to significantly reduce our field presence, our work and the kinds of services we are able to provide to persons in human mobility. That's true for the Americas and for all of our operations across the world.
To be very brief, the humanitarian work we do is only possible if it's felt as a commitment by anybody and everybody who can contribute, so of course we are concerned. We are concerned that there doesn't seem to be the same level of commitment to humanitarian causes.
Liberal
The Chair Liberal Ahmed Hussen
Thank you very much.
We go next to MP Kramp-Neuman.
You have five minutes.
Conservative
Shelby Kramp-Neuman Conservative Hastings—Lennox and Addington—Tyendinaga, ON
Thank you, Mr. Chair.
I'll start with Mr. Di Martino.
I'd like to thank you for joining today. You sharing your personal experience after growing up in Venezuela under the Chávez and Maduro governments is interesting, and your perspective is quite welcome in this discussion.
Could I ask you to expand on your experiences prior to leaving in 2016?
Fellow, Manhattan Institute, As an Individual
When I was a kid growing up, it was really a normal childhood in the early 2000s, meaning I went to school, we had a car, we owned our apartment, we had electricity and water and we bought what we needed for food. We went on vacation to Margarita Island and stayed in a great hotel. I met many foreigners who travelled to Margarita. Maybe Ms. Halvorsen has also been there to visit.
Then everything changed. We started losing power. We started having no water for days. We had to shower with buckets. Then, of course, we were going up five flights of stairs to bring up food, and we had to plan our food. We had to put our fingerprints in a scanning machine so that the government could tell us what we were allowed to purchase and which day of the week we were allowed to purchase it, and we'd run out. There were price controls, hyperinflation and not having enough cash.
Venezuela might be the only country in the history of the world that had hyperinflation and a shortage of cash at the same time. How do you even have that? It was because they printed money electronically, and then there was no cash, so the economy was dollarized. That was my experience economically.
Conservative
Shelby Kramp-Neuman Conservative Hastings—Lennox and Addington—Tyendinaga, ON
Can you share what Venezuelans on the ground right now are saying about the removal of Maduro? In your opinion, do you think we can expect popular support from Venezuelans to restore the democratic process in Venezuela?
Fellow, Manhattan Institute, As an Individual
Oh, wow, you should have seen my phone the morning after the removal of Maduro. I have friends who were in the vicinity of the military bases that were hit. One of my friends' windows broke because of the blast. They were very happy, I can tell you. Everybody was very much ecstatic.
Now everybody is just expectant. People want liberty in Venezuela. They want democracy. It's a unified country. It's not a country that has ethnic, religious or linguistic conflict like in many parts of the world or the Middle East. It's just a country that wants to move on. They're very grateful for what the United States did, and they're very grateful to all the countries and people around the world supporting us.
Conservative
Shelby Kramp-Neuman Conservative Hastings—Lennox and Addington—Tyendinaga, ON
Thank you, Daniel.
My next question is directed to Dr. Johnston.
In a recent article you wrote on—
Liberal
The Chair Liberal Ahmed Hussen
Mr. Johnston had to leave early, unfortunately, but if you have questions for him, the clerk will forward them to him so you can get a response.