Industry Committee on Oct. 24th, 2016

[Bob Masterson]

Yes, and it's important to remember that we are funding development in the gulf and in China and Asia and the United States right now.

Those companies that made it through the last two great recessions are lean and mean and belong here. They make profits every year. Those profits are not being reinvested in Canada because the shareholders can decide where they wish to invest. Canada has been very attractive to investors historically, but they're making a bet that it won't be as attractive in the future. That's the work of this committee and the provinces—to make the case that Canada can be the place for their next investment so that we can return those profits from Canadian operations to new investments here in Canada.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're going to Mr. Arya.

You have seven minutes.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Mr. Chair.

Thank you, guys.

Mr. Masterson, I agree with most of the things you say. Personally, I have knowledge of what is happening in the Gulf Cooperation Council countries, the oil-rich Arab countries, where every single day a new manufacturing plant is coming up, adding value to the oil and the natural gas.

When I say “adding value”, many people here think of refineries alone, but the downstream segment is so vast it's unimaginable. One of the books I bought, which I haven't read yet and is still in my personal library, is A History of the International Chemical Industry. I had a personal interest in that quite some time back, but not anymore, I guess.

You talked about the federal government partnering with the provinces. You mentioned Alberta's $400-million fund. How can the federal government partner with Ontario? I know you mentioned that the chemical industry in Ontario has been recognized as an advanced manufacturing sector. What are the specific ways in which the federal government can partner with Ontario?

[Bob Masterson]

For the strategic sectors it has identified, Ontario is working on strategies to enable growth in those sectors, chemistry being one of them. Again, one thing that is looked at is the total footprint of regulatory activity. They've indicated that they don't wish to change policies, but are there administrative processes that could be made more efficient or replaced with something that works better? We are doing that work with them as well.

I can't describe what it would look like. I won't say that we have an economy-wide issue and it is the work of this group to try to identify the sectors; the provinces have largely done that. Why not work with them, take advantage of the good work they've done in the last half-decade at least, and figure out the correct role for the federal government to complement that?

[Chandra Arya, Liberal, Nepean, ON]

Mr. Masterson, for the companies that decide to invest here in Ontario rather than Alberta, are there any additional problems in terms of, say, environmental clearance, etc.?

[Bob Masterson]

I wouldn't say problems with environmental clearance, but there is no question that Canada, and Ontario in particular, is a very complex and difficult place to do business. In fact, one of the recommendations from the Barton report is to create a sort of concierge service to help walk very large investments through this morass of complex and overlapping regulatory and approval processes.

If you were to go to Louisiana or Texas, that's exactly the way it takes place: here is the guy or the gal who is going to help get your application through. If there are problems, it's not going to go through, but they are going to tell you today what your problem is, and then they'll get it to the next stage.

We have situations where people will wait.... I can tell this group—it's public knowledge—that to achieve an environmental approval in Ontario today, the wait time is 700 days. We're talking routine environmental approvals, not major applications for new projects. If I put in a new piece of equipment that reduces my environmental footprint, or if I would like to do that, I will wait, on average, over 700 days for approval.

That gives you a sense of the complexity of doing business.

[Chandra Arya, Liberal, Nepean, ON]

Yes.

Mr. Chair, I would like to share my time with Mr. Baylis.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Thank you, Chandra.

That's leading to the questions I was looking at. In one of the presentations you gave to us, you touched on regulatory overlap and compliance costs and the opportunities to eliminate duplication. Can you expand on that, please?

[Bob Masterson]

I'm not sure I said that exactly.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

It was in one of the presentations that were sent to us.

[Bob Masterson]

The area that concerns us the most with overlap—I wouldn't say “overlap”, but integration—would be how the proposed carbon pricing is going to work between the provinces and the federal government.

We've spent years working with the federal government on an approach that we thought was going to work. We've spent years working with the provinces. Ontario is going down a cap-and-trade route, as is Quebec. B.C. has a carbon price. Alberta has an approach that's a hybrid, with a carbon tax plus regulatory requirements and performance standards. There is a concern that just as we are coming to grips with how those are going to work and how we can make our own contributions within those systems, there is something else on top. How the federal efforts will work with the provinces is a key point of concern for us at this time.

When it comes to other issues, we've worked very closely with the federal government as well as all stakeholders and the provinces on the federal clean air agenda—also over the last 8 to 10 years—and, by and large, that has been successful. It has been successful because people have come to the table and identified what the correct role for the different parties is.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Your document also touches on the Canadian Environmental Protection Act, and he just mentioned some issues there. What could be done to accelerate, without taking away the content—

[Bob Masterson]

We're very comfortable with where both the Canadian Environmental Protection Act and the chemicals management plan is, and our testimony to the environment and sustainable development committee was clear. The main message is that it's working, so leave it as it is and look for opportunities for some continual improvement, if you will. It's not a case of throwing out the whole piece of major legislative reform.

We have reviewed the detailed recommendations from the ministers of environment and health, and I can say that we concur and support the vast majority of those. There are a few very minor instances of a lack of clarity on what they're suggesting, and we're in touch with their officials to look at that.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

That's including the chemical management plan as well as CEPA?

[Bob Masterson]

Yes.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

So both things are going in the right direction.

[Bob Masterson]

We believe so, from our perspective, and we've said so to committee.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Are they being modernized in the way that's necessary?

[Bob Masterson]

We believe so, but the committees will have their say sometime soon.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Will they address that point you brought up about this 700 days?

[Bob Masterson]

No, that's specific to Ontario. We were talking about the—

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

That's in Ontario.

[Bob Masterson]

That's Ontario, not the federal government.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Are there opportunities, then, coming back to that idea for elimination of duplication and an ability for the provinces to work in tandem?

[Bob Masterson]

On working in tandem, again I can't identify in our sector anything other than the risks and the climate change issue. We don't identify a lot of areas of overlap and duplication, and where they exist on occasion, it's been when provinces have decided to undertake activities that were already being well delivered by the federal government, so that hasn't been a major concern.

Let me just say again that if you were a large company and you were thinking of—and there is a company thinking of doing it—making a $3.5 billion investment in Sarnia, the Government of Canada also has a very strong role to play. If we really want to land that investment, those two parties have to work very closely together to talk about what we expect from them and how we are going to make that happen. It can't be a process that becomes far too lengthy.