Ladies and gentlemen, I want to begin by thanking the members of the committee for studying the issue of the closure of the Montreal East Shell refinery.
For more than 12 years, I have been the president of the workers' union for this refinery, CEP local 121, which is affiliated with the FTQ. I have worked in the refining sector for 33 years. I am here because I believe that the Montreal East refinery can and should continue to operate, and that it can do so in a profitable manner while serving the Quebec market as it has done for 77 years.
As soon as Shell announced its plans to close the refinery a year ago, indicating that it preferred to sell the refinery, the union supported selling the refinery and protecting jobs.
I want to go over the reasons why the refinery should continue to operate.
First of all, it is profitable and has made money every year for the past 18 years, except in 2009, which was a bad year for the entire industry.
Second, it supplies a stable market with specific products that other refineries do not produce in large enough quantities, such as aviation fuel.
Third, it is directly responsible for 800 jobs and indirectly responsible for 3,500 jobs.
Fourth, it generates $240 million in economic benefits a year.
Fifth, the refinery has undergone upgrades and modernization over the years in order to meet Shell company standards, which are among the most stringent in the industry.
Sixth, closing the refinery could lead to the closure of its Suncor neighbour, which would mean that Quebec would lose two-thirds of its refining capacity.
Seventh, the disappearance of the Montreal East refinery would mean the end of the petrochemical industrial cluster.
Eighth, if the Shell refinery closes, Quebec will lose 25% of its refining capacity. What is worse, the entire aviation, civil and military fuel supply currently provided by the Montreal East refinery is at stake, not to mention the dependence with respect to importing.
That does not include the fact that any scenario put forward by the company based on the on time, on spec arrival by ship of refined products from abroad is the stuff of science fiction. The last three ships that arrived in Montreal were further proof of that. When ships do not arrive on time, it results in shortages at the pump, such as the one experienced by Quebeckers in June.
We are here because despite the fact that Shell received bids that satisfied the conditions set out in its February 16 document, no agreements were reached, contrary to the commitment to sell the refinery that Shell made to the workers, the community and the government.
Furthermore, even though the document put out by Shell on February 16 outlined the conditions under which it would sell the refinery, the company was not all that committed to selling. That is why the committee received confirmation from Shell on four different occasions, from Mr. Williams, Mr. Oblath, Mr. Rathweg and Mr. Marion, that it was prepared to sell if the conditions outlined in its February 16 document were fulfilled.
That confirmation changed the nature of the contract between Shell and the committee, such that if a buyer was prepared to do business with Shell under its terms, Shell had to sell its refinery to the buyer in question. That is the nature of the commitment undertaken by Shell that parliamentarians must consider today.
When Shell began the process to sell the refinery, it did not open the virtual data room, which brought together the refinery's financial documents and conditions of sale, until October 2009, and Shell closed it two months later in late December 2009. It was a fleeting period that should have opened the door to a serious process.
Despite rumours that certain companies were interested in buying the refinery, on January 7, 2010, Shell publicly announced its plans to convert the refinery to a terminal.
The union could not stand by in the face of such a senseless decision, both from an economic standpoint with respect to the 800 families directly affected and from the standpoint of the country's energy security. Our arguments are well-founded, and we have received considerable support from sincere non-partisan parties, initially from fellow union members but also from the Montreal East community. And I would just like to point out that Montreal East Mayor Robert Coutu is here today and has been steadfast in his support since the very beginning.
A coalition of more than 80 companies and socio-economic leaders was formed, and support has come rolling in from every political party, at the municipal, provincial and federal levels. Montreal's city council moved a unanimous motion, and governments sent letters to Shell in an attempt to delay the closure. And Shell delayed the closure for three months, until June 1. As early as February, we helped form a survival committee, chaired by Michael Fortier. It brought together union, municipal, provincial and federal representatives. As a member of that committee, I noticed that every time we took a step forward, Shell would raise the bar higher; I felt as though I had been invited to a silly dinner game.
Throughout the committee process, Shell engaged in doublespeak. On one hand, Steve Rathweg and Christian Houle told us that Shell preferred to sell the refinery rather than convert it to a terminal. On the other hand, however, local management at the refinery did everything in its power to dash the legitimate hopes of workers that the refinery would be sold. Just about every day for the past six months, supervisors and managers told workers the same thing: your RE/MAX agents committee will not find a buyer, it is impossible. If Shell could not find one, there were none. Then, when the committee managed to find five buyers, despite the extremely tight deadline, companies that Shell deemed serious and credible, companies it allowed into the data room, the line that management fed employees was that it would not go any further, that when the potential buyers saw the figures, they would not make an offer.
When two companies and practically a third made offers before the June 1 deadline, management told employees to stop operating one of the refinery's most profitable units, lubricating oils, and to stop protecting boiler 13, which had been shut down on May 18. Seventy-two hours after the offers had been made, management sent employees an email indicating that the two offers had been rejected. At that point, the ministers demanded an explanation from Shell regarding the lack of negotiations.
First, reassurance was given that Shell still wanted to sell, and steps were taken to submit a better offer that satisfied the conditions. And despite that, management continued to send out the same message within the refinery—Shell would never sell and the refinery was worth more than $1 billion to it, which was 5 to 7 times the amount it had told the committee. Certain supervisors and managers were so fervent in getting that message out that the union filed a harassment complaint.
Even though the sale process has ended, the doublespeak has not stopped. The local management has changed its tune and is now saying that the terminal will not be profitable, that the land and facilities are not configured for that purpose and that Shell estimates that the terminal will rank in the fourth quartile in terms of results.
It is our opinion that Shell did not really want to sell the refinery, contrary to what its commitments may suggest. Shell gave the Fortier committee a light pat on the back but never believed that the committee would succeed where it had not. What is worse, Shell probably thought that it would make the refinery so unappealing to buyers that no company would want it. When it was faced with a serious buyer, Shell ended up turning down an offer at the higher end of the range it had itself set. And that was no doubt to hide the fact that it had gone to great lengths to stop the progress of the Fortier committee.
Thanks to this parliamentary committee, we can now get to the bottom of the situation.
We still believe that the refinery can and should continue to operate, that our information shows there is still an offer on the table that meets Shell's conditions and that Shell will speed up the process of dismantling equipment. For those reasons, we have obtained an interlocutory, interim injunction from the Superior Court to stop Shell from rendering the refinery equipment unusable. That injunction is valid until September 10.
During that procedure, Shell submitted its terminal conversion plans, in which it indicated that it would remain open to any offer to purchase its Montreal East refining facility throughout the terminal conversion process. Therefore, according to the document Shell submitted to the department, Shell will be prepared to sell the refinery until the terminal conversion process has been completed.
Members of the committee, it may not be too late.
Thank you.